This is from Labor Notes. This sounds as if it is a real problem. I have heard some stories of Canadian nurses moving to the U.S. but then returning because of working conditions. Having mandatory ratios would improve working conditions and attract more nurses to help the shortage.
Battles Over Nurse Staffing Ratios Spread Across NationMischa GausLabor NotesFebruary 2008Faced with insufficient staffing, nurses in a number of states are pushingfor legislation that would specify the number of patients each nurse cansafely care for. Photo: Jim West.After a patient quietly died in registerednurse Danielle Magaña's hospital hallway, she decided she'd had enough.Although an autopsy later said the woman had died of natural causes, Magañasaid the incident was waiting to happen at her chronically short-staffedhospital, San Antonio's Baptist Medical Center.Intensive-care nurses like her were assigned up to five patients per shift,including two in the hallways who weren't hooked into monitoring equipmentthat warns when a patient's vital signs slip away. Magaña still questionswhether the woman could have been rescued if the nurses on her floor weren'tcarrying such heavy patient loads.Hospital management, she said, "do not give us the right to say, you need tocall in another nurse."So Magaña became one of the 40,000 Texas registered nurses the NationalNurses Organizing Committee (NNOC) estimates have left the hospital bedside,largely they argue because hospitals cut staff in the 1990s and quickenedthe pace of nursing work to intolerable levels. In a national study releasedin September, 42 percent of newly licensed RNs said they would like to leavebedside nursing.ENTRY POINT Magaña is at the forefront of a push to write into law thenumber of patients to which each nurse can safely attend. Active in Texas,Ohio, Maine, Illinois, Massachusetts, Pennsylvania, Arizona-and soon to bein Kentucky and Nevada-the drive operates on many levels, pulling nursesinto the political process, spreading the gospel that understaffed hospitalsare unsafe, and channeling overworked nurses' outrage into hospital-basedorganizing committees.The ratio law is an entry point to shopfloor agitation for nurses, who payabout $50 a month in dues to join NNOC as an associate member. These membersmake up the foundation of NNOC's non-majority unions, which start asadvocacy committees that raise staffing issues with management as soon as ameaningful number of nurses-generally around 10-join at a hospital.The push for ratios in the states exists sometimes uncomfortably alongsidethe Service Employees' promotion of a national law to establish staffingratios. NNOC organizers complain SEIU didn't back their landmark Californiaratio law, and at times undermine their efforts by seeking alliances withhospital chains. SEIU didn't respond to requests for comment.TROJAN HORSES One of the newest battlegrounds is Ohio, where nurses expecttheir ratio law to be introduced in February. Hospital trade groups in thestate have attempted to head off the ratio movement by introducing competinglegislation-a move copied from health care industry lobbies in Illinois.Their proposals oblige hospitals to publicly release staffing plans.Ed Bruno, NNOC's national organizing coordinator, calls that an industry figleaf because it doesn't mandate specific numbers of patients per nurse. Thedebate boils down to whether public disclosure of staffing conditions willsway hospitals to regulate themselves, said Sean Clarke, a nursing professorat the University of Pennsylvania.Unwilling to cede control over employment policy, the hospital industryargues ratios are a blunt, inflexible regulation. Terry Gallagher is an RNwho's worked for 11 years as a travel nurse at more than 16 hospitals innortheast Ohio. He said current staffing practices fail to account for thecomplex, constantly shifting demands placed on nurses-and that "flexibility"is code for forcing nurses to work on foreign terrain."A hospital can float a nurse into critical or emergency situations withabsolutely no experience or expertise," he said. "It is unconscionable and Ihave witnessed it."He began to refuse work in some hospitals after chancy encounters stackedup. Once he found himself sitting on a patient, trying to apply enoughpressure to stop his bleeding as he waited to wheel him into the operatingroom."I had to make choices as to who I had time to intervene with," Gallaghersaid. "This was not a battlefield."SAFETY IN NUMBERS California's early experience with ratios sets the bar forother state campaigns. After a decade of pressure, the California NursesAssociation won mandatory minimum staffing levels in 1999, only to later seeGovernor Arnold Schwarzenegger repay his hospital industry supporters bydelaying and attacking the law.As journalist Suzanne Gordon details in her upcoming book on ratios, Safetyin Numbers, the nurses fought back with studies, lawsuits, and highlyvisible protests, successfully defending the ratios, which limit each nurseto two patients in intensive care. Other California ratios vary, and thosein specialty units were lowered in January from five to four patients to anurse.Ratios became a fact of life. Jan Rodolfo, an oncology nurse at Alta BatesSummit Medical Center in Oakland, California, said they allow nurses toeducate patients and their families about their course of care, and reducemedication snafus and response times during emergencies.They also became a topic of constant scrutiny. Researchers began to confirmthat ratios improved patient care along with nurses' job satisfaction andwork conditions, all of which brought 52,000 more nurses into the workforceby 2006 than California had anticipated, an unexpected boon in an industryfacing a massive nurse shortage.Clarke said the associations between quality of patient care and staffinglevels only stand to reason."You can't put 50 students in a classroom and expect the teacher to performwell," he said.Winning a state law is hard enough-Massachusetts nurses have been trying for11 years-but it isn't sufficient.MORE THAN LAW "Even if you have a great law, if you don't have organizationyou can't enforce it," said Meredith Schafer, an NNOC organizer in Texas.California nurses warmed to that lesson quickly. Their law shifted thebalance of power in hospitals, Rodolfo said, and hospital-by-hospitalcommittees allowed nurses to identify and respond to management'scost-shifting tactics after they were required to increase RNs to meet theratios.Managers often force nurses to pick up a colleague's patients during mealsand breaks, a tactic they employ because there's no financial penalty ifhospitals fail to meet the ratios."They play the numbers game," said Genel Morgan, an intensive-care nurse atMills Peninsula hospital in San Mateo, California.But missing a meal or break is punishable by an hour each in penalty pay,which led nurses to coordinate the filing of hundreds of individualcomplaints. At one hospital, Alta Bates Summit, the campaign produced $1.9million in penalty pay last year-a pressure tactic nurses say is necessaryto convince hospitals not to cut corners on staffing."Patients don't always call before they stop breathing," Rodolfo said.RIGHT TO BETTER WORK Only 15 percent of nurses nationally belong to unions,Bruno said. That opens wide opportunities to turn nurses' dissatisfaction atthe bedside into motivation to change industry standards throughorganization.A powerful example to draw from is the nurses in Australia's Victoria state,who won staffing ratios in 2000 and defended them against a conservativegovernment's backlash through vigorous (and illegal) job actions. Byconstantly educating nurses and linking improvements in care to ratios,"they became like antibiotics," Gordon told Labor Notes. "Who would opposeit?"Most surprising to U.S. nurses is the fact that Victoria is an open-shopstate, despite which almost three-quarters of public sector nurses belong tothe union.In Texas, where nurses have rallied for two years for ratios, making inroadsis slow work. Nurses are taught to think their professional status willdecline if they ally with blue-collar institutions like unions. DanielleMagaña fills a notebook with the misunderstandings nurses have-that unionsare illegal, for instance-and has counted 35. She got a reminder of hospitalconditions when she gave birth in July."As a patient, you remember what it's like on the other side," she said,shuddering.http://labornotes.org/node/1510
Thursday, January 31, 2008
Arroyo: Philippines may not sign ASEAN Charter .
This is from the Daily Tribune. I don't really fathom Arroyo's reluctance to ratify the ASEAN charter until Burma's human rights situation improves. If Burma signs the charter this will surely provide just that much more ammunition to critics to put pressure on Burma. If the Philippines refuses to sign the charter that hardly hurts Burma!
Rights chief shrugs off GMA threat, urges gov’t to ratify Asean Charter
02/01/2008
The country’s top human rights official yesterday criticized a threat made by President Arroyo that the Philippines will not ratify the Association of Southeast Asian Nations’ (Asean) landmark Charter due to poor human rights conditions in junta-ruled Myanmar.
Commission on Human Rights (CHR) Chairman Purificacion Quisumbing said she finds it ironic that the Philippines has been at the forefront of the negotiations for the Asean Charter only to backtrack from ratifying the document.
“Let us have a common push for the Philippines to ratify this. I’m just not sure whether putting a condition or whether we
will ratify or not is a good idea,” Quisumbing said during the 4th Consultative Meeting of human rights commissions of Indonesia, Malaysia, the Philippines and Thailand in Manila.
“Some leaders have already made statements, they want the release of Aung San Suu Kyi before we even ratify. For us, you should ratify first then you make a stand. Anyway, there are different strategies but we hope that the Philippine government will ratify this as soon as possible,” she added.
The Charter, which was signed during the Asean Summit in Singapore in December last year, cannot be enforced if one country fails to ratify it. The document aims to transform the 40-year-old regional bloc into a rules-based legal entity and committing them to promote human rights and democratic ideals.
“We sent representatives from the Department of Foreign Affairs (to negotiate for it). We sent (former President) Fidel Ramos to the Eminent Person Group and Ambassador Rosario Manalo to draft the Charter. We worked hard for this and then we will say that we will not ratify it,” Quisumbing noted.
Mrs. Arroyo earlier warned that the Philippine Congress may not ratify the Charter unless Myanmar restores democracy and frees opposition leader Aung San Suu Kyi.
“The expectation of the Philippines is that if Myanmar signs the Charter, it is committed to returning to the path of democracy and releasing Aung San Suu Kyi,” Mrs. Arroyo said in December in Singapore.
“Until the Philippine Congress sees that happen, it would have extreme difficulty in ratifying the Charter.”
At their 4th consultative meeting in Manila, which was concluded yesterday, human rights officials from Thailand, Indonesia, Malaysia and the Philipines have proposed the establishment of an Asean Human Rights Commission in the Charter.
During the meeting, they discussed a proposed Terms of Reference (ToR) for the regional human rights body that will monitor human rights conditions in the 10-member Asean countries, but balked on the idea of imposing sanctions on violators like Myanmar.
Quisumbing said it is up to the Asean, which makes decisions by consensus and has a policy of non-interference, to adopt their proposal or incorporate it in future draft ToR of the Charter.
“It will be for the (Asean) governments to decide. It’s not for us to interfere but we will keep an eye on this,” she added. “Our commitment is that we will continue to monitor and observe and at the appropriate time, intervention. We will give inputs.”
She said she is not too optimistic that the charter will be implemented as soon as possible, but said she hopes that it will not take “another 40 years” for it to be enforced.
“The question is, will we wait for 40 years for this Terms of Reference? There is no deadline, but if we keep it alive, we will be able to get such a body. But the way I see it, it’s step by step,” Quisumbing said.
In the 10-member Asean, only the Philippines, Malaysia, Indonesia and Thailand have established human rights commission.
Michaela P. del Callar
Rights chief shrugs off GMA threat, urges gov’t to ratify Asean Charter
02/01/2008
The country’s top human rights official yesterday criticized a threat made by President Arroyo that the Philippines will not ratify the Association of Southeast Asian Nations’ (Asean) landmark Charter due to poor human rights conditions in junta-ruled Myanmar.
Commission on Human Rights (CHR) Chairman Purificacion Quisumbing said she finds it ironic that the Philippines has been at the forefront of the negotiations for the Asean Charter only to backtrack from ratifying the document.
“Let us have a common push for the Philippines to ratify this. I’m just not sure whether putting a condition or whether we
will ratify or not is a good idea,” Quisumbing said during the 4th Consultative Meeting of human rights commissions of Indonesia, Malaysia, the Philippines and Thailand in Manila.
“Some leaders have already made statements, they want the release of Aung San Suu Kyi before we even ratify. For us, you should ratify first then you make a stand. Anyway, there are different strategies but we hope that the Philippine government will ratify this as soon as possible,” she added.
The Charter, which was signed during the Asean Summit in Singapore in December last year, cannot be enforced if one country fails to ratify it. The document aims to transform the 40-year-old regional bloc into a rules-based legal entity and committing them to promote human rights and democratic ideals.
“We sent representatives from the Department of Foreign Affairs (to negotiate for it). We sent (former President) Fidel Ramos to the Eminent Person Group and Ambassador Rosario Manalo to draft the Charter. We worked hard for this and then we will say that we will not ratify it,” Quisumbing noted.
Mrs. Arroyo earlier warned that the Philippine Congress may not ratify the Charter unless Myanmar restores democracy and frees opposition leader Aung San Suu Kyi.
“The expectation of the Philippines is that if Myanmar signs the Charter, it is committed to returning to the path of democracy and releasing Aung San Suu Kyi,” Mrs. Arroyo said in December in Singapore.
“Until the Philippine Congress sees that happen, it would have extreme difficulty in ratifying the Charter.”
At their 4th consultative meeting in Manila, which was concluded yesterday, human rights officials from Thailand, Indonesia, Malaysia and the Philipines have proposed the establishment of an Asean Human Rights Commission in the Charter.
During the meeting, they discussed a proposed Terms of Reference (ToR) for the regional human rights body that will monitor human rights conditions in the 10-member Asean countries, but balked on the idea of imposing sanctions on violators like Myanmar.
Quisumbing said it is up to the Asean, which makes decisions by consensus and has a policy of non-interference, to adopt their proposal or incorporate it in future draft ToR of the Charter.
“It will be for the (Asean) governments to decide. It’s not for us to interfere but we will keep an eye on this,” she added. “Our commitment is that we will continue to monitor and observe and at the appropriate time, intervention. We will give inputs.”
She said she is not too optimistic that the charter will be implemented as soon as possible, but said she hopes that it will not take “another 40 years” for it to be enforced.
“The question is, will we wait for 40 years for this Terms of Reference? There is no deadline, but if we keep it alive, we will be able to get such a body. But the way I see it, it’s step by step,” Quisumbing said.
In the 10-member Asean, only the Philippines, Malaysia, Indonesia and Thailand have established human rights commission.
Michaela P. del Callar
Panitch: U.S. Econonic Crisis in Perspective.
Leo Panitch is a well known--at least in Canada--academic leftist. I didn't realize that Schwarzenegger had cut back on a lot of public expenditures in California. One would think that such expenditures would be a good stimulus. I guess if it were military expenditure it would be OK.
~~~~~~~~~~~~~~(((( T h e B u l l e t ))))~~~~~~~~~~~~~~A Socialist Project e-bulletin .... No. 80 .... January 31, 2008_________________________________________________
Putting the U.S. Economic Crisis in Perspective
Leo Panitch
It is time to take stock. The centrality of the American economy to the capitalist world – which now literally does encompass the whole world – has spread the financial crisis that began in the U.S. housing market around the globe. And the economic recession which that financial crisis has triggered in the U.S. now threatens to spread globally as well.
Capitalism has had an incredible run – politically and culturally as well as economically – since the stagflation crisis of the 1970s. The resolution of that crisis required, as economists put it at the time, 'reducing expectations' of the kind nurtured by the trade union militancy and welfare state gains of the 1960s. This was accomplished via the defeats suffered by trade unionism and the welfare state since the 1980s at the hands of what might properly be called capitalist militancy. This was accompanied by dramatic technological change, massive industrial restructuring, labour market flexibility and the over – all discipline provided by 'competitiveness.'
It was also accompanied, of course, by massive economic inequality. But this did not mean capitalism was no longer able to integrate the bulk of the population. On the contrary, this was now achieved through the private pension funds that mobilized workers savings, on the one hand, and through the mortgage and credit markets that loaned them the money to sustain high levels of consumer spending on the other. At the centre of this were the private banking institutions which, after their collapse in the Great Depression, had been nurtured back to health in the postwar decades and then unleashed the explosion of global financial innovation that has defined our era.
The question begged by the current crisis is whether capitalism's capacity to integrate the mass of people through their incorporation in financial markets has run out of steam. That the fault line should have appeared in 'sub-prime' mortgage loans to African-Americans is hardly surprising – this has always been the Achilles heel of working class incorporation into the American capitalist dream. But an economic earthquake will actually only result if there is a devaluation of working class assets in general through a collapse of housing prices and the stock and bonds in which their retirement savings are invested.
We are by no means there yet. The role being played to prevent just this by the Federal Reserve, very much acting as the world central bank in light of the global implications of a U.S. recession, should once and for all dispel the illusion that capitalist markets thrive without state intervention. It was through the types of policies that promoted free capital movements, international property rights and labour market flexibility that the era of free trade and globalization was unleashed. And this era has been kept going as long as it has by the repeated coordinated interventions undertaken by central banks and finance ministries to contain the periodic crises to which such a volatile system of global finance inevitably gives rise. The Fed has repeatedly poured liquidity into its financial system at the first sign of trouble. Yet the capacity of the system to go on integrating ordinary Americans though the expansion of investor and credit markets in this way may have reached its limit. This is indeed suggested by the Bush administration's sudden (non-military) Keynesian turn with its recently announced $150 billion fiscal stimulus. The announcement at the same time of massive public expenditure cutbacks by the Schwarzenegger administration in California is a reminder, however, that fiscal stimulus at the federal level may be undone at the state level.
This is especially likely to be the case with municipal government cutbacks, given their massive dependence on property taxes. The recent evidence that the financial institutions that specialize in selling risk insurance on municipal bonds are enveloped in the credit crisis further compounds the problem. This indeed brings to mind the extent to which it was municipal governments that were on the front lines of the Great Depression. The kind of fiscal stimulus that is needed to boost the economy now probably entails public infrastructure spending, but the type of state intervention that brought us financial globalization is not well suited to this, as the collapsed levies of New Orleans and the collapsed bridges of Minneapolis prove.
To see this go unmentioned in the Democratic primary debate this week may be hardly surprising given the absence of even a trade union campaign around this, but it bespeaks an impoverishment of American politics that in fact goes all the way back to the New Deal. The issue of economic democracy that had been placed on the political agenda alongside the New Deal's public infrastructure projects was set aside for the remainder of the century after the FDR's administration's self-described 'grand truce with capital' in the late 1930s.
There should be no illusion that a recession, or even a depression, will necessarily bring the issue of economic democracy back onto the U.S. political agenda. It would require a transformation of American politics to do so – and that too would have global implications.
Leo Panitch is Canada Research Chair in Comparative Political Economy at York University.
~~~~~~~~~~~~~~(((( T h e B u l l e t ))))~~~~~~~~~~~~~~A Socialist Project e-bulletin .... No. 80 .... January 31, 2008_________________________________________________
Putting the U.S. Economic Crisis in Perspective
Leo Panitch
It is time to take stock. The centrality of the American economy to the capitalist world – which now literally does encompass the whole world – has spread the financial crisis that began in the U.S. housing market around the globe. And the economic recession which that financial crisis has triggered in the U.S. now threatens to spread globally as well.
Capitalism has had an incredible run – politically and culturally as well as economically – since the stagflation crisis of the 1970s. The resolution of that crisis required, as economists put it at the time, 'reducing expectations' of the kind nurtured by the trade union militancy and welfare state gains of the 1960s. This was accomplished via the defeats suffered by trade unionism and the welfare state since the 1980s at the hands of what might properly be called capitalist militancy. This was accompanied by dramatic technological change, massive industrial restructuring, labour market flexibility and the over – all discipline provided by 'competitiveness.'
It was also accompanied, of course, by massive economic inequality. But this did not mean capitalism was no longer able to integrate the bulk of the population. On the contrary, this was now achieved through the private pension funds that mobilized workers savings, on the one hand, and through the mortgage and credit markets that loaned them the money to sustain high levels of consumer spending on the other. At the centre of this were the private banking institutions which, after their collapse in the Great Depression, had been nurtured back to health in the postwar decades and then unleashed the explosion of global financial innovation that has defined our era.
The question begged by the current crisis is whether capitalism's capacity to integrate the mass of people through their incorporation in financial markets has run out of steam. That the fault line should have appeared in 'sub-prime' mortgage loans to African-Americans is hardly surprising – this has always been the Achilles heel of working class incorporation into the American capitalist dream. But an economic earthquake will actually only result if there is a devaluation of working class assets in general through a collapse of housing prices and the stock and bonds in which their retirement savings are invested.
We are by no means there yet. The role being played to prevent just this by the Federal Reserve, very much acting as the world central bank in light of the global implications of a U.S. recession, should once and for all dispel the illusion that capitalist markets thrive without state intervention. It was through the types of policies that promoted free capital movements, international property rights and labour market flexibility that the era of free trade and globalization was unleashed. And this era has been kept going as long as it has by the repeated coordinated interventions undertaken by central banks and finance ministries to contain the periodic crises to which such a volatile system of global finance inevitably gives rise. The Fed has repeatedly poured liquidity into its financial system at the first sign of trouble. Yet the capacity of the system to go on integrating ordinary Americans though the expansion of investor and credit markets in this way may have reached its limit. This is indeed suggested by the Bush administration's sudden (non-military) Keynesian turn with its recently announced $150 billion fiscal stimulus. The announcement at the same time of massive public expenditure cutbacks by the Schwarzenegger administration in California is a reminder, however, that fiscal stimulus at the federal level may be undone at the state level.
This is especially likely to be the case with municipal government cutbacks, given their massive dependence on property taxes. The recent evidence that the financial institutions that specialize in selling risk insurance on municipal bonds are enveloped in the credit crisis further compounds the problem. This indeed brings to mind the extent to which it was municipal governments that were on the front lines of the Great Depression. The kind of fiscal stimulus that is needed to boost the economy now probably entails public infrastructure spending, but the type of state intervention that brought us financial globalization is not well suited to this, as the collapsed levies of New Orleans and the collapsed bridges of Minneapolis prove.
To see this go unmentioned in the Democratic primary debate this week may be hardly surprising given the absence of even a trade union campaign around this, but it bespeaks an impoverishment of American politics that in fact goes all the way back to the New Deal. The issue of economic democracy that had been placed on the political agenda alongside the New Deal's public infrastructure projects was set aside for the remainder of the century after the FDR's administration's self-described 'grand truce with capital' in the late 1930s.
There should be no illusion that a recession, or even a depression, will necessarily bring the issue of economic democracy back onto the U.S. political agenda. It would require a transformation of American politics to do so – and that too would have global implications.
Leo Panitch is Canada Research Chair in Comparative Political Economy at York University.
Afghan who dared to read about human rights sentenced to death
This is from the Independent. This is the free and democratic Afghanistan that NATO and the US are fighting for. Earlier, a Christian convert from Islam had to flee to Italy to avoid a death sentence. A female legislator was kicked out the
legislature for criticizing her colleagues. The US house and Senate would be emptied in no time if that rule were followed in the US.
Sentenced to death: Afghan who dared to read about women's rights
By Kim SenguptaThursday, 31 January 2008
A young man, a student of journalism, is sentenced to death by an Islamic court for downloading a report from the internet. The sentence is then upheld by the country's rulers. This is Afghanistan – not in Taliban times but six years after "liberation" and under the democratic rule of the West's ally Hamid Karzai.
The fate of Sayed Pervez Kambaksh has led to domestic and international protests, and deepening concern about erosion of civil liberties in Afghanistan. He was accused of blasphemy after he downloaded a report from a Farsi website which stated that Muslim fundamentalists who claimed the Koran justified the oppression of women had misrepresented the views of the prophet Mohamed.
Mr Kambaksh, 23, distributed the tract to fellow students and teachers at Balkh University with the aim, he said, of provoking a debate on the matter. But a complaint was made against him and he was arrested, tried by religious judges without – say his friends and family – being allowed legal representation and sentenced to death.
legislature for criticizing her colleagues. The US house and Senate would be emptied in no time if that rule were followed in the US.
Sentenced to death: Afghan who dared to read about women's rights
By Kim SenguptaThursday, 31 January 2008
A young man, a student of journalism, is sentenced to death by an Islamic court for downloading a report from the internet. The sentence is then upheld by the country's rulers. This is Afghanistan – not in Taliban times but six years after "liberation" and under the democratic rule of the West's ally Hamid Karzai.
The fate of Sayed Pervez Kambaksh has led to domestic and international protests, and deepening concern about erosion of civil liberties in Afghanistan. He was accused of blasphemy after he downloaded a report from a Farsi website which stated that Muslim fundamentalists who claimed the Koran justified the oppression of women had misrepresented the views of the prophet Mohamed.
Mr Kambaksh, 23, distributed the tract to fellow students and teachers at Balkh University with the aim, he said, of provoking a debate on the matter. But a complaint was made against him and he was arrested, tried by religious judges without – say his friends and family – being allowed legal representation and sentenced to death.
Wednesday, January 30, 2008
Philippines: Living in Paradise
This is from the Daily Tribune. This editorial seems to be cheerleading for Joseph Estrada the deposed and now pardoned former premier. The Catholic Bishops have actually in the past often opposed the Arroyo administration. Perhaps they are changing now and have made peace with the administration. The Papacy has always been after the Philippine Catholic Church to tone down its political advocacy. If the Church trends too far right it may find that it loses priests to the more radical opposition as has happened in the past.
Living in paradise?
EDITORIAL
01/30/2008
Catholic bishops appear to have totally lost their moral moorings as they virtually exculpated Gloria Arroyo and her government from blame on the rampant corruption and instead put the blame on the Filipino people for the moral decay in society.
They also placed the blame on the media for the “darkness” that we live with today, saying Filipinos are “a people almost without hope,” seeing darkness everywhere, adding the many problems we have today are “simply rumors, fears, suspicions, imagined wrongs” and as these rumors, imagined wrongs, suspicions and fears are reported in the newspapers, the people believe these imaginary problems to be true and factual. All these were stated in the bishops’ pastoral statement issued Monday.
This is truly an amazing pastoral statement from the bishops who claim to be the country’s moral guides.
Simply rumors, suspicions and imagined wrongs in this government and society, they say? Were the “Hello Garci” conversations caught on tape detailing the cheating operations of the presidential polls of 2004 which even included abductions of election officers who were not willing to engage in cheating, an imagined problem and a rumor?
Is the grossly overpriced ZTE-National Broadband Network project an imagined wrong, despite the testimonies of witnesses and documents presented as evidence?
Is the P3-billion fertilizer funds scam simply based on rumors and suspicions? And who planned this diversion of funds, going into the campaign kitty of Gloria in 2004? The Filipino people? Who benefited from this scam? Certainly not the Filipino people. So why should the blame of corruption be placed on the people? Because we have become apathetic and see these as perks of the powerful and influential? But aren’t the bishops leading the way in apathy and passiveness in addressing clearly moral issues by telling the flock to support the immoral?
They have so stated that impeachment is meaningless in the search for the truth. They are found to have accepted monetary and project bribes from Gloria and her Malacañang, not to mention their accepting without any qualms, donations stemming from jueteng, drugs, prostitution money, while calling the same “donations” as plunder when it comes to one whom they plotted to oust from his legitimate presidency.
Now they say it is not within their power to call for the resignation of the corrupt in government. They do not denounce the violence inflicted by Gloria’s police and military on the people who march in the streets for redress of grievances. Now they say they see the good in the Arroyo government and that it is we, the people, who must be first to change ourselves, and insinuate that we must unite behind the Gloria government, to rid ourselves of the “imaginary” problems besetting the nation, as these problems are merely rumors and suspicions.
The bishops were practically short of saying Filipinos today don’t realize that they live in Adam and Eve’s paradise and that they must shed off the darkness they imagine they live in for Paradise’s fall not to occur.
But obviously, the amoral bishops, by passing on the blame of moral decay and corruption on the people were “laying the predicate,” so to speak, to justify their pastoral stand on “critical collaboration” with the Gloria government that they clearly insinuated was not “all bad.”
As the bishops put it in their pastoral statement: “despite the prevailing darkness, we see everything is not thoroughly evil. There is good everywhere, even in those we often criticize, and it is our task to critically collaborate with them even as we critically oppose the not too good.”
This position is no different from the early position taken by the bishops during the Marcos years, where they chose a stand of critical collaboration with the Marcos government, after their priests, one of whom was Jesuit priest Integan who was into armed struggle with now National Security Adviser Norberto Gonzales, along with others engaged in guerrilla warfare against Marcos, were raided and arrested and where deals were made between Marcos and the church.
Certain bishops and priests were also earlier charged with rebellion for the Nov. 29 Manila Peninsula incident, but were released. Now it is critical collaboration again.
Yet the same bishops now say we should see the “glimmers of light shrining through” instead of focusing only on the “dark side of our national situation,” by changing ourselves.
They may as well have stated that they support Gloria Arroyo and her government, and have the people embrace the evils in government.
Bishops have become irrelevant. They cannot claim to be moral guardians guides when they are themselves being deliberately amoral.
Living in paradise?
EDITORIAL
01/30/2008
Catholic bishops appear to have totally lost their moral moorings as they virtually exculpated Gloria Arroyo and her government from blame on the rampant corruption and instead put the blame on the Filipino people for the moral decay in society.
They also placed the blame on the media for the “darkness” that we live with today, saying Filipinos are “a people almost without hope,” seeing darkness everywhere, adding the many problems we have today are “simply rumors, fears, suspicions, imagined wrongs” and as these rumors, imagined wrongs, suspicions and fears are reported in the newspapers, the people believe these imaginary problems to be true and factual. All these were stated in the bishops’ pastoral statement issued Monday.
This is truly an amazing pastoral statement from the bishops who claim to be the country’s moral guides.
Simply rumors, suspicions and imagined wrongs in this government and society, they say? Were the “Hello Garci” conversations caught on tape detailing the cheating operations of the presidential polls of 2004 which even included abductions of election officers who were not willing to engage in cheating, an imagined problem and a rumor?
Is the grossly overpriced ZTE-National Broadband Network project an imagined wrong, despite the testimonies of witnesses and documents presented as evidence?
Is the P3-billion fertilizer funds scam simply based on rumors and suspicions? And who planned this diversion of funds, going into the campaign kitty of Gloria in 2004? The Filipino people? Who benefited from this scam? Certainly not the Filipino people. So why should the blame of corruption be placed on the people? Because we have become apathetic and see these as perks of the powerful and influential? But aren’t the bishops leading the way in apathy and passiveness in addressing clearly moral issues by telling the flock to support the immoral?
They have so stated that impeachment is meaningless in the search for the truth. They are found to have accepted monetary and project bribes from Gloria and her Malacañang, not to mention their accepting without any qualms, donations stemming from jueteng, drugs, prostitution money, while calling the same “donations” as plunder when it comes to one whom they plotted to oust from his legitimate presidency.
Now they say it is not within their power to call for the resignation of the corrupt in government. They do not denounce the violence inflicted by Gloria’s police and military on the people who march in the streets for redress of grievances. Now they say they see the good in the Arroyo government and that it is we, the people, who must be first to change ourselves, and insinuate that we must unite behind the Gloria government, to rid ourselves of the “imaginary” problems besetting the nation, as these problems are merely rumors and suspicions.
The bishops were practically short of saying Filipinos today don’t realize that they live in Adam and Eve’s paradise and that they must shed off the darkness they imagine they live in for Paradise’s fall not to occur.
But obviously, the amoral bishops, by passing on the blame of moral decay and corruption on the people were “laying the predicate,” so to speak, to justify their pastoral stand on “critical collaboration” with the Gloria government that they clearly insinuated was not “all bad.”
As the bishops put it in their pastoral statement: “despite the prevailing darkness, we see everything is not thoroughly evil. There is good everywhere, even in those we often criticize, and it is our task to critically collaborate with them even as we critically oppose the not too good.”
This position is no different from the early position taken by the bishops during the Marcos years, where they chose a stand of critical collaboration with the Marcos government, after their priests, one of whom was Jesuit priest Integan who was into armed struggle with now National Security Adviser Norberto Gonzales, along with others engaged in guerrilla warfare against Marcos, were raided and arrested and where deals were made between Marcos and the church.
Certain bishops and priests were also earlier charged with rebellion for the Nov. 29 Manila Peninsula incident, but were released. Now it is critical collaboration again.
Yet the same bishops now say we should see the “glimmers of light shrining through” instead of focusing only on the “dark side of our national situation,” by changing ourselves.
They may as well have stated that they support Gloria Arroyo and her government, and have the people embrace the evils in government.
Bishops have become irrelevant. They cannot claim to be moral guardians guides when they are themselves being deliberately amoral.
Spritz your way to happiness
This is from the Daily Tribune (Manila) Perhaps this is a chance for some enterprising U.S. entrepreneur to market this in the U.S. Americans could remain smiley while losing their homes..
Spritz your way to happiness
By Maripet L. Poso, Staff Writer
01/30/2008
Throw out those Zoloft and Prozac; there’s a new antidepressant in town!
And you don’t need a doctor’s prescription for this one; you don’t even need to worry about side effects as the only proven aftermath is smelling nice and feeling good. And here’s the catch! Product can be consumed without any moderation whatsoever and at any time you want!
We’re talking about smiley perfume, a happiness-triggering slash the very first antidepressant perfume that’s become a cult scent in some parts of Europe and is starting to invade the Philippines.
“When we launched smiley in 2005, it was such an instant hit,” said Juan Cuadrado, area manager of Arthes, the French company behind Smiley, during the launch recently at Rustan’s Essenses, Makati. “The smiley concept defies the whole perfume industry notion down to the packaging,” added Cuadrado.
Designed by ora-ïto, a twentysomething French designer known as the “Prince of Design,” who has been behind many products of well-known brands like Louis Vuitton, Nike, Apple and Levi’s, to name a few, smiley’s packaging is hip, unisex, unique and blatantly nonconformist. It looks like a bottle of medicine so much that it blends beautifully in a medicine cabinet, especially the emergency smiley kit. It carries its signature smiley digital emoticon in (you guessed right) sunny yellow color.
If some fragrances capitalize on seduction, love and power, smiley simply wants to uplift one’s mood, so that everything else follows.
Taking its cue from the concept of the tangible benefits of aromatherapy, “smiley isolated the ingredients recognized for their stimulating capacities and assembled them for the fist time in a perfume.”
At first you get a whiff of the fresh top notes of bergamot, orange and pimento berry. Whether you like the scent or not, it will definitely capture your attention. Right after the the citrusy and somewhat spicy top notes start to fade, you get a hint of the divine pleasures emanating from the cocoa and praline curacao scents, the heart notes of smiley. Responsible for the happy therapy are phenylethylamine and theobromine substances that are found in cocoa. Phenylethylamine is said to help diffuse feelings of giddiness and euphoria, while theobromine has the same effects of stress-decreasing caffeine. Together, they set off a general feeling of happiness that chocolates similary give, without the calories!
Furthermore, bringing intensity to the fragrance would be the base notes. The relaxing hints of patchouli, myrrh and musk ultimately seal the deal with their soothing and calming effects, almost conducive to meditation.
Targetting the young and hip market of 20- to 30-year-olds, smiley’s unisex appeal crosses boundaries, raises skeptics’ brows and defies standards. Ultimately, however, it presents an exciting option to combat one of today’s generation’s number one killer disease, depression.
Maybe it’s not yet time to ditch the pills or another visit to the shrink, but a promise of happiness in every squirt? That’s something worth exploring.
Aside from eau de toilette and eau de parfum, smiley comes in full bath and body care line that includes body deodorant treatment, therapeutic bath (purifying milky pills with health spa side effects), all-in-one washing solution (total solution for body and hair), body rubbing friction (stimulating massage oils) and body gel.
Smiley is available at Rustans Essenses.
Spritz your way to happiness
By Maripet L. Poso, Staff Writer
01/30/2008
Throw out those Zoloft and Prozac; there’s a new antidepressant in town!
And you don’t need a doctor’s prescription for this one; you don’t even need to worry about side effects as the only proven aftermath is smelling nice and feeling good. And here’s the catch! Product can be consumed without any moderation whatsoever and at any time you want!
We’re talking about smiley perfume, a happiness-triggering slash the very first antidepressant perfume that’s become a cult scent in some parts of Europe and is starting to invade the Philippines.
“When we launched smiley in 2005, it was such an instant hit,” said Juan Cuadrado, area manager of Arthes, the French company behind Smiley, during the launch recently at Rustan’s Essenses, Makati. “The smiley concept defies the whole perfume industry notion down to the packaging,” added Cuadrado.
Designed by ora-ïto, a twentysomething French designer known as the “Prince of Design,” who has been behind many products of well-known brands like Louis Vuitton, Nike, Apple and Levi’s, to name a few, smiley’s packaging is hip, unisex, unique and blatantly nonconformist. It looks like a bottle of medicine so much that it blends beautifully in a medicine cabinet, especially the emergency smiley kit. It carries its signature smiley digital emoticon in (you guessed right) sunny yellow color.
If some fragrances capitalize on seduction, love and power, smiley simply wants to uplift one’s mood, so that everything else follows.
Taking its cue from the concept of the tangible benefits of aromatherapy, “smiley isolated the ingredients recognized for their stimulating capacities and assembled them for the fist time in a perfume.”
At first you get a whiff of the fresh top notes of bergamot, orange and pimento berry. Whether you like the scent or not, it will definitely capture your attention. Right after the the citrusy and somewhat spicy top notes start to fade, you get a hint of the divine pleasures emanating from the cocoa and praline curacao scents, the heart notes of smiley. Responsible for the happy therapy are phenylethylamine and theobromine substances that are found in cocoa. Phenylethylamine is said to help diffuse feelings of giddiness and euphoria, while theobromine has the same effects of stress-decreasing caffeine. Together, they set off a general feeling of happiness that chocolates similary give, without the calories!
Furthermore, bringing intensity to the fragrance would be the base notes. The relaxing hints of patchouli, myrrh and musk ultimately seal the deal with their soothing and calming effects, almost conducive to meditation.
Targetting the young and hip market of 20- to 30-year-olds, smiley’s unisex appeal crosses boundaries, raises skeptics’ brows and defies standards. Ultimately, however, it presents an exciting option to combat one of today’s generation’s number one killer disease, depression.
Maybe it’s not yet time to ditch the pills or another visit to the shrink, but a promise of happiness in every squirt? That’s something worth exploring.
Aside from eau de toilette and eau de parfum, smiley comes in full bath and body care line that includes body deodorant treatment, therapeutic bath (purifying milky pills with health spa side effects), all-in-one washing solution (total solution for body and hair), body rubbing friction (stimulating massage oils) and body gel.
Smiley is available at Rustans Essenses.
U.S. rejects more troops for Afghanistan
The US, along with Canada, Britain, and the Dutch, are trying to put pressure on other NATO members to contribute forces to areas in the south where the Taliban are resurgent. In most countries there is considerable opposition to sending troops period. A recent report in Canada, the Manley Report, would see Canadian troops move out of their combat role in Kandahar if there were not a thousand more troops sent there and also better equipment including helicopters. Our prime minister however is very pro-Bush and could very well say that the US troops already being sent to the south by the US constitute over a thousand troops and certainly the US could provide helicopter support. This is from the Globe and Mail.
U.S. rejects more troops for Afghanistan
The Canadian Press
January 29, 2008 at 3:47 PM EST
Washington — The United States won't be sending more combat troops to Afghanistan despite Canada's demand for NATO reinforcements as a condition for staying in the battle, a U.S. Defence Department spokesman said Tuesday.
Pentagon spokesman Geoff Morrell told a briefing that the deployment of 3,200 American marines announced earlier this month is the limit for now.
Just over two-thirds of them, 2,200, are scheduled to arrive in March in the dangerous region in southern Afghanistan.
“That's as much and as deep as we're going at this point,” said Mr. Morrell.
“We've got a number of allies with us there. And hopefully they can see to it to dig deeper and find additional forces to help this effort,” he said.
“Hopefully, we'll make some progress there that will help the Canadians extend their commitment to the mission.”
U.S. Defence Secretary Roberts Gates hasn't talked to Canadian Defence Minister Peter MacKay since John Manley's commission report on Afghanistan was released last week, said Mr. Morrell.
Prime Minister Stephen Harper has endorsed the report's chief recommendation — that Canada stay in Afghanistan for the duration of the war as long as NATO provides a modest increase of 1,000 soldiers for Kandahar.
Canada is also demanding more battlefield helicopters and surveillance aircraft.
About 2,500 Canadian troops are involved in the Afghan mission, most of them operating in Kandahar province.
U.S. rejects more troops for Afghanistan
The Canadian Press
January 29, 2008 at 3:47 PM EST
Washington — The United States won't be sending more combat troops to Afghanistan despite Canada's demand for NATO reinforcements as a condition for staying in the battle, a U.S. Defence Department spokesman said Tuesday.
Pentagon spokesman Geoff Morrell told a briefing that the deployment of 3,200 American marines announced earlier this month is the limit for now.
Just over two-thirds of them, 2,200, are scheduled to arrive in March in the dangerous region in southern Afghanistan.
“That's as much and as deep as we're going at this point,” said Mr. Morrell.
“We've got a number of allies with us there. And hopefully they can see to it to dig deeper and find additional forces to help this effort,” he said.
“Hopefully, we'll make some progress there that will help the Canadians extend their commitment to the mission.”
U.S. Defence Secretary Roberts Gates hasn't talked to Canadian Defence Minister Peter MacKay since John Manley's commission report on Afghanistan was released last week, said Mr. Morrell.
Prime Minister Stephen Harper has endorsed the report's chief recommendation — that Canada stay in Afghanistan for the duration of the war as long as NATO provides a modest increase of 1,000 soldiers for Kandahar.
Canada is also demanding more battlefield helicopters and surveillance aircraft.
About 2,500 Canadian troops are involved in the Afghan mission, most of them operating in Kandahar province.
Tuesday, January 29, 2008
Naomi Klein: Why the Right Loves a Disaster
A disaster, particularly an economic disaster, should be an opportunity for the left. However, Klein is to a large extent correct, because the left is so weak the right is able to use economic problems to their own advantage. A good example is Bush's use of tax cuts to stimulate the economy. He even describes them in ways that appeal to the masses. The cuts involve putting people's own money back in their pockets. However, he never talks about cutting a few billion off the military budget and putting it back into people's pockets to spend as they see fit. However, since government income will be reduced there will be increased pressure to cut social spending those terrible "entitlements". The military doesnt apparently have entitlements. They are funded following some sort of natural law but not by the Invisible Hand of the Market but the very visible hand of government. The costs of Empire and the War on Terror are not to be questioned.
Why The Right Loves a DisasterBy Naomi Klein28/01/08 "Los Angeles Times" --- - Moody’s, the credit-rating agency, claims the key to solving the United States’ economic woes is slashing spending on Social Security. The National Assn. of Manufacturers says the fix is for the federal government to adopt the organization’s wish-list of new tax cuts. For Investor’s Business Daily, it is oil drilling in the Arctic National Wildlife Refuge, “perhaps the most important stimulus of all.”But of all the cynical scrambles to package pro-business cash grabs as “economic stimulus,” the prize has to go to Lawrence B. Lindsey, formerly President Bush’s assistant for economic policy and his advisor during the 2001 recession. Lindsey’s plan is to solve a crisis set off by bad lending by extending lots more questionable credit. “One of the easiest things to do would be to allow manufacturers and retailers” — notably Wal-Mart — “to open their own financial institutions, through which they could borrow and lend money,” he wrote recently in the Wall Street Journal.Never mind that that an increasing number of Americans are defaulting on their credit card payments, raiding their 401(k) accounts and losing their homes. If Lindsey had his way, Wal-Mart, rather than lose sales, could just loan out money to keep its customers shopping, effectively turning the big-box chain into an old-style company store to which Americans can owe their souls.If this kind of crisis opportunism feels familiar, it’s because it is. Over the last four years, I have been researching a little-explored area of economic history: the way that crises have paved the way for the march of the right-wing economic revolution across the globe. A crisis hits, panic spreads and the ideologues fill the breach, rapidly reengineering societies in the interests of large corporate players. It’s a maneuver I call “disaster capitalism.”Sometimes the enabling national disasters have been physical blows to countries: wars, terrorist attacks, natural disasters. More often they have been economic crises: debt spirals, hyperinflation, currency shocks, recessions.More than a decade ago, economist Dani Rodrik, then at Columbia University, studied the circumstances in which governments adopted free-trade policies. His findings were striking: “No significant case of trade reform in a developing country in the 1980s took place outside the context of a serious economic crisis.” The 1990s proved him right in dramatic fashion. In Russia, an economic meltdown set the stage for fire-sale privatizations. Next, the Asian crisis in 1997-98 cracked open the “Asian tigers” to a frenzy of foreign takeovers, a process the New York Times dubbed “the world’s biggest going-out-of-business sale.”To be sure, desperate countries will generally do what it takes to get a bailout. An atmosphere of panic also frees the hands of politicians to quickly push through radical changes that would otherwise be too unpopular, such as privatization of essential services, weakening of worker protections and free-trade deals. In a crisis, debate and democratic process can be handily dismissed as unaffordable luxuries.Do the free-market policies packaged as emergency cures actually fix the crises at hand? For the ideologues involved, that has mattered little. What matters is that, as a political tactic, disaster capitalism works. It was the late free-market economist Milton Friedman, writing in the preface to the 1982 reissue of his manifesto, “Capitalism and Freedom,” who articulated the strategy most succinctly. “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”A decade later, John Williamson, a key advisor to the International Monetary Fund and the World Bank (and who coined the phrase “the Washington consensus”), went even further. He asked a conference of top-level policymakers “whether it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform.”Again and again, the Bush administration has seized on crises to break logjams blocking the more radical pieces of its economic agenda. First, a recession provided the excuse for sweeping tax cuts. Next, the “war on terror” ushered in an era of unprecedented military and homeland security privatization. After Hurricane Katrina, the administration handed out tax holidays, rolled back labor standards, closed public housing projects and helped turn New Orleans into a laboratory for charter schools — all in the name of disaster “reconstruction.”Given this track record, Washington lobbyists had every reason to believe that the current recession fears would provoke a new round of corporate gift-giving. Yet it seems that the public is getting wise to the tactics of disaster capitalism. Sure, the proposed $150-billion economic stimulus package is little more than a dressed-up tax cut, including a new batch of “incentives” to business. But the Democrats nixed the more ambitious GOP attempt to leverage the crisis to lock in the Bush tax cuts and go after Social Security. For the time being, it seems that a crisis created by a dogged refusal to regulate markets will not be “fixed” by giving Wall Street more public money with which to gamble.Yet while managing (barely) to hold the line, the House Democrats appear to have given up on extending unemployment benefits and increasing funding for food stamps and Medicaid as part of the stimulus package. More important, they are failing utterly to use the crisis to propose alternative solutions to a status quo marked by serial crises, whether environmental, social or economic.The problem is not a lack of ideas “alive and available” — to borrow Friedman’s phrase. There are plenty available, from single-payer healthcare to legislating a living wage. Hundreds of thousands of jobs can be created by rebuilding the ailing public infrastructure and making it more friendly to public transit and renewable energy. Need start-up funds? Close the loophole that lets billionaire hedge fund managers pay 15% capital gains instead of 35% income tax, and adopt a long-proposed tax on international currency trading. The bonus? A less volatile, crisis-prone market.The way we respond to crises is always highly political, a lesson progressives appear to have forgotten. There’s a historical irony to that: Crises have ushered in some of America’s great progressive policies. Most notably, after the dramatic market failure of 1929, the left was ready and waiting with its ideas — full employment, huge public works, mass union drives. The Social Security system that Moody’s is so eager to dismantle was a direct response to the Depression.Every crisis is an opportunity; someone will exploit it. The question we face is this: Will the current turmoil become an excuse to transfer yet more public wealth into private hands, to wipe out the last vestiges of the welfare state, all in the name of economic growth? Or will this latest failure of unfettered markets be the catalyst that is needed to revive a spirit of public interest, to get serious about the pressing crises of our time, from gaping inequality to global warming to failing infrastructure?The disaster capitalists have held the reins for three decades. The time has come, once again, for disaster populism.Naomi Klein is the author of many books, including her most recent, The Shock Doctrine: The Rise of Disaster Capitalism, which will be published in September.Visit Naomi’s website at www.naomiklein.org , or to learn more about her new book, visit www.shockdoctrine.com .
Why The Right Loves a DisasterBy Naomi Klein28/01/08 "Los Angeles Times" --- - Moody’s, the credit-rating agency, claims the key to solving the United States’ economic woes is slashing spending on Social Security. The National Assn. of Manufacturers says the fix is for the federal government to adopt the organization’s wish-list of new tax cuts. For Investor’s Business Daily, it is oil drilling in the Arctic National Wildlife Refuge, “perhaps the most important stimulus of all.”But of all the cynical scrambles to package pro-business cash grabs as “economic stimulus,” the prize has to go to Lawrence B. Lindsey, formerly President Bush’s assistant for economic policy and his advisor during the 2001 recession. Lindsey’s plan is to solve a crisis set off by bad lending by extending lots more questionable credit. “One of the easiest things to do would be to allow manufacturers and retailers” — notably Wal-Mart — “to open their own financial institutions, through which they could borrow and lend money,” he wrote recently in the Wall Street Journal.Never mind that that an increasing number of Americans are defaulting on their credit card payments, raiding their 401(k) accounts and losing their homes. If Lindsey had his way, Wal-Mart, rather than lose sales, could just loan out money to keep its customers shopping, effectively turning the big-box chain into an old-style company store to which Americans can owe their souls.If this kind of crisis opportunism feels familiar, it’s because it is. Over the last four years, I have been researching a little-explored area of economic history: the way that crises have paved the way for the march of the right-wing economic revolution across the globe. A crisis hits, panic spreads and the ideologues fill the breach, rapidly reengineering societies in the interests of large corporate players. It’s a maneuver I call “disaster capitalism.”Sometimes the enabling national disasters have been physical blows to countries: wars, terrorist attacks, natural disasters. More often they have been economic crises: debt spirals, hyperinflation, currency shocks, recessions.More than a decade ago, economist Dani Rodrik, then at Columbia University, studied the circumstances in which governments adopted free-trade policies. His findings were striking: “No significant case of trade reform in a developing country in the 1980s took place outside the context of a serious economic crisis.” The 1990s proved him right in dramatic fashion. In Russia, an economic meltdown set the stage for fire-sale privatizations. Next, the Asian crisis in 1997-98 cracked open the “Asian tigers” to a frenzy of foreign takeovers, a process the New York Times dubbed “the world’s biggest going-out-of-business sale.”To be sure, desperate countries will generally do what it takes to get a bailout. An atmosphere of panic also frees the hands of politicians to quickly push through radical changes that would otherwise be too unpopular, such as privatization of essential services, weakening of worker protections and free-trade deals. In a crisis, debate and democratic process can be handily dismissed as unaffordable luxuries.Do the free-market policies packaged as emergency cures actually fix the crises at hand? For the ideologues involved, that has mattered little. What matters is that, as a political tactic, disaster capitalism works. It was the late free-market economist Milton Friedman, writing in the preface to the 1982 reissue of his manifesto, “Capitalism and Freedom,” who articulated the strategy most succinctly. “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”A decade later, John Williamson, a key advisor to the International Monetary Fund and the World Bank (and who coined the phrase “the Washington consensus”), went even further. He asked a conference of top-level policymakers “whether it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform.”Again and again, the Bush administration has seized on crises to break logjams blocking the more radical pieces of its economic agenda. First, a recession provided the excuse for sweeping tax cuts. Next, the “war on terror” ushered in an era of unprecedented military and homeland security privatization. After Hurricane Katrina, the administration handed out tax holidays, rolled back labor standards, closed public housing projects and helped turn New Orleans into a laboratory for charter schools — all in the name of disaster “reconstruction.”Given this track record, Washington lobbyists had every reason to believe that the current recession fears would provoke a new round of corporate gift-giving. Yet it seems that the public is getting wise to the tactics of disaster capitalism. Sure, the proposed $150-billion economic stimulus package is little more than a dressed-up tax cut, including a new batch of “incentives” to business. But the Democrats nixed the more ambitious GOP attempt to leverage the crisis to lock in the Bush tax cuts and go after Social Security. For the time being, it seems that a crisis created by a dogged refusal to regulate markets will not be “fixed” by giving Wall Street more public money with which to gamble.Yet while managing (barely) to hold the line, the House Democrats appear to have given up on extending unemployment benefits and increasing funding for food stamps and Medicaid as part of the stimulus package. More important, they are failing utterly to use the crisis to propose alternative solutions to a status quo marked by serial crises, whether environmental, social or economic.The problem is not a lack of ideas “alive and available” — to borrow Friedman’s phrase. There are plenty available, from single-payer healthcare to legislating a living wage. Hundreds of thousands of jobs can be created by rebuilding the ailing public infrastructure and making it more friendly to public transit and renewable energy. Need start-up funds? Close the loophole that lets billionaire hedge fund managers pay 15% capital gains instead of 35% income tax, and adopt a long-proposed tax on international currency trading. The bonus? A less volatile, crisis-prone market.The way we respond to crises is always highly political, a lesson progressives appear to have forgotten. There’s a historical irony to that: Crises have ushered in some of America’s great progressive policies. Most notably, after the dramatic market failure of 1929, the left was ready and waiting with its ideas — full employment, huge public works, mass union drives. The Social Security system that Moody’s is so eager to dismantle was a direct response to the Depression.Every crisis is an opportunity; someone will exploit it. The question we face is this: Will the current turmoil become an excuse to transfer yet more public wealth into private hands, to wipe out the last vestiges of the welfare state, all in the name of economic growth? Or will this latest failure of unfettered markets be the catalyst that is needed to revive a spirit of public interest, to get serious about the pressing crises of our time, from gaping inequality to global warming to failing infrastructure?The disaster capitalists have held the reins for three decades. The time has come, once again, for disaster populism.Naomi Klein is the author of many books, including her most recent, The Shock Doctrine: The Rise of Disaster Capitalism, which will be published in September.Visit Naomi’s website at www.naomiklein.org , or to learn more about her new book, visit www.shockdoctrine.com .
Philippines exports weaker because of high dollar, energy prices
This is from the Inquirer. With inputs being very high priced Philippine exports are bound to be less competitive. With the dollar weaker, prices of Philippine products in U.S. markets will be higher. However, other currencies are also much higher so this may partly compensate. At least Philippine consumers will enjoy lower prices for products imported from the U.S.
2008 exports seen weaker on US concerns, high energy prices
Thomson FinancialFirst Posted 17:26:00 01/29/2008
MANILA, Philippines -- Merchandise exports growth this year is likely to be weaker on a further slowdown in the US economy, high energy prices and the continued strengthening of the peso, an industry leader said Tuesday.
"Exports contributed very little to national economic growth last year, and we are seeing very little growth, if any for 2008," Sergio Ortiz-Luis, president of the Philippine Exporters Confederation or Philexport said at an energy summit here.
In the first 11 months of last year, exports rose just 4.8 percent from a year before. The reduced target for the whole year is 8.0 percent.
Electronics exports, which accounted for 61.3 percent of total export earnings in November, fell to $2.42 billion from $2.54 billion a year earlier.
The Semiconductor and Electronics Industries in the Philippines or SEIPI said it is also bracing for a difficult year.
"We are anticipating demand to be weak in the first half of the year. We are just hoping that growth will, at best, be flat and won't get any worse or be negative," said SEIPI executive director Ernesto Santiago.
With exports last year weighed down by "a triple whammy of high electric rates, historic oil prices and a strong peso, nine percent of the country's exporters closed shop last year," said Luis of Philexport.
"While a recession in the US will be a drag on exports in the short-term, it is the high cost of power, triggered by a surge in crude oil prices, that has drastically eroded the viability of the exports sector," said Luis.
Electricity expenses make up about 15 percent of production costs of export manufacturing enterprises in the Philippines.
World oil prices were slightly higher Tuesday in Asian trade, hovering near $90 in a market focused on the fate of the US economy.
Luis said the Philippines has one of the highest electricity rates in Asia, next only to Japan.
The country's two biggest groups of exporters have been urging the Philippine government to take more concrete steps to make electricity prices more competitive.
"We hope that the government can seriously consider the exporter's plight. There is a need to address the issues of electric power quality and security, in addition to developing and tapping alternative or renewable energy sources," said Luis.
($1 = P40.69)
2008 exports seen weaker on US concerns, high energy prices
Thomson FinancialFirst Posted 17:26:00 01/29/2008
MANILA, Philippines -- Merchandise exports growth this year is likely to be weaker on a further slowdown in the US economy, high energy prices and the continued strengthening of the peso, an industry leader said Tuesday.
"Exports contributed very little to national economic growth last year, and we are seeing very little growth, if any for 2008," Sergio Ortiz-Luis, president of the Philippine Exporters Confederation or Philexport said at an energy summit here.
In the first 11 months of last year, exports rose just 4.8 percent from a year before. The reduced target for the whole year is 8.0 percent.
Electronics exports, which accounted for 61.3 percent of total export earnings in November, fell to $2.42 billion from $2.54 billion a year earlier.
The Semiconductor and Electronics Industries in the Philippines or SEIPI said it is also bracing for a difficult year.
"We are anticipating demand to be weak in the first half of the year. We are just hoping that growth will, at best, be flat and won't get any worse or be negative," said SEIPI executive director Ernesto Santiago.
With exports last year weighed down by "a triple whammy of high electric rates, historic oil prices and a strong peso, nine percent of the country's exporters closed shop last year," said Luis of Philexport.
"While a recession in the US will be a drag on exports in the short-term, it is the high cost of power, triggered by a surge in crude oil prices, that has drastically eroded the viability of the exports sector," said Luis.
Electricity expenses make up about 15 percent of production costs of export manufacturing enterprises in the Philippines.
World oil prices were slightly higher Tuesday in Asian trade, hovering near $90 in a market focused on the fate of the US economy.
Luis said the Philippines has one of the highest electricity rates in Asia, next only to Japan.
The country's two biggest groups of exporters have been urging the Philippine government to take more concrete steps to make electricity prices more competitive.
"We hope that the government can seriously consider the exporter's plight. There is a need to address the issues of electric power quality and security, in addition to developing and tapping alternative or renewable energy sources," said Luis.
($1 = P40.69)
Monday, January 28, 2008
Yemen's Deals with Jihadists Unsettle the U.S.
This article gives a rare insight into U.S. and Al Qaeda operations in Yemen. Yemen is a hotbed of jihadism. Ironically as with many other jihadists they are in effect a left over from the fight against the Soviets and also socialists in Yemen itself. The local accomodation with radical Islamists sounds as if it actually worked after a fashion although a new breed of young jihadists regards the radicals who participate as traitors.
January 28, 2008
Yemen’s Deals With Jihadists Unsettle the U.S.
By ROBERT F. WORTH
SANA, Yemen — When the Yemeni authorities released a convicted terrorist of Al Qaeda named Jamal al-Badawi from prison last October, American officials were furious. Mr. Badawi helped plan the attack on the American destroyer Cole in 2000, in which 17 American sailors were killed.
But the Yemenis saw things differently. Mr. Badawi had agreed to help track down five other members of Al Qaeda who had escaped from prison, and was more useful to the government on the street than off, said a high-level Yemeni government official, who spoke on condition of anonymity. Mr. Badawi had also pledged his loyalty to Yemen’s president before being released, the official said.
The dispute over Mr. Badawi — whom the Yemenis quickly returned to prison after being threatened with a loss of aid — underscored a much broader disagreement over how to fight terrorism in Yemen, a particularly valuable recruiting ground and refuge for Islamist militants in the past two decades.
Yemeni officials say they have had considerable success co-opting jihadists like Mr. Badawi, often by releasing them from prison and helping them with money, schooling or jobs. They are required to sign a pledge not to carry out any attacks on Yemeni soil, often backed by guarantees from their tribe or family members. Many have taken part in an Islamic re-education effort led by religious scholars, now being copied on a wider scale in Saudi Arabia.
A number of these former jihadists have become government informants, helping to capture a new generation of younger, more dangerous Qaeda militants — some of them veterans of the war in Iraq — who refuse to recognize the Yemeni government. Others have become mediators, helping persuade escaped prisoners to surrender.
But American counterterrorism officials and even some Yemenis say the Yemeni government, more than others in the region, is in effect striking a deal that helps stop attacks here while leaving jihadists largely free to plan them elsewhere. They also say the Yemeni government caters too much to radical Islamist figures to improve its political standing, nourishing a culture that could ultimately breed more violence.
“Yemen is like a bus station — we stop some terrorists, and we send others on to fight elsewhere,” said Murad Abdul Wahed Zafir, a political analyst at the National Democratic Institute in Sana. “We appease our partners in the West, but we are not really helping.”
Uneasy Alliance With Jihadists
All parties agree that the situation is urgent. With a young, poor, and fast-growing population of 22 million, Yemen is rapidly approaching an economic and political crisis that could result in its becoming a failed state. The government is fighting a persistent insurgency in the north, oil supplies are dwindling, and the water table in the capital is expected (according to a World Bank estimate) to run out in two years. Like Afghanistan, Yemen has a weak government with strong tribes and mountainous terrain, and a vast weapons supply.
The Yemeni government argues that its approach is in keeping with their deeply conservative society, where Osama bin Laden and Saddam Hussein remain popular figures. Although a new American-trained commando unit has regularly captured and killed terrorists, officials say they must also show restraint with prisoners: taking a harder line or acceding to American demands to extradite people like Mr. Badawi (as the United States has asked) could provoke a violent backlash.
“The strategy is fighting terrorism, but we need space to use our own tactics, and our friends must understand us,” said Rashad Muhammad al-Alimi, Yemen’s interior minister.
Yemen’s uneasy partnership with jihadists dates back to the late 1980s, when it welcomed tens of thousands of returning Arab veterans of the war against the Soviets in Afghanistan. While other Arab countries, particularly Saudi Arabia, struggled with the question of how to accommodate those jihadists, Yemen was actively open to sheltering them, said Gregory Johnsen, a security analyst at the terrorism research group Jamestown Foundation. At the time, President Ali Abdullah Saleh saw the returning fighters as a useful military and ideological weapon against the restive socialists of southern Yemen.
When a brief civil war broke out in 1994, President Saleh sent thousands of jihadists into battle against the south. He also forged important ties with Yemeni Islamist clerical and political figures like Sheik Abdul Majid al-Zindani, a former mentor of Mr. bin Laden who has a broad popular following and has since been listed as a “specially designated global terrorist” by the United States and the United Nations.
Those ties persist today, despite American complaints. Some American officials say the influence of Islamists, and entrenched government corruption, may have made possible the spectacular escape of 23 Qaeda figures, including Mr. Badawi, from a well-guarded prison in the capital in February 2006. Yemeni officials blamed poor oversight for the escape, in which the prisoners are said to have tunneled their way to the bathroom of a neighboring mosque.
Finding a Balance After 2001
After the attacks of Sept. 11, 2001, Mr. Saleh flew to Washington and pledged full cooperation with American antiterrorism efforts. At home in Yemen, thousands of former “Afghan Arabs” were rounded up and imprisoned.
But Mr. Saleh was still sensitive to Islamic extremists, who remained a crucial domestic constituency. When the Pentagon leaked word of Yemeni collaboration in an American missile strike in 2002 that killed the suspected leader of Al Qaeda in Yemen, Mr. Saleh was furious.
That same year, Mr. Saleh hit on an idea that he hoped would satisfy both his American and Islamist partners: “al hiwar al fikri,” or intellectual dialogue. This was an effort to inculcate the idea that Islam, properly understood, does not condone terrorism. Sessions began with hundreds of former jihadists who remained in prison without charges.
“It came from the idea that terror depends on ideology, and that thought should be confronted with thought,” said Hamoud al Hetar, the cleric and judge who led the program.
A cleric would sit for several hours with three to seven prisoners, mostly outside the prison, and discuss Islamic law and ethics, Judge Hetar said during an interview at his home in Sana.
At first, the Saudis and others derided the idea as too soft. At the same time, many Yemeni religious scholars refused to participate out of fear that they would be assassinated by militants, Judge Hetar said. Gradually the program gained acceptance, and Saudi Arabia soon adopted its own version, including therapy and a more comprehensive reintegration program.
Some critics have dismissed the dialogue program, which lapsed in 2005 after terror attacks dropped off, as a sham in which inmates feigned conversion to get out of prison. But Nasser al-Bahri, a former driver for Mr. bin Laden who spent four years with Al Qaeda in Afghanistan, said it was more like a raw bargain: exempt Yemen from your jihad and you will be left alone.
“It changed their behavior, not their thoughts,” said Mr. Bahri, a cheerful, talkative 33-year-old who once went by the nom de guerre Abu Jandal. “Judge Hetar cannot cancel jihad. It is in the roots of our religion.”
Sitting on the floor of a bare living room in his Sana apartment, Mr. Bahri said the government helped him buy a taxi and pay for business school after his release in 2003. Although he says he still supports Al Qaeda’s global goals, he also urges other Islamists to avoid any violence in Yemen.
Ali Saleh, another former jihadist who went through Judge Hetar’s program while in prison, now serves as a mediator between the government and Islamists. He helped negotiate the surrender of several of the 23 men who escaped from prison in Sana in early 2006. In exchange, the government agreed to make concessions, including releasing the men after their surrender, he said.
“The government understands, in Yemen you must compromise to reach a solution,” Mr. Saleh said. “The Americans would like to put us all in jail. But if you do this, 10 men will become 20, 20 will become 100, and then — we will be an army.”
A More Violent Generation
Some former jihadists also work as informants for the government and have helped foil a number of attacks, Yemeni officials said.
There appears to be a limit, however, to the government’s ability to co-opt Islamists. A new, more violent generation of militants has emerged in Yemen, according to Yemeni officials and older members of the jihadist community.
Some of these younger men have fought in Iraq, and they refuse all dialogue, seeing Yemen’s government as illegitimate. They appear to have been responsible for the suicide bombing in Marib Province last July in which eight Spanish tourists were killed, and two other suicide attacks on oil installations in 2006. Recently, there have been warnings of more attacks in Yemen on Islamist Web sites.
“They opened a door we hoped would be closed forever,” Mr. Bahri said.
The younger men also see older figures like Mr. Bahri, despite his association with Mr. bin Laden, as traitors. Mr. Bahri said Yemeni security men had showed him a “death list” of 30 names written by members of this younger generation, with his name at the top.
Last summer, two Internet statements claiming to be from Al Qaeda in Yemen lamented that “some of the people abandoned their principles and turned to the government.” The statement accurately describes the mediating committee on which Ali Saleh serves, and goes on to say, “Those deserters became the government’s hands; some of them turned into their spies,” according to a translation provided by the SITE Institute.
Mr. Bahri said he has tried to reason with members of the younger generation of militants, but they refuse all dialogue. He and Mr. Saleh, the mediator, now carry a weapon at all times, and fear for their safety, Mr. Bahri said.
In addition to the threat of these younger militants, there is the broader question of whether Mr. Bahri and his friends are involved in terrorism outside of Yemen. Mr. Bahri still supports the goals of Al Qaeda, and he speaks admiringly of Yemenis who fought in Iraq.
Yemeni officials say they have stepped up efforts to prevent Yemeni men from traveling for jihad. But Mr. Bahri says he knows 10 or 15 men who fought in Iraq, including two who went through Judge Hetar’s program.
Asked what he did to advance the cause of Al Qaeda outside of Yemen, Mr. Bahri smiled, and said answering the question could be dangerous — but that not answering it could also expose him to risks, from a different group of people. After a pause, he said he merely prayed for Al Qaeda’s success.
Another veteran of the Afghan jihad, Ali Muhammad al-Kurdi, said in open court during the course of an unrelated terrorism trial in 2005 that he had trained two Yemeni men to fight in Iraq. He was never prosecuted for the claim, because it is not against Yemeni law.
“They went to Iraq and fought, and they were killed there,” said Mr. Kurdi, a soft-spoken 33-year-old, smiling at the thought, as he sat for an interview in a cafe in Old Sana.
January 28, 2008
Yemen’s Deals With Jihadists Unsettle the U.S.
By ROBERT F. WORTH
SANA, Yemen — When the Yemeni authorities released a convicted terrorist of Al Qaeda named Jamal al-Badawi from prison last October, American officials were furious. Mr. Badawi helped plan the attack on the American destroyer Cole in 2000, in which 17 American sailors were killed.
But the Yemenis saw things differently. Mr. Badawi had agreed to help track down five other members of Al Qaeda who had escaped from prison, and was more useful to the government on the street than off, said a high-level Yemeni government official, who spoke on condition of anonymity. Mr. Badawi had also pledged his loyalty to Yemen’s president before being released, the official said.
The dispute over Mr. Badawi — whom the Yemenis quickly returned to prison after being threatened with a loss of aid — underscored a much broader disagreement over how to fight terrorism in Yemen, a particularly valuable recruiting ground and refuge for Islamist militants in the past two decades.
Yemeni officials say they have had considerable success co-opting jihadists like Mr. Badawi, often by releasing them from prison and helping them with money, schooling or jobs. They are required to sign a pledge not to carry out any attacks on Yemeni soil, often backed by guarantees from their tribe or family members. Many have taken part in an Islamic re-education effort led by religious scholars, now being copied on a wider scale in Saudi Arabia.
A number of these former jihadists have become government informants, helping to capture a new generation of younger, more dangerous Qaeda militants — some of them veterans of the war in Iraq — who refuse to recognize the Yemeni government. Others have become mediators, helping persuade escaped prisoners to surrender.
But American counterterrorism officials and even some Yemenis say the Yemeni government, more than others in the region, is in effect striking a deal that helps stop attacks here while leaving jihadists largely free to plan them elsewhere. They also say the Yemeni government caters too much to radical Islamist figures to improve its political standing, nourishing a culture that could ultimately breed more violence.
“Yemen is like a bus station — we stop some terrorists, and we send others on to fight elsewhere,” said Murad Abdul Wahed Zafir, a political analyst at the National Democratic Institute in Sana. “We appease our partners in the West, but we are not really helping.”
Uneasy Alliance With Jihadists
All parties agree that the situation is urgent. With a young, poor, and fast-growing population of 22 million, Yemen is rapidly approaching an economic and political crisis that could result in its becoming a failed state. The government is fighting a persistent insurgency in the north, oil supplies are dwindling, and the water table in the capital is expected (according to a World Bank estimate) to run out in two years. Like Afghanistan, Yemen has a weak government with strong tribes and mountainous terrain, and a vast weapons supply.
The Yemeni government argues that its approach is in keeping with their deeply conservative society, where Osama bin Laden and Saddam Hussein remain popular figures. Although a new American-trained commando unit has regularly captured and killed terrorists, officials say they must also show restraint with prisoners: taking a harder line or acceding to American demands to extradite people like Mr. Badawi (as the United States has asked) could provoke a violent backlash.
“The strategy is fighting terrorism, but we need space to use our own tactics, and our friends must understand us,” said Rashad Muhammad al-Alimi, Yemen’s interior minister.
Yemen’s uneasy partnership with jihadists dates back to the late 1980s, when it welcomed tens of thousands of returning Arab veterans of the war against the Soviets in Afghanistan. While other Arab countries, particularly Saudi Arabia, struggled with the question of how to accommodate those jihadists, Yemen was actively open to sheltering them, said Gregory Johnsen, a security analyst at the terrorism research group Jamestown Foundation. At the time, President Ali Abdullah Saleh saw the returning fighters as a useful military and ideological weapon against the restive socialists of southern Yemen.
When a brief civil war broke out in 1994, President Saleh sent thousands of jihadists into battle against the south. He also forged important ties with Yemeni Islamist clerical and political figures like Sheik Abdul Majid al-Zindani, a former mentor of Mr. bin Laden who has a broad popular following and has since been listed as a “specially designated global terrorist” by the United States and the United Nations.
Those ties persist today, despite American complaints. Some American officials say the influence of Islamists, and entrenched government corruption, may have made possible the spectacular escape of 23 Qaeda figures, including Mr. Badawi, from a well-guarded prison in the capital in February 2006. Yemeni officials blamed poor oversight for the escape, in which the prisoners are said to have tunneled their way to the bathroom of a neighboring mosque.
Finding a Balance After 2001
After the attacks of Sept. 11, 2001, Mr. Saleh flew to Washington and pledged full cooperation with American antiterrorism efforts. At home in Yemen, thousands of former “Afghan Arabs” were rounded up and imprisoned.
But Mr. Saleh was still sensitive to Islamic extremists, who remained a crucial domestic constituency. When the Pentagon leaked word of Yemeni collaboration in an American missile strike in 2002 that killed the suspected leader of Al Qaeda in Yemen, Mr. Saleh was furious.
That same year, Mr. Saleh hit on an idea that he hoped would satisfy both his American and Islamist partners: “al hiwar al fikri,” or intellectual dialogue. This was an effort to inculcate the idea that Islam, properly understood, does not condone terrorism. Sessions began with hundreds of former jihadists who remained in prison without charges.
“It came from the idea that terror depends on ideology, and that thought should be confronted with thought,” said Hamoud al Hetar, the cleric and judge who led the program.
A cleric would sit for several hours with three to seven prisoners, mostly outside the prison, and discuss Islamic law and ethics, Judge Hetar said during an interview at his home in Sana.
At first, the Saudis and others derided the idea as too soft. At the same time, many Yemeni religious scholars refused to participate out of fear that they would be assassinated by militants, Judge Hetar said. Gradually the program gained acceptance, and Saudi Arabia soon adopted its own version, including therapy and a more comprehensive reintegration program.
Some critics have dismissed the dialogue program, which lapsed in 2005 after terror attacks dropped off, as a sham in which inmates feigned conversion to get out of prison. But Nasser al-Bahri, a former driver for Mr. bin Laden who spent four years with Al Qaeda in Afghanistan, said it was more like a raw bargain: exempt Yemen from your jihad and you will be left alone.
“It changed their behavior, not their thoughts,” said Mr. Bahri, a cheerful, talkative 33-year-old who once went by the nom de guerre Abu Jandal. “Judge Hetar cannot cancel jihad. It is in the roots of our religion.”
Sitting on the floor of a bare living room in his Sana apartment, Mr. Bahri said the government helped him buy a taxi and pay for business school after his release in 2003. Although he says he still supports Al Qaeda’s global goals, he also urges other Islamists to avoid any violence in Yemen.
Ali Saleh, another former jihadist who went through Judge Hetar’s program while in prison, now serves as a mediator between the government and Islamists. He helped negotiate the surrender of several of the 23 men who escaped from prison in Sana in early 2006. In exchange, the government agreed to make concessions, including releasing the men after their surrender, he said.
“The government understands, in Yemen you must compromise to reach a solution,” Mr. Saleh said. “The Americans would like to put us all in jail. But if you do this, 10 men will become 20, 20 will become 100, and then — we will be an army.”
A More Violent Generation
Some former jihadists also work as informants for the government and have helped foil a number of attacks, Yemeni officials said.
There appears to be a limit, however, to the government’s ability to co-opt Islamists. A new, more violent generation of militants has emerged in Yemen, according to Yemeni officials and older members of the jihadist community.
Some of these younger men have fought in Iraq, and they refuse all dialogue, seeing Yemen’s government as illegitimate. They appear to have been responsible for the suicide bombing in Marib Province last July in which eight Spanish tourists were killed, and two other suicide attacks on oil installations in 2006. Recently, there have been warnings of more attacks in Yemen on Islamist Web sites.
“They opened a door we hoped would be closed forever,” Mr. Bahri said.
The younger men also see older figures like Mr. Bahri, despite his association with Mr. bin Laden, as traitors. Mr. Bahri said Yemeni security men had showed him a “death list” of 30 names written by members of this younger generation, with his name at the top.
Last summer, two Internet statements claiming to be from Al Qaeda in Yemen lamented that “some of the people abandoned their principles and turned to the government.” The statement accurately describes the mediating committee on which Ali Saleh serves, and goes on to say, “Those deserters became the government’s hands; some of them turned into their spies,” according to a translation provided by the SITE Institute.
Mr. Bahri said he has tried to reason with members of the younger generation of militants, but they refuse all dialogue. He and Mr. Saleh, the mediator, now carry a weapon at all times, and fear for their safety, Mr. Bahri said.
In addition to the threat of these younger militants, there is the broader question of whether Mr. Bahri and his friends are involved in terrorism outside of Yemen. Mr. Bahri still supports the goals of Al Qaeda, and he speaks admiringly of Yemenis who fought in Iraq.
Yemeni officials say they have stepped up efforts to prevent Yemeni men from traveling for jihad. But Mr. Bahri says he knows 10 or 15 men who fought in Iraq, including two who went through Judge Hetar’s program.
Asked what he did to advance the cause of Al Qaeda outside of Yemen, Mr. Bahri smiled, and said answering the question could be dangerous — but that not answering it could also expose him to risks, from a different group of people. After a pause, he said he merely prayed for Al Qaeda’s success.
Another veteran of the Afghan jihad, Ali Muhammad al-Kurdi, said in open court during the course of an unrelated terrorism trial in 2005 that he had trained two Yemeni men to fight in Iraq. He was never prosecuted for the claim, because it is not against Yemeni law.
“They went to Iraq and fought, and they were killed there,” said Mr. Kurdi, a soft-spoken 33-year-old, smiling at the thought, as he sat for an interview in a cafe in Old Sana.
Philippine Philharmonic Orchestra needs new instruments
This is from the Daily Tribune. Perhaps the Philharmonic could receive money from the infamous fertilizer fund. Many urban politician received money from the agricultural fund so why not use it to grow the renowned symphony orchestra?
Philippine Philharmonic Orchestra: Continuously regenerating
By Maripet L. Poso, Staff Writer
SHE SAYS
Dinah S. Ventura
01/28/2008
An old trombone with its slide fastened by electrical tape is a sad sight even for non-musicians. It signifies deterioration, not just of the instrument itself, but of the music industry to which it belongs. And this is exactly what the Philippine Philharmonic Orchestra (PPO), the country’s leading orchestra and one of the Asia Pacific Region’s top musical ensembles, wants to keep from happening.
A recent survey on the condition of the PPO’s musical instruments revealed ratings that ranged from 0-3, with 0 being the lowest and 5, the highest. Considering the ideal national orchestra instrument ratings of 4-5, the PPO musicians must be really good at what they do, performing world-class concerts with musical instruments that are either inferior or worse, obsolete.
“Many of the instruments need to be replaced and repaired. As we all know, the quality of music produced is not only due to the talents of the musicians. No matter how good the musicians are, if the musical instruments are not in good condition, they can’t produce good music,” said Nestor Jardin, president of the Cultural Center of the Philippines (CCP), during a recent press conference held at the Instituto Cervantes.
To raise the much-needed funds for the replacement and repair of these instruments, the PPO with the help of Zara, the Spanish brand known for its stylish designs; Bvlgari, one of the global players in the luxury market, and ING Bank Manila, a foreign universal bank and a full branch of the ING Group, and through the initiation of Ms. Zenaida R. Tantoco, a member of the CCP Board of Trustees, is coming up with a benefit concert called La Musica Española on Jan. 29, at 8 p.m., at the Tanghalang Nicanor Abelardo (CCP Main Theatre).
To make the concert more special, the PPO will perform under the baton of Maestro Bernardo Adam Ferrero, a renowned composer and orchestra director from Valencia, Spain. Accompanied by his son, Ruben Adam, who will also be a guest violinist of the PPO, and his wife Amparo, Maestro Adam Ferrero will be coming to the country for the very first time as a guest conductor of the PPO.
With the instrument campaign estimated at P28 million and the proposed repair and maintenance program at P1 million annually, La Musica Española concert is intended to help raise funds, as the PPO had been doing continuously for the past years, to maintain its musical prowess in order to carry on its mission to promote Filipino culture in the national and the international scenes.
“We are lucky to have angels like Nedy who are helping us source the fund,” added Jardin.
Some of the fundraising events that Tantoco has initiated include a benefit concert in 2003 by jazz legend David Benoit, the Alexander Charriol exhibit/painting Sale in 2004, the Vienna Boys Choir Concert also in 2004, the Lacoste 12.12 Auction in 2005, and a generous donation by the San Francisco-Manila Sister City Committee led by Dennis Normandy made in 2006.
With all these efforts, a new tuba, a French horn, a bass trombone and three trumpets have been purchased and some repairs have been done in the past years. Apparently, however, these are not enough.
“I badly need a new, good and decent bow. My bow has lost its flexibility. I have a hard time with all the meticulous bow strokes,” said cellist Renato Lucas, the PPO’s principal cellist, who is regarded as one of the best cellists in the Asia-Pacific region.
“It is difficult to play an instrument with rotten parts that are glued by epoxy, very old keys that are so sharp they are like knives and deformed holes causing dissonant tones. It’s very hard to play,” lamented bassonist Adolfo Mendoza.
“The Yamaha trombone we are using today is absolutely in bad condition and overused. We need to have the best professional trombones to improve our sound,” Cornelio Ramos, principal trombone player, added.
Granted they have the gift and the calling, if their instruments are not at up to standards, their musical talents can only do so much.
With support from Stores Specialists Inc., Philippine Tatler, Instituto Cervantes, Embajada España Manila, Generalitat Valenciana of Spain and The Peninsula Manila, La Musica Española is slated on Jan. 29, 2008, 8 p.m. at the Tanghalang Nicanor Abelardo (CCP Main Theatre). Tickets are available at P2,000; P1,500; P500 and P300 at Ticketworld (Tel. No. 891-9999) and CCP Box Office (Tel. Nos. 832-3704 or 832-1125 loc 1409).
Philippine Philharmonic Orchestra: Continuously regenerating
By Maripet L. Poso, Staff Writer
SHE SAYS
Dinah S. Ventura
01/28/2008
An old trombone with its slide fastened by electrical tape is a sad sight even for non-musicians. It signifies deterioration, not just of the instrument itself, but of the music industry to which it belongs. And this is exactly what the Philippine Philharmonic Orchestra (PPO), the country’s leading orchestra and one of the Asia Pacific Region’s top musical ensembles, wants to keep from happening.
A recent survey on the condition of the PPO’s musical instruments revealed ratings that ranged from 0-3, with 0 being the lowest and 5, the highest. Considering the ideal national orchestra instrument ratings of 4-5, the PPO musicians must be really good at what they do, performing world-class concerts with musical instruments that are either inferior or worse, obsolete.
“Many of the instruments need to be replaced and repaired. As we all know, the quality of music produced is not only due to the talents of the musicians. No matter how good the musicians are, if the musical instruments are not in good condition, they can’t produce good music,” said Nestor Jardin, president of the Cultural Center of the Philippines (CCP), during a recent press conference held at the Instituto Cervantes.
To raise the much-needed funds for the replacement and repair of these instruments, the PPO with the help of Zara, the Spanish brand known for its stylish designs; Bvlgari, one of the global players in the luxury market, and ING Bank Manila, a foreign universal bank and a full branch of the ING Group, and through the initiation of Ms. Zenaida R. Tantoco, a member of the CCP Board of Trustees, is coming up with a benefit concert called La Musica Española on Jan. 29, at 8 p.m., at the Tanghalang Nicanor Abelardo (CCP Main Theatre).
To make the concert more special, the PPO will perform under the baton of Maestro Bernardo Adam Ferrero, a renowned composer and orchestra director from Valencia, Spain. Accompanied by his son, Ruben Adam, who will also be a guest violinist of the PPO, and his wife Amparo, Maestro Adam Ferrero will be coming to the country for the very first time as a guest conductor of the PPO.
With the instrument campaign estimated at P28 million and the proposed repair and maintenance program at P1 million annually, La Musica Española concert is intended to help raise funds, as the PPO had been doing continuously for the past years, to maintain its musical prowess in order to carry on its mission to promote Filipino culture in the national and the international scenes.
“We are lucky to have angels like Nedy who are helping us source the fund,” added Jardin.
Some of the fundraising events that Tantoco has initiated include a benefit concert in 2003 by jazz legend David Benoit, the Alexander Charriol exhibit/painting Sale in 2004, the Vienna Boys Choir Concert also in 2004, the Lacoste 12.12 Auction in 2005, and a generous donation by the San Francisco-Manila Sister City Committee led by Dennis Normandy made in 2006.
With all these efforts, a new tuba, a French horn, a bass trombone and three trumpets have been purchased and some repairs have been done in the past years. Apparently, however, these are not enough.
“I badly need a new, good and decent bow. My bow has lost its flexibility. I have a hard time with all the meticulous bow strokes,” said cellist Renato Lucas, the PPO’s principal cellist, who is regarded as one of the best cellists in the Asia-Pacific region.
“It is difficult to play an instrument with rotten parts that are glued by epoxy, very old keys that are so sharp they are like knives and deformed holes causing dissonant tones. It’s very hard to play,” lamented bassonist Adolfo Mendoza.
“The Yamaha trombone we are using today is absolutely in bad condition and overused. We need to have the best professional trombones to improve our sound,” Cornelio Ramos, principal trombone player, added.
Granted they have the gift and the calling, if their instruments are not at up to standards, their musical talents can only do so much.
With support from Stores Specialists Inc., Philippine Tatler, Instituto Cervantes, Embajada España Manila, Generalitat Valenciana of Spain and The Peninsula Manila, La Musica Española is slated on Jan. 29, 2008, 8 p.m. at the Tanghalang Nicanor Abelardo (CCP Main Theatre). Tickets are available at P2,000; P1,500; P500 and P300 at Ticketworld (Tel. No. 891-9999) and CCP Box Office (Tel. Nos. 832-3704 or 832-1125 loc 1409).
Crucial ally against Al Qaeda in Iraq wants fighters to be part of army and police
This is from the Independent. This shows the danger of the new policy that has dramatically reduced insurgent violence in parts of Iraq. The new allies are former Sunni insurgents. If they are "incorporated" in the army and police, many police and army units may in fact be under control of regional leaders. The majority Shia government fears just such a situation.
'If there is no change in three months, there will be war again'
By Patrick Cockburn in FallujahMonday, 28 January 2008
A crucial Iraqi ally of the United States in its recent successes in the country is threatening to withdraw his support and allow al-Qa'ida to return if his fighters are not incorporated into the Iraqi army and police.
"If there is no change in three months there will be war again," said Abu Marouf, the commander of 13,000 fighters who formerly fought the Americans. He and his men switched sides last year to battle al-Qa'ida and defeated it in its main stronghold in and around Fallujah.
"If the Americans think they can use us to crush al-Qa'ida and then push us to one side, they are mistaken," Abu Marouf told The Independent in an interview in a scantily furnished villa beside an abandoned cemetery near the village of Khandari outside Fallujah. He said that all he and his tribal following had to do was stand aside and al-Qa'ida's fighters would automatically come back. If they did so he might have to ally himself to a resurgent al-Qa'ida in order to "protect myself and my men".
Abu Marouf said he was confident that his forces controlled a swath of territory stretching east from Fallujah into Baghdad and includes what Americans called "the triangle of death" south-west of the capital. Even so his bodyguards, armed with AK-47 assault rifles, nervously watched the abandoned canals and reed beds around his temporary headquarters. Others craned over light machine guns in newly built watch towers. Several anti-Qa'ida tribal leaders have been killed by suicide bombers in recent weeks.
His threat is highly dangerous for the US and Iraqi government, neither of which made any headway in ending the Sunni insurgency against the US occupation for four years until the tribes of Anbar, the province in which Fallujah lies, turned against al-Qa'ida. They formed the Awakening movement, known in Arabic as al-Sahwah, of which Abu Marouf, whose full name is Karim Ismail Hassan al-Zubai, is a leading member.
The Iraqi Foreign Minister, Hoshyar Zebari, warned last week it would be "very dangerous" if the Awakening movement's 80,000 fighters were not absorbed into the army and police. "They are not that well organised and could easily be manipulated by al-Qa'ida," he said.
The Iraqi government fears ceding power to the Awakening movement which it sees as an American-funded Sunni militia, whose leaders are often former military or security officers from Saddam Hussein's regime and are unlikely to show long-term loyalty to the Shia and Kurdish-dominated administration.
Abu Marouf – a thin man aged about 40, with a short beard and wearing a brown suit and lilac tie – says he was "security officer" before the US invasion of 2003. Afterwards he became a resistance fighter and, though he will not say which guerrilla group he belonged to, local sources say he was a commander of the 1920 Revolution Brigades. He is also a member of the powerful Zubai tribe that was at the heart of anti-American resistance in an area which saw the fiercest fighting during the Sunni rebellion against the occupation.
He has a precise memory for dates and figures. He says that he started secretly working against al-Qa'ida at a meeting as long ago as 14 April 2005. He and his men gathered intelligence. Eight months later they started making attacks on al-Qa'ida, which was trying to monopolise power in Sunni areas.
"They cut off people's heads and put them on sticks, as if they were sheep. They cut off my brother's head with a razor. Thirteen of my relatives and 450 members of my tribe were killed by them," he said.
Part of Abu Marouf's force is paid for by the Americans. Ordinary fighters are believed to receive $350 (£175) a month and officers $1,200, but some receive no salary. He makes clear that he wants long-term jobs for himself and his followers and that "they must be long-term jobs". There is more than just money involved here. The Sunni tribal leaders want a share of power in Baghdad which they lost when Saddam Hussein was deposed.
The US calls the Awakening movement groups "Concerned Citizens", as if they were pacific householders heroically restoring law and order. In fact, the US has handed over Sunni areas to the guerrilla groups such as the 1920 Brigades and the Islamic Army who have been blowing up American solders since 2003.
This creates a serious problem for the Iraqi government and for the Americans themselves. Though Abu Marouf wants to join the government security forces, he volunteers that he considers the present Iraqi government of Nouri al-Maliki "the worst government in the world – his army has got 13 divisions, most of which are recruited from Shia militias controlled by Iran."
It is clear that Abu Marouf sees the Shia religious party takeover of government as something to be resisted.
The city of Fallujah – many of its buildings still in ruins since the US Marines stormed it in November 2004 – is peaceful compared with six months ago. Al-Qa'ida fighters, who once dominated it, have either gone or are keeping a low profile. The Americans have a large military camp on its outskirts. But the defeat of al-Qa'ida is not exactly a victory for the Iraqi government.
In the centre of the city is a much-attacked police station run by Colonel Feisal Ismail Hassan al-Zubai, an authoritative looking man, who is the elder brother of Abu Marouf. A career officer in Saddam Hussein's Special Forces since 1983, who fought in 11 battles against Iran, he was appointed police chief in December 2006. When I asked what he did previously he said: "I was fighting against the Americans." Asked why had he changed sides he replied: "When I compared the Americans to al-Qa'ida and the [Shia] militia, I chose the Americans."
Beside Colonel Feisal is a gold framed picture of himself as a young officer. "That was when I was a lieutenant in the real Iraqi army," he says. Behind him is the old Iraqi flag which the government is trying to replace.
He says: "The worst day of my life was when Saddam Hussein fell in 2003." He chokes himself off from giving an account of the first battle of Fallujah against the Americans in April 2004 in which he appears to have played a role. "The Americans now give me everything I want," he says.
There is no doubt that Abu Marouf and Colonel Feisal are far better people than the savage sectarian bigots of al-Qa'ida whom they have driven away.
But, far from America having won a victory in Iraq, violence has fallen largely because the United States has handed power to the guerrillas who fought it for so long.
If the Iraqi government pretends it has conquered its enemies and refuses to give men like Abu Marouf a share in power then Iraq will soon being facing another war
'If there is no change in three months, there will be war again'
By Patrick Cockburn in FallujahMonday, 28 January 2008
A crucial Iraqi ally of the United States in its recent successes in the country is threatening to withdraw his support and allow al-Qa'ida to return if his fighters are not incorporated into the Iraqi army and police.
"If there is no change in three months there will be war again," said Abu Marouf, the commander of 13,000 fighters who formerly fought the Americans. He and his men switched sides last year to battle al-Qa'ida and defeated it in its main stronghold in and around Fallujah.
"If the Americans think they can use us to crush al-Qa'ida and then push us to one side, they are mistaken," Abu Marouf told The Independent in an interview in a scantily furnished villa beside an abandoned cemetery near the village of Khandari outside Fallujah. He said that all he and his tribal following had to do was stand aside and al-Qa'ida's fighters would automatically come back. If they did so he might have to ally himself to a resurgent al-Qa'ida in order to "protect myself and my men".
Abu Marouf said he was confident that his forces controlled a swath of territory stretching east from Fallujah into Baghdad and includes what Americans called "the triangle of death" south-west of the capital. Even so his bodyguards, armed with AK-47 assault rifles, nervously watched the abandoned canals and reed beds around his temporary headquarters. Others craned over light machine guns in newly built watch towers. Several anti-Qa'ida tribal leaders have been killed by suicide bombers in recent weeks.
His threat is highly dangerous for the US and Iraqi government, neither of which made any headway in ending the Sunni insurgency against the US occupation for four years until the tribes of Anbar, the province in which Fallujah lies, turned against al-Qa'ida. They formed the Awakening movement, known in Arabic as al-Sahwah, of which Abu Marouf, whose full name is Karim Ismail Hassan al-Zubai, is a leading member.
The Iraqi Foreign Minister, Hoshyar Zebari, warned last week it would be "very dangerous" if the Awakening movement's 80,000 fighters were not absorbed into the army and police. "They are not that well organised and could easily be manipulated by al-Qa'ida," he said.
The Iraqi government fears ceding power to the Awakening movement which it sees as an American-funded Sunni militia, whose leaders are often former military or security officers from Saddam Hussein's regime and are unlikely to show long-term loyalty to the Shia and Kurdish-dominated administration.
Abu Marouf – a thin man aged about 40, with a short beard and wearing a brown suit and lilac tie – says he was "security officer" before the US invasion of 2003. Afterwards he became a resistance fighter and, though he will not say which guerrilla group he belonged to, local sources say he was a commander of the 1920 Revolution Brigades. He is also a member of the powerful Zubai tribe that was at the heart of anti-American resistance in an area which saw the fiercest fighting during the Sunni rebellion against the occupation.
He has a precise memory for dates and figures. He says that he started secretly working against al-Qa'ida at a meeting as long ago as 14 April 2005. He and his men gathered intelligence. Eight months later they started making attacks on al-Qa'ida, which was trying to monopolise power in Sunni areas.
"They cut off people's heads and put them on sticks, as if they were sheep. They cut off my brother's head with a razor. Thirteen of my relatives and 450 members of my tribe were killed by them," he said.
Part of Abu Marouf's force is paid for by the Americans. Ordinary fighters are believed to receive $350 (£175) a month and officers $1,200, but some receive no salary. He makes clear that he wants long-term jobs for himself and his followers and that "they must be long-term jobs". There is more than just money involved here. The Sunni tribal leaders want a share of power in Baghdad which they lost when Saddam Hussein was deposed.
The US calls the Awakening movement groups "Concerned Citizens", as if they were pacific householders heroically restoring law and order. In fact, the US has handed over Sunni areas to the guerrilla groups such as the 1920 Brigades and the Islamic Army who have been blowing up American solders since 2003.
This creates a serious problem for the Iraqi government and for the Americans themselves. Though Abu Marouf wants to join the government security forces, he volunteers that he considers the present Iraqi government of Nouri al-Maliki "the worst government in the world – his army has got 13 divisions, most of which are recruited from Shia militias controlled by Iran."
It is clear that Abu Marouf sees the Shia religious party takeover of government as something to be resisted.
The city of Fallujah – many of its buildings still in ruins since the US Marines stormed it in November 2004 – is peaceful compared with six months ago. Al-Qa'ida fighters, who once dominated it, have either gone or are keeping a low profile. The Americans have a large military camp on its outskirts. But the defeat of al-Qa'ida is not exactly a victory for the Iraqi government.
In the centre of the city is a much-attacked police station run by Colonel Feisal Ismail Hassan al-Zubai, an authoritative looking man, who is the elder brother of Abu Marouf. A career officer in Saddam Hussein's Special Forces since 1983, who fought in 11 battles against Iran, he was appointed police chief in December 2006. When I asked what he did previously he said: "I was fighting against the Americans." Asked why had he changed sides he replied: "When I compared the Americans to al-Qa'ida and the [Shia] militia, I chose the Americans."
Beside Colonel Feisal is a gold framed picture of himself as a young officer. "That was when I was a lieutenant in the real Iraqi army," he says. Behind him is the old Iraqi flag which the government is trying to replace.
He says: "The worst day of my life was when Saddam Hussein fell in 2003." He chokes himself off from giving an account of the first battle of Fallujah against the Americans in April 2004 in which he appears to have played a role. "The Americans now give me everything I want," he says.
There is no doubt that Abu Marouf and Colonel Feisal are far better people than the savage sectarian bigots of al-Qa'ida whom they have driven away.
But, far from America having won a victory in Iraq, violence has fallen largely because the United States has handed power to the guerrillas who fought it for so long.
If the Iraqi government pretends it has conquered its enemies and refuses to give men like Abu Marouf a share in power then Iraq will soon being facing another war
Sunday, January 27, 2008
Pakistan Rebuffs Secret U.S. Plea for C.I.A. Buildup
This is from the NY Times. Musharraf is no doubt wise to prevent U.S. intelligence from further infiltrating Pakistan. The U.S. already plotted to help Bhutto return although Musharraf it was also hoped to include Musharraf in a deal. However, the U.S. would like to have an even more pliant govt. in power if they can. Some in the administration don't seem to care a hoot for Musharaff's troubles. If Musharraf acted as the U.S. would like he would likely face civil war. Even as it is actions such as unmanned predators firing at buildings and alleged al Qaeda safe houses is provocative since there is always collateral damage.
Pakistan Rebuffs Secret U.S. Plea for C.I.A. Buildup
'President Pervez Musharraf dismissed proposals to allow the United States greater latitude to operate in tribal territories where militants are active, officials said.'
By ERIC SCHMITT and DAVID E. SANGER
Published: January 27, 2008
WASHINGTON — The top two American intelligence officials traveled secretly to Pakistan early this month to press President Pervez Musharraf to allow the Central Intelligence Agency greater latitude to operate in the tribal territories where Al Qaeda, the Taliban and other militant groups are all active, according to several officials who have been briefed on the visit.
But in the unannounced meetings on Jan. 9 with the two American officials — Mike McConnell, the director of national intelligence, and Gen. Michael V. Hayden, the C.I.A. director — Mr. Musharraf rebuffed proposals to expand any American combat presence in Pakistan, either through unilateral covert C.I.A. missions or by joint operations with Pakistani security forces.
Instead, Pakistan and the United States are discussing a series of other joint efforts, including increasing the number and scope of missions by armed Predator surveillance aircraft over the tribal areas, and identifying ways that the United States can speed information about people suspected of being militants to Pakistani security forces, officials said.
American and Pakistani officials have questioned each other in recent months about the quality and time lines of information that the United States has given to Pakistan to use in focusing on those extremists. American officials have complained that the Pakistanis are not seriously pursuing Al Qaeda in the region.
The Jan. 9 meetings, the first visit with Mr. Musharraf by senior administration officials since the assassination of Benazir Bhutto, also included the new army chief, Gen. Ashfaq Parvez Kayani, and the director of Pakistan’s leading military intelligence agency, Lt. Gen. Nadeem Taj. American officials said the visit was prompted by an increasing sense of urgency at the highest levels of the United States government that Al Qaeda and the Taliban are intensifying efforts to destabilize the Pakistani government.
The C.I.A. has fired missiles from Predator aircraft in the tribal areas several times, with varying degrees of success. Intelligence officials said they believed that in January 2006 an airstrike narrowly missed killing Ayman al-Zawahri, the second-ranking Qaeda leader, who had attended a dinner in Damadola, a Pakistani village.
Pakistani authorities, in interviews, say they have more than 100,000 troops operating in the region, including a sizable force conducting what they said was a major offensive in South Waziristan. But in the White House, the Pentagon and the C.I.A., frustrations remain high, and there is concern that Mr. Musharraf’s political problems will distract him from what the administration regards as its last chance to take aggressive action.
Despite the insistence of administration officials that the United States and Pakistan have a common goal in fighting Al Qaeda, Mr. Musharraf has made clear in public proclamations that it is far from his first priority. At the Davos World Economic Forum in Switzerland last week, Mr. Musharraf said several times that the 100,000 Pakistani troops that he said were now along the border were hunting for Taliban extremists and “miscreants,” but he also said there was no particular effort being put into the search for Qaeda fighters.
In Washington, however, the Bush administration has said that fighting terrorists, chiefly Al Qaeda, is the primary purpose of the $10 billion in American aid that has been sent to Pakistan, mostly for reimbursements for the cost of patrolling the tribal areas. President Bush has often praised Mr. Musharraf for fighting terrorism, pointing out that Al Qaeda has tried to kill the Pakistani leader. But White House officials were silent when Mr. Musharraf said this week that his efforts were focused on the Taliban, and that the main problem the United States faced was in Afghanistan, not Pakistan.
Accounts of the discussions between Mr. Musharraf and the intelligence officials were provided by American and Pakistani officials over the past two weeks after The New York Times inquired about the secret trip. While officials confirmed some details of the discussion, much remains unknown about the continuing dialogue between Islamabad and Washington.
The trip by Mr. McConnell and General Hayden, a 14,000-mile over-and-back visit for one day of discussions, occurred just five days after senior administration officials debated new strategies for dealing with Pakistan. No decisions were made at that meeting of the National Security Council, which gathered all of Mr. Bush’s top national security officials but not the president.
In the ensuing three weeks, however, the debate appeared to be intensifying, as senior American officials said they believed that American forces — whether as combat troops or trainers — could enhance the efforts of Pakistan’s military in the mountainous and lawless Federally Administered Tribal Areas.
“The purpose of the mission,” a senior official said, “was to convince Musharraf that time is ticking away,” and that the increased attacks on Pakistan would ultimately undermine his effort to stay in office.
Other officials said that recent intelligence analysis indicated that Al Qaeda was now operating in the tribal areas with an impunity similar to the freedom that it had in Afghanistan before the attacks on Sept. 11, 2001.
The C.I.A. operatives in Afghanistan and the covert Special Operations forces there have made little secret of their desire to move into the tribal areas with or without Mr. Musharraf’s explicit approval. In the administration, there has been discussion of whether Mr. Bush should give orders to allow them more latitude. Mr. Musharraf has explicitly rejected that, and within days after Mr. McConnell and General Hayden’s departure, he told a Singapore newspaper that any unilateral action by the United States would be regarded as an invasion. In Davos, he dismissed the idea that Americans could be effective in the tribal areas.
On Thursday, Defense Secretary Robert M. Gates said the United States was willing to send combat troops to Pakistan to conduct joint operations against Al Qaeda and other militants if the Pakistani government asked for American help. Mr. Gates said that Pakistan had not requested American assistance, and that any American troops sent to Pakistan would likely be assigned solely to train Pakistani forces. The top American commander in the region, Adm. William J. Fallon, visited Pakistan last Tuesday to discuss counterterrorism issues with senior Pakistani officials, including General Kayani.
American and Pakistani spokesmen confirmed that the meetings between Mr. Musharraf and American intelligence officials took place, but they declined to offer any details. Pakistan’s ambassador to the United States, Mahmud Ali Durrani, said in an interview that the meetings were about “improving coordination, discussing the war on terror, and filling the gaps between intelligence and operations,” but he declined to provide details.
Last Tuesday, the State Department’s counterterrorism chief, Lt. Gen. Dell L. Dailey, echoed some of those concerns, telling reporters that there were gaps in what the United States knew about the threat in the tribal areas. “We don’t have enough information about what’s going on there,” said General Dailey, who retired from the Army with extensive experience in military Special Operations. “Not on Al Qaeda. Not on foreign fighters. Not on the Taliban.”
In dealing with the American requests, Mr. Musharraf is conducting a delicate balancing act. American officials contend that now, more than ever, he recognizes the need to step up the battle against extremists who are seeking to topple his government. But he also believes that if American forces are discovered operating in Pakistan, the backlash will be more than he can control, especially because the Taliban and Al Qaeda are trying to cast him as a pawn of Washington. One result appears to be a compromise: Mr. Musharraf is willing, they say, to accept training, equipment, and technical help, but has insisted that no Americans get involved in ground operations.
Pakistani officials insist they are taking the militant threat seriously and have completed major operations in the Swat Valley to drive out extremists. In the past few days, about 1,000 Pakistan Army troops and Frontier Corps paramilitary forces have also begun a three-pronged attack against the South Waziristan stronghold of Baitullah Mehsud, a militant leader with links to Al Qaeda who is the main suspect in the assassination of Ms. Bhutto.
Ismail Khan contributed reporting from Peshawar, Pakistan.
Pakistan Rebuffs Secret U.S. Plea for C.I.A. Buildup
'President Pervez Musharraf dismissed proposals to allow the United States greater latitude to operate in tribal territories where militants are active, officials said.'
By ERIC SCHMITT and DAVID E. SANGER
Published: January 27, 2008
WASHINGTON — The top two American intelligence officials traveled secretly to Pakistan early this month to press President Pervez Musharraf to allow the Central Intelligence Agency greater latitude to operate in the tribal territories where Al Qaeda, the Taliban and other militant groups are all active, according to several officials who have been briefed on the visit.
But in the unannounced meetings on Jan. 9 with the two American officials — Mike McConnell, the director of national intelligence, and Gen. Michael V. Hayden, the C.I.A. director — Mr. Musharraf rebuffed proposals to expand any American combat presence in Pakistan, either through unilateral covert C.I.A. missions or by joint operations with Pakistani security forces.
Instead, Pakistan and the United States are discussing a series of other joint efforts, including increasing the number and scope of missions by armed Predator surveillance aircraft over the tribal areas, and identifying ways that the United States can speed information about people suspected of being militants to Pakistani security forces, officials said.
American and Pakistani officials have questioned each other in recent months about the quality and time lines of information that the United States has given to Pakistan to use in focusing on those extremists. American officials have complained that the Pakistanis are not seriously pursuing Al Qaeda in the region.
The Jan. 9 meetings, the first visit with Mr. Musharraf by senior administration officials since the assassination of Benazir Bhutto, also included the new army chief, Gen. Ashfaq Parvez Kayani, and the director of Pakistan’s leading military intelligence agency, Lt. Gen. Nadeem Taj. American officials said the visit was prompted by an increasing sense of urgency at the highest levels of the United States government that Al Qaeda and the Taliban are intensifying efforts to destabilize the Pakistani government.
The C.I.A. has fired missiles from Predator aircraft in the tribal areas several times, with varying degrees of success. Intelligence officials said they believed that in January 2006 an airstrike narrowly missed killing Ayman al-Zawahri, the second-ranking Qaeda leader, who had attended a dinner in Damadola, a Pakistani village.
Pakistani authorities, in interviews, say they have more than 100,000 troops operating in the region, including a sizable force conducting what they said was a major offensive in South Waziristan. But in the White House, the Pentagon and the C.I.A., frustrations remain high, and there is concern that Mr. Musharraf’s political problems will distract him from what the administration regards as its last chance to take aggressive action.
Despite the insistence of administration officials that the United States and Pakistan have a common goal in fighting Al Qaeda, Mr. Musharraf has made clear in public proclamations that it is far from his first priority. At the Davos World Economic Forum in Switzerland last week, Mr. Musharraf said several times that the 100,000 Pakistani troops that he said were now along the border were hunting for Taliban extremists and “miscreants,” but he also said there was no particular effort being put into the search for Qaeda fighters.
In Washington, however, the Bush administration has said that fighting terrorists, chiefly Al Qaeda, is the primary purpose of the $10 billion in American aid that has been sent to Pakistan, mostly for reimbursements for the cost of patrolling the tribal areas. President Bush has often praised Mr. Musharraf for fighting terrorism, pointing out that Al Qaeda has tried to kill the Pakistani leader. But White House officials were silent when Mr. Musharraf said this week that his efforts were focused on the Taliban, and that the main problem the United States faced was in Afghanistan, not Pakistan.
Accounts of the discussions between Mr. Musharraf and the intelligence officials were provided by American and Pakistani officials over the past two weeks after The New York Times inquired about the secret trip. While officials confirmed some details of the discussion, much remains unknown about the continuing dialogue between Islamabad and Washington.
The trip by Mr. McConnell and General Hayden, a 14,000-mile over-and-back visit for one day of discussions, occurred just five days after senior administration officials debated new strategies for dealing with Pakistan. No decisions were made at that meeting of the National Security Council, which gathered all of Mr. Bush’s top national security officials but not the president.
In the ensuing three weeks, however, the debate appeared to be intensifying, as senior American officials said they believed that American forces — whether as combat troops or trainers — could enhance the efforts of Pakistan’s military in the mountainous and lawless Federally Administered Tribal Areas.
“The purpose of the mission,” a senior official said, “was to convince Musharraf that time is ticking away,” and that the increased attacks on Pakistan would ultimately undermine his effort to stay in office.
Other officials said that recent intelligence analysis indicated that Al Qaeda was now operating in the tribal areas with an impunity similar to the freedom that it had in Afghanistan before the attacks on Sept. 11, 2001.
The C.I.A. operatives in Afghanistan and the covert Special Operations forces there have made little secret of their desire to move into the tribal areas with or without Mr. Musharraf’s explicit approval. In the administration, there has been discussion of whether Mr. Bush should give orders to allow them more latitude. Mr. Musharraf has explicitly rejected that, and within days after Mr. McConnell and General Hayden’s departure, he told a Singapore newspaper that any unilateral action by the United States would be regarded as an invasion. In Davos, he dismissed the idea that Americans could be effective in the tribal areas.
On Thursday, Defense Secretary Robert M. Gates said the United States was willing to send combat troops to Pakistan to conduct joint operations against Al Qaeda and other militants if the Pakistani government asked for American help. Mr. Gates said that Pakistan had not requested American assistance, and that any American troops sent to Pakistan would likely be assigned solely to train Pakistani forces. The top American commander in the region, Adm. William J. Fallon, visited Pakistan last Tuesday to discuss counterterrorism issues with senior Pakistani officials, including General Kayani.
American and Pakistani spokesmen confirmed that the meetings between Mr. Musharraf and American intelligence officials took place, but they declined to offer any details. Pakistan’s ambassador to the United States, Mahmud Ali Durrani, said in an interview that the meetings were about “improving coordination, discussing the war on terror, and filling the gaps between intelligence and operations,” but he declined to provide details.
Last Tuesday, the State Department’s counterterrorism chief, Lt. Gen. Dell L. Dailey, echoed some of those concerns, telling reporters that there were gaps in what the United States knew about the threat in the tribal areas. “We don’t have enough information about what’s going on there,” said General Dailey, who retired from the Army with extensive experience in military Special Operations. “Not on Al Qaeda. Not on foreign fighters. Not on the Taliban.”
In dealing with the American requests, Mr. Musharraf is conducting a delicate balancing act. American officials contend that now, more than ever, he recognizes the need to step up the battle against extremists who are seeking to topple his government. But he also believes that if American forces are discovered operating in Pakistan, the backlash will be more than he can control, especially because the Taliban and Al Qaeda are trying to cast him as a pawn of Washington. One result appears to be a compromise: Mr. Musharraf is willing, they say, to accept training, equipment, and technical help, but has insisted that no Americans get involved in ground operations.
Pakistani officials insist they are taking the militant threat seriously and have completed major operations in the Swat Valley to drive out extremists. In the past few days, about 1,000 Pakistan Army troops and Frontier Corps paramilitary forces have also begun a three-pronged attack against the South Waziristan stronghold of Baitullah Mehsud, a militant leader with links to Al Qaeda who is the main suspect in the assassination of Ms. Bhutto.
Ismail Khan contributed reporting from Peshawar, Pakistan.
Discontent grows in Iraq over new national flag
This is from wiredispatch. New flags seem to always cause trouble. Once earlier a new national flag was introduced that was rejected by almost everyone. However, the Kurds refuse to fly the old flag because they associate it with Saddam. Even though this flag is very much like the old one it deletes the three stars associated with the Baath party representing freedom, unity, and socialism. The deletion makes good sense to me since Iraq is neither free, unified, nor socialist.
Discontent grows in Iraq over new national flag
Dean YatesReuters North American News Service
Jan 26, 2008 04:21 EST
BAGHDAD, Jan 26 (Reuters) - The Iraqi parliament's move to adopt a new, temporary national flag has provoked an outcry, with one major province refusing to fly it and ordinary Iraqis attaching the old flag to their cars in a silent protest.
Iraqis have flooded chat rooms on the Internet with criticism of this week's decision, which had long been demanded by the Kurdish minority who say the Saddam Hussein-era banner was a reminder of his brutality.
Many Iraqi Arabs disagree. They see the old flag as having little to do with Saddam, a Sunni Arab, but as one under which countless soldiers died fighting for in various wars.
"It's shameful. Thousands of Iraqis lost their lives so this flag could fly ... Changing the flag ignores their sacrifice," said one Iraqi in a comment posted on an Arab chat room.
In fact, the new flag is very similar to the old one.
It is still red, white and black, but three green stars in the centre representing unity, freedom and socialism, the motto of Saddam's now outlawed Baath party, have been removed.
The phrase Allahu Akbar (God is Greatest), added in green Arabic script on Saddam's orders during the 1991 Gulf War, remains, but no longer in his handwriting.
The provincial council in western Anbar province and leaders of a council of tribal sheikhs that have allied with U.S. forces in the vast region have decided not to fly the new flag, the U.S.-backed al-Hurra television station reported on Saturday.
Officials from Anbar's provincial council could not be reached for comment, but officials in Falluja, one of the key cities in the province and once a Sunni Arab insurgent stronghold, expressed hostility to the new flag.
"This is a disaster ... I am using the old flag in my office and at home," the mayor of Falluja, Saad Rasheed, told Reuters, adding he would fly the new one only if the Anbar provincial council decided to do so.
A long-running debate over whether to change the flag had been given urgency by a planned pan-Arab meeting of politicians in Iraq's autonomous Kurdistan on March 10. Kurdish officials had refused to fly the old flag, which is banned in Kurdistan.
The new flag will last for only one year, while debate will continue on what the final banner should look like.
SYMBOLICALLY IMPORTANT
Some MPs have said Tuesday's parliamentary vote was symbolically important, changing a flag first flown after a coup by the Baath party in 1963. Saddam formally took power in 1979.
Sheikh Efan al-Issawi, a tribal leader in Falluja, said U.S. soldiers had asked him if he would fly the new flag.
"I told them we will use the old Iraqi flag because it represents the unity of Iraq. We do not believe it represents a certain ruler," he said, referring to Saddam.
Kurds associate the old flag with Saddam's genocidal Anfal campaign against them in the late 1980s in which tens of thousands of people were bombed, shot and gassed.
Many Iraqis have objected to the Kurds forcing the change. In Baghdad, some motorists have fixed the old flag to their car antennas.
"They (the Kurds) say Saddam made it, but he did not. We refuse to change the flag because it represents us all," said Amir Saadoun, a resident of Baghdad. (Additional reporting by Ahmed Rasheed, Aws Qusay and Waleed Ibrahim; Editing by Richard Balmforth)
Discontent grows in Iraq over new national flag
Dean YatesReuters North American News Service
Jan 26, 2008 04:21 EST
BAGHDAD, Jan 26 (Reuters) - The Iraqi parliament's move to adopt a new, temporary national flag has provoked an outcry, with one major province refusing to fly it and ordinary Iraqis attaching the old flag to their cars in a silent protest.
Iraqis have flooded chat rooms on the Internet with criticism of this week's decision, which had long been demanded by the Kurdish minority who say the Saddam Hussein-era banner was a reminder of his brutality.
Many Iraqi Arabs disagree. They see the old flag as having little to do with Saddam, a Sunni Arab, but as one under which countless soldiers died fighting for in various wars.
"It's shameful. Thousands of Iraqis lost their lives so this flag could fly ... Changing the flag ignores their sacrifice," said one Iraqi in a comment posted on an Arab chat room.
In fact, the new flag is very similar to the old one.
It is still red, white and black, but three green stars in the centre representing unity, freedom and socialism, the motto of Saddam's now outlawed Baath party, have been removed.
The phrase Allahu Akbar (God is Greatest), added in green Arabic script on Saddam's orders during the 1991 Gulf War, remains, but no longer in his handwriting.
The provincial council in western Anbar province and leaders of a council of tribal sheikhs that have allied with U.S. forces in the vast region have decided not to fly the new flag, the U.S.-backed al-Hurra television station reported on Saturday.
Officials from Anbar's provincial council could not be reached for comment, but officials in Falluja, one of the key cities in the province and once a Sunni Arab insurgent stronghold, expressed hostility to the new flag.
"This is a disaster ... I am using the old flag in my office and at home," the mayor of Falluja, Saad Rasheed, told Reuters, adding he would fly the new one only if the Anbar provincial council decided to do so.
A long-running debate over whether to change the flag had been given urgency by a planned pan-Arab meeting of politicians in Iraq's autonomous Kurdistan on March 10. Kurdish officials had refused to fly the old flag, which is banned in Kurdistan.
The new flag will last for only one year, while debate will continue on what the final banner should look like.
SYMBOLICALLY IMPORTANT
Some MPs have said Tuesday's parliamentary vote was symbolically important, changing a flag first flown after a coup by the Baath party in 1963. Saddam formally took power in 1979.
Sheikh Efan al-Issawi, a tribal leader in Falluja, said U.S. soldiers had asked him if he would fly the new flag.
"I told them we will use the old Iraqi flag because it represents the unity of Iraq. We do not believe it represents a certain ruler," he said, referring to Saddam.
Kurds associate the old flag with Saddam's genocidal Anfal campaign against them in the late 1980s in which tens of thousands of people were bombed, shot and gassed.
Many Iraqis have objected to the Kurds forcing the change. In Baghdad, some motorists have fixed the old flag to their car antennas.
"They (the Kurds) say Saddam made it, but he did not. We refuse to change the flag because it represents us all," said Amir Saadoun, a resident of Baghdad. (Additional reporting by Ahmed Rasheed, Aws Qusay and Waleed Ibrahim; Editing by Richard Balmforth)
Saturday, January 26, 2008
Is China de-coupled from the US economy?
These are two articles on the Chinese economy and the effect of a US downturn on its economic growth. Even pessimistic projections place Chinese economic growth at over 9 per cent this year, certainly not much like a recession. Up until now China was worried about growing too quickly. With its environmental problems a slow-down is probably positive and it may be helpful in terms of domestic consumption versus export. The first article is from the Wall Stree Journal.
OnlineJanuary 24, 2008China Turns Its Attention To Maintaining MomentumBy ANDREW BATSONJanuary 24, 2008BEIJING -- Even as China reported today a second year of annual growthabove 11%, the prospect of a U.S.-led global economic slowdown lookedlikely to force a shift in priorities: from curbing the boom tosustaining momentum.The government wants to generate 10 million urban jobs this year.Delivering that is likely to mean a sharper focus on the domesticeconomy, after a period when trade has been a big growth driver.China's export engine started to slow near the end of the year, andthe wider effects of that are already being felt. Economic growthpeaked at 11.9% in the second quarter, then eased to 11.5% in thethird. In the fourth quarter, the economy grew 11.2%, China's NationalBureau of Statistics said today in Beijing. For all of 2007, grossdomestic product expanded 11.4%, the bureau said.Some exporters, seeing orders from the U.S. fall off, are planning totrim staff, which could feed into a broader impact on households andconsumer spending. That is happening even as inflation in Chinaremains high, and as drops in stock markets and property prices alsothreaten to erode savings."The economic and financial conditions at home and abroad will be morecomplicated in 2008, and China is facing tougher challenges insustainable economic and financial development," Jiang Dingzhi, vicechairman of the China Banking Regulatory Commission, said this week.Top leaders are now still focused on combating inflation that reachednearly 5% in 2007. They have resorted to freezes in prices ofelectricity and fuels, and price controls on some foods. Thatinflation's persistence limits the government's ability to lift theeconomy through measures like interest-rate cuts.That could change quickly if inflation moderates and the U.S. andEurope continue to take a turn for the worse. "I think the governmenthas already started to pay attention to the possibility of a U.S.recession," says Zuo Xiaolei, chief economist for China GalaxySecurities in Beijing. Though even the most pessimistic forecasts callfor China's growth to ease to 9% or so this year, that would be asharp relative slowdown. "They should stimulate domestic consumptionto compensate for the loss of external demand," she says.Indeed, Chinese authorities have a track record of respondingaggressively to external economic slowdowns. In 1998, during the Asianfinancial crisis, a huge influx of government cash helped keep theeconomy growing by nearly 8%. Yet such efforts to boost the economyalso carry the risk that China could end up in a damaging downturnwhen the boost runs out.A boom in construction of housing, infrastructure and new factorieshas been the major driving force of China's expansion in recent years.Such investment has been so fast that many officials worry that moreis being built than is really needed. To avoid excess capacity, thegovernment has repeatedly moved to curb investment and warned thatfuture growth will have to be less reliant on such spending. But thoseconcerns may fall by the wayside if the leadership decides moreinfrastructure projects are needed to offset weaker exports."If the major economies do retrench fairly heavily, then maintaining adegree of growth that is consistent with social stability will requirea boost in construction and investment," says Glenn Maguire, Asiaeconomist for Societe Generale. A concrete increase in jobs could welloutweigh the more abstract worry of excess capacity or wastedinvestment. So, he says, "We may see a temporary pause in this desirefor more balanced growth."There is plenty of such spending under way. China's Ministry ofRailways earlier this month announced a major step-up in constructionof new railroads this year, with official plans calling for spendingabout $41 billion to lay 7,820 kilometers of new track. And withChina's cities growing by 18 million people a year, according toUnited Nations estimates, it wouldn't be difficult to speed upconstruction of housing and public works. About 10 major cities,including Beijing but also places like Chengdu, Wuhan and Guangzhou,are now building or expanding subway systems -- but there are severalothers whose plans are still waiting for approval.Similarly, most analysts expect fewer of the tax and regulatorychanges that were pushed through last year to limit exports of someproducts, mostly raw materials or those whose manufacture generateshigh pollution. Such measures were a response to the problems of thewide trade surplus, which had brought political friction with the U.S.and Europe, and flooded banks with cash they were ill-equipped todeploy properly.Yet as the U.S. economy has weakened, official talk of curbing thetrade surplus has subsided. Export growth slowed from about 29% in thefirst half of 2007 to around 22% in the second half, and thegovernment is once again concerned about aiding exporters. "Companies'exports are facing new pressure ... the task of stabilizing exports isvery heavy," Minister of Commerce Chen Deming said in a speech lastweek.A mild global slowdown could actually ease some of China's recenteconomic problems: domestic food prices that are being pushed up inpart by tight global agricultural markets, and a banking systemflooded with cash from an ever-expanding trade surplus. Governmentthink tanks are forecasting only a modest slowdown in economic growththis year, in the range of 10% to 11%, which is considered desirablegiven the strains that growth in excess of 11% has brought.But a big shock to the export sector that leads to an increase inunemployment would be a different matter."Although the current slowdown in export growth helps alleviate thetrade surplus and external imbalances, our nation still faces greatemployment pressures," argues Fan Caiyue, an economist for theNational Development and Reform Commission, in an article this week."We still need to maintain a certain amount of export growth, so ifexports substantially decline, it is not beneficial to maintainingstable and fast growth in our nation's economy."To reduce China's vulnerability to trade fluctuations and investmentcycles, the government over the past couple of years also has beentrying to encourage its consumers to spend more and save less. Yetwhile public-works projects can start up quickly, changing spendinghabits can take longer, and there hasn't yet been a big acceleration.After accounting for the effects of inflation, retail sales were up12.8% last year through November, little changed from the 12.7% pacein 2006.This year, officials are continuing to roll out policies designed toput more money in consumers' pockets, like higher minimum wages, andthey are continuing to expand new health-care and social-securityprograms to reduce the burden of those costs.
Here is the second article from the Economist:
An independent streakJan 24th 2008 HONG KONG>From The Economist print editionINVESTORS were until recently big fans of the "decoupling" theory, thenotion that Asian economies can shrug off an American recession. This week'splunge in share prices, at one point taking the MSCI Emerging Asia Indexdown 25% from its October high, suggests they have changed their minds. Butthe fact that their stockmarkets are still coupled does not mean that theireconomies will follow America over a cliff.Decoupling was always a misnomer if it implied that an American recessionwould have no impact in the East. Exports and hence profits would certainlybe squeezed; some fear Japan may even be tipping back into recession.Instead, the real argument in the rest of Asia was that it would suffer lessthan in previous American downturns.As well as hitting exports, America's troubles could also affect emergingAsia through financial channels. Its exposure to the subprime mess isthought to be smaller than that of American or European banks. Even so,Chinese bank shares tumbled this week on reports that they would have tomake bigger write-downs on their holdings of American subprime securities.And if shares slide further as global investors flee from risky assets, thiscould dampen business and consumer confidence in the region.Some Asian economies are more vulnerable than others. Singapore, Hong Kongand Malaysia are the most exposed, with exports to America equivalent to 20%or more of their GDPs, compared with only 8% in China and 2% in India. Thereare already some ominous signs. Singapore's exports to America are down by11% over the past year, whereas Malaysia's fell by 16%. Exports to otheremerging economies and to the European Union surged, so total exports stillgrew by 6% in both economies. But that was much slower than at the start of2007, and the worry now is that demand from Europe has started to flag.The growth in China's exports to America slowed to only 1% (in yuan terms)in the year to December from over 20% in late 2006. So far the impact on GDPhas been modest. Figures published on January 24th showed that China's GDPgrew by a sizzling 11.2% in the year to the fourth quarter, down from 11.5%in the previous three months. Most economists expect growth to slow to astill-healthy 9-10% this year, but there are growing concerns that newgovernment limits on bank lending risk choking the economy.China's economy would probably still expand by around 8-9% even if exportgrowth dried up. During the 2001 American recession China's GDP growthbarely slowed. In contrast, Hong Kong, Singapore, Taiwan and Malaysiasuffered full-blown recessions, with growth rates falling by more than tenpercentage points from peak to trough. America's slump is likely to bedeeper than in 2001 and Asia is now more integrated into the global economythan it used to be. Doomsters conclude, therefore, that these economiescould be hit even harder this time.The main reasons to be more optimistic are that domestic demand (consumerspending and investment) is likely to remain stronger and that governmentshave more flexibility to offset America's malaise. Last year, despite aslowdown in America's imports, most Asian economies grew faster as domesticdemand sped up everywhere except Thailand. Robert Prior-Wandesforde, aneconomist at HSBC, says that those who argue that Asia cannot decouple fromAmerica are ignoring the fact that they already have. Take Malaysia: itsexports to America plunged, yet its GDP growth quickened from 5.7% at theend of 2006 to 6.7% in the third quarter of last year.Contrary to the popular view that Asia's meltdown during the 2001 recessionwas entirely due to a slump in exports, Peter Redward, at Barclays Capital,argues that a fall in investment played a bigger role. Too much debt andexcess capacity weighed down firms, particularly in the electronicsindustry, which was at the heart of the American recession. Today firms arein much better shape. Capacity utilisation is high across the region;outside China, investment as a share of GDP is historically low; companybalance-sheets are stronger and real interest rates are low. Firms aretherefore less likely to slash investment than in 2001.Slowing exports will affect domestic spending. But macroeconomicfundamentals are much healthier in East Asia these days. Largeforeign-exchange reserves make countries less vulnerable to shocks. Budgetsare in surplus or close to balance, providing more scope for fiscal stimulusto support growth.For all these reasons, even if Asia's exports clearly have not decoupledfrom America, its economies will be less hurt by a recession there than inthe past. Standard Chartered forecasts that emerging Asia will grow by anaverage of 6.4% in 2008, down from 7.8% in 2007. In 2001 growth dropped bythree percentage points, to 4.2%. Financial markets were slow to realisethat growth and hence profits in some countries in emerging Asia will bedented by an American downturn. But now they risk exaggerating the potentialdamage.
OnlineJanuary 24, 2008China Turns Its Attention To Maintaining MomentumBy ANDREW BATSONJanuary 24, 2008BEIJING -- Even as China reported today a second year of annual growthabove 11%, the prospect of a U.S.-led global economic slowdown lookedlikely to force a shift in priorities: from curbing the boom tosustaining momentum.The government wants to generate 10 million urban jobs this year.Delivering that is likely to mean a sharper focus on the domesticeconomy, after a period when trade has been a big growth driver.China's export engine started to slow near the end of the year, andthe wider effects of that are already being felt. Economic growthpeaked at 11.9% in the second quarter, then eased to 11.5% in thethird. In the fourth quarter, the economy grew 11.2%, China's NationalBureau of Statistics said today in Beijing. For all of 2007, grossdomestic product expanded 11.4%, the bureau said.Some exporters, seeing orders from the U.S. fall off, are planning totrim staff, which could feed into a broader impact on households andconsumer spending. That is happening even as inflation in Chinaremains high, and as drops in stock markets and property prices alsothreaten to erode savings."The economic and financial conditions at home and abroad will be morecomplicated in 2008, and China is facing tougher challenges insustainable economic and financial development," Jiang Dingzhi, vicechairman of the China Banking Regulatory Commission, said this week.Top leaders are now still focused on combating inflation that reachednearly 5% in 2007. They have resorted to freezes in prices ofelectricity and fuels, and price controls on some foods. Thatinflation's persistence limits the government's ability to lift theeconomy through measures like interest-rate cuts.That could change quickly if inflation moderates and the U.S. andEurope continue to take a turn for the worse. "I think the governmenthas already started to pay attention to the possibility of a U.S.recession," says Zuo Xiaolei, chief economist for China GalaxySecurities in Beijing. Though even the most pessimistic forecasts callfor China's growth to ease to 9% or so this year, that would be asharp relative slowdown. "They should stimulate domestic consumptionto compensate for the loss of external demand," she says.Indeed, Chinese authorities have a track record of respondingaggressively to external economic slowdowns. In 1998, during the Asianfinancial crisis, a huge influx of government cash helped keep theeconomy growing by nearly 8%. Yet such efforts to boost the economyalso carry the risk that China could end up in a damaging downturnwhen the boost runs out.A boom in construction of housing, infrastructure and new factorieshas been the major driving force of China's expansion in recent years.Such investment has been so fast that many officials worry that moreis being built than is really needed. To avoid excess capacity, thegovernment has repeatedly moved to curb investment and warned thatfuture growth will have to be less reliant on such spending. But thoseconcerns may fall by the wayside if the leadership decides moreinfrastructure projects are needed to offset weaker exports."If the major economies do retrench fairly heavily, then maintaining adegree of growth that is consistent with social stability will requirea boost in construction and investment," says Glenn Maguire, Asiaeconomist for Societe Generale. A concrete increase in jobs could welloutweigh the more abstract worry of excess capacity or wastedinvestment. So, he says, "We may see a temporary pause in this desirefor more balanced growth."There is plenty of such spending under way. China's Ministry ofRailways earlier this month announced a major step-up in constructionof new railroads this year, with official plans calling for spendingabout $41 billion to lay 7,820 kilometers of new track. And withChina's cities growing by 18 million people a year, according toUnited Nations estimates, it wouldn't be difficult to speed upconstruction of housing and public works. About 10 major cities,including Beijing but also places like Chengdu, Wuhan and Guangzhou,are now building or expanding subway systems -- but there are severalothers whose plans are still waiting for approval.Similarly, most analysts expect fewer of the tax and regulatorychanges that were pushed through last year to limit exports of someproducts, mostly raw materials or those whose manufacture generateshigh pollution. Such measures were a response to the problems of thewide trade surplus, which had brought political friction with the U.S.and Europe, and flooded banks with cash they were ill-equipped todeploy properly.Yet as the U.S. economy has weakened, official talk of curbing thetrade surplus has subsided. Export growth slowed from about 29% in thefirst half of 2007 to around 22% in the second half, and thegovernment is once again concerned about aiding exporters. "Companies'exports are facing new pressure ... the task of stabilizing exports isvery heavy," Minister of Commerce Chen Deming said in a speech lastweek.A mild global slowdown could actually ease some of China's recenteconomic problems: domestic food prices that are being pushed up inpart by tight global agricultural markets, and a banking systemflooded with cash from an ever-expanding trade surplus. Governmentthink tanks are forecasting only a modest slowdown in economic growththis year, in the range of 10% to 11%, which is considered desirablegiven the strains that growth in excess of 11% has brought.But a big shock to the export sector that leads to an increase inunemployment would be a different matter."Although the current slowdown in export growth helps alleviate thetrade surplus and external imbalances, our nation still faces greatemployment pressures," argues Fan Caiyue, an economist for theNational Development and Reform Commission, in an article this week."We still need to maintain a certain amount of export growth, so ifexports substantially decline, it is not beneficial to maintainingstable and fast growth in our nation's economy."To reduce China's vulnerability to trade fluctuations and investmentcycles, the government over the past couple of years also has beentrying to encourage its consumers to spend more and save less. Yetwhile public-works projects can start up quickly, changing spendinghabits can take longer, and there hasn't yet been a big acceleration.After accounting for the effects of inflation, retail sales were up12.8% last year through November, little changed from the 12.7% pacein 2006.This year, officials are continuing to roll out policies designed toput more money in consumers' pockets, like higher minimum wages, andthey are continuing to expand new health-care and social-securityprograms to reduce the burden of those costs.
Here is the second article from the Economist:
An independent streakJan 24th 2008 HONG KONG>From The Economist print editionINVESTORS were until recently big fans of the "decoupling" theory, thenotion that Asian economies can shrug off an American recession. This week'splunge in share prices, at one point taking the MSCI Emerging Asia Indexdown 25% from its October high, suggests they have changed their minds. Butthe fact that their stockmarkets are still coupled does not mean that theireconomies will follow America over a cliff.Decoupling was always a misnomer if it implied that an American recessionwould have no impact in the East. Exports and hence profits would certainlybe squeezed; some fear Japan may even be tipping back into recession.Instead, the real argument in the rest of Asia was that it would suffer lessthan in previous American downturns.As well as hitting exports, America's troubles could also affect emergingAsia through financial channels. Its exposure to the subprime mess isthought to be smaller than that of American or European banks. Even so,Chinese bank shares tumbled this week on reports that they would have tomake bigger write-downs on their holdings of American subprime securities.And if shares slide further as global investors flee from risky assets, thiscould dampen business and consumer confidence in the region.Some Asian economies are more vulnerable than others. Singapore, Hong Kongand Malaysia are the most exposed, with exports to America equivalent to 20%or more of their GDPs, compared with only 8% in China and 2% in India. Thereare already some ominous signs. Singapore's exports to America are down by11% over the past year, whereas Malaysia's fell by 16%. Exports to otheremerging economies and to the European Union surged, so total exports stillgrew by 6% in both economies. But that was much slower than at the start of2007, and the worry now is that demand from Europe has started to flag.The growth in China's exports to America slowed to only 1% (in yuan terms)in the year to December from over 20% in late 2006. So far the impact on GDPhas been modest. Figures published on January 24th showed that China's GDPgrew by a sizzling 11.2% in the year to the fourth quarter, down from 11.5%in the previous three months. Most economists expect growth to slow to astill-healthy 9-10% this year, but there are growing concerns that newgovernment limits on bank lending risk choking the economy.China's economy would probably still expand by around 8-9% even if exportgrowth dried up. During the 2001 American recession China's GDP growthbarely slowed. In contrast, Hong Kong, Singapore, Taiwan and Malaysiasuffered full-blown recessions, with growth rates falling by more than tenpercentage points from peak to trough. America's slump is likely to bedeeper than in 2001 and Asia is now more integrated into the global economythan it used to be. Doomsters conclude, therefore, that these economiescould be hit even harder this time.The main reasons to be more optimistic are that domestic demand (consumerspending and investment) is likely to remain stronger and that governmentshave more flexibility to offset America's malaise. Last year, despite aslowdown in America's imports, most Asian economies grew faster as domesticdemand sped up everywhere except Thailand. Robert Prior-Wandesforde, aneconomist at HSBC, says that those who argue that Asia cannot decouple fromAmerica are ignoring the fact that they already have. Take Malaysia: itsexports to America plunged, yet its GDP growth quickened from 5.7% at theend of 2006 to 6.7% in the third quarter of last year.Contrary to the popular view that Asia's meltdown during the 2001 recessionwas entirely due to a slump in exports, Peter Redward, at Barclays Capital,argues that a fall in investment played a bigger role. Too much debt andexcess capacity weighed down firms, particularly in the electronicsindustry, which was at the heart of the American recession. Today firms arein much better shape. Capacity utilisation is high across the region;outside China, investment as a share of GDP is historically low; companybalance-sheets are stronger and real interest rates are low. Firms aretherefore less likely to slash investment than in 2001.Slowing exports will affect domestic spending. But macroeconomicfundamentals are much healthier in East Asia these days. Largeforeign-exchange reserves make countries less vulnerable to shocks. Budgetsare in surplus or close to balance, providing more scope for fiscal stimulusto support growth.For all these reasons, even if Asia's exports clearly have not decoupledfrom America, its economies will be less hurt by a recession there than inthe past. Standard Chartered forecasts that emerging Asia will grow by anaverage of 6.4% in 2008, down from 7.8% in 2007. In 2001 growth dropped bythree percentage points, to 4.2%. Financial markets were slow to realisethat growth and hence profits in some countries in emerging Asia will bedented by an American downturn. But now they risk exaggerating the potentialdamage.
Terrorist sympathizer appointed by Bush as ambassador to Nicrargua
This is from paulitics blog. Of course the terrorists were the Contras. Together with Negroponte another Bush favorite Callahan supported and facilitated the Contra counter-revolution. The nauseating story of CIA involvement is detailed at this site among others. Among the terrorist acts of the CIA was the mining of Nicaraguan harbours:
" The World Court declared the American mining illegal but the U.S. government chose to flout the law and continued the mining. The government of Saudi Arabia secretly arranged with the CIA to fund the Contras at the rate of $1 million a month. This money was laundered via a bank account in the Cayman Islands (under the name of Lt. Colonel Oliver North) to a Swiss Bank account, and thence to the Contras. "
Daniel Ortega was the leader of the Sandanistas and is now again president of Nicaragua. It is surely a gross insult to send Callahan. However, I guess you can say that he knows the ropes. Anyway, Ortega is now corrupted and probably quite able to adjust to the situation. Only Nicaraguans will suffer.
U.S. president George W. Bush has just appointed Robert Callahan as the United State’s Ambassador to Nicaragua. Callahan was John Negroponte’s (the former Ambassador to Honduras) right hand man, spokesman and speachwriter while the two were co-ordinating the operations of the Contras in Nicaragua during the 1980s.
" The World Court declared the American mining illegal but the U.S. government chose to flout the law and continued the mining. The government of Saudi Arabia secretly arranged with the CIA to fund the Contras at the rate of $1 million a month. This money was laundered via a bank account in the Cayman Islands (under the name of Lt. Colonel Oliver North) to a Swiss Bank account, and thence to the Contras. "
Daniel Ortega was the leader of the Sandanistas and is now again president of Nicaragua. It is surely a gross insult to send Callahan. However, I guess you can say that he knows the ropes. Anyway, Ortega is now corrupted and probably quite able to adjust to the situation. Only Nicaraguans will suffer.
U.S. president George W. Bush has just appointed Robert Callahan as the United State’s Ambassador to Nicaragua. Callahan was John Negroponte’s (the former Ambassador to Honduras) right hand man, spokesman and speachwriter while the two were co-ordinating the operations of the Contras in Nicaragua during the 1980s.
Friday, January 25, 2008
Howard government neglected Australian public housing crisis.
Of course Howard certainly didn't neglect to show his loyalty to his comrade Bush by spending money to send troops to serve in Iraq.
Govt slams predecessor on public housing
January 24, 2008 - 9:47AMThe federal government has accused its coalition predecessor of neglectfollowing the release of new reports showing almost 180,000 people are onwaiting lists for public housing.The reports - from the Australian Institute of Health and Welfare - alsoreveal there are 333,085 households living in public rental dwellings,33,557 in community housing and 12,622 in indigenous housing.Federal Housing Minister Tanya Plibersek said a third of those on publichousing waiting lists were waiting more than two years for a place.She said more people than ever were in need of affordable housing."Many low-income working families are now missing out on social housingaltogether," she said."The previous government's decade of neglect means that now the mostdisadvantaged Australians are waiting longer than ever just to get a roofover their heads."Ms Plibersek said the former Howard government had cut $3.1 billion fromsocial housing in real terms during its time in office."These funding cuts mean that low-income working families are finding itharder than ever to get affordable housing."(It) has forced the states and territories to target the provision ofsocial housing even more tightly to those in greatest need."Ms Plibersek said Australian Bureau of Statistics data showed that in 1995,22 per cent of applicants for social housing were accommodated."Ten years later, only 14 per cent were able to move off waiting lists andinto housing."These are the same working Australians suffering rapid increases in rentwhich grew by 6.4 per cent in 2007 - more than double the rate of inflation.Ms Plibersek offered no "silver bullets" to housing affordability but said anational rental affordability scheme would increase, by 50,000, the numberof suitable properties.© 2008 AAPBrought to you by aaphttp://news.theage.com.au/govt-slams-predecessor-on-public-housing/20080124-1nrf.html#
Govt slams predecessor on public housing
January 24, 2008 - 9:47AMThe federal government has accused its coalition predecessor of neglectfollowing the release of new reports showing almost 180,000 people are onwaiting lists for public housing.The reports - from the Australian Institute of Health and Welfare - alsoreveal there are 333,085 households living in public rental dwellings,33,557 in community housing and 12,622 in indigenous housing.Federal Housing Minister Tanya Plibersek said a third of those on publichousing waiting lists were waiting more than two years for a place.She said more people than ever were in need of affordable housing."Many low-income working families are now missing out on social housingaltogether," she said."The previous government's decade of neglect means that now the mostdisadvantaged Australians are waiting longer than ever just to get a roofover their heads."Ms Plibersek said the former Howard government had cut $3.1 billion fromsocial housing in real terms during its time in office."These funding cuts mean that low-income working families are finding itharder than ever to get affordable housing."(It) has forced the states and territories to target the provision ofsocial housing even more tightly to those in greatest need."Ms Plibersek said Australian Bureau of Statistics data showed that in 1995,22 per cent of applicants for social housing were accommodated."Ten years later, only 14 per cent were able to move off waiting lists andinto housing."These are the same working Australians suffering rapid increases in rentwhich grew by 6.4 per cent in 2007 - more than double the rate of inflation.Ms Plibersek offered no "silver bullets" to housing affordability but said anational rental affordability scheme would increase, by 50,000, the numberof suitable properties.© 2008 AAPBrought to you by aaphttp://news.theage.com.au/govt-slams-predecessor-on-public-housing/20080124-1nrf.html#
Obama's Economic Advisers.
This is an excerpt from Louis Proyect's blog. The excerpts show that at least some of Obama's economic mentors are far from progressive. Of course the situation may be no better or even worse if we looked at those advising Hillary Clinton!
Although it is not widely understood, Obama is pretty much committed to the neoclassical economics outlook of his home-town University of Chicago. Since becoming Senator, he has relied on the advice of a professor named Austan Goolsbee, who calls himself “a centrist, market economist” (Washington Times, July 16, 2007).
Goolsbee has been a columnist for Slate.com and the NY Times, as well as a standup comedian. His economics are not meant as a joke, as I understand it. His columns are written very much in the same vein as fellow U. of Chicago neoclassical economist Steven Levitt’s “Freakonomics,” examining everyday problems such as “Why you get stuck for hours at O’Hare.” Most are fairly uncontroversial except for the swipe he took at Michael Moore’s “Sicko”, whose single-payer recommendations violate his free market principles.
Another adviser with a particular interest in health care is David Cutler, a Harvard economist who was also an adviser to Bill Clinton–surprise, surprise. Cutler wrote an article for the New England Journal of Medicine in 2006 asserting that “The rising cost … of health care has been the source of a lot of saber rattling in the media and the public square, without anyone seriously analyzing the benefits gained.”
Anxious to show the good side of rising costs, Cutler and a group of other economists defend the idea that a powerful and profitable medical industry can serve as an engine of economic growth in the USA as the wretched Gina Kolata reported in the August 22, 2006 NY Times.
By 2030, predicts Robert W. Fogel, a Nobel laureate at the University of Chicago Graduate School of Business, about 25 percent of the G.D.P. will be spent on health care, making it ”the driving force in the economy,” just as railroads drove the economy at the start of the 20th century…
Other economists agree.
”We have to spend our money on something,” says Robert E. Hall, a Stanford University economist.
In a paper published in The Quarterly Journal of Economics, Dr. Hall and Charles I. Jones of the University of California, Berkeley, write: ”As we get older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”
David Cutler, an economist at Harvard, calculated the value of extra spending on medicine. ”Take a typical person aged 45,” he said. ”They will spend $30,000 more over their lifetime caring for cardiovascular disease than they would have spent in 1950. And they will live maybe three more years because of it.”
I guess this is why they call economics the dismal science. It should be noted in passing that the aforementioned Robert W. Fogel was the co-author with Stanley Engerman of “Time on the Cross”, a book that argued that slaves actually had it pretty good under the plantation system. His latest book is titled “The Escape from Hunger and Premature Death, 1700–2100: Europe, America, and the Third World” that posits a “technophysio evolution” that is filled with Panglossian enthusiasm about capitalism’s ability to bring prosperity to the developing world.
Another Harvard University adviser to Obama is Jeffrey Liebman, a Harvard economist who co-authored a paper on the feasibility of privatizing social security when he was an adviser to Bill Clinton. Apparently, the momentum toward adopting such a proposal was halted after the Monica Lewinsky affair put the president on the defensive. Liebman has co-authored a book on social security “reform” with Martin Feldstein, another Harvard economist who was–appropriately enough–the chairman of the Council of Economic Advisors under Ronald Reagan. In an article titled “The Rich, the Poor, and the Economists” that appeared in the January 2002 Monthly Review, Michael Yates notes the following:
Before he became Reagan’s chief economist, he [Feldstein] was an expert on the economics of social security. In published papers, he claimed to have empirically demonstrated that the social security system in the United States inhibited savings. Since savings are the source of capital investment, the implication of his research was that the social security system also reduced investment and thereby reduced the growth rate of the economy, since investment is the engine of economic growth.
Feldstein’s work fit nicely into the growing conservative movement which arose after the post World War Two boom came to an end in the early 1970s. The Keynesian economics that was gospel during my college years was giving way to a return to the pre-Keynesian theory that “freely” operating markets (free from the poison of government control and regulation) were the only solution to all economic problems. Led by the famous “Chicago Boys,” especially Milton Friedman, the anti-Keynesians carried the day in the economics profession and still do. No wonder, then, that when Ronald Reagan became president, he tapped Feldstein to chair the Council. For years, Reagan had been railing against social security from his General Electric radio pulpit. Now here was an economist who could lend professional credence to Reagan’s reactionary views. Social Security would be a tough nut to crack. It was an extremely popular program, run with great efficiency and effective in sharply reducing poverty among the elderly.
There was just one problem. Feldstein’s research was fatally flawed. Two staff economists at the Social Security Administration asked Feldstein for his supporting data. After three years of repeated requests, he sent the data to them. When they tried to use Feldstein’s numbers to replicate his results, however, they could not. They uncovered an error in the computer program Feldstein had used, and when they corrected the error, the results were exactly the opposite of Feldstein’s. That is to say, the social security system actually encouraged savings and, according to Feldstein’s cherished “free market” theory, facilitated capital formation and economic growth. (For more on this, see “‘Superstar’ Feldstein and His Little Mistake” in Dollars & Sense, Dec. 1980, pp. 1-2 and the citations therein.)
Although it is not widely understood, Obama is pretty much committed to the neoclassical economics outlook of his home-town University of Chicago. Since becoming Senator, he has relied on the advice of a professor named Austan Goolsbee, who calls himself “a centrist, market economist” (Washington Times, July 16, 2007).
Goolsbee has been a columnist for Slate.com and the NY Times, as well as a standup comedian. His economics are not meant as a joke, as I understand it. His columns are written very much in the same vein as fellow U. of Chicago neoclassical economist Steven Levitt’s “Freakonomics,” examining everyday problems such as “Why you get stuck for hours at O’Hare.” Most are fairly uncontroversial except for the swipe he took at Michael Moore’s “Sicko”, whose single-payer recommendations violate his free market principles.
Another adviser with a particular interest in health care is David Cutler, a Harvard economist who was also an adviser to Bill Clinton–surprise, surprise. Cutler wrote an article for the New England Journal of Medicine in 2006 asserting that “The rising cost … of health care has been the source of a lot of saber rattling in the media and the public square, without anyone seriously analyzing the benefits gained.”
Anxious to show the good side of rising costs, Cutler and a group of other economists defend the idea that a powerful and profitable medical industry can serve as an engine of economic growth in the USA as the wretched Gina Kolata reported in the August 22, 2006 NY Times.
By 2030, predicts Robert W. Fogel, a Nobel laureate at the University of Chicago Graduate School of Business, about 25 percent of the G.D.P. will be spent on health care, making it ”the driving force in the economy,” just as railroads drove the economy at the start of the 20th century…
Other economists agree.
”We have to spend our money on something,” says Robert E. Hall, a Stanford University economist.
In a paper published in The Quarterly Journal of Economics, Dr. Hall and Charles I. Jones of the University of California, Berkeley, write: ”As we get older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”
David Cutler, an economist at Harvard, calculated the value of extra spending on medicine. ”Take a typical person aged 45,” he said. ”They will spend $30,000 more over their lifetime caring for cardiovascular disease than they would have spent in 1950. And they will live maybe three more years because of it.”
I guess this is why they call economics the dismal science. It should be noted in passing that the aforementioned Robert W. Fogel was the co-author with Stanley Engerman of “Time on the Cross”, a book that argued that slaves actually had it pretty good under the plantation system. His latest book is titled “The Escape from Hunger and Premature Death, 1700–2100: Europe, America, and the Third World” that posits a “technophysio evolution” that is filled with Panglossian enthusiasm about capitalism’s ability to bring prosperity to the developing world.
Another Harvard University adviser to Obama is Jeffrey Liebman, a Harvard economist who co-authored a paper on the feasibility of privatizing social security when he was an adviser to Bill Clinton. Apparently, the momentum toward adopting such a proposal was halted after the Monica Lewinsky affair put the president on the defensive. Liebman has co-authored a book on social security “reform” with Martin Feldstein, another Harvard economist who was–appropriately enough–the chairman of the Council of Economic Advisors under Ronald Reagan. In an article titled “The Rich, the Poor, and the Economists” that appeared in the January 2002 Monthly Review, Michael Yates notes the following:
Before he became Reagan’s chief economist, he [Feldstein] was an expert on the economics of social security. In published papers, he claimed to have empirically demonstrated that the social security system in the United States inhibited savings. Since savings are the source of capital investment, the implication of his research was that the social security system also reduced investment and thereby reduced the growth rate of the economy, since investment is the engine of economic growth.
Feldstein’s work fit nicely into the growing conservative movement which arose after the post World War Two boom came to an end in the early 1970s. The Keynesian economics that was gospel during my college years was giving way to a return to the pre-Keynesian theory that “freely” operating markets (free from the poison of government control and regulation) were the only solution to all economic problems. Led by the famous “Chicago Boys,” especially Milton Friedman, the anti-Keynesians carried the day in the economics profession and still do. No wonder, then, that when Ronald Reagan became president, he tapped Feldstein to chair the Council. For years, Reagan had been railing against social security from his General Electric radio pulpit. Now here was an economist who could lend professional credence to Reagan’s reactionary views. Social Security would be a tough nut to crack. It was an extremely popular program, run with great efficiency and effective in sharply reducing poverty among the elderly.
There was just one problem. Feldstein’s research was fatally flawed. Two staff economists at the Social Security Administration asked Feldstein for his supporting data. After three years of repeated requests, he sent the data to them. When they tried to use Feldstein’s numbers to replicate his results, however, they could not. They uncovered an error in the computer program Feldstein had used, and when they corrected the error, the results were exactly the opposite of Feldstein’s. That is to say, the social security system actually encouraged savings and, according to Feldstein’s cherished “free market” theory, facilitated capital formation and economic growth. (For more on this, see “‘Superstar’ Feldstein and His Little Mistake” in Dollars & Sense, Dec. 1980, pp. 1-2 and the citations therein.)
Philippine peso loses top status in Asian currencies
This is from the Inquirer . Given the importance of exports and off remittances from oversease Philippinos often in U.S. dollars it may be just as well that the value of the peso not increase too much or too quickly. However, given the weakness of the U.S. dollar some increase is probably inevitable.
ANALYSIS : Asian star Philippine peso loses pole position
By Melissa ChiaReuters
Posted date: January 25, 2008
SINGAPORE -- The Philippine peso, Asia's best performer in 2007, may struggle to retain the top spot this year as it faces slowing exports and a drop in its hitherto attractive yields.
That said, the peso is still primed to gain anywhere between 5 to 12 percent against the US dollar this year, with the blessings of one of the most tolerant central banks in emerging Asia and the backdrop of flagging growth in developed markets.
The peso had a lot going for it in 2007 when it raced ahead of the Asian pack with a 19 percent gain, including a high yield, a cheap stock market and the central bank's hands-off policy towards the currency.
Most of those factors have changed. Philippine interest rates have fallen 2.25 percentage points in the past 12 months and foreign investors, smarting from a US mortgage-related crisis, are fleeing risky markets.
"The more uncertain growth environment, higher oil prices and slower remittance growth should mark the pace of the peso gains lower," said Yen Ping Ho, a strategist at JPMorgan Chase Bank.
The peso has already surrendered its pole position this year, with a 0.5 percent rise so far compared with gains of more than 1.0 percent in the Chinese yuan and Malaysian ringgit. It hit an eight-year high of 40.5 on Jan.15, but has since retreated to 41.10.
Citigroup forecasts a nearly 12.0 percent rise in the peso to 37.4 per dollar by the end of 2008, and HSBC is even more optimistic with a forecast of 37.2, but there are less bullish forecasts such as Standard Chartered's of a 5.0 percent rise to 39.5 and JPMorgan's estimate of 38.5.
"The yuan will outperform the peso. We expect a 9.0 percent appreciation in the yuan," said Thomas Harr, a strategist at Standard Chartered.
TURNING TIDE
So far, Philippine authorities have shown little resentment at the peso's steep rally, a rarity in export-dependent Asia where currency appreciation is anathema to monetary authorities.
Exporters say the rising peso is partly to blame for a sharp drop in exports in November and the widening trade deficit.
The outlook is not any brighter given that the Philippines' main trading partners, the United States and Japan, are slowing, and the prospects for the electronics sector, which forms two-thirds of Philippine exports, are still bleak.
But the Bangko Sentral ng Pilipinas, the country’s central bank, is concerned about the impact of an appreciating peso on remittance flows from millions of Filipinos working overseas, particularly as global growth slackens.
These remittances, totalling $13 billion in the first 11 months of 2007, drive most of the local spending and comprise about 10 percent of economic output.
The central bank plans special deposits and retail bonds as alternate investments for foreign workers, arguably to compensate them for the rising currency and falling yields.
It still forecasts a reduction of 65 percent in the balance of payments surplus for 2008 due to a widening trade deficit from high import prices and a slowdown in exports growth despite planned sales of state firms to foreign investors.
More importantly, yields on Philippine debt are set to fall further as the central bank pursues a growth-friendly policy.
TUMBLING YIELDS
The overnight borrowing rate is already at a 15-year low of 5.25 percent after the four rate cuts in 2007.
After the Federal Reserve's steep 75 basis point monetary easing this week, analysts expect a further reduction in Philippine rates when the central bank reviews policy on Jan. 31.
"With the borrowing rate at 5.25 percent and biased downward, it will potentially erode the peso's status as a high yielding currency," said Christy Tan, a strategist at Bank of America.
Peso yields are already far below Indonesia's 8.0 percent policy rate and India's 6.0 percent borrowing rate. Soon they could be on par with South Korea's 5.0 percent benchmark.
Unless the central bank is serious about its intent to let the peso rise to temper the effects of rising oil and food prices, without slamming the brakes too hard on an economy expanding at nearly 7.0 percent, foreigners have little incentive to buy the currency.
The consumer price index climbed 3.9 percent in December from a year earlier, taking inflation to the middle of the central bank's 3.0-5.0 percent target for 2008.
"It is probably best for (the) BSP to continue to allow market forces, including solid remittances, to play out, while always standing by to smooth markets if needed," said Sean Callow, a currency strategist at Westpac Banking Corporation. Editing by Vidya Ranganathan and Tomasz Janowski
©Copyright 2001-2008 INQUIRER.net, An Inquirer Company
ANALYSIS : Asian star Philippine peso loses pole position
By Melissa ChiaReuters
Posted date: January 25, 2008
SINGAPORE -- The Philippine peso, Asia's best performer in 2007, may struggle to retain the top spot this year as it faces slowing exports and a drop in its hitherto attractive yields.
That said, the peso is still primed to gain anywhere between 5 to 12 percent against the US dollar this year, with the blessings of one of the most tolerant central banks in emerging Asia and the backdrop of flagging growth in developed markets.
The peso had a lot going for it in 2007 when it raced ahead of the Asian pack with a 19 percent gain, including a high yield, a cheap stock market and the central bank's hands-off policy towards the currency.
Most of those factors have changed. Philippine interest rates have fallen 2.25 percentage points in the past 12 months and foreign investors, smarting from a US mortgage-related crisis, are fleeing risky markets.
"The more uncertain growth environment, higher oil prices and slower remittance growth should mark the pace of the peso gains lower," said Yen Ping Ho, a strategist at JPMorgan Chase Bank.
The peso has already surrendered its pole position this year, with a 0.5 percent rise so far compared with gains of more than 1.0 percent in the Chinese yuan and Malaysian ringgit. It hit an eight-year high of 40.5 on Jan.15, but has since retreated to 41.10.
Citigroup forecasts a nearly 12.0 percent rise in the peso to 37.4 per dollar by the end of 2008, and HSBC is even more optimistic with a forecast of 37.2, but there are less bullish forecasts such as Standard Chartered's of a 5.0 percent rise to 39.5 and JPMorgan's estimate of 38.5.
"The yuan will outperform the peso. We expect a 9.0 percent appreciation in the yuan," said Thomas Harr, a strategist at Standard Chartered.
TURNING TIDE
So far, Philippine authorities have shown little resentment at the peso's steep rally, a rarity in export-dependent Asia where currency appreciation is anathema to monetary authorities.
Exporters say the rising peso is partly to blame for a sharp drop in exports in November and the widening trade deficit.
The outlook is not any brighter given that the Philippines' main trading partners, the United States and Japan, are slowing, and the prospects for the electronics sector, which forms two-thirds of Philippine exports, are still bleak.
But the Bangko Sentral ng Pilipinas, the country’s central bank, is concerned about the impact of an appreciating peso on remittance flows from millions of Filipinos working overseas, particularly as global growth slackens.
These remittances, totalling $13 billion in the first 11 months of 2007, drive most of the local spending and comprise about 10 percent of economic output.
The central bank plans special deposits and retail bonds as alternate investments for foreign workers, arguably to compensate them for the rising currency and falling yields.
It still forecasts a reduction of 65 percent in the balance of payments surplus for 2008 due to a widening trade deficit from high import prices and a slowdown in exports growth despite planned sales of state firms to foreign investors.
More importantly, yields on Philippine debt are set to fall further as the central bank pursues a growth-friendly policy.
TUMBLING YIELDS
The overnight borrowing rate is already at a 15-year low of 5.25 percent after the four rate cuts in 2007.
After the Federal Reserve's steep 75 basis point monetary easing this week, analysts expect a further reduction in Philippine rates when the central bank reviews policy on Jan. 31.
"With the borrowing rate at 5.25 percent and biased downward, it will potentially erode the peso's status as a high yielding currency," said Christy Tan, a strategist at Bank of America.
Peso yields are already far below Indonesia's 8.0 percent policy rate and India's 6.0 percent borrowing rate. Soon they could be on par with South Korea's 5.0 percent benchmark.
Unless the central bank is serious about its intent to let the peso rise to temper the effects of rising oil and food prices, without slamming the brakes too hard on an economy expanding at nearly 7.0 percent, foreigners have little incentive to buy the currency.
The consumer price index climbed 3.9 percent in December from a year earlier, taking inflation to the middle of the central bank's 3.0-5.0 percent target for 2008.
"It is probably best for (the) BSP to continue to allow market forces, including solid remittances, to play out, while always standing by to smooth markets if needed," said Sean Callow, a currency strategist at Westpac Banking Corporation. Editing by Vidya Ranganathan and Tomasz Janowski
©Copyright 2001-2008 INQUIRER.net, An Inquirer Company
U.S. Asking Iraq for Wide Rights on War
This is from the NY Times. This article is much better than the bit of fluff at MSNBC. The U.S. is again asking the contractor's be granted immunity to prosecution under Iraq law. This is bound to cause trouble. It is bad enough that the military has immunity but given the problems with contractors the Iraqi government can hardly accept immunity for contractors.
At present the US can simply carry out military actions without consultation with let alone approval of Iraqi authorities. It is rather ludicrous to maintain that a state is sovereign when it does not even have the sole authority for legal use of force within the country but that is the case in Iraq. Probably it will stay that way if the US can possibly arrange it through these negotiations.
No doubt the administration is trying its best not to consider these negotiations the development of a treaty between Iraq and the U.S. as this would get the U.S. congress involved.
U.S. Asking Iraq for Wide Rights on War
By THOM SHANKER and STEVEN LEE MYERS
Published: January 25, 2008
WASHINGTON — With its international mandate in Iraq set to expire in 11 months, the Bush administration will insist that the government in Baghdad give the United States broad authority to conduct combat operations and guarantee civilian contractors specific legal protections from Iraqi law, according to administration and military officials.
This emerging American negotiating position faces a potential buzz saw of opposition from Iraq, with its fragmented Parliament, weak central government and deep sensitivities about being seen as a dependent state, according to these officials.
At the same time, the administration faces opposition from Democrats at home, who warn that the agreements that the White House seeks would bind the next president by locking in Mr. Bush’s policies and a long-term military presence.
The American negotiating position for a formal military-to-military relationship, one that would replace the current United Nations mandate, is laid out in a draft proposal that was described by White House, Pentagon, State Department and military officials on ground rules of anonymity. It also includes less controversial demands that American troops be immune from Iraqi prosecution, and that they maintain the power to detain Iraqi prisoners.
However, the American quest for protections for civilian contractors is expected to be particularly vexing, because in no other country are contractors working with the American military granted protection from local laws. Some American officials want contractors to have full immunity from Iraqi law, while others envision less sweeping protections. These officials said the negotiations with the Iraqis, expected to begin next month, would also determine whether the American authority to conduct combat operations in the future would be unilateral, as it is now, or whether it would require consultation with the Iraqis or even Iraqi approval.
“These are going to be tough negotiations,” said one senior Bush administration official preparing for negotiations with the Iraqis. “They’re not supplicants.”
Democrats in Congress, as well as the party’s two leading presidential contenders, Senators Hillary Rodham Clinton and Barack Obama, have accused the White House of sponsoring negotiations that will set into law a long-term security relationship with Iraq.
But administration officials said that the American proposal specifically did not set future troop levels in Iraq or ask for permanent American bases there. Nor, they said, did it offer a security guarantee defining Washington’s specific responsibilities should Iraq come under attack.
Including such long-term commitments in the agreement would turn the accord into a bilateral treaty, one that would require Senate approval. The Bush administration faces the political reality that it cannot count on the two-thirds vote that would be required to approve a treaty with Iraq setting out such a military commitment.
Administration officials are describing their draft proposal in terms of a traditional status-of-forces agreement, an accord that has historically been negotiated by the executive branch and signed by the executive branch without a Senate vote.
“I think it’s pretty clear that such an agreement would not talk about force levels,” Defense Secretary Robert M. Gates said Thursday. “We have no interest in permanent bases. I think the way to think about the framework agreement is an approach to normalizing the relationship between the United States and Iraq.”
While the United States currently has military agreements with more than 80 countries around the world, including Japan, Germany, South Korea and a number of Iraq’s neighbors, none of those countries are at war. And none has a population outraged over civilian deaths at the hands of armed American security contractors who are not answerable to Iraqi law.
Democratic critics have complained that the initial announcement about the administration’s intention to negotiate an agreement, made Nov. 26, included an American pledge to support Iraq “in defending its democratic system against internal and external threats.”
Representative Bill Delahunt, Democrat of Massachusetts, said that what the administration was negotiating amounted to a treaty and should be subjected to Congressional oversight and ultimately ratification.
“Where have we ever had an agreement to defend a foreign country from external attack and internal attack that was not a treaty?” he said Wednesday at a hearing of a foreign affairs subcommittee held to review the matter. “This could very well implicate our military forces in a full-blown civil war in Iraq. If a commitment of this magnitude does not rise to the level of a treaty, then it is difficult to imagine what could.”
Senator Jim Webb, Democrat of Virginia, who raised concerns in a letter to the White House in December, said the negotiations were an unprecedented step toward making an agreement on status of forces without the overarching security guarantees like those provided in the NATO treaty. He added that the Democratic majority would seek to block any agreements with the Iraqis, unless the administration was clear about its ultimate intentions in Iraq.
“There’s no exit strategy, because the administration doesn’t have one,” Senator Webb said in a telephone interview on Thursday. “By entering this agreement, they avoid a debate and they validate their unspoken strategy.”
Over recent days, administration officials acknowledged that the language of the Nov. 26 announcement went too far. The officials said that they were limiting the scope of the pending negotiations to issues that could be resolved this year, before the Security Council resolution expired.
To that end, administration officials said the draft text was narrowly written to codify what the administration regarded as four essential requirements for the American armed forces to continue the mission in Iraq.
In seeking immunity for contractors, the administration is requesting protections for the 154,000 civilian contractors working for the Defense Department in Iraq; most carry out such duties as driving trucks, preparing meals and the like. The administration says it depends heavily on those contractors, including about 13,000 private security contractors working for the Pentagon.
Under an earlier agreement between the United States and Iraq, those contractors have been exempt from Iraqi law. Justice Department officials have said it is not clear whether any crimes committed by contractors in Iraq, including the role played by Blackwater employees in a September shooting in Baghdad, would be subject to American law, but the administration has taken steps intended to close any loopholes
At present the US can simply carry out military actions without consultation with let alone approval of Iraqi authorities. It is rather ludicrous to maintain that a state is sovereign when it does not even have the sole authority for legal use of force within the country but that is the case in Iraq. Probably it will stay that way if the US can possibly arrange it through these negotiations.
No doubt the administration is trying its best not to consider these negotiations the development of a treaty between Iraq and the U.S. as this would get the U.S. congress involved.
U.S. Asking Iraq for Wide Rights on War
By THOM SHANKER and STEVEN LEE MYERS
Published: January 25, 2008
WASHINGTON — With its international mandate in Iraq set to expire in 11 months, the Bush administration will insist that the government in Baghdad give the United States broad authority to conduct combat operations and guarantee civilian contractors specific legal protections from Iraqi law, according to administration and military officials.
This emerging American negotiating position faces a potential buzz saw of opposition from Iraq, with its fragmented Parliament, weak central government and deep sensitivities about being seen as a dependent state, according to these officials.
At the same time, the administration faces opposition from Democrats at home, who warn that the agreements that the White House seeks would bind the next president by locking in Mr. Bush’s policies and a long-term military presence.
The American negotiating position for a formal military-to-military relationship, one that would replace the current United Nations mandate, is laid out in a draft proposal that was described by White House, Pentagon, State Department and military officials on ground rules of anonymity. It also includes less controversial demands that American troops be immune from Iraqi prosecution, and that they maintain the power to detain Iraqi prisoners.
However, the American quest for protections for civilian contractors is expected to be particularly vexing, because in no other country are contractors working with the American military granted protection from local laws. Some American officials want contractors to have full immunity from Iraqi law, while others envision less sweeping protections. These officials said the negotiations with the Iraqis, expected to begin next month, would also determine whether the American authority to conduct combat operations in the future would be unilateral, as it is now, or whether it would require consultation with the Iraqis or even Iraqi approval.
“These are going to be tough negotiations,” said one senior Bush administration official preparing for negotiations with the Iraqis. “They’re not supplicants.”
Democrats in Congress, as well as the party’s two leading presidential contenders, Senators Hillary Rodham Clinton and Barack Obama, have accused the White House of sponsoring negotiations that will set into law a long-term security relationship with Iraq.
But administration officials said that the American proposal specifically did not set future troop levels in Iraq or ask for permanent American bases there. Nor, they said, did it offer a security guarantee defining Washington’s specific responsibilities should Iraq come under attack.
Including such long-term commitments in the agreement would turn the accord into a bilateral treaty, one that would require Senate approval. The Bush administration faces the political reality that it cannot count on the two-thirds vote that would be required to approve a treaty with Iraq setting out such a military commitment.
Administration officials are describing their draft proposal in terms of a traditional status-of-forces agreement, an accord that has historically been negotiated by the executive branch and signed by the executive branch without a Senate vote.
“I think it’s pretty clear that such an agreement would not talk about force levels,” Defense Secretary Robert M. Gates said Thursday. “We have no interest in permanent bases. I think the way to think about the framework agreement is an approach to normalizing the relationship between the United States and Iraq.”
While the United States currently has military agreements with more than 80 countries around the world, including Japan, Germany, South Korea and a number of Iraq’s neighbors, none of those countries are at war. And none has a population outraged over civilian deaths at the hands of armed American security contractors who are not answerable to Iraqi law.
Democratic critics have complained that the initial announcement about the administration’s intention to negotiate an agreement, made Nov. 26, included an American pledge to support Iraq “in defending its democratic system against internal and external threats.”
Representative Bill Delahunt, Democrat of Massachusetts, said that what the administration was negotiating amounted to a treaty and should be subjected to Congressional oversight and ultimately ratification.
“Where have we ever had an agreement to defend a foreign country from external attack and internal attack that was not a treaty?” he said Wednesday at a hearing of a foreign affairs subcommittee held to review the matter. “This could very well implicate our military forces in a full-blown civil war in Iraq. If a commitment of this magnitude does not rise to the level of a treaty, then it is difficult to imagine what could.”
Senator Jim Webb, Democrat of Virginia, who raised concerns in a letter to the White House in December, said the negotiations were an unprecedented step toward making an agreement on status of forces without the overarching security guarantees like those provided in the NATO treaty. He added that the Democratic majority would seek to block any agreements with the Iraqis, unless the administration was clear about its ultimate intentions in Iraq.
“There’s no exit strategy, because the administration doesn’t have one,” Senator Webb said in a telephone interview on Thursday. “By entering this agreement, they avoid a debate and they validate their unspoken strategy.”
Over recent days, administration officials acknowledged that the language of the Nov. 26 announcement went too far. The officials said that they were limiting the scope of the pending negotiations to issues that could be resolved this year, before the Security Council resolution expired.
To that end, administration officials said the draft text was narrowly written to codify what the administration regarded as four essential requirements for the American armed forces to continue the mission in Iraq.
In seeking immunity for contractors, the administration is requesting protections for the 154,000 civilian contractors working for the Defense Department in Iraq; most carry out such duties as driving trucks, preparing meals and the like. The administration says it depends heavily on those contractors, including about 13,000 private security contractors working for the Pentagon.
Under an earlier agreement between the United States and Iraq, those contractors have been exempt from Iraqi law. Justice Department officials have said it is not clear whether any crimes committed by contractors in Iraq, including the role played by Blackwater employees in a September shooting in Baghdad, would be subject to American law, but the administration has taken steps intended to close any loopholes
Why Bush visited Saudi Arabia.
This is from Straight Goods. The mainstream press of course said virtually nothing about this although business reports have mentioned that petro-dollars are flowing into bank financing in the US.
The U.S. is becoming a credit junkie that needs to go overseas constantly to continually refinance its habit.
Why Bush visited Saudi Arabia
USA now $3 trillion in debt to foreign lenders, mostly Saudis.
Dateline: Tuesday, January 22, 2008
by Greg Palast
Bend over, pull out your wallet and kiss your Abe 'goodbye.' The Lincolns have got to go — and so do the Hamiltons and Jacksons.
Those bills in your billfold aren't yours anymore. The landlords of our currency — Citibank, the national treasury of China and the House of Saud — are foreclosing and evicting all Americans from the US economy.
It's mornings like this, when I wake up hung-over to photos of the King of Saudi Arabia festooning our President with gold necklaces, that I reluctantly remember that I am an economist; and one with some responsibility to explain what the hell Bush is doing kissing Abdullah's camel.
Let's begin by stating why Bush is not in Saudi Arabia. Bush ain't there to promote 'Democracy' nor peace in Palestine, nor even war in Iran. And, despite what some pinhead from CNN stated, he sure as hell didn't go to Riyadh to tell the Saudis to cut the price of oil.
What's really behind Bush's hajj to Riyadh is that America is in hock up to our knickers. The sub-prime mortgage market implosion, hitting a dozen banks with over $100 billion in losses, is just the tip of the debt-berg.
Since taking office, Bush has doubled the federal debt to more than $5 trillion. And, according to US Treasury figures, on net, foreign investors have purchased close to 100 percent of that debt. That's $3 trillion borrowed from the Saudis, the Chinese, the Japanese and others.
Now, Bush, our Debt Junkie-in-Chief, needs another fix. The US Treasury, Citibank, Merrill-Lynch and other financial desperados need another hand-out from Abdullah's stash. Abdullah, in turn, gets this financial juice by pumping it out of our pockets at nearly $100 a barrel for his crude.
Bush needs the Saudis to charge us big bucks for oil. The Saudis can't lend the US Treasury and Citibank hundreds of billions of US dollars unless they first get these US dollars from the US. The high price of oil is, in effect, a tax levied by Bush but collected by the oil industry and the Gulf kingdoms to fund our multi-trillion dollar governmental and private debt-load.
The US Treasury is not alone in its frightening dependency on Arabian loot. America's private financial institutions are also begging for foreign treasure. Yesterday, King Abdullah's nephew, Prince Alwaleed bin Talal, already the top individual owner of Citibank, joined the Kuwait government's Investment Authority and others to mainline a $12.5 billion injection of capital into the New York bank. Also this week, the Abu Dhabi government and the Saudi Olayan Group are taking a $6.6 billion chunk of Merrill-Lynch. It's no mere coincidence that Bush is in Abdullah's tent when the money-changers made the deal just outside it.
Bush is there to assure Abdullah that, unlike Dubai's ports purchase debacle, there will be no political impediment to the Saudi's buying up Citibank nor the isle of Manhattan....
For the whole story, please go to the related site below.
Greg Palast is the author of the New York Times bestseller, Armed Madhouse (Penguin Paperback 2007). When Palast, an investigator of corporate fraud and racketeering, turned his skills to journalism, he was quickly recognized as, "The most important investigative reporter of our time" [Tribune Magazine] in Britain, where his first reports appeared on BBC television and in the Guardian newspaper.
Thursday, January 24, 2008
Soros: The worst market crisis in 60 years
I am no fan of "market fundamentalism" but as Soros points out government policy has not relied on markets per se but on stimulating demand artificially by lowering interest rates etc. The article ignores the role of military Keynesianism in U.S. economic growth as well. What is interesting to me is that supposed market fundamentalists are intervening big time with market forces. Market fundamentalism might have its rhetorical purposes in defending capitalism but democracy requires the purchase of votes. Loss of jobs, houses, and creative destruction during crashes does not buy many votes. Lock up the fundamentalist theologians in economic departments until times improve.
Financial Times, Jan. 23, 2008
The worst market crisis in 60 years
By George Soros
Published: January 22 2008 19:57 | Last updated: January 22 2008 19:57
The current financial crisis was precipitated by a bubble in the US
housing market. In some ways it resembles other crises that have
occurred since the end of the second world war at intervals ranging
from
four to 10 years.
However, there is a profound difference: the current crisis marks the
end of an era of credit expansion based on the dollar as the
international reserve currency. The periodic crises were part of a
larger boom-bust process. The current crisis is the culmination of a
super-boom that has lasted for more than 60 years.
Boom-bust processes usually revolve around credit and always involve a
bias or misconception. This is usually a failure to recognise a
reflexive, circular connection between the willingness to lend and the
value of the collateral. Ease of credit generates demand that pushes up
the value of property, which in turn increases the amount of credit
available. A bubble starts when people buy houses in the expectation
that they can refinance their mortgages at a profit. The recent US
housing boom is a case in point. The 60-year super-boom is a more
complicated case.
Every time the credit expansion ran into trouble the financial
authorities intervened, injecting liquidity and finding other ways to
stimulate the economy. That created a system of asymmetric incentives
also known as moral hazard, which encouraged ever greater credit
expansion. The system was so successful that people came to believe in
what former US president Ronald Reagan called the magic of the
marketplace and I call market fundamentalism. Fundamentalists believe
that markets tend towards equilibrium and the common interest is best
served by allowing participants to pursue their self-interest. It is an
obvious misconception, because it was the intervention of the
authorities that prevented financial markets from breaking down, not
the
markets themselves. Nevertheless, market fundamentalism emerged as the
dominant ideology in the 1980s, when financial markets started to
become
globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the
world and consume more than it produced. The US current account deficit
reached 6.2 per cent of gross national product in 2006. The financial
markets encouraged consumers to borrow by introducing ever more
sophisticated instruments and more generous terms. The authorities
aided
and abetted the process by intervening whenever the global financial
system was at risk. Since 1980, regulations have been progressively
relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so
complicated that the authorities could no longer calculate the risks
and
started relying on the risk management methods of the banks themselves.
Similarly, the rating agencies relied on the information provided by
the
originators of synthetic products. It was a shocking abdication of
responsibility.
Everything that could go wrong did. What started with subprime
mortgages
spread to all collateralised debt obligations, endangered municipal and
mortgage insurance and reinsurance companies and threatened to unravel
the multi-trillion-dollar credit default swap market. Investment
banks’
commitments to leveraged buyouts became liabilities. Market-neutral
hedge funds turned out not to be market-neutral and had to be unwound.
The asset-backed commercial paper market came to a standstill and the
special investment vehicles set up by banks to get mortgages off their
balance sheets could no longer get outside financing. The final blow
came when interbank lending, which is at the heart of the financial
system, was disrupted because banks had to husband their resources and
could not trust their counterparties. The central banks had to inject
an
unprecedented amount of money and extend credit on an unprecedented
range of securities to a broader range of institutions than ever
before.
That made the crisis more severe than any since the second world war.
Credit expansion must now be followed by a period of contraction,
because some of the new credit instruments and practices are unsound
and
unsustainable. The ability of the financial authorities to stimulate
the
economy is constrained by the unwillingness of the rest of the world to
accumulate additional dollar reserves. Until recently, investors were
hoping that the US Federal Reserve would do whatever it takes to avoid
a
recession, because that is what it did on previous occasions. Now they
will have to realise that the Fed may no longer be in a position to do
so. With oil, food and other commodities firm, and the renminbi
appreciating somewhat faster, the Fed also has to worry about
inflation.
If federal funds were lowered beyond a certain point, the dollar would
come under renewed pressure and long-term bonds would actually go up in
yield. Where that point is, is impossible to determine. When it is
reached, the ability of the Fed to stimulate the economy comes to an
end.
Although a recession in the developed world is now more or less
inevitable, China, India and some of the oil-producing countries are in
a very strong countertrend. So, the current financial crisis is less
likely to cause a global recession than a radical realignment of the
global economy, with a relative decline of the US and the rise of China
and other countries in the developing world.
The danger is that the resulting political tensions, including US
protectionism, may disrupt the global economy and plunge the world into
recession or worse.
The writer is chairman of Soros Fund Management
Copyright The Financial Times Limited 2008
Financial Times, Jan. 23, 2008
The worst market crisis in 60 years
By George Soros
Published: January 22 2008 19:57 | Last updated: January 22 2008 19:57
The current financial crisis was precipitated by a bubble in the US
housing market. In some ways it resembles other crises that have
occurred since the end of the second world war at intervals ranging
from
four to 10 years.
However, there is a profound difference: the current crisis marks the
end of an era of credit expansion based on the dollar as the
international reserve currency. The periodic crises were part of a
larger boom-bust process. The current crisis is the culmination of a
super-boom that has lasted for more than 60 years.
Boom-bust processes usually revolve around credit and always involve a
bias or misconception. This is usually a failure to recognise a
reflexive, circular connection between the willingness to lend and the
value of the collateral. Ease of credit generates demand that pushes up
the value of property, which in turn increases the amount of credit
available. A bubble starts when people buy houses in the expectation
that they can refinance their mortgages at a profit. The recent US
housing boom is a case in point. The 60-year super-boom is a more
complicated case.
Every time the credit expansion ran into trouble the financial
authorities intervened, injecting liquidity and finding other ways to
stimulate the economy. That created a system of asymmetric incentives
also known as moral hazard, which encouraged ever greater credit
expansion. The system was so successful that people came to believe in
what former US president Ronald Reagan called the magic of the
marketplace and I call market fundamentalism. Fundamentalists believe
that markets tend towards equilibrium and the common interest is best
served by allowing participants to pursue their self-interest. It is an
obvious misconception, because it was the intervention of the
authorities that prevented financial markets from breaking down, not
the
markets themselves. Nevertheless, market fundamentalism emerged as the
dominant ideology in the 1980s, when financial markets started to
become
globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the
world and consume more than it produced. The US current account deficit
reached 6.2 per cent of gross national product in 2006. The financial
markets encouraged consumers to borrow by introducing ever more
sophisticated instruments and more generous terms. The authorities
aided
and abetted the process by intervening whenever the global financial
system was at risk. Since 1980, regulations have been progressively
relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so
complicated that the authorities could no longer calculate the risks
and
started relying on the risk management methods of the banks themselves.
Similarly, the rating agencies relied on the information provided by
the
originators of synthetic products. It was a shocking abdication of
responsibility.
Everything that could go wrong did. What started with subprime
mortgages
spread to all collateralised debt obligations, endangered municipal and
mortgage insurance and reinsurance companies and threatened to unravel
the multi-trillion-dollar credit default swap market. Investment
banks’
commitments to leveraged buyouts became liabilities. Market-neutral
hedge funds turned out not to be market-neutral and had to be unwound.
The asset-backed commercial paper market came to a standstill and the
special investment vehicles set up by banks to get mortgages off their
balance sheets could no longer get outside financing. The final blow
came when interbank lending, which is at the heart of the financial
system, was disrupted because banks had to husband their resources and
could not trust their counterparties. The central banks had to inject
an
unprecedented amount of money and extend credit on an unprecedented
range of securities to a broader range of institutions than ever
before.
That made the crisis more severe than any since the second world war.
Credit expansion must now be followed by a period of contraction,
because some of the new credit instruments and practices are unsound
and
unsustainable. The ability of the financial authorities to stimulate
the
economy is constrained by the unwillingness of the rest of the world to
accumulate additional dollar reserves. Until recently, investors were
hoping that the US Federal Reserve would do whatever it takes to avoid
a
recession, because that is what it did on previous occasions. Now they
will have to realise that the Fed may no longer be in a position to do
so. With oil, food and other commodities firm, and the renminbi
appreciating somewhat faster, the Fed also has to worry about
inflation.
If federal funds were lowered beyond a certain point, the dollar would
come under renewed pressure and long-term bonds would actually go up in
yield. Where that point is, is impossible to determine. When it is
reached, the ability of the Fed to stimulate the economy comes to an
end.
Although a recession in the developed world is now more or less
inevitable, China, India and some of the oil-producing countries are in
a very strong countertrend. So, the current financial crisis is less
likely to cause a global recession than a radical realignment of the
global economy, with a relative decline of the US and the rise of China
and other countries in the developing world.
The danger is that the resulting political tensions, including US
protectionism, may disrupt the global economy and plunge the world into
recession or worse.
The writer is chairman of Soros Fund Management
Copyright The Financial Times Limited 2008
How to Sink America
This is from Tom Dispatch. The article shows how support US hegemony globally is in effect sinking America economically. This is military Keynesianism gone wild but not happy with this huge military pump priming the US is now reducing interest rates and also cutting taxes to stimulate spending and consumption.
Within the next month, the Pentagon will submit its 2009 budget to Congress and it's a fair bet that it will be even larger than the staggering 2008 one. Like the Army and the Marines, the Pentagon itself is overstretched and under strain -- and like the two services, which are expected to add 92,000 new troops over the next five years (at an estimated cost of $1.2 billion per 10,000), the Pentagon's response is never to cut back, but always to expand, always to demand more.
After all, there are those disastrous Afghan and Iraqi wars still eating taxpayer dollars as if there were no tomorrow. Then there's what enthusiasts like to call "the next war" to think about, which means all those big-ticket weapons, all those jets, ships, and armored vehicles for the future. And don't forget the still-popular, Rumsfeld-style "netcentric warfare" systems (robots, drones, communications satellites, and the like), not to speak of the killer space toys being developed; and then there's all that ruined equipment out of Iraq and Afghanistan to be massively replaced -- and all those ruined human beings to take care of.
You'll get the gist of this from a recent editorial in the trade magazine Aviation Week & Space Technology:
"The fact Washington must face is that nearly five years of war have left U.S. forces worse off than they have been in a generation, yes, since Vietnam, and restoring them will take budget-building unlike any in the past."
Even on the rare occasion when -- as in the case of Boeing's C-17 cargo plane -- the Pentagon decides to cancel a project, there's Congress to remember. Contracts and subcontracts for weapons systems, carefully doled out to as many states as possible, mean jobs, and so Congress often balks at such cuts. (Fifty-five House members recently warned the Pentagon of a "strong negative response" if funding for the C-17 is excised from the 2009 budget.) All in all, it adds up to a defense menu for a glutton.
Already, Secretary of Defense Robert Gates has said that 2009 funding is "largely locked into place." The giant military-industrial combines -- Lockheed Martin, Northrop Grumman, Boeing, Raytheon -- have been watching their stocks rise in otherwise treacherous times. They are hopeful. As Ronald Sugar, Northrop CEO, put it: "A great global power like the United States needs a great navy and a great navy needs an adequate number of ships, and they have to be modern and capable" -- and guess which company is the Navy's largest shipbuilder?
There should be nothing surprising in all this, especially for those of us who have read Chalmers Johnson's Nemesis, The Last Days of the American Republic, the final volume of his Blowback Trilogy. Published in 2007, it is already a classic on what imperial overstretch means for the rest of us. The paperback of Nemesis is officially out today, just as global stock markets tumble. It is simply a must-read (and if you've already read it, then get a copy for a friend). In the meantime, hunker in for Johnson's latest magisterial account of how the mightiest guns the Pentagon can muster threaten to sink our own country. (For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses military Keynesianism and imperial bankruptcy.) Tom
Going Bankrupt
Why the Debt Crisis Is Now the Greatest Threat to the American Republic
By Chalmers Johnson
The military adventurers of the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the "smartest guys in the room," the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay -- or repudiate. This utter fiscal irresponsibility has been disguised through many manipulative financial schemes (such as causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
There are three broad aspects to our debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defense" projects that bear no relationship to the national security of the United States. Simultaneously, we are keeping the income tax burdens on the richest segments of the American population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our manufacturing base and our loss of jobs to foreign countries through massive military expenditures -- so-called "military Keynesianism," which I discuss in detail in my book Nemesis: The Last Days of the American Republic. By military Keynesianism, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of our country. These are what economists call "opportunity costs," things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs -- an infinitely more efficient use of scarce resources than arms manufacturing. Let me discuss each of these.
The Current Fiscal Disaster
It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The United States has become the largest single salesman of arms and munitions to other nations on Earth. Leaving out of account President Bush's two on-going wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.
Before we try to break down and analyze this gargantuan sum, there is one important caveat. Figures on defense spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicized) basic budget total and double it." Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defense budget is "black," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.
There are many reasons for this budgetary sleight-of-hand -- including a desire for secrecy on the part of the president, the secretary of defense, and the military-industrial complex -- but the chief one is that members of Congress, who profit enormously from defense jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch somewhat closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense, nor the Department of Homeland Security has ever complied. Congress has complained, but not penalized either department for ignoring the law. The result is that all numbers released by the Pentagon should be regarded as suspect.
In discussing the fiscal 2008 defense budget, as released to the press on February 7, 2007, I have been guided by two experienced and reliable analysts: William D. Hartung of the New America Foundation's Arms and Security Initiative and Fred Kaplan, defense correspondent for Slate.org. They agree that the Department of Defense requested $481.4 billion for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7 billion for the "supplemental" budget to fight the "global war on terrorism" -- that is, the two on-going wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4 billion to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional "allowance" (a new term in defense budget documents) of $50 billion to be charged to fiscal year 2009. This comes to a total spending request by the Department of Defense of $766.5 billion.
But there is much more. In an attempt to disguise the true size of the American military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4 billion for the Department of Energy goes toward developing and maintaining nuclear warheads; and $25.3 billion in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside the official Department of Defense budget is now needed for recruitment and reenlistment incentives for the overstretched U.S. military itself, up from a mere $174 million in 2003, the year the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7 billion, 50% of which goes for the long-term care of the grievously injured among the at least 28,870 soldiers so far wounded in Iraq and another 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4 billion goes to the Department of Homeland Security.
Missing as well from this compilation is $1.9 billion to the Department of Justice for the paramilitary activities of the FBI; $38.5 billion to the Department of the Treasury for the Military Retirement Fund; $7.6 billion for the military-related activities of the National Aeronautics and Space Administration; and well over $200 billion in interest for past debt-financed defense outlays. This brings U.S. spending for its military establishment during the current fiscal year (2008), conservatively calculated, to at least $1.1 trillion.
Military Keynesianism
Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neoconservatives and poorly informed patriotic Americans believe that, even though our defense budget is huge, we can afford it because we are the richest country on Earth. Unfortunately, that statement is no longer true. The world's richest political entity, according to the CIA's "World Factbook," is the European Union. The EU's 2006 GDP (gross domestic product -- all goods and services produced domestically) was estimated to be slightly larger than that of the U.S. However, China's 2006 GDP was only slightly smaller than that of the U.S., and Japan was the world's fourth richest nation.
A more telling comparison that reveals just how much worse we're doing can be found among the "current accounts" of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. For example, in order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88 billion per year trade surplus with the United States and enjoys the world's second highest current account balance. (China is number one.) The United States, by contrast, is number 163 -- dead last on the list, worse than countries like Australia and the United Kingdom that also have large trade deficits. Its 2006 current account deficit was $811.5 billion; second worst was Spain at $106.4 billion. This is what is unsustainable.
It's not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On November 7, 2007, the U.S. Treasury announced that the national debt had breached $9 trillion for the first time ever. This was just five weeks after Congress raised the so-called debt ceiling to $9.815 trillion. If you begin in 1789, at the moment the Constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defense expenditures in comparison with the rest of the world.
The world's top 10 military spenders and the approximate amounts each country currently budgets for its military establishment are:
1. United States (FY08 budget), $623 billion
2. China (2004), $65 billion
3. Russia, $50 billion
4. France (2005), $45 billion
5. Japan (2007), $41.75 billion
6. Germany (2003), $35.1 billion
7. Italy (2003), $28.2 billion
8. South Korea (2003), $21.1 billion
9. India (2005 est.), $19 billion
10. Saudi Arabia (2005 est.), $18 billion
World total military expenditures (2004 est.), $1,100 billion
World total (minus the United States), $500 billion
Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration's policies. They have been going on for a very long time in accordance with a superficially plausible ideology and have now become entrenched in our democratic political system where they are starting to wreak havoc. This ideology I call "military Keynesianism" -- the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.
This ideology goes back to the first years of the Cold War. During the late 1940s, the U.S. was haunted by economic anxieties. The Great Depression of the 1930s had been overcome only by the war production boom of World War II. With peace and demobilization, there was a pervasive fear that the Depression would return. During 1949, alarmed by the Soviet Union's detonation of an atomic bomb, the looming communist victory in the Chinese civil war, a domestic recession, and the lowering of the Iron Curtain around the USSR's European satellites, the U.S. sought to draft basic strategy for the emerging cold war. The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated April 14, 1950, and signed by President Harry S. Truman on September 30, 1950, it laid out the basic public economic policies that the United States pursues to the present day.
In its conclusions, NSC-68 asserted: "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living."
With this understanding, American strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment as well as ward off a possible return of the Depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of February 6, 1961: "The conjunction of an immense military establishment and a large arms industry is new in the American experience" -- that is, the military-industrial complex.
By 1990, the value of the weapons, equipment, and factories devoted to the Department of Defense was 83% of the value of all plants and equipment in American manufacturing. From 1947 to 1990, the combined U.S. military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, U.S. reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is, in fact, a form of slow economic suicide.
On May 1, 2007, the Center for Economic and Policy Research of Washington, D.C., released a study prepared by the global forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. Needless to say, the U.S. economy has had to cope with growing defense spending for more than 60 years. He found that, after 10 years of higher defense spending, there would be 464,000 fewer jobs than in a baseline scenario that involved lower defense spending.
Baker concluded:
"It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment."
These are only some of the many deleterious effects of military Keynesianism.
Hollowing Out the American Economy
It was believed that the U.S. could afford both a massive military establishment and a high standard of living, and that it needed both to maintain full employment. But it did not work out that way. By the 1960s, it was becoming apparent that turning over the nation's largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E. Woods, Jr., observes that, during the 1950s and 1960s, between one-third and two-thirds of all American research talent was siphoned off into the military sector. It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.
Nuclear weapons furnish a striking illustration of these anomalies. Between the 1940s and 1996, the United States spent at least $5.8 trillion on the development, testing, and construction of nuclear bombs. By 1967, the peak year of its nuclear stockpile, the United States possessed some 32,500 deliverable atomic and hydrogen bombs, none of which, thankfully, was ever used. They perfectly illustrate the Keynesian principle that the government can provide make-work jobs to keep people employed. Nuclear weapons were not just America's secret weapon, but also its secret economic weapon. As of 2006, we still had 9,960 of them. There is today no sane use for them, while the trillions spent on them could have been used to solve the problems of social security and health care, quality education and access to higher education for all, not to speak of the retention of highly skilled jobs within the American economy.
The pioneer in analyzing what has been lost as a result of military Keynesianism was the late Seymour Melman (1917-2004), a professor of industrial engineering and operations research at Columbia University. His 1970 book, Pentagon Capitalism: The Political Economy of War, was a prescient analysis of the unintended consequences of the American preoccupation with its armed forces and their weaponry since the onset of the Cold War. Melman wrote (pp. 2-3):
"From 1946 to 1969, the United States government spent over $1,000 billion on the military, more than half of this under the Kennedy and Johnson administrations -- the period during which the [Pentagon-dominated] state management was established as a formal institution. This sum of staggering size (try to visualize a billion of something) does not express the cost of the military establishment to the nation as a whole. The true cost is measured by what has been foregone, by the accumulated deterioration in many facets of life by the inability to alleviate human wretchedness of long duration."
In an important exegesis on Melman's relevance to the current American economic situation, Thomas Woods writes:
"According to the U.S. Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation's plant and equipment, and infrastructure, at just over $7.29 trillion. In other words, the amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock."
The fact that we did not modernize or replace our capital assets is one of the main reasons why, by the turn of the twenty-first century, our manufacturing base had all but evaporated. Machine tools -- an industry on which Melman was an authority -- are a particularly important symptom. In November 1968, a five-year inventory disclosed (p. 186) "that 64 percent of the metalworking machine tools used in U.S. industry were ten years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States' machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the Second World War. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry."
Nothing has been done in the period since 1968 to reverse these trends and it shows today in our massive imports of equipment -- from medical machines like proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.
Our short tenure as the world's "lone superpower" has come to an end. As Harvard economics professor Benjamin Friedman has written:
"Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence, and cultural influence. It's no accident that we took over the role from the British at the same time that we took over… the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone."
Some of the damage done can never be rectified. There are, however, some steps that this country urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defense budget all projects that bear no relationship to the national security of the United States, and ceasing to use the defense budget as a Keynesian jobs program. If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.
Chalmers Johnson is the author of Nemesis: The Last Days of the American Republic, just published in paperback. It is the final volume of his Blowback Trilogy, which also includes Blowback (2000) and The Sorrows of Empire (2004).
[Note: For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses "military Keynesianism" and imperial bankruptcy. For sources on global military spending, please see: (1) Global Security Organization, "World Wide Military Expenditures" as well as Glenn Greenwald, "The bipartisan consensus on U.S. military spending"; (2) Stockholm International Peace Research Institute, "Report: China biggest Asian military spender."]
Copyright 2008 Chalmers Johnson
Within the next month, the Pentagon will submit its 2009 budget to Congress and it's a fair bet that it will be even larger than the staggering 2008 one. Like the Army and the Marines, the Pentagon itself is overstretched and under strain -- and like the two services, which are expected to add 92,000 new troops over the next five years (at an estimated cost of $1.2 billion per 10,000), the Pentagon's response is never to cut back, but always to expand, always to demand more.
After all, there are those disastrous Afghan and Iraqi wars still eating taxpayer dollars as if there were no tomorrow. Then there's what enthusiasts like to call "the next war" to think about, which means all those big-ticket weapons, all those jets, ships, and armored vehicles for the future. And don't forget the still-popular, Rumsfeld-style "netcentric warfare" systems (robots, drones, communications satellites, and the like), not to speak of the killer space toys being developed; and then there's all that ruined equipment out of Iraq and Afghanistan to be massively replaced -- and all those ruined human beings to take care of.
You'll get the gist of this from a recent editorial in the trade magazine Aviation Week & Space Technology:
"The fact Washington must face is that nearly five years of war have left U.S. forces worse off than they have been in a generation, yes, since Vietnam, and restoring them will take budget-building unlike any in the past."
Even on the rare occasion when -- as in the case of Boeing's C-17 cargo plane -- the Pentagon decides to cancel a project, there's Congress to remember. Contracts and subcontracts for weapons systems, carefully doled out to as many states as possible, mean jobs, and so Congress often balks at such cuts. (Fifty-five House members recently warned the Pentagon of a "strong negative response" if funding for the C-17 is excised from the 2009 budget.) All in all, it adds up to a defense menu for a glutton.
Already, Secretary of Defense Robert Gates has said that 2009 funding is "largely locked into place." The giant military-industrial combines -- Lockheed Martin, Northrop Grumman, Boeing, Raytheon -- have been watching their stocks rise in otherwise treacherous times. They are hopeful. As Ronald Sugar, Northrop CEO, put it: "A great global power like the United States needs a great navy and a great navy needs an adequate number of ships, and they have to be modern and capable" -- and guess which company is the Navy's largest shipbuilder?
There should be nothing surprising in all this, especially for those of us who have read Chalmers Johnson's Nemesis, The Last Days of the American Republic, the final volume of his Blowback Trilogy. Published in 2007, it is already a classic on what imperial overstretch means for the rest of us. The paperback of Nemesis is officially out today, just as global stock markets tumble. It is simply a must-read (and if you've already read it, then get a copy for a friend). In the meantime, hunker in for Johnson's latest magisterial account of how the mightiest guns the Pentagon can muster threaten to sink our own country. (For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses military Keynesianism and imperial bankruptcy.) Tom
Going Bankrupt
Why the Debt Crisis Is Now the Greatest Threat to the American Republic
By Chalmers Johnson
The military adventurers of the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the "smartest guys in the room," the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay -- or repudiate. This utter fiscal irresponsibility has been disguised through many manipulative financial schemes (such as causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
There are three broad aspects to our debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defense" projects that bear no relationship to the national security of the United States. Simultaneously, we are keeping the income tax burdens on the richest segments of the American population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our manufacturing base and our loss of jobs to foreign countries through massive military expenditures -- so-called "military Keynesianism," which I discuss in detail in my book Nemesis: The Last Days of the American Republic. By military Keynesianism, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of our country. These are what economists call "opportunity costs," things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs -- an infinitely more efficient use of scarce resources than arms manufacturing. Let me discuss each of these.
The Current Fiscal Disaster
It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The United States has become the largest single salesman of arms and munitions to other nations on Earth. Leaving out of account President Bush's two on-going wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.
Before we try to break down and analyze this gargantuan sum, there is one important caveat. Figures on defense spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicized) basic budget total and double it." Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defense budget is "black," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.
There are many reasons for this budgetary sleight-of-hand -- including a desire for secrecy on the part of the president, the secretary of defense, and the military-industrial complex -- but the chief one is that members of Congress, who profit enormously from defense jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch somewhat closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense, nor the Department of Homeland Security has ever complied. Congress has complained, but not penalized either department for ignoring the law. The result is that all numbers released by the Pentagon should be regarded as suspect.
In discussing the fiscal 2008 defense budget, as released to the press on February 7, 2007, I have been guided by two experienced and reliable analysts: William D. Hartung of the New America Foundation's Arms and Security Initiative and Fred Kaplan, defense correspondent for Slate.org. They agree that the Department of Defense requested $481.4 billion for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7 billion for the "supplemental" budget to fight the "global war on terrorism" -- that is, the two on-going wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4 billion to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional "allowance" (a new term in defense budget documents) of $50 billion to be charged to fiscal year 2009. This comes to a total spending request by the Department of Defense of $766.5 billion.
But there is much more. In an attempt to disguise the true size of the American military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4 billion for the Department of Energy goes toward developing and maintaining nuclear warheads; and $25.3 billion in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside the official Department of Defense budget is now needed for recruitment and reenlistment incentives for the overstretched U.S. military itself, up from a mere $174 million in 2003, the year the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7 billion, 50% of which goes for the long-term care of the grievously injured among the at least 28,870 soldiers so far wounded in Iraq and another 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4 billion goes to the Department of Homeland Security.
Missing as well from this compilation is $1.9 billion to the Department of Justice for the paramilitary activities of the FBI; $38.5 billion to the Department of the Treasury for the Military Retirement Fund; $7.6 billion for the military-related activities of the National Aeronautics and Space Administration; and well over $200 billion in interest for past debt-financed defense outlays. This brings U.S. spending for its military establishment during the current fiscal year (2008), conservatively calculated, to at least $1.1 trillion.
Military Keynesianism
Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neoconservatives and poorly informed patriotic Americans believe that, even though our defense budget is huge, we can afford it because we are the richest country on Earth. Unfortunately, that statement is no longer true. The world's richest political entity, according to the CIA's "World Factbook," is the European Union. The EU's 2006 GDP (gross domestic product -- all goods and services produced domestically) was estimated to be slightly larger than that of the U.S. However, China's 2006 GDP was only slightly smaller than that of the U.S., and Japan was the world's fourth richest nation.
A more telling comparison that reveals just how much worse we're doing can be found among the "current accounts" of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. For example, in order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88 billion per year trade surplus with the United States and enjoys the world's second highest current account balance. (China is number one.) The United States, by contrast, is number 163 -- dead last on the list, worse than countries like Australia and the United Kingdom that also have large trade deficits. Its 2006 current account deficit was $811.5 billion; second worst was Spain at $106.4 billion. This is what is unsustainable.
It's not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On November 7, 2007, the U.S. Treasury announced that the national debt had breached $9 trillion for the first time ever. This was just five weeks after Congress raised the so-called debt ceiling to $9.815 trillion. If you begin in 1789, at the moment the Constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defense expenditures in comparison with the rest of the world.
The world's top 10 military spenders and the approximate amounts each country currently budgets for its military establishment are:
1. United States (FY08 budget), $623 billion
2. China (2004), $65 billion
3. Russia, $50 billion
4. France (2005), $45 billion
5. Japan (2007), $41.75 billion
6. Germany (2003), $35.1 billion
7. Italy (2003), $28.2 billion
8. South Korea (2003), $21.1 billion
9. India (2005 est.), $19 billion
10. Saudi Arabia (2005 est.), $18 billion
World total military expenditures (2004 est.), $1,100 billion
World total (minus the United States), $500 billion
Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration's policies. They have been going on for a very long time in accordance with a superficially plausible ideology and have now become entrenched in our democratic political system where they are starting to wreak havoc. This ideology I call "military Keynesianism" -- the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.
This ideology goes back to the first years of the Cold War. During the late 1940s, the U.S. was haunted by economic anxieties. The Great Depression of the 1930s had been overcome only by the war production boom of World War II. With peace and demobilization, there was a pervasive fear that the Depression would return. During 1949, alarmed by the Soviet Union's detonation of an atomic bomb, the looming communist victory in the Chinese civil war, a domestic recession, and the lowering of the Iron Curtain around the USSR's European satellites, the U.S. sought to draft basic strategy for the emerging cold war. The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated April 14, 1950, and signed by President Harry S. Truman on September 30, 1950, it laid out the basic public economic policies that the United States pursues to the present day.
In its conclusions, NSC-68 asserted: "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living."
With this understanding, American strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment as well as ward off a possible return of the Depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of February 6, 1961: "The conjunction of an immense military establishment and a large arms industry is new in the American experience" -- that is, the military-industrial complex.
By 1990, the value of the weapons, equipment, and factories devoted to the Department of Defense was 83% of the value of all plants and equipment in American manufacturing. From 1947 to 1990, the combined U.S. military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, U.S. reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is, in fact, a form of slow economic suicide.
On May 1, 2007, the Center for Economic and Policy Research of Washington, D.C., released a study prepared by the global forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. Needless to say, the U.S. economy has had to cope with growing defense spending for more than 60 years. He found that, after 10 years of higher defense spending, there would be 464,000 fewer jobs than in a baseline scenario that involved lower defense spending.
Baker concluded:
"It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment."
These are only some of the many deleterious effects of military Keynesianism.
Hollowing Out the American Economy
It was believed that the U.S. could afford both a massive military establishment and a high standard of living, and that it needed both to maintain full employment. But it did not work out that way. By the 1960s, it was becoming apparent that turning over the nation's largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E. Woods, Jr., observes that, during the 1950s and 1960s, between one-third and two-thirds of all American research talent was siphoned off into the military sector. It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.
Nuclear weapons furnish a striking illustration of these anomalies. Between the 1940s and 1996, the United States spent at least $5.8 trillion on the development, testing, and construction of nuclear bombs. By 1967, the peak year of its nuclear stockpile, the United States possessed some 32,500 deliverable atomic and hydrogen bombs, none of which, thankfully, was ever used. They perfectly illustrate the Keynesian principle that the government can provide make-work jobs to keep people employed. Nuclear weapons were not just America's secret weapon, but also its secret economic weapon. As of 2006, we still had 9,960 of them. There is today no sane use for them, while the trillions spent on them could have been used to solve the problems of social security and health care, quality education and access to higher education for all, not to speak of the retention of highly skilled jobs within the American economy.
The pioneer in analyzing what has been lost as a result of military Keynesianism was the late Seymour Melman (1917-2004), a professor of industrial engineering and operations research at Columbia University. His 1970 book, Pentagon Capitalism: The Political Economy of War, was a prescient analysis of the unintended consequences of the American preoccupation with its armed forces and their weaponry since the onset of the Cold War. Melman wrote (pp. 2-3):
"From 1946 to 1969, the United States government spent over $1,000 billion on the military, more than half of this under the Kennedy and Johnson administrations -- the period during which the [Pentagon-dominated] state management was established as a formal institution. This sum of staggering size (try to visualize a billion of something) does not express the cost of the military establishment to the nation as a whole. The true cost is measured by what has been foregone, by the accumulated deterioration in many facets of life by the inability to alleviate human wretchedness of long duration."
In an important exegesis on Melman's relevance to the current American economic situation, Thomas Woods writes:
"According to the U.S. Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation's plant and equipment, and infrastructure, at just over $7.29 trillion. In other words, the amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock."
The fact that we did not modernize or replace our capital assets is one of the main reasons why, by the turn of the twenty-first century, our manufacturing base had all but evaporated. Machine tools -- an industry on which Melman was an authority -- are a particularly important symptom. In November 1968, a five-year inventory disclosed (p. 186) "that 64 percent of the metalworking machine tools used in U.S. industry were ten years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States' machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the Second World War. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry."
Nothing has been done in the period since 1968 to reverse these trends and it shows today in our massive imports of equipment -- from medical machines like proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.
Our short tenure as the world's "lone superpower" has come to an end. As Harvard economics professor Benjamin Friedman has written:
"Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence, and cultural influence. It's no accident that we took over the role from the British at the same time that we took over… the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone."
Some of the damage done can never be rectified. There are, however, some steps that this country urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defense budget all projects that bear no relationship to the national security of the United States, and ceasing to use the defense budget as a Keynesian jobs program. If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.
Chalmers Johnson is the author of Nemesis: The Last Days of the American Republic, just published in paperback. It is the final volume of his Blowback Trilogy, which also includes Blowback (2000) and The Sorrows of Empire (2004).
[Note: For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses "military Keynesianism" and imperial bankruptcy. For sources on global military spending, please see: (1) Global Security Organization, "World Wide Military Expenditures" as well as Glenn Greenwald, "The bipartisan consensus on U.S. military spending"; (2) Stockholm International Peace Research Institute, "Report: China biggest Asian military spender."]
Copyright 2008 Chalmers Johnson
Wednesday, January 23, 2008
Reaction to Fed Interest Rate Cut from Davos
I always thought that economists were supposed to be worshippers of the free market. Shouldn't the government just keep its hands off and let the discipline of the market punish all these evil doers!!The Invisible Hand is supposed to give them a good spanking for being such reckless lenders and borrowers.
Financial Times - January 23, 2008
Davos 2008
FED'S CUT TRIGGERS HARSH WORDS FROM DAVOS
Reactions to the US Federal Reserve's dramatic 0.75 percentage point
cut in interest rates ranged from hostile to lukewarm as
policymakers, businessmen and economists gathered at the World
Economic Forum on Wednesday.
Economists at the meeting warned that the monetary easing announced
on Tuesday would not succeed in boosting a sickly US economy.
Moreover, they said, by reacting to turmoil in equity markets, the
Fed seriously risked creating the impression that it was most
concerned with ensuring investors did not lose money.
Stephen Roach of Morgan Stanley said that the Fed's policy of
cleaning up after a bubble has burst was "a dangerous and reckless
and irresponsible way to run the world economy". "It was market-
friendly action," he wrote in his FT.com blog from Davos, asking: "Is
that the way to run a central bank?"
Sir Howard Davies, the director of the London School of Economics and
a former chairman of the UK Financial Services Authority, the UK
financial regulator, agreed with Mr Roach. He said the move reminded
him of the character Corporal Jones in the long-running UK sitcom
Dad's Army, who always shouted "don't panic" just when he and
everyone else were doing just that.
In one session, almost 60 per cent of the delegates voted in favour
of a motion saying central banks had lost both their focus and
control with respect to economic governance.
The reactions among delegates were not entirely negative, however.
John Snow, chairman of Cerberus Capital Management and the former US
treasury secretary said the emergency rate cut showed that "the
question of whether the central bank is capable of bold action was
answered yesterday".
Jacob Frenkel, vice-chairman of AIG, added the cut was "on the mark",
indicating the drama and the severity of the situation.
But they were in a minority.
Professor Lawrence Summers of Harvard University - another former US
treasury secretary - said: "It is hard to give central banks a high
grade over the past two years on recognition of incipient bubbles or
on their action to address them. Nor in the last six months when they
were behind the curve."
Professor Nouriel Roubini of New York University, a long-standing
bear on the US and global economies, agreed and called for a more
symmetric approach from the Fed. "There was a Greenspan put and now
there is a Bernanke put," he added, in reference to the perception
that Fed chairmen always cut interest rates when investors lose money.
But the more worrying suggestion was that the action would not work.
Professor Joseph Stiglitz of Columbia University, a Nobel prize-
winning economist, thought the Fed had acted "too late". With
structural forces in the US housing market and financial system
likely to bring a contraction, it would be as effective as "pushing
on a piece of string".
___________________________________
Financial Times - January 23, 2008
Davos 2008
FED'S CUT TRIGGERS HARSH WORDS FROM DAVOS
Reactions to the US Federal Reserve's dramatic 0.75 percentage point
cut in interest rates ranged from hostile to lukewarm as
policymakers, businessmen and economists gathered at the World
Economic Forum on Wednesday.
Economists at the meeting warned that the monetary easing announced
on Tuesday would not succeed in boosting a sickly US economy.
Moreover, they said, by reacting to turmoil in equity markets, the
Fed seriously risked creating the impression that it was most
concerned with ensuring investors did not lose money.
Stephen Roach of Morgan Stanley said that the Fed's policy of
cleaning up after a bubble has burst was "a dangerous and reckless
and irresponsible way to run the world economy". "It was market-
friendly action," he wrote in his FT.com blog from Davos, asking: "Is
that the way to run a central bank?"
Sir Howard Davies, the director of the London School of Economics and
a former chairman of the UK Financial Services Authority, the UK
financial regulator, agreed with Mr Roach. He said the move reminded
him of the character Corporal Jones in the long-running UK sitcom
Dad's Army, who always shouted "don't panic" just when he and
everyone else were doing just that.
In one session, almost 60 per cent of the delegates voted in favour
of a motion saying central banks had lost both their focus and
control with respect to economic governance.
The reactions among delegates were not entirely negative, however.
John Snow, chairman of Cerberus Capital Management and the former US
treasury secretary said the emergency rate cut showed that "the
question of whether the central bank is capable of bold action was
answered yesterday".
Jacob Frenkel, vice-chairman of AIG, added the cut was "on the mark",
indicating the drama and the severity of the situation.
But they were in a minority.
Professor Lawrence Summers of Harvard University - another former US
treasury secretary - said: "It is hard to give central banks a high
grade over the past two years on recognition of incipient bubbles or
on their action to address them. Nor in the last six months when they
were behind the curve."
Professor Nouriel Roubini of New York University, a long-standing
bear on the US and global economies, agreed and called for a more
symmetric approach from the Fed. "There was a Greenspan put and now
there is a Bernanke put," he added, in reference to the perception
that Fed chairmen always cut interest rates when investors lose money.
But the more worrying suggestion was that the action would not work.
Professor Joseph Stiglitz of Columbia University, a Nobel prize-
winning economist, thought the Fed had acted "too late". With
structural forces in the US housing market and financial system
likely to bring a contraction, it would be as effective as "pushing
on a piece of string".
___________________________________
Philippines: Billions of Litres of Smuggled Oil
This is rather suspicious. Perhaps some politicians are pocketing some retirement savings in order to facilitate the smuggling. It is not absolutely clear but it sounds as if some of failure to pay tax is facilitated through importation via the free port at Subic Bay.
This excerpt is from the Daily Tribune
Oil smuggling bared: 4 billion liters untaxed in ’07
By Angie M. Rosales
01/24/2008
Finance and Energy officials yesterday virtually confessed to the existence of oil smuggling in the country as opposition Sen. Francis Escudero noted that four billion liters of oil have been unaccounted for last year as far as the imposition of value-added tax (VAT) on this product goes.
Escudero said data provided by the Department of Finance (DoF) and the Department of Energy (DoE) showed the discrepancy in figures vis-à-vis the yearly consumption volume of 12 billion liters that have been imposed with tariffs proved to only amount to eight billion liters.
“That’s four billion liters untaxed. And assuming this to be at P3 per liter based on VAT imposed, that’s already P12 billion down the drain without even computing the excise tax, tariffs and even income taxes,” Escudero, chairman of the Senate ways and means committee, told reporters after conducting a hearing into the proposed suspension of VAT on petroleum products.
Inquiring into the documents submitted by the two agencies, Bureau of Internal Revenue (BIR) officials claimed their collections represent only 8.7 billion liters while Bureau of Customs (BoC) officials said almost P20 billion worth of imported crude oil came into the country last year.
“Our collection in terms of VAT for petroleum products is (at) P17.28 billion while for crude oil, we have collected VAT of P28.9 billion and this is what we reported to DoF and to the President (Arroyo), in terms of the collections of BoC for VAT as an agent of the BIR,” BIR Assistant Commissioner James Roldan told the committee.
Escudero pointed out that the President herself admitted that she had instructed the Presidential Anti-Smuggling Group (PASG) to run after oil smugglers and probe the existence of the alleged illegal activity.
DoF planning division director Ma. Teresa Habitan that it is only now that they realized this as the volume of consumption last year appeared that the figures were within the limits of inventory.
“We’re awaiting the final outcome for 2007. It’s only now that it came out, the 2007 full-year data and we’ll compare it,” she said adding that the figures being cited by Escudero are those that they noted fell within the limits of the refinery and inventory losses which would equal to the bulk of imported oil that came in last year.
“According to the data of BoC, they imported a total of 6.1 billion of refined petroleum products or without the LPG, that would be around 5.2 in liter terms. These are already taxed or VAT-ed at the ports so that does not come in as taxable commodity at the BIR side. What the BIR has reported comes from the domestic manufacturers. The BoC also collected importation of about 13.4 billion liters of crude oil and this is what is refined by domestic manufacturers and that would translate to net of refinery loss and the inventory (loss) into what is reported by the BIR as 10.2B removals in terms of liters,” she explained.
“They’re inept, to begin with because they themselves, it’s at the finger tips of their own data and records and yet they can not compute backwards or forward how much should be accounted for,” Escudero said.
“Whichever way you look at it, there remains an accounted three to four billion liters by the DoF and as to where this went, there’s no record to show it,” he added then stressed: “They’re not only inept, I think the government has been negligent on this matter because of so many loopholes in their statements on why they failed to detect this…The two revenue-collecting agencies, BIR and BoC don’t coordinate with each other and it seems it’s only now that they are acting on this matter,” said Sen. Manuel Roxas during a briefing with reporters after the proceedings.
BoC Commissioner Napoleon Morales Jr. told the panel that it is only recently that they entered into a memorandum of agreement with the Subic Bay Metropolitan Authority (SBMA), where oil smuggling in the free port area is massive, to curb the illegal activity.
“There will now be computer linkages bet SBMA and ours and so Customs will now know what are the volumes of petroleum products being sent through PEZA and tax exemptions…I think it will be finished by February this year,” Morales said.
“So prior to that you were not aware (of ongoing oil smuggling?” asked Escudero.
“In the case of SBMA, this is a free port, and the only thing Customs acquired jurisdiction of is once it is outside customs territory,” Morales explained.
“But it does not mean, all a free port means is that you do not impose a tariff but it does not mean you cannot monitor, isn’t that so?” asked Roxas to which he was given an affirmative answer by the BoC chief.
“You see, in free ports, there is an indeed DoJ opinion on this, that any importation made by free port is not considered as importation. The tariffs and customs code only applies when the goods are being transferred to customs territory. This is why we have an MoA with SBMA,” Morales said.
“Are you saying that that the DoJ itself is sabotaging anti-smuggling efforts?” Roxas asked.
The BoC chief insisted that was the law, and that Customs has no jurisdiction there.
At the same time, major oil companies can not be made to bring down prices even if there will be a suspension on imposition of value-added tax (VAT) on petroleum products because of the existing deregulated market.
Senators were made to realize this yesterday by major oil players yesterday during the continuing public hearing on proposed zero percent VAT transactions on petroleum products to cushion the impact of continuing rise of crude in the world market.
This means the proposed legislation being pushed by Roxas could be an exercise in futility.
Under interrogation by Roxas and Escudero, Shell Philippines President Edgardo Chua said that under the present legal system where oil prices are deregulated, they are cannot be compelled to automatically reduce prices even if Congress passes into law the proposed suspension of VAT on petroleum products.
“You are not obliged to do it, would that be correct? So you can decide to reduce it by 50 percent of what is the amount of VAT or more than the amount of VAT?” asked Escudero pursuing Roxas’ line of questioning during the hearing.
“When it comes to tax, it’s a pass-on. We are just a collecting agent. So whatever tax the government imposes, that’s what we carry,” Chua told the committee.
Some senators, Roxas in particular, is pushing the suspension of VAT on oil to ease the plight of the people faced with a weakened purchasing power of the peso.
Roxas earlier filed Senate bill No. 1962 which seeks to treat oil and petroleum products as zero-rated products for a period of six months, effectively suspending the 12 percent VAT on these products or an estimated savings of P4 per liter of diesel and P65 for an 11-kilo tank diesel and foregone revenues due to moratorium.
“It’s like this. Our selling price has numerous components – tax component, cost of product etc. – so if we put aside the tax since as I’ve said we’re just a collecting agency, the final price, there could be other attributing factors, could be higher or lower than the tax relief,” Chua said.
“It can’t be straightforward, if in the event that there will be a reduction of VAT to the amount of P4.62 per liter, if this becomes law, you’re not obliged to effect this?” asked Escudero.
Chua replied in the positive, stressing that the industry is deregulated.
The Shell executive also said that even the DoE can not prevail upon them in setting their rates as final price in a deregulated industry is dictated by the market or by the competition.
Roxas, however, found this unacceptable pointing out that oil prices will effectively be reduced once tariffs are lifted.
“There are other elements to pricing. If we can reduce the prices by P4 for at least a month and then it will be imposed, it would not be an act by the government. Under the Price Act, you’re supposed to separate their price from the VAT. So if this ( P4 per liter VAT on oil) will be lifted, the there will be a corresponding lowering of price by P4,” Roxas insisted.
The senator said that they would also look into the Oil Deregulation Law in view of the position aired by the major oil companies.
In the same hearing, finance officials flip-flopped on their position regarding actual figures as far as losses in revenues once the proposed suspension on VAT in oil products is approved by Congress, admitting that it would translate to some P30 billion and not P54 billion as earlier claimed by them.
Both Escudero and Roxas assailed officials from the Finance department as they managed to extract this information from them in the course of the proceedings.
“They gave us conflicting figures, only to admit in the end that what they have been claiming during the past couple of weeks as P54 billion in foregone revenues (if this proposal pushed through). This morning, in our hearing, it trimmed down to P30 billion,” Escudero said.
“It was shown in the hearing that the so-called ‘doomsday scenario’ where there will be an economic instability or effect in our fiscal strength is without any basis as the DoF officials themselves say that there will only be a foregone revenue of P30 billion and this does not include in their calculation the savings that will be accumulated within the year,” Roxas said.
“If only the government will do its job, P30 billion would not be a big issue. It will restore to the public who in return, will be able to spend it on their other needs which means the government collecting it as VAT on other forms of commodities,” he added.
For comments about this website:Webmaster@tribune.net.ph
The Daily Tribune © 2006
This excerpt is from the Daily Tribune
Oil smuggling bared: 4 billion liters untaxed in ’07
By Angie M. Rosales
01/24/2008
Finance and Energy officials yesterday virtually confessed to the existence of oil smuggling in the country as opposition Sen. Francis Escudero noted that four billion liters of oil have been unaccounted for last year as far as the imposition of value-added tax (VAT) on this product goes.
Escudero said data provided by the Department of Finance (DoF) and the Department of Energy (DoE) showed the discrepancy in figures vis-à-vis the yearly consumption volume of 12 billion liters that have been imposed with tariffs proved to only amount to eight billion liters.
“That’s four billion liters untaxed. And assuming this to be at P3 per liter based on VAT imposed, that’s already P12 billion down the drain without even computing the excise tax, tariffs and even income taxes,” Escudero, chairman of the Senate ways and means committee, told reporters after conducting a hearing into the proposed suspension of VAT on petroleum products.
Inquiring into the documents submitted by the two agencies, Bureau of Internal Revenue (BIR) officials claimed their collections represent only 8.7 billion liters while Bureau of Customs (BoC) officials said almost P20 billion worth of imported crude oil came into the country last year.
“Our collection in terms of VAT for petroleum products is (at) P17.28 billion while for crude oil, we have collected VAT of P28.9 billion and this is what we reported to DoF and to the President (Arroyo), in terms of the collections of BoC for VAT as an agent of the BIR,” BIR Assistant Commissioner James Roldan told the committee.
Escudero pointed out that the President herself admitted that she had instructed the Presidential Anti-Smuggling Group (PASG) to run after oil smugglers and probe the existence of the alleged illegal activity.
DoF planning division director Ma. Teresa Habitan that it is only now that they realized this as the volume of consumption last year appeared that the figures were within the limits of inventory.
“We’re awaiting the final outcome for 2007. It’s only now that it came out, the 2007 full-year data and we’ll compare it,” she said adding that the figures being cited by Escudero are those that they noted fell within the limits of the refinery and inventory losses which would equal to the bulk of imported oil that came in last year.
“According to the data of BoC, they imported a total of 6.1 billion of refined petroleum products or without the LPG, that would be around 5.2 in liter terms. These are already taxed or VAT-ed at the ports so that does not come in as taxable commodity at the BIR side. What the BIR has reported comes from the domestic manufacturers. The BoC also collected importation of about 13.4 billion liters of crude oil and this is what is refined by domestic manufacturers and that would translate to net of refinery loss and the inventory (loss) into what is reported by the BIR as 10.2B removals in terms of liters,” she explained.
“They’re inept, to begin with because they themselves, it’s at the finger tips of their own data and records and yet they can not compute backwards or forward how much should be accounted for,” Escudero said.
“Whichever way you look at it, there remains an accounted three to four billion liters by the DoF and as to where this went, there’s no record to show it,” he added then stressed: “They’re not only inept, I think the government has been negligent on this matter because of so many loopholes in their statements on why they failed to detect this…The two revenue-collecting agencies, BIR and BoC don’t coordinate with each other and it seems it’s only now that they are acting on this matter,” said Sen. Manuel Roxas during a briefing with reporters after the proceedings.
BoC Commissioner Napoleon Morales Jr. told the panel that it is only recently that they entered into a memorandum of agreement with the Subic Bay Metropolitan Authority (SBMA), where oil smuggling in the free port area is massive, to curb the illegal activity.
“There will now be computer linkages bet SBMA and ours and so Customs will now know what are the volumes of petroleum products being sent through PEZA and tax exemptions…I think it will be finished by February this year,” Morales said.
“So prior to that you were not aware (of ongoing oil smuggling?” asked Escudero.
“In the case of SBMA, this is a free port, and the only thing Customs acquired jurisdiction of is once it is outside customs territory,” Morales explained.
“But it does not mean, all a free port means is that you do not impose a tariff but it does not mean you cannot monitor, isn’t that so?” asked Roxas to which he was given an affirmative answer by the BoC chief.
“You see, in free ports, there is an indeed DoJ opinion on this, that any importation made by free port is not considered as importation. The tariffs and customs code only applies when the goods are being transferred to customs territory. This is why we have an MoA with SBMA,” Morales said.
“Are you saying that that the DoJ itself is sabotaging anti-smuggling efforts?” Roxas asked.
The BoC chief insisted that was the law, and that Customs has no jurisdiction there.
At the same time, major oil companies can not be made to bring down prices even if there will be a suspension on imposition of value-added tax (VAT) on petroleum products because of the existing deregulated market.
Senators were made to realize this yesterday by major oil players yesterday during the continuing public hearing on proposed zero percent VAT transactions on petroleum products to cushion the impact of continuing rise of crude in the world market.
This means the proposed legislation being pushed by Roxas could be an exercise in futility.
Under interrogation by Roxas and Escudero, Shell Philippines President Edgardo Chua said that under the present legal system where oil prices are deregulated, they are cannot be compelled to automatically reduce prices even if Congress passes into law the proposed suspension of VAT on petroleum products.
“You are not obliged to do it, would that be correct? So you can decide to reduce it by 50 percent of what is the amount of VAT or more than the amount of VAT?” asked Escudero pursuing Roxas’ line of questioning during the hearing.
“When it comes to tax, it’s a pass-on. We are just a collecting agent. So whatever tax the government imposes, that’s what we carry,” Chua told the committee.
Some senators, Roxas in particular, is pushing the suspension of VAT on oil to ease the plight of the people faced with a weakened purchasing power of the peso.
Roxas earlier filed Senate bill No. 1962 which seeks to treat oil and petroleum products as zero-rated products for a period of six months, effectively suspending the 12 percent VAT on these products or an estimated savings of P4 per liter of diesel and P65 for an 11-kilo tank diesel and foregone revenues due to moratorium.
“It’s like this. Our selling price has numerous components – tax component, cost of product etc. – so if we put aside the tax since as I’ve said we’re just a collecting agency, the final price, there could be other attributing factors, could be higher or lower than the tax relief,” Chua said.
“It can’t be straightforward, if in the event that there will be a reduction of VAT to the amount of P4.62 per liter, if this becomes law, you’re not obliged to effect this?” asked Escudero.
Chua replied in the positive, stressing that the industry is deregulated.
The Shell executive also said that even the DoE can not prevail upon them in setting their rates as final price in a deregulated industry is dictated by the market or by the competition.
Roxas, however, found this unacceptable pointing out that oil prices will effectively be reduced once tariffs are lifted.
“There are other elements to pricing. If we can reduce the prices by P4 for at least a month and then it will be imposed, it would not be an act by the government. Under the Price Act, you’re supposed to separate their price from the VAT. So if this ( P4 per liter VAT on oil) will be lifted, the there will be a corresponding lowering of price by P4,” Roxas insisted.
The senator said that they would also look into the Oil Deregulation Law in view of the position aired by the major oil companies.
In the same hearing, finance officials flip-flopped on their position regarding actual figures as far as losses in revenues once the proposed suspension on VAT in oil products is approved by Congress, admitting that it would translate to some P30 billion and not P54 billion as earlier claimed by them.
Both Escudero and Roxas assailed officials from the Finance department as they managed to extract this information from them in the course of the proceedings.
“They gave us conflicting figures, only to admit in the end that what they have been claiming during the past couple of weeks as P54 billion in foregone revenues (if this proposal pushed through). This morning, in our hearing, it trimmed down to P30 billion,” Escudero said.
“It was shown in the hearing that the so-called ‘doomsday scenario’ where there will be an economic instability or effect in our fiscal strength is without any basis as the DoF officials themselves say that there will only be a foregone revenue of P30 billion and this does not include in their calculation the savings that will be accumulated within the year,” Roxas said.
“If only the government will do its job, P30 billion would not be a big issue. It will restore to the public who in return, will be able to spend it on their other needs which means the government collecting it as VAT on other forms of commodities,” he added.
For comments about this website:Webmaster@tribune.net.ph
The Daily Tribune © 2006
Some manufacturers facing skilled labor shortage.
This seems to be a neglected problem in discussion of the present economic problems in the US.
"Help Wanted" highlights skills drain in U.S.
Mon Jan 21, 2008 8:09am EST
By Joanne Morrison
TRAFFORD, Pennsylvania (Reuters) - Only half the machines are running
at precision parts maker Hamill Manufacturing, nestled in the
Allegheny Mountains just east of Pittsburgh, once the booming center
of the U.S. steel industry.
But the factory's overcapacity is the result not of a shortage of
business -- it has more orders than it can fill, despite a slowing
U.S. economy -- but because of a shortage of skilled workers.
"I'd hire 10 machinists right now if I could," said John Dalrymple,
president of the company, which makes high-end parts for military
helicopters and nuclear submarines. "That's eight to 10 percent of
our workforce."
While millions of jobs making everything from textiles to steel have
moved to new powerhouses like China in recent years, precision
manufacturing remains a crucial niche in the United States, one that
is overworked and chronically understaffed.
And, in a bad sign for the United States and its declining economic
might, that shortage of skilled workers is likely to get worse as
Baby Boomers retire -- with no younger generation of manufacturing
workers to take the baton.
"Our workforce is an aging workforce," said Chief Executive Jeff
Kelly, whose father founded Hamill nearly 60 years ago. "There isn't
a queue of people lining up to come into the industry."
Some 20 percent of small to medium-sized manufacturers -- those with
up to 2,000 workers -- cited retaining or training employees as their
No. 1 concern, according to a survey by the National Association of
Manufacturers. The survey was carried out in 2007 but has not been
published yet.
A separate study in 2005, the latest available, said 90 percent of
manufacturers are suffering a moderate to severe shortage of
qualified workers.
"The irony is we pay very well, we have good benefits, we have job
security and most of the companies that have survived the
manufacturing recession at the early part of this decade can't find
enough skilled workers," Kelly said.
A typical manufacturing job pays about $60,000 a year, according to
manufacturing industry figures, a premium of about 25 percent to the
service industries.
At Hamill, a general machinist will start at $9 an hour, rising to
$14.50 an hour after training, and going up to the mid to high
twenties for senior machinists, who can earn nearly $70,000 a year.
But that is not enough to attract younger workers into manufacturing,
a sector that has suffered a bad rap over the years with layoffs in
well-known companies such as the big three U.S. automakers.
"Too few young people consider manufacturing careers and often are
unaware of the skills needed in an advanced environment," the U.S.
Labor department wrote in a study on the issue.
Edward Lazear, the chairman of President George W. Bush's Council of
Economic Advisors, warns that as more and more baby boomers retire
the skills shortage will eventually cut into the country's economic
growth.
"You will start to see some decline in our growth rates as a result
of these demographic factors," Lazear told Reuters in an interview.
"As people start to retire, the labor market is going to not grow at
the same rate that it did in the past and it's going to affect our
growth," Lazear said.
This is clearly the problem in Pennsylvania, which has been suffering
from the decline and collapse of its steel giants, like Bethlehem
Steel, since the 1980s, but which has openings for skilled workers.
"I can tell you on my desk right now I have over 300 very high-
quality job openings that I cannot fill," said Michael Smeltzer,
executive director of the Manufactures Association of South-Central
Pennsylvania, who coordinates job openings for that part of the state.
State officials concede that the less-skilled work will continue to
move overseas where the pay is lower. The state has pledged $17
million to develop a skilled workforce and keep the high-precision
sector here
"We're not going to compete on the price of our labor, we're going to
compete on the skill of our labor, said Sandi Vito, deputy secretary
for workforce development in Pennsylvania.
But for Smeltzer, that investment may not generate enough skilled
workers to cover what he called a crisis of retirements. "Why do I
think it's a crisis today?" he said. "In 2010, which is right around
the corner, we have this avalanche of skilled labor needs."
Smaller businesses -- those with 200 employees or fewer -- make up
the bulk of the U.S. manufacturing sector, and for them the skills
shortage is a crucial issue.
Nationally, one in four businesses say they have a vacancy they
cannot fill, according to a survey by the National Federation of
Independent Business, which groups both manufacturing and non-
manufacturing businesses.
"We could make more GDP if we could find some hands to do it," said
Bill Dunkelberg, the group's chief economist.
At Hamill, demand for high-end, U.S.-made military parts is up, as
war in Iraq continues and the value of the dollar has decreased,
making these goods less expensive for overseas buyers. But Hamill has
not been able to take full advantage of the weaker dollar, and orders
have been lost.
The company has a staff of 110, up from 85 two years ago, but
potential growth has been stifled by the inability to bring new
people in, Kelly said.
Glenn Skena, who runs Hamill's apprenticeship programs, said it takes
years to train workers. On average, the company will invest about
$120,000 per apprentice, and often will send workers to college for
training to use the computers that design the parts and direct the
machines.
"We have a hard time hiring programmers from the outside so we have
to train them from within," said Skena.
Because these highly trained workers are such a commodity, wages are
high. "We're quickly ratcheting up our wage scale," said Kelly.
But still there are not enough workers.
"We have spindles sitting idle because we don't have machinists to
run them," said Dalrymple. A "Help Wanted" sign has been a fixture
outside the factory for months.
(Reporting by Joanne Morrison; Editing by Eddie Evans)
"Help Wanted" highlights skills drain in U.S.
Mon Jan 21, 2008 8:09am EST
By Joanne Morrison
TRAFFORD, Pennsylvania (Reuters) - Only half the machines are running
at precision parts maker Hamill Manufacturing, nestled in the
Allegheny Mountains just east of Pittsburgh, once the booming center
of the U.S. steel industry.
But the factory's overcapacity is the result not of a shortage of
business -- it has more orders than it can fill, despite a slowing
U.S. economy -- but because of a shortage of skilled workers.
"I'd hire 10 machinists right now if I could," said John Dalrymple,
president of the company, which makes high-end parts for military
helicopters and nuclear submarines. "That's eight to 10 percent of
our workforce."
While millions of jobs making everything from textiles to steel have
moved to new powerhouses like China in recent years, precision
manufacturing remains a crucial niche in the United States, one that
is overworked and chronically understaffed.
And, in a bad sign for the United States and its declining economic
might, that shortage of skilled workers is likely to get worse as
Baby Boomers retire -- with no younger generation of manufacturing
workers to take the baton.
"Our workforce is an aging workforce," said Chief Executive Jeff
Kelly, whose father founded Hamill nearly 60 years ago. "There isn't
a queue of people lining up to come into the industry."
Some 20 percent of small to medium-sized manufacturers -- those with
up to 2,000 workers -- cited retaining or training employees as their
No. 1 concern, according to a survey by the National Association of
Manufacturers. The survey was carried out in 2007 but has not been
published yet.
A separate study in 2005, the latest available, said 90 percent of
manufacturers are suffering a moderate to severe shortage of
qualified workers.
"The irony is we pay very well, we have good benefits, we have job
security and most of the companies that have survived the
manufacturing recession at the early part of this decade can't find
enough skilled workers," Kelly said.
A typical manufacturing job pays about $60,000 a year, according to
manufacturing industry figures, a premium of about 25 percent to the
service industries.
At Hamill, a general machinist will start at $9 an hour, rising to
$14.50 an hour after training, and going up to the mid to high
twenties for senior machinists, who can earn nearly $70,000 a year.
But that is not enough to attract younger workers into manufacturing,
a sector that has suffered a bad rap over the years with layoffs in
well-known companies such as the big three U.S. automakers.
"Too few young people consider manufacturing careers and often are
unaware of the skills needed in an advanced environment," the U.S.
Labor department wrote in a study on the issue.
Edward Lazear, the chairman of President George W. Bush's Council of
Economic Advisors, warns that as more and more baby boomers retire
the skills shortage will eventually cut into the country's economic
growth.
"You will start to see some decline in our growth rates as a result
of these demographic factors," Lazear told Reuters in an interview.
"As people start to retire, the labor market is going to not grow at
the same rate that it did in the past and it's going to affect our
growth," Lazear said.
This is clearly the problem in Pennsylvania, which has been suffering
from the decline and collapse of its steel giants, like Bethlehem
Steel, since the 1980s, but which has openings for skilled workers.
"I can tell you on my desk right now I have over 300 very high-
quality job openings that I cannot fill," said Michael Smeltzer,
executive director of the Manufactures Association of South-Central
Pennsylvania, who coordinates job openings for that part of the state.
State officials concede that the less-skilled work will continue to
move overseas where the pay is lower. The state has pledged $17
million to develop a skilled workforce and keep the high-precision
sector here
"We're not going to compete on the price of our labor, we're going to
compete on the skill of our labor, said Sandi Vito, deputy secretary
for workforce development in Pennsylvania.
But for Smeltzer, that investment may not generate enough skilled
workers to cover what he called a crisis of retirements. "Why do I
think it's a crisis today?" he said. "In 2010, which is right around
the corner, we have this avalanche of skilled labor needs."
Smaller businesses -- those with 200 employees or fewer -- make up
the bulk of the U.S. manufacturing sector, and for them the skills
shortage is a crucial issue.
Nationally, one in four businesses say they have a vacancy they
cannot fill, according to a survey by the National Federation of
Independent Business, which groups both manufacturing and non-
manufacturing businesses.
"We could make more GDP if we could find some hands to do it," said
Bill Dunkelberg, the group's chief economist.
At Hamill, demand for high-end, U.S.-made military parts is up, as
war in Iraq continues and the value of the dollar has decreased,
making these goods less expensive for overseas buyers. But Hamill has
not been able to take full advantage of the weaker dollar, and orders
have been lost.
The company has a staff of 110, up from 85 two years ago, but
potential growth has been stifled by the inability to bring new
people in, Kelly said.
Glenn Skena, who runs Hamill's apprenticeship programs, said it takes
years to train workers. On average, the company will invest about
$120,000 per apprentice, and often will send workers to college for
training to use the computers that design the parts and direct the
machines.
"We have a hard time hiring programmers from the outside so we have
to train them from within," said Skena.
Because these highly trained workers are such a commodity, wages are
high. "We're quickly ratcheting up our wage scale," said Kelly.
But still there are not enough workers.
"We have spindles sitting idle because we don't have machinists to
run them," said Dalrymple. A "Help Wanted" sign has been a fixture
outside the factory for months.
(Reporting by Joanne Morrison; Editing by Eddie Evans)
Tuesday, January 22, 2008
Philippines can weather effects of US recession
This is from the Inquirer.
In spite of the political turmoil such as it is, the Philippine economy seems to be growing at a reasonable rate. However the worst off may not be much if any better off as a result and with the costs of fuel and other imported items going up life must be quite difficult for many.
Teves: Philippines can weather effects of US recession
By Michelle Remo
Philippine Daily Inquirer
First Posted 23:41:00 01/22/2008
Teves: Philippines can weather effects of US recession
(
MANILA, Philippines--Calming fears on effects of a possible US recession on the local economy, Finance Secretary Margarito Teves said the Philippines could weather a volatile external environment.
“While a possible slowdown or recession in the US economy could dampen the growth of emerging markets, the Philippines will likely withstand the adverse effects of such a development largely because of its improving economic fundamentals,” Teves said.
He said a better fiscal environment due to a shrinking budget deficit has been gradually placing the Philippines back on the radar screen of foreign investors.
Higher government spending resulting from improved revenue collection also boosted economic growth and offset the ill-effects of external factors, such as lower demand for the country’s exports products. Increase in public spending on infrastructure was credited as one of the country’s major growth drivers last year.
The economy, as measured by the gross domestic product, grew 7.1 percent in the first three quarters of 2007. This kept the economy on track to surpass the official economic growth target of 6.1-6.7 percent last year.
But some feared the Philippines robust growth last year might not be sustained because of the looming recession of the United States, the country’s biggest export market. A US recession is feared to impact on the export sector and drag down the growth of the domestic economy.
But Teves said that while the United States was still the Philippines’ biggest export destination, its share to total earnings of Filipino exporters have dwindled over the years.
From a high of 28 percent seven years ago, the share of the United States’ demand to total export income of the Philippines has shrunk to less than 20 percent, Teves said, noting that exporters have been diversifying their markets.
Analysts also feared that a possible US recession would adversely affect the Philippines’ business process outsourcing (BPO) industry, one of the fastest growing sectors of the local economy catering mainly to US-based clients.
Teves said that while some BPO firms might engage in cost-cutting measures, this did not pose much threat to the Philippines. BPO companies wanting to cut cost actually come to the Philippines because labor is more affordable here.
Low interest rates, also a result of a reduced budget deficit, could also encourage more businesses to pursue expansion plans.
“By continuing to identify and follow through on the appropriate fiscal policies for the country, we hope to underpin the growing strength of the Philippine economy, and to support the critical programs that will alleviate poverty,” Teves said.
Teves said the Philippine government should not be significantly affected by a tightening credit market due to a US recession because it could reduce foreign borrowings and shift credit demand toward domestic sources.
He said 70 percent of the government’s financing requirements would be borrowed locally.
In spite of the political turmoil such as it is, the Philippine economy seems to be growing at a reasonable rate. However the worst off may not be much if any better off as a result and with the costs of fuel and other imported items going up life must be quite difficult for many.
Teves: Philippines can weather effects of US recession
By Michelle Remo
Philippine Daily Inquirer
First Posted 23:41:00 01/22/2008
Teves: Philippines can weather effects of US recession
(
MANILA, Philippines--Calming fears on effects of a possible US recession on the local economy, Finance Secretary Margarito Teves said the Philippines could weather a volatile external environment.
“While a possible slowdown or recession in the US economy could dampen the growth of emerging markets, the Philippines will likely withstand the adverse effects of such a development largely because of its improving economic fundamentals,” Teves said.
He said a better fiscal environment due to a shrinking budget deficit has been gradually placing the Philippines back on the radar screen of foreign investors.
Higher government spending resulting from improved revenue collection also boosted economic growth and offset the ill-effects of external factors, such as lower demand for the country’s exports products. Increase in public spending on infrastructure was credited as one of the country’s major growth drivers last year.
The economy, as measured by the gross domestic product, grew 7.1 percent in the first three quarters of 2007. This kept the economy on track to surpass the official economic growth target of 6.1-6.7 percent last year.
But some feared the Philippines robust growth last year might not be sustained because of the looming recession of the United States, the country’s biggest export market. A US recession is feared to impact on the export sector and drag down the growth of the domestic economy.
But Teves said that while the United States was still the Philippines’ biggest export destination, its share to total earnings of Filipino exporters have dwindled over the years.
From a high of 28 percent seven years ago, the share of the United States’ demand to total export income of the Philippines has shrunk to less than 20 percent, Teves said, noting that exporters have been diversifying their markets.
Analysts also feared that a possible US recession would adversely affect the Philippines’ business process outsourcing (BPO) industry, one of the fastest growing sectors of the local economy catering mainly to US-based clients.
Teves said that while some BPO firms might engage in cost-cutting measures, this did not pose much threat to the Philippines. BPO companies wanting to cut cost actually come to the Philippines because labor is more affordable here.
Low interest rates, also a result of a reduced budget deficit, could also encourage more businesses to pursue expansion plans.
“By continuing to identify and follow through on the appropriate fiscal policies for the country, we hope to underpin the growing strength of the Philippine economy, and to support the critical programs that will alleviate poverty,” Teves said.
Teves said the Philippine government should not be significantly affected by a tightening credit market due to a US recession because it could reduce foreign borrowings and shift credit demand toward domestic sources.
He said 70 percent of the government’s financing requirements would be borrowed locally.
Turkey to help U.S. operate, transport Iraqi oil
From a San Diego paper. The U.S. is to operate, and transport Iraqi oil? This is news. Apparently it can be reported in a U.S. paper via Reuters without even raising an eyebrow! Wow!
Turkey to help U.S. operate, transport Iraqi oil
REUTERS
4:41 a.m. January 11, 2008
ANKARA – Turkey will help the United States to operate and transport neighbouring Iraq's oil as part of its drive to become an energy hub, Turkish Energy Minister Hilmi Guler told CNN Turk on Friday.
Guler visited the United States this week with President Abdullah Gul for talks with U.S. officials dominated by energy.
'We have reached an agreement with the United States on the issue,' Guler said. He gave no more details.
Guler also said Iraq's natural gas could be transported to European markets via Turkey.
Iraq pumps crude oil exports via a pipeline to Turkey's Mediterranean coast.
Ankara's ties with Iraq have been strained in recent months by Turkey's aerial bombardment of separatist Kurdish PKK militants who have been using mainly Kurdish northern Iraq as a base from which to attack Turkey.
Turkey to help U.S. operate, transport Iraqi oil
REUTERS
4:41 a.m. January 11, 2008
ANKARA – Turkey will help the United States to operate and transport neighbouring Iraq's oil as part of its drive to become an energy hub, Turkish Energy Minister Hilmi Guler told CNN Turk on Friday.
Guler visited the United States this week with President Abdullah Gul for talks with U.S. officials dominated by energy.
'We have reached an agreement with the United States on the issue,' Guler said. He gave no more details.
Guler also said Iraq's natural gas could be transported to European markets via Turkey.
Iraq pumps crude oil exports via a pipeline to Turkey's Mediterranean coast.
Ankara's ties with Iraq have been strained in recent months by Turkey's aerial bombardment of separatist Kurdish PKK militants who have been using mainly Kurdish northern Iraq as a base from which to attack Turkey.
The neoconservatives' rise to power
This is a review of a book by Jacob Heilbrunn on the neoconservatives reviewed by Andrew Bacevich in the LA Times. As the article points out many of the neoconservatives were originally leftists sometimes associated with Trotskyism. Poor Trotsky, not only was he murdered by a Stalinist axeman but now some of his disciples have joined the enemy and replaced permanent revolution by permanent crisis to be used to advance US hegemony and power worldwide.
'They Knew They Were Right' by Jacob Heilbrunn
The neoconservatives' rise to power
By Andrew J. Bacevich
January 20, 2008
They Knew They Were Right
The Rise of the Neocons
Jacob Heilbrunn
Doubleday: 320 pp., $26
Explications of neoconservatism (most of them scathingly critical) continue to accumulate. Jacob Heilbrunn's contribution to this genre distinguishes itself from the rest -- or at least tries to -- by exploring in detail "the mental world" that neoconservatives inhabit. The principal result of that exploration is to expose the intellectual pretensions of that world's inhabitants. When it comes to ideas, the neocon legacy promises to be thin, derivative and largely pernicious.
In "They Knew They Were Right," Heilbrunn, a Washington-based journalist who was formerly a senior editor at the New Republic and later an editorial writer for the Los Angeles Times, provides a succinct but comprehensive neoconservative genealogy. Beginning his account in the 1930s, he surveys the people, publications and events that have combined in the present-day to give us the Weekly Standard, the American Enterprise Institute and various talking heads on Fox News, along with the Bush Doctrine of preventive war and the debacle of Iraq.
Along the way, Heilbrunn rousts all the usual suspects -- the Trotskyist Max Shachtman, the political theorist Leo Strauss, the nuclear strategist Albert Wohlstetter, the cultural critic Allan Bloom and the militantly anti-communist Democratic "senator from Boeing," Henry "Scoop" Jackson -- and he recounts the contribution each made in shaping today's neoconservative worldview. Heilbrunn devotes particular attention to political journalists Irving Kristol and Norman Podhoretz, who over the course of very long careers have never ceased to write, to organize and to agitate. Absent Kristol's considerable entrepreneurial talents and Podhoretz's flair as a polemicist, neoconservatism as we know it would not exist.
Little in this survey qualifies as genuinely new. The book is not deeply researched. Heilbrunn makes no great discoveries and drops no bombshells, although his contention that "neoconservatism is in a decisive respect a Jewish phenomenon" will likely raise hackles in some quarters. To describe neoconservatism as "ineluctably Jewish," he insists, "is anything but an anti-Semitic canard." Fair-minded readers are unlikely to dispute his judgment.
Beyond emphasizing neoconservatism's Jewish roots -- hardly a revelation -- three broadly unflattering impressions emerge from Heilbrunn's narrative.
First, to describe the neocons as conservative is to misconstrue their purpose, which is to overturn rather than to preserve. Although having nominally made a transformative ideological journey from the left to right, neoconservatives, writes Heilbrunn, have "never really ceased to be radicals in temperament and style." This residual radicalism is especially evident when it comes to foreign policy, which neoconservatives invariably view as a contest pitting good against evil. Contemptuous of realism, disdaining stability and equilibrium, neoconservatives show pronounced utopian propensities, fueled by exaggerated expectations about America's capacity to set things right. Whether directed against communism, "Islamofascism" or the United Nations (or domestically against the CIA, the State Department and liberal Democrats), this utopianism finds expression in a penchant for uncompromising and confrontational militancy.
Second, whatever Kristol, Podhoretz and their adherents might have us believe, when it comes to offering insights into the human condition, neoconservatives have not made much of a mark, Heilbrunn contends. Rather than exhibiting genuine creativity, they specialize in repackaging the obvious or in anticipating next month's conventional wisdom. They are gadflies and rabble-rousers rather than fresh, cutting-edge thinkers. Their genius lies in self-promotion, their ideas offered with "grandiosity and the conviction of self-importance," which appear on closer examination to be less than advertised. Even in the aftermath of the Sept. 11 terrorist attacks, when their influence was at its zenith, neoconservatives were serving up little more than warmed-over Wilsonianism laced with Machtpolitik.
Third, although they pose as intellectuals, neoconservatives more typically function as propagandists. Theirs is not the disinterested pursuit of truth so much as the endless repetition of ostensibly self-evident truisms. The neoconservative universe allows little room for ambiguity, irony or paradox. According to Heilbrunn, they subscribe to a vision of "binary simplicity," in which right and wrong, black and white, friend and foe are easily distinguished. Whatever the topic -- whether science or sexuality, the future of war or the future of the Middle East -- for neocons it's all cut and dried.
The radical inclination, the intellectual banality and the overweening certainty all derive from what Heilbrunn accurately describes as "a highly selective and moralistic view of history as a drama of salvation and idolatry." The point is a crucial one. For neoconservatives, the past begins and ends with the period 1938 to 1945. This is history as tendentious parable in which appeasement always invites aggression; "isolationism" paves the way for holocaust; and vigorous leadership (neoconservatives strongly favoring Winston Churchill over Franklin Delano Roosevelt) ensures the ultimate triumph of freedom, albeit too late to save the millions carted off to the Nazi death camps.
Neoconservatives, writes Heilbrunn, "see new Munichs everywhere and anywhere," a reference to Britain's 1938 pact over Hitler's seizure of part of Czechoslovakia. He might have added that they are as quick to see a new Hitler and to anticipate a new Auschwitz -- and U.S. power as the only force capable of averting the awful consequences that threaten.
For neoconservatives, therefore, crisis is a permanent condition. They revel in crisis, confident that they alone stand between survival and Armageddon. As Heilbrunn observes, "it's always imperative to have, somewhere, somehow, an enemy -- both at home and abroad." This suits the neoconservatives' "need to see themselves as lonely prophets standing in the breach between implacable foes on the one hand and weak-kneed liberals (and paper-pushing bureaucrats) on the other."
The Iraq war stands as testimony to where this sort of thinking leads. One might expect, therefore, the neoconservative movement of having been permanently discredited. Not so, says Heilbrunn,; they'll be back. He's right, if only because neoconservative fears and ambitions reflect something deep-seated in the American psyche.
So while this book takes its place along many other attempts to figure out what makes neoconservatives tick, it is unlikely to be the last word
Andew J. Bacevich is professor of history and international relations at Boston University.
'They Knew They Were Right' by Jacob Heilbrunn
The neoconservatives' rise to power
By Andrew J. Bacevich
January 20, 2008
They Knew They Were Right
The Rise of the Neocons
Jacob Heilbrunn
Doubleday: 320 pp., $26
Explications of neoconservatism (most of them scathingly critical) continue to accumulate. Jacob Heilbrunn's contribution to this genre distinguishes itself from the rest -- or at least tries to -- by exploring in detail "the mental world" that neoconservatives inhabit. The principal result of that exploration is to expose the intellectual pretensions of that world's inhabitants. When it comes to ideas, the neocon legacy promises to be thin, derivative and largely pernicious.
In "They Knew They Were Right," Heilbrunn, a Washington-based journalist who was formerly a senior editor at the New Republic and later an editorial writer for the Los Angeles Times, provides a succinct but comprehensive neoconservative genealogy. Beginning his account in the 1930s, he surveys the people, publications and events that have combined in the present-day to give us the Weekly Standard, the American Enterprise Institute and various talking heads on Fox News, along with the Bush Doctrine of preventive war and the debacle of Iraq.
Along the way, Heilbrunn rousts all the usual suspects -- the Trotskyist Max Shachtman, the political theorist Leo Strauss, the nuclear strategist Albert Wohlstetter, the cultural critic Allan Bloom and the militantly anti-communist Democratic "senator from Boeing," Henry "Scoop" Jackson -- and he recounts the contribution each made in shaping today's neoconservative worldview. Heilbrunn devotes particular attention to political journalists Irving Kristol and Norman Podhoretz, who over the course of very long careers have never ceased to write, to organize and to agitate. Absent Kristol's considerable entrepreneurial talents and Podhoretz's flair as a polemicist, neoconservatism as we know it would not exist.
Little in this survey qualifies as genuinely new. The book is not deeply researched. Heilbrunn makes no great discoveries and drops no bombshells, although his contention that "neoconservatism is in a decisive respect a Jewish phenomenon" will likely raise hackles in some quarters. To describe neoconservatism as "ineluctably Jewish," he insists, "is anything but an anti-Semitic canard." Fair-minded readers are unlikely to dispute his judgment.
Beyond emphasizing neoconservatism's Jewish roots -- hardly a revelation -- three broadly unflattering impressions emerge from Heilbrunn's narrative.
First, to describe the neocons as conservative is to misconstrue their purpose, which is to overturn rather than to preserve. Although having nominally made a transformative ideological journey from the left to right, neoconservatives, writes Heilbrunn, have "never really ceased to be radicals in temperament and style." This residual radicalism is especially evident when it comes to foreign policy, which neoconservatives invariably view as a contest pitting good against evil. Contemptuous of realism, disdaining stability and equilibrium, neoconservatives show pronounced utopian propensities, fueled by exaggerated expectations about America's capacity to set things right. Whether directed against communism, "Islamofascism" or the United Nations (or domestically against the CIA, the State Department and liberal Democrats), this utopianism finds expression in a penchant for uncompromising and confrontational militancy.
Second, whatever Kristol, Podhoretz and their adherents might have us believe, when it comes to offering insights into the human condition, neoconservatives have not made much of a mark, Heilbrunn contends. Rather than exhibiting genuine creativity, they specialize in repackaging the obvious or in anticipating next month's conventional wisdom. They are gadflies and rabble-rousers rather than fresh, cutting-edge thinkers. Their genius lies in self-promotion, their ideas offered with "grandiosity and the conviction of self-importance," which appear on closer examination to be less than advertised. Even in the aftermath of the Sept. 11 terrorist attacks, when their influence was at its zenith, neoconservatives were serving up little more than warmed-over Wilsonianism laced with Machtpolitik.
Third, although they pose as intellectuals, neoconservatives more typically function as propagandists. Theirs is not the disinterested pursuit of truth so much as the endless repetition of ostensibly self-evident truisms. The neoconservative universe allows little room for ambiguity, irony or paradox. According to Heilbrunn, they subscribe to a vision of "binary simplicity," in which right and wrong, black and white, friend and foe are easily distinguished. Whatever the topic -- whether science or sexuality, the future of war or the future of the Middle East -- for neocons it's all cut and dried.
The radical inclination, the intellectual banality and the overweening certainty all derive from what Heilbrunn accurately describes as "a highly selective and moralistic view of history as a drama of salvation and idolatry." The point is a crucial one. For neoconservatives, the past begins and ends with the period 1938 to 1945. This is history as tendentious parable in which appeasement always invites aggression; "isolationism" paves the way for holocaust; and vigorous leadership (neoconservatives strongly favoring Winston Churchill over Franklin Delano Roosevelt) ensures the ultimate triumph of freedom, albeit too late to save the millions carted off to the Nazi death camps.
Neoconservatives, writes Heilbrunn, "see new Munichs everywhere and anywhere," a reference to Britain's 1938 pact over Hitler's seizure of part of Czechoslovakia. He might have added that they are as quick to see a new Hitler and to anticipate a new Auschwitz -- and U.S. power as the only force capable of averting the awful consequences that threaten.
For neoconservatives, therefore, crisis is a permanent condition. They revel in crisis, confident that they alone stand between survival and Armageddon. As Heilbrunn observes, "it's always imperative to have, somewhere, somehow, an enemy -- both at home and abroad." This suits the neoconservatives' "need to see themselves as lonely prophets standing in the breach between implacable foes on the one hand and weak-kneed liberals (and paper-pushing bureaucrats) on the other."
The Iraq war stands as testimony to where this sort of thinking leads. One might expect, therefore, the neoconservative movement of having been permanently discredited. Not so, says Heilbrunn,; they'll be back. He's right, if only because neoconservative fears and ambitions reflect something deep-seated in the American psyche.
So while this book takes its place along many other attempts to figure out what makes neoconservatives tick, it is unlikely to be the last word
Andew J. Bacevich is professor of history and international relations at Boston University.
Monday, January 21, 2008
Philippines: What haunts Gloria?
It is rather ironic that Gloria fears people power even though she herself was originally placed into power to a considerable extent by people power. The editorialist it seems to me is looking at the events through the lens of the present rather than how it was seen at the time. Certainly masses of people were involved as well as many clerics and left wing organisations. Now Gloria fears that the people may throw her out using people power again so the hatches are battened down on the anniversary of Edsa II when Joseph Estrada was overthrown. A further irony is that the deposed but pardoned Estrada is more popular than Arroyo!
What haunts Gloria?
EDITORIAL
01/21/2008
The so-called Edsa II revolt, proved to be a historical misnomer because it was actually a coup d’etat led by certain elitist groups and then Vice President Gloria Arroyo, remains in the calendar of Malacañang and yesterday, Jan. 20, should have been a day of celebration and thanksgiving for Gloria.
The day, however, is marked by Gloria with fear and apprehension. For such symbolic occasion for Gloria, the celebration of the event was not even mentioned by Malacañang at all.
Instead of the people that supposedly thronged around the Edsa Shrine seven years ago to witness Gloria’s swearing in by an accomplice in the coup, then Supreme Court Chief Justice Hilario Davide Jr., now richly rewarded with an ambassadorial post at the United Nations, what is found around Malacañang on the day were police units on red alert and barricades against people entering the President’s compound.
For a President who flaunts to the world that she was installed to power through a popular people’s uprising, the isolation of Malacañang on Edsa II day was the height of irony. In fact, it could be attributed to Divine Justice and a revelation of the truth, for it was not a popular revolt that had the concurrence of the Filipino people, whom the elite coup plotters can hardly speak for.
Another complete twist of Edsa II was that former President Joseph Estrada, whom she threw out in the coup masquerading as a revolt, is now trusted immensely more than Gloria as borne out in independent confidence surveys.
Gloria’s Edsa II, thus, has lost its meaning in relation to Edsa I, when people power threw out a 21-year-old regime of then President Ferdinand Marcos which was best remembered for the installation of martial law and the shift to the parliamentary form of government that Gloria is now pushing to revive.
The fear that infests Malacañang now is that the people have awakened to the fact that Edsa II was a ruse and that Gloria remains scrambling for a seven-year raison d’etre of her power-grab. For certainly, there is nothing democratic about grabbing power through a coup d’etat.
The show of complete public distrust in Gloria is the result of the questionable way that she remains in power.
It all started with that event at Edsa in 2001 when a popularly elected president was unseated in the guise of restoring decency in government. In a rather grudging fashion, the so-called graft court convicted President Joseph Estrada on the charges of plunder based on the use of jueteng money and insider trading at the stock market, which conviction was utterly unconvincing for the public as a reason for Gloria to take over power, especially as a constitutional process of impeachment was then ongoing.
Add to that the general perception that Gloria had to steal the vote in the 2004 elections from Estrada’s bosom buddy Fernando Poe Jr. to buy a mandate for another six-year term and there is no mystery in her current negative trust rating.
Edsa II, in fact, has been lost in the consciousness of the people, and sad to say, so with it go the other symbolic events that would have instilled the value of the democratic tradition in the country such as the people power revolt, truly a people’s revolt, and even Independence Day.
More than the aberration in the historical calendar, Edsa II trivialized the footsteps to democracy in the country for the simple fact that, like Gloria, it was a bogus people power and the world saw it as such.
Edsa II is all about Gloria and her naked power-grab. It is is about the destruction of democracy and its institutions; the prostitution of military and police and the elite’s robbing of the sovereign will of the people, which grievous theft was upheld by the highly politicized Supreme Court.
Edsa II is Gloria and nothing else.
What haunts Gloria?
EDITORIAL
01/21/2008
The so-called Edsa II revolt, proved to be a historical misnomer because it was actually a coup d’etat led by certain elitist groups and then Vice President Gloria Arroyo, remains in the calendar of Malacañang and yesterday, Jan. 20, should have been a day of celebration and thanksgiving for Gloria.
The day, however, is marked by Gloria with fear and apprehension. For such symbolic occasion for Gloria, the celebration of the event was not even mentioned by Malacañang at all.
Instead of the people that supposedly thronged around the Edsa Shrine seven years ago to witness Gloria’s swearing in by an accomplice in the coup, then Supreme Court Chief Justice Hilario Davide Jr., now richly rewarded with an ambassadorial post at the United Nations, what is found around Malacañang on the day were police units on red alert and barricades against people entering the President’s compound.
For a President who flaunts to the world that she was installed to power through a popular people’s uprising, the isolation of Malacañang on Edsa II day was the height of irony. In fact, it could be attributed to Divine Justice and a revelation of the truth, for it was not a popular revolt that had the concurrence of the Filipino people, whom the elite coup plotters can hardly speak for.
Another complete twist of Edsa II was that former President Joseph Estrada, whom she threw out in the coup masquerading as a revolt, is now trusted immensely more than Gloria as borne out in independent confidence surveys.
Gloria’s Edsa II, thus, has lost its meaning in relation to Edsa I, when people power threw out a 21-year-old regime of then President Ferdinand Marcos which was best remembered for the installation of martial law and the shift to the parliamentary form of government that Gloria is now pushing to revive.
The fear that infests Malacañang now is that the people have awakened to the fact that Edsa II was a ruse and that Gloria remains scrambling for a seven-year raison d’etre of her power-grab. For certainly, there is nothing democratic about grabbing power through a coup d’etat.
The show of complete public distrust in Gloria is the result of the questionable way that she remains in power.
It all started with that event at Edsa in 2001 when a popularly elected president was unseated in the guise of restoring decency in government. In a rather grudging fashion, the so-called graft court convicted President Joseph Estrada on the charges of plunder based on the use of jueteng money and insider trading at the stock market, which conviction was utterly unconvincing for the public as a reason for Gloria to take over power, especially as a constitutional process of impeachment was then ongoing.
Add to that the general perception that Gloria had to steal the vote in the 2004 elections from Estrada’s bosom buddy Fernando Poe Jr. to buy a mandate for another six-year term and there is no mystery in her current negative trust rating.
Edsa II, in fact, has been lost in the consciousness of the people, and sad to say, so with it go the other symbolic events that would have instilled the value of the democratic tradition in the country such as the people power revolt, truly a people’s revolt, and even Independence Day.
More than the aberration in the historical calendar, Edsa II trivialized the footsteps to democracy in the country for the simple fact that, like Gloria, it was a bogus people power and the world saw it as such.
Edsa II is all about Gloria and her naked power-grab. It is is about the destruction of democracy and its institutions; the prostitution of military and police and the elite’s robbing of the sovereign will of the people, which grievous theft was upheld by the highly politicized Supreme Court.
Edsa II is Gloria and nothing else.
What a recession means for black America
As the author notes recessions hurt the poor and socially marginalized populations the most. It would be interesting to see what the figures are for lower income groups in general and other minority groups such as Latinos.
The recession will also impact heavily on those who are barely able to keep their heads above their debts no matter what income group they are in. Without increasing income their debts will become unpayable and their life standard unsupportable.
January 18, 2008 | EPI Issue Brief #241
What a recession means for black America
by Algernon Austin
Recessions hurt. And they hurt the poor and socially marginalized
populations the most. As we face the prospect of the second recession
of the decade and consider the merits of various stimulus packages,
it is useful to examine what a recession would mean for black America.
The late 1990s produced a full employment economy and significant
absolute and relative economic gains for blacks. This Issue Brief
contrasts the benefits of a national full-employment economy with the
harm caused by the 2001 recession and the weak job growth that
followed.
Black America's permanent recession
In the best of times, many African American communities are forced to
tolerate levels of unemployment unseen in most white communities. The
2001 recession pushed the white annual unemployment rate up from a
low of 3.5% in 2000 to a high of 5.2% in 2003. During the same
period, the black unemployment rate shot up from 7.6% to 10.8%.
National recessions take African Americans from a bad situation to a
worse one.
In 2007, the black unemployment rate was 8.3%. This figure is still
above the pre-recession low and more than twice the white
unemployment rate. Goldman Sachs estimates that a new recession would
increase the national unemployment rate to 6.4% by 2009.1 For African
Americans, the unemployment rate would be expected to rise to 11.0%.2
African Americans lose income relative to whites
The low unemployment rates of the 1990s led to positive gains in the
black/white income ratio. In 1995, the median black family earned
60.9% of what the median white family did. By 2000, the ratio had
climbed to a record high of 63.5%. The effect of the 2001 recession
and the weak economic recovery was to undo all of those gains—and
then take away some more. By 2005, the median black household earned
only 60.2% of the median white household, 0.7 points lower than it
was in 1995. 3
But median family income does not tell the entire story. The 2001
recession and weak recovery hurt the poorest African Americans the
most. In 1995, the poorest fifth of black families only earned on
average 43.0% of what the poorest fifth of white families earned.
Again, the economic growth of the late 1990s was a significant boon.
The black/white average income ratio for the poorest fifth increased
to 49.9% in 2000. By 2005, it had fallen back to 43.4%. Among blacks,
the poorest black families lost the largest share of their income
gains from the late 1990s.4
Another recession will likely reduce the median family income for all
Americans by about 4%. However, for blacks, the decline would be
about 6%, leaving the average African American family $2,400 poorer.5
Again, this loss of income will hurt the poorest fifth of African
Americans the most.
Additional social costs
Associated with the strong economy of the 1990s, there were
significant declines in the black violent crime rate and the black
teen pregnancy rate. Between 1993 and 2001, the black violent crime
rate declined by 60%.6 Between 1990 and 2004, the black teen
pregnancy rate declined by 46%.7 These improving trends have ended,
and it is likely that the worsening economic conditions of African
Americans since 2001 have played at least a partial role.
At the community level, criminologists find a correlation between
violent crime rates and socioeconomic disadvantage.8 At the national
level, too, the black violent crime rate has recently been strongly
correlated with black poverty rates.9 Therefore, it is not surprising
that the historic crime decline of the 1990s ended with the reversal
of economic fortunes that African Americans experienced at the
beginning of the 21st century.
Based on a study of five countries including the United States, the
Alan Guttmacher Institute reports "across all of the focus countries,
young people growing up in disadvantaged economic, familial and
social circumstances are more likely than their better-off peers to
engage in risky behavior and have a child during adolescence."10
Given that socioeconomic disadvantage has increased for African
Americans since 2000, it is not entirely surprising that black teen
pregnancy rates have started to rise again.
Another recession would likely continue these negative trends. The
black violent crime rate and the black teenage pregnancy rate both
will likely rise. Once again, the negative effects of these trends
will hurt the poorest African Americans most.
What black America needs
Even when the national unemployment picture is good, the black
unemployment rate is more than twice that of the white unemployment
rate. This means that in what looks like good economic times
nationally, most of black America is still experiencing a recession.
When white America is in recession, black America is in an economic
depression.
Faced with the prospect of another recession, what black America
needs is what all of America needs: a stimulus package that will help
average Americans and those with the most insecure jobs. The lesson
from black America is that the poorest among us are most hurt by
recessions. Stimulus proposals based on tax cuts for the wealthy or
for business owners are not likely to provide immediate relief to
those still hurting from the 2001 recession, much less protect them
from the additional damage of a new one.
A better approach would be to boost the economy by 1) providing
targeted supports through expanded unemployment insurance and broad-
based tax rebates, 2) providing assistance to states to prevent tax
increases or spending cuts, and 3) directly stimulating job growth by
accelerating funding for infrastructure, particularity for bridge and
school repair. (See EPI's Strategy for An Economic Rebound for more
details.)
While the discussion above is based on national data about African
Americans, it is important to remember that some black communities
are better off than average and some are worse off. Also, although
the discussion is about African Americans, the findings likely apply
to a degree to other poor minority communities and to the poorest
white communities, as well. For example, the violent crime decline
for whites has also stalled, and the teen pregnancy rate for whites
has also increased in the latest data from the National Center for
Health Statistics.11
Notes
1. U.S. Economics Analyst, Issue 08/02, January 18, 2008, p. 3.
2. Based on an analysis of historical economic data by Jared Bernstein.
3. Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto, The State
of Working America 2006/2007. An EPI book. (Ithaca, N.Y.: Cornell
University Press. 2006) p.51.
http://www.stateofworkingamerica.org/
4. Author's analysis of tables F-3 white and F-3 black, 2005 dollars,
Historical Income Tables, U.S. Census Bureau, http://www.census.gov/
hhes/www/income/histinc/ineqtoc.html.
5. Based on an analysis of historical economic data by Jared Bernstein.
6. Author's calculations of violent crime rates from the Bureau of
Justice Statistics, http://www.ojp.usdoj.gov/bjs/glance/tables/
racetab.htm.
7. Author's calculations of birth rates for 15-19-year-olds from
Table 4, Health in the United States, 2006 (Hyattsville, Md.:
National Center for Health Statistics, 2006), p. 135.
8. Marc Mauer, Race to Incarcerate (N.Y.: The New Press, 2006), pp.
177-186.
9. For the years 1976 to 2005, the correlation between the black
poverty rate and the black violent crime victimization rate is 0.92.
Author's analysis of Census poverty rates for all people and Bureau
of Justice Statistics victimization rates.
10. Heather Boonstra, Teen Pregnancy: Trends and Lessons Learned, The
Guttmacher Report on Public Policy, February 2002, Vol. 5, No. 1,
http://www.guttmacher.org/pubs/tgr/05/1/gr050107.html.
11. See Teen Birth Rate Rises for the First Time in 15 Years,
National Center for Health Statistics, December 5, 2007, http://
www.cdc.gov/nchs/pressroom/07newsreleases/teenbirth.htm.
The recession will also impact heavily on those who are barely able to keep their heads above their debts no matter what income group they are in. Without increasing income their debts will become unpayable and their life standard unsupportable.
January 18, 2008 | EPI Issue Brief #241
What a recession means for black America
by Algernon Austin
Recessions hurt. And they hurt the poor and socially marginalized
populations the most. As we face the prospect of the second recession
of the decade and consider the merits of various stimulus packages,
it is useful to examine what a recession would mean for black America.
The late 1990s produced a full employment economy and significant
absolute and relative economic gains for blacks. This Issue Brief
contrasts the benefits of a national full-employment economy with the
harm caused by the 2001 recession and the weak job growth that
followed.
Black America's permanent recession
In the best of times, many African American communities are forced to
tolerate levels of unemployment unseen in most white communities. The
2001 recession pushed the white annual unemployment rate up from a
low of 3.5% in 2000 to a high of 5.2% in 2003. During the same
period, the black unemployment rate shot up from 7.6% to 10.8%.
National recessions take African Americans from a bad situation to a
worse one.
In 2007, the black unemployment rate was 8.3%. This figure is still
above the pre-recession low and more than twice the white
unemployment rate. Goldman Sachs estimates that a new recession would
increase the national unemployment rate to 6.4% by 2009.1 For African
Americans, the unemployment rate would be expected to rise to 11.0%.2
African Americans lose income relative to whites
The low unemployment rates of the 1990s led to positive gains in the
black/white income ratio. In 1995, the median black family earned
60.9% of what the median white family did. By 2000, the ratio had
climbed to a record high of 63.5%. The effect of the 2001 recession
and the weak economic recovery was to undo all of those gains—and
then take away some more. By 2005, the median black household earned
only 60.2% of the median white household, 0.7 points lower than it
was in 1995. 3
But median family income does not tell the entire story. The 2001
recession and weak recovery hurt the poorest African Americans the
most. In 1995, the poorest fifth of black families only earned on
average 43.0% of what the poorest fifth of white families earned.
Again, the economic growth of the late 1990s was a significant boon.
The black/white average income ratio for the poorest fifth increased
to 49.9% in 2000. By 2005, it had fallen back to 43.4%. Among blacks,
the poorest black families lost the largest share of their income
gains from the late 1990s.4
Another recession will likely reduce the median family income for all
Americans by about 4%. However, for blacks, the decline would be
about 6%, leaving the average African American family $2,400 poorer.5
Again, this loss of income will hurt the poorest fifth of African
Americans the most.
Additional social costs
Associated with the strong economy of the 1990s, there were
significant declines in the black violent crime rate and the black
teen pregnancy rate. Between 1993 and 2001, the black violent crime
rate declined by 60%.6 Between 1990 and 2004, the black teen
pregnancy rate declined by 46%.7 These improving trends have ended,
and it is likely that the worsening economic conditions of African
Americans since 2001 have played at least a partial role.
At the community level, criminologists find a correlation between
violent crime rates and socioeconomic disadvantage.8 At the national
level, too, the black violent crime rate has recently been strongly
correlated with black poverty rates.9 Therefore, it is not surprising
that the historic crime decline of the 1990s ended with the reversal
of economic fortunes that African Americans experienced at the
beginning of the 21st century.
Based on a study of five countries including the United States, the
Alan Guttmacher Institute reports "across all of the focus countries,
young people growing up in disadvantaged economic, familial and
social circumstances are more likely than their better-off peers to
engage in risky behavior and have a child during adolescence."10
Given that socioeconomic disadvantage has increased for African
Americans since 2000, it is not entirely surprising that black teen
pregnancy rates have started to rise again.
Another recession would likely continue these negative trends. The
black violent crime rate and the black teenage pregnancy rate both
will likely rise. Once again, the negative effects of these trends
will hurt the poorest African Americans most.
What black America needs
Even when the national unemployment picture is good, the black
unemployment rate is more than twice that of the white unemployment
rate. This means that in what looks like good economic times
nationally, most of black America is still experiencing a recession.
When white America is in recession, black America is in an economic
depression.
Faced with the prospect of another recession, what black America
needs is what all of America needs: a stimulus package that will help
average Americans and those with the most insecure jobs. The lesson
from black America is that the poorest among us are most hurt by
recessions. Stimulus proposals based on tax cuts for the wealthy or
for business owners are not likely to provide immediate relief to
those still hurting from the 2001 recession, much less protect them
from the additional damage of a new one.
A better approach would be to boost the economy by 1) providing
targeted supports through expanded unemployment insurance and broad-
based tax rebates, 2) providing assistance to states to prevent tax
increases or spending cuts, and 3) directly stimulating job growth by
accelerating funding for infrastructure, particularity for bridge and
school repair. (See EPI's Strategy for An Economic Rebound for more
details.)
While the discussion above is based on national data about African
Americans, it is important to remember that some black communities
are better off than average and some are worse off. Also, although
the discussion is about African Americans, the findings likely apply
to a degree to other poor minority communities and to the poorest
white communities, as well. For example, the violent crime decline
for whites has also stalled, and the teen pregnancy rate for whites
has also increased in the latest data from the National Center for
Health Statistics.11
Notes
1. U.S. Economics Analyst, Issue 08/02, January 18, 2008, p. 3.
2. Based on an analysis of historical economic data by Jared Bernstein.
3. Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto, The State
of Working America 2006/2007. An EPI book. (Ithaca, N.Y.: Cornell
University Press. 2006) p.51.
http://www.stateofworkingamerica.org/
4. Author's analysis of tables F-3 white and F-3 black, 2005 dollars,
Historical Income Tables, U.S. Census Bureau, http://www.census.gov/
hhes/www/income/histinc/ineqtoc.html.
5. Based on an analysis of historical economic data by Jared Bernstein.
6. Author's calculations of violent crime rates from the Bureau of
Justice Statistics, http://www.ojp.usdoj.gov/bjs/glance/tables/
racetab.htm.
7. Author's calculations of birth rates for 15-19-year-olds from
Table 4, Health in the United States, 2006 (Hyattsville, Md.:
National Center for Health Statistics, 2006), p. 135.
8. Marc Mauer, Race to Incarcerate (N.Y.: The New Press, 2006), pp.
177-186.
9. For the years 1976 to 2005, the correlation between the black
poverty rate and the black violent crime victimization rate is 0.92.
Author's analysis of Census poverty rates for all people and Bureau
of Justice Statistics victimization rates.
10. Heather Boonstra, Teen Pregnancy: Trends and Lessons Learned, The
Guttmacher Report on Public Policy, February 2002, Vol. 5, No. 1,
http://www.guttmacher.org/pubs/tgr/05/1/gr050107.html.
11. See Teen Birth Rate Rises for the First Time in 15 Years,
National Center for Health Statistics, December 5, 2007, http://
www.cdc.gov/nchs/pressroom/07newsreleases/teenbirth.htm.
Iraq MP: Kurds, government stall oil law.
This is from UPI. In spite of being one of the main "benchmarks" the oil law is still stuck almost a year after it was approved by the Iraq cabinet. The Kurds have just gone their own way and signed contracts themselves. The oil law seems not even to be in parliament!
Iraq MP: Kurds, government stall oil law
BAGHDAD, Jan. 10 (UPI) -- The leader of the Iraqi Parliament's Energy Committee has accused Iraq's Kurdish leadership and the national ministerial council of holding up a draft oil law.
Abdul Hadi al-Hassani also said the federal government should keep up the pressure against the Kurdistan Regional Government for moving forward unilaterally on developing its oil sector in the north.
"The Parliament awaits for the government's approval of any of the draft law's four copies," Hassani told the Voices of Iraq news agency. He blamed the holdup on politics.
The draft law has been under negotiation for more than a year and is stuck in disputes between the Kurds, who want decentralized control over the oil sector, and Iraqi Arab leaders who want the national government in charge.
The law has seen many ups and downs. It was approved last February. Then a dispute broke out over which oil fields would be under the central government's control. It's also been altered a number of times -- so much that two of the three original authors oppose it -- and there are now more than one version.
Hassani's comments appear to mean the law isn't before the Parliament, as previously thought, but a step behind in the legislative process, waiting for a final version from the council of ministers.
Hassani reiterated the national government's reference of the KRG deals as "illegal." The KRG has passed its own regional oil law and signed more than 20 deals in the past six months. It feels the national government is moving too slow.
"The central government can use its political relations with the neighboring countries to pressure the government of Iraq's Kurdistan region to cancel these contracts," he said.
The Oil Ministry, which has threatened to blacklist firms that signed with the KRG, has told a South Korean oil importer to decide between purchasing Iraq oil and being part of a consortium in a KRG deal.
Iraq MP: Kurds, government stall oil law
BAGHDAD, Jan. 10 (UPI) -- The leader of the Iraqi Parliament's Energy Committee has accused Iraq's Kurdish leadership and the national ministerial council of holding up a draft oil law.
Abdul Hadi al-Hassani also said the federal government should keep up the pressure against the Kurdistan Regional Government for moving forward unilaterally on developing its oil sector in the north.
"The Parliament awaits for the government's approval of any of the draft law's four copies," Hassani told the Voices of Iraq news agency. He blamed the holdup on politics.
The draft law has been under negotiation for more than a year and is stuck in disputes between the Kurds, who want decentralized control over the oil sector, and Iraqi Arab leaders who want the national government in charge.
The law has seen many ups and downs. It was approved last February. Then a dispute broke out over which oil fields would be under the central government's control. It's also been altered a number of times -- so much that two of the three original authors oppose it -- and there are now more than one version.
Hassani's comments appear to mean the law isn't before the Parliament, as previously thought, but a step behind in the legislative process, waiting for a final version from the council of ministers.
Hassani reiterated the national government's reference of the KRG deals as "illegal." The KRG has passed its own regional oil law and signed more than 20 deals in the past six months. It feels the national government is moving too slow.
"The central government can use its political relations with the neighboring countries to pressure the government of Iraq's Kurdistan region to cancel these contracts," he said.
The Oil Ministry, which has threatened to blacklist firms that signed with the KRG, has told a South Korean oil importer to decide between purchasing Iraq oil and being part of a consortium in a KRG deal.
Sunday, January 20, 2008
Robert Brenner: Devastating Crisis Unfolds
This is a fairly extensive analysis of some of the factors behind the current crisis. I would think that many foreign corporations must be sharing in the growth and profiting from increased production in areas such as China and India.
With military spedning already providing an artificial stimulus to the US economy I just wonder what effect further stimulus through tax cats will have. The US dollar is already being abandoned to some degree. Further decline will create inflated prices for all goods imported and that is quite a few goods! Even those goods made in the USA may have a number of imported components.
http://www.solidarity-us.org/node/1297
Devastating Crisis Unfolds
— Bob Brenner, for the ATC editors
THE CURRENT CRISIS could well turn out to be the most devastating since
the Great Depression. It manifests profound, unresolved problems in the
real economy that have been — literally — papered over by debt for
decades, as well as a shorter term financial crunch of a depth unseen
since World War II. The combination of the weakness of underlying
capital accumulation and the meltdown of the banking system is what’s
made the downward slide so intractable for policymakers and its
potential for disaster so serious. The plague of foreclosures and
abandoned homes — often broken into and stripped clean of everything,
including copper wiring — stalks Detroit in particular, and other
Midwest cities.
The human disaster this represents for hundreds of thousands of
families
and their communities may be only the first signal of what such a
capitalist crisis means. Historic bull runs of the financial markets in
the 1980s, 1990s and 2000s — with their epoch-making transfer of
income
and wealth to the richest one per cent of the population — have
distracted attention from the actual longterm weakening of the advanced
capitalist economies. Economic performance in the United States,
western
Europe and Japan, by virtually every standard indicator — the growth
of
output, investment, employment and wages — has deteriorated, decade
by
decade, business cycle by business cycle, since 1973.
The years since the start of the current cycle, which originated in
early 2001, have been worst of all. GDP (Gross Domestic Product) growth
in the United States has been the slowest for any comparable interval
since the end of the 1940s, while the increase of new plant and
equipment and the creation of jobs have been one third and two thirds,
respectively, below postwar averages. Real hourly wages for production
and non supervisory workers, about 80% of the labor force, have stayed
roughly flat, languishing at about their level of 1979.
Nor has the economic expansion been significantly stronger in either
western Europe or Japan. The declining economic dynamism of the
advanced
capitalist world is rooted in a major drop in profitability, caused
primarily by a chronic tendency to overcapacity in the world
manufacturing sector, going back to the late 1960s and early 1970s. By
2000, in the United States, Japan and Germany, the rate of profit in
the
private economy had yet to make a comeback, rising no higher in the
1990s cycle than in that of the 1970s.
With reduced profitability, firms had smaller profits to add to their
plant and equipment, as well as smaller incentives to expand. The
perpetuation of reduced profitability since the 1970s led to a steady
falloff in investment, as a proportion of GDP, across the advanced
capitalist economies, as well as step-by-step reductions in the growth
of output, means of production, and employment.
The long slowdown in capital accumulation, as well as corporations’
repression of wages to restore their rates of return, along with
governments’ cuts in social spending to buttress capitalist profits,
have resulted in a slowdown in the growth of investment, consumer and
government demand, and thus in the growth of demand as a whole. The
weakness in aggregate demand, ultimately the consequence of the
reduction in profitability, has long constituted the main barrier to
growth in advanced capitalist economies.
To counter the persistent weakness of aggregate demand, governments,
led
by the United States, have seen little choice but to underwrite ever
greater volumes of debt, through ever more varied and baroque channels,
to keep the economy turning over. Initially, during the 1970s and
1980s,
states were obliged to incur ever larger public deficits to sustain
growth. But while keeping the economy relatively stable, these deficits
also rendered it increasingly stagnant: In the parlance of that era,
governments were getting progressively less bang for their buck, less
growth of GDP for any given increase in borrowing.
From Budget-Cutting to Bubblenomics
In the early 1990s, therefore, in both the United States and Europe,
led
by Bill Clinton, Robert Rubin and Alan Greenspan, governments moving to
the right and guided by neoliberal thinking (privatization and slashing
of social programs) sought to overcome stagnation by attempting to move
to balanced budgets. But although this fact does not loom large in most
accounts of the period, this dramatic shift radically backfired.
Because profitability had still failed to recover, the deficit
reductions brought about by budget balancing resulted in a huge hit to
aggregate demand, with the result that during the first half of the
1990s, both Europe and Japan experienced devastating recessions, the
worst of the postwar period, and the U.S. economy experienced the
so-called jobless recovery. Since the middle 1990s, the United States
has consequently been obliged to resort to more powerful and risky
forms
of stimulus to counter the tendency to stagnation. In particular, it
replaced the public deficits of traditional Keynesianism with the
private deficits and asset inflation of what might be called asset
price
Keynesianism, or simply Bubblenomics.
In the great stock market runup of the 1990s, corporations and wealthy
households saw their wealth on paper massively expand. They were
therefore enabled to embark upon a record-breaking increase in
borrowing
and, on this basis, to sustain a powerful expansion of investment and
consumption. The so-called New Economy boom was the direct expression
of
the historic equity price bubble of the years 1995-2000. But since
equity prices rose in defiance of falling profit rates and since new
investment exacerbated industrial overcapacity, there quickly ensued
the
stock market crash and recession of 2000-2001, depressing profitability
in the non-financial sector to its lowest level since 1980.
Undeterred, Greenspan and the Federal Reserve, aided by the other major
Central Banks, countered the new cyclical downturn with another round
in
the inflation of asset prices, and this has essentially brought us to
where we are today. By reducing real short-term interest rates to zero
for three years, they facilitated an historically unprecedented
explosion of household borrowing, which contributed to and fed on
rocketing house prices and household wealth.
According to The Economist,, the world housing bubble between 2000 and
2005 was the biggest of all time, outrunning even that of 1929. It made
possible a steady rise in consumer spending and residential investment,
which together drove the expansion. Personal consumption plus housing
construction accounted for 90-100% of the growth of U.S. GDP in the
first five years of the current business cycle. During the same
interval, the housing sector alone, according to Moody’s Economy.com,
was responsible for raising the growth of GDP by almost 50% above what
it would otherwise been — 2.3% rather than 1.6%.
Thus, along with G. W. Bush’s Reaganesque budget deficits, record
household deficits succeeded in obscuring just how weak the underlying
economic recovery actually was. The rise in debt-supported consumer
demand, as well as super-cheap credit more generally, not only revived
the American economy but, especially by driving a new surge in imports
and the increase of the current account (balance of payments and trade)
deficit to record levels, powered what has appeared to be an impressive
global economic expansion.
Brutal Corporate Offensive
But if consumers did their part, the same cannot be said for private
business, despite the record economic stimulus. Greenspan and the Fed
had blown up the housing bubble to give the corporations time to work
off their excess capital and resume investing. But instead, focusing on
restoring their profit rates, corporations unleashed a brutal offensive
against workers. They raised productivity growth, not so much by
increasing investment in advanced plant and equipment as by radically
cutting back on jobs and compelling the employees who remained to take
up the slack. Holding down wages as they squeezed more output per
person, they appropriated to themselves in the form of profits an
historically unprecedented share of the increase that took place in
non-financial GDP.
Non-financial corporations, during this expansion, have raised their
profit rates significantly, but still not back to the already reduced
levels of the 1990s. Moreover, in view of the degree to which the
ascent
of the profit rate was achieved simply by way of raising the rate of
exploitation — making workers work more and paying them less per hour
—
there has been reason to doubt how long it could continue. But above
all, in improving profitability by holding down job creation,
investment
and wages, U.S. businesses have held down the growth of aggregate
demand
and thereby undermined their own incentive to expand.
Simultaneously, instead of increasing investment, productiveness and
employment to increase profits, firms have sought to exploit the
hyper-low cost of borrowing to improve their own and their
shareholders’
position by way of financial manipulation — paying off their debts,
paying out dividends, and buying their own stocks to drive up their
value, particularly in the form of an enormous wave of mergers and
acquisitions. In the United States, over the last four or five years,
both dividends and stock repurchases as a share of retained earnings
have exploded to their highest levels of the postwar epoch. The same
sorts of things have been happening throughout the world economy — in
Europe, Japan and Korea.
Bursting Bubbles
The bottom line is that, in the United States and across the advanced
capitalist world since 2000, we have witnessed the slowest growth in
the real economy since World War II and the greatest expansion of the
financial or paper economy in U.S. history. You don’t need a Marxist
to
tell you that this can’t go on.
Of course, just as the stock market bubble of the 1990s eventually
burst, the housing bubble eventually crashed. As a consequence, the
film
of housing-driven expansion that we viewed during the cyclical upturn
is
now running in reverse. Today, house prices have already fallen by 5%
from their 2005 peak, but this has only just begun. It is estimated by
Moody’s that by the time the housing bubble has fully deflated in
early
2009, house prices will have fallen by 20% in nominal terms — even
more
in real terms — by far the greatest decline in postwar U.S. history.
Just as the positive wealth effect of the housing bubble drove the
economy forward, the negative effect of the housing crash is driving it
backward. With the value of their residences declining, households can
no longer treat their houses like ATM machines, and household borrowing
is collapsing, and thus households are having to consume less.
The underlying danger is that, no longer able to putatively “save”
through their rising housing values, U.S. households will suddenly
begin
to actually save, driving up the rate of personal savings, now at the
lowest level in history, and pulling down consumption. Understanding
how
the end of the housing bubble would affect consumers’ purchasing
power,
firms cut back on their hiring, with the result that employment growth
fell significantly from early in 2007.
Thanks to the mounting housing crisis and the deceleration of
employment, already in the second quarter of 2007, real total cash
flowing into households, which had increased at an annual rate of about
4.4% in 2005 and 2006, had fallen near zero. In other words, if you add
up households’ real disposable income, plus their home equity
withdrawals, plus their consumer credit borrowing, plus their capital
gains realization, you find that the money that households actually had
to spend had stopped growing. Well before the financial crisis hit last
summer, the expansion was on its last legs.
Vastly complicating the downturn and making it so very dangerous is, of
course, the sub-prime debacle which arose as direct extension of the
housing bubble. The mechanisms linking unscrupulous mortgage lending on
a titanic scale, mass housing foreclosures, the collapse of the market
in securities backed up by sub-prime mortgages, and the crisis of the
great banks who directly held such huge quantities of these securities,
require a separate discussion.
One can simply say by way of conclusion, because banks’ losses are so
real, already enormous, and likely to grow much greater as the downturn
gets worse, that the economy faces the prospect, unprecedented in the
postwar period, of a freezing up of credit at the very moment of
sliding
into recession — and that governments face a problem of unparalleled
difficulty in preventing this outcome.
[This statement was written by Robert Brenner, a member of the ATC
editorial board and author of The Economics of Global Turbulence.
References for all data cited here can be found in this book,
especially
in the Afterword.]
from ATC 132 (January/February 2008)
With military spedning already providing an artificial stimulus to the US economy I just wonder what effect further stimulus through tax cats will have. The US dollar is already being abandoned to some degree. Further decline will create inflated prices for all goods imported and that is quite a few goods! Even those goods made in the USA may have a number of imported components.
http://www.solidarity-us.org/node/1297
Devastating Crisis Unfolds
— Bob Brenner, for the ATC editors
THE CURRENT CRISIS could well turn out to be the most devastating since
the Great Depression. It manifests profound, unresolved problems in the
real economy that have been — literally — papered over by debt for
decades, as well as a shorter term financial crunch of a depth unseen
since World War II. The combination of the weakness of underlying
capital accumulation and the meltdown of the banking system is what’s
made the downward slide so intractable for policymakers and its
potential for disaster so serious. The plague of foreclosures and
abandoned homes — often broken into and stripped clean of everything,
including copper wiring — stalks Detroit in particular, and other
Midwest cities.
The human disaster this represents for hundreds of thousands of
families
and their communities may be only the first signal of what such a
capitalist crisis means. Historic bull runs of the financial markets in
the 1980s, 1990s and 2000s — with their epoch-making transfer of
income
and wealth to the richest one per cent of the population — have
distracted attention from the actual longterm weakening of the advanced
capitalist economies. Economic performance in the United States,
western
Europe and Japan, by virtually every standard indicator — the growth
of
output, investment, employment and wages — has deteriorated, decade
by
decade, business cycle by business cycle, since 1973.
The years since the start of the current cycle, which originated in
early 2001, have been worst of all. GDP (Gross Domestic Product) growth
in the United States has been the slowest for any comparable interval
since the end of the 1940s, while the increase of new plant and
equipment and the creation of jobs have been one third and two thirds,
respectively, below postwar averages. Real hourly wages for production
and non supervisory workers, about 80% of the labor force, have stayed
roughly flat, languishing at about their level of 1979.
Nor has the economic expansion been significantly stronger in either
western Europe or Japan. The declining economic dynamism of the
advanced
capitalist world is rooted in a major drop in profitability, caused
primarily by a chronic tendency to overcapacity in the world
manufacturing sector, going back to the late 1960s and early 1970s. By
2000, in the United States, Japan and Germany, the rate of profit in
the
private economy had yet to make a comeback, rising no higher in the
1990s cycle than in that of the 1970s.
With reduced profitability, firms had smaller profits to add to their
plant and equipment, as well as smaller incentives to expand. The
perpetuation of reduced profitability since the 1970s led to a steady
falloff in investment, as a proportion of GDP, across the advanced
capitalist economies, as well as step-by-step reductions in the growth
of output, means of production, and employment.
The long slowdown in capital accumulation, as well as corporations’
repression of wages to restore their rates of return, along with
governments’ cuts in social spending to buttress capitalist profits,
have resulted in a slowdown in the growth of investment, consumer and
government demand, and thus in the growth of demand as a whole. The
weakness in aggregate demand, ultimately the consequence of the
reduction in profitability, has long constituted the main barrier to
growth in advanced capitalist economies.
To counter the persistent weakness of aggregate demand, governments,
led
by the United States, have seen little choice but to underwrite ever
greater volumes of debt, through ever more varied and baroque channels,
to keep the economy turning over. Initially, during the 1970s and
1980s,
states were obliged to incur ever larger public deficits to sustain
growth. But while keeping the economy relatively stable, these deficits
also rendered it increasingly stagnant: In the parlance of that era,
governments were getting progressively less bang for their buck, less
growth of GDP for any given increase in borrowing.
From Budget-Cutting to Bubblenomics
In the early 1990s, therefore, in both the United States and Europe,
led
by Bill Clinton, Robert Rubin and Alan Greenspan, governments moving to
the right and guided by neoliberal thinking (privatization and slashing
of social programs) sought to overcome stagnation by attempting to move
to balanced budgets. But although this fact does not loom large in most
accounts of the period, this dramatic shift radically backfired.
Because profitability had still failed to recover, the deficit
reductions brought about by budget balancing resulted in a huge hit to
aggregate demand, with the result that during the first half of the
1990s, both Europe and Japan experienced devastating recessions, the
worst of the postwar period, and the U.S. economy experienced the
so-called jobless recovery. Since the middle 1990s, the United States
has consequently been obliged to resort to more powerful and risky
forms
of stimulus to counter the tendency to stagnation. In particular, it
replaced the public deficits of traditional Keynesianism with the
private deficits and asset inflation of what might be called asset
price
Keynesianism, or simply Bubblenomics.
In the great stock market runup of the 1990s, corporations and wealthy
households saw their wealth on paper massively expand. They were
therefore enabled to embark upon a record-breaking increase in
borrowing
and, on this basis, to sustain a powerful expansion of investment and
consumption. The so-called New Economy boom was the direct expression
of
the historic equity price bubble of the years 1995-2000. But since
equity prices rose in defiance of falling profit rates and since new
investment exacerbated industrial overcapacity, there quickly ensued
the
stock market crash and recession of 2000-2001, depressing profitability
in the non-financial sector to its lowest level since 1980.
Undeterred, Greenspan and the Federal Reserve, aided by the other major
Central Banks, countered the new cyclical downturn with another round
in
the inflation of asset prices, and this has essentially brought us to
where we are today. By reducing real short-term interest rates to zero
for three years, they facilitated an historically unprecedented
explosion of household borrowing, which contributed to and fed on
rocketing house prices and household wealth.
According to The Economist,, the world housing bubble between 2000 and
2005 was the biggest of all time, outrunning even that of 1929. It made
possible a steady rise in consumer spending and residential investment,
which together drove the expansion. Personal consumption plus housing
construction accounted for 90-100% of the growth of U.S. GDP in the
first five years of the current business cycle. During the same
interval, the housing sector alone, according to Moody’s Economy.com,
was responsible for raising the growth of GDP by almost 50% above what
it would otherwise been — 2.3% rather than 1.6%.
Thus, along with G. W. Bush’s Reaganesque budget deficits, record
household deficits succeeded in obscuring just how weak the underlying
economic recovery actually was. The rise in debt-supported consumer
demand, as well as super-cheap credit more generally, not only revived
the American economy but, especially by driving a new surge in imports
and the increase of the current account (balance of payments and trade)
deficit to record levels, powered what has appeared to be an impressive
global economic expansion.
Brutal Corporate Offensive
But if consumers did their part, the same cannot be said for private
business, despite the record economic stimulus. Greenspan and the Fed
had blown up the housing bubble to give the corporations time to work
off their excess capital and resume investing. But instead, focusing on
restoring their profit rates, corporations unleashed a brutal offensive
against workers. They raised productivity growth, not so much by
increasing investment in advanced plant and equipment as by radically
cutting back on jobs and compelling the employees who remained to take
up the slack. Holding down wages as they squeezed more output per
person, they appropriated to themselves in the form of profits an
historically unprecedented share of the increase that took place in
non-financial GDP.
Non-financial corporations, during this expansion, have raised their
profit rates significantly, but still not back to the already reduced
levels of the 1990s. Moreover, in view of the degree to which the
ascent
of the profit rate was achieved simply by way of raising the rate of
exploitation — making workers work more and paying them less per hour
—
there has been reason to doubt how long it could continue. But above
all, in improving profitability by holding down job creation,
investment
and wages, U.S. businesses have held down the growth of aggregate
demand
and thereby undermined their own incentive to expand.
Simultaneously, instead of increasing investment, productiveness and
employment to increase profits, firms have sought to exploit the
hyper-low cost of borrowing to improve their own and their
shareholders’
position by way of financial manipulation — paying off their debts,
paying out dividends, and buying their own stocks to drive up their
value, particularly in the form of an enormous wave of mergers and
acquisitions. In the United States, over the last four or five years,
both dividends and stock repurchases as a share of retained earnings
have exploded to their highest levels of the postwar epoch. The same
sorts of things have been happening throughout the world economy — in
Europe, Japan and Korea.
Bursting Bubbles
The bottom line is that, in the United States and across the advanced
capitalist world since 2000, we have witnessed the slowest growth in
the real economy since World War II and the greatest expansion of the
financial or paper economy in U.S. history. You don’t need a Marxist
to
tell you that this can’t go on.
Of course, just as the stock market bubble of the 1990s eventually
burst, the housing bubble eventually crashed. As a consequence, the
film
of housing-driven expansion that we viewed during the cyclical upturn
is
now running in reverse. Today, house prices have already fallen by 5%
from their 2005 peak, but this has only just begun. It is estimated by
Moody’s that by the time the housing bubble has fully deflated in
early
2009, house prices will have fallen by 20% in nominal terms — even
more
in real terms — by far the greatest decline in postwar U.S. history.
Just as the positive wealth effect of the housing bubble drove the
economy forward, the negative effect of the housing crash is driving it
backward. With the value of their residences declining, households can
no longer treat their houses like ATM machines, and household borrowing
is collapsing, and thus households are having to consume less.
The underlying danger is that, no longer able to putatively “save”
through their rising housing values, U.S. households will suddenly
begin
to actually save, driving up the rate of personal savings, now at the
lowest level in history, and pulling down consumption. Understanding
how
the end of the housing bubble would affect consumers’ purchasing
power,
firms cut back on their hiring, with the result that employment growth
fell significantly from early in 2007.
Thanks to the mounting housing crisis and the deceleration of
employment, already in the second quarter of 2007, real total cash
flowing into households, which had increased at an annual rate of about
4.4% in 2005 and 2006, had fallen near zero. In other words, if you add
up households’ real disposable income, plus their home equity
withdrawals, plus their consumer credit borrowing, plus their capital
gains realization, you find that the money that households actually had
to spend had stopped growing. Well before the financial crisis hit last
summer, the expansion was on its last legs.
Vastly complicating the downturn and making it so very dangerous is, of
course, the sub-prime debacle which arose as direct extension of the
housing bubble. The mechanisms linking unscrupulous mortgage lending on
a titanic scale, mass housing foreclosures, the collapse of the market
in securities backed up by sub-prime mortgages, and the crisis of the
great banks who directly held such huge quantities of these securities,
require a separate discussion.
One can simply say by way of conclusion, because banks’ losses are so
real, already enormous, and likely to grow much greater as the downturn
gets worse, that the economy faces the prospect, unprecedented in the
postwar period, of a freezing up of credit at the very moment of
sliding
into recession — and that governments face a problem of unparalleled
difficulty in preventing this outcome.
[This statement was written by Robert Brenner, a member of the ATC
editorial board and author of The Economics of Global Turbulence.
References for all data cited here can be found in this book,
especially
in the Afterword.]
from ATC 132 (January/February 2008)
Discontent in Iraq with daily life issues.
With security issues a bit improved other daily problems are becoming of greater concern. Political wrangling also seems to be on the increase. If Sadr were to abandon his ceasefire then violence could begin to rise again. The cold weather with no heat certainly will not cool tempers.
ANALYSIS: Discontent surges in Iraq
AP NEWS ANALYSIS: Al-Maliki Faces Growing Discontent, Scathing Criticism From Major Backer
HAMZA HENDAWI
AP News
Jan 19, 2008 16:16 EST
In the depths of a strangely cold winter in the Middle East, Iraqis complain that the lights are not on, the kerosene heaters are without fuel and the water doesn't flow — and they blame the government.
And with the war nearing its fifth anniversary, Prime Minister Nouri al-Maliki is feeling the discontent as well from the most powerful political centers in the majority Shiite community.
It's a pincer movement of domestic anger that yet again could threaten al-Maliki's hold on his Green Zone office.
"Where's the kerosene and the water?" asked Amjad Kazim, a 56-year-old Shiite who lives in eastern Baghdad. "We hear a lot of promises but we see nothing."
Little kerosene is available on the state-run market at the subsidized price of $0.52 a gallon. But the fuel can be found on the black market, where it goes for more than $3.79 a gallon.
Overnight temperatures since the first of the year have routinely fallen below freezing when normally they only dip into the upper 30s Fahrenheit.
An average household needs at least 1.32 gallons a day to stay warm, which translates into a monthly expense of $150, or half what an average Iraqi earns.
"I have had no electricity for a week, and I cannot afford to buy it from neighborhood generators," said Hamdiyah Subeih, a 42-year-old homemaker from Baghdad's Shiite Baladiyat district. "I would rather live in Saddam Hussein's hell than the paradise of these new leaders."
Even during the shortages of last summer's heat, most Iraqi's were counting on electricity for air conditioners, fans and refrigeration about half the day. Now it's off for days at a stretch in many areas and on only a few hours daily on average, residents say.
"My children are so happy when the power comes back on they dance," said Marwan Ouni, a 34-year-old college teacher from Tikrit, Saddam's hometown north of Baghdad. "For me, the nonstop power cuts have made my life tedious. It's depressing."
That's the view from below, despite a considerable reduction in violence across the country. The view among those who hold power here is growing equally bilious.
Stinging criticism late last week from Abdul-Aziz al-Hakim, leader of parliament's largest Shiite bloc, was a stark break with the past. And a threat by Muqtada al-Sadr, the maverick Shiite cleric who once supported al-Maliki, not to renew an expiring six-month cease-fire he imposed on his feared militia could upend recent security progress.
In admonishing tones, al-Hakim called on the government and parliament not to be "entirely focused on political rivalries at the expense of the everyday problems faced by Iraqis." He also demanded that lawmakers quickly adopt key legislation divvying up the country's oil wealth and setting the rules for provincial elections to be held later this year.
He spoke of administrative and financial corruption, saying Iraqis were now forced to pay bribes to get business done with ministries and government agencies.
"It makes one's heart bleed ... it's a violation of man's freedom and dignity," he told tens of thousands of supporters in Baghdad on Friday.
Al-Hakim's harsh words carry considerable weight because his party, the Supreme Iraqi Islamic Council, is al-Maliki's most important backer after al-Sadr pulled ministers loyal to him from the Cabinet last year and took his 30 lawmakers out of the Shiite bloc.
Al-Hakim's focus on the daily hardships of most Iraqis finds a ready audience among those struggling to keep warm through one of the coldest winters in years — it snowed across Baghdad for the first time in living memory on Jan. 11. And al-Sadr's huge following among more radical Shiites could close the pincer on al-Maliki.
Source: AP News
Sponsored Links
ANALYSIS: Discontent surges in Iraq
AP NEWS ANALYSIS: Al-Maliki Faces Growing Discontent, Scathing Criticism From Major Backer
HAMZA HENDAWI
AP News
Jan 19, 2008 16:16 EST
In the depths of a strangely cold winter in the Middle East, Iraqis complain that the lights are not on, the kerosene heaters are without fuel and the water doesn't flow — and they blame the government.
And with the war nearing its fifth anniversary, Prime Minister Nouri al-Maliki is feeling the discontent as well from the most powerful political centers in the majority Shiite community.
It's a pincer movement of domestic anger that yet again could threaten al-Maliki's hold on his Green Zone office.
"Where's the kerosene and the water?" asked Amjad Kazim, a 56-year-old Shiite who lives in eastern Baghdad. "We hear a lot of promises but we see nothing."
Little kerosene is available on the state-run market at the subsidized price of $0.52 a gallon. But the fuel can be found on the black market, where it goes for more than $3.79 a gallon.
Overnight temperatures since the first of the year have routinely fallen below freezing when normally they only dip into the upper 30s Fahrenheit.
An average household needs at least 1.32 gallons a day to stay warm, which translates into a monthly expense of $150, or half what an average Iraqi earns.
"I have had no electricity for a week, and I cannot afford to buy it from neighborhood generators," said Hamdiyah Subeih, a 42-year-old homemaker from Baghdad's Shiite Baladiyat district. "I would rather live in Saddam Hussein's hell than the paradise of these new leaders."
Even during the shortages of last summer's heat, most Iraqi's were counting on electricity for air conditioners, fans and refrigeration about half the day. Now it's off for days at a stretch in many areas and on only a few hours daily on average, residents say.
"My children are so happy when the power comes back on they dance," said Marwan Ouni, a 34-year-old college teacher from Tikrit, Saddam's hometown north of Baghdad. "For me, the nonstop power cuts have made my life tedious. It's depressing."
That's the view from below, despite a considerable reduction in violence across the country. The view among those who hold power here is growing equally bilious.
Stinging criticism late last week from Abdul-Aziz al-Hakim, leader of parliament's largest Shiite bloc, was a stark break with the past. And a threat by Muqtada al-Sadr, the maverick Shiite cleric who once supported al-Maliki, not to renew an expiring six-month cease-fire he imposed on his feared militia could upend recent security progress.
In admonishing tones, al-Hakim called on the government and parliament not to be "entirely focused on political rivalries at the expense of the everyday problems faced by Iraqis." He also demanded that lawmakers quickly adopt key legislation divvying up the country's oil wealth and setting the rules for provincial elections to be held later this year.
He spoke of administrative and financial corruption, saying Iraqis were now forced to pay bribes to get business done with ministries and government agencies.
"It makes one's heart bleed ... it's a violation of man's freedom and dignity," he told tens of thousands of supporters in Baghdad on Friday.
Al-Hakim's harsh words carry considerable weight because his party, the Supreme Iraqi Islamic Council, is al-Maliki's most important backer after al-Sadr pulled ministers loyal to him from the Cabinet last year and took his 30 lawmakers out of the Shiite bloc.
Al-Hakim's focus on the daily hardships of most Iraqis finds a ready audience among those struggling to keep warm through one of the coldest winters in years — it snowed across Baghdad for the first time in living memory on Jan. 11. And al-Sadr's huge following among more radical Shiites could close the pincer on al-Maliki.
Source: AP News
Sponsored Links
Saturday, January 19, 2008
Intelligence officials question Al Qaeda role in Bhutto killing
This is from rawstory. This story should probably be taken with a grain of salt, although Pakistani politics is certainly tortuous. The Pakistani intelligence services probably have good connections with everyone including the CIA!
Intelligence officials on both sides of the Atlantic question al Qaeda role in Bhutto killingLarisa Alexandrovna
Published: Friday January 18, 2008
Scotland Yard says they’re not investigating assassin
Read a detailed timeline of the assassination
The assassination of former Pakistani Prime Minister Benazir Bhutto last December may never be solved, because Pakistani officials refused to demand an autopsy and hosed away evidence at the scene of her killing.
Pakistani president Pervez Musharraf, President Bush, CIA Director Michael Hayden, and news reports have all claimed that al Qaeda was responsible. However, some current and former US and British intelligence officials now say the evidence points instead to Pakistan’s Inter Services Intelligence Agency (ISI), the country’s security services.
Moreover, both Scotland Yard and a spokesman for MI6 told RAW STORY this week that British investigators are not examining the question of who killed Benazir Bhutto. They were only charged with identifying the cause of her death.
“The investigation is primarily a matter for the Pakistan authorities,” said Nev Johnson, the Press Officer for the British Foreign & Commonwealth Office, which oversees security and the MI6 intelligence service.
Bhutto, the leader of the opposition Pakistan People’s Party, was shot in Rawalpindi, Pakistan on Dec. 27, 2007. Following her death, a bomb detonated, killing 25 people.
Almost immediately, differences emerged in the official story of her death, with a Musharraf spokesman saying she had been killed as a result of hitting her head against a lever on the sunroof of her bulletproof LandRover.
In a 45-minute interview given exclusively to the Washington Post Friday, CIA Director Hayden blamed members of al Qaeda and Baitullah Mehsud, a Pakistani tribal leader.
However, when asked about the allegations that Mehsud, and thus al Qaeda, is behind the assassination, one former high-ranking CIA case officer replied, “That is total bullshit.”
“Mehsud is an ISI [Inter-Services Intelligence] asset. It is ridiculous to think he acted unilaterally. What [the Pakistanis] have [as evidence] is an intercepted conversation, but it is not conclusive that Mehsud is speaking or that he is admitting a role in the assassination. There is some sort of congratulations, but that call could have been made at any time about any topic.”
Another US intelligence source said that it would be impossible to determine who was behind the attacks because the crime scene was “hosed down and there was no autopsy.”
The role of Scotland Yard
Pakistani President Musharraf initially declined the services of the famed Metropolitan Police Services (MPS) – or, as they are more commonly known, Scotland Yard – when they were offered by British Prime Minister Gordon Brown However, with public pressure mounting, Musharraf agreed. The MPS team, which arrived in Pakistan Jan. 3, concluded Thursday that Bhutto was killed by a bullet wound to the head.
US intelligence officials were concerned from the outset that the MPS investigation would be limited and kept in line with the official Musharraf position, because of the delicate diplomatic relationship that both Britain and the US have with Pakistan. Musharraf has publicly stated that Taliban tribal leader Baitullah Mehsud was the mastermind of the attack and that Mehsud's close relationship to al Qaeda implicates the terrorist group.
A current US official, who wishes to remain anonymous due to the sensitive nature of the subject, told RAW STORY Wednesday that “[Mehsud] is not formally part of the Taliban or al Qaeda, but he’s linked to both, and it is, at times, difficult to say where one organization ends and the other begins.”
Sources close to Scotland Yard say their role is not to identify who killed Mrs. Bhutto, but only to determine how she was killed. According to British intelligence, they are not directing their investigation to point to any single group or person.
Reached early Thursday, a Scotland Yard spokeswoman said that the role of MPS investigators is to “assist the local authorities” in Pakistan.
"At the request of the Pakistan Government, New Scotland Yard's Counter Terrorism Command (SO15) [has deployed] a team of investigators to support the Pakistan Law Enforcement Agencies responsible for investigating the death of Benazir Bhutto,” the spokeswoman said.
“The principal purpose of the SO15 deployment is to assist the local authorities in providing clarity regarding the precise cause of Ms Bhutto's death… The primacy and responsibility for the investigation remains with the Pakistan authorities.”
Asked about recent news reports that Scotland Yard investigators have concluded al Qaeda was behind the murder of Mrs. Bhutto, Nev Johnson, the Press Officer for the British Foreign & Commonwealth Office said that “as the investigation is still underway, it would not be appropriate for the Metropolitan Police to comment. The same thing applies to the FCO.”
“The investigation is primarily a matter for the Pakistan authorities,” he added.
While neither the British Foreign & Commonwealth Office nor Scotland Yard is publicly discussing the investigation, someone appears to be leaking information suggesting that al Qaeda is behind the assassination of Mrs. Bhutto. A recent article, “Scotland Yard believes al Qaeda assassinated Benazir Bhutto,” claims that Mehsud had associations with al Qaeda but quotes no one from the service actually fingering al Qaeda in the attack.
US intelligence officials and some foreign intelligence officers are concerned that leaking anything about the case could ignite a firestorm in the region. Some privately take issue with Scotland Yard’s decision to be part of the investigation to begin with, as it puts the British in an untenable position.
Shootings atypical for al Qaeda
US intelligence officials believe that the use of guns against multiple targets distinctly points away from al Qaeda, whose standard methods of operation are designed to minimize the cost to the organization by causing the most damage possible from a single resource. Typically, that would mean either a suicide bomber or multiple bombings at the same time, using single assets for each attack.
Although there have been several attempts on Mrs. Bhutto’s life, the most recent prior to the fatal shooting was on December 8, 2007, when gunmen attacked a PPP office and killed three Bhutto supporters.
Late on the morning of Dec. 27, 2007, just hours before Mrs. Bhutto was assassinated in Rawalpindi, snipers attacked the followers of another opposition leader – former Prime Minister, Nawaz Sharif, head of the Pakistan Muslim League-N (PML-N) party, who was also scheduled to speak in Rawalpindi – injuring 16 and killing 4.
The use of snipers and gunmen as assassins, say intelligence sources, does not support the theory that al Qaeda was behind the attacks. These sources added that if Mehsud was involved, it could have only been on contract through the ISI.
One US official concluded that if “Mehsud is in fact behind this, then it would be more of an indictment against the ISI than against al Qaeda.”
The ISI, the Taliban, and al Qaeda all have strong ties to one another. It is this complex relationship that confuses the players and the issues and prevents what many professional intelligence officers believe to be a much needed public understanding of what is terrorism and what is not.
In the case of the Bhutto assassination, these sources view the shooting as an act of murder, not an act of terrorism. As previously reported by Raw Story, they believe that the bombing that followed the shooting was aimed at eliminating the shooter and removing evidence of the assassination.
According to a former high ranking US intelligence official, who wishes to remain anonymous due to the delicate nature of the information, the US intelligence community understands the gunman to have been killed in the blast following Mrs. Bhutto's assassination.
“He was killed, probably not knowing that the suicide bomber was there,” said this source. “We don't know for sure if the two men arrived together. We do know that the assassin died in the explosion, and was probably meant to.”
Several other US intelligence officials concur that the bomber was likely “inserted” to “clean up” evidence of the shooting, including eliminating the gunman.
The real question for most of these sources is not “who,” but rather “how.” All of them are inclined to believe that factions of the ISI, either with or without the knowledge and backing of Musharraf, were involved in the assassination at the management level. It is those people who pose a continued danger, say US intelligence officials, to the Pakistani people and to nations in the region, as well as to the US.
A state within a state
The Pakistan Directorate of Inter-Services Intelligence has been described as the shadow government of Pakistan or as “a state within a state.”
Although the ISI has existed since the 1940s, it became truly a world player during the Afghan-Soviet war, when many groups of foreign fighters – the Mujahedeen – worked as proxy warriors for Western nations against the Russians and were managed through the ISI. The ISI recruited, trained, and even housed many of these young fighters as they were readied for battle. For its efforts, the ISI was paid by the West as well, as by other nations in the region, including Saudi Arabia and Israel.
After the fall of the Soviet Union, some of the Mujahedeen went home, some were absorbed into the ISI, and others splintered off to become al Qaeda and the Taliban, with the direct help of both elements within the ISI and Saudi Arabia. Although it remains a matter of debate just how much influence the ISI continues to exert over its al Qaeda and Taliban offspring, there is no question that there are certain individuals – and even small but powerful factions – within the ISI that have a very close relationship with terrorists and militants.
Read Raw Story's detailed timeline of the assassination
.
Muriel Kane contributed research for this story.
Larisa Alexandrovna is managing editor of investigative news for Raw Story and regularly reports on intelligence and national security stories. Contact: larisa@rawstory.com.
Intelligence officials on both sides of the Atlantic question al Qaeda role in Bhutto killingLarisa Alexandrovna
Published: Friday January 18, 2008
Scotland Yard says they’re not investigating assassin
Read a detailed timeline of the assassination
The assassination of former Pakistani Prime Minister Benazir Bhutto last December may never be solved, because Pakistani officials refused to demand an autopsy and hosed away evidence at the scene of her killing.
Pakistani president Pervez Musharraf, President Bush, CIA Director Michael Hayden, and news reports have all claimed that al Qaeda was responsible. However, some current and former US and British intelligence officials now say the evidence points instead to Pakistan’s Inter Services Intelligence Agency (ISI), the country’s security services.
Moreover, both Scotland Yard and a spokesman for MI6 told RAW STORY this week that British investigators are not examining the question of who killed Benazir Bhutto. They were only charged with identifying the cause of her death.
“The investigation is primarily a matter for the Pakistan authorities,” said Nev Johnson, the Press Officer for the British Foreign & Commonwealth Office, which oversees security and the MI6 intelligence service.
Bhutto, the leader of the opposition Pakistan People’s Party, was shot in Rawalpindi, Pakistan on Dec. 27, 2007. Following her death, a bomb detonated, killing 25 people.
Almost immediately, differences emerged in the official story of her death, with a Musharraf spokesman saying she had been killed as a result of hitting her head against a lever on the sunroof of her bulletproof LandRover.
In a 45-minute interview given exclusively to the Washington Post Friday, CIA Director Hayden blamed members of al Qaeda and Baitullah Mehsud, a Pakistani tribal leader.
However, when asked about the allegations that Mehsud, and thus al Qaeda, is behind the assassination, one former high-ranking CIA case officer replied, “That is total bullshit.”
“Mehsud is an ISI [Inter-Services Intelligence] asset. It is ridiculous to think he acted unilaterally. What [the Pakistanis] have [as evidence] is an intercepted conversation, but it is not conclusive that Mehsud is speaking or that he is admitting a role in the assassination. There is some sort of congratulations, but that call could have been made at any time about any topic.”
Another US intelligence source said that it would be impossible to determine who was behind the attacks because the crime scene was “hosed down and there was no autopsy.”
The role of Scotland Yard
Pakistani President Musharraf initially declined the services of the famed Metropolitan Police Services (MPS) – or, as they are more commonly known, Scotland Yard – when they were offered by British Prime Minister Gordon Brown However, with public pressure mounting, Musharraf agreed. The MPS team, which arrived in Pakistan Jan. 3, concluded Thursday that Bhutto was killed by a bullet wound to the head.
US intelligence officials were concerned from the outset that the MPS investigation would be limited and kept in line with the official Musharraf position, because of the delicate diplomatic relationship that both Britain and the US have with Pakistan. Musharraf has publicly stated that Taliban tribal leader Baitullah Mehsud was the mastermind of the attack and that Mehsud's close relationship to al Qaeda implicates the terrorist group.
A current US official, who wishes to remain anonymous due to the sensitive nature of the subject, told RAW STORY Wednesday that “[Mehsud] is not formally part of the Taliban or al Qaeda, but he’s linked to both, and it is, at times, difficult to say where one organization ends and the other begins.”
Sources close to Scotland Yard say their role is not to identify who killed Mrs. Bhutto, but only to determine how she was killed. According to British intelligence, they are not directing their investigation to point to any single group or person.
Reached early Thursday, a Scotland Yard spokeswoman said that the role of MPS investigators is to “assist the local authorities” in Pakistan.
"At the request of the Pakistan Government, New Scotland Yard's Counter Terrorism Command (SO15) [has deployed] a team of investigators to support the Pakistan Law Enforcement Agencies responsible for investigating the death of Benazir Bhutto,” the spokeswoman said.
“The principal purpose of the SO15 deployment is to assist the local authorities in providing clarity regarding the precise cause of Ms Bhutto's death… The primacy and responsibility for the investigation remains with the Pakistan authorities.”
Asked about recent news reports that Scotland Yard investigators have concluded al Qaeda was behind the murder of Mrs. Bhutto, Nev Johnson, the Press Officer for the British Foreign & Commonwealth Office said that “as the investigation is still underway, it would not be appropriate for the Metropolitan Police to comment. The same thing applies to the FCO.”
“The investigation is primarily a matter for the Pakistan authorities,” he added.
While neither the British Foreign & Commonwealth Office nor Scotland Yard is publicly discussing the investigation, someone appears to be leaking information suggesting that al Qaeda is behind the assassination of Mrs. Bhutto. A recent article, “Scotland Yard believes al Qaeda assassinated Benazir Bhutto,” claims that Mehsud had associations with al Qaeda but quotes no one from the service actually fingering al Qaeda in the attack.
US intelligence officials and some foreign intelligence officers are concerned that leaking anything about the case could ignite a firestorm in the region. Some privately take issue with Scotland Yard’s decision to be part of the investigation to begin with, as it puts the British in an untenable position.
Shootings atypical for al Qaeda
US intelligence officials believe that the use of guns against multiple targets distinctly points away from al Qaeda, whose standard methods of operation are designed to minimize the cost to the organization by causing the most damage possible from a single resource. Typically, that would mean either a suicide bomber or multiple bombings at the same time, using single assets for each attack.
Although there have been several attempts on Mrs. Bhutto’s life, the most recent prior to the fatal shooting was on December 8, 2007, when gunmen attacked a PPP office and killed three Bhutto supporters.
Late on the morning of Dec. 27, 2007, just hours before Mrs. Bhutto was assassinated in Rawalpindi, snipers attacked the followers of another opposition leader – former Prime Minister, Nawaz Sharif, head of the Pakistan Muslim League-N (PML-N) party, who was also scheduled to speak in Rawalpindi – injuring 16 and killing 4.
The use of snipers and gunmen as assassins, say intelligence sources, does not support the theory that al Qaeda was behind the attacks. These sources added that if Mehsud was involved, it could have only been on contract through the ISI.
One US official concluded that if “Mehsud is in fact behind this, then it would be more of an indictment against the ISI than against al Qaeda.”
The ISI, the Taliban, and al Qaeda all have strong ties to one another. It is this complex relationship that confuses the players and the issues and prevents what many professional intelligence officers believe to be a much needed public understanding of what is terrorism and what is not.
In the case of the Bhutto assassination, these sources view the shooting as an act of murder, not an act of terrorism. As previously reported by Raw Story, they believe that the bombing that followed the shooting was aimed at eliminating the shooter and removing evidence of the assassination.
According to a former high ranking US intelligence official, who wishes to remain anonymous due to the delicate nature of the information, the US intelligence community understands the gunman to have been killed in the blast following Mrs. Bhutto's assassination.
“He was killed, probably not knowing that the suicide bomber was there,” said this source. “We don't know for sure if the two men arrived together. We do know that the assassin died in the explosion, and was probably meant to.”
Several other US intelligence officials concur that the bomber was likely “inserted” to “clean up” evidence of the shooting, including eliminating the gunman.
The real question for most of these sources is not “who,” but rather “how.” All of them are inclined to believe that factions of the ISI, either with or without the knowledge and backing of Musharraf, were involved in the assassination at the management level. It is those people who pose a continued danger, say US intelligence officials, to the Pakistani people and to nations in the region, as well as to the US.
A state within a state
The Pakistan Directorate of Inter-Services Intelligence has been described as the shadow government of Pakistan or as “a state within a state.”
Although the ISI has existed since the 1940s, it became truly a world player during the Afghan-Soviet war, when many groups of foreign fighters – the Mujahedeen – worked as proxy warriors for Western nations against the Russians and were managed through the ISI. The ISI recruited, trained, and even housed many of these young fighters as they were readied for battle. For its efforts, the ISI was paid by the West as well, as by other nations in the region, including Saudi Arabia and Israel.
After the fall of the Soviet Union, some of the Mujahedeen went home, some were absorbed into the ISI, and others splintered off to become al Qaeda and the Taliban, with the direct help of both elements within the ISI and Saudi Arabia. Although it remains a matter of debate just how much influence the ISI continues to exert over its al Qaeda and Taliban offspring, there is no question that there are certain individuals – and even small but powerful factions – within the ISI that have a very close relationship with terrorists and militants.
Read Raw Story's detailed timeline of the assassination
.
Muriel Kane contributed research for this story.
Larisa Alexandrovna is managing editor of investigative news for Raw Story and regularly reports on intelligence and national security stories. Contact: larisa@rawstory.com.
There is a certain parallel between Fischer and the Jihadists. As with the Jihadists Fischer was a great hero in the battle against the Evil Empire. However, afterwards both Fishcher and the Jihadists became implacable foes of the US, Fischer
even applauding the 9/11 attack.
Fischer was always quite eccentric to put it mildly. Not only was he outspokenly anti-Jewish but also he was rather paranoid. He was wanted in the US for playing chess in Yugoslavia at the wrong time when it was verboten! Fischer renounced his US citizenship and was an Icelander at the time of his death. I wonder if his companion
Miyoko Watai will write a book!
Bobby Fischer, Chess Master, Dies at 64
By THE ASSOCIATED PRESS
Published: January 18, 2008
Filed at 2:55 p.m. ET
REYKJAVIK, Iceland (AP) -- ''Chess,'' Bobby Fischer once said, ''is life.'' It was the chess master's tragedy that the messy, tawdry details of his life often overshadowed the sublime genius of his game. Fischer, who has died at the age of 64, was a child prodigy, a teenage grandmaster and -- before age 30 -- a world champion who triumphed in a Cold War showdown with Soviet champion Boris Spassky.
But the last three decades of his life were spent in seclusion, broken periodically by erratic and often anti-Semitic comments and by an absurd legal battle with his homeland, the United States.
''He was the pride and sorrow of chess,'' said Raymond Keene, a British grandmaster and chess correspondent for The Times of London. ''It's tragic that such a great man descended into madness and anti-Semitism.''
Fischer died Thursday of kidney failure in Reykjavik after a long illness, friend and spokesman Gardar Sverrisson said Friday.
''A giant of the chess world is gone,'' said Fridrik Olafsson, an Icelandic grandmaster and former president of the World Chess Federation.
Noted French chess expert Olivier Tridon: ''Bobby Fischer has died at age 64. Like the 64 squares of a chess board.''
In another bit of symmetry, his death occurred in the city where he had his greatest triumph -- the historic encounter with Spassky.
Chicago-born and Brooklyn-bred, Fischer moved to Iceland in 2005 in a bid to avoid extradition to the U.S., where he was wanted for playing a 1992 match in Yugoslavia in defiance of international sanctions.
At his peak, Fischer was a figure of mystery and glamour who drew millions of new fans to chess.
Russian former world chess champion Garry Kasparov said Fischer's ascent of the chess world in the 1960s was ''a revolutionary breakthrough'' for the game.
''The tragedy is that he left this world too early, and his extravagant life and scandalous statements did not contribute to the popularity of chess,'' Kasparov told The Associated Press.
Rival and friend Spassky, reached at his home in France, said in a brief telephone interview that he was ''very sorry'' to hear of Fischer's death.
Kirsan Ilyumzhinov, president of the World Chess Federation, called Fischer ''a phenomenon and an epoch in chess history, and an intellectual giant I would rank next to Newton and Einstein.''
An American chess champion at 14 and a grand master at 15, Fischer vanquished Spassky in 1972 in a series of games in Reykjavik to become the first officially recognized world champion born in the United States.
The Fischer-Spassky match, at the height of the Cold War, took on mythic dimensions as a clash between the world's two superpowers.
It was a myth Fischer was happy to fuel. ''It's really the free world against the lying, cheating, hypocritical Russians,'' he said.
But Fischer's reputation as a chess genius was eclipsed, in the eyes of many, by his volatility and often bizarre behavior.
He lost his world title in 1975 after refusing to defend it against Anatoly Karpov. He dropped out of competitive chess and largely out of view, spending time in Hungary and the Philippines and emerging occasionally to make outspoken and often outrageous comments.
He praised the Sept. 11 terrorist attacks, saying, ''I want to see the U.S. wiped out,'' and described Jews as ''thieving, lying bastards.'' Fischer's mother was Jewish.
In 2004, Fischer was arrested at Japan's Narita airport for traveling on a revoked U.S. passport. He was threatened with extradition to the United States to face charges of violating sanctions imposed to punish Slobodan Milosevic, then leader of Yugoslavia, by playing a 1992 rematch against Spassky in the country.
Fischer renounced his U.S. citizenship and spent nine months in custody before the dispute was resolved when Iceland -- a chess-mad nation of 300,000 -- granted him citizenship.
''They talk about the 'axis of evil,''' Fischer said when he arrived in Iceland. ''What about the allies of evil ... the United States, England, Japan, Australia? These are the evildoers.''
In his final years, Fischer railed against the chess establishment, claiming that the outcomes of many top-level chess matches were decided in advance.
Instead, he championed his concept of ''Fischerandom,'' or random chess, in which pieces are shuffled at the beginning of each match in a bid to reinvigorate the game.
''I don't play the old chess,'' he told reporters when he arrived in Iceland in 2005. ''But obviously if I did, I would be the best.''
Born in Chicago on March 9, 1943, Robert James Fischer was a child prodigy, playing competitively from age 8.
At 13, he became the youngest player to win the United States Junior Championship. At 14, he won the United States Open Championship for the first of eight times.
At 15, he became an international grand master, the youngest person to hold the title.
Tall and striking-looking, he was a chess star -- but already gaining a reputation for erratic behavior.
He turned up late for tournaments, walked out of matches, refused to play unless the lighting suited him and was intolerant of photographers and cartoonists. He was convinced of his own superiority and called the Soviets ''commie cheats.''
''Chess is war on a board,'' he once said. ''The object is to crush the other man's mind.''
His behavior often unsettled opponents -- to Fischer's advantage.
This was seen most famously in the championship match with Spassky in Reykjavik between July and September 1972. Having agreed to play Spassky in Yugoslavia, Fischer raised one objection after another to the arrangements and they wound up playing in Iceland.
Fischer then demanded more money and, urged by no less than Henry Kissinger, he went to Iceland after a British financier, Jim Slater, enriched the prize pot.
''Fischer is known to be graceless, rude, possibly insane. I really don't worry about that, because I didn't do it for that reason,'' Slater has said.
''I did it because he was going to challenge the Russian supremacy, and it was good for chess,'' he added.
When play got under way, days late, Fischer lost the first game with an elementary blunder after discovering that the TV cameras he had reluctantly accepted were not unseen and unheard, but right behind the players' chairs.
He boycotted the second game and the referee awarded the point to Spassky, putting the Russian ahead 2-0.
But then Spassky agreed to Fischer's demand that the games be played in a back room away from cameras. Fischer went on to beat Spassky, 12.5 points to 8.5 points in 21 games.
In the recent book ''White King and Red Queen,'' British author Daniel Johnson said the match was ''an abstract antagonism on an abstract battleground using abstract weapons ... yet their struggle embraced all human life.''
''In Spassky's submission to his fate and Fischer's fierce exultant triumph, the Cold War's denouement was already foreshadowed.''
Funeral details were not immediately available. Fischer moved to Iceland with his longtime companion, Japanese chess player Miyoko Watai. She survives him.
------
Associated Press Writers Jill Lawless in London and Mansur Mirovalev in Moscow contributed to this report.
More Articles in International »
even applauding the 9/11 attack.
Fischer was always quite eccentric to put it mildly. Not only was he outspokenly anti-Jewish but also he was rather paranoid. He was wanted in the US for playing chess in Yugoslavia at the wrong time when it was verboten! Fischer renounced his US citizenship and was an Icelander at the time of his death. I wonder if his companion
Miyoko Watai will write a book!
Bobby Fischer, Chess Master, Dies at 64
By THE ASSOCIATED PRESS
Published: January 18, 2008
Filed at 2:55 p.m. ET
REYKJAVIK, Iceland (AP) -- ''Chess,'' Bobby Fischer once said, ''is life.'' It was the chess master's tragedy that the messy, tawdry details of his life often overshadowed the sublime genius of his game. Fischer, who has died at the age of 64, was a child prodigy, a teenage grandmaster and -- before age 30 -- a world champion who triumphed in a Cold War showdown with Soviet champion Boris Spassky.
But the last three decades of his life were spent in seclusion, broken periodically by erratic and often anti-Semitic comments and by an absurd legal battle with his homeland, the United States.
''He was the pride and sorrow of chess,'' said Raymond Keene, a British grandmaster and chess correspondent for The Times of London. ''It's tragic that such a great man descended into madness and anti-Semitism.''
Fischer died Thursday of kidney failure in Reykjavik after a long illness, friend and spokesman Gardar Sverrisson said Friday.
''A giant of the chess world is gone,'' said Fridrik Olafsson, an Icelandic grandmaster and former president of the World Chess Federation.
Noted French chess expert Olivier Tridon: ''Bobby Fischer has died at age 64. Like the 64 squares of a chess board.''
In another bit of symmetry, his death occurred in the city where he had his greatest triumph -- the historic encounter with Spassky.
Chicago-born and Brooklyn-bred, Fischer moved to Iceland in 2005 in a bid to avoid extradition to the U.S., where he was wanted for playing a 1992 match in Yugoslavia in defiance of international sanctions.
At his peak, Fischer was a figure of mystery and glamour who drew millions of new fans to chess.
Russian former world chess champion Garry Kasparov said Fischer's ascent of the chess world in the 1960s was ''a revolutionary breakthrough'' for the game.
''The tragedy is that he left this world too early, and his extravagant life and scandalous statements did not contribute to the popularity of chess,'' Kasparov told The Associated Press.
Rival and friend Spassky, reached at his home in France, said in a brief telephone interview that he was ''very sorry'' to hear of Fischer's death.
Kirsan Ilyumzhinov, president of the World Chess Federation, called Fischer ''a phenomenon and an epoch in chess history, and an intellectual giant I would rank next to Newton and Einstein.''
An American chess champion at 14 and a grand master at 15, Fischer vanquished Spassky in 1972 in a series of games in Reykjavik to become the first officially recognized world champion born in the United States.
The Fischer-Spassky match, at the height of the Cold War, took on mythic dimensions as a clash between the world's two superpowers.
It was a myth Fischer was happy to fuel. ''It's really the free world against the lying, cheating, hypocritical Russians,'' he said.
But Fischer's reputation as a chess genius was eclipsed, in the eyes of many, by his volatility and often bizarre behavior.
He lost his world title in 1975 after refusing to defend it against Anatoly Karpov. He dropped out of competitive chess and largely out of view, spending time in Hungary and the Philippines and emerging occasionally to make outspoken and often outrageous comments.
He praised the Sept. 11 terrorist attacks, saying, ''I want to see the U.S. wiped out,'' and described Jews as ''thieving, lying bastards.'' Fischer's mother was Jewish.
In 2004, Fischer was arrested at Japan's Narita airport for traveling on a revoked U.S. passport. He was threatened with extradition to the United States to face charges of violating sanctions imposed to punish Slobodan Milosevic, then leader of Yugoslavia, by playing a 1992 rematch against Spassky in the country.
Fischer renounced his U.S. citizenship and spent nine months in custody before the dispute was resolved when Iceland -- a chess-mad nation of 300,000 -- granted him citizenship.
''They talk about the 'axis of evil,''' Fischer said when he arrived in Iceland. ''What about the allies of evil ... the United States, England, Japan, Australia? These are the evildoers.''
In his final years, Fischer railed against the chess establishment, claiming that the outcomes of many top-level chess matches were decided in advance.
Instead, he championed his concept of ''Fischerandom,'' or random chess, in which pieces are shuffled at the beginning of each match in a bid to reinvigorate the game.
''I don't play the old chess,'' he told reporters when he arrived in Iceland in 2005. ''But obviously if I did, I would be the best.''
Born in Chicago on March 9, 1943, Robert James Fischer was a child prodigy, playing competitively from age 8.
At 13, he became the youngest player to win the United States Junior Championship. At 14, he won the United States Open Championship for the first of eight times.
At 15, he became an international grand master, the youngest person to hold the title.
Tall and striking-looking, he was a chess star -- but already gaining a reputation for erratic behavior.
He turned up late for tournaments, walked out of matches, refused to play unless the lighting suited him and was intolerant of photographers and cartoonists. He was convinced of his own superiority and called the Soviets ''commie cheats.''
''Chess is war on a board,'' he once said. ''The object is to crush the other man's mind.''
His behavior often unsettled opponents -- to Fischer's advantage.
This was seen most famously in the championship match with Spassky in Reykjavik between July and September 1972. Having agreed to play Spassky in Yugoslavia, Fischer raised one objection after another to the arrangements and they wound up playing in Iceland.
Fischer then demanded more money and, urged by no less than Henry Kissinger, he went to Iceland after a British financier, Jim Slater, enriched the prize pot.
''Fischer is known to be graceless, rude, possibly insane. I really don't worry about that, because I didn't do it for that reason,'' Slater has said.
''I did it because he was going to challenge the Russian supremacy, and it was good for chess,'' he added.
When play got under way, days late, Fischer lost the first game with an elementary blunder after discovering that the TV cameras he had reluctantly accepted were not unseen and unheard, but right behind the players' chairs.
He boycotted the second game and the referee awarded the point to Spassky, putting the Russian ahead 2-0.
But then Spassky agreed to Fischer's demand that the games be played in a back room away from cameras. Fischer went on to beat Spassky, 12.5 points to 8.5 points in 21 games.
In the recent book ''White King and Red Queen,'' British author Daniel Johnson said the match was ''an abstract antagonism on an abstract battleground using abstract weapons ... yet their struggle embraced all human life.''
''In Spassky's submission to his fate and Fischer's fierce exultant triumph, the Cold War's denouement was already foreshadowed.''
Funeral details were not immediately available. Fischer moved to Iceland with his longtime companion, Japanese chess player Miyoko Watai. She survives him.
------
Associated Press Writers Jill Lawless in London and Mansur Mirovalev in Moscow contributed to this report.
More Articles in International »
Friday, January 18, 2008
47 killed as Insurgents Take Key Fort in NW Pakistan
It is rather surprising that insurgents would bother to hold the fort for some period. It is not clear from the article as I read it that the military even retook the fort. Both the US and the Pakistani govt. seem bound and determined to try and subdue the tribal areas something that has never been possible in the past as far as I know. Pakistan is in for an indefinite period of increased unrest and violence. If the US should actually send troops there could be all out civil war with incalculable consequences.
47 Killed as Insurgents Take Key Fort in NW Pakistan
By Griff Witte and Imtiaz Ali
Washington Post Foreign Service
Thursday, January 17, 2008; A14
ISLAMABAD, Pakistan, Jan. 16 -- Hundreds of insurgent fighters mounted a brazen assault on a key fort in northwestern Pakistan on Wednesday, seizing it from security forces in a battle that left at least 47 people dead, the military said.
The attack was carried out by fighters loyal to Taliban commander Baitullah Mehsud, who has been blamed by Pakistani authorities for a succession of high-profile strikes, including the assassination last month of former prime minister Benazir Bhutto.
Mehsud and the military have been engaged in an intensifying battle for territory in the country's volatile northwest, and Wednesday's clash reflected the Taliban commander's growing strength, as well as the Pakistani government's struggle to confront him.
The assault, in the remote tribal region of South Waziristan, began Wednesday just after midnight when 200 Mehsud fighters converged on Sararogha Fort, barraging it with small-arms fire and rocket-propelled grenades.
The fort was manned by 42 soldiers from Pakistan's Frontier Corps, and the troops initially succeeded in repelling the attack by using heavy artillery fire, according to a military spokesman, Maj. Gen. Athar Abbas. But an hour and a half later, the Taliban fighters returned, this time in greater numbers -- between 300 and 400.
"The second attack was more fierce and more intense," Abbas said.
The insurgents used explosives to blow holes in the fort's outer walls, streamed in and began fighting the soldiers hand-to-hand. Seven troops were killed, 15 managed to escape and an additional 20 were unaccounted for, Abbas said. There were fears Wednesday night that they had been taken hostage, a common tactic of Mehsud.
Abbas said 40 insurgents were killed in the battle.
A purported spokesman for the Pakistani Taliban disputed the military's numbers. "We have killed 16 soldiers and have kidnapped 12, while just two of our fighters have been killed in this clash," Maulvi Omar told the BBC's Pashto-language service.
While Mehsud has carried out a string of devastating attacks in recent months, the decision to assault the fort head-on reflected an even bolder strategy than he has exhibited before.
In the past, Mehsud's fighters have carried out suicide attacks on military convoys, as well as hit-and-run strikes against Pakistani government checkpoints and facilities. But as of Wednesday night, his forces seemed intent on holding on to the fort.
"It really carries a lot of significance," said Fazal Rahim Marwat, a professor at Peshawar University who has studied the Taliban movement in Pakistan. "This is another daring step on the part of the militants, and it seems that they are getting stronger and bolder with the passage of time."
Over a century old, Sararogha Fort is one of the few symbols of government authority in South Waziristan, an area where Pakistan has never succeeded in exerting much control.
The region is a haven for Taliban and al-Qaeda fighters and has been identified by Western intelligence officials as an international headquarters for Islamic extremist groups.
The Pakistani government has struggled to find a strategy to counter the threat -- alternately combating it with military force and signing peace deals. Crucial truces in both North and South Waziristan collapsed last summer, spurring a surge in attacks that have claimed hundreds of lives throughout the country.
A Western military official with knowledge of extremist groups on both sides of the Pakistan-Afghanistan border estimated this week that Mehsud, who has allied himself with al-Qaeda, has about 5,000 hard-core fighters at his disposal.
But the official also said Mehsud has purposely exaggerated his own influence. "A lot more is attributed to him than I think he's capable of," the official said.
Pakistani President Pervez Musharraf has blamed Bhutto's assassination on Mehsud, and the government has produced an audio recording that it says implicates him. But Bhutto's supporters have said they believe that explanation is intended to cover for others, including current and former government officials.
Pakistan has repeatedly tried and failed to kill Mehsud. It has also attempted to turn rival tribal commanders in the area against him, with limited success.
Wednesday's attack represented yet another setback for the Frontier Corps, a paramilitary force that is supposed to be on the front lines of Pakistan's counterinsurgency campaign but has taken heavy losses and proved generally overmatched.
The United States has made beefing up the Frontier Corps a priority and is investing in a new program to train and equip the force.
Adm. William J. Fallon, commander of U.S. Central Command, told reporters in Florida on Wednesday that Pakistan appeared more welcoming of U.S. counterinsurgency training and advice than it had been in the past.
"My sense is, there is an increased willingness to address these problems," he said. "And we're going to try to help them."
Ali reported from Peshawar.
47 Killed as Insurgents Take Key Fort in NW Pakistan
By Griff Witte and Imtiaz Ali
Washington Post Foreign Service
Thursday, January 17, 2008; A14
ISLAMABAD, Pakistan, Jan. 16 -- Hundreds of insurgent fighters mounted a brazen assault on a key fort in northwestern Pakistan on Wednesday, seizing it from security forces in a battle that left at least 47 people dead, the military said.
The attack was carried out by fighters loyal to Taliban commander Baitullah Mehsud, who has been blamed by Pakistani authorities for a succession of high-profile strikes, including the assassination last month of former prime minister Benazir Bhutto.
Mehsud and the military have been engaged in an intensifying battle for territory in the country's volatile northwest, and Wednesday's clash reflected the Taliban commander's growing strength, as well as the Pakistani government's struggle to confront him.
The assault, in the remote tribal region of South Waziristan, began Wednesday just after midnight when 200 Mehsud fighters converged on Sararogha Fort, barraging it with small-arms fire and rocket-propelled grenades.
The fort was manned by 42 soldiers from Pakistan's Frontier Corps, and the troops initially succeeded in repelling the attack by using heavy artillery fire, according to a military spokesman, Maj. Gen. Athar Abbas. But an hour and a half later, the Taliban fighters returned, this time in greater numbers -- between 300 and 400.
"The second attack was more fierce and more intense," Abbas said.
The insurgents used explosives to blow holes in the fort's outer walls, streamed in and began fighting the soldiers hand-to-hand. Seven troops were killed, 15 managed to escape and an additional 20 were unaccounted for, Abbas said. There were fears Wednesday night that they had been taken hostage, a common tactic of Mehsud.
Abbas said 40 insurgents were killed in the battle.
A purported spokesman for the Pakistani Taliban disputed the military's numbers. "We have killed 16 soldiers and have kidnapped 12, while just two of our fighters have been killed in this clash," Maulvi Omar told the BBC's Pashto-language service.
While Mehsud has carried out a string of devastating attacks in recent months, the decision to assault the fort head-on reflected an even bolder strategy than he has exhibited before.
In the past, Mehsud's fighters have carried out suicide attacks on military convoys, as well as hit-and-run strikes against Pakistani government checkpoints and facilities. But as of Wednesday night, his forces seemed intent on holding on to the fort.
"It really carries a lot of significance," said Fazal Rahim Marwat, a professor at Peshawar University who has studied the Taliban movement in Pakistan. "This is another daring step on the part of the militants, and it seems that they are getting stronger and bolder with the passage of time."
Over a century old, Sararogha Fort is one of the few symbols of government authority in South Waziristan, an area where Pakistan has never succeeded in exerting much control.
The region is a haven for Taliban and al-Qaeda fighters and has been identified by Western intelligence officials as an international headquarters for Islamic extremist groups.
The Pakistani government has struggled to find a strategy to counter the threat -- alternately combating it with military force and signing peace deals. Crucial truces in both North and South Waziristan collapsed last summer, spurring a surge in attacks that have claimed hundreds of lives throughout the country.
A Western military official with knowledge of extremist groups on both sides of the Pakistan-Afghanistan border estimated this week that Mehsud, who has allied himself with al-Qaeda, has about 5,000 hard-core fighters at his disposal.
But the official also said Mehsud has purposely exaggerated his own influence. "A lot more is attributed to him than I think he's capable of," the official said.
Pakistani President Pervez Musharraf has blamed Bhutto's assassination on Mehsud, and the government has produced an audio recording that it says implicates him. But Bhutto's supporters have said they believe that explanation is intended to cover for others, including current and former government officials.
Pakistan has repeatedly tried and failed to kill Mehsud. It has also attempted to turn rival tribal commanders in the area against him, with limited success.
Wednesday's attack represented yet another setback for the Frontier Corps, a paramilitary force that is supposed to be on the front lines of Pakistan's counterinsurgency campaign but has taken heavy losses and proved generally overmatched.
The United States has made beefing up the Frontier Corps a priority and is investing in a new program to train and equip the force.
Adm. William J. Fallon, commander of U.S. Central Command, told reporters in Florida on Wednesday that Pakistan appeared more welcoming of U.S. counterinsurgency training and advice than it had been in the past.
"My sense is, there is an increased willingness to address these problems," he said. "And we're going to try to help them."
Ali reported from Peshawar.
Old Remedies Wont Work this Time.
It remains to be seen if Myerson is correct. It seems that cutting taxes will mean that unless the government is willing to undertake even more debt social programs will be cut when they are most needed. Reducing interest rates will just encourage people to take on more debt that just postpones further crises. So far a recession is not even officially admitted although the stock markets certainly suggest that these are not good times. President Bush is to speak to the nation this afternoon so at least hot air is still in good supply.
Washington Post, Wednesday, January 16, 2008; A15
A Different Recession
The Old Remedies Won't Work This Time
By Harold Meyerson
In a normal recession, the to-do list is clear. Copies of Keynes are
dusted off, the Fed lowers interest rates, the president and Congress
cut taxes and hike spending. In time, purchasing, production and loans
perk up, and Keynes is placed back on the shelf. No larger alterations
to the economy are made, because our economy, but for the occasional
bump in the road, is fundamentally sound.
This has been the drill in every recession since World War II.
Republicans and Democrats argue over whose taxes should be cut the most
and which projects should be funded, but, under public pressure to do
something, they usually find some mutually acceptable midpoint and
enact
a stimulus package. Even in today's hyperpartisan Washington, the odds
still favor such a deal.
This time, though, don't expect that to be the end of the story --
because the coming recession will not be normal, and our economy is not
fundamentally sound. This time around, the nation will have to craft
new
versions of some of the reforms that Franklin Roosevelt created to
steer
the nation out of the Great Depression -- not because anything like a
major depression looms but because we face an economy that's been
warped
by two developments we've not seen since FDR's time.
The first of these is the stagnation of ordinary Americans' incomes, a
phenomenon that began back in the 1970s and that American families have
offset by having both spouses work and by drawing on the rising value
of
their homes. With housing values toppling, no more spouses to send into
the workplace, and prices of gas, college and health care continuing to
rise, consumers are played out. December was the cruelest month that
American retailers have seen in many years, and, as Michael Barbaro and
Louis Uchitelle reported in Monday's New York Times, delinquency rates
on credit cards, auto loans and mortgages have all been rising steeply
for the past year.
What's alarming is that this slump in purchasing power doesn't appear
to
be merely cyclical. Wages have been flat-lining for a long time now,
the
housing bubble isn't going to be reinflated anytime soon, and the
upward
pressure on oil prices is only going to mount. As in Roosevelt's time,
we need a policy that boosts incomes and finds new solutions for our
energy needs.
FDR's long-term income remedies included Social Security, the Wagner
Act
(which made it possible for many workers to join unions) and public
works projects -- including a massive electrification of rural America.
A comparable set of solutions today would include the passage of the
Employee Free Choice Act, which would enable workers in nonexportable
service-sector jobs to unionize without fear of being fired. It would
include a massive, federally financed program to retrofit America,
creating several million "green jobs" in the process.
On these issues, there's a clear difference between the two parties.
Barack Obama, Hillary Clinton, John Edwards and the congressional
Democrats favor these measures; the Republicans oppose them (though
John
McCain at least has begun speaking about creating green jobs).
What Republicans favor is simply more tax cuts, which will do nothing
to
address our deeper problems of income distribution and energy
dependence.
The second way in which the current downturn echoes the Depression is
the role played by our deregulated financial sector. Now, as then, the
financial foundations of our leading banks and other lending
institutions have turned out to be made of mush. Now, as then, this
news
has come as an appalling surprise not just to consumers but to many of
the banks themselves. Now, as then, the banks created such complex and
deliberately opaque financial vehicles -- all devised to make them a
buck every time they swapped some paper -- that they long ago lost
track
of the paper's true value.
In his time, Roosevelt, through the Securities and Exchange Act and
other legislation, compelled banks to be both more prudent and
transparent. Over the past 30 years, however, Wall Street has created a
host of new, unregulated institutions (such as private equity
companies)
and devices (such as the bundled, and bungled, resale of mortgages into
ever-larger investment pools). Now it's time to enforce some
transparency and prudence regarding financial institutions that have
been gambling with other people's money and lives.
When it comes to reining in Wall Street, however, the Democrats have
been AWOL almost as much as the Republicans have been -- not least
because their presidential candidates get so much money from Wall
Street. By refusing to take on the Street, however, they forfeit what
could be a potent issue this fall and lay the groundwork for yet
another
recession.
Washington Post, Wednesday, January 16, 2008; A15
A Different Recession
The Old Remedies Won't Work This Time
By Harold Meyerson
In a normal recession, the to-do list is clear. Copies of Keynes are
dusted off, the Fed lowers interest rates, the president and Congress
cut taxes and hike spending. In time, purchasing, production and loans
perk up, and Keynes is placed back on the shelf. No larger alterations
to the economy are made, because our economy, but for the occasional
bump in the road, is fundamentally sound.
This has been the drill in every recession since World War II.
Republicans and Democrats argue over whose taxes should be cut the most
and which projects should be funded, but, under public pressure to do
something, they usually find some mutually acceptable midpoint and
enact
a stimulus package. Even in today's hyperpartisan Washington, the odds
still favor such a deal.
This time, though, don't expect that to be the end of the story --
because the coming recession will not be normal, and our economy is not
fundamentally sound. This time around, the nation will have to craft
new
versions of some of the reforms that Franklin Roosevelt created to
steer
the nation out of the Great Depression -- not because anything like a
major depression looms but because we face an economy that's been
warped
by two developments we've not seen since FDR's time.
The first of these is the stagnation of ordinary Americans' incomes, a
phenomenon that began back in the 1970s and that American families have
offset by having both spouses work and by drawing on the rising value
of
their homes. With housing values toppling, no more spouses to send into
the workplace, and prices of gas, college and health care continuing to
rise, consumers are played out. December was the cruelest month that
American retailers have seen in many years, and, as Michael Barbaro and
Louis Uchitelle reported in Monday's New York Times, delinquency rates
on credit cards, auto loans and mortgages have all been rising steeply
for the past year.
What's alarming is that this slump in purchasing power doesn't appear
to
be merely cyclical. Wages have been flat-lining for a long time now,
the
housing bubble isn't going to be reinflated anytime soon, and the
upward
pressure on oil prices is only going to mount. As in Roosevelt's time,
we need a policy that boosts incomes and finds new solutions for our
energy needs.
FDR's long-term income remedies included Social Security, the Wagner
Act
(which made it possible for many workers to join unions) and public
works projects -- including a massive electrification of rural America.
A comparable set of solutions today would include the passage of the
Employee Free Choice Act, which would enable workers in nonexportable
service-sector jobs to unionize without fear of being fired. It would
include a massive, federally financed program to retrofit America,
creating several million "green jobs" in the process.
On these issues, there's a clear difference between the two parties.
Barack Obama, Hillary Clinton, John Edwards and the congressional
Democrats favor these measures; the Republicans oppose them (though
John
McCain at least has begun speaking about creating green jobs).
What Republicans favor is simply more tax cuts, which will do nothing
to
address our deeper problems of income distribution and energy
dependence.
The second way in which the current downturn echoes the Depression is
the role played by our deregulated financial sector. Now, as then, the
financial foundations of our leading banks and other lending
institutions have turned out to be made of mush. Now, as then, this
news
has come as an appalling surprise not just to consumers but to many of
the banks themselves. Now, as then, the banks created such complex and
deliberately opaque financial vehicles -- all devised to make them a
buck every time they swapped some paper -- that they long ago lost
track
of the paper's true value.
In his time, Roosevelt, through the Securities and Exchange Act and
other legislation, compelled banks to be both more prudent and
transparent. Over the past 30 years, however, Wall Street has created a
host of new, unregulated institutions (such as private equity
companies)
and devices (such as the bundled, and bungled, resale of mortgages into
ever-larger investment pools). Now it's time to enforce some
transparency and prudence regarding financial institutions that have
been gambling with other people's money and lives.
When it comes to reining in Wall Street, however, the Democrats have
been AWOL almost as much as the Republicans have been -- not least
because their presidential candidates get so much money from Wall
Street. By refusing to take on the Street, however, they forfeit what
could be a potent issue this fall and lay the groundwork for yet
another
recession.
Thursday, January 17, 2008
House passes 696 billion defense bill.
This is from wiredispatch. This doesn't seem to count for much on mainstream media such as CNN. There the important news of a murder of a marine by a marine and the primaries. Interesting that Bush can push through such a budget even with changes that disallow lawsuits against Iraq during the Hussein era, changes that will impact negatively on American victims of the regime.
House passes $696 billion defense bill
House Passes Defense Bill That Includes Troop Pay Raise, Backs Down on Dispute Over Lawsuits
ANNE FLAHERTY
AP News
Jan 16, 2008 18:27 EST
The House on Wednesday passed a new defense policy bill that includes a pay raise for troops.
President Bush had rejected an earlier version of the legislation because he said it would expose the Iraqi government to expensive lawsuits.
The new bill, which passed 369-46, would let Bush grant Iraq immunity under the provision, which otherwise guarantees that U.S. victims of state-sponsored abuse can sue foreign governments in court. Iraqi officials objected to the measure because they said it would have subjected Baghdad to high-dollar payouts in damages from the Saddam Hussein era.
The administration now supports the bill, said White House spokesman Tony Fratto.
"We appreciate that the House moved quickly to address the serious concerns the president had," he said.
The revised measure also makes the 3.5 percent pay increase for troops — included in the original bill — retroactive to Jan. 1.
The decision to change the bill without attempting to challenge Bush's rejection reflects the difficulty Democrats have had in challenging the president on even minor issues. Democrats lack the two-thirds majority needed to override a presidential veto.
Overall, the bill authorizes about $696 billion in defense spending, including $189 billion for the wars in Iraq and Afghanistan. Besides the pay raises for service members, the bill's primary purpose is to guide Pentagon policy, including setting restrictions on the Pentagon's multibillion-dollar acquisition program.
Sen. Frank Lautenberg, D-N.J., had sponsored the lawsuits provision, which he said was necessary to provide justice to American victims of terror. Republicans had embraced the legislation, and the bill passed by overwhelming margins in both chambers.
A few weeks later, after Iraqi officials objected, Bush announced his opposition.
In a statement, Bush said the legislation "would imperil billions of dollars of Iraqi assets at a crucial juncture in that nation's reconstruction efforts."
The revised bill allows Bush to waive the provision with regard to Iraq, so long as he determines that doing so promotes Iraqi reconstruction and that Baghdad remains a "reliable ally" in the war on terror.
The bill also includes nonbinding language that urges the administration to work with Baghdad to ensure compensation of any "meritorious claims" stemming from Hussein's regime.
Source: AP News
House passes $696 billion defense bill
House Passes Defense Bill That Includes Troop Pay Raise, Backs Down on Dispute Over Lawsuits
ANNE FLAHERTY
AP News
Jan 16, 2008 18:27 EST
The House on Wednesday passed a new defense policy bill that includes a pay raise for troops.
President Bush had rejected an earlier version of the legislation because he said it would expose the Iraqi government to expensive lawsuits.
The new bill, which passed 369-46, would let Bush grant Iraq immunity under the provision, which otherwise guarantees that U.S. victims of state-sponsored abuse can sue foreign governments in court. Iraqi officials objected to the measure because they said it would have subjected Baghdad to high-dollar payouts in damages from the Saddam Hussein era.
The administration now supports the bill, said White House spokesman Tony Fratto.
"We appreciate that the House moved quickly to address the serious concerns the president had," he said.
The revised measure also makes the 3.5 percent pay increase for troops — included in the original bill — retroactive to Jan. 1.
The decision to change the bill without attempting to challenge Bush's rejection reflects the difficulty Democrats have had in challenging the president on even minor issues. Democrats lack the two-thirds majority needed to override a presidential veto.
Overall, the bill authorizes about $696 billion in defense spending, including $189 billion for the wars in Iraq and Afghanistan. Besides the pay raises for service members, the bill's primary purpose is to guide Pentagon policy, including setting restrictions on the Pentagon's multibillion-dollar acquisition program.
Sen. Frank Lautenberg, D-N.J., had sponsored the lawsuits provision, which he said was necessary to provide justice to American victims of terror. Republicans had embraced the legislation, and the bill passed by overwhelming margins in both chambers.
A few weeks later, after Iraqi officials objected, Bush announced his opposition.
In a statement, Bush said the legislation "would imperil billions of dollars of Iraqi assets at a crucial juncture in that nation's reconstruction efforts."
The revised bill allows Bush to waive the provision with regard to Iraq, so long as he determines that doing so promotes Iraqi reconstruction and that Baghdad remains a "reliable ally" in the war on terror.
The bill also includes nonbinding language that urges the administration to work with Baghdad to ensure compensation of any "meritorious claims" stemming from Hussein's regime.
Source: AP News
Philippines: Head of Air Transportation Office fired.
This is from the Daily Tribune. This is just part of the article. The firing is not surprising. The ATO should have realised the problems within the air industry and taken action earlier. The problems seem to be more than just technical issues. The government must ultimately share part of the blame. No doubt some will blame the FAA since the decision will help US airlines.
Malacañang yesterday sacked Air Transportation Office (ATO) chief Daniel Dimagiba following the downgrading by the US Federal Aviation Administration (FAA) of the Philippine ratings from Cate-gory 1 to Category 2.
Press Secretary Ignacio Bunye said President Arroyo has designated Trans-portation Secretary Leandro Mendoza to head the ATO.
“The President has designated Secretary Mendoza as concurrent officer-in-charge of ATO,” he added.
The Palace official said the President has given Mendoza three months to address administrative and
technical concerns raised by the US FAA.
“The President gave him (Mendoza) a three-month deadline to comply with FAA/ICAO (International Civil Aviation Organization) requirements, which are mostly administrative and technical in nature,” Bunye stressed.
He added “the issues involved here are merely technicalities and documentation and do not concern issues on safety.”
The FAA included in a Jan. 8 report the Philippines in a list of 21 countries that failed to “provide safety oversight of its air carrier operators in accordance with the minimum safety oversight standards established by ICAO.”
Category 2 means the US FAA has assessed the Philippines’ aviation as not being in compliance with ICAO.
Among the FAA’s concerns were the outdated aviation regulations, poor training programs for safety inspectors and sub-standard licensing for air frame and engine inspectors.
Mendoza, meanwhile, also yesterday vowed to cooperate in the Senate investigation as he tasked agencies involved to appear before the hearing.
Malacañang yesterday sacked Air Transportation Office (ATO) chief Daniel Dimagiba following the downgrading by the US Federal Aviation Administration (FAA) of the Philippine ratings from Cate-gory 1 to Category 2.
Press Secretary Ignacio Bunye said President Arroyo has designated Trans-portation Secretary Leandro Mendoza to head the ATO.
“The President has designated Secretary Mendoza as concurrent officer-in-charge of ATO,” he added.
The Palace official said the President has given Mendoza three months to address administrative and
technical concerns raised by the US FAA.
“The President gave him (Mendoza) a three-month deadline to comply with FAA/ICAO (International Civil Aviation Organization) requirements, which are mostly administrative and technical in nature,” Bunye stressed.
He added “the issues involved here are merely technicalities and documentation and do not concern issues on safety.”
The FAA included in a Jan. 8 report the Philippines in a list of 21 countries that failed to “provide safety oversight of its air carrier operators in accordance with the minimum safety oversight standards established by ICAO.”
Category 2 means the US FAA has assessed the Philippines’ aviation as not being in compliance with ICAO.
Among the FAA’s concerns were the outdated aviation regulations, poor training programs for safety inspectors and sub-standard licensing for air frame and engine inspectors.
Mendoza, meanwhile, also yesterday vowed to cooperate in the Senate investigation as he tasked agencies involved to appear before the hearing.
U.S. Boosts Its Use of Airstrikes in Iraq
One of the reasons for this type of strategy is not mentioned here. Fewer casualties to troops result. Of course the civilian casualties are bound to increase but it is US civilian response not Iraqis that is of greatest concern and US civilians worry about US casualties first and foremost. I just wonder what the response would be if in the US criminal gangs or terrorist groups were bombed in cities in their hideouts resulting in considerable civilian collateral damage? Would the civilian populace find solace in the fact that the bombing was precision and that the tactic lowered casualties among the police or military?
U.S. Boosts Its Use of Airstrikes In Iraq
Strategy Supports Troop Increase
By Josh White
Washington Post Staff Writer
Thursday, January 17, 2008; A01
The U.S. military conducted more than five times as many airstrikes in Iraq last year as it did in 2006, targeting al-Qaeda safe houses, insurgent bombmaking facilities and weapons stockpiles in an aggressive strategy aimed at supporting the U.S. troop increase by overwhelming enemies with air power.
Top commanders said that better intelligence-gathering allows them to identify and hit extremist strongholds with bombs and missiles from above, and they predicted that extensive airstrikes will continue this year as the United States seeks to flush insurgents out of havens in and around Baghdad and to the north in Diyala province.
The U.S.-led coalition dropped 1,447 bombs over Iraq last year, an average of nearly four a day, compared with 229 bombs, or about four each week, in 2006.
"The core reason why we see the increase in strikes is the offensive strategy taken by General [David H.] Petraeus," said Air Force Col. Gary Crowder, commander of the 609th Combined Air Operations Center in Southwest Asia. Because the United States has sent more troops into areas rife with insurgent activity, he said, "we integrated more airstrikes into those operations."
The greater reliance on air power has raised concerns from human rights groups, which say that 500-pound and 2,000-pound munitions threaten civilians, especially when dropped in residential neighborhoods where insurgents mix with the population. The military assures that the precision attacks are designed to minimize civilian casualties -- particularly as Petraeus's counterinsurgency strategy emphasizes moving more troops into local communities and winning over the Iraqi population -- but rights groups say bombings carry an especially high risk.
"The Iraqi population remains at risk of harm during these operations," said Eliane Nabaa, a spokeswoman for the U.N. Assistance Mission for Iraq. "The presence of individual combatants among a great number of civilians does not alter the civilian character of an area."
UNAMI estimates that more than 200 civilian deaths resulted from U.S. airstrikes in Iraq from the beginning of April to the end of last year, when U.S. forces began to significantly increase the strikes to coordinate with the expansion of ground troops.
The strategy was evident last week, as U.S. forces launched airstrikes across Iraq as part of Operation Phantom Phoenix. On Thursday morning in Arab Jabour, southeast of Baghdad, the U.S. military dropped 38 bombs with 40,000 pounds of explosives in 10 minutes, one of the largest strikes since the 2003 invasion. U.S. forces north of Baghdad employed bombs totaling more than 16,500 pounds over just a few days last week, according to officers there.
"The purpose of these particular strikes was to shape the battlefield and take out known threats before our ground troops move in," Army Col. Terry Ferrell, commander of the 2nd Brigade, 3rd Infantry Division, said at a news conference in Baghdad last Friday, describing the Arab Jabour attacks. "Our aim was to neutralize any advantage the enemy could claim with the use of IEDs and other weapons," he said, referring to improvised explosive devices.
Counterinsurgency experts said the greater use of airstrikes meshes with U.S. strategy, which calls for coalition troops to clear hostile areas before holding and then rebuilding them. U.S. forces have put the new counterinsurgency efforts into play by using their increased numbers to home in on insurgent strongholds.
Colin Kahl, a professor of security studies at Georgetown University who studies the Iraq war, said airstrikes rose in 2007 because of a combination of increased U.S. operations and a realization that air power can have a strong psychological effect on the enemy.
"Part of this is announcing our presence to the adversary," said Kahl, who recently returned from a trip to the air operations center. "Across this calendar year you will see a reduction in U.S. forces, so there will be fewer troops to support Iraqi forces. One would expect a continued level of airstrikes because of offensive operations, and as U.S. forces begin to draw down you may see even more airstrikes."
Senior Air Force officials said the greater use of airstrikes stems from better intelligence that provides a clearer picture of the battlefield. Commanders said the additional U.S. forces in Iraq over the past year have pushed insurgents out of urban areas and into places that are easier to target.
"You see an increase in the number of kinetic strikes because we have found the enemy, we are finding the enemy's emplacement sites, manufacturing facilities for IEDs and caches of weapons," said Air Force Lt. Gen. Gary L. North, the U.S. Central Air Forces and Combined Forces Air Component commander. "And we're striking them."
The Marine Corps keeps its own statistics for airstrikes in western Iraq but could not provide 2007 data.
In Afghanistan, where U.S. and NATO bombings picked up in the middle of 2006, coalition airstrikes reached 3,572 last year, more than double the total for 2006 and more than 20 times the number in 2005. Many of the strikes have targeted the Taliban and other extremists in Helmand province, and military officials said they have been able to use air power to support small Special Forces units that engage the enemy in remote locations.
Human rights groups estimate that Afghan civilian casualties caused by airstrikes tripled to more than 300 in 2007, fueling fears that such aggressive bombardment could be catastrophic for the innocent.
Marc Garlasco, a military analyst at Human Rights Watch who tracks airstrikes in Iraq and Afghanistan, said the strikes carry unique risks. "My major concern with what's going on in Iraq is massive population density," he said. "You have the potential for very high civilian casualties, so you need really granular intelligence on what you're going to hit. But I don't think they're being careless."
In preparation for last week's major airstrikes near Baghdad, North said, he met two weeks ago with Army Maj. Gen. Rick Lynch, commander of the 3rd Infantry Division and U.S. forces in Baghdad, to walk through the plans.
"What you're seeing in the last few days is a very deliberate process honed by intelligence, targeted and aligned to get the desired effect in a particular area," North said.
Commanders also said they are using air power more creatively, in some cases dropping bombs that explode in the air to detonate insurgent roadside bombs. Other U.S. munitions have cut off small bridges or roads to isolate insurgent movement. As seen in Air Force videos, some attacks have been extremely precise, such as when a Predator unmanned aircraft fired an AGM-114P Hellfire missile to kill three extremists who were setting up a mortar attack on Nov. 7 in Balad.
North said the Air Force has at times used concrete-filled bombs to detonate IED sites and is using 250-pound GBU-39 small-diameter bombs to make blasts safer for civilians. Commanders also have been using airstrikes on houses suspected to be rigged with explosives, called "house-borne IEDs."
Such a strike happened Jan. 6, when soldiers with the 2nd Battalion, 1st Cavalry Regiment, 4th Stryker Brigade Combat Team spotted five suspected insurgents with rocket-propelled grenades and AK-47 rifles apparently rigging a house with explosives near Khan Bani Saad, northeast of Baghdad. Lt. Col. Stuart Pettis, air liaison officer for Multinational Division North, said the unit asked for airstrikes.
"After doing a show of force to get civilians out of the area, they engaged the house and the fighters with a 500-pound bomb," he said of the attack by two British Tornado GR4 jets. "They took the fighters out."
U.S. Boosts Its Use of Airstrikes In Iraq
Strategy Supports Troop Increase
By Josh White
Washington Post Staff Writer
Thursday, January 17, 2008; A01
The U.S. military conducted more than five times as many airstrikes in Iraq last year as it did in 2006, targeting al-Qaeda safe houses, insurgent bombmaking facilities and weapons stockpiles in an aggressive strategy aimed at supporting the U.S. troop increase by overwhelming enemies with air power.
Top commanders said that better intelligence-gathering allows them to identify and hit extremist strongholds with bombs and missiles from above, and they predicted that extensive airstrikes will continue this year as the United States seeks to flush insurgents out of havens in and around Baghdad and to the north in Diyala province.
The U.S.-led coalition dropped 1,447 bombs over Iraq last year, an average of nearly four a day, compared with 229 bombs, or about four each week, in 2006.
"The core reason why we see the increase in strikes is the offensive strategy taken by General [David H.] Petraeus," said Air Force Col. Gary Crowder, commander of the 609th Combined Air Operations Center in Southwest Asia. Because the United States has sent more troops into areas rife with insurgent activity, he said, "we integrated more airstrikes into those operations."
The greater reliance on air power has raised concerns from human rights groups, which say that 500-pound and 2,000-pound munitions threaten civilians, especially when dropped in residential neighborhoods where insurgents mix with the population. The military assures that the precision attacks are designed to minimize civilian casualties -- particularly as Petraeus's counterinsurgency strategy emphasizes moving more troops into local communities and winning over the Iraqi population -- but rights groups say bombings carry an especially high risk.
"The Iraqi population remains at risk of harm during these operations," said Eliane Nabaa, a spokeswoman for the U.N. Assistance Mission for Iraq. "The presence of individual combatants among a great number of civilians does not alter the civilian character of an area."
UNAMI estimates that more than 200 civilian deaths resulted from U.S. airstrikes in Iraq from the beginning of April to the end of last year, when U.S. forces began to significantly increase the strikes to coordinate with the expansion of ground troops.
The strategy was evident last week, as U.S. forces launched airstrikes across Iraq as part of Operation Phantom Phoenix. On Thursday morning in Arab Jabour, southeast of Baghdad, the U.S. military dropped 38 bombs with 40,000 pounds of explosives in 10 minutes, one of the largest strikes since the 2003 invasion. U.S. forces north of Baghdad employed bombs totaling more than 16,500 pounds over just a few days last week, according to officers there.
"The purpose of these particular strikes was to shape the battlefield and take out known threats before our ground troops move in," Army Col. Terry Ferrell, commander of the 2nd Brigade, 3rd Infantry Division, said at a news conference in Baghdad last Friday, describing the Arab Jabour attacks. "Our aim was to neutralize any advantage the enemy could claim with the use of IEDs and other weapons," he said, referring to improvised explosive devices.
Counterinsurgency experts said the greater use of airstrikes meshes with U.S. strategy, which calls for coalition troops to clear hostile areas before holding and then rebuilding them. U.S. forces have put the new counterinsurgency efforts into play by using their increased numbers to home in on insurgent strongholds.
Colin Kahl, a professor of security studies at Georgetown University who studies the Iraq war, said airstrikes rose in 2007 because of a combination of increased U.S. operations and a realization that air power can have a strong psychological effect on the enemy.
"Part of this is announcing our presence to the adversary," said Kahl, who recently returned from a trip to the air operations center. "Across this calendar year you will see a reduction in U.S. forces, so there will be fewer troops to support Iraqi forces. One would expect a continued level of airstrikes because of offensive operations, and as U.S. forces begin to draw down you may see even more airstrikes."
Senior Air Force officials said the greater use of airstrikes stems from better intelligence that provides a clearer picture of the battlefield. Commanders said the additional U.S. forces in Iraq over the past year have pushed insurgents out of urban areas and into places that are easier to target.
"You see an increase in the number of kinetic strikes because we have found the enemy, we are finding the enemy's emplacement sites, manufacturing facilities for IEDs and caches of weapons," said Air Force Lt. Gen. Gary L. North, the U.S. Central Air Forces and Combined Forces Air Component commander. "And we're striking them."
The Marine Corps keeps its own statistics for airstrikes in western Iraq but could not provide 2007 data.
In Afghanistan, where U.S. and NATO bombings picked up in the middle of 2006, coalition airstrikes reached 3,572 last year, more than double the total for 2006 and more than 20 times the number in 2005. Many of the strikes have targeted the Taliban and other extremists in Helmand province, and military officials said they have been able to use air power to support small Special Forces units that engage the enemy in remote locations.
Human rights groups estimate that Afghan civilian casualties caused by airstrikes tripled to more than 300 in 2007, fueling fears that such aggressive bombardment could be catastrophic for the innocent.
Marc Garlasco, a military analyst at Human Rights Watch who tracks airstrikes in Iraq and Afghanistan, said the strikes carry unique risks. "My major concern with what's going on in Iraq is massive population density," he said. "You have the potential for very high civilian casualties, so you need really granular intelligence on what you're going to hit. But I don't think they're being careless."
In preparation for last week's major airstrikes near Baghdad, North said, he met two weeks ago with Army Maj. Gen. Rick Lynch, commander of the 3rd Infantry Division and U.S. forces in Baghdad, to walk through the plans.
"What you're seeing in the last few days is a very deliberate process honed by intelligence, targeted and aligned to get the desired effect in a particular area," North said.
Commanders also said they are using air power more creatively, in some cases dropping bombs that explode in the air to detonate insurgent roadside bombs. Other U.S. munitions have cut off small bridges or roads to isolate insurgent movement. As seen in Air Force videos, some attacks have been extremely precise, such as when a Predator unmanned aircraft fired an AGM-114P Hellfire missile to kill three extremists who were setting up a mortar attack on Nov. 7 in Balad.
North said the Air Force has at times used concrete-filled bombs to detonate IED sites and is using 250-pound GBU-39 small-diameter bombs to make blasts safer for civilians. Commanders also have been using airstrikes on houses suspected to be rigged with explosives, called "house-borne IEDs."
Such a strike happened Jan. 6, when soldiers with the 2nd Battalion, 1st Cavalry Regiment, 4th Stryker Brigade Combat Team spotted five suspected insurgents with rocket-propelled grenades and AK-47 rifles apparently rigging a house with explosives near Khan Bani Saad, northeast of Baghdad. Lt. Col. Stuart Pettis, air liaison officer for Multinational Division North, said the unit asked for airstrikes.
"After doing a show of force to get civilians out of the area, they engaged the house and the fighters with a 500-pound bomb," he said of the attack by two British Tornado GR4 jets. "They took the fighters out."
Wednesday, January 16, 2008
In Saudi Arabia Bin Laden more popular than Bush
This is from adn.com. The president of Iran is over twice as popular as Bush even though Ahmidenejad is relatively unpopular. Although Bush has only a 12 percent popularity rating the U.S. has a forty per cent rating, but much lower than that of China or even Iran.
Saudi public leery of Bush
By DONNA ABU-NASR
Published: January 14th, 2008 09:38 AM
Last Modified: January 14th, 2008 09:43 AM
Saudi Arabia's warm official welcome for President Bush, the scion of a family with close ties to the kingdom's ruling family, masks his deep unpopularity among ordinary Saudis.
A recent poll found only 12 percent here view Bush positively - lower than Iran's president or even al-Qaida chief Osama bin Laden - and more think warmly toward Iran than America.
Among the reasons are the chaos in Iraq that followed the U.S.-led invasion and the widespread Arab feeling that the United States is biased in favor of Israel and not serious in seeking Mideast peace. A recent editorial said everything the president touches "turns to dust and ashes."
That mirrors the deep distrust many Americans hold toward Saudi Arabia - the homeland of 15 of the 19 Sept. 11 hijackers - even as U.S. leaders praise Saudi Arabia's leadership in the region and its crackdown on Islamic extremism.
Still, Bush, on his first visit to the kingdom, will enjoy a warm embrace from Saudi King Abdullah. He is staying at the monarch's home - a rare show of hospitality for a visiting dignitary that reflects Bush's hosting of Abdullah twice at his own ranch in Texas.
Most of the two leaders' talks will be one-on-one. The king will introduce Bush to Saudi delicacies in a tent at his farm overlooking meadows and lakes, and then take Bush to inspect his horses, according to a Saudi official who spoke on condition of anonymity because of the sensitivity of the countries' ties.
For the U.S.-Saudi alliance, such deep contradictions are nothing new.
Bush's visit comes at a time of deep Saudi worry over Iran's intentions. Yet Saudi officials have urged all players in the region to exercise restraint, and have warned of the grave consequences for the world economy of incidents such as the recent Persian Gulf standoff between Iran and the U.S.
Foreign Minister Prince Saud has said Iran will be on the agenda.
"We will listen with all ears to what President Bush will raise," Saud said.
A rare cold front has brought clouds and rain to Riyadh for the visit. Tight security is evident: Hundreds of police cars have deployed along major roads and sharpshooters are on some rooftops. In one neighborhood, police using loudspeakers demanded that cars be removed from some streets as two helicopters hovered overhead.
It is Bush's first trip to Saudi Arabia, which has the world's largest oil reserves. His father, the first President Bush, had warm relations with many Saudis.
When the Saudi-American relationship began in the 1940s, it was built on a simple bargain: Saudi Arabia offered oil in return for U.S. protection. It was a relationship of accommodation between a monarchy ruled according to Islamic law and a secular, liberal democracy.
The United States became the kingdom's biggest trading partner. The Saudis became the biggest buyers of U.S. weapons - $39 billion worth in the 1990s. They have also been major U.S. creditors, buying billions in Treasury bonds, and enthusiastic investors in U.S. business. Many Saudis sent their children to American schools.
But over the years, issues arose as the United States became more involved in the region, especially in the Israeli-Palestinian conflict, where Saudis, like all Arabs, feel Washington leans unfairly to Israel's side.
Saudi-U.S. ties were hit hard after the Sept. 11 attacks when Americans questioned the kingdom's loyalty as an ally and its support for the U.S.-led war on terrorism. Some Americans asked if the kingdom's conservative society and schools bred hatred of the West.
The Saudi official said relations have "improved tremendously" since then, in part because the kingdom's anti-terror campaign has proved its seriousness to Washington.
A senior U.S. administration official said Bush's visit would reaffirm not just traditional ties with Saudi Arabia but also the president's personal relationship with Abdullah.
Despite such warmth, the recent poll conducted for Terror Free Tomorrow, a bipartisan group whose goal is undermining world support for terrorism, found Bush viewed positively by only 12 percent of Saudis.
That was less than half the number with a good impression of Iran's hard-line President Mahmoud Ahmadinejad. About 15 percent had a favorable opinion of bin Laden.
Forty percent have a favorable opinions of the U.S. - a lower rating than they gave China or Iran - though 69 percent want good relations with the United States. The poll of 1,004 Saudis, conducted in December, had a margin of error of 3 percentage points.
Bush's unpopularity goes beyond Saudi Arabia, with many in the Arab world angry over the war in Iraq and over U.S. support for Israel.
Several hundred people protested in Bahrain during his stop there Saturday. And newspapers in Egypt have been running critical editorials. Rose el-Youssef, a paper close to Egypt's ruling party, called Bush "the leader of sabotage, the thief of Arab lands."
Analyst Abdullah al-Fozan said in a recent column in Al-Watan daily that Bush's "black pages" have been piling up.
"You have the opportunity now to decrease that blackness ... by fulfilling the promise you made to help establish a Palestinian state," he wrote.
And an editorial in Saturday's Arab News, a Saudi English-language newspaper, said Bush's record makes it hard for Arabs to believe he can deliver.
"No Palestinian, no Arab believes he will, or can, deliver," the editorial said. "Everything he touches turns to dust and ashes. Iraq, Afghanistan - maybe now even Iran."
Saudi public leery of Bush
By DONNA ABU-NASR
Published: January 14th, 2008 09:38 AM
Last Modified: January 14th, 2008 09:43 AM
Saudi Arabia's warm official welcome for President Bush, the scion of a family with close ties to the kingdom's ruling family, masks his deep unpopularity among ordinary Saudis.
A recent poll found only 12 percent here view Bush positively - lower than Iran's president or even al-Qaida chief Osama bin Laden - and more think warmly toward Iran than America.
Among the reasons are the chaos in Iraq that followed the U.S.-led invasion and the widespread Arab feeling that the United States is biased in favor of Israel and not serious in seeking Mideast peace. A recent editorial said everything the president touches "turns to dust and ashes."
That mirrors the deep distrust many Americans hold toward Saudi Arabia - the homeland of 15 of the 19 Sept. 11 hijackers - even as U.S. leaders praise Saudi Arabia's leadership in the region and its crackdown on Islamic extremism.
Still, Bush, on his first visit to the kingdom, will enjoy a warm embrace from Saudi King Abdullah. He is staying at the monarch's home - a rare show of hospitality for a visiting dignitary that reflects Bush's hosting of Abdullah twice at his own ranch in Texas.
Most of the two leaders' talks will be one-on-one. The king will introduce Bush to Saudi delicacies in a tent at his farm overlooking meadows and lakes, and then take Bush to inspect his horses, according to a Saudi official who spoke on condition of anonymity because of the sensitivity of the countries' ties.
For the U.S.-Saudi alliance, such deep contradictions are nothing new.
Bush's visit comes at a time of deep Saudi worry over Iran's intentions. Yet Saudi officials have urged all players in the region to exercise restraint, and have warned of the grave consequences for the world economy of incidents such as the recent Persian Gulf standoff between Iran and the U.S.
Foreign Minister Prince Saud has said Iran will be on the agenda.
"We will listen with all ears to what President Bush will raise," Saud said.
A rare cold front has brought clouds and rain to Riyadh for the visit. Tight security is evident: Hundreds of police cars have deployed along major roads and sharpshooters are on some rooftops. In one neighborhood, police using loudspeakers demanded that cars be removed from some streets as two helicopters hovered overhead.
It is Bush's first trip to Saudi Arabia, which has the world's largest oil reserves. His father, the first President Bush, had warm relations with many Saudis.
When the Saudi-American relationship began in the 1940s, it was built on a simple bargain: Saudi Arabia offered oil in return for U.S. protection. It was a relationship of accommodation between a monarchy ruled according to Islamic law and a secular, liberal democracy.
The United States became the kingdom's biggest trading partner. The Saudis became the biggest buyers of U.S. weapons - $39 billion worth in the 1990s. They have also been major U.S. creditors, buying billions in Treasury bonds, and enthusiastic investors in U.S. business. Many Saudis sent their children to American schools.
But over the years, issues arose as the United States became more involved in the region, especially in the Israeli-Palestinian conflict, where Saudis, like all Arabs, feel Washington leans unfairly to Israel's side.
Saudi-U.S. ties were hit hard after the Sept. 11 attacks when Americans questioned the kingdom's loyalty as an ally and its support for the U.S.-led war on terrorism. Some Americans asked if the kingdom's conservative society and schools bred hatred of the West.
The Saudi official said relations have "improved tremendously" since then, in part because the kingdom's anti-terror campaign has proved its seriousness to Washington.
A senior U.S. administration official said Bush's visit would reaffirm not just traditional ties with Saudi Arabia but also the president's personal relationship with Abdullah.
Despite such warmth, the recent poll conducted for Terror Free Tomorrow, a bipartisan group whose goal is undermining world support for terrorism, found Bush viewed positively by only 12 percent of Saudis.
That was less than half the number with a good impression of Iran's hard-line President Mahmoud Ahmadinejad. About 15 percent had a favorable opinion of bin Laden.
Forty percent have a favorable opinions of the U.S. - a lower rating than they gave China or Iran - though 69 percent want good relations with the United States. The poll of 1,004 Saudis, conducted in December, had a margin of error of 3 percentage points.
Bush's unpopularity goes beyond Saudi Arabia, with many in the Arab world angry over the war in Iraq and over U.S. support for Israel.
Several hundred people protested in Bahrain during his stop there Saturday. And newspapers in Egypt have been running critical editorials. Rose el-Youssef, a paper close to Egypt's ruling party, called Bush "the leader of sabotage, the thief of Arab lands."
Analyst Abdullah al-Fozan said in a recent column in Al-Watan daily that Bush's "black pages" have been piling up.
"You have the opportunity now to decrease that blackness ... by fulfilling the promise you made to help establish a Palestinian state," he wrote.
And an editorial in Saturday's Arab News, a Saudi English-language newspaper, said Bush's record makes it hard for Arabs to believe he can deliver.
"No Palestinian, no Arab believes he will, or can, deliver," the editorial said. "Everything he touches turns to dust and ashes. Iraq, Afghanistan - maybe now even Iran."
Tuesday, January 15, 2008
US envoy meets with ex-Taliban commander
So the military finally manages to drive the Taliban out of Musa Qala but within a couple of weeks a Taliban Commander is back in charge. The commander does not seem to have changed his views except that he now backs Karzai. However, the Commander is in charge of Musa Qala! Seems that he did not like sharing power with local drug lords who were not properly Islamic! Now he can use the occupying forces to help get rid of them!
Maybe the US is trying a new tactic namely to fund ex-Taliban to fight drug dealers. This is similar to funding ex-insurgents to fight Al Qaeda in Iraq. In both cases there are obvious dangers. Once Al Qaeda and the drug dealers are defeated the occupiers will again be the enemy.
US envoy meets former Taliban commander
US Ambassador to Afghanistan Tells Ex-Taliban Commander Afghans Must Stop Poppy Production
JASON STRAZIUSO
AP News
Jan 14, 2008 05:17 EST
The U.S. ambassador to Afghanistan flew to a town previously held by the Taliban in the heart of the world's largest poppy-growing region and told the ex-militant commander now in charge there that Afghans must stop "producing poison."
Ambassador William Wood on Sunday drank tea and talked with Mullah Abdul Salaam, a former Taliban commander who defected to the government last month and is now the district leader of Musa Qala in the southern province of Helmand.
Wood urged Salaam to tell his people to leave behind "the practice of producing poison," and said poppy production, the key element in the opium and heroin trade, was against the law and Islam.
"In Musa Qala the price of bread has risen dramatically. I won't say why — you know why," Wood said, alluding to farmers' practice of growing poppies instead of needed food.
Southern Afghanistan was the scene of the heaviest fighting in the country in 2007, the bloodiest year since the U.S.-led invasion in 2001 toppled the Taliban militant movement. More than 6,500 people — mostly militants — were killed in violence last year, according to an Associated Press count based on official figures.
Islamist insurgents held sway in Musa Qala for most of last year, until U.S., British and Afghan forces retook it in early December. Wood said he thought the chances were good Musa Qala would remain under government control and said Afghan forces were drawing up a "comprehensive stabilization program" to help ensure it does.
U.S. soldiers from the 82nd Airborne now ring the town, but those troops will pull out of the region within days.
Officials say poppy production and the resulting drug trade help finance the insurgents, and that many Afghan farmers turn to poppies because they are a lucrative source of income. As a result, Afghanistan last year produced 93 percent of the world's opium, the main ingredient in heroin. Its export value was estimated at $4 billion.
Wood has said officials discovered $500 million worth of heroin in dozens of labs around Musa Qala. He said U.N. and Afghan officials have told him that farmers in Helmand have again been planting a lot of poppies for this season's harvest.
"There is a solution, but it depends on the people of Afghanistan. The people of Afghanistan have to decide what kind of Afghanistan they want, and we will support them if they choose an Afghanistan of peace, of Islam and of law," Wood told Salaam.
Salaam offered Wood a list of things he said needed to happen immediately for Musa Qala to remain peacefully under government control. Topping the list, he said, was a request to the Ministry of Interior for 200 more police.
"We still have a problem with the police. We need more to come here," Salaam said. "We want the police to be honest and strong, because in the past they have stolen from the people, and because of that the people still don't trust them."
Salaam said he defected to the government in part because "un-Islamic" trials were being carried out in Musa Qala on the orders of Pakistani and Chechen fighters.
"The other reason was that they were calling everyone Taliban who were not real Taliban. They should make a difference between real Taliban and drug users and smugglers," Salaam said. "This place (Musa Qala) was under the control of smugglers, drug dealers, and Islamic law was not implemented here."
The original meaning of the word "Taliban" in Afghanistan means "religious student or scholar" and does not necessarily have the negative connotation of its Western meaning, which is an armed member of the radical militia.
Showing the era he comes from, Salaam told Wood he wanted to thank the United States and Britain for helping Afghans "do jihad" against the Soviets — a reference to the Afghan resistance to the Soviet occupation in the 1980s.
Reflecting the dangers of traveling in the area, the two Black Hawk helicopters carrying Wood's team flew extremely close to the sandy ground, barely skimming over rooftops. The two aircraft, escorted by two Apache helicopter gunships, banked sharply from side to side over populated areas as a defensive measure against any possible incoming fire.
Wood said the situation in Musa Qala is "filled with hope."
"One of the elements of that hope is that a former Taliban commander has now not only agreed to support the constitution and respect the authority of the national government, but as a district governor will defend the constitution and represent the national government," Wood said.
Source: AP News
Maybe the US is trying a new tactic namely to fund ex-Taliban to fight drug dealers. This is similar to funding ex-insurgents to fight Al Qaeda in Iraq. In both cases there are obvious dangers. Once Al Qaeda and the drug dealers are defeated the occupiers will again be the enemy.
US envoy meets former Taliban commander
US Ambassador to Afghanistan Tells Ex-Taliban Commander Afghans Must Stop Poppy Production
JASON STRAZIUSO
AP News
Jan 14, 2008 05:17 EST
The U.S. ambassador to Afghanistan flew to a town previously held by the Taliban in the heart of the world's largest poppy-growing region and told the ex-militant commander now in charge there that Afghans must stop "producing poison."
Ambassador William Wood on Sunday drank tea and talked with Mullah Abdul Salaam, a former Taliban commander who defected to the government last month and is now the district leader of Musa Qala in the southern province of Helmand.
Wood urged Salaam to tell his people to leave behind "the practice of producing poison," and said poppy production, the key element in the opium and heroin trade, was against the law and Islam.
"In Musa Qala the price of bread has risen dramatically. I won't say why — you know why," Wood said, alluding to farmers' practice of growing poppies instead of needed food.
Southern Afghanistan was the scene of the heaviest fighting in the country in 2007, the bloodiest year since the U.S.-led invasion in 2001 toppled the Taliban militant movement. More than 6,500 people — mostly militants — were killed in violence last year, according to an Associated Press count based on official figures.
Islamist insurgents held sway in Musa Qala for most of last year, until U.S., British and Afghan forces retook it in early December. Wood said he thought the chances were good Musa Qala would remain under government control and said Afghan forces were drawing up a "comprehensive stabilization program" to help ensure it does.
U.S. soldiers from the 82nd Airborne now ring the town, but those troops will pull out of the region within days.
Officials say poppy production and the resulting drug trade help finance the insurgents, and that many Afghan farmers turn to poppies because they are a lucrative source of income. As a result, Afghanistan last year produced 93 percent of the world's opium, the main ingredient in heroin. Its export value was estimated at $4 billion.
Wood has said officials discovered $500 million worth of heroin in dozens of labs around Musa Qala. He said U.N. and Afghan officials have told him that farmers in Helmand have again been planting a lot of poppies for this season's harvest.
"There is a solution, but it depends on the people of Afghanistan. The people of Afghanistan have to decide what kind of Afghanistan they want, and we will support them if they choose an Afghanistan of peace, of Islam and of law," Wood told Salaam.
Salaam offered Wood a list of things he said needed to happen immediately for Musa Qala to remain peacefully under government control. Topping the list, he said, was a request to the Ministry of Interior for 200 more police.
"We still have a problem with the police. We need more to come here," Salaam said. "We want the police to be honest and strong, because in the past they have stolen from the people, and because of that the people still don't trust them."
Salaam said he defected to the government in part because "un-Islamic" trials were being carried out in Musa Qala on the orders of Pakistani and Chechen fighters.
"The other reason was that they were calling everyone Taliban who were not real Taliban. They should make a difference between real Taliban and drug users and smugglers," Salaam said. "This place (Musa Qala) was under the control of smugglers, drug dealers, and Islamic law was not implemented here."
The original meaning of the word "Taliban" in Afghanistan means "religious student or scholar" and does not necessarily have the negative connotation of its Western meaning, which is an armed member of the radical militia.
Showing the era he comes from, Salaam told Wood he wanted to thank the United States and Britain for helping Afghans "do jihad" against the Soviets — a reference to the Afghan resistance to the Soviet occupation in the 1980s.
Reflecting the dangers of traveling in the area, the two Black Hawk helicopters carrying Wood's team flew extremely close to the sandy ground, barely skimming over rooftops. The two aircraft, escorted by two Apache helicopter gunships, banked sharply from side to side over populated areas as a defensive measure against any possible incoming fire.
Wood said the situation in Musa Qala is "filled with hope."
"One of the elements of that hope is that a former Taliban commander has now not only agreed to support the constitution and respect the authority of the national government, but as a district governor will defend the constitution and represent the national government," Wood said.
Source: AP News
High oil prices and speculation
This is from a Philippine paper. Although this is in a Philippine paper and discusses the effect of increased oil prices in the Philippines the author is based in Saudi Arabia. He makes the interesting point that perhaps a considerable amount of the increase in oil prices is due to speculation rather than other factors often cited.
COMMENTARY
The threat of oil prices
By Louie de Leon
Philippine Daily Inquirer
First Posted 11:39pm (Mla time) 01/03/2008
Undeniably, crude oil price levels have shot up considerably since the start of the year.
Some say the reason is the geopolitical tensions in the Middle East and in other parts of the world, which raise concerns about the security of oil facilities. But Iraq is more secure now than it was two years or even a year ago. But still, oil prices started to spike up during the latter part of the first quarter of 2007. If Iraq is safer now, as George W. Bush says, shouldn’t oil prices be going down instead of up? On the other hand, Iran is just as confrontational toward the United States today as it was last year, and no major war has erupted since January to warrant a 100-percent increase in oil prices.
If geopolitical tensions alone explain the oil price hikes, why didn’t prices shoot up just as fast in 2006 when Israel bombed Lebanon for more than a week, and many oil-producing Arab countries threatened retaliation?
Is the increase, then, due to increasing demand and shrinking supply? That the demand for oil is going up is undeniable, but that begs the question: whether the magnitude of the demand for oil in the United States and in China and India, as well as in other East Asian tigers has increased 100 percent to warrant a meteoric rise in the prices of oil. And I don’t think either that the world’s oil supplies have been so drastically depleted to warrant the doubling of oil prices.
At the recent OPEC meeting, oil ministers of Kuwait and Saudi Arabia said oil supplies were adequate and they saw no need to increase output, as this could lead to an oversupply in the market. Accusing these oil producers of manipulating the prices is an all too easy explanation. If the accusation were true, wouldn’t the United States, the United Kingdom and other European countries by now have led some political protests such as an embargo or a UN resolution?
Indeed, geopolitical uncertainties and demand-and-supply concerns are contributing to the rise of oil prices. However, the sharp increases in prices are being driven by factors inside the oil markets themselves.
In the spot market, or what commodity traders call the “wet market,” where there is physical delivery of the traded commodity, oil prices are not fixed. Oil prices are fixed in the futures market, where “paper barrels” are traded; this may entail no actual deliveries until several years from now. The futures market is where speculation is rife.
Speculative attacks are fueling the increase, since the price of oil, as a physical commodity, is fixed in the market using oil futures, the primary buyers of which are investors, hedge funds, investments banks, among others. The great unwinding in the US housing market and the increasing liquidity in the world financial system have sent large sums of “hot money” circulating in the world equities, currency and commodities market in search of “investment” instruments that would yield the highest return. And oil is one of those instruments, gold being another. Fortunately, unlike oil, gold price changes have no effect on the daily life of ordinary Filipinos and, hence, have caught little of our attention.
The global economy is driven by an unforgiving capitalism fueled by greed, in which the Philippines is just a bit player. And the Philippines has very little control over this trend. This reminds me of what the former French Prime Minister Edouard Balladur said: “What is the market? It is the law of the jungle, the law of nature. What is civilization? It is the struggle against nature.”
World commodities and capital markets are jungles too big for the Philippines to struggle against. I would like to suggest an article written by Prof. Giacomo Luciani of the Gulf Research Center of Geneva, titled “Global Oil Market Needs Fundamental Reforms.” Another interesting read on this analysis is Alan Greenspan’s “The Age of Turbulence.”
I think Luciani summed up brilliantly the threat of oil prices when he said: “In the long run, demand will slow down, expectations will reverse and prices will decline; but a lot of economic damage may be done in the meantime.”
Louie de Leon is a credit analyst based in Saudi Arabia.
COMMENTARY
The threat of oil prices
By Louie de Leon
Philippine Daily Inquirer
First Posted 11:39pm (Mla time) 01/03/2008
Undeniably, crude oil price levels have shot up considerably since the start of the year.
Some say the reason is the geopolitical tensions in the Middle East and in other parts of the world, which raise concerns about the security of oil facilities. But Iraq is more secure now than it was two years or even a year ago. But still, oil prices started to spike up during the latter part of the first quarter of 2007. If Iraq is safer now, as George W. Bush says, shouldn’t oil prices be going down instead of up? On the other hand, Iran is just as confrontational toward the United States today as it was last year, and no major war has erupted since January to warrant a 100-percent increase in oil prices.
If geopolitical tensions alone explain the oil price hikes, why didn’t prices shoot up just as fast in 2006 when Israel bombed Lebanon for more than a week, and many oil-producing Arab countries threatened retaliation?
Is the increase, then, due to increasing demand and shrinking supply? That the demand for oil is going up is undeniable, but that begs the question: whether the magnitude of the demand for oil in the United States and in China and India, as well as in other East Asian tigers has increased 100 percent to warrant a meteoric rise in the prices of oil. And I don’t think either that the world’s oil supplies have been so drastically depleted to warrant the doubling of oil prices.
At the recent OPEC meeting, oil ministers of Kuwait and Saudi Arabia said oil supplies were adequate and they saw no need to increase output, as this could lead to an oversupply in the market. Accusing these oil producers of manipulating the prices is an all too easy explanation. If the accusation were true, wouldn’t the United States, the United Kingdom and other European countries by now have led some political protests such as an embargo or a UN resolution?
Indeed, geopolitical uncertainties and demand-and-supply concerns are contributing to the rise of oil prices. However, the sharp increases in prices are being driven by factors inside the oil markets themselves.
In the spot market, or what commodity traders call the “wet market,” where there is physical delivery of the traded commodity, oil prices are not fixed. Oil prices are fixed in the futures market, where “paper barrels” are traded; this may entail no actual deliveries until several years from now. The futures market is where speculation is rife.
Speculative attacks are fueling the increase, since the price of oil, as a physical commodity, is fixed in the market using oil futures, the primary buyers of which are investors, hedge funds, investments banks, among others. The great unwinding in the US housing market and the increasing liquidity in the world financial system have sent large sums of “hot money” circulating in the world equities, currency and commodities market in search of “investment” instruments that would yield the highest return. And oil is one of those instruments, gold being another. Fortunately, unlike oil, gold price changes have no effect on the daily life of ordinary Filipinos and, hence, have caught little of our attention.
The global economy is driven by an unforgiving capitalism fueled by greed, in which the Philippines is just a bit player. And the Philippines has very little control over this trend. This reminds me of what the former French Prime Minister Edouard Balladur said: “What is the market? It is the law of the jungle, the law of nature. What is civilization? It is the struggle against nature.”
World commodities and capital markets are jungles too big for the Philippines to struggle against. I would like to suggest an article written by Prof. Giacomo Luciani of the Gulf Research Center of Geneva, titled “Global Oil Market Needs Fundamental Reforms.” Another interesting read on this analysis is Alan Greenspan’s “The Age of Turbulence.”
I think Luciani summed up brilliantly the threat of oil prices when he said: “In the long run, demand will slow down, expectations will reverse and prices will decline; but a lot of economic damage may be done in the meantime.”
Louie de Leon is a credit analyst based in Saudi Arabia.
Avoid Philippine Airliners, US advises citizens.
This is from the Daily Tribune. This will be a big blow to Philippine Air and other Philippine airlines. Why they did not see this coming and take action to correct the situation is not clear. Other regional Philippine airlines will now probably not be able to expand as they had hoped.
This will give US airlines a huge advantage over Philippine rivals. I usually take Philippine Air Lines direct to Manila from Vancouver and back. I have never had any trouble although I have heard others complain. Some say PAL stands for Plane is Always Late! Service on PAL is always better than Air Canada in my experience!
Avoid RP aircraft, US advises citizens
By Michaela del Callar and Angie M. Rosales
01/16/2008
The local airline industry expects a direct hit from the recent downgrading of the country to a Category 2 rating by the US Federal Aviation Administration (FAA) which was quickly followed yesterday by a United States government advisory on its citizens yesterday to shun Philippine carrier.
The advisory said Americans should avoid RP airline planes until the country meets international aviation safety standards.
In a warden message dated Jan. 15, 2008 that was posted on its Web site, the US Embassy in Manila said: “Whenever possible, Americans traveling to and from the Philippines should fly to their destinations on international carriers from countries whose civil aviation safety standards for the oversight of their air carrier operations are under the Federal Aviation Administration’s International Aviation Safety Assessment (IASA) program.”
The country’s flag carrier Philippine Airlines Inc. (PAL) said restrictions imposed under the Category 2 rating will affect not just the aviation
industry but all other sectors, practically the entire economy, but most directly the tourism sector.
PAL, nevertheless, said it will continue to fly to the US, although under certain restrictions, despite the downgrading.
In a statement, PAL blamed the aviation agency Air Transportation Office (ATO) for the downgrade saying it reflected deficiencies in the agency’s oversight functions.
Despite the oversight, PAL has maintained an independent record of strict adherence to international safety standards, as reflected in PAL passing the IATA (International Air Transport Association) Operational Safety Audit (IOSA) in 2007, it said.
IOSA is an internationally recognized and accepted evaluation system designed to assess the operational management and control system of an airline.
“We hope the ATO will soon be able to rectify the assessed deficiencies in its air safety oversight functions so the country can revert to Category 1,” Bautista added.
Under a category 2 FAA rating, PAL is prohibited from increasing its 33 flights a week to the US and its territories and from changing the type or increasing the number of aircraft used on these routes. Also to be affected is the delivery, beginning 2009, of six brand-new Boeing 777-300ER airplanes, to be deployed by PAL on the trans-Pacific flights.
PAL said the country is expected to suffer from the negative perception that it is not a safe destination.
Last Dec. 26, Washington downgraded Philippine aviation standards to a lower category.
The US FAA revised the Philippines’ aviation safety oversight category from Category 1 to Category 2 due to “serious concerns” on the Philippine Air Transportation Office’s “oversight of air carrier operations.”
Under Category 2, the FAA assessed the Philippine Civil Aviation Authority as “not being in compliance” with International Civil Aviation Organization (ICAO) safety standards for Philippine air carrier operations.
“While in Category 2, Philippine air carriers will be permitted to continue current operations to the United States, but will be under heightened FAA surveillance,” the US Embassy said.
With the “Open Skies” policy prevailing between the RP and the US, American carriers are free to fly to the Philippines with unrestricted destinations and frequencies, but local carriers will be denied the same access because of the FAA rating.
Hawaiian Airlines will soon be operating regular service to Manila, clearly showing how US carriers intend to take advantage of the situation.
“Other local airlines, like Cebu Pacific, will be stymied from pushing through with any plans to fly on US routes while the Category 2 is enforced,” it added.
“Being the only Philippine carrier to fly to the US, we have a responsibility to our passengers to maintain our US operations in spite of the Category 2 rating,” PAL president Jaime Bautista said.
All local airlines will be affected by the category 2 rating which requires PAL to maintain a status quo of its current service to the US.
“We lament FAA’s decision. We will do everything we can so our loyal trans-Pacific passengers will not be inconvenienced by any effects of Category 2,” Bautista said.
Bautista also expressed concern on the negative effect of Category 2 to PAL’s plans to open service to San Diego, Chicago, New York and Saipan.
Bautista added that PAL’s airplanes are currently maintained by Lufthansa Technik Philippines, an affiliate of the world’fs largest maintenance service provider Lufthansa Technik of Germany.
Aside from withholding PAL’s expansion plans to the US, the Category 2 rating is also expected to gravely affect inbound and outbound tourism traffic (including the balikbayan traffic that is PAL’s niche market), RP-US cargo traffic and investments inflow to the Philippines.
PAL currently flies to Los Angeles (11 flights a week), San Francisco (9), Las Vegas via Vancouver (5), Honolulu (3) and Guam (5).
PAL will only be permitted to add a flight or route if it wetleases an aircraft from an airline coming from a Category 1 country, as PAL did back in the mid-1990s. Under a wetlease agreement, PAL is charged for the use of another carrier’s aircraft, its crew, maintenance and insurance cost.
The reported downgrading of the country’s commercial aviation category yesterday drew strong suspicion from a staunch Palace ally in the Senate that this matter was deliberately disregarded by concerned transportation officials, as this would leave the government no option but to order the creation of a Civil Aviation Authority (CAA), a public corporation whose revenues need not be remitted to the country’s coffers.
Administration Sen. Joker Arroyo floated this possibility, noting several questions arising from the report on the US FAA downgrade of the country.
“Were our civil aviation authorities aware of the impending downgrade and yet the Executive did not do anything to address FAA’s concerns? Why did the Executive not inform Congress of the need for remedial legislation? For one thing, during the current budget hearings, none of the government agencies involved in aviation asked for additional budget that they needed to meet FAA’s warnings. There was complete silence on the safety issues. Congress passed the budget they asked for,” Arroyo pointed out.
He added that the creation of the CAA as touted during the hearings was just what FAA asked for to forestall the downgrade.
“Or is it just a ruse so that another public corporation can be created that will collect its own revenues and spend it as it seems fit, without the need to remit its income to the National Treasury?” he asked.
Under this set-up, the senator said that airports and commercial aviation will be operated by two independent government corporations--the existing Manila International Airport Authority (MIAA) and the proposed CAA. Both will impose its own fees, collect revenues and disburse it without any government intervention, Arroyo noted.
Meanwhile, Department of Transportation and Communications Secretary Leandro Mendoza yesterday ordered ATO Acting Assistant Secretary Daniel Dimagiba to immediately evaluate, review, and undertake measures and course of action to ensure compliance with the audit results and recommendations of the US FAA.
Mendoza also ordered ATO to immediately make the rectifications of the deficiencies identified in the International Aviation Safety Assessment conducted by the FAA in a bid to have the downgrade lifted.
Mendoza assured the public that the government will tap its available resources to ensure the lifting of the Category 2 rating of FAA.
Mendoza also appealed to Congress for the immediate passage of the bill creating the Civil Aviation Authority of the Philippines, otherwise known as the Civil Aviation Authority Act of 2008, which is now being questioned by Senator Arroyo.
With regard to aviation regulations, the ATO has made adjustments in the area of regulations including preparation of a list of effective regulations and adoption of a policy on updating them to reflect developments in the industry and changes to ICAO standards.
On technical guidance, ATO has updated and centralized inspector files and improved their physical security. It developed effective training programs. It is also working with ICAO to arrange for hiring retired, qualified pilots from the national airline to serve as inspectors.
On licensing and certification obligations, the ATO has reviewed all carrier licensing files for completeness. It has also organized files in the technical library and improving procedures of the licensing examination board. It has improved the guidance on issuance of airframe and powerplant certificates, including regularizing the period of issuance.
On surveillance obligations, the ATO has revised the airworthiness handbook. The ATO is also working with airport directors to ensure access of inspectors. It is also revising and consolidating the surveillance systems and briefing personnel on their responsibility. Further, it is continuously updating the list of maintenance facilities, establishing controls, and ensuring that only qualified inspectors conduct inspections.
In effect, the ATO has addressed and is continuously addressing the other deficiencies as per the FAA safety audit, it was claimed.
Tesa Gaila Medina and AFP
This will give US airlines a huge advantage over Philippine rivals. I usually take Philippine Air Lines direct to Manila from Vancouver and back. I have never had any trouble although I have heard others complain. Some say PAL stands for Plane is Always Late! Service on PAL is always better than Air Canada in my experience!
Avoid RP aircraft, US advises citizens
By Michaela del Callar and Angie M. Rosales
01/16/2008
The local airline industry expects a direct hit from the recent downgrading of the country to a Category 2 rating by the US Federal Aviation Administration (FAA) which was quickly followed yesterday by a United States government advisory on its citizens yesterday to shun Philippine carrier.
The advisory said Americans should avoid RP airline planes until the country meets international aviation safety standards.
In a warden message dated Jan. 15, 2008 that was posted on its Web site, the US Embassy in Manila said: “Whenever possible, Americans traveling to and from the Philippines should fly to their destinations on international carriers from countries whose civil aviation safety standards for the oversight of their air carrier operations are under the Federal Aviation Administration’s International Aviation Safety Assessment (IASA) program.”
The country’s flag carrier Philippine Airlines Inc. (PAL) said restrictions imposed under the Category 2 rating will affect not just the aviation
industry but all other sectors, practically the entire economy, but most directly the tourism sector.
PAL, nevertheless, said it will continue to fly to the US, although under certain restrictions, despite the downgrading.
In a statement, PAL blamed the aviation agency Air Transportation Office (ATO) for the downgrade saying it reflected deficiencies in the agency’s oversight functions.
Despite the oversight, PAL has maintained an independent record of strict adherence to international safety standards, as reflected in PAL passing the IATA (International Air Transport Association) Operational Safety Audit (IOSA) in 2007, it said.
IOSA is an internationally recognized and accepted evaluation system designed to assess the operational management and control system of an airline.
“We hope the ATO will soon be able to rectify the assessed deficiencies in its air safety oversight functions so the country can revert to Category 1,” Bautista added.
Under a category 2 FAA rating, PAL is prohibited from increasing its 33 flights a week to the US and its territories and from changing the type or increasing the number of aircraft used on these routes. Also to be affected is the delivery, beginning 2009, of six brand-new Boeing 777-300ER airplanes, to be deployed by PAL on the trans-Pacific flights.
PAL said the country is expected to suffer from the negative perception that it is not a safe destination.
Last Dec. 26, Washington downgraded Philippine aviation standards to a lower category.
The US FAA revised the Philippines’ aviation safety oversight category from Category 1 to Category 2 due to “serious concerns” on the Philippine Air Transportation Office’s “oversight of air carrier operations.”
Under Category 2, the FAA assessed the Philippine Civil Aviation Authority as “not being in compliance” with International Civil Aviation Organization (ICAO) safety standards for Philippine air carrier operations.
“While in Category 2, Philippine air carriers will be permitted to continue current operations to the United States, but will be under heightened FAA surveillance,” the US Embassy said.
With the “Open Skies” policy prevailing between the RP and the US, American carriers are free to fly to the Philippines with unrestricted destinations and frequencies, but local carriers will be denied the same access because of the FAA rating.
Hawaiian Airlines will soon be operating regular service to Manila, clearly showing how US carriers intend to take advantage of the situation.
“Other local airlines, like Cebu Pacific, will be stymied from pushing through with any plans to fly on US routes while the Category 2 is enforced,” it added.
“Being the only Philippine carrier to fly to the US, we have a responsibility to our passengers to maintain our US operations in spite of the Category 2 rating,” PAL president Jaime Bautista said.
All local airlines will be affected by the category 2 rating which requires PAL to maintain a status quo of its current service to the US.
“We lament FAA’s decision. We will do everything we can so our loyal trans-Pacific passengers will not be inconvenienced by any effects of Category 2,” Bautista said.
Bautista also expressed concern on the negative effect of Category 2 to PAL’s plans to open service to San Diego, Chicago, New York and Saipan.
Bautista added that PAL’s airplanes are currently maintained by Lufthansa Technik Philippines, an affiliate of the world’fs largest maintenance service provider Lufthansa Technik of Germany.
Aside from withholding PAL’s expansion plans to the US, the Category 2 rating is also expected to gravely affect inbound and outbound tourism traffic (including the balikbayan traffic that is PAL’s niche market), RP-US cargo traffic and investments inflow to the Philippines.
PAL currently flies to Los Angeles (11 flights a week), San Francisco (9), Las Vegas via Vancouver (5), Honolulu (3) and Guam (5).
PAL will only be permitted to add a flight or route if it wetleases an aircraft from an airline coming from a Category 1 country, as PAL did back in the mid-1990s. Under a wetlease agreement, PAL is charged for the use of another carrier’s aircraft, its crew, maintenance and insurance cost.
The reported downgrading of the country’s commercial aviation category yesterday drew strong suspicion from a staunch Palace ally in the Senate that this matter was deliberately disregarded by concerned transportation officials, as this would leave the government no option but to order the creation of a Civil Aviation Authority (CAA), a public corporation whose revenues need not be remitted to the country’s coffers.
Administration Sen. Joker Arroyo floated this possibility, noting several questions arising from the report on the US FAA downgrade of the country.
“Were our civil aviation authorities aware of the impending downgrade and yet the Executive did not do anything to address FAA’s concerns? Why did the Executive not inform Congress of the need for remedial legislation? For one thing, during the current budget hearings, none of the government agencies involved in aviation asked for additional budget that they needed to meet FAA’s warnings. There was complete silence on the safety issues. Congress passed the budget they asked for,” Arroyo pointed out.
He added that the creation of the CAA as touted during the hearings was just what FAA asked for to forestall the downgrade.
“Or is it just a ruse so that another public corporation can be created that will collect its own revenues and spend it as it seems fit, without the need to remit its income to the National Treasury?” he asked.
Under this set-up, the senator said that airports and commercial aviation will be operated by two independent government corporations--the existing Manila International Airport Authority (MIAA) and the proposed CAA. Both will impose its own fees, collect revenues and disburse it without any government intervention, Arroyo noted.
Meanwhile, Department of Transportation and Communications Secretary Leandro Mendoza yesterday ordered ATO Acting Assistant Secretary Daniel Dimagiba to immediately evaluate, review, and undertake measures and course of action to ensure compliance with the audit results and recommendations of the US FAA.
Mendoza also ordered ATO to immediately make the rectifications of the deficiencies identified in the International Aviation Safety Assessment conducted by the FAA in a bid to have the downgrade lifted.
Mendoza assured the public that the government will tap its available resources to ensure the lifting of the Category 2 rating of FAA.
Mendoza also appealed to Congress for the immediate passage of the bill creating the Civil Aviation Authority of the Philippines, otherwise known as the Civil Aviation Authority Act of 2008, which is now being questioned by Senator Arroyo.
With regard to aviation regulations, the ATO has made adjustments in the area of regulations including preparation of a list of effective regulations and adoption of a policy on updating them to reflect developments in the industry and changes to ICAO standards.
On technical guidance, ATO has updated and centralized inspector files and improved their physical security. It developed effective training programs. It is also working with ICAO to arrange for hiring retired, qualified pilots from the national airline to serve as inspectors.
On licensing and certification obligations, the ATO has reviewed all carrier licensing files for completeness. It has also organized files in the technical library and improving procedures of the licensing examination board. It has improved the guidance on issuance of airframe and powerplant certificates, including regularizing the period of issuance.
On surveillance obligations, the ATO has revised the airworthiness handbook. The ATO is also working with airport directors to ensure access of inspectors. It is also revising and consolidating the surveillance systems and briefing personnel on their responsibility. Further, it is continuously updating the list of maintenance facilities, establishing controls, and ensuring that only qualified inspectors conduct inspections.
In effect, the ATO has addressed and is continuously addressing the other deficiencies as per the FAA safety audit, it was claimed.
Tesa Gaila Medina and AFP
Monday, January 14, 2008
Ex-Baathists Get a Break. Or Do They?
This is from the New York Times.This is a useful article in that it gives some idea of what is happening in the Iraqi parliament and discusses in some detail the issues being faced.
It is strange that the Americans do not already know what has been passed. Surely they must have translators available or if they do not it is no surprise that things do not go the way Americans want all the time! They may not even know what is happening!
It seems that the oil law and the Kirkuk issue may take a long while to solve! It sounds as if there could be a huge fight between regional interests and those trying to support a general Iraqi interest.
\
Ex-Baathists Get a Break. Or Do They?
By SOLOMON MOORE
Published: January 14, 2008
BAGHDAD — A day after the Iraqi Parliament passed legislation billed as the first significant political step forward in Iraq after months of deadlock, there were troubling questions — and troubling silences — about the measure’s actual effects.
The measure, known as the Justice and Accountability Law, is meant to open government jobs to former members of the Baath Party of Saddam Hussein — the bureaucrats, engineers, city workers, teachers, soldiers and police officers who made the government work until they were barred from office after the American invasion in 2003.
But the legislation is at once confusing and controversial, a document riddled with loopholes and caveats to the point that some Sunni and Shiite officials say it could actually exclude more former Baathists than it lets back in, particularly in the crucial security ministries.
Under that interpretation, the law would be directly at odds with the American campaign to draft Sunni Arabs into so-called Awakening militias with the aim of integrating them into the police and military forces. That plan has been praised as a key to the sharp drop in violence over the past year and as being the most effective weapon against jihadi insurgents like Al Qaeda in Mesopotamia.
There has been mostly silence from American officials, who have pushed Prime Minister Nuri Kamal al-Maliki’s government hard over the past year to ease restrictions on former Baathists as a sign of political reconciliation between Shiites and Sunnis. The two highest-ranking Americans in Baghdad, Ambassador Ryan C. Crocker and Gen. David H. Petraeus, were with President Bush in Kuwait on Saturday when the measure was passed. And a day afterward, officials were still putting off questions about it.
“We still have to go through it,” said a United States Embassy spokeswoman, Mirembe Nantongo. “We’re not going to comment at this time.”
Col. Steven Boylan, General Petraeus’s spokesman, said he had not seen a translation of the legislation and was uncertain whether his boss had.
According to a translated copy received by The New York Times, a whole new rung of former party members could be allowed back into government. Where the old de-Baathification law barred members of the top four of the party’s seven levels, the new measure would bar three, theoretically allowing as many as 30,000 people back in. And a vast majority of the ones still excluded, who held top national- and regional-level jobs, would become eligible for pensions if they had not been implicated in crime or corruption.
But interpretations of the measure’s actual effects varied widely among Iraqi officials. In general, Shiite politicians hailed it as an olive branch to Sunni Arabs. But some Sunnis say it is at best an incremental improvement over the old system, and at worst even harsher.
“This law includes some good articles, and it’s better than the last de-Baathification law because it gives pensions to third-level Baathists,” said Khalaf Aulian, a Sunni politician who opposed the legislation. “But I don’t like the law as a whole, because it will remain as a sword on the neck of the people.
“Maybe in the future they will use it to prevent anyone they like from keeping their job,” he said.
The most extreme interpretations of the measure’s effects actually came from Shiite officials. Some of them hailed it because it would ban members of even the lowest party levels from the most important ministries: justice, interior, defense, finance and foreign.
That would seem to preclude the government from keeping its promise to offer military and police jobs to the thousands of Sunni Arabs who have joined the Awakening groups.
Mr. Aulian, among other Sunni Arab politicians who opposed the measure, pointed out that the greatest risk could be that it would unravel successful efforts to draw more Sunnis away from the insurgency, perhaps toppling the country back into open sectarian conflict.
“Many Baathists hated the Baath Party, but they were part of it to have a job,” he said. “By this law, we will push them into the insurgency.”
But the proof of the measure will come in how it is applied. Even the old de-Baathification process did not achieve its goal of purging all of the former high-ranking party members from the government. The process lost track of many and avoided prosecuting others, like the former interim prime minister, Ayad Allawi, out of political expediency.
Some officials pointed out that there was still room to interpret the legislation liberally, allowing more former Baathists in while still satisfying the pride of Shiites who have been dead-set against conciliation toward officials who worked for Mr. Hussein.
Sadiq al-Rikabi, a political adviser to Mr. Maliki, said the new bill was a result of compromises by both hard-line Shiites and Sunni Arabs.
One particular improvement, he said, was that de-Baathification cases would now be subject to judicial review, whereas the old de-Baathification committee’s decisions were final. And the Council of Ministers would have the right to make exceptions to the law in order to serve the public interest. “Before, we dealt with Baath Party members as a group,” he said. “Now, being a Baath Party member is not a crime by itself. If someone has committed a crime in the old regime, that accusation should be made in court. And all of the members can get a pension.”
In the meantime, Iraqi legislators said Sunday that they were making progress on two more key benchmarks urged by the Bush administration: the approval of an oil revenue sharing law and the settlement of competing claims to the contested northern city of Kirkuk.
Several Iraqi political parties — including the one led by the cleric Moktada al-Sadr, along with the National Dialogue Front, a Sunni Arab group, and several independent and secular groups — said they had formed a coalition of at least 140 legislators, of 275 total, to work on the issues.
While they have yet to propose a specific plan, the unusual alliance stands opposed to Iraq’s powerful regional interests, including the Supreme Iraqi Islamic Council, which dominates the oil-rich south, and the Kurdish bloc, which has cut independent deals with foreign oil companies to exploit vast oil reserves in the northern region of Iraqi Kurdistan. Both groups favor more regional control of oil revenues and political power.
The sharing of oil revenues has been a major obstacle for Iraq’s competing political groups, especially for Sunni Arabs in the western Anbar Province, which has little oil.
Salih Mutlaq, a member of the National Dialogue Front, said he hoped the coalition would promote nationalism.
“We are against creating regions,” he said. “This bloc is against investment and oil contracting unless it is approved and consulted about with the central government.”
Mahmoud Othman, a Kurdish politician, took a dim view of the alliance and said he suspected that Mr. Maliki, despite his own party’s agreement with the Kurdish bloc, secretly supported the coalition. “I think he indirectly participated in this alliance and encouraged it to make problems for the Kurds,” Mr. Othman said. “Maliki is a double-faced man.”
Reporting was contributed by Ahmad Fadam, Qais Mizher, Abeer Mohammed and Balen Y. Younis.
It is strange that the Americans do not already know what has been passed. Surely they must have translators available or if they do not it is no surprise that things do not go the way Americans want all the time! They may not even know what is happening!
It seems that the oil law and the Kirkuk issue may take a long while to solve! It sounds as if there could be a huge fight between regional interests and those trying to support a general Iraqi interest.
\
Ex-Baathists Get a Break. Or Do They?
By SOLOMON MOORE
Published: January 14, 2008
BAGHDAD — A day after the Iraqi Parliament passed legislation billed as the first significant political step forward in Iraq after months of deadlock, there were troubling questions — and troubling silences — about the measure’s actual effects.
The measure, known as the Justice and Accountability Law, is meant to open government jobs to former members of the Baath Party of Saddam Hussein — the bureaucrats, engineers, city workers, teachers, soldiers and police officers who made the government work until they were barred from office after the American invasion in 2003.
But the legislation is at once confusing and controversial, a document riddled with loopholes and caveats to the point that some Sunni and Shiite officials say it could actually exclude more former Baathists than it lets back in, particularly in the crucial security ministries.
Under that interpretation, the law would be directly at odds with the American campaign to draft Sunni Arabs into so-called Awakening militias with the aim of integrating them into the police and military forces. That plan has been praised as a key to the sharp drop in violence over the past year and as being the most effective weapon against jihadi insurgents like Al Qaeda in Mesopotamia.
There has been mostly silence from American officials, who have pushed Prime Minister Nuri Kamal al-Maliki’s government hard over the past year to ease restrictions on former Baathists as a sign of political reconciliation between Shiites and Sunnis. The two highest-ranking Americans in Baghdad, Ambassador Ryan C. Crocker and Gen. David H. Petraeus, were with President Bush in Kuwait on Saturday when the measure was passed. And a day afterward, officials were still putting off questions about it.
“We still have to go through it,” said a United States Embassy spokeswoman, Mirembe Nantongo. “We’re not going to comment at this time.”
Col. Steven Boylan, General Petraeus’s spokesman, said he had not seen a translation of the legislation and was uncertain whether his boss had.
According to a translated copy received by The New York Times, a whole new rung of former party members could be allowed back into government. Where the old de-Baathification law barred members of the top four of the party’s seven levels, the new measure would bar three, theoretically allowing as many as 30,000 people back in. And a vast majority of the ones still excluded, who held top national- and regional-level jobs, would become eligible for pensions if they had not been implicated in crime or corruption.
But interpretations of the measure’s actual effects varied widely among Iraqi officials. In general, Shiite politicians hailed it as an olive branch to Sunni Arabs. But some Sunnis say it is at best an incremental improvement over the old system, and at worst even harsher.
“This law includes some good articles, and it’s better than the last de-Baathification law because it gives pensions to third-level Baathists,” said Khalaf Aulian, a Sunni politician who opposed the legislation. “But I don’t like the law as a whole, because it will remain as a sword on the neck of the people.
“Maybe in the future they will use it to prevent anyone they like from keeping their job,” he said.
The most extreme interpretations of the measure’s effects actually came from Shiite officials. Some of them hailed it because it would ban members of even the lowest party levels from the most important ministries: justice, interior, defense, finance and foreign.
That would seem to preclude the government from keeping its promise to offer military and police jobs to the thousands of Sunni Arabs who have joined the Awakening groups.
Mr. Aulian, among other Sunni Arab politicians who opposed the measure, pointed out that the greatest risk could be that it would unravel successful efforts to draw more Sunnis away from the insurgency, perhaps toppling the country back into open sectarian conflict.
“Many Baathists hated the Baath Party, but they were part of it to have a job,” he said. “By this law, we will push them into the insurgency.”
But the proof of the measure will come in how it is applied. Even the old de-Baathification process did not achieve its goal of purging all of the former high-ranking party members from the government. The process lost track of many and avoided prosecuting others, like the former interim prime minister, Ayad Allawi, out of political expediency.
Some officials pointed out that there was still room to interpret the legislation liberally, allowing more former Baathists in while still satisfying the pride of Shiites who have been dead-set against conciliation toward officials who worked for Mr. Hussein.
Sadiq al-Rikabi, a political adviser to Mr. Maliki, said the new bill was a result of compromises by both hard-line Shiites and Sunni Arabs.
One particular improvement, he said, was that de-Baathification cases would now be subject to judicial review, whereas the old de-Baathification committee’s decisions were final. And the Council of Ministers would have the right to make exceptions to the law in order to serve the public interest. “Before, we dealt with Baath Party members as a group,” he said. “Now, being a Baath Party member is not a crime by itself. If someone has committed a crime in the old regime, that accusation should be made in court. And all of the members can get a pension.”
In the meantime, Iraqi legislators said Sunday that they were making progress on two more key benchmarks urged by the Bush administration: the approval of an oil revenue sharing law and the settlement of competing claims to the contested northern city of Kirkuk.
Several Iraqi political parties — including the one led by the cleric Moktada al-Sadr, along with the National Dialogue Front, a Sunni Arab group, and several independent and secular groups — said they had formed a coalition of at least 140 legislators, of 275 total, to work on the issues.
While they have yet to propose a specific plan, the unusual alliance stands opposed to Iraq’s powerful regional interests, including the Supreme Iraqi Islamic Council, which dominates the oil-rich south, and the Kurdish bloc, which has cut independent deals with foreign oil companies to exploit vast oil reserves in the northern region of Iraqi Kurdistan. Both groups favor more regional control of oil revenues and political power.
The sharing of oil revenues has been a major obstacle for Iraq’s competing political groups, especially for Sunni Arabs in the western Anbar Province, which has little oil.
Salih Mutlaq, a member of the National Dialogue Front, said he hoped the coalition would promote nationalism.
“We are against creating regions,” he said. “This bloc is against investment and oil contracting unless it is approved and consulted about with the central government.”
Mahmoud Othman, a Kurdish politician, took a dim view of the alliance and said he suspected that Mr. Maliki, despite his own party’s agreement with the Kurdish bloc, secretly supported the coalition. “I think he indirectly participated in this alliance and encouraged it to make problems for the Kurds,” Mr. Othman said. “Maliki is a double-faced man.”
Reporting was contributed by Ahmad Fadam, Qais Mizher, Abeer Mohammed and Balen Y. Younis.
This is from the Independent.
This is a debate between two of the occupiers of Afghanistan. If Afghanistan were an independent nation one would think that it would be the Afghan govt. that would approve of these sorts of policies!
The U.S. criticism has some valid points but rather ironically the same sort of objections could be made against US policy in Iraq where the US is in effect arming Sunni militias many of them former insurgents to use them against Al Qaeda supporting insurgents.
US attacks UK plan to arm Afghan militias
By Jerome Starkey in Kabul
Published: 14 January 2008
The US general in charge of training the Afghan police has criticised British-backed plans to arm local militias in an attempt to defeat the Taliban. The remarks by Maj-Gen Robert Cone, the second most senior US soldier in Afghanistan, are likely to deepen the row between London and Washington over how to counter the insurgency.
General Cone, who is in charge of rebuilding the Afghan police force, is the second US commander to condemn the initiative. He said: "Anything that detracts from a professional, well-trained, well-led police force is not the answer."
Last month, Gordon Brown said Britain would increase its support for "community defence initiatives, where local volunteers are recruited to defend homes and families modelled on traditional Afghan arbakai". The arbakai system involves arming untrained Afghani men, who agree to come running at the beating of a drum if their village elders feel threatened.
British diplomats and military strategists in the restive southern province of Helmand hope the idea might bolster Afghanistan's fledgling police force, which is unable to defend itself against attacks by Taliban insurgents. At least 10 officers died yesterday in a Taliban attack on a checkpoint in Kandahar. But US officials fear that arbakai fighters would fall under the command of warlords disloyal to the Afghan government. Their reluctance to endorse the plan follows a disastrous international initiative to build an "auxiliary" police force, which was scrapped last year.
Auxiliary officers were given assault rifles and uniforms after just a few days of rudimentary training, on the understanding that they would be required only to police the area they came from. "The auxiliary police was an attempt to take short-cuts," said General Cone, warning that there were similarities between the doomed auxiliaries and Mr Brown's arbakai plan. "It is very important to understand why the Afghan National Auxiliary Police Force did not work, as we look at any informal programme that doesn't promote professional policing," he added.
Analysts also fear the introduction of arbakai would undo years of effort by the United Nations to disarm illegal militias.
General Cone's remarks follow earlier criticism of the idea by the commander of the 37-nation Nato coalition in Afghanistan. General Dan McNeill said the plan would work only in small parts of the countryside which did not include Helmand, where most of Britain's 7,700 troops are stationed. He said: "My information, from studying Afghan history, is that arbakai works only in Paktia, Khost and the southern portion of Paktika, and it's not likely to work beyond those geographic locations."
General Cone is leading a root-and-branch reform of the Afghan police force, which has been ill-equipped, badly paid, poorly trained and dogged by corruption since 2001. The US government has pledged $7.4bn (£3.7bn) to improve Afghan security forces between now and October. But General Cone admitted there was no "model of what policing should be" in the country. "When Afghan people understand what well-trained, well-paid police do, they will demand it," he added. "But right now they are just not familiar."
He said he backed greater community involvement in the police if it meant "neighbourhood-watch type programmes" rather than arming and paying local people.
Britain has faced increasing criticism from allies in recent months for championing alternative tactics to defeat the Taliban. The Prime Minister promised more "tribal engagement" during a recent visit to Kabul. But last month the Afghan government expelled two UN and EU diplomats for meeting commanders sympathetic to insurgents.
This is a debate between two of the occupiers of Afghanistan. If Afghanistan were an independent nation one would think that it would be the Afghan govt. that would approve of these sorts of policies!
The U.S. criticism has some valid points but rather ironically the same sort of objections could be made against US policy in Iraq where the US is in effect arming Sunni militias many of them former insurgents to use them against Al Qaeda supporting insurgents.
US attacks UK plan to arm Afghan militias
By Jerome Starkey in Kabul
Published: 14 January 2008
The US general in charge of training the Afghan police has criticised British-backed plans to arm local militias in an attempt to defeat the Taliban. The remarks by Maj-Gen Robert Cone, the second most senior US soldier in Afghanistan, are likely to deepen the row between London and Washington over how to counter the insurgency.
General Cone, who is in charge of rebuilding the Afghan police force, is the second US commander to condemn the initiative. He said: "Anything that detracts from a professional, well-trained, well-led police force is not the answer."
Last month, Gordon Brown said Britain would increase its support for "community defence initiatives, where local volunteers are recruited to defend homes and families modelled on traditional Afghan arbakai". The arbakai system involves arming untrained Afghani men, who agree to come running at the beating of a drum if their village elders feel threatened.
British diplomats and military strategists in the restive southern province of Helmand hope the idea might bolster Afghanistan's fledgling police force, which is unable to defend itself against attacks by Taliban insurgents. At least 10 officers died yesterday in a Taliban attack on a checkpoint in Kandahar. But US officials fear that arbakai fighters would fall under the command of warlords disloyal to the Afghan government. Their reluctance to endorse the plan follows a disastrous international initiative to build an "auxiliary" police force, which was scrapped last year.
Auxiliary officers were given assault rifles and uniforms after just a few days of rudimentary training, on the understanding that they would be required only to police the area they came from. "The auxiliary police was an attempt to take short-cuts," said General Cone, warning that there were similarities between the doomed auxiliaries and Mr Brown's arbakai plan. "It is very important to understand why the Afghan National Auxiliary Police Force did not work, as we look at any informal programme that doesn't promote professional policing," he added.
Analysts also fear the introduction of arbakai would undo years of effort by the United Nations to disarm illegal militias.
General Cone's remarks follow earlier criticism of the idea by the commander of the 37-nation Nato coalition in Afghanistan. General Dan McNeill said the plan would work only in small parts of the countryside which did not include Helmand, where most of Britain's 7,700 troops are stationed. He said: "My information, from studying Afghan history, is that arbakai works only in Paktia, Khost and the southern portion of Paktika, and it's not likely to work beyond those geographic locations."
General Cone is leading a root-and-branch reform of the Afghan police force, which has been ill-equipped, badly paid, poorly trained and dogged by corruption since 2001. The US government has pledged $7.4bn (£3.7bn) to improve Afghan security forces between now and October. But General Cone admitted there was no "model of what policing should be" in the country. "When Afghan people understand what well-trained, well-paid police do, they will demand it," he added. "But right now they are just not familiar."
He said he backed greater community involvement in the police if it meant "neighbourhood-watch type programmes" rather than arming and paying local people.
Britain has faced increasing criticism from allies in recent months for championing alternative tactics to defeat the Taliban. The Prime Minister promised more "tribal engagement" during a recent visit to Kabul. But last month the Afghan government expelled two UN and EU diplomats for meeting commanders sympathetic to insurgents.
Keystone Cops Confront Iran.
This is from the huffingtonpost. For some reason the U.S. seems to be turning up the temperature in its propaganda offensive against Iran at a time even though the international pressure against Iran seems to have cooled a bit. Perhaps this is why the U.S. feels the need to increase its own pressure.
While in the Mid-East Bush has taken the opportunity to lecture his Mid-East Allies on the necessity to pressure Iran. Yet there is evidence of some detente there. While no doubt Arab States are suspicious of Iran they seem to be taking a road of talking with Iran rather than confrontation.
Keystone Cops Confront Iran
Posted January 11, 2008 | 10:46 AM (EST)
--------------------------------------------------------------------------------
Read More: Iran, Pentagon, Breaking Politics News
The Pentagon has now admitted that the audio they released in their video of the naval encounter with Iran might not have come from the Iranian ships. The Washington Post reports Friday:
The Pentagon said yesterday that the apparent radio threat to bomb U.S. warships in the Persian Gulf last weekend may not have come from the five Iranian Revolutionary Guard speedboats that approached them -- and may not even have been intended against U.S. targets.
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Comment
US officials are trying to spin this admission as not being a big deal.
They are, of course, wrong. It is a huge deal.
The New York Times reported on its website Thursday:
The list of those who are less than fully confident in the Pentagon's video/audio mashup of aggressive maneuvers by Iranian boats near American warships in the Strait of Hormuz now includes the Pentagon itself.
Unnamed Pentagon officials said on Wednesday that the threatening voice heard in the audio clip, which was released on Monday night with a disclaimer that it was recorded separately from the video images and merged with them later, is not directly traceable to the Iranian military.
The Times reported Thursday:
The audio includes a heavily accented voice warning in English that the Navy warships would explode. However, the recording carries no ambient noise -- the sounds of a motor, the sea or wind -- that would be expected if the broadcast had been made from one of the five small boats that sped around the three-ship American convoy.
On Wednesday, a reader identifying himself as a former Navy officer with experience in the Strait of Hormuz wrote to the Times:
All ships at sea use a common UHF frequency, Channel 16, also known as "bridge-to bridge" radio. Over here, near the U.S., and throughout the Mediterranean, Ch. 16 is used pretty professionally, i.e., chatter is limited to shiphandling issues, identifying yourself, telling other ships what your intentions are to avoid mishaps, etc.
But over in the Gulf, Ch. 16 is like a bad CB radio. Everybody and their brother is on it; chattering away; hurling racial slurs, usually involving Filipinos (lots of Filipinos work in the area); curses involving your mother; 1970's music broadcast in the wee hours (nothing odder than hearing The Carpenters 50 miles off the coast of Iran at 4 a.m.)
On Ch. 16, esp. in that section of the Gulf, slurs/threats/chatter/etc. is commonplace. So my first thought was that the "explode" comment might not have even come from one of the Iranian craft, but some loser monitoring the events at a shore facility.
Indeed, it's not at all clear that the voice in the Pentagon's audiotape is even Iranian. The Washington Post reports:
Farsi speakers and Iranians told The Washington Post that the accent did not sound Iranian.
Presumably, all the information that we have now about this incident - that the radio communication that the Pentagon released as part of its video might not have come from the Iranian ships, and that the voice might not even be Iranian - was available to the Pentagon - if they were interested - when they released the tape. Why the rush to release this video without checking?
The most plausible explanation was that there was a rush to release the video prior to President Bush's trip to the region, because his key goal was to press the US case for isolating Iran.
And this is similar to what the Iranians have claimed, that the US was hyping whatever happened to try to bolster their case for isolating Iran ahead of the President's trip.
So, as with the release of the National Intelligence Estimate on Iran, where the US intelligence conclusion that Iran did not have a nuclear weapons program followed a period in which the US was claiming that they did and Iran was saying that they did not, and IAEA and Russia were saying that they had no evidence that Iran had a nuclear weapons program, the net effect of this incident is that the credibility of the US on Iran is diminished and the credibility of Iran is increased.
Members of Congress, and Presidential candidates, should be asking questions about the Pentagon's rush to release the tape, with the quite possibly unrelated audio. People in the region are likely to conclude that it is the U.S., not Iran, that is behaving in a dangerously provocative way.
It's difficult to overstate how low the credibility of U.S. statements is in the Middle East right now. It may actually be negative. If the U.S. announces that two plus two is four, some people in the Middle East are going to scratch their heads and say, "Well, until now we thought it was four, but perhaps it is five."
You have to wonder if some folks in the Washington foreign policy establishment are counting the days until they can put the empire under new management.
While in the Mid-East Bush has taken the opportunity to lecture his Mid-East Allies on the necessity to pressure Iran. Yet there is evidence of some detente there. While no doubt Arab States are suspicious of Iran they seem to be taking a road of talking with Iran rather than confrontation.
Keystone Cops Confront Iran
Posted January 11, 2008 | 10:46 AM (EST)
--------------------------------------------------------------------------------
Read More: Iran, Pentagon, Breaking Politics News
The Pentagon has now admitted that the audio they released in their video of the naval encounter with Iran might not have come from the Iranian ships. The Washington Post reports Friday:
The Pentagon said yesterday that the apparent radio threat to bomb U.S. warships in the Persian Gulf last weekend may not have come from the five Iranian Revolutionary Guard speedboats that approached them -- and may not even have been intended against U.S. targets.
Comment
US officials are trying to spin this admission as not being a big deal.
They are, of course, wrong. It is a huge deal.
The New York Times reported on its website Thursday:
The list of those who are less than fully confident in the Pentagon's video/audio mashup of aggressive maneuvers by Iranian boats near American warships in the Strait of Hormuz now includes the Pentagon itself.
Unnamed Pentagon officials said on Wednesday that the threatening voice heard in the audio clip, which was released on Monday night with a disclaimer that it was recorded separately from the video images and merged with them later, is not directly traceable to the Iranian military.
The Times reported Thursday:
The audio includes a heavily accented voice warning in English that the Navy warships would explode. However, the recording carries no ambient noise -- the sounds of a motor, the sea or wind -- that would be expected if the broadcast had been made from one of the five small boats that sped around the three-ship American convoy.
On Wednesday, a reader identifying himself as a former Navy officer with experience in the Strait of Hormuz wrote to the Times:
All ships at sea use a common UHF frequency, Channel 16, also known as "bridge-to bridge" radio. Over here, near the U.S., and throughout the Mediterranean, Ch. 16 is used pretty professionally, i.e., chatter is limited to shiphandling issues, identifying yourself, telling other ships what your intentions are to avoid mishaps, etc.
But over in the Gulf, Ch. 16 is like a bad CB radio. Everybody and their brother is on it; chattering away; hurling racial slurs, usually involving Filipinos (lots of Filipinos work in the area); curses involving your mother; 1970's music broadcast in the wee hours (nothing odder than hearing The Carpenters 50 miles off the coast of Iran at 4 a.m.)
On Ch. 16, esp. in that section of the Gulf, slurs/threats/chatter/etc. is commonplace. So my first thought was that the "explode" comment might not have even come from one of the Iranian craft, but some loser monitoring the events at a shore facility.
Indeed, it's not at all clear that the voice in the Pentagon's audiotape is even Iranian. The Washington Post reports:
Farsi speakers and Iranians told The Washington Post that the accent did not sound Iranian.
Presumably, all the information that we have now about this incident - that the radio communication that the Pentagon released as part of its video might not have come from the Iranian ships, and that the voice might not even be Iranian - was available to the Pentagon - if they were interested - when they released the tape. Why the rush to release this video without checking?
The most plausible explanation was that there was a rush to release the video prior to President Bush's trip to the region, because his key goal was to press the US case for isolating Iran.
And this is similar to what the Iranians have claimed, that the US was hyping whatever happened to try to bolster their case for isolating Iran ahead of the President's trip.
So, as with the release of the National Intelligence Estimate on Iran, where the US intelligence conclusion that Iran did not have a nuclear weapons program followed a period in which the US was claiming that they did and Iran was saying that they did not, and IAEA and Russia were saying that they had no evidence that Iran had a nuclear weapons program, the net effect of this incident is that the credibility of the US on Iran is diminished and the credibility of Iran is increased.
Members of Congress, and Presidential candidates, should be asking questions about the Pentagon's rush to release the tape, with the quite possibly unrelated audio. People in the region are likely to conclude that it is the U.S., not Iran, that is behaving in a dangerously provocative way.
It's difficult to overstate how low the credibility of U.S. statements is in the Middle East right now. It may actually be negative. If the U.S. announces that two plus two is four, some people in the Middle East are going to scratch their heads and say, "Well, until now we thought it was four, but perhaps it is five."
You have to wonder if some folks in the Washington foreign policy establishment are counting the days until they can put the empire under new management.
Sunday, January 13, 2008
Some economic reasons for U.S. staying in Afghanistan
This is part of a much larger article in the MOnthly Review. These factors are usually not mentioned in most accounts of the Afghan mission and never in official pronouncements of reasons for being there.
During the present war in Afghanistan, the U.S. media have generally been quiet about U.S. oil ambitions in the region. Nevertheless, an article in the business section of the New York Times (December 15, 2001) noted that, “The State Department is exploring the potential for post-Taliban energy projects in the region, which has more than 6 percent of the world’s proven oil reserves and almost 40 percent of its gas reserves.” In an Op-Ed piece in the New York Times (January 18, 2002), Richard Butler, of the Council on Foreign Relations, acknowledged that, “The war in Afghanistan…has made the construction of a pipeline across Afghanistan and Pakistan politically possible for the first time since Unocal and the Argentinean company Bridas competed for the Afghan rights in the mid-1990s.” Needless to say, without a strong U.S. military presence in the region, through the establishment of bases as a result of the war, the construction of such a pipeline would almost certainly have proven impracticable.
During the present war in Afghanistan, the U.S. media have generally been quiet about U.S. oil ambitions in the region. Nevertheless, an article in the business section of the New York Times (December 15, 2001) noted that, “The State Department is exploring the potential for post-Taliban energy projects in the region, which has more than 6 percent of the world’s proven oil reserves and almost 40 percent of its gas reserves.” In an Op-Ed piece in the New York Times (January 18, 2002), Richard Butler, of the Council on Foreign Relations, acknowledged that, “The war in Afghanistan…has made the construction of a pipeline across Afghanistan and Pakistan politically possible for the first time since Unocal and the Argentinean company Bridas competed for the Afghan rights in the mid-1990s.” Needless to say, without a strong U.S. military presence in the region, through the establishment of bases as a result of the war, the construction of such a pipeline would almost certainly have proven impracticable.
US foreign military bases.
This is a portion of a much longer article in the Monthly Review. The US insists that there will be no permanent bases in Iraq but nevertheless Bush speaks of the US being in Iraq ten years or so. The U.S. keeps bases as long as it thinks it needs them in most instances.
According to a December 21, 1970 report issued by the Subcommittee on Security Agreements and Commitments Abroad, U.S. Senate Committee on Foreign Relations, “Once an American overseas base is established it takes on a life of its own. Original missions may become outdated but new missions are developed, not only with the intention of keeping the facility going, but often to actually enlarge it. Within the government departments most directly concerned—State and Defense—we found little initiative to reduce or eliminate any of these overseas facilities” (pp. 19-20). In the 1950s and 1960s the United States articulated a specific doctrine of “strategic denial” that argued that no withdrawal should be made from any base that could potentially be acquired thereafter by the Soviet Union. The majority of U.S. bases were justified as “ringing” and “containing” Communism. Yet, upon the collapse of the Soviet Union, the United States sought to retain its entire basing system on the grounds that this was necessary for the global projection of its power and the protection of U.S. interests abroad.
According to a December 21, 1970 report issued by the Subcommittee on Security Agreements and Commitments Abroad, U.S. Senate Committee on Foreign Relations, “Once an American overseas base is established it takes on a life of its own. Original missions may become outdated but new missions are developed, not only with the intention of keeping the facility going, but often to actually enlarge it. Within the government departments most directly concerned—State and Defense—we found little initiative to reduce or eliminate any of these overseas facilities” (pp. 19-20). In the 1950s and 1960s the United States articulated a specific doctrine of “strategic denial” that argued that no withdrawal should be made from any base that could potentially be acquired thereafter by the Soviet Union. The majority of U.S. bases were justified as “ringing” and “containing” Communism. Yet, upon the collapse of the Soviet Union, the United States sought to retain its entire basing system on the grounds that this was necessary for the global projection of its power and the protection of U.S. interests abroad.
This story sounds a bit fishy. While there may be secret talks going on, it is surely doubtful that the US would talk with someone on their most wanted list! I wonder if they are also having secret talks with Osama Bin Laden and Mullah Omar!
The charges about Iranian IEDs seem to be regularly trotted out and then dropped for a while depending it seems on whether the US wants to raise or lower the pressure on Iran. The speedboat incident is just trotted out without any caveats as is common in the media in the west.
From The Sunday TimesJanuary 13, 2008
Iran’s Revolutionary Guard in secret Iraq talks with USMarie Colvin
THE HEAD of the Iranian Revolutionary Guard Corps slipped into the green zone of Baghdad last month to press Tehran’s hardline position over the terms of the current talks with American officials, it was claimed last week.
Iraqi government sources say that Major-General Mohammed Ali Jafari, 50, travelled secretly from Tehran. Jafari appears to have passed through checkpoints on his way into the fortified enclave that contains the American embassy and Iraqi ministries, even though he is on Washington’s “most wanted” list.
Last year Washington declared the guard a “foreign terrorist organisation” and imposed sanctions on it.
One of the accusations that led to the designation was the charge that the Quds Force, a branch of the guard, was supplying rockets, mortars and roadside bombs known as explosively formed projectiles (EFPs) to Shi’ite militias in Iraq.
In recent days there has been a sharp increase in the use of such bombs against American troops, and last weekend five Iranian speedboats were said to have harassed three American Navy ships, radioing a threat to blow them up.
On his tour of the Middle East yesterday President George W Bush put Tehran on notice over its support for the insurgency in Iraq. “Iran’s role in fomenting violence has been exposed,” he said in Kuwait.
Iran and the United States have held three rounds of talks over security in Iraq. They have made little progress so far but are considered a breakthrough because they are the first face-to-face encounters since 1980.
At the insistence of the Americans, the talks between Ryan Crocker, the American ambassador to Iraq, and Hassan Kazemi Qomi, his Iranian counterpart, have been kept to the issue of security in Iraq. But Tehran wants them broadened to include the release of Iranian diplomats being held in Baghdad by the Americans. It is understood Jafari was sent to Baghdad to ensure that this happened.
The charges about Iranian IEDs seem to be regularly trotted out and then dropped for a while depending it seems on whether the US wants to raise or lower the pressure on Iran. The speedboat incident is just trotted out without any caveats as is common in the media in the west.
From The Sunday TimesJanuary 13, 2008
Iran’s Revolutionary Guard in secret Iraq talks with USMarie Colvin
THE HEAD of the Iranian Revolutionary Guard Corps slipped into the green zone of Baghdad last month to press Tehran’s hardline position over the terms of the current talks with American officials, it was claimed last week.
Iraqi government sources say that Major-General Mohammed Ali Jafari, 50, travelled secretly from Tehran. Jafari appears to have passed through checkpoints on his way into the fortified enclave that contains the American embassy and Iraqi ministries, even though he is on Washington’s “most wanted” list.
Last year Washington declared the guard a “foreign terrorist organisation” and imposed sanctions on it.
One of the accusations that led to the designation was the charge that the Quds Force, a branch of the guard, was supplying rockets, mortars and roadside bombs known as explosively formed projectiles (EFPs) to Shi’ite militias in Iraq.
In recent days there has been a sharp increase in the use of such bombs against American troops, and last weekend five Iranian speedboats were said to have harassed three American Navy ships, radioing a threat to blow them up.
On his tour of the Middle East yesterday President George W Bush put Tehran on notice over its support for the insurgency in Iraq. “Iran’s role in fomenting violence has been exposed,” he said in Kuwait.
Iran and the United States have held three rounds of talks over security in Iraq. They have made little progress so far but are considered a breakthrough because they are the first face-to-face encounters since 1980.
At the insistence of the Americans, the talks between Ryan Crocker, the American ambassador to Iraq, and Hassan Kazemi Qomi, his Iranian counterpart, have been kept to the issue of security in Iraq. But Tehran wants them broadened to include the release of Iranian diplomats being held in Baghdad by the Americans. It is understood Jafari was sent to Baghdad to ensure that this happened.
Saturday, January 12, 2008
Philippines: Distribution of Income
This is from the Daily Tribune. These statistics are not too surprising. Politics and the economy are more or less dominated by a group of rich long established families. What is rather surprising at first is the percentage of income that the poor have to pay for their basic food. Increased costs of basic necessities such as food are negating any positive effect of absolute increase in income. The bottom 30 percent of families have less to spend on other basic goods as so much of income is spent on food.
Richest 10% Filipino families corner 36% of income — poll
01/13/2008
A supposed improvement in the economy has been barely contributing to the reduction of poverty in the country, based on a government survey on income disparity released yesterday.
The National Statistics Office (NSO) said the survey showed the richest 10 percent of Filipino families earned P1.08 trillion in 2006 that accounted for 36 percent of total family income during that year.
The share of the upper-class in the society barely changed from 36.3 percent of the total income of families three years ago.
The survey also indicated that income disparity between the poor and the rich is even widening in six regions of the country which it said was based on the Gini coefficient, which is an internationally accepted formula in determining income gaps.
The widening in the wealth disparity was most pronounced in Central Luzon, according to the NSO. “Central Luzon showed the biggest increase in the Gini coefficient to .3994 in 2006 from .3515 in 2003.
The Gini coefficient ranges from 0 to 1, with 0 indicating income equality among families, and 1 indicating absolute inequality.
The gap in family income between the richest and the poorest group narrowed slightly, according to NSO.
In 2006, the total family income of the richest group was about 19 times that of the poorest, while it was 20 times in 2003.
NSO said the total annual family income in 2006 was estimated at P 2.99 trillion, or a 22.7 percent increase from the 2003 estimate of P2.44 trillion. “Total family expenditure was approximately P2.56 trillion, an increase of 25.7 percent over the 2003 estimate of P2.04 trillion,” it added.
In 2006, the average annual income of Filipino families was estimated at P172,000, according to the survey. Across income groups, families in lowest income bracket had an average income of P32,000 a year or under P3,000 a month to P617,000 a year average or P51,400 a month for the highest income group.
The average annual income of P172,000 in 2006 was 16.2 percent higher than the 2003 average of P148,000, according to NSO.
Family spending grew by 18.5 percent during the three years covered by the survey. Average annual expenditure of families increased from P124,000 in 2003 to P147,000 in 2006, or by 18.5 percent.
The average savings per year among Filipino families also barely changed to P25,000 per family in 2006 from P24,000 in 2003. The NSO survey, however, indicated that the bulk of savings were from the richest group surveyed with an average of P156,000 in 2006.
“From 2003 to 2006, annual income among all groups increased. The average annual income of the bottom 30 percent of families increased by around P8,000 a year while that of the upper 70 percent of families, by some P31,000.
Adjusting for inflation rate in the three years covered by the survey, total family income in 2006 of P2.99 trillion would be valued at P2.5 trillion at 2003 prices, the NSO said.
It added total family expenditure in 2006 of P2.56 trillion was valued at P2.14 trillion at 2003 prices.
“In real terms, the total income of families increased slightly by 2.6 percent while the total expenditure increased by 5.1 percent between 2003 and 2006,” according to NSO.
Taking into account the inflation rate, however, the real value of the average savings of Filipino families dropped to P21,000 compared to savings of P24,000 per family in 2003.
The spending pattern of Filipino families particularly among those in the bottom 30 percent income group has changed in 2006, according to the survey.
The survey showed the bottom 30 percent of the families in the income group have increased spendings on food during the years covered.
“In 2006, 59 percent of all expenditures by the 30 percent lowest income group was on food, while it was 48 percent in 2003,” the NSO said.
This means that for every P100 spent by families in the group in 2006, P59 went to food, compared to only P48 in 2003.
“Consequently, there was a decrease in the shares of other expenditure items like house rental, from 12.7 percent to nine percent; transportation and communication, from 6.1 percent to 3.8 percent; and education, from 2.9 percent to 1.3 percent.
Richest 10% Filipino families corner 36% of income — poll
01/13/2008
A supposed improvement in the economy has been barely contributing to the reduction of poverty in the country, based on a government survey on income disparity released yesterday.
The National Statistics Office (NSO) said the survey showed the richest 10 percent of Filipino families earned P1.08 trillion in 2006 that accounted for 36 percent of total family income during that year.
The share of the upper-class in the society barely changed from 36.3 percent of the total income of families three years ago.
The survey also indicated that income disparity between the poor and the rich is even widening in six regions of the country which it said was based on the Gini coefficient, which is an internationally accepted formula in determining income gaps.
The widening in the wealth disparity was most pronounced in Central Luzon, according to the NSO. “Central Luzon showed the biggest increase in the Gini coefficient to .3994 in 2006 from .3515 in 2003.
The Gini coefficient ranges from 0 to 1, with 0 indicating income equality among families, and 1 indicating absolute inequality.
The gap in family income between the richest and the poorest group narrowed slightly, according to NSO.
In 2006, the total family income of the richest group was about 19 times that of the poorest, while it was 20 times in 2003.
NSO said the total annual family income in 2006 was estimated at P 2.99 trillion, or a 22.7 percent increase from the 2003 estimate of P2.44 trillion. “Total family expenditure was approximately P2.56 trillion, an increase of 25.7 percent over the 2003 estimate of P2.04 trillion,” it added.
In 2006, the average annual income of Filipino families was estimated at P172,000, according to the survey. Across income groups, families in lowest income bracket had an average income of P32,000 a year or under P3,000 a month to P617,000 a year average or P51,400 a month for the highest income group.
The average annual income of P172,000 in 2006 was 16.2 percent higher than the 2003 average of P148,000, according to NSO.
Family spending grew by 18.5 percent during the three years covered by the survey. Average annual expenditure of families increased from P124,000 in 2003 to P147,000 in 2006, or by 18.5 percent.
The average savings per year among Filipino families also barely changed to P25,000 per family in 2006 from P24,000 in 2003. The NSO survey, however, indicated that the bulk of savings were from the richest group surveyed with an average of P156,000 in 2006.
“From 2003 to 2006, annual income among all groups increased. The average annual income of the bottom 30 percent of families increased by around P8,000 a year while that of the upper 70 percent of families, by some P31,000.
Adjusting for inflation rate in the three years covered by the survey, total family income in 2006 of P2.99 trillion would be valued at P2.5 trillion at 2003 prices, the NSO said.
It added total family expenditure in 2006 of P2.56 trillion was valued at P2.14 trillion at 2003 prices.
“In real terms, the total income of families increased slightly by 2.6 percent while the total expenditure increased by 5.1 percent between 2003 and 2006,” according to NSO.
Taking into account the inflation rate, however, the real value of the average savings of Filipino families dropped to P21,000 compared to savings of P24,000 per family in 2003.
The spending pattern of Filipino families particularly among those in the bottom 30 percent income group has changed in 2006, according to the survey.
The survey showed the bottom 30 percent of the families in the income group have increased spendings on food during the years covered.
“In 2006, 59 percent of all expenditures by the 30 percent lowest income group was on food, while it was 48 percent in 2003,” the NSO said.
This means that for every P100 spent by families in the group in 2006, P59 went to food, compared to only P48 in 2003.
“Consequently, there was a decrease in the shares of other expenditure items like house rental, from 12.7 percent to nine percent; transportation and communication, from 6.1 percent to 3.8 percent; and education, from 2.9 percent to 1.3 percent.
"Filipino Monkey" may be behind radio threats, ship drivers say
The US military corporate political correctness committee obviously does not rule over the waves. With hits like Operation Enduring Freedom etc. surely this bad guy should be an Iranian or North Korean monkey rather than a Filipino. Anyway why not gender equality and hence a filipina monkey? Aren't there any heckling female voices?
The article does bring into question the US version of events and makes one wonder if the incident's US descriptions aren't to a large degree designed to further the propaganda war against Iran rather than just tell us what happened.
Filipino Monkey’ may be behind radio threats, ship drivers say
By Andrew Scutro and David Brown
Posted : Friday Jan 11, 2008 17:24:25 EST
The threatening radio transmission heard at the end of a video showing harassing maneuvers by Iranian patrol boats in the Strait of Hormuz may have come from a locally famous heckler known among ship drivers as the “Filipino Monkey.”
Since the Jan. 6 incident was announced to the public a day later, the U.S. Navy has said it’s unclear where the voice came from. In the videotape released by the Pentagon on Jan. 8, the screen goes black at the very end and the voice can be heard, distancing it from the scenes on the water.
“We don’t know for sure where they came from,” said Cmdr. Lydia Robertson, spokeswoman for 5th Fleet in Bahrain. “It could have been a shore station.”
While the threat — “I am coming to you. You will explode in a few minutes” — was picked up during the incident, further jacking up the tension, there’s no proof yet of its origin. And several Navy officials have said it’s difficult to figure out who’s talking.
“Based on my experience operating in that part of the world, where there is a lot of maritime activity, trying to discern [who is speaking on the radio channel] is very hard to do,” Chief of Naval Operations Adm. Gary Roughead told Navy Times during a brief telephone interview today.
Indeed, the voice in the audio sounds different from the one belonging to an Iranian officer shown speaking to the cruiser Port Royal over a radio from a small open boat in the video released by Iranian authorities. He is shown in a radio exchange at one point asking the U.S. warship to change from the common bridge-to-bridge channel 16 to another channel, perhaps to speak to the Navy without being interrupted.
Further, there’s none of the background noise in the audio released by the U.S. that would have been picked up by a radio handset in an open boat.
So with Navy officials unsure and the Iranians accusing the U.S. of fabrications, whose voice was it? In recent years, American ships operating in the Middle East have had to contend with a mysterious but profane voice known by the ethnically insulting handle of “Filipino Monkey,” likely more than one person, who listens in on ship-to-ship radio traffic and then jumps on the net shouting insults and jabbering vile epithets.
Navy women — a helicopter pilot hailing a tanker, for example — who are overheard on the radio are said to suffer particularly degrading treatment.
Several Navy ship drivers interviewed by Navy Times are raising the possibility that the Monkey, or an imitator, was indeed featured in that video.
Rick Hoffman, a retired captain who commanded the cruiser Hue City and spent many of his 17 years at sea in the Gulf was subject to the renegade radio talker repeatedly, often without pause during the so-called “Tanker Wars” of the late 1980s.
“For 25 years there’s been this mythical guy out there who, hour after hour, shouts obscenities and threats,” he said. “He could be tied up pierside somewhere or he could be on the bridge of a merchant ship.”
And the Monkey has stamina.
“He used to go all night long. The guy is crazy,” he said. “But who knows how many Filipino Monkeys there are? Could it have been a spurious transmission? Absolutely.”
Furthermore, Hoffman said radio signals have a way of traveling long distances in that area. “Under certain weather conditions I could hear Bahrain from the Strait of Hormuz.”
Cmdr. Jeff Davis, a Navy spokesman at the Pentagon, could not say if the voice belonged to the heckler.
“It’s an international circuit and we’ve said all along there were other ships and shore stations in the area,” he said.
When asked if U.S. officials considered whether the threats came from someone besides the Iranians when releasing the video and audio, Roughead said: “The reason there is audio superimposed over the video is it gives you a better idea of what is happening.”
Similarly, Davis said the audio was part of the “totality” of the situation and helped show the “aggressive behavior.”
Another former cruiser skipper said he thought the Monkey might be behind the audio threats when he first heard them earlier this week.
“It wouldn’t have surprised me at all,” he said. “There’s all kinds of chatter on Channel 16. Anybody with a receiver and transmitter can hear something’s going on. It was entirely plausible and consistent with the radio environment to interject themselves and make a threatening comment and think they’re being funny.”
This former skipper also noted how quiet and clean the radio “threat” was, especially when radio calls from small boats in the chop are noisy and cluttered.
“It’s a tough environment, you’re bouncing around, moving fast, lots of wind, noise. It’s not a serene environment,” he said. “That sounded like somebody on the beach or a large ship going by.”
He said he and others believe that the Filipino Monkey is comprised of several people, and whoever gets on Channel 16 to heckle instantly gets the monicker.
“It was just a gut feeling, something the merchants did. Guys would get bored, one guy hears it, comes back a year later and does it for himself,” he said. “I never thought it was one, rather it was part of the woodwork.”
The former skipper noted that he warned his crew about hecklers when preparing to transit Hormuz. “I tell them they’ll hear things on there that will be insulting,” he said. “You tell your people that you’ll hear things that are strange, insulting, aggravating, but you need to maintain a professional posture.”
A civilian mariner with experience in that region said the Filipino Monkey phenomenon is worldwide, and has been going on for years.
“They come on and say ‘Filipino Monkey’ in a strange voice. They might say it two or three times. You’re standing watch on bridge and you’re monitoring Channel 16 and all of a sudden it comes over the radio. It can happen anytime. It’s been a joke out there for years.”
While it happens all over the world, it’s more likely to occur around the Strait of Hormuz because there is so much shipping traffic, he said.
The article does bring into question the US version of events and makes one wonder if the incident's US descriptions aren't to a large degree designed to further the propaganda war against Iran rather than just tell us what happened.
Filipino Monkey’ may be behind radio threats, ship drivers say
By Andrew Scutro and David Brown
Posted : Friday Jan 11, 2008 17:24:25 EST
The threatening radio transmission heard at the end of a video showing harassing maneuvers by Iranian patrol boats in the Strait of Hormuz may have come from a locally famous heckler known among ship drivers as the “Filipino Monkey.”
Since the Jan. 6 incident was announced to the public a day later, the U.S. Navy has said it’s unclear where the voice came from. In the videotape released by the Pentagon on Jan. 8, the screen goes black at the very end and the voice can be heard, distancing it from the scenes on the water.
“We don’t know for sure where they came from,” said Cmdr. Lydia Robertson, spokeswoman for 5th Fleet in Bahrain. “It could have been a shore station.”
While the threat — “I am coming to you. You will explode in a few minutes” — was picked up during the incident, further jacking up the tension, there’s no proof yet of its origin. And several Navy officials have said it’s difficult to figure out who’s talking.
“Based on my experience operating in that part of the world, where there is a lot of maritime activity, trying to discern [who is speaking on the radio channel] is very hard to do,” Chief of Naval Operations Adm. Gary Roughead told Navy Times during a brief telephone interview today.
Indeed, the voice in the audio sounds different from the one belonging to an Iranian officer shown speaking to the cruiser Port Royal over a radio from a small open boat in the video released by Iranian authorities. He is shown in a radio exchange at one point asking the U.S. warship to change from the common bridge-to-bridge channel 16 to another channel, perhaps to speak to the Navy without being interrupted.
Further, there’s none of the background noise in the audio released by the U.S. that would have been picked up by a radio handset in an open boat.
So with Navy officials unsure and the Iranians accusing the U.S. of fabrications, whose voice was it? In recent years, American ships operating in the Middle East have had to contend with a mysterious but profane voice known by the ethnically insulting handle of “Filipino Monkey,” likely more than one person, who listens in on ship-to-ship radio traffic and then jumps on the net shouting insults and jabbering vile epithets.
Navy women — a helicopter pilot hailing a tanker, for example — who are overheard on the radio are said to suffer particularly degrading treatment.
Several Navy ship drivers interviewed by Navy Times are raising the possibility that the Monkey, or an imitator, was indeed featured in that video.
Rick Hoffman, a retired captain who commanded the cruiser Hue City and spent many of his 17 years at sea in the Gulf was subject to the renegade radio talker repeatedly, often without pause during the so-called “Tanker Wars” of the late 1980s.
“For 25 years there’s been this mythical guy out there who, hour after hour, shouts obscenities and threats,” he said. “He could be tied up pierside somewhere or he could be on the bridge of a merchant ship.”
And the Monkey has stamina.
“He used to go all night long. The guy is crazy,” he said. “But who knows how many Filipino Monkeys there are? Could it have been a spurious transmission? Absolutely.”
Furthermore, Hoffman said radio signals have a way of traveling long distances in that area. “Under certain weather conditions I could hear Bahrain from the Strait of Hormuz.”
Cmdr. Jeff Davis, a Navy spokesman at the Pentagon, could not say if the voice belonged to the heckler.
“It’s an international circuit and we’ve said all along there were other ships and shore stations in the area,” he said.
When asked if U.S. officials considered whether the threats came from someone besides the Iranians when releasing the video and audio, Roughead said: “The reason there is audio superimposed over the video is it gives you a better idea of what is happening.”
Similarly, Davis said the audio was part of the “totality” of the situation and helped show the “aggressive behavior.”
Another former cruiser skipper said he thought the Monkey might be behind the audio threats when he first heard them earlier this week.
“It wouldn’t have surprised me at all,” he said. “There’s all kinds of chatter on Channel 16. Anybody with a receiver and transmitter can hear something’s going on. It was entirely plausible and consistent with the radio environment to interject themselves and make a threatening comment and think they’re being funny.”
This former skipper also noted how quiet and clean the radio “threat” was, especially when radio calls from small boats in the chop are noisy and cluttered.
“It’s a tough environment, you’re bouncing around, moving fast, lots of wind, noise. It’s not a serene environment,” he said. “That sounded like somebody on the beach or a large ship going by.”
He said he and others believe that the Filipino Monkey is comprised of several people, and whoever gets on Channel 16 to heckle instantly gets the monicker.
“It was just a gut feeling, something the merchants did. Guys would get bored, one guy hears it, comes back a year later and does it for himself,” he said. “I never thought it was one, rather it was part of the woodwork.”
The former skipper noted that he warned his crew about hecklers when preparing to transit Hormuz. “I tell them they’ll hear things on there that will be insulting,” he said. “You tell your people that you’ll hear things that are strange, insulting, aggravating, but you need to maintain a professional posture.”
A civilian mariner with experience in that region said the Filipino Monkey phenomenon is worldwide, and has been going on for years.
“They come on and say ‘Filipino Monkey’ in a strange voice. They might say it two or three times. You’re standing watch on bridge and you’re monitoring Channel 16 and all of a sudden it comes over the radio. It can happen anytime. It’s been a joke out there for years.”
While it happens all over the world, it’s more likely to occur around the Strait of Hormuz because there is so much shipping traffic, he said.
Friday, January 11, 2008
John Pilger on the War in Afghanistan
This seems a relevant article at this time since candidates such as Obama want to shift military resources to Afghanistan and the war against terror and out of Iraq. The Bush administration too seems bent on increasing the pressure on the Taliban and of course has been trying to get NATO to commit more forces and for a longer time to Afghanistan. To get a good snapshot of the neo-conservative global strategy I recommend their own website NACP.
Pilger doesn't bother to mention that the war was illegal and never covered by UN resolution until after the fact--as of course is the Iraq occupation! On US policy I commend the book by Gwynne Dyer, FUTURE:TENSE McLelland and Stewart 2006.
The "Good Good War" Is A Bad War
By John Pilger
10/01/08 "ICH" -- - In his latest article for the New Statesman, John Pilger describes how the invasion of Afghanistan, which was widely supported in the West as a 'good war' and justifiable response to 9/11, was actually planned months before 9/11 and is the latest instalment of 'a great game'.
"To me, I confess, [countries] are pieces on a chessboard upon which is being played out a game for dominion of the world."
Lord Curzon, viceroy of India, speaking about Afghanistan, 1898
I had suggested to Marina that we meet in the safety of the Intercontinental Hotel, where foreigners stay in Kabul, but she said no. She had been there once and government agents, suspecting she was Rawa, had arrested her. We met instead at a safe house, reached through contours of bombed rubble that was once streets, where people live like earthquake victims awaiting rescue.
Rawa is the Revolutionary Association of the Women of Afghanistan, which since 1977 has alerted the world to the suffering of women and girls in that country. There is no organisation on earth like it. It is the high bar of feminism, home of the bravest of the brave. Year after year, Rawa agents have travelled secretly through Afghanistan, teaching at clandestine girls' schools, ministering to isolated and brutalised women, recording outrages on cameras concealed beneath their burqas. They were the Taliban regime's implacable foes when the word Taliban was barely heard in the west: when the Clinton administration was secretly courting the mullahs so that the oil company Unocal could build a pipeline across Afghanistan from the Caspian.
Indeed, Rawa's understanding of the designs and hypocrisy of western governments informs a truth about Afghanistan excluded from news, now reduced to a drama of British squaddies besieged by a demonic enemy in a "good war". When we met, Marina was veiled to conceal her identity. Marina is her nom de guerre. She said: "We, the women of Afghanistan, only became a cause in the west following 11 September 2001, when the Taliban suddenly became the official enemy of America. Yes, they persecuted women, but they were not unique, and we have resented the silence in the west over the atrocious nature of the western-backed warlords, who are no different. They rape and kidnap and terrorise, yet they hold seats in [Hamid] Karzai's government. In some ways, we were more secure under the Taliban. You could cross Afghanistan by road and feel secure. Now, you take your life into your hands."
The reason the United States gave for invading Afghanistan in October 2001 was "to destroy the infrastructure of al-Qaeda, the perpetrators of 9/11". The women of Rawa say this is false. In a rare statement on 4 December that went unreported in Britain, they said: "By experience, [we have found] that the US does not want to defeat the Taliban and al-Qaeda, because then they will have no excuse to stay in Afghanistan and work towards the realisation of their economic, political and strategic interests in the region."
The truth about the "good war" is to be found in compelling evidence that the 2001 invasion, widely supported in the west as a justifiable response to the 11 September attacks, was actually planned two months prior to 9/11 and that the most pressing problem for Washington was not the Taliban's links with Osama Bin Laden, but the prospect of the Taliban mullahs losing control of Afghanistan to less reliable mujahedin factions, led by warlords who had been funded and armed by the CIA to fight America's proxy war against the Soviet occupiers in the 1980s. Known as the Northern Alliance, these mujahedin had been largely a creation of Washington, which believed the "jihadi card" could be used to bring down the Soviet Union. The Taliban were a product of this and, during the Clinton years, they were admired for their "discipline". Or, as the Wall Street Journal put it, "[the Taliban] are the players most capable of achieving peace in Afghanistan at this moment in history".
The "moment in history" was a secret memorandum of understanding the mullahs had signed with the Clinton administration on the pipeline deal. However, by the late 1990s, the Northern Alliance had encroached further and further on territory controlled by the Taliban, whom, as a result, were deemed in Washington to lack the "stability" required of such an important client. It was the consistency of this client relationship that had been a prerequisite of US support, regardless of the Taliban's aversion to human rights. (Asked about this, a state department briefer had predicted that "the Taliban will develop like the Saudis did", with a pro-American economy, no democracy and "lots of sharia law", which meant the legalised persecution of women. "We can live with that," he said.)
By early 2001, convinced it was the presence of Osama Bin Laden that was souring their relationship with Washington, the Taliban tried to get rid of him. Under a deal negotiated by the leaders of Pakistan's two Islamic parties, Bin Laden was to be held under house arrest in Peshawar. A tribunal of clerics would then hear evidence against him and decide whether to try him or hand him over to the Americans. Whether or not this would have happened, Pakistan's Pervez Musharraf vetoed the plan. According to the then Pakistani foreign minister, Niaz Naik, a senior US diplomat told him on 21 July 2001 that it had been decided to dispense with the Taliban "under a carpet of bombs".
Acclaimed as the first "victory" in the "war on terror", the attack on Afghanistan in October 2001 and its ripple effect caused the deaths of thousands of civilians who, even more than Iraqis, remain invisible to western eyes. The family of Gulam Rasul is typical. It was 7.45am on 21 October. The headmaster of a school in the town of Khair Khana, Rasul had just finished eating breakfast with his family and had walked outside to chat to a neighbour. Inside the house were his wife, Shiekra, his four sons, aged three to ten, his brother and his wife, his sister and her husband. He looked up to see an aircraft weaving in the sky, then his house exploded in a fireball behind him. Nine people died in this attack by a US F-16 dropping a 500lb bomb. The only survivor was his nine-year-old son, Ahmad Bilal. "Most of the people killed in this war are not Taliban; they are innocents," Gulam Rasul told me. "Was the killing of my family a mistake? No, it was not. They fly their planes and look down on us, the mere Afghan people, who have no planes, and they bomb us for our birthright, and with all contempt."
There was the wedding party in the village of Niazi Qala, 100km south of Kabul, to celebrate the marriage of the son of a respected farmer. By all accounts it was a wonderfully boisterous affair, with music and singing. The roar of aircraft started when everyone was asleep, at about three in the morning. According to a United Nations report, the bombing lasted two hours and killed 52 people: 17 men, ten women and 25 children, many of whom were found blown to bits where they had desperately sought refuge, in a dried-up pond. Such slaughter is not uncommon, and these days the dead are described as "Taliban"; or, if they are children, they are said to be "partly to blame for being at a site used by militants" – according to the BBC, speaking to a US military spokesman.
The British military have played an important part in this violence, having stepped up high-altitude bombing by up to 30 per cent since they took over command of Nato forces in Afghanistan in May 2006. This translated to more than 6,200 Afghan deaths last year. In December, a contrived news event was the "fall" of a "Taliban stronghold", Musa Qala, in southern Afghanistan. Puppet government forces were allowed to "liberate" rubble left by American B-52s.
What justifies this? Various fables have been spun – "building democracy" is one. "The war on drugs" is the most perverse. When the Americans invaded Afghanistan in 2001 they had one striking success. They brought to an abrupt end a historic ban on opium production that the Taliban regime had achieved. A UN official in Kabul described the ban to me as "a modern miracle". The miracle was quickly rescinded. As a reward for supporting the Karzai "democracy", the Americans allowed Northern Alliance warlords to replant the country's entire opium crop in 2002. Twenty-eight out of the 32 provinces instantly went under cultivation. Today, 90 per cent of world trade in opium originates in Afghanistan. In 2005, a British government report estimated that 35,000 children in this country were using heroin. While the British taxpayer pays for a £1bn military super-base in Helmand Province and the second-biggest British embassy in the world, in Kabul, peanuts are spent on drug rehabilitation at home.
Tony Blair once said memorably: "To the Afghan people, we make this commitment. We will not walk away . . . [We will offer] some way out of the poverty that is your miserable existence." I thought about this as I watched children play in a destroyed cinema. They were illiterate and so could not read the poster warning that unexploded cluster bombs lay in the debris.
"After five years of engagement," reported James Fergusson in the London Independent on 16 December, "the [UK] Department for International Development had spent just £390m on Afghan projects." Unusually, Fergusson has had meetings with Taliban who are fighting the British. "They remained charming and courteous throughout," he wrote of one visit in February. "This is the beauty of malmastia, the Pashtun tradition of hospitality towards strangers. So long as he comes unarmed, even a mortal enemy can rely on a kind reception. The opportunity for dialogue that malmastia affords is unique."
This "opportunity for dialogue" is a far cry from the surrender-or-else offers made by the government of Gordon Brown. What Brown and his Foreign Office advisers wilfully fail to understand is that the tactical victory in Afghanistan in 2001, achieved with bombs, has become a strategic disaster in south Asia. Exacerbated by the assassination of Benazir Bhutto, the current turmoil in Pakistan has its contemporary roots in a Washington-contrived war in neighbouring Afghanistan that has alienated the Pashtuns who inhabit much of the long border area between the two countries. This is also true of most Pakistanis, who, according to opinion polls, want their government to negotiate a regional peace, rather than play a prescribed part in a rerun of Lord Curzon's Great Game.
www.johnpilger.com
Pilger doesn't bother to mention that the war was illegal and never covered by UN resolution until after the fact--as of course is the Iraq occupation! On US policy I commend the book by Gwynne Dyer, FUTURE:TENSE McLelland and Stewart 2006.
The "Good Good War" Is A Bad War
By John Pilger
10/01/08 "ICH" -- - In his latest article for the New Statesman, John Pilger describes how the invasion of Afghanistan, which was widely supported in the West as a 'good war' and justifiable response to 9/11, was actually planned months before 9/11 and is the latest instalment of 'a great game'.
"To me, I confess, [countries] are pieces on a chessboard upon which is being played out a game for dominion of the world."
Lord Curzon, viceroy of India, speaking about Afghanistan, 1898
I had suggested to Marina that we meet in the safety of the Intercontinental Hotel, where foreigners stay in Kabul, but she said no. She had been there once and government agents, suspecting she was Rawa, had arrested her. We met instead at a safe house, reached through contours of bombed rubble that was once streets, where people live like earthquake victims awaiting rescue.
Rawa is the Revolutionary Association of the Women of Afghanistan, which since 1977 has alerted the world to the suffering of women and girls in that country. There is no organisation on earth like it. It is the high bar of feminism, home of the bravest of the brave. Year after year, Rawa agents have travelled secretly through Afghanistan, teaching at clandestine girls' schools, ministering to isolated and brutalised women, recording outrages on cameras concealed beneath their burqas. They were the Taliban regime's implacable foes when the word Taliban was barely heard in the west: when the Clinton administration was secretly courting the mullahs so that the oil company Unocal could build a pipeline across Afghanistan from the Caspian.
Indeed, Rawa's understanding of the designs and hypocrisy of western governments informs a truth about Afghanistan excluded from news, now reduced to a drama of British squaddies besieged by a demonic enemy in a "good war". When we met, Marina was veiled to conceal her identity. Marina is her nom de guerre. She said: "We, the women of Afghanistan, only became a cause in the west following 11 September 2001, when the Taliban suddenly became the official enemy of America. Yes, they persecuted women, but they were not unique, and we have resented the silence in the west over the atrocious nature of the western-backed warlords, who are no different. They rape and kidnap and terrorise, yet they hold seats in [Hamid] Karzai's government. In some ways, we were more secure under the Taliban. You could cross Afghanistan by road and feel secure. Now, you take your life into your hands."
The reason the United States gave for invading Afghanistan in October 2001 was "to destroy the infrastructure of al-Qaeda, the perpetrators of 9/11". The women of Rawa say this is false. In a rare statement on 4 December that went unreported in Britain, they said: "By experience, [we have found] that the US does not want to defeat the Taliban and al-Qaeda, because then they will have no excuse to stay in Afghanistan and work towards the realisation of their economic, political and strategic interests in the region."
The truth about the "good war" is to be found in compelling evidence that the 2001 invasion, widely supported in the west as a justifiable response to the 11 September attacks, was actually planned two months prior to 9/11 and that the most pressing problem for Washington was not the Taliban's links with Osama Bin Laden, but the prospect of the Taliban mullahs losing control of Afghanistan to less reliable mujahedin factions, led by warlords who had been funded and armed by the CIA to fight America's proxy war against the Soviet occupiers in the 1980s. Known as the Northern Alliance, these mujahedin had been largely a creation of Washington, which believed the "jihadi card" could be used to bring down the Soviet Union. The Taliban were a product of this and, during the Clinton years, they were admired for their "discipline". Or, as the Wall Street Journal put it, "[the Taliban] are the players most capable of achieving peace in Afghanistan at this moment in history".
The "moment in history" was a secret memorandum of understanding the mullahs had signed with the Clinton administration on the pipeline deal. However, by the late 1990s, the Northern Alliance had encroached further and further on territory controlled by the Taliban, whom, as a result, were deemed in Washington to lack the "stability" required of such an important client. It was the consistency of this client relationship that had been a prerequisite of US support, regardless of the Taliban's aversion to human rights. (Asked about this, a state department briefer had predicted that "the Taliban will develop like the Saudis did", with a pro-American economy, no democracy and "lots of sharia law", which meant the legalised persecution of women. "We can live with that," he said.)
By early 2001, convinced it was the presence of Osama Bin Laden that was souring their relationship with Washington, the Taliban tried to get rid of him. Under a deal negotiated by the leaders of Pakistan's two Islamic parties, Bin Laden was to be held under house arrest in Peshawar. A tribunal of clerics would then hear evidence against him and decide whether to try him or hand him over to the Americans. Whether or not this would have happened, Pakistan's Pervez Musharraf vetoed the plan. According to the then Pakistani foreign minister, Niaz Naik, a senior US diplomat told him on 21 July 2001 that it had been decided to dispense with the Taliban "under a carpet of bombs".
Acclaimed as the first "victory" in the "war on terror", the attack on Afghanistan in October 2001 and its ripple effect caused the deaths of thousands of civilians who, even more than Iraqis, remain invisible to western eyes. The family of Gulam Rasul is typical. It was 7.45am on 21 October. The headmaster of a school in the town of Khair Khana, Rasul had just finished eating breakfast with his family and had walked outside to chat to a neighbour. Inside the house were his wife, Shiekra, his four sons, aged three to ten, his brother and his wife, his sister and her husband. He looked up to see an aircraft weaving in the sky, then his house exploded in a fireball behind him. Nine people died in this attack by a US F-16 dropping a 500lb bomb. The only survivor was his nine-year-old son, Ahmad Bilal. "Most of the people killed in this war are not Taliban; they are innocents," Gulam Rasul told me. "Was the killing of my family a mistake? No, it was not. They fly their planes and look down on us, the mere Afghan people, who have no planes, and they bomb us for our birthright, and with all contempt."
There was the wedding party in the village of Niazi Qala, 100km south of Kabul, to celebrate the marriage of the son of a respected farmer. By all accounts it was a wonderfully boisterous affair, with music and singing. The roar of aircraft started when everyone was asleep, at about three in the morning. According to a United Nations report, the bombing lasted two hours and killed 52 people: 17 men, ten women and 25 children, many of whom were found blown to bits where they had desperately sought refuge, in a dried-up pond. Such slaughter is not uncommon, and these days the dead are described as "Taliban"; or, if they are children, they are said to be "partly to blame for being at a site used by militants" – according to the BBC, speaking to a US military spokesman.
The British military have played an important part in this violence, having stepped up high-altitude bombing by up to 30 per cent since they took over command of Nato forces in Afghanistan in May 2006. This translated to more than 6,200 Afghan deaths last year. In December, a contrived news event was the "fall" of a "Taliban stronghold", Musa Qala, in southern Afghanistan. Puppet government forces were allowed to "liberate" rubble left by American B-52s.
What justifies this? Various fables have been spun – "building democracy" is one. "The war on drugs" is the most perverse. When the Americans invaded Afghanistan in 2001 they had one striking success. They brought to an abrupt end a historic ban on opium production that the Taliban regime had achieved. A UN official in Kabul described the ban to me as "a modern miracle". The miracle was quickly rescinded. As a reward for supporting the Karzai "democracy", the Americans allowed Northern Alliance warlords to replant the country's entire opium crop in 2002. Twenty-eight out of the 32 provinces instantly went under cultivation. Today, 90 per cent of world trade in opium originates in Afghanistan. In 2005, a British government report estimated that 35,000 children in this country were using heroin. While the British taxpayer pays for a £1bn military super-base in Helmand Province and the second-biggest British embassy in the world, in Kabul, peanuts are spent on drug rehabilitation at home.
Tony Blair once said memorably: "To the Afghan people, we make this commitment. We will not walk away . . . [We will offer] some way out of the poverty that is your miserable existence." I thought about this as I watched children play in a destroyed cinema. They were illiterate and so could not read the poster warning that unexploded cluster bombs lay in the debris.
"After five years of engagement," reported James Fergusson in the London Independent on 16 December, "the [UK] Department for International Development had spent just £390m on Afghan projects." Unusually, Fergusson has had meetings with Taliban who are fighting the British. "They remained charming and courteous throughout," he wrote of one visit in February. "This is the beauty of malmastia, the Pashtun tradition of hospitality towards strangers. So long as he comes unarmed, even a mortal enemy can rely on a kind reception. The opportunity for dialogue that malmastia affords is unique."
This "opportunity for dialogue" is a far cry from the surrender-or-else offers made by the government of Gordon Brown. What Brown and his Foreign Office advisers wilfully fail to understand is that the tactical victory in Afghanistan in 2001, achieved with bombs, has become a strategic disaster in south Asia. Exacerbated by the assassination of Benazir Bhutto, the current turmoil in Pakistan has its contemporary roots in a Washington-contrived war in neighbouring Afghanistan that has alienated the Pashtuns who inhabit much of the long border area between the two countries. This is also true of most Pakistanis, who, according to opinion polls, want their government to negotiate a regional peace, rather than play a prescribed part in a rerun of Lord Curzon's Great Game.
www.johnpilger.com
Thursday, January 10, 2008
Economic indoctrination
This is from Adbusters. Many of the comments on this article claim that the author oversimplifies and to some extent misrepresents Mankiw. Myself, I find the author rather mild in his critique. I find orthodox economics a combination of ideology often with the addition of mathematical models. The whole aim of the "science" is to obscure the most important aspects of an economy such as who owns the means of production, how what is produced is appropriated, the contrast between effective demand (backed by funds) and needs that can be more urgent but are not even factored into the economic picture since they are not effective (backed by money). The market is a system of rationing that rations goods on the basis of money. If you have no money but are starving, need health care or whatever, then you don't enter the picture. Of course concepts such as surplus value, contradictions in the economy and their causes are entirely missing.
As the article notes Mankiw and other orthodox economists recognise problems with markets. For example they do not price externalities such as pollution. Many orthodox economists including Mankiw if one commetator on the article is correct, believe in measures such as carbon taxes as a "market" solution to one type of solution. This is misnamed probably deliberately since it is precisely not a market solution but a government regulation a fiat solution but within a market economy. Because it is within a market economy it will provide an incentive not to pollute and also collects money that can be used perhaps to compensate for some of the damage done by the pollution etc.
Economic Indoctrination
From Adbusters #75, JAN-FEB 2008
You might not have heard of N. Gregory Mankiw. The Harvard economics professor and former adviser to George W. Bush is one of the most gifted economists of our generation. He is also one of the most effective and talented propagandists of our times. His target: young economics students. His field of operation: the world’s universities. His weapon: the best selling textbook in the world. It includes 36 chapters and 800 pages of nice colors, graphs, cool stories and interesting asides. Don’t worry if you or your kids don’t speak English, Mankiw’s text surely exists in your language.
Gregory Mankiw is one of the most effective and talented propagandists of our times. His target: young economics students.But what is most worrisome is that Mankiw’s text presents economics as a unified discipline, entirely committed to the neoliberal agenda. Mankiw believes that markets are the solution to everything – and he would like students to think likewise. According to Mankiw, if a problem persists, it can only be for one of two reasons: the market is imperfect, or it is inexistent. No other explanation for persisting economic or social problems is permitted.
Unemployment is an example of the market being imperfect. For Mankiw, if unemployment exists, it is only because of human inventions such as unemployment benefits, trade unions and minimum wages. Without them, there cannot be unemployment. Mankiw presents this view as being consensual among economists. In fact, quite a few of them admit that the labor market is a very special “market” indeed, where the price – the wage – is not set the same way as the price of other “goods,” say, tomatoes. As Alan Krueger has put it, “it is a gross oversimplification to say that ‘wages are set by the competitive forces of supply and demand,’ or that there is a unique, market-determined wage.”
This specificity in the way in which wages are set is one of the reasons why 600 economists (including stars like Kenneth Arrow, Robert Solow and Joseph Stiglitz) have recently argued in favor of an increase of the US minimum wage. But when students and workers at Harvard asked for a “living wage,” Mankiw opposed it. As he told Harvard Magazine in 2001, raising, even modestly, the minimum wage for janitors at Harvard would “compromise the university’s commitment to the creation and dissemination of knowledge.” No kidding. Of course, Mankiw does not discuss the possibility that the salary of tenured professors might be above its “equilibrium” value; not to mention the very existence of tenure, which goes against the principles of a perfectly competitive labor market – for academics.
Pollution is an example of the inexistent market. Mankiw admits that in some cases, markets do not ensure that the environment is clean and the result is excessive pollution (what economists call a “negative externality”). But what is the solution to pollution? According to Mankiw, it is to define property rights to pollute. Public authorities issue “pollution permits” to polluting companies (who then cannot pollute more than the amount covered by the permits they hold). Companies buy and sell these permits on the market, depending on how much they will pollute in a year. The fewer the permits, the higher their price and the higher the incentives for firms to reduce their pollution. This system is not stupid. Indeed, there are instances where such permit systems might work to solve simple pollution problems. But the problem is that, to the amazement of his students, Mankiw never mentions self-restraint, and downplays government regulation as a way to regulate production and diminish consumption or waste. Nor does he bring up the imperative to use renewable sources of energy. In fact, Mankiw even insists in his textbook that we are not running out of resources (because if that were the case, the price of oil would be much higher than it is now). Climate change is a critical issue, caused by ever-growing economic activity – but it doesn’t even merit an index entry.
Principles of Economics
by N. Gregory Mankiw
Incredibly, in Mankiw’s chapter on growth, the only two factors of production are capital and labor. Workers and firms do not use land nor electricity, gas or coal. They produce with their hands and their brains, and work on machines that run day and night on . . . well on what, exactly? Nobody knows. But what is sure is that it’s not energy. As natural resources and energy are absent in Mankiw’s model, they cannot become a problem – for economists, that is.
Some of the students I had at Harvard have described Mankiw’s course to me during private conversations as “massive conservative propaganda.” One of them told me that he thought that Mankiw manages to “indoctrinate a whole generation.” In 2003, a protest against a similar course then proposed by professor Marty Feldstein, an ex-adviser to President Reagan, led to the creation of an alternative intro economics course, taught by radical economist Steve Marglin. But while Mankiw’s course gives the required credits to students, Marglin’s does not. As a result, Mankiw has around 800 students, and Marglin 100. Not to mention the more than 100,000 students around the globe who learn from Mankiw’s textbook.
According to Mankiw, since markets are a good way to organize economic activity, supply and demand is just about all you need to know in economics. Whatever you desire, you can pay for in the market: tomatoes, health care, housing, a car. That’s demand. On the other side of the market, firms compete to supply the consumers with the latest cool clothes, or mobile phone or housing. That’s supply. When supply is higher than demand, the price falls (holiday trips to a country at war). When demand is higher than supply, the price rises (a war in the Ivory Coast reduces the supply of cocoa). And supply and demand apply to absolutely every single issue you can think of, including organ scarcity. But Mankiw’s text is all about trivial choices, such as how many slices of pizza you are willing to give up to buy yourself an extra can of Coke. This method is extremely effective in hiding the magnitude of what is at stake. The reactions of the students would not be the same if the textbook addressed how much health care people have to give up to be able to buy basic food. Also, the very notion of “need” is absent from Mankiw’s text. One may wonder how students would feel if we discussed the fact that a millionaire’s desire for a yacht will always be met because it is backed by money, while a poor family’s need for a roof wouldn’t. But such discussions are avoided.
By repeating his trivial examples, Mankiw accustoms the students to the idea of individual choices and preferences. The words “poor” and “rich” are rarely used. But, more surprisingly, there is also no mention of the power of corporations to shape tastes. This is because Mankiw’s world is a world of small firms operating on perfectly competitive markets. “Corporate America” is not part of the picture. No MacDonald’s, no Nike, no Microsoft.
Also, Mankiw downplays inequality, even if the growing gap between rich and poor in the US over the last decade has commanded the attention of more and more American economists, even within the mainstream. But Mankiw is not one of them. True, he admits that there is more disparity in the US than in Europe (even if he forgets to mention that this was not the case in the 60s). But he goes on to remark that there is less disparity in the US than in Brazil and China. So we can all relax.
Mankiw knows that the vast majority of his students are not going to become economics majors. He is not interested in training economists – his textbook is too simplistic to prepare a student for advanced study in economics. As he explicitly tells his teaching fellows, Mankiw’s interest is in shaping the minds of thousands of citizens and future leaders around the world. Mankiw’s world is one where “there is no such thing as a society.” Rather, the world is made up of isolated individuals. But it is a world where fairness prevails: everybody gets what they deserve. It is also a world where, thanks to the magic effect of markets, private enterprise and property rights, standards of living rise constantly. It’s a beautiful world . . . if only it existed.
While Mankiw’s text is easy for professors to use, it oversimplifies economic theory and leaves out the ways in which markets can degrade human well-being, undermine societies, and threaten the planet. Each year, tens of thousands of students go out into the world, with Mankiw’s biases as a roadmap to the future. But we know that the neoliberal agenda is more and more disputed outside universities. And within universities, alternative textbooks are flourishing. One can thus hope that these new textbooks, with their greater relevance to real world problems – and their better acknowledgment of the diversity and complexity of economic thought – will soon out-compete Mankiw’s bible. As a believer in competition, Professor Mankiw could only consider this to be fair game.
_Gilles Raveaud obtained his PhD in economics from the University Paris-X Nanterre, France, and was a teaching fellow for Greg Mankiw at Harvard in 2006 and 2007. He is a co-founder of the “post-autistic economics movement.”
As the article notes Mankiw and other orthodox economists recognise problems with markets. For example they do not price externalities such as pollution. Many orthodox economists including Mankiw if one commetator on the article is correct, believe in measures such as carbon taxes as a "market" solution to one type of solution. This is misnamed probably deliberately since it is precisely not a market solution but a government regulation a fiat solution but within a market economy. Because it is within a market economy it will provide an incentive not to pollute and also collects money that can be used perhaps to compensate for some of the damage done by the pollution etc.
Economic Indoctrination
From Adbusters #75, JAN-FEB 2008
You might not have heard of N. Gregory Mankiw. The Harvard economics professor and former adviser to George W. Bush is one of the most gifted economists of our generation. He is also one of the most effective and talented propagandists of our times. His target: young economics students. His field of operation: the world’s universities. His weapon: the best selling textbook in the world. It includes 36 chapters and 800 pages of nice colors, graphs, cool stories and interesting asides. Don’t worry if you or your kids don’t speak English, Mankiw’s text surely exists in your language.
Gregory Mankiw is one of the most effective and talented propagandists of our times. His target: young economics students.But what is most worrisome is that Mankiw’s text presents economics as a unified discipline, entirely committed to the neoliberal agenda. Mankiw believes that markets are the solution to everything – and he would like students to think likewise. According to Mankiw, if a problem persists, it can only be for one of two reasons: the market is imperfect, or it is inexistent. No other explanation for persisting economic or social problems is permitted.
Unemployment is an example of the market being imperfect. For Mankiw, if unemployment exists, it is only because of human inventions such as unemployment benefits, trade unions and minimum wages. Without them, there cannot be unemployment. Mankiw presents this view as being consensual among economists. In fact, quite a few of them admit that the labor market is a very special “market” indeed, where the price – the wage – is not set the same way as the price of other “goods,” say, tomatoes. As Alan Krueger has put it, “it is a gross oversimplification to say that ‘wages are set by the competitive forces of supply and demand,’ or that there is a unique, market-determined wage.”
This specificity in the way in which wages are set is one of the reasons why 600 economists (including stars like Kenneth Arrow, Robert Solow and Joseph Stiglitz) have recently argued in favor of an increase of the US minimum wage. But when students and workers at Harvard asked for a “living wage,” Mankiw opposed it. As he told Harvard Magazine in 2001, raising, even modestly, the minimum wage for janitors at Harvard would “compromise the university’s commitment to the creation and dissemination of knowledge.” No kidding. Of course, Mankiw does not discuss the possibility that the salary of tenured professors might be above its “equilibrium” value; not to mention the very existence of tenure, which goes against the principles of a perfectly competitive labor market – for academics.
Pollution is an example of the inexistent market. Mankiw admits that in some cases, markets do not ensure that the environment is clean and the result is excessive pollution (what economists call a “negative externality”). But what is the solution to pollution? According to Mankiw, it is to define property rights to pollute. Public authorities issue “pollution permits” to polluting companies (who then cannot pollute more than the amount covered by the permits they hold). Companies buy and sell these permits on the market, depending on how much they will pollute in a year. The fewer the permits, the higher their price and the higher the incentives for firms to reduce their pollution. This system is not stupid. Indeed, there are instances where such permit systems might work to solve simple pollution problems. But the problem is that, to the amazement of his students, Mankiw never mentions self-restraint, and downplays government regulation as a way to regulate production and diminish consumption or waste. Nor does he bring up the imperative to use renewable sources of energy. In fact, Mankiw even insists in his textbook that we are not running out of resources (because if that were the case, the price of oil would be much higher than it is now). Climate change is a critical issue, caused by ever-growing economic activity – but it doesn’t even merit an index entry.
Principles of Economics
by N. Gregory Mankiw
Incredibly, in Mankiw’s chapter on growth, the only two factors of production are capital and labor. Workers and firms do not use land nor electricity, gas or coal. They produce with their hands and their brains, and work on machines that run day and night on . . . well on what, exactly? Nobody knows. But what is sure is that it’s not energy. As natural resources and energy are absent in Mankiw’s model, they cannot become a problem – for economists, that is.
Some of the students I had at Harvard have described Mankiw’s course to me during private conversations as “massive conservative propaganda.” One of them told me that he thought that Mankiw manages to “indoctrinate a whole generation.” In 2003, a protest against a similar course then proposed by professor Marty Feldstein, an ex-adviser to President Reagan, led to the creation of an alternative intro economics course, taught by radical economist Steve Marglin. But while Mankiw’s course gives the required credits to students, Marglin’s does not. As a result, Mankiw has around 800 students, and Marglin 100. Not to mention the more than 100,000 students around the globe who learn from Mankiw’s textbook.
According to Mankiw, since markets are a good way to organize economic activity, supply and demand is just about all you need to know in economics. Whatever you desire, you can pay for in the market: tomatoes, health care, housing, a car. That’s demand. On the other side of the market, firms compete to supply the consumers with the latest cool clothes, or mobile phone or housing. That’s supply. When supply is higher than demand, the price falls (holiday trips to a country at war). When demand is higher than supply, the price rises (a war in the Ivory Coast reduces the supply of cocoa). And supply and demand apply to absolutely every single issue you can think of, including organ scarcity. But Mankiw’s text is all about trivial choices, such as how many slices of pizza you are willing to give up to buy yourself an extra can of Coke. This method is extremely effective in hiding the magnitude of what is at stake. The reactions of the students would not be the same if the textbook addressed how much health care people have to give up to be able to buy basic food. Also, the very notion of “need” is absent from Mankiw’s text. One may wonder how students would feel if we discussed the fact that a millionaire’s desire for a yacht will always be met because it is backed by money, while a poor family’s need for a roof wouldn’t. But such discussions are avoided.
By repeating his trivial examples, Mankiw accustoms the students to the idea of individual choices and preferences. The words “poor” and “rich” are rarely used. But, more surprisingly, there is also no mention of the power of corporations to shape tastes. This is because Mankiw’s world is a world of small firms operating on perfectly competitive markets. “Corporate America” is not part of the picture. No MacDonald’s, no Nike, no Microsoft.
Also, Mankiw downplays inequality, even if the growing gap between rich and poor in the US over the last decade has commanded the attention of more and more American economists, even within the mainstream. But Mankiw is not one of them. True, he admits that there is more disparity in the US than in Europe (even if he forgets to mention that this was not the case in the 60s). But he goes on to remark that there is less disparity in the US than in Brazil and China. So we can all relax.
Mankiw knows that the vast majority of his students are not going to become economics majors. He is not interested in training economists – his textbook is too simplistic to prepare a student for advanced study in economics. As he explicitly tells his teaching fellows, Mankiw’s interest is in shaping the minds of thousands of citizens and future leaders around the world. Mankiw’s world is one where “there is no such thing as a society.” Rather, the world is made up of isolated individuals. But it is a world where fairness prevails: everybody gets what they deserve. It is also a world where, thanks to the magic effect of markets, private enterprise and property rights, standards of living rise constantly. It’s a beautiful world . . . if only it existed.
While Mankiw’s text is easy for professors to use, it oversimplifies economic theory and leaves out the ways in which markets can degrade human well-being, undermine societies, and threaten the planet. Each year, tens of thousands of students go out into the world, with Mankiw’s biases as a roadmap to the future. But we know that the neoliberal agenda is more and more disputed outside universities. And within universities, alternative textbooks are flourishing. One can thus hope that these new textbooks, with their greater relevance to real world problems – and their better acknowledgment of the diversity and complexity of economic thought – will soon out-compete Mankiw’s bible. As a believer in competition, Professor Mankiw could only consider this to be fair game.
_Gilles Raveaud obtained his PhD in economics from the University Paris-X Nanterre, France, and was a teaching fellow for Greg Mankiw at Harvard in 2006 and 2007. He is a co-founder of the “post-autistic economics movement.”
Growing Reliance on Temps Holds Back Japan's Rebound
The companies may not worry that much about domestic demand if their exports increase to make up the difference and if their cost savings through using temps increases their profit levels. If increased domestic consumption decreases their profits companies will prefer that domestic consumption not increase. If the price of increasing domestic demand is to hire more expensive full time employers with resulting lower profit margins then naturally companies will oppose this.
The article points to the problem of underconsumption if wages are too low but since the companies do not depend primarily upon domestic consumption this may not be that much of a problem. However, for companies that depend solely upon domestic consumption low wages may very well slow down growth through lack of consumption.
Hayashi, Yuka. 2008. "Growing Reliance on Temps Holds Back Japan's
Rebound." Wall
Street Journal (7 January): p. A 1.
http://online.wsj.com/article/SB119939511325465729.html?mod=todays_us_pa&apl=y&r=125968
"One reason Japan's rebound hasn't gotten traction: companies' growing
reliance on
temporary workers, who earn less -- and spend less -- than full-time
employees. The
shift in hiring can be seen at companies like Hino Motors Ltd. The
truck-making unit
of Toyota Motor Corp. is paying record dividends this year. But it also
has been
filling thousands of factory jobs with temporary workers, who start at
$10 an hour
and get few benefits."
"More than a third of the people in Japan's labor force are categorized
as
"nonpermanent" workers: part-timers, temps on fixed-term contracts and
people sent
to companies by temporary-staffing agencies. That compares with 23% in
1997 and 18%
in 1987."
"Use of temps gives companies flexibility and cost control, helping
them succeed in
highly competitive global industries like manufacturing. Big Japanese
companies have
reported earnings growth for five straight years."
"In the past decade, average wages in Japan have fallen every year
except two
because of an increase in temps and stagnant wages for full-timers.
Consumption by
working families declined on a year-on-year basis in six of the past
eight quarters.
This even though the Japanese are also saving less: A Bank of Japan
survey showed
that some 23% of households had no savings last year, compared with
just 10% in
1996."
"The result is sluggish domestic demand and growth that is supported by
exports to a
lopsided extent. In the July-September quarter, when Japan's economy
grew at an
annualized rate of 1.5%, exports were rising at an annualized 11% rate
and domestic
demand was shrinking slightly. Personal consumption is so weak in Japan
that it
accounts for only a little over half of the economy, compared with 70%
in the U.S."
"Until the late '90s, worker-friendly laws forbade temporary-labor
contracts except
for a few specialized areas, such as computer programming. A change in
1999 allowed
temp agencies to dispatch workers to many more types of jobs. And in
2004,
manufacturers were allowed to use workers sent by temporary-help
agencies."
The article points to the problem of underconsumption if wages are too low but since the companies do not depend primarily upon domestic consumption this may not be that much of a problem. However, for companies that depend solely upon domestic consumption low wages may very well slow down growth through lack of consumption.
Hayashi, Yuka. 2008. "Growing Reliance on Temps Holds Back Japan's
Rebound." Wall
Street Journal (7 January): p. A 1.
http://online.wsj.com/article/SB119939511325465729.html?mod=todays_us_pa&apl=y&r=125968
"One reason Japan's rebound hasn't gotten traction: companies' growing
reliance on
temporary workers, who earn less -- and spend less -- than full-time
employees. The
shift in hiring can be seen at companies like Hino Motors Ltd. The
truck-making unit
of Toyota Motor Corp. is paying record dividends this year. But it also
has been
filling thousands of factory jobs with temporary workers, who start at
$10 an hour
and get few benefits."
"More than a third of the people in Japan's labor force are categorized
as
"nonpermanent" workers: part-timers, temps on fixed-term contracts and
people sent
to companies by temporary-staffing agencies. That compares with 23% in
1997 and 18%
in 1987."
"Use of temps gives companies flexibility and cost control, helping
them succeed in
highly competitive global industries like manufacturing. Big Japanese
companies have
reported earnings growth for five straight years."
"In the past decade, average wages in Japan have fallen every year
except two
because of an increase in temps and stagnant wages for full-timers.
Consumption by
working families declined on a year-on-year basis in six of the past
eight quarters.
This even though the Japanese are also saving less: A Bank of Japan
survey showed
that some 23% of households had no savings last year, compared with
just 10% in
1996."
"The result is sluggish domestic demand and growth that is supported by
exports to a
lopsided extent. In the July-September quarter, when Japan's economy
grew at an
annualized rate of 1.5%, exports were rising at an annualized 11% rate
and domestic
demand was shrinking slightly. Personal consumption is so weak in Japan
that it
accounts for only a little over half of the economy, compared with 70%
in the U.S."
"Until the late '90s, worker-friendly laws forbade temporary-labor
contracts except
for a few specialized areas, such as computer programming. A change in
1999 allowed
temp agencies to dispatch workers to many more types of jobs. And in
2004,
manufacturers were allowed to use workers sent by temporary-help
agencies."
Credit Card Debt Soars as House Prices Plunge
The credit crunch is spreading to other areas. An earlier article I posted showed that the credit crunch was building in the car loans sector as well. The number of people unable to pay of car or credit card loans is increasing placing more stress on lenders. If there is a slowdown in the economy resulting in more job losses evne more people will lag behind in payments..
Credit Card Debt Soars as House Prices Plunge
By Dean Baker
The Center for Economic and Policy Research
Wednesday 09 January 2008
"The current rate of house price decline will destroy $2.2 trillion of wealth this year."
The Federal Reserve Board reported yesterday that credit card debt rose at an 11.3 percent annual rate in November after rising at an 8.5 percent rate in October. By comparison, credit card debt rose at a rate between 2 percent and 4 percent from 2003 to 2005.
The explanation for this surge in credit card debt is that millions of homeowners are losing the ability to borrow against their home. In the last Flow of Funds release, the Fed reported that the ratio of homeowners' equity to value stood at just 50.4 percent, down from 54.2 percent at the end of 2005, and 57.3 percent at the end of 2001. The ratio will almost certainly cross below 50 percent for the first time in history when the fourth quarter data is reported. This is a remarkably rapid decline, especially since the soaring home prices of recent years translated dollar for dollar into additional equity.
This aggregate number conceals vast differences among homeowners. More than one-third of homeowners have completely paid off their mortgages and many others are close to having them paid off. This means that a large number of homeowners have little or no equity in their home. These people are now running up credit card debt at near record rates. Of course, credit card debt cannot offset the ability to borrow against home equity for long. Total outstanding credit debt is less than $940 billion; mortgage debt was increasing at a $730 billion annual rate in the third quarter. Millions of households will soon have little choice but to sharply curtail their consumption.
The latest Case-Shiller indexes, which received little attention because they were released on December 26th, showed that house prices in the aggregate index were dropping at an annual rate of 11.7 percent in the three months from July to October. At this pace, households will lose more than $2.2 trillion in housing wealth over the next year. Some of the really big losers in the latest data were Las Vegas, where house prices were falling at an 18.9 percent annual rate over the last three months, San Diego, where they declined at a 20.3 percent rate, and Miami where they dropped at a 22.0 percent rate.
Many homeowners in these formerly hot markets put little or nothing down when they purchased homes in the last two or three years. As a result, a large percentage of recent homebuyers will soon find themselves with negative equity. This is the reason that the foreclosure crisis is spreading from the subprime segment of the mortgage market to the Alt-A and prime segment. Homeowners who find themselves owing more than the value of their home have enormous incentive to default.
The pending home sales data for November are somewhat better than most analysts had expected. While they are down slightly from the October levels, the latter were revised up to show a gain of 3.7 percent from September instead of 0.6 percent. The improvement from the August-September trough is concentrated in the West, where sales have risen by almost 8 percent from the lows hit in the summer. This probably is due more to the extraordinary weakness of the summer sales levels (down almost 40 percent from 2005) than to any real upturn in the market.
The mortgage applications index continues to give erratic readings, jumping 32 percent from last week's seasonally adjusted measure. The recent mortgage application data is hard to interpret for two reasons. First, the subprime segment of the mortgage market is underrepresented in the Mortgage Bankers Association (MBA), which constructs the index. This means that the index will not fully capture some of the falloff in subprime loans. Also, as borrowers switch from defunct subprime lenders to MBA members, it will appear in the index as an increase in lending. The other problem with this data is that a far higher portion of applications are turned down now that a year ago. Even with these factors inflating the index, the four-week average for the purchase index was just 397.9. It had been over 500 at its peaks in 2005.
Credit Card Debt Soars as House Prices Plunge
By Dean Baker
The Center for Economic and Policy Research
Wednesday 09 January 2008
"The current rate of house price decline will destroy $2.2 trillion of wealth this year."
The Federal Reserve Board reported yesterday that credit card debt rose at an 11.3 percent annual rate in November after rising at an 8.5 percent rate in October. By comparison, credit card debt rose at a rate between 2 percent and 4 percent from 2003 to 2005.
The explanation for this surge in credit card debt is that millions of homeowners are losing the ability to borrow against their home. In the last Flow of Funds release, the Fed reported that the ratio of homeowners' equity to value stood at just 50.4 percent, down from 54.2 percent at the end of 2005, and 57.3 percent at the end of 2001. The ratio will almost certainly cross below 50 percent for the first time in history when the fourth quarter data is reported. This is a remarkably rapid decline, especially since the soaring home prices of recent years translated dollar for dollar into additional equity.
This aggregate number conceals vast differences among homeowners. More than one-third of homeowners have completely paid off their mortgages and many others are close to having them paid off. This means that a large number of homeowners have little or no equity in their home. These people are now running up credit card debt at near record rates. Of course, credit card debt cannot offset the ability to borrow against home equity for long. Total outstanding credit debt is less than $940 billion; mortgage debt was increasing at a $730 billion annual rate in the third quarter. Millions of households will soon have little choice but to sharply curtail their consumption.
The latest Case-Shiller indexes, which received little attention because they were released on December 26th, showed that house prices in the aggregate index were dropping at an annual rate of 11.7 percent in the three months from July to October. At this pace, households will lose more than $2.2 trillion in housing wealth over the next year. Some of the really big losers in the latest data were Las Vegas, where house prices were falling at an 18.9 percent annual rate over the last three months, San Diego, where they declined at a 20.3 percent rate, and Miami where they dropped at a 22.0 percent rate.
Many homeowners in these formerly hot markets put little or nothing down when they purchased homes in the last two or three years. As a result, a large percentage of recent homebuyers will soon find themselves with negative equity. This is the reason that the foreclosure crisis is spreading from the subprime segment of the mortgage market to the Alt-A and prime segment. Homeowners who find themselves owing more than the value of their home have enormous incentive to default.
The pending home sales data for November are somewhat better than most analysts had expected. While they are down slightly from the October levels, the latter were revised up to show a gain of 3.7 percent from September instead of 0.6 percent. The improvement from the August-September trough is concentrated in the West, where sales have risen by almost 8 percent from the lows hit in the summer. This probably is due more to the extraordinary weakness of the summer sales levels (down almost 40 percent from 2005) than to any real upturn in the market.
The mortgage applications index continues to give erratic readings, jumping 32 percent from last week's seasonally adjusted measure. The recent mortgage application data is hard to interpret for two reasons. First, the subprime segment of the mortgage market is underrepresented in the Mortgage Bankers Association (MBA), which constructs the index. This means that the index will not fully capture some of the falloff in subprime loans. Also, as borrowers switch from defunct subprime lenders to MBA members, it will appear in the index as an increase in lending. The other problem with this data is that a far higher portion of applications are turned down now that a year ago. Even with these factors inflating the index, the four-week average for the purchase index was just 397.9. It had been over 500 at its peaks in 2005.
Czechs oppose US missile plan.
This is from the News. This poll confirms what has been obvious for a long time in the Czech republic. Perhaps the government will listen one of these years. Probably the next election year!
Czechs oppose US missile plan
Wednesday, January 09, 2008
PRAGUE, Czech Republic: Most Czechs continued to oppose plans to place parts of a US missile defence system in the country, according to a poll released on Tuesday.
According to a public poll conducted by the CVVM agency, 70 per cent of respondents oppose the idea of hosting a missile tracking radar system at a base in a military area near Prague as part of the system.
The government-sponsored agency said a total of 1,056 people aged 15 and older were questioned between Dec 3-10, with 23 per cent approving the plan. Seven per cent were undecided.
The latest result of the poll conducted by the agency six times last year indicated the highest number of opponents so far. In April and November, 68 per cent of respondents were against the missile defence base.
The US is in talks with the Czech government about the missile plans. Washington also wants to place 10 interceptor missiles in Poland as part of a defence shield that US officials say is needed to protect against a possible threat from Iran. The Czech government has been receptive to the proposal, which has been strongly opposed by Russia. Opposition parties have demanded a national referendum on the issue.
Czechs oppose US missile plan
Wednesday, January 09, 2008
PRAGUE, Czech Republic: Most Czechs continued to oppose plans to place parts of a US missile defence system in the country, according to a poll released on Tuesday.
According to a public poll conducted by the CVVM agency, 70 per cent of respondents oppose the idea of hosting a missile tracking radar system at a base in a military area near Prague as part of the system.
The government-sponsored agency said a total of 1,056 people aged 15 and older were questioned between Dec 3-10, with 23 per cent approving the plan. Seven per cent were undecided.
The latest result of the poll conducted by the agency six times last year indicated the highest number of opponents so far. In April and November, 68 per cent of respondents were against the missile defence base.
The US is in talks with the Czech government about the missile plans. Washington also wants to place 10 interceptor missiles in Poland as part of a defence shield that US officials say is needed to protect against a possible threat from Iran. The Czech government has been receptive to the proposal, which has been strongly opposed by Russia. Opposition parties have demanded a national referendum on the issue.
The Myth of Sectarianism
Even though the occupation may have increased sectarianism it was no doubt latent all along but repressed by Hussein's iron rule. The US probably thought it would be useful to exploit it. However, some of the sectarian violence is an unintended by-product of the introduction of an elected government which gave Kurds plus Shias a big majority over the Sunnis. This in itself increased sectarian friction. There is also intergroup conflict as between moderate Sunnis and Al Qaeda. The US has successfully exploited this conflict by paying Sunni groups to attack Al Qaeda in Sunni areas.
The Myth Of Sectarianism
The policy is divide to rule
By DAHR JAMAIL
09/01/08 "ISR" -- -- IF THE U.S. leaves Iraq, the violent sectarianism between the Sunni and Shia will worsen. This is what Republicans and Democrats alike will have us believe. This key piece of rhetoric is used to justify the continuance of the occupation of Iraq.
This propaganda, like others of its ilk, gains ground, substance, and reality due largely to the ignorance of those ingesting it. The snow job by the corporate media on the issue of sectarianism in Iraq has ensured that the public buys into the line that the Sunni and Shia will dice one another up into little pieces if the occupation ends.
It may be worthwhile to consider that prior to the Anglo-American invasion and occupation of Iraq there had never been open warfare between the two groups and certainly not a civil war. In terms of organization and convention, Iraqis are a tribal society and some of the largest tribes in the country comprise Sunni and Shia. Intermarriages between the two sects are not uncommon either.
Soon after arriving in Iraq in November 2003, I learned that it was considered rude and socially graceless to enquire after an individual’s sect. If in ignorance or under compulsion I did pose the question the most common answer I would receive was, “I am Muslim, and I am Iraqi.” On occasion there were more telling responses like the one I received from an older woman, “My mother is a Shia and my father a Sunni, so can you tell which half of me is which?” The accompanying smile said it all.
Large mixed neighborhoods were the norm in Baghdad. Sunni and Shia prayed in one another’s mosques. Secular Iraqis could form lifelong associations with others without overt concern about their chosen sect. How did such a well-integrated society erupt into vicious fighting, violent sectarianism, and segregated neighborhoods? How is one to explain the millions in Iraq displaced from their homes simply because they were the wrong sect in the wrong place at the wrong time?
Back in December 2003 Sheikh Adnan, a Friday speaker at his mosque, had recounted a recent experience to me. During the first weeks of the occupation, a U.S. military commander had showed up in Baquba, the capital of Diyala province located roughly twenty-five miles northeast of Baghdad with a mixed Sunni-Shia population. He had asked to meet with all the tribal and religious leaders. On the appointed day the assembled leaders were perplexed when the commander instructed them to divide themselves, “Shia on one side of the room, Sunni on the other.”
It would not be amiss, perhaps, to read in this account an implanting of a deliberate policy of “divide and rule” by the Anglo-American invaders from the early days of the occupation.
There have been no statistical surveys in recent years to determine the sectarian composition of Iraq. However, when the Coalition Provisional Authority, led by Paul Bremer, formed the first puppet Iraqi government, a precedent was set. The twenty-five seats in the Iraqi Governing Council (IGC), were assigned strictly along sectarian lines based on the assumption that 60 percent of the population is Shia, 20 percent Sunni, and 20 percent Kurds, who are mostly Sunni. For good measure, a couple of Turkoman and a Christian were thrown in.
It is evident that this puppet troupe deployed at the onset of “democracy” in Iraq was mandated to establish to the population that it was in the larger interest to begin thinking, at least politically, along sectarian and ethnic lines. Inevitably, political power struggles ensued and were cemented and exacerbated with the January 30, 2005, elections.
Mild surface scratching reveals a darker, largely unreported aspect of the divisive U.S. plan. A UN report released in September 2005 held Iraqi interior ministry forces responsible for an organized campaign of detention, torture, and killing of fellow Iraqis. These special police commando units were recruited from the Shia Badr Organization and Mehdi Army militias.
In Baghdad during November and December 2004, I heard widespread accounts of death squads assassinating Sunni resistance leaders and their key sympathizers. It was after the failure of Operation Phantom Fury, as the U.S. siege of Fallujah that November was named, that the Iraqi resistance spread across Iraq like wildfire. Death squads were set up to quell this fire by eliminating the leadership of this growing resistance.
The firefighting team had at its helm the U.S. ambassador to Iraq, John Negroponte, ably assisted by retired Colonel James Steele, adviser to Iraqi security forces. In 1984–86 Steele had been commander of the U.S. military advisory group in El Salvador. Between 1981 and 1985 Negroponte was U.S. ambassador to neighboring Honduras. In 1994 the Honduras Commission on Human Rights charged him with extensive human rights violations, reporting the torture and disappearance of at least 184 political workers. A CIA working group set up in 1996 to look into the U.S. role in Honduras has placed on record documents admitting that the operations Negroponte oversaw in Honduras were carried out by “special intelligence units,” better known as “death squads,” of CIA-trained Honduran armed units which kidnapped, tortured, and killed thousands of people suspected of supporting leftist guerrillas. Negroponte was ambassador to Iraq for close to a year from June 2004.
The only public mention of any of this I have seen was in Newsweek magazine on January 8, 2005. It quotes Donald Rumsfeld, U.S. secretary of defense at the time, who discussed the use of the “Salvador Option” in Iraq. It compared the strategy being planned for Iraq to the one used in Central America during the Reagan administration:
"Then, faced with a losing war against Salvadoran rebels, the U.S. government funded or supported “nationalist” forces that allegedly included so-called death squads directed to hunt down and kill rebel leaders and sympathizers. Eventually the insurgency was quelled, and many U.S. conservatives consider the policy to have been a success—despite the deaths of innocent civilians and the subsequent Iran-Contra arms-for-hostages scandal."
U.S.-backed sectarian death squads have become the foremost generator of death in Iraq, even surpassing the U.S. military machine, infamous for its capacity for industrial-scale slaughter. It is no secret in Baghdad that the U.S. military would regularly cordon off pro-resistance areas like the al-Adhamiyah neighborhood of Baghdad and allow “Iraqi police” and “Iraqi army” personnel, masked in black balaclavas, through their checkpoints to carry out abductions and assassinations in the neighborhood.
Consequently, almost all of Baghdad and much of Iraq is now segregated. The flipside is that violence in the capital city has subsided somewhat of late now that the endgame of forming the death squads, that of fragmenting the population, has been mostly accomplished.
Baghdad resident, retired General Waleed al-Ubaidy told my Iraqi colleague recently, “I would like to agree with the idea that violence in Iraq has decreased and that everything is fine, but the truth is far more bitter. All that has happened is a dramatic change in the demographic map of Iraq.” Baghdad today is a divided city.
Ahmad Ali, chief engineer from one of Baghdad’s municipalities told my colleague, Ali al-Fadhily, “Baghdad has been torn into two cities and many towns and neighborhoods. There is now the Shia Baghdad and the Sunni Baghdad to start with. Each is divided into little town-like pieces of the hundreds of thousands who had to leave their homes.” Al-Adhamiyah, on the Russafa side of Tigris River, is now entirely Sunni, the other areas are all Shia. The al-Karkh side of the river is purely Sunni except for Shula, Hurriya, and small strips of Aamil which are dominated by Shia militias.
Not being privy to the U.S. machinations, Iraqis in Baghdad blame the Iraqi police and Iraqi army for the sectarian assassinations and wonder why the U.S. military does little or nothing to stop them. “The Americans ask [Prime Minister Nouri al] Maliki to stop the sectarian assassinations knowing full well that his ministers are ordering the sectarian cleansing,” says Mahmood Farhan of the Muslim Scholars Association, a leading Sunni group.
A more recent manifestation of the divisive U.S. policy has been the “purchase” of members of the largely Sunni resistance in Baghdad and in al-Anbar province that constitutes one-third of the geographic area of Iraq. Payments made by the U.S. military to collaborating tribal sheikhs already amount to $17 million. The money passes directly into the hands of fighters who in many cases were engaged in launching attacks against the occupiers less than two weeks ago. Tribal fighters are being paid $300 per month to patrol their areas, particularly against foreign mercenaries. Today the military refers to these men as “concerned local citizens,” “awakening force,” or simply “volunteers.”
Arguably, violence in the area has temporarily declined. “Those Americans thought they would decrease the resistance attacks by separating the people of Iraq into sects and tribes,” announced a thirty-two-year-old man from Ramadi, who spoke with al-Fadhily on terms of anonymity, “They know they are sinking deeper into the shifting sand, but the collaborators are fooling the Americans right now, and will in the end use this strategy against them.” By the end of November 2007, the U.S. military had enlisted 77,000 of these fighters, and hopes to add another 10,000. Eighty-two percent of the fighters are Sunni.
Politically, the U.S. administration maintains its support of the Shia-dominated government in Baghdad. The fallout has been blatantly clear. On the first of December, Adnan al-Dulaimi, head of the Accordance Front, which is the Sunni political bloc in the Iraqi Parliament, was placed under house arrest by Iraqi and U.S. security forces in the Adil neighborhood, west of Baghdad. Iraqi security forces also detained his son Makki and forty-five of his guards. They were accused of manufacturing car bombs and killing Sunni militia members in the neighborhood who have been working with the U.S. military. Members of the Accordance Front, which holds 44 of the 275 seats in the Iraqi Parliament, promptly walked out. Maliki has, several times in the last several weeks, hurled public accusations and criticisms at al-Dulaimi, sending political and sectarian shock waves, further crippling the crumbling political process.
It is important to mention that Maliki, a U.S. puppet par excellence, acts only as told. After the January 2005 elections, the government that came into power had chosen Ibrahim al-Jaafari as its prime minister. When Jaafari refused to toe the U.S./UK line, Condoleezza Rice and her UK counterpart Jack Straw flew to Baghdad, and before their short trip ended Jaafari was out and Maliki was in as prime minister.
In the context of these facts let us now return to the big question: Will Iraq descend further into a sectarian nightmare if the occupation ends?
An indicator of how things will likely resolve themselves upon the departure of foreign troops may be drawn from the southern city of Basra. In early September, 500 British troops left one of Saddam Hussein’s palaces in the heart of the city and ceased to conduct regular foot patrols. According to the British military, the overall level of violence in the city has decreased 90 percent since then.
This may or may not be a guarantee of a drop in sectarianism upon the departure of the invading armies, but it does prove that when the primary cause of the violence, sectarian strife, instability, and chaos is removed from the equation of Iraq, things are bound to improve rapidly.
Are we still going to believe that the occupation is holding Iraq together?
Dahr Jamail, who spent eight months in Iraq as an independent journalist, is author of Beyond the Green Zone: Dispatches From an Unembedded Journalist in Occupied Iraq (Haymarket Books, 2007). The New York Times’ Stephen Kinzer describes his writing as “international journalism at its best.” Dahr is currently on a national speaking tour sponsored by Haymarket and his articles can be found at http://www.dahrjamailiraq.com/ .
The Myth Of Sectarianism
The policy is divide to rule
By DAHR JAMAIL
09/01/08 "ISR" -- -- IF THE U.S. leaves Iraq, the violent sectarianism between the Sunni and Shia will worsen. This is what Republicans and Democrats alike will have us believe. This key piece of rhetoric is used to justify the continuance of the occupation of Iraq.
This propaganda, like others of its ilk, gains ground, substance, and reality due largely to the ignorance of those ingesting it. The snow job by the corporate media on the issue of sectarianism in Iraq has ensured that the public buys into the line that the Sunni and Shia will dice one another up into little pieces if the occupation ends.
It may be worthwhile to consider that prior to the Anglo-American invasion and occupation of Iraq there had never been open warfare between the two groups and certainly not a civil war. In terms of organization and convention, Iraqis are a tribal society and some of the largest tribes in the country comprise Sunni and Shia. Intermarriages between the two sects are not uncommon either.
Soon after arriving in Iraq in November 2003, I learned that it was considered rude and socially graceless to enquire after an individual’s sect. If in ignorance or under compulsion I did pose the question the most common answer I would receive was, “I am Muslim, and I am Iraqi.” On occasion there were more telling responses like the one I received from an older woman, “My mother is a Shia and my father a Sunni, so can you tell which half of me is which?” The accompanying smile said it all.
Large mixed neighborhoods were the norm in Baghdad. Sunni and Shia prayed in one another’s mosques. Secular Iraqis could form lifelong associations with others without overt concern about their chosen sect. How did such a well-integrated society erupt into vicious fighting, violent sectarianism, and segregated neighborhoods? How is one to explain the millions in Iraq displaced from their homes simply because they were the wrong sect in the wrong place at the wrong time?
Back in December 2003 Sheikh Adnan, a Friday speaker at his mosque, had recounted a recent experience to me. During the first weeks of the occupation, a U.S. military commander had showed up in Baquba, the capital of Diyala province located roughly twenty-five miles northeast of Baghdad with a mixed Sunni-Shia population. He had asked to meet with all the tribal and religious leaders. On the appointed day the assembled leaders were perplexed when the commander instructed them to divide themselves, “Shia on one side of the room, Sunni on the other.”
It would not be amiss, perhaps, to read in this account an implanting of a deliberate policy of “divide and rule” by the Anglo-American invaders from the early days of the occupation.
There have been no statistical surveys in recent years to determine the sectarian composition of Iraq. However, when the Coalition Provisional Authority, led by Paul Bremer, formed the first puppet Iraqi government, a precedent was set. The twenty-five seats in the Iraqi Governing Council (IGC), were assigned strictly along sectarian lines based on the assumption that 60 percent of the population is Shia, 20 percent Sunni, and 20 percent Kurds, who are mostly Sunni. For good measure, a couple of Turkoman and a Christian were thrown in.
It is evident that this puppet troupe deployed at the onset of “democracy” in Iraq was mandated to establish to the population that it was in the larger interest to begin thinking, at least politically, along sectarian and ethnic lines. Inevitably, political power struggles ensued and were cemented and exacerbated with the January 30, 2005, elections.
Mild surface scratching reveals a darker, largely unreported aspect of the divisive U.S. plan. A UN report released in September 2005 held Iraqi interior ministry forces responsible for an organized campaign of detention, torture, and killing of fellow Iraqis. These special police commando units were recruited from the Shia Badr Organization and Mehdi Army militias.
In Baghdad during November and December 2004, I heard widespread accounts of death squads assassinating Sunni resistance leaders and their key sympathizers. It was after the failure of Operation Phantom Fury, as the U.S. siege of Fallujah that November was named, that the Iraqi resistance spread across Iraq like wildfire. Death squads were set up to quell this fire by eliminating the leadership of this growing resistance.
The firefighting team had at its helm the U.S. ambassador to Iraq, John Negroponte, ably assisted by retired Colonel James Steele, adviser to Iraqi security forces. In 1984–86 Steele had been commander of the U.S. military advisory group in El Salvador. Between 1981 and 1985 Negroponte was U.S. ambassador to neighboring Honduras. In 1994 the Honduras Commission on Human Rights charged him with extensive human rights violations, reporting the torture and disappearance of at least 184 political workers. A CIA working group set up in 1996 to look into the U.S. role in Honduras has placed on record documents admitting that the operations Negroponte oversaw in Honduras were carried out by “special intelligence units,” better known as “death squads,” of CIA-trained Honduran armed units which kidnapped, tortured, and killed thousands of people suspected of supporting leftist guerrillas. Negroponte was ambassador to Iraq for close to a year from June 2004.
The only public mention of any of this I have seen was in Newsweek magazine on January 8, 2005. It quotes Donald Rumsfeld, U.S. secretary of defense at the time, who discussed the use of the “Salvador Option” in Iraq. It compared the strategy being planned for Iraq to the one used in Central America during the Reagan administration:
"Then, faced with a losing war against Salvadoran rebels, the U.S. government funded or supported “nationalist” forces that allegedly included so-called death squads directed to hunt down and kill rebel leaders and sympathizers. Eventually the insurgency was quelled, and many U.S. conservatives consider the policy to have been a success—despite the deaths of innocent civilians and the subsequent Iran-Contra arms-for-hostages scandal."
U.S.-backed sectarian death squads have become the foremost generator of death in Iraq, even surpassing the U.S. military machine, infamous for its capacity for industrial-scale slaughter. It is no secret in Baghdad that the U.S. military would regularly cordon off pro-resistance areas like the al-Adhamiyah neighborhood of Baghdad and allow “Iraqi police” and “Iraqi army” personnel, masked in black balaclavas, through their checkpoints to carry out abductions and assassinations in the neighborhood.
Consequently, almost all of Baghdad and much of Iraq is now segregated. The flipside is that violence in the capital city has subsided somewhat of late now that the endgame of forming the death squads, that of fragmenting the population, has been mostly accomplished.
Baghdad resident, retired General Waleed al-Ubaidy told my Iraqi colleague recently, “I would like to agree with the idea that violence in Iraq has decreased and that everything is fine, but the truth is far more bitter. All that has happened is a dramatic change in the demographic map of Iraq.” Baghdad today is a divided city.
Ahmad Ali, chief engineer from one of Baghdad’s municipalities told my colleague, Ali al-Fadhily, “Baghdad has been torn into two cities and many towns and neighborhoods. There is now the Shia Baghdad and the Sunni Baghdad to start with. Each is divided into little town-like pieces of the hundreds of thousands who had to leave their homes.” Al-Adhamiyah, on the Russafa side of Tigris River, is now entirely Sunni, the other areas are all Shia. The al-Karkh side of the river is purely Sunni except for Shula, Hurriya, and small strips of Aamil which are dominated by Shia militias.
Not being privy to the U.S. machinations, Iraqis in Baghdad blame the Iraqi police and Iraqi army for the sectarian assassinations and wonder why the U.S. military does little or nothing to stop them. “The Americans ask [Prime Minister Nouri al] Maliki to stop the sectarian assassinations knowing full well that his ministers are ordering the sectarian cleansing,” says Mahmood Farhan of the Muslim Scholars Association, a leading Sunni group.
A more recent manifestation of the divisive U.S. policy has been the “purchase” of members of the largely Sunni resistance in Baghdad and in al-Anbar province that constitutes one-third of the geographic area of Iraq. Payments made by the U.S. military to collaborating tribal sheikhs already amount to $17 million. The money passes directly into the hands of fighters who in many cases were engaged in launching attacks against the occupiers less than two weeks ago. Tribal fighters are being paid $300 per month to patrol their areas, particularly against foreign mercenaries. Today the military refers to these men as “concerned local citizens,” “awakening force,” or simply “volunteers.”
Arguably, violence in the area has temporarily declined. “Those Americans thought they would decrease the resistance attacks by separating the people of Iraq into sects and tribes,” announced a thirty-two-year-old man from Ramadi, who spoke with al-Fadhily on terms of anonymity, “They know they are sinking deeper into the shifting sand, but the collaborators are fooling the Americans right now, and will in the end use this strategy against them.” By the end of November 2007, the U.S. military had enlisted 77,000 of these fighters, and hopes to add another 10,000. Eighty-two percent of the fighters are Sunni.
Politically, the U.S. administration maintains its support of the Shia-dominated government in Baghdad. The fallout has been blatantly clear. On the first of December, Adnan al-Dulaimi, head of the Accordance Front, which is the Sunni political bloc in the Iraqi Parliament, was placed under house arrest by Iraqi and U.S. security forces in the Adil neighborhood, west of Baghdad. Iraqi security forces also detained his son Makki and forty-five of his guards. They were accused of manufacturing car bombs and killing Sunni militia members in the neighborhood who have been working with the U.S. military. Members of the Accordance Front, which holds 44 of the 275 seats in the Iraqi Parliament, promptly walked out. Maliki has, several times in the last several weeks, hurled public accusations and criticisms at al-Dulaimi, sending political and sectarian shock waves, further crippling the crumbling political process.
It is important to mention that Maliki, a U.S. puppet par excellence, acts only as told. After the January 2005 elections, the government that came into power had chosen Ibrahim al-Jaafari as its prime minister. When Jaafari refused to toe the U.S./UK line, Condoleezza Rice and her UK counterpart Jack Straw flew to Baghdad, and before their short trip ended Jaafari was out and Maliki was in as prime minister.
In the context of these facts let us now return to the big question: Will Iraq descend further into a sectarian nightmare if the occupation ends?
An indicator of how things will likely resolve themselves upon the departure of foreign troops may be drawn from the southern city of Basra. In early September, 500 British troops left one of Saddam Hussein’s palaces in the heart of the city and ceased to conduct regular foot patrols. According to the British military, the overall level of violence in the city has decreased 90 percent since then.
This may or may not be a guarantee of a drop in sectarianism upon the departure of the invading armies, but it does prove that when the primary cause of the violence, sectarian strife, instability, and chaos is removed from the equation of Iraq, things are bound to improve rapidly.
Are we still going to believe that the occupation is holding Iraq together?
Dahr Jamail, who spent eight months in Iraq as an independent journalist, is author of Beyond the Green Zone: Dispatches From an Unembedded Journalist in Occupied Iraq (Haymarket Books, 2007). The New York Times’ Stephen Kinzer describes his writing as “international journalism at its best.” Dahr is currently on a national speaking tour sponsored by Haymarket and his articles can be found at http://www.dahrjamailiraq.com/ .
Smile of the day
"Barack Obama is in favour of hope, unity and change. If only his
rivals would agree to campaign on a ticket of despair, discord and
stagnation, the electorate would have a real choice."
--Gideon Rachman, Financial Times, January 7 2008
rivals would agree to campaign on a ticket of despair, discord and
stagnation, the electorate would have a real choice."
--Gideon Rachman, Financial Times, January 7 2008
Obamamania in the Media
Maybe the media loves to be dazzled and even the pollsters. At least the New Hampshire primary voters did not seem to be also dazzled. A majority voted for Hilary Clinton even though she will not even iron their shirts!
Washington Post - January 8, 2008
Even Conservative Media Chorus Sings Obama's Praises
By Howard Kurtz
Washington Post Staff Writer
Barack Obama, now the media's odds-on favorite to win the White
House, is drawing effusive praise from the chattering classes.
"You'd have to have a heart of stone not to be moved by this. . . .
This is a huge moment," one commentator wrote.
An unreconstructed liberal? An African American hungering for a
racial breakthrough? No, it was David Brooks, the conservative New
York Times columnist, and he's got plenty of company on the right.
The media overall are being swept up by a wave of Obamamania, in
which normally hard-bitten journalists watch the orator in action and
come away dazzled by his gifts. A New York Times piece Saturday
compared the Illinois senator to JFK and Martin Luther King in the
same paragraph. A Newsweek cover story out yesterday gushed that
Obama, "tall and handsome and blessed with a weighty baritone, knows
how to bring along a crowd while seeming to stay slightly above it."
The journalistic scrutiny usually visited on instant front-runners
has been replaced by something akin to a standing ovation.
What's more, the applause extends even to pundits on the right, many
of whom routinely denigrate Democratic politicians and yet are
strikingly warm toward Obama. There is gratitude, to be sure, that he
seems poised to knock off their longtime bete
Washington Post - January 8, 2008
Even Conservative Media Chorus Sings Obama's Praises
By Howard Kurtz
Washington Post Staff Writer
Barack Obama, now the media's odds-on favorite to win the White
House, is drawing effusive praise from the chattering classes.
"You'd have to have a heart of stone not to be moved by this. . . .
This is a huge moment," one commentator wrote.
An unreconstructed liberal? An African American hungering for a
racial breakthrough? No, it was David Brooks, the conservative New
York Times columnist, and he's got plenty of company on the right.
The media overall are being swept up by a wave of Obamamania, in
which normally hard-bitten journalists watch the orator in action and
come away dazzled by his gifts. A New York Times piece Saturday
compared the Illinois senator to JFK and Martin Luther King in the
same paragraph. A Newsweek cover story out yesterday gushed that
Obama, "tall and handsome and blessed with a weighty baritone, knows
how to bring along a crowd while seeming to stay slightly above it."
The journalistic scrutiny usually visited on instant front-runners
has been replaced by something akin to a standing ovation.
What's more, the applause extends even to pundits on the right, many
of whom routinely denigrate Democratic politicians and yet are
strikingly warm toward Obama. There is gratitude, to be sure, that he
seems poised to knock off their longtime bete