A Brilliant Pentagon Plan for Spreading Perpetual “Persistent War” Looks Just Like A “Failed” Terror War

[This is an excellent explanation of the mess that we find ourselves in today, due to the miserable, evil policies of the past two American Administrations, but the author from TomDispatch misses the most important point, as always.  That singular, vital to understand point is this--the American war on terror HAS NOT FAILED, it has succeeded brilliantly in its primary mission--to spread conflict over the entire planet.  The war on terror was NEVER intended to be won, it was just a means to an end, prepositioning military forces in every nation, before unleashing global nuclear war.  All of these little "piss ant" wars that we have been fighting, the various Partnership-for-Peace programs, Special Forces training missions, drug-interdiction and border control operations, along with the overall rubric of "fighting terrorism," have all provided the means to preposition American "Special Operators" and their weapons within other national militaries and police forces.  Their original mission has been to "win the hearts and minds" of foreign military men, before the real war begins, the war against all enemies at once.  

The Pentagon would prefer to be known as a bumbling,"inept giant," rather than as the monstrous, devouring beast that it really is.  The Joint Chiefs have been faithfully carrying-out the desires of their corporate masters and their puppets in the White House, by spreading the Pentagon's tentacles into every corner of the planet, even to the depths of the oceans and the heights of sub-orbital space.  The Pentagon is a monster, that is set upon devouring all of the little peasant villagers who will besiege the fortified fortresses of their dark overlords.  The Pentagon is firmly committed to a policy that is best defined as "Malthusian," the calculated thinning-out of the human herd.  The Pentagon has been setting itself up as the ultimate protectors of a small group of racist elitists, who consider the rest of us as cattle, fit only to be bought and sold, improved in limited numbers through selective crossbreeding and genetic experimentation, with the remainder of the herd to be  eventually slaughtered, probably to be processed into "Soylent Green" for them.  

The day is nearly upon us when open-air thermonuclear detonations will become a regular occurrence.  The day after that day comes and goes, will be the only time when Bush's war could be judged either a resounding success, or a total failure.  Until then, only the spread of death and terminal madness will spread across the face of the Earth.]  

A failed formula for worldwide war

How the empire changed its face, but not its nature.
US Chairman of the Joint Chiefs of Staff General Martin Dempsey has been holding “strategic seminars” over a giant map of the world larger than a basketball court [EPA]
They looked like a gang of geriatric giants. Clad in smart casual attire – dress shirts, sweaters, and jeans – and incongruous blue hospital booties, they strode around “the world”, stopping to stroke their chins and ponder this or that potential crisis. Among them was General Martin Dempsey, the Chairman of the Joint Chiefs of Staff, in a button-down shirt and jeans, without a medal or a ribbon in sight, his arms crossed, his gaze fixed. He had one foot plantedfirmly in Russia, the other partly in Kazakhstan, and yet the general hadn’t left the friendly confines of Virginia.Several times this year, Dempsey, the other joint chiefs, and regional war-fighting commanders have assembled at the Marine Corps Base in Quantico to conduct a futuristic war-game-meets-academic-seminar about the needs of the military in 2017. There, a giant map of the world, larger than a basketball court, was laid out so the Pentagon’s top brass could shuffle around the planet – provided they wore those scuff-preventing shoe covers – as they thought about “potential US national military vulnerabilities in future conflicts” (so one participant told the New York Times). The sight of those generals with the world underfoot was a fitting image for Washington’s military ambitions, its penchant for foreign interventions, and its contempt for (non-US) borders and national sovereignty.A world so much larger than a basketball court

In recent weeks, some of the possible fruits of Dempsey’s “strategic seminars”, military missions far from the confines of Quantico, have repeatedly popped up in the news. Sometimes buried in a story, sometimes as the headline, the reports attest to the Pentagon’s penchant for globetrotting.

In September, for example, Lieutenant General Robert L Caslen, Jr, revealed that, just months after the US military withdrew from Iraq, a unit of Special Operations Forces had already been redeployed there in an advisory role and that negotiations were underway to arrange for larger numbers of troops to train Iraqi forces in the future. That same month, the Obama administration won congressional approval to divert funds earmarked for counterterrorism aid for Pakistan to a new proxy project in Libya. According to the New York Times, US Special Operations Forces will likely bedeployed to create and train a 500-man Libyan commando unit to battle Islamic militant groups which have become increasingly powerful as a result of the 2011 US-aided revolution there.

Earlier this month, the New York Times reported that the US military had secretly sent a new task force to Jordan to assist local troops in responding to the civil war in neighbouring Syria. Only days later, that paper revealed that recent US efforts to train and assist surrogate forces for Honduras’s drug war were already crumbling amid a spiral of questions about the deaths of innocents, violations of international law, and suspected human rights abuses by Honduran allies.

Shortly after that, the Times reported the bleak, if hardly surprising, news that the proxy army the US has spent more than a decade building in Afghanistan is, according to officials, “so plagued with desertions and low re-enlistment rates that it has to replace a third of its entire force every year”. Rumors now regularly bubble up about a possible US-funded proxy war on the horizon in Northern Mali where al-Qaeda-linked Islamists have taken over vast stretches of territory – yet another direct result of last year’s intervention in Libya.

 Empire – The decline of the American empire

And these were just the offshore efforts that made it into the news. Many other US military actions abroad remain largely below the radar. Several weeks ago, for instance, US personnel were quietly deployed to Burundi to carry out training efforts in that small, landlocked, desperately poor East African nation. Another contingent of US Army and Air Force trainers headed to the similarly landlocked and poor West African nation of Burkina Faso to instruct indigenous forces.

At Camp Arifjan, an American base in Kuwait, US and local troops donned gas masks and protective suits to conduct joint chemical, biological, radiological, and nuclear training. In Guatemala, 200 Marines from Detachment Martillo completed a months-long deployment to assist indigenous naval forces and law enforcement agencies in drug interdiction efforts.

Across the globe, in the forbidding tropical forests of the Philippines, Marines joined elite Filipino troops to train for combat operations in jungle environments and to help enhance their skills as snipers. Marines from both nations also leapt from airplanes, 10,000 feet above the island archipelago, in an effort to further the “interoperability” of their forces. Meanwhile, in the Southeast Asian nation of Timor-Leste, Marines trained embassy guards and military police in crippling “compliance techniques” like pain holds and pressure point manipulation, as well as soldiers in jungle warfare as part of Exercise Crocodilo 2012.

The idea behind Dempsey’s “strategic seminars” was to plan for the future, to figure out how to properly respond to developments in far-flung corners of the globe. And in the real world, US forces are regularly putting preemptive pins in that giant map – from Africa to Asia, Latin America to the Middle East. On the surface, global engagement, training missions, and joint operations appear rational enough. And Dempsey’s big picture planning seems like a sensible way to think through solutions to future national security threats.

But when you consider how the Pentagon really operates, such war-gaming undoubtedly has an absurdist quality to it. After all, global threats turn out to come in every size imaginable, from fringe Islamic movements in Africa to Mexican drug gangs. How exactly they truly threaten US “national security” is often unclear – beyond some White House adviser’s or general’s say-so. And whatever alternatives come up in such Quantico seminars, the “sensible” response invariably turns out to be sending in the Marines, or the SEALs, or the drones, or some local proxies. In truth, there is no need to spend a day shuffling around a giant map in blue booties to figure it all out.

In one way or another, the US military is now involvedwith most of the nations on Earth. Its soldiers, commandos, trainers, base builders, drone jockeys, spies, and arms dealers, as well as associated hired guns and corporate contractors, can now be found just about everywhere on the planet. The sun never sets on American troops conducting operations, training allies, arming surrogates, schooling its own personnel, purchasing new weapons and equipment, developing fresh doctrine, implementing novel tactics, and refining their martial arts. The US has submarines trolling the briny deep and aircraft carrier task forces traversing the oceans and seas, robotic drones flying constant missions and manned aircraft patrolling the skies, while above them, spy satellites circle, peering down on friend and foe alike.

“The US military should have the planet on lockdown… yet after more than a decade of war, it has failed to eliminate a rag-tag Afghan insurgency with limited popular support.”

Since 2001, the US military has thrown everything in its arsenal, short of nuclear weapons, including untold billions of dollars in weaponry, technology, bribes, you name it, at a remarkably weak set of enemies – relatively small groups of poorly-armed fighters in impoverished nations like Iraq, Afghanistan, Somalia, and Yemen – while decisively defeating none of them. With its deep pockets and long reach, its technology and training acumen, as well as the devastatingly destructive power at its command, the US military should have the planet on lockdown. It should, by all rights, dominate the world just as the neoconservative dreamers of the early Bush years assumed it would.

Yet after more than a decade of war, it has failed to eliminate a rag-tag Afghan insurgency with limited popular support. It trained an indigenous Afghan force that was long known for its poor performance – before it became better known for killing its American trainers. It has spent years and untold tens of millions of tax dollars chasing down assorted firebrand clerics, various terrorist “lieutenants”, and a host of no-name militants belonging to al-Qaeda, mostly in the backlands of the planet. Instead of wiping out that organisation and its wannabes, however, it seems mainly to have facilitated its franchising around the world.

At the same time, it has managed to paint weak regional forces like Somalia’s al-Shabaab as transnational threats, then focus its resources on eradicating them, only to fail at the task. It has thrown millions of dollars in personnel, equipment, aid, and recently even troops into the task of eradicating low-level drug runners (as well as the major drug cartels), without putting a dent in the northward flow of narcotics to America’s cities and suburbs.

It spends billions on intelligence only to routinely find itself in the dark. It destroyed the regime of an Iraqi dictator and occupied his country, only to be fought to a standstill by ill-armed, ill-organised insurgencies there, then out-manoeuvered by the allies it had helped put in power, and unceremoniously bounced from the country (even if it is now beginning to claw its way back in). It spends untold millions of dollars to train and equip elite Navy SEALs to take on poor, untrained, lightly-armed adversaries, like gun-toting Somali pirates.

How not to change in a changing world

And that isn’t the half of it.

The US military devours money and yet delivers little in the way of victories. Its personnel may be among the most talented and well-trained on the planet, its weapons and technology the most sophisticated and advanced around. And when it comes to defence budgets, it far outspends the next nine largest nations combined (most of which are allies in any case), let alone its enemies like the Taliban, al-Shabaab, or al-Qaeda in the Arabian Peninsula, but in the real world of warfare this turns out to add up to remarkably little.

In a government filled with agencies routinely derided for profligacy, inefficiency, and producing poor outcomes, itsrecord may be unmatched in terms of waste and abject failure, though that seems to faze almost no one in Washington. For more than a decade, the US military has bounced from one failed doctrine to the next. There was Donald Rumsfeld’s “military lite”, followed by what could have been called military heavy (though it never got a name), which was superseded by General David Petraeus’s “counterinsurgency operations” (also known by its acronym COIN). This, in turn, has been succeeded by the Obama administration’s bid for future military triumph: a “light footprint” combination of special ops, drones, spies, civilian soldiers, cyberwarfare, and proxy fighters. Yet whatever the method employed, one thing has been constant: Successes have been fleeting, setbacks many, frustrations the name of the game, and victory MIA.

Convinced nonetheless that finding just the right formulafor applying force globally is the key to success, the US military is presently banking on that new six-point plan. Tomorrow, it may turn to a different war-lite mix. Somewhere down the road, it will undoubtedly again experiment with something heavier. And if history is any guide, counterinsurgency, a concept that failed the US in Vietnam and was resuscitated only to fail again in Afghanistan, will one day be back in vogue.

“The more time, effort and treasure the US invests in its military and its military adventures, the weaker the payback.”

In all of this, it should be obvious, a learning curve is lacking. Any solution to America’s war-fighting problems will undoubtedly require the sort of fundamental reevaluation of warfare and military might that no one in Washington is open to at the moment. It’s going to take more than a few days spent shuffling around a big map in plastic shoe covers.

American politicians never tire of extolling the virtues of the US military, which is now commonly hailed as “the finest fighting force in the history of the world”. This claim appears grotesquely at odds with reality. Aside from triumphs over such non-powers as the tiny Caribbean island of Grenada and the small Central American nation of Panama, the US military’s record since World War II has been a litany of disappointments: Stalemate in Korea, outright defeat in Vietnam, failures in Laos and Cambodia, debacles in Lebanon and Somalia, two wars against Iraq (both ending without victory), more than a decade of wheel-spinning in Afghanistan, and so on.

Something akin to the law of diminishing returns may be at work. The more time, effort and treasure the US invests in its military and its military adventures, the weaker the payback. In this context, the impressive destructive power of that military may not matter a bit, if it is tasked with doing things that military might, as it has been traditionally conceived, can perhaps no longer do.

Success may not be possible, whatever the circumstances, in the twenty-first-century world, and victory not even an option. Instead of trying yet again to find exactly the right formula or even reinventing warfare, perhaps the US military needs to reinvent itself and its raison d’être if it’s ever to break out of its long cycle of failure.

But don’t count on it.

Instead, expect the politicians to continue to heap on the praise, Congress to continue insuring funding at levels that stagger the imagination, presidents to continue applying blunt force to complex geopolitical problems (even if in slightly different ways), arms dealers to continue churning out wonder weapons that prove less than wondrous, and the Pentagon continuing to fail to win.

Coming off the latest series of failures, the US military has leapt headlong into yet another transitional period – call it the changing face of empire – but don’t expect a change in weapons, tactics, strategy, or even doctrine to yield a change in results. As the adage goes: The more things change, the more they stay the same.

Nick Turse is the managing editor of TomDispatch.com and a fellow at the Nation Institute. He is the author/editor of several books, including the just published The Changing Face of Empire: Special Ops, Drones, Spies, Proxy Fighters, Secret Bases, and Cyberwarfare  (Haymarket Books). This piece is the final article in his series on the changing face of American empire, which is being underwritten by Lannan Foundation.

A version of this article first appeared on TomDispatch.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.

Source:
Tomdispatch

The Road to World War 3

The Road to World War 3

Published on Sep 11, 2012 by 

We are on a road that leads straight to the World War 3, but in order to see that and to fully understand what is at stake you have to look at the big picture and connect the dots. This video examines the history of the dollar, its relation to oil, and the real motives behind the wars of the past two decades.

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Credits:
Music is original composition by StormCloudsGathering
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Scenes from Grey State trailer used with permission fromhttp://www.graystatemovie.com

The GRAY STATE Project–the American People Under Seige

The GRAY STATE Project

The world reels with the turmoil of war, geological disaster, and economic collapse, while Americans continue to submerge themselves in illusions of safety and immunity. While rights are sold for security, the federal government, swollen with power, begins a systematic takeover of liberty in order to bring about a New World Order.

Americans, quarantined to militarized districts, become a population ripe for tyrannical control.
Fearmongering, terrorism, police state, martial law, war, arrest, internment, hunger, oppression, violence, resistance – these are the terms by which Americans define their existence. Neighbor is turned against neighbor as the value of the dollar plunges to zero, food supplies are depleted, and everyone becomes a terror suspect. There are arrests. Disappearances. Bio attacks. Public executions of those even suspected of dissent. Even rumors of concentration camps on American soil.

This is the backdrop to an unfolding story of resistance. American militias prepare for guerilla warfare. There are mass defections from the military as true Patriots attempt to rally around the Constitution and defend liberty, preparing a national insurgency against federal forces, knowing full well this will be the last time in history the oppressed will be capable of organized resistance.

It is a time of transition, of shifting alliance, of mass awakening and mass execution. It is an impending storm, an iron-gray morning that puts into effect decades of over-comfort and complacency, and Americans wake up to an occupied homeland. It is a time of lists. Black list, white list, and those still caught in the middle, those who risk physical death for their free will and those who sell their souls to maintain their idle thoughts and easy comforts. It is in this Gray State that the perpetuation of human freedom will be contested, or crushed.

Is it the near future, or is it the present? The Gray State is coming – by consent or conquest. This is battlefield USA.

Encompassing the world of conspiracy theory, economic collapse, global disaster, end-time prophecies, martial law, and growing civil unrest, GRAY STATE is a piercing look into the immediate future in which the withered remains of freedom are traded for an impression of security.

GRAY STATE is the reality that can no longer be ignored. It is coming – by consent or conquest.

Watch the first official Gray State concept trailer here.

What is the Gray State?

The GRAY STATE is here. It always was.

A Leninist critique of Western humanitarian imperialism

A Leninist critique of Western humanitarian imperialism

By Nicolas Bonnal
A Leninist critique of Western humanitarian imperialism. 48364.jpeg

We are living dangerous yet moral times, for a few hundreds of arrogant and powerful men (call them Bilderbergs, Illuminati, Trilateralists) have decided to rule the World together in the name of “the commerce and the imaginative”, as put Cecil Rhodes, the founder of the first version of the NWO which opened first modern concentration camps for the Boers’ families 111 years ago.

We are thus ruled by humanitarian oligarchs, by imaginative and moral rascals who mix oil with principles and raw materials with innumerable moral commandments which oblige us to intervene everywhere. Warmongers adore justifying their wars. It is like in the time of Hitler, when he was compelled to invade Czechoslovakia to protect his fellow Germans, then Poland to protect the citizens of Danzig, then soviet Russia to protect the West against the evils of communism (the Nazis, while massacring anyone, often boasted of protecting western heritage)!

And today when the West attacks and bombs Libya, Syria or Lebanon, waiting for poor Iran, massacring civilians, we are used to understand that it is for the promotion of good and to fight evil. Thanks to their own bad faith and disinformation, western mainstream media, politicians, military and adventurers are auto-convinced that they castigate the bad to celebrate the good, may they be the sinister Mujahedin in Syria or elsewhere. Such limited handling of reality explicates in Europe or in America our debt, our uncontrolled immigration, our social unrest, our unemployment, our weakness. Yet it has to be understood. Why are we so wrong?

I was for that reason reading again Lenin’s masterwork about imperialism (Imperialism highest stage of capitalism). Some things have changed, fortunately for some countries (they are no more starved and whipped by democratic colonial powers), some others have not. The imperial and barbaric movement is still the same, except that it is now uneasy to assail India or China for a new break up, and that Russia is too strong and efficiently protects some of her allies. Of course now the hidden companions who rule the world have decided to ruin western people delocalizing all production and developing immigration… but I won’t complaint since at Lenin’s times these enlightened elites had decided to butcher Europe as a whole to defend some local mines or overseas interests… Anyway Lenin shrewdly denounces in his book decaying capitalism, economic parasitism and the oligarchic conduct of the 300, as put Rathenau, who then ruled their gloomy West.

Yet I must recognize that the most interesting parts of Vladimir Lenin’s book come from his quote of an unknown and remarkable British writer named Hobson (John A. Hobson, Imperialism, a study). Contrarily to Lenin, Hobson is not a Marxist, and that perhaps gives him more intuition and finesse when it comes to understand the motives of our humanitarian elites. A capitalist may be a ruthless businessman full of greed, but he can be a real idealist too, and of the worst kind. Writes Hobson on the matter:

In view of the part which the non-economic factors of patriotism, adventure, military enterprise, political ambition, and philanthropy play in imperial expansion, it may appear that to impute to financiers so much power is to take a too narrowly economic view of history.

Hobson then reproaches the sinister role of adventurers, writers (Kipling, Verne, Haggard, etc.), missionaries, travellers, sportsmen, scientists, who promote the imperialist ideals. He writes and it’s always the case that the western imperialist consider that they must have such a divine right of force that they even can lead “to the point of complete subjugation or extermination the physical struggle between races and types of civilisation.” The lower race must disappear not because it is black or yellow, but because it is less moral! This is what happens nowadays with the Arabs, may they be Palestinians, Iraqis, Syrians or Libyans.

Of course in 1900 nobody in the European populations is convinced of the imperialistic benefits. Life is hard in Europe, inequalities fantastic, and many people must emigrate… in free countries, not in our colonies. Also, the expenses for colonial wars are enormous. This is why, for Hobson, the imperialist bankers, traders and their affiliates emphasize humanitarian motives, buy the press, print travel books and celebrate heroism and exotic action. They adore the generous missionaries, travellers (Dr Livingstone, I presume?) and all the Allan Quatermain and Phileas Fogg of the creation… These feelings are fed by a flood of the literature of travel and of imaginative writing… Today we have terrorist novels or books, manipulated reportages, false flag attacks, painted terrorism, faked digital pictures, and so on to justify for instance the “three trillion dollars” (Jo Stieglitz) war of Iraq or of Afghanistan. We all remember famous Randolph Hearst’s expression, pronounced on the verge of infamous American-Spanish war: I’ll produce the war! There was too a false flag attack to unclench war process.

Hobson has got a master point: like every capitalistic operation, imperialism is awfully interested in money yet it is often driven by a foolish agenda based on crossed morality, biased ethics and anarchic interventionism. We have today the human rights agenda, run by non-governmental-organisations, secret services and philanthropist billionaires. Already in 1900, there exists in a considerable though not a large proportion of the British nation a genuine desire to spread Christianity among the heathen, to diminish the cruelty and other sufferings… Hell is often paved with good intentions… western oligarchs want to be good even if, like said Oscar Wilde, “our conscience is always cowardice.”

Since the West is no more Christian, it has become a criminal with a conscience! Western madness, this mix of hubris and nemesis, had of course softened after WW2 and decolonization, but it violently stroke back since the end of USSR; and the American agenda in Balkans and Middle-East was coldly applied by Clinton, Bush or Obama. And the same state of mind has remained: our elites and the so-called public opinion forged by media, polls, and bad consciousness (“we must destroy any new Hitler”, especially if he lives in a small modernist Arab country!) have accustomed themselves to self-deception and fake ideals. Of course we know the strategic role of Afghanistan or Syria, the importance of oilfields, pipelines and minerals. But they’re not alone, and we don’t know how far the limits of Western bad faith can lead. I let humanist and pessimistic Hobson conclude:

The gravest peril of Imperialism lies in the state of mind of a nation which has become habituated to this deception and which has rendered itself incapable of self-criticism.

Nicolas Bonnal

Toward Barbarism: US Imperialism Unleashed

Toward Barbarism: US Imperialism Unleashed

by Ben Schreiner
The triumph of imperialism leads to the annihilation of civilization.
Rosa Luxemburg, The Junius Pamphlet
With signs of a global economic downturn mounting, US aggression across the Middle East and North Africa ratchets up.  And once again, US imperialism stands poised to swing open the gates of Hell.
The choice presently confronting humanity, then, is one between imperialism on the one hand, and the struggle against imperialism on the other.  It’s a choice of socialism or barbarism.
Global Capitalism Imperiled
 
According to the IMF’s World Economic Outlook report released last week, the “risks for a serious global slowdown are alarmingly high.”  The report projects the world economy to expand just 3.3 percent this year and 3.6 percent in 2013—both projections down from the IMF’s July forecast.   As Joseph Davis, chief economist at the Vanguard Group, cautioned to the Wall Street Journal, “The odds of a global recession are not fully appreciated.”
Indeed, for as the Financial Times reports, the Tracking Indices for the Global Economic Recovery, the Brookings Institution-Financial Times index of the world economy, finds severe problems “in both advanced and emerging markets.”
“The global economic recovery,” Brookings’ senior fellow and index creator Eswar Prasad warned, “is on the ropes.”
And though in its latest report the IMF continued to peddle the harsh elixir of austerity for the depressed economies of the euro zone periphery, the Fund also came to tacitly acknowledge the limits of austerity.
“The IMF now says global efforts to slash deficits and debt may have hurt growth because they occurred too quickly and too widely,” the Wall Street Journal reported.
But with the limits of austerity as a means of resolving the present crisis apparent, the last remaining card for the capitalist elite to play in their attempt to regenerate global capitalism appears to be in unleashing the forces of “creative destruction” wrought by military aggression.  As Henryk Grossman warned in his Law of Accumulation, “The destructions and devaluations of war are a means of warding off the immanent collapse [of capitalism], of creating a breathing space for the accumulation of capital.”
It is thus out of the need to renew the impetus for capital accumulation that the iron fist of US imperialism gains free rein once more across the full spectrum of what American neo-conservatives deem the “arc of instability.”
US Imperialism on the March
 
According to the New York Times, the Pentagon is readying military strikes in Libya in retaliation for the September attack on the US compound in Benghazi.  As the paper reports, “The top-secret Joint Special Operations Command is compiling so-called target packages of detailed information about the suspects.”
“Potential military options could include drone strikes, Special Operations raids like the one that killed Osama bin Laden and joint missions with Libyan authorities.”
The Times goes on to report that the Pentagon is also rushing to train and equip a 500 member Libyan commando force to be used to combat “Islamic extremists” within the country.
At the same time, the Pentagon has reportedly dispatched a task force of 150 military “planners” and “specialists” (i.e., special operations troops) to a Jordanian military base along the Jordan-Syria border.  Speaking at a NATO conference in Brussels last week, US Defense Secretary Leon Panetta claimed that the task force was sent to help Jordan “monitor chemical and biological weapons sites in Syria.”
The specter of chemical weapons has been increasingly used as a pretext by the Atlantic powers to threaten military intervention into Syria.  As President Obama declared in August, the use of chemical weapons by Syrian forces would be a “red line,” which would force him to change his “calculus” on intervention.
“Once again, Western powers are digging deep for excuses to intervene militarily in another conflict-torn Middle East country,” an editorial in the state-run Xinhua news agency of China read in response to Obama’s threat.
Sure enough, as the New York Times reported, discussions have already taken place over using the Jordanian-stationed US task force to help establish a buffer zone within Syrian territory.
(In addition to the deployment of troops along the Jordan-Syria border,  CIA operatives are presently active along the Syria-Turkey border, facilitating the flow of arms to rebel forces.  Meanwhile, a recent report in the Los Angeles Timesnoted that the US military is currently using aerial surveillance drones to monitor Syrian chemical weapon stockpiles.)
Of course, the stepped up targeting of Syria cannot be decoupled from the joint Israel-US campaign against Iran.  After all, as hawks Michael Doran and Max Boot argue in a New York Times op-ed, the first reason American intervention in Syria is now merited is because it “would diminish Iran’s influence in the Arab world.”
The road to Tehran, we see, may very well lead through Damascus; although, the urge to fly non-stop to Tehran may just prove too strong to resist.
Marching Toward Tehran
 
With Iran clearly in mind, the US and Israel are set to begin a massive three-week joint missile and air defense exercise later this month.  The exercise, Business Week reports, will include 3,500 US personnel and 1,000 members of the Israel Defense Forces, making it the largest joint military exercise held between the two nations.  The planned war game also occurs amid mounting speculation of a looming strike against Iran.
According to a report in Foreign Policy by David Rothkopf, the US and Israel are actively planning a joint “surgical strike targeting Iranian enrichment facilities.”  Rothkopf, a former Clinton administration official and Editor-at-Large ofForeign Policy, cites his source as stating that “the strike might take only ‘a couple of hours’ in the best case and only would involve a ‘day or two’ overall.”
The strike, Rothkopf quotes an “advocate” of an attack as stating, would have a “transformative outcome: saving Iraq, Syria, Lebanon, reanimating the peace process, securing the Gulf, sending an unequivocal message to Russia and China, and assuring American ascendancy in the region for a decade to come.”  This, of course, being the essence of the proverbial neo-con wet dream.
Remarkably, Rothkopf even goes as far as to triumph the idea of a “surgical strike” as a potential October Surprise Obama could use to propel himself back to the White House.
It appears now, however, that Rothkopf’s “report” may have been little more than a plant by the Israeli embassy in Washington.  A move, perhaps, intended to further coerce Obama into adopting a more hawkish stance on Iran, while simultaneously serving to downplay the risks of an attack.
Of course, peddling the notion of a so-called “surgical strike” on Iran is nothing particularly new.  In March, Jeffrey Goldberg reported for Bloomberg that Israeli talk of striking Iran had assumed a rather optimistic tenor.
“One conclusion key [Israeli] officials have reached,” Goldberg wrote after a trip to Israel, “is that a strike on six or eight Iranian facilities will not lead, as is generally assumed, to all-out war.”
(One cannot help wonder if the Rothkopf and Goldberg share the same source.)
Such assessments, though, are rather dubious, given that they directly contradict numerous assessments determining that any strike against Iran would quickly spiral into a regional conflict.  A report earlier this year in the New York Times, for instance, noted a war game simulation run by the Pentagon forecast that an Israeli strike “would lead to a wider regional war, which could draw in the United States and leave hundreds of Americans dead.”
Likewise, a September war game organized by Kenneth Pollack, a senior fellow at the Brookings Institution’s Saban Center for Middle East Policy, resulted in a dangerous escalation from both sides.  As the Washington Post’s David Ignatius reported, “The game showed how easy it was for each side to misread the other’s signals.”
“Misjudgment was the essence of this game,” Ignatius continued.  “Each side thought it was choosing limited options, but their moves were interpreted as crossing red lines. Attacks proved more deadly than expected; signals were not understood; attempts to open channels of communication were ignored; the desire to look tough compelled actions that produced results neither side wanted.”
“War,” as Clausewitz wrote, “is the province of danger.”
Toward Barbarism
 
US imperial dreams, however, are hardly confined to setting the Middle East ablaze.  Imperial ambitions—rooted in the capitalist logic of endless expansion—are inherently limitless.  Thus, we see the US today readying to propel the greater Middle East into the abyss, while simultaneously “pivoting” to the Asia-Pacific in order to “contain” a rising China.
US imperialism, however, is destined for defeat (and sooner rather than later).  The US, after all, can only use its immense military power to keep potential competitors in check for so long.  The universal law of change cannot be held at bay by the barrel of a gun in perpetuity.  As Lenin asked and answered in his pamphlet Imperialism: “Is it ‘conceivable’ that in ten or twenty years’ time the relative strength of the imperialist powers will have remained unchanged? Absolutely inconceivable.”
But imperial powers are always dangerously deluded by the strength of their power—impervious to its ultimate limits.  As a George W. Bush administration official once remarked to the journalist Ron Suskind: “’We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”
(One would be mistaken to believe that such hubris is not as present in the Obama White House as it was in the Bush administration.)
Such arrogance from the power elite—indicative of imperial rot—is but a byproduct of the imperialist imperative of endless expansion and conquest.  And it is this very imperative that today compels US imperialism towards igniting a military conflagration in the Middle East threatening to ensnare the global powers. “A great cemetery,” as Luxemburg warned nearly a century ago, awaits such a triumph of barbarism.
The only means with which to elude such a miserable fate is found in the revolutionary power of working people to resist. As Luxemburg argued, escape from barbarism is only possible once the working class comes to seize “its own destiny and escape the role of the lackey to the ruling classes.”

The only genuine and enduring hope for humanity, then, lies is in the struggle for socialism.

United Front Against Austerity Public Assembly–October 27, 2012

Update 10/9: Please RSVP if you plan to attend the October 27 Public Assembly. This will be a great help to us in planning for the event.

UFAA Public Assembly

October 27, 2012
12-6pm

INN World Report
56 Walker Street, NYC | Map

About UFAA and the Public Assembly

Austerity – the imminent, existential threat to the American people. No matter the outcome of the November elections in the US, working families will be thrown over the proverbial “fiscal cliff” in the name of debt and deficits. Cutting Social Security, Medicare and other threads in our fragile social fabric is not only grossly unjust – it won’t work! The so-called “Grand Bargain” threatens to unleash a death spiral of unemployment and poverty which our nation is not certain to survive.

Organizing to defend our economic rights. It is for this reason that we must organize now to mobilize effective opposition to the impending austerity offensive; agitate to shift the burden of the economic depression onto Wall Street oligarchs; and to build momentum toward a genuine political revolution of, by and for the people.

Not a conference – an assembly! The UFAA Public Assembly on October 27 will not be “just another conference” that ends when the doors close. Participants will hear proposals from distinguished speakers, engage in floor debate, and vote on vital strategic matters. The UFAA intends to build on Wisconsin and Occupy – with decisions, demands and action.

ASSEMBLY FORMAT

Addresses

(90+ minutes) A series of brief addresses, both live and recorded, from distinguished representatives.

Proposals and Debate

(4+ hours) A moderated presentation of proposals, live debate and votes. For example, “what is the more effective demand – a 1% Wall Street sales tax, or a more progressive income tax?”

All persons representing proposals acceptable to the American public are invited to attend and debate. Disruptive behavior and tactics will not be tolerated.

KEY ISSUES WILL INCLUDE

Program

Concrete demands for political & economic reform.

Organization

An organic coalition with organized centers of leadership.

Strategy

Identifying our immediate strategic needs, and a roadmap for success.

Leadership

Developing and attracting political leaders to our coalition.

MAKE YOUR VOICE HEARD

We want to hear from:

  • Labor unions
  • Political organizations
  • Journalists & media
  • Academics and public advocates
  • Groups representing blacks, hispanics and other disadvantaged minorities
  • Professional organizations, especially those in industry, agriculture, science and engineering

General Motors Wants Out of Govt. Bailout That Enabled GM Sell-Out of Workers and Retirees

SAN FRANCISCO (MarketWatch) – The Wall Street Journal took a fresh look Monday at General Motors Co.’s efforts to end its awkward relationship with the U.S. Treasury.

The article, citing “people familiar with the government’s thinking,” states the government is reluctant to sell its 26.5% holding in GM because it would mean booking a loss on the bailout. That’s understandable. While it’s great to be able to point to all the jobs saved by the $50 billion bailout, any political currency gained by the White House would be a lot sweeter if it also made a profit on the deal.

That’s not happening. Not yet, anyway. GM GM +1.92%   is currently trading at just under $24 a share, well below its $33 post-bankruptcy public offering in November 2010. The share price needs to reach $53 for the government to extract itself from GM without a loss.


Reuters

General Motors assembly plant in Hamtramck, Mich.

What’s the likelihood of that happening? Much hinges on the success of GM’s heavily revamped lineup here at home, its ability to stem losses in Europe, and whether it can continue to grow sales in Asia. But with less than two months to go before the presidential election, investors won’t have enough information by then to judge whether GM’s performance on these three critical fronts has a realistic shot at lifting the share price past $53.

Does Wall Street think it can happen? The charts are not reassuring. Analysts surveyed by FactSet currently have an average $30.19 price target on the stock, slipping from a 2012 high of $34.35 in April. And while no one has a sell rating on GM, 4.3% of analysts following the company now have underweight ratings on it, ending a nine-month run free of underweight ratings, a reflection more of tougher macroeconomic conditions than specific shortcomings at GM.
So, given the political stakes, there’s little reason to bet the Treasury Department will bail out of its GM holdings any time soon. Unless, of course, Mitt Romney wins the election. If he does, and he keeps his word, he’ll end this uncomfortable alliance right away, incurring a loss to taxpayers that he can pin on his predecessor.

That scenario might be good for GM shareholders. If company executives are to be believed, shedding government oversight would free GM to conduct business the way it sees fit, not the Treasury.

But campaign rhetoric rarely delivers what it promises. As with most things, it’s easier to rush in than to get out. (Think Iraq, Afghanistan.) In this case, exiting GM without a loss would be spun into exiting with honor. Achieving anything close to that is going to take a while, especially in this economy.

Does General Motors (GM) Control US Uzbek Policy?

[If not for Obama/Bush policies to ship US manufacturing jobs overseas, GM would be downsizing under federal bankruptcy jurisdiction right now, over its failure to honor contractual commitments made to United Auto Workers and other union workers in exchange for multiple contract concessions.  In other words, if General Motors had been forced to honor the contracts that it had entered into with its workforce, then it would have been bankrupt.  They had gotten too big for their britches when their famed product reputation for excellence could not sell enough Chevrolets, Pontiacs and Buicks to produce a profit over their expenses.  Time and time again, workers gave the corporation huge contract concessions to maintain shareholder profits.  Over and over, GM management refused to produce the clean, small economy cars (like those made today in Uzbekistan) that the cash-strapped, environmentally conscious American people demanded, until it was too late.  Now, there are very few cars really made in the USA.   Because Obama allows GM corporation to continue operating as an American company, even though nearly every component of every car and truck they sell is manufactured outside the US, they can maintain the illusion that GM still makes "American-made" automobiles.  Many of "Chevy's" vehicles are still assembled here, but unlike the miniature Uzbek  Chevrolet "Spark," they are not "made locally."

No one can honestly claim today that the Uzbek workers "took our jobs," but the jobs were handed to them, thanks to our beloved President and Congressmen.]

In Uzbekistan, a Chevy on every corner

ALMATY (Reuters) – When a Tashkent resident flags down a private car for a $2 ride, chances are it will be a Chevrolet. Ninety-four percent of new cars sold in Uzbekistan last year were made by General Motors – the biggest share of any market served by the U.S. auto giant.That General Motors should have a foothold in the reclusive former Soviet republic owes much to the technology and capital it brings to a country which, under veteran President Islam Karimov, has been the graveyard of many foreign ventures.

Landlocked Uzbekistan, a mainly Muslim country of 29 million in the heart of Central Asia, is ranked by rights bodies among the world’s most repressive states. Hundreds died in 2005 during a bloody crackdown on an uprising in the Ferghana valley city of Andizhan.

The same, densely populated valley, where poverty fuels simmering discontent with Karimov’s rule, is home to the GM plant where South Korean-trained workers file through electronic turnstiles to sparkling production lines beyond.

Robots tease metal sheets into shiny new Chevys and workers are trained to calmly respond to musical signals, in contrast to the noisy bustle, embroidered skull caps and brightly colored gowns on display in Asaka, the town outside the factory gates.

A former Communist party apparatchik, Karimov, now 74, has gambled heavily on building high-tech industries to try to cut dependence on the export of cotton, gold and other raw materials that were the backbone of Uzbek production in Soviet times.

“The Uzbek government’s economic development model is essentially one of import substitution,” said Lilit Gevorgyan, analyst at IHS Global Insight. “Uzbekistan lacks the capital and the new technologies. The joint venture with GM is a good example of how they can achieve this goal.”

The compact Matiz and the Nexia sedan so ubiquitous in Tashkent, the country’s capital, are a throwback to the 1990s, when South Korea’s Daewoo Motor Co was Uzbekistan’s joint venture partner at the plant.

Daewoo Motor Co split from its parent, Daewoo Group, in 2001 and later became part of General Motors. In its current incarnation, GM Uzbekistan is owned 25 percent by GM and 75 percent by state company UzAvtosanoat.

“We appreciate the great support of the Uzbek government, which clearly recognizes the fundamental role car manufacturing can make to a nation’s economy,” a GM spokesman wrote in an emailed reply to questions.

GM sold 121,584 vehicles in Uzbekistan last year, making the country the eighth-largest market for its Chevrolet brand. The joint venture produced more than 225,000 cars last year and will raise output to 250,000 units this year.

On Wednesday, the company rolled out a new model, the Chevrolet Cobalt, a family-size sedan aimed both at the local Uzbek market and other former Soviet states.

Reuters text correspondents are not accredited to report in Uzbekistan and permission was not granted to attend the launch. But an accredited TV cameraman was admitted and also visited GM’s Asaka plant and engine plant in Tashkent with a photographer.

Marimjon Jumabayev, manager of the production line at the Asaka plant which rolls out the Chevrolet Spark, described the launch as a “great achievement”.

“I am happy to glorify my nation, Uzbekistan,” he said. A Foreign Ministry official accompanied Reuters on the visit.

‘RISKY ENVIRONMENT’

Not every foreign investor has met with success in Uzbekistan. Russia’s top mobile phone operator, MTS, which trades on the New York Stock Exchange, has written off $1.1 billion after its Uzbek license was permanently revoked on August 13.

Uzbekistan’s State Inspectorate for Communications cited “repeated and systematic” violations when it first suspended the MTS license in July.

But the company says it is facing a “classic shakedown” of the type that has forced out London-listed miner Oxus Gold, U.S. company Newmont Mining Corp and Russia’s Wimm-Bill-Dann, now part of PepsiCo.

The dispute prompted the GSMA, an organization uniting nearly 800 mobile operators worldwide, to write an open letter on Wednesday asking Karimov to intervene directly in a case that has seen four local MTS managers imprisoned.

“The mobile communications industry is a lucrative source of potential foreign investment to Uzbekistan, and other providers may be hesitant to make investments after seeing what has happened to MTS-Uzbekistan,” GSMA Director-General Anne Bouverot wrote.

A U.S. State Department official raised the matter on a visit to Tashkent last month, while the Helsinki Commission, an independent U.S. government agency that monitors human rights, has also written to Karimov to express its concern.

Ties between the West and Uzbekistan that soured after the Andizhan massacre are warming again, however, in anticipation of the drawdown of NATO troops from Afghanistan in 2014.

Neighboring Uzbekistan has been a vital cog in the transit route to supply NATO-led forces fighting the Taliban. U.S. influence also acts as a counter-balance to Russia’s strategic designs on its former Soviet hinterland.

Secretary of State Hillary Clinton last year toured the GM Powertrain-Uzbekistan plant in Tashkent, a separate joint venture between GM and its Uzbek partner to make fuel-efficient engines for its light vehicles.

“The U.S. hopes that having its businesses operating in Uzbekistan will only help to cement their strategic relations,” said Gevorgyan.

And GM is not alone. Case New Holland, for example, has been manufacturing agricultural equipment in Tashkent for 15 years, Robert Blake, Assistant Secretary of State for South and Central Asia, said during a recent visit by a U.S. business delegation.

“I hear a consistent message that Uzbekistan has great potential as an investment destination. However, to reach its full economic potential, it should address persistent challenges in the business and investment climate,” Blake said in a speech in Tashkent on August 17.

“Delays in currency conversion prevent manufacturers from importing the supplies they need to produce their finished goods, and the problem can be compounded by complex and uncertain customs procedures.”

YEAR-LONG QUEUES

For GM, the launch of the Cobalt reinforces its presence in the emerging markets now driving the growth of the world’s top auto makers. The car, which has optional six-speed transmission, will also be built in Brazil for the South American market.

The Chevrolet Spark, the Captiva sport utility vehicle and the glitzy Malibu sedan vastly outnumber the Russian-made Lada, a relic of the Soviet era, on the dusty alleys of the ancient Silk Road cities of Samarkand and Bukhara.

In a country where the economy is tightly regulated and monthly wages average $300 in Tashkent and less in rural areas, many would-be Chevy owners wait as long as a year to buy their car, after making a deposit of up to 85 percent of its price.

The overwhelming popularity of the Chevrolet in Uzbekistan can also be explained, in part, by prohibitive customs duties and other taxes on imported cars.

A local journalist with knowledge of the car market, who asked not to be identified, said by telephone that the myriad costs incurred when importing a car could add up to 150 percent of the actual purchase price.

Umid, a 21-year-old university graduate who, like many Tashkent residents, makes a living driving his private car as a taxi, said he had once tried to buy a second-hand Mercedes in Dubai to replace his old Nexia.

“I called home and my friends made me drop the idea. The old Mercedes would have cost me nearly as much as a brand new limo in Uzbekistan,” he said.

Humming a melody to himself as he weaved his tiny Matiz through a leafy Tashkent suburb, Bahauddin, a 50-year-old former shop assistant, is happy enough with his Chevy.

After quitting his job to undergo cancer surgery, the income he earns ferrying passengers around the capital is just enough to get by.

“I had no money to buy food,” he said. “Now I have this car. It’s a real life-saver.”

(Reporting by Almaty newsroom; Editing by Andrew Osborn)

(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp

Significant recession imminent if Congress doesn’t act on fiscal cliff: CBO report

[If American Congressmen cannot immediately stop themselves from passing simultaneous tax hikes and budget cuts, then the American economy will take a nosedive in the first half of next year.  It is that extreme and that certain, Congress is arriving at a very ugly "moment of truth," which none of us should be ignoring.  The American economy, and by extension, the entire world economy, is about to plunge into another deep dark economic chasm which can only be avoided if all Congressmen and Congresswomen change their own natures overnight.  But that will never happen, Congress will NOT CHANGE until we force it to change.  If we cannot immediately reign-in Congress, then America will enter into an economic downturn far worse than those in the  recent past, which have been described as "worse than the Great Depression."  In the first half of 2013, we will be in the same boat as the European Union.  Mandated tax increases on the Middle Class and the wealthy will only exacerbate a bad conundrum.   We can no longer afford Congress the luxury of following its own customary, contradictory budget policies.  There has to be some sort of citizen enforcement of Constitutional Law, in order to bind the hands of Congress, so that they can no longer simultaneously add to the budget and cut it at the same time.  The American Congress behaves as if all of them were "Lords," or other "aristocrats," who did not have to answer to the people they represent, administering laws arbitrarily, deciding which of their friends and relatives would receive their fortunes from government largess.  Obama's policies and stop-gap measures have only amplified the existing contradictions in American govt. policies and accelerated the conflict.  The closer we get to the American police state, the more our society of alleged "free choice" comes to resemble a classic totalitarian dictatorship, much like that of the former CIS states dictatorships.  Downtown Portsmouth, Ohio will come to look more and more like downtown Khorog, Tajikistan, where the military now rules in a most brutal manner.  As the clock ticks down to zero, notice just how much Obama clings to the pattern of continually making things more painful by constantly avoiding the appearance of pain.  He is a typical consensus-building politician, who will never try to make things a little better by offering a painful cure.

Can the world be saved or won by belt-tightening alone, even in conjunction with incentives to wealthy investors?  Perhaps during less dire times than the era we are entering it might have worked.  More money is now needed to set the world aright than all of the gold that is now hoarded away.  To set the course of humanity upon a path of progress, one which is far different than the destructive track we have been on, will require massive infrastructure investments, especially in those areas where there has been almost no infrastructure to speak of.  We have run out of road and must therefore, build new roads.   We haven't the luxury to wait to make these infrastructure improvements until we have saved enough to finance the work; we need that money now--but we will NOT HAVE that money now.  We will instead, blissfully sail the American ship of state off the edge of the cliff.  It is going to be a very rough ride.]

Significant recession imminent if Congress doesn’t act on fiscal cliff: CBO report

The nation would be plunged into a deep recession during the first half of next year if Congress fails to avert nearly $500 billion in tax hikes and spending cuts set to hit in January, congressional budget analysts said Wednesday.

The massive round of New Year’s belt-tightening – variously known as the fiscal cliff or Taxmageddon – would disrupt recent economic progress, push the unemployment rate back up to 9.1 percent by the end of 2013 and cause economic conditions “that will probably be considered a recession,” the nonpartisan Congressional Budget Office said.

The outlook is considerably darker than the forecast the agency released in January, when CBO predicted that the fiscal cliff would trigger a modest recession in the first half of 2013, followed by a quick recovery.

Since that forecast was issued, Congress has steepened the fiscal cliff by extending a temporary payroll tax break and emergency unemployment benefits, which are now also set to expire in January.

In addition, CBO analysts concluded that the underlying economy is weaker than previously predicted. In its latest budget outlook, the CBO predicts the federal deficit will be $1.1 trillion in the fiscal year that ends in September, marking the fourth straight year of deficits in excess of $1 trillion.

 

US austerity: Genocide of 50 million people

US austerity: Genocide of 50 million people

50 million Americans are in danger of losing their lives due to the government’s austerity measures.

No matter whether the next US president is named Obama or Romney, the Wall Street financier elite that dominates the United States is psychotically planning a series of tax increases for the middle class and working people, cuts in benefits and social services, and a transfer of wealth in favor of the top 1%, all of which will add up to a further cut of about 25% in the depleted US standard of living.

The mythical “fiscal cliff”

This outcome is being prepared right now by a demagogic propaganda campaign around the slogan that the United States faces a “fiscal cliff” at the end of the current calendar year. This alleged fiscal cliff is the result of two factors. First, the tax cuts enacted by George Bush the younger in the months before 9/11 are due to expire. If the Bush tax cuts are ended, the average family would pay a few hundred dollars more. But the tax rate for the richest earners would go from 35% to 39.6%, which, at high levels of income, can mean hundreds of thousands of dollars or more in taxes.

At the same time, stock speculators and hedge fund hyenas like Mitt Romney would no longer pay 15%, but rather 20%, on their profits. In other words, the Bush tax cuts were mainly a gift to the super-rich. The Republicans want to keep the Bush tax cuts for the rich, and if possible make people in the middle – earning between $48,000 and $80,000 per year – pay significantly more.

The other aspect of the fiscal cliff are the automatic cuts in military spending and social services spending which were built in to the budget agreement of August, 2011 (popularly known as the “Satan Sandwich”) which allowed the United States to avoid default on necessary payments. Under these automatic cuts, the Pentagon budget would be cut by about 8% or $500 billion over 10 years. At the same time, doctors and hospitals working for Medicare, the government’s health insurance program for people over 65, will suffer a 2% payment cut across the board. The goal of all this is to reduce federal spending by $1.2 trillion over the next 10 years. Obama and the Congress both ignore that austerity cuts of this type have actually increased the budget deficit in Greece and other European countries where they have been tried.

The lame duck session and the grand bargain

The goal of reactionary Republicans and of Obama’s Wall Street Democrats is to negotiate a “Grand Bargain” of austerity and cuts sometime in the next few months. One possible time for this dirty deal to be made will come in December, after the US general election at the beginning of November. In December, significant numbers of defeated or retiring congressmen and senators will be leaving, and many will be looking for jobs on Wall Street. They will be eager to betray the economic interests of the American people to curry favor with the bankers they hope will hire them. Otherwise, pressure will build for a Grand Bargain during the early months of 2013.

Such a Grand Bargain of austerity will target in particular Social Security (government old-age pensions), Medicare (health care for seniors), and Medicaid (health care for the poor); only token sacrifices will be asked from the rich 1%. If this scenario actually occurs, the lives of up to 50 million Americans will be in grave danger.

This is first of all the case because of the long decline in the American standard of living, which has, according to some reckonings, been reduced by about two thirds since August 15, 1971, when Nixon and Kissinger abandoned the Bretton Woods international monetary system. There is no more margin for cuts without tragic consequences. During this same period, the social mobility in the United States – understood as the ability to go from being poor to being well-off – has declined markedly, and is now inferior to every country in Western Europe except for ossified Great Britain.

50 million Americans officially in dire poverty

Every 10 years, the United States government conducts a census of the population, and in the process collects important data about demographics and income. It is now expected that the official US poverty rate, which underestimates the real problem of poverty, will rise to almost 16% of the population. Poverty means an individual living on less than $11,170, or a family of three living on less than $19,090. This is truly dire poverty. By this estimate, about 50 million Americans will be poor, the highest rate since Medicare and Medicaid were enacted in 1965.

According to official statistics, the US unemployment rate rose slightly to 8.3% in July 2012. Once again, this figure understates the problem. The US Department of Labor publishes a data series called the U6 unemployment rate, which tries to reflect underemployment — as in cases where a worker who wants to work full-time is forced to work part-time – and workers who have given up their job searches in despair.

By this measure, the US unemployment rate has been as high as 17.1% at the end of 2009, and is currently at 15%. These are depression levels. Assuming that the US workforce is about 155 million, this means that over 23 million Americans are actually out of work. If we add in elderly dependents and children, we will once again get close to the 50 million whose lives are now in danger.

Under Franklin D. Roosevelt’s original Social Security Act of 1935, the federal government could have provided benefits to one important category – impoverished mothers with dependent children. This was called welfare, but it no longer exists, having been abolished by Bill Clinton in 1995-96 as part of his reelection campaign. Currently it is estimated that about 15 million children – about 21% of all children in the United States – live below the official poverty line. Since an adequate standard of living requires about twice the federal poverty level income, it follows that 44% of US children are in reality stuck in low income families. They can thank Bill Clinton for their current situation.

That same Social Security Act of 1935 established a system of unemployment insurance, which is now being sorely tested. When the depression began in 2008-9, the Obama stimulus bill extended jobless payments to unemployed workers for 99 weeks in many states. Now, with the depression grinding on, more than 5 million people have been unemployed for more than six months, and most of these have joined the ranks of the 99ers – those who have been jobless for almost 2 years. Some 23 states, especially those governed by Republicans, have now cut eligibility by as much as five months, impacting a half million unemployed. Only three states still offer 99 weeks of benefits, and that will end in September 2012.

Food stamps for 46.5 million under attack

The one federal program that still contributes to keeping the endangered 50 million alive is the Food Stamp program of the US Department of Agriculture, which currently feeds 46.5 million Americans. In some cities, the food stamp allowance is about $130 per month, which translates into about $1.55 per person per meal. This is already too little to permit good nutrition.

Right now the debate in the Congress is whether this program should be cut by $16 billion as the Republicans demand, or by “only” $5 billion, the Democratic Party proposal. Once again, any cuts in the food stamp budget under the current conditions will inevitably lead to vitamin deficiencies, cognitive impairment, and large increases in morbidity and mortality.

As for health insurance, most sources estimate that about 46 million Americans have no way of paying for the services of a doctor, hospital, or pharmacy. This figure largely overlaps with the 50 million who are in dire poverty, and the 50 million who are living on food stamps. Any reduction in Medicaid, which is intended for low income people, will take a toll of lives. Republicans are demanding massive cuts to Medicaid, while Democrats argue that moderate cuts will be sufficient. In reality, any cuts at all will represent thinly disguised murder.

Neither Obama nor Romney has anything to offer the endangered 50 million. Indeed, Romney has already announced that he is “not worried about the poor.” This issue highlights the inhuman cruelty of the political process in the United States today. How long before a social explosion forces the ruling elite to confront these issues?

WT/MA

Born in Pittsfield, Massachusetts, 1946, Dr. Webster Griffin Tarpley is a philosopher of history who seeks to provide the programs and strategies needed to overcome the current world crisis. As an activist historian he first became widely known for his book George Bush: The Unauthorized Biography (1992), a masterpiece of research which is still a must read. AB Princeton 1966, summa cum laude and Phi Beta Kappa; Fulbright Scholar at University of Turin, Italy; MA in humanities from Skidmore College; and Ph.D. in early modern history from the Catholic University of America with emphasis on the role of Venice in the origins of the Thirty Years’ War (1618-1648). During 2008, he warned of the dangers of an Obama presidency controlled by Wall Street with Obama: The Postmodern Coup, The Making of a Manchurian Candidate and Barack H. Obama: The Unauthorized Biography. His interest in economics is reflected in Surviving the Cataclysm: Your Guide Through the Worst Financial Crisis in Human History Against Oligarchy. His books have appeared in Japanese, German, Italian, French, and Spanish. More articles by Dr. Webster Griffin Tarpley

Exclusive: U.S. Banks Told To Prepare for the Big One

Exclusive: U.S. banks told to make plans for preventing collapse

An ATM machine at a Bank of America office is pictured in Burbank, California August 19, 2011. REUTERS/Fred Prouser

By Rick Rothacker

 

(Reuters) – U.S. regulators directed five of the country’s biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

The two-year-old program, which has been largely secret until now, is in addition to the “living wills” the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.

Officials like Lehman Brothers former Chief Executive Dick Fuld have been criticized for having been too hesitant to take bold steps to solve their banks’ problems during the financial crisis.

According to documents obtained by Reuters, the Federal Reserve and the U.S. Office of the Comptroller of the Currency first directed five banks – which also include Citigroup Inc,, Morgan Stanley and JPMorgan Chase & Co – to come up with these “recovery plans” in May 2010.

They told banks to consider drastic efforts to prevent failure in times of distress, including selling off businesses, finding other funding sources if regular borrowing markets shut them out, and reducing risk. The plans must be feasible to execute within three to six months, and banks were to “make no assumption of extraordinary support from the public sector,” according to the documents.

Spokespeople for the five banks declined to comment. The Federal Reserve also declined to comment.

Recovery plans differ from living wills, also known as “resolution plans,” which are required under the 2010 Dodd-Frank financial reform law. Living wills aim to end bailouts of too-big-to-fail banks by showing how they would liquidate themselves without imperiling the financial system.

“Recovery plans are about protecting the crown jewels,” said Paul Cantwell, a managing director at consulting firm Alvarez & Marsal. “It’s about, ‘How do I sell off non-core assets?’ The priority is to the shareholders. A resolution plan is about protecting the system, taxpayers and creditors.”

The recovery plans are being used as part of regulators’ ongoing supervisory process. In Britain, recovery and resolution plans have both been part of the living will requirements for large banks.

Mike Brosnan, senior deputy comptroller for large banks at the OCC, said the regulator continuously evaluates contingency planning at the banks and savings associations it supervises.

“Recovery plans required of the largest banks are helpful in ensuring banks and regulators are prepared to manage periods of severe financial distress or instability affecting the banking sector,” he said.

This summer, nine global banks submitted living wills to the Fed and Federal Deposit Insurance Corp, and regulators released the public portion of the documents.

The recovery plans requested in 2010, meanwhile, have received little publicity. The names of the banks required to submit them have not been previously disclosed, and Reuters obtained them only through a Freedom of Information Act request.

The Fed supplied Reuters with the letters requesting plans from banks, but not the banks’ actual plans because they were deemed confidential supervisory information. The regulator said it was withholding 5,100 pages of information.

MOVING FURTHER FROM DISASTER

Five years after the financial crisis, concerns remain about whether blow-ups at big banks could lead to another round of taxpayer bailouts. Trading losses have cost JPMorgan nearly $6 billion so far, and scandals such as the alleged rigging of an international interest rate benchmark have only highlighted the risks lurking inside big banks.

These disasters have damaged banks’ reputations, but not their balance sheets. Most are still profitable, and in recent years the five banks have improved their capital bases and liquidity. They also have been subjected to annual Federal Reserve stress tests that measure whether the banks have sufficient capital to weather severe economic scenarios.

Bank of America and Citigroup, in a sense, have already been executing the kind of moves called for in the recovery plans. Both have been selling off non-core operations and assets to streamline their sprawling businesses, after receiving multiple bailouts during the financial crisis.

Bank of America in June 2011 told Fed officials that it could shed branches in some parts of the country if it needed to raise capital in an emergency, a person familiar with the matter said in January. The proposal was part of a series of options provided to the Fed, including issuing a tracking stock for Bank of America’s Merrill Lynch operations.

But just because the bank proposed selling branches does not mean it’s a desirable move or highly probable, the person said. In the past year, Bank of America has shown progress in building capital without such actions. Its Tier 1 common capital ratio increased to 11.24 percent of risk-weighted assets as of June 30 from 8.23 percent a year earlier.

Tier 1 refers to a bank’s core capital and has been the main focus of regulators in assessing a bank’s capital adequacy.

MENTIONED IN PASSING

The banks’ chief risk officers, and in the case of Citigroup, Chief Executive Vikram Pandit, received letters in May 2010 instructing them on what to include in the recovery plans. The requests stemmed from January 2010 crisis management meetings held by regulators. The letters sent to the five banks were nearly identical.

Each plan was to address severe financial stress at the firm, as well as “general financial instability.” The plans should be capable of being executed ideally within three months, but no longer than six months, the documents said.

The plans should “make appropriate assumptions as to the valuations of assets and off-balance sheet positions,” the documents said.

Recovery plans have been mentioned in public before, but only in passing. In testimony to Congress in July 2010, Fed Governor Daniel Tarullo said the “largest internationally active U.S. banking organizations” were working on recovery plans. The initiative stemmed from work led by the Financial Stability Board, a body that coordinates the work of international financial regulators, he said.

In a presentation in March, JPMorgan Chase said it had a recovery plan in place and said it was ordered by regulators. The presentation was organized by Harvard Law School and was closed to the media at the time, but is available online. (here)

(Reporting By Rick Rothacker in Charlotte, North Carolina; Additional reporting by David Henry in New York; Editing by Leslie Adler)

Former CIA Army General–Martial Law Expected and “Warranted”

Former CIA Army General: Martial Law Expected and “Warranted”

Dominique de Kevelioc de Bailleul:  Lt. General William Boykin (retired) told TruNews Radio Tuesday that the U.S. economy of the United States “is just about the break” and collapse.  And when the dam gives way, severe food shortages and pervasive violence throughout America will warrant, in his opinion, an executive declaration of martial law.

“I’ll be very honest with you; the situation in America could be such that martial law is actually warranted, and that situation in my view could occur if we had an economic collapse,” said Boykin, a former CIA Deputy Director of Special Activities. Get my next ALERT 100% FREE

“The dam is just about to break on our economy, and I think when it does, there’s going to be a major disruption of the distribution of food,” he added. “And I think what you’ll see particularly in the inner cities is you will see riots, civil unrest that ultimately might justify martial law.”

Though the U.S. is the world’s largest exporter of agriculture, in the case of a currency collapse, producers will withhold shipments to retailers and consumers unable to pay in a currency other than U.S. dollars.  For a time, barter will take the place of currency for those living in rural areas, but for the majority of Americans living in cities and adjacent suburbs, food shortages can emerge within 24 hours.

“I think those people that are not in the major cities are going to be far better off, but it could actually justify martial law,” Boykin continued.  “And I’m praying that we will not see that kind of collapse, we won’t see a disruption of the distribution of food in America.  That’s probably the single biggest problem.”

Recommendations by “prepper” organizations and a handful of governments (as in the case of Utah and some municipalities) to include storing enough nonperishable food to last a month to 90 days have become commonplace during the four-year-long economic recession, as the history of currency collapses throughout the world demonstrate that for a meaningful period of time food will not be available at grocery stores, food pantries and other collective emergency food supplies.

Recent examples of food shortages due to rapid currency devaluations include Argentina in 2002; Cuba, following the fall of the Soviet Union in 1989; and in Zimbabwe during its currency collapse of the late 2000s.

Although, the U.S. is not expected to match Zimbabwe in intensity and duration of inflation (89 sextillion percent in 2008), all nations undergo a period of profound dislocation of commerce during a currency devaluation, which may range from as little as several weeks to several months.  At that time, food becomes the king of all commodities while government reestablishes a new workable currency to reestablish normal commerce once again.

“If people can eat, they can survive for some period of time while we get through the economic crisis and reestablish currency, and systems, and all that,” said Boykin.  “But if they can’t eat, you know, they’re going to fight.  And that’s my big concern.”

From his intelligence, as well as from numerous publicly-available anecdotal testimonies and leaked government documents, the U.S. military has been preparing with local law enforcement for a coming crisis.  Boykin strongly advises the public to make preparations for the most likely scenario of a coming breakdown of the food distribution channels in America during a dollar collapse.

“For me, I have three months of food stored.  I have a bunch of other essentials that I have stored in my home,” he said.  “And my wife and I are preparing for this.

“Now a lot of people call us, you know, foolish, for that kind of attitude,” he added.  “But I would tell you that I’m not going to be unprepared, and I think people should be prepared now for some disruption. You know this economic collapse is a very strong possibility.  We need to get ready for it, and we need to be thinking through and developing plans for how we’re going to react to it.”

In Middle East, Premature Elections Invite Instability–Key To US Destabilization Plans

[American terror war policy of forcing premature elections as a political exercise, intended to demonstrate a progression of "democracy" in an Arab/Muslim war zone, even though it was a complete fabrication.  This imbecilic deception has resulted in the elections of "Islamist" governments from Palestinian Gaza, to Iraq and all of the "Arab spring" countries.  Unless this  was the American intention from the start, then it confirms that American policies to create a Greater Middle East have been "misguided," at best.  Forcing premature elections upon Muslim populations, who have had no previous experience with democratic institutions, is a surefire formula for replacing authoritarian governments with radical "Islamist" ones.  In short, it is a policy certain to empower the Muslim Brotherhood candidates, which it has done very efficiently, so far.  If this wasn't the intention of the American government, from the beginning, then it is either proof of the shortsightedness of America's bi-partisan leadership, or of their ignorance of the law of consequences.

American politicians haven't a clue about where their wrong-headed decisions are taking us....The only alternative to one of the overwhelming ignorance of America's political class, is one which suggests an answer that is far too sinister for most of us to even contemplate--We are in the mess we are in because that was the plan all along (SEE:  The planned collapse of USA).]

In Middle East, Premature Elections Invite Instability

By Alon Ben-Meir

Libyan election workers start the counting process at a polling station in the western city of Misrata during Libya’s General National Congress election on July 7. Voters lined up at polling stations across Libya keen to take part in the country’s first national election after more than four decades of dictatorship. (Giovanni Diffidenti/AFP/GettyImages)

Libyan election workers start the counting process at a polling station in the western city of Misrata during Libya’s General National Congress election on July 7. Voters lined up at polling stations across Libya keen to take part in the country’s first national election after more than four decades of dictatorship. (Giovanni Diffidenti/AFP/GettyImages)

Although elections and political reforms are needed in the wake of the Arab Spring, premature elections could usher in a period of continued political instability punctuated by violence, or introduce new totalitarian regimes that would assume power under the pretext of maintaining order and stability.

Of paramount importance is the formation of transitional governments proportionally representative of all segments of the populations for a minimum of five years.

Such a government would be tasked with writing a new constitution and instituting gradual political reforms, while promoting human rights and economic development programs. Otherwise, elections will fail to produce the desired outcome of a free and vibrant new political and social order.

Greek Reporter Documenting the Slide from First World To Third World Status

“We Are Moving from Being a Western Country to a Third-World Country”

Greece.GreekReporter.com Latest News from Greece

Extreme political uncertainty, rampant corruption, queues forming at soup kitchens, and aid from non-governmental organizations (NGOs)—all these are more commonly associated with countries still developing Western-style economies.

“We are moving from being a Western country to a poor country,” George Protopapas, national director of international charity SOS Children’s Villages, told CNBC.
“I’m worried that it’s going to be like Ceausescu’s Romania or Bulgaria in the early 1990s.”

Of course, the concept of the Third World, which dates from the Cold War, is dismissed by many as outdated. There is no universal concept for how to label developing and developed countries as development is not always a linear process.

What really differentiates Greece from struggling developing countries is its large, well-educated middle class and cultural identification with the West.

It’s difficult to sit in Syntagma Square—the central Athens square that is home to the Greek parliament, with its exclusive hotels and shops—and see Greece regressing. Yet many of the people in suits chatting on their iPhones have had their pay slashed in the past year, and there are few shops that are busy.

Greece itself, with its strange mixture of capitalism and socialism, was always one of the least developed of the European Union countries. There are many now who argue that it should never have been allowed to join the euro at all. It is often mentioned as the country where the foundations of modern democracy were laid millennia ago, yet ironically, its current democracy is less than four decades old.

Greece’s 20th-century development was notoriously hampered by political upheaval, including a fascist dictatorship, an army-led coup, and a period of occupation by Nazi Germany.  It is the memory of this too-recent occupation that is sparking opposition to the external forces such as the ones the Troika have been trying to implement into Greek policy.

After recent stringent cuts as part of the bailout, non-governmental organizations are providing some of the services like health, normally provided by the government. This kind of aid is much more often associated with the developing world. Diseases such as HIV and malaria are on the rise.

The medical charity Medecins du Monde — Doctors of the World — known for its work in the Third World, saw the number of Greeks coming to its clinics double in 2011.

“Many patients are retired elderly citizens whose pensions have been substantially reduced because of the austerity measures implemented by the government in recent years,” the charity noted in recent research. And such charities are paying taxes on donations for the first time, as well as facing rising costs across the board.

Immigrants from developing countries are starting to see more opportunities for prosperity in their home countries than in Greece.

Ade, who emigrated from Nigeria in 2005, is planning to go back home as soon as she can afford to.  “There’s nothing here for me anymore, and I can’t contribute to society if I can’t work,” she told CNBC as she waited for free medical treatment (she is four months pregnant) at a center funded by the Orthodox Church.

There are also concerns that the escalating cost of heat and electricity, the result of tax increases brought in by the government following the bailout, coupled with a rising number of unpaid invoices, could lead to power cuts.

Energy companies in Greece are already struggling. State-run PPC needs to pay $657.2 million (which it does not have in its coffers after recent falls in revenue) by June 22 or persuade its banks to roll over its debts. And people increasingly cannot pay their bills.

Close to a third of the Greek population — the highest level in Europe — was considered at risk for poverty or social exclusion by Eurostat in 2010, when the economic and political situation was not as dire as it now appears. And nearly 20 percent of Greek children live in homes unable to afford at least 3 out of 9 basic items.
“We are the band that’s still playing on the Titanic. We have to play on and keep working even though the ship is sinking,” Protopapas told CNBC about his charity, which helps struggling families and has seen a dramatic increase in calls for its help.
(source: CNBC, Capital)

European Central Bank Prepared for Emergency EU Bailout, After Sunday’s Greek Elections

ECB on standby for Greek election fallout

By Ralph Atkins in Frankfurt, Mure Dickie in Tokyo and Kerin Hope in Athens

The European Central Bank is on standby to keep banks flush with liquidity if Greece creates fresh financial market turmoil, its president has indicated, joining a global chorus of central bankers pledging support ahead of Sunday’s elections.

Mario Draghi’s comments on Friday followed the announcement by the UK’s central bank of plans to pump £100bn into the ailing British economy, hinting at a co-ordinated strategy by the world’s top central bankers.

“The ECB has the crucial role of providing liquidity to sound bank counterparties in return for adequate collateral. This is what we have done throughout the crisis … and this is what we will continue to do,” Mr Draghi said.

Eurozone central banks “will continue to supply liquidity to solvent banks where needed,” he added, without giving details.

The ECB provided unlimited three-year loans to eurozone banks in December and February – and ended up pumping more than €1tn into the financial system. A repeat of such offers would be one option if the Greek elections led to market financing drying up.

Shares rallied in Asia and Europe on hopes that central banks would act to stem any negative impact from Sunday’s election in Greece. The euro was stable and the yields on Spanish and Italian government bonds, which had been approaching dangerous levels, fell.

Mr Draghi said: “In times of increased financial instability, ‘adequate liquidity’ indicates a volume of central bank money that also counteracts a temporary inability of banks to refinance in the market, which could lead to systemic consequences for the banking sector as a whole.”

If Greece goes …

FT ebook

The FT’s first ebook examines the potential consequences for Greece and the world of a Greek exit from the eurozone

Masaaki Shirakawa on Friday said Japan’s central bank was ready to take any necessary steps to maintain financial sector stability.

Meeting journalists after a regular bank policy board meeting, Mr Shirakawa did not comment on whether central banks might take co-ordinated action to deal with possible market jitters after the Greek election. But he said central banks had a common understanding of the importance of stability.

“There are no cunning steps to achieve financial system stability,” Reuters news agency quoted Mr Shirakawa as saying. “An orthodox step would be to provide liquidity. We have the means to provide own currency and foreign currencies. It would be important to supply abundant liquidity to calm worries.”

The frontrunners in Greece’s general election traded recriminations as they wrapped up a hard-fought campaign.

Alexis Tsipras, the Syriza leader, accused rivals New Democracy and the PanHellenic Socialist Movement, which have held power alternately for almost 40 years, of “plundering” Greece.

“You tried to poison Greece with fear and insecurity,” he told a cheering crowd in central Athens on Thursday night. “You pulled down the Greek flag and handed it to [German chancellor] Angela Merkel as a trophy.”

Meanwhile European officials were preparing a package of incentives, including further reductions in interest rates and extended repayment periods for bailout loans, for a new Greek government but only if it was led by Antonis Samaras, head of the pro-bailout centre-right New Democracy party.

In depth

Greece debt crisis

Greece

Fear’s mount over Greece’s potential exit from the eurozone and the implications for the wider bloc

“In the scenario where Samaras wins the elections, they would like to see him committing very clearly to his adherence to the memorandum,” said one EU official briefed on the discussions. “They would then get together with the new Greek government and say: here is what we can now do to make life a bit sweeter, a bit less harsh.”

Eurozone officials have not ruled out making the same offer to Alexis Tsipras, the Syriza leader, should he win Sunday’s Greek election and form a new government instead of Mr Samaras.

Mr Samaras was due to make a last campaign speech in Syntagma square in Athens on Friday evening. Opinion polls are banned in Greece in the two weeks before an election but both the leading parties say unpublished polls give New Democracy a very narrow lead over Syriza. Two pollsters noted on Friday that 10-12 per cent of voters were still undecided.

CNBC Predicting Bank Runs In Spain and Italy, Financial Anarchy Throughout Europe

US CNBC Predicting Bank Runs In Spain & Italy & Financial Anarchy Throughout Europe

During an appearance on Meet The Press on Sunday, Jim Cramer of CNBC boldly predicted that “financial anarchy” is coming to Europe and that there will be “bank runs” in Spain and Italy in the next few weeks.

This is very strong language for the most famous personality on the most watched financial news channel in the United States to be using.  In fact, if Cramer is not careful, people will start accusing him of sounding just like The Economic Collapse Blog.

It may not happen in “the next few weeks”, but the truth is that the European banking system is in a massive amount of trouble and if Greece does leave the euro it is going to cause a tremendous loss of confidence in banks in countries such as Spain, Italy and Portugal.

There are already rumors that the “smart money” is pulling out of Spanish and Italian banks.  So could we see some of these banks collapse?

Would they get bailed out if they do collapse?  It is so hard to predict exactly how “financial anarchy” will play out, but it is becoming increasingly clear that the European financial system is heading for a massive amount of pain.

Posted below is a clip of Jim Cramer making his bold predictions during his appearance on Meet The Press.  He is obviously very, very disturbed about the direction that Europe is heading in….

But what is Europe supposed to do?  Even though “austerity measures” have been implemented in many eurozone nations, the truth is that they are all still running up more debt.  Are European nations just supposed to run up massive amounts of debt indefinitely and pretend that there will never been any consequences?

That is apparently what Barack Obama wants.  During the G-8 summit that just concluded, Obama urged European leaders to pursue a “pro-growth” path.

Of course to Obama a “pro-growth” economic plan includes spending trillions of dollars that you do not have without any regard for what you are doing to future generations.

Germany has been trying to get the rest of the eurozone to move much closer to living within their means, but as the recent elections in France and Greece demonstrated, much of the rest of the eurozone is not too thrilled with the end of debt-fueled prosperity.

In Greece, the recent elections failed to produce a new government, so new elections will be held on June 17th.

Many EU politicians are trying to turn these upcoming elections into a referendum on whether Greece stays in the eurozone or not.  If the next Greek government is willing to honor the austerity agreements that have been previously agreed to, then Greece will probably stay in the eurozone for a while longer.  If the next Greek government is not willing to honor the austerity agreements that have been previously agreed to, then Greece will probably be forced out of the eurozone.

The following is what John Praveen, the chief investment strategist at Prudential International Investments Advisers, had to say about the political situation in Greece recently….

“If the pro-euro major parties fail to muster enough support to form a coalition and the radical left Syriza party and other anti-euro, anti-austerity parties secure a majority, the risk of a disorderly Greek exit from the Euro increases and could roil markets”

Right now, polls show the leading anti-austerity party, Syriza, doing very well.  The leader of Syriza, Alexis Tsipras, has declared that he plans “to stop the experiment” with austerity and that what the rest of the eurozone has tried to do in Greece is a “crime against the Greek people“.

But the Germans do not see it that way.  The Germans just want the Greeks to stop spending far more money than they bring in.

The Germans do not want to endlessly bail out the Greeks if the Greeks are not willing to show some financial discipline.

As we approach the June 17th elections, the financial markets are likely to be quite nervous.  According to Art Hogan of Lazard Capital Partners, many investors are deeply concerned about how “sloppy” a great exit from the euro could be….

“Next week is only one of the four weeks we have to wait until the Greek election. Every utterance out of Greece makes us think about their [possible] exit and how sloppy that could be”

Most Greek citizens want to remain in the eurozone and most European politicians want Greece to remain in the eurozone, but it is looking increasingly likely as if that may not happen.

In fact, there are reports that preparations are rapidly being made for a Greek exit.  According to Reuters, “contingency plans” for the printing of Greek drachmas have already been drawn up….

De La Rue (DLAR.L) has drawn up contingency plans to print drachma banknotes should Greece exit the euro and approach the British money printer, an industry source told Reuters on Friday.

And even EU officials are now acknowledging that plans for a Greek exit from the euro are being developed.  The following is what EU Trade Commissioner Karel De Gucht saidduring one recent interview….

“A year and a half ago, there may have been the danger of a domino effect,” he said, “but today there are, both within the European Central Bank and the European Commission, services that are working on emergency scenarios in case Greece doesn’t make it.”

When these kinds of things start to become public, that is a sign that officials really do not expect Greece to remain a part of the euro.

And Greece is rapidly beginning to run out of money.  According to a recent Ekathimerini article, the Greek government is likely to run out of money at the end of June….

The public coffers are seen running dry at the end of June, but this will depend on two key factors. First, revenue collection: In the first 10 days of May, inflows were about 15 percent lower than projected but there are fears that the slide may reach 50 percent. The GAO will have a picture for the first 20 days on May 23, while the last three days of the month are considered crucial, when 1.5 billion euros of the month’s budgeted total of 3.6 billion are expected to flow in.

Second, whether the IMF and EFSF installments are disbursed: This is not certain, as the decision will be purely political for both providers and evidently partly linked to political developments. Earlier this month the eurozone approved a disbursement 1 billion short of the 5 billion euros that were expected.

If Greece runs out of money and if the rest of Europe cuts off the flow of euros, Greece would essentially be forced to leave the euro.

So the last half of June looks like it could potentially be a key moment for Greece.

Meanwhile, the Greek banking system is struggling to survive as hundreds of millions of euros get pulled out of it.  The following is from a recent CNN article….

The Greek financial system is straining hard for cash.

Consumers and businesses are making massive withdrawals from Greece’s banks — leading to concern the beleaguered nation could be forced out of the eurozone by a banking crisis even before its government runs out of cash.

Deposits are the lifeblood of any bank, and Greeks pulled 800 million euros out of the banking system on Tuesday alone, the most recent day for which figures are available.

If Greece does leave the euro and the Greek banking system does collapse, that is going to be a clear signal that a similar scenario will be allowed to play out in other eurozone nations.

That is why Jim Cramer, myself and many others are warning that there could soon be bank runs all over the eurozone.

Sadly, the banking crisis in Europe just seems to get worse with each passing day.

For example, the Telegraph has reported that wealthy individuals are starting to pull money out of Spanish banking giant Santander….

Customers with large deposits have started withdrawing cash from Santander, the bank has admitted, as it tried to reassure concerned members of the public that their money is safe.

Round and round we go.  Where all this will stop nobody knows.

If Greece does end up leaving the euro, that could set off a chain of cascading events that could potentially be absolutely catastrophic.

Former Italian Prime Minister Romano Prodi recently stated that the “whole house of cards will come down” if Greece leaves the euro.

And if the “house of cards” does come down in Europe, that is going to greatly destabilize the global derivatives market.

You see, the truth is that the global derivatives market is very delicately balanced.  The assumption most firms make is that things are not going to deviate too much from what is considered “normal”.

If we do end up seeing “financial anarchy” in Europe, that is going to greatly destabilize the system and we could rapidly have a huge derivatives crisis on our hands.

And as we saw with JP Morgan recently, losses from derivatives can add up really fast.

Originally, we were told that the derivatives losses that JP Morgan experienced recently came to a total of only about 2 billion dollars.

Now, we are told that it could be a whole lot more than that.  According to the Wall Street Journal, JP Morgan could end up losing about 5 billion dollars (or more) before it is all said and done….

J.P. Morgan Chase & Co. is struggling to extricate itself from disastrous wagers by traders such as the “London whale,” in a sign that the size of its bets could bog down the bank’s unwinding of the trades and deepen its losses by billions of dollars.

The nation’s largest bank has said publicly that its losses on the trades have surpassed $2 billion, and people familiar with the matter have said they could over time reach $5 billion.

And if Europe experiences a financial collapse, the losses experienced by U.S. firms could make that 5 billion dollars look like pocket change.  The following is from a recent articleby Graham Summers….

According to Reuters once you include Spain and Italy as well as Credit Default Swaps and indirect exposure to Europe, US banks have roughly $4 TRILLION in potential exposure to the EU.

To put that number in perspective, the entire US banking system is $12 trillion in size.

Interesting days are ahead my friends.

Let us hope for the best, but let us also prepare for the worst.

Economic Collapse: The End of the World As We Know It

Economic Collapse: The End of the World As We Know It

By Dr. Mark Sircus
theintelhub.com
martin-mike-larry.jpg

As everyone is well aware, Europe is an absolute mess. The gravity of the global debt crisis is getting worse and for sure it’s the end of the world as we have known it.

EU trade commissioner Karel De Gucht recently said, “The endgame has begun, and how it will finish I do not know.”

There is an implosion happening in Greece, and Spain is not far behind with Portugal and Ireland running neck and neck into the full embrace of depression and life-shattering bank runs.

Greece is a big deal and Spain is even bigger. Right now the European Central Bank (ECB) is starting to cut off funds from several Greek banks and there is a run going on at the same time.

Those banks are going down the toilet into a black hole and there will be a loud sucking sound as these banks pull hard on other banks. The Titanic is going down at the bow and just because you are at the stern (in the United States), not in Spain or Greece, it does not mean the cold waters of economic calamity are not going to come to the shores of your life.

Martin Weiss has a logical sequence that forecasts the ruin of our current way of life.

Forecast #4
The European Central Bank (ECB)
will kick its money printing presses
into overdrive and very, very soon.

“That’s the only way they know how to react to the riots on the streets, how to finance their budgets, how to rescue their banks and save their own necks politically. And if you think Europe is too far away from your hometown to matter very much—too far away from Main Street USA—think again,” says Weiss.

Chris Martenson said:

“Well, my hat is off to the global central planners for averting the next stage of the unfolding financial crisis for as long as they have. I guess there’s some solace in having had a nice break between the events of 2008/09 and today, which afforded us all the opportunity to attend to our various preparations and enjoy our lives. Alas, all good things come to an end, and a crisis rooted in ‘too much debt’ with a nice undercurrent of ‘persistently high and rising energy costs’ was never going to be solved by providing cheap liquidity to the largest and most reckless financial institutions. And it has not.”

Graham Summers, of Phoenix Capital Research, just back from Europe says:

“The situation in Europe is bad… How BAD? Well, France, Spain, and Germany have ALL implemented border controls. Spain, France, and Germany can each close their borders for up to 30 days at any point if they so choose. Why are they doing this? Because they know that when the stuff hits the fan and the EU collapses (which it will in the next few months) people are going to attempt to flee with their money… so they have made it so that no one can get it… and no one can get out,”

“A €1 billion run [$1.28 billion] on a recently nationalized Spanish bank has sparked further fears that the 17-nation eurozone is about to implode. “The U.S. media has completely ignored this story because the implications are truly horrifying: that the EU and its banking system could very easily collapse in the coming months. After all, there are already bank runs taking place in Spain and Greece. Once things pick up steam NO ONE will be immune. No less than Ben Bernanke has publicly admitted that if the EU goes down, it will potentially take the U.S. with it. Make no mistake, what’s coming will be bigger and worse than 2008. We’re talking about bank holidays, civil unrest, and the worse,” said Summers.

You think this is all to be taken lightly? The Italian government does not think so and has deployed 20,000 law enforcement officers to protect individuals and sensitive sites.

The government increased security last Thursday at 14,000 sites, and assigned bodyguards to protect 550 individuals after a nuclear energy company official was shot and letter bombs directed to the tax collection agency.

It really is the end of the world we know, or the beginning of that end. Christians believe in the end of the world as a matter of course and the world is giving them every reason to think that their beliefs are correct. Our modern civilization is vulnerable from a number of different angles and the insanity of the elite and centuries of financial manipulation and control are smashing against the wealth of the masses and the very structure of society.

I read that Homeland Security is preparing forcivil war, preparing to fight the heavily armed American people and internal security agencies have bought enough ammunition to kill everyone. Never has a public been so heavily armed so obviously the military and the police know it will take a lot to suppress Americans.

But they are not the only ones itching for war. Forty-nine headless bodies were dumped in Mexico and the idiots in Washington are still proud of their war against drugs. Modern civilization has been at war with its own people for a long while and now national governments are ready and set for war on a broader scale.

In the China Sea it’s the Philippines facing off against the Chinese and now we hear of a new unholy alliance in Israel that seems to have established a war cabinet to go full out to war with Iran.

Russia and Putin are talking rough and I don’t think they are kidding about defending their interests from the mentally deranged Europeans and Americans. Syria has joined the list of countries being torn apart by civil war.

Financial Armageddon is inching closer and closer. The future for the first world is already being written in Spain and Greece and even California, places where the money is running out big time. And the volcanoes and earthquakes just don’t stop. They just don’t stop and the reports keep coming in.

John Rubino said, “Europe’s leaders—that is to say German Chancellor Angela Merkel and the bureaucrats running the various eurozone agencies from Brussels—have looked into the abyss and don’t like what they see.

Specifically, a default and departure by even a relatively insignificant country like Greece might start a contagion that cripples or destroys the whole eurozone.

Paul Brodsky says, “The only way to deleverage is either to let credit deteriorate or to print money. Clearly the politically expedient way of deleveraging is to print money. Central banks can chatter all they want about not wanting to print money or wanting to keep the integrity of their currencies, but, at the end of the day, they don’t really have a choice.

They either have to manufacture more electronic credits and put them in the banking system or they have to let their banking system fail. That is just the reality. There is one interconnected banking system and they all have claims with each other. If German banks end up in difficulty, it presents problems for U.S. banks.

California Gov. Jerry Brown (D) has some bad news: His cash-strapped state isn’t $9.2 billion in the hole, as projected in January; the Golden State is actually facing a yawning$15.7 billion shortfall.

The business and financial community is not paying attention to what is happening inFukushima and how that alone will ruin the plans of mice and men.

Rich or poor, it makes little difference when we are challenged beyond our capacity to respond. Assuming that life will go on as it has these past decades is perhaps one of the greatest and most dangerous assumptions most people are making today.

The mainstream news media feeds this almost universally-shared assumption, so when this greatest-of-all bubbles bursts, there will be hell to pay—that is for sure.

We are all going to have to turn our bows into more spiritual winds to manage the major upheavals headed our way. Depending on who and where you are, these major upheavals have already occurred leaving increasing millions desperate and without hope.

The illusion of growth is fast fading and what will take its place is an ugly depression with a threatened currency collapse as trillions are printed to save the world from its own stupidity.

This article originally appeared on blog.IMVA.com

100 Million Americans Without Jobs

image

(Note: The chart above is the Civilian Over-16 Non-Institutional Population minus the seasonally adjusted Civilian Workforce.)

100 Million Americans Without Jobs

The national unemployment rates gets lots of attention, and lately more attention has been paid to the workforce participation rate since more Americans have given up looking for a job, but we can also see that an astounding 100 million Americans don’t have jobs.

Specifically, these are people who are part of the civilian over-16 non-institutional population who are either unemployed or not part of the workforce. According to the April jobs report, the number of jobless American stood at 100.9 million.

That’s an all-time record and it’s an increase of 26.2 million over the last 12 years. It’s as if we absorbed the entire adult population of Canada and not a single person had a job.

The numbers are staggering. The jobs-to-population ratio peaked 12 years ago. If we were to have the same ratio today, we would need 15.3 million more jobs, or 23.7 million fewer people.

 

Bank of England Sounds Alarm On Coming Storm

Bank governor warns of eurozone crisis ‘storm’

The Bank of England has cut its growth forecast for this year to 0.8% from 1.2%, saying the eurozone “storm” is still the main threat to UK recovery.

The eurozone was “tearing itself apart” and the UK would not be “unscathed”, said its governor Sir Mervyn King.

He also confirmed that the Bank has been making contingency plans for the break-up of the euro.

The rate of inflation will remain above the government’s 2% target “for the next year or so”, the Bank said.

Sir Mervyn was presenting the Bank’s quarterly inflation report.

He told a news conference that the euro area posed the greatest threat to the UK recovery, and there was a “risk of a storm heading our way from the continent”.

“We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country’s history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution.

“The idea that we could reasonably hope to sail serenely through this with growth close to the long-run average and inflation at 2% strikes me as wholly unrealistic,” Sir Mervyn said.

A ‘mess’

Andrew Balls, the managing director in London of global investment firm Pimco, said it was reasonable for Sir Mervyn and other policymakers to plan for a Greek exit.

“Yes, maybe they should plan for an exit, but the thing is, speculating about it can make the event more likely, so the Europeans really do have a mess there,” he told the BBC.

“If Greece is to slide out of the euro and collapse, how are they going to protect Ireland, Portugal, Spain and Italy?”

Separately, Prime Minister David Cameron also spoke of the financial storm clouds across Europe, warning that eurozone leaders must act swiftly to solve its debt crisis or face the consequences of a potential break up.

He said during Prime Minister’s Questions in the House of Commons: “The eurozone has to make a choice. If the eurozone wants to continue as it is, then it has got to build a proper firewall, it has got to take steps to secure the weakest members of the eurozone, or it’s going to have to work out it has to go in a different direction,

“It either has to make up or it is looking at a potential break up. That is the choice they have to make, and it is a choice they cannot long put off.”

The Bank’s report said, however, that the eurozone crisis was not the only issue weighing on the UK economy, with volatile energy and commodity costs, and the squeeze on household earnings also having an impact.

It all meant that the UK economy would not return to pre-financial crisis levels before 2014, Sir Mervyn said.

Nevertheless, he remained optimistic about the longer term. “We don’t know when the storm clouds will move away. But there are good reasons to believe that growth will recover and inflation will fall back,” he said.

On quantitative easing, he said that no decisions had been made whether or not to continue pumping money into the economy. The last stimulus programme was still “working its way through the system”.

‘Outlook is probably better’

Sir Mervyn’s comments came on the day that official unemployment figures showed a fall in the jobless rate, underlining recent surveys that the private sector had become more confident about hiring labour.

He said the fall in joblessness was consistent with the expected gradual recovery in the UK economy.

But Graeme Leach, chief economist at the Institute of Directors, said of the Bank’s report: “Talk about kicking an economy when it’s down.

“On top of the euro crisis and a double-dip recession, the Bank of England is now saying inflation may not fall fast enough to permit more quantitative easing.

“Actually we think the inflation outlook is probably better than the Monetary Policy Committee (MPC) thinks, with the impact of the euro crisis, declining real incomes and weak money supply growth suggesting inflationary pressures may recede later this year and into 2013.

“After many years of underestimating inflationary pressure let’s hope the MPC is now making the opposite mistake by overestimating it”.

Ed Balls, Labour’s shadow chancellor, said: “The Bank of England has once again slashed its growth forecast for Britain, but despite this the government says it will just plough on regardless with policies that are hurting but not working.

“The governor is right to warn of a coming storm from Europe. That is why we warned George Osborne not to rip up the foundations of the house and choke off Britain’s recovery with spending cuts and tax rises that go too far and too fast.

“What happens in the eurozone in the coming weeks and months will have an impact on our weakened economy,” Mr Balls added.

EU’s Iran Sanctions–stroke of genius from the so-called elite of Europe, or an irreversible miscalculation?

Sam’s Exchange: Who is bluffing who?

Sam Barden

The European Union (EU) has decided to ban the import of Iranian oil, but not for another six months. Iran however, looks like they are about to call the EU’s bluff and ban exports to Europe with immediate effect. The self-appointed rulers of a united Europe may be doing much more than disrupting the flow of oil to EU members who most need it; they may actually have moved the world financial system to the tipping point of change, something a democracy could never have done. Is this a stroke of genius from the so-called elite of Europe, or an irreversible miscalculation of historical proportions?

© Photo Source: Sam Barden

Sam Barden

The financial and physical sanctions on Iran, imposed largely by the U.S., EU, Israel and the UK, for Iran’s alleged ambitions to build a nuclear bomb, are in fact about economics. It is a test of the current financial system. On the one hand there is the U.S.-European banking cabal, or as we know it the Western banks, and on the other hand everyone else. When countries trade with each other, they need a financial mechanism for clearing their trades. This is what we know as the current banking system. When sanctions are applied, like with Iran, which are designed to exclude a country (Iran) from the global system of settlement, it means in theory they can no longer be part of world trade. The problem here of course is that major trading nations such as China, Russia, India and South Korea, have thumbed their noses at the sanctions and will continue to trade with Iran. So when Iran goes looking for an alternative way to settle its international trade, to find new mechanisms of clearing, they have found they are knocking on an open door.

Rather than use western banks, and settle trades in USD or EUR, Iran is being forced to set up an alternative network.  Far from having difficulty, it seems Iran and their trading partners are actively touting new methods. In fact India and Iran, and possibly China and Iran, have said they will soon start settling oil trades with gold. Neither India nor Iran nor China have said exactly how this will occur, but given gold is priced primarily against the USD, the trade will occur using the USD as a price base initially. As the USD begins to debase, presumably the gold and oil will begin to become price reference points in their own right. The gold bugs out there will be calling for a sharp increase in the price of gold, but the point is that a gold pool will be used to underwrite trade rather than letters of credit issued by western banks. The alternative network emerges.

Rather than the USD as the world reserve currency (with a move towards a global currency) what we are likely to see as a result of the emergence of an alternative to the existing banking network is a move towards a global standard. As a new network emerges, one which is multi-lateral, it is likely that national currencies will be priced against hard assets such as gold, or in my view energy. In order for this to happen as part of the new network, the way in which we price oil and gas will also change. A more likely market structure will be one which is decentralized, unlike today’s centralized market, but networked. Like a series of networked exchanges, the new system will have several pricing points for hydrocarbons, which will exist in dynamic equilibrium, similar to an eco-system, which will be the basis of an Energy standard. This system will remove the extreme price volatility we are seeing in today’s dysfunctional markets.

As we move towards this system, there will be fallout. We are already seeing it now in the form of independent oil refineries going bankrupt. Petroplus, one of the UK’s biggest oil refineries, which accounts for 10% of the UK’s fuel supply, has filed for bankruptcy. As the refinery ran out of cash, and was unable to extend its credit facilities with banks, it was forced to close and file for bankruptcy. The knock-on effect of course is panic buying of fuel in the UK adding pressure to the problem. This only serves to highlight the fact that there is no real cash in the current financial system, only credit and as the banks close the credit tap, the urgency for a new system becomes more pressing. Greece faces the same situation, the only difference is that counties cannot go bankrupt, they can only default.

The winds of change are blowing strongly in the world financial markets and fundamental change is in process. So is it genius or lunacy from which the European elite are acting in pushing oil sanctions on Iran, creating this change? It all depends on the outcome.

The views expressed in this article are the author’s and do not necessarily represent those of RIA Novosti.

Current markets are anything but global or integrated.  What if we had a paradigm shift in the way we think and transact when doing business with each other?  Balanced global trade can only occur if we have transparent, accessible and efficient markets.  We are on the cusp of achieving this, although most people cannot see it.  Sam’s Exchange aims to give its readers a clearer view and a platform for discussion.  Markets, trade and economics are in fact nothing more than the result of our thoughts and actions expressed in numbers, not the reverse.

Sam Barden is founding Partner of SBI Markets DMCC, a Dubai-registered commodities trading and advisory company.  Barden has worked in the global financial markets for more than 17 years in Europe, Russia and the Middle East.  He has advised and executed strategic transactions for both the government and private sector, in particular in energy and commodity markets, advising various energy producing nations on their strategic market developments and interaction.  He holds a degree in economics and finance from Victoria University, Melbourne, Australia.

Census shows 1 in 2 people are poor or low-income

[Half of the American population lives in poverty and our government spends nearly  two-thirds of a trillion dollars to expand our wars.]

Census shows 1 in 2 people are poor or low-income

WASHINGTON (AP) – Squeezed by rising living costs, a record number of Americans, almost 1 in 2, have fallen into poverty or are scraping by on earnings that classify them as low income.

The latest census data depict a middle class that is shrinking as unemployment stays high and the government’s safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.

“Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too ‘rich’ to qualify,” said Sheldon Danziger, a University of Michiganpublic policy professor who specializes in poverty.

“The reality is that prospects for the poor and the near poor are dismal,” he said. “If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years.”

Congressional Republicans and Democrats are sparring over legislation that would renew a Social Security payroll tax cut, part of a year-end political showdown over economic priorities that also could trim unemployment benefits, freeze federal pay and reduce entitlement spending. That is money set aside for payment to individual Americans under such programs as the Social Security retirement scheme or the Medicare health plan.

Robert Rector, a senior research fellow at the conservative Heritage Foundation, questioned whether some people classified as poor or low-income actually suffer material hardship. He said that while safety-net programs have helped many Americans, they have gone too far, citing poor people who live in decent-size homes, drive cars and own wide-screen TVs.

“There’s no doubt the recession has thrown a lot of people out of work and incomes have fallen,” Rector said. “As we come out of recession, it will be important that these programs promote self-sufficiency rather than dependence and encourage people to look for work.”

Mayors in 29 cities say more than 1 in 4 people needing emergency food assistance did not receive it. Many middle-class Americans are dropping below the low-income threshold — roughly $45,000 a year for a family of four — because of pay cuts, a forced reduction of work hours or a spouse losing a job. Housing and child-care costs are consuming up to half a family’s income.

States in the South and West had the highest shares of low-income families, including Arizona, New Mexico and South Carolina, which have scaled back or eliminated aid programs for the needy. By raw numbers, such families were most numerous in California and Texas, each with more than 1 million.

The struggling Americans include Zenobia Bechtol, 18, in Austin, Texas, who earns minimum wage as a part-time pizza delivery driver. Bechtol and her 7-month-old baby were recently evicted from their bedbug-infested apartment after her boyfriend, an electrician, lost his job in the sluggish economy.

After an 18-month job search, Bechtol’s boyfriend now works as a waiter and the family of three is temporarily living with her mother.

“We’re paying my mom $200 a month for rent, and after diapers and formula and gas for work, we barely have enough money to spend,” said Bechtol, a high school graduate who wants to go to college. “If it weren’t for food stamps and other government money for families who need help, we wouldn’t have been able to survive.”

About 97.3 million Americans fall into a low-income category, commonly defined as those earning between 100 and 199 percent of the poverty level, based on a new supplemental measure by the Census Bureau that is designed to provide a fuller picture of poverty. Together with the 49.1 million who fall below the poverty line and are counted as poor, they number 146.4 million, or 48 percent of the U.S. population. That is up by 4 million from 2009, the earliest numbers for the newly developed poverty measure.

The new measure of poverty takes into account medical, commuting and other living costs. Doing that helped push the number of people below 200 percent of the poverty level up from 104 million, or 1 in 3 Americans, that was officially reported in September.

Broken down by age, children were most likely to be poor or low-income, about 57 percent, followed by older people, those over 65. By race and ethnicity, Hispanics topped the list at 73 percent, followed by blacks, Asians and non-Hispanic whites.

Even by traditional measures, many working families are hurting.

Following the recession that began in late 2007, the share of working families who are low income has risen for three consecutive years to 31.2 percent, or 10.2 million. That proportion is the highest in at least a decade, up from 27 percent in 2002, according to a new analysis by the Working Poor Families Project and the Population Reference Bureau, a nonprofit research group based in Washington.

Among low-income families, about one-third were considered poor while the remainder, 6.9 million, earned income just above the poverty line. Many states phase out eligibility for food stamps, Medicaid, tax credit and other government aid programs for low-income Americans as they approach 200 percent of the poverty level.

The majority of low-income families, 62 percent, spent more than one-third of their earnings on housing, surpassing a common guideline for what is considered affordable. By some census surveys, child-care costs consume close to another one-fifth.

Paychecks for low-income families are shrinking. The inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to just under $15,000, and earnings for the next 20 percent have remained flat at $37,000. In contrast, higher-income brackets had significant wage growth since 1979, with earnings for the top 5 percent of families climbing 64 percent to more than $313,000.

A survey of 29 cities conducted by the U.S. Conference of Mayors being released Thursday points to a gloomy outlook for those on the lower end of the income scale.

Many mayors cited the challenges of meeting increased demands for food assistance, expressing particular concern about possible cuts to federal programs such as food stamps and WIC, which assists low-income pregnant women and mothers. Unemployment led the list of causes of hunger in cities, followed by poverty, low wages and high housing costs.

Across the 29 cities, about 27 percent of people needing emergency food aid did not receive it. Kansas City, Missouri, Nashville, Tennessee, Sacramento, California, and Trenton, New Jersey, were among the cities that pointed to increases in the cost of food and declining food donations, while Mayor Michael McGinn in Seattle, Washington, cited an unexpected spike in food requests from immigrants and refugees, particularly from Somalia, Myanmar and Bhutan.

Among those requesting emergency food assistance, 51 percent were in families, 26 percent were employed, 19 percent were elderly and 11 percent were homeless.

“People who never thought they would need food are in need of help,” said Kansas City Mayor Sly James, who co-chairs a mayors’ task force on hunger and homelessness.

———

Online:

Census Bureau: http://www.census.gov

U.S. Conference of Mayors: http://www.usmayors.org/

Newt and Other Republican Morons Forget To Register As Agents of Israel

["Neut" is here to remind us exactly what Bush was all about.  Kissing Netanyahu's ass, while appeasing the Rapture Republicans is a neocon speciality.  Gingrich steered Reagan's bankrupt policies through the Congress, while fixating on Monica Lewinski's stained dress.  He locked the Congress up over Clinton's sexual deviancies, while ignoring the mess that Bill and Hillary were making with his Bosnian Islamists that he recruited from the Afghan veterans, otherwise known as "al-Qaeda."  He, more than anyone else, can be said to have "fiddled" while Clinton created the force of international terrorist mercenaries who helped lead us into the perpetual terror war.  It has been American bipartisan policy to unleash Islamist terrorists upon the rest of the world, as seen in the wave of Islamists which we have helped empower in the Middle East.  The zombie Republicans have arisen from the dead to impersonate American statesmen, who all speak with the same voice, uttering the same seductive promises to save America from Obama, knowing full well that every word they speak is a lie.]

Gingrich and company share their Middle East delusions

James Zogby

On Wednesday, six Republican candidates for president appeared before the Republican Jewish Coalition to campaign for Christian votes. There are Jewish Republicans, to be sure, but not enough to make a difference in this primary contest. No, the real prize that drew the candidates to the event were the 40 per cent of GOP primary voters who identify themselves as “born-again” Christians. Many of them fervently believe that Israel can do no wrong and that it is their religious duty to support any and all Israeli policies as a prerequisite to hasten the “Day of Judgment”.

The speeches were mostly filled with hysterical criticism of President Barack Obama’s “appeasement” of Israel’s enemies and hyperbolic praise for Israel (with the exception of John Huntsman, who, after a few pandering platitudes, spoke mostly about the economy and was greeted with stony silence). Because their remarks included such irresponsible charges and promises, I have included significant excerpts to give a flavour of how out of touch today’s Republican Party is with current Middle East realities.

Newt Gingrich has in recent days surged ahead in the polls with statements like this: “As president, on my first day in office, I will issue an executive order directing the US embassy in Israel to be moved to Jerusalem as provided for in the legislation I introduced in Congress in 1995.

“The United States should explicitly reject the concept of a right of return for Palestinian refugees. The so-called right of return is a historically impossible demand that would be a demographic disaster and mean the end of the Jewish state of Israel.

“The United Nations camps system must be replaced by a system of earned income and property rights to restore dignity and hope to every Palestinian.”

The next day, Mr Gingrich followed up these remarks, in essence rejecting any Palestinian claim to a state: “Remember there was no Palestine as a state. It was part of the Ottoman Empire. And I think that we’ve had an invented Palestinian people, who are in fact Arabs, and were historically part of the Arab community. And they had a chance to go many places. And for a variety of political reasons we have sustained this war against Israel now since the 1940s, and I think it’s tragic.”

Michele Bachmann continued her pattern of lambasting Mr Obama while pandering to the far-right constituency: “It seems as if lately, our president has forgotten the importance of Israel to America and thinks of our relationship only in terms of what we do for Israel. The president is more concerned about Israel building homes on its own land than the threats that Israel and America face in the region.

“Obama improperly calls for Israel to retreat to indefensible 1949 armistice lines with swaps, and to then still face further demands to divide Jerusalem and allow a Palestinian ‘right of return’ to overrun the entire state of Israel. The Obama administration has also unconditionally given the Palestinians unprecedented amounts of US foreign aid, and opposed Congressional efforts to condition aid on the real steps that would bring about peace.

“The so-called Palestinian ‘right of return’ would demographically destroy Israel by swamping it with millions of Arabs who never lived in Israel, thereby turning the world’s only Jewish state into the world’s 23rd Arab state.

“My administration will fully recognise Jerusalem as Israel’s undivided capital.”

In that company, Mitt Romney was eager to sing the same tune: “Over the past three years, President Obama has … chastened Israel. He’s publicly proposed that Israel adopt indefensible borders. He’s insulted its prime minister. And he’s been timid and weak in the face of the existential threat of a nuclear Iran.

“These actions have emboldened Palestinian hard-liners who now are poised to form a unity government with terrorist Hamas and feel they can bypass Israel at the bargaining table. President Obama has immeasurably set back the prospect of peace in the Middle East.”

Rick Perry continued the refrain, based on his own version of history: “President Obama has systematically undermined America’s relationship with Israel … I support the goal of a Palestinian state, but it should be the Palestinians who meet certain preconditions.

“Instead, the administration has insisted on previously unheard of preconditions for Israel, such as an immediate stop to all settlement activity. President Obama has suggested the 1967 borders as a basis for negotiations. And he has instituted the practice of ‘indirect talks’, subverting the Oslo Accords.

“Israel does not need our president demanding gratitude for being the best friend Israel has ever had while his secretary of defence rails that Israel has ‘to get back to the damn table’ with the Palestinians, and his secretary of state questions the viability of Israel’s democracy, even as his ambassador to Belgium blames anti-Semitism among Muslims on Israel’s failure to accommodate the Palestinians.”

All of this went beyond the normal platitudes offered up in an election year. It was dangerous, shameful and crass pandering, making it clear how far today’s Republicans have moved from the reality-based foreign policy of the Bush-Baker era. And while it’s hard to imagine the alternate universe inhabited by these candidates for president, it’s frightening to think of where they would take US-Middle East policy should any of them be elected.

James Zogby is the president of the Arab American Institute

Democracy, Capitalism Have Failed the World

Africa: Democracy, Capitalism Have Failed the World

Yusuf Serunkuma

Since the outbreak of riots in the Middle East early this year, there has been much commentary arguing that this marks the only opportunity for the Arab world to democratise.

After the October election in Tunisia, the “Islamist” party Ennahda won 41.5% of the vote. And also in October, Libya’s National Transitional Council leader Mustafa Abdel Jalil declared that religion would serve their country better than anything else.

As well, there’s believable speculation that were Egypt to have an election, as is slated for November, the Muslim Brotherhood, a party that espouses Sharia as a source of legislation, is poised to sweep the elections.

What is interesting for Tunisia is that Ennahda is being asked to clarify that it will establish a secular and democratic state. And they have budged! But even then, they have not survived the wrath of the Western media, one that has taken on to speaking for their foreign offices.

Patronising comments like it is hoped Ennahda will rule “intelligently” and that “it is not necessarily a darker force,” have been doing the rounds.

Of course, this does not only despise the political ambitions of the Tunisians, but also treats them as little children who could have made a mistake voting for Ennahda.

I do not know if all this commentary is aware that there were secular parties that contested and were defeated. The democratic West is keen on exporting democracy to the Muslim world, for it gives life to capitalism.

In view of this much maligned religion, with the war on terror still raging and with Muslims bearing the brunt, why are these rioters-cum-liberators opting for Islamic states as opposed to full secular democracies, even in places where the West’s assistance exceeded legal boundaries?

It starts with the economy. The economic crisis in the West has exposed the foundations of democracy, not only as weak but also as dangerous to the public spirit. This has made the system very unlikable and hard to export.

The ‘Occupy the World’ (OW) movements make this point very clear. The OWs have made a strong case against capitalism, democracy’s longtime partner. Economists have often euphemized capitalism to mean free markets, i.e., the free interaction of forces of demand and supply.

However, this has been at only a rhetorical level. Indeed the present shape of capitalism amounts to “survival for the fittest”– it has made the world look like a jungle. After reading Adam Smith’s The Theory of Moral Sentiments, the brain behind capitalism, it is clear that capitalism has been grossly abused, and largely because of its weaknesses at ensuring checks.

Holding placards reading, “Capitalism is over”, “Pepper Spray Goldman Sachs”, “We are the 99%,” the OWs are showing the world a major weakness with a system that has shouldered capitalism — democracy.

In a travel piece, “Inside the American Dream,” journalist Andrew Mwenda notes that “the top 20% take 80% of the total income and the 80% of the Americans share the 20%.”

Also, democracy espouses one big lie: power belongs to the people in which people realise that their power only stops at elections. How does the American public contain a democracy from crime both at home and abroad, considering the fact that all other arms of government, including the media, can be manipulated?

The shift to religion perhaps comes to address two major elements of the community that are absent in secular democracies; the morality of the leader and the indispensability of the public.

It is sad that many western intellectuals often confuse human rights and democracy. Human rights can be ensured under any dispensation, for they are just a reflection of the conscience of the people, for any leader to guard, but they are not a product of a system.

Yet, a good public service sector is a key human right. Perhaps this might partly explain why Gaddafi lasted over four decades. Religious based republics seek to establish a consultable group of a few, often the intelligent and the rich, not the crowd as with democracy.

This does not mean people do not hold them accountable; they do, and there will often be more than one way of doing this. But this also means, to do a good thing for the public, leaders do not have to look through a contract, neither do they have to exploit a loose end of the contract to plot mischief.

It is unfortunate that the world has not had the opportunity to appreciate a movement of this nature.

The author is an editor at Fountain Publishers.

The Dominoes Are Falling In Europe

[Italy is taking France down with it.]

France draws fire after “alarm bells” warning

France's President Nicolas Sarkozy arrives to deliver a speech on benefits fraud during his visit in Bordeaux, southwestern France, November 15, 2011. REUTERS/Regis Duvignau

By Daniel Flynn and James Mackenzie

PARIS/ROME | Tue Nov 15, 2011 11:06am EST

PARIS/ROME (Reuters) – France came under heavy fire on global markets on Tuesday reflecting fears that the euro zone’s second biggest economy is being sucked into a spiraling debt crisis after a warning that Paris’s failure to adapt should be “ringing alarm bells”.

Nervous markets also showed concern about whether Italy’s Mario Monti and new Greek leader Lucas Papademos, unelected European technocrats without a domestic political base, can impose tough austerity measures and economic reform.

European Central Bank President Mario Draghi has predicted the 17-nation currency bloc will be in a mild recession by the end of the year, a view underlined by data showing the economy barely grew in the third quarter and faces a sharp downturn.

“The risks of a technical recession have increased and we expect the economy in Germany to shrink at least in one quarter, most likely in the first quarter of next year,” said economist Michael Schroeder of German economic research institute ZEW.

On the markets, Italy’s 10-year bond yield rocketed back above 7 percent, pushing its borrowing costs to a level widely seen as unsustainable in the long term and which helped trigger the fall of Silvio Berlusconi’s government last week.

Spain’s Treasury paid yields not seen since 1997 to sell 12- and 18-month treasury bills.

French 10-year bond yields have risen around 50 basis points in the last week, pushing the spread over safe haven German bonds to a euro-era high of 173 basis points.

French banks are among the biggest holders of Italy’s 1.8 trillion euro public debt pile.

The urgency of resolving the debt crisis was underscored by a think-tank report saying triple-A rated France should also be “ringing euro zone alarm bells” as it could not make rapid adjustments to its economy.

In New York, U.S. stock index futures fell sharply on Tuesday morning after the rise in European bond yields, the drop caused by fears in the United States that Europe’s debt crisis was mushrooming into a wider systemic problem.

“THREAT TO THE WORLD”

President Barack Obama’s top economic adviser said the European debt crisis was the leading risk to the U.S. recovery.

“Clearly, Europe is a tremendous concern,” Alan Krueger, chairman of the White House Council of Economic Advisers, said.

“It is important they act quickly, because it is a threat not only to Europe and the U.S., but the world as a whole.”

But Greek conservatives set themselves on a collision course with the European Commission, refusing its demand to sign a pledge to meet the terms of a bailout designed to save the country from bankruptcy and safeguard the euro zone.

Members of the New Democracy party, a key player in Papademos’s new crisis coalition government, said they would not bow to “dictates from Brussels” to give a written guarantee to honor the bailout.

With the survival of the 17-state currency zone in its current form now at risk, EU governments have until a summit on December 9 to come up with a bolder and more convincing strategy, involving some form of massive, visible financial backing.

The debt crisis is likely to make matters worse in the next months with nations such as Italy, Greece, Ireland, Portugal and Spain forced to adopt politically unpopular cuts to stop the bond market driving them toward default.

Economists say there is no visible growth strategy in place to counter those austerity measures.

After last week’s disastrous week for the euro zone’s third biggest economy, Italy’s Monti appeared to win a key breakthrough on Tuesday when Angelino Alfano, secretary of Berlusconi’s People of Freedom (PDL) party, emerged from the talks saying moves to form a government would succeed.

With the zone under intense scrutiny, Germany and France posted solid growth in the third quarter, statistics released on Tuesday showed, but euro zone nations on the front line of the debt crisis fared much worse and analysts expect bleaker times ahead in the core economies.

“THIS IS ALL HISTORY”

“The key point is that this is all history,” said Jonathan Loynes, chief European economist at Capital Economics.

“Forward-looking indicators suggest that the euro-zone economy is likely to drop back into recession in the fourth quarter and beyond,” he said.

The entire euro zone economy grew just 0.2 percent in the third quarter from the second, lifted by France and Germany, but economists were resigned to the fact the bloc was almost certainly heading for a recession.

Stagnation in Spain, Belgium and a contraction in the Netherlands and Portugal appeared to signal that the worse was yet to come and a summer growth spurt was temporary.

Monti is racing to secure support from feuding politicians to allow his cabinet of experts to speed up reform of pensions, labor markets and business regulation needed to put Italy’s finances on a sustainable footing.

Italy has to refinance some 200 billion euros ($273 billion) of bonds by the end of April, a daunting prospect

Expected to seek a confidence vote by Friday, Monti has said that he aimed to serve until scheduled elections in 2013, not just until reforms had been pushed through.

Far-reaching reforms are seen as crucial if Italy is to end years of stagnant growth, trim a debt mountain equal to 120 percent of gross domestic product and avoid the sort of crisis that forced bailouts of Greece, Ireland and Portugal.

In Athens, Papademos said late on Monday that Greece had no choice but to stay in the euro zone, telling lawmakers reforms were the only solution.

But conservatives on whom Papademos must rely for support demanded pro-growth policies and rejected any more cuts, fueling fears of a Greek default that may force Athens out of the currency group triggering a euro zone debt meltdown.

GREECE MUST SIGN

Austerity measures had deepened Greece’s recession but reforms — including widening the tax base and fighting rampant tax evasion — could mitigate the problem, said Papademos, who oversaw Greece’s entry to the euro zone in 2002.

But New Democracy leader Antonis Samaras said he would not vote for new austerity measures and he would not sign any pledge about new belt-tightening.

The European Commission issued a stark warning to Greece on Tuesday that it must provide written confirmation to its European partners of its commitment to reforms to bring down its debt, no matter who wins the next elections.

“The Eurogroup as a whole expects Greece, the Greek political forces, to provide a clear and unequivocal commitment to the agreement … and we expect this in writing. It has to be a letter and signed,” Commission spokesman on economic and monetary affairs Amadeu Altafaj told reporters.

Most Greeks hailed Papademos’s appointment, but thousands of people angry at more than a year of austerity are expected to rally on Thursday, the anniversary of a 1973 student uprising that helped to bring down the colonels’ junta of 1967-74.

(Additional reporting by Luke Baker in Brussels; Writing by Peter Millership; Editing by Giles Elgood)

Life Beyond Capitalism

Quantum Note: Beyond Capitalism

By Dr. Muzaffar Iqbal

The demise of the USSR did not alter the contours of the world; it merely made a small dent in the global distribution of power. To be sure, it ended the cold war, consolidated the gains of World War II for the Western world, liberated a small part of Europe from the iron clutches of communism, and led us into the nightmare of a unipolar world. While communism was wedded to dictatorship, capitalism has always been branded as eternally married to liberal democracy. A closer examination, however, reveals capitalism is, in many ways, the alter ego of communism and it is ethically as bankrupt as communism.

This was not apparent until recently, but now there are early signs of disappearance of the façade. People around the world are discovering the new face of capitalism as they march on the streets of financial capitals of the world amidst fears of a global economic collapse. Indeed, the global economy is under strain of an order it has never witnessed before. Movements as “Occupy Wall Street” are not only insisting that this is the case, they are, in fact, the desperate calls of humanity for release from the iron clutches of a morally bankrupt system. They are not only signs of discontent against an economic system, they are simultaneously indicative of a lack of confidence in the political system; people have finally realized that there is no choice left for them politically except to vote for one of the two parties, both of which sell the same goods.

These early signs may not be the start of the demise of capitalism, but there is no doubt that all brands of capitalism—the anglo-saxon, the neoliberalism, the Chinese-Singaporean capitalism with Asian values—all are fracturing from within. The most apparent indicators are emerging from USA where, according to the U.S. Census Bureau data released on September 13th, 2011, the nation’s poverty rate rose to 15.1% in 2010, up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. The economic situation of other countries in the Western world is not rosy either. In fact, millions of people are now living under the looming shadow of economic collapse which may trigger mass social unrest.

After putting bandages on the Greek economy, the leaders of the Western world—the so-called G20 countries—are now preparing for emergency talks on averting a return to worldwide recession. While they move to the next emergency, the Greek bandages are already falling apart because of the popular discontent at the terms of the deal which has forced George Papandrou, the Greek Prime Minister, to seek a referendum on the deal which took months to finalize. While Europe deals with defaulting countries, the United Nations’ International Labour Organisation (ILO) has warned of the social effects of the continuing economic crisis, which could take until 2016 for global employment to return to the levels of three years ago.

No one from within the Western political leadership seems ready to acknowledge that there is something seriously wrong with the system; they are all looking for minor tune-ups and they are all living in the self-created utopia of a happy marriage between capitalism and the political system which has beget them. The magic cure they have found is creation of jobs through state-sponsored projects. Mega projects were first announced by President Obama, then by the Canadian Prime Minister and the latest came from David Cameron, who announced a fresh drive to create jobs through major infrastructure projects last week. This includes the construction of power plants at Ferrybridge, West Yorkshire, and Thorpe Marsh, South Yorkshire, creating 1,000 construction jobs.

The economic strains are translating into political strains: many citizens of Western democracy are realizing that though they live in so-called free societies, with elections every five years, authoritarianism is creeping at such a rate that its breath is upon their necks. Security threats have been blown out of proportion to institutionalize repression in the name of security: callous anti-terrorism laws passed by Bush-Blair and Co. now routinely insult passengers at airports, the camp outside St Paul’s Cathedral can’t be allowed, those who have finally come together to seek justice will be overcome, defeated by any means necessary, the right to peaceful protest notwithstanding.

This is not to say that there is no one in the Western world who is ready to acknowledge the inherent bankruptcy of capitalism; it is just that such voices are considered “interesting” and cast aside. The nameless millions living below poverty level are told that they are still better than millions out there, in the so-called developing world and there is no alternative to capitalism so they had better be silent. This breeds hopelessness, disempowerment, doom and gloom, which then translates into individual tragedies.

A recent work by Ha-joon Chang, a South Korean economist, currently a Reader in the Political Economy of Development, University of Cambridge23 Things They Don’t Tell You About Capitalism lays bare certain long-standing myths about capitalism. These are not shocking disclosures; merely common sense truths supported by fact and logic. Chang is not anti-capitalist, he simply recognizes the failings of centrally planned economies, describes capitalism as “the worst economic system except for all the others”. His book shows capitalism as it actually operates, but does not look deeper than that: he is not interested in looking at the links between capitalism and “democratic authoritarianism”; nor at the fundamental flaws of the system, yet it is instructive to see these insights from within the system.

What remains to be seen is how Capitalism will eventually come to its logical end and what will emerge from the rubble. There are no alternatives available for the Western world. The new and emerging economies in Asia, likewise, have no alternative; they will simply emulate the Western model with a sprinkle of Asian values. The slick veneer that has camouflaged the inherent ills of capitalism is now tearing and the world is finally able to make connections between events: the disgraceful Victorian work practices, the terror unleashed by Thatcher’s special police forces on black and Asian people and miners in the 1980s, and the current union of the high churchmen with the City of London are not isolated instances of failure of the system; they are veritable signs of its inherent moral bankruptcy.

Hillary Pulling Zardari Puppet Strings

[Hillary has no problem getting the answers she wants from Zardari, but Kayani dances to a different tune.  Whatever may come out of this "tri-logue," it is the Pak Army which will have to enforce any "truce" reached by the talking heads.  We are watching a very elaborate road show being staged to seduce the leaders of AfPak and Central Asia into making it possible for Western corporations to bring the "Silk Road" Pipeline scheme into existence.  The big obstacle is in convincing the other players that the survival of the American Empire is not in question...that the American Empire's treasury will have something in it for them after 2014.]

Accord with US on Taliban ‘tri-logue’

[Hillary shares her "dead Qaddafi" joke with Zardari]

US Secretary of State Hillary Clinton, third from left, meets with Pakistan’s President Asif Ali Zidari, right, alongside US special envoy for Afghanistan and Pakistan Marc Grossman, left, and US Ambassador to Pakistan Cameron Munter, second from left, in Islamabad on Oct. 21, 2011. – AP Photo

WASHINGTON: The United States and Pakistan agree on a framework for holding direct talks with the militants and are now working to operationalise the plan, says the US State Department.

At a briefing for the press corps that accompanied Secretary of State Hillary Clinton to Islamabad last week, two State Department officials explained what the secretary meant when she said in her recent interviews that the US and Pakistan had agreement on 90-95 per cent of issues they confronted.

They said the US, Pakistan and Afghanistan had already an understanding on holding a “tri-logue” with the Taliban militants.

They also agree that this has to be Afghan-led and has to be at the pace and scope that the Afghans decide on.

“That Pakistan has to play its part in this; it has to encourage reconciliation. And that as efforts are made at reconciliation, if the US can play a helpful role, that we would be available to do that,” said one official.

After agreeing on this framework, the US and Pakistan were now working on the need to operationalise it. “What does it mean? And particularly in the context of the awful, horrific experience that the Afghans had with the death of President Rabbani … we’re all working off the script that is going to protect against that kind of thing happening again,” the official said.

Operational details like where to hold the dialogue, who to talk to and in what form and formats and for how long were now being worked out, the official added.

“We needed to start with ensuring we were all on the same page in terms of the framework.” The two officials explained that in their meetings with the US delegation, which included the CIA and military chiefs, Pakistani leaders kept referring to the resolution passed by the all-parties conference on the proposed talks with the militants.

“What does the all-parties conference mean to them? It means that every party in Pakistan got together and agreed that reconciliation, if it can be done right and if it is Afghan-led and if it meets the red lines, is in Pakistan’s interests,” said the State Department official.

“And so as they seek to work with Afghanistan and with us on this, what we heard in general, was that they need to keep the Pakistani body politic together on this agenda. And they think that they have a framework for doing that with this agreement of the all-parties council,” the official added.

The two officials disagreed with a suggestion that the Pakistanis were refusing to take military action against the militants because they had failed to produce results.

“The conversation that we had was very much on the lines that we have to squeeze them,” said one State Department official.
“But we also have to have a track for talking for those who are willing to come in off the battlefield within the parameters that the Afghans have set.

“So I don’t think there’s any disagreement between us, that we have to fight and squeeze even as we talk.”

Another senior State Department official said that Pakistan also recognised that there were militant safe havens inside its territory and the two sides needed to work together to deal with them.

In an interview to The Washington Post, Gen. Scaparrotti noted that until last year he enjoyed excellent cooperation with the Pakistani military and toured the battlefield with his counterparts from Pakistan along both sides of the porous border.

After the US raid on the Bin Laden compound in Abbottabad, “this relationship is not what it was, say, a year ago,” he said. “My intent is to start rebuilding this on a mil-to-mil basis, at least.”

A week before Secretary Clinton’s visit to Islamabad, Gen. Scaparrotti met top Pakistani military officials and pressed for re-establishing “routine daily communication” and discussions of how to deal with insurgents.

“If we work together, we can have a joint effect on [the insurgents], and we need to do so,” he said.

Meanwhile, former State Department official Vali Nasr, who was a senior adviser to the late US special representative for Pakistan and Afghanistan, Richard Holbrook, noted that the Obama administration clearly wanted to re-engage Pakistan.

“Every one of our assumptions about our timetable of getting out of Afghanistan, our success on the ground with military operation has been predicated on the kind of at least minimal cooperation we have had with Pakistan over the past two years,” he told the US National Public Radio.

“If that cooperation ceases to exist and our relations get any worse than they are currently, it’s very difficult to see how the United States can meet its deadlines in order to be able to withdraw from Afghanistan.”

Here are eleven facts that you need to know about the nation’s biggest banks:

Here are eleven facts that you need to know about the nation’s biggest banks:

– Bank profits are highest since before the recession…: According to the Federal Deposit Insurance Corp., bank profits in the first quarter of this year were “the best for the industry since the $36.8 billion earned in the second quarter of 2007.” JP Morgan Chase is currently pulling in record profits.

– …even as the banks plan thousands of layoffs: Banks, including Bank of AmericaBarclaysGoldman Sachsand Credit Suisse, are planning to lay off tens of thousands of workers.

– Banks make nearly one-third of total corporate profits: The financial sector accounts for about 30 percent of total corporate profits, which is actually downfrom before the financial crisis, when they made closer to 40 percent.

– Since 2008, the biggest banks have gotten bigger: Due to the failure of small competitors and mergers facilitated during the 2008 crisis, the nation’s biggest banks — including Bank of America, JP Morgan Chase, and Wells Fargo — are now bigger than they were pre-recession. Pre-crisis, the four biggest banks held 32 percent of total deposits; now they hold nearly 40 percent.

– The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards: Bank of America, JP Morgan Chase, Wells Fargo and Citigroup issue one out of every two mortgages and nearly two out of every three credit cards in America.

– The 10 biggest banks hold 60 percent of bank assets: In the 1980s, the 10 biggest banks controlled 22 percent of total bank assets. Today, they control 60 percent.

– The six biggest banks hold assets equal to 63 percent of the country’s GDP: In 1995, the six biggest banks in the country held assets equal to about 17 percent of the country’s Gross Domestic Product. Now their assets equal 63 percent of GDP.

– The five biggest banks hold 95 percent of derivatives: Nearly the entire market in derivatives — the credit instruments that helped blow up some of the nation’s biggest banks as well as mega-insurer AIG — is dominated by just five firms: JP Morgan Chase, Goldman Sachs, Bank of America, Citibank, and Wells Fargo.

– Banks cost households nearly $20 trillion in wealth: Almost $20 trillion in wealth was destroyed by the Great Recession, and total family wealth is still down “$12.8 trillion (in 2011 dollars) from June 2007 — its last peak.”

– Big banks don’t lend to small businesses: The New Rules Project notes that the country’s 20 biggest banks “devote only 18 percent of their commercial loan portfolios to small business.”

– Big banks paid 5,000 bonuses of at least $1 million in 2008: According to the New York Attorney General’s office, “nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008.”

In the last few decades, regulations on the biggest banks have been systematically eliminated, while those banks engineered more and more ways to both rip off customers and turn ever-more complex trading instruments into ever-higher profits. It makes perfect sense, then, that a movement calling for an economy that works for everyone would center its efforts on an industry that exemplifies the opposite.

US To Spend $700 Billion On New Nukes and Modernization In Next Ten Years

What We Spend on Nuclear Weapons

BY JOEL RUBIN

The United States is projected to spend over $700 billion on nuclear weapons and related programs during the next ten years. As federal budgets tighten and officials address the most pressing national security needs of the 21st century, the substantial cost of nuclear weapons must be fully examined. By understanding these costs and setting effective national security priorities, policymakers can reduce nuclear budget excesses incurred by the active stockpile of approximately 5,000 nuclear weapons.

Ploughshares Fund has written a working paper (http://ploughshares.org/sites/default/files/resources/What%20We%20Spend%20on%20Nuclear%20Weapons_0.pdf) to address the magnitude of this complex issue. As a result of this analysis, we are convinced that the current projected expenditures on nuclear weapons are mismatched for both the fiscal and physical threats we face as a country, and must therefore come down. This working paper should be viewed as a living document that, as the budget picture for nuclear weapons spending becomes clearer, will be adjusted to match the changing policy environment.

We hope that this working paper will contribute to the overall national debate about defense spending, both for the sake of our national security and our country’s fiscal health. It is our view that these projected investments are oriented towards fighting last century’s wars, thereby creating significant financial waste while undercutting our country’s ability to address the threats we all face. In an era of tight federal budgets, limited defense dollars must be spent wisely to address the security needs of today and the anticipated security needs of tomorrow. Our projected nuclear weapons spending, as outlined in this paper, does not meet this standard.

Ultimately, the United States must find a bipartisan path forward for reducing the nuclear budget burden that we all face. We should not saddle our children and grandchildren with hundreds of billions of dollars of unnecessary future expenditures for weapons systems that we neither need nor can afford.

ORIGINAL POSTING LINK: http://www.ploughshares.org/blog/2011-09-14/what-we-spend-nuclear-weapons

Uncle Sam’s decline and rise of China

Uncle Sam’s decline and rise of China

, TNN

The most enduring images of what is known as the “9/11 decade” are of suicide bombings, Predators, dead al-Qaeda leaders and new al-Qaeda leaders. But did we miss another, equally powerful image? Yes, that of China, growing unhindered and becoming a superpower in its own right, when the US was busy fighting its wars?

Ten years since 9/11, the jury is still out on whether the US is winning the war against al-Qaida. But there is no doubt that in the past decade the world has found a new fulcrum. As Lionel Barber wrote in the ‘FT’ , the three most important words in the last decade was not “war on terror” but “made in China” . Derek Scissors, economist at conservative think tank, Heritage Foundation says, “The US met the narrow security challenge of 9/11 but meeting any security challenge has an economic component. The US lacked the political courage to pay the economic price, weakening America’s global position and making China a more serious challenger than it otherwise would be in 2011.” The year 2001 was the zenith of America’s unipolar status. Ten years later, the world is talking about Pax Sinica. After the 9/11 attacks, the US decided to go after the guys who planned and executed the terror plot. But instead of hot pursuit , US decided to go after Saddam Hussein in Iraq, which was a war of “choice” . But despite pouring billions into its war effort in Iraq and Afghanistan, al-Qaida and Talibanremain a potent threat to the US and a drain on an imploding US economy.

All this while, China stayed in the background. They did not have to spend murderous amounts of money, or send thousands of soldiers to die in a war where their main ally was also their main enemy. China retained its “all weather ” friendship with Pakistan – on the cheap. China never spent the kind of money America did in Pakistan, yet its influence with Islamabad was disproportionately high.

In Afghanistan, US-led ISAF was fighting the Taliban, China , meanwhile, was investing billions in copper mines. In 2007, Musharraf stormed the Lal Masjid in Islamabad after China protested at the abduction of its citizens; in 2011, Gen Kayani was advising the Afghan leadership to abandon the Americans and throw their lot with the Chinese.

Mohan Malik of the Asia-Pacific Centre for Security Studies says, “When historians look back in a few decades’ time, 2001 will be seen as marking the beginning of the end of the “unipolar moment” in history. This was the year when the sole superpower, the US, was challenged by both state and non-state actors – first by China in April 2001 via the EP-3 spy plane incident in the South China Sea, and then by al-Qaida via the 9/11 terrorist attacks. Though the US still stands as “first among equals” – China poses a far more potent challenge to the US than the Soviet Union ever did. The 9/11 attacks and Washington’s response to it have crippled the US economy.”

The US made some economic choices that led to the deterioration of its own economy. Scissors outlines them thus – US monetary stimulus in response to the expected economic impact of the 9/11 attacks lasted far too long and weakened the entire world economy, including China ; to buy support for the Iraq invasion, President Bush implemented an expansionary fiscal policy, which weakened the US; the cost of the war on terror weakened the US, because a war should have necessitated cutbacks elsewhere which did not happen.

At the end of the decade, America was withdrawing from Iraq without the confidence that it would stabilise in the way it was intended. Al-Qaida and Taliban are being led from Pakistan, which means that even with a 2014 withdrawal deadline, there is no certainty that victory is in sight. Meanwhile, the US economy is in shambles , its politics is in a worse logjam than in India , it owes over $1.5 trillion to China, and its public debt is at $14 trillion.

China has overcome the financial crisis fairly successfully. The US preoccupation in the Middle East and south-central Asia left the Chinese to concentrate on its military modernisation. The Afghan war showed China how high technology , special forces, unmanned UAVs could wage successful wars. China’s military budgets went into overdrive in the decade past, as the US concentrated on fighting terrorism. Diplomatically, too, China spread its influence in Asia and beyond. this was helped along by a general distaste for American methods in the affected countries, its neglect of many allies, and certainly in Asia, the relative cooling of ties between Washington and Seoul and Washington and Tokyo.

But China’s overreach may have negated some of those gains for Beijing in the past few years. Its assertiveness in south China Sea, over the Cheonan and Senkaku/Diaoyutai islands have angered and alarmed its neighbourhood, who are once again looking at the US as the balancer . Malik adds, “Convinced that the US hegemony and Western politico-military dominance are now in an irreversible process of decline and final disappearance, China is becoming increasingly assertive on the international stage in ways that are inconsistent with regional peace, global stability and Indian interests.”

Dean Cheng, a China security analyst, believes despite its big bucks in military modernisation , China may still seem less of a challenge. “The US now has arguably the most battle-hardened military in the world. Its small-unit commanders are probably more familiar with not only combat, but diplomacy, than any other military. China has now gone 40 years without fighting a war.”

In the past few years, Indian strategists have fretted that US over-exposure in Afghanistan could see a China challenge grow, which would be against Indian interests. But while China will certainly continue to become more powerful, it may be a while before US is ready to relinquish hegemony to China.

Once Again, the US Misses-Out On More Gas Liberated In Spite of the Terror War

[TAPI pipeline is realistically put on hold, since all players seem to be facing-up to the dangers of Afghanistan and American failure to overcome the insurgency.   Everyone seems to be gravitating towards an alternative Chinese solution and away from anything tied to the American position.  If American corporations, in hand with the US Govt., cannot solve the equation of Afghanistan, so that pipeline plans can be realized, then someone else will rise to the task and to the rewards promised to those who harvest Central Asian gas and oil.  From other reports on the international meeting of Asian leaders, comes word that they are all pushing to create the CAREC Corridor 5 project.  This proposed strategic corridor connects China all the way to Pakistan and everything in between.   The route bypasses Turkmenistan, but it is assumed from reports that China expects to more than double the amount of Turkmen gas flowing to China and the following report that China is loaning Turkmenistan billions to develop the possibly defunct TAPI pipeline, that China will get its money's worth of Turkmen gas.  Actually, the Corridor 2 Project connects both Turkmenistan and Uzbekistan to the Corridor 5 pipelines (SEE: Corridor 2). 

In this case is really is true for American investors that "if you snooze, you lose," or would it be more accurate to say that American failure to achieve its militarist plans in both Afghanistan and in Iraq have cost Western oil majors the Iraqi and Central Asian bonanza that they have lusted so hard over, all of these years?]  

larger map

09/02/2011

Gas pipeline through Afghanistan – Emergency cancellation?

Dmitry Verkhoturov

If the Americans leave southern Afghanistan, the Afghan forces can not guarantee the security of the pipeline. In the picture: After signing a framework agreement on construction of a trans-Afghan pipeline (TAPI).Ashgabat, 2010

Not so long ago been completed negotiations on TAPI gas pipeline that would carry Turkmen gas fields Dovletabad through Afghanistan and Pakistan to India. Parties managed to overcome all differences, all the political difficulties, and in May 2011 Afghan parliament approved the construction start scheduled for 2012. Turkmenistan has already begun preparations for the construction, which includes the equipment building industry and the railroad Atamurat – Akin – Andkhoy.

The collapse of the safeguards

In early 2011 the U.S. put forward a plan for further strategy in Afghanistan, which threatens the project a complete failure. A former deputy adviser to U.S. President for National Security Robert Blackville suggested, referring to the high losses and the inability to keep the south of Afghanistan, go to “Plan B”. The plan calls for a sharp reduction in foreign military contingent from 150 thousand to 30-50 thousand people, and challenge him to Kabul and northern Afghanistan. The whole of southern Afghanistan province of Kunar province, Nimroz to left, so the Taliban.

It comes even to the point that Robert Blackville said: “At the same time, Washington must recognize that the” Taliban “sooner or later will acquire control over the Pashtun south and east, and to prevent such an outcome, will pay an unacceptably high price.” In fact, we are talking about recreating the Taliban government in some of his form in the form of Islamic Emirate of Afghanistan, in the form of “Pashtunistan” or else under some other name, with forms of management, which will strongly resemble the device Taliban government in 1999 -2001, respectively.

All agreements on the construction of the TAPI held on Afghan security guarantees and the construction of the pipeline. When these agreements were signed, it was assumed that the Americans will stay in Afghanistan long enough to become stronger Afghan army and managed to take control of security. But if the Americans leave southern Afghanistan, the Afghan forces can not guarantee the security of the pipeline, which passes through the southern provinces. Even if you start building it in 2012, its completion would be in question because about a thousand kilometers of gas pipeline will pass through the territory on which military operations are possible. Delays in construction as a threat to the failure of the project. Thus, the U.S. “Plan B” destroys everything that participating countries have established an agreement on TAPI with great difficulty.

The Chinese word

Contrary to current opinion, China has always stood for talks on TAPI, and the entire project is impossible without China’s participation. Typically, experts believe that China was not profitable direction of Turkmen gas to the southern route, since China imports of Turkmen gas via a pipeline Turkmenistan – China, entered service in late 2009 and has plans to expand its capacity.

However, this is only part of the picture. If we take into account the fact that Pakistan has become an important ally of China, and to take into account the activity of the Chinese investment in countries of the region (Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and Turkmenistan), it becomes obvious that the construction of the TAPI very much in the interests of Beijing . Firstly, the fuel and economic development opportunities for Pakistan – an important ally. Second, these are the conditions for large-scale investment in the whole sector of countries, particularly in Pamir region. TAPI implementation makes this region so far very little affected by economic development, a major area for investment and a source of valuable raw materials for Chinese industry. Do not forget that the Pamir and Hindu Kush are numerous mineral deposits, including rare metals and uranium. In addition, the gas required and Chinese companies in the mining of minerals such as copper deposit Aynak. A major gas pipeline allows you to build copper plant and take out no ore concentrate and blister copper suitable for electrolytic refining.

December 12, 2010 signed a framework agreement on TAPI gas pipeline construction, and only April 27, 2011 the Bank of China has provided “Turkmengaz” a large loan of $ 4.1 billion for 10 years under the terms of repayment of gas supplies. It is clear that such a large loan provides for a major investment in a large construction site, and at that time there was only one project of this magnitude – TAPI.

American “Plan B” shuffled the cards and broke all the calculations. However, China is still a loser will not. August 27, 2011 China National Petroleum Corp. – Chinese oil company, said that before 2015 there are plans to double the power of the Turkmenistan – China, and to increase the volume of gas imports to 55-60 billion cubic meters. meters per year. Currently imports account for August this year, 13.6 billion cubic meters. meters, to 2012, should reach 30 billion cubic meters. meters. The increase in the plan in 2015 to 60 billion cubic meters. meters – it’s just turning the volume of gas that had to go to the TAPI gas pipeline Turkmenistan – China. Already granted to credit “Turkmengaz” just build a pipeline in a different direction.

Well, the Chinese policy has always led a leisurely policies and preferred not to risk it.Obviously, after analyzing the situation in Afghanistan, they decided to postpone the TAPI to better times and not keep it up until the situation changes and stabilizes. China has nothing to lose, and can provide 4-5 billion dollars in construction and in 2015, and in 2020 and later.

Implications for Afghanistan

Such a solution, of course, greatly complicates the situation in Afghanistan. First, it is a significant deceleration of economic development, which determines in particular the construction of the armed forces and security. Second, the Afghan government is deprived of important arguments in the process of national reconciliation. Prior to that, it could promise the militants, and even major commanders, the broad perspective associated with the pipeline. Judging by the statement of support for Gulbuddin Hekmatyar construction with preliminary agreement had been. As now the situation, and whether the actual agreement on – debatable.

All this means that opportunities to persuade fighters to disarm some prospects for a peaceful life and legal income for the Afghan government have fallen significantly, and now, willy-nilly have to balk at the increased military pressure on the Taliban and try to inflict the greatest possible damage to Taliban squads.

Americans are ill-considered words and his speeches, of course, have already caused great damage to Afghanistan’s security, disrupted long-term agreement that would guarantee an end to the war years 2014-2015. Now everything is delayed. That’s how important it is to some experts to Washington to think through their proposals before, and only then to express them out loud.

However, do not lose heart. Palliative Turkmen gas can be Turkmen electricity, and railroad Atamurat – Akin – Andkhoy good in itself, and outside gas pipeline project. Temporarily, until the TAPI build fails, it is necessary to advance the project of development of the Afghan-Turkmen cooperation and industrial development in the border with Turkmenistan provinces. This is one of the most peaceful areas of Afghanistan, and projects it may be of interest to investors from different countries.