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The Rise Of The American Oligarch Class

September 30, 2008

The Paulson Plan

Robert Wenzel | Information Clearing House, Sep 29, 2008

The word oligarchy dates back at least to the time of Aristotle and comes from the Greek words for “few” (ὀλίγον olígon) and “rule” (ἄρχω arkho). An oligarchy is generally considered any form of government where a small elite segment of society, be they from royalty, wealth, family or military, rule. The most current day popular meaning associates an oligarch with an extremely wealthy person who acquires his wealth, or increases it significantly, by incorporating the use of government influence. Oligarchs are not the only ones who become rich, but their success and secretive influence over governments put them into a separate class.

A recent example of a major grab of power and wealth in this type of oligarch fashion comes from the period of the collapse of the Soviet Union. In the confusion during the collapse, and the rise of Boris Yeltsin as president of Russia, the oligarchs made their move. With relatives or close associates as government officials, sometimes even government officials themselves, they achieved vast wealth by acquiring state assets very cheaply during the so-called “privatization” process controlled by the Yeltsin government.

The current $700 billion Paulson bailout plan has brought to the forefront a new class of what must be called American Oligarchs and oligarch wannabes. Some may have originally earned their wealth by supplying consumers with desired goods, but at some point they crossed over to the dark side to use government as a vehicle to take from the poor and the middle class to give to themselves. Others, never produced an honest product and have been career long parasites on the working classes.

It is instructive that outside of this small group of oligarchs and wannabe oligarchs, few appear to have been in favor of the Paulson “bailout”. (Note: The use of the word “bailout” to describe the Paulson Plan is a misnomer, see my column: THE BIG LIE: The Supposed Paulson ‘Bailout’ Plan).

A letter circulated and signed by many academic economists was sent to Congressional leaders objecting to the plan. The Austrian economists, who are the only ones who understand the business cycle, as would be expected also objected to the plan (See Rockwell: Stop the Bailout and Murphy: The Government Is Not Promoting Stability ).

Even some bankers have objected:

U.S. Treasury Secretary Henry Paulson’s proposed $700 billion bank rescue aims to help “poorly run” companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley, said BB&T Corp. Chief Executive Officer John Allison in a critique of the plan.

Treasury “is totally dominated by Wall Street investment bankers” and “cannot be relied on to objectively assess” the impact of government policy on the financial industry, Allison wrote in a Sept. 23 letter to Congress…

Allison, 60, said Congress should “hear from well-run financial institutions” as lawmakers consider the plan, which seeks to ease the credit crunch by buying troubled mortgage- related assets. Under Allison, Winston-Salem, North Carolina- based BB&T avoided the subprime mortgage market, whose collapse led to the credit crisis. BB&T has risen 26 percent this year, the best showing in the 24-company KBW Bank Index.

From the right, Newt Gingrich has called the plan “stupid.” From the left, Paul Krugman opposed the plan, calling it “Cash for trash.”

Most noteworthy is the fact that the notoriously pro-Bush FOX television network carried this AP report:

There is scant public support for President Bush’s $700 billion federal rescue plan for the U.S. financial industry and little expectation it would solve the crisis that has roiled the markets and hobbled some of the country’s largest investment firms, according to a poll released Friday.

Just 30 percent of Americans say they support Bush’s package, according to an Associated Press-Knowledge Networks poll released as White House and congressional leaders struggled to rescue the plan after House Republicans rebelled against it. Despite the president’s pleas that the package is urgently needed to prevent an economic meltdown, 45 percent say they oppose Bush’s proposal while 25 percent said they are undecided.

Yet, despite the extremely limited support for the plan, the Oligarchs prevailed and Paulson’s Plan will become law. Indeed, the Oligarchs were out in full force to support the legislation. As I have pointed out before, Paulson with his Goldman Sachs connections must be considered an oligarch, but there are others.

Billionaire David Rubenstein, co-founder of the politically connected Carlyle Group, has come out in favor of Paulson’s Plan. Rubenstein told CNBC that he hopes Congress will move quickly to approve the rescue of the U.S. financial system.

Carlyle Group almost has too many ways to benifit from Paulson’s Plan to count. They ran a mortgage securities firm that went under. Those securities will be coming up for sale under a reorganization, just in time for purchase by the Treasury.

The Federal Reserve has changed regulations which will allow them to buy larger stakes in bank stocks. And Rubenstein wants to buy some of the paper the Treasury acquires. “Private equity can help by buying these assets,” he told CNBC. “Private equity can be among the most significant buyers of assets.”

Billionaire Warren Buffett is in favor of the plan, and he just bought, through Berkshire Hathaway, a $5 billion stake in Goldman Sachs. Goldman Sachs just received approval from the Fed to become a bank holding company, so that they can buy up troubled banks (And then sell the troubled mortgages of the banks to the Treasury?). Buffett called Paulson’s plan “absolutely necessary” and said that “I am betting on the Congress doing the right thing for the American public and passing this bill,”

Billionaire Wilbur Ross , through a firm controlled by Ross, bid $435 million last September to buy the service unit of American Home Mortgage, which collects payments from homeowners. He is in favor of Paulson’s Plan and penned a column published at the New York Post to say so, “…we need this passed, and passed quickly…,”wrote Ross.

There are likely other oligarchs who maintain a low profile and keep their names out of the headlines, and there are oligarch wannabes like former New York City Mayor Rudy Giuliani . Giuliani has put out a press release advising that his firm has formed a “task force” to “guide financial institutions, private investment funds, institutional investors and other market participants through the legislative, regulatory and enforcement challenges posed by the” Paulson Plan.

Clearly, the new oligarchs have arrived in America. It will mean a lower standard of living for the rest of us as it is clear by the Paulson Plan that they are not afraid to think big when grabbing money from the populous at large. Further, they have the political skill and influence to get the legislation passed that will benefit themselves even when there is virtually non-existent popular support. Be scared, very scared. The new American Oligarchs now rule financial America and there is no such thing as enough with them. They will be back for another big bite from our wallets and income streams, all too soon.

Update: Word has reached me (HTrpm) that snuck into Paulson’s plan are changes that will make it easier for the Fed to inflate the money supply. So is the play for the Oligarchs to grab the banks, the assets and the mortgages and then inflate the money supply boosting the value of all these assets by trillions, while the rest of us simply get to deal with the price inflation as higher prices at the grocery store, the gas pump and everywhere else?

Robert Wenzel is an economic consultant and Editor & Publisher of EconomicPolicyJournal.com. He can be reached at rw@economicpolicyjournal.com.

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Michael Moore: The Rich Are Staging a Coup This Morning

September 30, 2008

Published on Monday, September 29, 2008 by CommonDreams.org

by Michael Moore

Friends,

Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies — who must soon vacate the White House — are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.

No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday’s New York Times and you can see what the real deal is:

“Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.”Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

“At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.

“Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.”

Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to “consult” in the bailout.

The problem is, nobody truly knows what this “collapse” is all about. Even Treasury Secretary Paulson admitted he doesn’t know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can’t figure it out nor can he explain it to anyone.

And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!

Falling for whom? NOTHING in this “bailout” package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.

Health insurance? Mike, why are you bringing this up? What’s this got to do with the Wall Street collapse?

It has everything to do with it. This so-called “collapse” was triggered by the massive defaulting and foreclosures going on with people’s home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it’s because too many working class idiots were given mortgages that they really couldn’t afford. Here’s the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage “crisis” may never have happened.

This bailout’s mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It’s to protect the top shareholders who own and control corporate America. It’s to make sure their yachts and mansions and “way of life” go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!

I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something — NOW! Here’s what you can do immediately:

1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they’ve made. Tell him we know he has the smarts to slow this thing down and figure out what’s the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.

2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).

3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.

When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!

Yours,
Michael Moore
MMFlint@aol.com
 MichaelMoore.com

P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.

P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we’ll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say “NO!” If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.

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When faith uses force

September 30, 2008

Behind a new outbreak of violence against Christians in India lies a long-running campaign for Hindu cultural dominance

Protest in New Delhi against Hindu anti-Christian violence in India

An activist demonstrating in New Delhi against the violence of hardline Hindu groups against Christians in several Indian states, September 29 2008. Photo: Adnan Abidi/Reuters

Standing next to France’s President Sarkozy, the Indian prime minister Manmohan Singh today made a heartfelt plea over the spread of anti-Christian violence in India. The sight of Hindu mobs smashing churches and prayer halls while Christians in the country are killed or left cowering under tarpaulin sheets in refugee camps is, as Dr Singh rightly described, a “national shame”. There are calls from within the ruling Congress party, which relies on the votes of Christians and Muslims in India, to ban Hindu extremist organisations such as the Bajrang Dal, which uses force when the force of argument fails.

There has been bloodshed on both sides. One Christian priest was “cut to pieces” in front of his wife. A Hindu priest was shot dead for campaigning against religious conversions. The violence, which has left nearly two dozen dead, has spread across six states. Even after the Pope intervened, the Roman Catholic archbishop of one of the worst affected areas in eastern India said the situation was “out of control”.

What lies behind this violence is nothing less than a struggle for the soul of India. Religion is deeply rooted in this country of one billion. The divine was fundamental in the creation of post-independence India. Unlike Europe, in India the Gods will not disappear in a blaze of rational thinking.

But views of God led to a schism in Indian nationalism. One side is rooted in secular thinking: that beneath the differences among India’s religions there is a common creed, a moral order articulated in the country’s constitution. Opposing this is the Hindu right. Their philosophy aims to unify the country under the banner of the majority religion. It sees the country’s post-independence constitution as an instrument forged by “pseudo-secularists”, which now needs to be updated to reflect the Hindu character of India.

Christians in India long pre-dated the British, who sponsored missionary activity with little success. In 1947, only 3% of the country was Christian. There’s an unmistakable tint to Christianity in India: the priests are mostly upper-caste Brahmin converts and the flock is mostly drawn from the country’s untouchable communities known as Dalits. Contemporary Hindu anger centres on the idea that India’s rise will see an explosion of Christians in the country – a takeover by a foreign ideology like that experienced by South Korea in the 1960s.

The Hindu nationalist party, the Bharatiya Janata party, says it is against proselytisation through coercion, inducement, or by vilifying any faith. That conversion continues, therefore, and that it remains legal, drives Hindu groups into a bloody frenzy. By decrying the violence but remaining powerless to prevent it, the Indian prime minister exposes his strength and weakness. The Indian federal government could suspend state administrations – for failing to quell violence. This is the nuclear option of unseating a democratically elected local regime. Instead, the Indian prime minister chooses only speak up.

Martha Nussbaum, the noted American philosopher, draws a comparison with 1950s America where only a few groups such as the Ku Klux Klan would openly advocate violence, but “where the whole society was suffused with attitudes that … often condoned violence against African Americans, attitudes that clearly affected the behaviour of the police and other officers of the law”. This remark is telling because, in the southern Indian town of Mangalore, it was Christian churches that were attacked, yet the leaders of Hindu mobs walked free for days, untouched by the police.

The violence is the really about the clash within. Like the United States, India has never had a state-imposed religion. It has always had a tradition of sects and religious minorities, which coexist and compete with each other without suffering state persecution or patronage. Instead of trying to capture state power for the purpose of waging a cultural war, the Hindu right would do the country a service by reforming itself from within – promoting equality and unifying its own denominations and sects.

Religion’s role in India must be one of restraining passions, not inflaming them.

To keep up with Randeep Ramesh’s blog from India, go here.

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Remembering Edward Said Five Years On

September 29, 2008
Edward Said. ‘He stood for everything that is virtuous.’

By Stephen Lendman – Chicago | The Palestine Chronicle, Sep 22, 2008

Said was passionately against Palestine being turned into an isolated prison wherein Israel repeatedly attacked mostly defenseless civilians with tanks and F-16s.Born in West Jerusalem in 1935. Exiled in December 1947. Said was diagnosed with chronic lymphocytic leukemia in 1991, a malignant cancer of the bone marrow and blood. At 6:45AM on September 25, 2003, he succumbed (at age 67) after a painful courageous 12 year struggle. Tributes followed and resumed a year later. In a testimony to his teacher, Professor Moustafa Bayoumi called him “indefatigable, incorruptible, a humanist and devastatingly charming….leav(ing behind) legions of followers and fans in every corner of the world. I am lost without him….I miss him so.”

Chomsky called his death an “incalculable loss.” A year later, Ilan Pappe said “his absence seems to me still incomprehensible. What would have happened if we still had Edward with us in this last year….another terrible (one) for the values (he) represented and causes he defended.” Tariq Ali referred to his “indomitable spirit as a fighter, his will to live, (my) long-standing friend and comrade,” and described his ordeal:

“Over the last eleven years one had become so used to his illness – the regular hospital stays, the willingness to undergo trials with the latest drugs, the refusal to accept defeat – that (we thought) him indestructible.” Leukemia kills, and in response to Ali’s questions, his doctor said there was “no medical explanation for (his) survival.” No doubt Dr. Kanti Rai made a difference. Said spoke of him reverentially – of his “redoubtable medical expertise and remarkable humanity” that kept him going during his darkest times, and there were many. He later described months in and out of the hospital, “painful treatments, blood transfusions, endless tests, hours and hours of unproductive time spent staring at the ceiling, draining fatigue and infection, inability to do normal work, and thinking, thinking, thinking.”

Yet, as Ali recounted, in the end the “monster (overpowered him), devouring his insides (but when) the cursed cancer finally took him the shock was intense.” Palestinians had lost their “most articulate (and powerful) voice….(he’s) irreplaceable.”

Veteran Palestinian-American journalist Ramzy Baroud agrees. He called 2003 a bad time for Palestinians to lose one their iconic best and described him like many others: He “stood for everything that is virtuous. His moral stance was even more powerful than (his) essays, books and music (as critic, scholar and consummate artist)….He was an extraordinary intellectual, thoughtful….inimitable” and never silent or compromising in his beliefs or virtue. No “wonder he….was adored by (his) people (and) detested by the” forces he opposed.

Phyllis Bennis called him “one of the great internationalist intellectuals of our time….a hero of the Palestinian people (and) the global peace and justice movement as well….(my) great mentor, a challenging collaborator, a remarkable friend….his passion, vision, wit (and fury against injustice) will be terribly missed.”

Daniel Barenboim called him a “fighter and a compassionate defender. A man of logic and passion. An artist and a critic….a visionary (who) fought for Palestinian rights while understanding Jewish suffering.” In 1999, they jointly founded the West-East Divan – an orchestra for young Arabs and Jews who collaboratively “understood that before Beethoven we all stand as equals….Palestinians have lost a formidable defender, the Israelis a no less formidable adversary, and I a soulmate.”

Rashid Khalidi is the Edward Said Professor of Arab Studies at Columbia where Said taught for nearly 40 years as a Professor of English and Comparative Literature. He called him “a man of vast erudition and learning, of extraordinary versatility and remarkable (interdisciplinary) expertise.” We’ve lost “one of the most profound, original and influential thinkers of the past half-century (and) a fearless independent voice speaking truth to the entrenched powers that dominate the Middle East.”

On September 30, 2003, Columbia University paid tribute as well. It mourned the passing of its “beloved and esteemed university professor.” Called him one of the world’s most influential scholars, and said “the world has lost a brilliant and beautiful mind, a big heart, and a courageous fighter.”

When he learned of his illness and its seriousness, Said decided to write (from memory) a biographical account of his childhood, upbringing and early years in Palestine, Lebanon and Egypt. Titled “Out of Place, A Memoir,” he called it “a record of an essentially lost or forgotten world….a subjective account of (his life) in the Arab world” of his birth and formative years. Then in America where he attended boarding school, Princeton for his bachelor’s and master’s degrees, and Harvard for his doctorate.

He began “Out of Place” in 1994 while recovering from three early rounds of chemotherapy and continued to completion with the help and “unstinting kindness and patience” of the “superb nurses” who spent months caring for him as well as his family and friends whose support helped him finish.

He recounted a young man’s coming of age. Of coming to terms with being displaced. An American. A Christian. A Palestinian. An outsider, and ultimately the genesis of an intellectual giant. An uncompromising opponent of imperialism and oppression, and an advocate for his peoples’ struggle for justice and self-determination. No one made the case more powerfully or with greater clarity than he did – in his books, articles, opinion pieces, and wherever he spoke around the world. He made hundreds of appearances and became a target of pro-Israeli extremists. They threatened him and his family. Once burned his Columbia University office, but never silenced him or ever could. Nor did the FBI in spite of over 30 years of surveillance the way it monitors all prominent outspoken activists and intellectuals and many of lesser stature.

Said’s great writings include Orientalism (1978) in which he explained a pattern of western misinterpretation of the East, particularly the Middle East. In Culture and Imperialism (1993), he broadened Orientalism’s core argument to show the complex relationships between East and West. Colonizers and the colonized, “the familiar (Europe, West, us) and the strange (the Orient, East, them).”

His writings showed the breath of his scholarship, interests and activism – on comparative literature, literary criticism, culture, music and his many works on Israeli-Palestinian history and conflict – combining scholarship, passion and advocacy for his people in contrast to the West’s one-sided view of Arabs and Islam. He championed equity and justice. Denounced imperialism, and believed Israel has a right to exist but not exclusively for Jews at the expense of indigenous Palestinians.

The 1967 war and illegal occupation changed everything for him. It radicalized him. Set the course of his intellectual career and activism, and made him the Palestinians’ leading spokesperson for the next 37 years until his death. He advocated a one-state solution and wrote in 1999: “The beginning is to develop something entirely missing from both Israeli and Palestinian realities today: the idea and practice of citizenship, not of ethnic or racial community, as the main vehicle of coexistence.”

In a lengthy January 1999 New York Times op-ed he elaborated: “Palestinian self-determination in a separate state is unworkable (after years earlier believing otherwise). The question (now isn’t separation) but to see whether it is possible for (Jews and Palestinians) to live together (in the same land) as fairly and peacefully as possible. What exists now is a disheartening…bloody impasse. There is no way for Israel to get rid of Palestinians or for Palestinians to wish Israelis away….I see no other way than to begin now to speak about sharing the land that has thrust us together, sharing it in a truly democratic way, with equal rights for each citizen.”

This diminishes life and aspirations for neither side. It affirms self-determination for them both together in the same land where they once lived peacefully. But it doesn’t mean “special status for one people at the expense of the other.” For millennia, Palestine was the homeland for many peoples, predating the Ottomans and Romans. It’s “multicultural, multiethnic, multireligious.” There’s no “historical justification for homogeneity” or for “notions of national or ethnic and religious purity….The alternatives (today) are unpleasantly simple: either the war continues (with its unacceptable costs)” or an equitable way out is found, obstacles notwithstanding.

Oslo wasn’t the answer, and Said denounced it in its run-up and weeks later in a London Review of Books piece titled “The Morning After.” In stinging language, he referred to “the fashion-show vulgarities of the White House ceremony, the degrading spectacle of Yasser Arafat thanking everyone for the suspension of most of his people’s rights, and the fatuous solemnity of Bill Clinton’s performance, like a 20th century Roman emperor shepherding two vassal kings through rituals of reconciliation and obeisance (and) the truly astonishing proportions of the Palestinian capitulation.”

For him, Oslo was plainly and simply “an instrument of Palestinian surrender, a Palestinian Versailles,” and worst of all is that a better deal could have been had without so many “unilateral concessions to Israel.” The same goes for the 1978 Camp David Accords and every “peace” negotiation to the present except the “permanent status” 2000 Camp David “generous” and “unprecedented” offer that Arafat turned down and was unfairly pilloried for spurning peace for conflict.

Said was on top of everything to the end as reflected in “The Last Interview” – a documentary film less than a year before his death. After a decade of illness, he agreed to a final film interview at a time he was drained, weakened and dying, yet found it “very difficult to turn (himself) off.” It was a casual conversation between himself and journalist Charles Glass reflecting on his childhood, upbringing, writing, scholarship, involvement with Yasser Arafat, and strong opinions and activism on Palestinian issues.

It was in all his writings and outspokenness – so powerful, passionate, virtuous and a testimony to his uncompromising principles. He described “Sharonian evil.” His blind destructiveness. His terrorism in ordering the massacring of children, then congratulating one pilot for his great success. The patently dishonest media. Its one-sided support for Israel. Its suppressing other views. Its turning a blind eye to the grossest crimes against humanity, day after day after day. Of relegating public discourse to repetitive official propaganda. Of subverting truth in support of power and privilege.

Of turning Palestine into an isolated prison. Suffocating an entire people of their existence. Of impoverishing, starving and slaughtering them. Of attacking defenseless civilians with tanks and F-16s. Of blaming victims for their own terror. Of creating a vast wasteland of destruction and human misery. Of sanctioning torture and targeted assassinations as official policy. Of committing every imaginable human indignity and degradation against people whose only crime is their faith, ethnicity, and presence. Whose only defense is their will and redoubtable spirit. Of enlisting world support for the most unspeakable, unrelenting campaign of terror and genocide.

Of pursuing an endless “cycle of violence” and consigning Palestinians to a “slow death” in defense of imperial interests and the national security state. Of pursuing peace as a scheme for “pacification.” Of placing the onus for it “squarely on Palestinian shoulders.” Of “putting an end to the (Palestinian) problem.” Of placing huge demands on Palestinians and making no concessions in return. Of calling resistance “terrorism” while ignoring oppressive occupation as the fundamental problem. Of seeing Palestinians endure and survive in spite of every imaginable assault, affront and indignity. Of piling on even more and seeing an even greater will to survive and prevail.

Said was passionate on all this and more. He was uncompromisingly anti-war and denounced America’s “war on terror.” The country “hijacked by a small cabal of individuals….unelected and unresponsive to public pressure.” The Democrats supporting them “in a gutless display of false patriotism.” The entire power structure characterizing Muslims as enemies. Passing repressive laws. Creating the obscenity of Guantanamo and other prisons like it.

Their self-righteous sophistry of so-called “just wars” and evil of Islam. The near omnipotence of the Zionist Lobby, Christian fascists, and military-industrial complex. Their hostility to Arabs and claim to be “on the side of the angels.” Their inexorable pursuit of war and power. The media in lockstep supporting “hypocritical lies” masquerading as “absolute truth.” The silencing of dissent. Of mocking and betraying democracy. Of making a total sham of decency, humanity and justice. Of letting a few extremists create their own “fantasy world” to run the country for their own corrupted self-interest.

Said said it all, and ended one opinion piece as follows: “Jonathan Swift, thou shouldst be living at this hour.” But even he might have blanched in disbelief considering the current state and potential horror of its consequences. Said understood. He’s sorely missed when we need him most.

-Stephen Lendman contributed this article to PalestineChronicle.com. Contact him at: lendmanstephen@sbcglobal.net. (Also visit his blog site at sjlendman.blogspot.com, and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM—1PM US Central time.)

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Christians protest attacks by Hindus in India

September 29, 2008
The News International, Sep 29, 2008
NEW DELHI: Hundreds of Christians held a rally Sunday in the Indian capital to protest recent attacks by Hindu hard-liners that have left dozens of Christians dead and thousands homeless in several Indian states. About 400 Christians gathered in a New Delhi park to pray and listen to speeches in which community leaders urged the government to do more to protect the country’s religious minorities.

“We are quite disappointed with both the federal government and state governments as violence against Christians has spread to several states in the past month,’’ said Dominic Emmanuel, a spokesman for the Catholic Bishops’ Conference of India. The clashes between Hindus and Christians started in the Kandhamal district of Orissa state on Aug 24 following the killing of a Hindu religious leader. At the time, police blamed Maoist rebels active in the area, but right-wing Hindu groups blamed local Christians and set fire to a Christian orphanage.

The violence then worsened to include mob attacks on churches, shops and homes. Emmanuel said Hindu hard-liners have killed at least 40 Christians in the state in the past month. Gopal Nanda, the director-general of state police, put the death toll at 27.

Emmanuel said more than 4,200 Christian homes and 150 Christian buildings – including churches, hospitals and orphanages – have been burned in the past month and nearly 50,000 people have been left homeless in Orissa state.

The state government has not given details about the number of homes and buildings attacked.

The attacks on Christians have spread to the southern states of Karnataka, Tamil Nadu and Kerala and the central Indian state of Madhya Pradesh. Christians have been responsible for retaliatory attacks on Hindus in Orissa state.

Meanwhile, the archbishop of New Delhi accused Sonia Gandhi, the chief of the governing Congress party and a Christian, of not doing enough to help Christians.

Vincent Concessao told the CNN-IBN television channel on Sunday that Gandhi may be reluctant because “Hindu bodies have been levelling an allegation against her that because she is a Christian she is in favour of Christians.’’

Manish Tiwari, a Congress party spokesman, rejected the claim, saying Gandhi had ordered ministers and party officials to visit all places where people have been attacked.

He also said Prime Minister Manmohan Singh’s government had ordered state governments to take all possible steps to protect people and property.

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Saudi Arabia: Shia Minority Treated as Second-Class Citizens

September 28, 2008

Wahhabi Authorities Discriminate Against Ismaili Citizens

Source: Human Rights Watch

(London, September 22, 2008) – The Saudi government should end its systematic discrimination against its Ismaili religious minority, Human Rights Watch said in a report released today. Human Rights Watch called upon the government to set up a national institution empowered to recommend remedies for discriminatory policies and responding to individual claims.

" The Saudi government preaches religious tolerance abroad, but it has consistently penalized its Ismaili citizens for their religious beliefs. The government should stop treating Ismailis as second-class in employment, the justice system, and education. "
Joe Stork, deputy Middle East director at Human Rights Watch
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The 90-page report, “The Ismailis of Najran: Second-Class Saudi Citizens,” based on more than 150 interviews and reviews of official documents, documents a pattern of discrimination against the Ismailis in the areas of government employment, education, religious freedom, and the justice system.

“The Saudi government preaches religious tolerance abroad, but it has consistently penalized its Ismaili citizens for their religious beliefs,” said Joe Stork, deputy Middle East director at Human Rights Watch. “The government should stop treating Ismailis as second-class in employment, the justice system, and education.”

At least several hundred thousand, and perhaps as many as 1 million, Ismailis live in Saudi Arabia, part of the Shia minority in the Sunni-dominated country of 28 million. Most Ismailis live in Najran province, on Saudi Arabia’s southwestern border with Yemen, where tensions have been growing in recent years.

Saudi Arabia conquered Najran following a brief war with Yemen in 1934, incorporating into the kingdom the local Sulaimani Ismailis, one strand of Ismaili belief. Najran has been home to the highest Sulaimani Ismaili cleric, the Absolute Guide, since the 17th century.

Despite more than 70 years of shared history, Saudi authorities at the highest levels continue to propagate hate speech against this religious minority. In April 2007, the Council of Senior Religious Scholars, the body tasked with officially interpreting Islamic faith, ritual, and law, termed Ismailis “corrupt infidels, debauched atheists.” In August 2006, Saudi Arabia’s highest judge, Shaikh Salih al-Luhaidan, declared to an audience of hundreds that Ismailis “outwardly appear Islamic, but inwardly, they are infidels.” Other Saudi officials did not rebut or disown those statements.

Growing tension since the mid-1990s between Ismailis and Najran’s governor, Prince Mish’al bin Sa’ud bin Abd al-‘Aziz, led to clashes in April 2000, after the authorities arrested an Ismaili cleric they accused of “sorcery.” Security forces arrested hundreds of Ismailis, and tortured and secretly tried dozens of others. The authorities then purged some 400 Ismailis from the local bureaucracy.

Since then, local officials who have been sent to Najran from other parts of the country and reflecting the country’s dominant conservative Wahhabi Muslim ideology, have continued to discriminate against Ismailis in employment, education and the justice system, and interfered with their ability to practice their religion.

Only one of the 35 department heads of the Najran provincial government is an Ismaili. Almost no Ismailis work as senior security personnel or as religion teachers. Saudi textbooks teach that the Ismaili faith is a sin of “major polytheism,” tantamount to excommunication. Wahhabi teachers in Najran insult Ismaili pupils’ faith and try to convert them to Sunni Islam, even using threats of class failure and flogging.

Ismailis are not free to pass their religious teachings on to new generations. The authorities have at times exiled the Absolute Guide from Najran or placed him under house arrest. Saudi authorities also ban the import or production of Ismaili religious literature. Ismailis face obstacles in obtaining permits to build new mosques or expand existing ones, whereas the state funds and builds Sunni mosques in Najran, even in areas without a Sunni population.

The country’s Sharia judges, following Wahhabi beliefs, routinely discriminate against Ismailis on the basis of their faith. In March 2006, a judge annulled the marriage of an Ismaili man to a Sunni woman, saying that the man lacked religious qualification. In May 2006, another judge barred an Ismaili lawyer from representing his Sunni client.

“State-sponsored and officially tolerated discrimination against the Ismailis of Najran seriously threatens their identity and denies them basic rights,” Stork said. “The authorities are shutting them out from education, government employment, and professions.”

In July 2008, King Abdullah opened a well-publicized interfaith conference in Spain initiated by Saudi Arabia and attended by Muslim, Jewish, Christian, Hindu, and Buddhist religious leaders.

“The measure of Saudi religious tolerance will be its practice at home, not only what it preaches abroad,” Stork said.

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The Illusion of Sovereignty

September 28, 2008

By Soraya Sepahpour-Ulrich | Information Clearing House, Sep 28, 2008

Perhaps sovereignty is relative; how else can one explain the subjugation of the most powerful industrial nations to the will of another while under the delusion of independence, national interest, democracy, and even capitalism? A single country, Israel and its powerful lobby AIPAC have altered the course of history in America and by extension, the rest of the world.

In order to understand the argument being made and the power of manipulation of this extraordinary group, one must revisit the Arab economic boycott of Israel dating back several decades. To defeat the boycott, the Israeli lobby went into full gear and argued before the House that the Arab boycott constituted “a harassment and blackmailing of America, an interference with normal business activities … that the boycott activities were contrary to the principles of free trade that the United States has espoused for many years … and the Arab interference in the business relations of American firms with other countries is in effect an interference with the sovereignty of the United States.”i Bowing to AIPAC, the US adopted and enforced comprehensive anti-boycott legislation which Jimmy Carter signed into law in 1977. The law called for fines to be levied on American companies which cooperated with the boycott.

However, in spite of pressure from the Lobby, Congress refused to enforce sanctions on the Arab League on the grounds that “extraterritorial measures that impermissibly impinge on the sovereignty of other nations”ii was not acceptable. Yet in an about face, America has yielded its own sovereignty and has demanded other nations subjugate theirs and impose sanctions on Iran. Surely one must wonder what made the United States bow to the Israeli demands and impinge on the sovereignty of Japan as an example when it had to forgo its exclusive rights to develop part of Iran’s Azadegan oil field, the country’s largest in compliance with the Iran-Libya Sanction Act (ILSA).

For not only is it believed that AIPAC wrote the ILSA, but today, using their foot soldier, the neocon influenced US government, it is holding the United Nations hostage as three rounds of illegal sanctions have been passed against Iran with a recent House approved tougher sanctions bill iii as Iran pursues nuclear technologies that are put in the service of humankind on every continent. Surely those whose lust for power blindly led them to office must come to realize that their power is an illusion for the reins are held by another. They are the puppets and the Lobby and the neoconservatives the puppeteers. Should we not question how we got to this point in our history?

Was it the power of the vote or the ally’s treachery? In the 60’s and 70’s while the Lobby was asking for American sacrifice, Israel was busy betraying America. Within the CIA as elsewhere in the intelligence community, there is a “widespread belief” that in the 1960s Israeli intelligence spirited about two hundred pounds of weapons- grade uranium from the Nuclear Materials and Equipment Corporation (NUMEC) in Apollo, Pennsylvania. John Hadden, a former CIA station chief in Tel Aviv, states that NUMEC was an “Israeli operation from the beginning.” The NUMEC case was investigated by the GAO and the House Interior Committee in 1978, but their reports have never been declassified”. Lyndon Johnson who was the first of a string of administrations to bury the NUMEC affairiv, not only covered up the report but it would seem as if the audacity of their act merited further cover up – the killing of American servicemen on board the Liberty by Israelis.v To their credit, the Israelis, confident that they could do as they pleased with American administrations, smuggled 810 krytons to Israelvi (krytons can be used for electronic triggers for nuclear weapons). Not long after this outrageous thievery, Ronald Reagan punished Iran by reinstating trade sanctions (Exec. Ord. No.12613) (first imposed by Carter and lifted in accordance to the Algiers Accords). It would seem that the trend for punishing other nations for Israel’s dangerous betrayal continues.

On every continent nuclear technology is being made available to promote progress. In South America, nuclear technology is being used to map underground aquifers, so that water supplies can be managed sustainably. The Nuclear magnetic resonance imaging (NMRI) which was changed to magnetic resonance imaging (MRI) because of the negative connotations associated with the word nuclear in the late 1970’s would be explored to diagnose and treat patients. In Vietnam farmers plant rice with greater nutritional value that was developed with IAEA assistance – rice is also the staple food of Iranians. Within the next few years (estimates are 10-25 years) over 2 billion people will be without drinking water. Research in desalination technology initiated in 1970 using Advance Heavy Water Reactor (AHWR) will make salt water drinkable. These are the components of nuclear technology that are the fundamentals of ‘Atoms for Peace’. These are the inalienable rights of Iran under Article IV for which it is being sanctioned.

AIPAC had previously contended that the Arab boycott constituted “a harassment and blackmailing of America…..”, yet today, with all nations blackmailed by a country that has an illegal nuclear arsenal capable of unimaginable destruction, a country which has no regard for international law and norms or loyalty, is demanding that sanctions be imposed on Iran for pursuing its inalienable right within the framework of the NPT.
“What makes it so plausible to assume that hypocrisy is the vice of vices is that integrity can indeed exist under the cover of all other vices except this one. Only crime and the criminal, it is true, confront us with the perplexity of radical evil; but only the hypocrite is really rotten to the core.” – Hannah Arendt

Soraya Sepahpour-Ulrich is an independent researcher with a focus on U.S. foreign policy and the influence of lobby groups. She is a peace activist and political analyst.

1 – H. Alikhani, Sanctioning Iran, Anatomy of a Failed Policy, New York, 2000, p.321

2 – Alikhani (2000), p.312.

3 – http://news.yahoo.com/s/ap/20080927/ap_on_go_co/iran_sanctions

4 – Duncan L.Clarke, “Israel’s Economic Espionage in the United States”, Journal of Palestine Studies, Vol. 27, No. 4. (Summer, 1998), pp. 20-35.Quoted in Cockburn and Cockburn, Dangerous Liaison, pp. 78-81., also Hersh, The Samson option’, pp. 188-89, 242; Raviv and Melman, Every Spy a Prince, pp. 197-98., and Interview, congressional source, Washington, D.C., August 1994.

5 – http://www.informationclearinghouse.info/article17901.htm

6 – “Israelis Illegally Got U.S. Devices Used in Making Nuclear Weapons,” NewYork Times, 16 May 1985

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Truth and war mean nothing at the party conferences

September 28, 2008

John Pilger | New Statesman,  25 September 2008

The media turns the other way, or perverts the truth, while an increasingly imperialist United States, with Britain in tow, pursues its expansionist interests

Britain’s political conference season of 2008 will be remembered as The Great Silence. Politicians have come and gone and their mouths have moved in front of large images of themselves, and they often wave at someone. There has been lots of news about each other. Adam Boulton, the political editor of Sky News, and billed as “the husband of Blair aide Anji Hunter”, has published a book of gossip derived from his “unrivalled access to No 10”. His revelation is that Tony Blair’s mouthpiece told lies. The war criminal himself has been absent, but the former mouthpiece has been signing his own book of gossip, and waving. The club is celebrating itself, including all those, Labour and Tory, who gave the war criminal a standing ovation on his last day in parliament and who have yet to vote on, let alone condemn, Britain’s part in the wanton human, social and physical destruction of an entire nation. Instead, there are happy debates such as, “Can hope win?” and, my favourite, “Can foreign policy be a Labour strength?” As Harold Pinter said of unmentionable crimes: “Nothing ever happened. Even while it was happening, it wasn’t happening. It didn’t matter. It was of no interest.”

The Guardian‘s economics editor, Larry Elliott, has written that the Prime Minister “resembles a tragic hero in a Hardy novel: an essentially good man brought down by one error of judgement”. What is this one error of judgement? The bank-rolling of two murderous colonial adventures? No. The unprecedented growth of the British arms industry and the sale of weapons to the poorest countries? No. The replacement of manufacturing and public service by an arcane cult serving the ultra-rich? No. The Prime Minister’s “folly” is “postponing the election last year”. This is the March Hare Factor.

Following the US

Reality can be detected, however, by applying the Orwell Rule and inverting public pronouncements and headlines, such as “Aggressor Russia facing pariah status, US warns”, thereby identifying the correct pariah; or by crossing the invisible boundaries that fix the boundaries of political and media discussion. “When truth is replaced by silence,” said the Soviet dissident Yevgeny Yevtushenko, “the silence is a lie.”

Understanding this silence is critical in a society in which news has become noise. Silence covers the truth that Britain’s political parties have converged and now follow the single-ideology model of the United States. This is different from the political consensus of half a century ago that produced what was known as social democracy. Today’s political union has no principled social democratic premises. Debate has become just another weasel word and principle, like the language of Chaucer, is bygone. That the poor and the state fund the rich is a given, along with the theft of public services, known as privatisation. This was spelt out by Margaret Thatcher but, more importantly, by new Labour’s engineers. In The Blair Revolution: Can New Labour Deliver? Peter Mandelson and Roger Liddle declared Britain’s new “economic strengths” to be its transnational corporations, the “aerospace” industry (weapons) and “the pre-eminence of the City of London”. The rest was to be asset-stripped, including the peculiar British pursuit of selfless public service. Overlaying this was a new social authoritarianism guided by a hypocrisy based on “values”. Mandelson and Liddle demanded “a tough discipline” and a “hardworking majority” and the “proper bringing-up [sic] of children”. And in formally launching his Murdochracy, Blair used “moral” and “morality” 18 times in a speech he gave in Australia as a guest of Rupert Murdoch, who had recently found God.

A “think tank” called Demos exemplified this new order. A founder of Demos, Geoff Mulgan, himself rewarded with a job in one of Blair’s “policy units”, wrote a book called Connexity. “In much of the world today,” he offered, “the most pressing problems on the public agenda are not poverty or material shortage . . . but rather the disorders of freedom: the troubles that result from having too many freedoms that are abused rather than constructively used.” As if celebrating life in another solar system, he wrote: “For the first time ever, most of the world’s most powerful nations do not want to conquer territory.”

That reads, now as it ought to have read then, as dark parody in a world where more than 24,000 children die every day from the effects of poverty and at least a million people lie dead in just one territory conquered by the most powerful nations. However, it serves to remind us of the political “culture” that has so successfully fused traditional liberalism with the lunar branch of western political life and allowed our “too many freedoms” to be taken away as ruthlessly and anonymously as wedding parties in Afghanistan have been obliterated by our bombs.

The product of these organised delusions is rarely acknowledged. The current economic crisis, with its threat to jobs and savings and public services, is the direct consequence of a rampant militarism comparable, in large part, with that of the first half of the last century, when Europe’s most advanced and cultured nation committed genocide. Since the 1990s, America’s military budget has doubled. Like the national debt, it is currently the largest ever. The true figure is not known, because up to 40 per cent is classified “black” – it is hidden. Britain, with a weapons industry second only to the US, has also been militarised. The Iraq invasion has cost $5trn, at least. The 4,500 British troops in Basra almost never leave their base. They are there because the Americans demand it. On 19 September, Robert Gates, the American defence secretary, was in London demanding $20bn from allies like Britain so that the US invasion force in Afghanistan could be increased to 44,000. He said the British force would be increased. It was an order.

In the meantime, an American invasion of Pakistan is under way, secretly authorised by President Bush. The “change” candidate for president, Barack Obama, had already called for an invasion and more aircraft and bombs. The ironies are searing. A Pakistani religious school attacked by American drone missiles, killing 23 people, was set up in the 1980s with CIA backing. It was part of Operation Cyclone, in which the US armed and funded mujahedin groups that became al-Qaeda and the Taliban. The aim was to bring down the Soviet Union. This was achieved; it also brought down the Twin Towers.

War of the world

On 20 September the inevitable response to the latest invasion came with the bombing of the Marriott Hotel in Islamabad. For me, it is reminiscent of President Nixon’s invasion of Cambodia in 1970, which was planned as a diversion from the coming defeat in Vietnam. The result was the rise to power of Pol Pot’s Khmer Rouge. Today, with Taliban guerrillas closing on Kabul and Nato refusing to conduct serious negotiations, defeat in Afghanistan is also coming.

It is a war of the world. In Latin America, the Bush administration is fomenting incipient military coups in Venezuela, Bolivia, and possibly Paraguay, democracies whose governments have opposed Washington’s historic rapacious intervention in its “backyard”. Washington’s “Plan Colombia” is the model for a mostly unreported assault on Mexico. This is the Merida Initiative, which will allow the United States to fund “the war on drugs and organised crime” in Mexico – a cover, as in Colombia, for militarising its closest neighbour and ensuring its “business stability”.

Britain is tied to all these adventures – a British “School of the Americas” is to be built in Wales, where British soldiers will train killers from all corners of the American empire in the name of “global security”.

In Latin America, the Bush government is fomenting incipient military coups in Venezuela, Bolivia and possibly Paraguay

None of this is as potentially dangerous, or more distorted in permitted public discussion, than the war on Russia. Two years ago, Stephen Cohen, professor of Russian Studies at New York University, wrote a landmark essay in the Nation which has now been reprinted in Britain.* He warns of “the gravest threats [posed] by the undeclared Cold War Washington has waged, under both parties, against post-communist Russia during the past 15 years”. He describes a catastrophic “relentless winner-take-all of Russia’s post-1991 weakness”, with two-thirds of the population forced into poverty and life expectancy barely at 59. With most of us in the West unaware, Russia is being encircled by US and Nato bases and missiles in violation of a pledge by the United States not to expand Nato “one inch to the east”. The result, writes Cohen, “is a US-built reverse iron curtain [and] a US denial that Russia has any legitimate national interests outside its own territory, even in ethnically akin former republics such as Ukraine, Belarus and Georgia. [There is even] a presumption that Russia does not have fully sovereignty within its own borders, as expressed by constant US interventions in Moscow’s internal affairs since 1992 . . . the United States is attempting to acquire the nuclear responsibility it could not achieve during the Soviet era.”

This danger has grown rapidly as the American media again presents US-Russian relations as “a duel to the death – perhaps literally”. The liberal Washington Post, says Cohen, “reads like a bygone Pravda on the Potomac”. The same is true in Britain, with the regurgitation of propaganda that Russia was wholly responsible for the war in the Caucasus and must therefore be a “pariah”. Sarah Palin, who may end up US president, says she is ready to attack Russia. The steady beat of this drum has seen Moscow return to its old nuclear alerts. Remember the 1980s, writes Cohen, “when the world faced exceedingly grave Cold War perils, and Mikhail Gorbachev unexpectedly emerged to offer a heretical way out. Is there an American leader today ready to retrieve that missed opportunity?” It is an urgent question that must be asked all over the world by those of us still unafraid to break the lethal silence.

*Stephen Cohen’s article, “The New American Cold War”, is reprinted in full in the current issue of the Spokesman, published by the Bertrand Russell Peace Foundation: http://www.spokesmanbooks.com

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ECONOMY-US: Bailout for Who?

September 27, 2008


By Adrianne Appel | Inter-Press Service


BOSTON, Sep 26 – U.S. lawmakers and the George W. Bush administration are continuing their closed-door meetings through the weekend to try and fashion a softer 700-billion-dollar deal for Wall Street that will appeal to citizens angry at the prospect of the mega-corporate bailout.

Treasury Secretary Henry Paulson brought the plan to Congress on Sep. 19 in a three-page outline, and said it was necessary to prevent the collapse of the finance market due to complex trades involving subprime mortgages.

The plan would have allowed Paulson, a former CEO of Goldman Sachs, complete control of the massive payout with no oversight, no auditing and no plan of a payback to the taxpayer.

ACORN president Maude Hurd captured the nation’s sentiment when she hinted at the potential electoral fallout in a speech this week: “There is a palpable populist revolt rolling through towns and cities across the country, and if Main Street doesn’t get any real help with the mortgage out of this deal, the American people only have to wait a few weeks for a constructive outlet for their anger.”

ACORN is the nation’s largest grassroots community organisation of low- and moderate-income people, with over 400,000 member families in 110 cities across the country.

At the Capitol, members of Congress attempted to convince taxpayers — and voters — that they had their best interests in mind, and that meant a big bailout for Wall Street.

“Hundreds of billions of dollars that Americans invested in retirement accounts and mutual funds have evaporated,” and more surely would, warned Democrat Chris Dodd, Senate Banking Committee chairman, while giving the impression that the income security of average people is at stake.

This couldn’t be further from the truth, say those who study stock ownership. The average U.S. citizen owns very little or no stock, and wouldn’t be helped directly by an up-market.

“I think the middle class are not going to be very affected at all by a bailout. It’s something that is going to affect the very wealthy. Changes in the stock market won’t make much difference to the middle class,” Edward Wolff, a New York University economist, told IPS.

“It’s just a political gambit to help the rich recover from the stock market collapse. If you claim that everyone is suffering, it’s easier to get a bailout from Washington,” Wolff said.

In 2001, the richest 10 percent of families owned 85 percent of all outstanding stocks, about 85 percent of all financial securities and 90 percent of all business assets, according to Wolff.

As for the rest of the country, only 32 percent of households owned more than 10,000 dollars of stock, and only 25 percent of households owned more than 25,000 dollars worth of stock, Wolff said.

A 2007 report by the Government Accountability Office found that in 2004, just 36 percent of workers had any savings at all in a retirement account. Most U.S. citizens will depend on Social Security in retirement, the government programme that provides 30-40 percent of what was earned in their lifetimes.

The bad practices of the mortgage lending industry targeted people of colour and the elderly, in particular, according to a report by United for a Fair Economy.

Only 11 percent of subprime loans went to first-time buyers last year. The vast majorities were refinancing that caused borrowers to owe more on their homes under the guise that they were saving money. Many borrowers were talked into refinancing their homes to gain additional cash for things like medical bills, the report says.

African American borrowers will lose between 71 billion and 92 billion dollars, and Latino borrowers will lose between 75 billion and 98 billion dollars as a result of bad subprime loans, according to the report.

“A couple decades of deregulation have allowed people at the top of the financial food chain to benefit from millions of people, through unscrupulous mortgage lending practices,” Michael Lapham of United for a Fair Economy told IPS.

“Who are we most concerned about helping? Homeowners facing foreclosure or people who’ve made millions and billions on subprime lending?” Lapham asked.

The U.S. public seems especially peeved at the idea of helping companies that pay exorbitant salaries to their bosses, at a time when many people have seen a decline in their standard of living.

According to the Institute for Policy Studies, CEOs of large U.S. companies last year made an average of 10.5 million dollars, while the top 50 private equity and hedge fund managers pocketed an average of 588 million dollars each.

The institute notes that draft proposals floated by the chairs of both the House and Senate banking committees would allow Paulson to determine what qualifies as “inappropriate or excessive” executive compensation under the bailout plan.

“Secretary Paulson amassed a personal stock stash worth over three-quarters of a billion dollars as the CEO at Goldman Sachs,” said analyst Sarah Anderson. “He hardly strikes us as the appropriate arbiter of what’s excessive and what’s not.”

In a statement, Anderson said the nation needs clear and strict limits on CEO pay “so that taxpayers won’t have to worry about their money flooding into the pockets of top executives and encouraging another round of reckless behaviour.”

On Thursday, unions, and anti-poverty and peace groups took to the streets, staging large demonstrations on Wall Street and in many cities chanting, “No bailouts for billionaires.”

At the end of the day Thursday, it was hard-line Republicans, including Sen. Richard Shelby and Rep. Spencer Bachus, who stood firm against the bailout. Bachus told reporters that the Republicans do not want the U.S. to buy the bad debts of the companies, but instead to loan the companies money.

Their argument that the market could do more to fix itself was bolstered later Thursday evening, when troubled Washington Mutual bank, riddled with bad mortgages, was bought by J.P. Morgan Chase.

The Democrats want the bailout, one that would meter out the billions in installments and somewhat restrict the pay of CEOs, Dodd said.

“I don’t understand why the Democrats in particular didn’t feel they have the leverage to get more out of this deal. Congress has squandered an opportunity to actually help homeowners facing foreclosure,” Brenda Muniz, legislative director for ACORN, told IPS.

According to an analysis of U.S. Census data by the Centre for Budget and Policy Priorities, 18 percent of U.S. children lived in poverty in 2007.

The willingness of Congress to consider a 700-billion-dollar payout makes clear that Congress could budget other large sums to help end homelessness and hunger, and improve public education.

“When people go to Congress to ask for more affordable housing funds and are told there isn’t money, then along comes Wall Street and they say, ‘Oh sure we have 700 billion dollars for your bailout.’ It definitely makes you question our nation’s priorities,” Lapham said.

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Financial Meltdown: The Financial Edifice of U.S. Imperialism is

September 26, 2008

Raymond Lotta, Global Research, September 24, 2008

The events of the last ten days on Wall Street represent a new and more destabilizing phase of the turmoil gripping financial institutions and markets in the U.S. A financial crisis has been unfolding for more than a year. It is now the most serious financial crisis of U.S. capitalism since the Great Depression of the 1930s. And it is by no means contained or under control.

The financial edifice of U.S. imperialism is in danger of crumbling. And the U.S. ruling class is cobbling together desperate measures to prevent wholesale collapse.

This analysis examines the recent eruptions on Wall Street of mid- and late September and the deeper structural causes of the crisis.

I. Wall Street Panics, the Guardians of U.S. Capitalism Scramble

A). A Week of Deepening Financial Crisis

Two of the last two independent investment banks on Wall Street ceased to exist in mid-September. In a matter of hours, Lehman Brothers went bankrupt on September 15, while Merrill Lynch was forced into liquidation and then absorbed by Bank of America. This follows the government-promoted buyout in April of Bear Stearns, another giant investment banking firm that was on the ropes, by JPMorgan Chase.

It was only several weeks earlier that the U.S. government had taken over the two major and failing mortgage-finance giants–Fannie Mae and Freddie Mac. At the time, this takeover was presented as providing an effective firewall against future financial eruptions. But it proved to be no more than the patching up of a pothole during an earthquake. This past week the government had to take over the American International Group (AIG), the giant insurance-financial firm.

AIG had over a trillion dollars in assets. It had earned enormous profits from insuring mortgage-backed investments circulating in the financial system that were held by other banks. But this has turned into a disaster. Here is some of what happened:

Through deceit and aggressive marketing, banks pushed mortgages on people. The Federal Reserve Bank had pumped low-cost funds into the banking system to prop up mortgage loans. These loans were then combined into larger groups of loans by investment banks (like Lehman Brothers) and turned into financial products that were sold on financial markets. All kinds of lending took place with these original loans as collateral. But when housing prices fell, and mortgages could not be paid, much of this collateral became worthless.

AIG was insuring much of this lending against the risk of loss. But as the losses mounted astronomically, AIG could neither cover the costs of backing this debt nor borrow funds on the financial markets to keep itself afloat.

The financial markets had basically lost confidence, and AIG’s assets tumbled in value. AIG was in danger of collapse. But if AIG went under, the probability was great that it would have taken down other financial institutions with it. This forced the government’s hand.

Normally, so-called bad debt is marketed at distress prices. During the financial storm of mid-September, not only were there no takers for debt but it also proved impossible for the financial markets to establish any kind of value on this debt.

As the pace of the financial crisis grew more frenetic during the week of September 15, the U.S. ruling class was faced with a two-fold danger: additional and cascading losses and bankruptcies in the financial sector; and the possible choking up of lending channels, which could send the economy as a whole into a rapid downward spiral.

On September 19th, the U.S. government announced what will likely turn out to be the largest bail-out operation in U.S. history. Its initial cost is $700 billion, and this is on top of the $200 billion earmarked to shore up Freddie Mac and Fannie Mae and the $85 billion to bail out AIG.

B). International Dimensions

This is a rolling financial and credit crisis. It is amplifying internationally with bursts of instability. In the midst of last week’s U.S. market gyrations, the Russian stock market sank and shut down for two days. In other parts of the world, concern spread about whether dollar-based loans in global markets would continue on the scale necessary to sustain daily business operations. In response, the central banks of Germany, Japan, England, Canada, and Switzerland pumped some $185 billion into the financial markets.

And investor worry is mounting in East Asia. China, Japan, and South Korea, for instance, count on the U.S. as a major export market.

One of the most significant features of world growth and expansion over the past decade has been the deepening integration of the world capitalist economy. This is happening both on the level of production and trade—like the parts that go into an automobile being manufacturing in different factories around the world. And it is happening at the level of finance—where banks are more globally and tightly interlinked with one another through chains of borrowing and lending and even, as in the case of AIG, insuring the risks of borrowing and lending.

The rescue operation announced by the U.S. government was motivated, on the one hand, by the need to stanch the bleeding of the U.S. financial system; and, on the other, by the need to restore international confidence in the U.S. economy.


Raymond Lotta is a frequent contributor to Global Research. Global Research Articles by Raymond Lotta

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