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.

UN debates West Bank settlements

September 27, 2008
Al Jazeera, Sep 27, 2008

The construction of settlements is viewed as a major obstacle to peace [AFP]

The Palestinian president and Arab countries have criticised Israel over its settlement expansion policy in the West Bank during debates at the United Nations.

In a speech to the General Assembly on Friday, Mahmoud Abbas deplored as “racial terrorism” what he said were daily attacks by Israeli settlers on Palestinian civilians, and urged the international community to take action.

“[The settlements] will not allow for the emergence of a viable Palestinian state because they divide the West Bank into at least four cantons,” he said.

Prince Saud al-Faisal, the Saudi foreign minister, whose country formally called for the debate, said Israel must halt settlement activity and obey international law.

“Settlement makes the creation of a viable Palestinian state impossible,” he said.

“The only path to Israel’s security is peace and it is time for Israel to understand that it cannot continue to exempt itself from behaving in accordance to international law,” Prince Saud said.

The Palestinian Authority, Saudi Arabia and the Arab League urged the UN Security Council to encourage the faltering peace process by demanding an end to Jewish settlements on Palestinian land.

In August, Israel approved the construction of 400 new homes in a Jewish neighbourhood in east Jerusalem and invited bids for the construction of another 416 settler homes in the occupied West Bank.

Quartet meeting

The Middle East diplomatic Quartet on Friday pressed Israel and the Palestinians to seal a peace deal this year, but also expressed “deep concern” over continuing settlement expansion in the West Bank.

A ministerial session of Quartet members, the US, Russia, the European Union and the UN, ended with a call on the parties “to make every effort to conclude an agreement before the end of 2008”.

Quartet members “expressed deep concern about increasing [Israeli] settlement activity, which has a damaging impact on the negotiating environment and is an impediment to economic recovery and called on Israel to freeze all settlement activity.”

They also reiterated that the parties “must avoid actions that undermine confidence and could prejudice the outcome of the negotiations”.

In Annapolis, Maryland last November, Israel and the Palestinians revived negotiations toward resolving core problems such as the status of Jerusalem, the borders of a future Palestinian state and refugees, by the end of 2008.

Settlement expansion

Settlement expansion has nearly doubled since 2007, despite Israel’s pledge to freeze such activities, Peace Now, the Israeli watchdog, said last month.

“The situation necessitates a serious stand by the international community and a clear call upon Israel to begin withdrawing its settlers and dismantling its settlements,” Abbas said.

Settlement expansion has nearly doubled since 2007, according to Peace Now [File: EPA]

“It was recognised [in Annapolis] that this was a prerequisite for allowing negotiations towards ending the conflict to progress,” he said.But Gabriela Shalev, Israel’s UN Ambassador, told council members that while the settlements are a “delicate issue,” they “are not an obstacle to peace”.

“They have been used here as another instrument to bash Israel instead of addressing the realities on the ground,” she said.

“There is much that those in the region can do to support that peace process, but it is not about more UN meetings.

“It is, first and foremost, about commitment to prepare the people of the region for the price of peace, to accept the true meaning of peace,” Shalev said.

The West Bank has been under military occupation by Israel since 1967 and at least 400,000 Israelis have been settled in the territory, including East Jerusalem.

The settlements are illegal under international law, although Israel disputes this.

Bernard Kouchner, the French foreign minister, whose country currently chairs the European Union, restated the EU view that Israeli settlements, “wherever in the occupied Palestinian territories, are illegal under international law.”

He added that settlement “harms the credibility of the process started in Annapolis and affects the viability of the future Palestinian state.”

Reaching out

Condoleezza Rice, the US secretary of state, shifted the focus of the debate away from settlements, instead urging Arab countries to “consider ways they might reach out to Israel”.

She said the Arab world needed to fully understand that: “Israel belongs to the Middle East and will remain” in the Middle East.

Meanwhile, a group of 21 leading aid agencies said on Thursday that the Middle East Quartet was “losing its grip” on the peace process and must radically revise its approach.

The aid agencies said the Quartet has failed to hold Israel to account for expanding settlements in the West Bank.

Israeli academic injured in bomb blast

September 27, 2008

By Donald Macintyre in Jerusalem

The Independent, Thursday, 25 September 2008

Change font size: A | A | A

One of Israel’s leading centre-left academics was injured early today when a pipe bomb blew up outside his home in an attack which police suspect was the work of Jewish extreme right-wing extremists.

The victim of the attack was Professor Zeev Sternhell, a Holocaust survivor and recent winner of the prestigious Israel prize, who has long opposed Jewish settlements in the Occupied Territories.

Police said they had found fliers in the area of the attack offering 1.1m shekels (£173,000) to anyone who kills a member of the long established organisation Peace Now, of which Mr Sternhell is a veteran member.

The professor was in hospital tonight with minor shrapnel wounds in one of his legs. Police said that the explosive had been planted on the doorstep of his Jerusalem home and was detonated when he opened the door.

Tzipi Livni, foreign minister and the prospective Prime Minister, said that the attack was “intolerable” and could not be glossed over. Ehud Barak, the Labour leader and Defence Minister also strongly condemned the attack “from a dark corner” of Israeli society against a “very gifted person who never shies away from expressing his opinion.”

In a statement which coupled condemnation of the attack on Professor Sternhell with a reference to the apparently growing instances of settler violence against Palestinians in the West Bank, Peace Now said: “Those who don’t enforce the law on violent settlers… will find himself with a Jewish terror organization in the heart of Israel.”

In contrast with the West Bank, political violence by right wing extremists inside Israel has been relatively rare-with the notable exception of the assassination of the then Prime Minister Yitzhak Rabin in Tel Aviv in 1995. Another extremist killed a member of Peace Now with a grenade at a 1983 peace protest.

The future is one nation

September 27, 2008

The two-state approach in the Middle East has failed. There is a fairer, more durable solution

Imagine the scene: the United Nations general assembly meets to discuss a resolution to the Israel-Palestine conflict. Unlike previous resolutions, which have been based on a Jewish state in most of historic Palestine with Palestinians relegated to the remnants, this one calls for a new state, covering what is now Israel, the West Bank and Gaza, whose present and former inhabitants are equal under the law. Such a resolution has, in fact, already been drafted and discussions have begun to place it on the agenda at the UN.

The one-state solution is now part of mainstream discourse. Increasingly, Palestinians – and some Israelis – support it as the only alternative to a Palestinian state subordinate to Israel. One-state groups have sprung up and conferences and studies are under way.

A UN resolution is the logical next step, underlining the issue’s global importance and exposing the inequity and dishonesty of the two-state solution, to replace it with something fairer and more durable. It would be encapsulated in the following clauses, part of the draft UN resolution for a one-state solution, which has been under discussion for six months. Its principal authors are my fellow Palestinian Karl Sabbagh and myself:

“The general assembly notes the failure of recent efforts made by regional and international parties to resolve the conflict through the creation of two states; Recalling the recent history of the former [Palestine] Mandate territory as a land where Arabs and Jews shared equal rights of habitation; Reviewing Israel’s non-compliance with UN Resolution 194, requiring Israel to repatriate the Palestinian refugees, and its illegal conduct in the occupied territories.

“Calls upon representatives of Israel and Palestine to agree on behalf of their peoples to share the land between the Mediterranean and the river Jordan … by setting up a state which is democratic and secular, in which the rights of all people living within its borders to freedom of worship, security, and equality under the law are enshrined in a new constitution, to replace the separate forms of government that apply currently in Israel, the West Bank and Gaza.”

The two-state adherents will not approve. David Miliband at the Labour party conference this week continued to argue for a two-state solution. Tomorrow in New York, Mahmoud Abbas will petition George Bush for the same thing. Both are on a hiding to nothing.

The pace of Israeli colonisation, unimpeded since 1967, redoubled after the Oslo accords, demonstrating Israel’s aversion to a two-state solution. By 2007, the West Bank Jewish settler population had reached 282,000. In East Jerusalem, it rose to 200,000, massively Judaising the city and precluding it as a Palestinian capital. Today the West Bank is a jigsaw of settlements, bypass roads and barriers, making an independent state impossible. Gaza is a besieged enclave. In 2006 the UN special rapporteur in the Palestinian territories concluded that “a two-state solution is unattainable”. Avraham Burg, former Knesset speaker, told the Israeli daily Haaretz in June that “time was running out for the two-state solution”.

Scores of others have articulated the same view. The peace process predicated on the two-state solution is stagnant, and a momentum has started towards the obvious alternative, a unitary state. This month a new forum, encompassing Palestinian personalities from the occupied territories and outside, has published a petition in the Arabic daily Al-Hayat to halt negotiations, annex the territories to Israel and demand equal rights in one state. This echoes many recent Palestinian demands to dissolve the Palestinian Authority and start an anti-apartheid campaign for equal rights.

The UN high commissioner for human rights has referred us to Robert Serry, the UN official responsible for the peace process, who stated that UN policy must conform to the Palestinian formal position, the two-state solution. A change in that position is not unthinkable. For our resolution to be discussed at the UN, a member state would have to present it, and several are privately known to support our aims.

A unitary state is inevitable. Establishing an exclusive state defined along ethnic-religious lines and excluding its previous inhabitants was unjust and ultimately unsustainable. No political acrobatics will alter this. The sooner the UN, which unwisely created Israel in the first place, takes charge of the consequences, the better it will be for Palestinians, for Israelis and for the region as a whole.

· Ghada Karmi is research fellow at the Institute of Arab and Islamic Studies, Exeter University g.karmi@exeter.ac.uk

Revolutionary poet Fredrico Garcia Lorca

September 26, 2008
Source: Cybersapin.com

Federico Garcia Lorca

logo

Federico García Lorca was born in Fuente Vaqueros, Granada on the 5th of June, 1898 and died the 19th of August, 1936. His life spanned the years between the Year of Disaster and the Spanish Civil War which ultimately victimized him. He travelled throughout Spain and America, principally Argentina, living and writing some of the most beautiful poetry ever written. His poetry has been translated into a dozen languages and his name is known worldwide. His personal life is the subject of much debate now, relating to his tendencies and friends. This page is dedicated to his poetry, written by him for us to enjoy instead of dissecting his personality.

Lorca’s poetry and plays combine elements of Andalusion folklore with sophisticated and often surrealistic poetic techniques, cut across all social and educational barriers. Works include: Thus Five Years Pass, The Public, Dona Rosita. He is toted to have succeeded in the creation of a viable poetic idiom for the stage, superior to the works of his contemporaries, Yeats, Eliot and Claudel.

August 9, 1936, Falangist soldiers dragged the Spanish poet and playwright Federico Garcia Lorca into a field, shot him and tossed his body into an unmarked grave… Franco’s government tried to obliterate Lorca’s memory. His books were prohibited, his name forbidden.

Lorca and Bunuel
Lorca and his good friend, film director Luis Buñuel

One of the first and most famous casualties of the Spanish Civil War, Lorca quickly became an almost mythical figure, a symbol of all the victims of political oppression and fascist tyranny. People began speaking publicly about Lorca again in the late 1940’s, and The House of Barnardo Alba was the first of his plays to be produced in Spain (1950), since his death and since the end of the war. Though foreign influence helped to loosen the Franco regimes control over Lorca’s work, bans were still placed as late as 1971. Due to public outcry however, Lorca’s work was produced.

Lorca’s reconquest of the Spanish public, and his growing prestige among scholars is a relatively recent phenomenon. When his works began to recirculate freely, many people who knew only the Gypsy Ballads and two or three of the more popular plays considered Lorca a poet of limited interest and local color. When his later poetry –Poet in New York– and experimental plays such as The Public came to be better known and understood, attitudes changed.

Lament for Ignacio Sanchez Mejias
(fragment)

1. Cogida and death

At five in the afternoon.
It was exactly five in the afternoon.
A boy brought the white sheet
at five in the afternoon.
A frail of lime ready prepared
at five in the afternoon.
The rest was death, and death alone
at five in the afternoon.

The wind carried away the cottonwool
at five in the afternoon.
And the oxide scattered crystal and nickel
at five in the afternoon.
Now the dove and the leopard wrestle
at five in the afternoon.
And a thigh with a desolate horn
at five in the afternoon.
The bass-string struck up
at five in the afternoon.
Arsenic bells and smoke
at five in the afternoon.
Groups of silence in the corners
at five in the afternoon.
And the bull alone with a high heart!
At five in the afternoon.
When the sweat of snow was coming
at five in the afternoon,
when the bull ring was covered in iodine
at five in the afternoon.
Death laid eggs in the wound
at five in the afternoon.
At five in the afternoon.
Exactly at five o’clock in the afternoon.

A coffin on wheels in his bed
at five in the afternoon.
Bones and flutes resound in his ears
at five in the afternoon.
Now the bull was bellowing through his forehead
at five in the afternoon.
The room was iridescent with agony
at five in the afternoon.
In the distance the gangrene now comes
at five in the afternoon.
Horn of the lily through green groins
at five in the afternoon.
The wounds were burning like suns
at five in the afternoon,
and the crowd was breaking the windows
at five in the afternoon.
At five in the afternoon.
Ah, that fatal five in the afternoon!
It was five by all the clocks!
It was five in the shade of the afternoon!

2. The Spilled Blood

I will not see it!

Tell the moon to come
for I do not want to see the blood
of Ignacio on the sand.

I will not see it!

The moon wide open.
Horse of still clouds,
and the grey bull ring of dreams
with willows in the barreras.

I will not see it!

Let my memory kindle!
Warm the jasmines
of such minute whiteness!

I will not see it!

The cow of the ancient world
passed her sad tongue
over a snout of blood
spilled on the sand,
and the bulls of Guissando,
partly death and partly stone,
bellowed like two centuries
sated with treading the earth.
No.
I do not want to see it!
I will not see it!

Ignacio goes up the tiers
with all his death on his shoulders.
He sought for the dawn
but the dawn was no more.
He seeks for his confident profile
and the dream bewilders him.
He sought for his beautiful body
and encountered his opened blood.
I will not see it!
I do not want to hear it spurt
each time with less strength:
that spurt that illuminates
the tiers of seats, and spills
over the corduroy and the leather
of a thirsty multitude.
Who shouts that I should come near!
Do not ask me to see it!

His eyes did not close
when he saw the horns near,
but the terrible mothers
lifted their heads.
And across the ranches,
an air of secret voices rose,
shouting to celestial bulls,
herdsmen of pale mist.
There was no prince in Seville
who could compare to him,
nor sword like his sword
nor heart so true.
Like a river of lions
was his marvellous strength,
and like a marble toroso
his firm drawn moderation.
The air of Andalusian Rome
gilded his head
where his smile was a spikenard
of wit and intelligence.
What a great torero in the ring!
What a good peasant in the sierra!
How gentle with the sheaves!
How hard with the spurs!
How tender with the dew!
How dazzling the fiesta!
How tremendous with the final
banderillas of darkness!
But now he sleeps without end.
Now the moss and the grass
open with sure fingers
the flower of his skull.
And now his blood comes out singing;
singing along marshes and meadows,
sliding on frozen horns,
faltering soulless in the mist,
stumbling over a thousand hoofs
like a long, dark, sad tongue,
to form a pool of agony
close to the starry Guadalquivir.
Oh, white wall of Spain!
Oh, black bull of sorrow!
Oh, hard blood of Ignacio!
Oh, nightingale of his veins!
No.
I will not see it!
No chalice can contain it,
no swallows can drink it,
no frost of light can cool it,
nor song nor deluge of white lilies,
no glass can cover it with silver.
No.
I will not see it!

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

Finally, the Story of the Whistleblower Who Tried to Prevent the Iraq War

September 26, 2008

by Norman Solomon

Of course Katharine Gun was free to have a conscience, as long as it didn’t interfere with her work at a British intelligence agency. To the authorities, practically speaking, a conscience was apt to be less tangible than a pixel on a computer screen. But suddenly — one routine morning, while she was scrolling through e-mail at her desk — conscience struck. It changed Katharine Gun’s life, and it changed history.

Despite the nationality of this young Englishwoman, her story is profoundly American — all the more so because it has remained largely hidden from the public in the United States. When Katharine Gun chose, at great personal risk, to reveal an illicit spying operation at the United Nations in which the U.S. government was the senior partner, she brought out of the transatlantic shadows a special relationship that could not stand the light of day.

By then, in early 2003, the president of the United States — with dogged assists from the British prime minister following close behind — had long since become transparently determined to launch an invasion of Iraq. Gun’s moral concerns were not unusual; she shared, with countless other Brits and Americans, strong opposition to the impending launch of war. Yet, thanks to a simple and intricate twist of fate, she abruptly found herself in a rare position to throw a roadblock in the way of the political march to war from Washington and London. Far more extraordinary, though, was her decision to put herself in serious jeopardy on behalf of revealing salient truths to the world.

We might envy such an opportunity, and admire such courage on behalf of principle. But there are good, or at least understandable, reasons why so few whistleblowers emerge from institutions that need conformity and silence to lay flagstones on the path to war. Those reasons have to do with matters of personal safety, financial security, legal jeopardy, social cohesion and default positions of obedience. They help to explain why and how people go along to get along with the warfare state even when it flagrantly rests on foundations of falsehoods.

The e-mailed memorandum from the U.S. National Security Agency that jarred Katharine Gun that fateful morning was dated less than two months before the invasion of Iraq that was to result in thousands of deaths among the occupying troops and hundreds of thousands more among Iraqi people. We’re told that this is a cynical era, but there was nothing cynical about Katharine Gun’s response to the memo that appeared without warning on her desktop. Reasons to shrug it off were plentiful, in keeping with bottomless rationales for prudent inaction. The basis for moral engagement and commensurate action was singular.

The import of the NSA memo was such that it shook the government of Tony Blair and caused uproars on several continents. But for the media in the United States, it was a minor story. For the New York Times, it was no story at all.

At last, a new book tells this story. “The Spy Who Tried to Stop a War” packs a powerful wallop. To understand in personal, political and historic terms — what Katharine Gun did, how the British and American governments responded, and what the U.S. news media did and did not report — is to gain a clear-eyed picture of a military-industrial-media complex that plunged ahead with the invasion of Iraq shortly after her brave action of conscience. That complex continues to promote what Martin Luther King Jr. called “the madness of militarism.”

In a time when political players and widely esteemed journalists are pleased to posture with affects of great sophistication, Katharine Gun’s response was disarmingly simple. She activated her conscience when clear evidence came into her hands that war — not diplomacy seeking to prevent it — headed the priorities list of top leaders at both 1600 Pennsylvania Avenue and 10 Downing Street. “At the time,” she has recalled, “all I could think about was that I knew they were trying really hard to legitimize an invasion, and they were willing to use this new intelligence to twist arms, perhaps blackmail delegates, so they could tell the world they had achieved a consensus for war.”

She and her colleagues at the Government Communications Headquarters were, as she later put it, “being asked to participate in an illegal process with the ultimate aim of achieving an invasion in violation of international law.”

The authors of “The Spy Who Tried to Stop a War,” Marcia and Thomas Mitchell, describe the scenario this way: “Twisting the arms of the recalcitrant [U.N. Security Council] representatives in order to win approval for a new resolution could supply the universally acceptable rationale.” After Katharine Gun discovered what was afoot, “she attempted to stop a war by destroying its potential trigger mechanism, the required second resolution that would make war legal.”

Instead of mere accusation, the NSA memo provided substantiation. That fact explains why U.S. intelligence agencies firmly stonewalled in response to media inquiries — and it may also help to explain why the U.S. news media gave the story notably short shrift. To a significant degree, the scoop did not reverberate inside the American media echo chamber because it was too sharply telling to blend into the dominant orchestrated themes.

While supplying the ostensible first draft of history, U.S. media filtered out vital information that could refute the claims of Washington’s exalted war planners. “Journalists, too many of them — some quite explicitly — have said that they see their mission as helping the war effort,” an American media critic warned during the lead-up to the invasion of Iraq. “And if you define your mission that way, you’ll end up suppressing news that might be important, accurate, but maybe isn’t helpful to the war effort.”

Jeff Cohen (a friend and colleague of mine) spoke those words before the story uncorked by Katharine Gun’s leak splashed across British front pages and then scarcely dribbled into American media. He uttered them on the MSNBC television program hosted by Phil Donahue, where he worked as a producer and occasional on-air analyst. Donahue’s prime-time show was cancelled by NBC management three weeks before the invasion — as it happened, on almost the same day that the revelation of the NSA memo became such a big media story in the United Kingdom and such a carefully bypassed one in the United States.

Soon a leaked NBC memo confirmed suspicions that the network had pulled the plug on Donahue’s show in order to obstruct views and information that would go against the rush to war. The network memo said that the Donahue program would present a “difficult public face for NBC in a time of war.” And: “He seems to delight in presenting guests who are antiwar, anti-Bush and skeptical of the administration’s motives.” Cancellation of the show averted the danger that it could become “a home for the liberal antiwar agenda at the same time that our competitors are waving the flag at every opportunity.”

Overall, to the editors of American mass media, the actions and revelations of Katharine Gun merited little or no reporting — especially when they mattered most. My search of the comprehensive LexisNexis database found that for nearly three months after her name was first reported in the British media, U.S. news stories mentioning her scarcely existed.

When the prosecution of Katharine Gun finally concluded its journey through the British court system, the authors note, a surge of American news reports on the closing case “had people wondering why they hadn’t heard about the NSA spy operation at the beginning.” This book includes an account of journalistic evasion that is a grim counterpoint to the story of conscience and courage that just might inspire us to activate more of our own.

This article was adapted from Norman Solomon’s foreword to the new book by Marcia and Thomas Mitchell, “The Spy Who Tried to Stop a War: Katharine Gun and the Secret Plot to Sanction the Iraq Invasion.”

Pakistan and US troops exchange fire

September 26, 2008

September 26, 2008

Israel asked US for green light to bomb nuclear sites in Iran

September 26, 2008

US president told Israeli prime minister he would not back attack on Iran, senior European diplomatic sources tell Guardian

nuclear enrichment plant of Natanz in central Iran

A view of the nuclear enrichment plant of Natanz in central Iran. Photograph: EPA

Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.

The then prime minister, Ehud Olmert, used the occasion of Bush’s trip to Israel for the 60th anniversary of the state’s founding to raise the issue in a one-on-one meeting on May 14, the sources said. “He took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office”, they added.

The sources work for a European head of government who met the Israeli leader some time after the Bush visit. Their talks were so sensitive that no note-takers attended, but the European leader subsequently divulged to his officials the highly sensitive contents of what Olmert had told him of Bush’s position.

Bush’s decision to refuse to offer any support for a strike on Iran appeared to be based on two factors, the sources said. One was US concern over Iran’s likely retaliation, which would probably include a wave of attacks on US military and other personnel in Iraq and Afghanistan, as well as on shipping in the Persian Gulf.

The other was US anxiety that Israel would not succeed in disabling Iran’s nuclear facilities in a single assault even with the use of dozens of aircraft. It could not mount a series of attacks over several days without risking full-scale war. So the benefits would not outweigh the costs.

Iran has repeatedly said it would react with force to any attack. Some western government analysts believe this could include asking Lebanon’s Shia movement Hizbollah to strike at the US.

“It’s over ten years since Hizbollah’s last terror strike outside Israel, when it hit an Argentine-Israel association building in Buenos Aires [killing 85 people]”, said one official. “There is a large Lebanese diaspora in Canada which must include some Hizbollah supporters. They could slip into the United States and take action”.

Even if Israel were to launch an attack on Iran without US approval its planes could not reach their targets without the US becoming aware of their flightpath and having time to ask them to abandon their mission.

“The shortest route to Natanz lies across Iraq and the US has total control of Iraqi airspace”, the official said. Natanz, about 100 miles north of Isfahan, is the site of an uranium enrichment plant.

In this context Iran would be bound to assume Bush had approved it, even if the White House denied fore-knowledge, raising the prospect of an attack against the US.

Several high-level Israeli officials have hinted over the last two years that Israel might strike Iran’s nuclear facilities to prevent them being developed to provide sufficient weapons-grade uranium to make a nuclear bomb. Iran has always denied having such plans.

Olmert himself raised the possibility of an attack at a press conference during a visit to London last November, when he said sanctions were not enough to block Iran’s nuclear programme.

“Economic sanctions are effective. They have an important impact already, but they are not sufficient. So there should be more. Up to where? Up until Iran will stop its nuclear programme,” he said.

The revelation that Olmert was not merely sabre-rattling to try to frighten Iran but considered the option seriously enough to discuss it with Bush shows how concerned Israeli officials had become.

Bush’s refusal to support an attack, and the strong suggestion he would not change his mind, is likely to end speculation that Washington might be preparing an “October surprise” before the US presidential election. Some analysts have argued that Bush would back an Israeli attack in an effort to help John McCain’s campaign by creating an eve-of-poll security crisis.

Others have said that in the case of an Obama victory, the vice-president, Dick Cheney, the main White House hawk, would want to cripple Iran’s nuclear programme in the dying weeks of Bush’s term.

During Saddam Hussein’s rule in 1981, Israeli aircraft successfully destroyed Iraq’s nuclear reactor at Osirak shortly before it was due to start operating.

Last September they knocked out a buildings complex in northern Syria, which US officials later said had been a partly constructed nuclear reactor based on a North Korean design. Syria said the building was a military complex but had no links to a nuclear programme.

In contrast, Iran’s nuclear facilities, which are officially described as intended only for civilian purposes, are dispersed around the country and some are in fortified bunkers underground.

In public, Bush gave no hint of his view that the military option had to be excluded. In a speech to the Knesset the following day he confined himself to telling Israel’s parliament: “America stands with you in firmly opposing Iran’s nuclear weapons ambitions. Permitting the world’s leading sponsor of terror to possess the world’s deadliest weapon would be an unforgivable betrayal of future generations. For the sake of peace, the world must not allow Iran to have a nuclear weapon.”

Mark Regev, Olmert’s spokesman, tonight reacted to the Guardian’s story saying: “The need to prevent Iran from obtaining nuclear weapons is raised at every meeting between the prime minister and foreign leaders. Israel prefers a diplomatic solution to this issue but all options must remain on the table. Your unnamed European source attributed words to the prime minister that were not spoken in any working meeting with foreign guests”.

Three weeks after Bush’s red light, on June 2, Israel mounted a massive air exercise covering several hundred miles in the eastern Mediterranean. It involved dozens of warplanes, including F-15s, F-16s and aerial refueling tankers.

The size and scope of the exercise ensured that the US and other nations in the region saw it, said a US official, who estimated the distance was about the same as from Israel to Natanz.

A few days later, Israel’s deputy prime minister, Shaul Mofaz, told the paper Yediot Ahronot: “If Iran continues its programme to develop nuclear weapons, we will attack it. The window of opportunity has closed. The sanctions are not effective. There will be no alternative but to attack Iran in order to stop the Iranian nuclear programme.”

The exercise and Mofaz’s comments may have been designed to boost the Israeli government and military’s own morale as well, perhaps, to persuade Bush to reconsider his veto. Last week Mofaz narrowly lost a primary within the ruling Kadima party to become Israel’s next prime minister. Tzipi Livni, who won the contest, takes a less hawkish position.

The US announced two weeks ago that it would sell Israel 1,000 bunker-busting bombs. The move was interpreted by some analysts as a consolation prize for Israel after Bush told Olmert of his opposition to an attack on Iran. But it could also enhance Israel’s attack options in case the next US president revives the military option.

The guided bomb unit-39 (GBU-39) has a penetration capacity equivalent to a one-tonne bomb. Israel already has some bunker-busters.

Iran nuclear map Map showing nuclear activity in Iran

Aid groups: Tony Blair faces imminent failure in Middle East

September 25, 2008

Tony Blair

(Justin Lane)

The Middle East Quartet, of which Tony Blair has been the representative for the past year, is accused of “losing its grip” on the peace process

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International efforts to advance the Middle East peace process are facing imminent failure under Tony Blair’s leadership, aid groups operating in the region say in a report released today.The report says that the international community Mr Blair represents suffers from a “vacuum of leadership” and has failed to curb the expansion of Jewish settlements in the West Bank or tackle the worsening living conditions of Palestinians, despite pledges made at a US peace summit almost a year ago.In a damning report, the Middle East Quartet, of which Mr Blair has been the representative for the past year, is accused of “losing its grip” on the peace process. Aid officials also said that its failings could have serious ramifications for implementing international law around the globe.

The Quartet — the United States, European Union, United Nations and Russia — has “fundamentally failed to improve the situation on the ground,” David Mepham, the director of policy for Save the Children UK, said. “Unless the Quartet’s words are matched by more sustained pressure and decisive action, the situation will deteriorate still further.

“Time is fast running out. The Quartet needs to radically revise its existing approach and show the people of the region that it can help make a difference.”

The report, released as the Quartet meets in New York to review progress, said that despite repeated calls from the international community to halt the expansion of Jewish settlements in the West Bank — considered illegal under international law and seen as a major obstacle to any peace agreement — there has been a “marked acceleration in construction, and no serious attempts by the Israeli authorities to dismantle outposts”.

The role of Mr Blair and the Quartet were limited by President Bush, who gave his British ally the task of reviving the Palestinian economy to make it ready for future statehood, leaving the political process in the hands of Condoleezza Rice, the US Secretary of State.

Mr Bush promised a deal by the end of this year. Most politicians in the region see that as unlikely.

“We are facing a vacuum in leadership,” said Martha Myers, CARE International’s director for the Palestinian territories. “The Quartet has been unable to hold parties to their obligations. The Quartet’s credibility is on the line and we hope it will use this meeting to show it is able to make a real difference to the lives of Palestinians and Israelis.”

While it credits Mr Blair with securing donor funding and encouraging private investment in the Palestinian territories, the report noted that his project unveiled last May to focus on rejuvenating the economy in specific areas such as Jenin and Jericho had made only a localised impact.

A spokesman for Mr Blair denied that he was stretching himself too thinly with his other projects. These include tackling climate change, poverty in Africa, a Faith Foundation to bridge the gaps between world religions, lectures at Yale University and lucrative posts as an adviser to JP Morgan and Zurich Financial Services.

Peace barriers

Settlements The peace “Road map” called for the dismantling of Jewish settlements built since 2001 and freezing all settlement growth

Palestinian security “Road map” called for a rebuilt Palestinian Authority security apparatus to confront terrorism. An EU-trained police force has been introduced in the West Bank but Palestinians are still afraid for their security

Source: US State Department, Middle East Quartet