Sunday, November 23, 2014
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Dave Lindorff is an American investigative reporter. His work was highlighted by Project Censored 2004, 2011 and 2012.
The latest news on the burgeoning police state in the US -- a page-one investigative report in the New York Times  disclosing that at least 40 agencies of the US government from the Department of Health and Human Services to the Supreme Court (!) are using undercover agents to spy on and even to entrap law-abiding American citizens -- suggests that we have passed the tipping point.
One can no longer speak in terms of the US as a country that is moving towards becoming a police state. We are living in a police state.
The Times reports that IRS personnel have been going undercover posing as accountants and even as physicians to root out tax fraud, that the Supreme Court has been dispatching some of its guards (all of whom have been trained in undercover work) “dressed down” in civilian clothes to mingle with protesters (notably abortion-rights activists) to spy on people simply exercising their First Amendment rights outside the court building, that the USDA sends out agents posing as Food Stamp recipients to try and entrap shop-owners to commit Food Stamp fraud, and that even NASA and the Smithsonian Institution have undercover operatives. Undercover cops and agents are assuming the identities of teachers, doctors, journalists and even priests.
This information has to be put together with the rampant militarization of local police forces, who have become an occupying army, and with the proliferation of spying activities by state and local police agencies, encouraged by the establishment by the FBI and the Department of Homeland Security of myriad “Joint Anti-Terrorism Strike Forces, and of 76 so-called Fusion Centers. These latter are totally unregulated operations that meld the spying activities of state and local cops and the myriad three-lettered intelligence units of the federal government, as well as private corporate security units, with no specific agency assuming oversight responsibility.
I used to scoff at the wild-eyed claims made by people on the right and left who said that we were living in a police state. Having lived for a year and a half in China, where a police state has been operating now for 65 years, and having visited police states in Eastern Europe during the days of the Soviet Union, I have seen and experienced what life is like when the police, secret and overt, run rampant, and I knew the US was not like those places.
I’ve changed my mind, though. The only difference I see now, knowing what we know about the breadth and depth of police activity in the US, between what’s happening here and what happens in places where police states have long existed, is that in long-standing police states, everyone knows they are being watched and are subject to arbitrary arrest. while here in the US, many Americans remain blissfully ignorant of what has happened to their vaunted freedoms.
You don’t know you are in a newly established police state until you deliberately or inadvertently cross a line. That’s why we still have people in this country thanking people in uniform for “defending our freedom,” when we’ve actually already lost them (in no small part thanks to the state of perpetual war our politicians have been orchestrating).
Even in China, I didn’t realize the extent of the police state there until I once made a trip to the countryside to visit a peasant village at the invitation of a Chinese friend who was a lawyer and vice director of a local radio station. The day I arrived at his city on a flight from Hong Kong, while having dinner at my friend’s house, a police officer came to his apartment door. This cop, a former law student of my friend’s, said he had come to warn his old teacher that as a foreigner I could not stay the night at his house, and that I’d have to go instead to a designated hotel. He also said I would need to go to a meeting at the Public Security Bureau the next morning. He urged my friend to “be careful.”
I left after dinner, checked into the specified hotel, and sure enough, the next morning, a uniformed officer from China’s ministry of state security came to my room and politely escorted me to headquarters. As I walked into the building, I saw, to my surprise and dismay, my friend seated in another room, across a table from another officer. I was brought into the main office, a well-appointed room with comfortable lounge chairs and a glass-topped tea table. A ranking officer came in and politely offered me tea and cigarettes. Then he began asking me why I was in town.
I explained that I had met my friend in the US when he was a visiting legal scholar, and had shown him and his family around the region, and that he was now returning the favor to me, showing me around his home town. He said, “But you are planning to go out and visit a village in the countryside, aren’t you?”
I replied that I was, and said that I did not believe that this was a restricted area.
He said, “But you are a journalist.”
I agreed, but noted that I had just recently spent a year as a teacher at Shanghai’s Fudan University at the invitation of the Chinese central government’s Ministry of Education, and that during that whole year I was in the country as a “friend of China” on a regular visa. I added that I was currently in China not to write an article as a journalist, but as a tourist visiting a Chinese friend. I added for good measure that I was surprised that there was any concern about a foreigner seeing what great strides were being made in reforming agriculture and increasing peasant incomes.
He was not satisfied. He said if I was a journalist, then I must have a journalist’s visa in China. (This was not correct. Both before and after this incident, I have traveled to China on a tourist visa with no difficulty.)
At any rate, after a long back and forth on this, he announced that we were friends and that we’d be going to lunch at a restaurant owned by his bureau. We walked out to a waiting limo, and there I met my friend and his wife, who had also been brought in. We got in the car and my friend leaned over and told me that everything was fine -- we were to be allowed to go to the village, but just could not spend the night there as I had once hoped to do.
At the extravagant lunch, it was all pats on the back and rounds of rice wine with the police in attendance, and talk of “our good American friend.” Then we parted, with the police taking the check and waving us on the way in their limo.
Afterwards, I told my friend I did not want to make the trip to the countryside. I said going would be putting him and his family at risk, as the police were clearly uptight about it, and I didn’t want to be responsible for any trouble for him. He insisted he knew what he was doing and that everything was fine. He did note that they’d taken his passport, but assured me that it would be returned to him when we came back as promised from our run-out to the village the next day.
He finally convinced me and we went, and spent a very enlightening and enjoyable day with a family he had lived with for a year during the Cultural Revolution, when his cadre parents had been attacked by Red Guards as “rightists.”
The following day, after our trip, I left for Nanjing and then went on by train to Shanghai, where I visited with friends. When I returned to my home in Hong Kong, a week later, I called this friend to see how he was. I got his wife on the phone, who told me he was in the hospital, recovering from serious injuries caused by a police beating. It seems as soon as I had left, he was arrested, beaten by several thug cops who broke his cheekbones and caused massive bruising around his groin from kicking him repeatedly. He was also fired from his post at the radio station.
Eventually, he left China, earned a US law degree, and then later returned, after using his Chinese law school connections to have his case “rectified”. But he told me while he was meeting with a high-ranking security official in Beijing who had been a law-school classmate, he was shown my file, which included, apparently, virtually every article I had written about China over perhaps five years’ time.
He also learned that I had been surreptitiously tailed after my visit to him, all through Nanjing and Shanghai, so that every person I met, including former students I had taught in Shanghai, was identified.
It was a truly daunting realization that if I visited China, whether as a tourist or as a journalist, even without an official “handler,” I would be potentially putting everyone I spoke with or met with at risk, or at least in the cross-hairs of the police state.
It never occurred to me back then in the 1990s that such a state of affairs could exist in my own country, and yet it appears, on the basis of the latest Times report, put together with what we know now about the extent of NSA monitoring of all our communications, that it does exist. There is every reason to believe that the US Post Office is monitoring our mail, that the NSA is monitoring our phone calls and our internet usage, and even that local police are keeping tabs on our comings and goings. And even if they are not, we have to operate as if they were, because they can and could be.
This is what makes a police state so insidious. Once you know that it exists, and that it is monitoring people, one would be crazy not to assume that the possibility is that each of us could be one of those who are targeted for such attention.
As a journalist, this is terribly threatening, not so much for myself, but for those I might want to interview as sources. Just as my eye-opening trip to China showed me that while I might be protected from harassment or physical as a US citizen, those Chinese people I talked to or befriended are not, I have to assume that unless I take extreme caution in how I meet people or communicate with people when working on a sensitive story involving someone who is a whistleblower, I am likely to be putting such contacts in jeopardy in today’s America.
Two personal examples of how deeply embedded the police state has become here:
A year ago, I was driving into New York City, late to an event. I came through the Holland Tunnel into lower Manhattan, part of what was a crush of traffic. Finding myself in the wrong lane for making a right turn onto Canal Street, I signaled to a cop in front of my car who was directing traffic, asking if he could help me cross over one lane and make my turn. He looked at me, nodded, and then said, casually, “How’s the traffic down in Philly?” I made my turn, and then suddenly asked my wife, “How in hell did he know we were from Philly? Our car only has a license plate on the back!” (I don’t know the answer, but New York City has more security cams than any other place in America, particularly in lower Manhattan.) Also, I heard from a friend whose husband has advanced dementia, that she had taken him to a crowded market on Manhattan’s lower West Side. Attempting to buy something, she turned away from him for a moment and then found him missing. In a panic, she approached a police officer, who asked her if she had a photo of him. She did, on her cell phone. He texted that photo to a command center and minutes later got word that her husband had been spotted at an intersection nearby. This happened in minutes! I had read that at the urging of nervous bankers during the Occupy Movement, Mayor Bloomberg and the banks had installed a high-tech monitoring system throughout lower Manhattan, that was including face-recognition technology. Here its power was being demonstrated!
Clearly we are being watched, at least in some locales.
The latest Times article also shows that every American is now at risk too, not just journalists and protesters. If the government feels free, or even becomes enthusiastic about using undercover officers in every agency to engage in entrapment, people will have to worry about what they say to anyone. Routine behavior like watering a lawn at night during a draught alert, doing a home roof repair without a permit, or sharing a friend’s “joint” in a private setting could lead to an arrest -- especially if you happen to have enemies in a local community. Routine conversations, particularly about politics, could be viewed as subversive and be passed on to employers.
And that, I’ve learned, is one of the worst things about police states. Sure, it’s terrible that the full power of the state can be brought to bear to crush heretics, rebels and outsiders. But in a police state, those in authority at any level -- in schools, police departments, planning commissions, courts, health departments and other offices -- can also make use of the apparatus of the police state for more petty and vindictive purposes, to harass and humiliate and punish those against whom they have personal grudges. In a state like China, or the former German Democratic Republic (East Germany), we know such abuses are or were commonplace. They will become so here too in the new Police State of America.
That I can predict with absolute confidence.
Mahatma Gandhi once said, “A nation’s greatness is measured by how it treats its weakest members.” On that basis, the US has in recent decades fallen very far from any greatness it may have once had. But it can also be said that a nation’s freedom can be measured by how free its people are and feel to be to criticize, protest and organize against its ruling elites. Most of us, including those of us who are critics of the Establishment, may still feel that we are free to act, but we must note the terrible lengths to which this government is going to repress political activists like Chelsea Manning, Julian Assange, Leonard Peltier, Mumia Abu-Jamal, Edward Snowden, and others, journalists like James Risen, Glenn Greenwald and Barrett Brown, or Internet activists like the late Aaron Swarz. The list of people being hounded and persecuted by the US police state is far too long to publish.
Suffice to say if police repression can happen to the people on that list, it can happen to all of us.
The only way to end a police state is to call it out and to stand against it.
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The G20 Just Stole Your Bank Account
The Federal Reserve and the Bank of England Have Already Rehearsed the Theft of Your Bank Account
Your Bank Account Has No Protection
Goldman Sachs Opened the Gates to Hell
Why Would Goldman Sachs Dramatically Drive the Price of Gold Down?
ONE MORE DOT TO CONNECT
To The Dumbed Down Sheep of America
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On Wednesday, the US Senate Permanent Subcommittee on Investigations released a detailed report documenting yet another aspect of the insider dealing, price-fixing and general criminality that pervades the American financial system.
The 400-page report gives some insight into the extraordinary and malevolent power of a handful of banks and financial institutions. These corporations, the largest of which control hundreds of billions and even trillions of dollars in assets, dominate the economy and control the political system.
The document focuses on the role of three of the largest banks—Goldman Sachs, Morgan Stanley and JPMorgan Chase—in the physical control of commodities, including energy resources and metals. “The current level of bank involvement with critical raw materials, power generation and the food supply appears to be unprecedented in US history,” the report states.
After the deregulation of the commodities markets in the late 1990s—part of a broader banking deregulation under the Clinton administration—trading in commodity-related assets increased enormously. A vast array of derivatives were developed to allow for speculation on commodities, with the market in these assets increasingly divorced from its initial purpose of enabling producers and buyers to hedge against shifts in commodity prices. Markets such as the Commodity Mercantile Exchange in Chicago are now dominated by speculators, who control as much as 70 percent of all assets.
A great deal of money is made buying and selling financial instruments tied to the prices of such basic necessities as oil and wheat. The growth in the direct control of physical goods by banks has allowed them not only to influence the prices consumers pay, but also to leverage their control of commodities to manipulate the prices of the financial instruments on which they gamble. The consequences can be deadly. Speculation in food prices, for example, is a major factor in price swings that can throw millions of people into poverty and hunger all over the world.
Some figures from the report give a sense of what is involved. At one point, the investment bank Morgan Stanley “controlled over 55 million barrels of oil storage capacity, 100 oil tankers, and 6,000 miles of pipeline.”
JPMorgan built up a significant stake in the copper market, with “a copper inventory… comprising nearly 60 percent of the available physical copper on the world’s premier copper trading exchange.” Other activities of the banks documented in the report include trading in uranium, selling jet fuel to airlines, and owning mines and power plants.
One focus of the Senate subcommittee report is the control of the aluminum market by Goldman Sachs, which has been sued by dozens of companies accusing the bank of deliberately manipulating supply to increase aluminum prices and its own profits.
In 2010, Goldman purchased Metro International, a Detroit-area warehousing company that stores about 85 percent of exchange-traded aluminum in the United States. Goldman proceeded to implement complex new rules and incentives at its subsidiary to bottleneck supplies, according to the report.
The bank “approved ‘merry-go-round’ transactions in which warehouse clients [including banks and financial institutions such as Deutsche Bank and the London hedge fund Red Kite] were paid cash incentives to transfer aluminum from one Metro warehouse to another.” The result was curtailed supply and increased prices, which the bank and its financial trading arm could anticipate because they were directly responsible.
Wednesday’s report is only the latest in a long string of revelations of nefarious activities by Wall Street banks, including three major documents released by the Senate Permanent Subcommittee on Investigations over the past three-and-a-half years.
The most significant thing about these exposés is that they have no repercussions. Detailed and damning evidence is presented showing that the likes of JPMorgan, Goldman, Morgan Stanley, Bank of America, Citigroup, etc.—and their top executives—lied, cheated, broke laws and, in general, profited handsomely from the economic and social disasters produced by their actions. But no bank or top banker is prosecuted, let alone jailed. No measures are taken to rein in the banks. The sporadic exposés assume the character of harmless rituals. The banks are and remain above the law.
At most, the banks are made to pay fines that amount to a small fraction of their revenues (and far less than the handouts and subsidies they have received from the government) in settlements that have been worked out between the banks and the government in closed-door negotiations—amounts the banks discount as the cost of doing business.
Just last week, JPMorgan, Citigroup, Bank of America, UBS, Royal Bank of Scotland and HSBC agreed to a collective fine of $4 billion for their role in manipulating foreign exchange rates. This followed similar settlements over the banks’ manipulation of the most important interest rate in the world, the London Interbank Offer Rate (Libor).
Previous deals were reached to settle charges of money-laundering for drug cartels, deceit and fraud in the sale of mortgage-backed securities, concealment of losses from derivatives trading, complicity in the Bernard Madoff Ponzi scheme, fraud in the foreclosure of homes, and other crimes.
After the Permanent Subcommittee’s release of a 640-page document in 2011 on the 2008 financial collapse, the committee’s chairman, Senator Carl Levin, declared that the investigation had found “a financial snake pit rife with greed, conflicts of interests and wrongdoing.” The longest chapter of the report was a detailed, fact-filled review of Goldman Sach’s unloading of toxic sub-prime loans in 2007 and 2008 to counterparties who were not informed that Goldman was betting against the very securities it was hailing as sound investments.
Nevertheless, the Obama administration announced in 2012 that it was ending its investigation of Goldman Sachs for manipulating the sub-prime mortgage market and would file no charges against the bank.
The Subcommittee’s second major report on banking fraud, published in 2013, focused on fraud and deception by JPMorgan Chase over $6.2 billion in losses from speculative trades in financial derivatives (the so-called “London whale” trades). Despite documentary evidence that the bank’s top management, including Chairman and CEO Jamie Dimon, deliberately concealed information from investors about the loss, no one was prosecuted or held accountable.
This latest report will produce similar results. That the Senate committee has no intention of seriously pressing for a criminal investigation is shown by its failure to summon a single top bank executive to testify at two days of hearings it is holding on its investigation into the banks’ commodities dealings.
The functionaries who populate the state apparatus, Democratic and Republican, are either directly or indirectly on the payroll of the banks and corporations whose interests they safeguard. The so-called regulatory agencies are staffed by former or future officers of the very banks they are supposed to be policing. They run interference for the financial mafia.
The inescapable conclusion from this cesspool of corruption and criminality is that the financial system cannot be reformed. The dictatorship of the banks can be broken only through the independent, revolutionary mobilization of the working class. Among the very first tasks of a workers’ state will be the expropriation of the banks, their transformation into public utilities under the democratic control of the working class, and the prosecution of all those who have amassed unimaginable wealth on the basis of parasitism and fraud.
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The release of the annual report of the US Pension Benefits Guaranty Corporation (PBGC) is being seized upon by the media and politicians of both parties to press for a new round of devastating cuts to pension benefits for tens of millions of retired industrial and other private-sector workers.
The PBGC is the government insurer for 24,000 defined benefit pension plans, which cover more than 41 million workers, retirees and their dependents. On Monday, the government-backed corporation released a report showing that the long-term projected deficit of its multiemployer program rose by $34 billion in fiscal year 2014 to a record $42 billion. This was largely due to potential losses from shoring up two large pension funds that could become insolvent in the next decade.
Although they were not named in the report, the two funds are reportedly the Teamsters Central States fund and the United Mine Workers fund, which together cover some 10 million current and retired workers. The precarious position of the funds, which are jointly administered by the two unions and trucking and mining companies, is due to the wiping out of hundreds of thousands of jobs, which has left many companies with more retirees than active workers. The pension funds were also hit by stock market losses.
The Washington Post and Wall Street Journal zeroed in on a single paragraph in the report warning that the PBGC could go broke over the next eight years if the current rate of premium payments from corporations continues. The “risk of insolvency” would rise over time, the report said, “exceeding 50 percent in 2022 and reaching 90 percent by 2025.” It added, “When the program becomes insolvent, PBGC will be unable to provide financial assistance to pay guaranteed benefits in insolvent plans.”
Nowhere in the media or political commentary on the report was there any suggestion that the government should carry out a Wall Street-style bailout of the pension insurer. The Post noted that that such a bailout was a “political non-starter” in Washington.
Nor was there any suggestion that Congress should mandate a major increase in contributions from the big corporations, which have extracted billions from the labor of workers while deliberately diverting funds from their pension plans and keeping them chronically underfunded.
Instead, in the name of “saving” the pensions, the capitalist media is demanding savage cuts in the workers’ benefits.
The Wall Street Journal wrote Tuesday that any solution to the agency’s “long-running problems” would likely include “sharp benefit cuts for the plans.” The Postconcurred on the same day, saying, “Unless Congress makes changes, which could include raising insurance premiums for multiemployer plans or the controversial move of allowing for preemptive pension cuts in struggling plans,” the PBGC will go bankrupt.
One proposal, cited approvingly by the Wall Street Journal, came from the Center for Retirement Research at Boston College. A 30 percent benefit cut on average for current retirees, the report said, would allow the Teamsters plan “to remain solvent indefinitely and increase the aggregate welfare of plan participants.”
Leading Democrats and Republicans added their voices to the choir demanding action.
The annual report was “a sober reminder that time is running out” said Congressman John Kline (Republican from Minnesota), chairman of the House Committee on Education and the Workforce. The multiemployer pension system “is a ticking time bomb that will inflict a lot of pain on workers, employers, taxpayers and retirees if Congress fails to act,” he added.
Senate Finance Committee leaders Ron Wyden (Democrat from Oregon) and Orrin Hatch (Republican from Utah) issued a joint statement saying they remained “very concerned” about the multiemployer system.
As usual, the trade unions are willing accomplices in the crime being prepared against the working class. According to the Washington Post, “A coalition of unions and businesses has been pushing for reforms, including more flexible coverage structures and pension cuts in financially struggling plans.”
Last year, “a commission made up of representatives from employer and labor organizations,” the Wall Street Journal reported, issued a proposal “that would include the extreme step of cutting pension benefits for some current retirees in the most troubled plans.”
One such joint labor-management body is the National Coordinating Committee for Multiemployer Plans, which includes the presidents of the Teamsters, the AFL-CIO’s construction trades, the Service Employees International Union (SEIU), and the United Food and Commercial Workers (UFCW). It has called for congressional action, warning that employers planned to exit the system and “leave retirees behind.”
The union executives could care less about their retired members. These unions have spent decades collaborating in gutting pension benefits in order to boost the corporations’ profits. The threatened liquidation of multibillion-dollar pension investment funds, however, threatens the income and portfolios of the aspiring capitalists who control the unions.
There is an element of deliberate crisis mongering in the PBGC report. The shaky position of the agency has long been known and nothing has been done about it.
Over the last three decades, more and more corporations have jettisoned their employer-paid plans—one of the most important gains won by the working class in the mass industrial battles of the 1930s, 1940s and 1950s. All but a few have forced current workers onto employee-paid 401(K) plans subject to the vagaries of the stock market.
Earlier this year, aerospace and defense giant Boeing worked in tandem with the International Association of Machinists (IAM) to force 33,000 IAM workers onto 401 (K) plans. The company’s top executive, Jim McNerney, has a special retirement plan valued at $42 million, which will provide him with over $270,000 per month after he quits.
It has long been a standard business practice for American corporations to dump their pension obligations onto the PBGC through bankruptcy. Since Congress established the PBGC as part of the 1975 Employee Retirement Income Security Act (ERISA), the government-backed corporation has paid out billions to cover pension plans terminated by giant corporations, particularly in the steel and airline industries.
As millions of workers know through painful, first-hand experience, when the PBGC takes over an insolvent fund, the workers are hit with brutal benefit cuts. Congress limits the amount the agency can pay to retirees to less than $13,000 a year, effectively condemning the workers to poverty. A worker with a very modest annual pension of $20,000 after 30 years of labor stands to lose more than $7,000 a year—a cut of over 35 percent.
The decks are being cleared for the next stage in the relentless, bipartisan assault on the working class. Private-sector pensions will be targeted along with other supposed “ticking bombs” such as Social Security, Medicare and public-sector pensions.
The nationwide offensive against the pensions of state and municipal workers has already been launched with precedent-setting rulings by federal bankruptcy judges in Detroit and Stockton, California declaring null and void provisions of state constitutions guaranteeing the pension benefits of public employees.
Last week, a federal bankruptcy judge gave final approval to the Detroit bankruptcy settlement, which imposes huge cuts in the pensions and health benefits of retired city workers and imposes 401(k) plans on active workers. This week, the PBGC report has signaled the widening of the attack to include the private sector.
The official justification is the claim that society simply cannot afford to keep the “overgenerous promises” made to workers in an earlier, more prosperous period. The situation is supposedly made worse by the problem of workers living too long after retirement and imposing an unsustainable burden on the rest of the population.
These are self-serving lies pumped out by the ruling class through its political servants and media apologists. Since the financial crash of 2008, the Obama administration’s pro-business policies of bank bailouts, virtually free money for the banks from the Federal Reserve, wage and benefit cuts for auto workers, corporate tax cuts and deregulation have transferred trillions from the working class to the super-rich.
The share of the gross domestic product going to corporate profits is at the highest level since World War II, while the share going to workers’ wages is at the lowest. American corporations are sitting on an estimated cash hoard of $1.5 trillion and using it for stock buybacks, executive bonuses and mergers and acquisitions that are occurring at their most frenzied pace since 2007.
The total $60 billion deficit of the PGBC could be wiped out overnight by using only a portion of the $360 billion being hoarded by tech giants Google, Apple, Cisco and Microsoft, or employing one-tenth of the annual Pentagon budget.
Instead, the financial oligarchy that controls the economy and both big-business parties is determined to steal the pensions that tens of millions need to survive and return workers to the dark days when they labored without end until they died.