Tuesday, February 12, 2008

A Look at the Consumer End of a Stumbling Economy

A Look at the Consumer End of a Stumbling Economy

By Charles R. Morris

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One can pity Federal Reserve Chairman Ben S. Bernanke. No other federal reserve chairman ever cut interest rates by a full 1.25% within just eight days, as Bernanke has done. But the monetary skies remain as leaden and thunder-clouded as ever. The stock market keeps quivering downward, crowds thin at the malls, jobless queues grow. Wal-Mart reports that customers are using their Christmas gift cards for groceries.

The hard reality is that the economy is facing a one-two knockout blow from a collapse in consumer spending, plus a shock-and-awe wave of asset write-downs that is wreaking havoc in the financial sector. The more Bernanke floods the economy with easy money, the worse the final reckoning is likely to be.

First the consumer. For decades, personal consumption’s share of GDP averaged in the 66 percent-67 percent range. In 2000, however, it moved up sharply, hitting 72 percent in early 2007, the highest rate of consumption in any modern country ever.

How did consumers pay for it? Well, not with their wage packet—median household incomes were roughly flat in the 2000s. Instead, households doubled their debt load, and personal savings rates dropped to zero.

Almost all the new borrowing was against houses. Very low interest rates and super-easy mortgage rules drove house prices up 50 percent between 2000 and 2005, one of the fastest jumps in history. As prices soared, consumers refinanced again and again, rolling over the proceeds into pricier houses and more consumption. Wall Street’s economists looked on happily, and constructed elaborate theories proving that the debt spiral could continue indefinitely.

But as outstanding mortgages balances ratcheted higher and higher, they finally smacked up against the ability of homeowners to service their debt, no matter how low the interest. A tipping point was crossed last year, when it dawned on markets that houses were overpriced – and by a whole lot. Home prices are now in free fall; price drops of 20 percent to 30 percent will be required to get them back in line with incomes. Stuck with heavy debt service and no cash left in their homes, consumers are cutting back hard. The credit merry-go-round, in short, has started to run backwards.

The truly bad news is that the credit crisis is not just about home mortgages. The same problems infect almost every important asset class. Commercial mortgages had a drunken spree of their own in 2006 and 2007. A sign of the times: the big New York developer, Harry Macklowe, is unable to pay $7 billion in debt on seven prime Manhattan office buildings he bought less than a year ago. The takeover loans that fueled the 2006-2007 stock market boom are also faltering badly. Trading markets are now pricing prime takeover loans and commercial mortgages as if they were junk bonds.

On quite reasonable assumptions, total market losses from defaults and writedowns on mortgages of all kinds, and from junk bonds, leveraged takeover loans, credit cards, and auto loans, will be in the range of $1 trillion.

(What are "writedowns?" Suppose I pay $1000 for an apparently high-quality 10-year bond that pays 5 percent, or $50, a year. Then, suppose my bond turns out to be riskier than I thought – say, the kind that usually pays 9 percent returns. How much can I sell it for? The answer is about $720; at that price, the $50 in interest equates to a 9 percent yield on the investment. The $1000 bond, that is, has lost 28 percent of its value. If it is held in a bank trading account, the bank would have to reduce its stated profits and equity capital by that amount.)

Roughly half the shaky mortgages and other loans are on the books of banks, with the rest spread among hedge funds, pension funds and individual investors. Banks have already written off $130 billion of bad loans, so they have some $250-$350 billion to go. Reductions in equity capital have about a 10-to-one downward ratchet effect on a bank’s ability to lend.

That is the source of the great "‘credit crunch" that has sent bankers scurrying around the world to Arab, Chinese and other Asian investment funds to replenish their capital. And those are the worries that have pushed the "fiscal stimulus" program through Congress and prodded Bernanke to turn on his fire hose of new money.

The questipn is, what are we are trying to accomplish? Do we want consumers to keep on spending and borrowing? Are we hoping over-levered companies will pile on more debt? Are we trying to make house prices go up? Isn’t that why we’re in trouble in the first place?

GM Posts $38.7B Loss for 2007, Offers Buyouts to 74,000 Hourly Workers

GM Posts $38.7B Loss for 2007, Offers Buyouts to 74,000 Hourly Workers

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It is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.

Detroit - General Motors Corp. reported a $38.7 billion loss for 2007 today, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.

The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens.

But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.

The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.

GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour.

Ford Motor Co. and Chrysler LLC already have announced similar buyout offers.

GM shares rose 24 cents to $27.36 in morning trading.

GM's annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.

The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.

Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.

For the fourth quarter, GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with a net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GM's former parts division, for its restructuring efforts.

GM reported $181 billion in revenues for the year, down from $206 billion in 2006. Its automotive business saw record automotive revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favorable exchange rates.

GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, up 140 percent from 2006. GM's Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.

But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.

Wagoner said the weak U.S. economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected U.S. sales.

"We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner said in a statement.

GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.

GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.

Scalia says courts shouldn't prohibit torture

Scalia in uncompromising form

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Law in Action has a rare, extended interview with Antonin Scalia, the most outspoken and acerbic of Justices on the US Supreme Court.

In a wide-ranging discussion, he defends his often controversial positions on issues like Guantanamo Bay, argues that torture may be legal and attacks the "sick" practice of televising trials.

Justice Scalia is often described as the most conservative member of the court - but it's a charge he denies.

Instead, he says he's an "originalist," which means he interprets the text of the US Constitution as it was written.

He both attacks and mocks the idea that the Constitution is a "living document" which needs reinterpreting in the light of social change.

Judicial views that divide America

He has made many decisions in favour of the rights of criminal defendants, and has ruled that burning the US flag is legal, although he adds that if he were king, he would "throw flag burners in jail".

Justice Scalia has ruled against the right to abortion and in favour of the death penalty.

He says there is nothing in the Constitution that grants women the right to an abortion.

The death penalty, he argues, is not covered by the 8th Amendment's ban on "cruel and unusual punishment."

He points out that at the time the Constitution was written, execution was the only penalty for felonies, and therefore cannot be excluded by the amendment.

Justice Scalia says that it is far from clear that torture is unconstitutional and says that it may be legal to "smack [a suspect] in the face" if the suspect is concealing information which could endanger the public.

He criticises the politicisation of the process of appointing Supreme Court Justices, but blames this on the court for being too flexible in interpreting the Constitution.

This means that politicians want to appoint a judge who will "write the new constitution that you like."

UN appeals for 13 million dollars to help Afghan children

UN appeals for 13 million dollars to help Afghan children

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Hundreds of thousands of Afghan children lack proper food, water and other essentials while conflict hampers the delivery of help, UNICEF warned Tuesday in an appeal for 13 million dollars' emergency aid.

Its Humanitarian Action Report 2008 covers medicines, supplements, water systems, education facilities and play areas for children -- many from families that have returned from exile or been displaced by conflict.

"Afghanistan is facing a variety of natural and man-made disasters across the country," said the United Nations Children's Fund appeal for 39 countries.

"Armed conflict, school burning, suicide attacks and kidnapping and killing of humanitarian workers limit the access to civilian population and hamper the delivery of humanitarian assistance," UNICEF added.

The report said the return of 353,000 people from Pakistan and Iran last year, and the deportation of 260,300 more, was adding to the needs of people already affected by natural disaster.

Around 760 people have died from cold this winter, the government says, but parts of Afghanistan also suffer drought.

Growing conflict in the south and east is also adding to civilian casualties and population movement, with more than 2,000 families displaced in the south last year, UNICEF said.

Afghan people suffer some of the worst conditions in the world after decades of war and neglect. Around 1,600 out of 100,000 women die giving birth, while about 165 of 1,000 babies die in birth, according to United Nations figures.

One child out of four does not live to five, it says.

The UNICEF appeal said two million primary school-aged children, about 60 percent of all children, are out of school. About 1.3 million of these are girls.

Only 23 percent of the population -- 24 million based on UN figures for 2007 -- has access to safe drinking water and 12 percent to sanitation facilities, it says.

The War Against Tolerance

The War Against Tolerance

By Chris Hedges

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Walid Shoebat, Kamal Saleem and Zachariah Anani are the three stooges of the Christian right. These self-described former Muslim terrorists are regularly trotted out at Christian colleges-a few days ago they were at the Air Force Academy-to spew racist filth about Islam on behalf of groups such as Focus on the Family. It is a clever tactic. Curly, Larry and Mo, who all say they are born-again Christians, engage in hate speech and assure us it comes from personal experience. They tell their audiences that the only way to deal with one-fifth of the world’s population is by converting or eradicating all Muslims. Their cant is broadcast regularly on Fox News, including the Bill O’Reilly and Neil Cavuto shows, as well as on numerous Christian radio and television programs. Shoebat, who has written a book called “Why We Want to Kill You,” promises in his lectures to explain the numerous similarities between radical Muslims and the Nazis, how “Muslim terrorists” invaded America 30 years ago and how “perseverance, recruitment and hate” have fueled attacks by Muslims.

These men are frauds, but this is not the point. They are part of a dark and frightening war by the Christian right against tolerance that, in the moment of another catastrophic terrorist attack on American soil, would make it acceptable to target and persecute all Muslims, including the some 6 million Muslims who live in the United States. These men stoke these irrational fears. They defend the perpetual war unleashed by the Bush administration and championed by Sen. John McCain. McCain frequently reminds listeners that “the greatest danger facing the world is Islamic terrorism,” as does Mike Huckabee, who says that “Islamofascism” is “the greatest threat this country [has] ever faced.” George W. Bush has, in the same vein, assured Americans that terrorists hate us for our freedoms, not, of course, for anything we have done. Bush described the “war on terror” as a war against totalitarian Islamofascism while the Israeli air force was dropping tens of thousands of pounds of iron fragmentation bombs up and down Lebanon, an air campaign that killed 1,300 Lebanese civilians.

The three men tell lurid tales of being recruited as children into Palestinian terrorist organizations, murdering hundreds of civilians and blowing up a bank in Israel. Saleem says that as a child he infiltrated Israel to plant bombs via a network of tunnels underneath the Golan Heights, although no incident of this type was ever reported in Israel. He claims he is descended from the “grand wazir” of Islam, a title and a position that do not exist in the Arab world. They assure audiences that the Palestinians are interested not in a peaceful two-state solution but rather the destruction of Israel, the murder of all Jews and the death of America. Shoebat claims he first came to the United States as part of an extremist “sleeper cell.”

“These three jokers are as much former Islamic terrorists as ‘Star Trek’s’ Capt. James T. Kirk was a real Starship captain,” said Mikey Weinstein, the head of the watchdog group The Military Religious Freedom Foundation. The group has challenged Christian proselytizing in the military and denounced the visit by the men to the Air Force Academy.

The speakers include in their talks the superior virtues of Christianity. Saleem, for example, says his world “turned upside down when he was seriously injured in an automobile accident.”

“A Christian man tended to Kamal at the accident scene, making sure he got the medical treatment he needed,” his Web site says. “Kamal’s orthopedic surgeon and physical therapist were also Christian men whom over a period of several months ministered the unconditional love of Jesus Christ to him as he recovered. The love and sacrificial giving of these men caused Kamal to cry out to the God of Abraham, Isaac and Jacob acknowledging his need for the Savior. Kamal has since become a man on a new mission, as an ambassador for the one true and living God, the great I Am, Jehovah God of the Bible.”

This creeping Christian chauvinism has infected our political and social discourse. It was behind the rumor that Barack Obama was a Muslim. Obama reassured followers that he was a Christian. It apparently did not occur to him, or his questioners, that the proper answer is that there is nothing wrong with being a Muslim, that persons of great moral probity and courage arise in all cultures and all religions, including Islam. Christians have no exclusive lock on virtue. But this kind of understanding often provokes indignant rage.

The public denigration of Islam, and by implication all religious belief systems outside Christianity, is part of the triumphalism that has distorted the country since the 9/11 attacks. It makes dialogue with those outside our “Christian” culture impossible. It implicitly condemns all who do not think as we think and believe as we believe as, at best, inferior and usually morally depraved. It blinds us to our own failings. It makes self-reflection and self-criticism a form of treason. It reduces the world to a cartoonish vision of us and them, good and evil. It turns us into children with bombs.

These three con artists are not the problem. There is enough scum out there to take their place. Rather, they offer a window into a worldview that is destroying the United States. It has corrupted the Republican Party. It has colored the news media. It has entered into the everyday clichés we use to explain ourselves to ourselves. It is ignorant and racist, but it is also deadly. It grossly perverts the Christian religion. It asks us to kill to purify the Earth. It leaves us threatened not only by the terrorists who may come from abroad but the ones who are rising from within our midst.

Chris Hedges, who graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times, is the author of “American Fascists: The Christian Right and the War on America.“

Israeli Lobby Declares War On Gandhi

Israeli Lobby Declares War On Gandhi

By Punyapriya Dasgupta

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The problem the Israelis and their supporters have with Gandhi refuses to go away.. In what they call their pre-State era, they tried to get Mahatma Gandhi to endorse their campaign to dispossess the Arabs and transform Palestine into a Jewish homeland. He not only branded their enterprise unjust but even made comments which lend support to the Palestinian resistance that has been calumniated more recently by Israel and its American backers as terrorism. Today, the Israel lobby in America is baying for the blood of Arun Gandhi for his temerity in advising the Jews in Israel that it is time they got over their holocaust fixation and for their own secure future moved on to build peace and friendship with their neighbours.

Arun Gandhi, a grandson of the Mahatma, together with his wife Sunanda, founded the M.K.Gandhi Institute of Non-Violence in Memphis to spread the Gandhian philosophy in AmericaUniversity of Rochester. Early last month Arun Gandhi wrote in a Washington Post blog: "The Jewish identity in the past has been locked into the holocaust experience – a German burden that the Jews have not been able to shed. It is a very good example of a community that can overplay a historic experience to the point that it begins to repulse friends. The holocaust was the result of the warped mind of an individual who was able to influence his followers into something dreadful. But it seems to me that the Jews today not only want the Germans to feel guilty but the whole world must regret what happened to the Jews. The world did feel sorry for the episode but when an individual or a nation refuses to forgive and move on, the regret turns into anger. The Jewish identity in the future appears bleak. Any nation that remains anchored to the past is unable to move ahead and especially a nation that believes its survival can only be ensured by weapons and bombs. In Tel Aviv in 2004, I had the opportunity to speak to some MPs and peace activists all of whom argued that the wall and the military build up was necessary to protect the nation and the people. In other words, I asked, you believe that you can create a snake pit with many deadly snakes in it – and expect to live in the pit secure and alive? What do you mean? they countered. Well, with your superior weapons and your attitude towards your neighbours would it not be right to say you are creating a snake pit? Would it not be better to befriend those who hate you? Can you not reach out to share your technical advantage with your neighbours and build a relationship?" and later made it a part of the

This is vintage Gandhian logic about the means to an end. Arun Gandhi is a true inheritor of Gandhism except in such obsolete externals as the asceticism the Mahatma espoused in dress to identify himself with the poorest Indian nearly a century ago. When the Israel lobbyists turned on him for what they regard as sacrilege of the holocaust, Arun responded with more of Gandhism. He resigned from the presidentship of the institution of non-violence he had himself founded and issued an apology:

"My statement on the recent Washington Post blog was couched in language that was hurtful and contrary to the principle of non-violence.

My intention was to generate a healthy discussion on the proliferation of violence. Clearly I did not achieve my goal. Instead, unintentionally, my words have resulted in pain, anger, confusion and embarrassment. I deeply regret these consequences.

I would like to be a part of as healing process. The principles of non-violence are founded on love, respect, understanding and compassion. It is my sincere hope that this situation will give me and others the opportunity to work together and transform anger and negative emotions, create deeper mutual respect and understanding and build more harmonious communities."

The Zionist response was typical too. Not only was Arun Gandhi abused as soon as the blog appeared, even his apology was rejected as not enough or inconsequential. The Anti-Defamation League adjudged him guilty of a classic attempt at blaming the victim. Arun Gandhi was branded anti-semite by the Israel lobbyists The director of the Simon Wiesenthal Institute seized it as a not-to-be lost opportunity to extend his sneer retrospectively to the Mahatma, a revered figure in world history. Efraim Zuroff was quoted by the Jerusalem Post as saying: "Even the great Mohandas Gandhi did not have a monopoly on wisdom, evidence his suggested passive resistance against the Nazis." Someone may take this cue and say that Arun Gandhi betrayed poor wisdom for he advised the Palestinians to defeat the Israelis with a massive non-violent march. John Mearsheimer who along with Stephen Walt wrote about the Israel lobby and faced its full fury, offered a consolation to Arun Gandhi with a comment that he would have gotten into serious trouble with the lobby even if he had chosen his words carefully "simply because he had criticized Israel and its American supporters, which one does at his or her own peril."

Sixty years after his death Mahatma Gandhi still remains a thorn on Zionism's side. His view, written in 1938, remains in indelible print and sharply relevant even now. "Palestine belongs to the Arabs in the same sense that England belongs to the English or France to the French. It is wrong and inhuman to impose the Jews on the Arabs. What is going on in Palestine today cannot be justified by any code of conduct. The Mandates have no sanction but that of the last War. Surely it would be a crime against humanity to reduce the proud Arabs so that Palestine can be restored to the Jews partly or wholly as their national home. I am not defending the Arab excesses. I wish they had chosen the way of non-violence in resisting what they rightly regarded as an unwarranted encroachment upon their country. But according to the accepted canons of right and wrong, nothing can be said against the Arab resistance in the face of overwhelming odds."

Punyapriya Dasgupta, journalist, can be reached at siliserh@yahoo.co.in

UN Seeks $265 Million For Iraq Aid In 2008

UN Seeks $265 Million For Iraq Aid In 2008

By Agence France Presse

The United Nations on Tuesday issued an appeal for 265 million dollars (182 million euros) in aid to Iraq for 2008, warning the country is still suffering from a humanitarian crisis.

"We have to respond rapidly to those people who need support," said David Shearer, the UN's humanitarian coordinator for Iraq.

"We aim to meet vulnerable people's most urgent needs wherever we have access," he said in a statement.

Four million Iraqis need food assistance while only 40 percent of the population has reliable access to safe drinking water, the UN said.

The bloody conflict that has gripped the country since the US-led invasion in March 2003 has only exacerbated chronic problems from the past two decades, it added.

The UN's emergency appeal hopes among other things to deliver food assistance to newly displaced people who cannot access their food rations.

It also targets aid for health and nutrition, education, water and sanitation, housing and shelter, and protection.

According to the UN refugee agency, 4.2 million Iraqis have been displaced since 2003, including 750,000 who found refuge in Jordan and 1.4 million in Syria.

Another two million or so are displaced within the country.

4 Million Iraqis Struggling For Food - UN

4 Million Iraqis Struggling For Food - UN

By Reuters

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Four million Iraqis are struggling to feed themselves, and 40 per cent of the country's 27 million people have no safe water, the UN said today.

Iraq has annual economic growth of around 7 per cent, according to UN estimates, and a national budget of €33 billion, buoyed by oil exports of 1.6 million barrels per day.

But insurgency and sectarian attacks have displaced more than two million people and left nearly twice as many hungry.

"Four million Iraqis cannot guarantee they're going to have food on their table tomorrow," the United Nations humanitarian co-ordinator for Iraq, David Shearer, said as he unveiled a €182 million appeal to donor governments for 2008.

The United Nations says the number of displaced people has roughly doubled since 2006 to nearly 2.5 million. High unemployment has left many others unable to feed themselves.

The Iraqi government said it would for the first time give €27.5 million from its own coffers to the aid appeal.

The Real Reason for Vast US Defence Bill

The Real Reason for Vast US Defence Bill

By Gwynne Dyer

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ast week the Pentagon asked Congress for the biggest defence budget since World War II. It asked for US$515 billion, plus an extra US$70 billion to cover the costs of the wars in Afghanistan and Iraq for part of the coming year.

The United States proposes to spend more on the armed forces, quite apart from the running costs of Iraq and Afghanistan, than it did at the height of the Cold War against the Soviet Union. And yet almost all the commentary and analysis in the US media has focused on the spending on the two wars.

Even that is a lot of money. The US Congress has already approved US$691 billion in spending on Iraq and Afghanistan since 2001, and the total estimate for this year alone is US$190 billion. Not only that, but some of the money in the regular defence budget can also be indirectly attributed to America's wars in the Muslim world, like the expenditure on new equipment to replace the weapons that have been destroyed or worn out in the wars.

But there is a great deal more money in the present US defence budget - probably three times as much - that has nothing to do with the "war on terror".

Even if you accept the deeply suspect proposition that invading foreign countries is a useful way to fight terrorism, invading the target countries (which generally do not inhabit the higher reaches of the technological pecking order) does not require eleven aircraft carriers and fleets of stealth bombers.

So what is all the rest of the money for? According to Michael Klare, defence correspondent for The Nation, the answer is obvious. "The US military posits its future on the China threat. That is the ultimate justification for a defence budget of US$500 billion a year. There is no other plausible threat.

"If you look at the new budget which came out just this week, it calls for vast spending on new weapons systems that can only reasonably be justified by what they call a 'peer competitor', a future superpower that could threaten the United States. Only China conceivably can fill that bill. Not Iran, not Iraq, or some [other] rogue state. Only China fits that bill."

It is obvious, when you think about it. If the United States had no present or prospective "peer competitor", how could the Pentagon justify spending huge amounts of money on next-generation weapons?

For beating up on "rogue states", last-generation-but-one weapons are more than adequate. So there has to be a peer competitor, whether it understands its role in the scheme of things or not. And only China can fill that role.

So what is the alleged competition about? Energy, of course, and mostly oil. Michael Klare again: "The Pentagon and US strategists talk openly about US-China competition for energy in Africa, in the Caspian Sea basin, and in the Persian Gulf, and they talk about the danger of a China-Russia strategic alliance that the US has to be able to counter.

"This is very much part of US concerns. They talk about the Shanghai Co-operation Organisation as a proto-military alliance that threatens America's vital interests.

"Terrorist assaults and skirmishes with Iran or some other rogue state are more likely on the curve of probability, and the military is geared to fight these kind of regional skirmishes ... But when they talk about the greatest threats that they might have to face, for which they have to allocate their largest sums and acquire their most potent weapons, it's the China-Russia alliance that they're preparing for and asking Congress to allocate the largest sums of money for."

What the US military are not doing, for the moment, is telling the American public that China is why they want all that money.

The amorphous, infinitely expandable "war on terror" can be used to cover all sorts of other expenditures as well. Nobody is required to prove that China really does pose a strategic threat to America's oil supplies, or to demonstrate that a Chinese-Russian alliance is a serious political possibility.

But that happy time is probably coming to an end. As the "terrorist threat" gradually shrinks down towards its true, rather modest dimensions in the minds of American voters and even American politicians, the wisdom of spending so much money on a strategic confrontation with China that does not yet exist - and may never actually come to pass - is bound to come under question.

As for an enduring Chinese-Russian alliance, the notion is about as credible this time round as it was back in the early days of the Cold War. Since China is the country that poses the greatest potential threat to Russia, it can be a good short-term strategy for Moscow to hug China close.

But the alliance lasted only 13 years last time and would probably not survive even that long on a second occasion.

This year's US defence budget will probably go through more or less uncut, because few members of Congress who face re-election in November will want to leave themselves open to accusations of being "soft on terror". But next year will be a different story. For the Pentagon, the good old days are coming to an end.

Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.

Bush Calls on France for Help

Bush Calls on France for Help

War without end

By Paul Craig Roberts

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"We support the troops!" That's the excuse the Democrats have given for continuing to fund Bush's aggression against Iraq and Afghanistan. But, of course, war funding doesn't support the troops. War funding supports an evil machine that chews up and spits out the lives and well being of the troops, along with that of hundreds of thousands of Iraqi and Afghan, men, women, and children. War funding supports Bush's aggression in Iraq and Afghanistan and his continuing efforts to occupy both countries in order to turn them into puppet states.

Polls show that a majority of the troops and their families do not support Bush's aggression. The fact that Ron Paul's campaign for the Republican presidential nomination received the lion's share of contributions from military families also underlines the great divide between the troops and those who would "support" them by keeping them in Iraq and Afghanistan. What all those ribbon decals on the back of SUVs, which proclaim "support the troops," really mean is support Bush's wars of aggression against Muslims.

According to the Washington Post (Feb. 9, 2008), Bush's $3.1 trillion federal budget provides no funding for his proposal in his State of the Union address to permit military members to transfer their unused education benefits to family members. Bush got applause for his nationally televised words, but the troops and their families got no money in his budget.

Government analysts calculate the education benefits would cost in the range of $1-2 billion annually--the cost of funding the war for two days.

The only money that Bush and Congress want to give the troops is what is required to keep them at war. Everyone has read the horror stories of the lack of care for the physically and emotionally wounded troops who have made it back from Iraq.

In contrast, to fund Bush's war, Bush and Congress have already spent in out-of-pocket and future costs at least $1,000 billion. Every American can draw up lists of better uses of this immense fortune than blowing up a country's infrastructure and killing hundreds of thousands of its citizens.

Nothing good whatsoever has been accomplished by Bush's invasions of Iraq and Afghanistan. It was obvious to anyone with a lick of sense in 2002, six months prior to Bush's invasion of Iraq on March 18, 2003, that an invasion would be a strategic blunder. William S. Lind, myself and others made that prediction in October, 2002. Three years later, Lt. Gen. William Odom, former director of the National Security Agency, vindicated us by declaring Bush's invasion of Iraq to be "the greatest strategic disaster in U.S. history." If the head of the NSA doesn't know a "strategic disaster" when he sees one, who does?

Gen. Odom's assessment is certainly correct. Bush, Cheney, the neocons, and the sycophant media were completely wrong. Look at the situation today. Unable to defeat the Sunni insurgency, the US "superpower" has had to resort to paying tens of millions of dollars to insurgency leaders to bribe them not to attack US troops. In addition, Bush is supplying the insurgents with weapons "to fight al Qaeda." The Sunni leaders gladly accept the money and weapons, but how long can they survive being collaborators with the American enemy that has destroyed their country and the Sunni place in the sun?

It was obvious to everyone but Bush and the neocons that overthrowing Saddam Hussein in the name of democracy would put the majority Shi'ites, who are allied with Iran, in place as the new rulers of Iraq. So far the Iraqi Shi'ites have bided their time and have not joined in earnest the insurgency against the US occupation. Instead, they, like the Sunnis, have directed most of their attention to cleansing neighborhoods of one another. The reasons that violence--although still higher than Americans could live with--is down are that most of the neighborhoods are now segregated, al Sadr has ordered his militia to stand down, and the Sunni insurgents are being paid not to attack US troops.

Bush started a war, and now to avoid losing it Bush pays Iraqis not to attack US troops!

The Sunnis and Shi'ites are stronger than ever, while the US troops are worn down and demoralized from multiple lengthy combat tours that violate traditional US military policy.

It was also obvious that Bush's invasions would destabilize nuclear-armed Pakistan. On February 8, seasoned foreign correspondent Warren Strobel reported for the McClatchy newspapers that "Pakistan is now the central front in America's war on terror." On February 9, the Washington Post reported: "Pakistan faces a growing threat from a new generation of radicalized, battle-hardened militants who embrace jihad and have become allied with local and international terrorists intent on toppling the pro-Western government [shorthand for paid US puppet], a senior U.S. intelligence official told reporters yesterday."

US officials have been pressing Pakistan, to no effect, to allow US troops to join the Pakistani army's fight against Pakistani tribes allied with the Taliban. US officials, "speaking on condition of anonymity," are trying to muster support for an expanded US military role in Pakistan by alleging that Osama bin Laden and Taliban leader Mullah Mohammad Omar are in Pakistan with their top commanders. Bush wants to bomb Pakistan in order to win the war in Afghanistan.

With all available US troops tied down in Iraq, the US is using NATO soldiers as mercenaries to try to counter a resurgent Taliban. Europeans are tiring of their role as an European proxy for America's legions, and the NATO commander speaks of a NATO defeat in Afghanistan.

NATO was an alliance created to resist a Soviet invasion of Europe. The US has kept an unnecessary NATO alive for 18 years as a source of troops for its foreign adventures. Europeans dislike being mercenaries for American Empire, especially one that slaughters civilians.

Desperate for troops, US Defense Secretary Robert Gates is trying to scare Europeans with the threat of "international terrorism," but Europeans know that the best way to bring terrorism to Europe is to send troops to fight Muslims for the Americans. Whether Gates will get the German and French soldiers that he so desperately needs depends on whether the US can give the German and French leaders, Angela Merkel and Nicolas Sarkozy, enough billions of dollars to divide among their parties to embolden them to override public opinion and send their soldiers to die for US and Israeli hegemony in the Middle East.

Gates told Europe that NATO's survival is at stake: "We must not--we cannot--become a two-tiered alliance of those willing to fight and those who are not." In a rare bit of honesty for an American government official, Gates admitted at the NATO conference in Munich last week that Europeans' anger at the US over Iraq is the reason Europe won't send enough troops to fight the Taliban in Afghanistan, thus putting what Gates disingenuously called "the international mission in Afghanistan" at risk of failure.

The Afghanistan "mission," like the Iraq "mission," was a mission for US and Israel hegemony. The official reason for invading Afghanistan was 9/11 and the alleged refusal of the Taliban to hand over Osama bin Laden. It had nothing whatsoever to do with Europe, NATO, or any "international mission." The official reason for invading Iraq was alleged, but nonexistent, weapons of mass destruction that allegedly threatened America--another, but more deadly, 9/11 in the making according to the Bush regime.

If the US now needs foreign troops to save its bacon in these two lost wars, it should demand them from Israel. Israel is why the US is at war in the Middle East. Let Israel supply the troops. The neocons who dominated the Bush regime and took America to illegal wars are allied with the extreme right-wing government of Israel. The goal of neoconservatism is to remove all obstacles to Israeli territorial expansion. The Zionist aim is to grab the entirely of the West Bank and southern Lebanon, with more to follow later.

Remember "mission accomplished"? Remember all the strutting neocons with their promises of a "cakewalk war"? Remember all the ignorant bragging about having "defeated the Taliban"? All of these lies were designed to tie American down in interminable wars in the Middle East for Israel's benefit. There is no other reason for Bush's invasions. We know for certain that Bush and his entire administration lied through their teeth about the Taliban and about weapons of mass destruction in Iraq.

What a total crock of ignorance and deception the Bush regime represents. Bush, defeated in Iraq, defeated in Afghanistan, with Pakistan crumbling in front of his eyes, is now reduced to begging the French, whom it was such grand sport for his neocon officials to denigrate, to send soldiers to save his ass in Afghanistan.

What a laughing stock Bush has made of America. What ruination this utter idiot and his supporters have brought to America. What total traitors the neoconservatives are. Every last one of them should be immediately arrested for high treason. Neonconservatives are America's greatest enemies, and they control our government! All Americans have to show for six years of Bush's "war on terror" is an incipient police state.

Now standing in the wings is mad John "hundred year war" McCain. Will the American electorate wipe out the Republican Party before this insane party wipes out America?

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan's first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand.

Court Declares Corporations Are People, Some Human Beings Are Not

Court Declares Corporations Are People, Some Human Beings Are Not

By Jeffrey Kaplan

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In evaluating allegations that U.S. military forces deprived four British men of human rights during two years they were held captive in Guantanamo Bay prison, a U.S. appeals court found an innovative way to let the Bush administration off the hook. Two of three judges ruled the men -- because they are not U.S. citizens and, technically, were not imprisoned in the U.S. -- were not legally "persons" and, therefore, had no rights to violate.

While those judges were defying common sense and decency by denying legal personhood to living human beings, an appeals court in Boston has been reviewing an April 2007 decision by Federal Judge Paul Barbadoro that engaged in a different form of judicial activism -- granting human rights to corporations.

Barbadoro struck down a New Hampshire law that prevented pharmaceutical corporations from learning exactly what drugs doctors prescribe and how much they prescribe. The law aims to protect doctors and, indirectly, their patients, from drug companies pressuring doctors to choose their products.

The judge's grounds? He claims corporations, as legal persons, have "free speech rights" that would be infringed by such a measure.

The real issue in these cases (Maine recently passed a similar law) isn't free speech at all; it's manipulation and control. The drug salespeople only will decide what to say after poking into the doctors' prescription records. Under the guise of protecting speech, Judge Barbadoro denied both legitimate privacy rights of doctors and key protections to ensure patients are prescribed drugs based on their medical situation, not pressure applied to their physician.

Taken together, these two rulings are a perplexing and dangerous development. The founding principle of our country is right in the Declaration of Independence: all people are "endowed by their Creator with certain unalienable Rights." It is not for judges to decide who is and who is not a human being.

Nor should the courts play Creator by endowing legal constructs like corporations with human rights. Our constitutional rights exist to prevent large, powerful institutions -- whether governments, corporations, or other entities -- from oppressing us humans.

For too long a strange dichotomy has persisted between principled people on the political left and right wings. The left wing often warns against the growing power of business corporations. The right wing complains the left ignores the overweening power of the government and is "anti-business."

But many people on both sides have been seeing only part of the same elephant. What's happening is a merger of corporations and state.

Already there are corporate "black holes" for human rights that rival government affronts like Guantanamo. Under the Bush administration's legal framework for Iraq during its occupation, the Iraqi government wields no authority over Blackwater corporation's security guards.

And it's not clear the U.S. government does either. As a result, we may never see anyone punished for Blackwater's wanton killing of Iraqi civilians in Baghdad last September.

Then there's the case of Jamie Leigh Jones, an American employee of Halliburton/KBR in Iraq who claimed she was gang raped by co-workers in 2005. U.S. officials reportedly handed the evidence to KBR, whereupon the evidence apparently disappeared. Nobody in Congress, Democrat or Republican, has been able to persuade the Bush administration to reveal what it has done about the case since then.

Halliburton/KBR, like Blackwater, apparently enjoys the rights of a person, but not the responsibilities.

Editor's note: shortly after completing this article, we learned of this shocking story: Judge Denies Allows Halliburton to Force Sexual Assault Case Out of Court

The danger of "corporate personhood" is a bit like global warming; people have warned us of the threat for decades only to go unheeded because the dire consequences seemed far-fetched.

But look at what's happened to the First Amendment. Corporations use it to strike down laws clearly designed to protect citizens, even while courts deny prisoners the right to know what evidence the government is using against them. It's time for alarm.

We should take offense whenever we hear the dangerous notion of "corporate citizenship" promoted. Soon, the only citizens with real power in the United States may be the corporate kind.

Jeffrey Kaplan is a researcher with ReclaimDemocracy.org, a non-profit organization working to restore citizen authority over corporations.

Following Orders

Following Orders

By Mark A. Goldman

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If I have my facts straight, Hitler killed only one person in his lifetime: himself. All the other atrocities that are attributed to him were carried out by people who were only following orders.

If it is true that the war in Iraq is illegal, as I and others believe it is—including the Secretary General of the United Nations—then all the deaths and atrocities that have occurred to date, inflicted by our coalition forces, are the acts of individuals who, knowingly or unknowingly, with good intentions or not, have been willing to break the law in order to follow the orders of superiors.

Each member of the US military took an oath to preserve, protect and defend the Constitution of the United States. Each also took a pledge to follow the legal orders of the Commander in Chief. Under the Constitution, no soldier is required to follow an illegal order. But that's what many Americans have been doing now for quite some time. And this is not confined to our military personnel, but also to members of the FBI, the CIA, the NSA (the folks who have been carrying out those illegal wire taps), outsourced contractors, the media, and perhaps most egregious of all— elected members of Congress, who for all intents and purposes, put their conscience and oversight responsibilities on hold as they get their marching orders from the Oval Office or from party leaders.

I believe the reason that many of those who do follow illegal orders, or otherwise fall into line under pressure, is that if they refused, they would be subject to severe ridicule and/or punishment. They know that if they subjected themselves to this ridicule or punishment, that we would not do anything to protect them from that injustice.

And so, in pursuit of this war, we have suspended the Constitution. Many members of Congress have supported the administration in carrying out illegal acts, rationalizing that such behavior is in the name of national security. That was Hitler's rationale too. Innocent people have been killed, wounded, tortured, rendered, humiliated, had their privacy invaded, and their lives dismantled all in the name of national security. Anyone who objects can now be put under suspicion and may be targeted for future intimidation or worse. According to members of Congress, nothing this administration does is egregious enough to qualify them for impeachment.

The stories of individuals who have been damaged by the illegal acts of our government and their agents are beginning to filter through. But the damage that's been done is far greater than the stories yet told. Damage done to our Constitution and to our self respect will likely take a heavy toll for generations to come.

And yet for most Americans their sensibilities are not disturbed by what's been happening… many do not want to hear about it. Those who do hear about it, make up their own rationalization of why it's ok. Many simply don't know what to think or do.

This all leads me to believe that with every victory this administration experiences, the light of liberty and freedom will dim a little more. If we were to achieve the victory that Bush talks about in Iraq, it would not help the cause of freedom, it would help to kill it. It would only encourage his hubris, his arrogance. He doesn't want democracy, he only wants stability. He wants the oil. He doesn't believe in the Constitution or the rule of law. He has the sensibilities of a despot.

Since the atrocities and illegalities for which his administration is responsible have not been repudiated by Congress or the American people, he and his conspirators will continue to conclude that there is no limit to their power… all they have to do is take however much they want... but do it just a little bit at a time. And there is no reason to suspect that they will not do just that and use that power for their own purposes, whatever that might be.

I say to you: the ends do not justify the means. If we do not identify, explore, and repudiate the illegal acts of this government, soon the fist of injustice will come knocking at every door… if history teaches us anything at all, it surely teaches us that.

There is good reason for secrecy in the Bush administration. The reason they don't want to conduct or discuss their activities in the light of day is because eventually the American people would figure it out: they would come to the conclusion that the reason the so called terrorists are out to kill Americans is because secretly the American government has been responsible for murder and the disenfranchisement of decent people all over the world. The United States has been active in destroying democratic institutions for a long time. We have done this to satisfy American greed for resources that don't belong to us, oil being supreme among them. We have caused people in middle eastern countries to suffer tyrants like Saddam Hussein and the Saudi family.

American leaders favor tyrants. We help install them. We work very hard to keep them in place. We like tyrants because we can buy them off in a protection racket. We use our money and our military power to support their illegitimate regimes in exchange for cheap oil, or whatever the resource happens to be. In all countries it works pretty much the same. And in these countries it is ordinary people who suffer because of our policies.

When some of these people finally decide to strike out, fight back, to get us to stop, our leaders call it terrorism and then they ask us to send our children to die in battle fighting these 'bad' guys. They tell us that we are being attacked for no other reason than that they hate our freedom and our democracy. And we believe them; and we send our children to die and to kill because we don't have the knowledge or courage not to believe them. We are so afraid, we are even willing to send our beautiful children to die and to kill. What a price to pay for ignorance and blind faith.

No one in Congress has been willing to stand up and say what I just said. It is only the truth that will save us. Nothing less will do. The truth, the whole truth, and nothing but the truth.

Stand up. Speak out. Remove the traitors from their perches or they will take our children and turn them into criminals like themselves.

Guantanamo Comes to Main Street U.S.A.

Guantanamo Comes to Main Street U.S.A.

By Mark A. Goldman

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They say that the difference between how democracy in Europe has evolved compared to that of the United States is that in Europe the government is afraid of the People whereas in the United States the People are afraid of the government. That's a dangerous state of affairs and it looks like it's going to get worse.

It's not only a matter of who you vote for... it's a matter of how well informed you are when you do vote... and Americans now are notorious for not being nearly as well informed as the citizens of many other countries are. So in America, we don't really think that deeply about the range of choices that are or are not available to us. Fatal mistake.

The video below is indicative of the evolving consciousness of law enforcement in our nation... and it's our 'Shock and Awe' government, with its penchant for gratuitous and unconscionable violence, and the People's refusal to hold them accountable, that is setting the stage for our future in this 'land of the free and home of the brave.'

When we allow fear and force to dominate the way in which our government deals with people we don't know... we open the door to despotism, for surely when we fail to protect the legitimate rights of any group or person, we sow the seeds of our own destruction. Take a look at this video if you want to know what is happening to civil liberties in our own country. I guess for some members of our community, this is not news at all.

Apparently local law enforcement officers are now being trained to treat citizens the way military personnel were trained to treat Guantanamo prisoners. Your government doesn't seem to care anymore what you think... except maybe during an election year and even then, not so much. And like the military, many police officers who have been trained to just follow orders, are doing just that...just following orders. Watch this video.

Everything by the book

Woman is stripped naked and abused by Start County Sheriff Dept. http://www.sheriff.co.stark.oh.us/ email them at strkshrf@raex.com to let them know how you feel

Our silence and indifference to the plight of others is what allows this kind of thing to happen. You probably won't get a better wake up call than this. No doubt bad public relations will force this kind of evidence into dark corners. The question is, will we wake up, or will we remain silent until something like this happens to someone we know and care about... or maybe to a lot of people we know and care about?

Bush's Controversial Decisions to Be Back in Spotlight in 9/11 Case

Bush's Controversial Decisions to Be Back in Spotlight in 9/11 Case

By Steven Lee Myers

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Washington - Harsh interrogations and Guantánamo Bay, secret prisons and warrantless eavesdropping, the war against Al Qaeda and the one in Iraq. On issue after issue, President George W. Bush has shown little indication that he will shrink from the most controversial decisions of his tenure.

With the decision to charge six Guantánamo detainees with the attacks of Sept. 11, 2001, and to seek the death penalty for the crimes, many of those issues will now be back in the spotlight. In an election year, that appears to be exactly where Bush wants the focus to be.

The White House said Monday that Bush had no role in the decision to file charges now against the six detainees, leaving the strategy for prosecuting them to the military.

Still, the cases soon to be put before military tribunals - including that against Khalid Sheikh Mohammed, who has described himself as the mastermind of the attacks - represent a major part of "the unfinished business" that Bush and his aides talk about when they vow "to sprint to the finish," as one aide did again on Monday.

Bush never sounds surer of himself than when the subject is the terrorist attacks of Sept. 11, even when his critics argue that he has squandered the country's moral authority, violated American and international law and led the United States into the foolhardy distraction of Iraq.

"Six-and-a-half years ago, our country faced the worst attack in our history," Bush said late last week, speaking to the Conservative Political Action Conference. "I understood immediately that we would have to act boldly to protect the American people. So we've gone on the offense against these extremists. We're staying on the offense, and we will not relent until we bring them to justice."

The 9/11 candidate, Rudolph Giuliani of New York, may have dropped his bid for the White House. But the 9/11 presidency is far from over.

On the question of warrantless wiretapping, widely expanded after the Sept. 11 attacks, Bush is pushing to make permanent legislation that last year made a once-secret program legal, despite a storm of protest that has reverberated since 2005, when the program was disclosed.

Only a year ago, Iraq appeared to have deflated the president's popularity and eroded his standing even among Republicans and the Pentagon's generals. But Bush now appears to have laid a foundation to keep more than 130,000 American troops on the ground in a mission he has justified as part of a broader fight against terrorism, despite an overwhelming groundswell against an unpopular conflict. Robert Gates, the defense secretary, on Monday essentially endorsed a "pause" in further troop withdrawals once those troops sent in last year as part of a temporary buildup go home.

In each of these cases - the military tribunals, the wiretapping legislation, Iraq - the White House seems eager to lock in as many of the president's policies as possible before he leaves office in 11 months. And as it looks ahead to the November elections, the White House seems to have concluded that each is politically sustainable and even favorable for a Republican candidate and Bush's own legacy.

Whether the White House will succeed, and November will certainly be the measure, remains to be seen.

Democrats have battled before, with mixed success, against Republican efforts to portray them as weak on defense. This time, the Democrats sound determined to fight back more forcefully.

"I wish they had as coherent a strategy for fighting the war on terror as they do for politicizing the war on terror," Representative Rahm Emanuel of Illinois, chairman of the House Democratic Caucus, said Monday.

The legality of military tribunals has been in dispute since the days immediately after the Sept. 11 attacks. It is possible that the trials could backfire by underscoring the administration's failures as well as any successes in bringing some of America's most-wanted to justice.

"The American public doesn't need to put them on trial at this point to prove we got the bad guys," said Jennifer Daskal, a lawyer at Human Rights Watch in Washington. "I think the focus is going to be on the unfairness of the trials and the use of highly abusive interrogations."

Just last week, General Michael Hayden, the director of the Central Intelligence Agency, became the first government official to acknowledge publicly that those interrogations, in three cases, included the technique known as waterboarding, which simulates drowning and is regarded by many as torture.

Bush's administration, however, appears to have calculated that many Americans, if not most, do not necessarily object to harsh interrogations or eavesdropping if they were used to prevent further attacks.

At a fund-raiser on Friday in Pennsylvania, hardly the most conservative state, Vice President Dick Cheney vigorously defended the use of waterboarding and other harsh interrogation techniques, referring to them as "a tougher program for a very few tougher customers."

"He and others were questioned at a time when another attack on this country was believed to be imminent," Cheney said of Mohammed and other Qaeda members. "It's a good thing we had them in custody, and it is a good thing that we found out what they knew."

Of the six men charged on Monday, Mohammed and four others were held for as long as three years in the secret CIA prisons that were part of what the agency calls its "high-value terrorist interrogation program." The prisons were established in 2002, but the administration did not publicly reveal their existence until 2006, when Mohammed and other detainees were moved from the CIA facilities to the military prison in Guantánamo Bay, Cuba.

In a statement to CIA employees on Monday, Hayden called the filing of charges "a crucial milestone on the road to justice for the victims of 9/11."

East Timor Declares State of Emergency

East Timor Declares State of Emergency

By Guido Goulart

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Dili, East Timor - East Timor declared a state of emergency Tuesday after rebel attacks on the country's top leaders left the president in "extremely serious" condition with gunshot wounds.

The assassination attempts Monday against President Jose Ramos-Horta and Prime Minister Xanana Gusmao — East Timor's independence heroes — thrust the desperately poor country into a fresh crisis amid fears of more unrest and political turmoil.

The first of a planned contingent of 120 Australian troops landed in the capital of Dili to strengthen the nation's foreign military peacekeeping mission, according to an Associated Press reporter at the scene. Earlier, about 30 Australian police officers arrived to boost a U.N. force already in the country.

Surgeons operated on Ramos-Horta for three hours overnight to remove bullet fragments and repair his chest wounds, Dr. Len Notaros, the general manager of the Royal Darwin Hospital, told the Australian Broadcasting Corp. Tuesday.

"His condition remains extremely serious but by the same token, stable," Notaros said. "The next few days will be the telling point. I believe he is extremely lucky to be alive."

East Timor is a nation of 1 million people that won independence from Indonesia in 2002 after a U.N.-sponsored ballot. It has struggled to emerge as a stable nation, especially since an outbreak of violence and political turmoil in 2006.

Ramos-Horta, who won the 1996 Nobel Peace Prize for his nonviolent resistance to the decades-long Indonesian occupation, was shot in the chest and stomach outside his home by gunmen in two cars around dawn Monday, officials said.

Rebel soldiers separately attacked Prime Minister Xanana Gusmao's motorcade an hour later. The former guerrilla fighter escaped unhurt.

The country's top fugitive, Alfredo Reinado, and one of his men were killed in the attack on the president. One of the president's guards also died.

Acting President Vicente Gutterres announced the two-day emergency in an address on national television. The order bans demonstrations, gives police extended powers of search of arrest and calls for a nighttime curfew.

"Our country is right now in an extraordinary situation where a state of emergency will bring us back to normality," Gutterres said. "I ask for your help."

As he spoke, international soldiers and police patrolled the streets of Dili and searched cars at roadblocks. By midday, most shops and businesses were open and traffic was normal. There were no immediate reports of unrest.

East Timor's army chief Taur Matan Ruak questioned how the attack happened given the heavy presence of foreign police and troops in the tiny island since the turmoil in 2006.

"How is it possible that cars transporting armed people have entered the city and executed an approach to the residences of the prime minister and president without having been detected?" he asked journalists.

Ramos-Horta, 58, first underwent surgery at an Australian army hospital in East Timor before being sedated, attached to a ventilator and airlifted to the hospital in the northern Australian city of Darwin.

Notaros said Ramos-Horta's wounds indicated he had been shot two or three times. The most serious wound was to the lower part of his right lung near his liver, and would likely require more surgery. There was also a risk of sepsis infection, Notaros said.

The bullet fragments will be handed to Australia Federal Police for the investigation into the shooting, Notaros said. At least one fragment was being left in his body, and was not thought to be life-threatening.

Reinado was among 600 mutinous soldiers dismissed by the government in 2006 — a move that triggered gunbattles between security forces that later spilled over into gang fighting and ethnic unrest.

At least 37 people were killed and more than 150,000 people forced from their homes in the unrest, which also led to the resignation of the country's first post-independence prime minister.

Reinado was arrested but escaped from prison after several months.

He was charged with murder in connection with the 2006 violence, but remained in hiding and threatened insurrection against the government — a stance that made him popular among some disaffected East Timorese youth.

"What we are going do now is try to get back our confidence after the loss of our commander, our teacher and our guide," said Joao Zito Marques, a 24-year-old student. "He was a good revolutionary struggling to find truth and justice."

Despite the outstanding charges, Ramos-Horta had met with Reinado on several occasions in recent months to try to persuade him to surrender.

Putting The Screws On Workers

Putting The Screws On Workers

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The Family and Medical Leave Act (FMLA) -- a bill authored by Sen. Chris Dodd (D-CT) and signed into law by President Clinton in 1993 -- grants eligible workers up to 12 weeks of unpaid leave per year in case of a serious health condition, or to care for a new child or sick family member. The law protects an employee's job during such an absence and provides various benefit and privacy protections. For nearly fifteen years, the law has made it easier for over 50 million American workers to provide a better balance between work, health, and family life. The FMLA currently allows employees up to two days after the beginning of a shift to notify their employers of their intention to claim time off. But the Labor Department recently proposed changes to the law that would add restrictions to the FLMA -- provisions benefiting employers and making it more difficult for workers to take advantage of the law. Some of the proposed changes include requiring workers to notify their bosses in advance when taking non-emergency leave, allowing employers to require "fitness-for-duty" evaluations for those who took FMLA time off, requiring employees to obtain medical certifications of their illnesses every year, and allowing businesses to exclude workers who took FMLA time from perfect attendance awards.

EMPLOYEES NEED MORE PROTECTIONS: Even if the Labor Department's proposals -- which some businesses regard as welcome news -- are not adopted, the FMLA needs to expand in order to cover more American workers and to provide increased benefits. As it currently stands, the FMLA does not apply to businesses employing fewer than 50 people, a provision that allows the exclusion of nearly 40 million America workers from the law. Millions more are excluded because of rules not covering part-time workers and those who have not worked for their present employer for over one year. Yet "while unpaid leave has helped millions of families, there is little question that many employees have been unable to take time to care for a new child or an ill loved one because they cannot afford the lost pay." Indeed, a study released last year by Harvard University and McGill University found that the United States lags "far behind virtually all wealthy countries with regard to family-oriented workplace policies" such as maternity leave and paid sick days. According to the study, the United States is one of just five countries out of 173 "that does not guarantee some form of paid maternity leave." Expanding the FMLA is necessary because nearly "half of all full-time private sector workers (and three quarters of low-wage workers) in the U.S. get no paid sick days." Businesses also suffer in productivity and other workers face health risks when sick employees are forced to go to work. In fact, expanding employee benefits has overwhelming support: "95 percent of the public thinks it is unacceptable for employers to not provide paid sick leave" while "60 percent think it is illegal."

CONGRESS RESPONDS: House, Education, and Labor Committee Chairman George Miller (D-CA) has said that the Labor Department proposal tightening the FMLA "clearly benefits employers at the expense of workers." Sen. Edward Kennedy (D-MA), Chairman of the Senate Committee on Health, Education, Labor, and Pensions, has also criticized the proposals, saying they "will make it more difficult for workers to use this leave when they need it" and "impose burdensome new paperwork requirements on both workers and heath providers." Hearings on the Labor Department's proposals will be held this week in both the House and Senate. The National Journal notes that, under a new administration, Congress "could do away" with the Labor Department rule change proposals in "early in 2009 under the Congressional Review Act, which allows Congress to withdraw regulations within 60 session days after they are published."

CALIFORNIA LEADS THE WAY: On July 1, 2004, California's Paid Family Leave (PFL) Law went into effect. The law is a 100 percent employee-funded provision that provides workers in that state "with a maximum of six weeks of partial pay [55% of wages up to a maximum of $882 per week] each year while taking time off from work to bond with a newborn baby, newly adopted or foster child, or to care for a seriously ill parent, child, spouse or registered domestic partner." While five other states have proposed similar bills to provide some form of paid leave, California is currently the only state mandating comprehensive paid family leave. Nearly 85% of California adult residents in every segment of the population support paid family leave, and one survey of California businesses found that more workers returned to their jobs where employers offered leave benefits beyond what is required.

Senate Protects Telecom Immunity in Spy Bill

Senate Protects Telecom Immunity in Spy Bill

By William Branigin and Paul Kane

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The Senate voted today to preserve retroactive immunity from lawsuits for telecommunications companies that cooperated with a government eavesdropping program, decisively rejecting an amendment that would have stripped the provision from a bill to modernize an electronic surveillance law.

Senators voted 67 to 31 to shelve the amendment offered by Sens. Christopher J. Dodd (D-Conn.) and Russell Feingold (D-Wis.). A filibuster-proof 60 votes had been needed for the amendment to move forward.

The vote represented a victory for the Bush administration and a number of telecommunications companies -- including AT&T and Sprint Nextel -- that face dozens of lawsuits from customers seeking billions of dollars in damages.

Approval of the amendment would have exposed the companies to privacy lawsuits for helping the administration monitor the calls of suspected terrorists without warrants from a special court following the Sept. 11, 2001, attacks.

The amendment was one of a series the Senate is considering today to modify legislation that would extend the government's authority to carry out electronic surveillance against targets outside the United States.

President Bush has called on Congress to rapidly renew the surveillance authority granted to the federal government in the Protect America Act approved last year. But he has vowed to veto any bill that does not shield the companies that helped the government carry out the warrantless wiretapping program he ordered after the Sept. 11 attacks.

About 40 lawsuits have been filed against U.S. telecommunications companies by plaintiffs who alleged that the firms' actions violated wiretapping and privacy laws.

Immunity from such lawsuits must also be approved by the House, which does not provide such protection in its version of the bill.

The Senate bill is aimed at modernizing the Foreign Intelligence Surveillance Act of 1978. The Protect America Act last year gave the government expanded authority to carry out surveillance, but its provisions expired Feb. 1. Congress and Bush agreed to an extension that runs out Friday.

In debate on the Senate floor before the vote, Dodd said it was a bad precedent to grant retroactive immunity to telecommunications companies, and he urged senators to "allow the courts to do their job."

Arguing against the amendment, Sen. Christopher S. Bond (R-Mo.) said that permitting lawsuits against the companies would lead to public disclosure of vital intelligence-gathering methods and would discourage the private sector from cooperating with the government in the future. He said the companies facing lawsuits had acted "in good faith," and he called the immunity provision "an essential part of this bill."

Seventeen Democrats and one independent joined 49 Republicans in voting against the Dodd-Feingold amendment. Among those voting with the majority was Sen. John McCain (R-Ariz.), the leading candidate for the GOP presidential nomination. Sen. Barack Obama (D-Ill.), who is battling for the Democratic nomination, voted in favor of the amendment. His chief rival, Sen. Hillary Rodham Clinton (D-N.Y.), did not vote.

Civil liberties groups denounced the Senate's action.

"When companies break the law, they should be held accountable by our government -- not given a multimillion-dollar favor," said Caroline Fredrickson, director of the American Civil Liberties Union's Washington Legislative Office. "The millions of Americans who are telecom customers deserve to know that their phone conversations are private."

In a statement, she charged that telecommunications companies "illegally turned over private customer call information to the government." But instead of "having faith in the U.S. court system to fairly handle these cases," she said, the Senate opted to "give the telecom providers a get-out-of-jail-free card."

The Senate today also rejected two other amendments aimed at diluting the immunity provision. One would have allowed the lawsuits to go forward but would have made the federal government--not the telecommunications companies--the defendant in those cases. The measure, co-sponsored by Sens. Arlen Specter (R-Pa.) and Sheldon Whitehouse (D-R.I.), was rejected 68 to 30.

The other rejected amendment, sponsored by Sen. Dianne Feinstein (D-Calif.), would have authorized the secret FISA court, which oversees federal surveillance of foreign intelligence and terrorism suspects inside the United States, to decide whether a company could be sued for providing customers' records to the government. It was defeated by a vote of 57 to 41.