Wednesday, March 12, 2008

Crude rallies to surpass $110 as dollar falls

Crude rallies to surpass $110 as dollar falls

Futures end at $109.92, shrug off surprise increase in U.S. inventories

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Crude-oil futures ended Wednesday's trading at a new closing high of $109.92 a barrel after earlier topping $110 a barrel for the first time, as the dollar fell to a new low against the euro in a lift for dollar-denominated oil prices and as speculation increased in the futures market.

Crude gains came even after government data showed a surprising upturn in U.S. crude inventories in the latest week. Meanwhile, heating oil futures surpassed $3 a gallon for the first time.

Crude oil for April delivery hit a new intraday high of $110.20 a barrel on the New York Mercantile Exchange in late afternoon trading. It closed up $1.17 a barrel, or 1.1%. The benchmark contract was mostly in negative territory during morning trading after the inventories report.

U.S. crude inventories rose 6.2 million barrels to 311.6 million barrels in the week ended March 7, the Energy Information Administration reported. Analysts surveyed by Platts had expected an increase of 1.6 million barrels.

"Today's report is overwhelmingly bearish," said Chris Lafakis, an analyst at Moody's Economy.com. "There isn't a positive element in today's report for the oil bulls."

But some analysts believe the bearish news could instead push oil prices higher as investment funds resort to a buy-the-dip mentality, especially with the dollar under pressure. Crude has been making consecutive new highs and has rallied more than $20 in one month.

Market bears are hoping that in the short term this week's supplies numbers "could dent the recent rally, but we would not hold our breath," said Edward Meir, an analyst at MF Global, in a research note.

The dollar on Wednesday fell to the lowest level against the euro, which hit a new high of $1.5524. See Currencies.

Crude prices, denominated in dollars, tend to rise when the greenback falls, as a weaker U.S. currency makes crude less expensive to buyers holding other currencies. It also eats into oil producers' dollar revenue and forces them to raise prices. See story on dollar and crude.

Also on Nymex, April reformulated gasoline rose slightly to $2.7286 a gallon, and April heating oil surged to close at $3.0244 a gallon, up 2.87 cents.

April natural gas closed at $10.011 per million British thermal units, up 1.1 cent. EIA will report last week's U.S. natural gas inventories Thursday. Analysts at GlobalInsight expected stockpiles have fallen by 87 billion cubic feet.

Increasing speculation

The gap between WTI crude, the underlying product of Nymex crude futures, and Brent oil, a type of crude typically refined in Northwest Europe, widened to more than $4 a barrel on Wednesday, an unusual gap reflecting growing speculative buying of the U.S. contract, an analyst said on Wednesday.

"We believe that this is evidence of increased buying by hedge funds in the U.S.," said Peter Hitchens, analyst at Seymour Pierce.

According to Hitchens, the traditional premium between WTI and Brent is in the range of $1 to $1.50 a barrel, which he said "normally reflects the transportation price of moving a barrel of Brent to the U.S."

Government data showed speculators and managers of large investment funds, those who don't need physical oil, dominated bets on rising oil prices, while refiners and other oil users were betting oil prices would move lower.

The latest data from the Commodity Futures Trading Commission showed long positions from speculators, in which investors expect oil prices to move higher, outnumbered short positions, or bets on lower prices, by nearly 100,000 contracts last week.

Net long positions more than tripled in one month. This was the fourth consecutive week marking an increase in net long positions from financial traders, and some analysts are expecting another build-up in this week's net long positions.

Inventories in detail

Crude inventories at Cushing, Okla., the delivery point for crude traded on the Nymex, rose sharply, increasing by 2.7 million barrels to a total of 18.9 million barrels, EIA said in the report.

EIA also reported U.S. gasoline supplies rose by 1.7 million barrels in the latest week, while distillate stocks fell by 1.2 million barrels. Analysts surveyed by Platts, an energy information provider, had been expecting that gasoline supplies would fall by 900,000 barrels and that distillate stocks would drop by 2 million barrels.

U.S. refineries operated at 85% of their operable capacity last week, down from the previous week's 85.9%. U.S. crude oil imports averaged 10.5 million barrels a day last week, up 1.1 million barrels a day from the previous week.

'The War on Democracy': John Pilger Video

'The War on Democracy'

'The War on Democracy' is John Pilger's first major film for the cinema - in a career that has produced more than 55 television documentaries. Set in Latin America and the US, it explores the historic and current relationship of Washington with countries such as Venezuela, Bolivia and Chile.

"The film tells a universal story," says Pilger, "analysing and revealing, through vivid testimony, the story of great power behind its venerable myths. It allows us to understand the true nature of the so-called war on terror".

Shipyard Workers Organize to Stop 21st Century Slavery

Shipyard Workers Organize to Stop 21st Century Slavery

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Pascagoula, Mississippi - More than 100 workers, carrying signs reading "I Am A Man," walked off the job at a Mississippi shipyard last week to protest conditions of slavery. Their struggle for justice comes 40 years after the Rev. Martin Luther King, Jr., marched with striking Memphis sanitation workers carrying the same signs.

The shipyard workers - who are from India - have filed a class action suit against Signal International, a marine fabrication company; recruiters in India and the United States; and a New Orleans immigration lawyer, Malvern Burnett; accusing them of forced labor, human trafficking, fraud and civil rights violations.

The suit charges that in the aftermath of Hurricane Katrina, more than 500 Indian men "were trafficked into the United States through the federal government's H-2B guestworker program to provide labor and services . . . Plaintiffs were subjected to forced labor as welders, pipefitters, shipfitters, and other marine fabrication workers at Signal operations in Pascagoula, Mississippi and Orange, Texas."

At the walkout last Thursday, the workers symbolically threw their hardhats over the fence as they left the shipyard, media reported, and sang the civil rights anthem, "We Shall Overcome."

Saket Soni of the New Orleans Workers' Center for Racial Justice, who served as an interpreter for the workers, said they talk of living "like pigs in a cage" in a company-run "work camp."

One of the workers, Sabulal Vijayan, tried to organize his fellow workers last year and was fired. He then attempted suicide.

The exploitation began in 2006 when recruiters in New Orleans and Bombay, together with Signal, a Northrop Grumman subcontractor, used the post-Katrina labor shortage in the Gulf Coast to create a trafficking racket within the guest worker program that President Bush wants to expand, the Workers Center said in a news release. Workers paid up to $20,000 to get jobs in the United States.

"They promised us green cards and permanent residency, and instead gave us 10-month visas and made us live like animals in company trailers, 24 to a room," Vijayan said. "We were trapped between an ocean of debt at home and constant threats of deportation from our bosses in Mississippi."

When the workers began to organize last year, Signal sent armed guards to detain and fire the organizers, the Workers Center said.

The lawsuit, filed by the Louisiana Justice Institute, Southern Poverty Law Center and the Asian American Legal Defense and Education Fund, charges violations of the Victims of Trafficking and Violence Protection Act; the Racketeer Influenced and Corrupt Organizations Act ("RICO"); the Civil Rights Act of 1866; the Ku Klux Klan Act of 1871; and the Fair Labor Standards Act.

"The U.S. State Department calls it 'a repulsive crime' when recruiters and employers in other parts of the world bind guest workers with crushing debts and threats of deportation," said Soni. "This is precisely what is happening on the Gulf Coast."

The lawsuit seeks compensatory and punitive damages and injunctions to prevent future exploitation of workers. While the court action moves forward, the workers pledge to continue more demonstrations to call attention to the treatment of workers on the Gulf Coast.

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This report is adapted from information on www.Sajaforum.org, the blog of the South Asian journalists association, and www.Sepiamutiny.com.

Study: Contractors Escape Ethics Laws

Study: Contractors Escape Ethics Laws

By Anne Flaherty

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Washington - The military hires so many private contractors that it should consider forcing them to disclose their financial interests so as to avoid any conflicts of interest, according to a congressional audit.

In a report released Monday, the Government Accountability Office found that contractors outnumber Defense Department employees in many offices and perform such sensitive tasks as developing contract details and advising award fees. Yet unlike federal employees, contractors are not bound to most government ethics laws and regulations.

Defense officials agreed that tougher standards are probably needed and said they were looking into it. Some officials told GAO privately that they were concerned about the cost of enforcing new rules, an argument GAO rebuffed as dangerous.

The "costs of contractor employees constructing options for their personal gain - an outcome increasingly lik

While the Defense Department has not determined the total number of contractors it employs, the numbers are substantial. For example, there are more than 163,000 contractors working in Iraq and some 36,500 in Afghanistan - about the same number of troops in those regions, a senior defense official told Congress in testimony last month.

In its audit of 21 defense offices, GAO found that 15 of them had more contractors on staff than Defense Department employees. In several offices, including an Army human resources group and an engineering unit at the Missile Defense Agency, contractors comprised more than 80 percent of the workforce.

Under federal laws and regulations, contractors are prohibited specifically from accepting bribes or kickbacks, and companies working with the military must have written ethic policies. Also, several defense offices have instituted ethics safeguards on a voluntary basis.

But there isn't a department-wide requirement that contractor employees be free from personal conflicts of interest. Further, most companies' ethic policies prohibit an employee from having a financial stake in its competitors, but do not require them to disclose potential conflicts of interest as their work relates to the Defense Department.

GAO recommended that the Pentagon establish requirements for companies to identify and prevent conflicts of interest. Included in the new code should be a prohibition of employees accepting gifts such as cash, meal or trips in connection to their jobs, GAO stated.

Pentagon Report on Saddam's Iraq Censored?

Pentagon Report on Saddam's Iraq Censored?

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ABC News' Jonathan Karl Reports: The Bush Administration apparently does not want a U.S. military study that found no direct connection between Saddam Hussein and al Qaeda to get any attention. This morning, the Pentagon cancelled plans to send out a press release announcing the report's release and will no longer make the report available online.

The report was to be posted on the Joint Forces Command website this afternoon, followed by a background briefing with the authors. No more. The report will be made available only to those who ask for it, and it will be sent via U.S. mail from Joint Forces Command in Norfolk, Virginia.

It won't be emailed to reporters and it won't be posted online.

Asked why the report would not be posted online and could not be emailed, the spokesman for Joint Forces Command said: "We're making the report available to anyone who wishes to have it, and we'll send it out via CD in the mail."

Another Pentagon official said initial press reports on the study made it "too politically sensitive."

ABC News obtained the comprehensive military study of Saddam Hussein's links to terrorism on Tuesday. Read the report's executive summary HERE.

The study, which was due to be released Wednesday, found no "smoking gun" or any evidence of a direct connection between Saddam's Iraq and the al Qaeda terrorist organization.

The report is based on the analysis of some 600,000 official Iraqi documents seized by US forces after the invasion. It is also based on thousands of hours of interrogations of former top officials in Saddam's government who are now in U.S. custody.

Others have reached the same conclusion, but no previous study has had access to so much information. Further, this is the first official acknowledgement from the U.S. military that there is no evidence Saddam had ties to Al Qaeda.

The study does, however, show that Saddam Hussein did much to support terrorism in the Middle East and used terrorism "as a routine tool of state power." Saddam's government, for example, had a program for the "development, construction, certification and training for car bombs and suicide vests in 1999 and 2000." The U.S. military is still dealing with the fall-out from this particular program.

The report says Saddam's bureaucrats carefully recorded the regime's connections to Palestinian terrorists groups and its financial support for the families of suicide bombers.

The primary target, however, of Saddam's terror activities was not the United States, and not Israel. "The predominant targets of Iraqi state terror operations were Iraqi citizens, both inside and outside of Iraq." Saddam's primary aim was self preservation and the elimination of potential internal threats to his power.

Bush administration officials have made numerous attempts to link Saddam Hussein and the Al Qaeda terror group in their justification for waging war against Iraq.

"What I want to bring to your attention today is the potentially much more sinister nexus between Iraq and the Al Qaida terrorist network," former U.S. Secretary of State Colin Powell told the United Nations February 5, 2003.

On June 18, 2004 the Washington Post quoted President George W. Bush as saying: "The reason I keep insisting that there was a relationship between Iraq and Saddam and al Qaeda: because there was a relationship between Iraq and al Qaeda," Bush said.

"This administration never said that the 9/11 attacks were orchestrated between Saddam and al Qaeda," The Washington Post quoted Bush as saying. "We did say there were numerous contacts between Saddam Hussein and al Qaeda."

"We know he's out trying once again to produce nuclear weapons and we know that he has a long-standing relationship with various terrorist groups, including the al-Qaeda organization," Vice President Dick Cheney said on NBC's Meet The Press March 16, 2003.

"But the cost is far less than it will be if we get hit, for example, with a weapon that Saddam Hussein might provide to al-Qaeda, the cost to the United States of what happened on 9/11 with billions and billions of dollars and 3,000 lives. And the cost will be much greater in a future attack if the terrorists have access to the kinds of capabilities that Saddam Hussein has developed," Cheney said.

"There is no question but that there have been interactions between the Iraqi government, Iraqi officials and Al Qaeda operatives. They have occurred over a span of some 8 or 10 years to our knowledge. There are currently Al Qaeda in Iraq," former Defense Secretary Donald Rumsfeld said in a interview with Infinity CBS Radio, Nov. 14, 2002.

Not Guilty, But Jailed for Five Years: Al-Arian's Third Hunger Strike Under Way

Not Guilty, But Jailed for Five Years: Al-Arian's Third Hunger Strike Under Way

By Chris Hedges

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The Palestinian activist Dr. Sami Amin Al-Arian, imprisoned for five years despite a jury's failure to return a single guilty verdict against him, has gone on a hunger strike in Northern Neck Regional Jail in Warsaw, Va. Al-Arian, who has abstained from food and water since March 3rd, began his hunger strike after being informed he would be called before a third grand jury. He has lost 15 pounds and has been moved to the jail's medical unit.

"A great nation is ultimately defined and judged by its system of justice," Al-Arian said in a statement released through his family. "When the system is manipulated by the powerful and tolerates abuses against the minorities or the weak members of society, the government not only loses its moral authority and betrays future generations, but will also be condemned by history."

The hunger strike is the third by the Palestinian activist, who was to have been released in April and deported. During his first hunger strike, which lasted 140 days, he took liquid nutrients and lost 45 pounds. During his hunger strike last year, which lasted 60 days, he drank only water and lost 55 pounds. Al-Arian is a diabetic.

"We are very worried about his health, but we understand why he's doing this," said his daughter, Laila Al-Arian. "The U.S. government, through its vindictive and politically motivated behavior, has given our family no other option."

The recent documentary, USA vs Al-Arian, detailed the absurdity of the show trial held in Florida and the hollowness of the government's case against Al-Arian. When the film was awarded Best Nordic Documentary at the Nordic Panorama in Finland the jury wrote: "The film shows precisely how a common man becomes a victim of the situation in the contemporary world, where the Big Brother is watching you even when you're ordering pizza."

The decision to call Al-Arian before the grand jury was made although Al-Arian had signed a "no-cooperation" agreement. The agreement stipulated that he would not be required to cooperate with the government in other cases. The government's attempt to force him to testify, despite the agreement, came a month before his scheduled release. It is seen by his lawyers and his family as an effort by the government to keep the activist in jail indefinitely.

Al-Arian endured a six-month show trial in Florida that saw the government's case collapse. The Justice Department spent an estimated $50 million and several years investigating and prosecuting Al-Arian. The government called 80 witnesses and subjected the jury to hundreds of hours of often absurd phone transcriptions and recordings made over a 10-year period, which the jury dismissed as "gossip." Out of the 94 charges made against the four defendants, there were no convictions. Of the 17 charges against Al-Arian -- including "conspiracy to murder and maim persons abroad'' -- the jury acquitted him of eight and was hung on the rest. The jurors disagreed on the remaining charges, with 10 of the 12 jurors favoring his full acquittal. Two others in the case, Ghassan Ballut and Sameeh Hammoudeh, were acquitted of all charges, dealing another body blow to the government's case.

Following the acquittal, a disaster for the government, especially because then-Attorney General John Ashcroft had announced the indictment, prosecutors threatened to retry Al-Arian. The Palestinian professor, under duress, accepted a plea bargain agreement that would spare him a second trial, saying in his agreement that he had helped people associated with Palestinian Islamic Jihad with immigration matters. It was a tepid charge given the high profile of the case. The U.S. Attorney's Office for the Middle District of Florida and the counter-terrorism section of the Justice Department agreed to recommend to the judge the minimum sentence of 46 months.

But U.S. District Judge James S. Moody Jr. sentenced Dr. Al-Arian to the maximum 57 months. In referring to Al-Arian's contention that he had only raised money for Palestinian Islamic Jihad's charity for widows and orphans, the judge said acidly to the professor that "your only connection to orphans and widows is that you create them."

UN Official Denied Access to Iraq Prisons

UN Official Denied Access to Iraq Prisons

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A human rights expert says the US won't allow him to visit its detainees.

Geneva - The U.N. torture investigator said Tuesday that American officials are denying him access to U.S.-run detention facilities in Iraq, even though he has received credible reports that conditions there have improved.

Manfred Nowak, one of the United Nations' independent human rights experts, said Iraqi officials had agreed in principle that he could visit the country this year. British officials have agreed to let him visit detainees held by their forces, he said.

"The U.K. said yes, the U.S. said no," Nowak told reporters in Geneva, adding that he was still hoping to win American approval before deciding whether to travel to Iraq.

Nowak said U.S. officials told him that American-run prisons in Iraq were not subject to international human rights law because of the armed conflict, and as such were outside his area of responsibility.

A State Department official in Washington said only that the International Committee of the Red Cross had been granted full access to all of the several thousand detainees under U.S. control.

Spitzer's Shame Is Wall Street's Gain

Spitzer's Shame Is Wall Street's Gain

By Robert Scheer

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Tell me again: Why should we get all worked up over the revelation that the New York governor paid for sex? Will it bring back to life the eight U.S. soldiers killed in Iraq that same day in a war that makes no sense and has cost this nation trillions in future debt? Will it save those millions of homes that hardworking folks all over the country are losing because of financial industry shenanigans that Eliot Spitzer, as much as anyone, attempted to halt? Perhaps it provides some insight into why oil has risen to $108 a barrel, benefiting most of all the oil sheiks whom our taxpayer-supported military has kept in power?

Sure, the guy, by his own admission, is quite pathetic in all those small, squirrelly ways that have messed up the lives of other grand public figures before him, but why is an all-too-human sin, amply predicted in early Scripture, getting all this incredible media play as some sort of shocking event? The answer is that, while having precious little to do with serious corruption in public life, it does have a great deal to do with stoking flagging newspaper sales and television ratings.

The sad truth is that reporting on major corruption, say, the rationalizations of a president who has authorized torture, doesn't cut it as a marketing bonanza. Just days before this grand expose, the president vetoed a bill banning torture, and instead of being greeted with horrified disgust, the president's deep denigration of this nation's presumed ideals was met with a vast public yawn. Torture, unlike paid sex, doesn't have legs as a news story.

Sex sells, and frankly it would seem far more exploitative for the news media to pimp this tale to the public than anything that VIP escort service did with the pitiable governor. His behavior was not really any more wretched than messing around with a young and vulnerable White House intern who didn't even get paid for her efforts, yet Bill Clinton survived that one, whereas Spitzer was presumed dead on the arrival of this "news." The New York Times, which editorially has supported the candidacy of Hillary Clinton, whose vast White House experience clearly did not include corralling her husband, now editorializes contemptuously about Spitzer's betrayal of the public trust as well as about his exploitation of his "ashen-faced" wife, who, like Hillary, stood by her man.

The media consensus from the opening salvo was that Spitzer must resign and he will be thrown to the dogs, which is unfortunate because, like Clinton, he has done much valuable work in the public interest, and the outrage over this personal dereliction, tawdry in the extreme, is excessive. I certainly never wanted Clinton to resign, let alone be impeached, but why is Spitzer's paying for sex more disgraceful than ripping it off? Yes, Spitzer allegedly broke a law that shouldn't be on the books, and his resignation in disgrace is inevitable, but it bothers me that George W. Bush and Dick Cheney remain in office despite having violated enormously more serious laws.

Frankly, I don't care what any of these politicians do in their personal lives as long as the practice is consensual, and the thousands of dollars that exchanged hands in this case would provide a presumption that the lady in question was indeed a willing partner in this commercial transaction. True, Spitzer is an outrageous hypocrite for having prosecuted others caught in what should not be considered criminal behavior, but since when is hypocrisy on the part of a politician, particularly as to sex, so shocking?

I wouldn't have written this column had I not read The Wall Street Journal's Page 1 news story headlined "Wall Street Cheers as Its Nemesis Plunges Into Crisis." The article begins with the crowing statement "It's Schadenfreude time on Wall Street" and goes on to quote those whom Spitzer went after over what should be considered the criminal greed that has predominated on Wall Street. It was Spitzer, as much as anyone, who sounded the alarm on the subprime mortgage crisis, the obscene payouts to CEOs who defrauded their shareholders and the other financial scandals that have brought the U.S. economy to its knees.

The best rule of thumb these days is that ordinary Americans should be mightily depressed over any news that Wall Street hustlers cheer, for they have been exposed as a dangerous pack of scoundrels quite willing to rob decent, hardworking people of their homes. And of course no one on Wall Street ever paid for sex.

Iraq Violence Sees Spike

Iraq Violence Sees Spike

By Ryan Lenz

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Baghdad - Violence appeared to be on the rise in Iraq after a day that saw at least 42 people die - numbers that cast doubt on the easing of sectarian violence following a surge of U.S. forces to the country last year.

An Iraqi official confirmed the grisliest attack of Tuesday when 16 passengers on a bus in southern Iraq were killed by a roadside bomb. The U.S. military, however, claimed no one died in the attack, which was targeting a passing military convoy. The reason for the discrepancy was not immediately clear.

Dr. Hadi Badr al-Riyahi, head of the Nasiriyah provincial health directorate, confirmed Wednesday that the attack on the bus traveling from Najaf to Basra killed 16 civilians and wounded 20.

At the time, a local policeman and the assistant bus driver also said 16 people were killed.

But Maj. Brad Leighton, a military spokesman in Baghdad, disputed that claim on Wednesday, telling The Associated Press that only one coalition soldier and one Iraqi civilian were wounded in the attack about 50 miles from Nasiriyah, about 200 miles southeast of Baghdad.

At least 26 people were killed Tuesday in other violence around the country.

The spike comes in the wake of a 60 percent drop in attacks across the country since June, according to U.S. military figures.

According to an Associated Press count, at the height of unrest from November 2006 to August 2007, on average approximately 65 Iraqis died each day as a result of violence. As conditions improved, the daily death toll steadily declined. It reached its lowest point in more than two years in January, when on average 20 Iraqis died each day.

Those numbers have since jumped. In February, approximately 26 Iraqis died each day as a result of violence, and so far in March, that number is up to 39 daily. These figures reflect the months in which people were found, and not necessarily - as in the case of mass graves - the months in which they were killed.

Last Thursday, two massive bombs killed 68 people in Baghdad's Karradah neighborhood, while on March 3, two car bombs killed 24 people in the capital.

Military spokesman Rear Adm. Gregory Smith said Sunday that recent violence should not be taken as evidence of "an increase or a trend of an increase."

"I think we need to continue to look at historically what has happened over the last year to really put in perspective a one-week or two-weeks' worth of activity inside Baghdad," Smith said.

An American soldier died Tuesday after his patrol was hit by a roadside bomb near Diwaniyah, 80 miles south of Baghdad, a day after eight soldiers died in a pair of bomb attacks marking the heaviest single day of U.S. casualties since September.

On Wednesday, two Iraqi civilians were killed and 10 others wounded when a roadside bomb exploded near a passing U.S. military patrol, local police said. There were no reports of American casualties.

Bush to Sidestep Congress on Iraq Pact

Bush to Sidestep Congress on Iraq Pact

By Maya Schenwar

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As the Bush administration heads into months of negotiations with Iraqi Prime Minister Nouri al-Maliki on the future of US troops in Iraq, it aims to stretch the bounds of executive power to unprecedented lengths.

The administration plans to bypass Congress to forge a status of forces agreement (SOFA) that would grant US forces an unlimited permit to continue engaging in military action in Iraq, according to statements by the State Department's Coordinator for Iraq, David Satterfield, and Assistant Secretary of Defense Mary Beth Long, at a House Foreign Affairs Committee hearing last week.

Drafts of the SOFA, a binding pact, also provide legal immunity for US private contractors operating in Iraq, according to a late January New York Times article, which assertions were not denied by administration officials during the hearing.

With the United Nations mandate that allows US troops to be in Iraq due to expire in December, clear legal options to continue the American presence include a renewal of the mandate or a treaty approved by the Senate.

Yet, Long confirmed last week the administration's SOFA will include an "authority to fight" provision, allowing US forces to carry on status quo operations in Iraq without the consent of Congress.

Under the Constitution, Congress has the sole power to declare war.

Satterfield held that the result of the Bush-Maliki negotiations will simply be a routine measure to normalize relations with Iraq as it transitions to independent sovereignty; "an agreement which is in its shape similar, in many respects, to SOFAs we have across the world."

However, the standard provisions of a SOFA include banking and postal procedures, legal protection of US military personnel and "covered persons" and the transport of Americans' property into and out of the country. No other status of forces agreement has ever included the authority to fight or immunity for contractors, according to Oona Hathaway, a Yale Law School professor who testified at last week's hearing.

"With the SOFA, the administration is claiming the power to continue using force in Iraq without the consent of Congress," Hathaway told Truthout. "These are issues that have never been in the status of forces agreement in the country's history."

In a belated response to a question asked at the March 4 hearing, Satterfield maintained the administration has the autonomous authority to keep combat troops in Iraq beyond the expiration of the UN mandate. Satterfield cited Congress's 2002 authorization of the use of force by the president to "defend the national security of the United States against the continuing threat posed by Iraq."

However, Bruce Ackerman, another Yale Law professor, argues the terms of the 2002 resolution have long expired, since the state of Iraq currently poses no direct threat to the United States. Furthermore, subsequent Iraq-related legislation, such as appropriations of money for the war, shouldn't be construed as an authorization for ongoing military action, he said during a March 6 press teleconference.

Additionally, according to Hathaway, the original legislation to allow force was enacted under the assumption that weapons of mass destruction existed in Iraq.

The SOFA's probable inclusion of an immunity provision for military contractors has both Ackerman and Hathaway calling foul.

"The president does not have authority to determine the legal status of civilians working abroad, and that's what these Blackwater personnel are," Ackerman said. "Congress must have that power."

US contractors employed by the armed forces in other parts of the world typically work for the Department of Defense, so, although they're exempt from prosecution by foreign governments, they fall under the jurisdiction of US military law. However, since many contractors in Iraq work for the State Department, the SOFA would leave them subject to no laws whatsoever, according to Hathaway.

"Unlike anywhere else in the world, we have this law-free zone for private military contractors," Hathaway said. "In the moment, it appears there may not be any legal jurisdiction over these folks."

The SOFA would solidify that legal loophole.

Efforts are sprouting up in Congress to curb the president's authority to make agreements with Iraq. Late last week, Congresswoman Barbara Lee introduced a resolution affirming the Constitution only grants the president sole authority over "essentially nonpolitical foreign engagements," and any agreement regarding US military involvement in a foreign country should require the explicit consent of Congress. The bill is nonbinding, but Lee hopes it will build momentum for a backlash against executive excess.

"We have to restore our checks and balances," Lee said during the March 6 teleconference. "Hopefully, the debate around [the Lee resolution] will help to wake people up and understand the kind of power the president continues to take from the Congress."

Bill Delahunt, chairman of the House Foreign Affairs Committee, is also at work on legislation to rein in the power of the president, according to his spokesman, who said Delahunt hopes to introduce a bill this week. He will also continue to hold hearings on the constitutionality of the proposed agreement.

A House leadership bill to recommend extending the UN mandate may also be in the cards, according to Hathaway. Extending the mandate - at least for a few months - would postpone the necessity of a bilateral agreement between the US and Iraq until a new president is in office.

Whether or not it goes anywhere, this flurry of legislation will serve as a reminder to the administration that Congress is still around, according to Erik Leaver, policy outreach director for Foreign Policy In Focus.

"The number of hearings, questions and general knowledge of the issues are indicative of the level of concern," Leaver told Truthout. "Measures like the Lee bill help to highlight this issue, and the general power the president has gained relative to the Congress on foreign policy decisions."

Iraq's Parliament is confronting similar dilemmas: Like Bush, Maliki has skirted his legislature in making agreements for a future US military presence.

The House Foreign Affairs Committee hopes to bring several Iraqi Parliamentarians to the US to speak in April, according to Raed Jarrar, Iraq consultant to the American Friends Service Committee.

Congresswoman Lee told Truthout that, although she is not aware of any formal cooperation between Congress and the Iraqi government, "that's not to say that conversations aren't happening."

The Biometric Cataloging of Americans at Home

The Biometric Cataloging of Americans at Home

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"Avoid the hassle of airport security every time you fly."

This is the rhetoric being used to entice U.S. citizens to voluntarily provide their biometric information to the U.S. government.

The program, called "clear," is being installed at airports around the country now. For a little background on this, view a post at this website from September 2005, called Securitizing the Global Norm of Identity: Biometric Technologies in Domestic and Foreign Policy.

In Fallujah, the cataloging of human beings has been involuntary since the U.S. siege of that city in November 2004. Having retina scans, fingerprinting and bar-code IDs is mandatory there for Iraqis.

But now, in the "homeland" of the United States, you too can join the happy club of those giving their biometric data to the federal government. Just bring two forms of government issued identification to your local Clear airport or various downtown location, enroll, pay the $128 fee, wait 2-3 weeks, and then if you are accepted, step up to your nearest scanner, and try not to blink as your retina is scanned.

These kiosks are planned for airports in New York, Denver, Oakland, and many others.

So, no need to be intimidated by the government’s desire to use biometric data to catalog U.S. citizens, (or Iraqis for that matter), as you can rest more peacefully knowing you are now more secure.

You can learn more about this safe, fast, and helpful way to get through airport security in four minutes or less, here.

Dollar Falls to Record Low on Concern Fed Package Won't Succeed

Dollar Falls to Record Low on Concern Fed Package Won't Succeed

By Ye Xie and Gavin Finch

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The dollar fell to a record below $1.55 per euro as firms from Citigroup Inc. to Goldman Sachs Group Inc. said the Federal Reserve's plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending.

The U.S. currency erased almost half of yesterday's 1.6 percent rally versus the yen, the biggest in six months, which came after the Fed said it would lend Treasuries to financial institutions in return for mortgage debt. Traders bet the Fed will cut rates by as much as three quarters of a percentage point next week to avert a recession, while the European Central Bank keeps borrowing costs unchanged.

``It's difficult for the dollar to gain traction,'' said Paresh Upadhyaya, who helps manage $50 billion in currency assets at Putnam Investments in Boston. ``The Fed is probably running out of options; the market is fixated on interest-rate differentials, which are clearly negative for the dollar.''

The dollar fell to $1.5504 per euro, the weakest since the euro's 1999 debut, and traded at $1.5484 at 11:19 a.m. in New York, from $1.5338 yesterday. The previous historic low was set yesterday. It dropped to 102.67 yen from 103.42, within 1.5 yen of an eight-year low. The euro rose to 158.95 yen from 158.61.

Euro gains were limited after Luxembourg Finance Minister Jean-Claude Juncker told reporters in Brussels he is ``very vigilant'' on exchange rates. The remark echoes comments from March 4, when the region's finance ministers said they were concerned the euro's rally risks hurting the economy.

Yen Versus Rand

The yen climbed against a dozen major currencies, including a 1.5 percent gain versus South Korea's won, as a government report showed Japan's economy grew an annualized 3.5 percent last quarter, faster than the 2.3 percent median forecast of economists surveyed by Bloomberg News.

The euro extended its climb against the dollar earlier after a European Union report showed industrial production in the region increased for the first time in three months in January. It rose 0.9 percent from the prior month, more than twice the rate forecast by economists surveyed by Bloomberg.

The euro also rose on speculation ECB President Jean-Claude TrichetAxel Weber yesterday said that he sees ``no room'' to lower rates. will highlight inflation risks today at a press conference. ECB council member

The ECB's main rate is 1 percentage point above the Fed's 3 percent target for overnight loans between banks. The euro interbank offered rate for three-month euro loans rose a seventh day, by 1 basis point to 4.61 percent, the highest since Jan. 7, the European Banking Federation said.

`Stay Short'

The dollar dropped to $2.0187 per U.K. pound from $2.0064, and to 1.0241 Swiss francs from 1.0335.

Policy makers in the U.S., U.K., Canada, Switzerland and the euro region agreed yesterday on a second round of emergency- loans to curb rising money-market rates, on top of the Fed loans.

``Read the need for such new measures as being a symptom of what ails the world and not a panacea for its problems,'' said David Simmonds, the London-based global head of currency research at Royal Bank of Scotland Plc, the world's fourth- biggest foreign-exchange trader. ``Stay short dollars.''

The collapse of the U.S. subprime mortgage market has caused losses and writedowns of $190 billion at the world's biggest financial institutions. Concerted action announced Dec. 12 temporarily eased the shortage of cash in money markets.

`Not a Panacea'

The Fed's measures are ``not a panacea, more like an aspirin for the dollar,'' analysts led by Daniel Tenengauzer, New York-based head of global currency strategy at Merrill Lynch & Co., wrote in a research note today. ``There is a reasonable risk that this Fed move reflects the depth of their concern with U.S. asset markets, not a Fed formula to resolve U.S. asset- market difficulties.''

Goldman Sachs analysts said in a report that ``we are not convinced that yesterday's move will solve all the multiple challenges facing credit markets and the financial system.'' Citigroup said ``credit concerns are likely to persist and averting a drawn out recession is becoming increasingly challenging.''

The dollar will extend declines against most major currencies in the next six months as the U.S. economy slows, a survey of 5,430 Bloomberg users showed.

March 18 Bets

The Dollar Index traded on ICE Futures in New York, which compares the currency to those of six trading partners, declined to 72.54. It set a record low of 72.462 on March 7.

Traders bet the Fed will cut its target rate as much as 0.75 percentage point on March 18 to keep the U.S. from falling into a recession. The likelihood of a reduction to 2.25 percent was 68 percent, according to futures on the Chicago Board of Trade. The balance of bets is on a cut to 2.5 percent.

``There has not yet been a U.S. dollar crisis,'' Henry Kaufman, president of Henry Kaufman & Co. in New York and the former chief economist at Salomon Brothers Inc., said in a Bloomberg Radio interview yesterday. ``Dollar weakness is critical only if it becomes disorderly, and so far in the price movements we haven't seen real gapping taking place.''

Why the US has really gone broke

Why the US has really gone broke

Chalmers Johnson

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Global confidence in the US economy has reached zero, as was proved by last month’s stock market meltdown. But there is an enormous anomaly in the US economy above and beyond the subprime mortgage crisis, the housing bubble and the prospect of recession: 60 years of misallocation of resources, and borrowings, to the establishment and maintenance of a military-industrial complex as the basis of the nation’s economic life

The military adventurers in the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups thought that they were the “smartest guys in the room” — the title of Alex Gibney’s prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.

As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay or repudiate. This fiscal irresponsibility has been disguised through many manipulative financial schemes (causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.

There are three broad aspects to the US debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on “defence” projects that bear no relation to the national security of the US. We are also keeping the income tax burdens on the richest segment of the population at strikingly low levels.

Second, we continue to believe that we can compensate for the accelerating erosion of our base and our loss of jobs to foreign countries through massive military expenditures — “military Keynesianism” (which I discuss in detail in my book Nemesis: The Last Days of the American Republic). By that, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.

Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of the US. These are what economists call opportunity costs, things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world’s number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs, an infinitely more efficient use of scarce resources than arms manufacturing.

Fiscal disaster

It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense’s planned expenditures for the fiscal year 2008 are larger than all other nations’ military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defence budget, is itself larger than the combined military budgets of Russia and China. Defence-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The US has become the largest single seller of arms and munitions to other nations on Earth. Leaving out President Bush’s two on-going wars, defence spending has doubled since the mid-1990s. The defence budget for fiscal 2008 is the largest since the second world war.

Before we try to break down and analyse this gargantuan sum, there is one important caveat. Figures on defence spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: “A well-founded rule of thumb is to take the Pentagon’s (always well publicised) basic budget total and double it” (1). Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defence budget is “black”,” meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.

There are many reasons for this budgetary sleight-of-hand — including a desire for secrecy on the part of the president, the secretary of defence, and the military-industrial complex — but the chief one is that members of Congress, who profit enormously from defence jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense, nor the Department of Homeland Security, has ever complied. Congress has complained, but not penalised either department for ignoring the law. All numbers released by the Pentagon should be regarded as suspect.

In discussing the fiscal 2008 defence budget, as released on 7 February 2007, I have been guided by two experienced and reliable analysts: William D Hartung of the New America Foundation’s Arms and Security Initiative (2) and Fred Kaplan, defence correspondent for Slate.org (3). They agree that the Department of Defense requested $481.4bn for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7bn for the “supplemental” budget to fight the global war on terrorism — that is, the two on-going wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4bn to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional “allowance” (a new term in defence budget documents) of $50bn to be charged to fiscal year 2009. This makes a total spending request by the Department of Defense of $766.5bn.

But there is much more. In an attempt to disguise the true size of the US military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4bn for the Department of Energy goes towards developing and maintaining nuclear warheads; and $25.3bn in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt and Pakistan). Another $1.03bn outside the official Department of Defense budget is now needed for recruitment and re-enlistment incentives for the overstretched US military, up from a mere $174m in 2003, when the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7bn, 50% of it for the long-term care of the most seriously injured among the 28,870 soldiers so far wounded in Iraq and 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4bn goes to the Department of Homeland Security.

Missing from this compilation is $1.9bn to the Department of Justice for the paramilitary activities of the FBI; $38.5bn to the Department of the Treasury for the Military Retirement Fund; $7.6bn for the military-related activities of the National Aeronautics and Space Administration; and well over $200bn in interest for past debt-financed defence outlays. This brings US spending for its military establishment during the current fiscal year, conservatively calculated, to at least $1.1 trillion.

Military Keynesianism

Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neo-conservatives and poorly informed patriotic Americans believe that, even though our defence budget is huge, we can afford it because we are the richest country on Earth. That statement is no longer true. The world’s richest political entity, according to the CIA’s World Factbook, is the European Union. The EU’s 2006 GDP was estimated to be slightly larger than that of the US. Moreover, China’s 2006 GDP was only slightly smaller than that of the US, and Japan was the world’s fourth richest nation.

A more telling comparison that reveals just how much worse we’re doing can be found among the current accounts of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. In order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88bn per year trade surplus with the US and enjoys the world’s second highest current account balance (China is number one). The US is number 163 — last on the list, worse than countries such as Australia and the UK that also have large trade deficits. Its 2006 current account deficit was $811.5bn; second worst was Spain at $106.4bn. This is unsustainable.

It’s not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On 7 November 2007, the US Treasury announced that the national debt had breached _$9 trillion for the first time. This was just five weeks after Congress raised the “debt ceiling” to $9.815 trillion. If you begin in 1789, at the moment the constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defence expenditures.

The top spenders

The world’s top 10 military spenders and the approximate amounts each currently budgets for its military establishment are:

Rank Country Military budget
1. United States (FY 2008 budget) $623bn
2. China (2004) $65bn
3. Russia $50bn
4. France (2005) $45bn
5. United Kingdom $42.8bn
6. Japan (2007) $41.75bn
7. Germany (2003) $35.1bn
8. Italy (2003) $28.2bn
9. South Korea (2003) $21.1bn
10. India (2005 est.) $19bn
World total military expenditures (2004 est) $1,100bn
World total (minus the US) $500bn

Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration’s policies. They have been going on for a very long time in accordance with a superficially plausible ideology, and have now become so entrenched in our democratic political system that they are starting to wreak havoc. This is military Keynesianism — the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.

This ideology goes back to the first years of the cold war. During the late 1940s, the US was haunted by economic anxieties. The great depression of the 1930s had been overcome only by the war production boom of the second world war. With peace and demobilisation, there was a pervasive fear that the depression would return. During 1949, alarmed by the Soviet Union’s detonation of an atomic bomb, the looming Communist victory in the Chinese civil war, a domestic recession, and the lowering of the Iron Curtain around the USSR’s European satellites, the US sought to draft basic strategy for the emerging cold war. The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated 14 April 1950 and signed by President Harry S Truman on 30 September 1950, it laid out the basic public economic policies that the US pursues to the present day.

In its conclusions, NSC-68 asserted: “One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living” (4).

With this understanding, US strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment, as well as ward off a possible return of the depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of 6 February 1961: “The conjunction of an immense military establishment and a large arms industry is new in the American experience” — the military-industrial complex.

By 1990 the value of the weapons, equipment and factories devoted to the Department of Defense was 83% of the value of all plants and equipment in US manufacturing. From 1947 to 1990, the combined US military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, US reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is a form of slow economic suicide.

Higher spending, fewer jobs

On 1 May 2007, the Center for Economic and Policy Research of Washington, DC, released a study prepared by the economic and political forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. The US economy has had to cope with growing defence spending for more than 60 years. Baker found that, after 10 years of higher defence spending, there would be 464,000 fewer jobs than in a scenario that involved lower defence spending.

Baker concluded: “It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment” (5).

These are only some of the many deleterious effects of military Keynesianism.

It was believed that the US could afford both a massive military establishment and a high standard of living, and that it needed both to maintain full employment. But it did not work out that way. By the 1960s it was becoming apparent that turning over the nation’s largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E Woods Jr observes that, during the 1950s and 1960s, between one-third and two-thirds of all US research talent was siphoned off into the military sector (6). It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.

Can we reverse the trend?

Nuclear weapons furnish a striking illustration of these anomalies. Between the 1940s and 1996, the US spent at least $5.8 trillion on the development, testing and construction of nuclear bombs. By 1967, the peak year of its nuclear stockpile, the US possessed some 32,500 deliverable atomic and hydrogen bombs, none of which, thankfully, was ever used. They perfectly illustrate the Keynesian principle that the government can provide make-work jobs to keep people employed. Nuclear weapons were not just America’s secret weapon, but also its secret economic weapon. As of 2006, we still had 9,960 of them. There is today no sane use for them, while the trillions spent on them could have been used to solve the problems of social security and health care, quality education and access to higher education for all, not to speak of the retention of highly-skilled jobs within the economy.

The pioneer in analysing what has been lost as a result of military Keynesianism was the late Seymour Melman (1917-2004), a professor of industrial engineering and operations research at Columbia University. His 1970 book, Pentagon Capitalism: The Political Economy of War, was a prescient analysis of the unintended consequences of the US preoccupation with its armed forces and their weaponry since the onset of the cold war. Melman wrote: “From 1946 to 1969, the United States government spent over $1,000bn on the military, more than half of this under the Kennedy and Johnson administrations — the period during which the [Pentagon-dominated] state management was established as a formal institution. This sum of staggering size (try to visualize a billion of something) does not express the cost of the military establishment to the nation as a whole. The true cost is measured by what has been foregone, by the accumulated deterioration in many facets of life, by the inability to alleviate human wretchedness of long duration.”

In an important exegesis on Melman’s relevance to the current American economic situation, Thomas Woods writes: “According to the US Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation’s plant and equipment, and infrastructure, at just over _$7.29 trillion… The amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock” (7).

The fact that we did not modernise or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated. Machine tools, an industry on which Melman was an authority, are a particularly important symptom. In November 1968, a five-year inventory disclosed “that 64% of the metalworking machine tools used in US industry were 10 years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States’ machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the second world war. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry.”

Nothing has been done since 1968 to reverse these trends and it shows today in our massive imports of equipment — from medical machines like _proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.

Our short tenure as the world’s lone superpower has come to an end. As Harvard economics professor Benjamin Friedman has written: “Again and again it has always been the world’s leading lending country that has been the premier country in terms of political influence, diplomatic influence and cultural influence. It’s no accident that we took over the role from the British at the same time that we took over the job of being the world’s leading lending country. Today we are no longer the world’s leading lending country. In fact we are now the world’s biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone” (8).

Some of the damage can never be rectified. There are, however, some steps that the US urgently needs to take. These include reversing Bush’s 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defence budget all projects that bear no relationship to national security and ceasing to use the defence budget as a Keynesian jobs programme.

If we do these things we have a chance of squeaking by. If we don’t, we face probable national insolvency and a long depression.

6 Signs the U.S. May Be Headed for War in Iran

6 Signs the U.S. May Be Headed for War in Iran

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This report by the US mainstream press suggests in no uncertain terms that the US is heading for war with Iran and that opposition within the US high command has been significantly weakened with the forced resignation of Admiral William Fallon.


Is the United States moving toward military action with Iran?

The resignation of the top U.S. military commander for the Middle East is setting off alarms that the Bush administration is intent on using military force to stop Iran's moves toward gaining nuclear weapons. In announcing his sudden resignation today following a report on his views in Esquire, Adm. William Fallon didn't directly deny that he differs with President Bush over at least some aspects of the president's policy on Iran. For his part, Defense Secretary Robert Gates said it is "ridiculous" to think that the departure of Fallon -- whose Central Command has been working on contingency plans for strikes on Iran as well as overseeing Iraq -- signals that the United States is planning to go to war with Iran.

Fallon's resignation, ending a 41-year Navy career, has reignited the buzz of speculation over what the Bush administration intends to do given that its troubled, sluggish diplomatic effort has failed to slow Iran's nuclear advances. Those activities include the advancing process of uranium enrichment, a key step to producing the material necessary to fuel a bomb, though the Iranians assert the work is to produce nuclear fuel for civilian power reactors, not weapons.

Here are six developments that may have Iran as a common thread. And, if it comes to war, they may be seen as clues as to what was planned. None of them is conclusive, and each has a credible non-Iran related explanation:

1. Fallon's resignation: With the Army fully engaged in Iraq, much of the contingency planning for possible military action has fallen to the Navy, which has looked at the use of carrier-based warplanes and sea-launched missiles as the weapons to destroy Iran's air defenses and nuclear infrastructure. Centcom commands the U.S. naval forces in and near the Persian Gulf. In the aftermath of the problems with the Iraq war, there has been much discussion within the military that senior military officers should have resigned at the time when they disagreed with the White House.

2. Vice President Cheney's peace trip: Cheney, who is seen as a leading hawk on Iran, is going on what is described as a Mideast trip to try to give a boost to stalled Israeli-Palestinian peace talks. But he has also scheduled two other stops: One, Oman, is a key military ally and logistics hub for military operations in the Persian Gulf. It also faces Iran across the narrow, vital Strait of Hormuz, the vulnerable oil transit chokepoint into and out of the Persian Gulf that Iran has threatened to blockade in the event of war. Cheney is also going to Saudi Arabia, whose support would be sought before any military action given its ability to increase oil supplies if Iran's oil is cut off. Back in March 2002, Cheney made a high-profile Mideast trip to Saudi Arabia and other nations that officials said at the time was about diplomacy toward Iraq and not war, which began a year later.

3. Israeli airstrike on Syria: Israel's airstrike deep in Syria last October was reported to have targeted a nuclear-related facility, but details have remained sketchy and some experts have been skeptical that Syria had a covert nuclear program. An alternative scenario floating in Israel and Lebanon is that the real purpose of the strike was to force Syria to switch on the targeting electronics for newly received Russian anti-aircraft defenses. The location of the strike is seen as on a likely flight path to Iran (also crossing the friendly Kurdish-controlled Northern Iraq), and knowing the electronic signatures of the defensive systems is necessary to reduce the risks for warplanes heading to targets in Iran.

4. Warships off Lebanon: Two U.S. warships took up positions off Lebanon earlier this month, replacing the USS Cole. The deployment was said to signal U.S. concern over the political stalemate in Lebanon and the influence of Syria in that country. But the United States also would want its warships in the eastern Mediterranean in the event of military action against Iran to keep Iranian ally Syria in check and to help provide air cover to Israel against Iranian missile reprisals. One of the newly deployed ships, the USS Ross, is an Aegis guided missile destroyer, a top system for defense against air attacks.

5. Israeli comments: Israeli President Shimon Peres said earlier this month that Israel will not consider unilateral action to stop Iran from getting a nuclear bomb. In the past, though, Israeli officials have quite consistently said they were prepared to act alone -- if that becomes necessary -- to ensure that Iran does not cross a nuclear weapons threshold. Was Peres speaking for himself, or has President Bush given the Israelis an assurance that they won't have to act alone?

6.Israel's war with Hezbollah: While this seems a bit old, Israel's July 2006 war in Lebanon against Iranian-backed Hezbollah forces was seen at the time as a step that Israel would want to take if it anticipated a clash with Iran. The radical Shiite group is seen not only as a threat on it own but also as a possible Iranian surrogate force in the event of war with Iran. So it was important for Israel to push Hezbollah forces back from their positions on Lebanon's border with Israel and to do enough damage to Hezbollah's Iranian-supplied arsenals to reduce its capabilities. Since then, Hezbollah has been able to rearm, though a United Nations force polices a border area buffer zone in southern Lebanon.

Defense Secretary Gates said that Fallon, 63, asked for permission to retire. Gates said that the decision, effective March 31, was entirely Fallon's and that Gates believed it was "the right thing to do." In Esquire, an article on Fallon portrayed him as opposed to President Bush's Iran policy and said he was a lone voice against taking military action to stop the Iranian nuclear program. In his statement, Fallon said he agreed with the president's "policy objectives" but was silent on whether he opposed aspects of the president's plans. "Recent press reports suggesting a disconnect between my views and the president's policy objectives have become a distraction at a critical time and hamper efforts in the Centcom region," Fallon, said in the statement issued by Centcom headquarters in Tampa, Fla. "And although I don't believe there have ever been any differences about the objectives of our policy in the Central Command area of responsibility, the simple perception that there is makes it difficult for me to effectively serve America's interests there," he said. Gates announced that Fallon's top deputy, Army Lt. Gen. Martin Dempsey, will take over temporarily when Fallon leaves. A permanent successor, requiring nomination by the president and confirmation by the Senate, might not be designated in the near term.