Saturday, April 26, 2008

The Bush Team's Geneva Hypocrisy

The Bush Team's Geneva Hypocrisy

By Jason Leopold

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Newly released U.S. government documents, detailing how Bush administration officials punched legalistic holes in the Geneva Convention’s protections of war captives, stand in stark contrast to the outrage some of the same officials expressed in the first week of the Iraq War when Iraqi TV interviewed several captured American soldiers.

Then, Defense Secretary Donald Rumsfeld, President George W. Bush and other administration officials orchestrated a chorus of outrage, citing those TV scenes as proof of the Iraq’s government contempt for international law in general and the Geneva Convention in particular.

“It is a blatant violation of the Geneva Convention to humiliate and abuse prisoners of war or to harm them in any way. As President Bush said yesterday, those who harm POWs will be found and punished as war criminals,” Pentagon spokeswoman Victoria Clarke said on March 24, 2003.

That same day, Deputy Defense Secretary Paul Wolfowitz told the BBC

At a March 25, 2003, press briefing about progress in the U.S.-led invasion, Secretary Rumfeld said, “This war is an act of self defense, to be sure, but it is also an act of humanity. … In recent days, the world has witnessed further evidence of their [Iraqi] brutality and their disregard for the laws of war. Their treatment of coalition POWs is a violation of the Geneva Conventions.” that “the Geneva Convention is very clear on the rules for treating prisoners. They're not supposed to be tortured or abused, they're not supposed to be intimidated, they're not supposed to be made public displays of humiliation or insult, and we're going to be in a position to hold those Iraqi officials who are mistreating our prisoners accountable, and they've got to stop.”

The U.S. news media also assisted in this one-sided indictment by uncritically reporting the administration’s complaints while staying silent on the fact that just days earlier, American TV had run scenes of captured Iraqi soldiers, some forced to kneel down at gunpoint to be patted down by U.S. soldiers.

This behavior of the U.S. news media during the early phase of the Iraq War fit with its lack of skepticism in the months leading up to the March 19, 2003, invasion as Bush administration officials spoon-fed the press false intelligence alleging secret Iraqi WMD stockpiles and covert links to al-Qaeda terrorists responsible for the 9/11 attacks.

So, perhaps it should have come as no surprise when the U.S. news media treated the TV footage of American POWs as further evidence that Iraq was run by a lawless regime with no respect for the rules of war. [For a contemporaneous account of the POW issue, see Consortiumnews.com’s “International Law a la Carte.”]

Stunning Hypocrisy

In retrospect – now with much more of the documentary record available – the disparity between the administration’s outrage toward the Iraqis for showing the video and the abuse inflicted by the U.S. government on captives from the Iraq and Afghan wars is stunning.

Declassified documents reveal that the Bush administration concocted legal theories to justify sidestepping the Geneva Convention when it came to prisoners incarcerated at Guantanamo Bay, at secret CIA prisons and at various locations in Iraq, including Abu Ghraib where shocking photos were leaked of sexual and physical abuse in 2004.

Indeed, while U.S. government officials were preaching to Iraqis about the rules of war, the Bush administration was seven months into a secret interrogation program that authorized CIA interrogators to question Afghan and al-Qaeda detainees using brutal methods.

The techniques included painful “stress positions,” forced nudity in cold conditions and the simulated drowning of waterboarding, practices that human rights organizations say violated Geneva and anti-torture laws.

The Bush administration also ordered the CIA to engage in “extraordinary renditions,” which involved kidnapping terror suspects and shipping them to countries that are known to practice torture.

If held to the same standards that the Bush administration demanded of the Iraqi military, U.S. officials implicated in these policies would be guilty of violating the Geneva Convention, said Claire Tixeire, a "human rights fellow" with the Center for Constitutional Rights in New York and an attorney.

“They clearly knew that the laws of war were supposed to apply to prisoners apprehended by the United States in Afghanistan and Iraq, but they found every legal loophole to find ways it didn't apply to the U.S. side,” Tixeire said in an interview.

Tixeire, whose organization is defending some of the prisoners at Guantanamo Bay, said that while U.S. officials may have had a point in accusing the Iraqi military of violating the Geneva Convention over the TV interviews, the way the U.S. treated Iraqi captives was much worse.

“It’s clear to me these actions came down from the very top,” Tixeire said. “Denying prisoners of war humane treatment is a grave breach of the Geneva Convention. It's a war crime. They put U.S. troops at risk for being treated inhumanely if they were captured.”

When asked recently about the past statements about Iraqi violations of the Geneva Convention, representatives for Clarke, Wolfowitz and Rumsfeld said the now-former officials would not comment for this story.

Anti-Torture Laws

The actions of the Bush administration also flouted the 1984 "Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment," which was approved by 145 nations, including the United States. It declares that:

"No exceptional circumstances whatsoever, whether a state of war or a threat of war, internal political instability or any other public emergency, may be invoked as a justification of torture."

Moreover, the convention says individuals who resort to torture cannot defend their actions by saying they were acting on orders from superiors and it mandates that torturers be prosecuted wherever they are found.

The United States signed the Convention Against Torture in 1988 under President Ronald Reagan, who hailed it as “a significant step” in preventing torture, which he called “an abhorrent practice unfortunately still prevalent in the world today.”

In a May 20, 1988, message to the U.S. Senate, Reagan noted that “the core provisions of the Convention establish a regime for international cooperation in the criminal prosecution of torturers relying on so-called ‘universal jurisdiction.’”

According to that provision, “each state party is required either to prosecute torturers who are found in its territory or to extradite them to other countries for prosecution.”

It was this Convention, ratified by the Senate in 1994, that Bush administration officials sought to bypass with legal memos, many drafted by John Yoo of the Justice Department’s Office of Legal Counsel.

The administration memos argued that the Geneva Convention did not apply to detainees in the “war on terror” and that President Bush’s commander-in-chief powers allowed him to ignore laws in the interest of protecting the nation.

The record now shows that during the same week in March 2003 – when Rumsfeld was publicly berating Iraq for violating the Geneva Convention by broadcasting footage of American POW’s – he was engaged in drafting a top-secret plan that would give military interrogators at Guantanamo wide latitude to use harsher techniques to obtain information from prisoners.

Rumsfeld signed off on the plan on April 2, 2003, according to documents declassified and turned over to the American Civil Liberties Union last month in response to a Freedom of Information Act lawsuit.

Though some of the more extreme techniques were dropped as the list was winnowed down to 24 from 35, the final set of interrogation methods Rumsfeld approved still included tactics for isolating and demeaning a detainee, known as "pride and ego down."

Such degrading tactics would appear to contravene the Geneva Convention, which bars abusive or demeaning treatment of captives.

Reports of Abuse

Weeks after the Iraq invasion, human rights groups started receiving information about the abuse of dozens of Iraqi prisoners at Camp Cropper, Camp Bucca and Abu Ghraib, and the deaths of two prisoners, one of whom died of a crushed larynx, and the other with a hard blow to the head.

Amnesty International sent a letter to the head of the U.S. occupation, Paul Bremer, on June 26, 2003, raising concerns about abuses during house searches, treatment during arrest and detention, people being forced to lie face down on the ground; use of hoods or blind folds, exposure to sun and heat for hours, limited amount of water supplied, and lack of proper washing and toilet facilities.

One month later, Amnesty International released a report, "Iraq: memorandum on concerns relating to law and order," warning of allegations of torture and abuse in U.S. prisons, including Abu Ghraib.

"Regrettably, testimonies from recently released detainees held at Camp Cropper and Abu Ghraib Prison do not suggest that conditions of detention have improved," the report said.

There are "a number of reports of cases of detainees who have died in custody, mostly as a result of shooting by members of the Coalition forces." A Saudi national "alleged that he was subjected to beatings and electric shocks."

Photographs backing up these allegations would surface a year later in two investigative news reports, one by Seymour Hersh of The New Yorker and the other by "60 Minutes II," which detailed the systematic abuse of Iraqi prisoners at Abu Ghraib.

Months before the worldwide condemnation of the treatment of the Abu Ghraib prisoners, Rumsfeld sent Maj. Gen. Geoffrey D. Miller was sent to Baghdad from Guantanamo Bay to “hit back at the [Iraqi] insurgents...through unorthodox means,” according to a May 10, 2004, front-page story in the Washington Post.

"He came up there and told me he was going to 'Gitmoize' the detention operation," turning it into a hub of interrogation, said Brig. Gen. Janis L. Karpinski, then commander of the military prison system in Iraq, according to the Post.

Hersh wrote in The New Yorker’s May 24, 2004, issue that “the roots of the Abu Ghraib prison scandal lie not in the criminal inclinations of a few Army reservists but in a decision, approved last year [2003] by Secretary of Defense Donald Rumsfeld, to expand a highly secret operation, which had been focused on the hunt for Al Qaeda, to the interrogation of prisoners in Iraq. …

“The solution, endorsed by Rumsfeld and carried out by Stephen Cambone, was to get tough with those Iraqis in the Army prison system who were suspected of being insurgents. … Rumsfeld and Cambone went a step further, [bringing] unconventional methods to Abu Ghraib. … The male prisoners could be treated roughly, and exposed to sexual humiliation.”

Tarnished Image

Amrit Singh, a staff attorney at the ACLU’s Immigrant Rights Project and the co-author of Administration of Torture, added that Rumsfeld and other top Bush administration officials by “holding up the Geneva Convention and saying it did not apply to some prisoners have tarnished the image of the U.S. throughout the world.”

Even after the programs governing interrogations were exposed, Rumsfeld made sure that a loophole in a new Defense Department policy issued in November 2005, which barred torture and called for the "humane" treatment of detainees, gave him and his deputy the authority to override it.

"Intelligence interrogations will be conducted in accordance with applicable law, this directive and implementing plans, policies, orders, directives, and doctrine developed by DoD components and approved by USD (I), unless otherwise authorized, in writing, by the secretary of defense or deputy secretary of defense," the policy says. "USD (I)" refers to the undersecretary of defense for intelligence.

Rumsfeld resigned in November 2006.

Redefining Iran as the Enemy in Iraq

Redefining Iran as the Enemy in Iraq

By Ivan Eland

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Editor’s Note: In Washington and Tel Aviv, war drums are beating again regarding Iran, as the Bush administration and Israel’s Olmert government see the window closing on the time frame for confronting Teheran with George W. Bush in the White House.

In this guest essay, the Independent Institute’s Ivan Eland looks at how – in support of this political need – the ever-shifting enemy in Iraq has become Iran:

This label refers to parts of Moktada al-Sadr’s Mahdi Army, which Prime Minister Nuri al-Maliki and his security forces ham-handedly sought to confront and undermine in Basra before the fall local elections.

Al-Qaeda in Iraq is so passé.

This repeated allegation during the congressional hearings and the firing of Admiral William Fallon as commander-in-chief of U.S. forces in the Middle East, who was an opponent of any attack on Iran, should again raise worries to war-weary Americans about a cowboy attack on Iran before the Bush administration leaves office.

On cue, administration surrogates, such as former Bush speechwriter Michael Gerson, repeated Petraeus’s charges: “...despite undeniable progress against Sunni radicalism [read: al-Qaeda], events in Iraq are still inseparable from the actions and attitudes of Shiite militias armed and directed by Iran—an influence that America failed to confront for many years.”

Not only has America failed to confront these Shiite militias, the Bush administration has been enabling them.

The congressional hearings failed to bring out, because of administration intention and Democratic ignorance, that Maliki’s security forces are infested with Shiite Badr Brigade militias that Iran prefers over the Iraqi nationalist Mahdi Army.

The confused milieu of Iraq, an administration with no coherent strategy to improve the conditions in that country, has always tried to downplay that the U.S.-backed Shiite government and its associated militias are the same ones backed by its archenemy, Iran.

But the hearings once again confirmed that the administration, always better at politics than at governing, does have a strategy: hold the lid on violence in Iraq until the Bush administration leaves office, and then blame any subsequent deterioration or loss in Iraq on the next administration.

This tack will be similar to the ludicrous argument that Henry Kissinger, who has been advising both the administration and presidential candidate John McCain, still uses about the Vietnam War: we were winning until the Democrats cut off funding for the war.

This explains Bush’s acceptance of Petraeus’s troop-withdrawal pause, which will undoubtedly continue until January of 2009. Of course, retaining a high level of U.S. forces, and the troop surge that preceded it, really has just been an insurance policy and a macho way to mask the real U.S. strategy of paying off the Sunni and Mahdi Army enemies.

This libertarian strategy ordinarily might be smart, except that bolstering these militias will, in the long run, exacerbate any civil war when they again begin to fight each other.

At the congressional hearings, however, there were signs that the latest botched Iraqi government offensive in Basra, the most important city in Iraq because it’s in a region containing 60 percent of the country’s oil and has Iraq’s only access to the Persian Gulf to ship that oil (why the U.S. let less capable British forces try to secure this city has been an unexplored administration blunder), was beginning to flip a few Republicans against the war.

This movement was indicated by some Republicans adopting the Democrats’ argument that Iraqis were failing to do enough to become democratic.

Although it is grossly unfair to invade a country, destroy its social fabric and economy, and then expect people who have had no experience in democracy to quickly become democrats, if it takes those rhetorical gymnastics to justify a more rapid U.S. withdrawal, then I guess it’s an improvement.

But unfortunately, as the hearings showed, progress toward a U.S. exit is very slow indeed.

“Financial” Crisis?

“Financial” Crisis?

by Richard Hirschhorn

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When the financial media report to us that there is a financial crisis they are not talking about the ongoing problems driving our economy down into recession. They are not talking about an out of control political system that cannot control spending, they are not talking about the flight of capital and manufacturing overseas, and they are not talking about the oil shock that has us reeling.

The “crisis” they are describing is that troika of problems known as the housing “bubble”, the mortgage “meltdown” and the credit “crisis”.

This is no financial problem, but a scam, a fraudulent enterprise gone bust. A scheme. A swindle.

The only reason we believe what is happening to that troika is economic in nature is because news organizations gave the assignment to the wrong desk. This is not a story of economic theory gone wrong or of too much or too little regulation. This is a story that might have been ignited on Page Six, picked up by the crime blotter, and finally assigned to the front page. This is the story of the largest scandal in American history and it should be the hottest item in every news cycle.


In a mature economy such as ours, the financial sectors represent an ever-increasing share of the remaining pie. Enterprise becomes secondary to the financial products that bankroll everything. We may not make a thing that’s on all those shelves in the big-box stores, but the plastic in your pocket is All-American. Deals that put a business together often make as much or more money than the business itself. Banks and trading houses get a piece of everything both here and over there. We might not be able to make TVs, tan leather, weave fabric, or cobble a pair of shoes, but we’re hell on wheels when it comes to derivatives.

It is this ever increasing desperate attempt to manufacture profits out of thin air that has brought our banking system to the brink of collapse. Our leading financial institutions have gone over the line, the result being what financial reporters call a “crisis”. This is not a question concerning economic orientation. These are questions of morality, criminality and national character.

The major-league bunko artists that have brought this nation to the brink of ruin took their lead from practices perfected down on the farm. In the minor leagues of high finance, certain sectors of our lending establishment have long feasted on the desperate and naïve elements of our society living from paycheck to paycheck. These seedy practices are widespread and readily apparent in the car- loan, check cashing, credit card, student loan, and paycheck loan operations that prey on these desperate folks. In these industries, the more you take advantage of your customers the better off you are. Too many of our fellow Americans earn their living everyday by selling bad deals to the rest of us. The worse the financial instrument is for the customer, the more money they make in profit and commission. These sordid practices were an inspiration to our banking elite. They were an enabler of things to come.

This malevolent consciousness provided the architecture within which the initial fraud that underpins this scandal occurred. In the past, predatory loans represented a hardship to the borrower, but lenders still predicated profit on the expectation of being paid back. Today’s mortgage brokers issued loans to homebuyers knowing full well the borrowers would default. Every professional credit review informed the lenders that they were handing out loans that would never be repaid, and that they would never see a profit on the capital they were “investing”. This is not the twenty bucks your buddy “borrows” from you at the pub on Friday night. We are talking about hundreds of billions of dollars, perhaps trillions. The loss of such sums would represent the greatest disaster in our financial history, yet this huge amount was exposed knowing full well that it was not properly secured. This exposure had to be covered up, and this cover-up can be described as “stage two” of the scheme.

The availability of bad mortgages distorted the market for homes by increasing demand. This distortion in demand artificially increased home prices, an increase that provided a smokescreen to the underlying unsound mortgages and a rosy story for the business desk to report. These market distortions cannot be understood by traditional financial analysis because they were predicated on unsound principles, and perpetuated outside the bounds of all normal lending models. Even if the press didn’t, the perps knew these mortgages were no good. The proof of this is how fast they repackaged them and got them off the books. After all, if they were good loans, why the bum’s rush to get rid of them?

This derivative process can be likened to the role that “fences” play in the criminal underground. Hot goods are not worth a dime unless they can be fenced, turned into cash. Banks, institutions run by our leading citizens, took these highly questionable mortgages off the hands of the mortgage lenders, keeping the fraudulent scheme alive. Like an art thief scribbling a moustache on the Mona Lisa, losing mortgages were turned into derivatives. Apparently, on Wall Street, you can make a silk purse out of a cow’s ear. In this way, they enabled the unscrupulous lending they depended on to continue evading the economic consequence of a shady practice. While this went on, the financial press did not see a thing, nor sound the alarm, but restricted their abbreviated commentary to the single word: “bubble”.

To make the swindle complete, one more “accessory after the fact” was required. They needed somebody to provide a French bath to keep the stink off. The firms that rate bonds and derivatives provided this final link in the crooked scheme. Ratings agencies are supposed to be the Sergeant at Arms for the bond markets, providing one last firewall, protecting investors from instruments of dubious quality. Despite the fact they were based on bad loans, this garbage paper was allowed to enter global markets with a “Triple A” rating. These austere gentlemen were acting in a manner akin to Al Capone slapping a Stolichnaya label on a bottle of bathtub gin. Once again, the business desk missed the story, only continuing to murmur softly, “bubble”.

In the last few months the entire fabric of this scheme has come unwoven. Reported losses have already amounted to several hundred billion dollars. Lending institutions have lost so much money; they don’t have sufficient funds to make the legitimate loans
that allow for business expansion. This they call a “credit” crisis.

When a sun-glassed coke-head on a used car lot informs a customer (who may be a recent immigrant barely able to comprehend English), that the “good news” is that he has qualified for the special low rate of l6% on that lovely overpriced rust-bucket, we all know what that is about. But when you can no longer distinguish between that used car salesman and the heads of our largest banks; that is a sorry spectacle.

How can we explain the financial media missing the biggest story of the century?

The community of business journalists and economic commentators, including great newspapers, several magazines and a fistful of cable networks, did manage to send up a warning balloon. They called the situation a “bubble.” That was their way of saying, “there is something going on here, but we can’t say what it is, can we Mr. Jones?”

At that point, we should have gone on alert. After all, it was less than a decade ago, that our economy last suffered the damages caused by a “bubble”. That scam was called the dotcom “bubble”, when any jackass that could post a pricelist online was hailed, by our friends at the business desk, as a captain of industry. Have we forgotten how the entire nation was gulled into spending billions on resetting the clocks on our computers? We all learned then, or should have, what a “bubble” was and the damage it could do. When the dotcom bubble burst, to begin the new millennium, billions were lost. But today’s bursting, perhaps because we seemed to have learned nothing from the last one, is much, much worse.

Business reporters are not trained to report on either crime or scandal. This may be a case of being too close to the forest to see the trees. It may be a case of needing a fox, not a chicken, in the henhouse. Maybe business journalists need to learn when an “outside” auditor is called for.

Sport has been assigned even more coverage than business. No newscast dares omit the scores. Some events have twenty camera setups. Not even Greenspan got twenty camera setups. Like finance, there are oodles of publications and broadcasts designed to shout out every detail of every game. Despite this, THE GAME was perverted by steroid use. Seasoned journalists on the sports beat now say how obvious the abuse was, how easy it was to pick out the abusers. Thanks a lot.

The Pope was in town. There were a lot of new and unfamiliar faces popping up on the screen. These are the religion reporters whose specialty is reporting on our various spiritual communities. Every one of them has noted how important, and inspiring, it is that the Holy Father met with those sexually abused by priests. Yet, that vile practice went on for decades and not a peep about it was heard from the God desk. For Christ’s sake, how did they miss that story? If we want to protect children from religious pedophiles, perhaps we should give the coverage to the atheist desk.

It is not likely we are going to see any of the villains in this piece do the perp walk. They probably have not broken any laws. The first premise to avoiding justice is knowing how to commit the perfect crime, and the perfect crime is the one that is legal.

Another way crooks can be assured they will get away with it is by knowing who is looking over your shoulder. If the sports desk can miss steroid abuse, and the God desk can describe child molesting as a religious problem, big time bank swindlers can rest easy knowing that even when they are caught, it will only be described as a financial crisis.

Maybe all the serious reporting should be given to the political desk. Maybe they would have done a better job than the guys from the business desk. Ought to run down there and ask. As soon as they get back, that is just what I’m going to do.

Right now, they’re all out buying lapel pins.

Global Famine? Blame the Fed

Global Famine? Blame the Fed

By Mike Whitney

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The stakes couldn't be higher for Ben Bernanke. If the Fed chief decides to lower rates at the end of April, he could be condemning millions of people to an agonizing death by starvation. The situation is that serious; there's no room for error. Food riots have broken out across the globe destabilizing large parts of the developing world. China is experiencing double-digit inflation. Indonesia, Vietnam and India have imposed controls over rice exports. Wheat, corn and soya are at record highs and threatening to go higher still. Commodities are up across the board. The World Food Program is warning of widespread famine if the West doesn't provide emergency humanitarian relief. The situation is dire. Venezuelan President Hugo Chavez summed it up like this, "It is a massacre of the world's poor. The problem is not the production of food. It is the economic, social and political model of the world. The capitalist model is in crisis."

Right on, Hugo. There is no shortage of food; it's just the prices that are making food unaffordable. Bernanke's "weak dollar" policy has ignited a wave of speculation in commodities which is pushing prices into the stratosphere. The UN is calling the global food crisis it a "silent tsunami", but its more like a flood; the world is awash in increasingly worthless dollars that are making food and raw materials more expensive. Foreign central banks and investors presently hold $6 trillion in dollars and dollar-backed assets, so when the dollar starts to slide, the pain radiates through entire economies. This is especially true in countries where the currency is pegged to the dollar. That's why most of the Gulf States are experiencing runaway inflation. This doesn't mean that oil depletion, biofuel production, over-population, and giant agribusinesses don't add to the problem. They do. But the catalyst is the Fed's monetary policies; that's the domino that puts the others in motion. Here's Otto Spengler's summary in his recent article in Asia Times, "Rice, Death and the Dollar":

"The global food crisis is a monetary phenomenon, an unintended consequence of America's attempt to inflate its way out of a market failure. There are long-term reasons for food prices to rise, but the unprecedented spike in grain prices during the past year stems from the weakness of the American dollar. Washington's economic misery now threatens to become a geopolitical catastrophe....The link between the declining parity of the US unit and the rising price of commodities, including oil as well as rice and other wares, is indisputable.

Never before in history has hunger become a global threat in a period of plentiful harvests. Global rice production will hit a record of 423 million tons in the 2007-2008 crop year, enough to satisfy global demand. The trouble is that only 7% of the world's rice supply is exported, because local demand is met by local production. Any significant increase in rice stockpiles cuts deeply into available supply for export, leading to a spike in prices. Because such a small proportion of the global rice supply trades, the monetary shock from the weak dollar was sufficient to more than double its price." ("Rice, death and the dollar", By Otto Spengler, Asia Times)

The US is exporting its inflation by cheapening its currency. Now a field worker in Haiti who earns $2 a day, and spends all of that to feed his family, has to earn twice that amount or eat half as much. That's not a choice a parent wants to make. Its no wonder that six people were killed Port au Prince in the recent food riots. People go crazy when they can't feed their kids.

Food and energy prices are sucking the life out of the global economy. Foreign banks and pension funds are trying to protect their investments by diverting dollars into things that will retain their value. That's why oil is nudging $120 per barrel when it should be in the $70 to $80 range.

According to Tim Evans, energy analyst at Citigroup in New York, “There’s no supply-demand deficit". None. In fact suppliers are expecting an oil surplus by the end of this year.

"The case for lower oil prices is straightforward: The prospect of a deep U.S. recession or even a marked period of slower economic growth in the world’s top energy consumer making a dent in energy consumption. Year to date, oil demand in the U.S. is down 1.9% compared with the same period in 2007, and high prices and a weak economy should knock down U.S. oil consumption by 90,000 barrels a day this year, according to the federal Energy Information Administration." ("Bears Baffled by Oil Highs" gregory Meyer, Wall Street Journal)

There's no oil shortage; that's another ruse. Speculators are simply driving up the price of oil to hedge their bets on the falling dollar. What else can they do; put them in the frozen bond market, or the sinking stock market, or the collapsing housing market? The Fed has gummed up the entire financial system with its low-interest credit scam; now it's on to commodities where the real pain is just beginning to be felt. What a mess!

This is what happens when there's too many dollars sloshing around the system; they all need a place to rest, and when they do, they create equity bubbles. Sound familiar? Indeed. This is Greenspan's legacy in a nutshell; the dark specter of Maestro will continue to haunt the world until all the hyper-inflated asset-classes (real estate, bonds, stocks, commodities) return to earth and all the red ink is mopped up. That'll take time, but Bernanke could make things a lot easier if he accepted some responsibility for the current turmoil and raised rates by 25 basis points. That would show speculators that the Fed was serious about defending the currency which would send the commodities bubble crashing to earth. Prices would go down overnight; guaranteed.

But Bernanke won't raise rates because he doesn't really give a hoot about the people in Cameroon who have to scavenge through garbage-dumps for a few morsels to keep their families alive. Nor does he care about the average American working-stiff who gets cardiac-arrest every time he pulls up to the gas pump. What matters to Bernanke is making sure that his fat-cat buddies in the banking establishment get a steady stream of low interest loot so they can paper-over their bad investments and ward off bankruptcy for another day or two. Its a joke; it was the investment banks that started this downward spiral with their rotten mortgage-backed securities and other debt-exotica. Still, in Bernanke's mind, they are the only ones who really count.


And don't expect Bush to step in and save the day either. The "Decider" still believes in the unrestricted activity of the free market; especially when his crooked friends can make a buck on the deal.

From the Washington Times:

"Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas. Costco and other grocery stores in California reported a run on rice, which has forced them to set limits on how many sacks of rice each customer can buy. Filipinos in Canada are scooping up all the rice they can find and shipping it to relatives in the Philippines, which is suffering a severe shortage that is leaving many people hungry." (Patrice Hill, Washington Times)

The Bush administration knows there's hanky-panky going on, but they just look the other way. It's Enron redux, where Ken Lay Inc. scalped the public with utter impunity while regulators sat on the sidelines applauding. Great. Now its the Commodity Futures Trading Commission (CFTC) turn; they're taking a hands-off approach so Wall Street sharpies make a fortune jacking up the price of everything from soda crackers to toilet bowls.


"A hearing Tuesday in Washington before the Commodity Futures Trading Commission starts a new round of scrutiny into the popularity of agricultural futures, a once a quieter arena that for years was dominated largely by big producers and consumers of crops and their banks trying to manage price risks. The commission's official stance and that of many of the exchanges, however, is likely to disappoint many consumer groups. The CFTC's economist plans to state at the hearing that the agency doesn't believe financial investors are driving up grain prices. Some grain buyers say speculators' big bets on relatively small grain exchanges, especially recently, are pushing up prices for ordinary consumers. ("Call Goes Out to Rein In Grain Speculators", Ann Davis)

"The agency doesn't believe financial investors are driving up grain prices"?!?

Prices have doubled, people are starving, and the Bush troop is still parroting the same worn party-mantra. Its maddening.

The US has been gaming the system for decades; sucking up two-thirds of the world's capital to expand its cache of Cadillac Escalades and flat-screen TVs; giving nothing back in return except mortgage-backed junk, cluster bombs, and crummy green paper. Nothing changes; it only gets worse. But this is different. The world is now facing the very real prospect of "completely avoidable" famine because twelve doddering old banksters at the Federal Reserve would rather bailout their sketchy friends and preserve their spot at the top of the economic food-chain then save the lives of starving women and children. Bernanke now has an opportunity to do more damage than Bush with one swipe of the pen. If he cut rates; the dollar will fall, commodities will spike, and people will starve. It's as simple as that.

Many States Appear to Be in Recession

Many States Appear to Be in Recession

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The finances of many states have deteriorated so badly that they appear to be in a recession, regardless of whether that's true for the nation as a whole, a survey of all 50 state fiscal directors concludes.

The situation looks even worse for the fiscal year that begins July 1 in most states.

"Whether or not the national economy is in recession - a subject of ongoing debate - is almost beside the point for some states," said the report to be released Friday by the National Conference of State Legislatures.

The weakening economy is hitting tax revenue in a number of ways: People's discretionary income is being gobbled up by higher food and fuel costs, while the tanking housing market means people are spending less on furniture and appliances associated with buying a house.

The situation is grim in Delaware, with a $69 million gap this year, and bleak in California, with a projected $16 billion budget shortfall over the next two years, the report said. Florida does not expect a rapid turnaround in revenue because of the prolonged real estate slump there.

By mid-April, 16 states and Puerto Rico were reporting shortfalls in their current budgets as the revenue those budgets were built on - typically, taxes - fell short of estimates. That's double the number of states reporting a deficit six months ago.

The NCSL said the news is even worse for the upcoming fiscal year, with 23 states and Puerto Rico already reporting budget shortfalls totaling $26 billion. More than two-thirds of states said they are concerned about next year's budgets.

The results are consistent with a drumbeat of bad economic news for states that several budget groups have produced in the past few months.

Last week, the Washington-based Center on Budget and Policy Priorities said 27 states are reporting projected budget shortfalls next year totaling at least $39 billion.

President Bush said Tuesday that the economy was not in a recession but a period of slower growth. However, some economists have pointed to the string of declines in manufacturing orders to argue that the economy has fallen into a recession.

Bolstering their position, the Commerce Department reported Thursday that sales of new homes plunged in March to the lowest level in 16 1/2 years. The government also reported that orders to factories for big-ticket goods fell for a third straight month in March, the longest string of declines since the 2001 recession.

Some states "have declined so much that they appear to be in a recession," the NCSL report said.

It also noted the silver lining for states where the economy is based on energy, such as North Dakota and Wyoming. Alaska is making so much money from oil that it announced an estimated surplus next year of $8 billion, almost twice the state's annual budget.

In North Dakota, revenue is above legislative predictions by 13 percent, and in Louisiana, the oil and gas sector is robust.

"For energy-producing states, the fiscal situation is strong and the outlook is good," the report said.

Among Other Findings:

  • More than half the 16 states reporting deficits this year have cut spending, including $1 billion by Florida lawmakers last year and across-the-board cuts in Nevada. At least eight states are debating raising taxes or fees, including a proposed $1-per-pack cigarette tax increase in Massachusetts to raise $175 million.

  • Twelve states, including Georgia, Idaho and Illinois, reported that personal income tax collections were failing to meet estimates, and in eight of these, collections were even below a reduced forecast.

  • Many states, including Alabama, Arizona, Massachusetts, Minnesota, Nevada and Wisconsin, plan to tap their rainy day funds, which contain money set aside for fiscal emergencies. Nevada may use its entire rainy day balance.

On the Web:

NCSL: http://www.ncsl.org

BP to Shut Forties Pipeline, Cutting U.K. Oil Output

BP to Shut Forties Pipeline, Cutting U.K. Oil Output

By Ben Farey

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BP Plc, Europe's second-biggest oil producer, will close the North Sea Forties Pipeline System by tomorrow morning because of a strike at a refinery in Scotland, cutting U.K. oil production by 40 percent.

Ineos Group Holdings Plc's Grangemouth refinery will supply power and steam to the Forties pipeline until 6 a.m., Richard Grant, a BP spokesman in Aberdeen, Scotland, said in a phone interview today. BP had earlier expected the utility supply to stop this evening, forcing the pipeline to shut today.

Crude oil has surged on the prospect of the pipeline closing. The Forties Pipeline System ships about 700,000 barrels a day from more than 50 fields in the North Sea which will be forced to close as well. Workers at the Grangemouth refinery will start a two-day walk out tomorrow in a dispute over pensions. Fuel supplies have run out at some gas stations in Scotland as motorists rushed to fill up their cars.

The shutdown will also cut natural gas pumped from fields that produce both fuels. As much as 3 billion cubic feet a day (85 million cubic meters) of natural gas production may be affected, Grant said. That's equivalent to 30 percent of the U.K.'s gas demand at this time of year, he said.

Union Officials

Meetings with local union officials will take place this morning, Ineos spokesman Richard Longden said earlier today. The company remains ``hopeful'' the refinery workers' union, Unite, will agree to provide steam and power to allow the Forties pipeline to remain operational, he said before the latest BP comment. Talks aimed at reaching a settlement will continue ``until the eleventh hour,'' he said.

The refinery ``shutdown in now an inevitability,'' said Pauline Doyle, an official at the Unite union, in a telephone interview.

The walkout of refinery workers will begin at 6 a.m. U.K. time tomorrow, she said. Workers will return on April 29. There's ``nothing on the table'' to suggest a last minute deal to keep the Forties pipe open is possible, she said. Doyle said there may be unofficial talks with Ineos she wasn't aware of.

The shutdown of the 200,000 barrel-a-day refinery was completed yesterday in preparation for the strike, the company said. Grangemouth supplies about 95 percent of the fuel used in Scotland's central belt, including its capital, Edinburgh, and biggest city, Glasgow.

Pension Changes

About 1,200 workers at the Grangemouth plant will go on strike from 6 a.m. tomorrow in protest against changes to the company's pension scheme.

The Grangemouth plant has refined oil for around 80 years and the last time the entire facility was completely shut down was during World War II, according to Ineos, which bought the plant from BP in 2005.

Brent crude oil futures rose to a record $117.56 a barrel on London's ICE Futures Europe exchange yesterday on concern the strike will disrupt output. Wholesale gasoline prices have also reached records.

Some gas stations in Scotland have run out of gasoline and diesel as motorists filled their cars before the strike begins. Others have rationed fuel and increased prices.

Petrol garages operated by Royal Dutch Shell Group Plc and the U.K. unit of Exxon Mobil Corp. in central Edinburgh have been roped off with ``No Fuel'' signs in the price display window. Still, fuel retailers said that gasoline stations are being re-supplied and that the country has adequate stockpiles.

``Supplies of petrol and diesel are about even and there's plenty of both,'' Alexander Wells, a spokesman for the Petrol Retailers' Association, said today. Demand is ``about normal,'' he said, with pockets of higher consumption in parts of Scotland's central belt.

Why Not Let The Market Set The Prices?

Why Not Let The Market Set The Prices?

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Those unfamiliar with marketplace dynamics may not recognize how government activity has created price distortions across our economy. But when these chains fail to restrain the market, the underlying forces become easier to see.

Much as government mandated easy credit propelled home prices to bubble levels, similar forces pushed college tuitions up to the stratosphere. Both systems are currently breaking down along similar lines.

In light of the staggering cost of college education today, it may seem unbelievable that my father in the early 1950s was able to finance his own education with a summer job waiting tables. Like most in his generation, eight weeks of work per year allowed him to graduate debt free. In contrast, the debt burden now heaped on today's college graduates is so oppressive that the financial challenges are becoming a palpable psychological strain on an entire generation.

The irony is that without easy access to student loans, which have been touted as a means to ease college affordability, tuitions never could have risen so high in the first place. Sadly, it is not students who have benefited, but the educational establishment that receives the proceeds. Colleges collect huge sums of money up front while students get saddled with staggering balances.

Now that repaying loans has become increasingly difficult for home buyers and students (especially since the home equity well has run dry and the employment market has cooled), more debtors are defaulting. As a result, the market for securitized loans, which has completely dried up in the mortgage market, is now equally desolate for student loans. Here again, the government is being asked to pick up the slack by buying existing student loans and issuing new loans directly to students.

In so doing, the government is helping to sustain high tuitions just as similar actions are working to prop up real estate prices. If the government stayed out of the student loan market, students would not be denied educations. Colleges and universities would simply be forced to offer affordable tuitions or go out of business --just the way they used to back in my father's day. Similarly, if the government allowed real estate prices to collapse, Americans would not have to take on so much debt to buy houses.

To buy up all of these loans, the Fed is running the printing presses non-stop. As a result, prices of other goods, such as food and energy, are spiraling out of control.

Of course, mainstream Wall Street firms and the conventional financial media do not see this obvious connection. While CNBC searches the world for clues to this "mystery", no one sees the evidence "hiding" in plain sight. Higher prices simply result from all the money printing, both by the Fed and foreign central banks trying to maintain currency pegs to a sinking dollar.

It is amazing how those who were completely blindsided by the surge in food prices are now so quick to come up with ridiculous reasons to explain the phenomenon. However, for those of us who actually understand what inflation is, predicting the current surge in food prices was a no brainer. Read one of my commentaries from Oct. of 2006 and see for yourself.

Similarly, analysts are blaming $120 oil on the hidden machinations of greedy speculators. They buttress these claims by noting that absent a bona fide oil shortage, current prices are not justified by fundamentals. This overlooks that while there is no shortage, there is also no surplus. The market is in perfect equilibrium at today's price, and recent spikes merely reflect the substantial increase in global money supply. If today's prices really were artificially high, like house prices, they would be a glut of oil in storage facilities while users, priced out of an inflated market, cut back on their consumption (This is precisely what is happening in the real estate market).

As consumers are getting wise to inflation, they are beginning to stock up on those products showing the most rapid price increases. This week, Cosco and Sam's Club began to limit bulk purchases of rice. After all, if you have the cash why not by the things you know you will need in the future now, before the prices go any higher. My guess is that if home storage were possible, consumers would be buying as much gasoline and home heating oil as they could currently afford...they might even load up their credit cards to do so. After airfares (which unfortunately cannot be stockpiled), apparel may be next major category of goods that will experience rapid price increases. Why not buy a few extra pairs of socks while they are still cheap?

As the government creates more inflation, and prices for all sorts of consumer goods spiral upward, the authorities, as they always have, will institute price controls and other forms of rationing of consumer staples. My advice is to stock up now, before you end up having to spend hours waiting in line.

FLDS Raid - A Dangerous Legal Precedent

FLDS Raid - A Dangerous Legal Precedent

Joel Skousen

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I waited a week to comment on the Texas case, separating 437 children from their FLDS parents, to see if any substantive evidence of abuse would emerge. It hasn't. Even if it had, those could have been handled individually. But no, Texas plans instead to make every member of the group pay the supreme price: to strip away their beloved children. This case is about group punishment. In spite of a search warrant tainted by a false witness (the "Sarah" who doesn't exist), no actual specific evidence of abuse, or any unwilling participants in this polygamous compound, a self-righteous Texas judge had decreed that all 400 + children will not be returned to the custody of their parents. Texas has gone too far to rid itself of this awkward religious sect that built the "Yearning for Zion" (YFZ) ranch in order to evade persecution in Utah and Arizona.

As this tyrannical order clearly meant separating even nursing children from their mothers, a wave of outrage began to sweep the nation. The media-savvy judge immediately changed her order (allowing children under 1 year if age to be nursed) in order to keep the tide of public relations on the side of the authorities. But this should not deter the nation from realizing the danger of the tenuous legal proposition that mere membership in a group (that may have isolated examples of marrying underage girls) makes all unworthy of possessing any children at all--ever. That is wrong, especially when legal remedies exist to prosecute specific wrongdoers.

The local sheriff admitted on television that he had an "informant" on the inside for over 4 years. That was probably a disgruntled member of the group who decided to stay on to build up a case against his fellow church members. If a case can't be built after four years of informing, and authorities have to rely on a false abuse phone call to justify this invasion, what does that say about the State's case?
The key testimony the judge relied upon was that of Texas Child Protective Services' Angie Voss who said that at least "five girls younger than 18 are pregnant or have children." CPS argued under cross-examination that none of the 400+ children should be allowed to return to the YFZ ranch because 10 or 12 years down the road they may be subject to abuse. Incredible! Defense lawyers correctly noted that the state cannot make such sweeping generalizations about all of these families. Fairness requires a case by case assessment. In the meantime, Children should be free to return home with their parents, who have not been accused of any crime. Criminals get easier release terms and bail than these families.

Unfortunately, even Sen. Harry Reid, the Senate Majority leader (and a Mormon who probably has polygamous ancestors) has joined in the witch hunt and called for Department of Justice assistance to states in prosecuting polygamists nationwide wherever they may be hiding. I call this a witch hunt because these people are being judged as a group, mostly because they can be easily targeted as a group. There is far more abuse that occurs among the general populace as a whole, but because they are not part of an organized group, they have to be prosecuted individually--as it should be. There is no excuse for engaging in group punishment for the polygamists when their general record of raising fine, well behaved children is superior to the average public educated family. Individual prosecution for underage marriage or cohabitation is not that much more difficult than the typical secretive bigamist--who makes no attempt to take responsibility for any children.

Even the suspected perpetrator of the phony abuse calls (representing herself as "Sarah Barlow") was treated more leniently by authorities than these Texas families. Rozita Swinton, a 33 year old black woman, with a history of false reports was allowed out on bail ($20,000 put up by someone yet unknown) and promptly disappeared. An arrest warrant was issued for her charging her with false reporting to authorities for an incident in February. Some justice. This makes at least the third time Swinton has been implicated in these kinds of false reports and she has never served jail time. She was not arrested for this incident even though the false call from "Sarah" originated from a phone Swinton has used in the past to falsify abuse reports. Rod Parker, an attorney and spokesman for the FLDS Church said Tuesday that "Sarah Barlow doesn't exist and Dale Barlow lives in Arizona." He correctly noted that the phone call tainted the search warrant used at the YFZ Ranch, which will certainly be part of a future legal challenge to the blanket separation of mothers from children.

Authorities in Colorado are keeping everything concerning Swinton sealed in order to avoid embarrassment of Texas authorities who based their search and seizure warrant on this illegal call for help. Their reluctance to prosecute Swinton is suspicious. A tape recording of the call exists. How hard is it to match her distinctive voice to that call?

There is other evidence as well. Texas Rangers admitted privately to Child Protection Project founder Linda Walker who took the call that "she [Swinton] was obsessed with the FLDS." Rangers confiscated tons of material on the FLDS in the search of Swinton's home. She had real addresses and real names of FLDS people which is not easy to get a hold of for someone with limited intellect. Swinton also knew that the FLDS had doctrinal beliefs that denied their Priesthood to Blacks and devised racist statements in her call to the Texas abuse hot line so as to further implicate the FLDS as racists. Because of Swinton's intellectual limitations (friends describe her as a sort of soft spoken simpleton), I would not rule out that Swinton may be under the influence of an agent provocateur working to justify the seizure of children from the YFZ ranch.

The longer this blanket forced separation of family members continues, based solely upon the tenuous doctrine of "potential abuse" for group beliefs, the more dangerous it will become to the rights of all who are or will become potential dissidents to government tyranny--unless it backfires and they go too far. That's what happened with the state of Utah when they shot a polygamist home schooler named John Singer for refusing to hand over his children to the state who was going to force them into public schools. The nationwide bad press on the killing forced Utah to stop prosecuting homeschoolers and finally allow parents the right to educate their own.

If you think this is only about the evils of polygamy, consider that Texas authorities prepared a "Cultural Competencies" tip sheet for Texas social workers engaged in "de-programming" FLDS children warning them that these cult members would be "fearful and distrustful of government." Why shouldn't they be, given what has happened? We should all be deeply concerned.

The Texas ACLU also weighed in on the case: "While we acknowledge that Judge Walther's task may be unprecedented in Texas judicial history [and totally without legal precedent], we question whether the current proceedings adequately protect the fundamental rights of the mothers and children,' Terri Burke, executive director of the ACLU of Texas, said in a written statement. "As this situation continues to unfold, we are concerned that the constitutional rights that all Americans rely upon and cherish -- that we are secure in our homes, that we may worship as we please and hold our places of worship sacred, and that we may be with our children absent evidence of imminent danger [the current legal standard] -- have been threatened," Burke said.

I'm hoping that good people everywhere will realize how this expansion of child "protective" law threatens every family whose parents subscribe to any belief system "society" considers "abusive" and who are members of an identifiable group of similar believers. "Society" doesn't exist legally, except in the minds of those who claim (wrongly) that they speak for the majority. This targeting of dissident groups, if allowed to continue, will eventually encircle almost all fundamentalist Christians who believe in any form of strict discipline and spanking, who are home schoolers or who hold to any theory that our government is in some way an enemy of liberty. Indeed, belief in mere physical discipline, or patriarchal authority, is one of the "evils" social workers regularly list as one of the criteria that make for abusive parents, and thus unworthy to keep their children.

That said, I do think there is a problem endemic to polygamous groups relative to the treatment of girls. I've had some experience with members of these groups. Almost all are constitutional conservatives and some individual members have attended speeches I have given in the West. We have to be careful not to stereotype all polygamous groups as the press tends to do. They have some common beliefs, but vary greatly in how they are organized and how they function as a group. The ones I have met have actually been very fine conservative people. They all readily admit that some polygamous groups are much more authoritarian than others, and that is why there have been so many splinter groups among them, each trying to find some form of leadership they are comfortable with. Most often the problem with the old line groups like the FLDS is with older leaders who tend to run things with a patriarchal authoritarian mindset. In Biblical terms, the Lord does endorse patriarchal authority, but it must never be exercised with unrighteous dominion.

Notwithstanding problem people or leaders (which isn't limited to fundamentalists), the FLDS have many admirable qualities. The children follow an excellent health code, eat natural foods, are well behaved, clean and well groomed. They are homeschooled and thus shielded from so many of the evil influences that infect other good Christians who lose many of their children to the world. There parents are clearly not monsters the state of Texas seeks to portray in their aggressive attempt to justify the separation and destruction of these families.

Arranged marriages occur in only a few of these groups. Most of the splinter groups run things by normal persuasion. But, the core problem with any of the groups is that it is a relatively closed circle relative to available future wives. Despite having large families, polygamists tend to intermarry within the group because it's very difficult to convert outside woman to join the group, and they have significant doctrinal and authoritarian issues with other splinter groups that discourage intermingling. Those that are raised within the group are the ones most willing to continue on in this tradition of multiple wives--though a significant number within the non-authoritarian groups decide not to be polygamous.

But, even these have trouble breaking with the group because of strong family and religious ties. Business ties are also hard to break. Certain polygamist groups are extremely effective at banding together and forming successful businesses that make a lot of money. This makes it difficult to break away because they still have a share in the business ventures, which isn't easily separable from the group.

What I suspect is happening in this larger FLDS compound is that there are not many available future wives except these teenage girls, who are yet unspoken for. Thus, a competition develops as certain men try to get commitments of marriage out of either the parents or the girl before someone else does. This leads to very unhealthy competition and some incentive to intermarry among relatives or enter into underage marriages. But the solution to this major source of abuse is clear:

Regardless of these people's commitment to polygamy, they need to follow the law relative to marriage age.

Various FLDS men have said they are more than willing to do that, which could swiftly solve this crisis. However, the government is probably going to use the results of the mandated DNA tests to prosecute those who have married an underage mother, or close relative, rather than simply establish paternity as they claim. The authorities wrongfully induced their "voluntary" participation in the DNA tests by promising this could lead to the restoration of their children. Instead, I believe this will only lead to criminal charges, and the state will already have proof of the illegal relationship. The prosecutions are appropriate where excessive pressure was involved in the marriage. But if authorities are going down this route, they should not simply be targeting polygamists. To be fair, they should be arresting every under-aged pregnant girl in the state and subject all known male contacts to DNA testing. Of course they won't do that, proving that they are targeting an unpopular religious group, rather than seeking to protect all underage girls equally. Sadly any prosecutions they do will be used to justify condemning the whole group and painting them all with the same broad brush.

William Norman Grigg, an immensely talented but often caustic patriotic writer who used to write for the New American, weighed in on this subject with exceptional force. Here are a few excerpts from his blog first addressing the danger of government's unfettered claim to gathering personal DNA:

"The Homeland Security Apparatus is now prepared to act on the claim that our very genetic material is the collective property of society, requiring us to surrender DNA samples whenever a pretext can be found. (This opens up all kinds of possible mischief, beginning with the claim, recently upheld in New York, that genetic evidence is sufficient grounds for a criminal indictment.) The same is true of other individual biometric signifiers, such as fingerprints. Commissar for Homeland Security "Mikhail" Chertoff -- who received his post at Homeland Security after helping to build the Regime's torture apparatus [see story below] -- insists that fingerprints are not 'personal data,' and thus can be collected by the Regime and shared with other national security systems as our rulers see fit."

This is all leading to the Orwellian "Newborn Screening Saves Lives Act of 2007" a proposed piece of dangerous legislation where government plans to mandate newborn testing for DNA anomalies and then consider the collected DNA as government property, free to share with whomever it chooses.

Grigg then turns to the "Texas Child Snatchers" directly. "The Texas Department of Child Abduction, sometimes wittily referred to as the Department of Protective and Family Services, has announced that as soon as it has extracted DNA samples from the FLDS child captives they will be placed in foster care. In many instances this will require tearing newborn or nursing infants out of the arms of their mothers:

"'Some FLDS mothers with nursing babies and toddlers may be unaware that they will be forced to leave their children behind once Texas officials gather the DNA samples from them..' As with every other act of government coercion, this unspeakably cruel crime will be accompanied by the threat of lethal violence.... The above-quoted Mrs. Jessop has described an attempt she made yesterday with a group of mothers to visit their children, who are being held prisoner at the San Angelo Coliseum. They were -- to use a phrase made offensive by its dishonest delicacy -- 'turned away by law enforcement.' Which is to say that they were threatened with lethal violence by the State's rented thugs: 'They told us if we went on that property again we would be arrested.'

"To get a sense of the pure, unalloyed evil being wrought by 'law enforcement' in this matter, we turn to the indispensable blog published by Brooke Adams of the Salt Lake Tribune. 'We watched as this woman was greeted by younger women, all hugging her, obviously going to her for comfort, crying,' writes Adams. 'From afar, we had no idea who they were or what they were doing or what the emotions playing out were.' The name of the woman being embraced is Janet.

"'She has five children in state custody, three girls and two boys. The girls are ages 9, 13 and 16. The boys are 11 and 15. This is what she said about that moment: 'I was in the shelter and had girls in the other one. They told me my two girls were running for me and I went across to hug them. Instantly I had eight police men around me. I was just hugging them.' These women and children have neither been accused of a crime, nor convicted of one. Yet they are being treated like inmates in one of the nouveau gulags called Supermax Prisons. It occurs to me that this is the kind of situation in which a writ of habeas corpus would be appropriate... if, that is, the habeas corpus guarantee still existed in this once-free country.

"The 437 kidnapped children, and more than 100 detained mothers, are being compelled to undergo DNA testing -- despite the fact that not a single one of them has been accused of a crime. Barbara Walther, the same judge who authorized that outrage [and thus has every incentive to see it justified], ruled yesterday that FLDS mothers of nursing children would not be permitted to breastfeed their infants. After all, sniffed the judge with the refined disdain persons so often display when dealing with mere people, 'every day in this country, we have mothers who go back to work after six weeks of maternity leave.' [She has since modified this ruling, but her limit of nursing children to less than one year old shows a decided ignorance or disdain for the overall health and birth control benefits of longer periods of nursing.]"

Commenting with acid tongue accuracy Grigg continues: "Lavishing such individualized attention on a youngster is unhealthy, after all. If he's fed, raised, educated, and cared for by his own parents, he won't be properly socialized; that is to say, he won't be taught to think of himself as part of the people. Why, a child in such circumstances tends to think of himself as a person without being given permission to do so.

"Yesterday, in a scene of unfathomable cruelty, about 100 FLDS children were loaded on to buses with tinted windows and taken from their temporary prison... In fact, the kidnappers of those children were beginning the process of redistributing the captives to foster homes scattered across Texas. Imagine, for a second, the clinical indifference to the suffering of children that one must display in order to do such a thing to innocent children kept ignorant of their fate.

"And then ask yourself how, in the name of anything anybody considers holy, can any rational human being -- any intelligent person -- look upon the government ruling us as anything other than our implacably evil enemy. Bear in mind that we're talking about a government that -- without a legally defensible rationale -- had dispatched a heavily-armed party of raiders to surround their property and abduct their children. Why on earth would anybody be 'distrustful' toward people who would seize his children at gunpoint? Oh, but I see I've got the categories wrong: It was the officially recognized persons who committed those acts, so the people belonging to the FLDS church had no right to complain, and were obligated to display child-like trust and canine submissiveness."

Inflation soars and thousands more face losing their homes

Inflation soars and thousands more face losing their homes

By Mike Head

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Official inflation figures for the March quarter, showing a leap to a 16-year high of 4.2 percent, have raised the chance of further interest rate increases in Australia, which will push thousands more working class families into severe financial stress.

The unexpectedly high cost of living figures underscore the worsening impact of global inflationary forces that are driving up prices for food, oil and other commodities worldwide.

Although the headline result was 4.2 percent, the annualised rate for the March quarter was 5 percent. Over the past year, household budgets have been hit by rises of 18.9 percent for petrol, 10.5 percent for electricity and 5.7 percent for food. Bank fees rose 7.6 percent and rents by 7.1 percent. Secondary education costs rose by 6.6 percent, while health costs were up 5.4 percent.

ANZ bank senior treasury economist Warren Hogan described the results as a “shocker”. He warned journalists that the headline inflation rate could rise to 5 percent this year. “The problem is not just that inflation is elevated but that it is accelerating. If anything, inflation pressures are intensifying.”

The March quarter result is well above the Reserve Bank of Australia (RBA) target range of 2-3 percent, and belies the forecast made by RBA governor Glenn Stevens just two weeks ago that inflation was likely to decline over time. Stevens made the comments in the context of explaining why the RBA board decided to keep interest rates on hold last month, after a dozen 25-basis point rises since 2004.

Economists and market speculators predict that the RBA will now resume raising rates in a bid to counter inflation by cutting domestic spending. Financial markets have put the chance of another 25-basis point rise by August at 60 percent. Media commentators have raised the spectre of average home loan rates of more than 10 percent. The RBA’s official cash rate is already 7.25 percent, up a full percentage point in 12 months, and major banks have pushed their basic mortgage rates to around 9.5 percent.

Key big business interests are urging the RBA not to hesitate in raising rates, regardless of the hardship for ordinary people. In its April 24 editorial, the Australian Financial Review said the RBA must be prepared to “endure sustained criticism—at times bordering on the hysterical and personal—for inflicting ‘pain’ on ‘working families’.”

By contrast, the Murdoch media outlets are calling on the RBA to hold off, amid signs of an emerging slump, with sharp downturns in retail spending and consumer confidence. The Australian’s April 24 editorial cautioned that it would be unwise to “put further pressure on household budgets” when higher food and petrol prices were already “doing the RBA’s work for it by causing people to cut back on discretionary spending”.

Whatever the differences, all sections of the ruling elite agree that it is the working people who must pay the price for a deepening economic crisis over which ordinary people have no say or control.

Mortgage stress worsens

Rising interest rates and prices are already causing increasing levels of housing stress. According to Anatomy of Australian Mortgage Stress, published by Fujitsu Consulting on Thursday, about 400,000 households will be in “severe” mortgage stress by September—with half of them likely to lose their homes. That compares with Fujitsu’s March report, which said 300,000 households would fall into the severe stress category by June.

Severe mortgage stress is defined as when borrowers fall behind in repayments, think of selling up or face default proceedings. Fujitsu predicts that by September almost a million households will be in mild or severe housing stress, based on in-depth surveys of difficulties in meeting repayments. Moreover, every 25-basis point rise in the mortgage rate from now on will push 150,000 more households into mild stress, and 75,000 into severe stress. Of these, 45,000 will be young families.

Fujitsu’s managing consultant director Martin North told Fairfax newspapers: “We’ve got all these things coming together: global trends of recession in the US and potentially in Europe; the credit crunch continuing to lift rates for consumers and also to banks and business; we have [housing] affordability at its lowest level and debt as high as it’s ever been. I think all of these things together are creating the perfect storm.”

North pointed out that mortgage stress is experienced for some time before households default. “One of the biggest things we’ve noticed over the past two months is people who’ve maxed out on their credit cards and now don’t have the ability to continue to [cover] their other expenses.” In 2005, only 14 percent of households blamed rate rises for trouble paying mortgages, but the most recent data showed 72 percent blaming rate rises.

North said households in severe stress typically attempt one or two refinances before the end. That is, they seek to avoid defaulting by borrowing more money from other lenders, always at higher rates and with larger repayments and less equity left in their homes. The Fujitsu research shows that refinancing doubles the likelihood of ultimately losing the house. By last September, it estimated that 50,000 households over the previous year had fallen victim to predatory brokers and lenders, who earned high commissions by pushing loans on people.

Defaults and forced house sales are rising, while home prices are falling, leaving many people with “negative equity”—owing more on their mortgages than their property can be sold for. Estimates by property research group Residex show that working class suburbs in Sydney, Melbourne and Perth have been worst affected, with price falls of between a third and half in their suburbs during February.

Knock-on effects from the mortgage crisis are creating severe hardship for those renting, or trying to rent. While rents rose 7.1 percent nationally over the past year, the situation is far worse in some of the poorest areas. In the Sydney western suburb of Auburn, for example, the local newspaper, the Auburn Review, reported this week that some rents had almost doubled over the past year. Other rents had risen by 25 percent.

Some economists have been warning for years that unprecedented levels of private debt, particularly household debt, were creating the conditions for a financial crash. Steve Keen, associate economics professor at the University of Western Sydney, has estimated that private debt [household plus business] has risen to 170 percent of Gross Domestic Product, far higher than during the Great Depression of the 1930s when the ratio peaked at 78 percent.

According to Keen’s calculations, the Australian ratio is as high as America’s, while the British level has risen to 243 percent. In Australia, the debt bubble has grown quickly since 1990, when household debt was about 20 percent of GDP. Today, mortgage debt alone is some 100 percent of GDP. Keen warns that, as a result, a recession within the next two years is inevitable.

Further signs of deeper problems in the Australian banking system emerged this week. Behind the scenes, the RBA spent $1.1 billion in two days to buy packages of mortgages from lenders, leading to speculation in business circles of a banking bailout like those conducted by the US Federal Reserve and the Bank of England.

One major bank, the ANZ, reported a half-yearly cash profit drop of 14 percent, mainly attributed to the global credit squeeze and a trebling of provisions for doubtful loans, which now total $2.4 billion. However, the bank’s share price rose, because the markets had expected even worse news. ANZ also outlined new job-shedding, including the eventual shifting of all its 4,000 backroom jobs to the Indian city of Bangalore.

While bailouts may be organised for the banks and finance houses whose highly-profitable operations helped sow the seeds for the economic breakdown, no bailouts are being offered to the millions of ordinary people in danger of losing their jobs and homes.

The Rudd Labor government is committed to imposing the burden of the crisis onto the back of working people. In his response to the inflation results, while paying lip service to the “pain people are feeling around their kitchen table,” Treasurer Wayne Swan reiterated “the need for a responsible [government] budget that gets spending under control”.

Swan attacked the previous Howard government from the right, claiming that its “irresponsible” spending had put upward pressure on interest rates and inflation. Asked if the May Budget would now be even tougher, Swan said: “We will be taking difficult decisions in this Budget when it comes to spending.’’ His comments are a warning of deep cuts in social spending in the May 13 budget, on top of the $10 billion already pledged.