Friday, May 2, 2008

The Plague of Potomac Fever

The Plague of Potomac Fever

By David Sirota

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If any publication was going to document the sickness known as Potomac Fever, it was going to be The Washington Post.

Last month, the newspaper penned a front-page dispatch headlined “Housing Accord Puts Builders First; Strapped Homeowners Offered Little Aid.” It described congressional leaders agreeing to “provide billions of dollars in tax rebates to the slumping home-building industry while offering little to homeowners threatened with foreclosure.” The bill proposes $6 billion in corporate tax cuts, while “families who cannot afford to repay their home loans—the group at the heart of the mortgage meltdown”—would get less than 2 percent of that for “counseling services.”

Next to this story was a report labeled “Sweeping Bills Passed to Help Homeowners.” It told of Maryland state lawmakers “toughening oversight of the mortgage-lending industry and establishing pre-emptive measures to help people at risk of foreclosure.”

The newspaper page was a scientific proof, with states as the control. They show what minimally healthy democratic systems do: help ordinary people. That’s different from a Congress ravaged by Potomac Fever—the disease inside the Washington Beltway inhibiting emotions like compassion and integrity. As the housing crisis intensifies, this malady is getting worse.

For example, states like Oregon are cracking down on predatory lenders, while North Carolina and Minnesota are the latest to regulate abusive mortgage fees. Yet, Congress—debilitated by the fever—does nothing to halt banks’ usurious practices that originally created the mortgage meltdown.

State legislators are demanding aid to borrowers. Delegate Dereck Davis, D-Md., told The Washington Post that homeowners “need a federal bailout from Congress.”

But in the land of Potomac Fever, bailouts are for financial firms. Congressman Barney Frank, D-Mass., in fact, told newspapers “it’s irrelevant” how many homeowners—if any—are ever helped. According to The Hill newspaper, he is pushing industry-backed legislation that would federally guarantee banks’ outstanding mortgages for modest write-downs. The proposal deliberately avoids forcing banks to freeze interest rates.

Because the plan is voluntary, lenders “will just dump their worst loans into the system,” says economist Dean Baker. The Congressional Budget Office adds that the proposal focuses not on rescuing homeowners, but on “shift[ing] the risk involved in mortgage losses from the current lenders and investors to taxpayers.”

Such virulent strains of Potomac Fever have many causes. One is the proximity of lawmakers to constituents. Many state representatives serve part time and are not career politicians, meaning they have authentic connections to local communities and therefore often better reflect public priorities. By contrast, professional lawmakers in Washington are insulated from real-world pressures by six-figure salaries, security sentries and servile staffers.

Campaign contributions are also a culprit. Though industries certainly influence state legislators, Big Money has a tougher time controlling 50 separate state capitals than one U.S. Capitol. And, boy, is the money flowing in D.C. Reporting on the housing crisis, says “campaign donations from affected industries have spiked [and] lobbyists also are making money off the misery.” Banks pleading poverty somehow have plenty of resources to buy influence.

Finally, there is the filibuster—a tool that does not exist in state legislatures. Coupled with the U.S. Senate’s undemocratic structure giving Delaware as many votes as California, the filibuster allows 41 politicians representing just 11 percent of America’s total population to stop almost anything. Corporate lobbyists and their Senate allies have used the filibuster to obstruct legislation representing the public’s economic interests.

Can Potomac Fever be stopped? Maybe not, considering most inside the Beltway are so afflicted they have lost the capacity to even see it. Then again, the more bold actions states take, the more ill Washington will look. Perhaps the embarrassing contrast can cure the plague.

Somalia: a victim of Bush’s recklessness

Somalia: a victim of Bush’s recklessness

How the West ended Somalia’s brief flirtation with stability

By Matthew Carr

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One of the forgotten battlegrounds of George Bush's 'war on terror' jumped sharply into focus yesterday, with the announcement that a pre-dawn US missile strike had killed the Islamist militia leader Aden Hashi Ayro and at least 10 other people in the town of Dusamareb in Somalia.

The Americans claim Ayro was a key al-Qaeda figure in East Africa. There is no way of objectively assessing these claims, but his assassination is certain to fuel the ongoing conflict in a country that Oxfam recently described as Africa's worst humanitarian crisis.

To much of the Western public, violent mayhem has long been synonymous with the failed state depicted in Ridley Scott's Black Hawk Down. But the violence that is currently ripping Somalia apart is a direct consequence of the Bush administration's reckless military adventurism and the Manichean fantasy world of the 21st century's terror wars.

The present conflict can be traced to Christmas Day 2006, when the Ethiopian dictator Meles Zenawi invaded Somalia in order to topple a grassroots Islamic movement, the Union of Islamic Courts (UIC).

During their six-month ascendancy in the south of the country, the Islamic Courts earned themselves some kudos amongst the war-weary Somali population, who were prepared to tolerate their literalist interpretation of Sharia in exchange for the freedom to walk the streets without being robbed, shot or raped by warlord militias.

It was a period in which many analysts, such as John Prendergast, a former Clinton official, saw 'the beginnings of governance' after nearly two decades of relentless civil war.

However, the xenophobic Zenawi regime did not regard the triumphant Islamists in Somalia with any enthusiasm. Nor did the Bush administration, which saw the Islamic Courts as an incipient Taliban and accused its leaders of sheltering "half a dozen or less" al-Qaeda leaders and an unknown number of lesser operatives.

The UIC denied these allegations and even made some conciliatory overtures to the West, but these efforts were not reciprocated. Instead the Bush administration gave what one US official called a 'yellow-green light' to an invasion that the Zenawi regime presented as its own 'war on terror'.

From its bases in Kenya and Djibouti, the Pentagon's newly-created Africa Command also provided military support for the invasion, in the form of special forces and helicopters. In January 2007 US helicopter gunships carried out 'rinse and repeat' attacks on fleeing refugees near the Kenyan border, who were believed to include al-Qaeda terrorists.

The main casualties in these attacks appear to have been nomads and their livestock, though few people were counting. But the Islamists appeared to have been routed and Ethiopia promptly set about establishing a puppet government, headed by the warlord Abdullahi Yusuf. Since then, resistance to Ethiopian occupation has grown exponentially and Somalia has sunk ever deeper into a vortex of violence. More than one million people have been displaced, thousands have been killed and the country's fragile food supply once more placed in jeopardy.

Was all this done in order to eliminate "half a dozen or less" al-Qaeda operatives who may never have been in the country in the first place? Did the US hope to gain access to Somalia's rich oil fields? Or was the Bush administration so blinded by its association between 'Islamism' and 'terror' that it chose to shoot first and ask questions later?

We cannot know what the Islamic Courts might have become had the US engaged them diplomatically or offered aid instead of rinse and repeat free fire zones. But the consequences could hardly have been much worse than they are now.

In its bloody attempt to rescue Somalia from 'fundamentalism' the US and its Ethiopian proxy have paved the way for the violent political fragmentation in which al-Qaeda thrives. While Western politicians dream of further humanitarian interventions elsewhere, it is salutary to pause and reflect on the catastrophe inflicted on yet another country that had to be destroyed before it could be saved.

Democrats Okay Funds for Covert Ops

Democrats Okay Funds for Covert Ops; Secret Bush "Finding" Widens War on Iran

By Andrew Cockburn

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Six weeks ago, President Bush signed a secret finding authorizing a covert offensive against the Iranian regime that, according to those familiar with its contents, "unprecedented in its scope."

Bush’s secret directive covers actions across a huge geographic area – from Lebanon to Afghanistan – but is also far more sweeping in the type of actions permitted under its guidelines – up to and including the assassination of targeted officials. This widened scope clears the way, for example, for full support for the military arm of Mujahedin-e Khalq, the cultish Iranian opposition group, despite its enduring position on the State Department's list of terrorist groups.

Similarly, covert funds can now flow without restriction to Jundullah, or "army of god," the militant Sunni group in Iranian Baluchistan – just across the Afghan border -- whose leader was featured not long ago on Dan Rather Reports cutting his brother in law's throat.

Other elements that will benefit from U.S. largesse and advice include Iranian Kurdish nationalists, as well the Ahwazi arabs of south west Iran. Further afield, operations against Iran's Hezbollah allies in Lebanon will be stepped up, along with efforts to destabilize the Syrian regime.

All this costs money, which in turn must be authorized by Congress, or at least a by few witting members of the intelligence committees. That has not proved a problem. An initial outlay of $300 million to finance implementation of the finding has been swiftly approved with bipartisan support, apparently regardless of the unpopularity of the current war and the perilous condition of the U.S. economy.

Until recently, the administration faced a serious obstacle to action against Iran in the form of Centcom commander Admiral William Fallon, who made no secret of his contempt for official determination to take us to war. In a widely publicized incident last January, Iranian patrol boats approached a U.S. ship in what the Pentagon described as a "taunting" manner. According to Centcom staff officers, the American commander on the spot was about to open fire. At that point, the U.S. was close to war. He desisted only when Fallon personally and explicitly ordered him not to shoot. The White House, according to the staff officers, was "absolutely furious" with Fallon for defusing the incident.

Fallon has since departed. His abrupt resignation in early March followed the publication of his unvarnished views on our policy of confrontation with Iran, something that is unlikely to happen to his replacement, George Bush's favorite general, David Petraeus.

Though Petraeus is not due to take formal command at Centcom until late summer, there are abundant signs that something may happen before then. A Marine amphibious force, originally due to leave San Diego for the Persian Gulf in mid June, has had its sailing date abruptly moved up to May 4. A scheduled meeting in Europe between French diplomats acting as intermediaries for the U.S. and Iranian representatives has been abruptly cancelled in the last two weeks. Petraeus is said to be at work on a master briefing for congress to demonstrate conclusively that the Iranians are the source of our current troubles in Iraq, thanks to their support for the Shia militia currently under attack by U.S. forces in Baghdad.

Interestingly, despite the bellicose complaints, Petraeus has made little effort to seal the Iran-Iraq border, and in any case two thirds of U.S. casualties still come from Sunni insurgents. "The Shia account for less than one third," a recently returned member of the command staff in Baghdad familiar with the relevant intelligence told me, "but if you want a war you have to sell it."

Even without the covert initiatives described above, the huge and growing armada currently on station in the Gulf is an impressive symbol of American power.

Armed Might of US Marred By Begging Bowl to Arabs

Sometime in the next two weeks, fleet radar operator may notice a blip on their screens that represents something rather more profound: America's growing financial weakness. The blip will be former Treasury Secretary Robert Rubin's plane commencing its descent into Abu Dhabi. Rubin's responsibility these days is to help keep Citigroup afloat despite a balance sheet still waterlogged, despite frantic bail out efforts by the Federal Reserve and others, by staggering losses in mortgage bonds. The Abu Dhabi Sovereign Wealth Fund injected $7.5 billion last November (albeit at a sub-prime interest rate of eleven percent,) but the bank's urgent need for fresh capital persists, and Abu Dhabi is where the money is.

Even if those radar operators pay no attention to Mr. Rubin's flight, and the ironic contrast it illustrates between American military power and financial weakness, others will, and not just in Tehran. There's not much a finding can do about that.

Andrew Cockburn is a regular CounterPunch contributor. He lives in Washington DC. His most recent book is Rumsfeld: His Rise, Fall and Catastrophic Legacy.

Elite Policy and the "Axis of Evil" by Noam Chomsky

Elite Policy and the "Axis of Evil"

By Noam Chomsky

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Having brought up Iran [in Part 1], we might as well turn briefly to the third member of the famous Axis of Evil, North Korea. The official story right now is that after having been forced to accept an agreement on dismantling its nuclear weapons facilities, North Korea is again trying to evade its commitments in its usual devious way—"good news" for superhawks like John Bolton, who have held all along that the North Koreans understand only the mailed fist and will exploit negotiations only to trick us. A New York Times headline reads: "U.S. Sees Stalling by North Korea on Nuclear Pact" (January 19). The article by Helene Cooper details the charges. In the last paragraph we discover that the U.S. has not fulfilled its pledges. North Korea has received only 15 percent of the fuel that was promised by the U.S. and others and the U.S. has not undertaken steps to improve diplomatic relations, as promised. Several weeks later (February 6), in the McClatchey press Kevin Hall reported that the chief U.S. negotiator with North Korea, Christopher Hill, confirmed in Senate Hearings that "North Korea has slowed the dismantling of its nuclear reactor because it hasn't received the amount of fuel oil it was promised."

As we learn from the specialist literature, and asides here and there, this is a consistent pattern. North Korea may have the worst government in the world, but they have been pursuing a pragmatic tit-for-tat policy on negotiations with the United States. When the U.S. takes an aggressive and threatening stance, they react accordingly. When the U.S. moves towards some form of accommodation, so do they.

When Bush came into office, both North Korea and the U.S. were bound by the Framework Agreement of 1994. Neither was fully in accord with its commitments, but the agreement was largely being observed. North Korea had stopped testing long-range missiles. It had perhaps one to two bombs worth of plutonium and was verifiably not making more. After seven Bush years of confrontation, North Korea had eight to ten bombs and long-range missiles, and was developing plutonium. The Clinton administration Korea specialist, Bruce Cumings, reports the Administration "had also worked out a plan to buy out, indirectly, the North's medium and long-range missiles; it was ready to be signed in 2000 but Bush let it fall by the wayside and today the North retains all its formidable missile capability."

The reasons for Bush's achievements are well understood. The Axis of Evil speech, a serious blow to Iranian democrats and reformers as they have stressed, also put North Korea on notice that the U.S. was returning to its threatening stance. Washington released intelligence reports about North Korean clandestine programs; these were conceded to be dubious or baseless when the latest negotiations began in 2007, probably, commentators speculated, because it was feared that weapons inspectors might enter North Korea and the Iraq story would be repeated. North Korea responded by ratcheting up missile and weapons development.

In September 2005, under international pressure, Washington agreed to turn to negotiations within the six-power framework. They achieved substantial success. North Korea agreed to abandon "all nuclear weapons and existing weapons programs" and allow international inspections, in return for international aid and a non-aggression pledge from the U.S., with an agreement that the two sides would "respect each other's sovereignty, exist peacefully together and take steps to normalize relations." The ink was barely dry on the agreement when the Bush administration renewed the threat of force, also freezing North Korean funds in foreign banks and disbanding the consortium that was to provide North Korea with a light-water reactor consortium. Cumings alleges that "the sanctions were specifically designed to destroy the September pledges [and] to head off an accommodation between Washington and Pyongyang."

After Washington scuttled the promising September 2005 agreements, North Korea returned to weapons and missile development and carried out a test of a nuclear weapon. Again under international pressure, with its foreign policy in tatters, Washington returned to negotiations, leading to an agreement, though it is now dragging its feet on fulfilling its commitments.

Writing in Le Monde diplomatique last October, Cumings concluded that, "Bush had presided over the most asinine Korea policy in history. These last years, relations between Washington and Seoul have deteriorated drastically. By commission and omission, Bush trampled on the norms of the historic U.S. relationship with Seoul while creating a dangerous situation with Pyongyang."

Charges against North Korea escalated in September 2007, when Israel bombed an obscure site in northern Syria, an "act of war," as at least one American correspondent recognized (Seymour Hersh). Charges at once surfaced that Israel attacked a nuclear installation being developed with the help of North Korea, an attack compared with Israel's bombing of the Osirak reactor in Iraq in 1981—which, according to available evidence, convinced Saddam Hussein to initiate his nuclear weapons program. The September 2007 charges are dubious. Hersh's tentative conclusion after detailed investigation is that the Israeli actions may have been intended as another threat against Iran—the U.S.-Israel have you in their bombsights. However this may be, there is some important background that should be recalled.

In 1993 Israel and North Korea were on the verge of an agreement: Israel would recognize North Korea, and in return, North Korea would end any weapons-related involvement in the Middle East. The significance for Israeli security is clear. Clinton ordered the deal terminated, and Israel had no choice but to obey. Ever since its fateful decision in 1971 and the years that followed to reject peace and security in favor of expansion, Israel has been compelled to rely on the U.S. for protection, hence to obey Washington's commands.

Whether or not there is any truth to current charges about North Korea and Syria, it appears that the threat to the security of Israel and the region could have been avoided by peaceful means, had security been a high priority.

Let us return to the first member of Axis of Evil, Iraq. Washington's expectations were outlined in a Declaration of Principles between the U.S. and the U.S.-backed Iraqi government last November. The Declaration allows U.S. forces to remain indefinitely to "deter foreign aggression" and for internal security. The only aggression in sight is from the United States, but that is not aggression, by definition. And only the most naïve will entertain the thought that the U.S. would sustain the government by force if it moved towards independence, going too far in strengthening relations with Iran, for example. The Declaration also committed Iraq to facilitate and encourage "the flow of foreign investments to Iraq, especially American investments."

The unusually brazen expression of imperial will was underscored when Bush quietly issued yet another signing statement, declaring that he will reject crucial provisions of congressional legislation that he had just signed, including the provision that forbids spending taxpayer money "to establish any military installation or base for the purpose of providing for the permanent stationing of United States Armed Forces in Iraq" or "to exercise United States control of the oil resources of Iraq." Shortly before, the New York Times had reported that Washington "insists that the Baghdad government give the United States broad authority to conduct combat operations," a demand that "faces a potential buzz saw of opposition from Iraq, with its...deep sensitivities about being seen as a dependent state." More third world irrationality.

In brief, Iraq must agree to allow permanent U.S. military installations (called "enduring" in the preferred Orwellism), grant the U.S. the right to conduct combat operations freely, and ensure U.S. control over the oil resources of Iraq while privileging U.S. investors. It is of some interest that these reports did not influence discussion about the reasons for the U.S. invasion of Iraq. These were never obscure, but any effort to spell them out was dismissed with falsification and ridicule. Now the reasons are openly conceded, eliciting no retraction or even reflection.

Iraqis are not alone in believing that national reconciliation is possible. A Canadian-run poll found that Afghans are hopeful about the future and favor the presence of Canadian and other foreign troops—the "good news," that made the headlines. The small print suggests some qualifications. Only 20 percent "think the Taliban will prevail once foreign troops leave." Three-fourths support negotiations between the U.S.-backed Karzai government and the Taliban and more than half favor a coalition government. The great majority therefore strongly disagree with the U.S.-Canadian stance and believe that peace is possible with a turn towards peaceful means.

Though the question was not asked, it is reasonable to surmise that the foreign presence is favored for aid and reconstruction. More evidence in support of this conjecture is provided by reports about the progress of reconstruction in Afghanistan six years after the U.S. invasion. Six percent of the population now have electricity, the AP reports, primarily in Kabul, which is artificially wealthy because of the huge foreign presence. There, "the rich, powerful, and well connected" have electricity, but few others, in contrast to the 1980s under Russian occupation, when "the city had plentiful power"—and women in Kabul were relatively free under the occupation and the Russian-backed Najibullah government that followed, probably more so than now, though they did have to worry about attacks from Reagan's favorites, like Gulbuddin Hekmatyar, who got his kicks from throwing acid in the faces of young women he thought were improperly dressed.

These matters were discussed at the time by Rasil Basu, UN Development Program senior advisor to the Afghan government for women's development (1986-88). She reported "enormous strides" for women under the Russian occupation: "illiteracy declined from 98 percent to 75 percent, and they were granted equal rights with men in civil law, and in the Constitution.... Unjust patriarchal relations still prevailed in the workplace and in the family with women occupying lower level sex-type jobs. But the strides [women] took in education and employment were very impressive.... In Kabul I saw great advances in women's education and employment. Women were in evidence in industry, factories, government offices, professions and the media. With large numbers of men killed or disabled, women shouldered the responsibility of both family and country. I met a woman who specialized in war medicine which dealt with trauma and reconstructive surgery for the war-wounded. This represented empowerment to her. Another woman was a road engineer. Roads represented freedom—an escape from the oppressive patriarchal structures."

By 1988, however, Basu "could see the early warning signs" as Russian troops departed and the fundamentalist Islamist extremists favored by the Reagan administration took over, brushing aside the more moderate mujahideen groups. "Saudi Arabian and American arms and ammunition gave the fundamentalists a vital edge over the moderates," providing them with military hardware used, "according to Amnesty International, to target unarmed civilians, most of them women and children." Then followed much worse horrors as the U.S.-Saudi favorites overthrew the Najibullah government. The suffering of the population was so extreme that the Taliban were welcomed when they drove out Reagan's freedom fighters. Another chapter in the triumph of Reaganite reactionary ultra-nationalism, worshipped today by those dedicated to defaming the honorable term "conservative."

Basu is a distinguished advocate for women's rights, including a long career with the UN during which she drafted the World Plan of Action for Women and the draft Programme for the Women's Decade, 1975-85, adopted at the Mexico City Conference (1975) and Copenhagen Conference (1980). But her words were not welcome in the U.S. Her 1988 report was submitted to the Washington Post, New York Times, and Ms. magazine. But rejected. Also rejected were Basu's recommendation of practical steps that the West, particularly the U.S., could take to protect women's rights.

Highly relevant in this connection are the important investigations by Nicolas Lanine, a former soldier in the Russian army in Afghanistan, bringing out the striking comparisons between Russian commentary during the occupation and that of their NATO successors today.

These and further considerations suggest that Afghans really would welcome a foreign presence devoted to aid and reconstruction, as we can read between the lines in the polls.

There are, of course, numerous questions about polls in countries under foreign military occupation, particularly in places like southern Afghanistan. But the results of the Iraq and Afghan studies conform to earlier ones and should not be dismissed.

Recent polls in Pakistan also provide "good news" for Washington. Fully 5 percent favor allowing U.S. or other foreign troops to enter Pakistan "to pursue or capture al Qaeda fighters." Nine percent favor allowing U.S. forces "to pursue and capture Taliban insurgents who have crossed over from Afghanistan." Almost half favor allowing Pakistani troops to do so. And only a little over 80 percent regard the U.S. military presence in Asia and Afghanistan as a threat to Pakistan, while an overwhelming majority believe that the U.S. is trying to harm the Islamic world.

The good news is that these results are a considerable improvement over October 2001, when a Newsweek poll found that "Eighty- three percent of Pakistanis surveyed say they side with the Taliban, with a mere 3 percent expressing support for the United States," while over 80 percent described Osama bin Laden as a guerrilla and 6 percent a terrorist.

Events elsewhere in early 2008 might also turn out to be "good news" for Washington. In January, in a remarkable act of courageous civil disobedience, tens of thousands of the tortured people of Gaza broke out of the prison to which they had been confined by the U.S.-Israel alliance (with the usual timid European support) as punishment for the crime of voting the wrong way in a free election in January 2006. It was instructive to see the front pages with stories reporting the brutal U.S. response to a genuinely free election alongside others lauding the Bush administration for its noble dedication to "democracy promotion" or sometimes gently chiding it because it was going too far in its idealism, failing to recognize that the unpeople of the Middle East are too backward to appreciate democracy—another principle that traces back to "Wilsonian idealism."

This glaring illustration of elite hatred and contempt for democracy is routinely reported, apparently with no awareness of what it signifies. To pick an illustration at random, Cam Simpson reports in the Wall Street Journal (February 8) that despite the harsh U.S.-Israeli punishment of Gaza and "flooding the West Bank's Western- backed Fatah-led government with diplomatic and economic support [to] persuade Palestinians in both territories to embrace Fatah and isolate Hamas," the opposite is happening: Hamas's popularity is increasing in the West Bank. As Simpson casually explains, "Hamas won Palestinian elections in January 2006, prompting the Israeli government and the Bush administration to lead a world-wide boycott of the Palestinian Authority," along with much more severe measures. The goal, unconcealed, is to punish the miscreants who fail to grasp the essential principle of democracy: "Do what we say, or else."

The U.S.-backed Israeli punishment increased through early 2006 and escalated sharply after the capture of an Israeli soldier, Gilad Shalit, in June. That act was bitterly denounced in the West. Israel's vicious response was regarded as understandable if perhaps excessive. These thoughts were untroubled by the dramatic demonstration that they were sheer hypocrisy. The day before the capture of Corporal Shalit on the front lines of the army attacking Gaza, Israeli forces entered Gaza City and kidnapped two civilians, the Muammar brothers, taking them to Israel (in violation of the Geneva Conventions), where they disappeared into Israel's prison population, including almost 1,000 held without charge, often for long periods. The kidnapping, a far more serious crime than the capture of Shalit, received a few scattered lines of comment, but no noticeable criticism. That is perhaps understandable, because it is not news. U.S.-backed Israeli forces have been engaged in such practices, and far more brutal ones, for decades. In any event, as a client state, Israel inherits the right of criminality from its master.

The U.S.-Israel attempted to organize a military coup to install their favored faction. That was also reported frankly, considered entirely legitimate, if not praiseworthy. The coup was preempted by Hamas, which took over the Gaza Strip. Israeli savagery reached new heights. While in the West Bank, U.S.-backed Israeli operations carried forward the steady process of taking over valuable territory and resources, breaking up the fragments remaining to Palestinians by settlements and huge infrastructure projects, imprisoning the whole by a takeover of the Jordan Valley, and expanding settlement and development in Jerusalem in violation of Security Council orders that go back 40 years to ensure that there will be no more than a token Palestinian presence in the historic center of Palestinian cultural, commercial, and social life. Non-violent reactions by Palestinians and solidarity groups are viciously crushed with rare exceptions and scarcely any notice. Even when Nobel laureate Mairead Corrigan Maguire was shot and gassed by Israeli troops while participating in a vigil protesting the Separation Wall—now better termed an annexation wall—there was apparently not a word in the English-language press, outside of Ireland.

Israel's settlement and development programs on the West Bank, including occupied East Jerusalem, are flagrantly illegal, in violation of numerous Security Council resolutions and the authoritative jugment by the International Court of Justice on the Separation Wall, with the agreement of U.S. Justice Buergenthal in a separate declaration.

Criminal actions by Palestinians, such as Qassam rockets fired from Gaza, are angrily condemned in the West. The far more violent and destructive Israeli actions sometimes elicit polite clucking of tongues if they exceed approved levels of state terror. Invariably Israel's actions —for which of course the U.S. shares direct respon- sibility—are portrayed as retaliation, perhaps excessive. Another way of looking at the cycle of violence is that Qassam rockets are retaliation for Israel's unceasing crimes in the West Bank, which is not separable from Gaza except by U.S.-Israeli fiat. But standard racist- ultranationalist assumptions exclude that interpretation.

International humanitarian law is quite explicit on these matters. Article 33 of the Fourth Geneva Convention of 1950 states that, "No protected person may be punished for an offence he or she has not personally committed. Collective penalties and likewise all measures of intimidation or of terrorism are prohibited.... Reprisals against protected persons and their property are prohibited." Gazans are unambigously "protected persons" under Israeli military occupation. The Hague Convention of 1907 also declares that, "No general penalty, pecuniary or otherwise, can be inflicted on the population on account of the acts of individuals for which it cannot be regarded as collectively responsible" (Article 50).

Furthermore, High Contracting Parties to the Geneva Convention are bound to "respect and to ensure respect for the present Convention in all circumstances," including of course Israel and the U.S., which is obligated to prevent, or to punish, the serious breaches of the Convention by its own leaders and its client. When the media report, as they regularly do, that "Israel hopes [reducing supplies of fuel and electricity to the Gaza Strip] will create popular pressure to force the Hamas rulers of Gaza and other militant groups to stop the rocket fire" (Stephen Erlanger, NYT, January 31), they are calmly informing us that Israel is in grave breach of international humanitarian law, as is the U.S. for not ensuring respect for law on the part of its client. When the Israeli High Court grants legitimacy to these measures, as it has, it is adding another page to its ugly record of subordination to state power. Israel's leading legal journalist, Moshe Negbi, knew what he was doing when he entitled his despairing review of the record of the courts We were like Sodom (Kisdom Hayyinu).

International law cannot be enforced against powerful states, except by their own populations. That is always a difficult task, particularly so when articulate opinion and the courts declare crime to be legitimate.

In January, the Hamas-led prison break allowed Gazans for the first time in years to go shopping in nearby Egyptian towns, plainly a serious criminal act because it slightly undermined U.S.-Israeli strangulation of these unpeople. But the powerful quickly recognized that these events too could turn into "good news." Israeli Deputy Defense Minister Matan Vilnai "said openly what some senior Israeli officials would only say anonymously," Stephen Erlanger reported in the New York Times: the prison-break might allow Israel to rid itself of any responsibility for Gaza after having reduced it to devastation and misery in 40 years of brutal occupation, keeping it only for target practice and, of course, under full military occupation, its borders sealed by Israeli forces on land, sea, and air, apart from an opening to Egypt (in the unlikely event that Egypt would agree).

That appealing prospect would complement Israel's ongoing criminal actions in the West Bank, carefully designed along the lines already outlined to ensure that there will be no viable future for Palestinians there. At the same time, Israel can turn to solving its internal "demographic problem," the presence of non-Jews in a Jewish state. The ultra-nationalist Knesset member Avigdor Lieberman was harshly condemned as a racist in Israel when he advanced the idea of forcing Arab citizens of Israel into a derisory "Palestinian state," presenting this to the world as a "land swap." His proposal is slowly being incorporated into the mainstream. Israel National News reported in April that Knesset member Otniel Schneller of the governing party Kadima, "considered to be one of the people closest and most loyal to Prime Minister Ehud Olmert," proposed a plan that "appears very similar to one touted by Yisrael Beiteinu leader Avigdor Lieberman," though Schneller says his plan would be "more gradual" and the Arabs affected "will remain citizens of Israel even though their territory will belong to the [Palestinian Authority and], they will not be allowed to resettle in other areas of Israel." Of course the unpeople are not consulted.

In December Foreign Minister Tzipi Livni, the last hope of many Israeli doves, adopted the same position. An eventual Palestinian state, she suggested, would "be the national answer to the Palestinians" in the territories and those "who live in different refugee camps or in Israel." With Israeli Arabs dispatched to their "natural" place, Israel would then achieve the long-sought goal of freeing itself from the Arab taint, a stand that is familiar enough in U.S. history, for example in Thomas Jefferson's hope, never achieved, that the rising empire of liberty would be free of "blot or mixture," red or black.

For Israel, this is no small matter. Despite heroic efforts by its apologists, it is not easy to conceal the fact that a "democratic Jewish state" is no more acceptable to liberal opinion than a "democratic Christian state" or a "democratic white state," as long as the blot or mixture is not removed. Such notions could be tolerated if the religious/ethnic identification were mostly symbolic, like selecting an official day of rest. But in the case of Israel, it goes far beyond that. The most extreme departure from minimal democratic principles is the complex array of laws and bureaucratic arrangements designed to vest control of over 90 percent of the land in the hands of the Jewish National Fund (JNF), an organization committed to using charitable funds in ways that are "directly or indirectly beneficial to persons of Jewish religion, race or origin," so its documents explain: "a public institution recognized by the Government of Israel and the World Zionist Organization as the exclusive instrument for the development of Israel's lands," restricted to Jewish use, in perpetuity (with marginal exceptions), and barred to non-Jewish labor (though the principle is often ignored for imported cheap labor). This extreme violation of elementary civil rights, funded by all American citizens thanks to the tax-free status of the JNF, finally reached Israel's High Court in 2000, in a case brought by an Arab couple who had been barred from the town of Katzir. The Court ruled in their favor, in a narrow decision, which seems to have been barely implemented. Seven years later, a young Arab couple was barred from the town of Rakefet, on state land, on grounds of "social incompatibility" (Scott Peterson, Washington Post, December 20, 2007), a very rare report. Again, none of this is unfamiliar in the U.S. After all, it took a century before the 14th Amendment was even formally recog- nized by the courts and it still is far from implemented.

For Palestinians, there are now two options. One is that the U.S. and Israel will abandon their unilateral rejectionism of the past 30 years and accept the international consensus on a two-state settlement, in accord with international law—and, incidentally, in accord with the wishes of a large majority of Americans. That is not impossible, though the two rejectionist states are working hard to render it so. A settlement along these lines came close in negotiations in Taba Egypt in January 2001 and might have been reached, participants reported, had Israeli Prime Minister Barak not called off the negotiations prematurely. The framework for these negotiations was Clinton's "parameters" of December 2000, issued after he recognized that the Camp David proposals earlier that year were unacceptable. It is commonly claimed that Arafat rejected the parameters. However, as Clinton made clear and explicit, both sides had accepted the parameters, in both cases with reservations, which they sought to reconcile in Taba a few weeks later—and apparently almost succeeded. There have been unofficial negotiations since that have produced similar proposals. Though possibilities diminish as U.S.-Israeli settlement and infrastructure programs proceed, they have not been eliminated. By now the international consensus is near universal, supported by the Arab League, Iran, Hamas, in fact every relevant actor apart from the U.S. and Israel.

A second possibility is the one that the U.S.-Israel are actually implementing, along the lines just described. Palestinians will then be consigned to their Gaza prison and to West Bank cantons, perhaps joined by Israeli Arab citizens as well if the Lieberman-Schneller-Livni plans are implemented. For the occupied territories, that will realize the intentions expressed by Moshe Dayan to his Labor Party cabinet colleagues in the early years of the occupation: Israel should tell the Palestinian refugees in the territories that "we have no solution, you shall continue to live like dogs, and whoever wishes may leave, and we will see where this process leads." The general conception was articulated by Labor Party leader Haim Herzog, later president, in 1972: "I do not deny the Palestinians a place or stand or opinion on every matter.... But certainly I am not prepared to consider them as partners in any respect in a land that has been consecrated in the hands of our nation for thousands of years. For the Jews of this land there cannot be any partner."

A third possibility would be a binational state. That was a feasible option in the early years of the occupation, perhaps a federal arrangement leading to eventual closer integration as circumstances permit. There was even some support for similar ideas within Israeli military intelligence, but the grant of any political rights to Palestinians was shot down by the governing Labor Party. Proposals to that effect were made (by me in particular), but elicited only hysteria. The opportunity was lost by the mid-1970s when Palestinian national rights reached the international agenda and the two-state consensus took shape. The first U.S. veto of a two-state resolution at the Security Council, advanced by the major Arab states, was in 1976. Washingon's rejectionist stance continues to the present, with the exception of Clinton's last month in office. Some form of unitary state remains a distant possibility through agreement among the parties, as a later stage in a process that begins with a two-state settlement. There is no other form of advocacy of such an outcome, if we understand advocacy to include a process leading from here to there; mere proposal, in contrast, is free for the asking.

It is of some interest, perhaps, that when advocacy of a unitary binational state had some prospects, it was anathema, while today, when it is completely unfeasible, it is greeted with respect and is advocated in leading journals. The reason, perhaps, is that it serves to undermine the prospect of a two-state settlement.

Advocates of a binational (one-state) settlement argue that on its present course, Israel will become a pariah state like apartheid South Africa, with a large Palestinian population deprived of rights, laying the basis for a civil rights struggle leading to a unitary democratic state. There is no reason to believe that the U.S., Israel, or any other Western state would allow anything like that to happen. Rather, they will proceed exactly as they are now doing in the territories today, taking no responsibility for Palestinians who are left to rot in the various prisons and cantons that may dot the landscape, far from the eyes of Israelis travelling on their segregated superhighways to their well-subsidized West Bank towns and suburbs, controlling the crucial water resources of the region, and benefiting from their ties with U.S. and other international corporations that are evidently pleased to see a loyal military power at the periphery of the crucial Middle East region, with an advanced high tech economy and close links to Washington.

Turning elsewhere, major polls are not such good news for conventional Western doctrine. Few theses are upheld with such passion and unanimity as the doctrine that Hugo Chavez is a tyrant bent on destroying freedom and democracy in Venezuela and beyond. The annual polls on Latin American opinion by the respected Chilean polling agency Latinobarometro therefore are "bad news." The most recent (November 2007) had the same "irritating" results as before. Venezuela ranks second, close behind first-place Uruguay, in satisfaction with democracy, and third in satisfaction with leaders. It ranks first in assessment of the current and future economic situation, equality, and justice, and education standards. True, it ranks only 11th in favoring a market economy, but even with this "flaw," overall it ranks highest in Latin America on matters of democracy, justice, and optimism, far above U.S. favorites Colombia, Peru, Mexico, and Chile.

Latin America analyst Mark Turner writes that he "found an almost total English speaking blackout about the results of this important snapshot of [Latin American] views and opinions." That has also been true in the past. Turner also found the usual exception: there were reports of the finding that Chavez is about as unpopular as Bush in Latin America, something that will come as little surprise to those who have seen some of the bitterly hostile coverage to which Chavez is subjected, in the Venezuelan press as well—an oddity in this looming "dictatorship." Editorial offices have been well aware of the polls, but evidently understand what may pass through doctrinal filters.

Also receiving scant notice was a declaration of President Chavez on December 31, 2007 granting amnesty to leaders of the U.S.-backed military coup that kidnapped the president, disbanded parliament and the Supreme Court and all other democratic institutions, but was soon overturned by a popular uprising. That the West would have followed Chavez's model in a comparable case is, to put it mildly, rather unlikely. Perhaps all of this provides some further insight into the "clash of civilizations"—a question that should be prominent in our minds, I think.

Making a Killing From Hunger

Making a Killing From Hunger

Go to Original

We need to overturn food policy, now!

For some time now the rising cost of food all over the world has taken households, governments and the media by storm. The price of wheat has gone up by 130% over the last year.[1] Rice has doubled in price in Asia in the first three months of 2008 alone,[2] and just last week it hit record highs on the Chicago futures market.[3] For most of 2007 the spiralling cost of cooking oil, fruit and vegetables, as well as of dairy and meat, led to a fall in the consumption of these items. From Haiti to Cameroon to Bangladesh, people have been taking to the streets in anger at being unable to afford the food they need. In fear of political turmoil, world leaders have been calling for more food aid, as well as for more funds and technology to boost agricultural production. Cereal exporting countries, meanwhile, are closing their borders to protect their domestic markets, while other countries have been forced into panic buying. Is this a price blip? No. A food shortage? Not that either. We are in a structural meltdown, the direct result of three decades of neoliberal globalisation.

Farmers across the world produced a record 2.3 billion tons of grain in 2007, up 4% on the previous year. Since 1961 the world's cereal output has tripled, while the population has doubled. Stocks are at their lowest level in 30 years, it's true,[4] but the bottom line is that there is enough food produced in the world to feed the population. The problem is that it doesn't get to all of those who need it. Less than half of the world's grain production is directly eaten by people. Most goes into animal feed and, increasingly, biofuels - massive inflexible industrial chains. In fact, once you look behind the cold curtain of statistics, you realise that something is fundamentally wrong with our food system. We have allowed food to be transformed from something that nourishes people and provides them with secure livelihoods into a commodity for speculation and bargaining. The perverse logic of this system has come to a head. Today it is staring us in the face that this system puts the profits of investors before the food needs of people.

Market realities

The policy makers who have shaped today's world food system - and who are supposed to be responsible for averting such catastrophes - have come out with a number of explanations for the current crisis that everyone has heard over and over again: drought and other problems affecting harvests; rising demand in China and India where people are supposedly eating more and better than in the past; crops and lands being massively diverted into biofuel production; and so on. All of these issues, of course, are contributing to the current food crisis. But they do not account for the full depth of what is happening. There is something more fundamental at work, something that brings all these issues together, and which the world's finance and development chiefs are keeping out of public discussion.

Nothing that the policy makers say should obscure the fact that today's food crisis is the outcome of both an incessant push towards a "Green Revolution" agricultural model since the 1950s and the trade liberalisation and structural adjustment policies imposed on poor countries by the World Bank and the International Monetary Fund since the 1970s. These policy prescriptions were reinforced with the establishment of the World Trade Organisation in the mid-1990s and, more recently, through a barrage of bilateral free trade and investment agreements. Together with a series of other measures, they have led to the ruthless dismantling of tariffs and other tools that developing countries had created to protect local agricultural production. These countries have been forced to open their markets and lands to global agribusiness, speculators and subsidised food exports from rich countries. In that process, fertile lands have been diverted away from serving local food markets to the production of global commodities or off-season and high-value crops for Western supermarkets. Today, roughly 70% of all so-called developing countries are net importers of food.[5] And of the estimated 845 million hungry people in the world, 80% are small farmers.[6] Add to this the re-engineering of credit and financial markets to create a massive debt industry, with no control on investors, and the depth of the problem becomes clear.

Agricultural policy has completely lost touch with its most basic goal of feeding people. Hunger hurts and people are desperate. The UN World Food Programme estimates that recent price hikes have meant that an additional 100 million people can no longer afford to eat adequately.[7] Governments are frantically seeking shelter from the system. The fortunate ones, with export stocks, are pulling out of the global market to cut their domestic prices off from the skyrocketing world prices. With wheat, export bans or restrictions in Kazakhstan, Russia, Ukraine and Argentina mean that a third of the global market has now been closed off. The situation with rice is even worse: China, Indonesia, Vietnam, Egypt, India and Cambodia have banned or severely restricted exports, leaving just a few sources of export supply, mainly Thailand and the US. Countries like Bangladesh can't buy the rice they need now because the prices are so high. For years the World Bank and the IMF have told countries that a liberalised market would provide the most efficient system for producing and distributing food, yet today the world's poorest countries are forced into an intense bidding war against speculators and traders, who are having a field day. Hedge funds and other sources of hot money are pouring billions of dollars into commodities to escape sliding stock markets and the credit crunch, putting food stocks further out of poor people's reach.[8] According to some estimates, investment funds now control 50-60% of the wheat traded on the world's biggest commodity markets.[9] One firm calculates that the amount of speculative money in commodities futures - markets where investors do not buy or sell a physical commodity, like rice or wheat, but merely bet on price movements - has ballooned from US$5 billion in 2000 to US$175 billion to 2007.[10]

The situation today is untenable. Look at Haiti. A few decades ago it was self-sufficient in rice. But conditions on foreign loans, particularly a 1994 package from the IMF, forced it to liberalise its market. Cheap rice flooded in from the US, backed by subsidies and corruption, and local production was wiped out.[11] Now prices for rice have risen 50% since last year and the average Haitian can't afford to eat. So people are taking to the streets or risking their lives to journey by boat to the US. Food protests have also erupted in West Africa, from Mauritania to Burkina Faso. There, too, structural adjustment programmes and food-aid dumping have destroyed the region's own rice production, leaving people at the mercy of the international market. In Asia, the World Bank constantly assured the Philippines, even as recently as last year, that self-sufficiency in rice was unnecessary and that the world market would take care of its needs.[12] Now the government is in a desperate plight: its domestic supply of subsidised rice is nearly exhausted and it cannot import all it needs because traders' asking prices are too high.

Making a killing from hunger

The truth about who profits and who loses from our global food system has never been more obvious. Take the most basic element of food production: soil. The industrial food system is a chemical-fertiliser junkie. It needs more and more of the stuff just to keep alive, eroding soils and their potential to support crop yields in the process. In the current context of tight food supplies, the small clique of corporations that control the world's fertiliser market can charge what they want - and that's exactly what they are doing. Profits at Cargill's Mosaic Corporation, which controls much of the world's potash and phosphate supply, more than doubled last year.[13] The world's largest potash producer, Canada's Potash Corp, made more than US$1 billion in profit, up more than 70% from 2006.[14] Panicking now about future supplies, governments are becoming desperate to boost their harvests, giving these corporations additional leverage. In April 2008, the joint offshore trading arm for Mosaic and Potash hiked the price of its potash by 40% for buyers from Southeast Asia and by 85% for those from Latin American. India had to pay 130% more than last year, and China 227% more.[15]

Table 1. Profit increase for some of the world's largest fertiliser corporations


Profits 2007 (US$ million)

Increase from 2006

Potash Corp (Canada)



Yara (Norway)



Sinochem (China)



Mosaic (US)



ICL (Israel)



K + S (Germany)



Source: Compiled from corporate reports

While big money is being made from fertilisers, it is just a sideline for Cargill. Its biggest profits come from global trading in agricultural commodities, which, together with a few other big traders, it pretty much monopolises. On 14 April 2008, Cargill announced that its profits from commodity trading for the first quarter of 2008 were 86% higher than the same period in 2007. "Demand for food in developing economies and for energy worldwide is boosting demand for agricultural goods, at the same time that investment monies have streamed into commodity markets," said Greg Page, Cargill's chairman and chief executive officer. "Prices are setting new highs and markets are extraordinarily volatile. In this environment, Cargill's team has done an exceptional job measuring and assessing price risk, and managing the large volume of grains, oilseeds and other commodities moving through our supply chains for customers globally."[16]

Table 2. Profit increase for some of the world's largest grain traders


Profits 2007 (US$ million)

Increase from 2006 (%)

Cargill (US)






ConAgra (US)



Bunge (US)



Noble Group (Singapore)



Marubeni (Japan)



Source: Compiled from corporate reports
*Data is for Marubeni's Agri-Marine division only.

Absent from this list is Louis Dreyfus (France), a private agricultural commodities trader with annual sales in excess of US$22 billion, which does not report its profits.

Managing and assessing are not so difficult for a company like Cargill, with its near monopoly position and a global team of analysts the size of a UN agency. Indeed, all of the big grain traders are making record profits. Bunge, another big food trader, saw its profits of the last fiscal quarter of 2007 increase by US$245 million, or 77%, compared with the same period of the previous year. The 2007 profits registered by ADM, the second largest grain trader in the world, rose by 65% to a record US$2.2 billion. Thailand's Charoen Pokphand Foods, a major player in Asia, is forecasting revenue growth of 237% this year.

The world's big food processors, some of which are commodity traders themselves, are also cashing in. Nestlé's global sales grew 7% last year. "We saw this coming, so we hedged by forward-buying raw materials", says François-Xavier Perroud, Nestlé's spokesman.[17] Margins are up at Unilever, too. "Commodity pressures have increased sharply, but we have successfully offset these through timely pricing action and continued delivery from our savings programmes", says Patrick Cescau, Group CEO of Unilever. "We will not sacrifice our margins and market share."[18] The food corporations don't seem to be making these profits off the back of the retailers. UK supermarket Tesco reports profits up 12.3% from last year, a record rise. Other major retailers, such as France's Carrefour and the US's Wal-Mart, say that food sales are the main factor sustaining their profit increases.[19] Wal-Mart's Mexican division, Wal-Mex, which handles a third of overall food sales in Mexico, reported an 11% increase in profits for the first quarter of 2008. (At the same time Mexicans are demonstrating in the streets because they can no longer afford to make tortillas.[20])

It seems that nearly every corporate player in the global food chain is making a killing from the food crisis. The seed and agrochemical companies are doing well too. Monsanto, the world's largest seed company, reported a 44% increase in overall profits in 2007.[21] DuPont, the second-largest, said that its 2007 profits from seeds increased by 19%, while Syngenta, the top pesticide manufacturer and third-largest company for seeds, saw profits rise 28% in the first quarter of 2008.[22]

Such record profits have nothing to do with any new value that these corporations are producing and they are not one-off windfalls from a sudden shift in supply and demand. Instead, they are a reflection of the extreme power that these middlemen have accrued through the globalisation of the food system. Intimately involved with the shaping of the trade rules that govern today's food system and tightly in control of markets and the ever more complex financial systems through which global trade operates, these companies are in perfect position to turn food scarcity into immense profits. People have to eat, whatever the cost.

The Urgent Need for a Policy Rethink

The larger backdrop to this perverse food market situation is the global financial system, which is now teetering on its flimsy axis. What began as a localised housing loan collapse in the US in 2007 has unravelled into something far more serious, as people realise that the emperors of the global financial system have no clothes. The world economy is living on debt that no one can pay. While central bankers and Lear jet executives try to patch the holes and restore confidence, the underlying truth is that the system is close to bankruptcy and no one in power wants to take the necessary tough measures: not the IMF, nor the World Bank, nor the leaders of the world's most powerful nations. Not much more than public relations glitter can be expected from the G8 meeting in June.

Similar problems lie at the heart of the food crisis: an ideologically driven elite has forced countries to wrench open markets and let the free market run, so that a few megacorporations, investors and speculators can take huge payoffs. Many countries have lost that most basic power: the ability to feed themselves. This loss, coupled with the corruption that plagues our countries and trading systems, shows that neoliberalism has lost any legitimacy that it might once have had. It is a measure of how out of touch these ideologues are that many now openly call for more trade liberalisation as a solution to the food crisis, with some even proposing that the rules of the WTO be changed to prevent countries from imposing export restrictions on food.[23]

The World Bank president, Robert Zoellick, has tried to win the world over with his call for a "New Deal" to solve the hunger crisis, but there is nothing new about it: he calls for more trade liberalisation, more technology and more aid. Today's food crisis is the direct result of decades of these policies, which must now be rejected. While immediate action is necessary to lower food prices and to get food to those who need it, we also need radical changes in agricultural policy so that small farmers around the world gain access to land and can make a living from it. We need policies that support and protect farmers, fishers and others to produce food for their families, for the local markets and for people in cities, rather than money for an abstract international commodity market and a tiny clan of corporate boardroom executives. And we need to strengthen and promote the use of technologies based on the knowledge and in the control of those who know how to grow food. To put it another way, we need food sovereignty, now - the kind that is defined and driven by small farmers and fisherfolk themselves.

Social movements around the globe have been struggling to promote such a reversal of strategy, only to be dismissed as unrealistic and backward by those in power, and often violently repressed. The glimmer of hope in this crisis is that the situation can be reversed. Peasant organisations have concrete proposals about what needs to be done to resolve the crisis in their countries, and governments should listen to what they are saying. Already some governments are talking of a policy change towards food self-reliance.[24] Others are starting to question the fundamental rationale of pushing for more free trade. Neoliberal hawks at the top of the global food policy pyramid have lost whatever credibility they may think they once had. It is time for them to move out of the way so that the visions of food sovereignty and agrarian reform that come from the grassroots can take their place and get us out of this hellish mess.

Going Further:


1 Bloomberg, quoted by the BBC, London, 14 April 2008,

2 BBC, "Action to meet Asian rice crisis", London, 17 April 2008,

3 See for daily reports. With many Asian rice exporters out of the game, needy countries from Asia and Africa are turning to the US market where prices are going through the roof.

4 Brian Halweil, "Grain harvest sets record, but supplies still tight", Worldwatch Institute, Washington DC,

5 Katarina Wahlberg, "Are we approaching a global food crisis?", World Economy & Development in Brief, Global Policy Forum, 3 March 2008,

6 Food policy expert interviewed on Radio France International, Paris, 20 April 2008.

7 "UN food chief urges crisis action," BBC, London, 22 April 2008,

8 Sinclair Stewart and Paul Waldie, "U.S. food producers, speculators square off", Globe and Mail, Toronto, 23 April 2008,

9 Ibid. and Paul Waldie, "Why grocery prices are set to soar", Globe and Mail, Toronto, 24 April 2008,

10 Paul Waldie, "Why grocery prices are set to soar", op cit.

11 Bill Quigley, "USA role in Haiti hunger riots", ZNet, US, 23 April 2008,

12 World Bank, "Can the world market for rice be trusted", Box 1 on p. 52 of "Philippines: Agriculture Public Expenditure Review," Technical Paper, World Bank, Washington DC, 2007,

13 Potash and phosphates are two of the main ingredients in chemical fertiliser.

14 David Ebner, "Saskatchewan: A lot more than wheat" Globe and Mail, Toronto, 11 April 2008,

15 John Partridge and Andy Hoffman, "China deal sends Potash soaring" Globe and Mail, Toronto, 17 April 2008,

16 "Cargill income up sharply in third quarter", World Grain, Kansas City, 14 April 2008,

17 "Tightening belts," The Economist, London, 10 April 2008,

18 Jonathan Sibun, "Unilever profits surge despite price pressures," Daily Telegraph, London, 3 November 2007,; and, "Get set for more price hikes: Unilever chief," Business Standard, India, 16 March 2008,

19 Foo Yun Chee, "Major European retailers post higher profits for 2007," Reuters, 6 March 2008,

20 Associated Press, "Wal-Mart de Mexico's 1Q profits rise 11 percent on higher sales, cost controls," 8 April 2008,

21 Monsanto, Annual Report, 2007.

22 DuPont, Annual Report 2007, and "Syngenta anuncia cifra negocio en progresión 28 por ciento primer trimestre", EFE, 22 de abril 2008,

23 Isabel Reynolds, "WTO should pressure food exporters - Mandelson", Reuters, 23 April 2008,

24 See, for example, recent comments from West African farmers and officials: Noel Tadégnon, "Le ROPPA préconise une pression sur les autorités politiques pour soutenir l'agriculture africaine," APA, 23 April 2008,; and, "Réunion extraordinaire du Conseil des ministres de l`UEMOA, hier : 200 milliards pour freiner la flambée des prix," Le Nouveau Réveil, Abidjan, 24 April 2008,

US Navy Resuscitates South Atlantic Fourth Fleet

US Navy Deploys Around Latin America

By Lamia Oualalou

Go to Original

Choosing to confront the rise in power of left-leaning governments in its backyard, the United States is recreating the Fourth Fleet.

It's now official: The Pentagon is going to resuscitate its Fourth Fleet, with the mission of patrolling Latin American and Caribbean waters. Created during the Second World War to protect traffic in the South Atlantic, the structure was dissolved in 1950. "By reestablishing the Fourth Fleet, we acknowledge the immense importance of maritime security in this region," declared Adm. Gary Roughead, head of the Pentagon's naval operations.

Based in Mayport, Florida, the fleet will operate under the double orders of the American Navy and the Army's Southern Command, responsible for Latin America and the Caribbean. Vice Adm. Joseph Kernan will command the fleet, which should include a nuclear aircraft carrier.

According to Alejandro Sanchez, an analyst at the Council on Hemispheric Affairs, a research center on Latin America based in Washington, "the reestablishment of the Fourth Fleet is more of a political than a military gesture, designed to confront the rise in power of left-leaning governments in the region." The Pentagon does not trouble to camouflage its intentions: "the message is clear: whether local governments like it or not, the United States is back after the war in Iraq," Sanchez explains.

"New Threats"

De facto,, Washington's military influence in the region has diminished considerably since September 11, 2001, and the launch of the "war against terrorism." Concentrated on the Middle Eastern arc of crisis, the Pentagon did not pay much attention to the political upsets in its own backyard. Leftist governments, now broadly in the majority in Latin America, reproach the United States with the support it gave the dictatorships that reigned over several decades and to the ultra-neo-liberal policies those dictatorships applied.

While Washington assures that its sole interest in the region is combating "new threats" (terrorism, drug trafficking and the Maras gangs of Central America), Latin American people often see it as the pursuit of "imperialist" interests dictated by energy needs. The tensions between Washington and the radical presidents of the sub-continent's main oil and gas producers (Venezuela, Equator and Bolivia) accentuate that perception.

As a sign of defiance, almost all Latin American countries have refused to sign the American Serviceman Protection Act, a treaty that prevents legal pursuit of American soldiers for crimes committed abroad.

The plan to install a military base in Paraguay, close to Bolivian gas fields, was denounced by Brazil and Argentina. Ecuador has made it known that the American military base installed in Manta until 2009 will not be allowed to renew its mandate. Worse still, Brazilian president Luiz Inacio Lula da Silva, has relaunched the idea of a South American Defense Council, explicitly excluding all United States intervention.

Washington's sidelining comes at a time when new sources of conflict are arising in the region, as, for example, the one that pits Colombia on one side and Ecuador and Venezuela on the other, or that between Bolivia and Chile over sea access. An arms race is underway in the region, where governments have taken advantage of the economic revival to reequip their armies, neglected since the 1970s.

American arms manufacturers are no longer alone in this market: some European countries, but especially China, Russia and Iran, are trying to get a footing in a region that also attracts them for its natural resource and energy potential.

The New Geopolitics of Energy

The New Geopolitics of Energy

By Michael T. Klare

Go to Original

While the day-to-day focus of US military planning remains Iraq and Afghanistan, American strategists are increasingly looking beyond these two conflicts to envision the global combat environment of the emerging period - and the world they see is one where the struggle over vital resources, rather than ideology or balance-of-power politics, dominates the martial landscape. Believing that the United States must reconfigure its doctrines and forces in order to prevail in such an environment, senior officials have taken steps to enhance strategic planning and combat capabilities. Although little of this has reached the public domain, there have been a number of key indicators.

Since 2006 the Defense Department, in its annual report Military Power of the People's Republic of China, has equated competition over resources with conflict over Taiwan as a potential spark for a US war with China. Preparation for a clash over Taiwan remains "an important driver" of China's military modernization, the 2008 edition noted, but "analysis of China's military acquisitions and strategic thinking suggests Beijing is also developing capabilities for use in other contingencies, such as conflict over resources." The report went on to suggest that the Chinese are planning to enhance their capacity for "power projection" in areas that provide them with critical raw materials, especially fossil fuels, and that such efforts would pose a significant threat to America's security interests.

The Pentagon is also requesting funds this year for the establishment of the Africa Command (Africom), the first overseas joint command to be formed since 1983, when President Reagan created the Central Command (Centcom) to guard Persian Gulf oil. Supposedly, the new organization will focus its efforts on humanitarian aid and the "war on terror." But in a presentation delivered at the National Defense University in February, Africom's deputy commander, Vice Adm. Robert Moeller, said, "Africa holds growing geostrategic importance" to the United States - with oil a key factor in this equation - and that among the key challenges to US strategic interests in the region is China's "Growing Influence in Africa."

Russia, too, is being viewed through the lens of global resource competition. Although Russia, unlike the United States and China, does not need to import oil and natural gas to satisfy its domestic requirements, it seeks to dominate the transportation of energy, especially to Europe. This has alarmed senior White House officials, who resent restoration of Russia's great-power status and fear that its growing control over the distribution of oil and gas in Eurasia will undercut America's influence in the region. In response to the Russian energy drive, the Bush Administration is undertaking countermoves. "I do intend to appoint...a special energy coordinator who could especially spend time on the Central Asian and Caspian region," Secretary of State Condoleezza Rice informed the Senate Foreign Relations Committee in February. "It is a really important part of diplomacy." A key job of the coordinator, she suggested, would be to encourage the establishment of oil and gas pipelines that bypass Russia, thereby diminishing its control over the regional flow of energy.

Taken together, these and like moves suggest that a momentous shift has occurred. At a time when world supplies of oil, natural gas, uranium and key industrial minerals like copper and cobalt are beginning to shrink and the demand for them is exploding, the major industrial powers are becoming more desperate in their drive to gain control over what remains of the planet's untapped reserves [for more evidence of major shortages in fossil fuels, see Klare, "Beyond the Age of Petroleum," November 12, 2007, and Mark Hertsgaard, "Running on Empty," May 12]. These efforts typically entail intense bidding wars for supplies on international markets - hence the record high prices for all these commodities. But they also take military form, as arms transfers and the deployment of overseas missions and bases. It is to bolster America's advantage - and to counter similar moves by China and other resource competitors - that the Pentagon has placed resource competition at the center of its strategic planning.

Alfred Thayer Mahan Revisited

This is not the first time that American strategists have placed a high priority on the global struggle over vital resources. At the end of the nineteenth century a bold and outspoken group of military thinkers, led by naval historian and Naval War College president Alfred Thayer Mahan and his protégé, then-Assistant Secretary of the Navy Theodore Roosevelt, campaigned for a strong American Navy and the acquisition of colonies to ensure access to overseas markets and raw materials. Eventually, their views helped generate public support for the Spanish-American War and, upon its conclusion, the establishment of a Caribbean and Pacific empire by the United States.

During the cold war, ideology reigned supreme as containment of the USSR and the defeat of Communism were the overriding objectives of American strategy. But even then, resource considerations were not entirely neglected. The Eisenhower Doctrine of 1957 and the Carter Doctrine of 1980, though couched in the standard anti-Soviet rhetoric of the day, were principally intended to ensure continued US access to the Persian Gulf's prolific oil reserves. And when President Carter established the nucleus of Centcom in 1980, its primary responsibility was protection of the Persian Gulf oil flow - not containment of the Soviet Union.

After the cold war, the first President Bush tried, and failed, to establish a global coalition of like-minded states - a "new world order" - that would maintain global stability and allow Western corporate interests (American firms foremost among them) to extend their reach across the planet. This approach, in watered-down form, was subsequently embraced by President Clinton. But 9/11 and the current Administration's relentless campaign against "rogue states," notably Iraq under Saddam Hussein and Iran, has reinjected an ideological element into US strategic planning. As George W. Bush tells it, the "war on terror" and rogue states are the contemporary equivalents of earlier ideological struggles against Fascism and Communism. Examine the issues closely, however, and it is impossible to disentangle the problem of Middle Eastern terrorism or the challenge posed by Iraq and Iran from the history of Western oil extraction in those regions.

Islamic extremism of the sort propagated by Osama bin Laden and Al Qaeda has many roots, but one of its major claims is that the Western assault on and occupation of Islamic lands - and the resulting defilement of Muslim peoples and cultures - has been driven by the West's craving for Middle Eastern oil. "Remember too that the biggest reason for our enemies' control over our lands is to steal our oil," bin Laden told his sympathizers in a December 2004 audiotaped address. "So give everything you can to stop the greatest theft of oil in history."

Likewise, the US conflict with Iraq and Iran has largely been shaped by the fundamental tenet of the Carter Doctrine: that the United States will not permit the emergence of a hostile power that might gain control over the flow of Persian Gulf oil and thus - in Vice President Cheney's words - "be able to dictate the future of worldwide energy policy." The fact that these countries might be seeking weapons of mass destruction only complicates the task of neutralizing the threat they pose, but it does not alter the underlying strategic logic.

Concern over the safety of vital resource supplies has, therefore, been a central feature of strategic planning for a long time. But the attention now devoted to this issue represents a qualitative shift in US thinking, matched only by the imperial impulses that led to the Spanish-American War a century ago. This time, however, the shift is driven not by an optimistic faith in America's capacity to dominate the world economy but by a largely pessimistic outlook regarding the future availability of vital resources and the intense competition over them waged by China and other rising economic dynamos. Faced with these dual challenges, Pentagon strategists believe that ensuring US primacy in the global resource struggle must be the top priority of American military policy.

Back to the Future

In line with this new outlook, fresh emphasis is being placed on the global role of the Navy. Using language that would sound surprisingly familiar to Alfred Mahan and the first President Roosevelt, the Navy, Marines and Coast Guard unveiled A Cooperative Strategy for 21st Century Seapower in October; it emphasizes America's need to dominate the oceans and guard the vital sea lanes that connect this country to its overseas markets and resource supplies:

Over the past four decades, total sea borne trade has more than quadrupled: 90% of world trade and two-thirds of its petroleum are transported by sea. The sea-lanes and supporting shore infrastructure are the lifelines of the modern global economy.... Heightened popular expectations and increased competition for resources, coupled with scarcity, may encourage nations to exert wider claims of sovereignty over greater expanses of ocean, waterways, and natural resources - potentially resulting in conflict.

To address this danger, the Defense Department has undertaken a massive modernization of the combat fleet, entailing the design and procurement of new aircraft carriers, destroyers, cruisers, submarines and a new type of "littoral combat" (coastal warfare) ship - an endeavor that could take decades to complete and consume hundreds of billions of dollars. Elements of this plan were unveiled by President Bush and Defense Secretary Gates in the budget proposal for Fiscal Year 2009, submitted in February. Among the big-ticket items highlighted in the shipbuilding budget are:

  • $4.2 billion for the lead ship of a new generation of nuclear-powered aircraft carriers;
  • $3.2 billion for a third Zumwalt class missile destroyer; these warships with advanced stealth capabilities will also serve as a "testbed" for a new class of missile cruisers, the CG(X);
  • $1.3 billion for the first two littoral combat ships;
  • $3.6 billion for another Virginia class submarine, the world's most advanced undersea combat vessel in production.

Proposed shipbuilding programs will cost $16.9 billion in FY 2009, on top of $24.6 billion voted in FY 2007 and FY 2008.

The Navy's new strategic outlook is reflected not only in the procurement of new vessels but also in the disposition of existing ones. Until recently most naval assets were concentrated in the North Atlantic, the Mediterranean and the Northwest Pacific in support of American forces assigned to NATO and the defense pacts with South Korea and Japan. These ties still figure prominently in strategic calculations, but ever-increasing weight is placed on the protection of vital trade links in the Persian Gulf, the Southwest Pacific and the Gulf of Guinea (close to Africa's major oil producers). In 2003, for example, the head of the US European Command declared that the aircraft carrier battle groups under his command would be spending fewer months in the Mediterranean and "half their time going down the west coast of Africa."

A similar outlook is guiding the realignment of overseas bases, which has been under way for the past several years. When the Bush Administration came into office, most major bases were in Western Europe, Japan or South Korea. Under the prodding of then-Defense Secretary Rumsfeld, however, the Pentagon began to relocate forces from the outer fringes of Eurasia to its central and southern regions - especially East-Central Europe, Central Asia and Southwest Asia - as well as to North and Central Africa. True, these areas are home to Al Qaeda and the Middle Eastern "rogue states" - but they also contain 80 percent or more of the world's oil and natural gas, as well as reserves of uranium, copper, cobalt and other critical industrial materials. And, as noted, it is impossible to separate the one from the other in US strategic calculations.

A case in point is the US plan to maintain a basing infrastructure to support combat operations in the Caspian Sea basin and Central Asia. American ties with states in this area were established several years before 9/11, to protect the flow of Caspian Sea oil to the West. Believing that the Caspian basin could prove a valuable new source of oil and natural gas, President Clinton worked assiduously to open the doors to US involvement in the area's energy production; aware also of the endemic ethnic antagonisms in the region, he sought to bolster the military capabilities of friendly local powers and to prepare for possible intervention by American forces. President Bush later built on these efforts, increasing the flow of US military aid and establishing bases in the Central Asian republics.

A corresponding mix of priorities governs the Pentagon's plans to retain a constellation of "enduring" bases in Iraq. Many of these installations will no doubt be used to support continuing operations against insurgent forces, for intelligence activities or for the training of Iraqi army and police units. Even if all US combat troops are withdrawn in accordance with plans announced by senators Clinton and Obama, some of these bases will probably be retained for the training activities they say will continue. At least some bases, moreover, are specifically earmarked for the protection of Iraqi oil exports. In 2007, for example, the Navy revealed that it had established a command-and-control facility atop an offshore Iraqi oil terminal in the Persian Gulf to oversee the protection of vital terminals.

A Global Struggle

No other major power is capable of matching the United States when it comes to the global deployment of military power in the pursuit or protection of vital raw materials. Nevertheless, other powers are beginning to challenge this country in various ways. In particular, China and Russia are providing arms to oil and gas producers in the developing world and beginning to enhance their military capacity in key energy-producing areas.

China's drive to gain access to foreign supplies is most evident in Africa, where Beijing has established ties with the oil-producing governments of Algeria, Angola, Chad, Equatorial Guinea, Nigeria and Sudan. China has also sought access to Africa's abundant mineral supplies, pursuing copper in Zambia and Congo, chromium in Zimbabwe and a range of minerals in South Africa. In each case the Chinese have wooed suppliers through vigorous diplomacy, offers of development assistance and low-interest loans, high-visibility cultural projects - and, in many cases, arms. China is now a major supplier of basic combat gear to many of these countries and is especially known for its weapons sales to Sudan - arms that reportedly have been used by government forces in attacks on civilian communities in Darfur. Moreover, like the United States, China has supplemented its arms transfers with military-support agreements, leading to a steady buildup of Chinese instructors, advisers and technicians, who now compete with their US counterparts for the loyalty of African military officers.

Much the same process is under way in Central Asia, where China and Russia cooperate under the auspices of the Shanghai Cooperation Organization (SCO) to provide arms and technical assistance to the military forces of the Central Asian "stans" - again competing with the United States to win the loyalty of local military elites. In the 1990s Russia was too preoccupied with Chechnya to pay much attention to this area, and China was likewise consumed with other priorities, so Washington enjoyed a temporary advantage; in the past five years, however, Moscow and Beijing have made concerted efforts to gain influence in the region. The result has been a far more competitive geopolitical environment, with Russia and China, linked through the SCO, gaining ground in their drive to diminish US influence.

A clear expression of this drive was the military exercise the SCO conducted last summer, the first of its kind to feature participation by all member states. The maneuvers involved some 6,500 personnel from China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan and took place in Russia and China. Aside from its symbolic significance, the exercise was indicative of China's and Russia's efforts to enhance their capabilities, placing a heavy emphasis on long-range assault forces. For the first time, a contingent of Chinese airborne troops were deployed outside Chinese territory, a clear sign of Beijing's growing assertiveness.

To ensure that the intended message of these exercises did not go unnoticed, the presidents of China and Russia used the occasion of an accompanying SCO summit in Kyrgyzstan to warn the United States (though not by name) against meddling in Central Asian affairs. In calling for a "multipolar" world, for example, Vladimir Putin declared that "any attempts to solve global and regional problems unilaterally are hopeless." For his part, Hu Jintao noted, "The SCO nations have a clear understanding of the threats faced by the region and thus must ensure their security themselves."

These and other efforts by Russia and China, combined with stepped-up US military aid to states in the region, are part of a larger, though often hidden, struggle to control the flow of oil and natural gas from the Caspian Sea basin to markets in Europe and Asia. And this struggle, in turn, is but part of a global struggle over energy.

The great risk is that this struggle will someday breach the boundaries of economic and diplomatic competition and enter the military realm. This will not be because any of the states involved make a deliberate decision to provoke a conflict with a competitor - the leaders of all these countries know that the price of violence is far too high to pay for any conceivable return. The problem, instead, is that all are engaging in behaviors that make the outbreak of inadvertent escalation ever more likely. These include, for example, the deployment of growing numbers of American, Russian and Chinese military instructors and advisers in areas of instability where there is every risk that these outsiders will someday be caught up in local conflicts on opposite sides.

This risk is made all the greater because intensified production of oil, natural gas, uranium and minerals is itself a source of instability, acting as a magnet for arms deliveries and outside intervention. The nations involved are largely poor, so whoever controls the resources controls the one sure source of abundant wealth. This is an invitation for the monopolization of power by greedy elites who use control over military and police to suppress rivals. The result, more often than not, is a wealthy strata of crony capitalists kept in power by brutal security forces and surrounded by disaffected and impoverished masses, often belonging to a different ethnic group - a recipe for unrest and insurgency. This is the situation today in the Niger Delta region of Nigeria, in Darfur and southern Sudan, in the uranium-producing areas of Niger, in Zimbabwe, in the Cabinda province of Angola (where most of that country's oil lies) and in numerous other areas suffering from what's been called the "resource curse."

The danger, of course, is that the great powers will be sucked into these internal conflicts. This is not a far-fetched scenario; the United States, Russia and China are already providing arms and military-support services to factions in many of these disputes. The United States is arming government forces in Nigeria and Angola, China is aiding government forces in Sudan and Zimbabwe, and so on. An even more dangerous situation prevails in Georgia, where the United States is backing the pro-Western government of President Mikhail Saakashvili with arms and military support while Russia is backing the breakaway regions of Abkhazia and South Ossetia. Georgia plays an important strategic role for both countries because it harbors the Baku-Tbilisi-Ceyhan (BTC) pipeline, a US-backed conduit carrying Caspian Sea oil to markets in the West. There are US and Russian military advisers/instructors in both areas, in some cases within visual range of each other. It is not difficult, therefore, to conjure up scenarios in which a future blow-up between Georgian and separatist forces could lead, willy-nilly, to a clash between American and Russian soldiers, sparking a much greater crisis.

It is essential that America reverse the militarization of its dependence on imported energy and ease geopolitical competition with China and Russia over control of foreign resources. Because this would require greater investment in energy alternatives, it would also lead to an improved energy economy at home (with lower prices in the long run) and a better chance at overcoming global warming.

Any strategy aimed at reducing reliance on imported energy, especially oil, must include a huge increase in spending on alternative fuels, especially renewable sources of energy (solar and wind), second-generation biofuels (those made from nonedible plant matter), coal gasification with carbon capture and burial (so that no carbon dioxide escapes into the atmosphere to heat the planet) and hydrogen fuel cells, along with high-speed rail, public transit and other advanced transportation systems. The science and technology for these advances is already largely in place, but the funding to move them from the lab or pilot-project stage to full-scale development is not. The challenge, then, is to assemble the many billions - even trillions - of dollars that will be needed.

The principal obstacle to this herculean task is the very reason for its necessity in the first place: massive spending on the military dimensions of overseas resource competition. I estimate that it costs approximately $100 billion to $150 billion per year to enforce the Carter Doctrine, not including the war in Iraq. Extending that doctrine to the Caspian Sea basin and Africa will add billions. A new cold war with China, with an accompanying naval arms race, will require trillions in additional military expenditures over the next few decades. This is sheer lunacy: it will not guarantee access to more sources of energy, lower the cost of gasoline at home or discourage China from seeking new energy resources. What it will do is sop up all the money we need to develop alternative energy sources and avert the worst effects of global climate change.

And this leads to a final recommendation: rather than engage in militarized competition with China, we should cooperate with Beijing in developing alternative energy sources and more efficient transportation systems. The arguments in favor of collaboration are overwhelming: together, we are projected to consume 35 percent of the world's oil supply by 2025, most of which will have to be imported from dysfunctional states. If, as is widely predicted, global oil reserves have begun to shrink by then, both of our countries could be locked in a dangerous struggle for dwindling supplies in chronically unstable areas of the world. The costs, in terms of rising military outlays and the inability to invest in more worthwhile social, economic and environmental endeavors, would be staggering. Far better to forswear this sort of competition and work together on the development of advanced petroleum alternatives, super-fuel-efficient vehicles and other energy innovations. Many American and Chinese universities and corporations have already initiated joint ventures of this sort, so it is not hard to envision a much grander regime of cooperation.

As we approach the 2008 elections, two paths lie before us. One leads to greater reliance on imported fuels, increased militarization of our foreign fuel dependency and prolonged struggle with other powers for control over the world's remaining supplies of fossil fuels. The other leads toward diminished reliance on petroleum as a main source of our fuel, the rapid development of energy alternatives, a reduced US military profile abroad and cooperation with China in the development of innovative energy options. Rarely has a policy choice been as stark or as momentous for the future of our country.


Michael T. Klare, defense correspondent of The Nation, is a professor of peace and world security studies at Hampshire College. His newest book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, will be published by Metropolitan Books in April.