Friday, July 4, 2008

A Declaration Of Independence From The Government Of The USA

A Declaration Of Independence From The Government Of The USA

This article is from an anonymous woman now living in South Africa. It was sent to me by a third party, and I have no reason to believe that it's bogus. In any case, I believe its relevance to the present moment is stunning.--Carolyn Baker

Go To Original

Through my signature below I hereby withdraw my consent to be ruled by the organization that has called itself the Government of the United States of America.

A government is empowered through the consent of the governed to serve a sacred purpose, namely, to create a bright and sustainable future for its people and a biodiverse garden of its region. This purpose is possible.

If a government no longer serves its intended purpose then it is proper that each individual formally withdraw his or her consent to be ruled by that government.

Through a consistent stream of actions the United States Government has proved itself to be corrupt, having turned away from serving its original purpose. The United States Government has therefore failed, and is de facto illegitimate. Consequently, all of its authorities over me are hereby removed and the United States Government is hereby disbanded in its entirety. All branches, the legislative, executive and judicial branches, including all offices and resources, political, military, informational and financial, are hereby disenfranchised and replaced by local, self-organizing, bioregional governments and currencies that promote sustainable infrastructures and demonstrably serve the principles of integrity, transparency, interdependence, consciousness and the sustainable well being of their entire ecology.

Human beings carry an inalienable responsibility for choosing to whom or what they pledge their allegiance. From this moment forward I no longer pledge my allegiance to the organization that has called itself the Government of the United States of America. We are dissociated. I disallow that organization to legislate, adjudicate, use money, or make agreements in my name, either nationally or internationally. I hereby withdraw my franchise from the United States Government and I no longer submit myself to its authority. I hereby abandon my United States Passport as worthless, null and void because through its own actions the United States Government has invalidated itself.

This document recognizes that the United States Government has

Irredeemably abolished itself by no longer fulfilling its true purpose. This document announces that I take my authority back from that failed organization. The United States Government no longer has authority to represent me, tax me, detain me, question me, or in any way rule over me. It can no longer take any actions in my name. From this moment forward I take back my autonomy. I hereby declare my independence from the organization that has called itself the Government of the United States of America.

Although I alone, without reason or circumstance, am responsible for my decision to withdraw my franchise and allegiance from the organization that has called itself the Government of the United States of America, I am willing to name examples of how this organization has betrayed the purpose for which it was originally created:

1. The Government of the United States of America (herein referred to as the Government) has consistently legislated in favor of a carbon-based economy that multiplies corporate profits while disregarding the increases in greenhouse gas concentrations to the point where the future of all of humanity is now seriously threatened by the consequences of global warming.

2. The Government has promoted the use of nuclear powered electric generation plants creating millions of tons of lethal nuclear waste products that can never be safely stored, and creating decommissioned power plants that remain radioactive for eternity.

3. The Government has abused its leadership position in the world by promoting fear-based military force as the international culture of America, rather than a culture of innovation, compassion, respect, and mutual support of humanity.

4. The Government over and over again, and still now is using illegal DU (Depleted Uranium) weapons and devices in direct opposition to signed United Nations agreements, degrading the United States of America to a renegade country, likely to have its leadership regime brought to war crimes trials and capitally punished.

5. The Government has promoted an unsustainable consumerism culture that multiplies corporate profits while devouring the future's natural resources and producing mountains, rivers and seas of toxic unrecyclable wastes. The consumer economy never did have a future and still the government promoted it wholeheartedly.

6. The Government has promoted covert military actions and subterfuge that includes traffic in illegal drugs, illegal weapons trade, assassinations, illegal takeovers of corporations and governments, and ruthless competition rather than intelligent cooperation or creative collaboration.

7. The Government has allowed itself to be infiltrated and corrupted by corporate and elite regimes that now direct the branches of Government to serve purposes contrary to the true and proper purpose of government.

8. The Government has turned over control of the currency of the United States of America (the original world currency) to private individuals who manipulate it for their own personal benefit rather than for the benefit of the world.

9. The Government has promoted a system of education that keeps people stupid rather than developing their innate potential and well being so they can create satisfying lives, fulfilling relationships and loving families in the 21st Century. The Government has allowed corporations and organized religions to control school curriculums, and has permitted drugs, gangs and guns to define the school experience for many children.

10. The Government has promoted economy over humanity in a value system that shamelessly sponsors injustice, inequity, and slavery, not only in America but around the world, regarding people in developing nations not as brothers and sisters but as sweatshop slaves for producing cheap clothes and the latest technological devices.

11. The Government has designed cities and towns around automobiles and roads rather than around people, cutting people off from their own community and trapping people in suburbs that are not sustainable.

12. The Government has consistently sponsored an imbalanced budget and has accrued a national debt over one trillion dollars that future generations must somehow pay back, meanwhile losing track of an additional trillion dollars.

13. The Government has greedily destroyed the future of civilization by developing an infrastructure, energy, food, housing and transportation systems relying entirely on consuming vast quantities of hydrocarbons that exist in limited supply, thus building a dangerous house of cards that will now tumble down as oil, gas and coal supplies dwindle. If half of the war budget would have been redirected towards developing renewable power for the last twenty years, the entire country would be oil free by now.

14. The Government has promoted a diet of fat-saturated fast-foods, and hormone and antibiotic saturated beef, pigs, poultry, and dairy products that endanger the health and general well being of its people, ground water and farmlands. The Government has also promoted fishing grounds to be exhausted to near extinction, and promotes deforestation and dependence on pesticides and fertilizers that undermine foreign economies but makes huge profits for corporations.

15. The Government has promoted the so-called patenting and engineering of the genetic designs of life forms to be used for the profit of corporations while endangering the future of the humanity.

16. The Government has promoted the introduction of genetically modified organisms into the general food chain for the profit of corporations while endangering the future of humanity.

17. The Government has used military force, assassination, and political manipulation to overthrow other governments as a desperate attempt to control remaining oil supplies for the purpose of maintaining the illusionary value of a world petro-dollar to assure profit for the corporations rather than assuring a bright future for the people.

18. The Government has promoted a medical establishment that profits pharmaceutical corporations and has blocked the development of less profitable but more humanistic, holistic and intuitive healing modalities.

19. The Government has persistently implemented legislation and presidential orders to override constitutional rights, and has built and staffed over 600 new prison camps across the country prepared to imprison citizens who might be regarded as the enemy of Government.

These and other actions reveal that the United States Government has irredeemably abolished itself by no longer fulfilling its original and true purpose.

The Federal Reserve’s dilemma

The Federal Reserve’s dilemma

By Andre Damon
Go To Original

Earlier this month, Federal Reserve Board Chairman Ben Bernanke hinted that the US central bank would shift to a tighter monetary policy, leading analysts to expect multiple interest rate hikes this year. In a speech given June 3, Bernanke stressed the need to ensure that record oil prices do not feed into wage inflation, and all but announced a plan to boost the US exchange rate by raising interest rates. Now, a month later, the Fed has proven unable to act on either of these goals, having kept the Target Federal Funds Rate at a steady 2 percent at its Federal Open Market Committee (FOMC) meeting last week.

In our analysis of Bernanke’s speech, we stressed that the shift in policy emphasis represented an attempt to orchestrate a controlled recession, leading to a moderate rise in unemployment and a steady lowering of real wages. This process would in turn boost the profits of US corporations, guaranteeing a certain baseline level of returns to carry through the de-leveraging of financial firms and the write-downs of hundreds of billions of dollars in financial assets. The Fed aimed to oversee a controlled purge of infected assets, financed by a recessionary assault on the working class.

But the best-laid plans often go awry, and in the weeks that passed from Bernanke’s speech to the June 25 policy decision the conditions facing US finance capital have taken a tremendous turn for the worse. From late March through May, there was a certain recovery in the financial markets. Stock prices started to creep back up, banks succeeded in reducing the ratio of borrowings to assets by receiving significant infusions of capital, in many cases from abroad. The recovery reached its peak around mid-May, after which stocks began to slump rapidly. Last month ended with stock indexes registering their worst June since the Great Depression.

The institutions that recapitalized banks suffered significant losses on their investments, and—after some had their fingers burned—other institutions are far less willing to invest in bank stocks. The inability to raise capital—together with the precipitous decline of already existing share values—has left many banks, even very large ones, hurtling towards insolvency. As the Fed’s March 14 and March 16 minutes make clear, the Federal Reserve board firmly believed that the collapse of Bear Stearns would have resulted in an uncontrolled destabilization of the financial system leading to further bank failures. The conditions for such a crisis have fully reemerged in recent weeks, only perhaps in more pervasive and systematic form.

Far from being merely a technical operation, monetary policy is among the main regulators of aggregate relations between the working class and the owners of the productive forces—the bourgeoisie. In the US economic system, wages are set by the labor market—that is, by the interaction of labor supply and labor demand. But monetary policy, by spurring or constricting business activity, increases or reduces the demand for labor. Wage levels—if accompanied by aggressive action by one or the other class—tend to move accordingly.

The theory goes as follows: in the event of an unwanted economic slowdown, the Fed will stimulate demand by lowering interest rates—making credit easier to obtain and thus furthering business and consumer consumption. In case of an upturn in the class struggle, the Fed will raise rates, rein in demand, and suppress the wage struggles of the working class.

The Fed—under the leadership of Paul Volker—successfully implemented such a policy in the 1980s, when the breaking of the PATCO strike was accompanied by a manufactured recession—the sharpest since the 1930s—opening up a still-ongoing assault on the US working class.

The Federal Reserve is mandated by the US government to pursue a monetary policy that minimizes both inflation and unemployment. Aside from these policies, it acts as the guarantor of depository institutions; a “lender of last resort” with whom banks are required to keep a certain minimum amount of reserves. But with the latest crisis, the Federal Reserve has taken on the task of preserving the “shadow banking system” of hedge funds, loan distributors, and other unregulated entities, significantly complicating its operations. In so doing, it has granted itself quasi-legal authority to lend to investment banks and to take the assets of distressed institutions onto its own balance sheet.

These latest developments have complicated the Fed’s role. Aside from the “discount window,” through which the Fed lends to banks that are otherwise unable to borrow, the US central bank must operate with the blunt instrument of the Federal Funds rate, which impacts not only wages—the intended target—but also financial performance and exchange rates. In setting interest rate policy, the Federal Reserve now confronts problems on both sides. On one hand, rising commodities prices are fueling inflationary expectations and are likely to lead to a wages counteroffensive by the working class; to guard against this the Fed would need to raise interest rates and tighten the labor market. On the other hand, there is a very real threat of more crises like that of Bear Stearns.

Recent discussions in the business press have made clear that the US financial system faces a long-term solvency crisis that, if stock prices continue to fall, could well result in the failure of multiple “systemically important” institutions, prompting their rescue by the Federal Reserve or the broader US government. Such an event—referred to as the omnipresent “tail risk” in Bernanke’s parlance—could entail the government’s appropriation of hundreds of billions of dollars in toxic assets, putting into question the creditworthiness of US Treasury securities. This could, in turn, precipitate a dollar collapse and a catastrophic reordering of the international economic system.

To guard against this possibility, the Fed would seek to lower interest rates, making cheaper financing available to stimulate business activity and consumer spending, resulting in lower default rates on debt and safer conditions for finance. But to the Fed’s chagrin, its two most pressing goals—anti-inflation and the prevention of a financial meltdown—necessitate opposite policy responses. As the credit crisis reared up again this month, the Fed was forced to back down from its emphasis on raising interest rates.

Meanwhile, the European Central Bank faces the same dilemma. In line with previous announcements by ECB President Jean-Claude Trichet, the bank raised its benchmark rate from 4 to 4.25 percent on Thursday, hoping to stave off a wages offensive in response to rising commodity prices. But the dismal performance of financial stocks has made the likelihood of bank failures even more significant and, according to most financial analysts, further rate hikes unlikely.

Thomas Mayer, chief European economist at Deutsche Bank, observed, “The ECB is hiking at a time when confidence is plummeting.” He continued, “The question is, ‘What do you do when asset prices fall at the same time that consumer prices rise?’ The central bankers seem to have reached the end of the line.”

The Commodities Bubble

The Commodities Bubble

Sameer Dossani

Go To Original

For those following economic trends, the past 18 months are notable primarily for two reasons. First, the U.S. housing market, long seen as overvalued by alternative economists and even powerful economic institutions including the International Monetary Fund (IMF), finally went from boom to bust. Over the span of a few months, housing in some markets depreciated by as much as 30%, and some economists estimate that losses may ultimately reduce value by as much as 50% in some cities.

Second, the market for commodities, especially food and oil has been growing at an alarming rate. While the per-barrel price of crude oil has been rising since about 2005, the upsurge in food prices has been even more rapid. Rice, the world’s largest staple crop, has more than doubled in value since January of this year alone, with wheat prices not far behind.

Economists are citing many reasons for the upsurge in grain prices, including increased demand in developing countries, especially India and China, as well as poor harvest due to adverse weather conditions in some places.

While changing consumption and production patterns due to things like global warming and the wasteful consumption patterns (particularly in the developed world) may be a worry, in most of the world grain stores are still more than sufficient to handle these fluctuations. With the exception of East Africa, where there are genuine shortages and a genuine danger of famine, the rise in global food prices can’t be explained solely in terms of supply and demand.

Economists also agree that speculation is playing a role in pushing up global food prices. They argue that many investors are engaging in hoarding or other kinds of speculation, anticipating that they will receive bigger returns on their investments in the future than what they could make now. According to this mainstream argument, speculation is a secondary or less important reason for the price boom, with supply and demand factors and rising fuel costs being the primary factors.

While the story of rising food costs is no doubt a complicated one, the sudden rise of commodities prices and the simultaneous collapse in many financial markets is unlikely to be a coincidence.

Markets in Crisis

While many economists maintain that speculation can be a way to increase demand to keep markets flexible, the global economy depends on speculation to a dangerous extent. In the past two decades, we have seen two examples of that dependence on speculation crashing around us, first with the “dot com bubble” of the 1990s and more recently with the housing bubble.

In each of these cases, speculation bred more speculation as investors sought to cash in on seemingly endless growth – until the bubble burst and they dumped their holdings. In the case of the housing bubble, deregulation meant that mortgages could be broken up, sold and resold to small and large companies, making it difficult for investors to track sound loans from unsound loans.

In this case, some of the worst disasters could have been averted or at least detected earlier if analysts had been interested in asking the right questions. Those who did ask those questions, including many progressive economists, were ignored. As Chuck Prince, head of Citigroup at the time, famously stated, “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance.”

That’s a deeply troubling attitude. The willingness of investors and companies to go along with speculative bubbles and the prevalence of a huge amount of speculative capital in the global economy generally may have grave implications. These conditions suggest that the bubbles may not be the disease in themselves, but the symptoms of something much deeper. The market may be so based on speculation, and speculative investors have such a tendency to “herd” together, that we are in a chronic bubble economy. The economic bubble of the day may change – “emerging markets” bonds one day, tech stocks the next, and home mortgages the day after that – but the presence of a bubble may be ubiquitous.

Using this hypothesis, the food crisis becomes a little easier to understand. Commodities, including food, are seen as relatively safe investments. One can imagine situations where most of the world’s population stop buying houses or computers, but it’s hard to stop buying food. The World Bank and the IMF have pushed for the deregulation of trade in agriculture, and therefore it is much easier today for the private sector to invest in a global food market. Once big investors and analysts begin to act as though food commodities are a safe bet, the herd mentality kicks in, more and more investors join the fray and eventually you have an over-inflated food market in the same way as you had an over-inflated mortgage market.

The Real and the Imagined Food Crises

So to what extent can we blame the current state of affairs on a chronic and collective bubble of the financial markets? While speculation has almost certainly been underplayed by mainstream analysts, it’s far from the whole story.

The so-called demand side arguments for increases in food prices – that consumption, especially consumption of meat and dairy has gone up in China and India – ignore a crucial point. While it’s true that changes, sometimes significant changes, have occurred in the diets of the middle class of both of those countries, the middle class constitutes a small minority in each country. Other segments of the population, especially in India, often consume less than they have historically and suffer from chronic malnutrition. According to the Indian economist Jayati Ghosh, both China’s and India’s per capita grain consumption have been more or less constant for the last 20 years. With this in mind, it seems unlikely that the dramatic rise in prices has anything to do with increased demand.

There are other factors not directly related to speculation that have no doubt played a role. For developing countries, these factors include IMF policy “advice” to reduce or eliminate grain reserves, the elimination of tariffs on food coming from Europe and the United States and the removal of subsidies for fertilizer and other agricultural inputs, and at the behest of the IMF and World Bank.

Since about 1980, international financial institutions have attempted to eliminate the mechanisms whereby governments can control food supplies. In their absence, national and international private companies have stepped in and have been dictating food policy in the interests of their profit margins. In times of stress, the mechanisms whereby governments could protect their citizens from the impacts of fluctuating prices often no longer exist.

While this analysis is absolutely correct and the IFIs do deserve their share of the blame for the current crisis in that they have limited the possibility of remedial measures, the analysis does not satisfactorily account for the sharp increase in food prices in such a short time. The liberalization measures of the IMF and World Bank have been applied since about 1980, and for much of this period the only visible effect has been a decrease in global commodity prices, including food prices.

Other real factors, especially the rise in oil prices and related rises in transportation and fertilizer costs, have certainly played a role in the spike in food prices. But these increases to the cost of some inputs cannot account for the whole picture.

Beyond the Bubble: Reforming Global Agriculture

Though speculation may be the main driving factor behind the current surge in prices, all was not well prior to the current crisis. Since about 1960, global food production has been transformed from a primarily local activity, albeit with the import and export of luxury foods, to a primarily global business. International trade rules reward those who produce their goods for export over those who produce for local consumption. Though farmers in British Colombia and California both grow tomatoes in the summer, it is more profitable for them to ship those tomatoes over the border than to sell them domestically. Aside from the obvious ludicrousness of the situation, the increased transportation costs of shipping goods by truck across vast distances adds even more expense.

In Asia, Latin America, North America and some parts of Europe, small farmers are becoming increasingly rare. The industrialization of agriculture through monocropping and over reliance on chemical fertilizer and pesticides has effectively created economies of scale such that it is almost impossible for small farmers to succeed. Genetic modification of seeds adds yet another layer to that industrialization, ensuring that large agribusiness companies including Monsanto, Archer Daniels Midland, and Cargill continue to post record profits.

A solution that some countries have already begun implementing is to de-liberalize their agricultural sectors. So far this has mostly been done in a knee-jerk and unplanned way, which is understandable given the circumstances. So India has banned the export of certain crops, while eliminating some export tariffs; China has introduced some price controls and increased its tariffs on some grains to discourage exports. More than 25 countries and the European Union, which has temporarily suspended import duties, have taken similar measures.

These measures are necessary, but they are not solutions. They may lessen the impact of soaring food prices, but they will do nothing to reverse the trend.

Real solutions will involve the remaking and “de-globalizing” of the global agriculture market. Some steps may include the following:

  1. Food sovereignty is food security. Countries that are serious about food security should take measures to increase their production for domestic purposes. In cases where it is not feasible or desirable to be 100% self-sufficient in staple crops, trading deals should be negotiated within the region. If more trade were regional, it would not only cut down on transportation costs, it would help promote regional growth and development.
  2. Undo Trade Agreements. Food sovereignty will not be possible unless all talk about agriculture agreements at the World Trade Organization or through bi-lateral trade agreements is suspended. Such trade deals are designed in the context of a global agricultural market, where one country should fine tune its agricultural sector based on comparative advantage and market need. Such a strategy makes no sense when people in countries all over the world are demanding better and cheaper access to staple foods.
  3. Increase taxes on speculation. In order to promote domestic production, subsidies and other government-sponsored programs are a must. But many governments are already having difficulty raising money for basic infrastructure and other essential services. There’s no easy answer here, but one possibility may be to find ways to impose taxes on speculation. If this were to be done along the “Tobin tax” model – with a small tax on every transaction made and administered globally – this could generate a lot of money and could be administered by the UN Food and Agriculture Organization. Alternatively countries could tax their own futures and other commodity markets where they exist.

In the final analysis, the food crisis is actually a convergence of two crises. The first is the crisis of speculation, characterized by a chronic “bubble economy.” Increased regulation and taxation of speculation of all kinds is the only long-term solution to this crisis.

The second is a crisis that has been a long time coming – the crisis of global agriculture which has been in many ways been a planned and calculated crisis. When agricultural policy is not made by citizens and their elected representatives but rather by international financial institutions and their market fundamentalist policies and by big agribusiness whose primary concern is their own bottom line, it is a recipe for disaster.

Sameer Dossani, a Foreign Policy In Focus contributor, is the director of 50 Years is Enough and blogs at This commentary is adapted from a article soon to be published in Spanish by "América Latina en Movimiento," a monthly magazine edited by the Latin American Information Agency (ALAI).

Employment Rate Drops as Economy Sheds 62,000

Employment Rate Drops as Economy Sheds 62,000

Dean Baker

Go To Original

Job seeker uses computer to search for jobs at the Marin Employment Connection in April 2008 in San Rafael, California. 62,000 jobs were lost across the United States in June. (Photo: Justin Sullivan / AFP / Getty Images)

Private sector job gains in the Bush years may fall below 3 million by November.

Private sector job gains in the Bush years may fall below 3 million by November. The employment to population ratio (EPOP) fell to 62.4 percent in June, its lowest level in more than three years, as the economy lost another 62,000 jobs in June. This was the sixth consecutive month in which the economy lost jobs. The private sector lost 91,000 jobs in June. With the April and May numbers revised down by 76,000, the job loss in the private sector over the last three months has been 273,000, an average of 91,000 a month. The private sector has now shed 578,000 jobs since employment peaked in November.

Job loss continues to be led by construction and manufacturing, but most sectors are now losing jobs. Construction lost 43,000 jobs in June, with both residential and non-residential construction now shedding jobs. Employment in residential construction has fallen by 15.8 percent since its peak in February of 2006. By comparison, real spending is down by almost 50 percent over this period. The fact that employment has fallen so much less than production undoubtedly reflects the fact that many undocumented workers never showed up in the employment data.

Losses were widespread across sectors. Manufacturing lost 33,000 jobs in June, a number that would have been larger had it not been for the return of about 15,000 striking workers in the auto sector.

The retail sector lost 7,500 jobs, with 4,800 of the lost jobs in auto dealers. Auto dealerships have shed just 25,900 jobs (2.1 percent of total employment) over the last year. Given the sharp falloff in sales this number is likely to increase substantially in the months ahead.

In the same vein, employment in the real estate sector has fallen by 2.4 percent from its peak in January of 2006. With sales of existing homes down by almost 30 percent, sales of new homes down by almost 50 percent, and prices down by 15 percent, it seems virtually certain that there will be much more job loss in this sector in the months ahead.

The temporary help and the larger employment services sectors are both shedding jobs at rapid rates, losing 30,400 and 56,900 jobs, respectively in June. These two sectors, which are often seen as harbingers of future employment trends have, respectively, lost 150,000 and 200,000 jobs since January.

The health care sector, which had been adding jobs at a rate of more than 30,000 a month, added just 14,500 jobs in June. The earlier rate was clearly unsustainable, since it would imply enormous increases in health care costs. Similarly, educational services, another key growth sector, added 15,300 jobs in June, a rate that is also not likely to be sustained in the months ahead.

State and local governments added 25,000 jobs in June. They have added 233,000 jobs over the last year. With most state and local governments now facing severe budget shortfalls, this pace will surely slow in the new fiscal year.

The news in the household survey is consistent with the weak picture in the establishment data. The June EPOP is a full percentage point below the peak hit in December of 2006. It is 2.3 percentage points below the peak hit in April of 2000, a difference that corresponds to 5.4 million fewer people having jobs.

The biggest falloff has been among teenagers, who have seen a drop of 4.5 percentage points in their EPOPs. (The EPOP for black teens fell to 19.6 percent, the lowest rate since March of 1984.) While some have attributed this to the minimum wage hike, this falloff in teen employment is standard for recessions. The EPOP for teens fell 6.8 pp from April of 2000 to May of 2002, a period in which there was no change in the federal minimum wage. There also was a big jump in Hispanic unemployment, which at 7.7 percent is 3.0 pp above its low in October of 2006.

The economy has entered a slow motion recession. It is not seeing the dramatic plunges in jobs that characterized prior recessions, but the collapse of the housing bubble is slowly sinking more and more sectors of the economy.

Oil rises to record above $US146 a barrel

Oil rises to record above $US146 a barrel

Hyun Young Lee

Go To Original

OIL closed above $USUS145 a barrel for the first time as market participants shrugged off a stronger US dollar to test new highs.

Light, sweet crude for August delivery settled up $US1.72, or 1.2 per cent, at $US145.29 a barrel on the New York Mercantile Exchange, after hitting a new all-time high of $US145.85 a barrel in overnight trading. Brent crude on the ICE futures exchange settled $US1.82 higher at $US146.08 a barrel, down from an intraday record of $US146.69 a barrel.

"For the moment, the market is still preoccupied with the question: how high can it go?" said Tim Evans, an energy analyst at Citi Futures Perspective in New York.

"That's the focus in this market and it's not letting a stronger dollar get in the way."

Crude prices have shot up 50 per cent in the year to date as the market eyes ferocious oil demand in Asia and the Middle East, despite weaker global economic conditions and a significant pullback in US demand.

But many participants have also pointed the finger at speculators, pouring funds into commodity markets as global economic conditions started to deteriorate last year.

Investors have sought oil as a safe haven against the weakening US dollar and volatile equity markets, as well as a hedge against inflation. Participants pointed to the European Central Bank's interest rate increase and key US jobs data - both of which came in at or near expectations - as leading the oil market.

US non-farm payrolls shrank by 62,000 in June, the sixth straight loss, the Labour Department said, close to market expectations of a 55,000 loss. While the report gave the US dollar a leg up, the ECB's quarter of a percentage point rate hike to 4.25 per cent had a bigger impact.

The US dollar jumped against the euro as ECB President Jean-Claude Trichet appeared to rule out further rate increases. Recovering US stock markets boosted the greenback further, with both the Dow Jones index and the Standard & Poor's 500 finishing higher on the day.

Oil prices flirted briefly with negative territory on the currency moves, but momentum remains firmly biased to the upside, with many traders seeing any dips as a buying opportunity.

Mr Evans noted that the US dollar has been trading "sideways or higher" in the past three months, while oil prices have repeatedly smashed through records.

Reaction from a US government report earlier this week showing yet another drop in US oil stockpiles spilled over into the latest session. Sentiment also remained buoyant from the International Energy Agency's annual medium-term outlook released on Tuesday, which indicated tightening global oil supplies through 2013 despite trimming demand growth forecasts.

Traders appeared to pay little attention to increased crude output from Saudi Arabia, the world's biggest oil producer. At Madrid's World Petroleum Congress, Saudi oil minister Ali Naimi confirmed that the kingdom's output would reach a 27-year high of 9.7 million barrels a day this month.

He reiterated that speculation, not supply constraints, was driving the oil price, a stance the Organisation of Petroleum Exporting Countries has studiously maintained during crude's dizzying rise.

Trading volumes were light overnight as participants squared their positions ahead of the Independence Day weekend in the United States.

Many expect crude oil to keep aiming higher next week.

"The trend is definitely still up," said Tom Bentz, an energy broker at BNP Paribas in New York. "We'd need to get back down to yesterday's low at $US140 before people even start thinking of a turnaround."

Bush's Dollar Drop Maps Loss of U.S. Clout at Final G-8 Summit

Bush's Dollar Drop Maps Loss of U.S. Clout at Final G-8 Summit

By James G. Neuger

Go To Original

When President George W. Bush went to his first Group of Eight summit in 2001, a dominant issue was the dollar -- the strong dollar, that is. The U.S. currency was on a record-setting streak, and the free-marketeering president wasn't going to stand in the way.

On the eve of Bush's last G-8 appearance, the dollar's gyrations are again in the crossfire. This time, it is a weak currency, upended by slumping growth, a housing recession and record gas prices, that is gnawing away at the world economy.

The dollar's 41 percent drop against the euro during Bush's term writes the economic epitaph of an administration that set out to restore American preeminence. Instead, Bush heads to Japan next week for his final international summit with diminished leverage as Russian and Chinese influence grows.

‘‘Between the economic duress facing the United States and the global community at large and the fact that the clock is running out on the Bush administration, Bush does not hold a good hand,'' said Charles Kupchan, an international-relations professor at Georgetown University in Washington. He called the summit a ‘‘damage-limitation'' exercise to show the world that governments are trying to contain food and oil prices.

Global economic-confidence building crowds the agenda at the three-day summit starting July 7 in Toyako, on the northern Japanese island of Hokkaido, that was meant to tackle climate change, recommit the rich world to development aid for Africa and strengthen nuclear non-proliferation controls.

Growth Lags

Bush represents the worst-performing economy in the G-8 after Italy, with growth of 0.5 percent this year set to lag behind 1.6 percent in the U.K., 1.4 percent in the euro area, 1.4 percent in Japan and 1.3 percent in Canada, according to International Monetary Fund forecasts.

Russia, brought into the G-8 by Bill Clinton in 1998, will eclipse the rest of the club with growth of 6.8 percent this year, the IMF says. Russia's oil and commodity wealth puts it at odds with the western goal of cutting reliance on fossil fuels. China, seen expanding 9.3 percent, has also frustrated the fight against global warming by locking up energy deals in Africa to slake its economic thirst. China will be among eight non-G-8 members that take part on the summit's last day.

America's economic woes with $4-a-gallon gasoline prices will stiffen Bush's opposition to European and Japanese calls for binding, quantifiable targets for cutting greenhouse-gas emissions, blamed by scientists for pushing up global temperatures.

Global Warming

Bush took a baby step at last year's G-8 by acknowledging the need to do something about global warming, edging the U.S. away from the laissez-faire approach that he championed after pulling the U.S. out of the Kyoto climate-protection protocol in a move that met international condemnation in 2001.

With the countdown under way to the presidency of Barack Obama or John McCain, the most the summit can do is set up a framework for pollution-cutting agreements that replace Kyoto when it expires in 2012, said Reginald Dale, a senior fellow at the Center for Strategic and International Studies in Washington.

‘‘Most of Bush's partners are looking to the next president,'' Dale said. European leaders will ‘‘be trying to pin Bush further down on the nature of commitments that the United States might undertake to reduce emissions in the shorter term.''

Europe's Bind

Europe is caught in a bind of its own. Soaring fuel prices and a chorus of protests put pressure on leaders to offer relief instead of weaning consumers away from fossil fuels. French President Nicolas Sarkozy, holder of the 27-nation European Union's six-month presidency, is pressing for fuel-tax cuts.

Oil prices continued climbing after pressure by European leaders including Britain's Gordon Brown led Saudi Arabia, the world's biggest oil exporter, to announce for July the third straight monthly increase in production.

‘‘There's no hope for new achievements or concrete results regarding crude-oil prices or the shortage of food or global warming,'' said Koichi Kato, a senior member of Japan's ruling Liberal Democratic Party.

Spiraling food and fuel costs are hitting poorer countries the hardest, increasing the pressure on the G-8 to make good on a 2005 pledge to double development aid to Africa to $50 billion annually by 2010 and to implement last year's promise to invest $60 billion worldwide to combat deadly diseases.

Price Surge

G-8 finance ministers last month identified surging commodities prices as a bigger threat than the credit squeeze to the world economy. Prices for 19 commodities in the Reuters/Jefferies CRB Index rose 29 percent in the first half, the most since 1973. Rice, corn and wheat futures have all touched records this year.

Sagging faith in the dollar -- it now makes up 63 percent of global currency reserves, down from 71 percent when Bush took office -- complicates efforts to tame commodity prices because they are primarily denominated in the U.S. currency.

America's dependence on imported capital to finance a $9.5 trillion debt -- up from $5.7 trillion when Bush took office -- has driven down the currency. The decline was accelerated by the subprime crisis that plunged the U.S. into an economic tailspin.

‘‘If Bush could get others at the G-8 summit to demand a stronger dollar he'd have done a final good after a lot of negatives over the years,'' said Uwe von Parpart, chief Asia strategist at Cantor Fitzgerald LP in Hong Kong. ‘‘Dollar strengthening appears to be the only thing capable of containing or pushing back oil prices.''

Speaking at the White House yesterday, Bush tried to give the markets a nudge: ‘‘We're strong dollar people in this administration and have always been for the strong dollar.''

Single Moms' Poverty Spikes After Welfare Overhaul

Single Moms' Poverty Spikes After Welfare Overhaul

By Allison Stevens

Go To Original

The ranks of poor single mothers have grown since the 1996 welfare overhaul that weakened their safety net, and 30 percent now live with neither job income nor public assistance. Third in "The Memo" series on the status of U.S. women.

MILWAUKEE (WOMENSENEWS)--In 2001, Lisa Craig snuck out of her home in Chicago and boarded a bus for Milwaukee with her three children, leaving behind an abusive husband, a stable job and most of her possessions.

The elimination in 1996 of federal welfare entitlements had its roots here in Wisconsin, where voters in the 1980s were angered over perceptions that poor Chicago "welfare queens" were heading north to take advantage of more generous programs. But Craig headed north because she had family there to help her.

After a short stay with her sister, Craig took her children--aged 1 to 8--to a homeless shelter. In order to receive a monthly welfare payment of about $600, she entered a three-month training program with the hope of a landing a job at the end of it.

But the training didn't pay off. She didn't find full-time employment until 2006, when she was hired as a retail clerk at Goodwill, which paid enough to cover her $600 rent but not much else. The job lasted only until last November and she has been looking for another since.

Over the years, Craig has made ends meet with the help of Wisconsin Works, or W2, the state's overhauled welfare system. But she is "disenchanted" with the program because it has not lived up to its promise of helping her obtain long-term employment. "They need to come up with something else," she said in an interview.

Craig is caught in the public policy experiments that began in Milwaukee in 1987 when Gov. Tommy Thompson tied welfare payments to behavior, including requiring recipients to engage in work-related activities, not need. Thompson stiffened the requirements in 1994. The country took notice as Wisconsin welfare rolls plummeted.

In 1996, President Bill Clinton teamed up with a Republican Congress to enact the Personal Responsibility and Work Opportunity Reconciliation Act, a welfare overhaul reflecting much of the new policies in Wisconsin. The law was reauthorized in 2006.

Advocates working on behalf of single mothers say the law, which ended government's obligation to provide minimum support to impoverished single heads of households, has exacerbated poverty.

"It definitely has played a role in the demise of the city," said Sangita Nayak, an organizer with 9to5 National Association of Working Women, an advocacy group based here.

12 Percent of Women Are Poor

In 2006, 12 percent of Wisconsin women lived in poverty, compared to 9.7 percent of men, according to census data.

Advocates see some rays of hope that life will improve for the city's poor. In April, voters elected the only woman to the 15-member city council; in May, a philanthropist gave $50 million to boost low-income neighborhoods; and in June, the state opened a new department to improve the life of children and families.

But without the welfare benefits, poor women are giving up on government to help them survive, said Joyce Mallory, a former program director at the Wisconsin Council on Children and Families in Madison. "A lot of people just stop trying," she said. "They just figure, 'Hey, I'll try to get by. I'll do whatever I have to do.'"

Single Mothers: Work and Welfare During 1996-2005

Source: Congressional Research Service.To see the chart, please go to:

Some 15 million U.S. women live in poverty, according to 2006 Census data collated by the Washington-based National Women's Law Center. Poverty rates are especially high among women of color, older women and single mothers. Black and Hispanic women are about twice as likely to be poor than white women. Roughly 1 in 5 elderly women are poor, as are 1 in 3 single mothers.

For many, poverty has worsened in recent years due to the shrinking economy, higher unemployment rates and the rising cost of fuel and food.

That is especially true in Milwaukee, now the seventh poorest city in the nation. Here, temporary homeless shelters have become permanent, food pantries are pleading for donations to meet demand and public schools now serve universal free breakfasts, Mallory said.

Like many other cities in the Rust Belt--the swath of industrial states that stretch from the Northeast through the Midwest--Milwaukee has seen a steady loss of jobs, many in the decent-paying manufacturing sector.

Economic Downturns Hit Women Hardest

Economic downturns hit women the hardest because they earn less then men; are more likely to work part-time; are less likely to be eligible for unemployment insurance; are less likely to have health insurance; and are more likely to leave their jobs because of caregiving responsibilities, domestic violence, or harassment or stalking.

Since the welfare overhaul, the number of recipients plunged as many found stable employment. At the same time, the number of single mothers who are unemployed and who receive no welfare assistance has doubled, from 16 percent in 1996 to nearly 33 percent in 2005, or 1 in 3 single parents.

Wisconsin's welfare provides unemployed single heads of households with children payments of up to $673 a month and the parent must participate in at least 40 hours of assigned work, work-related activities or training programs a week. That averages to about $4.20 an hour, considerably below the current minimum wage of $5.85 an hour, which is set to increase to $7.25 per hour next July.

Parents can apply for county-based programs to help them pay with child care, medical treatment and food. Some parents can work part-time for pro-rated benefits.

Proponents say the effort to move people from welfare to work has been a tremendous success, helping parents--especially single mothers--find stable jobs to support their families. The welfare overhaul, they say, has also helped women collect child support.

'A Signal Achievement'

"Welfare reform stands as a signal achievement, in my judgment, in social reform policy," Secretary of Health and Human Services Michael Leavitt said in a 2006 speech marking the law's 10th anniversary. "The act brought significant improvements in the lives of many Americans by helping them break the cycle of dependency and encouraging them to pursue self-sufficiency."

He pointed to a 57 percent decline in the national welfare caseload between 1996 and 2006.

Nowhere has that been more evident than in Wisconsin, where welfare participation has dropped from 90,000 in 1996 to 6,400 today, said Reggie Bicha, head of the state's Department of Children and Family Services. In 2007, over 5,000 participants found work, with an average hourly wage of $8.54.

But critics say the numbers don't tell the whole story.

More single mothers are employed now than were in the 1990s, according to Liz Schott, a welfare expert at the Washington-based Center on Budget and Policy Priorities.

But recent declines suggest a healthy economy--rather than changes to welfare--helps people transition to work, she said. And many of those now working are still poor because they do not earn enough to afford child care, transportation and other work expenses, she added.

Moreover, the government did not implement a mechanism to track those who left the system. Countless others are now homeless and living in extreme poverty, she added.

"This is going to catch up with us," Schott said. "We no longer have the very, very, very weak safety net that we used to have for poor families with children."

New York court dismisses case against former stock exchange head

New York court dismisses case against former stock exchange head

By Naomi Spencer
Go To Original

In a victory for the ultra-wealthy, the New York State Court of Appeals on Tuesday dismissed all remaining charges against former New York Stock Exchange chairman Richard Grasso in a case, People v. Grasso, brought by the state over the size of his last compensation package in 2003.

Grasso's total compensation was worth $187.5 million, awarded by a board of directors handpicked by Grasso himself from amongst companies over which he had nominal regulatory authority. Overriding a 2006 order by a lower court to return part of his $112 million retirement pay, the appeals court ruled that Grasso was entitled to keep every penny of this sum.

The court also threw out related charges against Kenneth Langone, the chairman of the NYSE's Compensation Committee and a member of the board in 2003. The state Attorney General's office indicated that it would not pursue the charges any further.

Concerned by public outrage and criticism by investors and regulators, the board forced Grasso to resign from his position just 20 days after his pay was made public. In May 2004, the Attorney General's office, then led by Eliot Spitzer, filed six charges against Grasso for excessive pay. State law requires that executives of not-for-profit entities be paid "reasonable" amounts.

In 2006, the NYSE merged with Archipelago Holdings, an electronic securities trading exchange, to become the explicitly for-profit NYSE Group. The following year, four of the charges were dismissed by the state appeals court, which ruled that the attorney general did not have authority to bring the charges against the Exchange. In both the 2007 decision and the July 1 ruling, the same judge, James McGuire, authored the majority opinion.

The two remaining charges—relating to "unlawful payments" and breach of fiduciary duty as a regulator—centered on the fact that during Grasso's tenure, the NYSE was classified as a non-profit entity and thus subject to state laws limiting executive compensation.

In dismissing the charges Tuesday, McGuire ruled that "the Attorney General's authority to prosecute the causes of action seeking that relief lapsed with the merger." In other words, the prosecution was no longer relevant because the NYSE was no longer considered a not-for-profit operation. Therefore, the excessive pay awarded to its former regulatory chairman was of no public concern and did the public no harm.

McGuire further suggested that the case was a waste of taxpayer money. In his opinion, McGuire wrote, "Here, the Attorney General is using public funds out of appropriations to his office to prosecute causes of action on behalf of an entity that is no longer a not-for-profit corporation and seeks only a money judgment that would benefit the owners of the for-profit entity into which the not-for-profit has been converted (even if the judgment nominally would be paid to the not-for-profit corporation). The Attorney General's continued prosecution of these causes of action ... vindicates no public purpose."

McGuire wrote that because the NYSE incorporated itself as an explicitly for-profit entity, the right to recovery of funds awarded to Grasso no longer belonged to the state, but to the NYSE's "successor" incorporation.

Essentially, the court's ruling has given the huge payout legal protection from any public governance by invoking the supposed sovereignty of the profit-taking entity.

The court was split in its decision, 3 to 1. Justice Angela Mazzarelli, the lone dissenter, insisted the stock exchange's incorporation as a for-profit entity "has no effect whatsoever upon the causes of action that were pending against the not-for-profit at the time of the merger."

Mazzarelli warned that the ruling "would open the door to a feeding frenzy for con men and swindlers to raid assets of not-for-profit corporations they control and then evade prosecution and responsibility by merging with a for-profit corporation."

This prediction McGuire wrote off as a "parade-of-horrors argument." "The short and complete answer to this," the majority opinion countered, "is that, regardless of what might possibly occur with respect to some other not-for-profit corporation, 'con men and swindlers' certainly played no role at all in the transactions resulting in the merger of the Exchange into a for-profit entity."

The economic developments of the past several years, of course, undermine this assertion. While it is unlikely that the purpose of the transformation of the NYSE into a for-profit corporation was to shield Grasso from litigation on behalf of the public, it can hardly be disputed that the "con men and swindlers"—better known on Wall Street as billionaire speculators and hedge fund managers—have benefited enormously from the abandonment of the least pretense of oversight.

It must be noted that during Grasso's eight-year tenure as regulatory head at the NYSE, one major accounting scandal after another unfolded, dubious and outright illegal financial dealings became the standard for banking and securities trading, a series of speculation "bubbles" were inflated only to collapse at the expense of the working class, and the economic disparity between Wall Street and corporate managers and the rest of the population widened astronomically. Grasso's last big payout was one of the purest expressions of this rot.

Bush administration encouraged oil deal in Kurdistan, undermining Iraqi “national unity”

Bush administration encouraged oil deal in Kurdistan, undermining Iraqi “national unity”

By David Walsh
Go To Original

The Bush administration publicly criticized a deal made between Hunt Oil of Dallas, Texas and the Kurdistan Regional Government in Iraq last September for supposedly undermining Iraqi “national unity,” while privately officials were facilitating the oil firm’s activities, documents released this week by the US House Committee on Oversight and Government Reform reveal.

Hunt Oil, whose chief executive Ray Hunt has been a major backer of George W. Bush, signed the agreement with the Kurdish government on September 8, 2007 to explore and develop oilfields in the region.

No national law on the division of oil revenues had been passed at the time (and still has not been), and the agreement outraged Iraqi government officials fearful that Baghdad would be cut out of its share of lucrative oil profits by such arrangements and that the country might well break up under centrifugal pressures. At the time Iraq’s oil minister, Hussein al-Shahristani, called the deal “illegal.”

The Bush administration echoed these remarks. The president stated on September 20, 2007: “I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I’m concerned.”

A State Department official told the press: “It’s counterproductive. Our view is the contract process should be controlled by the central government and that these regional deals could become illegal if an oil law is passed.”

The Assistant Secretary of State for Legislative Affairs, Jeffrey T. Bergner, wrote to a Congressional committee in October 2007 that, in his department’s view, “the signature of such contracts would needlessly elevate tensions between the KRG [Kurdish Regional Government] and the Government of Iraq.” Bergner went on to say, “We believe it is in the best interest of Iraq for all interested parties to agree to a single central approver of contracts so that Iraq’s oil and gas resources can be developed in accordance with a rational plan.”

This was all for public consumption. Behind the scenes, US government officials were assisting Hunt, a former member of the board at Halliburton (1998-2007), who has contributed $35 million toward the building of a Bush library, to land the deal with the Kurds.

The documents released by California Democratic Congressman Henry Waxman’s Oversight and Government Reform committee include an email from David McDonald, Hunt Oil’s General Manager for Europe, Africa and the Middle East, reporting on conversations with US government officials held June 12 and 15, 2007 in Erbil, the capital of the Kurdish autonomous region. McDonald sent the message in late September 2007, after the Hunt deal had been publicly censured by Bush and other administration officials.

In the email, addressed to Hunt Vice President Ken Topolinsky, McDonald writes about the initial discussion with US officials on June 12: “I described our visit as a security and business opportunity assessment, we discussed their views about security, power supply.” The officials, including members of the State Department’s Regional Reconstruction Team for the Kurdish region, suggested that McDonald return for another discussion three days later “when the expert concerned with the petroleum industry would be present.”

McDonald did so, and on June 15 another conversation took place between the Hunt oilman and US government representatives, among them, the “Senior Economic Adviser, Regional Reconstruction Team, USAID Northern Region.” In response to a question about production sharing contracts, McDonald explained that “I answered with a demonstration on a whiteboard of the terms of the agreement how royalties, cost oil, and profit oil are calculated and noted that the KRG contract [model production sharing agreement on the KRG web site] is consistent with agreements in use around the world and in fact is a sophisticated agreement. I specifically asked if the USG [US government] had a policy toward companies entering contracts with the KRG and [blacked out name] replied that there was no policy, neither for nor against.”

McDonald notes other contacts with American government officials in August and early September 2007, and concludes: “There was no communication to me or in my presence made by the 9 state department officials with whom I met prior to 8 September that Hunt should not pursue our course of action leading to a contract. In fact there was ample opportunity to do so, but it did not happen.”

The Commerce Department official who participated in the June 12 meeting, wrote Hunt Oil executives that same day: “It was a real pleasure meeting with you today, hope you [have] a fruitful visit to Kurdistan ... Please feel free to contact in case you need any support from our office here in Erbil.”

Casting further doubt on State Department claims that it was discouraging deals similar to the one Hunt was making with the Kurdish government, a few days after the agreement was announced in September, the Deputy Director of the US Regional Embassy in Basra wrote to a Hunt official, “I read and heard about with interest your deal with the regional Kurdish government,” and went on to tip her off about “another opportunity,” a liquefied natural gas refinery in southern Iraq. He added, “This seems like it would be a good opportunity for Hunt.”

As to the White House claim that it knew nothing about the deal, Ray Hunt’s own political relationship with the administration puts the lie to that. Aside from being a billionaire oilman, Hunt is a member of the President’s Foreign Intelligence Advisory Board (PFIAB), along with 15 other business, military and intelligence types. Hunt dispatched two letters informing the PFIAB of his Kurdistan venture, presumably because the latter would involve contact with representatives of a foreign government.

On July 12, he wrote: “We were approached a month or so ago by representatives of a private group in Kurdistan as to the possibility of our becoming interested in that region. We had one team of geoscientists travel to Kurdistan several weeks ago and were encouraged by what we saw. We have a larger team going back to Kurdistan this week but who they will actually meet with while they are there and what the relationships of those people might be with the Government of Kurdistan are both unclear at this time.”

Some six weeks later, Hunt wrote again to the PFIAB, informing board members of his upcoming visit to the region: “While my schedule is still fluid, there is a high likelihood that I will meet with President Masoud Barzani, the Prime Minister, the Oil Minister and various other individuals associated with the government of Kurdistan.” The visit bore fruit.

Barzani said recently, in response to criticism from Baghdad, that the more than 20 production-sharing contracts his government has signed with foreign oil companies since passing its own gas and oil law in August 2007 are “irreversible.” He added, “Anyone who wants to put off these deals is a dreamer.” The Iraqi oil ministry has threatened to blacklist any oil firms making deals with the KRG, but that has not stopped the flow of such agreements. In late June, the Kurdish regime announced a new package of oil deals with South Korea’s state oil company.

The revelations about the US government and its dealings with Hunt come in the context of the recent announcement that American and European oil giants Exxon, Shell, BP and Total are receiving no-bid service contracts from the Iraqi government, deals that are simply the foot in the door for the massive companies.

The Bush administration claimed in this case too that it had nothing to do with the negotiations. Secretary of State Condoleezza Rice stated, “The United States Government has stayed absolutely out of the matter of the awarding of Iraq oil contracts.” A State Department spokesman declared, “These are Iraqi contracts. They were made by Iraqis, for Iraqis.”

Everyone over the age of 10 knows that these claims are boldfaced lies. The US intervened in Iraq to seize control of the country’s oil reserves and assert its hegemony throughout the petroleum-rich Middle East. All the stated reasons—weapons of mass destruction, the Hussein regime’s ties with Al Qaeda, the establishment of democracy—have been exposed as falsehoods, and now, some five-and-a-half years later, the truth is emerging for all to see.

This is a potential embarrassment to the American ruling elite. Rep. Waxman makes clear that the brazenness of the Bush administration’s actions is a political problem: “The documents the Committee has received about Hunt Oil show that in matters involving Iraqi oil, official denials of knowledge and involvement can be misleading. This is a serious matter because of the widespread suspicion in Iraq and other nations that the United States went to war to gain access to Iraqi oil.”

As to why the State Department aided Hunt in Kurdistan, effectively undermining official policy in support of Iraqi “national unity,” the Bush administration is no doubt keeping all its options “on the table.” Washington is duplicitous in its dealings with the puppet regime in Baghdad, which it mistrusts and believes is too close to the Iranians, as it is with everyone else.

Voices have loudly been raised in favor of partition of the country, legal or de facto, and this policy has its backers in the administration. At the time of the Hunt deal signing last year, New York Times columnist Paul Krugman noted that Ray Hunt, “thanks to his policy position, is presumably as well-informed about the actual state of affairs in Iraq as anyone in the business world can be. By putting his money into a deal with the Kurds, despite Baghdad’s disapproval, he’s essentially betting that the Iraqi government ... won’t get its act together. Indeed, he’s effectively betting against the survival of Iraq as a nation in any meaningful sense of the term.

“The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia. And I suspect that most people in the Bush administration—maybe even Mr. Bush himself—know this, too.”

Bush officials no doubt believe that there are various routes to the exploitation of Iraqi oil reserves. They are pressing for a national oil law, but see no difficulty in helping open up the Kurdish region to foreign predators in the meantime. Their policy is shortsighted and reckless, but this has been the character of the administration’s actions all along. The criminal plundering of Iraq’s natural resources, in the interest of the American corporate oligarchy, does not lend itself to rational, long-term planning.

Billions of dollars are at stake, and no doubt the administration did what it could to pass along some business to Hunt, a close political ally, whatever the ultimate consequences. A State Department official’s September 2007 email notes that when asked about “concerns over potential conflicts between the recently passed KRG hydrocarbon law and an [sic] national law,” Hunt’s McDonald said “the ‘significant opportunity’ outweighs the legal ambiguity.” Indeed.

It is worth noting that the Hunt name has a special political connotation.

The founder of the company, H.L. Hunt (1889-1974), Ray Hunt’s father, made a fortune in the oil industry in Texas. In 1957 Fortune magazine estimated that Hunt was worth $400-700 million, making him one of the eight richest individuals in the US.

Hunt was a fanatical right-winger and anticommunist. In 1951, he launched the Gen. Douglas MacArthur for president campaign with a chunk of his own money. Later, with two of his sons, he set up a right-wing “intelligence network,” the International Committee for the Defense of Christian Culture.

Hunt was involved in various ultra-right activities, including anti-Castro operations, and was a member of the John Birch Society. He also apparently helped bankroll the career of Democratic President Lyndon B. Johnson.

Ray Hunt was appointed the finance chairman of the Republican National Committee’s Victory 2000 Committee. During that campaign he was designated one of the 241 Bush “Pioneers,” thanks to his raising more than $100,000 in donations from his family. In 2004, Hunt and his wife donated $190,000 to the Republican cause.

In addition to his seat on the Foreign Intelligence Advisory Board, Hunt serves as chairman of the Federal Reserve Bank of Dallas and is a member of the National Petroleum Council, which advises the president on energy policy. As noted above, Hunt also served on the board of Halliburton, the firm once headed by Vice President Dick Cheney.

Obama continues lurch to the right on Iraq war and militarism

Obama continues lurch to the right on Iraq war and militarism

By Bill Van Auken
Go To Original

The embrace of key elements of the Republican agenda and jettisoning of positions that he advanced during his “Change you can believe in” primary campaign have become a daily routine, as the Democratic Party’s presumptive presidential candidate Barack Obama carries out a dizzying turn to the right.

In speeches and press appearances on Wednesday and Thursday, Obama continued to identify his campaign with support for American militarism, while backing away from his primary-campaign pledge to withdraw US combat forces from Iraq based on a definite timetable.

Appearing Wednesday in Colorado Springs, Obama delivered a speech on national service, which hailed the US military and vowed to swell its ranks.

While proposing the expansion of Americorps, the Peace Corps and other civilian entities, Obama made it clear that the main service to which he intended to call young Americans was the military.

He began by invoking the September 11, 2001 terrorist attacks on New York City and Washington and lamenting the failure of the Bush administration to issue “a call to service” and “a call for shared sacrifice.”

“There is no challenge greater than the defense of our nation and our values,” he continued, praising the actions of US troops “fighting a resurgent Taliban” and “persevering in the deserts and cities of Iraq.”

What “values” are embodied in the systematic destruction of the Afghan and Iraqi societies and the killing and maiming of millions of civilians in the attempt to impose US hegemony over oil-rich regions of the planet, the Democratic candidate did not spell out.

Instead, he insisted on the “need to ease the burden on our troops, while meeting the challenges of the 21st century.” That these “challenges” entail the continuation of these wars and the launching of new ones is clear. As president, he said, he would “call on a new generation of Americans to join our military,” while vowing to increase US ground forces by 65,000 soldiers and 27,000 Marines.

With the military struggling to meet current recruitment quotas, this proposal raises the real question of whether the national service envisioned by Obama will involve the reactivation of the military draft.

Speaking at a press conference in Fargo, North Dakota Thursday before addressing a group of veterans, Obama allowed that he expected to “refine” his positions on Iraq during an upcoming trip to the US occupied country this summer.

Backing away from his earlier pledge to carry out a 16-month withdrawal of combat troops from Iraq, the candidate said, “I have always said I would listen to the commanders on the ground. I have always said that the pace of withdrawal would be dictated by the safety and security of our troops and the need to maintain stability.” Meanwhile, he couched his opposition to the continued occupation of Iraq at current levels in terms of what he posed as the more urgent necessity for sending troops to Afghanistan.

Obama’s advisors have been more explicit. His top foreign policy advisor, Anthony Lake, a former Clinton administration national security advisor, told the press that an incoming Democratic administration was committed to maintaining “a residual force for clearly defined missions” in Iraq, as well as “preparedness to go back in,” if needed. “That is not a ‘cut and run’ and let’s just see what happens,’” said Lake, one of the architects of the Clinton administration’s “humanitarian” interventions in Somalia, Haiti and the Balkans.

Meanwhile, there is growing speculation that Obama is prepared to keep current US Defense Secretary Robert Gates at his post and the campaign has agreed to participate in a series of transition teams being set up in military, intelligence and police agencies to assure the seamless continuation of the “global war on terrorism.”

Having won the Democratic primaries in no small part by posturing as an opponent of the Iraq war and indicting his opponent, Hillary Clinton, for voting to authorize it, Obama is now presenting himself as another “wartime president.”

The lurch to the right by the Obama campaign is so blatant that it has aroused substantial commentary in the bourgeois press, some of it gloating and some of it reflecting concerns that this maneuver is so naked that it may alienate substantial layers of the population from the electoral process and expose the fraud of the entire two-party system.

The Christian Science Monitor, for example, cited concerns Thursday that Obama’s lurch to the right posed “a particular risk among young voters, who have turned out and volunteered in droves for Obama and may be disillusioned by his display of old-style politics.”

In the gloating category was an editorial published Wednesday in the Wall Street Journal entitled “Bush’s Third Term.” The Journal, whose editorial board has generally reflected the views within the right-wing sections of the Republican Party that dominate the Bush administration, pointed to Obama’s continuous warnings against McCain’s victory resulting in “George Bush’s third term.”

“Maybe he’s worried that someone will notice that he’s the candidate running for it,” the editorial affirmed.

It went on to note Obama’s announcement two weeks ago that he will vote for legislation legalizing the Bush administration’s sweeping domestic wiretapping program, while granting retroactive immunity to the telecom companies that helped it carry out this unlawful spying operation. It pointed to the pullback from campaign promises of a timetable for withdrawing US combat troops from Iraq. And it cited his embrace of government funding for “faith-based” social programs, as well as a series of calculated statements on so-called hot button issues of the political right, ranging from guns to the death penalty.

Another demagogic appeal that the Obama campaign has jettisoned is the previous pretense that he opposed NAFTA and sympathized with the protectionist outlook of the trade union bureaucracy. In a recent interview with Fortune magazine, the candidate declared, “I’ve always been a proponent of free trade,” and allowed that some of the primary rhetoric on the subject had been “overheated.”

“Now that he is in a general election,” the Journal commented, “he can’t scare the business community too much.” It would appear that the stock exchange is not at all frightened. According to figures compiled by the Center for Responsive Politics, Obama has netted nearly $8 million in contributions from the securities and investment houses, almost double the amount received by his Republican rival, McCain.

The Journal editorial concludes cynically, though justifiably, that “the next President, whether Democrat or Republican, is going to embrace much of Mr. Bush’s foreign and antiterror policy whether he admits it or not.”

In the end, this right-wing voice of Wall Street criticizes Obama not for his policies, but rather for what it terms his questionable “political character,” meaning doubts about whether he can be trusted to carry through the wars abroad and attacks on the working class at home that the ruling elite requires.

Obama’s turn to the right is the manifestation of a system in which the policies of both major parties are determined by a small wealthy layer of the population, which holds the will and sentiments of the American population in contempt.

The right-wing agenda being spelled out by the Obama campaign sets the stage for yet another election in which the masses of working people in the US will find themselves politically disenfranchised, with no viable means to express their immense hostility to the policies of war, destruction of living standards, and political reaction identified with the Bush administration.

Obama’s rapid evolution in the wake of the primaries demonstrates the politics of deception and manipulation of public opinion that his campaign has embodied from the outset. It has never represented an insurgency from below, but rather a bid by elements of the ruling elite to effect certain definite but limited changes in policy, while using Obama to supply a fresh face for American imperialism under conditions in which it is discredited at home and abroad.

The attempt to use the Obama campaign to delude broad layers of the population seeking change enjoys the active and crucial support of most of what passes for the American “left.” They seek to cover up or apologize for the right-wing trajectory of the Democrats. Some put forward the cynical argument that Obama is merely doing what it takes to get elected—the American people, they would argue, are backward and right-wing. Others maintain that he is reacting to pressure from the establishment and must be pushed back on course through pressure from the left.

Typical of this second school is the left liberal journalist Arianna Huffington, who posted on her web site advice to Obama, warning him that “tacking to the center is a losing strategy.”

Instead, she called upon him to “appeal to the 82 million people who did not vote in 2004.” She continued, “Isn’t galvanizing the electorate to demand fundamental change the raison d’être of the Obama campaign in the first place?”

In reality, Obama is now running on his real program, that of a corrupt and reactionary big business politician. He will leave it to figures like Huffington, the Nation, and others on the so-called left to continue promoting illusions in his candidacy, while he makes his pitch to his key constituencies, the financial aristocracy and the forces of the state.

The Democrats have no interest in coming into office with a mandate for “fundamental change,” because they have no desire or intention of carrying out such transformations. In fact, Obama’s latest campaign swing is aimed in no small part at creating a new and decidedly conservative base for politics that will in key respects represent continuity with those of the Bush administration.

In the end, the promotion of illusions in Obama and the Democrats serves only to block the emergence of a genuine alternative based upon the independent political mobilization of the broad mass of working people.

One thing is certain. The policies of an incoming Obama administration will not be determined by the erstwhile populist posturing of the candidate or by the pressure exerted by the left liberals. Rather, they will be dictated by the enormity of the economic and political crisis confronting American capitalism and what is required under these conditions to defend the class interests of the ruling elite. The turn to the right on the campaign trail is preparation for this essential task.