Friday, December 12, 2008

Arundhati Roy, The Monster in the Mirror

Arundhati Roy, The Monster in the Mirror

Go To Original

The single omnipresent historical reference in the American media immediately in the wake of September 11, 2001, was, of course, "Pearl Harbor" -- and those code words for it, "infamy" and "day of infamy," splashed in mile-high letters across the front pages of papers. What we had experienced, it was commonly said then, was "the Pearl Harbor of the 21st century." And with that image of the Japanese attack that began the Second World War for the United States went powerful, if only half-conscious, memories of how that war ended, of nuclear holocaust, and so the place where the World Trade Center towers went down was promptly dubbed "Ground Zero," previously a term reserved for the spot where an atomic blast took place.

Naturally, the idea that 9/11 was an "act of war," and that we were "at war," quickly and heavily promoted by the Bush administration, followed; and all of this would have been appropriate to a surprise attack by a nuclear-armed state, but not to an assault by 19 terrorists backed by a ragtag organization spread from Hamburg, Germany, to the backlands of Afghanistan. That the framework for taking in what had happened that day was so thoroughly askew mattered not a whit to most Americans at that time; and the rest, including the President's "Global War on Terror," came easily, if disastrously, in its wake. Now, "9/11" has become the "Pearl Harbor" of the twenty-first century, the antecedent and analogy of choice, and so, not surprisingly, it was on all but a few media lips, during the recent massacre and siege in Mumbai, India.

Arundhati Roy, the Indian activist and author of the prize-winning novel The God of Small Things, was one of the earliest, strongest, sanest voices on this planet of ours to take on George W. Bush and his Global War on Terror. "The freshest voice on Earth," I called her back in 2003. She was an inspiration. Now, she turns to the events in her own country, in Mumbai, and explains just why using 9/11 as the analogy of choice there, as we once used "Pearl Harbor" here, will lead in no less terrible directions.

The piece that follows was published by the superb magazine Outlook India, which is sharing it with TomDispatch.com. Tom

9 Is Not 11

(And November Isn't September)
By Arundhati Roy

We've forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching "India's 9/11." And like actors in a Bollywood rip-off of an old Hollywood film, we're expected to play our parts and say our lines, even though we know it's all been said and done before.

As tension in the region builds, U.S. Senator John McCain has warned Pakistan that, if it didn't act fast to arrest the "bad guys," he had personal information that India would launch air strikes on "terrorist camps" in Pakistan and that Washington could do nothing because Mumbai was India's 9/11.

But November isn't September, 2008 isn't 2001, Pakistan isn't Afghanistan, and India isn't America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It's odd how, in the last week of November, thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India's richest city ended up looking like war-torn Kupwara -- one of Kashmir's most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur, and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all are Indian nationals, which obviously indicates that something's going very badly wrong in this country.

If you were watching television you might not have heard that ordinary people, too, died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness.

The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of "India shining" and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish center.

We're told that one of these hotels is an icon of the city of Mumbai. That's absolutely true. It's an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company, I think) said, "Hungry, kya?" ("Hungry eh?"). It, then, with the best of intentions I'm sure, informed its readers that, on the international hunger index, India ranked below Sudan and Somalia.

But of course this isn't that war. That one's still being fought in the Dalit bastis (settlements) of our villages; on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal; and the slums and shantytowns of our gigantic cities.

That war isn't on TV. Yet.

So maybe, like everyone else, we should deal with the one that is.

Terrorism and the Need for Context

There is a fierce, unforgiving fault line that runs through the contemporary discourse on terrorism. On one side (let's call it Side A) are those who see terrorism, especially "Islamist" terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit, and has nothing to do with the world around it, nothing to do with history, geography, or economics. Therefore, Side A says, to try to place it in a political context, or even to try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that, though nothing can ever excuse or justify it, terrorism exists in a particular time, place, and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm's way. Which is a crime in itself.

The sayings of Hafiz Saeed who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hard-line Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias, and Democracy, and believes that jihadhis Islam, rules the world. should be waged until Islam,

Among the things he said are:

"There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy."

And: "India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir."

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera):

"We didn't spare a single Muslim shop, we set everything on fire… we hacked, burned, set on fire… we believe in setting them on fire because these bastards don't want to be cremated, they're afraid of it… I have just one last wish… let me be sentenced to death… I don't care if I'm hanged... just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay... I will finish them off… let a few more of them die... at least twenty-five thousand to fifty thousand should die."

And where in Side A's scheme of things would we place the Rashtriya Swayamsevak Sangh bible, We, or, Our Nationhood Defined by M. S. Golwalkar , who became head of the RSS in 1944. (The RSS is the ideological heart, the holding company of the Hindu fundamentalist Bharatiya Janata Party, BJP, and its militias. The RSS was founded in 1925. By the 1930s, its founder, Dr. K. B. Hedgewar, a fan of Benito Mussolini's, had begun to model it overtly along the lines of Italian fascism.)

It says:

"Ever since that evil day, when Moslems first landed in Hindustan, right up to the present moment, the Hindu Nation has been gallantly fighting on to take on these despoilers. The Race Spirit has been awakening."

Or:

"To keep up the purity of its race and culture, Germany shocked the world by her purging the country of the Semitic races -- the Jews. Race pride at its highest has been manifested here... a good lesson for us in Hindustan to learn and profit by."

Of course Muslims are not the only people in the gun sights of the Hindu Right. Dalits have been consistently targeted. Recently, in Kandhamal in Orissa, Christians were the target of two and a half months of violence that left more than 40 dead. Forty thousand people have been driven from their homes, half of whom now live in refugee camps.

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jihad with his twisted, fiery sermons. On December 11, the United Nations imposed sanctions on the Jamaat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest.

Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide, he left the Vishwa Hindu Parishad (VHP, a militia of the RSS) to join the Shiv Sena (another rightwing nationalist party). Narendra Modi, Bajrangi's former mentor, is still the Chief Minister of Gujarat.

So the man who presided over the Gujarat genocide was reelected twice, and is deeply respected by India's biggest corporate houses, Reliance and Tata. Suhel Seth, a TV impresario and corporate spokesperson, recently said, "Modi is God." The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted.

The RSS has 45,000 branches and seven million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former Prime Minister A. B. Vajpayee, current leader of the opposition L. K. Advani, and a host of other senior politicians, bureaucrats, and police and intelligence officers.

And if that's not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organizations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I'd pick Side B. We need context. Always.

A Close Embrace of Hatred, Terrifying Familiarity, and Love

On this nuclear subcontinent, that context is Partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes, and families, was drawn virtually overnight. It was Britain's final, parting kick to us.

Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India, left their homes with nothing but the clothes on their backs.

Each of those people carries, and passes down, a story of unimaginable pain, hate, horror, but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity, but also love. It has left Kashmir trapped in a nightmare from which it can't seem to emerge, a nightmare that has claimed more than 60,000 lives.

Pakistan, the Land of the Pure, became an Islamic Republic, and then very quickly a corrupt, violent military state, openly intolerant of other faiths.

India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi's predecessors had been hard at work since the 1920s, dripping poison into India's bloodstream, undermining that idea of India even before it was born.

By 1990, they were ready to make a bid for power. In 1992 Hindu mobs exhorted by L. K. Advani stormed the Babri Masjid and demolished it.

By 1998, the BJP was in power at the center. The U.S. War on Terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy.

This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism on the subcontinent -- and of the Mumbai attacks. It shouldn't surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and L. K. Advani of the Rashtriya Swayamsevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 Parliament attack, the 2002 burning of the Sabarmati Express, and the 2007 bombing of the Samjhauta Express, the government of India announced that it has "incontrovertible" evidence that the Lashkar-e-Taiba, backed by Pakistan's Inter-Services Intelligence (ISI), was behind the Mumbai strikes.

The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies, the Lashkar operates in India through an organization called the "Indian Mujahideen." Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir Police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy.

Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen, and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously.

In today's world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state, is very much like trying to pin down the provenance of corporate money. It's almost impossible.

In circumstances like these, air strikes to "take out" terrorist camps may take out the camps, but certainly will not "take out" the terrorists. And neither will war.

Also, in our bid for the moral high ground, let's try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighboring Sri Lanka, one of the world's most deadly terrorist groups, were trained by the Indian Army.

Releasing Frankensteins

Thanks largely to the part it was forced to play as America's ally, first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening toward civil war.

As recruiting agents for America's jihad against the Soviet Union, it was the job of the Pakistani Army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the U.S. expected it could rein them in like pet mastiffs whenever it wanted to. Certainly it did not expect them to come calling in the heart of the homeland on September 11. So once again, Afghanistan had to be violently remade.

Now the debris of a re-ravaged Afghanistan has washed up on Pakistan's borders.

Nobody, least of all the Pakistani government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs, and the maniacs who believe that Islam will, or should, rule the world are mostly the detritus of two Afghan wars. Their ire rains down on the Pakistani government and Pakistani civilians as much, if not more, than it does on India.

If, at this point, India decides to go to war, perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India's shores, endangering us as never before.

If Pakistan collapses, we can look forward to having millions of "non-state actors" with an arsenal of nuclear weapons at their disposal as neighbors.

It's hard to understand why those who steer India's ship are so keen to replicate Pakistan's mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it's the best way for India to avoid facing up to the serious trouble building on our home front.

The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at "ground zero" kept up an endless stream of excited commentary.

Over three days and three nights we watched in disbelief as a small group of very young men, armed with guns and gadgets, exposed the powerlessness of the police, the elite National Security Guard, and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this, they indiscriminately massacred unarmed people, in railway stations, hospitals, and luxury hotels, unmindful of their class, caste, religion, or nationality.

(Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S. and Israeli armies don't hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq, and Afghanistan.)

But this was different. And it was on TV.

The boy-terrorists' nonchalant willingness to kill -- and be killed -- mesmerized their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news.

Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that's worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.)

Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people, and inflict as much damage as they could, before they were killed themselves. They left us completely bewildered.

Collateral Damage

When we say, "Nothing can justify terrorism," what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it's precious.

So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they've died, they've journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself "Imran Babar." I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the "terror emails" that were sent out before several other bomb attacks in India. Things we don't want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir.

"You're surrounded," the anchor told him. "You are definitely going to die. Why don't you surrender?"

"We die every day," he replied in a strange, mechanical way. "It's better to live one day as a lion and then die this way." He didn't seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn't it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for?

Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don't figure in their calculations except as collateral damage.

It has always been a part of, and often even the aim of, terrorist strategy to exacerbate a bad situation in order to expose hidden fault lines. The blood of "martyrs" irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project.

A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theater, spectacle, and symbolism, and today the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as TV anchors were being condemned by other TV anchors, the effectiveness of the terror strikes was being magnified a thousand-fold by the TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least, there has been very little mention of the elephants in the room: Kashmir, Gujarat, and the demolition of the Babri Masjid.

Instead, we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed. (Is it alright for the poor to remain unprotected?) We had people suggest that the government step down and each state in India be handed over to a separate corporation.

We had the death of former Prime Minster V. P. Singh, the hero of Dalits and lower castes, and the villain of upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir give us his version of George Bush's famous "Why They Hate Us" speech. His analysis of why religious bigots, both Hindu and Muslim, hate Mumbai: "Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness."

His prescription: "The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever."

Didn't George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can't seem to get away from.

A Shadowy History of Suspicious Terror Attacks

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and left-wing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army, and virtually asking for a police state.

It isn't surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of "pickings" is long gone. We're now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid oversimplifications like the Police are Good/Politicians are Bad, Chief Executives are Good/Chief Ministers are Bad, Army is Good/Government is Bad, India is Good/Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically this regression into intellectual infancy comes at a time when people in India were beginning to see that, in the business of terrorism, victims and perpetrators sometimes exchange roles.

It's an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we're still learning. (If Kashmir won't willingly integrate into India, it's beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 Parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation.

Eventually, the courts acquitted two out of the four accused, including S. A. R. Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him, but was then convicted for a fresh, comparatively minor offense.

The Supreme Court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged that there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, "The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender."

Even today we don't really know who the terrorists that attacked the Indian Parliament were and who they worked for.

More recently, on September 19th of this year, we had the controversial "encounter" at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur, and Ahmedabad in 2008. An assistant commissioner of police, Mohan Chand Sharma, who played a key role in the Parliament attack investigation, lost his life as well. He was one of India's many "encounter specialists," known and rewarded for having summarily executed several "terrorists."

There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics, and activists, all of whom demanded a judicial inquiry into the incident.

In response, the BJP and L. K. Advani lauded Mohan Chand Sharma as a "Braveheart" and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying to do so was "suicidal" and calling them "anti-national." Of course, there has been no enquiry.

Only days after the Batla House event, another story about "terrorists" surfaced in the news. In a report submitted to a Sessions Court, the Central Bureau of Investigation (CBI) said that a team from Delhi's Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted two kilograms of RDX (explosives) and two pistols on them, and then arrested them as "terrorists" who belonged to Al Badr (which operates out of Kashmir).

Ali and Qamar, who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured, and even killed on false charges.

This pattern changed in October 2008 when Maharashtra's Anti-Terrorism Squad (ATS), which was investigating the September 2008 Malegaon blasts, arrested a Hindu preacher Sadhvi Pragya, a self-styled God man, Swami Dayanand Pande, and Lt. Col. Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu nationalist organizations, including a Hindu supremacist group called Abhinav Bharat.

The Shiv Sena, the BJP, and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that "Hindus could not be terrorists." L. K. Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On November 25th, newspapers reported that the ATS was investigating the high profile VHP chief Pravin Togadia's possible role in the blasts in Malegaon (a predominantly Muslim town). The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai attacks. The chances are that the new chief, whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonizing, and openly heckling people who have dared to question the integrity of the police and armed forces.

My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to the camera: "Arundhati Roy and Prashant Bhushan," he said. "I hope you are watching this. We think you are disgusting."

For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today amounts to incitement, as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So, according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police.

This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake "encounters." This in a country that boasts of the highest number of custodial deaths in the world, and yet refuses to ratify the international covenant on torture. A country where the ones who make it to torture chambers are the lucky ones because at least they've escaped being "encountered" by our Encounter Specialists. A country where the line between the underworld and the Encounter Specialists virtually does not exist.

The Monster in the Mirror

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them?

There are those who point out that U.S. strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse.

If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The U.S. military is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire.

(Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?)

Hundreds of thousands of people, including thousands of American soldiers, have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S. allies/agents (including India) and U.S. interests in the rest of the world has increased dramatically since 9/11.

George W. Bush, the man who led the U.S. response to 9/11, is a despised figure not just internationally, but also by his own people.

Who can possibly claim that the United States is winning the War on Terror?

Homeland Security has cost the U.S. government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It's not that kind of homeland.

We have a hostile nuclear-weapons state that is slowly spinning out of control as a neighbor; we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalize, will end up as a threat not just to India, but to the whole world.

If 10 men can hold off the NSG commandos and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix.

Anti-terrorism laws are not meant for terrorists; they're for people that governments don't like. That's why they have a conviction rate of less than 2%. They're just a means of putting inconvenient people away without bail for a long time and eventually letting them go.

Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It's what they want.

What we're experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet's squelching under our feet.

The only way to contain -- it would be naïve to say end -- terrorism is to look at the monster in the mirror. We're standing at a fork in the road. One sign says "Justice," the other "Civil War." There's no third sign and there's no going back. Choose.

Arundhati Roy was born in 1959 in Shillong, India. She studied architecture in New Delhi, where she now lives, and has worked as a film designer, actor, and screenplay writer in India. A tenth anniversary edition of her novel, The God of Small Things (Random House), for which she received the 1997 Booker Prize, will be officially published within days. She is also the author of numerous nonfiction titles, including An Ordinary Person's Guide to Empire. This piece was published by Outlook India, which is sharing it with TomDispatch.com.

Former chairman of the Nasdaq arrested over alleged $50 billion fraud

Bernard Madoff arrested over alleged $50 billion fraud

By Edith Honan and Dan Wilchins

Go To Original

Bernard Madoff, a quiet force on Wall Street for decades, was arrested and charged on Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever.

The former chairman of the Nasdaq Stock Market is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he launched in 1960. But he also ran a hedge fund that U.S. prosecutors said racked up $50 billion of fraudulent losses.

Madoff told senior employees of his firm on Wednesday that "it's all just one big lie" and that it was "basically, a giant Ponzi scheme," with estimated investor losses of about $50 billion, according to the U.S. Attorney's criminal complaint against him.

A Ponzi scheme is a swindle offering unusually high returns, with early investors paid off with money from later investors.

On Thursday, two agents for the U.S. Federal Bureau of Investigation entered Madoff's New York apartment.

"There is no innocent explanation," Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he "paid investors with money that wasn't there," according to the complaint.

The $50 billion allegedly lost would make the hedge fund one of the biggest frauds in history. When former energy trading giant Enron filed for bankruptcy in 2001, one of the largest at the time, it had $63.4 billion in assets.

U.S. prosecutors charged Madoff, 70, with a single count of securities fraud. They said he faces up to 20 years in prison and a fine of up to $5 million.

The Securities and Exchange Commission filed separate civil charges against Madoff.

"Our complaint alleges a stunning fraud -- both in terms of scope and duration," said Scott Friestad, the SEC's deputy enforcer. "We are moving quickly and decisively to stop the scheme and protect the remaining assets for investors."

Dan Horwitz, Madoff's lawyer, told reporters outside a downtown Manhattan courtroom where he was charged, "Bernard Madoff is a longstanding leader in the financial services industry. We will fight to get through this unfortunate set of events."

A shaken Madoff stared at the ground as reporters peppered him with questions. He was released after posting a $10 million bond secured by his Manhattan apartment.

Authorities, citing a document filed by Madoff with the U.S. Securities and Exchange Commission on January 7, 2008, said Madoff's investment advisory business served between 11 and 25 clients and had a total of about $17.1 billion in assets under management. Those clients may have included other funds that in turn had many investors.

The SEC said it appeared that virtually all of the assets of his hedge fund business were missing.

CONSISTENT RETURNS

An investor in the hedge fund said it generated consistent returns, which was part of the attraction. Since 2004, annual returns averaged around 8 percent and ranged from 7.3 percent to 9 percent, but last decade returns were typically in the low-double digits, the investor said.

The fund told investors it followed a "split strike conversion" strategy, which entailed owning stock and buying and selling options to limit downside risk, said the investor, who requested anonymity.

Jon Najarian, an acquaintance of Madoff who has traded options for decades, said "Many of us questioned how that strategy could generate those kinds of returns so consistently."

Najarian, co-founder of optionmonster.com, once tried to buy what was then the Cincinnati Stock Exchange when Madoff was a major seatholder on the exchange. Najarian met with Madoff, who rejected his bid.

"He always seemed to be a straight shooter. I was shocked by this news," Najarian said.

'LOCK AND KEY'

Madoff had long kept the financial statements for his hedge fund business under "lock and key," according to prosecutors, and was "cryptic" about the firm. The hedge fund business was located on a separate floor from the market-making business.

Madoff has been conducting a Ponzi scheme since at least 2005, the U.S. said. Around the first week of December, Madoff told a senior employee that hedge fund clients had requested about $7 billion of their money back, and that he was struggling to pay them.

Investors have been pulling money out of hedge funds, even those performing well, in an effort to reduce risk in their portfolios as the global economy weakens.

The fraud alleged here could further encourage investors to pull money from hedge funds.

"This is a major blow to confidence that is already shattered -- anyone on the fence will probably try to take their money out," said Doug Kass, president of hedge fund Seabreeze Partners Management. Kass noted that investors that put in requests to withdraw their money can subsequently decide to leave it in the fund if they wish.

Bernard L. Madoff Investment Securities has more than $700 million in capital, according to its website.

Madoff remains a member of Nasdaq OMX Group Inc's nominating committee, and his firm is a market maker for about 350 Nasdaq stocks, including Apple, EBay and Dell, according to the website.

The website also states that Madoff himself has "a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark."

The company's website may be found here: www.madoff.com/

As world slump deepens US jobless claims soar to 26-year high

As world slump deepens US jobless claims soar to 26-year high

By Barry Grey

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The Labor Department reported Thursday that the number of US workers filing new claims for unemployment benefits last week jumped 58,000 to a seasonally adjusted total of 573,000—the highest figure since November 1982.

The increase was more than twice the figure forecast by economists, showing that the recession in the US is developing far more rapidly than anticipated.

The four-week average of new claims also neared a 26-year high, rising 14,250 to 540,000.

The total of continuing claims, those drawn by workers collecting benefits for more than one week, also rose, climbing 338,000 to 4,429,000. The increase in continuing claims was the biggest in 34 years, showing that laid-off workers are finding it increasingly difficult to find new employment.

Also on Thursday, the Federal Reserve Board reported that the total net worth of US households fell 4.7 percent in the third quarter from the second quarter. The decline was the fourth in a row, indicating the degree to which the recession is driving down the living standards of the population.

These figures, and other newly released data on retail sales, home foreclosures and US exports that show a dramatic decline in the American economy and growing social distress, coincide with economic reports documenting the emergence of a global recession on a scale not seen since the Great Depression.

The World Bank on Tuesday issued a report saying that the world is plunging into a recession likely to be more protracted than any since the 1930s. The bank projected that world trade would actually contract next year, marking the first year of negative growth since 1982. It noted that North America, Europe and Japan are already in recession, and predicted that economic growth in the so-called developing world would fall sharply. The bank forecast that capital flows to developing countries will plunge by 50 percent.

“We know that the financial crisis is now likely to be the worst since the 1930s,” said Justin Lin, the chief economist of the World Bank.

The bank forecast that the global economy will grow by a mere 0.9 percent in 2009, down from 2.5 percent this year and 4 percent in 2006.

The volume of world trade, which grew 9.8 percent in 2006 and an estimated 6.2 percent this year, will contract by 2.1 percent in 2009. That drop would be deeper than the last major contraction in trade—1.9 percent in 1975.

The bank noted as particularly ominous a sharp contraction in China’s growth rate. It forecast that the country, which grew 11.9 percent in 2007, will slow to 7 percent this year and 6.6 percent in 2010.

Deutsche Bank this week issued an even more dire forecast, saying the global economy would actually contract by 0.2 percent in 2009, with the US, Europe and Japan in recessions of roughly equal severity.

“Global trade is reversing course because it is a function of industrial production, and we’re seeing the biggest coordinated slump in industrial production since the early 1930s,” said Philip Suttle, director of Global Macro Analysis at the Institute of International Finance.

In an article Thursday on the global crisis, the Washington Post noted that the credit crunch and near-collapse of consumer spending in the advanced countries are reverberating across the globe. South African miners are being laid off because of the collapse in platinum prices, which is bound up with the slump in auto sales in North America, Europe and Japan. In India, thousands of textile workers are losing their jobs as global clothing sales plunge. While November auto sales were down 37 percent in the US, they were also down 15 percent in India and 30 percent in South Africa.

In the two days since the release of the World Bank report, economic data has emerged that indicates the bank has, if anything, underestimated the depth of the crisis. On Wednesday, the Chinese government reported that Chinese exports last month registered their sharpest drop in nearly a decade, falling 2.2 percent from a year earlier. That compares to a 19.2 percent rise in October and a nearly 26 percent increase in 2007.

Imports into China fell even more sharply. They were down 17.9 percent in November from a year earlier. Particularly indicative of the impact of the recession in the West on Chinese manufacturing, the country reported a steep decline in oil imports. China also reported that direct foreign investment fell 36.5 percent in November from a year earlier.

The Chinese government was itself shocked by these figures, which it had not anticipated. The dramatic decline in the Chinese economy revealed by these figures dashes hopes in the advanced countries that China could serve as the catalyst to pull the world economy out of recession.

Elsewhere in Asia:

• Japan’s gross domestic product contracted much more rapidly in the third quarter than previously thought, figures published Tuesday showed. Data showed a quarter-on-quarter decline of 0.5 percent, compared to a preliminary estimate of 0.1 percent. Japan’s economy contracted at an annualized rate of 1.8 percent.

• Taiwanese exports last month fell by almost a quarter from a year ago, the sharpest drop since September 2001.

• Korea reported that its November shipments dropped 18 percent from the previous year.

In Europe:

• Ford, Volkswagen and Renault have idled their plants in Russia, and Standard & Poor’s on Monday cut the country’s debt rating for the first time in a decade, warning of a “rapid depletion” of Russia’s reserves.

• German manufacturing orders plunged in October by 6.1 percent after a record decline of 8.3 percent the previous month. Economists had forecast a rise of 0.4 percent for October. Deutsche Bank chief economist Norbert Walter told a newspaper that German GDP could contract by up to 4 percent in 2009.

• In France, manufacturing excluding energy and agriculture dropped 3.2 percent in October compared to September. Auto production dropped 14.3 percent after a 5.9 percent drop the previous month. Over 12 months, auto production has dropped 29.2 percent, the biggest drop since 1991.

Also in October, production of metal and metal products declined 5.5 percent. Rubber and plastics dropped 3.6 percent.

In the Americas:

• New auto sales in Brazil dropped 25.7 percent in November from the previous month. Auto production fell 34.4 percent.

• Statistics Canada reported December 5 that 70,600 jobs were lost in November, the biggest monthly job loss since 1982.

Other data on the US economy released this week showed retail sales in November, excluding autos, falling by 5.5 percent from the previous year, the biggest monthly drop in five years. November sales were down 3 percent from October.

The real estate firm Realty Trac reported that US home mortgage foreclosure activity jumped 28 percent last month compared with the same month a year ago. The company predicted that foreclosures would surge even more sharply beginning in January, when temporary foreclosure moratoria end and mass layoffs take their toll on family incomes.

More than 1 million homes have been lost to foreclosure since the housing crisis broke in August of 2007, and Realty Trac predicts that another 1 million homeowners could be forced out of their homes next year.

Last week, Credit Suisse issued a report forecasting 8.1 million foreclosures by the end of 2012, accounting for 16 percent of all US mortgages.

Finally, the US trade deficit unexpectedly rose in October, after having consistently fallen as a result of the falling value of the dollar and the resultant reduction in the relative price of US exports. The 1.1 percent rise in the trade gap was mainly the result of a precipitous 2.2 percent drop in US exports resulting from falling demand in Europe, Japan, China and elsewhere.

Harm Bandholz, an economist at UniCredit Markets & Investment Banking in New York, commented, “The last bastion of the US economy has collapsed. The US economy will contract by 4.5 percent in the current quarter.”

Economists at Morgan Stanley projected the US economy will contract at a 6 percent annual pace this quarter, upping the estimate from 5 percent.

US and global financial markets, meanwhile, continue to be in turmoil. One measure of the fear that continues to grip the markets is the fact that investors on Tuesday accepted a zero percent rate in the US government’s auction of $30 billion worth of short-term securities. Demand was so great that the government could have sold four times as much.

“The last time this happened was the Great Depression, when people were willing to accept no return on their money, or possibly even a negative return,” said Edward Yardeni, an independent analyst.

Every day continues to bring reports of new mass layoffs. Over the past several days the following have been announced:

• Bank of America announced plans Thursday to cut 30,000 to 35,000 jobs over the next three years as a result of its acquisition of Merrill Lynch and the weak economy. This represents more than 10 percent of the combined workforce of the merged firms.

• Rio Tinto, the mining giant, said Wednesday it will cut 14,000 jobs, 13 percent of its workforce.

• Sony on Tuesday said it will close five or six factories and cut 8,000 jobs worldwide.

• Wyndham Worldwide Corp. announced it will cut 4,000 jobs. The New Jersey company owns hotel brands such as Ramada and Days Inn.

• Goldman Sachs this week will lay off as many as 250 European staff, with most cuts coming in London.

• KB Toys, an 86-year-old toy retailer, filed for bankruptcy with plans to shut its 277 stores, employing 11,000 workers.

• Stanley Works, a Connecticut-based diversified maker of tools for construction and do-it-yourself use, said Thursday it is eliminating 2,000 jobs and will close three of its 45 factories.

• Office Deport plans to close 112 stores in North America over the next three months, eliminating 2,200 jobs.

• National Public Radio will cut its workforce by 7 percent (about 60 employees).

• SKF, the Swedish engineering company and world’s biggest bearings producer, said Wednesday it will cut 2,500 jobs, or 6 percent of its workforce.

Bush, Democratic auto bailout fails in Senate, talks continue

Bush, Democratic auto bailout fails in Senate, talks continue

By Jerry White

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As of this writing, the bill negotiated between the Bush administration and congressional Democrats on the bailout of the US auto industry has been blocked in the US Senate. Intense negotiations are reportedly continuing over a new deal that could impose immediate and devastating wage and benefit cuts on autoworkers in exchange for an emergency loan to stave off the bankruptcy of Detroit’s automakers.

Word of the deal’s collapse led to a sharp sell-off on Asian stock markets Friday, including more than a six percent drop in Japan and Hong Kong.

Earlier Thursday, leading Senate Republicans rejected a bill backed by the White House and passed by the House of Representatives Wednesday night. By the end of the evening, however, the Senate’s Democratic Majority Leader Harry Reid said “good faith” negotiations were underway to reach a compromise based on a proposal by Tennessee Republican Bob Corker, which demands even more draconian concessions from autoworkers than the House bill.

Corker’s proposal insists that any federal assistance to General Motors and Chrysler be contingent upon the companies reducing their debts by two-thirds by March 15. If they fail to do so, they would be forced into mandatory bankruptcy.

In order to carry out such a massive cost reduction, autoworkers at Detroit’s Big Three auto companies would have to take an immediate wage and benefit cut of approximately 30 percent in order to be on par with non-union workers at the US plants operated by Toyota, Honda, Nissan and other international companies.

Under the restructuring plan submitted to Congress by GM last week, wage and benefit levels would not be equivalent with the foreign automakers until 2012. This would largely be carried out through offering early retirement and buy-out packages to higher-paid veteran workers and replacing them with new hires making half the wages, under the two-tier system introduced by the labor agreement signed by the United Auto Workers union last year.

Corker’s measure also calls for an end to all supplemental unemployment benefits for workers who are laid off permanently or idled temporarily. In addition, he wants to force the UAW to take one-half of the payments to the health care trust fund for retirees as equity instead of debt or cash. This measure, which would involve accepting virtually worthless stock from the auto companies, would require a massive reduction in health care benefits for a million retired autoworkers and their dependents.

Corker told reporters that he had spoken on Thursday with UAW President Ron Gettelfinger about the proposal, according to Reuters. Additional meetings between lawmakers and the UAW were held as the day wore on, including a discussion involving Senate Banking Committee Chairman Christopher Dodd of Connecticut. Corker said GM “was very supportive” of his alternative, which he said was the “only way” a bailout was going to happen right now.

Two days ago, the House of Representatives passed by a vote of 237 to 170, a bill that would have provided $14 billion in short-term loans to General Motors and Chrysler, which have both said they will fail by the end of the year without federal assistance. It also set terms for Ford Motor Co., which has said it will not take a loan but would ask for a $9-billion credit line.

The backers of the bailout—including the Democratic congressional leadership, the Bush administration and the Obama transition team—have argued that the “uncontrolled bankruptcy” of one or more of the auto companies and the potential loss of millions of jobs could transform the economic recession into a full blown depression.

While staving off failure—at least until March 2009—the measure would put into place a government overseer, or so-called Car Czar, who would have powers equal to or even greater than a bankruptcy judge.

That official—who would be appointed by President Bush—could demand the repayment of the loans or halt future assistance, essentially driving the companies into bankruptcy, if they did not meet specific restructuring benchmarks by March 31. According to plans submitted to Congress by the automakers, these would include the shutting down of dozens of factories and the elimination of another 31,500 GM workers’ jobs.

The Democrats in particular are relying on the UAW bureaucracy to suppress rank-and-file opposition and collaborate with the automakers in the further downsizing of the industry and reduction of workers’ wages to the level of the non-union workers in the US factories operated by Detroit’s foreign competitors.

Rejecting appeals from the White House, leading Republican senators opposed the House bill for failing to mandate immediate and specific wage and benefit cuts. Announcing his plans to vote against the bill, the Senate Republican Minority Leader Mitch McConnell of Kentucky said, “This proposal isn't nearly tough enough.”

McConnell blamed the industry’s crisis on “decades of complicity between management and labor” and said it was “delusional” to expect the automakers to compete with companies in neighboring states paying far lower wages.

McConnell and other Republican senators from southern states see the crisis as an opportunity to settle scores with the trade unions—even though the UAW long ago abandoned any struggle against the corporations. They are deliberately setting the bar so high in order to simply liquidate the unionized companies or to extract concessions that would reduce autoworkers to the most brutal conditions of poverty and exploitation.

The faction of the financial and political establishment represented by the Democratic congressional leadership and the incoming Obama administration are essentially seeking the same goal—a massive rollback in the conditions of autoworkers—but want to do this with the assistance of the UAW bureaucracy and without the wholesale collapse of the US-based auto industry.

Both factions, however, are seeking to exploit the crisis in the auto industry to permanently reduce the wages and benefits of autoworkers, who, through decades of struggle had established a modest standard of living, which is now deemed unaffordable by American capitalism.

It is significant that leading Democrats are lobbying for Paul Volcker to be selected as the new auto czar. As Federal Reserve chairman under the Carter and the Reagan administrations, Volcker drove interest rates up to 20 percent, precipitating the worst economic recession since the Great Depression in order to use mass unemployment to break resistance to the wave of wage-cutting and union-busting of the 1980s. He played a key role in the 1979-80 Chrysler bailout that led to massive wage cuts, the destruction of tens of thousands of jobs and the decimation of cities like Detroit.

In recent comments to the Economic Club of New York, Volcker complained, “It is the United States as a whole that became addicted to spending and consuming beyond its capacity to produce. It all seemed so comfortable.” This had to end, he insisted. “It's going to be a tough period,” he said in a speech at the Urban Land Institute in late October. “But when we dealt with inflation, it laid the groundwork for 20 years of growth. I'd like to see that happen this time.”

The ongoing debate over the auto bailout has demonstrated the conspiracy of the automakers, the two big business parties and the UAW against the autoworkers. All insist that workers must pay for a crisis that they did not cause, in order to restore the auto companies to profitability so they can once again be a lucrative source of income for corporate executives and big investors who are responsible for the financial catastrophe.

Torture Trail Seen Starting with Bush

Torture Trail Seen Starting with Bush

By Jason Leopold

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A bipartisan congressional report traces the U.S. abuse of detainees at Guantanamo Bay and Abu Ghraib to President George W. Bush’s Feb. 7, 2002, action memorandum that excluded “war on terror” suspects from Geneva Convention protections.

The Senate Armed Services Committee’s report said Bush’s memo opened the door to “considering aggressive techniques,” which were then developed with the complicity of then-Defense Secretary Donald Rumsfeld, Bush’s National Security Adviser Condoleezza Rice, and other senior officials.

Three months ago, Rice admitted that she led high-level discussions beginning in 2002 with other senior Bush administration officials about subjecting suspected al-Qaeda terrorists to the harsh interrogation technique known as waterboarding, according to documents released by Sen. Carl Levin, D-Michigan, committee chairman.

“The abuse of detainees in U.S. custody cannot simply be attributed to the actions of ‘a few bad apples’ acting on their own,” the committee report said. “The fact is that senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality, and authorized their use against detainees.”

The Dec. 11 report also disputed the Bush administration’s rationale that the harsh interrogation methods were effective in extracting valuable intelligence and protecting the country from terrorist attacks.

Instead, the report said, “Those efforts damaged our ability to collect accurate intelligence that could save lives, strengthened the hand of our enemies, and compromised our moral authority.”

The findings, which were released by Sens. Levin and John McCain of Arizona, this year’s Republican presidential nominee, drew no dissent from the 12 Republicans on the 25-member committee.

The 19-page report is the final installment in the Armed Services Committee’s 18-month investigation, which generated 38,000 pages of documents and relied upon the testimony of 70 people.

The White House declined comment, but Keith Urbahn, an aide to Rumsfeld, told the Washington Post that the allegations were “unfounded” and called the committee report a “false narrative.”

The Narrative

The report’s narrative of the prisoner abuse begins in early 2002 when Rumsfeld’s Defense Department inquired about what limits should be placed on interrogations of terror suspects detained during the U.S. invasion of Afghanistan.

Those questions sparked an internal administration debate and led to Bush’s Feb. 7, 2002, memo stating that the Third Geneva Convention, which sets standards for treatment of prisoners from armed conflicts, “did not apply to the conflict with al-Qaeda and concluding that Taliban detainees were not entitled to prisoner of war status or the legal protections afforded by the Third Geneva Convention,” the report said.

“The President’s order closed off application of Common Article 3 of the Geneva Conventions, which would have afforded minimum standards for humane treatment, to al-Qaeda or Taliban detainees.

“While the President’s order stated that, as ‘a matter of policy, the United States Armed Forces shall continue to treat detainees humanely and, to the extent appropriate and consistent with military necessity, in a manner consistent with the principles of the Geneva Conventions,’ the decision to replace well established military doctrine, i.e., legal compliance with the Geneva Conventions, with a policy subject to interpretation, impacted the treatment of detainees in U.S. custody.”

What followed were senior-level meetings deciding which interrogation techniques could be used and which couldn’t.

“In the spring of 2002, CIA sought policy approval from the National Security Council (NSC) to begin an interrogation program for high-level al-Qaeda terrorists,” Rice said, according to the report. Rice is now Bush’s Secretary of State.

“Secretary Rice said that she asked Director of Central Intelligence George Tenet to brief NSC Principals on the program and asked the Attorney General John Ashcroft ‘personally to review and confirm the legal advice prepared by the Office of Legal Counsel.’ She also said that Rumsfeld participated in the NSC review of CIA’s program," according to the report.

In July 2002, Rumsfeld and his legal counsel, William Haynes, solicited input from military psychologists about developing harsh methods that interrogators could use against detainees who were being held at the U.S. naval base at Guantanamo Bay, Cuba.

“Mr. Haynes was not the only senior official considering new interrogation techniques for use against detainees,” the report said. “Members of the President’s Cabinet and other senior officials attended meetings in the White House where specific interrogation techniques were discussed.”

John B. Bellinger, Rice’s legal adviser at the State Department, said they recalled participating in meetings with Ashcroft and Rumsfeld in July 2002 about an Army and Air Force survival training program called Survival, Evasion, Resistance and Escape (SERE), which was meant to prepare U.S. soldiers for abuse they might suffer if captured by an outlaw regime.

“SERE training techniques were designed to give our troops a taste of what they might be subjected to if captured by a ruthless, lawless enemy so that they would be better prepared to resist," Levin said Thursday. "The techniques were never intended to be used against detainees in U.S. custody.”

Last April, President Bush told an ABC News reporter during an interview that he approved meetings of the NSC’s Principals Committee to discuss specific interrogation techniques the CIA could use against detainees. The Principals Committee included Vice President Dick Cheney, Secretary of State Colin Powell, CIA Director George Tenet and Attorney General Ashcroft as well as Rumsfeld and Rice.

Spreading Abuse

On Dec. 2, 2002, Rumsfeld authorized “aggressive interrogation techniques,” leading to “interrogation policies and plans approved by senior military and civilian officials [that] conveyed the message that physical pressures and degradation were appropriate treatment for detainees in U.S. military custody,” the committee report said.

"What followed was an erosion in standards dictating that detainees be treated humanely.”

After the U.S.-led invasion of Iraq in 2003 and amid the rising Iraqi insurgency against the American occupation in 2004, the harsh interrogation tactics, which had been used at Guantanamo, spread to the Abu Ghraib prison in Iraq.

Bush’s Feb. 7, 2002, memo prompted Lt. Gen. Ricardo S. Sanchez, who became the top commander in Iraq, to institute a “dozen interrogation methods beyond” the Army’s standard practice under the convention, according to a report by a panel headed by James Schlesinger on the Abu Ghraib prisoner abuses in 2004.

Sanchez said he based his decision on “the President's Memorandum,” which he said had justified "additional, tougher measures" against detainees, the Schlesigner report said.

The abuse of Iraqi prisoners at Abu Ghraib exploded into an international scandal in 2004 when photos were leaked showing American prison guards parading detainees around naked and forcing them into mock sexual positions.

Bush, Rumsfeld and other senior administration officials expressed outrage over the Abu Ghraib photos and blamed the abuses on low-level soldiers acting on their own.

Eleven enlisted soldiers, who were guards at Abu Ghraib, subsequently were convicted in courts martial.

Cpl. Charles Graner Jr. received the harshest sentence – 10 years in prison – while Lynndie England, a 22-year-old single mother who was photographed holding an Iraqi on a leash and pointing at a detainee’s penis, was sentenced to three years in prison. Their superior officers either were cleared of wrongdoing or received mild reprimands.

The Bush administration’s handling of the Abu Ghraib scandal drew especially sharp criticism from the Armed Services Committee chairman.

“Attempts by senior officials to pass the buck to low-ranking soldiers while avoiding any responsibility for abuses are unconscionable,” Levin said. “The message from top officials was clear; it was acceptable to use degrading and abusive techniques against detainees."

Regarding the prison abuse at Abu Ghraib, the committee’s report concluded that it “was not simply the result of a few soldiers acting on their own.” The report added: “Secretary of Defense Donald Rumsfeld’s authorization of aggressive interrogation techniques for use at Guantanamo Bay was a direct cause of detainee abuse there.”

Obama’s Response

Human rights organizations have pressed Barack Obama to aggressively investigate the Bush administration’s actions once he is sworn as President next month.

In a recent interview with “60 Minutes,” President-elect Obama told correspondent Steve Kroft “that America doesn’t torture and I’m going to make sure we don’t torture. Those are part and parcel an effort to regain America’s moral stature in the world.”

But Obama has not indicated whether Eric Holder, his choice for Attorney General, will pursue an investigation into Bush's interrogation policies.

Rep. Silvestre Reyes, Democratic chairman of the House Intelligence Committee, said this week that he told Obama’s transition team that some of the Bush administration’s interrogation policies should remain intact.

In an interview with Congress Daily, Reyes, D-Texas, said dealing with suspected terrorists requires that “some options” beyond interrogation rules in the Army Field Manual need to be available.

"There are those that believe that this particular issue has to be dealt with very carefully because there are beliefs that there are some options that need to be available," Reyes said. "We don't want to be known for torturing people. At the same time we don't want to limit our ability to get information that's vital and critical to our national security. That’s where the new administration is going to have to decide what those parameters are, what those limitations are."

Meanwhile, Attorney General Michael Mukasey has argued that there is no legal basis to prosecute current and former administration officials for authorizing torture and warrantless domestic surveillance because those decisions were made in the context of a presidential interest in protecting national security.

"There is absolutely no evidence that anybody who rendered a legal opinion, either with respect to surveillance or with respect to interrogation policies, did so for any reason other than to protect the security in the country and in the belief that he or she was doing something lawful,” Mukasey said during a Dec. 3 roundtable discussion with reporters.

“If the word goes out to the contrary, then people are going to get the message, which is that if you come up with an answer that is not considered desirable in the future you might face prosecution, and that creates an incentive not to give an honest answer but to give an answer that may be acceptable in the future,” Mukasey told the reporters.

Rep. John Conyers, chairman of the House Judiciary Committee, immediately took issue with the “breadth” of Mukasey’s statement “and the blanket conclusion that everyone involved in approving these policies believed they were acting within the law.”

Conyers reminded Mukasey that reams of evidence – including testimony from career military and law enforcement officials – show that top White House officials may have broken the law by authorizing torture and warrantless domestic surveillance.

Indeed, Maj. Gen. Antonio Taguba, who led an early investigation of abuses at the Abu Ghraib prison in Iraq, said “there is no longer any doubt as to whether the current administration has committed war crimes. The only question that remains to be answered is whether those who ordered the use of torture will be held to account.”

Christopher Anders, the American Civil Liberties Union senior legislative counsel, said the Armed Services Committee's report "makes clear the role of top White House and Defense Department officials in authorizing torture and abuse.”

Retail sales post big drop in November

Retail sales post big drop in November

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U.S. retail sales excluding autos posted their biggest monthly drop in five years in November, as consumers, spooked by a deepening recession, pared spending for a third straight month, a private report released on Thursday showed.

The decline accelerated in November despite a sales spurt over the crucial "Black Friday" weekend -- the three days after the Thanksgiving holiday in late November -- according to SpendingPulse, the retail data service of MasterCard Advisors, a subsidiary of MasterCard Inc.

Consumer spending excluding autos fell 3.8 percent last month on a seasonally adjusted basis, steeper than the 1.5 percent decline in October, SpendingPulse said.

The November figure was the largest one-month drop in SpendingPulse history, which began in 2003, surpassing the prior record fall of 2.4 percent set two months ago.

The report was the latest evidence that U.S. retailers are facing one of the worst holiday retail seasons in recent memory. The year-end shopping period accounts for the bulk of the annual business of many retailers.

"We are talking about a consumer who is wary of spending," said Kamalesh Rao, SpendingPulse's director of economic research.

Consumers, who account for more than two-thirds of the U.S. economy, have been battered by worsening job conditions, dwindling 401(k) retirement funds and a persistent credit crunch.

The spending decline was again led by a drop in gasoline sales, as pump prices have fallen well below $2 a gallon since rising above $4 in July, according to Rao.

Retail sales excluding cars and gasoline fell 1.3 percent in November compared with a 0.9 percent drop in October.

Once red-hot categories like electronics, furniture and luxury goods have turned cold, registering double-digit sales drops from year ago, Rao said.

"People are a lot more price sensitive. When they buy, they buy less expensive things," Rao said.

SpendingPulse's "core" measure on consumer spending, which strips out cars, gasoline and building materials, declined 1.3 percent compared with a 1.6 percent fall in October.

While it is too early to predict when spending will pick up, the worst of the downturn may have occurred, Rao said.

"Spending may have bottomed out in October. We are not seeing more a pullback," he said.

The SpendingPulse data is derived from the aggregate sales in the MasterCard U.S. payment network, coupled with estimates on all other payment methods including cash and check.

A tattered safety net for US unemployed

A tattered safety net for US unemployed

As a rising number of Americans sign up for unemployment benefits, many of the state-funded trusts that pay them are on the decline.

At least 12 of them are on the brink of insolvency. In 20 other states, the funds have lost value, even before the big job losses of the past two months.

While unemployed workers will get their benefits – federal law requires it – the trust fund woes are putting states into a peculiar squeeze. They're loath to raise taxes or cut services in a recession, so many are racking up new loans. That debt burden will affect residents for years to come.

"No one wants to raise taxes in the middle of this kind of recession. And nobody wants to cut benefits," says Maurice Emsellem, an Oakland-based policy analyst who focuses on unemployment insurance issues for the National Employment Law Project. "So the states are going to have to borrow ... and that's going to have a cost." The costs are already being rung up in some of America's biggest states. California's trust fell 42 percent in the year ended September, the latest period for which numbers are available, leaving it with enough to pay four months of estimated benefits. New York's trust had enough for two months of benefits; Indiana's, just one month. Michigan's is already bust. It has borrowed $550 million from the federal government to fill the hole.

The demand for benefits, meanwhile, is likely to soar.

Stamping his feet against the chill, Colin Hollinghead is waiting in line outside a New Jersey employment-assistance office in East Orange, one of the state's poorest towns. The 40-year-old father was laid off last month from a local auto-parts distributor. After a fruitless hour on hold this past Friday, he says he decided to come down to see if he could file for unemployment insurance in person.

"Money is real, real tight and it's the worst time of year,'' he says. "There's supposed to be an office to help you find a job in there, so I'll check with them ... but I'm not expecting anything."

The good news for Mr. Hollinghead is that the federal government extended unemployment benefits for seven more weeks in an emergency bill rushed through Congress at the end of last month. That follows an earlier extension of 13 weeks passed in June that now brings the total run of the benefit to 10 months and protects more than 1 million Americans whose checks would have otherwise stopped coming this holiday season.

The widening budget shortfalls have some states weighing tax increases, despite the recession. Michigan, one of the hardest hit states with unemployment above 9 percent, is already pushing up payroll taxes.

State budget problems are likely to worsen before they improve. Of the states that completed a survey from the National Conference of State Legislatures (NCSL) last month, 38 said they were expecting to be in the red for the year ending in September 2009 – a total budget gap of $32 billion. Worse, 26 states forecast more red ink – a cumulative $65 billion – for the following year.

"As bad as the current state fiscal situation is, it may pale in comparison to what looms ahead," the NCSL said. "As a rule, state finances lag the national economy… this means that the toughest years lie ahead."

One likely option: cutting state services
With the easiest options already tapped, states may have to cut services.

"Food stamps I'm not worried about – it's entirely federally funded," says Rebecca Blank, a senior fellow and economist at the Brookings Institution in Washington. "But I do worry about the healthcare programs and education. Medicaid is such a large part of the budget that it's easier to cut services."

Cutbacks in education could undermine an eventual recovery because that will mean fewer highly qualified workers, she adds, pointing to California's proposed $100 million cut for its state university system.

The state unemployment trusts are funded through the collection of payroll taxes and administered by the federal government under guidelines that require the money only be used to pay unemployment benefits, which average about $300 a week nationally. But the states still have considerable discretion over how much they pay into the system.

For instance, states are only obligated to tax the first $7,000 of a salary to fund their trust, says Mr. Emsellem of the National Employment Law Project. Increasingly, states have been sailing close to this minimum, under the assumption that the risks of a deep recession were outweighed by the benefits of encouraging industry. He estimates the average national "base" such taxes have been collected on has been $11,000.

"In the past 10 years in states like California, the employers were saying 'let's reduce taxes so we can extend payroll' and they got what they wanted,'' he says. "So even during the dot-com boom here during the '90s, we were hardly collecting more in revenue then we were in the previous decade. There's no big secret as to how we got here."

Indiana's troubles began about five years ago when labor unions and business clashed over a plan to cut payroll taxes, says state Sen. Luke Kenley (R). At the time, its unemployment trust was about $2 billion.

In the end, an actuary concluded that the system was overfunded beyond any foreseeable event, he says. That analysis convinced legislators not only to cut payroll taxes but also to increase benefits to those who were already unemployed. The trust started to deplete.

Then, unemployment worsened as oil prices surged, especially in places like Elkhart, the so-called "RV capital of the world," which saw demand collapse. The trust's funds fell 77 percent to $91 million in the past year.

"I was concerned at the time that we were kidding ourselves that we could increase benefits,'' Senator Kenley says.

Today, he anticipates the state will eventually raise payroll taxes again to fund the system, though the state's overall finances are sound, he adds. "We don't anticipate cutting services as much as we do 'spreading the pain' kind of ideas, like freezing wage schedules for all state employees."

States await Obama's recovery package
Only 38 percent of unemployed Americans receive benefits, Emsellem points out, so the problems with unemployment trust funds represent only a fraction of a growing need. The answer, he says, lies in more federal money. "What it all comes down to is the size of this whole recovery package that President-elect Obama and that Congress are putting together,'' he says.

Many states appear to agree. New Jersey's trust, despite a $260 million emergency loan from Washington five months ago, is about to borrow money again with just four months of money for benefits left.

"The scope of this may well have to be met at a federal level," says Kevin Smith, a spokesman for the New Jersey Department of Labor.

New Jersey, like Indiana, made a decision to deplete its fund in the 1990s, diverting $4.7 billion from it to other uses. New Jersey Gov. Jon Corzine, who says he put a stop to this practice when he took office in 2006, told the Star Ledger recently: "We have to pay that piper ... either by putting money into that system from some other place or we're going to have get help from the federal government."