Friday, January 30, 2009

California pension funds close to bankruptcy

California pension funds close to bankruptcy

By Kevin Martinez

Go To Original

The two largest pension funds in California, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), have lost billions of dollars in value. Hundreds of thousands of retiring state employees and teachers now face the stark choice of accepting much reduced pension checks or working past their retirement age.

CalPERS is the largest pension fund in the US and the fourth largest in the world. At its height in October 2007 it had $260 billion in assets, comparable to the GDP of Poland, Indonesia or Denmark. At the end of 2008 CalPERS was worth $186 billion, one of its worst annual declines since the fund’s inception in 1932. It is one of the latest casualties of the financial collapse on Wall Street.

After years of gambling in real estate investments, the state workers pension fund has lost more than 41 percent of its value, after peaking last fall. Its real estate holdings have dropped from $9 billion to $5.8 billion, according to the Sacramento Bee.

CalPERS manages pension and health benefits for more than 1.6 million retirees and their families. The pensions are guaranteed by law, but given the current economic malaise employers may be asked to contribute more from their payrolls. The average employer, a taxpayer-funded government agency, contributes 12.7 percent of their payroll to CalPERS, while workers must contribute 5 to 7 percent of their salaries.

For now, a “rainy day fund” is being used to offset the worst in losses. It is likely, however, that CalPERS will ask for additional funds starting in July 2010 from state employers and July 2011 from local employers. The increases could be from 2 to 5 percent. Since the employers are public entities, the money will have to come from taxpayers or from budget cuts to other social programs.

CalPERS’s losses are intimately tied with the collapse of the housing bubble and the economic downturn in general. The Dow Jones Industrial Average has dropped 39.8 percent during the same period that CalPERS fell 31 percent. Because of the fund’s aggressive purchasing of real estate during the property bubble, CalPERS is now the largest owner of undeveloped residential land in America, much of it purchased in Arizona, California and Florida, some of the states hardest hit by the real estate crash. Many of these properties were purchased when their prices were at their peak.

The pension fund is expected to report paper losses of 103 percent on its residential investments in the fiscal year that ended June 30. It is estimated 80 percent of these investments were paid with borrowed money, which means that CalPERS will eventually be obligated to pay them back at the original market price.

The second largest pension fund in the US, CalSTRS, covers 794,812 teachers. Its value has fallen from $162.2 billion to $129.3 billion. CalSTRS’s pension funds are guaranteed just like CalPERS, but unlike CalPERS, it does not have the authority to ask for increased contributions from employers. CalSTRS is funded by school districts contributing 8.25 percent of its payroll. The state general fund pays 2 percent and a further 8 percent comes from the members’ salaries. Any contribution changes would have to be added by the state legislature and approved by the governor.

While CalPERS’ losses are currently being defrayed by the rainy-day fund, state administrators are hoping that the economic situation will improve, otherwise CalPERS and other pension funds will have to ask for further contributions. California Treasurer Bill Lockyer, who sits on the CalPERS board, told the San Francisco Chronicle that the current crisis means “both state and local government employers would be spending more on retirement than on some immediate program needs. Paying the commitments to pension obligation is a high priority, and it would take precedence over many other spendings.”

He added, “You either cut some other program expenditures or you tax something.” In other words, the pension deficit will be placed on the backs of working people who had no control over the investment decisions made by the government, let alone the recklessness and avarice of the banking executives and Wall Street speculators who are responsible for the crisis.

In the midst of a severe recession, this will only add to social anxiety and financial insecurity, particularly since hundreds of thousands of public school teachers and state employees covered by these massive pension funds have seen the value of their personal retirement savings, including 401(k)s and IRAs, reduced by 25 percent or more.

Pacific Grove, a coastal town north of San Francisco, highlights what cities and towns are being forced to do. In fiscal 2002, Pacific Grove paid less than $100,000 to CalPERS, only 1 percent of the town’s general fund revenue. By 2006, this cost shot up to more than $2.2 million, or 15 percent of its revenue.

The city of 15,000 would have to spend $10 million or more to pay its pension obligations if it were to pull out of CalPERS. The recreation department staff has already been reduced from seven to one and budgets for the library and Pacific Grove Museum of Natural History, a 125-year-old institution, were cut in half.

Joanne Nolan Stewart, a 48-year-old with two children, told the Wall Street Journal, “The people who used to run the recreation programs grew up here and sheltered the kids like they were their own.” Joanne is also an account manager for AT&T and said, “If I were to retire, my retirement would be one-quarter of what I make today for the rest of my life.”

California’s pension and budget defaults are not isolated phenomena. All across the US state pension funds have been collapsing due to the broader economic crisis. According to the Center for Retirement Research at Boston College, state governments have run up pension fund losses totaling $865.1 billion. Assets for 109 pension funds dropped 37 percent to $1.46 trillion in the 14-month period ending December 16. By comparison, the S&P 500 fell 41 percent in the same period.

To return to 2007 funding levels by 2010, the 109 funds would need annual returns of 52 percent, the center found. Alicia Munnell, the center’s director, told, “Even if markets recover, this will be a one-time loss that will have to be made up in the future by taxpayers.”

State and local governments contributed more than $64.5 billion to pension plans in fiscal 2005-2006, according to the US Census Bureau, which is about 57 percent of the $113.2 billion spent on police and firefighters. A report by the Pew Center on the States did a survey in December 2007 that found that states owed $2.35 trillion in pension payments over 30 years.

Unsurprisingly, state authorities are attempting to cut benefits for new state hires in order to ameliorate the crisis. In Kentucky, lawmakers set the minimum age of retirement at 57 for employees hired after September 1, and required 30 years of service, up from 27, to receive full benefits. They also capped cost-of-living adjustments, tied to the Consumer Price Index, at 1.5 percent. Democratic Governor of New York David Paterson, trying to close a $15.4 billion gap over 15 months, also wants to reduce new workers’ benefits while raising the retirement age from 55 to 62.

Rhode Island state and local governments were scheduled to make contributions to their pension funds equaling 25 percent of their payroll expenses in 2010, and the contributions may increase up to 30 percent in 2011 with a deepening recession. With increasing membership growth in state pension plans, these defaults will be even more exacerbated. State funds have been experiencing 12 percent growth since 2002, with 23.1 million now participating.

Company pension funds, or so-called defined benefit plans, have also been starved by the economic crash, falling to $1.2 trillion as of December 31 compared to $1.6 trillion a year earlier.

Oregon unemployment hits 9 percent with worse expected

Oregon unemployment hits 9 percent with worse expected

By Hector Cordon

Go To Original

In its release of December’s grim unemployment figure of 9.0 percent last week, Oregon’s Employment Department warned that worse is on the way. It did not take long for that prediction to pan out.

The next day Intel Corporation, Oregon’s largest private employer, announced the specifics of long-rumored job cuts. Nearly 6,000 employees will be laid off worldwide, with 1,000 of those cuts to take place in the Portland suburb of Hillsboro, where Santa Clara based Intel will—in addition to closing facilities in Malaysia, the Philippines and Santa Clara—close its Fab 20 plant.

Two days later, Portland’s largest employer, Oregon Health Sciences University, announced job cuts that could total 1,000 by year’s end as part of cost reductions of $30-35 million for the current financial year.

On Thursday, Boeing—which has operations in the state of Washington and Oregon—announced 10,000 job cuts, up from the 4,500 cuts the company initially announced January 9.

With nearly 10,000 jobs lost in December, the official unemployment figure jumped an unprecedented 1 percent from November’s revised figure of 8 percent—the highest rate since April of 1985 when 9.1 percent of Oregon workers were jobless. There are now 174,819 unemployed workers statewide.

According to the press release of the Oregon Employment Division, “The state’s unemployment rate has risen rapidly and substantially over the past six months after remaining stable throughout the first half of 2008 at near 5.5 percent.” The 1 percent increase is the largest month-to-month increase since 1976, when the state began tracking this data.

As the month of January progressed an almost steady drumbeat of businesses announced layoffs on a near daily basis: catalog fruit vendor Harry & David, based in the southern Oregon town of Medford, plans to lay off over 100 workers—10 percent of its workforce. Plans by Xerox to cut 3,000 from its global workforce resulted in 50 job cuts at its Wilsonville campus. Also in Wilsonville, the Movie Gallery Inc. video rental chain will lay off 213 employees. Mercy Corp International eliminated 14 jobs in Portland out of 22 cut nationally; Precision Castparts, which fabricates castings for high tech, automotive and aerospace industries, will cut about 40 salaried employees and an unspecified number of hourly workers.

Daimler Trucks North America will wipe out 190 jobs at its Portland facility as part of 2,300 it is cutting nationally. Boeing, which had experienced a bitter eight-week strike by its machinists last fall, announced the elimination of 4,500 positions mostly through layoffs—a figure it has now raised to 10,000. Most of these job cuts will be in the Seattle area where its operations are concentrated, but an unknown number will be lost at its plant located in Gresham, Oregon.

Oregon is one of six states to announce increases in unemployment of 1 percent or higher in December over the previous month. Massachusetts, Michigan, Nevada, New Jersey and New York were the others. The new numbers place Oregon as sixth in the nation for unemployment. In 2003, Oregon led the country with an 8.2 percent unemployment rate.

State economists anticipate that that unemployment rate could reach double digits in the mid-10 to mid-11 percent range by next year. Given the speed with which the economic crisis is intensifying this may be so much wishful thinking as jobless figures spike even higher.

The speed with which jobs are hemorrhaging has confounded state economists, who had anticipated smaller losses. Construction, deeply affected by the housing crisis, lost 4,500 jobs, while a 2,400 cut had been anticipated. Government jobs were also cut by 4,500; a 2,900 decline had been forecast. The leisure and hospitality sector dropped 3,200 jobs while the seasonal norm is 500. Transportation equipment manufacturing shed 3,800 jobs—or 22 percent—in the last 12 months.

The opening of a call center earlier this month in Vancouver, Washington, across the Columbia River from Portland and part of the area’s economic infrastructure, drew 800 applicants for a grand total of 30 positions.

The official US unemployment rate rose by 0.4 percent in December, to 7.2 percent. Many of these laid-off workers will find that the social services that have traditionally blunted the loss of livelihood no longer exist. Even as the state of Oregon bleeds jobs uncontrollably, its present two-year budget and its upcoming two-year budget face a drastic loss of tax revenue.

Estimates developed last November project that Oregon’s present and future budgets are on track to lose nearly $1 billion in tax revenue. Since then, the economy has deteriorated drastically, indicating that the state’s revenue losses might be much higher. Indeed, economists recently warned the legislature that the budget hole may grow even larger.

Democratic Governor Ted Kulongoski responded to the projected shortfall by ordering a 1.2 percent across-the-board cut last November. However, since there were six months left in the budget, the 1.2 percent translates closer into a 5 percent cut of the remaining budget.

The Department of Human Services (DHS) faces a loss of $40 million. Meanwhile, the demand for food stamps, cash assistance and other services is increasing. An October report shows that requests to DHS for Temporary Assistance to Needy Families increased by 16 percent over the previous October, while food stamp applications rose by 13 percent. The Oregonian quoted spokeswoman Patty Wentz, saying, “Over the last several months we’ve already implemented cuts, a hiring freeze and cut travel.” Evidently, further cuts will affect core services.

Kulongoski has also proposed that state workers take eight unpaid furlough days during the time covered by the upcoming two-year budget.

Latest US economic data confirms accelerating contraction

Latest US economic data confirms accelerating contraction

By Patrick O’Connor

Go To Original

Figures released yesterday on US unemployment, home sales, and business capital investment all proved significantly worse than economists' prior forecasts.

The Commerce Department reported that new single-family home sales for December plunged 14.7 percent from a month earlier, or about 45 percent on an annualized basis. Economists surveyed by Dow Jones Newswires had forecast an average 2.9 percent monthly fall. December's sales decline was the largest recorded since such data was first kept in 1963. In 2008, home sales totaled 482,000, the lowest number since 1982 and sharply below the 776,000 homes sold in 2007.

The Commerce Department also issued data yesterday on December's durable goods investment. Orders for durable goods—such as computers, vehicles, tools, and construction equipment—fell 2.6 percent, or 4.9 percent excluding military purchases. This was the fifth monthly decline in a row. Orders for computers and electronics fell by 7.2 percent, machinery by 5 percent, and primary metals by 6.9 percent. Total orders for durable goods in 2008 fell by a total of 5.7 percent.

The protracted downturn in capital expenditure foreshadows a prolonged downturn in economic activity. "This is pretty much what you expect when the economy is in the process of shrinking and businesses don't see any need to purchase any capital goods," Bernard Baumohl, managing director of advisory firm Economic Outlook Group, told the New York Times. "Even if you did want to increase your capital investments, it's going to be difficult to get the capital to purchase this."

Wall Street closed lower in response to the latest economic indicators. The Dow Jones Industrial Average lost 226 points, 2.7 percent, to close at 8,149. The S&P 500 index was 3.3 percent lower while the Nasdaq shed 3.2 percent. Financial stocks suffered the steepest falls, with Bank of America down 8.3 percent, JP Morgan Chase 8.1 percent lower, and Citigroup down 7.1 percent.

Auto giants General Motors and Ford lost 7 and 5.8 percent respectively after Ford announced a record $5.9 billion loss for the fourth quarter. The company's total 2008 loss of $14.6 billion amounted, according to the New York Times, to a loss of $2,700 on every vehicle it sold around the world.

Labor Department data released yesterday that showed the number of workers applying for new unemployment benefits last week increased by 3,000 to 588,000. According to one survey, economists expected a decline in claims of 4,000. The total number of continuing claims—those who apply for benefits for more than one week—rose by 159,000 to 4.78 million. This is the highest ever recorded since such data was first kept in 1967. The total as a proportion of the workforce is the highest since 1983.

The return of mass unemployment in the US is one of the sharpest expressions of the social misery now being felt by wide sections of the population. The past four days alone, according to a analysis, have seen more than 110,000 layoff announcements—about 71,000 on Monday, 11,500 on Tuesday, 15,000 on Wednesday, and 13,000 yesterday.

Among the latest companies to announce major retrenchments are:

* Photographic giant Kodak said it will cut 2,000 to 3,000 more jobs this year. Counting the company's earlier layoff announcements, in 2009 the total workforce will be reduced by up to 18 percent.

* Aircraft manufacturer Cessna is to cut 2,000 more jobs, on top of the 2,600 layoffs it announced earlier this month. Most of the job losses will take effect at the company headquarters in Wichita, Kansas, with about one-third of the staff there to be sacked. A service center in Toledo, Ohio will also be closed.

* Department store operator Bon-Ton Stores said it will lay off about 1,150 workers while also freezing pay and suspending 401(k) contributions for remaining staff.

* Large vehicle maker Oshkosh announced that it has recently implemented 1,000 additional layoffs, bringing the company's total job losses over the past year to 2,400.

* Allstate Corp, the largest publicly traded US home and auto insurer, is cutting 1,000 jobs at the firm's life insurance unit. The layoffs came as the company reported its first ever unprofitable year, with a loss of $1.68 billion in 2008. Shares plunged by 21 percent in response to the announcement.

* British-based pharmaceutical firm AstraZeneca is to lay off 6,000 workers internationally as part of a plan to reduce its workforce by at least 15,000 over the next four years. The company has not yet announced where the job cuts will take effect, but some of the 4,500 employees at AstraZeneca's US headquarters in Wilmington, Delaware are likely to be cut.

* Teradyne, a Massachusetts-based electronics and semiconductor manufacturer is to lay off 14 percent of its workforce, affecting up to 500 workers, and impose a 10 percent temporary pay cut on remaining staff.

Numerous temporary and contract workers are also being hit with lower pay, reduced hours, and mounting layoffs. According to a 2006 General Accountability Office report, more than 42 million people or nearly one-third of the total workforce, go to work every week without being classified as a full-time employee.

The Associated Press reported yesterday: "Just how many temporary workers are getting swept out in corporate housecleanings is unclear, largely because regulators don't require the same disclosures as they typically do when at least 50 full-time workers are let go... The looser rules have allowed prominent employers like Google Inc. and Microsoft Corp. to trim contractors and temporary workers without quantifying how many people are being shown the door. The phenomenon has happened in other downturns, but never to this extent. The main reason: Employers have been relying increasingly more on temporary, or ‘contingent', workers during the past two decades to save money on payroll taxes and benefits. Analysts believe the trend will accelerate in the years ahead. If it does, even more people may be forced to accept temporary jobs even after the economy recovers."

Policy makers have no idea when any such recovery may eventuate. US fourth quarter GDP figures are due out today; economists anticipate a 5.5 percent contraction on an annualized basis. Given their previous underestimations of the situation, however, there is every possibility that the real picture will be even worse.

A further acceleration of the US economic slump would in turn drag down the world economy. The International Monetary Fund's revised growth figures it issued on Wednesday—forecasting just 0.5 percent global growth—is already under challenge. New York University Professor Nouriel Roubini has predicted the world economy will experience negative growth of at least -0.5 percent, the first such international contraction since the 1930s great depression.

The rising tide of economic nationalism

The rising tide of economic nationalism

Go To Original

As the global economic crisis continues to deepen, the unmistakable stench of economic nationalism is on the rise around the world. Confronted with collapsing industries and growing anger over job losses, governments are reaching for protectionist measures despite the disastrous consequences of such beggar-thy-neighbour policies in the 1930s.

At the G-20 summit in mid-November, the leaders of the world’s largest economies pledged not to raise barriers to trade and investment—even those allowed under World Trade Organisation (WTO) rules—for a year. The joint communiqué also promised to restart the failed Doha round of trade talks as a means of boosting world trade.

However, as the Financial Times noted this week: “The solemn pledge intended to bind its signatories for a year lasted less than 36 hours before Russia said it would go ahead with planned increases in car tariffs. Moscow’s violation of the pledge was followed by several other G-20 countries—India, Brazil, Indonesia and Argentina—all pushing for increased protection.” Since then protectionist measures under various guises have been enacted in country after country, including the US and the European Union.

As for the Doha round, WTO director general Pascal Lamy last month called off a planned ministerial meeting aimed at kick-starting negotiations, declaring that there was “an unacceptably high risk of failure which could damage not only the round but also the WTO system”. This week, Lamy tried to sound a more optimistic note. In an interview on British television, he described the completion of the round as “low-hanging fruit” and emphasised that 80 percent of the package had been finished. But there is no sign of any end to the bitter wrangling over the “remaining 20 percent” that led to the collapse of talks last year.

The new Obama administration spurred on the rising tide of protectionism with the comments last week of Treasury Secretary nominee Tim Geithner accusing China of manipulating its currency to boost exports. Designating Beijing as a “currency manipulator” would allow the White House to invoke a broad range of punitive tariffs and other economic penalties against China under US trade legislation.

The Democrats in the House of Representatives went one step further by including a “Buy American” provision in Obama’s $825 billion stimulus package approved on Wednesday. The clause, which requires infrastructure projects funded by the package to use only US-made iron and steel, has provoked protests from European steelmakers. Democrat senator Byron Dorgan is proposing a broader measure to exclude most foreign-made manufactured goods when the package reaches the Senate.

Such measures threaten to provoke escalating retaliation and a full-blown trade war. A comment in the US journal Foreign Policy warned that the “explicitly protectionist language” contained in the package would “certainly be taken as a bad sign by the rest of the world. The world can deal with a protectionist India or Indonesia. The trading system will have much more trouble if the United States starts to renege on its traditional leadership role.”

Cautions about growing protectionism have been sounded already at this week’s Davos Economic Summit, including by the Chinese and Russian premiers. Igor Yurgens, a senior adviser to Russian President Dmitry Medvedev, gave vent to some of the bitterness in Moscow and other capitals over the impact of the various US rescue packages. “Of course, [Mr Obama] expects the Chinese or Russians to buy US Treasury bills [to fund the massive US deficit]. That is pretty selfish and philosophically it is protectionism,” he declared.

Tit-for-tat trade measures and legal challenges are on the increase. In only its second case before the WTO, China pressed ahead this week with a complaint against US measures restricting the import of steel pipes, tyres and woven sacks. After Beijing initiated the dispute last September, Washington began legal action against subsidised Chinese branded goods. China, which is the world’s second largest exporter after Germany, has been the target of seven WTO disputes, all of which involve the US.

There is no shortage of economic commentators issuing dire warnings about the potential for protectionism to catapult the world economy into a depression akin to the 1930s. International trade is slowing dramatically, with the IMF forecasting this week that world trade volumes would contract 2.8 percent in 2009 after rising 4.1 percent last year. Nevertheless, as the global economy shrinks, the capitalist class in every country is driven to foist the crisis onto its international rivals as well as the working class.

In 1930, many foresaw the disastrous consequences of the Smoot-Hawley tariff act, which increased nearly 900 American import duties. Some 1,028 US economists signed a petition pleading with US President Herbert Hoover not to sign the bill into law. The Economist magazine recently cited the comments of Thomas Lamont, a partner of J.P. Morgan, who recalled: “I almost went down on my knees to beg Herbert Hoover to veto the asinine Hawley Smoot Tariff. That act intensified nationalism all over the world.” Nevertheless, Hoover signed the law, provoking an avalanche of retaliation, the collapse of world trade and the formation of antagonistic currency blocs that set the course for the Second World War.

While those promoting “free trade” speak for the bankers, financiers and more globally competitive sections of capital, there is a definite constituency for protectionism among less competitive industries. The whipping up of economic nationalism also serves a vital ideological function in diverting the anger of working people over job losses and the precipitous decline in living standards outwards rather than at the real source of the crisis—the profit system itself.

Those who push this reactionary poison in the working class are the trade unions and their various middle class radical allies. Far from defending jobs and conditions, economic nationalism goes hand-in-hand with the continuing impoverishment of working people. Whether in the US, Europe or any other country, the same union bureaucrats who have presided over the decimation of manufacturing industry over the past three decades now insist on the further sacrifice of wages and conditions as part of the protectionist packages to defend American or European companies.

The bailout plan for the US auto industry backed by the United Auto Workers is conditional on a savage restructuring of the industry that will result in plant closures, layoffs and the systematic lowering of wages. In France, Germany and other European countries, the unions are collaborating with governments and corporations in plans to defend “their” auto industries, using the threat of job losses to enlist the support of workers. The logic of economic nationalism is class collaboration in a dog-eat-dog competition that pits workers in one country against their class brothers and sisters around the world. The end result is trade war and military conflict.

Iraq to Deny New License To Blackwater Security Firm

Iraq to Deny New License To Blackwater Security Firm

U.S. Embassy's Preferred Contractor Accused of Killings

By Ernesto Londoño and Qais Mizher

Go To Original

The Iraqi government has informed the U.S. Embassy in Baghdad that it will not issue a new operating license to Blackwater Worldwide, the embassy's primary security company, which has come under scrutiny for allegedly using excessive force while protecting American diplomats, Iraqi and U.S. officials said Wednesday.

Iraq's Interior Ministry conveyed its decision to U.S. officials in Baghdad on Friday, in one of the boldest moves the government has made since the Jan. 1 implementation of a security agreement with the United States that sharply curbed American power in Iraq.

Blackwater employees who have not been accused of improper conduct will be allowed to continue working as private security contractors in Iraq if they switch employers, Iraqi officials said Wednesday.

The officials said Blackwater must leave the country as soon as a joint Iraqi-U.S. committee finishes drawing up guidelines for private contractors under the security agreement. It is unclear how long that will take. Blackwater employees and other U.S. contractors had been immune from prosecution under Iraqi law.

"When the work of this committee ends," Interior Ministry spokesman Maj. Gen. Abdul-Karim Khalaf said, private security companies "will be under the authority of the Iraqi government, and those companies that don't have licenses, such as Blackwater, should leave Iraq immediately."

The State Department said Wednesday that its contractors will obey Iraqi law.

"We will work with the government of Iraq and our contractors to address the implications of this decision in a way that minimizes any impact on safety and security of embassy Baghdad personnel," spokesman Noel Clay said.

Blackwater spokeswoman Anne Tyrrell said she was not aware of the Iraqi government's decision.

"It would be irresponsible for me to comment on a decision that may or may not have been reached," she said in an e-mail Wednesday.

The United States was unable to persuade the Iraqi government to extend the immunity of its contractors past the expiration of the U.N. Security Council resolution on Dec. 31. No American diplomat has been killed during missions secured by Blackwater.

The North Carolina company became widely despised by Iraqis after a string of incidents during which its heavily armed guards were accused of using excessive force. The deadliest was the Sept. 16, 2007, shooting in Nisoor Square, in central Baghdad, when Blackwater guards opened fire on Iraqis in a crowded street, killing 17 civilians, after the guards' convoy reportedly came under fire.

The U.S. attorney's office in Washington last month charged five of the men with voluntary manslaughter and using a machine gun to commit a violent act. The men entered not guilty pleas and are awaiting trial. A sixth guard reached a plea deal with prosecutors.

Private security companies working for the U.S. government in Iraq have been required to obtain licenses from the Iraqi Interior Ministry since 2004, but some have operated without licenses, and until this year, there was little the Iraqi government could do to enforce the rule.

The ministry revoked Blackwater's license in September 2007 and threatened to expel the company's employees, but U.S. officials ignored the order and renewed the company's contract the following April.

Iraqi officials said Wednesday they decided not to issue the company a new license largely because of the Nisoor Square shooting.

"We informed the U.S. Embassy in Iraq about this decision, and they will have to find another company to replace them," said Gen. Hussain Kamal, a senior Interior Ministry official.

Blackwater employees were also accused of shooting Iraqi guards working for a television station in the spring of 2007. And on Dec. 24, 2006, a drunk Blackwater guard fatally shot a guard employed by Iraqi Vice President Adel Abdul Mahdi.

According to a congressional report issued in October 2007, Blackwater guards have been involved in nearly 200 shootings in Iraq since 2005.

The company has received more than $1 billion from the federal government since 2000. In recent months, however, Blackwater has expanded its business model to rely less heavily on private security work overseas. Though tremendously profitable, the field has generated an avalanche of bad publicity for the company and exposed it to numerous lawsuits.

The two other large security companies that protect American diplomats in Iraq are DynCorp International and Triple Canopy, both based in Northern Virginia.

Blackwater employees work under the supervision of the embassy's regional security officer. The company's drivers and bodyguards take U.S. diplomats to meetings outside the Green Zone, and its pilots often fly in small helicopters over convoys as an added security measure. The Blackwater employees live in a compound in the Green Zone that is informally referred to as "man camp." According to the October 2007 congressional report, Blackwater guards made more than $1,200 per day.

Private security contractors in Iraq last year became deeply concerned about losing their immunity with the implementation of the security agreement, which U.S. officials feared would trigger a mass exodus. But few have left. Instead, in recent months, Western private security companies have sought to build strong relationships with the Iraqi government and have hired more Iraqi guards.

Sami Hawa Hamud al-Sabahin, who was among those wounded in the Nisoor Square shooting, said he was overjoyed to hear the news about Blackwater.

"It makes me happy and lets me feel that the government didn't forget us," he said.

Umm Tahsin , the widow of Ali Khalil Abdul Hussein, one of the men killed in the shooting, also applauded the government's decision. But she lamented that neither the Iraqi nor the U.S. government has compensated her family for their loss.

"Those people are a group of criminals," she said of Blackwater. "What they did was a massacre. Pushing them out is the best solution. They destroyed our family."

US Special Forces Unconventional Warfare Ops, FM 3-05.201

US Special Forces Unconventional Warfare Operations: overthrowing governments, sabotage, subversion, intelligence and abduction, FM 3-05.201, Apr 2003

Go To Original




FM 3-05.201: Special Forces Unconventional Warfare Operations is current US military doctrine (policy) on the use of indigenous or surrogate forces to overthrow a foreign government and the use of sabotage, subversion, intelligence, extra-territorial abductions and similar activities, the most well known example of which is the US involvement in Nicaragua. There is also a section on legalities, including abductions ("The United States reserves the right to engage in nonconsensual abductions for three specific reasons.."). The 296 page manual was made doctrine in April 2003 by Army Headquarters, Washington DC. Introduction:
FM 3-05.20 defines UW as a broad spectrum of military and paramilitary operations, predominantly conducted through, with, or by indigenous or surrogate forces organized, trained, equipped, supported, and directed in varying degrees by an external source. UW includes, but is not limited to, guerrilla warfare (GW), sabotage, subversion, intelligence activities, and unconventional assisted recovery (UAR).
1-43. There are seven phases to a U.S.-sponsored insurgency (Figure 1-1, page 1-12). They are preparation, initial contact, infiltration, organization, buildup, combat employment, and demobilization. Although each insurgency is unique, U.S. sponsorship of a resistance organization generally passes through the seven phases.
1-3. Guerrilla warfare consists of military and paramilitary operations conducted by irregular, predominantly indigenous forces against superior forces in enemy-held or hostile territory. It is the overt military aspect of an insurgency.
1-4. Sabotage is an act or acts with intent to injure or obstruct the national defense of a nation by willfully damaging or destroying any national defense or war materiel, premises, or utilities, including human and natural resources. It may also refer to actions taken to injure or obstruct the military capability of an occupying power. Sabotage may be the most effective or the only means of attacking specific targets beyond the capabilities of conventional weapon systems. Sabotage selectively disrupts, destroys, or neutralizes hostile capabilities with a minimum of manpower and material resources. SF conducts sabotage unilaterally through indigenous or surrogate personnel. Sabotage is also a form of effects-based targeting performed by SF personnel.
1-5. Subversion is any action designed to undermine the military, economic, psychological, or political strength or morale of a regime. All elements of the resistance organization contribute to the subversive effort, but the clandestine nature of subversion dictates that the underground will do the bulk of the activity. Subversion is a form of effects-based targeting on human terrain.
1-9. UW has taken on new significance for several reasons. Historically, SF units have focused on UW as a part of general war. Now, the U.S. policy of supporting selected resistance movements requires SF to focus on UW during conflicts short of war. Also, global urbanization provides for a shift in emphasis from rural guerrilla warfare to all aspects of clandestine resistance including urban and border operations. Training and support for these operations may come from the joint special operations area (JSOA) or from an external training or support site. Some scenarios may dictate a traditional role reversal--the urban guerrilla may conduct most of the operations while supported by the rural guerrilla.
1-10. UW is the most challenging of SF missions because it involves protracted operations with joint forces, allied forces, indigenous or surrogate forces, U.S. agencies, or elements of all of these entities. UW involves detailed, centralized planning and coordination from the SFODA through the Secretary of Defense, and ultimately, decentralized execution.
Distribution restriction:
Distribution authorized to U.S. Government agencies only to protect technical or operational information from automatic dissemination under the International Exchange Program or by other means. This determination was made on 15 March 2003. Other requests for this document must be referred to Commander, United States Army John F. Kennedy Special Warfare Center and School, ATTN: AOJK-DT-SFD, Fort Bragg, North Carolina 28310-5000. DESTRUCTION NOTICE: Destroy by any method that must prevent disclosure of contents or reconstruction of the document·
See Counterinsurgency for additional information.

NATO High Commander Issues Illegitimate Order to Kill

NATO High Commander Issues Illegitimate Order to Kill

Go To Original

The approach to combatting the drug mafia in Afghanistan has spurred an open rift inside NATO. According to information obtained by SPIEGEL, top NATO commander John Craddock wants the alliance to kill opium dealers, without proof of connection to the insurgency. NATO commanders, however, do not want to follow the order.

A dispute has emerged among NATO High Command in Afghanistan regarding the conditions under which alliance troops can use deadly violence against those identified as insurgents. In a classified document, which SPIEGEL has obtained, NATO's top commander, US General John Craddock, has issued a "guidance" providing NATO troops with the authority "to attack directly drug producers and facilities throughout Afghanistan."

According to the document, deadly force is to be used even in those cases where there is no proof that suspects are actively engaged in the armed resistance against the Afghanistan government or against Western troops. It is "no longer necessary to produce intelligence or other evidence that each particular drug trafficker or narcotics facility in Afghanistan meets the criteria of being a military objective," Craddock writes.

The NATO commander has long been frustrated by the reluctance of some NATO member states -- particularly Germany -- to take aggressive action against those involved in the drug trade. Craddock rationalizes his directive by writing that the alliance "has decided that (drug traffickers and narcotics facilities) are inextricably linked to the Opposing Military Forces, and thus may be attacked." In the document, Craddock writes that the directive is the result of an October 2008 meeting of NATO defense ministers in which it was agreed that NATO soldiers in Afghanistan may attack opium traffickers.

The directive was sent on Jan. 5 to Egon Ramms, the German leader at NATO Command in Brunssum, Netherlands, which is currently in charge of the NATO ISAF mission, as well as David McKiernan, the commander of the ISAF peacekeeping force in Afghanistan. Neither want to follow it. Both consider the order to be illegitimate and believe it violates both ISAF rules of engagement and international law, the "Law of Armed Conflict."

A classified letter issued by McKiernan's Kabul office in response claims that Craddock is trying to create a "new category" in the rules of engagement for dealing with opposing forces that would "seriously undermine the commitment ISAF has made to the Afghan people and the international community ... to restrain our use of force and avoid civilian casualties to the greatest degree predictable."

A value equivalent to 50 percent of Afghanistan's gross national product is generated through the production and trade of opium and the heroin that is derived from it. Of those earnings, at least $100 million flows each year to the Taliban and its allies, which is used to purchase weapons and pay fighters. That, at least, is the estimate given by Antonio Maria Costas, head of the UN's Office on Drugs and Crime.

But the chain of people profiting from the drug trade goes a lot further -- reaching day laborers in the fields, drug laboratory workers and going all the way up to police stations, provincial governments and high-level government circles that include some with close proximity to President Hamid Karzai. If Craddock's order were to go into effect, it would lead to the addition of thousands of Afghans to the description of so-called "legitimate military targets" and could also land them on so-called targeting lists.

The Taliban are still responsible for the majority of civilian victims in Afghanistan. According to a United Nations report, more than half of the approximately 2,000 citizens killed last year died as a result of suicide attacks, car bombs and fighting with extremists. Nevertheless, relations between the Americans and the local population are extremely tense due the rising number of US-led air strikes and the dramatic increase in the number of civilian casualties.

Afghan villagers complain of the increase in the deaths of relatives who were mistakenly killed during military operations carried out by the Americans and their allies, such as the one carried out recently in Masamut, a village in the eastern Afghan province of Laghman. The US army announced that it had "eliminated" 32 Taliban insurgents. However, survivors claim that 13 civilians had been killed during the search for a Taliban commander. In the eyes of many Afghans the former liberators have long become ruthless occupiers.

German NATO General Ramms made it perfectly clear in his answer to General Craddock that he was not prepared to deviate from the current rules of engagement for attacks, which reportedly deeply angered Craddock. The US general, who is considered a loyal Bush man and fears that he could be replaced by the new US president, has already made his intention known internally that he would like to relieve any commander who doesn't want to follow his instructions to go after the drug mafia of his duties. Back in December, Central Command in Florida, which is responsible for the US Armed Forces deployment in Afghanistan, yet again watered-down provisions in the rules of engagement for the Afghanistan deployment pertaining to the protection of civilians. According to the new rules, US forces can now bomb drug labs if they have previous analysis that the operation would not kill "more than 10 civilians."

Desperate Times and Desperate Measures

Desperate Times and Desperate Measures

Go To Original

The body count is still rising. For months on end, marked by bankruptcies, foreclosures, evictions, and layoffs, the economic meltdown has taken a heavy toll on Americans. In response, a range of extreme acts including suicide, self-inflicted injury, murder, and arson have hit the local news. By October 2008, an analysis of press reports nationwide indicated that an epidemic of tragedies spurred by the financial crisis had already spread from Pasadena, California, to Taunton, Massachusetts, from Roseville, Minnesota, to Ocala, Florida.

In the three months since, the pain has been migrating upwards. A growing number of the world's rich have garnered headlines for high profile, financially-motivated suicides. Take the New Zealand-born "millionaire financier" who leapt in front of an express train in Great Britain or the "German tycoon" who did much the same in his homeland. These have, with increasing regularity, hit front pages around the world. An example would be New York-based money manager René-Thierry Magnon de la Villehuchet, who slashed his wrists after he "lost more than $1 billion of client money, including much, if not all, of his own family's fortune." In the end, he was yet another victim of financial swindler Bernard Madoff's $50 billion Ponzi scheme.

An unknown but rising number of less wealthy but distinctly well-off workers in the financial field have also killed themselves as a result of the economic crisis -- with less press coverage. Take, for instance, a 51-year-old former analyst at Bear Stearns. Learning that he would be laid off after JPMorgan Chase took over his failed employer, he "threw himself out of the window" of his 29th-floor apartment in Fort Lee, New Jersey. Or consider the 52-year-old commercial real estate broker from suburban Chicago who "took his life in a wildlife preserve" just "a month after he publicly worried over a challenging market," or the 50-year-old "managing partner at Leeward Investments" from San Carlos, California, who got wiped out "in the markets" and "suffocated himself to death."

Beverly Hills clinical psychologist Leslie Seppinni caught something of our moment when she told Forbes magazine that this was "the first time in her 18-year career that businessmen are calling her with suicidal impulses over their financial state." In the last three months, alone, "she has intervened in at least 14 cases of men seriously considering taking their lives." Seppinni offered this observation: "They feel guilt and shame because they think they should have known what was coming with the market or they should have pulled out faster."

Still, it's mostly on Main Street, not Wall Street, that people are being driven to once unthinkable extremes. And while it's always impossible to know the myriad factors, including deeply personal ones, that contribute to drastic acts, violent or otherwise, many of those recently reported are undoubtedly tied, at least in part, to the way the bottom seems to be falling out of the economy.

As a result, reports of people driven to anything from armed robbery to financially-motivated suicide in response to new fiscal realities continue to bubble to the surface. And since only a certain percentage of such acts receive media coverage, the drumbeat of what is being reported definitely qualifies as startling.

Breaking the Bank

In September 2008, a 23-year-old woman from West Norriton, Pennsylvania, robbed a bank, police reported, to pay her rent. According to East Norriton Detective Sgt. Peter Mastrocola, "She said that the reason that she went to PNC Bank and committed the robbery was because she was two months behind in her rent and she was going to be evicted." In fact, after stealing $1,410, the young woman reportedly told police that she "took the cash from the robbery and went to another bank where she purchased a cashier's check for $1,410 made payable to Westover Village Apartments"

The next month, in Northampton, Pennsylvania, a 49-year-old woman reportedly robbed a bank and, just 18 minutes later, "arrived at a check-cashing business and arranged for several money orders -- totaling $1,090 -- to pay a portion of the rent she owed her landlord." According to court papers, a "confidential informant" told police the woman had confided that "she was going to rob the bank to satisfy about $1,800 in back rent." The police reported that she was "in the process of being evicted."

This, however, is no Keystone State phenomenon. As the Los Angeles Times recently reported, "Another sign of the bad economic times

[b]ank robberies, which had been declining for years, rose in 2008 in Southern California

[by] 22% compared to 2007." In Orange County, the spike was especially acute, a jump of 41% to 145 robberies. Similarly, Inland Empire News Radio reported that authorities attributed a 13% rise in bank robberies in Riverside and San Bernardino counties to a "poor economy."

"We've certainly seen a rise in bank robberies across the country particularly in our metropolitan areas," FBI Special Agent Scott Wilson recently pointed out. "The bank robbery rate has risen dramatically."

Last year, according to the New York City Police Department, bank robberies in that city jumped to more than 430, a 54% rise over 2007. On December 29th alone, CNN noted, "robbers targeted five banks in the Big Apple, some striking in broad daylight and near famous landmarks." Interviewed by the New York Times, a customer in one of the robbed banks put the obvious into words: "It makes me think that the recession is making people go to extreme measures." Illinois Wesleyan University Economics Professor Mike Seeborg agrees. Commenting on a similar local spike in crime, he told a Central Illinois TV station, "There's a clear linkage nationwide that when the economy is in bad shape, when unemployment begins to increase, if people lose their jobs and output falls, that crimes against property especially increase."

Suicidal Tendencies

At least 33 people chose to commit suicide in national parks in 2008. And there seemed to be an economic component to at least some of the cases. For example, an Associated Press report noted that a "49-year-old builder blamed the economy in a note he left for his ex-wife and attorney before killing himself at the edge of the woods at Georgia's Kennesaw Mountain National Battlefield Park." Similarly, in October, Bruce J. Colburn, a "[f]reshly unemployed, former business executive" from Reading, Pennsylvania, traveled to Montana's scenic Glacier National Park where "he shot himself in the chest with a handgun, according to park officials."

Others stayed closer to home.

On October 14, 2008, a woman in Bogart, Georgia, was "supposed to go to court for an eviction hearing." Instead, she called the police and informed them that she was thinking of killing herself. Not long afterward, she shot herself in the head. On October 29th, a 47-year-old man from Blount County, Tennessee, "killed himself when sheriff's deputies tried to evict him from his rented home." The next month, according to Mike Witzky, the executive director of the Mental Health and Recovery Board in Union County, Ohio, two local men committed suicide due to financial problems, while another failed in his attempt.

On December 5, 2008, Ricky Guseman of West Palm Beach, Florida, was to be evicted. Instead, local officials told the South Florida Sun-Sentinel, he "barricaded himself in a mobile home set the place on fire and then shot himself in the head with a shotgun."

In December, coroner's investigators in Kern County, California, revealed that they were "seeing a wave of people committing suicide because of financial stress," a 5-10% increase over 2007.

An analysis of 2008 "death reports" in Milwaukee County, Wisconsin, by local ABC television affiliate WISN-TV found "[f]inancial pressure in a difficult economy has led to desperate measures." Of 108 suicides -- a 20% jump over any of the last three years -- at least 25% of the victims "were struggling financially." For example, Wauwatosa resident Tom Brisch, a married father of two, fell on hard times after his wife of 20 years, Sherry, lost her job. At the same time, his job as a commission-only Ford car salesman fell victim to the sluggish auto market. As Sherry summed the situation up after his suicide, "[T]he economic picture with a kid going to college, another one starting high school... was pretty grim and we were struggling." She returned home one day to find that her husband had hanged himself. In his shirt pocket was a suicide note in which "he asked for forgiveness and wrote that he could not get it together to provide for them."

WISN-TV uncovered a host of similar tragedies including:

  • A 21-year-old Milwaukee man who shot himself in the face after "he ran out of unemployment [insurance]."
  • A 43-year-old West Allis man who hanged himself in his basement with a belt. "[T]he mortgage payments are behind," his girlfriend told the police. "There are astronomical medical bills."
  • A 40-year-old Milwaukee woman who overdosed after having "financial problems."
  • A 24-year-old Milwaukee man, "fired from his job three weeks before," who suffocated himself with Saran Wrap.
  • And a 38-year-old Milwaukee man who shot himself in the head. He'd lost his job six weeks earlier.
  • In January, less than an hour's drive south of Milwaukee, 37-year-old Staci Paul's car was pulled from Lake Michigan, but they couldn't find the body of the Kenosha, Wisconsin, woman. As an article in the Kenosha News noted, however, friends "said they knew things hadn't been easy for Paul. A single mother, she worked hard to find jobs and as the economy worsened, friends speculated, Paul might have run into some financial trouble. Court records also show Paul had been evicted from her home in October."

    Distress Signals

    Paul apparently felt she had to deal with her problems on her own. Others, however, have called for help. According to a January 9th report in the Pittsburgh Post-Gazette, local police received a phone call concerning a 64-year-old resident of Westview, Pennsylvania, who was "apparently distraught over losing his house." When they arrived at the home, they found him "sitting in a lawn chair in his driveway with a rifle under his chin." He was later taken into custody and sent to a psychiatric clinic for "evaluation."

    Increasing numbers of desperate souls have also called the National Suicide Prevention Lifeline, which logged a record 568,437 calls in 2008. (There were only 412,768 such calls the previous year.) Similarly, a recent investigation by USA Today's Marilyn Elias found that suicide hotlines in Dallas, Pittsburgh, suburban San Francisco, Hyattsville (Maryland), Georgia, Delaware, and Detroit have all reported "increases in callers since the economy slid." The report added:

    "In Boston, more hotline callers with mental health problems mention job losses, evictions or fear that they'll lose their homes, says Roberta Hurtig, executive director at Samaritans Inc. [a not-for-profit volunteer organization dedicated to reducing the incidence of suicide.] In Kalamazoo, Mich[igan], and other locales, callers with mental illnesses such as bipolar disorder say loss of insurance and cutbacks in public health programs are preventing them from getting medications.

    "At the Gary, Ind[iana], Crisis Center, suicidal callers with economic worries are increasing, and their depression is more severe, says Willie Perry, program coordinator for the hotline."

    In Franklin County, Ohio, suicide hot line volunteers are "logging more calls from people in financial distress, says Mary Brennen-Hofmann, coordinator of suicide-prevention services at North Central Mental Health Services in Columbus." She continued, "We have seen a lot more calls dealing with financial problems, evictions, foreclosures and job loss."

    Similarly, the Hopeline of North Carolina Inc. in Raleigh saw a 50% jump in calls in October and November. "We get calls from people who are suicidal because the stock market is down," said executive director Courtney Atwood. "They have lost money and are not able to provide for their family."

    In Los Angeles, calls to the city's "busiest suicide hot line" increased by as much as 60% last year. "A year ago, many of the calls we would get were from people with mental illnesses," commented Sandri Kramer, the program director of the center that operates the hot line. "Now many of the calls are from people who have lost their home, or their job, or who still have a job but can't meet the cost of living."

    Domestic Disturbances

    Not surprisingly, the economic meltdown has also strained marriages and, according to experts, is contributing to a rise in domestic violence. Retha Fielding, a spokeswoman for the National Domestic Violence Hotline, notes that calls increased 18% between October 2007 and October 2008 and attributes the spike to the poor economy. "It is bringing increased stress and violence into the home. Domestic violence is about control. If you lose your job, that's control you don't have, so you may want to have more control at home."

    Sometimes economically exacerbated violence can turn deadly.

    On December 9th, for example, 59-year-old Thomas Garrett of Midwest City, Oklahoma, murdered his wife. According to Midwest City Police Chief Brandon Clabes, "Garrett told officers he shot his wife because he didn't know how to explain that they were evicted from their home while she was in the hospital." He apparently planned to kill himself too, but was stopped by the police.

    Thirty-one-year-old Eryn Allegra had lost her home as well as her job, and had, according to press accounts, been thinking about suicide for weeks. On Christmas day, the Port St. Lucie, Florida, resident reportedly checked into a hotel, gave her 8-year-old son over-the-counter medicine to put him to sleep, and then smothered him. She subsequently slit her own wrists in a failed suicide attempt.

    Noting a man's pickup truck parked in his driveway at a time when he was normally at work, neighbors in an "upscale neighborhood" in Manteca, Georgia, entered his home which a bank had recently approved for a short sale. (A short sale often takes place when a buyer in default is trying to avoid foreclosure.) According to the Manteca Bulletin, they found him "lying in the foyer of the home dead of a gunshot wound." Arriving at the scene soon after, police discovered the body of his wife nearby "and located a firearm near the two bodies."

    On January 11th, Pinole, California police responding to a domestic disturbance call found 43-year-old Kimberly Petretti sitting on the curb in front of the home. She was being evicted that morning. Inside the house, which "showed no signs of a preparation for the move," they found the woman's mother, 62-year-old Claudia Petretti, dead -- shot in the head with an assault rifle. According to Deputy District Attorney Harold Jewett, a two-page letter on the scene indicated a murder-suicide plan linked to the family's financial difficulties. "It was a significant event in their lives that may have precipitated this tragic and desperate act," he said.

    Last October, a man in Los Angeles, beset by financial troubles, shot his wife, mother-in-law, and three sons before turning the gun on himself. An eerily similar scene replayed itself this week, when another Los Angeles resident apparently killed his wife and five children -- an 8-year-old girl, twin 5-year-old girls, and twin 2-year-old boys -- before faxing a letter to a local television station and then killing himself. "This was a financial and job-related issue that led to the slayings," Deputy Chief Kenneth Garner said. "In these tough economic times, there are other options. In my 32 years, I've never seen anything like this."

    As the World Burns

    On December 15th, a 41-year-old Dubuque, Iowa man "used liquid pre-shave to set his apartment on fire because he thought he was going to be evicted."

    On December 21st, a 31-year-old woman who had been evicted from her Orange Park, Florida, apartment, "started a weekend fire that caused an estimated $500,000 in damage" to the complex that was her former home. That same day, a woman in St. Augustine, Florida, "was charged with arson after vacating a house she was evicted from that was later found burning."

    On January 5, 2009, Bobby Crigler, the property manager for Holly Street Apartments in Fayetteville, Arkansas, said, "I went over and had a confrontation with [tenants about an eviction notice], and they got belligerent." After that, he sent the property's maintenance man, his son, 49-year-old Kent Crigler, to change the locks at another tenant's apartment. When friends of the tenant facing eviction spotted Kent, they assumed, according to Bobby, that he was there to evict their buddy. They set upon Kent, punching and kicking the father of four to death, according to a report in the Northwest Arkansas Times.

    Generally, however, if you weren't a multimillionaire intent on suicide, what you did to your house, your husband, your wife, your child, your bank, your neighbors, your landlord, or yourself remained a distinctly local story, a passing moment in the neighborhood gazette or a regional paper. And for the range of such acts, unlike sports statistics, there are no centralized databases toting up and keeping score. Every now and then, though, a spectacular act of extreme desperation makes it out of the neighborhood and into the national news.

    One of these occurred this January, although the media generally played it as a sensational screwball story rather than another extreme act stemming from the economic crisis. In December, Marcus Schrenker, a money manager and sometime stunt pilot, penned a letter that read, in part: "It needs to be known that I am financially insolvent I am intending on filing bankruptcy in 2009 should my financial conditions continue to deteriorate." They did.

    As the Indiana investment adviser grew more desperate to escape mounting financial difficulties and legal issues stemming from accusations of investor fraud, he reportedly hatched a plan that was splashed all over national television as it unfolded. According to news reports, he staged a Hollywood-style getaway from his rapidly deteriorating life, complete with a fake mid-air mayday call, a parachute jump over Alabama, and a faked death from a plane he put on autopilot that crashed in a swamp near a residential area in the Florida Panhandle. Schrenker then raced away on a carefully pre-stashed motorcycle, before being discovered by federal marshals just after he had slashed his wrists at a Florida campsite. He recently pleaded not guilty in federal court to charges that he willfully destroyed an aircraft and made a fake distress call.

    Going to Extremes

    Across the United States, people have been reacting to dire circumstances with extreme acts, including murder, suicide and suicide attempts, self-inflicted injury, bank robberies, flights from the law, and arson, as well as resistance to eviction and armed self-defense. And yet, while various bailout schemes have been introduced and implemented for banks and giant corporations, no significant plans have been outlined or introduced into public debate, let alone implemented by Washington, to take strong measures to combat the dire circumstances affecting ordinary Americans.

    There has been next to no talk of debt or mortgage forgiveness, or of an enhanced and massively bulked-up version of the Nixonian guaranteed income plan (which would pay stipends to the neediest), or of buying up and handing over the glut of homes on the market, with adequate fix-up funds, to the homeless, or of any significant gesture toward even the most modest redistributions of wealth. Until then, for many, hope will be nothing but a slogan, the body count will rise, and Americans will undoubtedly continue going to extremes.


    Nick Turse is the associate editor of His work has appeared in many publications, including the Los Angeles Times, the Nation, In These Times, and regularly at TomDispatch. A paperback edition of his first book, The Complex: How the Military Invades Our Everyday Lives (Metropolitan Books), an exploration of the new military-corporate complex in America, will be published this spring. His website is Nick

    [Note: A special bow should be offered to undervalued small-town newspapers and local television stations across the country that have done the grunt work in covering the tragic results of the global economic crisis in their own communities. They continue to offer a real service to the public by documenting how individuals in cities and towns across America are suffering and just what that suffering drives them to do. By way of a Newsweek article on the "Killer Economy?" I recently became aware of an excellent resource on some of the human fallout of the financial crisis, "Greenspan's Body Count" an ongoing feature on the W.C. Varones Blog. Since early 2008, it has provided an invaluable record of "mortgage-related suicides" and other "victims of (former Chairman of the Federal Reserve) Alan Greenspan."]

    Measure of US jobless hits record high

    Jobless numbers reach record high: 4.8 million

    US new jobless claims up,continued claims a record

    Go To Original

    The number of U.S. workers filing new claims for jobless benefits rose 3,000 last week, data on Thursday showed, while so-called continued claims hit the highest level on record as the country's year-long recession continued to chill employment.

    Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 588,000 in the week ended Jan 24 from a revised 585,000 the prior week, the Labor Department said.

    Analysts polled by Reuters had forecast 580,000 new claims versus a previously reported count of 589,000 the week before.

    The number of people remaining on the benefits roll after drawing an initial week of aid, or continued claims, rose 159,000 to a higher-than-forecast 4.776 million in the week ended Jan 17, the most recent week for which data is available.

    The Labor Department said this was the highest reading since its records on this series began in 1967. Analysts had expected continued claims to be 4.65 million.

    A Labor Department official said there were no special factors impacting last week's initial claims numbers.

    The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, increased to 542,500 from 518,250 the week before.

    This measure has mounted steadily as the U.S. housing slump roils financial markets and spreads to the wider economy, forcing lay-offs as firms slash costs to offset weaker income.

    Is America on the Brink of a Food Crisis?

    Is America on the Brink of a Food Crisis?

    By Robert Jensen

    Go To Original

    As everyone scrambles for a solution to the crises in the nation's economy, Wes Jackson suggests we look to nature's economy for some of the answers. With everyone focused on a stimulus package in the short term, he counsels that we pay more attention to the soil over the long haul.

    "We live off of what comes out of the soil, not what's in the bank," said Jackson, president of the Land Institute. "If we squander the ecological capital of the soil, the capital on paper won't much matter."

    Jackson doesn't minimize the threat of the current financial problems but argues that the new administration should consider a "50-year farm bill," which he and the writer/farmer Wendell Berry proposed in a New York Times op-ed earlier this month.

    Central to such a bill would be soil. A plan for sustainable agriculture capable of producing healthful food has to come to solve the twin problems of soil erosion and contamination, said Jackson, who co-founded the research center in 1976 after leaving his job as a environmental studies professor at California State University, Sacramento.

    Jackson believes that a key part of the solution is in approaches to growing food that mimic nature instead of trying to subdue it. While Jackson and his fellow researchers at the Land Institute continue their work on natural systems agriculture, he also ponders how to turn the possibilities into policy. He spoke with me from his office in Salina, Kansas.

    Robert Jensen: This is a short-term culture, and federal policies typically are aimed at short-term results. Why the call for a farm bill that looks so far ahead, especially in tough economic times?

    Wes Jackson: For the past 50 or 60 years, we have followed industrialized agricultural policies that have increased the rate of destruction of productive farmland. For those 50 or 60 years, we have let ourselves believe the absurd notion that as long as we have money we will have food. If we continue our offenses against the land and the labor by which we are fed, the food supply will decline, and we will have a problem far more complex than the failure of our paper economy.

    We need to reverse that destructive process, which means recognizing the need for fundamental changes in the way agriculture is practiced. That requires thinking beyond the next quarterly earnings report of the agribusiness corporations and beyond this fiscal year of the feds. We need farm bills -- laid out in five-year segments, with a view to the next 50 years -- that can be mileposts for moving agriculture from an extractive to a renewable economy.

    RJ: What are some of the key aspects of a long-term solution?

    WJ: Support for soil conservation and protecting water resources have to be central. There needs to be funding for research on a different model for agriculture. And we have to avoid wasting any more resources on biofuels made from annual crops, especially corn, which is certain to exacerbate soil erosion, chemical contamination and a larger dead zone in the gulf.

    RJ: But it is true that most people, including those in the new administration, are focused on short-term problems in the financial and industrial economy. Is there any chance people -- especially people in an overwhelmingly urban nation -- will pay attention right now?

    WJ: Remember, if our agriculture is not sustainable then our food supply is not sustainable, and food is an issue as close to every one of us as our own stomachs. Either we pay attention or we pay a huge price, not so far down the road. When we face the fact that civilizations have destroyed themselves by destroying their farmland, it's clear that we don't really have a choice. Beyond that, changing the way agriculture is practiced would incorporate partial solutions to major problems that people do care about: climate change, overconsumption of energy, water problems. Yes, a 50-year bill is sensible right now.

    RJ: What would such a 50-year plan look like? What are the key features?

    WJ: We start by acknowledging the necessity of moving from an extractive, unsustainable economy to one that is renewable and sustainable, and the first place to look is to the production of the most basic commodity -- food. Once we face that necessity, we move to examining the possibilities for achieving this, recognizing that we have to act now while we still have slack, some room to move. Here's a sobering thought: If we don't achieve this sustainability first in agriculture, it's highly unlikely we will in any other sector of the economy and society. That's what makes this so imperative.

    RJ: OK, start with the necessity: How is agriculture, as it is practiced today, an extractive enterprise that is unsustainable?

    WJ: All organisms are carbon-based and in a constant search for energy-rich carbon. About 10,000 years ago, humans moved from gathering/hunting to agriculture, tapping into the first major pool of energy-rich carbon -- the soil. It was agriculture that allowed us effectively to mine, as well as waste, the soil's carbon and other soil-bound nutrients. Humans went on to exploit the carbon of the forests, coal, oil and natural gas. But through all that, we've continued to practice agriculture that led to soil erosion beyond natural replacement levels. That's the basic problem of agriculture.

    Added to the problem of soil loss, the industrialization of agriculture has given us pollution by toxic chemicals, now universally present in our farmlands and streams. We have less soil and it is more degraded. We've masked that for years through the use of petrochemicals -- pesticides, herbicides, fertilizers. But that "solution" is no solution and is, in fact, part of the problem. There are no technological substitutes for healthy soil and no miraculous technological fixes for the problem of agriculture. We need to move past the industrial model and adopt an ecological model.

    RJ: This concern about chemicals has led to increased support for organic agriculture. Is that the solution?

    WJ: Organic agriculture is a start but by itself is insufficient. Eliminating the chemicals is only half the problem -- we still have to deal with soil erosion. Remember that we humans had organic agriculture until very recently, when we got industrial agriculture, and we still lost soil all along the way, for the last 10,000 years. There is good reason to believe we started the increase of carbon dioxide into the atmosphere about then (with the carbon compound of the soil being oxidized). It has only become a crisis in our time due to the scale increase of people and material and energy throughput.

    RJ: OK, so organic alone isn't the answer. Isn't that where no-till or minimum-till farming comes in?

    WJ: Those methods help deal with erosion, but as practiced today they require unacceptable levels of chemical inputs and end up eliminating biodiversity. Once again, it doesn't offer a way out of the extractive economy and the problem of contamination.

    RJ: So, where does that leave us?

    WJ: Let's go back to basics: The core of this idea is the marriage of agriculture and ecology. As Wendell [Berry] says, we need to take nature as the measure. We need to look to nature for models of how to manage ecosystems in a sustainable fashion. At the Land Institute, we think that leads to perennial polycultures. Instead of annual crops grown in monocultures on an industrial model, we are looking at perennials in mixtures, which we think can solve a number of problems regarding erosion and contamination.

    RJ: Before I ask about the details, a basic question: Is that feasible, given the 6.5 billion people on the planet? Can such strategies focused on perennials produce enough food?

    WJ: First, let's recognize that without fossil fuels, the industrial-agriculture strategies we have now could not feed even the current population, and population growth makes these changes more important than ever. As populations grow, there's increasing pressure to put more and more marginal land into production, which increases the rate of degradation. A new model is essential.

    At the Land Institute, we've been working on perennializing the major crops and domesticating a few promising wild species. By increasing the use of mixtures of grain-bearing perennials, we can not only better protect the soil but also help reduce greenhouse gases, fossil-fuel use and toxic pollution. Carbon sequestration would increase, and the husbandry of water and soil nutrients would become much more efficient.

    RJ: Let's assume that natural systems agriculture and similar projects hold the promise you suggest. Those practices will have to be implemented in the real world, which is structured by the larger extractive economy in capitalism, at a time of crisis -- some would say, even, a time of collapse. What has to happen to make that possible?

    WJ: You're right that it's not just about plants and science; it's also about people and society. We think that protecting the soil is not only an ecological imperative but an opportunity for positive economic and cultural change as well. The proposals we're discussing would increase employment opportunities in agriculture -- sustainable farming will require more "eyes per acre," and replacing fossil-fuel energy with human energy and ecological knowledge makes good economic sense. With the reduced need for the hoe or plow, and land management relying more on fire and grazing, we draw on the naturalist instinct in nearly all of us, rather than presenting farm work as nothing but the "sweat of the brow" amid "thistles and thorns." This will be necessary to counter the longstanding denigration of the countryside and rural communities, which has been a feature of our so-called cosmopolitan culture.

    We're seeing that on a small scale now, with more young farmers staying on the land, with creative new endeavors in community-supported agriculture. People recognize that life is more than working in a small cubicle and consuming in a big-box store. People are hungry for good food, and they're also hungry for a good life. People are ready to explore what it would mean to come home, not to a romanticized vision of the past but to a sustainable future.

    RJ: How would a farm bill that you and Wendell might write differ from what we see today?

    WJ: The farm bills we've had largely address exports, commodity problems, subsidies and food programs. They all involve here-and-now concerns. A 50-year farm bill represents a vision that stresses the need to protect soil from erosion, cut the wastefulness of water, cut fossil-fuel dependence, eliminate toxins in soil and water, manage carefully the nitrogen of the soil, reduce dead zones, restore an agrarian way of life and preserve farmland from development. The best way to accomplish most of these goals is to gradually increase the number of acres with perennial vegetation, first of all through rotations and increase in the number of grass-fed dairies sprinkled about the countryside, and second, through progress toward perennializing the major crops. A good bill could help farmers accomplish those things.

    RJ: It's also likely that many people reading this will dismiss you as idealistic, as unrealistic. How would you answer that?

    WJ: These are the same people who believe it's realistic to continue practices they know to be unsustainable. The basic choice is simple: Do we want to work at coming up with a system that can produce healthful food and healthy communities, one that is economically and ecologically viable? Or do we want to continue to contaminate our soil and water as we watch that soil continue to be eroded by that water? That contamination and erosion are both material reality and metaphor for our cultural and economic condition.

    Look, I'm a scientist from the countryside, which means I have spent my life dealing with reality in research and on the farm. These are necessary and possible goals. Without the necessity, it may be considered grandiose. Without the possibility, it could be regarded as grandiose. The test for grandiosity, in my view, fails. As a nation, we are blessed with some of the world's best soils. Increasingly, city people want healthier and safer food. And we're at a political moment when everybody and his dog is talking about the need for change. So, let's get to it.