Sunday, February 1, 2009

46 Of 50 States Could File Bankruptcy In 2009-2010

46 Of 50 States Could File Bankruptcy In 2009-2010

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There is a high chance a majority of the States within the United States of America could file for Chapter 9 bankruptcy. There are currently 46 states with high budget deficits, Arizona being one of them.

In fact, Jan Brewer, the newly appointed Governor of Arizona has a major crisis on her hands, one that Arizona and national media isn’t covering. The alarming news is the State of Arizona has 90 to 120 days before they completely run out of money. After that, all bills and tax refunds owed to the citizens will go unpaid.

Before Janet Napolitano left for her new Homeland secretary position, she had a stand-off with Arizona Treasurer Dean Martin. The AZ Treasurer forewarned Napolitano about Arizona’s financial crisis, but she refused to heed his words.

With neighboring California on the verge of bankruptcy this year, many States will follow in their steps.

Many States are already scurrying to cut unwanted costs, cut State-funded programs, raise taxes, not issue tax refunds to their citizens, and borrow money just to survive in 2009. Unfortunately, many banks — the same banks the Fed bailed out — are refusing to loan money to the States and their Treasury agencies.

The article, State Budget Troubles Worsen, at the Center on Budget and Policy Priorities website is an excellent piece to read. It shows where each State currently stands in these challening economic times, and you see 46 of the 50 States are clearly in the financial red.

It’s very possible you’ll see the end of the United States as we know it. If the Fed doesn’t bailout the States when their cash dries up and the banks don’t loan them money, then our States will be left in financial ruin. This would be a tragic and unprecedented event never experienced in the United States.

No State has ever filed bankruptcy, but it could be coming to a State near you this year.

We are on the brink of something far worse than the Great Depression.

California is told to furlough employees

California is told to furlough employees

A judge orders officials to implement Schwarzenegger's plan to force 238,000 employees to take two days off without pay each month. The state is expected to shut down some services on those days

By Patrick McGreevy and Evan Halper

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California officials must immediately implement Gov. Arnold Schwarzenegger's order that state employees take two days off without pay each month, a judge ruled Thursday, denying claims by unions and the controller that the governor's directive is illegal.

The decision clears the way for the biggest rollback of the state payroll in decades. Starting next week, 238,000 state employees will be furloughed on the first and third Fridays of each month. Some state offices that provide public services, including DMV field offices, will be closed on those days.

The judge's order, if it withstands an appeal promised by organized labor, would represent a shift in power over the civil service workforce. Past attempts by governors to cut salaries and hours have generally been stymied by the courts or the Legislature.

"This state is in a huge mess . . . the scope of which is unprecedented," Sacramento County Superior Court Judge Patrick Marlette said in a courtroom packed with government workers. His ruling called the governor's order "reasonable and necessary under the circumstances."

He acknowledged that his decision could have "devastating" financial consequences for some workers, but said state law and union contracts provide the governor with the authority to cut the payroll during an emergency.

The state is in the midst of a financial crisis, with an immediate cash shortage and a projected deficit of nearly $42 billion by the middle of next year. Refunds to taxpayers and other payments will be suspended Feb. 1 because the state does not have the money for them.

State Controller John Chiang, a longtime ally of organized labor whose job is to manage the state payroll, said he would put into effect the pay cuts that will result from the furloughs.

"Today, the court has directed me to implement the governor's order affecting state employee pay, and I will immediately move to do so," he said in a statement.

The mandatory time off will apply to almost all state workers except those employed in public universities, on state tax boards, in the Legislature and in other offices not under the control of the governor.

Engineers, scientists, nurses, Department of Motor Vehicles clerks, pharmacists, Caltrans maintenance workers, dietitians, psychologists, social workers, computer programmers, unemployment caseworkers, full-time state commissioners and attorneys not working for the state attorney general will all be affected.

Prison guards and park rangers will be permitted to schedule their days off without pay in a way that does not compromise public safety. California Highway Patrol officers, who have a contract specifically prohibiting furloughs, will be exempt.

Union leaders said the furloughs will drain the finances of workers and disrupt the Californians they serve. The union officials are drafting court papers that they hope will stop the mandatory time off from taking effect until the appeal is complete.

"We think [Marlette] is wrong. The governor does not have this authority," said Bruce Blanning, executive director of the Professional Engineers in California Government. "One man is telling 200,000 people to stay home: 'Don't go to work.' "

The unions had argued that furloughs must be approved by the Legislature. Chiang agreed and sided in court with the Service Employees International Union Local 1000, the California Assn. of Professional Scientists and the engineers.

The governor wants the furloughs to remain in place even if he and lawmakers reach a budget agreement that addresses the deficit. The equivalent of a 9% pay cut, the move will save the state about $1.3 billion through June 30, 2010, officials said.

State employees who packed the courthouse Thursday were angered by the judge's ruling.

David Miller, a toxin-control scientist, is newly married and helping to put his wife through college. "We will have to reduce our expenditures, tighten our belts," he said. His wife "may have to reduce her [course] schedule," he said. ". . . It's a real bite."

Dianne Bradford of San Diego, who does nursing-home inspections, said in a telephone interview that she is "seriously considering getting a second job."

Bradford, 56, said the $600 a month that she will lose will make it tough for her to pay for her car and mortgage. "I'm not sure how I'm going to manage," she said.

Schwarzenegger said earlier this week that he was imposing the furloughs as an alternative to mass layoffs.

State law gives him the authority to lay off workers, but the process for doing so is onerous. Most experts agree it would be many months before the state recognized significant savings that way.

It is not just state workers who will be affected by the furloughs. The state is expected to shut down some services on the days workers are required to be off. State personnel officials are working with unions to determine what offices will have to close.

At the state's six unemployment-insurance call centers, where the phones have been ringing with calls from the soaring number of jobless Californians, operators will not be there to answer on two Fridays each month.

Most state-operated One-Stop Career Centers, which provide job information and related services to the unemployed, will also be closed then, said Loree Levy, a spokeswoman for the Employment Development Department.

In addition to the DMV closures, the California Department of Transportation has said all of its offices will close on the two Fridays.

Marlette said his ruling is in no way meant to endorse the governor's cost-cutting strategy.

"My job is not to rule if this is the right solution but whether his action is authorized by law," he said.

The US Unemployment Rate 10% Higher than government is reporting

John Williams,, on the Unemployment Rate

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John Williams, Founder of Shadow Government Statistics, calculates that the jobless rate is a full l0 percent higher than the government is reporting. He also discusses the news Monday morning that American companies (including Sprint, Home Depot) are cutting about 43,000 jobs.

Homelessness surges as funding falters

Homelessness surges as funding falters

Providers to the poor try to stretch meager resources to meet growing need

By Kari Huus

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As snowstorms blew into this Northwest city and the economy iced over in December, the occupants of a shelter nestled among industrial buildings on the north side prayed for divine intervention.

“We were hoping for the Christmas miracle,” says Glen Dennis, 41, who was working his way through a residential drug-treatment program at the CityTeam Ministries shelter. Dennis and the other 11 guys in the long-term program —dubbed the “disciples” — also worked each day to prepare for some 50 to 60 overnight shelter guests, and dish up free hot meals to about 100 people. “We kept doing what we were doing, and hoped someone would come by and drop off a big check.”

But the check did not come — even after a coalition of other shelters, nonprofits and local churches tried to pull together a rescue package to keep the shelter open. On Dec. 27, CityTeam Ministries, based in San Jose, Calif., closed the Seattle facility — leaving scores of people to seek food, shelter and sobriety elsewhere. For Dennis, who had been free of crack cocaine for nearly 11 months, the upheaval led to another painful relapse out on the streets.

“It’s a real loss,” says Herb Pfifner, executive director of the Union Gospel Mission shelter in downtown Seattle. “We’re all scrambling to try to handle the growth of homelessness because of the economic situation … and then the closing of another mission adds more pressure.”

The CityTeam closure is a piece in the expanding problem of homelessness across the nation: Shelters and related services for the homeless are facing funding shortfalls as the downturn takes its toll on state budgets and corporate donations. And while individual donors in many cases are keeping up gifts — or even digging a little deeper for charities that help with urgent needs like food and shelter — the service providers say they are faced with a rapidly growing demand from people losing jobs and homes in the economic crisis.

Less funding, more demand
“A downturn in (overall) funding in this case is accompanied by a surge in demand, so a homeless shelter, food pantry, or job-training program is going to feel it first,” says Chuck Bean, executive director of Nonprofit Roundtable of Greater Washington, in the District of Columbia. “Even if they have 100 percent of their budget compared to last year, they now see a 50 percent surge in demand. Then (they) get into the tough decisions: Do you thin the soup, or shorten the line?”

Even as census-takers fan out in cities across the country this week in an attempt to count homeless populations, advocates and experts point to a bevy of evidence that homelessness is rising and will continue to, most notably among families with children.

Shelters across the country report that more people are seeking emergency shelter and more are being turned away. In a report published in December, 330 school districts identified the same number or more homeless students in the first few months of the school year than they identified in the entire previous year. Meantime, demand is sharply up at soup kitchens, an indication of deepening hardship and potential homelessness.

“Everything we are seeing is indicating an increase,” says Laurel Weir, policy director at the National Law Center on Homelessness and Poverty. “And homelessness tends to lag the economy. So we’re probably seeing the tip of the iceberg here.”

In the foreclosure crisis, the people being displaced from homes won’t likely be on the street immediately, explains Michael Stoops, director of National Coalition for the Homeless.

“The people who have lost homes or tenants in homes that were foreclosed … have downsized, and if that doesn’t work they will move in with family and friends,” says Stoops. “After a while, they will move into their RV in a state campground. The next step is a car. And the worst nightmare for a working, middle-class person or even a wealthy person who has never experienced homelessness is knocking on a shelter door.”

Services teeter on brink
As the case of Seattle’s CityTeam shelter illustrates, many nonprofits serving the poor are working on a shoestring, even in better times. Seattle-area donations to the shelter had to be supplemented from general funds, said Jeff Cherniss, chief financial officer of CityTeam, which operates shelters and food programs in five other U.S. cities.

“We were hoping (the Seattle shelter) could become self-sustaining,” says Cherniss. CityTeam Ministries, a Christian organization funded by donations from individuals, corporations and churches, kept the Seattle facility afloat with help from its general fund for most of a decade, but the 2008 crisis prompted them to retrench.

Every major source of funding is under pressure in the current environment: Charitable foundations — which rely on corporate profits for their seed money and investments to preserve and build those funds — have been forced to pull back grants after taking a massive hit as corporate earnings faltered and stocks plunged. The National Council of Foundations recently estimated that philanthropic foundation endowments have lost $200 billion in value during the economic crisis.

A few of the largest foundations have, despite losses, promised to maintain or give at higher levels in the face of the crisis. The Bill and Melinda Gates Foundation this week said it would increase its giving to 7 percent of its assets from 5 percent. And the John D. and Catherine T. MacArthur Foundation announced three gifts totaling $34 million to help homeowners in Chicago avoid foreclosure and keep renters in homes.

Still, the casualties are mounting. Among them: Atlanta nonprofit Nicholas House, which closed a shelter for families in mid-January so it could safely keep other housing services open. Nearly all corporate donors gave to the organization at lower levels this year, says Dennis Bowman, executive director of the 26-year-old agency. The final straw came when a corporate donation ended, and was not renewed.

“It was directly because of the economy — the business has suffered in this economy, and so can’t provide the funding, which was well over $100,000 a year,” says Bowman.

The organization is scrambling to find other options for the 12 families — 45 people in all — who lived there, by squeezing them into other parts of its own programs or openings with other nonprofit programs.

Arguably, no single event in the economic crisis has caused a greater ripple of concern among advocates for the homeless than the government takeover of mortgage giants Freddie Mac and Fannie Mae in September. In 2007 alone, charitable giving through the Freddie Mac Foundation and the Fannie Mae philanthropic division topped $47 million — the bulk of which goes to programs that shelter and feed homeless Americans, and establish affordable housing.

In Washington, D.C., where Fannie and Freddie had been the largest corporate donors, dozens of organizations were up in the air as government auditors reviewed the corporations’ records, including their charity operations.

Linda Dunphy, executive director of Doorways for Women and Families, a shelter program that has been receiving funding from Freddie Mac since 1996, says the takeover of the mortgage company threw a promised $300,000 grant into limbo.

Meantime, Doorways watched other substantial corporate donations drain away — including some $50,000 that had been coming through an annual walkathon from financial companies Morgan Stanley and Merrill Lynch.

Fortunately, when the review of Fannie and Freddie’s charitable operations ended in late December, the Freddie Mac grant came through for Doorways, averting the need to shut down a family shelter — for the next six months, at least. “But then we face a whole new fiscal year, and our concerns about what is going to happen at (Freddie Mac Foundation) and whether they can continue to keep giving at the level they have been giving,” says Dunphy.

The Alternative House for homeless mothers in northern Virginia was not as lucky. Freddie Mac had been giving $35,000 to $60,000 a year to this nonprofit. The Freddie Mac money was spent on providing developmental assistance for the babies, who are often behind because of their chaotic beginnings. Last week, Judith Dittman, who runs the program, got word that the funding was cut.

States awash in red ink
Up to now, another major source of funding for nonprofits providing homeless services came from state budgets. But entering 2009, at least 45 states faced budget deficits, according to the Center on Budget and Policy Priorities, which estimates combined state budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 at more than $350 billion. The trend bodes very badly for programs that benefit the poor and homeless. The leading example of state budget problems is California, which has eliminated funding for emergency housing assistance this year as it struggles to pare its $40 billion deficit.

In Ventura County just north of Los Angeles, the cut of about $60,000 delivered an immediate blow to three homeless operations. The largest, a winter shelter run by St. Vincent de Paul that provides beds for 100 people, was forced to cut 30 nights from its schedule.

“Because they operate on a shoestring, it’s a significant hit to them,” says Karen Schulkin, program coordinator for homeless services in the county. “The winter shelter at the National Guard Armory can only stay open for the number of days they have funding for.”

Local government funding often provides seed money for nonprofits, who leverage it to drum up foundation money and other donations. So, according to Bean of the Nonprofit Roundtable of Greater Washington, the local deficit — about $1.5 billion in the case of D.C. and surrounding areas — could present an even bigger problem than the uncertainty over the future of Fannie Mae and Freddie Mac Foundation.

“This will put a huge strain on the ability to invest in the safety net. …The challenge for a lot of nonprofits is that local government support will be down, foundations will be down,” says Bean. “The question will be what happens with individual donations.”

To be sure, out of the crisis come tales of inspired giving as communities scramble to raise new funding. The town of Danville in southern Virginia rallied to reopen a shelter that closed at the end of December after 15 years in operation. A drive prompted a $20,000 anonymous gift, which was more than matched by dozens of other local contributions. By Jan. 22, the money and a new director were in place to reopen the 20-bed shelter—offering some reprieve, at least, in a town with an estimated 150 homeless.

“The people of Danville … opened up their hearts and pocketbooks with $23,100 in matching funds,” reports Pastor Donnie Anderson of the Riveroak Church of God, who spearheaded the fundraising. “We are so grateful! The shelter is open as House of Hope and is ready for any who may need a warm place to stay and hot meals to eat.”

On Capitol Hill, as part of the $819 billion economic stimulus package, Congress included a boost in funding for emergency shelters. The $1.5 billion provision doubles the annual federal funding for alleviating homelessness. In addition, the bill includes $200 million to help people who are behind on mortgage or rent payments.

The bill, now being debated in the Senate, is “a good step forward,” says Maria Foscarinis, executive director of National Law Center on Poverty and Homelessness. But the organization is also calling for the federal government to renew its commitment to affordable housing, which she says ended with large cuts for low-income housing in the 1980s. The NLCPH calls for Congress to make a large infusion of funding to the National Housing Trust Fund, tasked with building affordable housing.

“The growing gap between wages and housing costs has long been hard for low-income people,” says Foscarinis. “Now we’re seeing people who are middle-income who are being squeezed.”

Hopes fade for CityTeam shelter
While that debate continues, local churches and homeless activists are still trying to revive the CityTeam shelter, though hope for a breakthrough is dwindling.

Glen Dennis was lucky. His former CityTeam friends dusted him off after his relapse and helped him get into a rehab program at Bread of Life Ministry in downtown Seattle. He is starting over again.

Charles Capizano, who lives with three other graduates of the rehab program in a house secured for them by Bread of Life, is cautiously planning his future, but worries about the many people who scattered when the shelter closed.

“Once you lose everything, it’s very hard to get back to the surface again,” he says. “You get a good lead on a job and you think, 'how am I going to get there, how can I dress for work?' Not having a place to cycle out of that is really tough.”

Lenders abruptly cut lines of credit

Lenders abruptly cut lines of credit

Fear excessive use amid hard times

By Beth Healy

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Banks and other lenders nationwide, seeking to reduce their debt exposure, are shutting off and limiting consumer credit card lines, even for many customers who carry low balances and pay on time.

As much as $2 trillion in consumer credit - nearly half of what is available - could be rescinded, according to an estimate by a prominent banking analyst. Just two years ago, institutions were handing out liberal borrowing lines to almost anyone. But now, drowning in debt and soured investments, lenders are seeking to stop consumers from running up big balances in hard times, bills they might not be able to pay.

The credit squeeze doesn't just limit spending potential; it can also damage cardholders' credit ratings by making them appear to be riskier borrowers. And in many cases, the institutions pulling back on credit took government bailout funds that were supposed to encourage them to lend more freely.

Diana Lawton, a 44-year-old freelance writer in Chelmsford, is one of those being affected by the change in credit-line policies. She said American Express Co. called her last week to say her two charge cards - one personal, one for business - had been frozen pending a "financial review." Lawton, who had been using the personal card since 1988, said she was stunned. The company offered no explanation, accord ing to Lawton, but told her she could apply for reinstatement by submitting two years of income tax returns, along with three months of pay stubs and bank records.

Outraged at having to undergo a 10-day investigation of her finances, Lawton canceled the cards. "I know the economy's bad," she said, "but this is just shocking to me."

American Express, which has received $3.4 billion in federal bailout money, declined to discuss Lawton's situation. Lisa A. Gonzalez, a company spokeswoman, said that on "isolated occasions" it asks card members to provide financial information. "Though we continually look at the credit limits we offer card members and review them on a case-by-case basis, we are being more targeted in response to economic conditions," Gonzalez said. "This may also include cancellations."

Most bankers won't offer details about the cutbacks, but acknowledge they are happening. Betty Reiss, a spokeswoman for Bank of America Corp., the nation's second-largest card issuer, said, "We're taking a more aggressive look at accounts in order to control risk in the current environment." The bank is one of the biggest recipients of federal bailout funds - $45 billion.

As far back as July, 60 percent of card issuers reported they were constricting lines of credit, according to Javelin Strategy & Research, a Pleasanton, Calif., firm that tracks the credit card industry. And a Federal Reserve Bank survey in October, the latest available, found the same portion of bankers reporting tighter lending standards on credit cards.

Meredith Whitney, the Oppenheimer & Co. banking analyst who in November predicted a $2 trillion drop in credit availability, has said the loss will hurt the economy because consumers rely on credit cards for regular spending.

In part, banks and credit card companies are reacting to an increase in the number of cardholders who fail to pay their bills. For example, American Express said it wrote off 6.7 percent of its $63 billion US loan portfolio in the fourth quarter, up from 3.4 percent a year ago. To counter such losses, some institutions, including Citibank, have raised the interest rates they charge certain customers as a way to generate revenue.

Citibank said it is primarily raising interest rates for customers who haven't seen a change in two or three years. In a statement, the company said, "We have taken actions such as lowering credit limits, adjusting rates, tightening credit standards, and closing inactive accounts, particularly in certain geographies and where we can use mortgage data to enhance our decision-making capabilities."

In addition, as investor demand for credit card debt that is usually packaged into securities has plunged, banks are being forced to keep the debt on their books longer.

Many of the credit lines being taken away or reduced have not been used recently, according to people who track the business. Dennis Moroney of TowerGroup, a Needham research firm, called it the "kitchen drawer" syndrome because some consumers keep cards they don't need or don't use often. Card issuers are trying to rein in such accounts before they get tapped for emergencies in the slumping economy, Moroney said.

In addition to limiting spending, a reduced credit line can have a lasting effect on personal credit scores. For instance, someone who carries $1,000 balance on a card with $10,000 limit is suddenly tapping into a higher percentage of their credit if the limit is dropped to $3,000 - even though they haven't spent additional money. Using more than 30 percent of total available credit can make a consumer look riskier on paper, according to credit bureaus.

"In general, if a credit limit is reduced, and therefore the amount of credit utilized increases, it could have a negative impact on your credit score," said Tim Klein, a spokesman for Equifax, one of the three major companies that track consumers' credit lines and payment records.

None of the banks contacted for this story would discuss how their actions might affect credit scores.

The company that calculates scores, Fair Isaac Corp., said it is examining the impact that creditline cuts are having. The results are expected to made public within the next month and could lead to a shift in the way scores are calculated. Still, Fair Isaac spokesman Craig Watts defended banks' moves to reduce credit lines. "It's only unfair if you regard credit as a right instead of a privilege," Watts said.

Tom McNiff, a retiree in Winthrop, said he received a letter Jan. 7 informing him the credit line on his Eastern Bank card was being reduced from $12,000 to $2,700 "to reflect your spending." The letter was sent on behalf of Barclay Card US, the company that owns his account.

Kevin Sullivan, a Barclay spokesman, said, "We think we have a [credit] policy that's appropriate for this economic environment."

McNiff said he rarely carries a card balance, unless he makes a large purchase, and even then he typically pays the balance within two months. He said the letter troubled him because he had a hunch it would hurt his credit rating. After McNiff called to complain and the Globe made inquiries about his situation, the company reinstated his $12,000 credit line.

Leslie McFadden, a writer for, a consumer banking and finance website, said banks are targeting people with inactive accounts as well as those with large balances. "You can't prevent your credit card issuer from lowering your limit," she said. "The advice is to pay on time and keep your balances low."

And if you have a card you haven't used in a while that you want to keep, McFadden said, "Buy something inexpensive and pay it off that month."

Protesters rally in Mexico City

Protesters rally in Mexico City

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Thousands of people in Mexico City have protested against what they say is the inadequate response by the government to growing economic problems in Mexico.

The protesters - most of them from rural areas - were angry at President Felipe Calderon's recent move to freeze the price of petrol but not diesel.

They said the costs of running farm machinery had become prohibitive.

The country's economy has also been hit by a fall in the amount of money sent home by Mexicans living abroad.

Remittances that Mexicans living abroad - mainly in the United States - have fallen for the first time since records began in 1995, the BBC's Stephen Gibbs in Mexico City says.

After oil, the money is the country's second largest source of foreign income, our correspondent says, although it represents less than 3% of Mexico's GDP.

General Wants to Scan More U.S. Irises, Fingerprints

General Wants to Scan More U.S. Irises, Fingerprints

By Nathan Hodge

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Air Force Gen. Victor Renuart, the Pentagon's homeland security commander, thinks one of the tools the military uses to combat insurgents in Iraq -- the collection of biometric data -- is needed here at home.

The Associated Press has this alarming intriguing quote from Renuart, who spoke Tuesday at a defense industry conference in northern Virginia:

"Interestingly, we are probably further forward in using biometrics outside our country in some of the combat environments than we are inside our country," said the general. "We’ve got to find a way to fix that."

Tuesday's conference was devoted to discussion of implementation of HSPD-24, a homeland security directive signed by President George W. Bush in 2008. The directive is supposed to harmonize the way federal agencies and the military collect, store, analyze -- and share -- biometric data. As it stands, the directive instructs the Attorney General to work with the Secretaries of State, Defense, and Homeland Security and the Director of National Intelligence and the Director of the Office of Science and Technology to create an action plan for implementing HSPD-24 by this June.

The new administration may be reviewing a number of Bush directives, but now might be a really good time to read up on the military's use of biometric technology. Noah reported extensively on the use of biometrics to deny freedom of movement to insurgents in Anbar province; he also noted privacy and human-rights implications. For good measure, go read this fascinating transcript of this bloggers' roundtable from 2007 with Lt. Col. John Velliquette, then the chief of biometrics collection in Iraq.

In the conference Tuesday, Renuart seemed to be talking largely about security badges for military bases. But as anyone who's been on the receiving end of the U.S. military's biometric identification process knows, it's an intrusive process. More importantly, deciding who has access to the databases -- and how that info will be shared -- will continue to be a major concern for the government and for privacy advocates.

Israel says Spain says it will amend war crimes law

Israel says Spain says it will amend war crimes law

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Israel said on Friday the Spanish government had said it would work to amend a law under which a Madrid court is to consider trying seven Israelis over the killing of Palestinians.

Spain's High Court announced this week it would launch a war crimes investigation into a Israeli ex-defence minister and six other top security officials for their role in a 2002 attack that killed a Hamas commander and 14 civilians in Gaza.

Spanish law allows the prosecution of foreigners for such crimes as genocide, crimes against humanity and torture committed anywhere in the world.

"I was just told by the Spanish foreign minister that Spain decided to change the legislation," Israeli Foreign Minister Tzipi Livni told journalists after a telephone conversation with her Spanish counterpart Miguel Angel Moratinos.

"In order to change the possibility of different organisations, political organisations, to abuse the legal system in Spain in order to put charges against Israelis and others that are fighting terror."

Spain's Foreign Ministry did not reply to repeated telephone requests for confirmation.

Spanish state television TVE quoted government sources as saying the possibility of a legal "adjustment or modification" may have been mentioned, but it would not be retroactive and would not affect the case before the courts.

The case, filed on behalf of the Gaza-based Palestinian Centre for Human Rights, has sent shockwaves through Israel, which is trying to fend off foreign censure over the civilian casualty toll from its 22-day offensive in Hamas-ruled Gaza.

Calls to investigate Israel over alleged war crimes in Gaza conflict prompted Israeli Prime Minister Ehud Olmert to promise military personnel state protection from foreign prosecution.

Any government-initiated changes to Spanish law would have to be approved by congress. TVE said Spain would not renounce universal jursidiction, which has been on its statute books since 1870.

Livni, who gave no details on how Spain planned to amend the law or handle the case against Israel, said of her conversation with Moratinos:

"I think that this is very important news and I hope that other states in Europe will do the same, and will follow this."

Dirty Business, Dirty Wars U.S.-Latin American Relations in the 21st Century

Dirty Business, Dirty Wars, U.S.-Latin American Relations in the 21st Century

By Cyril Mychalejko

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Much is being made across the political spectrum in the United States about Washington's waning influence in Latin America. The region has seen an emergence of left and center-left presidents voted into office, many as a result of budding social movements growing democracy from the grassroots. Some pundits and analysts are suggesting that this phenomenon is occurring because of the Bush Administration's perceived neglect of the region. Rather, what is happening is blowback from Washington's continued meddling in the economic and political affairs of an area arrogantly referred to as the United States' "backyard." Latin America's growing unity in rejecting the Washington Consensus remains fragile in the face of U.S. opposition. Washington has been quietly using the war on drugs, the war on terrorism, and a neo-cold war ideology to institutionalize a militarism in the region that risks returning us to the not so far off days of "dirty wars."

Breaking the Chains

Venezuelan President Hugo Chavez's election in 1998 sparked the beginning of the leftward electoral paradigm shift in the hemisphere. After he orchestrated a failed coup attempt in 1992, he was elected six years later based on a campaign that promised to lift up the impoverished nation's poor majority through economic policies that ran counter to the free market fundamentalism and crony capitalism pursued by the country's oligarchs, with the aid of Washington and international financial institutions such as the World Bank and the International Monetary Fund (IMF). Chavez also began to challenge the idea of U.S. hegemony in the region by advocating a united Latin America based on the ideas of one of his intellectual mentors, Simón Bolívar, the 19th century revolutionary instrumental in defeating Spain's control of the region. Chavez, who also claims to be influenced by the teachings of Karl Marx and Jesus Christ, has championed what he calls a "Socialism of the 21st Century." A fierce and outspoken critic of neoliberalism, Chavez has said "I am convinced that a path to a new, better and possible world is socialism, not capitalism," words that have been scarce in the region's capitals with the exception of Cuba.

Since Chavez's ascent to power, we have seen presidents elected in Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Paraguay, and Uruguay which translates into a majority of countries in the region advocating center-left and left-wing political programs (while Mexico and Peru missed joining this new Latin American consensus by narrow, if not fraudulent, election outcomes).

While it is true that, despite these developments, socialism is a long way off from taking hold in the region, the rejection of Washington's Free Trade Area of the Americas (FTAA) back in 2003, long before the left had firmly taken hold in the hemisphere, marked the beginning of an outright challenge to free market orthodoxy, U.S. hegemony, and corporate power. Since then we have seen multinational corporations booted out of countries and defiantly confronted by social movements, U.S. ambassadors expelled from three nation's capitals, free trade agreements protested, illegitimate foreign debts challenged, and U.S. drug policies rejected. In addition, alternative political and economic institutions and policies have been advocated and created.

Venezuela's Chavez developed the Bolivarian Alternative for the Americas (ALBA), an antithesis to the FTAA that advocates a trade regime based on economic, social, and political integration guided by the principals of solidarity and cooperation. Even Honduras, long seen as a U.S. satellite state dating back to the days it assisted Washington in overthrowing Guatemala's government in 1954, has joined ALBA, showing that the creeping tide of Bolivarianism is extending to the still fragile Central America. Meanwhile, Brazil's Lula de Silva, viewed by Washington and the U.S. corporate media as part of the "acceptable" or "responsible" left, declared in 2007 that "Developing nations must create their own mechanisms of finance instead of suffering under those of the IMF and the World Bank, which are institutions of rich nations . . . it is time to wake up." And the region has woken up as the "Bank of the South" was formed to make development loans without the draconian economic prescriptions of Washington-controlled financial institutions, which in the past have forced countries to cut social spending, deregulate industries, and open markets to foreign capital — policies that have exacerbated poverty and inequality in the past and as a result compounded dependence on foreign capital and Washington.

In terms of security cooperation, both Brazil and Venezuela have led efforts to create a South American Defense Council, a NATO-style regional body that would coordinate defense policies, deal with internal conflicts and presumably diminish Washington's influence in its "backyard." While U.S. Secretary of State Condoleezza Rice said back in March that Washington "had no problem with it" and looked "forward to coordination with it," Bloomberg News reported that Brazilian Defense Minister Nelson Jobim told Rice and National Security Adviser Stephen Hadley that the United States should "watch from the outside and keep its distance," and that "this is a South American council and we have no obligation to ask for a license from the United States to do it." In a similar challenge to U.S. military presence and influence, Ecuador's President Rafael Correa decided to force the United States. to close its military base in the port city of Manta. And then there is China's and Russia's growing economic and political ties to the region — something that would not only be unheard of in the past, but not tolerated.

Developments such as these led the Council on Foreign Relations to declare in May that the "era of the United States as the dominant influence in Latin America is over." Frank Bajak, writing for the Associated Press on Oct. 11, echoed this observation when he wrote, "U.S. clout in what it once considered its backyard has sunk to perhaps the lowest point in decades" and that "it's unlikely to be able to leverage economic influence in Latin America anytime soon." Meanwhile, The Washington Post took a more indignant and belligerent position in an Oct. 6 editorial when it questioned whether Washington should "continue to subsidize governments that treat it as an enemy" while "a significant part of Latin America continues to march away from the 'Washington consensus' of democracy and free-market capitalism that has governed the region for a generation."

A Laboratory for Counterinsurgency

While conventional thinking has led many to believe that Latin America's independence from the United States may be an irreversible paradigm shift, behind the scenes Washington has put into place policies that could unleash a reign of terror not seen since the 1980's. Colombia has served as laboratory for this new counterinsurgency program that can be interpreted as a continuance of U.S. supported state terrorism and a re-emergence of the national security state in Latin America.

The U.S. government has sent more than $5 billion in mostly military and counter-narcotics assistance to Colombia since 2000 to fund "Plan Colombia," a counter drug program said to be designed to fight cocaine production and narco-trafficking, as well as the Revolutionary Armed Forces of Colombia (FARC), in turn further intensifying the country's long-standing civil war. But as the International Consortium of Investigative Journalists (ICIJ) reported in 2001 in a study sponsored by the Center for Responsive Politics, "The protection of U.S. oil and trade interests is also a key factor in the plan, and historic links to drug-trafficking right-wing guerrillas by U.S. allies belie an exclusive commitment to extirpating drug trafficking."

The ICIJ investigation also found that "Major U.S. oil companies have lobbied Congress intensely to promote additional military aid to Colombia, in order to secure their investments in that country and create a better climate for future exploration of Colombia's vast potential reserves." In addition, corporations with interests in the region were reported to have spent almost $100 million lobbying Congress to affect U.S. Latin America policy.

Eight years later, Colombia has evolved into a full-fledged paramilitary state. President Álvaro Uribe, Washington's staunchest ally in the region, his extended family, and many of his political supporters in the government and military are under investigation for ties to paramilitaries and right-wing death squads. As far as U.S. corporate collusion goes, Chiquita Brands International Inc. was forced to pay the U.S. Justice Department a $25 million settlement in 2007 for giving over $1 million to the right-wing terrorist organization United Self-Defense Forces of Colombia (AUC). Even more damaging is the fact that Secretary of Homeland Security Michael Chertoff, at the time assistant attorney general, knew about the company's relationship with AUC and did nothing to stop it. Alabama-based coal company Drummond Co., Inc. and Coca-Cola have also been accused of hiring right-wing death squads to intimidate, murder or disappear trade unionists. This is what the ICIJ meant when they wrote about securing investments and creating a "better climate" for business.

According to the U.S. Labor Education on the Americas Project, Colombia accounts for more than 60 percent of trade unionists killed worldwide. There have also been at least 17 murders of trade unionists just this year, which, according to a report released in April 2008, accounts for an 89 percent increase in murders over the same time period from 2007. Meanwhile, The Washington Post reported in August that the collateral damage from Colombia's civil war has resulted in more disappearances than occurred in El Salvador and Chile, while Colombia's attorney general believes there could be as many as 10,000 more bodies scattered across the country — meaning totals would surpass those from Argentina and Peru.

Despite what should be considered as a total failure from a policy and, more importantly, human rights standpoint, this same Colombian model has been promoted by Washington to other nations in the region, and — remarkably — has been embraced by these countries. In 2005, Guatemalan officials called for their own "Plan Guatemala," while Oscar Berger, president at the time, asked for a permanent DEA station in the country and for U.S. military personnel to conduct anti-narcotics operations. In addition, he was a proponent of a regional rapid deployment force, initially conceived to fight gangs, but later adjusted to include counter-narcotics and counter-terrorism in order to attract U.S. support. It should be noted that the AFL-CIO, along with six Guatemalan unions, filed a complaint, allowed through labor provisions of the Central America Free Trade Agreement (CAFTA), on April 23, 2008, charging the Guatemalan government with not upholding its labor laws and for failing to investigate and prosecute crimes against union members — which include rape and murder. This speaks to the idea of securing a "business-friendly" climate like in Colombia, which many in Washington want to reward with a free trade agreement. Guatemala's government is currently led by President Alvaro Colom, a politician who represents the country's ruling oligarchs. Pre-election violence during his campaign claimed the lives of over 50 candidates (or their family members) and political activists, in a country Amnesty International reports is infested with "clandestine groups" comprised of members of "the business sector, private security companies, common criminals, gang members and possibly ex and current members of the armed forces" responsible for targeting human rights activists.

This regional militaristic strategy finally materialized into policy on June 30 when President Bush signed into law the Meridia Initiative, or "Plan Mexico," which according to Laura Carlsen of the Americas Program "could allocate up to $1.6 billion to Mexico, Central American, and Caribbean countries for security aid to design and carry out counter-narcotics, counter-terrorism, and border security measures."

Just one day later, investigative journalist Kristen Bricker reported that a video had surfaced showing a U.S.-based private security company teaching torture techniques to Mexican police. This led Amnesty International to call for an investigation on July 3 to determine why techniques such as "holding a detainee down in a pit full of excrement and rats and forcing water up the nostrils of the detainee in order to secure information" were being taught. Later in July the Inter Press Service published a story about a 53-page report on Human Rights and Conflicts in Central America 2007-2008 that suggested "Central America is backsliding badly on human rights issues, and social unrest could flare up into civil wars like those experienced in the last decades of the 20th century."

Nevertheless, Washington continues to push for the re-militarization of the region, as evidenced by a $2.6 million aid package given to El Salvador in October to "fight gangs." Coincidentally, this was announced just months after the Inter Press Service reported in a June 16 article that U.S. Deputy Secretary of State John Negroponte "expressed concern over supposed ties between the Revolutionary Armed Forces of Colombia (FARC) guerrillas and the Farabundo Martí National Liberation Front (FMLN)," while also announcing that "the Bush administration is on the alert to Iran's presence in Central America."

Playing the Terror Card

In order to up the ante as a means of promoting this militaristic vision for the Americas and to vilify strategic "enemies" such as Venezuela's Hugo Chavez and Bolivia's Evo Morales, Washington has added the "War on Terror" into the equation by spreading unfounded allegations about Islamic terrorist infiltration into the region.

Journalists Ben Dangl and April Howard of Upside Down World, reporting for EXTRA! in Oct. 2007, wrote "In the Cold War, Washington and the media used the word 'communism' to rally public opinion against political opponents. Now, in the post– September 11 world, there is a new verbal weapon — 'terrorism.'" This puts into context Washington's evidence-lacking assertions that the Tri-Border Area, where Brazil, Paraguay and Argentina meet, is a hub for Islamic Terrorist groups such as Hezbollah and Hamas, claims the mainstream media have obsequiously parroted, yet Dangl and Howard helped disprove. Dangl and Howard, reporting from Ciudad del Este, a city located in the center of this alleged "hotbed" of terrorsim, talked with Paraguayan officials, as well as local residents, all of whom denied there was any presence of foreign terrorist groups. They pointed out that the governments of Brazil and Argentina have also denied the claims. But the terrorist assertions haven't stopped there.

Norman A. Bailey, a former U.S. spy chief for Cuba and Venezuela, testified before the House Committee on Foreign Affairs on July 17 that "financial support has been provided [by drug traffickers] to insurgent groups in certain countries, most notoriously to the FARC in Colombia, as well as to ETA, the Basque separatist organization, and most importantly to Hamas, Hezbollah and Islamic Jihad, through their extensive network in Venezuela and elsewhere in Latin America."

The State Department's David M. Luna, Director for Anticrime Programs, Bureau of International Narcotics and Law Enforcement Affairs, gave a statement on Oct. 8 claiming that international terrorist organizations will collaborate with regional criminal networks to smuggle WMD's across the U.S.'s border with Mexico.

"Fighting transnational crime must go hand in hand with fighting terrorists, if we want to ensure that we 'surface them,'" stated Luna. He also went on to regurgitate the empty claims of the Tri-Border Islamic threat.

That same day the Associated Press reported that U.S. officials were concerned with alliances being formed by terrorist groups such as Al-Qaida and Hezbollah and Latin American drug cartels.

"The presence of these people in the region leaves open the possibility that they will attempt to attack the United States," said Charles Allen, a veteran CIA analyst. "The threats in this hemisphere are real. We cannot ignore them."

And on Oct. 21 The Los Angeles Times reported that U.S. and Colombian officials allegedly dismantled a drug and money laundering ring used to finance Hezbollah.

This post-Sept. 11 fear-mongering, being carried out for years now, has served as a pretext for Washington to deploy Special Operations troops in embassies across the globe, including Latin America, "to gather intelligence on terrorists...for potential missions to disrupt, capture or kill them."

The New York Times, which broke the story on March 8, 2006, reported that this initiative, led by then-Secretary of Defense Donald Rumsfeld, was an attempt to broaden the U.S. military's role in intelligence gathering. The soldiers, referred to as "Military Liaison Elements," were initially deployed without the knowledge of local ambassadors. This changed after an armed robber in Paraguay was killed after attempting to rob a group of soldiers covertly deployed to the country. Senior embassy officials were "embarrassed" by the episode as the soldiers were operating out of a hotel, rather than the embassy.

But in a follow-up by The Washington Post on April 22, "the Pentagon gained the leeway to inform — rather than gain the approval of — the U.S. ambassador before conducting military operations in a foreign country" when deploying these "elite Special Operations Troops." This development has remained largely under the radar, with the exception of analysis by Just the Facts, a joint project of the Center for International Policy, the Latin American Working Group Education Fund, and the Washington Office on Latin America.

A New Cold War?

In Oct. 2006 President Bush signed a waiver that authorized the U.S. military to resume certain types of training to a number of militaries in the region which had been suspended as a result of a bill intended to punish countries not signing bilateral agreements that would grant immunity to U.S. citizens from prosecution before the International Criminal Court.

Bush was forced to act as a result of Venezuela's growing influence in the region, as well as the "red" threat that China's growing business in the region presented.

"The Chinese are standing by and I can't think of anything that is worse than having those people go over there and get indoctrinated by them. And I think maybe we should address that because that's a very serious thing," said Sen. James Inhofe (R-OK), at a March 14, 2008, hearing of the Senate Armed Services Committee.

Sen. Hillary Rodham Clinton (D-NY), at the same hearing, said this was "a serious threat" and called for ending the restrictions on U.S. military training programs imposed on Latin American nations for refusing to sign the bilateral immunity agreements. Of course, Latin American nations should not be subject to sanctions for quite properly rejecting the immunity agreements; but neither should there be training programs for their repressive militaries, to teach these militaries repressive practices.

The Associated Press reported in Oct. that "China's trade with Latin America jumped from $10 billion in 2000 to $102.6 billion last year. [And] In May, a state-owned Chinese company agreed to buy a Peruvian copper mine for $2.1 billion."

hese developments should further perpetuate the "Red Scare" making its way through the Senate. Then there is Russia's military sales and cooperation with Venezuela. U.S. News and World Report's Alastair Gee wrote a fear-mongering article on Oct. 14, 2008, in which he stated, "This is not the first time Russians have sought close links with Latin America. In 1962, the stationing of Soviet missiles in Cuba nearly precipitated nuclear war with the United States. The Soviets also funded regional communist parties and invited students from the region to study in Soviet universities."

But more importantly, it is the region's "march away from the 'Washington consensus' of democracy and free-market capitalism" that has drummed up a cold war mentality in Washington. With democratically elected presidents in the region openly embracing socialism and socialist-style policies, economic programs in various countries that include nationalizing industries and "redistributing the wealth", and social movements ideologically and physically confronting free market capitalism, it should come as no surprise that anti-globalization movements have found themselves classified as a national security threat to the United States. A declassified April 2006 National Intelligence Estimate entitled "Trends in Global Terrorism: Implications for the United States," states, "Anti-U.S. and anti-globalization sentiment is on the rise and fueling other radical ideologies. This could prompt some leftist, nationalist, or separatist groups to adopt terrorist methods to attack US interests."

Moving Forward

Developments in Latin America are reason for hope and optimism that "a new, better and possible world" could be on the horizon. But these very same reasons are cause for concern.

With Washington's imperial stretch on the decline, both militarily and economically, both history and current conditions suggest it will try to reassert itself in Latin America — just as it did after Vietnam.

But because of the deeply embedded and institutionalized nature of Washington's imperial machine, it doesn't matter much which party controls the White House and Congress. To fight these developments, we need to continue to grow grassroots media projects and support independent journalists, build long-term solidarity with Latin American social movements and build social movements in the United States, fight free trade and do our part to shed light upon the structural violence threatening Latin America's promising future — which is directly tied to ours.

Common Man News 2/2009

News for the common man because the elite already know!



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Bailed out banks sought foreign workers for high-paying jobs

Proposed legislation in Congress would set up camps for US citizens


46 Of 50 States Could File Bankruptcy In 2009-2010

California is told to furlough employees

The US Unemployment Rate 10% Higher than government is reporting

Homelessness surges as funding falters

Lenders abruptly cut lines of credit

Protesters rally in Mexico City

General Wants to Scan More U. S. Irises, Fingerprints

Israel says Spain says it will amend war crimes law

Dirty Business, Dirty Wars U. S. -Latin American Relations in the 21st Century

Buckling Europe fears protests may spark a new revolution