Monday, February 23, 2009

Layoffs at GM Lordstown plant ravage Ohio communities

Layoffs at GM Lordstown plant ravage Ohio communities

By Samuel Davidson

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General Motors recently announced plans to eliminate the second shift at its Lordstown, Ohio, complex in April, laying off 800 workers. Just last December GM cut the third shift at the facility, slashing 900 jobs.

Unsold carsUnsold cars at the Lordstown plant

As recently as this summer over 4,000 were working on three shifts at the several plants that make up the Lordstown complex. Currently the workforce is down to 2,500, and with the layoffs in April the number of workers will fall below 2,000.

Lordstown produces Chevrolet Cobalt and Pontiac G5 cars. Sales of the small fuel-efficient cars spiked last spring, as gas prices were on the rise to over $4 a gallon. But with the deepening of the housing crisis and recession, car sales have plummeted.

Cobalt sales, which were over 26,000 last May, fell to 6,400 in October and November. December sales rebounded somewhat to 12,700 units, but that was still a 27 percent drop from a year before. Dealers have thousands of unsold cars, and thousands more sit in an enormous parking lot outside the Lordstown plants.

A General Motors spokesperson said the plant is currently running just one shift. One week the afternoon shift works and the following week the day shift works, until April 9 when the second shift is eliminated completely.

GM is still going ahead with retrofitting the fabricating plant for its new Cruze model, which is expected to go into production in 2010. However, nothing is certain given the precarious state of the company.

The World Socialist Web Site recently spoke with skilled trades workers at the Lordstown complex. John, a die maker with 31 years experience, said, “The union is not saying a whole bunch. Everybody is just holding their breath. We gave up a lot of stuff in the last contract so that there would not be any layoffs. There are a whole lot of people in here who are making just $14 an hour. Now the union has given up the Jobs Bank, so the people who get laid off will only have unemployment. That is not very much.

“We have half the workforce we used to have, and next month they will cut another shift. We are still working to bring the Cruze online. We are supposed to have some cars ready by October so they can crash test them, but who knows if that is still going to happen.”

BurtBurt Pollock

Burt Pollock, with 32 years in the skilled trades, said “It is terrible. Nobody knows what is going to happen, if they are going to have a job tomorrow and be able to support their family. It is not only us, but our kids are in trouble. I grew up in a great time in America. I work very hard, but I was able to be part of middle-class America. I am sending three kids to college, but what will happen to them? Where will they be able to find work?

“They raised the base price of the 2008-09 models by $1,400. I would like to know why they did that. I want to be able to build an affordable car.”

The layoffs at Lordstown were announced by GM prior to the company’s February 17 public statement that it would cut 47,000 workers worldwide as part of the restructuring plan demanded by the Obama administration in exchange for government loans to keep the automaker from going bankrupt. Workers were not sure if the Lordstown layoffs were part of that 47,000 figure or in addition to it.

United Auto Workers locals 1112 and 1714 are the bargaining units at Lordstown. They have collaborated with the union’s national leadership in pushing through massive concessions at Lordstown, supposedly to “save jobs.” Dave Green, the president of Local 1714, was cited in the Wall Street Journal in 2007 as a key player in assisting the central union leadership in pushing through that year’s concessionary national contract.

Many of those newly hired at Lordstown this year, when the plant was expanding production, are being paid just $14 an hour, under the terms of the 2007 contract. These younger workers, who were hoping to have a steady job, are now being laid off, and even workers with years of seniority are threatened.

In December the UAW leadership agreed to the elimination of the Jobs Bank, which had enabled some laid-off workers to continue receiving their pay. Last week, the UAW agreed to further concessions, including limits on overtime, changes in work rules, cuts in lump-sum bonuses and the elimination of cost-of-living raises. The only issue on which the union is resisting is the company’s demand that it accept company stock in lieu of cash payments owed to the UAW-controlled retiree health care trust fund.

Morris Collins

Morris Collins, a worker with 41 years seniority, said, “I don’t like it. We have been giving concessions all these years to ‘save jobs’ and now everyone is getting laid off anyway.

“They are going to cut our health benefits. I have a friend who has cancer. His medication costs $5,500 a month. Where is he going to be able to find an insurance policy to cover him when General Motors cuts his health care? He might as well drop dead.

“People work hard here all their lives so they can have something, and these people are going to take it away. These congressmen in Washington, they are demanding that we give up our benefits, yet they gave hundreds of billions to the bankers. They work four years and they get health insurance and a pension for life. And what do they do? They go to a few meetings, and half of them they don’t even show up.

“I come to work every day, working hard, breathing in all kinds of chemicals and dirt, and they want to take my health care away when I retire. The politicians complain about our sub pay [supplemental jobless pay], but that is money we put in each week out of our pay to cover times when there are layoffs.

“I also don’t like what they are doing to the salaried employees. I know three guys who were just told they have to move to Kansas. They didn’t give them any kind of warning or anything. I have worked in 5 different plants, but at least I knew in advance that I needed to move and I could make plans. They just told them, ‘Move to Kansas, or else.’

“It seems like every company is just trying to make the working people pay for their problems.”

Many workers fear that General Motors plans to go bankrupt so that it can rid itself of pensions and health benefits owed to its workers and retirees.

Another worker, who asked that his name not be used, said: “I have been here 30 years, and we hear more from you than from anyone. No one knows what is going on.

“We have given enough. It is time our backers give some more. I wish I could show you our union contract from today and from ten years ago, so you could see how much we have given up. I can only go see my doctor five times.

“I feel that the company is going to go bankrupt and just like the steel mills, we will lose our pensions and health insurance. I have worked here 30 years. I feel I deserve to get a pension. It would be about $1,600 or $1,700 a month. I figured it outif General Motors goes bankrupt, I would only get $700 or $800 a month, plus I would have to pay for health insurance until I qualify for Medicare. That is what I worked my whole life for?

“I started working in the late ‘70s. The union in the early ‘70s was very militant. They were able to tell General Motors how things were going to be. Now everything has been taken away and the union is working with the company against the members.”

The Lordstown plant was built in 1966 and then retrofitted in 1970 to produce GM’s first small car model. It was at that time the most automated plant in the world. Production at the plant ran at a staggering speed of 100 cars an hour, meaning that a car rolled off the assembly line every 36 seconds.

General Motors placed the facility in a rural area of northeastern Ohio, about equal distance from the towns of Youngstown and Warren, then major steel centers. GM hoped that a rural workforce would be more docile than workers in the urban centers. However, Lordstown workers staged a series of protests and slowdowns against the brutal line-speed and dictatorial management methods, culminating in a three-week strike in the spring of 1972.

The UAW leadership worked to sabotage the struggle, and while GM did back down on some of its management methods, the UAW agreed to maintain the line speed.

The current layoffs will have a devastating impact on the working class population in Lordstown and the surrounding region. The GM plant is the largest employer in the area. According to official figures, unemployment in the Youngstown-Warren-Boardman metropolitan area, which includes Lordstown, is 8.9 percent, up from 5.7 percent in November 2007.

The unemployment rate is 9 percent in Warren and a staggering 14.1 percent—one in seven workers—in Youngstown. These figures do not take into account the enormous number of workers who are not counted in the official jobless tally because they have given up looking for work.

Even before the current slump, the Youngstown-Warren area was very depressed, never having recovered from the collapse of the steel industry in the 1980 and 1990s. Both cities continue to see a population decline, and household income is far below the national average. In Warren, the median household income was $33,122 in 2007, and in Youngstown it was just $24,924less than half of the US figure of $50,000.

YeagersThe Yeager family

Carl Yeager works as a salesman for a local manufacturing firm. “Things are bad around here,” he told the WSWS. “It is a domino effect. Every day it hits the automakers, it also hits us and a lot of other smaller companies that depend upon auto sales. Then people who are laid off can’t buy as much, so it hurts all the way down to the little mom and pop store.

“General Motors and the people who work there pay a lot of taxes to Lordstown. That means a lot of services will get cut. This is affecting everyone.

“We have 74 people were I work. Luckily there haven’t been any layoffs yet, but the company has eliminated all overtime.

“This valley has never recovered from the closing of the steel mills, and now this is going to be its last leg. I have three children. I tell them they will have to go to college, but then they will probably have to leave this area to find something. I know a lot of college graduates who are out of work right now and who are hurting.”

Archie Davis and his wife Jeanie spoke to the WSWS about living conditions in Warren. “I was laid off just before Christmas. I worked for a company that did home remodelingsiding and that kind of thing. He paid us through Christmas even though we didn’t work, so that was nice of him.

“He just didn’t have enough jobs to keep everybody working. It isn’t because of the weather. We used to work year-round. If it was raining or too cold to be putting up siding, we were working inside, redoing a kitchen or a bathroom or maybe fixing up a game room or something like that. I was making $12.75 an hour.

“I have signed up for unemployment, but I am not sure how much that will be and how long that will last. My wife works part-time up at the mall, but things are very slow there, and they are cutting back her hours. She doesn’t make enough for our family to live on. There are no jobs around here. I have been checking with many of my friends who also work doing construction, and they say everyone is cutting back on work.

“We still have to pay the mortgage, gas, electricity and the phone. I have two young kids, and you have to buy them clothes and food and take them to the doctor when they get sick.

“The politicians don’t care about the people. All they care about is the wealthy. Everybody put Obama in because we hated Bush so much, but I see him giving billions to the banks and I don’t see what is being done to help us.”

Obama's housing plan and the American ruling class

Obama’s housing plan and the American ruling class

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US President Barack Obama's Homeowner Affordability and Stability Plan (HASP), announced Wednesday, will do little to alleviate the enormous financial pressures on working class families caused by plummeting home prices.

It does not reduce the outstanding debt, or principal, that homeowners owe the banks, which for millions of Americans now surpasses the value of their homes. Even in its modest stated aims—to reduce monthly mortgage loan payments for a portion of embattled homeowners—HASP will in most cases depend on the voluntary participation of private banks. It does nothing for the hundreds of thousands of renters thrown out onto the streets by evictions and foreclosures against their landlords.

While complete details of the plan for loan modifications from private banks will not be released until next month, it is already clear that there will be innumerable hurdles designed to make it very difficult for homeowners to qualify. Anyone who is deemed able to "afford" their present rates will not qualify. If a mortgage company decides that refinancing a loan will cost them more than sending the house into foreclosure, moreover, they will be free to deny refinancing.

The haphazard and ineffectual character of Obama's proposal for the housing crisis, like his stimulus bill, does not arise from mere technical deficiencies. Rather, it is conditioned by the demands of the financial elite that Obama represents, which will brook no limit—no matter how mild—to its power and prerogatives.

Thus, HASP—which the Obama administration crafted in close consultation with the banks—is loaded with measures designed to win the support of financiers and investors. For the financial elite, the bill sets aside the lion's share of a $75 billion appropriation. The banks will not be required to write down the values of vastly overpriced loans, much less relinquish control over the securities built up through the home lending industry.

The proposal on housing, moreover, is part of an overall plan being developed by the Obama administration to funnel trillions of dollars into the hands and accounts of the financial institutions and investors who precipitated the crisis.

The New York Times on Friday ran a front-page analysis of the Term Asset-Backed Securities Loan Facility, or TALF, which is set to hand over more than $1 trillion in low-cost loans to major hedge funds and other holders of debt-based securities. Securities investors in the credit card and auto loan markets, among others, will be able to borrow against as much as 95 percent of the face value of their overpriced securities, and would be liable for as little as 5 percent of any losses.

Commenting on the program, the Times noted that the administration would be "effectively subsidizing the profits of big private investment firms in the bond markets." TALF is part of the massive bank bailout proposal outlined by Treasury Secretary Timothy Geithner earlier this month.

Wall Street's varying reactions to HASP and TALF are revealing. In spite of the fact that HASP, like TALF, is tailored to appease the finance industry, it has been met with hostility from sections of the elite who view the program as a "bailout" for "irresponsible" homeowners. Of course, Wall Street offers no such protestation when it comes to the ongoing bailout of irresponsible and incompetent banking executives and investors to the tune of trillions.

A moment on CNBC, which has since been widely broadcast in the American media, graphically captured the perspective of the financial elite. An animatedly angry correspondent, Rick Santelli, denounced Obama's tepid mortgage reform from the floor of the Chicago Board of Trade. Speaking on behalf of the traders, Santelli yelled, "We really [don't] want to subsidize the losers' mortgages... and reward people that should carry the water instead of drink the water." Santelli continued, "This is America! How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?" As he spoke, the traders cheered him on and interjected insults toward those facing foreclosure. America, indeed.

As it has been picked up in the media, the incident has been presented as an example of widespread popular opposition to the aiding homeowners. The ranting of the cable news commentator on a channel that functions as a mouthpiece for Wall Street, was the lead news item on NBC that evening. Santelli himself declared that the stock traders represented a "cross section of America." This places reality on its head. While the media sought to smother or downplay the enormous popular hatred for the bank bailouts, it is seeking to manufacture public opposition to aid for homeowners.

Such comments are part of an attempt to place the blame for the economic crisis on the supposedly profligate American consumer. This sentiment was in fact echoed by Obama himself, who spoke in his inaugural address of the "collective failure to make hard choices."

The crisis in the American housing market in fact represents the intersection of powerful objective processes that have been ripening for more than 30 years.

One has been the long-term erosion in the living standards of the working class. Since the 1970s, social inequality has increased and wages have stagnated, in spite of increased worker productivity. To counteract their declining social position, workers were compelled to seek out individualistic "coping mechanisms." They have labored for more hours at more jobs, wives and mothers have entered the workforce by the millions, and, most important, workers have increasingly relied upon credit to support consumer spending, tuition payments, cars, and even major health procedures.

This latter tendency, the turn toward credit debt, was promoted by American capitalism as a critical component in the financialization of the economy, a process set into motion by the historic decline of American capitalism in the latter half of the twentieth century. In the 1970s, American industry was weakened by powerful rivals in Japan and Germany, relentless downward pressures on the rate of profit, and a combative working class.

Financialization was the bourgeosie's response to these crises. A landmark in this development came in 1981, when Federal Reserve Chief Paul Volcker—currently a top economic advisor to Obama—introduced interest rate "shock therapy" to the economy. By laying waste to basic industry and creating mass unemployment, Volcker aimed to break the resistance of the working class. But the American bourgeoisie had also learned that enormous fortunes could be made through the transfer of social wealth from industry and the working class into various forms of financial speculation, including the manipulation of debt.

These interconnected processes came to a head in the collapse of the US housing market. In order to maintain themselves and their families, workers were compelled to build up ever greater levels of debt. The bubble in the housing market became the final means by which many workers offset declining living standards, leveraging their homes against rapidly rising values in order to make ends meet.

American banks, investors, real estate firms, mortgage companies and politicians relentlessly promoted this through sub-prime and other adjustable rate mortgages. The resulting loans were then sold, bundled, and resold, drawing the entire world financial system atop a profoundly unstable system. The process fueled a massive bubble in home prices.

New layers of billionaires and multi-millionaires were created on the basis of speculation in mortgage securities, stocks, and various forms of derivatives. The American capitalist class as a whole was enriched beyond comprehension. In the process, a modern aristocracy consolidated its control over every aspect of official political, cultural and economic life.

The immediate cause of the economic crisis was the bursting of the bubble in the housing market, as growing numbers of impoverished workers could no longer afford their home loans. After the collapse of the housing market bubble, the exotic securities instruments built up on the basis of the housing market turned out to be scarcely worth the paper upon which they were printed. This spread through the entire financial system. It soon became clear that the incalculably large quantities of paper value built up in the stock market, the hedge funds, mortgage financing concerns, and the banks, represented claims on precious little of value.

The American financial aristocracy, however, will not politely acknowledge its culpability and allow for the amelioration of the conditions of the working masses the world over. With the breakdown of the mechanisms by which it defrauded the working class of vast social wealth, the capitalist class is ruthlessly utilizing its control over the state to seize for itself new resources at home and abroad.

Barack Obama, who was elected by appealing to a popular rejection of the Bush administration's economic and military policies, is the new political frontman for the financial aristocracy. His mortgage plan aims to lend the appearance of "change," but his overriding concern is the defense of finance capital.

The resolution of the housing crisis, like the larger economic crisis of which it is part and parcel, is not simply a technical matter. It is a class question. The working class must articulate and fight for its own program.

Big Pharma Quietly Hikes Drug Prices 100 Percent or More

Big Pharma Quietly Hikes Drug Prices 100 Percent or More

by David Gutierrez

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Without any fanfare, pharmaceutical companies have been raising the prices of many of their drugs by 100 percent or more, according to a study conducted by researchers from the University of Minnesota.

The researchers investigated cases in which drugs had their prices increased by 100 percent or more in a single cost adjustment, finding that drug companies had done so for 26 products in 2006. Questcor Pharmaceuticals, for example, increased the price of its drug Acthar (used to treat spasms in infants) by 1,424 percent, from $1,650 per vial to a whopping $23,000.

The practice seems to be getting more common. In 2004, only 15 drugs had their prices so drastically increased. By only the first half of 2008, however, already the prices of 17 drugs had at least doubled.

"There's no simple explanation," said Stephen Schondelmeyer of the University of Minnesota. "Some companies seem to figure no one is watching so they can get away with it."

The trend has started to draw legal attention, however.

Recently, Abbot Pharmaceuticals settled a lawsuit over its 400 percent price hike for Norvir, an HIV/AIDS drug. The company agreed to pay as much as $27.5 million in compensation, but not to lower the price of the drug.

Senators Amy Klobuchar and Charles Schumer have called on the Government Accountability Office to investigate the price increases. In addition, Klobuchar has asked the Federal Trade Commission to investigate Ovation Pharmaceuticals for drastically raising the prices of four drugs in 2006. In one case, the price of the tumor drug Cosmegen increased from $16.79 per dose to $593.75 per dose, or 3,436 percent.

"This does drive up the price of health care," said Alan Goldbloom, president of Children's Hospitals and Clinics of Minnesota. "Hospitals are either eating the cost or passing it along to insurers, so you and I are paying it in increased premiums."

Army charity hoards millions

Army charity hoards millions

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The biggest charity inside the U.S. military has been hoarding tens of millions of dollars meant to help put fighters returning from Iraq and Afghanistan back on their feet.

An Associated Press investigation shows that between 2003 and 2007, the Army Emergency Relief grew into a $345 million behemoth. During those years, the charity packed away $117 million into its own reserves while spending just $64 million on direct aid.

That's at a time when many military families were struggling with long war deployments and increased numbers of home foreclosures.

The Fort Bliss-based charity is tax-exempt and legally separate from the military but really operates under close Army control. The massive nonprofit is funded primarily by the troops themselves. It allows superiors to squeeze soldiers for contributions, forces struggling soldiers to repay loans and often violates its own rules by rewarding donors.

AER executives defend their operation, insisting they need to keep sizable reserves to be ready for future catastrophes.

Closing Down Main Street

Closing Down Main Street

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As I read an early version of today's third (but by no means last) piece in Nick Turse's Tough Times series, I couldn't help thinking about an old line that, by my childhood in the 1950s, had become a kind of national folk wisdom: "As General Motors goes, so goes the nation." (Indeed, as befit the rise of the U.S. as an imperial power, "nation" was sometimes replaced with "world.") Of course, in those days, if you were the head of General Motors, it wasn't so unreasonable to imagine that you controlled the fate of the nation and the planet. Not only were you atop a global powerhouse of a company, but you might still be going places.

After all, in 1953, Charles Wilson, GM's president, did become President Dwight D. Eisenhower's secretary of defense. Asked in his Senate confirmation hearings whether he would have a problem making governmental decisions that might not be in the interest of GM, he famously replied that he found it hard to imagine a conflict of interest "because for years I thought what was good for the country was good for General Motors and vice versa." (Soon, that would be simplified to: "What's good for General Motors is good for the country.")

Only a few years after Wilson stepped down, a new President, John F. Kennedy, asked Ford's president, Robert S. McNamara, to step into the very same post. At that moment, it seemed true indeed that, as Big Auto went, so went the world. Of course, that was before McNamara and his "whiz kids" got us deep into, but not out of, the Vietnam War. Now, that's so much ancient history -- though today, you might imagine a new version of the old adage, based on Bush and Obama administration staffing decisions at the Treasury Department: What's good for Goldman Sachs is good for the country.

In any case, if Wilson's statement seems like history, the old GM line doesn't. As General Motors goes, so goes America. How sadly true. We know just how GM is going these days -- down the tubes; and, as Nick Turse indicates in his latest post, so go the towns and small cities not only in the vicinity of the Big Three's collapse, but countrywide. Tom

Tough Times in Troubled Towns

America's Municipal Meltdowns
By Nick Turse

When Barack Obama traveled to Elkhart, Indiana, to push his $800 billion economic recovery package two weeks ago, he made the former "RV capital of the world" a poster-child for the current economic crisis. Over the last year, as the British paper The Independent reported, "Practically the entire [recreational vehicle] industry has disappeared," leaving thousands of RV workers in Elkhart and the surrounding area out of work. As Daily Show host Jon Stewart summed the situation up: "Imagine your main industry combines the slowdown of the auto market with the plunging values in the housing sector." Unfortunately, the pain in Elkhart is no joke, and it only grew worse recently when local manufacturers Keystone RV Co. and Jayco Inc. announced more than 500 additional job cuts.

In a speech at Elkhart's town hall, Obama caught the town's plight dramatically: "[This] area has lost jobs faster than anywhere else in the United States of America, with an unemployment rate of over 15 percent when it was 4.7 percent just last year… We're talking about people who have lost their livelihood and don't know what will take its place… That's what those numbers and statistics mean. That is the true measure of this economic crisis."

Elkhart, as it happens, is but one of countless towns and small cities across the U.S. that have proven particularly vulnerable to tough times simply because their economies relied on just a few major employers, or a single industry, or even a single company that has gone under or cut back drastically. Places like Elkhart are feeling the pain in ways most of the country isn't -- yet; and even worse, from the out-of-work to local officials, no one knows how to stop the bleeding.

Take Dalton, Georgia, and its 33,000 residents. As the self-proclaimed "Carpet Capital of the World," it wasn't exactly well positioned when the foreclosure crisis hit and the construction industry ran off the rails. In fact, with its carpets piling up underfoot rather than heading out the factory doors, the housing crisis has all but wrecked Dalton which, from the 1980s to last year, had never been at a loss for jobs. Now, the Atlanta Journal-Constitution reports, U.S. Bureau of Labor statistics show the Dalton metro area ranking "second among 369 American cities in its rate of job loss, jumping from 6.2 percent to 11.2 percent last year."

Across the country, individuals, foreclosed or suddenly jobless, have been melting down like the economy and so bubbling up into the news in the form of extreme acts ranging from suicide and murder to arson and robbery. The same might now be said for news about whole troubled communities.

A few months ago, stories of economically-troubled towns were strictly local fare. Now, more and more of them are rising to regional or national attention. Take Lehigh Acres, Florida, a community that's home to large numbers of carpenters and pest exterminators who rode the housing boom until it went bust in a county that, between June 2007 and June 2008, lost a higher percentage of jobs (8.8%) than any other in the nation. A New York Times article on the "once-middle-class exurb" detailed the devastation:

"[H]omes are selling at 80 percent off their peak prices. Only two years after there were more jobs than people to work them, fast-food restaurants are laying people off or closing. Crime is up, school enrollment is down, and one in four residents received food stamps in December, nearly a fourfold increase since 2006."

Similarly, the Wall Street Journal profiled the plight of Rockford, Illinois, an industrial city about 90 miles northwest of Chicago with 12.5% unemployment, the highest in the state, a shortfall of $7.6 million in the city's budget, streets filled with "gaping potholes" and a "city center… rife with vacant storefronts."

Most of America's desperate towns and small cities, however, still remain relatively anonymous. Even with their pain quotient on the rise, they lack New York Times profiles or presidential photo ops to draw attention to their woes. But it's important to note that Elkhart, Dalton, and Lehigh Acres aren't American oddities. Other towns and cities in surprising numbers are following fast down the path they have already cleared. Such places are now hurt or possibly, in some cases, even dying -- with little in the way of hope or help in sight. Under the circumstances, they should no longer be treated as individual stories, locally or nationally. They represent a pattern, and putting even a small number of their stories together casts a light on a disturbing countrywide trend that may determine the tomorrows of a remarkable number of Americans.

Tough Times in the East

After Governor Deval Patrick slashed aid to municipalities across the state, the "cash-strapped" town of Winthrop, Massachusetts, was left with a $512,000 budget gap. As a first step, the town axed its $117,000-a-year police chief and is now considering shuttering its public library. "The library has gotten a lot of attention, but if it's not the library it's going to be something else," said Winthrop Town Council President Thomas Reilly, a 40-year veteran of local government. "This is the worst I've seen," he told the Boston Herald.

Tough times have even reached tony Greenwich, Connecticut, which, the Greenwich Time reports, is looking to cut $5 million from its proposed 2009-2010 budget, in part through layoffs as well as a wage freeze for public employees. This famed haven for the rich is also experiencing joblessness "near a record high that has not been seen since the withering downturn of the early '90s."

West Warwick, Rhode Island, a textile mill town that, according to its website, gave the world the "Fruit of the Loom" trademark, is another municipality in dire fiscal straights. In early February, West Warwick announced that it could not meet its obligations on a multi-million dollar lawsuit settlement stemming from a nightclub fire and that its school system was $3.5 million over budget. "There is no way that we can tax our way out of this problem," Town Manager James Thomas told local television station WPRI.

Tough Times in the South

The small Appalachian town of West Jefferson, North Carolina, like its northern brethren, has also been hit hard. A recent Associated Press report noted that in a little more than a year, "the town and the neighboring county seat of Jefferson have lost more than 500 factory jobs -- a number equal to 20 percent of the town's population." All of this resulted from crucial town businesses like its light-switch plant, which had long benefited from the housing boom, shutting down, sending ripples through its heavily manufacturing-dependent economy. As a result, other local businesses, from Thistlewood, a women's clothing boutique, to a Dodge car dealership, are shutting down as well. It's a symptom of the times that the local food bank is now feeding nearly 50% more families than a year ago.

When the Peanut Corporation of America plant linked to the 2008 salmonella outbreak decided to lay off almost all of its 50 workers in January -- the company has since filed for bankruptcy -- it was a hard pill for Mayor Ric Hall of Blakely, Georgia, to swallow. After all, it was one of the two main businesses the town of 5,700 -- and the self-proclaimed "Peanut Capital of the World" -- relied on for its economic wellbeing. In a sign of the times (and perhaps of the collapsing newspaper industry), the other, a newspaper production plant, had already announced plans to lay off at least 100 workers. "We're already struggling with high poverty and a struggling agricultural economy, and this will impact not just our community, but this entire region of the state," Hall told the Los Angeles Times. "That's a total of about 150 to 170 people who have lost their jobs," he said. "Being the small agricultural community that we are, the prospect of finding new employment is virtually impossible. People here don't have much, and the layoffs make it even more devastating."

Times are tough in Dillon, South Carolina, too, the town where Federal Reserve Chairman Ben Bernanke grew up. Just recently, his childhood home was purchased at a foreclosure sale -- an all-too-common occurrence in a town already long battered by the decline of the local tobacco and textile industries. Now, writes the Wall Street Journal, it's "facing a fresh assault of plant closings and layoffs that have pushed its unemployment rate to 14.2% -- almost double the national average." As in so many other places, the catastrophic housing and automotive markets have hit Dillon with hurricane force. Mohawk Industries, which made yarn for carpeting and employed 137 people in town, shut down, while Wix Manufacturing, which produces automotive filters, has slashed employee hours and some jobs. In fact, just outside of town, at South of the Border, a faux Mexican-themed "village" of souvenir stops, restaurants, and low-rent attractions where Bernanke once worked, business -- which depends on vacationers trekking down the East Coast to Florida -- is off 10%, the worst downturn since the 1973 oil crisis, according to Richard Schafer, the patriarch of the family that runs the tourist trap. "People are losing their home and jobs," he says, "and they're not traveling as much."

Tough Times in the Midwest

Wilmington, Ohio, is another company town whose fortunes have plummeted. After overnight shipper DHL shut down its domestic courier service, the town went into a tailspin. Already, 3,000 jobs have been lost at the local airport. Within months the number is expected to rise to 8,000, according to an Associated Press report. As a result, in the town of 12,000, new claims for unemployment benefits are the highest they've been in 26 years and many businesses are facing the prospect of closing down, as is its hospital. "I think one in five small businesses will fail or could fail," says Wilmington's mayor David Raizk. As a result, more and more families are visiting local food banks, while community leaders are promoting backyard gardens as an inexpensive way to help feed families. In fact, Wilmington College is even opening up gardening plots on its property for needy townspeople.

In Lordstown, Ohio, a town of 3,600, General Motors and its 5-million-square-foot plant was the lifeblood of the community. In January, however, GM told 2,800 of its more than 4,000 Lordstown workers to stay home for the month. At the end of the month, 800 of them were told not to return. Now the town, which derives 75-80% of its tax revenues from the auto plant, according to the Youngstown Vindicator, is facing ruin. "We're a one-horse town in that regard," said Mayor Michael Chaffee, who estimates, according to a CBS Evening News report, that for every GM job lost, at least two others are needed to replace it, due to pay differentials. Meanwhile, the Lordstown village council approved a wage freeze for its full-time workers and 60 part-time employees and is looking for other ways to cut costs, like suspending capital improvements like road repair. Elsewhere in Ohio, other GM towns are feeling Lordstown's pain. At GM's engine and transmission parts plant in Defiance, for instance, 100 GM employees were being laid off in mid-February.

GM isn't the only source of mid-Western woes, though. In recent months, massive layoffs by businesses in downtown Des Moines, Iowa, have caused great economic hardship. And the situation won't be getting better soon as software giant Microsoft recently shelved plans to build "a $500 million data center in West Des Moines" that would have brought with it 75 new jobs. On top of that, just this month the American Enterprise Group, a local insurance company announced 51 layoffs; the Des Moines City Council announced 88 jobs cuts; while the Des Moines County jail is contemplating unpaid furloughs or layoffs and a scheme by which inmates would pay for their own toilet paper. Robert Crandall, the executive director of the Bidwell-Riverside Center, a food pantry in Des Moines, noted that the number of families his group was serving had risen as much as 33% in recent months. "The really sharp [jump in numbers] started late summer, early fall," he told the Des Moines Register.

Tough Times in the West

In the West, California dominates the news with a seemingly endless string of stories about the deepening crisis faced by towns (sometimes in that state officially labeled "cities," even with populations of less than 1,000). El Centro, California, for example, boasts an eye-popping 22.6% jobless rate -- and while this is the highest rate in any metropolitan area, it isn't even the worst case in the state.

"We have a major problem to deal with," Mayor Robert Silva of Mendota, California, told local TV station KFSN in January. A month earlier, the "Cantaloupe Capital of the World" (population: 10,000) experienced the greatest spike ever in its unemployment rate. At an astounding 35%, it was clearly in a local Great Depression, whatever the rest of the country was in. In a rich agricultural area, it was also in a great drought as water supplies dwindled, fields were left fallow, and farming jobs dried up. Not surprisingly, with so many out of work, local businesses are suffering. Among the hardest hit are fertilizer and irrigation equipment suppliers as well as trucking companies with nothing to transport. "And, of course, it all trickles down to hairdressing shops, restaurants and other small businesses in town," Sarah Woolf of the Westlands Water District, which provides water to more than 600 family-owned farms in the region, told the San Jose Mercury News. Silva, who also works as a manager at a local store, agrees: "We're down 20% like all business in Mendota. Everybody's down." The fallout from the agricultural crisis has also hit the housing market where, the Wall Street Journal reports, Mendota's home sales "fell to fewer than 10 in the fourth quarter of last year from nearly 100 in the second quarter of 2007; [and] median prices dropped 37% to about $175,000 from a 2006 high of about $275,000…"

Things are only slightly better eight miles north in Firebaugh (population: 5,700), which saw its jobless rate climb to nearly 23%. In that town, too, the crisis is intimately linked to drought conditions across California. "I would call it the perfect storm or compound crisis," said Firebaugh City Manager Jose Ramirez.

In Rio Vista, a town of about 7,000, "plummeting property and sales taxes and building fees due to the housing bust, and a drop in funds from the state" have led to a $900,000 deficit in the local budget, according to a report in the San Francisco Chronicle. As a result, Rio Vista was forced to lay off four employees and leave 20 already vacant full-time jobs empty, freeze salaries, cut recreation programs, and adopt a four-day work week at city hall. The austerity plan has so far staved off bankruptcy, but the wolves at the town's door didn't have far to travel to find easy prey.

Maria La Ganga of the Los Angeles Times recently reported that Rio Vista's neighbor, tiny Isleton -- a half-square mile town with just 817 residents -- is almost $1 million in the red and fighting to stave off bankruptcy, if not dissolution, due to its seemingly insurmountable debt. "Some people have said, 'Just hand it over to the county and go home,'" said City Manager Bruce Pope. But while Isleton's case is among the worst in the state, it's hardly alone in its fiscal anguish. La Ganga notes:

"Vallejo, 36 miles northwest, filed for bankruptcy protection in May. Watsonville closed all city services except police and fire for two weeks over the holidays. Calexico declared a fiscal emergency… The state's 10 biggest cities are more than a quarter-billion dollars in the red this fiscal year. Next year, San Francisco and Los Angeles predict a combined $1-billion deficit."

Big Cities Going Bust in Tough Times

San Francisco and Los Angeles are far from alone. The one- or two-factory towns lacking economic diversity and suffering mightily for it may be harbingers for the fate of the bigger cities, many of which are already facing financial hardships. After all, as CNN reported, Labor Department statistics show unemployment rates rising "in 98% of metropolitan areas across the country in December."

In Chicago, recently named "the third most miserable city" in the United States by Forbes magazine, "unemployment is expected to rise to 9.2 percent… and major layoffs have hit local powerhouse employers including Midway Games, Motorola and the University of Chicago Medical Center."

In January, during his fourth State of the City message, Mayor Jerry Sanders of San Diego painted a typically grim picture, citing "a $54 million deficit, scaled-back city services, higher fees, layoffs and mandatory water rationing." And it could get much worse, he told San Diegans. "This year, an even larger deficit looms. Sacramento [the state government] is more likely to hurt us than help us, and we'll again need to make painful decisions. That scenario could repeat itself, next year and the year after." Subsequently, Rani Gupta of -- San Diego's non-profit on-line site that has been hailed as a new model for news gathering -- reported that estimates of the city's budget gap by a former mayoral candidate's think-tank actually top out at more than double the mayor's figure -- an astounding $128 million.

In New York City, 65,000 jobs were lost in the last three months of 2008 alone, while the jobless rate jumped from 6.3% to 7.4% between November and December. Mayor Michael Bloomberg has estimatedsuggests that such losses may translate into a 10.5% unemployment rate, "a level not seen since the mid-1970s." that an additional 300,000 job losses, including 46,000 fewer jobs on Wall Street, are expected to clobber the Big Apple by year's end. At the same time, a report by investment bank UBS

Meanwhile, New York's Metropolitan Transportation Authority (MTA) is considering a 23% increase in fares and tolls, the elimination of multiple subway lines and more than 24 bus routes, among other measures to help close its own $1.2 billion budget gap. The MTA is just one of many big city transportation authorities looking to make giant cuts in tough times. Recently, the New York Times reported that "[t]ransit systems across the country are raising fares and cutting service even after attracting record numbers of riders last year." A particularly dire case is St. Louis, where "despite rising ridership, the transit system plans to lay off a quarter of its work force and make drastic service cuts to balance its books." Boston, Atlanta, and San Francisco are facing similar tough choices when it comes to cutting subway or bus services, raising fares, and potentially leaving significant numbers of city and suburban dwellers high and dry.

Troubled Towns and Troubled Times

Stories about the economic woes facing individual cities and towns are already a staple of national newspapers, even as the bad news, experts believe, is only beginning to flow in. Spikes in unemployment already reaching double-digit levels in some cases, municipal governments deep in the red, essential cutbacks in local services, increasing lines at food pantries, towns facing bankruptcy or even contemplating municipal suicide are increasingly common nationwide.

Towns like Elkhart, Lehigh Acres, and Mendota may now be media poster-towns for tough times nationwide, but most distressed small towns are still suffering in silence and, as a group, they may only be the proverbial canaries in the coal mine. It isn't surprising that towns which relied heavily on the collapsing auto industry and the building trades are going belly-up first, but what about the rest of America's towns and even big cities? The same economic forces are battering them, and while they may have been able to withstand immediate collapse, there's no guarantee that town after town won't be deep in the red, drowning in joblessness, and facing catastrophe as the American depression drags on.

Stock Decline Hits Depression Levels

Stock Decline Hits Depression Levels

Money invested 10 years ago in stocks have lost half their real value, matching the worst ten years of the Great Depression

During the darkest 10 years of the Great Depression, from September 1929 to September 1939, the stock market dropped roughly 50%, adjusted for inflation. With today's drop in the stock market, the U.S. has now matched that unfortunate milestone. The Standard & Poor's 500-stock index, adjusted for inflation, is now down about 50% over the past 10 years from Feb. 17, 1999 to Feb. 17, 2009.

Other assets have done much better over the same period. For example, a nice safe investment in six-month certificates of deposit would have yielded a real total return of roughly 12% over the past 10 years. And despite the recent real estate bust, residential home values in the largest cities, adjusted for inflation, actually increased by about 30% over the past decade.

The Depression-level decline in the market has come during a stretch when many small investors, on the advice of financial advisers and the financial media, put much of their savings into equities. The enormously influential book Stocks for the Long Run by Jeremy J. Siegel, which was published in 1994, convinced people that they should ignore the short-term ups and downs of the market.

Should You Stay in Stocks?

But the mantra of "stocks for the long run" has reached its moment of truth. It's no longer possible to pretend that equities are a safe asset. Investors, looking at their depleted 401(k) and brokerage accounts, are being forced to ask the question: Do they have the stomach to stay in stocks, or are they ready to bail out?

Both approaches have their pluses and minuses. If you stay in stocks, you are accepting the possibility that the economy will plunge into a deep depression, and that your investments may never reach their original value again, much less show a profit. If you go into a safer asset, such as certificates of deposit, you are giving up any potential of an upside, especially if it turns out that the market has a big rebound.

Ultimately, you are placing a bet on the future of the U.S. and the global economy. Are we entering into a period of long-term stagnation or are there better days ahead? Two hundred years of history says that we are going to see more growth, but as the saying goes, past returns are no guarantee of future performance.

Black Sea: Pentagon's Gateway to Three Continents and the Middle East

Black Sea: Pentagon's Gateway to Three Continents and the Middle East

by Rick Rozoff

Go To Original

The Black Sea region connects Europe with Asia and the Eurasian land mass to the Middle East through Turkey on its southern rim, which borders Syria, Iraq and Iran.

The northern Balkans lie on its western shores and the Caucasus on its eastern end, the latter a land bridge to the Caspian Sea and Central Asia.

Ukraine, Russia and the strategic Sea of Azov are on its northern perimeter.

Given its central location, the Black Sea has been coveted for millennia by major powers: The Persian and Roman empires, Greeks and Hittites, Byzantines and Huns, Ottoman Turkey and Czarist Russia, even by Napoleon's France and Hitler's Germany in their wars to unite Europe to Asia and the Middle East.

The famed Trojan War was fought for control of Troy/Dardania/Ilium, the entrance to the Sea of Marmara which connects the Mediterranean to the Black Sea. The strait connecting the two is still called the Dardanelles after ancient Dardania.

Going back to Antiquity a third continent has also been involved, Africa; the Greek historian Herodotus claimed that the Black Sea city of Colchis, now in modern Georgia, was founded by Egyptians and in Virgil's if not Homer's account of the siege of Troy Memnon, king of Abyssinia (Ethiopia), is slain by Achilles fighting in defense of Troy.

A Romanian news source recently reiterated the importance of the region for the modern era:

"Through the Black Sea, the European area strategically meets Central Asia, the Caucasus and the Middle East, hydrocarbon production and transit areas." (Nine O'Clock News, May 14, 2008)

Allusions to the Black Sea's importance for not only energy and transit but for world military purposes will occur frequently in citations to follow.

Prior to the breakup of the Warsaw Pact in 1989 and the Soviet Union two years later the Black Sea was mainly off limits to the West in general and to the Pentagon and NATO in particular. Until 1991 only four states bordered the sea, Bulgaria, Romania, Turkey and the Soviet Union.

Turkey as a key NATO member state was the West's sole beachhead in the region with Bulgaria and Romania, the second more nominally than in fact, members of the Eastern bloc and the Warsaw Pact.

In the intervening eighteen years the situation in this region, like so many others, has been transformed and a new battle for control of it has emerged.

There have arisen two new littoral states, Georgia and Ukraine, with Abkhazia added last August, and every past Warsaw Pact nation outside the former Soviet Union is currently a full member of both NATO and the European Union - Bulgaria, the Czech Republic, the former German Democratic Republic, Hungary, Poland, Romania and Slovakia - with three former Soviet republics on the Baltic Sea - Estonia, Latvia and Lithuania - also dual members.

As an Indian commentator, Premen Addy, described it last summer:

"NATO's noose is drawn ever tighter round the Russian neck. American military and missile bases are already ensconced in Romania and Bulgaria - two states once in harness with Adolf Hitler's Third Reich and the invading Nazi legions into the USSR - in a bid to strangle the possible emergence of a rival centre of power in the Black Sea...." (Daily Pioneer, August 16, 2008)

A year earlier the online intelligence site The Power and Interest News Report in an analysis called "Bulgaria, U.S. Bases and Black Sea Geopolitics" summarized the situation regarding one key Black Sea state in the following words:

"Geographically speaking, Bulgaria provides the U.S. (and N.A.T.O.) a greater presence in the Black Sea, through which there are plans to build oil and gas pipelines. "Also, it is close to the former Yugoslavia, a place of constant tensions, particularly in the last decade. "The [new Pentagon] bases allow the U.S. to keep increased control of the country and the Greater Middle East region, as Washington now has a military presence in the south (America's 5th fleet is based in Bahrain) and will have a presence in the north through nearby Bulgaria." (August 29, 2007)


Since 1991 but especially since the December 2003 "Rose Revolution" the United States has transformed Georgia on the Black Sea's eastern border into a private military preserve, first dispatching Green Berets, then Marines to train, equip and transform the nation's armed forces for wars abroad and at home.

The revamped Georgian army was first tried out in Iraq, where with a 2,000-troop contingent it had the third largest foreign force in Iraq until last August when the US military, whose creation it was, flew the soldiers home for the war with Russia.

Before the echoes of last August's gunfire and artillery rounds had died down the US sent its warship the USS McFaul to the Georgian port city of Batumi and the flagship of its Sixth Fleet, the USS Mount Whitney, to Poti whose mission was announced to the chronically credulous as delivering "juice, powdered milk and hygiene products."

Batumi is the capital of Ajaria, a former autonomous region subjugated by the then newborn 'Rose' regime in April of 2004 after its US-trained army staged Georgia's largest-ever military exercises in nearby Poti and threatened invasion, lies just south of the Abkhazian capital of Sukhumi, where Russian ships were then stationed. Warships of the world's two major nuclear powers faced off against each other off the Black Sea coast just 75 kilometers apart.

At the same time NATO deployed a naval strike group to the Black Sea consisting of three US warships, a Polish frigate, a German frigate and a Spanish guided missile frigate as well as four Turkish vessels with eight more warships planning to join the flotilla.

The NATO warships were only 150 kilometers from Russian counterparts then docked in Abkhazia.


On the north end of the Black Sea the US has led annual Sea Breeze NATO exercises in Ukraine's Crimea, evoking mass outrage and spirited protests from the Crimeans themselves whose parliament three days ago voted against a proposed US representative office being set up, one which no doubt would oversee both the suppression of increased autonomy demands and anti-NATO actions in Crimea and prepare the groundwork for the eviction of Russia's Black Sea Fleet from Sevastopol.

Regarding the second point, a Russian news site offered these insights:

"Analysts speak about Ukrainian plans to kick out Russia and turn over the Crimean bases to NATO and the United States, as both salivate for a military presence in the Black Sea Basin." (Voice of Russia, May 28, 2008)

"One of the conditions for NATO membership is absence of foreign bases on the country’s territory....[Ukraine's 'orange' authorities] do what they can to drive away the Russian Black Sea Fleet from the Crimea. In such a way Kiev signals to Brussels that it is preparing a base for NATO naval ships in the Black Sea." (Voice of Russia, May 22, 2008

Georgia's and Ukraine's next, complete, phase of integration as Pentagon's military outposts was announced last December and January, respectively, when Washington signed Strategic Partnership Charters with first Kiev and then Tbilisi. Months before that and only days after Georgia launched its attack on South Ossetia and Russian peacekeepers there, triggering last August's war, all 26 NATO members sent representatives as part of a delegation to the Georgian capital to establish a new NATO-Georgia Commission.

At the same time the regime of Ukraine's Viktor Yushschenko, who rode to power on the US-financed and -directed 'orange revolution' of December 2004, and whose wife Kathy is a Chicago-born and -raised former official in the Reagan State Department and the George H. W. Bush Treasury Department and was once described by a fawning admirer as "a Reaganite's Reaganite," used the deployment of Russian ships to the Black Sea during the war with Georgia to apply pressure on the Black Sea Fleet, at one point implying the ships might not be permitted to return to Sevastopol.

Several weeks after the Caucasus war ended, Washington sent an intelligence gathering ship, U.S. Pathfinder, to Sevastopol harbor.

The Yushchenko junta renewed its accusations against the Russian fleet late last month on another score, slightly over a month after the Charter on Strategic Cooperation was signed with Washington.

The Black Sea connects with the Sea of Azov, surrounded almost entirely by Russia, at the Kerch Strait, the scene of a confrontation between Russia and Ukraine in 2003.

A Russian newspaper at the time explained what was at stake in the dispute:

"The Kerch Strait at the center of Russia's dispute with Ukraine controls access to the Azov Sea, which is reputed to have largely untapped hydrocarbon reserves. "Ownership rights to potential oil and gas resources have not been decided between the two countries, despite years of negotiations to delimit the seabed. "Although unlikely to be a second Caspian, geologists believe the Azov Sea is likely part of the same seam of hydrocarbon deposits that stretches from southern Ukraine and Russia through the Black Sea to the Caspian and beyond." (Moscow Times, October 24, 2003)

The US's Stratfor augmented the above with this brief analysis:

"The Kerch Strait is a 25-mile-long channel that is no wider than 9 miles, linking the critically important Black Sea to the Sea of Azov off of Russia's Northern Caucasus border. It has served as a key location for some strategic battles in the past from the Crimean wars to a Nazi-Soviet naval clash. To Russia, the Kerch Strait is a continuation of the Northern Caucasus into Ukraineâ's Crimea regions, which is one of the country's most pro-Russian regions and home to Russia's Black Sea Fleet located at Sevastopol." (November 10, 2008)

More concisely and even more to the point, a few weeks ago this quote appeared in a Ukrainian press wire report:

"Ukraine's Euro-Atlantic aspirations require that it solves all its problems, including border disputes. They need a border [in the Kerch Strait] for just one reason: to be able to join NATO as soon as possible." (Interfax-Ukraine, January 31, 2009)

Bulgaria and Romania

The US has signed Strategic Partnership Charters with both Georgia and Ukraine over the past two months and the two nations are the centerpieces for Washington's takeover of the Black Sea and indeed the former Soviet Union as a whole.

They are the main fulcra for the US-created GUAM (Georgia, Ukraine, Azerbaijan, Moldova) bloc originally set up in 1997 as the main transit route for 21st century Eurasian energy wars and for undermining and undoing the post-Soviet Commonwealth of Independent States. They are also the foundation stones of the European Union's Eastern Partnership.

But to date the main emphasis of the Pentagon's campaign to conquer the Black Sea region, and arguably the major focal point for its international shift to the east and the south, is with Bulgaria and Romania.

Both nations were formally brought into NATO at the 2004 Istanbul summit of the Alliance and since became the last - perhaps in both senses of the word, most recent and final - members of the European Union.

Earlier, Bulgaria and Romania both denied Russia use of their airspace to transport supplies to troops they had moved into Kosovo in June of 1999.

Russia was acting within its rights under the terms of UN Resolution 1244 to protect ethnic minority communities in the Serbian province, but clearly Bulgaria and Romania were following US and NATO orders in blocking the flights.

Whether, if Russia had persisted in its intent, the two nations would have grounded the Russian aircraft or even shot them down is a matter of conjecture, though perhaps not much.

Later Romania allowed the US to use its Mikhail Kogalniceanu Air Base in 2002 for the buildup to the following March's invasion of Iraq.

In December of 2005 US Secretary of State Condoleezza Rice traveled to the Romanian capital to sign an accord to use - take control of - four military bases, the aforementioned Mihail Kogalniceanu Air Base and training and firing grounds in Babadag, Cincu and Smardan.

The US's explanation at the time was that it was to employ the four bases for training, including joint and multilateral exercises, provision of supplies and transit for the downrange wars in Afghanistan and Iraq.

And Romanian territory has served those purposes ever since.

In April of the following year, 2006, the US signed a comparable agreement with neighboring Bulgaria for the use of three of its major military bases - the Bezmer air base, the Novo Selo army training range and the Graf Ignatievo airfield.

Both pacts were signed for an initial ten year duration.

The US was allowed to station troops - estimates vary from 5,000-10,000 - on a rotating or permanent basis in both countries.

In the case of Bulgaria it will be the first time foreign troops have been stationed on its soil since Nazi Wehrmacht forces were driven out in 1944 and with Romania since Soviet troops withdrew in 1958.

The seven sites in both countries will be the first US military bases in former Warsaw Pact territory.

The Bezmer air base in Bulgaria is a major facility, similar in scope to Romania's Mihail Kogalniceanu, and its scale and purpose for current and futures campaigns in the east and south are indicated by this Bulgarian description:

"[T]he airbase...according to the US-Bulgarian agreement...will acquire the status of a strategic military facility in two years, like the Incirlik airbase in Turkey and Aviano in Italy." (Standart News, June 10, 2007)

The same newspaper added that, "The Bezmer military airport near the town of Yambol (southeastern Bulgaria) will be transformed into one of the six new strategic airbases outside US borders." (Standart News, June 6, 2007)

Britain's Jane's Defence Weekly in late 2006 informed its readers of the strategic sweep of the Pentagon's move into the Black Sea:

"[T]he new land, sea and airbases along the Black Sea will provide much improved contingency access for deployments into Central Asia, parts of the Middle East and Southwest Asia. "Perhaps just as significantly, the new land, sea and airbases along the Black Sea will provide much improved contingency access for deployments into Central Asia, parts of the Middle East and Southwest Asia." (Sofia Echo, November 17, 2006)

From the other end of the planet Lin Zhiyuan, deputy office director of the World Military Affairs Research Department of the Chinese Academy of Military Sciences, saw the developments through the same lens but with trepidation:

"[N]ew military bases, airports and training bases will be built in Hungary, Romania, Poland, Bulgaria and other nations to ensure 'gangways' to some areas in the Middle East, African and Asia in possible military actions in the years ahead." (People's Daily, December 5, 2006)

Both preceding analyses were confirmed by the US military itself the following year when Maj. Gen. Mark Hertling, the U.S. Army Europe operations chief and deputy chief of staff, spoke of Romania to an armed forces publication:

"It's in a critical location with emerging partners, at a location which is really a place that has been a historical transit route for bad guys."

The interview added "The bases would house rotating U.S. troops that would train under the command of Joint Task Force East, headquartered at Mihail Kogalniceanu Air Base. "The U.S. signed a Defense Cooperation Agreement with Romania in December 2005 to allow U.S. forces to use the former communist nation for training, pre-positioning of equipment and, if necessary, staging and deploying troops into war zones." (Stars and Stripes, May 4, 2007)

Two months after the US-Bulgarian agreement the US led joint military training exercises in Bulgaria in which the head of local troops involved effused, "We want to be certified as part of NATO forces. We want to conduct expeditionary exercises as part of NATO." (Stars and Stripes, July 22, 2006)

The war games, named Immediate Response 2006, were designated to break in the new bases in Bulgaria and Romania and to implement the Rumsfeld era Pentagon's plans for military 'lily pads' from which to spring into action to points east and south.

In reporting on the exercise the main newspaper of the US armed forces provided this background perspective:

"According to the agreements, the U.S. would be able to use the Romanian and Bulgarian bases for pre-positioning of equipment, and to send U.S. troops and equipment into war if necessary. The "forward operating sites," as Defense Secretary Donald Rumsfeld calls them, would be in Romania at the Smardan Training Range, Babadag Training Area and Rail Head, Mihail Kogalniceanu air base, and Cincu Training Range." (Stars and Stripes, July 5, 2006)

A Bulgarian civilian cited by the same source said, "Every day we can see them (U.S. troops) in the cities and villages." (Stars and Stripes, July 24, 2006)

By September of the same year, "Sofia and Washington are to sign about 13 additional agreements to regulate the joint usage of several military bases in Bulgaria. "Defence Minister Veselin Bliznakov has announced that next week US European Command (EUCOM) experts will arrive in Bulgaria to draw a draft document." (Sofia News Agency, September 21, 2006)

The pacts with Bulgaria and Romania are, as usual in such instances, to be jointly used by NATO as all three signatories are members of the bloc.

In a US armed forces dispatch titled "England-based airmen head to NATO exercise in Bulgaria" it was reported that a British "squadron plans to test-fire laser-guided and general-purpose weapons at a Bulgarian range, as well as conduct air-to-air training with the Bulgarian MiG-29 and -21 aircraft" in war games coded Exercise Immediate Response. (Stars and Stripes, July 13, 2006)

Later NATO continued its leapfrogging over the Pentagon into Bulgaria as detailed in an article called "NATO bases may be set up near Bulgaria's Sungulare" which included this report:

"NATO asked if the former buildings of a tank brigade in the town of Aitos could be turned into a reserve storage base. "NATO planned to store here the equipment for one or two battalions, which would be based in the military bases of Novo Selo and Bezmer." (Sofia Echo, January 3, 2008)

In fact what NATO achieved was securing a base of its own.

"NATO will pay 150 million US dollars to the Municipality of Sungurlare (central Bulgaria) in exchange for a plot of municipal land for the construction of a military base." (Standart News, December 2, 2007)

The comparison between the Bulgarian Bezmer air base and the US's and NATO's main strategic air (bombing) bases in Aviano, Italy and Incirlik, Turkey was established earlier and this report later confirmed the analogy's accuracy, though immediately in reference to another air base.

"NATO will move aircraft from the US air base in Aviano, northeastern Italy, to Bulgaria's Graf Ignatievo air base near Plovdiv." (Sofia News Agency, October 6, 2007)

The above news item described the transfer as temporary, but it may have been a portent of what is planned for the future.

Aviano was the main base used by the US and NATO in their joint Operation Deliberate Force bombing of the Bosnian Serb Republic in 1995 and in the 78-day terror bombing campaign against Yugoslavia in 1999.

To leave no further doubt as to under whose auspices the Pentagon was able to secure its seven new bases for attacks to the east and south, in the autumn of 2007, "A top general from the NATO's Southern Command in Naples will inspect the two-week military exercises of army units from Bulgaria, the USA and Romania which will be held near the town of Sliven, in southern Bulgaria." (Standart News, September 3, 2007)

And to dispel any misconceptions as to who the main target of the US- and NATO-acquired bases was, in June of that year Russian President Vladimir Putin, citing the emerging and unmistakable pattern of "a new base in Bulgaria, another in Romania, a site in Poland, radar in the Czech Republic," rhetorically queried "What are we supposed to do? We cannot just observe all this." (New Europe [Belgium], Week of June 2, 2007)

The severity and urgency of the threat perceived by Russia was such that General Vladimir Shamanov, adviser to Russia's Defense Minister, was quoted as saying "We will point our missiles at the US military facilities in Bulgaria and Romania." (Standart News, June 6, 2007)

This concern was echoed by the Russian foreign ministry:

"Russia once again voiced her concern with the deployment of US military facilities in Bulgaria and Romania. "'We are deeply concerned, because such a move entails an expansion of the US forces in countries, which not long ago were allies of Russia,' Anatoly Antonov, Head of the Russian Foreign Ministry's Security and Disarmament Department, said at an extraordinary conference on the Conventional Forces in Europe Treaty (DOVSE,) held in Vienna." (Standart News, June 13, 2007)

The Russian military, most directly alert to and aware of the repercussions of the deployments, voiced its alarm in the person of Maj. Gen. Vladimir Nikishin, a representative of the Defense Ministry's Main International Military Cooperation Department, who said, "The location of NATO bases in Bulgaria and Romania actually means that the Alliance is creating bases for building up it forces in Eastern Europe, which is at variance with the adapted Conventional Forces in Europe Treaty." (Interfax-Military, September 19, 2007)

Two months afterward Russian Foreign Minister Sergei Lavrov would add, "Russia finds it hard to understand some decisions of the NATO like, for example, the deployment of US military facilities in Bulgaria and Romania." (Standart News, December 7, 2007)

Lastly, the then chief of the general staff of the Russian armed forces, Yuri Baluevsky, voiced concern that "Plans are...afoot to set up new US military bases in Bulgaria and Romania, and unlike Russia, no NATO country has so far raised a finger to ratify the modified CFE treaty." (Voice of Russia, December 17, 2007)

The above apprehensions could not have been assuaged by comments that year from Solomon Passy, former Bulgarian foreign minister, advocating that US infantry, air and naval forces be followed by missile deployments.

"Following the NATO treaty and the agreement for joint military bases in Bulgaria I think this will be the next strategic step that would enhance the security of the country, the region and the whole of Europe....This shield should be [placed] above all member states of NATO and the EU.” (Focus News Agency, June 10, 2007)

Nor could Russian fears be alleviated by the announcement the same month that "NATO defence ministers agreed at their Friday meeting in Brussels to initiate procedures for adding a short-range missile defence system in Eastern Europe to the on the US proposes that would also include Bulgaria." (Sofia News Agency, June 15, 2007)

Slightly over a year after the US-Bulgarian bases accord had been inked it was announced that US troops were heading there and Romania and "The bases are part of an ambitious plan to shift EUCOM's [the Pentagon's European Command's] fighting brigades from western Europe - mostly Germany - to forward bases closer to the Caucasus, the Balkans, the Middle East and Africa, for a quicker strike capability." (United Press International, May 18, 2007)

The same report added:

"'When this rebasing process is complete, two-thirds of USAREUR's [United States Army Europe and Seventh Army's] maneuver forces will be positioned in southern and eastern Europe,' [EUCOM and NATO's top commander John] Craddock told the U.S. Senate in written testimony. "USEUCOM has requested $73.6 million to build out Mikhail Kogalniceanu Air Base, Romania, and to establish a forward operating station in Bulgaria." (Ibid)

The Mihail Kogalniceanu Air Base received the first US troops deployed to Romania in 2007 and has hosted the US European Command's newly formed Joint Task Force East, formerly the Eastern Europe Task Force.

The title of that unit alone reveals volumes.

As soon as the Bulgarian and Romanian "full spectrum" air, land and sea bases were acquired, the Pentagon moved to expand and integrate them with its other Black Sea military partners, Georgia and Ukraine.

Referring specifically to the Romanian bases, it was reported that "It is also possible that troops from others nations would go to the sites to train, and that U.S. forces based there would, as part of their six-month tour, travel to nearby nations such as Georgia and Ukraine for shorter training missions." (Stars and Stripes, July 8, 2007)

In May of 2007 the commander of US Air Forces in Europe, Gen. Tom Hobbins, "visited with defense and air force leaders in Bulgaria and Georgia May 14-16 to discuss air force capabilities, modernization and future goals." (U.S. Air Forces in Europe, May 18, 2007)

The same commander the following month, described as looking "eastward to the Black Sea and southward into Africa," said: “Both Bulgaria and Romania have over a dozen projects where runways are being enhanced, facilities [and] buildings are being built. So we're actually taking advantage of the fact that there's a lot of NATO money being spent...." (Air Force Magazine, June 2007)

To make maximal use of the runways Hobbins mentioned, in February of 2007 Reuters reported that the US was selling Romania 48 new fighter jets and recalled that "The Romanian facilities and bases in Bulgaria will be the first U.S. military installations in the former Soviet bloc." (Reuters, February 22, 2007)

In August the US launched war games in Romania to inaugurate its new forward sites and break in its new Joint Task Force East, a process accompanied by no little fanfare:

"About 1,000 mostly Europe-based military personnel and civilians will have a ceremony today to commence the United States' first deployment to Joint Task Force East." (MakFax [Macedonia], August 17, 2007)

The significance of the exercise, named Proof of Principle, was highlighted as being a watershed, that "The U.S. military's new era in Eastern Europe has begun."

The same news source elaborated:

"American and Romanian military forces marked the start of a historic, two-month exercise on Friday that will serve as a trial run for thousands of U.S. troops expected to rotate in and out of Romania and Bulgaria for years to come." (Stars and Stripes, August 18, 2007)

Two months afterward the US held the Rodopi Javelin 2007 air warfare exercise in Bulgaria at the Graf Ignatevio air base where US F-16s were able to practice against Russian-made Bulgarian MiG-29s for future purposes.

Earlier in the year a US destroyer, the San Jacinto, had docked in the Bulgarian Black Sea port of Varna.

In April of last year the US reprised the earlier joint air exercise, also at the Graf Ignatevio air base. Similar aerial combat drills have been conducted in Romania and in both countries US warplanes are provided the opportunity of test their abilities against Russian-made aircraft.

A month afterward the US embassy announced that "a deal to re-fit a Bulgarian military base, one of four due to be autumn 2008. "The Novo Selo camp in eastern Bulgaria will undergo a $6.5 million refurbishment by the German-based company Field Camp Services (FCS). "The Pentagon has also set aside some $60 million for the construction of a permanent base at Novo Selo." (Agence France-Presse, May 14, 2008)

In June a Bulgarian news source, in an article titled "US Army Town to be Built near Novo Selo," wrote:

"Five hundred soldiers and officers will settle in Bulgaria permanently, the other 2,500 will live in the bases of Bezmer, Novo Selo, Graf Ignatievo and Aitos on a rotation principle. "It means that up to 5,000 troops may be using the bases when need arises....The first US servicemen will arrive in Bulgaria this August. "Over 1,200 soldiers will take part in a three-month exercise called 'The Bulgarian Panther.'" (Standart News, June 23, 2008)

The following day another Bulgarian report appeared on the expansion of US military sites in the nation:

"{T]he US military base to be built near Novo expected to be of the size of an average Bulgarian town....500 US rangers and their entire families would arrive at the base then to live permanently there while deployed to Bulgaria. "Another 2,500 US soldiers would use on rotation bases the military facilities in Bezmer, Graf Ignatievo and Aitos....[T]he military airport in slated to become one of the 6 strategic military airport bases outside the US...." (Sofia News Agency, June 24, 2008)

Events proceeded similarly in Romania.

"Construction of a permanent U.S. base in Romania to house 1,700 personnel is well under way, with work on a similar facility for up to 2,500 personnel due to start in Bulgaria this winter, according to a U.S. official." (Stars and Stripes, July 27, 2008)

In August of 2008 the Deputy of the Office for Defense Cooperation with the US embassy in the Bulgarian capital Jake Daystar held an interview with a Bulgarian news agency in which he said of one of the new US bases in the nation, "The main purpose of the base is to improve abilities through training – both of NATO troops and divisions of the US Army....The imperatives are hidden in the location of the state “with its geographic location Bulgaria has always been a strategically important country, as it stands on the crossroad between Asia and Europe." (Focus News Agency, August 14, 2008)

If Daystar was quoted accurately, his comments contain an amazing admission. US army divisions range in size from 10,000 to 30,000 troops. Though perhaps he intended divisions as in various units rather than in the formal designation.

By September of last year Russian concerns over the escalating US military buildup in the Black Sea had not abated and in citing the Pentagon's new bases in Bulgaria and Romania as well as its missile shield plans and ongoing NATO expansion to its borders, Russian Foreign Minister Sergei Lavrov said, "Parity as the basis of the strategic balance in the world has been violated."(Itar-Tass, September 29, 2008)

Nothing loath, within days of Lavrov's dire warning it was reported that "U.S. warships will call at the Bulgarian ports of Varna and Burgas, and drills involving the U.S. and Bulgarian air forces are also scheduled for next month...." (Sofia News Agency, October 15, 2008)

While that dispatch was being filed US and Bulgarian troops were engaged in a joint military drill at the Novo Selo Training Area and "Bulgarian President Georgi Parvanov and Commander of the U.S. Army in Europe Gen. Carter Ham...watched the drill....".

The news story added, "More than 62 million dollars will be spent on the training area's permanent facilities and equipment in the next two years, and construction is expected to be completed by then conflict zones in the Middle East and beyond." (Ibid)

Bulgaria and Romania, now full NATO members for almost five years, have deployed military contingents to the Balkans, Afghanistan and Iraq and have lost troops in the last two nations.

While neither hosted Soviet forces or Warsaw Pact bases during the Cold War, both are on the front line of future wars in the Black Sea region like that of last August between Georgia and Russia, one which might easily have drawn in Ukraine and in alleged defense of Ukraine NATO and the US directly.

As Romanian President Traian Basescu was quoted in a feature of last August titled "Romania is responsible for EU, NATO borders protection," "The Romanian navy is responsible in the name of the EU and allied countries." (Focus News Agency, August 15, 2008)

Romania and Bulgaria will both be held to that pledge. That is one of the crucial reasons they were absorbed into the Alliance.

Both will be ordered to intervene in former Yugoslavia - Kosovo and Bosnia - if their masters in Washington and Brussels will it.

They are both involved in the transit of troops and materiel for the war in Afghanistan and the occupation of Iraq.

For two years now it has been repeatedly mentioned that Bulgarian, now joint Bulgarian-US, air bases may be used for attacks against Iran, most recently by Russian envoy Dmitry Rogozin last September.

The US and allied NATO military expansion into the Black Sea is aimed at all four compass points.

A proponent of this dangerous strategy, Vakhtang Maisaia, Chairman of the Foreign Policy Association of Georgia, offered this terse yet comprehensive summary of what is involved in the Georgian Times of April 2, 2008:

"The Black Sea is a vital geo-strategic area for the Alliance in conjunction with the Alliance's ISAF mission in Afghanistan, logistic operations in Darfur, the NATO training mission in Iraq, and peacekeeping operations in Kosovo. "Currently, some clear signs of the new interest of NATO in the Black Sea region comprised of the South Caucasus and the South-East Europe sub-regions and Black Sea area itself, can be seen by looking at the geo-economics (including the Caspian energy reserves)....

"[W]ith the inclusion of Romania and Bulgaria into the Alliance, the Black Sea has been incorporated into NATO's Article 5 (collective defense) operational zone where activation of the Combined Joint Task Force (a deployable, multinational, multi-service force with a land component and comparable air and naval components) is possible.

"'In the event of crises which jeopardize Euro-Atlantic stability and could affect the security of Alliance members, the Alliance's military forces may be called upon to conduct crises response operations.' (1999 NATO Washington Summit)."