Monday, March 9, 2009
Plunging assets cost $50,000bnGo To Original
Falls in the value of financial assets worldwide might have reached more than $50,000bn, equivalent to a year’s global economic output, the Asian Development Bank will warn on Monday.
Asia has been hit disproportionately hard, the bank will say, in a report that warns of many Asian stimulus plans lagging behind those of the leading global economies.
Separately, the World Bank said on Sunday that developing countries faced a financing gap of between $270bn and $700bn a year as capital flows dried up, with only a quarter of vulnerable countries able to cushion the blow of the economic downturn.
The ADB report estimates capital losses last year in Asia, excluding Japan, at $9,625bn, or 109 per cent of gross domestic product, compared with a global average of 80-85 per cent of GDP. For Latin America, the study estimates 2008 losses at $2,119bn, or 57 per cent of GDP.
“Even as Asia and Latin America have diversified their investment and trading partners, the effect of the slowdown on exports, finance and investment is earthshaking,” the report warns.
The ADB’s estimates take into account falling stock market valuations and losses in the value of bonds supported by mortgages and other assets, though not financial derivatives. About a fifth of the losses in dollar terms arise from the depreciation of many currencies against the US dollar.
The World Bank report said $2,500bn-$3,000bn in public and private debt in emerging markets needed to be rolled over in 2009, most of it denominated in foreign currencies. This would put pressure on developing country governments, many of which had inadequate reserves to help their banks and companies refinance, the bank said.
Although the bank itself and other official institutions such as the International Monetary Fund have been increasing their lending, even at the lower end of the $270bn-$700bn range “existing resources of international financial institutions would appear inadequate to meet financing needs this year”, it said.
The ADB study, to be presented on Monday by Haruhiko Kuroda, president, was commissioned from Centennial Group, a consultancy company.
Mr Kuroda says: “I am afraid things may get worse before they get better. However, I remain confident that Asia will be one of the first regions to emerge from it, and it will emerge stronger than ever before.”
HSBC plunges over 24 percent to near 14-year low
Struggling British bank HSBC Holdings PLC plunged over 24 percent to its worst finish in nearly 14 years in Hong Kong Monday, as investors dumped the stock ahead of its offering of new shares to raise billions in fresh capital.
Shares of Europe's biggest lender fell 24.1 percent to close at 33 Hong Kong dollars, its lowest close since August 1995, according to analysts.
HSBC, which trades in London and Hong Kong, has gone into a tailspin since announcing last week that it would raise $17.7 billion through a rights issue meant to shore up the company's capital position without resorting to government handouts.
In Hong Kong, shareholders will be offered five new ordinary shares for every 12 existing shares at a price of HK$28 per new share.
The stock, down sharply throughout the session, tumbled further near the close of trading as an institutional investor sought to unload nearly 12 million shares, said Peter Lai, investment manager at DBS Vickers.
The day's losses also reflect broader skepticism about the bank's prospects amid the worst global downturn in decades.
"People are pessimistic about outlook about HSBC. The U.S. banking sector is in big trouble and HSBC is deeply involved in the U.S. market," Lai said.
The bank dragged down the market's Hang Seng Index, which fell 4.8 percent.
U.S. Downturn Dragging World Into Recession
Report Says Global Economy Will Shrink for First Time Since 1940s
By Anthony Faiola
The world is falling into the first global recession since World War II as the crisis that started in the United States engulfs once-booming developing nations, confronting them with massive financial shortfalls that could turn back the clock on poverty reduction by years, the World Bank warned yesterday.
The World Bank also cautioned that the cost of helping poorer nations in crisis would exceed the current financial resources of multilateral lenders. Such aid could prove critical to political stability as concerns mount over unrest in poorer nations, particularly in Eastern Europe, generated by their sharp reversal of fortunes as private investment evaporates and global trade collapses.
In its report, released ahead of a major summit of finance ministers in London this week, the World Bank called on developed nations struggling with their own economic routs to dedicate 0.7 percent of the money they spend on stimulus programs toward a new Vulnerability Fund to help developing countries.
The report predicted that the global economy will shrink this year for the first time since the 1940s, reducing earlier estimates that emerging markets would propel the world to positive growth even as the United States, Europe and Japan tanked. The dire prediction underscored what many are calling a mounting crisis within a crisis, as the downturn that started in the wealthy nations of the West washes over developing countries through a pullback in investment, trade and credit. Despite the United States' position as the epicenter of the crisis, investors are flocking to U.S. Treasury bills and the dollar, squeezing developing nations out of global credit markets.
"We need to react in real time to a growing crisis that is hurting people in developing countries," World Bank President Robert B. Zoellick said in a statement. Action is needed by governments and multilateral lenders "to avoid social and political unrest," he said.
The report said that 94 out of 116 developing countries have been hit by economic slowdowns. The World Bank projected that the economic crisis will push around 46 million people into poverty in 2009 through job and wage cuts, as well as declining flows of remittances, the money that foreign workers send to their families. Net private capital flows to emerging markets are plunging, set to fall to $165 billion this year -- or 17 percent of their 2007 levels. Falling demand in the West is sparking the sharpest drop in world trade in 80 years, sending sales of the products and commodities of poorer nations spiraling down, the report said.
That decline is touching off a wave of job losses. Cambodia has lost 30,000 jobs in the garment industry. In India, more than half a million jobs vanished in the last three months of 2008, including cuts in the gem, jewelry, auto and textile industries, according to the World Bank.
As a result, the report estimates that at least 98 countries may have problems financing at least $268 billion in public and private debt this year. It noted a worsening in market conditions could raise that figure as high as $700 billion. Additionally, only one quarter of vulnerable developing countries, the World Bank said, have the ability to launch their own stimulus programs or to independently finance measures such as job-creation or safety-net programs.
To help them, multilateral lenders will need to dig deep. The World Bank remains well financed and is positioned to almost triple spending to $35 billion this year. But it warned the scope of the need in the developing world will exceed the combined ability of major multilateral lenders, and it called on governments in major nations and the private sector to pitch in more.
For instance, its sister organization, the International Monetary Fund, recently received $100 billion more from Japan but is still asking more affluent nations to come up with an additional $150 billion to replenish its rapidly diminishing funds. While the World Bank aims to reduce global poverty largely through long-term projects in the developing world, the IMF is charged with offering bigger, more immediate bailouts to countries on the verge of economic collapse. The list of countries fitting that description has soared in recent months.
In November alone, the IMF parceled out $50 billion to nations in crisis -- the most the institution has ever spent in a single month. With more nations, particularly in Eastern Europe and Central Asia, facing serious trouble, the IMF is preparing to hand out tens of billions more. It is hoping to raise more funds from Western nations and other cash-rich countries such as China and those in the Middle East.
The concern now, however, is that the scope of the crisis may be so vast that even an extra $150 billion may not enough. Some fear that nations in Western Europe such as Austria, Ireland and Spain -- believed to have graduated from IMF lifelines decades ago -- may soon require bailouts, taking funds that would have been spent on poorer nations. It could also prove difficult to raise more money from hard-hit countries including the United States and Britain, where politicians and citizens may decide that charity begins at home.
"I'm worried about what happens when you see that a Greece or an Ireland that might need bailouts," said Simon Johnson, an MIT economics professor and former IMF chief economist. "Where is the money going to come from?"
The Economy -- Not the President -- Is Tanking the Market
One of the more ridiculous statements going around over the last few weeks is "this is an Obama bear market." This statement is, well, ill-informed at best and fraudulent at worst. Let's look at why.
First -- who is saying this? Such economic luminaries as John Hawkins at Right Wing News (who actually asked Is Obama Deliberately Tanking the Stock Market?), Powerline, Brit Hume along with a host of other right wing bloggers. What all of these people have in common is their incessant chearleading during the Bush years despite mounting evidence of an upcoming recession. There are the same people who argued that ... housing is a small part of the economy ... most people are paying their mortgages ... the US economy will decouple from the rest of the world .... it's the greatest story never told ..... you get the idea. Simply put, these are people who have distinguished themselves by being some of the best contrary indicators around.
Secondly, the SPYs -- the tracking ETF for the S&P 500 -- dropped from (roughly) 155 in the summer of 2007 to (roughly) 85 at the end of last year. Yet I don't remember any of them saying that was the Bush bear market -- even though that's a drop of roughly 43%. No -- it's the new President that's causing the problems. In addition, when Bush took office the SPYs dropped from roughly 130 at the begging of 2001 to 85 in the fourth quarter of 2002. Yet somehow I don't think any of them blamed Bush's policies for the drop. Then it was the "lasting effects of the Clinton recession" or something similar.
What all of these idiots are forgetting is the simple fact that the economy is the backdrop of the stock market. When the economy does well the stock market does well. When the economy doesn't do well, the stock market doesn't do well. And to that end, the economy isn't doing well right now. Let's look at some recent news events.
Real gross domestic product -- the output of goods and services produced by labor and propertylocated in the United States -- decreased at an annual rate of 6.2 percent in the fourth quarter of 2008,(that is, from the third quarter to the fourth quarter), according to preliminary estimates released by theBureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent.
Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors.
Reports from the twelve Federal Reserve Districts suggest that national economic conditions deteriorated further during the reporting period of January through late February. Ten of the twelve reports indicated weaker conditions or declines in economic activity; the exceptions were Philadelphia and Chicago, which reported that their regional economies "remained weak." The deterioration was broad based, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions. Looking ahead, contacts from various Districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.
Consumer spending remained sluggish on net, although many Districts noted some improvement in January and February compared with a dismal holiday spending season. Travel and tourist activity fell noticeably in key destinations, as did activity for a wide range of nonfinancial services, with substantial job cuts noted in many instances. Reports on manufacturing activity suggested steep declines in activity in some sectors and pronounced declines overall. Conditions weakened somewhat for agricultural producers and substantially for extractors of natural resources, with reduced global demand cited as an underlying determinant in both cases. Markets for residential real estate remained largely stagnant, with only minimal and scattered signs of stabilization emerging in some areas, while demand for commercial real estate weakened significantly. Reports from banks and other financial institutions indicated further drops in business loan demand, a slight deterioration in credit quality for businesses and households, and continued tight credit availability.
I could go on, but you you get the idea. The news of the underlying economy has been terrible (at best). And that's what's causing the problems.
Expenses associated with rising loan losses and declining asset values overwhelmed revenues in the fourth quarter of 2008, producing a net loss of $26.2 billion at insured commercial banks and savings institutions. This is the first time since the fourth quarter of 1990 that the industry has posted an aggregate net loss for a quarter. The ?0.77 percent quarterly return on assets (ROA) is the worst since the ?1.10 percent in the second quarter of 1987. A year ago, the industry reported $575 million in profits and an ROA of 0.02 percent. High expenses for loan-loss provisions, sizable losses in trading accounts, and large writedowns of goodwill and other assets all contributed to the industry's net loss. A few very large losses were reported during the quarter-four institutions accounted for half of the total industry loss-but earnings problems were widespread. Almost one out of every three institutions (32 percent) reported a net loss in the fourth quarter. Only 36 percent of institutions reported year-over-year increases in quarterly earnings, and only 34 percent reported higher quarterly ROAs.
Like Somali Pirates, Wall Street Holds U.S. to Ransom
Somali Pirates were condemned when they hijacked tankers, took sailors hostage and demanded million-dollar ransoms. But their demands were a drop in the bucket compared to the ransoms demanded by Wall Street.
And the Somalis were kinder to their hostages than Wall Street is to millions of unemployed Americans. For while the Somalian pirates returned hostages unharmed, bankers, fraudsters and failed insurers continue to harm the US administration and hold millions of Americans hostage. The latter are being stripped effectively, of pensions, savings, livelihoods and jobs.
The Pentagon ordered the US Navy to apprehend Somalian pirates. However there has been no such 'Counter Piracy Execute Order' from the White House or US Treasury and aimed at Wall St. buccaneers. On the contrary. The US Treasury, like the British government, is capitulating to the pirates of the finance sector with a haste and a timidity that is unseemly, and if I may say so, unmanly.
Britain's government announced yesterday that while it was obliged to take a 65% stake in a 'broke' bank - Lloyds - it was refraining from exercising its full rights. The government would not, for example, use its stake in the bank to give taxpayers full control. Nor would they call for the resignation of CEOs and board members responsible for breaking the bank. Lord Mandelson the Business Minister said this was neither "necessary or desirable".
The US Treasury has set the pattern. While filling the vaults of Wall Street banks with taxpayer-backed funds, Secretary Geithner has refrained from asking for letters of resignation from the board members and CEOs that broke the banks. These banks have used their control over the nation's deposits and savings and over interest rates to hold the whole economy to ransom.
The US administration, like the British government, is pumping taxpayer-backed 'liquidity' into these banks without giving taxpayers full control over the banks.
The liquidity has gone through the front door. An indecent proportion has been funnelled straight out the back door to pay bonuses to failed executives. The rest of the loot has been grabbed and hoarded by the banks and is not being lent out to companies and households at affordable rates.
In other words, the pirates have been paid a handsome ransom and left in charge of the hijacked ship that is the nation's finances.
All this daylight robbery and confusion takes place because policy-makers - at the US Treasury, the Federal Reserve and the British government - do not understand what is going on.
Let us spell it out for them. Banks are going bust because their customers cannot repay debts, or afford to borrow. Customers cannot repay debts because a) these debts exceed their income and/or assets and b) because the interest rates or borrowing costs on these debts are too high, and unpayable. If you don't believe me, ask Warren Buffett. He tells shareholders that "highly-rated companies, such as Berkshire, are experiencing borrowing costs that, in relation to Treasury rates, are at record levels.
Though Berkshire's credit is pristine - one of only seven AAA corporations in the country - (its) cost of borrowing is now far higher than competitors with shaky balance sheets but government backing."
Millions of individuals and many thousands of companies are now unable to borrow. Burdened with huge debts by de-regulated lenders and financiers, many are being bankrupted by record high borrowing costs on their debts.
This is the real crisis in the economy. And the Federal Reserve declines to address this crisis of high real rates of interest.
Because they are facing insolvency, companies are firing workers. This is pushing up unemployment to levels comparable to those at the height of the Great Depression. Unemployed workers can't pay debts. It's simple.
Our graph below gives the real unemployment figures. Last week the Labor Bureau suggested that only 5 million people have lost their jobs in the last twelve months, and that only 12.5 million people are unemployed. We think that is optimistic.
The Bureau does not include in the official release, 'discouraged' employees or those working part-time because they simply can't get full time jobs. Dig deeper, and the percentage unemployed today is almost double that announced on Friday: 15%. We predict if policies are inadequate and interest rates stay high, that it will be as high as 20% by the end of this year. That will bring unemployment - under President Obama's watch - close to the level it hit, 25%, at the height of the Great Depression in 1933.
These millions of unemployed are American hostages tied up in a global economic failure not of their making.
They are desperate for the Federal Reserve to act as decisively as the Pentagon, and take on the banking pirates.
This cannot be done by pumping more taxpayer-backed money into the banks. Why? Because the crisis has moved on. It's no longer a crisis of liquidity, but of solvency. Banks cannot be made solvent by taxpayers. They can only be made solvent if and when companies and individuals can afford to borrow, and to repay debts.
By throwing money at the banks, and by refusing to take full charge of how they are run; by refusing to lower borrowing costs, US Treasury officials and the Fed Reserve are dodging the big issue: corporate and household insolvency.
Cutting borrowing costs would start to address the solvency issue. Putting a floor under insolvent companies and insolvent homeowners - would save the banks. At the same time it would release the hostages that are the unemployed, the elderly, the savers and the entrepreneurs.
The Federal Reserve can begin to lower borrowing costs by measures known as Quantitative Easing (QE). These were adopted by the Bank of Japan in March, 2001, and by the Bank of England last week. QE does not mean 'printing money' - this is a widespread misunderstanding. (For more on QE, click here.) QE will help to lower interest rates and therefore borrowing costs. Governor Ben Bernanke is still ignoring the experience of Japan and the way in which QE was used to lower rates and loosen the grip of insolvency on the economy.
He must adopt QE measures urgently. The Obama presidency has only just been launched on a wave of excitement and anticipation. If it is not to end with a hostage crisis of mass unemployment, rising crime, hungry children and riots outside banks, then the Federal Reserve and the US Treasury must take control.
GE under close watch for corporate crisis
In a time when the nation's largest banks and corporations are using government aid to barely stay afloat, investors are eyeing their stocks closely for signs of trouble. Sign-readers are pointing to General Electric as the next trouble-maker to watch for, Joe Nocera of the New York Times reported on Friday.
GE, the only original member of the Dow Jones Industrial Average still trading, has undergone big changes in the last decade under the guidance of CEO Jeffrey Immelt. Immelt took over in 2001 and since then has re-built the company using GE Capital, the fiscal management branch of the company. GE's AAA credit rating encouraged expansion into the credit market. GE Capital was such a key to GE's success that it provided half its earnings in 2008. Now, some say, the consequences loom.
Heavy investments in commercial real estate over the past few years didn't turn out to be profitable. Profits at GE Real Estate dropped by $1.1 billion last year, according to Bloomberg. This led the company's executives to make financing changes. Last Friday, GE announced that it was slashing its dividend by 68 per cent to finance a $9 billion injection into GE Capital's capital base. The dividend cut, which hasn't been seen at GE since the Great Depression, angered investors who bought GE shares based on its quarterly reliability.
Two days later, analysts at Sterne Agee issued a report explaining GE's dire predicament, and had bad news for investors. “GE Capital is now confronting the prospect that a downward trend...could potentially lead to an extended period of steadily lower earnings, depleted loss provisions, lower credit ratings, [and] rising borrowing costs,” Nicholas Heymann wrote.
By the next day, skittish investors had sold off large amounts of GE stock. The company's stock, which was at 17$ a few months ago, fell to less than 6$, an 18-year-low. Credit default swaps indicated investors were worried that GE was at risk of not being able to pay debts.
Moody's Investors Service is currently reviewing its AAA credit rating on GE, and Standard & Poor's has a negative outlook on the company's debt, according to the Boston Globe.
Meanwhile, representatives of General Electric are trying hard to maintain their company's image. Immelt released his annual letter to stockholders last week, reminding them that GE posted an $18 billion profit last year. He admitted that GE Capital outgrew its original purpose - to finance the core company's business – and he recognized that because of this outgrowth, GE stocks are getting hammered. GE sent out an email after the release of Sterne Agee's analysis, claiming that it was well prepared for whatever cards the market dealt. “In the unexpected event that GE Capital requires additional equity, we have a number of options to satisfy that need without seeking external capital,” the e-mail said.
The current economic situation has investors running scared. GE is the focus of analysts and market-watchers because recent events – intense pressure from shareholders, quick stock market devaluation, blown-out credit default swaps, assurance from GE that everything's fine – may be the beginning of another corporate crisis. “It’s like a moving plague that hits different targets and has now landed on G.E.,” Michael Lewitt, president of Harch Capital Management, said to the New York Times.
Farm Control that will drive Organic Farms out of Business
The New Administration is pushing Farm Control that will drive Organic Farms out of Business: http://www.youtube.com/watch?v=epXNJNjYBvw
Buried in the bills are fine print that will force farmers to buy and use pesticides and to comply with severely onerous red tape (ostensibly to "protect consumers") or be driven out of business by gigantic fines.
It is "claimed" and being presented to establish a "Food Safety Administration" with in the Department of Health and Human Services to "protect" the publicfrom food born illnesses.... but as usual, nothing that happens in DC is actually the way it seems on the surface- its all smoke and mirrors- all LIES!!!
Congresswoman Rosa De Lauro (D-CT) deserves burial by phone call, fax, email and irate personal visits for sponsoring the slimiest piece of legislation I've seen in a very long time: HR 875 The (So Called) Food Safety Modernization Act of 2009: http://www.govtrack.us/congress/bill.xpd?bill=h111-875
This bill aleady has 31 cosponsors who most likely never read anything more than the PREAMBLE to the bill which seems reasonable enough, but as usual, the DEVIL is in the DETAILS. Peter Defazio (D-OR) is even cosponsoring this. He needs to REMOVE HIS NAME, and I think he will once he realizes whats actually in this bill. He is normally on our side against huge corporate powers like Monsanto, but in this case he's clearly making a mistake.
Whats driving this despicable P.O.S. was the recent contaminated Peanut Plant in Georgia http://www.foxnews.com/story/0,2933,497425,00.html
As usual, Monsanto's lobbyists are up to no good, however, and they've stuck language into this puppy that needs to be yanked outa there PRONTO- and we're all going to have to do some work to make that happen!
If we don't, you can say goodbye to all that nice organic produce that you buy at your health food store, in the organics section of your supermarket, from farmers markets, and you can even expect to have the Fedstapo show up on your DOORSTEP to FINE you for growing a garden in your own YARD- THAT is how overly broad the bill language in this thing is!
Check it out: Full Text: http://thomas.loc.gov/cgi-bin/query/z?c111:h875:
HERE IS WHATS SPECIFICALLY WRONG AND WHAT YOU CAN DO:
This bill is sitting in committee and I am not sure when it is going to hit the floor. One thing I do know is that very few of the Representatives have read it. As usual they will vote on this based on what someone else is saying. Urge your members to read the legislation and ask for opposition to this devastating legislation. Devastating for everyday folks but great for factory farming ops like Monsanto, ADM, Sodexo and Tyson to name a few.
I have no doubt that this legislation was heavily influenced by lobbyists from huge food producers. This legislation is so broad based that technically someone with a little backyard garden could get fined and have their property siezed. It will effect anyone who produces food even if they do not sell but only consume it. It will literally put all independent farmers and food producers out of business due to the huge amounts of money it will take to conform to factory farming methods.
If people choose to farm without industry standards such as chemical pesticides and fertilizers they will be subject to a vareity of harassment from this completely new agency that has never before existed. That's right, a whole new government agency is being created just to police food, for our own protection of course.
DO NOT TAKE MY WORD FOR IT, READ THIS LEGISLATION FOR YOURSELF.
The more people who read this legislation the more insight we are going to get and be able to share.
Post your observations and insights below.
Urge your members to read this legislation and to oppose the passage of this legislation.
Pay special attention to
- Section 3 which is the definitions portion of the bill-read in it's entirety.
- Section 103, 206 and 207- read in its entirety.
Red flags I found and I am sure that there are more...........
- Legally binds state agriculture depts to enforcing federal guidelines effectively taking away the States’ power to do anything other than being food police for the federal dept.
- Effectively criminalizes organic farming but doesn't actually use the word organic.
- Affects anyone growing food even if they are not selling it but consuming it.
- Affects anyone producing meat of any kind including wild game.
- Legislation is so broad based that every aspect of growing or producing food can be made illegal. There are no specifics which is bizarre considering how long the legislation is.
- Section 103 is almost entirely about the administrative aspect of the legislation. It will allow the appointing of officials from the factory farming corporations and lobbyists and classify them as experts and allow them to determine and interpret the legislation. Who do you think they are going to side with?
- Section 206 defines what will be considered a food production facility and what will be enforced up all food production facilities. The wording is so broad based that a backyard gardener could be fined and more
- Section 207 requires that the State's agriculture dept act as the food police and enforce the federal requirements. This takes away the State’s power and is in violation of the 10th amendment.
- There are many more but by the time I got this far in the legislation I was so alarmed that I wanted to bring someone's attention to it
Last word...... Legislate religion and enforce gag orders on ministers on what can and can't be said in the pulpit, instituting regulations forcing people to rely fully on the government, control the format of money (cash, plastic or digital), seeds and food.
I haven't read any of the Senate's version of the bill as I have been pouring through the House's version. Here is the link and I hope some of you can take a look and post your observations and insights below.
S 425 http://thomas.loc.gov/cgi-bin/bdquery/z?d111:s425:
Theres also a chance that as this bill moves through Congressman Waxman's Energy and Commerce Committee, he could use it as a vehicle for attacking the Dietary Supplement Health & Education Act of 1994 which defends our access to dietary supplements. Waxman is DSHEA's biggest opponent in Congress and he's never had more power than he has now. IAHF is especially monitoring this aspect of the bill, but the rest is very bad as it is!
Things you can do:
- Contact your members at 202-224-3121 (Capital Switchboard) and ask them to oppose HR 875 and S 425. While you are at it ask them if they personally have read the legislation and what their position is? If they have not read the legislation ask them to read it and politely let them know that just because other representitives are not reading the legislation and voting on it does not mean they can do the same
- Get in touch with local farmers and food producers by attending a local farmers market and asking them how you can understand further the implications that this will have on them
- Attend a local WAPF meeting, as a good start to learning about what is going on in farming and local & state initiatives . The website is http://www.westonaprice.org/localchapters/index.html
- Check out the Farmers Legal Defense Fund at http://www.ftcldf.org/index.html
- Find out who sits on your State’s agriculture and farming committee and contact them with your concerns
- Continue to contact your elected officials and let them know your position on legislation and why
- Get active at the local and State levels as this is the quickest way to initiate change.
I will be out of my office for a week, leaving Wednesday to work with a client in California, but I sure would appreciate if you forwarded this widely! Anyone can be on the IAHF list by signing up at www.iahf.com
Donations make it possible for me to do this Health Freedom work. If you appreciate this timely heads up, please consider sending a donation to IAHF via paypal at http://www.iahf.com/index1.html or by sending a check or money order to IAHF 556 Boundary Bay Rd., Point Roberts WA 98281 USA
US Continues Military Encirclement Of Russia
American Vice-President Joseph Biden at the Munich Security Conference in early February pledged to "press the reset button" with Russia.
Since then prominent Washington officials have repeated their intention to reset, reboot and so forth relations with Russia but have, starting with Biden at Munich, not relented in any substantive manner on any of the behaviors and projects that have antagonized Moscow.
US Secretary of State Hillary Clinton met with Russian Foreign Minister Sergei Lavrov recently and American President Obama is to meet with his Russian counterpart Dmitri Medvedev n London early next month.
Russia has permitted the US and its NATO allies transit rights for non-military goods to assist the West's expanding war in South Asia, though in the process is abetting the extension of the NATO military nexus from the Baltic to the Black to the Caspian Seas and hence tightening the noose around its own neck.
How are the US and NATO demonstrating their supposed resolve to mend ties with Russia, not in words but in deeds?
Starting at Russia's northwestern most border and proceeding counter-clockwise, in the following manner:
In nine days NATO will commence a ten-day military exercise, Cold Response 2009, consisting of 7,000 troops from thirteen nations in northern Norway, off the coast of the Norwegian Sea, adjoining the Barents Sea and the Russian coast.
It will be a full spectrum exercise with land, naval and air forces simulating an 'emergency' military intervention.
The Barents Observer reports:
"This year, about 700 of the participants are special forces. The [imaginary] conflict increased in 2008 when Northland attacked and occupied Midland. After a cease-fire Northland withdraws its forces and a power vacuum which NATO has to fill, occurred."
Moving slightly southwest, NATO has just completed the four-day Baltic Host 2009 exercise in Estonia, which Russia's Novosti described as involving "a series of scenarios simulating the arrival and deployment of NATO troops in a member country."
Participating in the war games were forces from the United States, Britain, Poland, Estonia, Latvia and Lithuania in "the first exercise of this type in the Baltic region, which could become a regular event in the future to improve interoperability between NATO troops."
Continuing southward, nine days ago Polish Foreign Minister Radoslaw Sikorski met with US Secretary of State Hillary Clinton and insisted that American Patriot missiles would be deployed in his country.
The new US Patriot PAC-3 missile covers seven times the area of the original model and has double the range, enabling such missiles in Poland to hit Russian territory in the Kaliningrad region.
Two weeks ago US Defense Secretary Robert Gates signed a pact with his Polish opposite number Defense Minister Bogdan Klich "to bolster Poland's special forces and enhance how it operates within the NATO military command structure" as the US armed forces newspaper Stars and Stripes reported.
This was two days after Poland's Deputy Defense Minister Stanislaw Komorowski said, as quoted by Interfax-Ukraine, "that there is much more of a discussion right now within the alliance [NATO], to a large extent because many partners realize that the enemy unfortunately can be much closer to our borders" and "We have to take this into account when we plan the future of the alliance."
At the same time NATO announced that it was going to establish a permanent military force in Eastern Europe which would draw troops from the NATO Response Force (NRF).
Further pursuing the path south and east along the Russian border, the Chief Commander of the Ukrainian Navy, Ihor Tenyukh, announced that the annual US-led Sea Breeze NATO military exercises in Crimea would "be of a larger scale regarding the strength and number of military personnel" than any of its predecessors.
His claim was made within weeks of the signing of the US-Ukraine Charter on Strategic Partnership.
At the Krakow, Poland meeting of NATO defense chiefs on February 20 the Alliance's Secretary General Jaap de Hoop Scheffer pledged that "NATO remains ready to assist Ukraine in undertaking comprehensive reforms in its defence and security structures. We are determined to continue to develop this strategic partnership."
Down the Black Sea coast, NATO's annual Cooperative Longbow/ Cooperative Lancer month-long Caucasus military exercises are to be held in Georgia starting on May 3 and as the Georgian Times reported "Georgia’s participation in NATO trainings is seen as the first serious step NATO has taken after the August conflict and the subsequent creation of the NATO-Georgian Commission in September."
900 troops from 23 nations will participate in the exercises.
Two weeks ago US defense chief Gates reiterated that the Pentagon has a "continuing security relationship with Georgia both bilaterally and through NATO-Georgia Commission" and according to Civil Georgia "We're involved in training. We are involved in military reform in Georgia."
On the western end of the Black Sea directly across from Georgia - and Russia - the US has begun the two-week Thracian Spring 2009 joint air and infantry exercises with the Bulgarian armed forces, starting at the US's newly acquired Bezmer airbase.
Two weeks ago the US European Command spoke of its expanding military presence in Bulgaria and its Black Sea neighbor Romania: "It is larger in scale than it has been in previous years and we think that is an important consideration. If our current plans hold, we'll cycle a number of U.S. companies through both Romania and Bulgaria under battalion-level leadership to partner with the Bulgarians and the Romanians for the training that will occur roughly from July through October. So a larger presence and for a longer period of time...."
Southeast of Georgia and on Russia's southern flank, US Central Command chief David Petraeus announced that Azerbaijan would be used as a transit route for NATO arms headed to the Afghan war theater. The US has also ordered more Azerbaijani troops deployed there to serve under NATO command and the US Missile Defense Agency is considering expanding its global missile shield program to include what is now a Russian surveillance base in Garbala, Azerbaijan.
Indeed, in late February former US National Security Adviser and arch-Russophobe Zbigniew Brzezinski stated, "We should work so that Georgia, Ukraine and Azerbaijan do not become victims of the US-Russia dialogue....We should do everything to defend these countries."
Proceeding steadily toward the east, the Pentagon and NATO have recently secured transit rights for the Afghan war with Kazakhstan, which borders both Russia and China.
A year ago the US Defense Department signed a military treaty with Kazakhstan, and as US Deputy Assistant Secretary of Defence Mitchell Shivers vowed, "As a member of NATO, the U.S. is committed to helping Kazakhstan in improving its inter-operability with equipment and training to U.S. and NATO standards."
In 2006 the Pentagon held a military exercise in Mongolia, Khaan Quest 2006, which also borders Russia and China.
At the far opposite end of Russia from where this survey began, the Barents Sea, the US has begun ICEX-2009 by deploying nuclear submarines for simulated warfare exercises off the coast of Alaska and into the Bering Sea and the Arctic Ocean. The last such exercise, in 2007, included US and British nuclear submarines maneuvering under the polar ice cap.
Several days earlier the chief of the Russian general staff, General Nikolai Makarov, warned that "Russia will respond to any attempts to militarize the Arctic," as Reuters reported.
A news dispatch of two days ago mentioned a recent poll that demonstrated half of all Russian adults fear military aggression from foreign nations. Small wonder, notwithstanding ingenuous blandishments from the likes of Joseph Biden, Hillary Clinton and Robert Gates.
Controversy Over Yucca Mountain May Be Ending
By Steve Vogel
More than two decades after Yucca Mountain in Nevada was selected to be the national nuclear waste repository, the controversial proposal may finally be put to rest by the Obama administration.
In keeping with a pledge President Obama made during the campaign, the budget released last week cuts off almost all funding for creating a permanent burial site for a large portion of the nation's radioactive nuclear waste at the site in the Nevada desert. Congress selected the location in 1987 and reaffirmed the choice in 2002. About $7.7 billion has been sunk into the project since its inception.
"Yucca Mountain is not an option, and the budget clearly reflects that," Stephanie Mueller, a spokeswoman for the Department of Energy, said yesterday.
Senate Majority Leader Harry M. Reid (D-Nev.), a staunch opponent of the Yucca project, called the Obama action "our most significant victory to date in our battle to protect Nevada from becoming the country's toxic wasteland."
Reid, who during primary season helped extract campaign promises from Obama and then-Sen. Hillary Rodham Clinton to stop Yucca Mountain, added: "President Obama recognizes that the proposed dump threatens the health and safety of Nevadans and millions of Americans. His commitment to stop this terrible project could not be clearer."
Less clear is what will happen next with the nation's growing stockpile of nuclear waste.
"That's a great question," said Geoffrey H. Fettus, an attorney with the Natural Resources Defense Council.
The budget provides no answers as to what the administration proposes to do with the approximately 57,700 tons of nuclear waste at more than 100 temporary sites around the country, or with the approximately 2,000 tons generated each year by nuclear power plants. The Yucca site was designed specifically to handle spent fuel rods from the nation's 103 nuclear generators.
"The new administration is starting the process of finding a new strategy for nuclear waste," Mueller said.
Keeping the waste at temporary sites is an option in the short term, but experts in the field say it will not serve as a long-term answer for the problem of radioactive waste, which will need to be kept safely stored for at least 1,000 years.
Others have advocated reprocessing much of the spent fuel, as is being done in France, but this too is fraught with problems, according to some experts.
Ultimately, Fettus said, the government will have to find a new site or sites for permanent storage of nuclear waste.
The Nuclear Energy Institute, which represents the nuclear industry, favors the creation of a "blue-ribbon commission to assess where we go," spokesman Steve Kerkeres said.
The Bush administration last year submitted a license application to the Nuclear Regulatory Commission and hoped to have the repository operating by 2020. The Obama administration is not withdrawing the application because of concerns about lawsuits but, nonetheless, insists the Yucca Mountain project will not go forward.
FDIC warns US bank deposit insurance fund may tank
The Federal Deposit Insurance Corporation is warning banks that its deposit insurance fund could dry up this year amid rising bank failures although the deposits would remain fully backed by the government.
The head of the Federal Deposit Insurance Corporation, Sheila Bair, in a letter to bank chief executives dated March 2, defended the FDIC's plan to raise fees on banks and assess an emergency fee to shore up the fund and maintain investor confidence.
Bair acknowledged the new fees, announced Friday, would put additional pressure on banks at time of financial crisis and a deepening recession, but insisted they were critical to keep the insurance fund solvent and protected.
"Without these assessments, the deposit insurance fund could become insolvent this year," Bair wrote.
The FDIC chief said in the letter that the rapidly deteriorating economic conditions raised the prospects of "a large number" of bank failures through 2010.
"Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative," she wrote.
The FDIC last Friday announced it would impose a temporary emergency fee on lenders and raise its regular assessments to shore up the rapidly depleting deposit insurance fund that insures individual customer deposits up to 250,000 dollars.
A week ago the FDIC reported a sharp depletion of the deposit insurance fund in the fourth quarter due to actual and anticipated bank failures, to 19 billion dollars from 34.6 billion in the third quarter.
The FDIC said it had set aside an additional 22 billion dollars for estimated losses on failures anticipated in 2009.
"Some have suggested that we should turn to taxpayers for funding. But banks -- not taxpayers -- are expected to fund the system, and I believe Congress would look skeptically on such a course of action," Bair wrote.
"All banks benefit from the FDIC's industry-funded status and should take pride in it. Keeping the guarantee industry funded will serve banks well once this current crisis passes. Turning to taxpayers for support, on the other hand, could paint all banks with the 'bailout' brush."
Solicitation for Media Team in Iraq Hints at Contracting-Overhaul Snags
By Walter Pincus
The Army wants a private firm to provide a seven-member media team to support the public affairs officer of the 25th Infantry Division, now serving as Multi-National Division-North in Iraq -- at least three media specialists, two Arab speakers, a Web manager in Iraq and a media specialist stateside.
So last week it extended until next Sunday the deadline for bids on a contract to provide those services, continuing a practice that has vastly expanded during the past five years as the military has hired outside firms for jobs in Iraq and Afghanistan.
President Barack Obama called last week for the Defense Department to stop outsourcing services that the government could perform. A look at solicitations last week on the Web site FBODaily.com showed more than 40 notices about new and modified contracts for Iraq and Afghanistan, including contracts for building an air-traffic control tower at an Iraq air base, providing security guards for U.S. military facilities in Iraq and hiring a new Food for Peace officer in Afghanistan.
But the solicitation for the media team is an example of the borderline cases that will be a challenge for government officials charged with writing new rules and enforcing them.
The statement of work accompanying the solicitation for the 25th Infantry Division contract says the services to be provided include "engaging Western and U.S. external audiences; informing our internal and home station audiences with aggressive media relations; as well as command information and outreach programs that support Iraq's steady growth in its government."
One result being sought: "Expand public information reach beyond traditional recipients of media products in order to garner maximum exposure to publics in the U.S. on a 24 hour basis," the work statement says.
Except for informing division personnel and home station audiences, those tasks are normally handled by the State Department's public diplomacy officials and before that by the U.S. Information Agency, not the military.
Maj. Patrick J.O. Husted, public affairs planning officer for the 25th Infantry Division, described the solicitation as "similar to other media support contracts that have been utilized during Operation Iraqi Freedom to augment divisional public affairs offices." He said the 25th Infantry's public affairs office has nine employees -- three officers, four noncommissioned officers and two enlistees -- all deployed to Iraq from the division's home base in Hawaii. "Doctrinally speaking, division public affairs assets are not manned to the point where we can provide adequate coverage of units and events," Husted said.
Under the proposal, three media specialists, including the team leader, would be stationed in Iraq to provide day-to-day assistance to the public affairs officer. The team leader would also help produce a 24- to 36-page monthly command magazine for internal and external distribution, along with a 220-page year-end command information book "to be distributed to key personnel and/or available for individual purchase," according to the proposal.
The two Arabic-speaking specialists would monitor Iraqi media and "assist in identifying and engaging Iraqi and international journalists/media," the proposal says. The Web manager would design a site, which would be separate from the 25th Division's home site. It would provide "a way for the troops to communicate with their family and friends and a broader range of the American public about their activities in Iraq." The stateside media specialist would work on story packages for distribution to "hometown, regional and national U.S. media."
In other cases, the military has been hiring private firms because the United States is undertaking tasks, particularly in Iraq and Afghanistan, that involve construction projects.
For example, on March 2, the U.S. Army Corps of Engineers sought the names of firms that would provide architectural and engineering services in Iraq that it said could total $245 million over the next five years. The projects, according to the solicitation, could include building town and city roads, bridges, police stations, schools, barracks, and army or air force bases.
The military is also undertaking programs that in other times would have been handled by the State Department or the U.S. Agency for International Development. On March 3, the Army solicited private firms to bid on a contract that could run to $40 million over four years "to inform and influence undecided Afghans to accept the government of Islamic Republic of Afghanistan as a legitimate government of the people, [and] support the acceptance of the Afghan National Security Forces as legitimate security forces."
To carry out this mission, the winning contractor "must be able to develop, test, produce, coordinate dissemination of media products and report effectiveness of products in support of the 2009 program lines," according to the solicitation. The selected media company would produce and distribute "approved billboards, flyers, posters, educational pamphlets or brochures, newspaper advertisements, radio messages, television advertisements and documentaries," the solicitation adds. The proposal offers specifics on the quantities the Army could order, such as single-sided fliers (10,000), posters (5,000), 45-second radio messages (three times a day for two weeks for each station in two languages) and 45-minute television programming (two times each station, two languages) so the bidder can estimate pricing.
As with similar but much more costly strategic communications contracts in Iraq, the Army would supply task orders during the year for the pamphlets and the radio or TV ads it wanted, guaranteeing that the contractor would get a minimum of $500,000 the first year.
Israel annexing East Jerusalem, says EU
• Confidential report attacks 'illegal' house demolitions
• Government accused of damaging peace prospects
A confidential EU report accuses the Israeli government of using settlement expansion, house demolitions, discriminatory housing policies and the West Bank barrier as a way of "actively pursuing the illegal annexation" of East Jerusalem.
The document says Israel has accelerated its plans for East Jerusalem, and is undermining the Palestinian Authority's credibility and weakening support for peace talks. "Israel's actions in and around Jerusalem constitute one of the most acute challenges to Israeli-Palestinian peace-making," says the document, EU Heads of Mission Report on East Jerusalem.
The report, obtained by the Guardian, is dated 15 December 2008. It acknowledges Israel's legitimate security concerns in Jerusalem, but adds: "Many of its current illegal actions in and around the city have limited security justifications."
"Israeli 'facts on the ground' - including new settlements, construction of the barrier, discriminatory housing policies, house demolitions, restrictive permit regime and continued closure of Palestinian institutions - increase Jewish Israeli presence in East Jerusalem, weaken the Palestinian community in the city, impede Palestinian urban development and separate East Jerusalem from the rest of the West Bank," the report says.
The document has emerged at a time of mounting concern over Israeli policies in East Jerusalem. Two houses were demolished on Monday just before the arrival of the US secretary of state, Hillary Clinton, and a further 88 are scheduled for demolition, all for lack of permits. Clinton described the demolitions as "unhelpful", noting that they violated Israel's obligations under the US "road map" for peace.
The EU report goes further, saying that the demolitions are "illegal under international law, serve no obvious purpose, have severe humanitarian effects, and fuel bitterness and extremism." The EU raised its concern in a formal diplomatic representation on December 1, it says.
It notes that although Palestinians in the east represent 34% of the city's residents, only 5%-10% of the municipal budget is spent in their areas, leaving them with poor services and infrastructure.
Israel issues fewer than 200 permits a year for Palestinian homes and leaves only 12% of East Jerusalem available for Palestinian residential use. As a result many homes are built without Israeli permits. About 400 houses have been demolished since 2004 and a further 1,000 demolition orders have yet to be carried out, it said.
City officials dismissed criticisms of its housing policy as "a disinformation campaign". "Mayor Nir Barkat continues to promote investments in infrastructure, construction and education in East Jerusalem, while at the same time upholding the law throughout West and East Jerusalem equally without bias," the mayor's office said after Clinton's visit.
However, the EU says the fourth Geneva convention prevents an occupying power extending its jurisdiction to occupied territory. Israel occupied the east of the city in the 1967 six day war and later annexed it. The Palestinians claim East Jerusalem as the capital of their future state.
The EU says settlement are being built in the east of the city at a "rapid pace". Since the Annapolis peace talks began in late 2007, nearly 5,500 new settlement housing units have been submitted for public review, with 3,000 so far approved, the report says. There are now about 470,000 settlers in the occupied territories, including 190,000 in East Jerusalem.
The EU is particularly concerned about settlements inside the Old City, where there were plans to build a Jewish settlement of 35 housing units in the Muslim quarter, as well as expansion plans for Silwan, just outside the Old City walls.
The goal, it says, is to "create territorial contiguity" between East Jerusalem settlements and the Old City and to "sever" East Jerusalem and its settlement blocks from the West Bank.
There are plans for 3,500 housing units, an industrial park, two police stations and other infrastructure in a controversial area known as E1, between East Jerusalem and the West Bank settlement of Ma'ale Adumim, home to 31,000 settlers. Israeli measures in E1 were "one of the most significant challenges to the Israeli-Palestinian peace process", the report says.
Mark Regev, spokesman for the Israeli prime minister, Ehud Olmert, said conditions for Palestinians living in East Jerusalem were better than in the West Bank. "East Jerusalem residents are under Israeli law and they were offered full Israeli citizenship after that law was passed in 1967," he said. "We are committed to the continued development of the city for the benefit of all its population."
U.S. Army document describes Israel as 'a nuclear power'
In December 2006, during his confirmation hearings as Secretary of Defense, Robert Gates referred to Israel as one of the powers seen by Iran as surrounding it with nuclear weapons. But once in office, Gates refused to repeat this allusion to Israel, noting that when he used it he was "a private citizen."
JFCOM's "Joint Operating Environment" (JOE) document, with a forward by Mattis and drafted by a team of officers and civilians he selected, was signed in mid-November 2008 and posted on the Pentagon's Web site. It has generated protests by the governments of Mexico - whose potential collapse is depicted as a grave threat to U.S. national security - and South Korea, which resented the reference to North Korea as a nuclear power. Following the Korean controversy, JFCOM issued a clarification, noting that this reference does not reflect U.S. government policy, which has vowed never to accept North Korea as a nuclear power.
Regarding Israel, the JOE document warns of the danger of nuclear exchanges between countries in and around Asia. It notes that India and Pakistan have nuclear arsenals and delivery systems, that North Korea has tested a nuclear weapon and has enough fissile material to produce more nuclear weapons, and that Iran is "driving forward aggressively" toward its nuclear goals, unchecked by the international community's "confused reaction." This could serve as a proliferation incentive for other countries, the document warns.
"In effect," the document continues, "there is a growing arc of nuclear powers running from Israel in the west through an emerging Iran to Pakistan, India and on to China, North Korea and Russia in the east. Unfortunately, that nuclear arc coincides with areas of considerable instability [which] are of enormous interest to the United States."
General Mattis, a tough, thinking marine with several friends in the Israel Defense Forces, including a former military college classmate (retired Major-General Shai Avital, a former commanding officer of the Sayeret Matkal commando unit), conferred with Chief of Staff Gabi Ashkenazi in NATO's Brussels headquarters last November, within days of signing the JOE document.
Mattis condemned the U.S. Air Force's "Effects Based Operations" approach to warfare, as employed by the IDF in the Second Lebanon War of 2006, citing lessons learned reported by IDF officers "in a very blunt way," as he recalled in a Washington speech last month. He praised the courage shown by Israeli soldiers, but noted that being brave is not enough to stop a rocket-propelled grenade.
George Bush could be next on the war crimes list
George W. Bush could one day be the International Criminal Court's next target.
David Crane, an international law professor at Syracuse University, said the principle of law used to issue an arrest warrant for Omar al-Bashir could extend to former US President Bush over claims officials from his Administration may have engaged in torture by using coercive interrogation techniques on terror suspects.
Crane is a former prosecutor of the Sierra Leone tribunal that indicted Liberian President Charles Taylor and put him on trial in The Hague.
Richard Dicker, director of the International Justice Programme at Human Rights Watch, said the al-Bashir ruling was likely to fuel discussion about investigations of possible crimes by Bush Administration officials.
Congressional Democrats and other critics have charged that some of the harsh interrogation techniques amounted to torture, a contention that Bush and other officials rejected.
The prospect of the court ever trying Bush is considered extremely remote, however.
The US Government does not recognise the court and the only other way Bush could be investigated is if the Security Council were to order it, something unlikely to happen with Washington a veto-wielding permanent member.
Younger and Hungrier in America
The revised and upgraded unemployment figures released on Friday were nothing short of staggering: almost two million jobs lost in the past three months as the official unemployment rate rose to a quarter-century high of 8.1%. Nearly three million Americans are now officially unemployed for six months or more, while another 8.6 million are "working part time because they cannot find full-time employment." Just the previous day, the government released figures showing, not surprisingly, that food stamp recipients had also soared by another 700,000 in February -- 651,000 jobs had been lost that same month -- to a record total of 31.8 million.
Food stamps may be the major government bailout program against hunger, but most bailout efforts by the Obama administration and its predecessor have been focused on pouring multi-billions repeatedly into ever more failing financial institutions, which, as economist Joseph Stiglitz writes, "years of reckless behavior, including bad lending and gambling with derivatives, have left [them], in effect, bankrupt." This includes, of course, $45 billion siphoned into Citigroup, whose stock hit the one-dollar mark just days ago, and into that black-hole-of-a-disaster, the global insurance company A.I.G., which got another $30 billion last week, bringing its grand bailout total (to date) to $163 billion.
Money-mad bankers, who helped put millions out of work and start a cascading global financial crisis that seems without end, evidently feel no shame as they receive millions in bonuses while milking their banks and the government for everything they're worth. On the other hand, increasing numbers of Americans feel deep shame, when they shouldn't, because they have to resort to the nation's private system of food banks and other free food outlets once they find they can't stock their refrigerators and cupboards adequately enough to feed themselves and their children.
This is a nightmare that Nick Turse -- in the fourth installment of his Tough Times series for TomDispatch on American economic hardship -- captures as he reports on what's happening to food banks nationwide. It's worth keeping in mind that, under the pressure of massive need and desperation, banks like Citigroup and Wells Fargo aren't the only ones that could fail and that it's ordinary Americans who really need, and deserve, the bailing out. Tom
Breaking the BanksThe Struggle to Feed America's Nouveau Needy
By Nick Turse
The message is simple. Ever more Americans need food they can't afford. As tough economic times take their toll, increasing numbers of Americans are on tightened budgets and, in some cases, facing outright hunger. As a result, they may be learning a lot more about food banks and soup kitchens than most of them ever wanted to know.
In recent interviews with TomDispatch.com, representatives from food banks -- the non-profit organizations that distribute groceries to those in need via food pantries, shelters, and soup kitchens -- expressed alarm at the recent surge in need all across the country. At the same time, most stated that, however counterintuitive it might seem, financial contributions to their organizations are actually on the rise. So, too, are food prices, however -- and donations, unfortunately, are not keeping up with demand.
Food bank representatives agree on one thing: the need for their services is spiking in a way none of them can recall. Again and again, they emphasize that lines at food pantries are growing longer, seemingly by the month, and that those in line are younger and often more middle class than ever before.
Families who just months ago didn't even know what a food bank was and would never have considered visiting a food pantry now have far more intimate knowledge of both. Embarrassed to approach institutions that they previously identified with the poor and indigent, many, say food bank officials, are also waiting far too long to seek aid. Other formerly middle class Americans who have never dealt with, or even thought about, food insecurity before simply don't know whom to call or where to turn.
These points echo a December 2008 survey conducted by Feeding America, a national hunger-relief charity. Its network of more than 200 food banks in all 50 states distributes more than two billion pounds of donated groceries annually to 63,000 local charitable agencies. Its survey found that, of 160 food banks, 99.4% of them reported seeing more first-time users in 2008.
For America's food banks this has meant one thing: that they, too, are needier. They need ever more fresh food, non-perishable food, and non-food items like cleaning products and toiletries from wholesalers, retailers, food distributors, corporations, charities, government agencies, local farms, and individual donors. They need ever more storage and freezer space. They need ever more volunteers. They need ever more food that can be made available on appointed distribution days at food pantries. And they need ever more emergency food supplies, available on demand for people who suddenly realize that they are hungry and out of options, possibly for the first time in their lives.
The Face of Hunger Today
"Hunger does not discriminate, but the face of the hungry is growing younger," says Stanley Bray of the St. Louis Area Foodbank, which distributes food to more than 500 agencies, including food pantries, soup kitchens, shelters, and emergency food programs in 14 counties in eastern Missouri and 12 counties in southwestern Illinois. Bray's organization has seen a 15% increase in need just since October 2008. Thirty to forty percent of that 15%, he says, are first-time clients. "Typically, those who would have volunteered at the Foodbank are now recipients of food at local pantries," he notes.
Even as Americans who once might have donated food or money now find themselves in need, people still have the urge to help as best they can. At one West Coast food bank, a representative told me of a man who recently came in with a proposition. He needed six weeks of food assistance while he was putting together the money to travel across country and move back in with his parents. Until then, he suggested, he would work for the food bank to pay his way.
"I must say that we are amazed and touched by the attitude of our community. From large local financial services [wealth management] companies, to the local Rotaries, schools, small businesses, and countless individuals -- everybody seems to be sharing what they can," notes Iris Valanti of the Greater Pittsburgh Community Food Bank. "Unlike the squabbling going on in Washington, people out here in real life are trying to pull together and do what they can."
But that communal spirit can only take food banks so far, given the troubling trends on the horizon. According to Valanti, large foundations are reviewing their "decimated portfolios" and trimming donations, leaving organizations like hers wondering what the future will bring. In fact, the Greater Pittsburgh Community Food Bank's subsidiaries are already struggling to obtain needed grants to secure new freezers to store food for the increasing number of nouveau needy. At the same time, she points out, food donations are actually down in her area, while the organization's food purchases have increased by an astonishing 560% in the last two years.
Valanti spelled out the enormity of the problem: "Fall quarter 2008 saw a 44% decrease in donated product we get through our national network partner Feeding America… The other trend was skyrocketing food prices. Our wholesale cost for a case of pasta, for instance, has risen 88% since 2006."
According to Cindy Stevens of the Community Food Bank of Eastern Oklahoma, demand for assistance began its current upswing after a major ice storm knocked out power in much of the area in December 2007. Food in refrigerators spoiled and many Oklahomans in the area were prevented from working, and thus from receiving paychecks. That led to the first "slight increase" in need, followed by a major jump when gas prices soared in the summer of 2008. Even though gas prices have fallen since, the economy has melted down with them.
"Our agencies report as much as a 40% increase in the number of people coming to them for assistance," she notes. Like other food assistance providers nationwide, her food bank has observed a clear shift in demographics. "Our agencies are reporting a change in clientele. Many of the people who are coming to them have never had to seek assistance before. Many of them have jobs or have just lost a job."
West Coast Woes
The San Diego Food Bank, which distributes groceries to 300 soup kitchens, senior centers, food pantries, churches, and other allied nonprofits in sprawling San Diego County, is facing similar marked increases in need. From December 2007 to December 2008, the number of people served by its USDA-funded Emergency Food Assistance Program, which aids low income people via 91 distribution sites, jumped from 37,302 to 65,663 -- a 76% increase. "It's unprecedented," says the Food Bank's Chris Carter. "We're seeing many more middle-class families coming in. I met a couple at one of our distributions, they have a mortgage and two car payments. They've both been laid off. The first thing to go is the food budget."
It can take several months for food stamps to kick in after they've been applied for, and, as Carter points out, "a lot of people don't have a couple of months. They need food immediately, so they're coming directly to us. We're seeing a dramatic increase in demand for food assistance across the board."
In some places, people need to wait for specific distribution days to get help from a food pantry. In San Diego, the needy don't have that worry; neither do people in Oakland, California, where the Alameda County Community Food Bank operates an Emergency Food Helpline. With just a phone call, those in dire need can receive food at a local pantry on the very day they dial. In 13 years, the Bank's help line had received more than 1,500 calls a month only twice. In 2008, every month topped the 1,500 mark. For the last six months, the average has been more than 2,000 a month and is soon expected to break the 2,500-call barrier.
In the last three months of 2008, according to Brian Higgins, the Food Bank's Communications Manager, "We saw a 45% spike over the exact same period in 2007, which was, in itself, a record breaking year." Add those numbers to the 40,000 people fed each week by the organization which distributes about 15 million pounds of food per year, while keeping in mind that we're only talking about one small city, and you begin to get a sense of the enormity of the crisis bearing down on the country.
Oakland is a poor city and many there have long experienced privation. Not surprisingly, the current economic crisis has hit its population hard. In East Oakland, the city's neediest area, people line up each Friday at the Columbian Gardens food pantry in anticipation of a regular delivery of groceries from the county food bank. "Those lines have gotten longer and longer and longer," says Higgins. Phone calls for emergency food are increasing exponentially as well. Two years ago, the staff at Columbian Gardens used to distribute four to five emergency bags of staples, including canned goods and pasta, each day. Now, on a normal day, it's 25 to 30 bags.
Nor is the pain confined to perennially hard-hit East Oakland. The whole city is suffering. Next door to the Alameda County Community Food Bank, for example, a brand new $35 million Toyota dealership -- the largest in all of Northern California -- was built from scratch on an empty lot. "It was open about eight weeks before it closed," comments Higgins -- and it's just one of numerous local businesses shutting down.
As a result, Oakland, historically saddled with the most impoverished senior population in all of California, is seeing new trends that the Food Bank's workers find chilling. Higgins notes that the population they serve now includes "more and more young people and working families. We're seeing people who made really decent money a couple years ago in real estate and other commission fields, who are down to nothing. They're having to make that call for first time."
Unfortunately, many put off calling for assistance for as long as possible. "People who work on our emergency food help-lines," he continues, "say there's a universal embarrassment about the calls they're getting now." Phone operators reassure clients that the food bank is there for that very reason, but shame and stigma have led to increased privation. "It really delays people calling."
At the Food Bank of Contra Costa and Solano, California, Lisa Sherrill has noted the same kind of spike in need. "Overall, we are serving 20% more people over two years ago," she wrote in a recent email. At some of its 29 Food Assistance Program sites, where boxes of fresh produce, bread, and other staples are handed out, demand is increasing by 5-10% a month.
Donated funds are on the rise, but they can't fully compensate for the surge in new assistance seekers. "There are many people in our Food Assistance lines that have never had to ask for food before," notes Sherrill. "Last week at a site in Antioch, we spoke with a man who has a master's [degree] in engineering, lost his job, and is having a hard time finding work because there aren't many opportunities, and what he can find he is being told he is overqualified for."
Alaska has fared better than many states. Lacking massive waves of home foreclosures and a startlingly high unemployment rate, it has been buffered from the worst of the hardships seen elsewhere. Still, the arrival of tough economic times was plainly visible last fall at "Thanksgiving Blessing," an annual holiday grocery distribution program spearheaded by the Food Bank of Alaska and held at eight locations in Anchorage.
In 2008, according to Marleah LaBelle, communications manager for the food bank, 5,900 families turned out for Thanksgiving Blessing, a 42.7% increase over the previous year. "If you factor the 5,900 families, with an average family size of four, and the total population of Anchorage 260,283 -- that is roughly 10% of the population or one in ten families," LaBelle notes. A similar December program, "Neighborhood GIFT" (which also includes toy distribution) saw a 30% spike in turnout compared to 2007. "I saw people that I knew personally at both of the holiday food distributions, and they are people I had not previously considered to be 'low income,'" she adds.
Unfortunately, the holiday season spike proved no aberration in Anchorage. The food bank's affiliates have been reporting, across the board, 30-50% increases in people visiting their soup kitchens and food pantries. For instance, the number of clients at the Valley Open Bible Fellowship food pantry in Big Lake, Alaska, has doubled recently.
As elsewhere, monetary donations have also increased for the Food Bank of Alaska, but ever less retail food is now being donated -- a worrisome trend nationally in light of increased need. "Something that has been striking to nearly everyone at Food Bank of Alaska is how quickly the food comes off the shelves in the warehouse. As soon as donated food gets sorted, it almost instantly gets picked up," LeBelle wrote in a recent email.
What's Ahead for the Nouveau Needy?
Tens of millions of Americans were already suffering from hunger and food insecurity before the current depression. In fact, in 2006, the U.S. Department of Agriculture estimated that 35.5 million Americans were "food insecure." Now, however, those numbers are bound to swell, thanks to the growing ranks of America's nouveau needy. "It's the new face of hunger for us. Before we primarily served the low-income population, the working poor, as people call them," says the San Diego Food Bank's Chris Carter. "Now middle class families who were in retail jobs, construction, the real estate industry… are finding themselves in our lines. Some of these people are those who would have donated food to us before, who would never dream they'd be in one of our food lines, and now they need help."
From his conversations with clients at the food bank's distribution sites, Carter sees bleak times ahead, especially for the staggering number of people who have, as a last resort, been maxing out their credit cards. "We've seen the credit crunch on Wall Street and the ripple effect that it's had on more vulnerable industries across the country. I think there's going to be a credit tightening at the consumer level. When that happens we're going to see a huge surge in demand," he said recently. "This is going to get worse before it gets better."
Such prospects will spell trouble in the years ahead. The Federal government is now pouring hundreds of billions of dollars into bailing out broken banks. If hunger and need continue to skyrocket, food banks may be the next banks to break. Who will bail them out?
Nick Turse is the associate editor of TomDispatch.com. His work has appeared in many publications, including the Los Angeles Times, the Nation, In These Times, and regularly at TomDispatch. A paperback edition of his book, The Complex: How the Military Invades Our Everyday Lives (Metropolitan Books), an exploration of the new military-corporate complex in America, has just been published. His website is Nick Turse.com.
[Note: The three previous pieces in Nick Turse's ongoing Tough Times series of reports on American economic hardship are: "The Rising Body Count on Main Street, The Human Fallout from the Financial Crisis," "Meltdown Madness, The Human Costs of the Economic Crisis," and "Tough Times in Troubled Towns, America's Municipal Meltdowns."]