Sunday, April 5, 2009

Workers occupy car parts factories in England and Northern Ireland

Workers occupy car parts factories in England and Northern Ireland

By Steve James

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Hundreds of workers at car parts maker Visteon have launched occupations and sit-in protests at three of the company's sites. Up to 200 workers are occupying the Finaghy plant in west Belfast, 130 are on the roof and around the premises in Enfield, North London, while protests are ongoing at Basildon, Essex.

The occupations follow the summary decision on Tuesday by the company's UK arm, formerly part of car giant Ford, to place itself in administration and sack 565 of its 610 workforce.

Workers, many with three decades of service, were given just moments to collect their belongings and leave. Summing up their experiences, a placard at the Basildon protest complained "20 Years Work, Zero Minutes Notice."

Protests began in the Belfast plant, where 210 workers have been sacked. One hundred workers occupied the plant on Tuesday night, demanding either that the plants are kept operational or the redundancy and pension pay-outs are the same as their entitlement would have been if Visteon UK, spun off in 2000, had remained part of Ford.

John McGowan told the Belfast Telegraph, "Last year they were offering redundancy packages of £30,000 minimum. Now they're telling me for my 30 years loyalty to this company I'm getting a redundancy package which is capped at just over £9,000. That's totally unjust and unfair."

Workers insist that they were offered guarantees on pay and conditions when Visteon was established.

At the Enfield plant, some 130 of the 227 workforce are still on the roof or in the surrounding grounds. Workers have been supported by families and friends, who have passed food and sleeping bags to them. The company has sought a court order for their removal.

Carl Benjamin from Enfield told the Guardian, "We just want to show them that they can't pick people up and put them down. We're not mannequins."

Angry scenes were reported in Basildon. Workers were called off the production line at 1 p.m. to be informed by administrators from corporate auditing firm KPMG and security guards that the company had been closed. Workers were given a leaflet and told to leave. The plant was briefly occupied and protests at the neighbouring Visteon Customer and Technology Centre (VSTC) took place on Thursday morning.

Workers returned to the plant late Thursday. Thirty marched inside and have since refused to leave. Police were called and stopped more workers entering the plant.

While workers were taken wholly by surprise by the closure, it is clear that the company has been preparing some sort of move for weeks, if not months.

Visteon's UK arm, which has lost £669 million since 2000, is being wound up. It is likely that closing the UK operation is part of the company's survival plan.

Worldwide, the Michigan-based company employs some 33,500 workers. It narrowly avoided filing for Chapter 11 bankruptcy earlier this month, making a last-minute $16 million interest payment. Annual turnover is around $9.5 billion.

Concern has been growing for months about its capacity to survive the crisis overwhelming the global car industry. Moody's cut Visteon's credit rating recently, querying whether it would survive as a "going concern."

The company makes air conditioning, interior and power train parts mostly for Ford, Jaguar and Land Rover. Ford in the UK informed the press, "We have been in close contact with Visteon, as we would be with any supplier in distress—especially so over the past few months."

Supplies to Ford's UK plants are being maintained from other Visteon plants. The company operates in some 27 countries, with major manufacturing operations in China, Europe and North America. It also has operations in South Africa, Brazil and Argentina.

The closures will not have come as a surprise to the trade unions. The union bureaucracy has decades-longs relations with all the major producers in the UK and discusses all aspects of production and factory life with corporate and plant management on a regular basis.

Speaking to the Enfield Independent, car worker Lee Cowell said of the union officials who had arrived at the occupied plant, "Where were they when all this was happening? It's only now they want to do something. We thought they'd do something before this happened. They should've known something was coming up."

None of the protestations of support and promises of action for Visteon workers from union officials should be taken at face value.

Speaking to sacked workers in Enfield, the national secretary of Unite for the vehicle industry, Dave Osborne, claimed that "the action will spread not just into Visteon plants but into Ford and right across the UK, not just in Dagenham."

Jimmy Kelly, regional secretary for Unite in Ireland, claimed there was "no time limit" on the sit-in in Belfast. He added, "The Finaghy workers deserve fairer treatment from Visteon and Ford—and a better redundancy package to see them through the tough times ahead."

These statements are a smokescreen to give the unions some veneer of credibility while they devise a strategy to contain the occupations. The British and Irish unions are opposed to any struggle by workers that damages corporate profits.

This is the lesson of the recent occupation of the Waterford glass factory in Kilbarry, Ireland. Workers occupied the plant in January after it was faced with closure as part of a move to sell the firm's viable global components to a venture capitalist—a measure fully supported by the unions.

The occupying workers intended to save their jobs and improve their redundancy terms. Workers, many of them employees of decades standing, showed considerable initiative and determination in launching the occupation. But despite maintaining a seven-week occupation, they were not able to translate this first step into a successful defence of their living standards, and in this the role of the unions was central.

Waterford workers were feted by union officials, placed at the head of demonstrations and assured by the unions of their support. But the vast amount of popular sympathy was not utilised. Neither was there any attempt to contact Waterford Wedgewood workers internationally.

All the while, the Unite union worked with the Irish government and the new and former owners to arrange a deal whereby the Waterford plant was shut down in return for no extra redundancy payments and some temporary posts. The initiative showed by the workers in taking over the plant was effectively isolated and neutralised by the unions. The takeover by KPS Capital, Unite's preferred purchaser, is now going through, while the glass blowing furnace is to close.

In this instance, and in others, the role of the unions has been to isolate and undermine the workers' resistance.

Behind the surge on Wall Street

Behind the surge on Wall Street

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Over the past month the major US stock exchanges have risen sharply. On Friday, the Dow Jones Industrial Average closed at over 8,000 for the first time since February 9. It has risen more than 20 percent since it plumbed a twelve-year low on March 9. The Nasdaq Composite Index and the S&P 500 have also risen more than 20 percent since early March.

Friday completed the biggest four-week rise in the Dow since 1933.

There is undoubtedly a technical correction at play in the rally. There had been indications that the market was heavily oversold and many investors and economists felt that a rebound was probable within the context of the bear market.

However, this by itself cannot explain the rally, especially since it has occurred in the absence of any significant economic indicators of recovery either in the US or internationally. On the contrary, figures on joblessness, industrial production, exports, world trade and overall growth have been almost uniformly grim and worse than anticipated. On Friday, the stock market rose in spite of a new US jobs report showing the highest level of unemployment since 1983.

The basic reasons must, therefore, be political.

The surge in the stock market shows that the American ruling elite is confident that the Obama administration will do everything in its power to protect the interests of the banks and finance capital.

First, there was Treasury Secretary Timothy Geithner's March 23 unveiling of the administration's plan to offload the banks' toxic assets. The markets had been steadily rising in anticipation of this announcement.

It should be recalled that when he first presented the administration's bank bailout plans the previous month (February 10), Geithner was roundly criticized for being vague as to precisely how the banks' losses were to be recovered. That announcement triggered a sharp sell-off that continued throughout the rest of February.

This time, Geithner made it clear that the government would provide unlimited funds to purchase the toxic assets of the banks at inflated prices, using taxpayer money. Even better, from the perspective of the finance industry, the plan was structured so as to guarantee big profits for hedge funds and other investment firms that participated in the scheme. In fact, Wall Street insiders had played a direct role in crafting the plan.

The new Wall Street bailout palpably boosted the confidence of the financial elite. On the day of Geithner's announcement, Wall Street celebrated with a demonstration of euphoria and greed, pushing the Dow up 497 points. Since then, the share values of the major banks and finance houses have paced the stock market rally.

Geithner's March 23 announcement coincided with the Obama administration's intervention into the scandal over lucrative bonuses awarded to traders and executives at the bailed-out insurance giant, American International Group (AIG). Obama made it clear that he would not bow to what the media derisively referred to as "populist" anger, and that he would oppose any serious limits on executive compensation.

To reassure Wall Street that his administration had no intention of limiting executive pay or otherwise challenging the wealth and prerogatives of the financial aristocracy, Obama hosted a meeting of the top banking CEOs on March 27. The bankers left the White House praising Obama for his cooperation, one noting that "we are very much aligned with the administration."

Then came Obama's restructuring plan for General Motors and Chrysler. The markets reacted positively because, first, it demonstrated that industrial policy would remain completely subordinated to the interests of Wall Street and second, because it signaled an intensification in the exploitation of the working class through mass layoffs, wage cuts and the destruction of health benefits and pensions.

The banks and big investors have been further cheered by repeated assurances from Obama that his administration will undertake major cuts in social programs—including Social Security, Medicare and Medicaid. Obama is promising that the working class will pay for the looming fiscal disaster resulting from the multi-trillion dollar bailout of Wall Street.

Finally, there was the announcement Thursday by the Financial Accounting Standards Board (FASB) weakening "mark-to-market" accounting rules and allowing banks to value their toxic assets at inflated prices. This was not only an immediate boost to banks' balance sheets and reported profits, it also showed that the government will give Wall Street a green light to continue the same methods of fraud and double bookkeeping that triggered the breakdown of the financial system in the first place.

But for all the joy on Wall Street, the market remains extremely volatile. Despite the bailout plan, none of the underlying problems caused by billions of dollars of “toxic”, that is, worthless, financial assets, has been resolved either in the US or internationally. Consequently, the market remains highly vulnerable to adverse developments which could see a reversal as dramatic as the present rise.

One lesson of the past month is that the fate of Wall Street and the fate of the masses of people move in opposite directions. Rising stock prices do not herald an improvement in the conditions facing the working class, as the continuing torrent of layoffs demonstrates.

None of this affects the prostration of the middle class liberals and so-called "lefts" before the Obama administration. In truth, they are comforted by the improvement in their own investment portfolios.

Nothing could more clearly demonstrate the class character of the Obama administration than Wall Street's orgiastic enthusiasm for its right-wing policies. Wall Street is celebrating the fact that it has, in the Obama administration, a completely reliable and docile instrument of its interests.

Procuring Academics for Empire

Procuring Academics for Empire

The Pentagon Minerva Research Initiative

By James Petras

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The Pentagon’s military strategists have recognized that they have suffered political losses, with strategic consequences in their recent military invasions of Iraq and Afghanistan. US military support for the Israeli invasions of Lebanon and Gaza, the US-sponsored Ethiopian occupation of Somali, the coup attempts in Venezuela (2002) and Bolivia (2008), have also failed to defeat popular incumbent regimes. Worse still, civilian, family, community and national networks have reinforced the anti-colonial movements providing essential logistical support, intelligence, recruits and legitimacy.

Pentagon strategists, recognizing the socio-political bases of their failures, have turned to willing accomplices in the academic world to provide intelligence, in the form of ethnographic accounts of targeted peoples, tactics and strategies in order to divide and destroy local and national loyalties. The Pentagon is contracting social scientists to develop ‘social maps’ to identify leaders and groups, susceptible to recruitment in the service of the empire. For example, Pentagon-contracted academic ‘field research’ is designed to demonstrate ways in which traditional religious practices and rituals can be harnessed to facilitate imperial conquest through cultural warfare discouraging subjugated peoples from giving their support to national liberation movements. Rather than confront the imperial occupier with a goal of re-establishing national sovereignty, ‘cultural warfare’ strategies direct people to focus on ‘local concerns’. These are a few of the Pentagon funded “research projects” taken up by the ‘academics in uniform.’

The Pentagon is seriously engaged in this military-academic empire building strategy, allocating almost 100 million dollars to contracting academic collaborators and funding multiple ‘research’ projects throughout the world against targeted states, movements and communities.

The “Minerva Research Initiative” (MRI)

The biggest, but not the only, Pentagon-funded empire building research program in the social sciences is dubbed the Minerva Research Initiative (MRI). The MRI has contracted scores of academics from the usual prestigious academic brothels, including the veteran academic hookers and ambitious neophytes among post-doctorates and graduate assistants. These ‘scholars for empire’ are currently engaged in at least fourteen projects. MRI money has attracted a wide assortment of university affiliated psychologists, political scientists, anthropologists, economists, professors of religious studies, public affairs specialists, labor economists and even nuclear physicists from MIT, Princeton, University of California at San Diego, and Arizona State University among others. This Pentagon largess provides what Science (Jan 30, 2009 p 576) (official journal of the American Association for the Advancement of Science) calls a “banquet for a field accustomed to living on scraps.”

All of the regions and groups specifically targeted for the ‘Pentagon-academic’ investigation are currently in conflict with the US empire or its Israeli ally and include Southwest Asia, West Africa, Gaza, Indonesia, the Middle East. The Pentagon’s ideological parameter, which defines the MRI, is the “war on terror” or its ‘Overseas Contingency Operations’, new facsimile under President Obama.

The MRI has a special interest in academics who can target the field of Muslim-Arab organizations and activities, in order to study and develop methods to “diffuse and influence counter-radical Muslim discourse.” In other words, the MRI is contracting academic research, which will allow the Pentagon to penetrate Muslim communities, co-opt the leaders and turn them into imperial collaborators.

MRI is not merely a mechanism of “soft power” – a battle of ideas – it engages US academics in some of the more brutal aspects of colonial warfare. For example, the Pentagon-funded Human Terrain Teams (HTT), which operate in Afghanistan, are deeply immersed in the identification and torture/interrogation of suspected resistance fighters, civilian sympathizers and members of extended families and clans. One San Francisco State psychology professor on the MRI payroll, with longstanding ties to Pentagon counter-insurgency operations, is deeply involved in the “study of emotions in stoking or quelling ideologically driven movements.” Covert occupation intelligence operations have been deeply involved in “stoking” hostility between Shia and Sunni communities in Iraq, Lebanon, Iran, and Afghanistan. Torture and harsh interrogation techniques, used in the Middle East and Afghanistan, are based on academic studies of cultural and emotional vulnerabilities of Muslims and are used by US and Israeli military interrogators to “break” or cause profound mental breakdown of anti-occupation activists (“quelling ideological movements”).

Two US professors who solicited and secured major funding under MRI, one Eli Berman of the University of California San Diego and Jacob Shapiro of Princeton are working with Israeli counter-insurgency academics in researching what it takes for the Jewish state to manipulate Palestinian communities “to counteract grass-roots movements such as Hamas” (Science Jan 30/09) .

Berman and Shapiro have their own academic empire building ambitions, feeding off the Pentagon largesse and its military driven empire building. With the Pentagon money Berman claims “I’ll be able to do surveys and experiments around the world, partner with additional organizations and bring postdocs as well as several graduate students. We’ll be able to accomplish things in a matter of years rather than decades.”

This contemporary version of Dr. Strangelove with his version of instant counter-insurgency formulas cooked up by a world network of academics in uniform can poison the academic ambience – in much the same way that the Professor ‘Bermans’ at Michigan State, MIT, Harvard and elsewhere developed techniques for search and destroy missions against grassroots movements during the Viet Nam War. The danger and appeal to academics of Pentagon funding is especially acute nowadays, given the economic depression and the pseudo-progressive image of the Obama regime. Wall Street bailouts and the crash of the US stock market have reduced university endowments resulting in sharp reductions in academic budgets, salaries and research funding especially on non-military, non-business related research. The Obama regime’s double discourse of talking peace and escalating military budgets, increasing troops in Southwest Asia and extending sanctions on Iran may entice academics to justify the latter by citing the former. To procure academic recruits to the MRI stable, the Pentagon organized a workshop in August 2008, under the ideological fa├žade of “complete openness and strict adherence to academic freedom and integrity.” Subsequently the Pentagon claimed to have received 211 inquires from academics seeking a place at the imperial trough.

Notwithstanding the Pentagon’s claim of success in procuring academics, there are counter-signs appearing in the academic world, especially in light of the highly publicized kidnapping, torture and interrogation of thousands of Muslims and activists throughout the world including in the United States, by Special Forces.

Outside the far-right there has been a widespread reluctance among academics to be associated with a government identified with abuses at Abu Gharib and Guantanamo prisons, the shredding of the US Constitutional protections and open ended colonial wars of occupation.

Even in the case where powerful pro-Israel academics and lobbyists have successfully secured the dismissal of highly published professors critical of the Hebrew state, these vindictive purges were openly opposed by scores of professors around the country including several dozen Jewish academics. More recently, hundreds of scholars and researchers in the US, the United Kingdom and Canada, horrified by the Israeli war crimes in Gaza, have called on universities to boycott Israeli academic institutions and individuals who collaborate with the Israeli Defense Forces and the Mossad in the destruction of Palestinian institutions especially the bombing of universities in Gaza.

The principled stand of academics critical of Israel and US policy notwithstanding, distinguished academics who have substantially challenged the empire through their research and publications are not immune from retaliation designed to discourage other intellectuals: A recent case in point is the suspension of academic medical epidemiologist, Dr. Gilbert Burnham of the Bloomberg School of Public Health at John Hopkins University. Dr Burnham was publicly reprimanded and suspended from directing any research involving ‘human subjects’ for 5 years because of ‘ethical breaches of confidentiality’(Science, March 6, 2009 Vol 323 page 1278). These ‘ethical violations’ referred to his co-authorship of the first rigorous large-scale epidemiologic survey of mortality in Iraq during the US invasion and occupation. Extensive site surveys throughout Iraq found that upwards of 600,000 Iraqi civilians had died from violence between the time of the US invasion in March 2003 and the summer of 2006. The results of this study of imperialist war-induced death and destruction, published in the prestigious medical journal Lancet in October 2006, was denied by a furious Pentagon but confirmed by subsequent studies. The so-called ‘ethical violations’ referred to a minor technicality: the incomplete coding of some of the names of the Iraqi families interviewed on the Arabic language survey sheets. For imperialist institutions, like Johns Hopkins University, using the phony pretext of ‘protecting the privacy’ of the hundreds of thousands of nameless dead in a US war of aggression to punish a distinguished epidemiologist send a message of intimidation to scholars to refrain from documenting the genocidal consequences of imperialist wars on a colonized people. By publicly punishing Dr. Burnham on these trumped up charges, the Pentagon-John Hopkins University are sending an unambiguous message to academics not to research and reveal the real human costs of military empire building. One thing is clear, the identity of those tortured or dispossessed on the basis of policies developed by the Pentagon sponsored Minerva ‘academics’ will certainly be kept ‘confidential’ –and very likely hidden in mass graves.

The fact that the Bloomberg School of Public Health levied extraordinarily severe punishment on one of its own faculty epidemiologists for a technical methodological error (the usual procedures is a private reprimand) and the fact that the sanctions were given the widest public notice indicates the highly political nature of the entire process. What is not clear is whether the financial backers of the Bloomberg School (with their own Middle East Agenda) may have had a say in the punitive decision.

We can expect the Obama regime, with its ‘missiles for peace’ rhetoric and populist images, will provide a cover for Pentagon recruitment of liberal academics to “work for change from within.” Unmasking the role of the Pentagon’s Minerva Research Initiative as an integral part of Obama’s military escalation is a challenge to all academics who are opposed to empire building and who support the reconstruction of an American republic supportive of international rights of self-determination.

The Secrets of Obama's Surge

The secrets of Obama's surge

By Pepe Escobar

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Is United States President Barack Obama telling it like it is as far as his new strategy for the Afghanistan and Pakistan war theater - AfPak, in Pentagonspeak - is concerned? There are reasons to believe otherwise.

Obama's relentless media blitzkrieg stressed the new strategy is refocusing on al-Qaeda. Washington, we got a problem. Why deploy 17,000 troops against "the Taliban" in the poppy-growing province of Helmand, not in the east near the Pakistani tribal areas, where "al-Qaeda" is holed up, plus 4,000 advisers to train the Afghan Army, when Washington actually wants to fight no more than 200 or 300 al-Qaeda jihadis roaming in Afghanistan, plus another 400 maximum in the Pakistani tribal areas? And by the way they are not Afghans - they are overwhelmingly Arabs, with a few Uzbeks, Chechens and Uyghurs thrown in.

President Hamid Karzai, the puppet in Kabul which has left Washington beyond exasperated, loved Obama's plan to "disrupt, dismantle and defeat" al-Qaeda and the Taliban. Especially because it involves the improbable "hunt for the good Taliban" (always bribable by loads of US dollars) mixed with Special Ops inside Pakistan, and not Afghanistan.

Former Pakistani premier Benazir Bhutto's widower, President Asif Ali Zardari, the puppet in Islamabad, loved it too. But as the Pakistani daily Dawn revealed, his Foreign Office diplomats definitely did not.

The Afghanistan-Pakistan war has got to be 2009's prime theater of the absurd. It took the New York Times and the usual "American officials" something like 13 years to "discover" that the Pakistani Inter-Services Intelligence (ISI) - a Central Intelligence Agency twin - helps the Taliban. And this while the CIA, alongside their ISI pals, is compiling a mega hit list in the Pashtun tribal areas inside Pakistan. Maybe this is what US Central Command supremo General David "I'm always positioning myself for 2012" Petraeus means by a "trilateral" love affair, as he told CNN's State of the Union.

The Pentagon's preferred pal is doubtless Pakistani Army Chief General Ashfaq Kayani, who happens to approve of what's not in Obama's presentation of the surge: the relentless drone war - with inevitable "collateral damage" - over what is for a fact Pashtunistan. As for the Pakistani masses, which have no say in all of this, they see the whole thing as a charade, and al-Qaeda as a threat to the US - not to Pakistan.

Obama is selling the surge basically as nation building, based on trust. A hard sell if there ever was one - as Washington cannot trust the ISI or the Pakistani government, while the Pakistani masses don't trust Washington.

Insistent rumors in Washington point to a troika - Holbrooke-Petraeus-Clinton - finally being able to convince Obama that the surge should be just the first step towards long-range nation building. Anyone with minimal familiarity with Afghanistan knows this is an impossible strategic target.

The Salvador option
And then Richard Holbrooke, Obama's special envoy to AfPak, finally let it slip on CNN: the "people we are fighting in Afghanistan" are essentially ... Pashtuns. This was followed by a stark admission: "In the informational side ... we don't have a strong enough counter-informational program to combat the Taliban and al-Qaeda."

So this amounts to the State Department admitting that the Pentagon/Petraeus "humint" (human intelligence) component of counter-insurgency in AfPak, hailed as a gift from the Messiah all across US corporate media, is essentially useless. This also means there's no way of winning local hearts and minds.

In the absence of "humint", what prevails is inevitably The Salvador option, performed by a Dick Cheney-supervised-style "executive assassination wing", as investigative icon Seymour Hersh first revealed in a talk at the University of Minnesota on March 10, "going into countries, not talking to the ambassador or to the CIA station chief, and finding people on a list and executing them and leaving". The "assassination wing" is in fact the Joint Special Operations Command (JSOC) - a shadowy, ultra-elite unit including Navy Seals and Delta Force commandos immune to Congressional investigations.

So if you have such a unit killing "al-Qaeda" jihadis at random from Iraq to Kenya, from Somalia to countries in South and Central America (these are not necessarily "al-Qaeda"; let’s say they are inimical to "US interests"), why not let them loose in Afghanistan and the Pakistani tribal areas? Instead of a $5 million bounty on his head, why not send a crack JSOC commando to South Waziristan and take out Pakistani Taliban superstar Baitullah Mehsud, who has just boasted his outfit will "soon launch an attack on Washington that will amaze everyone in the world?"

Well, maybe because US "humint" on South Waziristan is negligible - and even JSOC cannot infiltrate. JSOC by now should have been more than fully equipped to find Osama bin Laden and Ayman al-Zawahiri. Anyway, Vice-President Joseph Biden, to whom the unit would have to answer to, could at least come clean and state the "Salvador option" is not on the cards anymore. Or maybe it still is. The Obama administration is mum about it.

A priceless, self-described "hip pocket" manual prepared by the US Army Training and Doctrine Command - TRADOC, one more wonderful, Pentagon acronym to memorize - and available only to "US government personnel, government contractors and additional cleared personnel for national security purposes and homeland defense" spells out what's (visibly) going on. On page 5, one learns this is a US war against, yes, Pashtuns, as Holbrooke said on CNN. The overwhelming majority of the "insurgent syndicate", they are funded by drug smuggling and US allies in the Gulf such as Saudi Arabia, Kuwait and the Emirates, and are trained and assisted by, yes, the ISI, with some - in fact marginal - al-Qaeda assistance.

Al-Qaeda is a detail here. TRADOC does not seem to understand that al-Qaeda has a pan-Islamic agenda while the various groups bundled as "Taliban" are essentially in a war against foreign occupation and interference, with no dreams of establishing a Caliphate.

On page 7, TRADOC estimates the Taliban in Afghanistan to be around 30,000, half of them Pakistani, and supported by the ISI. That's correct. But they overestimate al-Qaeda to be 2,000; these "Arab-Afghans" plus some recently arrived "white moors" (European Arabs) are probably no more than 700.

On page 10, TRADOC finally admits that Karzai in Kabul is supported by a myriad of "warlord militias" profiting from crime, narco-trafficking and smuggling. The key element here is not "terrorism" - but regional wars for control over ultra-profitable poppy/heroin manufacturing and smuggling routes.

Then there's this stark admission, by former Taliban commander Mullah Abdul Salam, currently governor of a town in poppy-infested Helmand province. He told Reuters that the Taliban are not the real enemy. If Kabul was not so corrupt, and capable of providing security to the rest of the country, most Pashtuns would not even be Taliban. No wonder the Obama administration has stacks of reasons to get rid of Karzai.

An opening in The Hague
Asia knows this whole thing is upside down. The crucial Shanghai Cooperation Organization (SCO), grouping China, Russia and the Central Asian "stans", all concerned neighbors of Afghanistan, met in Moscow last Friday to discuss it, ahead of the North Atlantic Treaty Organization (NATO) meeting in The Hague this Tuesday privileged by the US.

This is how Asia sees it - and that's an absolutely taboo issue for Obama to touch upon every time he faces American public opinion: Asians simply don't want US military bases in Central Asia. No wonder Iran, which is currently an observer, and soon to become a full member, officially said the SCO is the right forum to solve the Afghan tragedy, not NATO. A minimum of 40% of Afghans are either Shi'ites or they speak Dari, a Persian language.

Well, at least Holbrooke admits "the door is open" for Iran to have a say on Afghanistan, but always with conditions attached ("plus our NATO allies"). If Holbrooke is clever, he should immediately buy dinner for legendary mujahid Ishmail Khan, the Lion of Herat, in Western Afghanistan. Khan, a complex mix of feudal warlord and economic developer, told al-Jazeera English "friendship between Iran and America" is essential to solve the Afghan riddle.
What Washington has to admit is that Iran has been deeply involved for years in visible, post-Taliban reconstruction in Afghanistan - from roads and railroads to restoration of mosques, financing of libraries and madrassas and the provision of electricity. The Iranian Consulate in Herat, for instance, houses no less than 40 diplomats. Khan - the key Iranian liaison in Herat - was so successful in spite of Kabul that Karzai, under US pressure, stripped him off his enormous powers as local governor and gave him an innocuous ministry in Kabul.

At the UN-sponsored, US-backed international conference on Afghanistan this Tuesday in The Hague, Mohammad Mehdi Akhundzadeh - one of Iran's deputy foreign ministers - officially broke the ice, offering to help the rebuilding and stabilization of Afghanistan, something that Iran is already doing anyway.

Akhunzadeh was specifically referring to projects fighting drug trafficking - which badly affects Iranian society. But he was also very clear on how Iran views NATO: "The presence of foreign forces has not improved things in the country and it seems that an increase in the number of foreign forces will prove ineffective, too."

But, significantly, he tipped his hat to Obama's decision to send those 4,000 trainers for the Afghan Army, when he stressed "Afghanization should lead the government-building process". As for US Secretary of State Hillary Clinton, she described corruption in the Kabul government, ie Karzai and his gang, as a "cancer" as threatening to Afghanistan as the Taliban. One more sign from Washington that Karzai’s days may be numbered.

Follow the money
Did Obama's "strategic reviewers" read this Carnegie Endowment report ( Apparently not. It states flatly "the mere presence of foreign soldiers fighting a war in Afghanistan is probably the single most important factor in the resurgence of the Taliban".

So the question Americans must ask themselves is this: Would you buy a used car - sorry - war from people like Mullen, Petraeus, McKiernan? Well, former CIA analyst Ray McGovern, who's seen them all since John F Kennedy, wouldn't. For him, "they resemble all too closely the gutless general officers who never looked down at what was really happening in Vietnam. The Joint Chiefs of Staff of the time have been called, not without reason, 'a sewer of deceit'."

So what if the AfPak quagmire had nothing to do with "terrorists" but with these facts:

1. A Cold War mentality in action still prevailing at the Pentagon. That explains a Vietnam-style surge - expanding the war to Cambodia then, expanding it to Pakistan now. As University of Michigan's Juan Cole has pointed out, the rationale is the same old fallacious domino theory (communism will take over Southeast Asia, terrorism will take over Central/South Asia). The Taliban are simply not able to take over and control the whole of Afghanistan (they didn't from 1996 to 2001). Al-Qaeda simply can't have bases in Afghanistan: they would be bombed to smithereens by the 80,000-strong Afghan Army plus Bagram-based US air strikes.

2. The US Empire of Bases still in overdrive, and in New Great Game mode - which implies very close surveillance over Russia and China via bases such as Bagram, and the drive to block Russia from establishing a commercial route to the Middle East via Pakistan.

3. The fear of a spectacular NATO failure. NATO Secretary General Jaap de Hoop Scheffer, absolutely despised by progressives in Brussels and assorted European capitals, is pressuring everyone for more troops to avoid what he calls the "Americanization" of the war. No one is impressed - especially because Scheffer himself was forced to admit troops will have to stay on the ground "for the foreseeable future".

4. Last but not least, the energy wars. And that involves that occult, almost supernatural entity, the $7.6 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, which would carry gas from eastern Turkmenistan through Afghanistan east of Herat and down Taliban-controlled Nimruz and Helmand provinces, down Balochistan in Pakistan and then to the Pakistani port of Gwadar in the Arabian Sea. No investor in his right mind will invest in a pipeline in a war zone, thus Afghanistan must be "stabilized" at all costs.

So is AfPak the Pentagon's AIG - we gotta bail them out, can't let them fail? Is it a Predator drone war disguised as nation building? Will it become Obama’s Vietnam? Whatever it is, it's not about "terrorists". Not really. Follow the money. Follow the energy. Follow the map.

It was Never about Democracy

It was Never about Democracy

By Mamoon Alabbasi

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"Those dirty A-rabs don't deserve democracy. We give them freedom and they kill our troops. We should nuke them all in their shit-hole."

-"Bring our troops home. What are they doing dying in some far away land trying to bring democracy to people who don't want it?"

-"We Arabs are not yet ready for democracy. We need strong authoritarian governments to keep the peace and ensure economic growth."

-"We should be grateful to the Americans. They got rid of our dictator and brought us democracy."

-"Is this democracy? Is this freedom? The Americans killed all my family and destroyed my house. If this democracy, I tell you my brother, we don't want it!"

Such comments and their likes are unfortunately not uncommon among some Americans and Iraqis regarding the US-led invasion of Iraq. Whether American or Iraqi, pro-war or anti-war, one fallacy lies at the bottom of their reasoning: that somehow 'democracy' had anything to do with the Iraq war.

Not that possessing WMDs was ever - objectively - enough reason to subject the whole of Iraq to so much senseless destruction; but since it became clear that the only real threat Iraq posed was to itself, the rhetoric had shifted into saving Iraqis from their themselves by bringing onto them good old (well, in human history it isn't actually that old) democracy.

But the fact is, that was never the case. Not in Iraq and certainly not in the region. Not in 2003 and most definitely not before that. After the fall of Baghdad, there were no serious moves to install democracy. Instead, US policies were channelled to inflame the sectarian divide.

After 12 years of merciless US-backed sanctions, all Iraq needed was one small push to descend into total chaos. Yet many Iraqis still waited to see what the US would offer. What they got was complete absence of security, hundreds of thousands of jobs losses, and death and torture at the hands of US forces with the help of some 'favoured' Iraqis.

That's where the seeds of sectarianism had been sown. Instead of promoting reconciliation and unity, the US played a classic 'divide and rule' game in Iraq and drew the new Iraq - politically - along sectarian lines.

Militarily, Iraqis who had friends or family members killed or tortured by US forces in the presence (or under the advice) of other Iraqis weren't always strong enough to punish the Americans so they took vengeance on their fellow Iraqis. The result? A cycle of vengeance that could have been averted.

Meanwhile, on the 'democracy' front, we had one segment of the population relatively prepared for campaigning whilst the other barely struggling to stay alive let alone take part in elections. Who would they vote for? How can you have fair elections when all your potential candidates are in hiding for fear of being killed or detained and tortured? Voting may (or may not) have been free, but who would one vote for if his/her choice is not on the list that is approved by the powers that be?

Adding to the confusion, Iraqis were requested to approve a constitution that most of whom have not even had the chance to read, let alone contemplate. 'Imported' from the US and released only five days before its referendum date, the new constitution caused further divisions in Iraq. In the meantime, new laws continued to be passed despite strong objection from a large segment of the population that was never properly represented in parliament because there never had been free elections in the first place.

All this was taking place with direct US involvement, with a mainly favourable outcome for the war architects. Big money was being made by the invasion's supporters while ordinary Iraqis were being killed by many unexplainable attacks. Some of a sectarian nature, others just for money; ones blamed on Iran or Israel, while others blamed on Al-Qaeda (which only came to Iraq post-2003 invasion) or on the US military (frequently accused of secretly targeting civilians to discredit the insurgency).

The absolute truth may never be known, but one thing is certain: the US, as an occupying power, was under obligation, according to international law, to protect Iraqis. We all know how well that went. If it can't - or is unwilling to - assume such responsibility it should have not been there in the first place, and trigger a 'sectarian domino effect', in addition to its own acts of murder and torture.

Washington and its allies in right-wing think thanks and mainstream media experts cannot talk of 'mistakes' happening when the average person in the street predicted that total chaos (at least) would befall Iraq in the event of an invasion. How can pro-invasion so called 'experts', 'analysts', and 'intelligence' fail to foresee what an average bricklayer in Tunisia predicted?

Charity begins at home

In fact, how can the invading countries 'export' democracy to Iraq while they were fighting democratic value at home? Why would an Iraqi believe that the US is bringing him/her democracy when he/she sees American citizens gradually being deprived of their rights and freedoms by the Bush administration? They also ignored the loud voices of their own people protesting against the Iraq war.

Saddam Hussein was accused of torture, detaining suspects indefinitely, spying on his own people, silencing journalist critical of his policies, and inciting fear in the hearts of his opponents. And how does that differ - relatively - from the actions of Bush, the 'decider in chief'? Can anyone say - with a straight face - that Saddam was more of a threat to the American people than Bush himself?

Yet US and European right-wingers, and their 'political pawns' in the Middle East continue to speak favourably of so called 'democracy and freedom interventions' in the region. Yes, democracy should be vigorously sought in the Middle East (by the people of the region) and yes Americans and Europeans have every reason to be proud of their democracies (despite many shortfalls). But the pro-war establishment has no right to boast of democracy because whatever rights and freedoms 'western' societies enjoy today, they were the direct result of people fighting or challenging a similar-natured establishment in former eras. Today's anti-war camp is the legitimate inheritor of the women's-rights and the civil-rights movements. They are the rightful heirs of the anti-slavery and later the anti-empire heroes.

The people of the Middle East could learn more about modern democracy from the anti-war camp, and not from former president Bush and his 'coalition of the willing', the very anti-Christ of democracy.

What has the Bush administration really done to support democracy in the region?

US-backed dictatorships

Despite few lip services to democracy in the Middle East now and then, American foreign policy has always backed Arab dictators to remain in power and oppress their own people. These 'puppet presidents' or 'drag-queen kings' are kept in power - with US weapons and intelligence - for as long as they continue to serve American interests, not those of their own peoples.

Although mainstream media is not equally kind to them, the truth is often grossly distorted. These leaders are always much more 'liberal' than their predominantly conservative societies on social and religious issues. They would only draw a red line when their hold to power is shaken or challenged. But as Bush does with democracy, they often pay lip service to 'moral values'. And if you believe Bush then you might as well believe them too.

War on words

As is the case with all wars, truth was the first causality too in the Iraq war. But as more details emerge regarding the lead up to the invasion, one could say, to a small degree, that the truth is making a slow but sustainable recovery. I wish I could say the same for the English language which was among the early victims of the Bush administration.

Many may laugh at the clumsy language mistakes Bush made during his speeches or when answering questions from the press, but few know that it is really the former US president who had the last laugh. The truth maybe recovering, but the English language is not. The Bush administration may have gone, but twisted right-wing rhetoric still lingers on in most mainstream media outlets.

From that perspective, killing ‘our’ soldiers is ‘terrorism’ yet killing ‘their’ civilians is not. Their actions are ‘barbaric’ but ours are ‘controversial’, etc.

But my concern here is on terms related to governments and politicians. How come Middle Easterners don’t get to have ‘hawks’ and ‘doves’ like their US (and sometime Israeli) counterparts? And why don’t Americans have ‘moderates’, ‘hardliners’ and ‘radicals’ at the Oval office?

More importantly, why are some US-backed Arab dictators who are extremely repressive of their own populations referred to as ‘moderates’? Is it just because they serve the interests of Washington (or Tel Aviv) instead of their own countries? At the same time, those who are brought to power through the ballot box or enjoy extremely wide support among their populations are termed ‘hardliners’ or ‘radicals’ just because they are not in good terms with foreign invading (or occupying) powers.

Who will defend the English language from ‘radical democracies’ and ‘moderate dictatorships’?

Iron Iran

Far from being a perfect democracy, Iran today is much closer to realising the wishes of its people than during the era of the ruthless US-backed dictator, the shah, toppled by the 1979 revolution. Most Iranians today, despite their young age, are also familiar with the role of the US CIA-backed coup against their democratically elected PM in the fifties, Mohammed Mosadaq.

Iranians are in an uphill struggle to have a modern democracy and more freedoms, but the last thing their reformers or rights activists need is foreign interference that would directly discredit them in the eyes of the majority of their people.

The people of Iran, generally fond of 'western' societies, remain suspicious of US foreign policy. And amid rumours that neo-conservatives and Christian Zionists seek to nuke their 70- million population, accompanied with serious threats from the Bush administration, their reformist camp took a heavy blow. You have to remember that during World War II even rooted democracies like Britain suspended all democratic activities, and to Iranians the US is still perceived as an enemy that poses an existential threat.

Hands off Hamas

I don't know of any people who have defended their electoral choice with so much blood and sweat (plus hunger and disease) as the people of Palestine following their election of Hamas.

They faced a superpower (US), an occupation power (Israel), propaganda war by pro-Israelis, Islamaphopbes, anti-Arab racists, Arab dictators, self-loathing Muslims, and tag-along opportunists, while being besieged in a tiny overpopulated strip.

They were punished for their votes and yet at the same time were prevented somehow from being represented. It is OK, according to some Rabbis, to kill them because they voted for Hamas, but Hamas, so Israel wishes, must not be seen as representing them. It wasn't enough to take away their liberty, health and lives; their political and social voices had to be taken away too. And thus Hamas leaders had to be silenced - but should they speak, then the mainstream media is there to distort their views.

So called 'experts' and 'analysts' would indulge in debates on why Hamas was elected, fruitlessly seeking to undermine their legitimacy, forgetting that in democracies, reasons of voting for one party instead of another does not affect the power that comes from the ballot box.

They often speak of corruption in Fatah or by some members of the Palestinian Authority, without even giving much thought to what that implies. To Palestinians, corruption is not just breaking the law for some financial benefits; it is deeper than that. Many see corruption as selling Palestinian rights to Israel for personal gains; i.e. treason of the first degree.

The people of Palestine had faced many atrocities before; land theft, ethnic cleansing, occupation, bone breaking, imprisonment, tight sieges, and mass murder, among other injustices. But it was only under Bush's watch that their first ever democracy and electoral choice came under such ruthless attack.

Jews-only democracy

No doubt that in many senses of the word, Israel is a democracy. It could be because the whole system was planted there by the 'west', like many of its American and European immigrants who settled there during and after the creation of the Jewish state. It also could be the people there reached that wise decision on their own. Nevertheless, whatever the causes and reasons are, the positive aspects of its democracy must be acknowledged.

But it should not pass as something comparable to 'western' democracies (not that they make those like they used to anymore). You have to remember a democracy is usually elected by a majority. Yet the majority of the people of that particular land are forced to live in exile.

Imagine if you'd expel the majority of blacks in the US and then when Election Day comes, you'd say to the few that remained that they have a right to vote and they should count their blessings for living in a democracy. You might even want to consider demanding that they'd show their loyalty to you. You didn't ban anyone from voting, you just prevented them from returning to their rightful homes, making them unable to cast their ballots.

Until the Palestinian refugees' problem is solved on a just basis, the Jewish state cannot claim to be a true democracy. But what has the Bush administration done to the plight of those estimated six million Palestinian refugees?

Plus, as the US should know, being a democracy at home does not give you the right to be a dictator abroad.

So why was Iraq invaded? Was it for money (oil)? For love (of Israel)? Or just for fame (keeping superpower reputation means teaching others a lesson every now and then)? I am not completely sure, but you can bet your sorry soul it was never about democracy.

Barbaric Israel

Barbaric Israel

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A nation that has violated “every norm of civilized behavior and international law” since its founding in 1948 is held virtually blameless by the U.S. corporate media – Israel sycophants of the lowest order. “Now members of the Israeli Defense Force themselves are coming forward to admit that they committed war crimes” – but the U.S. press is censoring their confessions! Even when Israeli soldiers openly testify to committing “murder” in Gaza, as reported by the Israeli press, the U.S. corporate media “keeps the people of this country ignorant” of the crimes against humanity bankrolled by American taxpayers.

by BAR editor and senior columnist Margaret Kimberle

“Every norm of civilized behavior and international law was violated.”

Despite the best efforts of the American corporate media, the Israeli lobby, and compromised politicians, the true nature of Israel’s barbarity towards the Palestinian people is not easily hidden. The massacres of Gaza’s civilian population that were recently carried out by the Israeli Defense Force created a turning point in worldwide public opinion. Only the Israeli and American governments try to deny that war crimes were committed.

The IDF barred the world’s media from witnessing the killings of more than 1,400 people. Every norm of civilized behavior and international law was violated, including the Geneva Conventions prohibition of acts of revenge against civilian populations. Israel kept the borders of Gaza sealed, and would not even allow the population to flee and save their lives. The IDF takes the term “shooting fish in a barrel” very seriously.

Now members of the IDF themselves are coming forward to admit that they committed war crimes. Soldiers have told the Israeli newspaper Haaretz that they were ordered to murder civilians without provocation. Haaretz has also revealed that the IDF prepares soldiers to kill civilians by openly condoning the killing of pregnant women and little children.

“1 Shot, 2 Kills” reads one t-shirt routinely worn by IDF soldiers. It depicts a pregnant woman covered by a bulls-eye. Another t-shirt for infantry snipers depicts “the inscription ‘Better use Durex,’ next to a picture of a dead Palestinian baby, with his weeping mother and a teddy bear beside him.” Soldiers wear these shirts only with the approval of their platoon commanders.

“The IDF prepares soldiers to kill civilians by openly condoning the killing of pregnant women and little children.”

The shirts are bilingual, written in Hebrew and in English too. It makes sense that the inscriptions are also in English, because were it not for American financial support, the IDF would not exist or be able to bomb Syria or the Sudan or invade Lebanon or carry out massacres in Gaza.

The United States is the Israeli government’s only friend in the world. While boycotts and protests against Israel are carried out all over the globe, concerned Americans are silenced because the corporate media and the political system have turned their country into Israel’s colony.

The Los Angeles Times carried the story of IDF war crimes revelations, but only after censoring the words of the soldiers themselves.

"When we entered a house, we were supposed to bust down the door and start shooting inside and just go up story by story… I call that murder. Each story, if we identify a person, we shoot them. I asked myself – how is this reasonable?"

The Los Angeles Times felt that the word “murder” was too much for sensitive American eyes and left the sentence out. “‘When we entered a house, we were supposed to bust down the door and start shooting inside and just go up story by story,’ he was quoted as saying. ‘Each story, if we identify a person, we shoot them. I asked myself: 'How is this reasonable?’”

Apparently, “I call that murder,” is just not acceptable, even if the words come straight from the horse’s mouth. The Los Angeles Times knows or thinks it knows that it can go only so far when Israel is the subject of what passes for reporting in the American corporate media.

“Several cardboard boxes full of excrement were left in the house.”

Not only do Israelis kill women and children and use civilians as human shields, but they also occupy Palestinian homes. They routinely desecrate them in ways that are so cruel and malicious, that they must be considered pathological. According to Amnesty International, not only did Israelis in Gaza illegally occupy Palestinian homes, but they left them in a devastated and desecrated condition.

“In one house in the Sayafa area in north Gaza several cardboard boxes full of excrement were left in the house (italics mine) - although there was a functioning toilet which the soldiers could have used. Walls were defaced with crude threats written in Hebrew, such as ‘next time it will hurt more’. In every case the soldiers had smashed holes in the outer walls of the houses to use as lookout and sniper positions.”
Israelis are not inherently worse than other human beings. They behave as they do because they never pay a price for their actions. The American people have paid and will continue to pay the price as targets of hatred and even of terror because their government has made them complicit in Israel’s crimes. But any suffering experienced by Americans is hardly unjust. Americans do not have a greater right to live in peace than do the people of Gaza.

If Gazans wore t-shirts encouraging the killing of women and little babies they would be no worse than the IDF soldiers whose actions are paid for by the American tax payer. Sadly, the Los Angeles Times and their counterparts in the rest of the media are unlikely to explain that very simple fact. This conspiracy of silence is just one of many that keeps the people of this country ignorant and incapable of making the demands and taking the necessary actions that would enable them to help themselves.

Mass Protest In Rome Over Financial Crisis

Mass protest in Rome over financial crisis

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Several hundred thousand workers, pensioners, immigrants and students filled a Rome park on Saturday in protest at the Italian government's handling of the financial crisis.

Led by Italy's largest union, the left-wing Italian General Confederation of Labour, many wore red hats or waved the CGIL's red flag as helicopters circled above Rome's Circo Massimo, an ancient hippodrome.

"There's too big a gap between what needs to be done and what is being done," CGIL leader Guglielmo Epifani told the throng, with banners reading "Together to Build a Different Future" and "Down with the New Mussolini."

"It's a pleasure to see the park filled once more," he said, recalling a mass protest in 2002 that drew three million people to the same venue to protest a bill that would have annulled a law protecting against unfair dismissal.

That protest took place under the last government of Silvio Berlusconi, the conservative self-made billionaire who was elected to a third stint as prime minister last year.

Helping swell the numbers at Saturday's protest to 2.7 million according to the CGIL -- although just 200,000 according to police -- 40 trainloads and nearly 5,000 buses as well as two ships had ferried protesters to Rome from all over Italy.

Opposition Democratic Party leader Dario Franceschini received a rock star welcome at the protest.

"It is a falsehood... to say that since the crisis is global the solutions can only be at an international level," he told reporters. "The crisis must be faced with concrete measures taken by national governments."

Franceschini initially hesitated to attend because of divisions within the Italian union movement, notably over the CGIL's rejection of contract reforms approved by two smaller unions.

Berlusconi has accused the media of exaggerating the crisis and insisted that Italy is doing more than any other country to address the situation.

Italy went into recession in the third quarter of last year, and gross domestic product (GDP) contracted 1.0 percent for the year in the worst downturn since 1975.

The central bank predicts negative growth of 2.6 percent in 2009.

Industry has been hard hit by the crisis, resulting in a spate of temporary layoffs. Job losses totalled some 370,500 in January and February, a 46 percent jump over the same period last year.

One poster, in a reference to the right-wing leadership's tough stance on crime, notably that of Rome Mayor Gianni Alemanno, read: "Make the City Safer," with an image of Berlusconi behind bars.

Epifani pledged that the CGIL would keep up the pressure, citing key dates for fresh action including the April 25 national day, Labour Day on May 1, and Republic Day on June 2.

He called for government-labour consultations on industrial and investment policy, particularly in Italy's chronically underdeveloped south, a halt to lay-offs for the duration of the crisis.

In addition, "the fight against tax havens must continue," he said, calling as well for a new "culture of morality" governing salaries and bonuses for top management.

"It's not right for a manager to earn 2,000 times more than a young intern or a temporary worker," he said.

Civil Service Minister Renato Brunetta heaped scorn on the protest, telling reporters in Cernobbio, on northern Lake Como: "It doesn't take a demonstration of 200,000 or 2.7 million to ask for a meeting with the government."

Times threatens to shut down Globe Unless Unions Give $20 Million in Concessions

Times co. threatens to shut down Globe

By Robert Gavin and Robert Weisman

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The New York Times Co. has threatened to shut the Boston Globe unless the newspaper's unions swiftly agree to $20 million in concessions, union leaders said.

Executives from the Times Co. and Globe made the demands Thursday morning in an approximately 90- minute meeting with leaders of the newspaper's 13 unions, union officials said. The possible concessions include pay cuts, the end of pension contributions by the company and the elimination of lifetime job guarantees now enjoyed by some veteran employees, said Daniel Totten, president of the Boston Newspaper Guild, the Globe's biggest union, which represents more than 700 editorial, advertising and business office employees.

The concessions will be negotiated individually with each of the unions, said Totten and Ralph Giallanella, secretary-treasurer of the Teamsters Local 259, which represents about 200 drivers who deliver the newspaper.

"We all know the newspaper industry is going through great transition and loss," said Giallanella. "The ad revenues have fallen off the cliff. Just based on everything that's going on around the country, they're serious."

Catherine Mathis, a Times Co. spokeswoman, declined to comment. Globe publisher P. Steven Ainsley also declined to comment.

The newspaper industry, which had already been struggling as readers and advertisers moved to the Internet, has been hard hit by the recession, and the Globe is no exception. The newspaper's advertising revenues have declined sharply in recent years; once robustly profitable, it is now losing money.

Several major newspaper companies have filed for bankruptcy in recent months, and several have threatened to shut down operations unless they got major concessions from workers. Hearst Corp. of New York in February threatened to shut or sell the San Francisco Chronicle if it could not cut costs. Hearst recently shut down the Seattle Post-Intelligencer after it failed to find a buyer, and Scripps Co. shuttered the Rocky Mountain News in Denver.

Earlier this week, the Globe newsroom completed cutting the equivalent of 50 full-time jobs. But the deteriorating economy has made the paper's financial outlook much worse. Management told union leaders Thursday that the Globe will lose $85 million in 2009, unless serious cutbacks are made, according to a Globe employee briefed on the discussions. Last year the paper lost an estimated $50 million, the employee said.

The Times Co. is seeking concessions from the union because the New York company, which is also suffering from the recession, can no longer subsidize the Globe's losses, said the Globe employee who requested anonymity because the person is not authorized to speak publicly. The Times Co. posted a net loss of $57.8 million in 2008.

Banks could bet on toxic assets with taxpayers' money

Banks could bet on toxic assets with taxpayers' money

By Jonathan Stempel and Karey Wutkowski

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U.S. banks that received billions of dollars of taxpayer money to bolster their capital could place bets on the same toxic assets that got them into trouble in the first place -- and with government support.

It is unclear whether U.S. regulators will prevent banks receiving government aid from participating as buyers in the $1 trillion Public-Private Investment Program (PPIP) designed to unclog credit markets and bank balance sheets.

But the program, where the government provides much of the financing and shoulders much of the risk, leaves open the prospect that banks, as well as private investors, could buy the troubled securities and loans. This means recipients under the government's $700 billion bank bailout fund, the Troubled Asset Relief Program, might take part.

"Without very strict regulation you're potentially creating big risks by allowing banks to buy toxic assets with house money," said Wayne Shaw, a professor at Southern Methodist University's Cox School of Business. "It's a terrible risk."

On Monday, Morgan Stanley Chief Executive John Mack told employees his bank may buy toxic assets and package them for sale to individual investors, according to a person who heard him speak, but was not authorized to comment publicly.

Three days earlier, Goldman Sachs Group Inc Chief Executive Lloyd Blankfein said his bank may join the PPIP as an investor.

Each of these banks took $10 billion from TARP.

The Financial Times said on Friday that Citigroup Inc and JPMorgan Chase & Co, which together took $70 billion of taxpayer money, might also buy toxic assets under the PPIP. Neither returned calls seeking comment. Two other large TARP recipients, Bank of America Corp and Wells Fargo & Co, had no immediate comment on their plans.


U.S. regulators may be open to letting TARP recipients participate in the new program.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, said on a conference call with bankers last month that "healthy banks will be able to participate on the investment side, not obviously on the assets you'd be selling," a transcript on the FDIC website shows.

Regulators have suggested that letting banks share in the upside as prices of largely illiquid toxic assets rise could provide an incentive for them to sell their own assets at discounted prices.

Banks, for their part, have expressed concern that selling distressed assets at prices below their carrying value could punch a sizable hole in their depleted capital levels.

But a backlash could occur as weariness over using tax dollars to prop up an errant sector grows.

This reached a crescendo last month as Congress flayed American International Group Inc for awarding $165 million of bonuses to workers in a unit that brought the insurer to the brink of failure.

"It's not a Democrat or Republican issue, it's a right or wrong issue," said Dan Alpert, an investment banker at Westwood Capital LLC in New York. "There are going to be voices who say this is ridiculous, we're giving them money with one hand and then with another hand. But theoretically there is no reason to keep (banks) out of the market. Their asset management arms have considerable asset aggregation capabilities."

Spencer Bachus, the top Republican on the House Financial Services Committee, introduced a bill on Thursday to block TARP recipients from "gaming" the PPIP.

He said if banks "are colluding to swap assets at inflated prices using taxpayers' dollars, the bailout cycle has sunk to a new level of absurdity."

The Alabama congressman is not alone.

"I'm worried about the following scenario: You and I have troubled assets, I buy assets from you, you buy them from me, and at the end of the day it ends up suspiciously like you bought assets from yourself," said Lawrence White, a professor at New York University's Stern School of Business.


A rule adopted on Thursday by the Financial Accounting Standards Board to give banks greater freedom to value securities as they would in a normal market rather than at distressed or fire-sale prices, could complicate matters.

The problem: it could actually reduce the amount of assets that are sold, while failing to reduce toxic assets overall.

"It might make some banks less willing to enter transactions if it were shown that the exit values they estimated were higher than they can actually realize," said Dennis Beresford, an accounting professor at the University of Georgia in Athens, and a former FASB chairman.

Regardless of how TARP recipients say they are using their bailout money, the perception will likely be that their participation in PPIP comes at the expense of what they should be doing more of in the first place: lending.

"Do I want Citigroup using the PPIP to buy more toxic assets at a price that some other institution is willing to sell at?" White asked. "It sure doesn't feel like the best use of Citi's money. There are plenty of buyers such as hedge funds that can buy the assets and which don't necessarily make consumer loans or commercial and industrial loans."

Administration Seeks an Out On Bailout Rules for Firms

Administration Seeks an Out On Bailout Rules for Firms

Officials Worry Constraints Set by Congress Deter Participation

By Amit R. Paley and David Cho

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The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.

The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.

Although some experts are questioning the legality of this strategy, the officials said it gives them latitude to determine whether firms should be subject to the congressional restrictions, which would require recipients to turn over ownership stakes to the government, as well as curb executive pay.

The administration has decided that the conditions should not apply in at least three of the five initiatives funded by the rescue package.

This strategy has so far attracted little scrutiny on Capitol Hill, and even some senior congressional aides dealing with the financial crisis said they were unaware of the administration's efforts. Just two weeks ago, Congress erupted in outrage over bonuses being paid at American International Group, with some lawmakers faulting the administration for failing to do more to safeguard taxpayers' interests.

Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, said the congressional conditions should apply to any firm benefiting from bailout funds. He said he planned to review the administration's decisions and might seek to undo them. "We have to make certain that if they are using government money in any sort of way, there should be restrictions," he said.

A Treasury spokesman defended the approach. "These programs are designed to both comply with the law and ensure taxpayers' funds are used most effectively to bring about economic recovery," spokesman Andrew Williams said.

In one program, designed to restart small-business lending, President Obama's officials are planning to set up a middleman called a special-purpose vehicle -- a term made notorious during the Enron scandal -- or another type of entity to evade the congressional mandates, sources familiar with the matter said.

In another program, which seeks to restart consumer lending, a special entity was created largely for the separate purpose of getting around legal limits on the Federal Reserve, which is helping fund this initiative. The Fed does not ordinarily provide support for the markets that finance credit cards, auto loans and student loans but could channel the funds through a middleman.

At first, when the initiative was being developed last year, the Bush administration decided to apply executive-pay limits to firms participating in this program. But Obama officials reversed that decision days before it was unveiled on March 3 and lifted the curbs, according to sources who spoke on condition of anonymity because the discussions were private.

Obama's team is also planning to exempt financial firms that participate in a program designed to find private investors to buy the distressed assets on the books of banks. But Treasury officials are still examining the legal basis for doing so. Congress has exempted the Treasury from applying the restrictions in a fourth program, which aids lenders who modify mortgages for struggling homeowners.

Congress drafted the restrictions amid its highly contentious consideration of the $700 billion rescue legislation last fall. At the time, lawmakers were aiming to reform the lavish pay practices on Wall Street. Congress also wanted the government to gain the right to buy stock in companies so that taxpayers would benefit if the firms recovered.

The requirements were honored in an initial program injecting public money directly into banks. That effort was developed by the Bush administration and continued by Obama's team. The initiative is on track to account for the bulk of the money spent from the rescue package. All the major banks already submit to executive-compensation provisions and have surrendered ownership stakes as part of this program.

Yet as the Treasury has readied other programs, it has increasingly turned to creating the special entities. Legal experts said the Treasury's plan to bypass the restrictions may be unlawful.

"They are basically trying to launder the money to avoid complying with the plain language of the law," said David Zaring, a former Justice Department attorney who defended the government from lawsuits involving related legal issues. "They are trying to create a loophole to ignore Congress, and I think the courts will think that it's ridiculous."

The federal watchdog agency overseeing the bailout is looking into the matter, trying to determine whether the Treasury's actions are legal.

Of the two major restrictions imposed by Congress in the bailout legislation, the limit on executive pay has been the most politically explosive issue.

Obama himself has called for these limits. "We've got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street," he said earlier this year.

But officials at the Treasury and the Fed said they worry harsh pay limits will undermine critical bailout programs by discouraging financial firms from participating. Although many of these companies could survive without government help, they might lack money to ramp up lending, which officials consider critical to turning the economy around.

In private meetings with officials in both the Bush and Obama administrations, firms' leaders have pushed back against pay limits.

A major test of whether the Treasury would apply the congressional restrictions was a $1 trillion program developed last fall to revive consumer lending. The initiative, known as the Term Asset-Backed Securities Loan Facility, or TALF, will be seeded with up to $100 billion from the financial rescue package, with the rest coming from the Fed.

The program set up a special entity providing low-cost loans to hedge funds and other private investors so they can buy securities that finance consumer debt from banks and other lenders. This would free these companies to make more loans.

When the Bush administration announced the program in November, officials directed the Fed to apply the pay limits to the lenders because they stood to benefit the most from the program. "There was a public hunger for executive-compensation restrictions, and we knew we couldn't be tone-deaf to the politics there," a former Bush administration official said.

In February, Obama administration officials at the White House and the Treasury began reviewing that decision. Treasury officials consulted with Department of Justice attorneys, who said they could legally avoid the pay restrictions, according to a government official. The requirements were removed just before the initiative was launched.

The concerns persisted as the administration crafted other initiatives. Some private investors said, for instance, that they would not help the government buy toxic assets from banks if the congressional restrictions were applied to them. And every major provider of small-business loans has said that it will not participate in the government's program if it has to surrender ownership stakes to the government or submit to executive-pay limits.