Tuesday, May 19, 2009

Housing Construction Plunges to Record Low in April

Housing construction plunges to record low in April

Economists had expected a modest increase
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Housing construction plunged to a record low in April as a steep drop in apartment building offset a rebound in single-family construction. Permits for new projects also hit a new low.

The Commerce Department said today that construction of new homes and apartments fell 12.8% last month to a seasonally adjusted annual rate of 458,000 units, the lowest pace on records going back a half-century.

In a disappointing sign for the future, applications for new building permits dropped 3.3 percent to a new record low annual rate of 494,000.

Economists had expected home construction and building permits to post modest increases in April as signs that the worst collapse in housing activity in the post-World War II period was drawing to a close.

Even in last month's big decline, there were some signs of stabilization. Construction of single-family homes rose 2.8 percent to an annual rate of 368,000, following a 0.3 percent gain in March and no change in February. The stability in single-family construction likely will be viewed as a hopeful sign that the three-year slide in housing could be bottoming out.

The weakness last month came in the more volatile multifamily sector where construction plunged 46.1 percent to an annual rate of 90,000 units after a 23 percent fall in March.

Housing construction fell 30.6 percent in the Northeast, the largest drop for any region. Housing starts dropped 21.4 percent in the Midwest and 21.1 percent in the South.

The West was the only region showing strength with a 42.5 percent jump in housing starts.

The National Association of Homebuilders reported Monday that its survey of builder confidence increased for the second straight month in May, reflecting growing optimism on the part of many builders.

The Washington-based trade group's index rose two points to 16, the highest reading since September. Even with the rebound, the index remains near historic lows. Index readings lower than 50 indicate negative sentiment about the market.

Still, private economists viewed rising builder sentiment as an encouraging sign.

"Record high affordability, record low mortgage rates and the government's efforts to jump start economic growth are giving potential buyers optimism to step in and take a look around," said Jennifer Lee, an economist with BMO Capital Markets.

But analysts cautioned that the wave of foreclosures hitting the market means that builders still face tough competition to sell new homes.

The nation's top three homebuilders reported financial results earlier this month that give little hope the spring selling season will be strong enough to stop the red ink.

Pulte Homes Inc. and Centex Corp., which agreed to combine this year to become the largest U.S. homebuilder, said that while their quarterly losses narrowed, they continued to be battered by falling prices and a glut of unsold homes.

D.R. Horton Inc., currently the industry's No. 1 home builder, also reported that its losses had shrunk, but the company said it still faces challenges from foreclosures, high inventory levels, tight homebuyer credit, low consumer confidence and job losses.

Unexceptional Americans

Noam Chomsky, Unexceptional Americans

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Murder, torture, abuse… and photos of the same. We've seen some of them, of course. Now, evidently under pressure from his top generals, President Obama has decided to fight the release of other grim photos from the dark side of the Bush years of offshore injustice -- on the grounds that their publication might inflame opinion in the Middle East and our various war zones (as if fighting to suppress their publication won't). In this way, just as the president is in the process of making Bush's wars his own, so he seems to be making much of the nightmare legacy of those years of crime, torture, and cover-up his, too.

The photos his Justice Department will fight to suppress (for how long or how successfully we don't yet know) are now officially "his"; next, assumedly, come those military commissions, suspended as Obama took office, which are evidently about to be reborn as Obama era tools of injustice. (This brings to mind, in grimmer form, the old saw about how military justice is to justice as military music is to music.) And with those commissions comes that wonderfully un-Constitutional idea of detaining chosen prisoners indefinitely either entirely without trial or with trials that will be mockeries. And with that, evidently, goes the idea of possibly setting up some sort of new "national security court" to try some detainees. (Keep in mind that the Obama administration is already hanging on tightly to Dick Cheney's "state secrets" privilege to block various lawsuits by those wronged in all sorts of ways in the Bush years.)

In other words, if you can't go to court and get the punishments you want, the solution is simply to create courts jiggered in such a way (and surrounded by enough secrecy) that you'll get the decisions you desire. If that isn't a striking definition of American justice, I don't know what is.

Obama's national security world is now coming into view -- and it's not a pretty picture, but then, as Noam Chomsky points out, in a tour de force piece below, it hasn't been a pretty picture for a long, long time. Tom

Why We Can't See the Trees or the Forest

The Torture Memos and Historical Amnesia
By Noam Chomsky

The torture memos released by the White House elicited shock, indignation, and surprise. The shock and indignation are understandable. The surprise, less so.

For one thing, even without inquiry, it was reasonable to suppose that Guantanamo was a torture chamber. Why else send prisoners where they would be beyond the reach of the law -- a place, incidentally, that Washington is using in violation of a treaty forced on Cuba at the point of a gun? Security reasons were, of course, alleged, but they remain hard to take seriously. The same expectations held for the Bush administration's "black sites," or secret prisons, and for extraordinary rendition, and they were fulfilled.

More importantly, torture has been routinely practiced from the early days of the conquest of the national territory, and continued to be used as the imperial ventures of the "infant empire" -- as George Washington called the new republic -- extended to the Philippines, Haiti, and elsewhere. Keep in mind as well that torture was the least of the many crimes of aggression, terror, subversion, and economic strangulation that have darkened U.S. history, much as in the case of other great powers.

Accordingly, what's surprising is to see the reactions to the release of those Justice Department memos, even by some of the most eloquent and forthright critics of Bush malfeasance: Paul Krugman, for example, writing that we used to be "a nation of moral ideals" and never before Bush "have our leaders so utterly betrayed everything our nation stands for." To say the least, that common view reflects a rather slanted version of American history.

Occasionally the conflict between "what we stand for" and "what we do" has been forthrightly addressed. One distinguished scholar who undertook the task at hand was Hans Morgenthau, a founder of realist international relations theory. In a classic study published in 1964 in the glow of Camelot, Morgenthau developed the standard view that the U.S. has a "transcendent purpose": establishing peace and freedom at home and indeed everywhere, since "the arena within which the United States must defend and promote its purpose has become world-wide." But as a scrupulous scholar, he also recognized that the historical record was radically inconsistent with that "transcendent purpose."

We should not be misled by that discrepancy, advised Morgenthau; we should not "confound the abuse of reality with reality itself." Reality is the unachieved "national purpose" revealed by "the evidence of history as our minds reflect it." What actually happened was merely the "abuse of reality."

The release of the torture memos led others to recognize the problem. In the New York Times, columnist Roger Cohen reviewed a new book, The Myth of American Exceptionalism, by British journalist Geoffrey Hodgson, who concludes that the U.S. is "just one great, but imperfect, country among others." Cohen agrees that the evidence supports Hodgson's judgment, but nonetheless regards as fundamentally mistaken Hodgson's failure to understand that "America was born as an idea, and so it has to carry that idea forward." The American idea is revealed in the country's birth as a "city on a hill," an "inspirational notion" that resides "deep in the American psyche," and by "the distinctive spirit of American individualism and enterprise" demonstrated in the Western expansion. Hodgson's error, it seems, is that he is keeping to "the distortions of the American idea," "the abuse of reality."

Let us then turn to "reality itself": the "idea" of America from its earliest days.

"Come Over and Help Us"

The inspirational phrase "city on a hill" was coined by John Winthrop in 1630, borrowing from the Gospels, and outlining the glorious future of a new nation "ordained by God." One year earlier his Massachusetts Bay Colony created its Great Seal. It depicted an Indian with a scroll coming out of his mouth. On that scroll are the words "Come over and help us." The British colonists were thus pictured as benevolent humanists, responding to the pleas of the miserable natives to be rescued from their bitter pagan fate.

The Great Seal is, in fact, a graphic representation of "the idea of America," from its birth. It should be exhumed from the depths of the psyche and displayed on the walls of every classroom. It should certainly appear in the background of all of the Kim Il-Sung-style worship of that savage murderer and torturer Ronald Reagan, who blissfully described himself as the leader of a "shining city on the hill," while orchestrating some of the more ghastly crimes of his years in office, notoriously in Central America but elsewhere as well.

The Great Seal was an early proclamation of "humanitarian intervention," to use the currently fashionable phrase. As has commonly been the case since, the "humanitarian intervention" led to a catastrophe for the alleged beneficiaries. The first Secretary of War, General Henry Knox, described "the utter extirpation of all the Indians in most populous parts of the Union" by means "more destructive to the Indian natives than the conduct of the conquerors of Mexico and Peru."

Long after his own significant contributions to the process were past, John Quincy Adams deplored the fate of "that hapless race of native Americans, which we are exterminating with such merciless and perfidious cruelty… among the heinous sins of this nation, for which I believe God will one day bring [it] to judgement." The "merciless and perfidious cruelty" continued until "the West was won." Instead of God's judgment, the heinous sins today bring only praise for the fulfillment of the American "idea."

The conquest and settling of the West indeed showed that "individualism and enterprise," so praised by Roger Cohen. Settler-colonialist enterprises, the cruelest form of imperialism, commonly do. The results were hailed by the respected and influential Senator Henry Cabot Lodge in 1898. Calling for intervention in Cuba, Lodge lauded our record "of conquest, colonization, and territorial expansion unequalled by any people in the 19th century," and urged that it is "not to be curbed now," as the Cubans too were pleading, in the Great Seal's words, "come over and help us."

Their plea was answered. The U.S. sent troops, thereby preventing Cuba's liberation from Spain and turning it into a virtual colony, as it remained until 1959.

The "American idea" was illustrated further by the remarkable campaign, initiated by the Eisenhower administration virtually at once to restore Cuba to its proper place, after Fidel Castro entered Havana in January 1959, finally liberating the island from foreign domination, with enormous popular support, as Washington ruefully conceded. What followed was economic warfare with the clearly articulated aim of punishing the Cuban population so that they would overthrow the disobedient Castro government, invasion, the dedication of the Kennedy brothers to bringing "the terrors of the earth" to Cuba (the phrase of historian Arthur Schlesinger in his biography of Robert Kennedy, who considered that task one of his highest priorities), and other crimes continuing to the present, in defiance of virtually unanimous world opinion.

American imperialism is often traced to the takeover of Cuba, Puerto Rico, and Hawaii in 1898. But that is to succumb to what historian of imperialism Bernard Porter calls "the saltwater fallacy," the idea that conquest only becomes imperialism when it crosses saltwater. Thus, if the Mississippi had resembled the Irish Sea, Western expansion would have been imperialism. From George Washington to Henry Cabot Lodge, those engaged in the enterprise had a clearer grasp of just what they were doing.

After the success of humanitarian intervention in Cuba in 1898, the next step in the mission assigned by Providence was to confer "the blessings of liberty and civilization upon all the rescued peoples" of the Philippines (in the words of the platform of Lodge's Republican party) -- at least those who survived the murderous onslaught and widespread use of torture and other atrocities that accompanied it. These fortunate souls were left to the mercies of the U.S.-established Philippine constabulary within a newly devised model of colonial domination, relying on security forces trained and equipped for sophisticated modes of surveillance, intimidation, and violence. Similar models would be adopted in many other areas where the U.S. imposed brutal National Guards and other client forces.

The Torture Paradigm

Over the past 60 years, victims worldwide have endured the CIA's "torture paradigm," developed at a cost that reached $1 billion annually, according to historian Alfred McCoy in his book A Question of Torture. He shows how torture methods the CIA developed from the 1950s surfaced with little change in the infamous photos at Iraq's Abu Ghraib prison. There is no hyperbole in the title of Jennifer Harbury's penetrating study of the U.S. torture record: Truth, Torture, and the American Way. So it is highly misleading, to say the least, when investigators of the Bush gang's descent into the global sewers lament that "in waging the war against terrorism, America had lost its way."

None of this is to say that Bush-Cheney-Rumsfeld et al. did not introduce important innovations. In ordinary American practice, torture was largely farmed out to subsidiaries, not carried out by Americans directly in their own government-established torture chambers. As Allan Nairn, who has carried out some of the most revealing and courageous investigations of torture, points out: "What the Obama [ban on torture] ostensibly knocks off is that small percentage of torture now done by Americans while retaining the overwhelming bulk of the system's torture, which is done by foreigners under U.S. patronage. Obama could stop backing foreign forces that torture, but he has chosen not to do so."

Obama did not shut down the practice of torture, Nairn observes, but "merely repositioned it," restoring it to the American norm, a matter of indifference to the victims. "[H]is is a return to the status quo ante," writes Nairn, "the torture regime of Ford through Clinton, which, year by year, often produced more U.S.-backed strapped-down agony than was produced during the Bush/Cheney years."

Sometimes the American engagement in torture was even more indirect. In a 1980 study, Latin Americanist Lars Schoultz found that U.S. aid "has tended to flow disproportionately to Latin American governments which torture their citizens,... to the hemisphere's relatively egregious violators of fundamental human rights." Broader studies by Edward Herman found the same correlation, and also suggested an explanation. Not surprisingly, U.S. aid tends to correlate with a favorable climate for business operations, commonly improved by the murder of labor and peasant organizers and human rights activists and other such actions, yielding a secondary correlation between aid and egregious violation of human rights.

These studies took place before the Reagan years, when the topic was not worth studying because the correlations were so clear.

Small wonder that President Obama advises us to look forward, not backward -- a convenient doctrine for those who hold the clubs. Those who are beaten by them tend to see the world differently, much to our annoyance.

Adopting Bush's Positions

An argument can be made that implementation of the CIA's "torture paradigm" never violated the 1984 Torture Convention, at least as Washington interpreted it. McCoy points out that the highly sophisticated CIA paradigm developed at enormous cost in the 1950s and 1960s, based on the "KGB's most devastating torture technique," kept primarily to mental torture, not crude physical torture, which was considered less effective in turning people into pliant vegetables.

McCoy writes that the Reagan administration then carefully revised the International Torture Convention "with four detailed diplomatic 'reservations' focused on just one word in the convention's 26-printed pages," the word "mental." He continues: "These intricately-constructed diplomatic reservations re-defined torture, as interpreted by the United States, to exclude sensory deprivation and self-inflicted pain -- the very techniques the CIA had refined at such great cost."

When Clinton sent the UN Convention to Congress for ratification in 1994, he included the Reagan reservations. The president and Congress therefore exempted the core of the CIA torture paradigm from the U.S. interpretation of the Torture Convention; and those reservations, McCoy observes, were "reproduced verbatim in domestic legislation enacted to give legal force to the UN Convention." That is the "political land mine" that "detonated with such phenomenal force" in the Abu Ghraib scandal and in the shameful Military Commissions Act that was passed with bipartisan support in 2006.

Bush, of course, went beyond his predecessors in authorizing prima facieBoumediene v. Bush in June 2008, the Supreme Court rejected as unconstitutional the Bush administration claim that prisoners in Guantanamo are not entitled to the right of habeas corpus. violations of international law, and several of his extremist innovations were struck down by the Courts. While Obama, like Bush, eloquently affirms our unwavering commitment to international law, he seems intent on substantially reinstating the extremist Bush measures. In the important case of

Salon.com columnist Glenn Greenwald reviews the aftermath. Seeking to "preserve the power to abduct people from around the world" and imprison them without due process, the Bush administration decided to ship them to the U.S. prison at Bagram Air Base in Afghanistan, treating "the Boumediene ruling, grounded in our most basic constitutional guarantees, as though it was some sort of a silly game -- fly your abducted prisoners to Guantanamo and they have constitutional rights, but fly them instead to Bagram and you can disappear them forever with no judicial process."

Obama adopted the Bush position, "filing a brief in federal court that, in two sentences, declared that it embraced the most extremist Bush theory on this issue," arguing that prisoners flown to Bagram from anywhere in the world (in the case in question, Yemenis and Tunisians captured in Thailand and the United Arab Emirates) "can be imprisoned indefinitely with no rights of any kind -- as long as they are kept in Bagram rather than Guantanamo."

In March, however, a Bush-appointed federal judge "rejected the Bush/Obama position and held that the rationale of Boumediene applies every bit as much to Bagram as it does to Guantanamo." The Obama administration announced that it would appeal the ruling, thus placing Obama's Department of Justice, Greenwald concludes, "squarely to the Right of an extremely conservative, pro-executive-power, Bush 43-appointed judge on issues of executive power and due-process-less detentions," in radical violation of Obama's campaign promises and earlier stands.

The case of Rasul v. Rumsfeld appears to be following a similar trajectory. The plaintiffs charged that Rumsfeld and other high officials were responsible for their torture in Guantanamo, where they were sent after being captured by Uzbeki warlord Rashid Dostum. The plaintiffs claimed that they had traveled to Afghanistan to offer humanitarian relief. Dostum, a notorious thug, was then a leader of the Northern Alliance, the Afghan faction supported by Russia, Iran, India, Turkey, and the Central Asian states, and the U.S. as it attacked Afghanistan in October 2001.

Dostum turned them over to U.S. custody, allegedly for bounty money. The Bush administration sought to have the case dismissed. Recently, Obama's Department of Justice filed a brief supporting the Bush position that government officials are not liable for torture and other violations of due process, on the grounds that the Courts had not yet clearly established the rights that prisoners enjoy.

It is also reported that the Obama administration intends to revive military commissions, one of the more severe violations of the rule of law during the Bush years. There is a reason, according to William GlabersonNew York Times: "Officials who work on the Guantanamo issue say administration lawyers have become concerned that they would face significant obstacles to trying some terrorism suspects in federal courts. Judges might make it difficult to prosecute detainees who were subjected to brutal treatment or for prosecutors to use hearsay evidence gathered by intelligence agencies." A serious flaw in the criminal justice system, it appears. of the

Creating Terrorists

There is still much debate about whether torture has been effective in eliciting information -- the assumption being, apparently, that if it is effective, then it may be justified. By the same argument, when Nicaragua captured U.S. pilot Eugene Hasenfuss in 1986, after shooting down his plane delivering aid to U.S.-supported Contra forces, they should not have tried him, found him guilty, and then sent him back to the U.S., as they did. Instead, they should have applied the CIA torture paradigm to try to extract information about other terrorist atrocities being planned and implemented in Washington, no small matter for a tiny, impoverished country under terrorist attack by the global superpower.

By the same standards, if the Nicaraguans had been able to capture the chief terrorism coordinator, John Negroponte, then U.S. ambassador in Honduras (later appointed as the first Director of National Intelligence, essentially counterterrorism czar, without eliciting a murmur), they should have done the same. Cuba would have been justified in acting similarly, had the Castro government been able to lay hands on the Kennedy brothers. There is no need to bring up what their victims should have done to Henry Kissinger, Ronald Reagan, and other leading terrorist commanders, whose exploits leave al-Qaeda in the dust, and who doubtless had ample information that could have prevented further "ticking bomb" attacks.

Such considerations never seem to arise in public discussion.

There is, to be sure, a response: our terrorism, even if surely terrorism, is benign, deriving as it does from the city on the hill.

Perhaps culpability would be greater, by prevailing moral standards, if it were discovered that Bush administration torture had cost American lives. That is, in fact, the conclusion drawn by Major Matthew Alexander [a pseudonym], one of the most seasoned U.S. interrogators in Iraq, who elicited "the information that led to the US military being able to locate Abu Musab al-Zarqawi, the head of al-Qa'ida in Iraq," correspondent Patrick Cockburn reports.

Alexander expresses only contempt for the Bush administration's harsh interrogation methods: "The use of torture by the U.S.," he believes, not only elicits no useful information but "has proved so counter-productive that it may have led to the death of as many U.S. soldiers as civilians killed in 9/11." From hundreds of interrogations, Alexander discovered that foreign fighters came to Iraq in reaction to the abuses at Guantanamo and Abu Ghraib, and that they and their domestic allies turned to suicide bombing and other terrorist acts for the same reasons.

There is also mounting evidence that the torture methods Dick Cheney and Donald Rumsfeld encouraged created terrorists. One carefully studied case is that of Abdallah al-Ajmi, who was locked up in Guantanamo on the charge of "engaging in two or three fire fights with the Northern Alliance." He ended up in Afghanistan after having failed to reach Chechnya to fight against the Russians.

After four years of brutal treatment in Guantanamo, he was returned to Kuwait. He later found his way to Iraq and, in March 2008, drove a bomb-laden truck into an Iraqi military compound, killing himself and 13 soldiers -- "the single most heinous act of violence committed by a former Guantanamo detainee," according to the Washington Post, and according to his lawyer, the direct result of his abusive imprisonment.

All much as a reasonable person would expect.

Unexceptional Americans

Another standard pretext for torture is the context: the "war on terror" that Bush declared after 9/11. A crime that rendered traditional international law "quaint" and "obsolete" -- so George W. Bush was advised by his legal counsel Alberto Gonzales, later appointed Attorney General. The doctrine has been widely reiterated in one form or another in commentary and analysis.

The 9/11 attack was doubtless unique in many respects. One is where the guns were pointing: typically it is in the opposite direction. In fact, it was the first attack of any consequence on the national territory of the United States since the British burned down Washington in 1814.

Another unique feature was the scale of terror perpetrated by a non-state actor.

Horrifying as it was, however, it could have been worse. Suppose that the perpetrators had bombed the White House, killed the president, and established a vicious military dictatorship that killed 50,000 to 100,000 people and tortured 700,000, set up a huge international terror center that carried out assassinations and helped impose comparable military dictatorships elsewhere, and implemented economic doctrines that so radically dismantled the economy that the state had to virtually take it over a few years later.

That would indeed have been far worse than September 11, 2001. And it happened in Salvador Allende's Chile in what Latin Americans often call "the first 9/11" in 1973. (The numbers above were changed to per-capita U.S. equivalents, a realistic way of measuring crimes.) Responsibility for the military coup against Allende can be traced straight back to Washington. Accordingly, the otherwise quite appropriate analogy is out of consciousness here in the U.S., while the facts are consigned to the "abuse of reality" that the naïve call "history."

It should also be recalled that Bush did not declare the "war on terror," he re-declared it. Twenty years earlier, President Reagan's administration came into office declaring that a centerpiece of its foreign policy would be a war on terror, "the plague of the modern age" and "a return to barbarism in our time" -- to sample the fevered rhetoric of the day.

That first U.S. war on terror has also been deleted from historical consciousness, because the outcome cannot readily be incorporated into the canon: hundreds of thousands slaughtered in the ruined countries of Central America and many more elsewhere, among them an estimated 1.5 million dead in the terrorist wars sponsored in neighboring countries by Reagan's favored ally, apartheid South Africa, which had to defend itself from Nelson Mandela's African National Congress (ANC), one of the world's "more notorious terrorist groups," as Washington determined in 1988. In fairness, it should be added that, 20 years later, Congress voted to remove the ANC from the list of terrorist organizations, so that Mandela is now, at last, able to enter the U.S. without obtaining a waiver from the government.

The reigning doctrine of the country is sometimes called "American exceptionalism." It is nothing of the sort. It is probably close to a universal habit among imperial powers. France was hailing its "civilizing mission" in its colonies, while the French Minister of War called for "exterminating the indigenous population" of Algeria. Britain's nobility was a "novelty in the world," John Stuart Mill declared, while urging that this angelic power delay no longer in completing its liberation of India.

Similarly, there is no reason to doubt the sincerity of Japanese militarists in the 1930s, who were bringing an "earthly paradise" to China under benign Japanese tutelage, as they carried out the rape of Nanking and their "burn all, loot all, kill all" campaigns in rural North China. History is replete with similar glorious episodes.

As long as such "exceptionalist" theses remain firmly implanted, however, the occasional revelations of the "abuse of history" often backfire, serving only to efface terrible crimes. The My Lai massacre was a mere footnote to the vastly greater atrocities of the post-Tet pacification programs, ignored while indignation in this country was largely focused on this single crime.

Watergate was doubtless criminal, but the furor over it displaced incomparably worse crimes at home and abroad, including the FBI-organized assassination of black organizer Fred Hampton as part of the infamous COINTELPRO repression, or the bombing of Cambodia, to mention just two egregious examples. Torture is hideous enough; the invasion of Iraq was a far worse crime. Quite commonly, selective atrocities have this function.

Historical amnesia is a dangerous phenomenon, not only because it undermines moral and intellectual integrity, but also because it lays the groundwork for crimes that still lie ahead.

Noam Chomsky is Institute Professor (retired) at MIT. He is the author of many books and articles on international affairs and social-political issues, and a long-time participant in activist movements.

[Note: A slightly longer version of this piece, fully footnoted, will be posted at Chomsky.info within 48 hours.]


White House relies on UAW to ram through GM job cuts, concessions

White House relies on UAW to ram through GM job cuts, concessions

By Jerry White
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With less than two weeks before the May 31 deadline for General Motors to reach an agreement with the United Auto Workers and its bondholders or face bankruptcy, it is increasingly clear the Obama administration is relying on the UAW as its principal instrument in destroying the jobs and living standards of auto workers.

In an email sent to members at GM, the UAW said it was “expecting the restructuring negotiations to intensify this coming week,” adding that the UAW was “actively involved in these complex negotiations, which involve the Obama auto task force, GM management, bondholders and secured lenders, dealers, parts suppliers and other stakeholders.” The UAW message continued, “These negotiations will have a major impact on wages, benefits and jobs for active and retired UAW members.”

The UAW is reportedly close to a deal to slash the wages and benefits of its 62,400 members at General Motors and reduce labor costs by $1 billion. In addition, it would allow GM to forego a $10 billion payment into the UAW-controlled retiree health care trust fund, a move that would gut benefits for more than half a million GM retirees and their dependents.

UAW President Ron Gettelfinger and GM Chief Executive Fritz Henderson were due in Washington Monday for talks with Obama’s auto task force, and local UAW officials have been told they should prepare to come to Detroit this week to ratify a deal before it is sent to the membership for a vote.

The concessions are expected to match or surpass what the UAW agreed to last month at Chrysler. That deal eliminated cost-of-living allowances and production bonuses, stripped workers of break time and holidays, gutted supplemental unemployment benefits and gave up the right to strike until 2015. In addition, the UAW agreed to further takeaways for retirees, including the elimination of vision and dental care and the imposition of higher co-pays for prescriptions and doctor visits.

The day after the UAW pushed through the contract—claiming it would prevent the company from declaring bankruptcy and save jobs—the number three US automaker filed for Chapter 11 protection and released plans to close eight plants and eliminate another 3,500 jobs.

In exchange for its services, the Obama administration is planning to give the UAW a 55 percent ownership stake in Chrysler and a 39 percent stake in GM. In addition, the UAW would be given seats on the corporate board of directors of both companies. This will give UAW executives a direct financial incentive to further slash jobs and living standards, since this would increase the value of their shareholdings.

In the case of GM, UAW officials are once again claiming givebacks will prevent bankruptcy and save jobs. They know this is a lie. It has long been the plan of Obama’s auto task force, headed by investment banker Steven Rattner, to use the bankruptcy courts to break up the century-old industrial icon and liquidate its unprofitable factories, brands and other assets. Under a so-called “363 sale,” a new, restructured GM would emerge. A fraction of the size of the current company and freed from the “legacy costs” of decent wages, hard won working conditions and retiree benefits, it would be a source of lucrative returns for Wall Street.

As part of its global plan to cut 47,000 jobs, GM has already announced plans to close 16 of its remaining 47 US manufacturing facilities and eliminate 23,000 jobs. Last week, the company announced plans to close 18 percent—or 1,100—of its dealerships, including many that have been in operation for half a century or more. Combined with the nearly 800 dealers Chrysler is closing, this move will result in more than 100,000 jobs being destroyed in cities and small towns across the country.

Under its restructuring plan a significant portion of GM’s less profitable small cars will be produced in lower wage countries such as China, South Korea and Mexico. This has already won the approval of the Obama administration, which, according to the New York Times, “sees interference in such plans as crossing a line into industrial policy, rather than helping a giant multinational get back on its feet as a successful, privately managed global operation.”

The UAW predictably seized upon the outsourcing issue in an attempt to divert anger over the destruction of jobs and channel it down the path of economic nationalism and illusions in Obama and the Democratic Party.

In the email sent to its members at GM, the UAW said, “We need President Obama and his auto task force to stand up for the interests of American workers and retirees in the restructuring negotiations.” It continued, “Tell [Obama] to insist that GM must change its restructuring plan,” the UAW message said. “If GM is going to receive government assistance to facilitate its restructuring, along with the tremendous sacrifices by UAW active and retired members, it should be required to maintain the maximum number of jobs in the U.S. instead of outsourcing more production to foreign countries.”

The UAW has long used “Buy American” appeals to foist the blame for the destruction of jobs onto foreign workers. Over the last three decades, the UAW has insisted that no resistance to plant closings, mass layoffs and concessions was permissible because this would undercut the competitiveness of the US automakers against their Asian and European rivals.

The UAW has no principled opposition to payment of poverty wages—it only prefers to have it done in the US so it can collect union dues from the workers. The UAW has already agreed to slashing wages in half to the level of non-union workers at the Japanese-owned factories in the US.

Nor does the UAW have any principled opposition job cuts. On the contrary, it has collaborated in the destruction of three quarters of a million GM, Ford and Chrysler workers’ jobs since 1979, including 250,000 in the last decade alone.

During this time, the UAW apparatus has sought to sever its dependency on dues and find other sources of income. In 2007, advised by Wall Street investment firm Lazard, the UAW allowed the auto companies to dump their retiree health care obligations in exchange for the taking control of a multi-billion-dollar retiree health care trust fund, known as a Voluntary Employee Beneficiary Association, or VEBA.

In the last two years, however, the shares of the automakers have plummeted, sharply undercutting the value of this private investment fund. As the Wall Street Journal noted, “Many worries remain for union officials, say people involved in the discussions. They say that the stock GM proposes to contribute to the VEBA is illiquid and hard to value...The union had initially asked for more from Treasury officials in the negotiations, but was rebuffed.”

GM’s bondholders—who are owed $27 billion—are complaining they are only being offered 10 percent of the company’s equity while the UAW is being given 40 percent. “The bondholders, who say the offer is equivalent to four cents on the dollar, have fired back with a counterproposal asking for 58% of the new GM’s equity, and a bigger slice than the UAW’s,” the Journal reported.

If the UAW has raised any objections over the current negotiations it is only to use auto workers as bargaining chips to secure the largest number of shares for the UAW apparatus itself.

In its lead editorial Monday, the New York Times made it clear that the Obama administration is relying on the UAW to impose Wall Street’s dictates, while expressing concern over opposition from rank-and-file workers.

After noting that the UAW had helped make the Chrysler bankruptcy so “smooth and fast,” it warns that GM’s restructuring might not be as easy. The “company must still slash labor costs further, and probably fire 20,000 additional workers. It wants to close hundreds of its dealerships,” the Times commented. “Even assuming G.M.’s likely bankruptcy ends felicitously, the automaker will have to pull off the trick of becoming an entirely different company,” it continued, before concluding, “Fortunately, the government, the U.A.W. and G.M.’s new leadership all seem to get it. They share a broad vision of where the company needs to go. Pulling it off won’t be easy.”

Indeed, opposition to the global restructuring of the auto industry is growing. Last Thursday, workers at Fiat’s Termini Imerese plant in Sicily stopped work and blocked a road following reports that the facility would be closed under plans by Fiat to take over Chrysler and GM Europe in order to create the world’s second-largest carmaker. On Saturday, they joined a mass demonstration of 15,000 Fiat workers in Turin near the company’s headquarters.

The development of a movement by auto workers in the US to oppose plant closings, layoffs and concessions requires an organizational and political break with the UAW. New organizations of struggle—based on rank-and-file factory and community committees—must be built to organize strikes, plant occupations and mass demonstrations. Such a struggle requires a new political perspective based on uniting workers’ struggles internationally, the building of a mass political party of the working class, and the socialist transformation of the economy to meet human needs, not profit.

The Disease of Permanent War

The Disease of Permanent War

By Chris Hedges

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The embrace by any society of permanent war is a parasite that devours the heart and soul of a nation. Permanent war extinguishes liberal, democratic movements. It turns culture into nationalist cant. It degrades and corrupts education and the media, and wrecks the economy. The liberal, democratic forces, tasked with maintaining an open society, become impotent. The collapse of liberalism, whether in imperial Russia, the Austro-Hungarian Empire or Weimar Germany, ushers in an age of moral nihilism. This moral nihilism comes is many colors and hues. It rants and thunders in a variety of slogans, languages and ideologies. It can manifest itself in fascist salutes, communist show trials or Christian crusades. It is, at its core, all the same. It is the crude, terrifying tirade of mediocrities who find their identities and power in the perpetuation of permanent war.

It was a decline into permanent war, not Islam, which killed the liberal, democratic movements in the Arab world, ones that held great promise in the early part of the 20th century in countries such as Egypt, Syria, Lebanon and Iran. It is a state of permanent war that is finishing off the liberal traditions in Israel and the United States. The moral and intellectual trolls—the Dick Cheneys, the Avigdor Liebermans, the Mahmoud Ahmadinejads—personify the moral nihilism of perpetual war. They manipulate fear and paranoia. They abolish civil liberties in the name of national security. They crush legitimate dissent. They bilk state treasuries. They stoke racism.

“War,” Randolph Bourne commented acidly, “is the health of the state.”

In “Pentagon Capitalism” Seymour Melman described the defense industry as viral. Defense and military industries in permanent war, he wrote, trash economies. They are able to upend priorities. They redirect government expenditures toward their huge military projects and starve domestic investment in the name of national security. We produce sophisticated fighter jets, while Boeing is unable to finish its new commercial plane on schedule. Our automotive industry goes bankrupt. We sink money into research and development of weapons systems and neglect renewable energy technologies to fight global warming. Universities are flooded with defense-related cash and grants, and struggle to find money for environmental studies. This is the disease of permanent war.

Massive military spending in this country, climbing to nearly $1 trillion a year and consuming half of all discretionary spending, has a profound social cost. Bridges and levees collapse. Schools decay. Domestic manufacturing declines. Trillions in debts threaten the viability of the currency and the economy. The poor, the mentally ill, the sick and the unemployed are abandoned. Human suffering, including our own, is the price for victory.

Citizens in a state of permanent war are bombarded with the insidious militarized language of power, fear and strength that mask an increasingly brittle reality. The corporations behind the doctrine of permanent war—who have corrupted Leon Trotsky’s doctrine of permanent revolution—must keep us afraid. Fear stops us from objecting to government spending on a bloated military. Fear means we will not ask unpleasant questions of those in power. Fear means that we will be willing to give up our rights and liberties for security. Fear keeps us penned in like domesticated animals.

Melman, who coined the term permanent war economy to characterize the American economy, wrote that since the end of the Second World War, the federal government has spent more than half its tax dollars on past, current and future military operations. It is the largest single sustaining activity of the government. The military-industrial establishment is a very lucrative business. It is gilded corporate welfare. Defense systems are sold before they are produced. Military industries are permitted to charge the federal government for huge cost overruns. Massive profits are always guaranteed.

Foreign aid is given to countries such as Egypt, which receives some $3 billion in assistance and is required to buy American weapons with $1.3 billion of the money. The taxpayers fund the research, development and building of weapons systems and then buy them on behalf of foreign governments. It is a bizarre circular system. It defies the concept of a free-market economy. These weapons systems are soon in need of being updated or replaced. They are hauled, years later, into junkyards where they are left to rust. It is, in economic terms, a dead end. It sustains nothing but the permanent war economy.

Those who profit from permanent war are not restricted by the economic rules of producing goods, selling them for a profit, then using the profit for further investment and production. They operate, rather, outside of competitive markets. They erase the line between the state and the corporation. They leech away the ability of the nation to manufacture useful products and produce sustainable jobs. Melman used the example of the New York City Transit Authority and its allocation in 2003 of $3 billion to $4 billion for new subway cars. New York City asked for bids, and no American companies responded. Melman argued that the industrial base in America was no longer centered on items that maintain, improve, or are used to build the nation’s infrastructure. New York City eventually contracted with companies in Japan and Canada to build its subway cars. Melman estimated that such a contract could have generated, directly and indirectly, about 32,000 jobs in the United States. In another instance, of 100 products offered in the 2003 L.L. Bean catalogue, Melman found that 92 were imported and only eight were made in the United States.

The late Sen. J. William Fulbright described the reach of the military-industrial establishment in his 1970 book “The Pentagon Propaganda Machine.” Fulbright explained how the Pentagon influenced and shaped public opinion through multimillion-dollar public relations campaigns, Defense Department films, close ties with Hollywood producers, and use of the commercial media. The majority of the military analysts on television are former military officials, many employed as consultants to defense industries, a fact they rarely disclose to the public. Barry R. McCaffrey, a retired four-star Army general and military analyst for NBC News, was, The New York Times reported, at the same time an employee of Defense Solutions Inc., a consulting firm. He profited, the article noted, from the sale of the weapons systems and expansion of the wars in Iraq and Afghanistan he championed over the airwaves.

Our permanent war economy has not been challenged by Obama and the Democratic Party. They support its destructive fury because it funds them. They validate its evil assumptions because to take them on is political suicide. They repeat the narrative of fear because it keeps us dormant. They do this because they have become weaker than the corporate forces that profit from permanent war.

The hollowness of our liberal classes, such as the Democrats, empowers the moral nihilists. A state of permanent war means the inevitable death of liberalism. Dick Cheney may be palpably evil while Obama is merely weak, but to those who seek to keep us in a state of permanent war, it does not matter. They get what they want. Fyodor Dostoevsky wrote “Notes From the Underground” to illustrate what happens to cultures when a liberal class, like ours, becomes sterile, defeated dreamers. The main character in “Notes From the Underground” carries the bankrupt ideas of liberalism to their logical extreme. He becomes the enlightenment ideal. He eschews passion and moral purpose. He is rational. He prizes realism over sanity, even in the face of self-destruction. These acts of accommodation doom the Underground Man, as it doomed imperial Russia and as it will doom us.

“I never even managed to become anything: neither wicked nor good, neither a scoundrel nor an honest man, neither a hero nor an insect,” the Underground Man wrote. “And now I am living out my life in my corner, taunting myself with the spiteful and utterly futile consolation that it is even impossible for an intelligent man seriously to become anything, and only fools become something.”

We have been drawn into the world of permanent war by these fools. We allow fools to destroy the continuity of life, to tear apart all systems—economic, social, environmental and political—that sustain us. Dostoevsky was not dismayed by evil. He was dismayed by a society that no longer had the moral fortitude to confront the fools. These fools are leading us over the precipice. What will rise up from the ruins will not be something new, but the face of the monster that has, until then, remained hidden behind the facade.

G.M. Seeks More Imports From Low-Wage Regions

G.M. Seeks More Imports From Low-Wage Regions

General Motors is engaged in negotiating a reorganization that could increase vehicle imports from its plants in Mexico and Asia while closing factories and cutting the work force in the United States.

That approach drew a sharp rebuke from the United Automobile Workers union on Friday. In a letter to each member of Congress, the U.A.W., which represents G.M. factory workers, argued that to qualify for more government assistance, the auto giant should be required “to maintain the maximum number of jobs in the United States.”

The administration, however, appears to accept the proposition that to return to profitability as quickly as possible, G.M. must import a significant percentage of cars from its plants in low-wage countries, like Mexico and China, or low-cost countries, like Japan.

G.M. already imports a third of the vehicles that go to showrooms in this country. That percentage would not change in the plan that G.M. is preparing to submit to the administration to justify billions of dollars in new loans to stave off collapse. G.M. would emerge a smaller company, with fewer employees and less output in this country and abroad. But imports would rise from low-cost countries, particularly Mexico and China, and that would be offset by fewer imports from Canada and Europe.

Some economists, like David Autor of M.I.T., say that G.M. cars made in China, among other countries, “are pretty competitive and could be sold here.”

Others, like Harley Shaiken, at the University of California, Berkeley, argue that if G.M. focused more intensely on technology and auto quality, it could concentrate production in the United States and still be competitive. “The other way to go,” he said, “is to cut costs by importing more vehicles from Mexico and China, and lifting the bottom line that way.”

A Treasury spokeswoman said over the weekend that “G.M. and the U.A.W. are in active and constructive deliberations around all aspects of their plan. This is one of several issues they are focused on and the administration is supportive of their efforts to come to a resolution.”

G.M. is asking Washington for billions of dollars more in federal loans to survive, on top of the $15.4 billion already borrowed. In a presentation to Congress, the company laid out the plan for the shifts in production to lower-cost countries. In the United States, G.M. would close 16 of its remaining 47 plants and eliminate an additional 21,000 jobs. The company also announced on Friday that 1,100 dealers would be eliminated from its American network by the fall of next year.

In the letter to Congress on Friday, Alan Reuther, the U.A.W.’s legislative director, also argued that if G.M. cut back production in Canada, it would hurt small manufacturers in the United States that supply parts to G.M.’s Canadian assembly plants.

But the Obama administration apparently sees interference in such plans as crossing a line into industrial policy, rather than helping a giant multinational get back on its feet as a successful, privately managed global operation. Insisting that G.M. preserve American jobs by shifting production to the United States from abroad, this argument goes, would require many times more in federal aid than the $16.3 billion in loans now anticipated.

“The idea is to get G.M. off the government dole,” Mr. Autor said. “And if that is the case, then one has to take the steps that a free-standing company must take to be profitable.”

Netanyahu stands firm against demands from Barack Obama

Netanyahu stands firm against demands from Obama

Israel stood firm against demands from Barack Obama on Monday to cease the construction of Jewish settlements and embrace the "two-state solution" to achieving peace in the Middle East.

Benjamin Netanyahu, the Israeli prime minister, in his first meeting with the US president, made it clear that while he welcomed Mr Obama's commitment to the region, he was more concerned about dealing with the threat of Iran than peace talks.

Mr Obama was unable to secure any commitments on ceasing the construction of Jewish settlements in the West Bank or embracing the "two-state solution" to achieving peace in the Middle East.

Sitting side by side in the White House, the two leaders hailed the friendship between their two countries but remained far apart on how to proceed towards a resolution of the 60-year conflict between Israel and the Palestinians.

Mr Obama said the Palestinians had to take steps to guarantee Israel's security – but took a tough line on the construction of settlements on Arab land.

"Israel is going to have to take difficult steps as well," he said. "There is a clear understanding we have to make progress on settlements. Settlements have to stop."

He called on Mr Netanyahu, who leads a hawkish, Right-wing coalition, to seize a "historic opportunity" to work earnestly for peace.

"It is in the interests of Israel, the US and the international community to achieve a two-state solution. We have seen progress stalled on this front. I suggested to the prime minister he has a historic opportunity to get serious movement on this issue during his tenure," he said.

There was a conspicuous lack of praise for his 59-year-old Israeli visitor, whom he said had the "benefit of having served" previously as prime minister and for having "both youth and wisdom".

The meeting overran to two hours, suggesting that the two sides had struggled to find a way of presenting a unified face to the watching world.

Though Mr Netanyahu made clear he wanted to hold peace talks with the Palestinians, he refused to utter the words "two-state solution", the consensus approach towards peace agreed by previous Israeli governments and US administrations.

Mr Obama is expected to announce his own revamped version of the "road map" next month, after he has met Mahmoud Abbas, the Palestinian president, and Hosni Mubarak, the Egyptian president.

"The terminology will take care of itself," said Mr Netanyahu. "The important thing is to resume negotiations with the Palestinians as soon as possible. The issue is less one of terminology than of substance."

He said that if a peace deal delivered a "terror base next door" to Israel than it would be worthless, and insisted that Hamas, the militant group that controlled Gaza, had to recognise Israel before he was ready to make concessions.

The prime minister dwelt at length on the threat posed to Israel by Iran's pursuit of nuclear weapons.

His goal is to persuade the Americans that Tehran must be reined in before peacemaking with the Palestinians can progress.

Hersh claims Bhutto was killed on Cheney's orders

US journo claims Bhutto was killed on Cheney’s orders

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A special death squad assassinated Pakistan’s former Prime Minister Benazir Bhutto on the orders of former US Vice-President Dick Cheney, an Arab TV channel has reported.

“Cheney was the chief of the Joint Special Operation Command and he cleared the way for the US by exterminating opponents through the unit and the CIA. General Stanley was the in-charge of the unit,” The Nation quoted US columnist Seymour Hersh, as saying.

The US death unit killed Bhutto because she had told Al-Jazeera TV about the assassination of Osama Bin Laden, Hersh said.

The US leadership did not want Osama to be declared dead. It would have raised questions about the US Army’s presence in Afghanistan, he claimed.

According to Hersh, the former Lebanese PM Rafique Al Hariri and the army chief were murdered for not safeguarding US interests and for refusing to set up US military bases in Lebanon.

Ariel Sharon, the then prime minister of Israel, was also a key man in the plot, he said.