Monday, June 1, 2009

Senate caves to bankers, passes up chance to help U.S. homeowners

Senate caves to bankers, passes up chance to help U.S. homeowners

by Margie Burns

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The U.S. Senate could have stepped up to the plate yesterday and passed an amendment to help bankruptcy judges help homeowners. Instead, twelve Democrats joined all the Republicans in the Senate--including those two supposed 'moderates' from Maine that we hear so much about--to defeat the amendment.

The amendment to Senate bill 896, called the Helping Families Save Their Homes Act of 2009 and introduced by Sen. Chris Dodd (D-Conn.), would have facilitated renegotiation in foreclosures by bankruptcy judges. It was proposed by Sen. Dick Durbin (D-Ill.)--and if only Durbin had been stronger in protecting the rule of law in reaction to that stunt arrest of Gov. Blagojevich, he, other Dems in Congress, and some necessary presidential initiatives would be in a stronger position now. For one thing, they would have an excellent senator in Danny Davis, a gracious and intelligent man. But that's water under the bridge--exc that poor Illinoisians are now stuck with a US Attorney who is not only a Giuliani-Bush holdover but also has a track record of accepting benefits from people he has benefited.

More on that later.

For now, the fate of any legislation, any legislation at all, that would benefit the housing sector and would help deserving people who are losing their houses for reasons beyond their control is an immediate concern.

It is staggering that more of our corporate media outlets do not recognize the housing situation as the impending emergency that it truly is--staggering even in view of the many instances of short-sightedness demonstrated by large media outlets in the past.

Obviously the media personnel who appear on the airwaves to discuss these matters, in so far as they discuss them, do not face foreclosure themselves, and remoteness affects anyone's perspective. Even so, there is a certain blandness, media-wise, about our impending waves of foreclosures that is an all but breathtaking spectacle of obliviousness.

Of the twelve Democrats who joined--once again--all Republican senators in defeating an amendment ardently opposed by the banking industry, only four are members of Class III, up for reelection in 2010. They are Michael F. Bennet of CO, Byron L. Dorgan of ND, Blanche L. Lincoln of AR, and brand-new or returned Dem Arlen Specter of PA.

UN report issues dire forecast for world economy

UN report issues dire forecast for world economy

By Patrick O'Connor

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The United Nations’ Department of Economic and Social Affairs (DESA) updated its “World Economic Situation and Prospects” report last Thursday, forecasting world growth this year of negative 2.6 percent. World trade is expected to decline by 11.1 percent—the sharpest annual contraction since the 1930s. The latest estimates are revised sharply downward from previous UN forecasts in January of positive 1 percent growth for 2009, with even the most pessimistic scenario then anticipating negative 0.5 percent growth.

The revised figures are another indication of the unprecedented rapidity with which the slowdown in global economic activity has developed. Putting paid to recent optimistic US media reports of a potential imminent recovery, DESA’s director of the development policy and analysis division Rob Vos said there were “no green shoots to be seen which could signal beginnings of a new spring in this still very wintry landscape”.

The report predicts a contraction of 3.9 percent for the advanced economies in 2009. The US economy is forecast to shrink by 3.5 percent. “With unemployment rising sharply and financial de-leveraging continuing, the risk of the economy falling into a protracted deflation is still increasing,” the UN warns.

Data released by the US Commerce Department on Friday added further weight to the UN forecast. First quarter 2009 US gross domestic product (GDP) declined by 5.7 percent, not as severe as the previous quarter’s 6.3 percent contraction, but still worse than most economists’ predictions. The Commerce Department noted that quarterly corporate profits nevertheless increased by an average of 3.4 percent. This was driven by financial sector profits, up an astonishing 94.9 percent due to the Obama administration’s bailout measures; non-financial sector profits fell by 8.6 percent.

In other advanced economies, the UN forecasts that the eurozone will suffer negative 3.7 percent growth. The UN predicts that Japan will be especially hard hit, with a fall in GDP of 7.1 percent. “The severe downturn in global demand, particularly for automobiles, information technology and machinery, has led to a collapse of Japanese exports, causing sharply falling corporate profits, tightening financial conditions, rising unemployment, declining household wealth, and weakening domestic demand,” it states.

The updated UN report points to some aspects of the social misery being inflicted on working people throughout the world. World income per capita is expected to decline by 3.7 percent this year. The UN also notes that initial projections had unemployment rising by 50 million internationally, “but as the situation continues to deteriorate, this number could easily double”.

The UN forecasts global growth of 1.6 percent for 2010, with an “increasingly less likely” optimistic scenario of 2.3 percent and a pessimistic scenario of 0.2 percent. It cautions: “A more prolonged global recession is possible, if the vicious circle between financial destabilisation and retrenchment in the real economy cannot be sufficiently contained and farther-reaching, concerted global policy actions are not taken.”

Much of the report details the impact of the economic crisis on the so-called developing countries. These are forecast to register an average GDP growth of 1.4 percent. In “East and South Asia”—which includes the decelerating but still growing Indian and Chinese economies—average growth of 3.2 percent is expected. Almost every other region is forecast to suffer contracting activity, with sub-Saharan Africa registering negative 0.1 percent growth, Western Asia negative 0.7 percent, and Latin America and the Caribbean negative 1.9 percent.

The UN anticipates “a considerable slowdown in progress towards poverty reduction and the fight against hunger,” with an additional 73 to 103 million people either remaining poor or falling into poverty as a result of the economic crisis. Some 56-80 million people in East and South Asia will be affected, with half of these in India, 12-16 million people in Africa, and another 4 million in Latin America and the Caribbean.

“These projections likely underestimate the true poverty impact of the crisis as the distributional consequences of the crisis are not adequately accounted for,” the report concludes. “Workers at the lower end of the job ladder, including youth and female workers, are more likely to lose their jobs or suffer income losses. Also, workers are already visibly shifting out of dynamic export-oriented sectors, and either becoming unemployed or displaced to lower productivity activities (including moving back from urban to rural areas).”

Poor communities are also expected to suffer from declining remittances as emigrants to advanced countries are affected by unemployment and lower wages.

The UN outlines the impact of the extraordinary collapse of trade and investment in the “emerging economies”. Net private capital inflows to these countries fell by 50 percent last year, from approximately $1 trillion to $500 billion. This figure is expected to again be cut in half in 2009. The sharpest expression of the decline is in the bank lending component of capital investment—bank lending to emerging economies reversed from a net inflow of $400 billion in 2007 to a projected net outflow this year.

Compounding the crisis caused by the withdrawal of foreign capital is the escalating cost of credit. One key index, the Emerging Markets Bond Index, soared from 250 to 800 basis points in the space of just a few weeks late last year, stalling critical public and private infrastructure projects.

The UN also highlights the mounting balance of payments crisis affecting the poorer countries. Capital flight, declining export income due to collapsing commodity prices, and attempts to defend the value of national currencies have produced a substantial reduction in foreign exchange reserves. The report notes: “Reserve accumulation by developing countries in the past decade was seen to be ‘excessive’ until recently, but in many cases, is now swiftly proving to be highly insufficient for ‘self-protection’ given the magnitude of the external shocks caused by the present global financial and economic crisis.”

More than 100 developing countries are forecast to have inadequate finances to cover private debt due, with a total “financing gap” of $200-700 billion. About 30 of these countries’ reserves are now depleted below the benchmark equivalent of three months of imports—“considered to be absolutely critical for keeping production going,” DESA’s Rob Vos warned.

The UN report also notes that numerous middle- and low-income countries have seen large currency devaluations in recent months, some between 20 and 50 percent. This has “made external debt service obligations much more expensive in terms of local currency and are already affecting the budget positions of governments and businesses”. As a result, “many developing countries face difficulties rolling over their foreign debts, with some $3 trillion of emerging economies’ foreign debt maturing during 2009.”

This is certain to mean a new round of government cutbacks to spending on essential social services, such as health care and education, as resources are shifted to pay off the international banks.

The GM bankruptcy

The GM bankruptcy

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General Motors—once the largest and most profitable corporation in the world—will file for bankruptcy protection in a New York City court this morning. The collapse of the 101-year-old Detroit automaker is the largest industrial failure and third largest bankruptcy in US history.

The bankruptcy of what was long the iconic symbol of the power of American industry signifies the failure of not only one company, but of American capitalism as a whole. It is a milestone in the decline in the global position of US capitalism and the crisis of world capitalism. It poses in the starkest form the need for the working class to advance a socialist alternative to the profit system.

President Barack Obama and General Motors CEO Fritz Henderson are expected to make public statements after the filing. Despite their assurances of a “quick” and “orderly” bankruptcy and a “new start” for the company, the action will have a devastating effect on GM’s 230,000 global employees and the millions more who will be hit by plant shutdowns, the closing of more than 1,000 dealerships and the wave of failures of auto suppliers that is expected to follow.

GM, which has already announced plans to cut 47,000 jobs worldwide, including 23,000 of its remaining 62,000 hourly employees in the US, is expected to announce plans to close between 12 and 20 more plants. Communities in Michigan, Indiana, Ohio and other states already suffering high levels of unemployment, home foreclosures and poverty will be driven into even deeper crisis.

The bankruptcy of GM is an historic event. The rise of the automaker in the first half of the 20th century paralleled the ascent of American capitalism and the global predominance of US industry. With its massive size, innovative management methods and global reach, GM defined the modern American corporation. With 850,000 hourly and salaried employees, including half a million in the US, GM was the largest private employer in the world, second only to the state-owned industries of the former Soviet Union.

In the decade following World War II, Detroit’s Big Three automakers—GM, Ford and Chrysler—were making four out of five of the world’s cars, with GM producing half of them. In 1955, the largest foreign competitor, Volkswagen, was only slightly bigger than GM's own German subsidiary, Opel, and Toyota was producing only 23,000 cars in Japan, compared to 4 million manufactured by GM in the US.

Over the last three decades, a sea change has taken place. In the late 1970s, faced with growing competition from abroad, a falling rate of profit in basic industry and the militant resistance of workers determined to defend the gains won in past struggles, the American ruling elite embarked on a deliberate policy of deindustrialization.

Sections of industry deemed insufficiently profitable were starved of investment and then shut down in order to free up capital for increasingly parasitical forms of financial speculation. This coincided with a corporate-government offensive against the working class, involving union-busting, strikebreaking, labor frame-ups and the use of plant closures and layoffs to undermine the militancy of the working class and impose cuts in wages and benefits. This offensive was carried out under Democratic as well as Republican administrations.

The key to its success was the treacherous collaboration of the United Auto Workers and the AFL-CIO, which betrayed a series of bitter strikes in the 1980s and worked to suppress all forms of working class resistance while promoting corporatist policies of union-management “partnership” and economic nationalism. The political expression of this betrayal was the continued subordination of the working class to the Democratic Party and the two-party system of the US ruling elite.

The government-dictated bankruptcy of GM marks a new stage in the ruling class offensive against the working class. After this next round of restructuring, GM expects to have only 38,000 hourly workers and a maximum of 34 factories left in the United States, compared with 395,000 hourly workers in more than 150 plants at its peak employment in 1979. The billions in wage and benefit concessions extorted from workers since the early 1980s were used, not to invest in the company’s long-term viability, but to finance stock buybacks and other measures to boost “shareholder value,” i.e., to enrich Wall Street investors and GM executives.

After decades of declining market share and some $90 billion in losses since 2005, the final nail in the coffin was the financial crash of 2008 and drying up of credit, which have led to a collapse of car sales in the US and internationally and what many analysts expect will be a wave of bankruptcies and mergers that will leave no more than five or six global auto companies left standing.

By driving Chrysler and now GM into bankruptcy, the Obama administration is seeking to exploit the economic crisis to carry out a fundamental realignment of class relations in the US. This involves a further downsizing of basic industry and a sweeping and permanent reduction in the living standards of workers in every sector of the American economy.

Acting on behalf of the most powerful financial interests, the Obama administration plans to use the bankruptcy courts to spin off and liquidate GM’s unprofitable brands, dealerships and factories. A “New GM”—largely owned by the government—will be shrunk to a fraction of its current size and freed from any obligation to pay decent wages, pensions or retiree health benefits. Once ample profits can be guaranteed, the government will sell the company back to private investors at a bargain price. The New York Times web site reported Sunday night that administration officials briefed reporters and stressed that the government, which will own 60 percent of GM stock, intends to leave management of the company in private hands.

While handing out trillions in public assets to Wall Street, the Democratic administration has demanded that auto workers accept the destruction of all of the gains won in the course of decades of bitter struggle.

The wage and benefit concessions imposed on auto workers—with the direct complicity of the United Auto Workers—will freeze wages, eliminate cost-of-living increases, substantially reduce break time and holidays and strip retirees of medical benefits, including dental and optical care. The companies will expand the use of low-paid entry level and temporary workers and workers will be stripped of the right to strike or even to vote on the terms of the next labor agreement until 2015.

The UAW, which will be handed 17.5 percent share of the “New GM,” will be retained as a labor police force to suppress any resistance to poverty wages and brutal exploitation. With billions in shares and a seat on the corporate board of directors, the UAW apparatus will have a direct financial stake in collaborating with the Obama administration in the further slashing of labor costs.

Any serious struggle in defense of jobs and living standards must take as its starting point a decisive break with the UAW and the building of independent committees of rank-and-file workers, in the factories and communities, to organize and coordinate a fight by US workers and their brothers and sisters internationally.

The organization of strikes, factory occupations and mass demonstrations must be guided by a new political strategy. There must be an irrevocable break with the Democratic Party and the fight to establish the political independence of the working class.

In opposition to the Obama administration, the working class must advance its own solution to the crisis of the capitalist system. The vast productive forces of the auto industry cannot be left in the hands of financial speculators and corporate executives, or a government that serves their interests. The auto industry and the banks must be nationalized under the democratic control of working people so that economic decisions can be made in the interests of society as a whole.

The ruling class plans to use the assault on auto workers to set a precedent for sweeping attacks on the jobs and living standards of the entire working class. This demonstrates the need for the greatest unity of the working class and the bringing together of every struggle—against unemployment, home foreclosures, attacks on education and other vital services—into a single political struggle. Its aim must be the establishment of a workers’ government and the socialist reorganization of the economy to meet human needs, not private profit.

Grand Theft Auto: How Stevie the Rat bankrupted GM

Grand Theft Auto: How Stevie the Rat bankrupted GM

by Greg Palast

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Screw the autoworkers.

They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day.

Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders – led by Morgan and Citibank – expect to get back 100% of their loans to GM, a stunning $6 billion.

The way these banks are getting their $6 billion bonanza is stone cold illegal.

I smell a rat.

Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.

When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.

But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.

Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replace by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.

Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.

Preventive Detention for Pensions

So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.

In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.

The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits."

"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits."

Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.

Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance.

Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must

"...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."

By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock.

This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.

House of Rubin

Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?

As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).

With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever."

Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?

And it's been a good year for Señor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer.

("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)

While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero.

If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.

It doesn't make it any less of a crime if the President drives the getaway car.

Quarter million jobs could be lost in bankruptcy

Quarter million jobs could be lost in bankruptcies

Economic impact depends on how quickly the automaker emerges

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Once upon a time, the failure of General Motors Corp. would have shaken the entire U.S. economy to its foundation. But the once-mighty auto giant has already shrunk so much that its bankruptcy may be hardly noticed by an economy that has much bigger problems.

If all goes according to plan, the bankruptcies of GM and Chrysler, which went bankrupt in late April, could cost about a quarter million people their jobs over the next year and a half, according to one researcher.

GM formally filed for bankruptcy protection Monday morning. See related story.

Whether GM's bankruptcy turns out to be a major or minor chapter in U.S. economic history will depend greatly on how quickly and painlessly it emerges as a new company, ready to compete, said Sean McAlinden, a top researcher at the Center for Automotive Research, a nonprofit research organization funded in part by the industry.

In its reorganization as it comes out of bankruptcy, GM will employ fewer workers, operate fewer plants and produce fewer cars, even in the best-case scenario.

Much of the required downsizing has already taken place as GM's position as the pre-eminent car maker in the world has eroded over the past three decades. During that time, GM's U.S. workforce has fallen from a high of 620,000 in 1979 to about 120,000 now.

Immediate impact

The company, the government and the United Auto Workers union hope GM can emerge from bankruptcy quickly, without hurting its key suppliers too much. If the bankruptcy isn't quick, however, the economic damage could be widespread.

When Chrysler declared bankruptcy, it shuttered its plants and furloughed its 27,000 hourly production workers. Those workers are expected to be called back later in the summer if all goes well in court and in the economy.

GM's bankruptcy could also lead to temporary layoffs of most or all of its 61,000 production workers. The company already has plans to temporarily shut 13 plants to reduce inventories, affecting about 25,000 GM workers and a comparable number who work for suppliers.

The statistical treatment of those workers, which determines when and where they show up in unemployment data, is complicated.

Furloughed workers show up in weekly jobless claims data, but won't be counted in the monthly payroll survey. Because they remain on the payroll while they receive severance payments, the company will report them as employed. However, they may show up in the unemployment figures, which are based on a separate survey of households.

The lost production at Chrysler and GM will reduce gross domestic product by about 0.7 percentage points in the second quarter, not a "dramatic" effect, said Abiel Reinhart, an economist for JPMorgan Chase Bank. Falling auto production cut 1.4 percentage points in the first quarter, he said.

Longer impact

A quick detour into court and back out would probably leave GM's relations with suppliers, dealers and customers largely intact even as it slowly loses market share. In that case, the economic impact would be relatively minor, if auto sales and production slowly recover over the next two years as expected.

In the best case, about 21,000 hourly GM workers are expected to lose their jobs by the end of 2010 as GM shutters 14 to 16 plants, according to the company's reorganization plan.

GM also plans to close dealerships, but the overall employment impact of those franchises closing should be minor, because any sales or maintenance business lost at one dealer would be picked up at another lot or garage. The average dealer has about 50 employees; remaining dealers would probably get larger.

Including jobs lost at suppliers and those lost at other companies indirectly because of reduced income, total jobs lost from the GM and Chrysler bankruptcies would total about 250,000 over the next 19 months, according to a study written by McAlinden.

That's a lot of jobs, but it pales in comparison with the 5.7 million jobs lost nationwide since the recession began. It doesn't even match the 281,000 jobs that the auto industry alone has lost since December 2007.

Counting the jobs at suppliers and at companies that have lost business because laid-off workers aren't spending so much, an estimated 1 million jobs across all sectors have already been lost due to the troubles in the industry, McAlinden said.

What GM loses in market share over time would largely be replaced by Ford and the foreign automakers' U.S. operations, said Haig Stoddard, an auto analyst for IHS Global Insight. That means jobs lost in GM plants could be offset by positions added at Ford, Toyota or Honda plants elsewhere as the industry rebounds.

That's if everything goes according to plan.

But if the bankruptcy isn't smooth, a protracted legal battle in court could have dire consequences that could be felt across the economy, with about 1.8 million jobs lost over the next 19 months, according to the CAR study.

A protracted legal battle could nearly destroy GM as a company and take down many of its suppliers, who also supply parts to Ford, Toyota and other automakers, said McAlinden. It would take time to establish new supply chains if major parts suppliers failed.

People’s Summit & Tent City protests planned

People’s Summit & Tent City protests planned

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Organizers of the People’s Summit and Tent City taking place June 14-17 in downtown Detroit have announced several demonstrations and other events as part of its four-day agenda. The People’s Summit will counter the National Summit, known until recently as the National Business Summit, occurring June 15-17 at the GM Renaissance Center.

A State of Emergency Fightback Rally will kick off the People’s Summit on June 14. Organizers say they will do what the politicians have so far refused to do–declare a state of economic emergency in Michigan and all areas affected by high unemployment, plant closings, mass layoffs, and record foreclosures and evictions. They will demand and begin instituting an immediate moratorium on layoffs, budget cuts, evictions and foreclosures.

On the morning of June 15, activists will distribute a Know Your Rights leaflet to homeowners and renters at Detroit’s 36th District Court, the busiest foreclosure and eviction court in the U.S. A lunchtime rally and speak-out for the moratorium and to “bail out the people not the banks” will take place. The theme of the day’s events will be “Detroit’s crisis as a symbol of the country and the world.”

Organizers will invite members of the big-business summit and the media to go on a Corporate/Banker Devastation Tour of the city. They will view neighborhoods with foreclosed and boarded-up homes, closed factories and schools, and other signs of poverty and homelessness. Activists from around the country are also invited.

Later, a mass march down Woodward Ave. will go from Grand Circus Park, site of the People’s Tent City, to the GM Renaissance Center on Detroit’s riverfront. People’s Summiteers will protest the corporate agenda of the big-business gathering and put forward positive demands such as free national health care for all and a massive program for union jobs at living wages.

In the evening a youth hip-hop concert and rally to “stop the war on drugs” and end police brutality are being planned.

The theme on June 16 will be “Stop the war on the workers and poor–feed the people, not the Pentagon!” A morning demonstration outside the People Mover station at Grand Circus Park will demand accessibility for disabled people on the elevated train and full rights for people with disabilities. The Detroit People Mover says on its Web site that it is “100-percent accessible,” but it’s not. The elevator at the Grand Circus Park station doesn’t work.

From noon to 1:30 p.m., as former Michigan Gov. John Engler, now head of the National Association of Manufacturers, and Richard Dauch, the CEO of American Axel & Manufacturing, speak at the big-business summit, a mass rally for jobs will take place. Autoworkers, including member of Soldiers of Solidarity, are expected to attend.

A Stop the Wars at Home and Abroad Rally and Cultural Program are slated for the evening. Special sessions on workers’ occupations, immigrant and women workers, fighting for the Employee Free Choice Act and other struggles will occur throughout the People’s Summit and Tent City. Videotaped testimony and people’s speak-outs on how the crisis affects them, as well as discussions about the People’s Stimulus Plan and Economic Bill of Rights, will take place daily.

Call 313-887-4344 or visit for more information or to register, endorse, get leaflets and volunteer.

Is O'Reilly to Blame for Dr. George Tiller's Murder?

Piecing Together the Murder of Dr. George Tiller: Right-Wing Violence Rears Its Head

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Dr. George Tiller, one of the few OB-GYNs in the country who performed late-term abortions despite ongoing threats to his safety, was fatally shot yesterday while attending a church service in Wichita, Kan. Scott Roeder, 51, has been detained for questioning.

Roeder -- a registered Republican previously arrested for having bomb materials in his car -- posted this chilling message on an Operation Rescue Web site called Charge Tiller in 2007 (via the Daily Kos):

It seems as though what is happening in Kansas could be compared to the "lawlessness" which is spoken of in the Bible. Tiller is the concentration camp "Mengele" of our day and needs to be stopped before he and those who protect him bring judgement upon our nation.

Tiller had long faced the threat of right-wing violence. The Tiller Women’s Health Clinic clinic was bombed in 1985; in 1993, Tiller was shot in both arms by abortion protester Rachelle Shannon. The heavily fortified clinic was guarded by a private security team, and Tiller relied on a bodyguard outside of work.

Recently, Tiller had aired concerns about his safety to federal investigators. The Associated Press reports:

[Tiller's Attorney Dan] Monnat said Tiller had asked federal prosecutors to step up investigations of vandalism and other threats against the clinic out of fear that the incidents were increasing and that Tiller's safety was in jeopardy. [Wichita Deputy Police Chief Tom] Stolz, however, said police knew of no threats connected to the shooting.

In early May, Tiller had asked the FBI to investigate vandalism at his clinic, including cut wires to surveillance cameras and damage to the roof that sent rainwater pouring into the building.

Tiller had also long been the target of vicious attacks by conservative pundits like Bill O'Reilly, who often denounced Tiller on his show. Brad Reed writes on Brad Blog following Tiller's acquittal in March on charges that he had broken a Kansas abortion law:

O'Reilly continued his series of programs focusing on the Kansas physician, charging him with "operating a death mill" (video here), and alleging that he was "executing babies" (video here).

O'Reilly had previously been highly critical of the state's Gov. Kathleen Sebelius, charging, during his "Talking Points" commentary in 2007, that she was "allowing [Tiller] to continue the slaughter."

Writing for Salon, Gabriel Winant argues that O'Reilly's vicious slander of Tiller may well have served as a provocation for the shooting. Although O'Reilly certainly did not instruct his listeners to commit violence:

... there's no other person who bears as much responsibility for the characterization of Tiller as a savage on the loose, killing babies willy-nilly thanks to the collusion of would-be sophisticated cultural elites, a bought-and-paid-for governor and scofflaw secular journalists. Tiller's name first appeared on The Factor on Feb. 25, 2005. Since then, O'Reilly and his guest hosts have brought up the doctor on 28 more episodes, including as recently as April 27 of this year. Almost invariably, Tiller is described as "Tiller the Baby Killer."

Tiller, O'Reilly likes to say, "destroys fetuses for just about any reason right up until the birth date for $5,000." He's guilty of "Nazi stuff," said O'Reilly on June 8, 2005; a moral equivalent to NAMBLA and al-Qaida, he suggested on March 15, 2006. "This is the kind of stuff happened in Mao's China, Hitler's Germany, Stalin's Soviet Union," said O'Reilly on Nov. 9, 2006.
O'Reilly has also frequently linked Tiller to his longtime obsession, child molestation and rape. Because a young teenager who received an abortion from Tiller could, by definition, have been a victim of statutory rape, O'Reilly frequently suggested that the clinic was covering up for child rapists (rather than teenage boyfriends) by refusing to release records on the abortions performed.
When Kansas Attorney General Phill Kline, an O'Reilly favorite who faced harsh criticism for seeking Tiller's records, was facing electoral defeat by challenger Paul Morrison, O'Reilly said, "Now we don't endorse candidates here, but obviously, that would be a colossal mistake. Society must afford some protection for viable babies and children who are raped." (Morrison ultimately unseated Kline.)
This is where O'Reilly's campaign against George Tiller becomes dangerous. While he never advocated anything violent or illegal, the Fox bully repeatedly portrayed the doctor as a murderer on the loose, allowed to do whatever he wanted by corrupt and decadent authorities. "Also, it looks like Dr. Tiller, who some call Tiller the Baby Killer, is spending a large amount of money in order to get Mr. Morrison elected. That opens up all kinds of questions," said O'Reilly on Nov. 6, 2006, in one of many suggestions that Tiller was improperly influencing the election.

Despite ongoing threats of violence and constant right-wing media attacks, Tiller continued running Tiller’s Women’s Health Care Service, one of just three facilities in the country providing access to abortion after the 21st week of pregnancy.

According to a statement issued by Planned Parenthood, Tiller bravely performed an invaluable service:

He provided critical reproductive health care services, including abortion services to women facing some of the most difficult medical circumstances. He was continually harassed by abortion opponents for much of his career -- his clinic was burned down, he was shot by a health center protester, and he was recently targeted for investigation, only to be acquitted by a jury just a few months ago. None of this stopped George Tiller from his commitment to providing women and their families with compassionate care that others were unwilling to offer.

Tiller's slaying has also brought forth personal testimonials from the women he helped, not just in his role as abortion provider but as an OB-GYN. A diarist writes on the Daily Kos:

In 1980, I was pregnant with my first child. I had no insurance and couldn't afford a doctor's appointment until I was approved for a medical card. ... Mom told Dr. Tiller, and he brought me into his office where he examined me, free of charge. I can credit him with the very first picture taken of my son.

The last story I have to share is about my friends who could not have children. Dr. Tiller’s office worked with several attorneys in the Wichita area to provide adoption services for his patients who wanted this option. My friends have a 10-year-old boy now, who is loved and adored.

Nancy Keenan, president of NARAL Pro-Choice America aired her concerns about the chilling effect Tiller’s killing would have on women’s health providers throughout the country:

Dr. Tiller's murder will send a chill down the spines of the brave and courageous providers and other professionals who are part of reproductive-health centers that serve women across this country. We want them to know that they have our support as they move forward in providing these essential services in the aftermath of the shocking news from Wichita.

President Barack Obama also issued a statement denouncing the slaying: "I am shocked and outraged by the murder of Dr. George Tiller as he attended church services this morning. However profound our differences as Americans over difficult issues such as abortion, they cannot be resolved by heinous acts of violence."

Some anti-choice groups were quick to distance themselves from Tiller’s killing, while reiterating their opposition to Tiller's work. The president of Operation Rescue, the group best known for organizing sometimes-violent protests outside abortion clinics in the 1980s, said the following, according to the New York Times:

"Our prayers go out to his family and the thousands of people this will impact," [Troy] Newman said in a telephone interview from his home in Wichita.

"Operation Rescue has worked tirelessly on peaceful, nonviolent measures to bring him to justice through the legal system, the legislative system," Mr. Newman said. "I'm a tireless advocate and spokesman for the pre-born children who are dying in clinics every day. Mr. Tiller was an abortionist. But this wasn’t personal. We are pro life, and this act was antithetical to what we believe."

But statements by other extremist abortion opponents went so far as to blame Tiller for his own killing, including one by Randall Terry, the founder of Operation Rescue. Randall stated:

George Tiller was a mass murderer. We grieve for him that he did not have time to properly prepare his soul to face God. I am more concerned that the Obama administration will use Tiller's killing to intimidate pro-lifers into surrendering our most effective rhetoric and actions. Abortion is still murder. And we still must call abortion by its proper name; murder.

Those men and women who slaughter the unborn are murderers according to the law of God. We must continue to expose them in our communities and peacefully protest them at their offices and homes, and yes, even their churches.

Meanwhile, Father Frank Pavone, the national director of Priests for Life, issued a statement questioning the link between Tiller’s slaying and abortion opponents:

I am saddened to hear of the killing of George Tiller this morning. At this point, we do not know the motives of this act, or who is behind it, whether an angry post-abortive man or woman, or a misguided activist, or an enemy within the abortion industry, or a political enemy frustrated with the way Tiller has escaped prosecution ...

Tiller leaves behind a wife, four children and 10 grandchildren. In a statement issued several hours after the shooting, Tiller’s family said:

Our loss is also a loss for the City of Wichita and women across America. George dedicated his life to providing women with high-quality heath care despite frequent threats and violence. We ask that he be remembered as a good husband, father and grandfather and a dedicated servant on behalf of the rights of women everywhere.

Year Of The Hungry: 1,000,000,000 Afflicted

Year of the hungry: 1,000,000,000 afflicted

By Geoffrey Lean

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Despite the West's pledge to halve world hunger, the number of people who are short of food will soon reach a shocking landmark

One billion people will go hungry around the globe next year for the first time in human history, as the international financial crisis deepens, the United Nations has told The Independent on Sunday.

The shocking landmark will be passed – despite a second record worldwide harvest in a row – because people are becoming too destitute to buy the food that is produced.

Decades of progress in reducing hunger are being abruptly reversed, dealing a devastating blow to a pledge by world leaders eight years ago to cut it in half by 2015.

Rich countries have failed to provide promised money to boost agriculture in the Third World; the financial crisis is starving developing countries of credit and driving their people into greater poverty, and food aid to the starving is expected to begin drying up next month.

Development charities recently called on US president-elect Barack Obama to put the escalating food crisis "front and centre" of his priorities.

Some 963 million people are now undernourished worldwide, according to the most recent survey of the crisis by the Food and Agriculture Organisation (FAO), and the UN body expects the situation to worsen with the recession. "The number will rise steadily next year," an FAO spokesman told the IoS last week. "We are looking at a billion people. That is clear." The FAO fears the tally will go on increasing for years to come.

This directly contradicts an undertaking by the world's leaders at a special summit in September 2000 to "reduce by half the proportion of people who suffer from hunger" from 1990 levels by 2015, as part of an ambitious set of Millennium Development Goals.

At the time, and for several years afterwards, the goal looked achievable, if challenging. Between 1990 and 2005 the number of undernourished people stayed more or less the same at between 800 and 850 million, even though world population grew by 1.2 billion, meaning that the proportion of a rapidly increasing humanity that went hungry was steadily falling.

Several countries – including Ghana, Peru, Mexico, Chile, Jamaica and Costa Rica – actually exceeded the target years ahead of time, while others such as Ethiopia, Nicaragua and Mozambique were on track to achieve it. Twenty-five developing nations looked as if they would be able to halve the absolute number of their hungry – not just the proportion of them in their rising populations – by the target date.

But over the past three years that progress has been thrown abruptly into reverse, with the first steep and sustained rise in hunger in decades leaving another 115 million people short of food. The increase began when prosperity was still increasing and has continued despite bumper harvests; a new FAO report shows that this year's grain crop is set to grow by 5.4 per cent to 2,241 million tons, following a 6 per cent rise last year – ahead of population growth.

So the growth in hunger is not occurring, as in the past, because of shortage of food – but because people cannot afford to buy it even when it is plentiful. The main reason has been that high food prices have priced the poor out of the market.

Over the 12 months until last summer, wheat and maize prices more than doubled and rice prices more than tripled. This was due partly to the growth in biofuels which, the FAO reports, has taken over 100 million tons of cereals out of food supplies over the past year to fuel cars instead. One fill of a 4x4's tank uses enough grain to feed one poor person for a year.

The organisation also blames speculation, population growth, the shrinking of food stocks to record lows and the increasing consumption of meat in developing countries such as China and India, which mops up grain supplies because they are used to feed livestock.

International prices have fallen sharply since the summer, as this year's good harvest has further swelled supplies and the growing financial crisis has cut demand. But the FAO reports that the lower prices have failed to ease the crisis, while the increasing financial turmoil has made it worse.

Developing countries have not benefited from the falling worldwide cost of food, it says, because their currencies have depreciated against the dollar in which international prices are set and their domestic supplies remain scarce, keeping prices in local markets at record levels.

Virtually none of the increased production of the past two years has taken place in the Third World, partly because its farmers have been unable to afford expensive fertilisers and seeds while the profits of giant agrochemical and biotech companies have soared. Now as rich countries' economies slump, they are importing fewer commodities and goods from developing ones, driving national incomes down and increasing unemployment and poverty. As employment falls in the West, Third World immigrants are losing their jobs and are no longer able to send back the money they save from their wages in remittances to their families, a financial boost that is often crucial in keeping them out of dire poverty.

Just as serious, the FAO adds, the credit that Third World farmers need to buy seeds, energy and agricultural chemicals – and to improve production – is drying up.

Aid, too, is falling precipitously. Earlier this month, the World Food Programme – the UN agency that provides food to the hungry – announced that it was running out of supplies. Unless it receives more soon it expects to have to start rationing aid next month, and to run out of food altogether for needy countries such as Haiti, Sudan and Bangladesh by March.

At a special summit in June last year, rich governments pledged $12.3bn (£8.4bn) to tackle the food crisis, but have so far handed over only $1bn of it, as they have scrambled to provide trillions to bail out failing banks.

"Overcoming the financial crisis is critical," concludes the FAO in a recent report, "but continuing the fight against hunger by realising those pledged billions is no less important." Jacques Diouf, the FAO's director general, warns: "Unless the political will and donor pledges are turned into urgent and real actions, millions more will fall into deep poverty."

Josette Sheeran, the executive director of the World Food Programme, added: "While we worry about Wall Street and the high street, we are also paying attention to the needs of those who live in places with no street." She has called on governments to devote just 1 per cent of their bailout and stimulus packages to fighting hunger.

The worst is yet to come, taking the number of hungry beyond the one billion mark. As food prices fall, the FAO is reporting signs that farmers in Europe and North America are reducing their plantings for next year's harvest – and the same thing is likely to happen in the Third World as the lack of credit stops its farmers from being able to buy the food and agricultural chemicals they need. So next year's harvest, it is feared, will be smaller, even if the weather remains good.

The run of good seasons is unlikely to continue for long, even in the short run. And in the medium to long term, climate change is expected to make harvests dramatically worse. Mr Diouf predicts that, if the world fails to take urgent action to keep global warming beneath 2C, the emerging international target, "the global food production potential can be expected to contract severely" – with harvests dropping by up to 40 per cent in Africa, Asia and Latin America.

Global targets: a progress report

Goal one Eradicate extreme poverty and hunger between 1990 and 2015.

Progress 1.4 billion people live in extreme poverty, down from 42 per cent of the world population in 1990 to 26 per cent in 2005. Up to 75 per cent of the population is employed except in parts of Africa and Asia. Undernourished under-fives dropped from 33 per cent in 1990 to 26 per cent in 2006.

Success or failure? Still possible by 2015 but lack of progress in sub-Saharan Africa, where workers earn less than $1 a day.

Goal two Universal primary education by 2015.

Progress 570 million children worldwide enrolled in school. Those not enrolled fell from 103 million in 1999 to 73 million in 2006. Primary school enrolment reached 88 per cent in 2006, up 5 per cent per cent from 2000.

Success or failure? 38 million children in sub-Saharan Africa are not enrolled, while in southern Asia 18 million do not go to school. This goal may not be achieved by 2015, and there are barriers on girls going to school.

Goal three Promote gender equality in education by 2015 and empower women.

Progress 55 per cent of children not in school are girls. Women occupy about 30 per cent of parliamentary seats in 20 countries. Women occupy 40 per cent of all paid jobs, up 5 per cent on 1990.

Success or failure? 113 countries failed to achieve equality of enrolment; only 18 will meet the target. Since 2000, the proportion of women in parliaments rose from 13.5 to 17.9 per cent.

Goal four Reduce child mortality of under-fives by two-thirds between 1990 and 2015.

Progress Deaths of under-fives declined from 93 to 72 deaths per 1,000 live births between 1990 and 2006, and child deaths dropped below 10 million a year in 2006.

Success or failure? Children born in developing countries still 13 times more likely to die under five. Between 1990 and 2006, 26 countries made no progress in reducing childhood deaths, while in 27 others the mortality rate is flat or getting worse.

Goal five Improve maternal health and reduce mortality by two-thirds between 1990 and 2015.

Progress Maternal mortality decreased by less than 1 per cent per year between 1990 and 2005; 60 per cent of births were attended by health professionals in 2006, up 10 per cent since 1990.

Success or failure? 500,000 women a year in developing countries die during pregnancy. Worst progress of all goals.

Goal six Universal access to treatment for Aids/HIV by 2010 and reverse spread of HIV/Aids and malaria by 2015.

Progress New HIV cases declined from three million a year in 2001 to 2.7 million in 2007. Funding increased tenfold within a decade. Mosquito net production rose from 30 million in 2004 to 95 million in 2007.

Success or failure? 7,500 people a day infected with HIV; 5,500 die of Aids-related illness; 500 million new cases of malaria a year.

Goal seven Reduce loss of biodiversity by 2010 and halve number of people without access to safe water or sanitation by 2015.

Progress Deforestation declined to 7.3 million hectares a year; 1.6 billion people have access to drinking water since 1990.

Success or failure? 40 per cent of the world lives with water scarcity, and fish stocks are overexploited. One billion people still have no access to safe drinking water and 2.5 billion have no access to basic sanitation, yet target may still be achieved.

Goal eight Develop a global partnership for development.

Progress The UK is among the few nations to meet targets of giving 0.15 per cent of gross national Income in aid. The burden of debt in developing countries fell from 13 per cent of exports in 2000 to 7 per cent in 2006.

Success or failure? Aid dropped from £67bn in 2005 to £64bn in 2007 but needs to increase by £18bn a year. A third of essential medicines are available in 30 developing countries.

Obama to ban PoW photos exposing rape, torture

Obama to ban PoW photos exposing rape, torture

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The US administration asks an appeals court to stop the release of prisoner abuse images, showing that Obama has fully backtracked on his promise of transparency.

In a motion filed Thursday in a New York federal appeals court, the Obama administration said that it did not want the photos to be available to the public, arguing that they could lead to violence against US troops in Iraq, Afghanistan and even Pakistan.

"[Distributing the photos poses] a clear and grave risk of inciting violence and riots against American and coalition forces, as well as civilian personnel, serving in Iraq and Afghanistan," the motion said.

The court filing also included two semi-classified statements by the top US commander in Iraq, General Raymond Odierno, and the head of US Central Command General David Petraeus, who leads US military activities in the Middle East and Central Asia.

"[The release of the images] would… further endanger the lives of US soldiers, Marines, airmen, sailors, civilians and contractors," said Petraeus.

Odierno also claimed that Iraqi officials had told him the release of the photos, which are believed to number in the thousands, could disrupt democratic progress in Iraq before the national elections.

Last month, Obama's administration said that it would comply with a court order, which was issued following a lengthy Freedom of Information Act lawsuit filed by the American Civil Liberties Union. The order said the pictures must be released by May 28.

Earlier in May, however, Barack Obama reversed his position, saying that he did not feel comfortable with his previous decision.

The new US administration's U-turn on the issue drew a heavy backlash from the ACLU, which expressed outrage and said the decision "makes a mockery" of Obama's campaign promise of transparency.

While Amnesty International said that it was disappointed, other US human rights groups also accused Obama of following in the footsteps of former president George W. Bush.

News of the US government's official stance came as Press TV released some images of the maltreatment of prisoners by US soldiers, confirming an earlier Daily Telegraph report, which revealed the photos of abuse at Iraqi jails include images of rape and sexual assault.

Washington-based investigative journalist Wayne Madsen emailed the horrific images to Press TV, rejecting allegations by neoconservative media that they were fake.

Madsen said when some of the disputed photos were randomly published by the Boston Globe in 2004, neoconservatives made the same accusations against the paper.

The Daily Telegraph report focused on information provided by Major General Antonio Taguba, a former army officer who published a report in 2004 into the abuse scandal at the Abu Ghraib prison.

Contradicting an Obama administration claim that photos did not include pictures of sexual abuse, Taguba said the images showed mistreatment, torture, and rape.

Manipulation: How Financial Markets Really Work

Manipulation: How Financial Markets Really Work

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Wall Street's mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government's visible hand and insiders control markets and manipulate them up or down for profit - all of them, including stocks, bonds, commodities and currencies.

It's financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls "pump and dump," defined as "artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price," then profit more on the downside by short-selling. "This practice is illegal under securities law, yet it is particularly common," and in today's volatile markets likely ongoing daily.

Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it's more than just "a process designed to wipe out the middle class. This is genocide (by other means) - a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."

Fitts explains that much more than market manipulation goes on. She describes a "financial coup d'etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank" along with insiders. It's a government-business partnership for enormous profits through "legislation, contracts, regulation (or lack of it), financing, (and) subsidies." More still overall by rigging the game for the powerful, while at the same time harming the public so cleverly that few understand what's happening.

Market Rigging Mechanisms - The Plunge Protection Team

On March 18, 1989, Ronald Reagan's Executive Order 12631 created the Working Group on Financial Markets (WGFM) commonly known as the Plunge Protection Team (PPT). It consisted of the following officials or their designees:

-- the President;

-- the Treasury Secretary as chairman;

-- the Fed chairman;

-- the SEC chairman; and

-- the Commodity Futures Trading Commission chairman.

Under Sec. 2, its "Purposes and Functions" were stated as follows:

(2) "Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

(1) the major issues raised by the numerous studies on the events (pertaining to the) October 19, 1987 (market crash and consider) recommendations that have the potential to achieve the goals noted above; and

(2)....governmental (and other) actions under existing laws and regulations....that are appropriate to carry out these recommendations."

In August 2005, Canada-based Sprott Asset Management (SAM) principals John Embry and Andrew Hepburn headlined their report on the US government's "surreptitious" market interventions: "Move Over, Adam Smith - The Visible Hand of Uncle Sam" to prevent "destabilizing stock market declines. Comprising key government agencies, stock exchanges and large Wall Street firms," this group "is significant because the government has never admitted to private-sector membership in the Working Group," nor is it hinting that manipulation works both ways - to stop or create panic.

"Current mythology holds that (equity) prices rise and fall on the basis of market forces alone. Such sentiments appear to be seriously mistaken....And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent....with the active participation of selected investment banks and brokerage houses" - the Wall Street giants.

In 2004, Texas Hedge Report principals Steven McIntyre and Todd Stein said "Almost every floor trader on the NYSE, NYMEX, CBOT and CME will admit to having seen the PPT in action in one form or another over the years" - violating the traditional notion that markets move randomly and reflect popular sentiment.

Worse still, according to SAM principals Embry and Hepburn, "the government's unwillingness to disclose its activities has rendered it very difficult to have a debate on the merits of such a policy," if there are any.

Further, "virtually no one ever mentions government intervention publicly....Our primary concern is that what apparently started as a stopgap measure may have morphed into a serious moral hazard situation."

Worst of all, if government and Wall Street collude to pump and dump markets, individuals and small investment firms can get trampled, and that's exactly what happened in late 2008 and early 2009, with much more to come as the greatest economic crisis since the Great Depression plays out over many more months.

That said, the PPT might more aptly be called the PPDT - The Plunge Protection/Destruction Team, depending on which way it moves markets at any time. Investors beware.

Manipulating markets is commonplace and as old as investing. Only the tools are more sophisticated and amounts involved greater. In her book, "Morgan: American Financier," Jean Strouse explained his role in the Panic of 1907, the result of stock market and real estate speculation that caused a market crash, bank runs, and hysteria. To restore confidence, JP Morgan and the Treasury Secretary organized a group of financiers to transfer funds to troubled banks and buy stocks. At the time, rumors were rampant that they orchestrated the panic for speculative profits and their main goals:

-- the 1908 National Monetary Commission to stabilize financial markets as a precursor to the Federal Reserve; and

-- the 1910 Jekyll Island meeting where powerful financial figures met in secret for nine days and created the private banking cartel Federal Reserve System, later congressionally established on December 23, 1913 and signed into law by Woodrow Wilson.

Morgan died early that year but profited hugely from the 1907 Panic. It let him expand his steel empire by buying the Tennessee Coal and Iron Company for about $45 million, an asset thought to be worth around $700 million. Today, similar schemes are more than ever common in the wake of the global economic crisis creating opportunities to buy assets cheap by bankers flush with bailout cash. Aided by PPT market rigging, it's simpler than ever.

Wharton Professor Itay Goldstein and Said Business School and Lincoln College, Oxford University Professor Alexander Guembel discussed price manipulation in their paper titled "Manipulation and the Allocational Role of Prices." They showed how traders effect prices on the downside through "bear raids," and concluded:

"We basically describe a theory of how bear raid manipulation works....What we show here is that by selling (a stock or more effectively short-selling it), you have a real effect on the firm. The connection with real value is the new thing....This is the crucial element," but they claim the process only works on the downside, not driving shares up.

In fact, high-volume program trading, analyst recommendations, positive or negative media reports, and other devices do it both ways.

Also key is that a company's stock price and true worth can be highly divergent. In other words, healthy or sick firms may be way-over or under-valued depending on market and economic conditions and how manipulative traders wish to price them, short or longer term.

The idea that equity prices reflect true value or that markets move randomly (up or down) is rubbish. They never have and more than ever don't now.

The Exchange Stabilization Fund (ESF)

The 1934 Gold Reserve Act created the US Treasury's ESF. Section 7 of the 1944 Bretton Woods Agreements made its operations permanent. As originally established, the Treasury ran the Fund outside of congressional oversight "to keep sharp swings in the dollar's exchange rate from (disrupting) financial markets" through manipulation. Its operations now include stabilizing foreign currencies, extending credit lines to foreign governments, and last September to guaranteeing money market funds against losses for up to $50 billion.

In 1995, the Clinton administration used the fund to provide Mexico a $20 billion credit line to stabilize the peso at a time of economic crisis, and earlier administrations extended loans or credit lines to China, Brazil, Ecuador, Iceland and Liberia. The Treasury's web site also states that:

"By law, the Secretary has considerable discretion in the use of ESF resources. The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s....the Secretary (per) approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."

In other words, ESF is a slush fund for whatever purposes the Treasury wishes, including ones it may not wish to disclose, such as manipulating markets, directing funds to the IMF and providing them with strings to borrowers as the Treasury's site explains:

"....Treasury has often linked the availability of ESF financing to a borrower's use of the credit facilities of the IMF, both to support the IMF's role and to strengthen assurances that there will be timely repayment of ESF financing."

The Counterparty Risk Management Policy Group (CRMPG)

Established in 1999 in the wake of the Long Term Capital Management (LTCM) crisis, it manipulates markets to benefit giant Wall Street firms and high-level insiders. According to one account, it was to curb future crises by:

-- letting giant financial institutions collude through large-scale program trading to move markets up or down as they wish;

-- bailing out its members in financial trouble; and

-- manipulating markets short or longer-term with government approval at the expense of small investors none the wiser and often getting trampled.

In August 2008, CRMPG III issued a report titled "Containing Systemic Risk: The Road to Reform." It was deceptive on its face in stating that CRMPG "was designed to focus its primary attention on the steps that must be taken by the private sector to reduce the frequency and/or severity of future financial shocks while recognizing that such future shocks are inevitable, in part because it is literally impossible to anticipate the specific timing and triggers of such events."

In fact, the "private sector" creates "financial shocks" to open markets, remove competition, and consolidate for greater power by buying damaged assets cheap. Financial history has numerous examples of preying on the weak, crushing competition, socializing risks, privatizing profits, redistributing wealth upward to a financial oligarchy, creating "tollbooth economies" in debt bondage according to Michael Hudson, and overall getting a "free lunch" at the public's expense.

CRMPG explains financial excesses and crises this way:

"At the end of the day, (their) root cause....on both the upside and the downside of the cycle is collective human behavior: unbridled optimism on the upside and fear on the downside, all in a setting in which it is literally impossible to anticipate when optimism gives rise to fear or fear gives rise to optimism...."

"What is needed, therefore, is a form of private initiative that will complement official oversight in encouraging industry-wide practices that will help mitigate systemic risk. The recommendations of the Report have been framed with that objective in mind."

In other words, let foxes guard the henhouse to keep inventing new ways to extract gains (a "free lunch") in increasingly larger amounts - "in the interest of helping to contain systemic risk factors and promote greater stability."

Or as Orwell might have said: instability is stability, creating systemic risk is containing it, sloping playing fields are level ones, extracting the greatest profit is sharing it, and what benefits the few helps everyone.

Michel Chossudovsky explains that: "triggering market collapse(s) can be a very profitable undertaking. (Evidence suggests) that the Security and Exchange Commission (SEC) regulators have created an environment which supports speculative transactions (through) futures, options, index funds, derivative securities (and short-selling), etc. (that) make money when the stock market crumbles....foreknowledge and inside information (create golden profit opportunities for) powerful speculators" able to move markets up or down with the public none the wiser.

As a result, concentrated wealth and "financial power resulting from market manipulation is unprecedented" with small investors' savings, IRAs, pensions, 401ks, and futures being decimated from it.

Deconstructing So-Called "Green Shoots"

Daily the corporate media trumpet them to lull the unwary into believing the global economic crisis is ebbing and recovery is on the way. Not according to longtime market analyst Bob Chapman who calls green shoots "Poison Ivy" and economist Nouriel Roubini saying they're "yellow weeds" at a time there's lots more pain ahead.

For many months and in a recent commentary he refers to "the worst financial crisis, economic crisis and recession since the Great Depression....the consensus is now becoming optimistic again and says that we are going to go from minus 6 percent growth to positive growth in the second half of the views are much more bearish....The problems of the financial system are severe. Many banks are still insolvent."

We're "piling public debt on top of private debt to socialize the losses; and at some point the back of (the) government('s) balance sheet is going to break, and if that happens, it's going to be a disaster." Short of that, he, Chapman, and others see the risks going forward as daunting. As for the recent stock market rise, they both call it a "sucker's rally" that will reverse as the US economy keeps contracting and the financial system suffers unexpected or manipulated shocks.

Highly respected market analyst Louise Yamada agrees. As Randall Forsyth reported in the May 25 issue of Barron's Up and Down Wall Street column:

"It is almost uncanny the degree to which 2002-08 has tracked 1932-38, 'Yamada writes in her latest note to clients.' " Her "Alternate Hypothesis" compares this structural bear market to 1929-42:

-- "the dot-com collapse parallels the Great Crash and its aftermath," followed by the 2003-07 recovery, similar to 1933-37;

-- then the late 2008 - early March 2009 collapse tracks a similar 1937-38 trajectory, after which a strong rally followed much like today;

-- then in November 1938, the market dropped 22% followed by a 26% rise and a series of further ups and downs - down 28%, up 23%, down 16%, up 13%, and a final 29% decline ending in 1942;

-- from the 1938 high ("analogous to where we are now," she says), stock prices fell 41% to a final bottom.

Are we at one today as market touts claim? No according to Yamada - top-ranked among her peers in 2001, 2002, 2003 and 2004 when she worked at Citigroup's Smith Barney division. Since 2005, she's headed her own independent research company.

She says structural bear markets typically last 13 - 16 years so this one has a long way to go before "complet(ing) the repair process." She calls the current rebound "a bungee jump," very typical of bear markets. Numerous ones occurred during the Great Depression, 8 alone from 1929 - 1932, some deceptively strong.

Expect market manipulators today to produce similar price action going forward - to enrich themselves while trampling on the unwary, well-advised to protect their dollars from becoming quarters or dimes.

Three GI resisters tell their stories

Three GI resisters tell their stories

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In real life Travis Bishop is best known for his acoustic country music CD, “So Here We Go.” He is also known as Sgt. Bishop, currently AWOL from Fort Hood after refusing to deploy with the 57th Elite Service Battalion to Afghanistan. He told his story recently in

“A few days before I was set to deploy, I was approached by members of an organization who told me that I had a choice. They told me that they were here to support me, and that if I really was against the war our country was currently in, I could choose not to go. All those old feelings and worries came back with a vengeance, and I began to question the war again. After a full day of thinking, the only reason I had come up with for me to go was the fact that my best friend was going too. ... I hope that he can forgive me one day.

“So the afternoon I was set to deploy, while everyone else was loading their gear in the van headed toward the airfield, I loaded my gear in my car, and left. It was the hardest decision I have ever made.”

Bishop doesn’t want to be AWOL for months or think of himself as a deserter. But, he says: “I believe that this particular war is unjust, unconstitutional and a total abuse of our nation’s power and influence. And so, in the next few days, I will be speaking with my lawyer, and taking actions that will more than likely result in my discharge from the military, and possible jail time ... and I am prepared to live with that.”

After five months in the Army, Dustin Che Stevens sat down during Airborne graduation in 2002 in order to refuse graduation. He was told to go home and wait for his discharge. Seven years later, he was arrested after being stopped for a traffic violation in his hometown of Louisville, Ky. He is charged with desertion. He is now awaiting court martial at Fort Bragg, N.C.—“Home of the Airborne.” While waiting, Stevens told Courage To Resist: “I started reading [literature on conscientious objection] and started thinking for myself. I knew in my heart and in my mind that I could not kill anyone. ... I went back and told them that.”

Stevens will be court-martialed unless he “volunteers” to deploy to Afghanistan. He shares a tiny 8-by-8-foot room with three other GIs accused of desertion. He says there are about 60 others in detention, most on AWOL charges, having left the Army during or after training. “Lots of other guys return from AWOL and test positive for drugs, and are processed out,” he said. But if you return without evidence of drug use, the Airborne wants you as a combat soldier in Afghanistan.

Stevens’ attorney, James Branum, is determined to beat the desertion charge and help him avoid a long prison sentence. To support Dustin Che Stevens contact

In a recent letter André Shepherd sent his “heartfelt thanks” to all his supporters. Last Nov. 26 he applied for asylum in Germany. The German Federal Office for Migration has not yet issued a decision, which could take several more months. Commenting on his case, he said: “This fight is not about a single soldier’s bid for freedom. Rather it is about whether or not the United States intentionally violated international law and ultimately its own laws regarding wars of aggression. Since the answer is so obvious, it should only be a matter of time before we get a ruling to that effect. Nevertheless, we have to remain vigilant in our efforts to claim victory.

“It is important to consider that although the War on Iraq is the centerpiece of our arguments, we need to take a closer look at the War on Afghanistan as well. ... It saddens me to say that we have once again been hoodwinked into thinking that the actions of our leaders were made purely by ‘good intentions.’ ... We must sound the alarm on the destructive nature of this war, as well as the crimes against humanity being perpetuated.”

Shepherd continues a very active asylum campaign in Germany. He has traveled across the country, “attending events and conferences that feature not only me, but other soldiers from around the world who have also decided to resist our Government’s imperialistic designs.” He has been featured on numerous major news outlets.

Chrysler workers rally to stop plant closing

Chrysler workers rally to stop plant closing

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On May 22 hundreds of laid-off Chrysler workers rallied in front of their plant in Twinsburg, Ohio. “The people have spoken, keep the plant open!” they chanted. Workers believe they were double-crossed when, two days after voting to grant Chrysler sweeping concessions, they read in the news media that Chrysler’s restructuring includes the closing of their plant and seven others.

Along with Twinsburg, three plants in Michigan, Wisconsin and Missouri—Sterling Heights Assembly, Kenosha Engine and St. Louis North Assembly—were covered by a plant-closing moratorium in the 2007 Chrysler contract with the United Auto Workers. Union members regard the newly announced plant closings—Twinsburg is scheduled to close in March 2010—as an attack on their right to collective bargaining.

Many workers brought their families to the demonstration. They carried signs reading “People before profits” and “Keep our plant open.” They also chanted, “One, two, three, four, open up the factory door!” All but nine members of UAW Local 122 have been on layoff since Chrysler declared bankruptcy April 30.

The union called the demonstration to coincide with a visit to the plant by Dr. Ed Montgomery, President Barack Obama’s “auto recovery czar.” Montgomery was in Twinsburg to offer the town a “relief plan” to be set up after the plant closes. Twinsburg stands to lose nearly 20 per cent of its tax revenues. Local 122 wanted to send a clear message that the workers want to keep their plant open and will accept nothing less.

When this writer began working at the plant 22 years ago, it had 3,300 hourly employees. Now there are 800. After learning of the shutdown, workers were given a May 26 deadline to decide whether to quit, retire under a buyout program or stay with the hope of eventually relocating to another Chrysler facility.

Eight days before the deadline, the buyouts were enhanced, further complicating the workers’ decision-making process. Many workers are only a few months short of the 10 years’ seniority qualifying them for the enhancements, so they are trying to decide whether to leave now or gamble that the enhanced buyouts will be offered again later.

Chrysler has no compassion for the workers and their families, who’ve been given a mere eight days to make what for many is the hardest decision of their lives. Some are refusing the buyout, saying, “That’s what the company wants us to do—leave so they can replace us with workers making half our wages.” Others who are taking the buyout want to stay involved in the fight to reverse Chrysler’s job-gutting plans.

The workers are not alone in their struggle for justice. The honks of support from passing motorists during the two-hour protest were even louder than the chants.

Congresspersons Betty Sutton and Dennis Kucinich sent representatives to the demonstration. On April 30 they and other northeast Ohio members of Congress, as well as Ohio Senator Sherrod Brown and Twinsburg Mayor Katherine Procop, were assured by both Chrysler and the White House Auto Task Force that the Ohio stamping plant was staying open. Like the autoworkers, the politicians learned of the planned closing when Chrysler attorneys made the announcement in U.S. Bankruptcy Court the same day.

UAW members across the country are outraged by Chrysler’s arrogant and malicious disregard of the rights of their sisters and brothers. Local 122 members were joined by delegations from UAW Locals 573, 420, 1005 and 1050. Local 573 represents clerical and engineering staff at the Twinsburg plant as well as the Chrysler Parts Distribution Center in Streetsboro. Locals 420 and 1005 represent workers at stamping plants at Ford and General Motors, while Local 1050 represents workers at the Cleveland Alcoa plant, which supplies the auto industry. Alcoa workers had support from Local 122 during their strike of several weeks in 2006.

Solidarity also came from the American Federation of State, County and Municipal Employees, American Friends Service Committee, Jobs with Justice and Bail Out the People Movement. Members of Local 122 are discussing ways of further broadening community support.

There were no supporters in front of the plant from the right-wing element. The Pat Buchanans and the Rush Limbaughs only rail against NAFTA to turn workers in this country against workers in other countries. Many workers and labor leaders, unfortunately, are focused on saving “American” jobs. Some workers at the rally even carried signs calling for layoffs in Canada and Mexico, which are also part of America.

Solidarity across borders and across oceans is what’s needed to counter the brutal capitalist consolidation into fewer car companies with far fewer workers. Autoworkers everywhere are staging protests to assert their right to their jobs. They need to join hands in order to win.