Friday, October 16, 2009

A NATO for the Middle East?

NATO for the Middle East?

Israel and Frontline Arab States Join Hands

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After the Anglo-American invasion of Iraq the U.S. and British governments gave up their excuses about bringing democracy to the people of the Middle East and started slowly talking about their strategic interests in the region. Fighting terrorism and bringing democracy were mere pretexts for military assaults. The Anglo-American game plan exposed itself in the summer of 2006 after the Israeli aerial seige of Lebanon. France and Germany were also implicated in the Anglo-American designs and the whole venture began to appear as a combined project, with NATO representing all four powers.

By the summer months of 2007, William M. Arkin, a columnist on security issues for The Washington Post, stated that the U.S. government had started the process of creating a NATO-like military alliance in the Middle East against Iran and Syria. [1] The basis for Arkin’s claims were the major, and very public, steps taken by the Bush Jr. Administration to demonize Iran and Syria in 2007 and to classify or divide the Middle East into two different camps, “moderates” and “radicals.” [2] According to Arkin:

The new military alliance even has a temporary name: GCC+2. Yesterday [July 31, 2007], Rice and Gates met [for security and policy meetings regarding the Middle East] with the leaders of the Gulf Cooperation Council of six nations: Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates — plus Egypt and Jordan. [3]

Although Tel Aviv was (deliberately) not mentioned due to the sensitivities of the Arab public, Israel is a partner within the framework of such an alliance. In July 2009, the international reports of the voyage of Israeli Dolphin submarines, which are capable of carrying nuclear weapons, through the Suez Canal as a veiled threat to Iran and as part of Israeli preparations for a war against Tehran illustrate the level of cooperation between these states and Israel. [4]

The Middle East: The Resistance Bloc versus the Coalition of the Moderate

The logistical process of marshalling together the network of existing U.S. allies and clients in the Middle East within an alliance against Iran and Syria started in 2006 after the Israeli defeat in Lebanon. Following the Israeli failure in Lebanon, the U.S. government started arming Saudi Arabia and the other Gulf Cooperation Council (GCC) states, Egypt, Jordon, Israel, the forces of Mahmoud Abbas, and the groups with militias in the March 14 Alliance of Lebanon with secret weapons shipments or through large weapon deals. [5] These players were all grouped together, along with Israel and Turkey, as the “Coalition of the Moderate.”

George W. Bush’s speech on Iraq in 2007 was an announcement that the U.S. intended to build a coalition against Iran, Syria, and all the regional players and forces that resisted the White House’s “New Middle East.” The intricate ties of the mainstream media (and the individual interests that both own and control them) to U.S. foreign policy were confirmed by the media aspects of the process and the timing of opinion pieces calling for the expansion of NATO into the Middle East or the creation of a NATO-like alliance in the region. Time Magazine, on queue with George W. Bush’s speech on Iraq, published an article calling for a NATO in the Middle East. [6]

The Arab League’s March 2007 summit in Saudi Arabia also served to cultivate the conditions for dividing the region into a so-called bloc of “moderates” and a so-called Iranian-led bloc of “radicals.” [7] The major regional tours of Condoleezza Rice and Robert Gates in 2007 were also defining moments in this process. Condoleezza Rice, while en route to the Middle East via Ireland, told reporters, “There isn’t a doubt, I think, that Iran constitutes the single most important, single-country challenge to...[American] interests in the Middle East and to the kind of Middle East that we [meaning the U.S. government] want to see.” [8]

The so-called “moderates,” such as Saudi Arabia, in the Middle East are those players who have sided with the plans to establish a “new regional order” or the “New Middle East.” The so-called “radicals” are really those players resisting foreign influence and control, for their own different reasons, over their lands and thus are a lose-knit “Resistance Bloc.” For this reason a diverse league of players are included in the Resistance Bloc: theocrats and secularists; Arabs, Armenians, Assyrians, Turkic peoples, and Iranians; Christians of various confessions from the Eastern Orthodox to various Catholics, Druze, and Muslims of various denominations; nationalists and pan-Arabists; reformists, liberals, and conservatives; Baathists, socialists, communists, and various religious political groups.

The Iraqi Resistance, most Palestinian organizations, the Lebanese National Opposition, Iran, and Syria are all categorized together within this bloc of players opposed to the agenda being pursued by America and its partners. This grouping is significantly propped up by Iran, either directly or indirectly. By way of their opposition to the U.S. and its allies they are preventing the move into Eurasia and hegemonic control of Middle Eastern oil resources.

The Resistance Bloc within the Context of Eurasian Resistance

The Resistance Bloc is merely the regional arm of the broader Eurasian alliance formed by Russia, China, and Iran against the U.S. and its allies (the Periphery). Iran and Syria are also the link between the non-state players in the Middle East and Moscow and Beijing. To support the Resistance Bloc, Russia has been aiding Iran and Syria and even maintains naval bases off the Syrian coast.

Moscow also aided the Lebanese during the 2006 war against Israel through providing Hezbollah with information about Israeli military movements. [9] There have also been serious talks, which are being stalled by the Hariri-led March 14 Alliance, about the Russians and Iranians arming the Lebanese military. [10] The Kremlin has also refused to stop having contacts with Hamas and other Palestinian organizations and with Hezbollah and its political allies in Lebanon. The Russians have also categorically warned several times that they will not accept a war against Iran.

Following in the Footsteps of the Baghdad Pact and CENTO?

The formation of a NATO in the Middle East would not only be targeted against Iran, Syria, and their regional allies, but would also be part of a larger equation aimed at targeting Russia and China in Eurasia. In this regard, the formation of a NATO-like military alliance would not be new to the Middle East. In the past, the U.S. had been actively involved in the creation of both the Baghdad Pact and later the Central Treaty Organization (CENTO) or Middle East Treaty Organization (METO), which was created after the 1958 revolution in Iraq resulted in an Iraqi withdrawal from the Baghdad Pact.

The organization of these alliances, especially CENTO, were designed alongside that of the organization of NATO and aimed at encircling the Soviet Union from the most relatively central location of Eurasia, as well as keeping other Middle Eastern states in balance. While the Baghdad Pact and CENTO formed a central military belt in Eurasia, NATO formed a military belt around the western and northern peripheries of Eurasia and the Soviet Union. The Southeast Asia Treaty Organization (SEATO) did the same from the eastern and southern peripheries of Eurasia, the Soviet Union, and China. All three military organizations were inter-linked through states that had more than one membership, which were Pakistan (in CENTO and SEATO), Britain (in NATO, CENTO, and SEATO), the U.S. (in NATO and SEATO), Turkey (NATO and CENTO), and France (in NATO and SEATO).

Mahdi Darius Nazemroaya is a Research Associate for the Centre for Research on Globalization who specializes on the Middle East and Central Asia.


NOTES


[1] William M. Arkin, A New Mideast Military Alliance? The Washington Post, July 31, 2007; William M. Arkin, Middle East Alliance 2.0., The Washington Post, August 1, 2007.

[2] Mahdi Darius Nazemroaya, America's “Divide and Rule” Strategies in the Middle East, Centre for Research on Globalization (CRG),
January 17, 2008.

[3] Akin, A New Mideast, Op. cit.

[4] Sheera Frenkel, Israeli navy in Suez Canal prepares for potential attack on Iran, The Times (U.K.), July 16, 2009.

[5] Mohamed Darwish, US peace policy for the Gulf: divide and conquer, Al-Ahram Weekly, no. 857, August 9-15, 2007.

[6] Walter Isaacson, A NATO for the Middle East, Time Magazine, January 26, 2007.

[7] Mahdi Darius Nazemroaya, War and the “New Middle East:” US Coalition Building and the Arab League, Centre for Research on Globalization (CRG), April 9, 2008; originally published by Payvand (April 7, 2008).

[8] Iran ‘biggest threat to Mid-East,’ British Broadcasting Corporation News (BBC News), July 31, 2007.

[9] Ze’ev Schiff, Syria, Iran intelligence services aided Hezbollah during war, Haaretz,
October 3, 2006.

[10] Mahdi Darius Nazemroaya, Israel’s Next War: Today the Gaza Strip, Tomorrow Lebanon? Centre for Research on Globalization (CRG), January 17, 2009.

Photos of Military Deaths in Afghanistan Banned

Photos of Military Deaths in Afghanistan Banned

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The U.S. military in eastern Afghanistan recently changed its media embed rules to ban pictures of troops killed in the war.

“Media will not be allowed to photograph or record video of U.S. personnel killed in action,” says a ground rules document issued Sept. 15 by Regional Command East at Bagram Air Field.

This language is new. A version of the same document dated July 23 says, “Media will not be prohibited from covering casualties” as long as a series of conditions are met.

Pictures of American military deaths are rare, but until now they have not been officially banned during either of the ongoing wars.

The new language was added in early September, according to a military spokesperson, Master Sgt. Tom Clementson of Regional Command East Public Affairs. Clementson described it as “a clarification rather than a new rule.”

“The clarification was added to ensure that service members’ privacy and propriety are maintained in situations where media have unique and intimate access as embedded reporters,” Clementson wrote by e-mail in response to questions. “While RC East does everything possible to accommodate an embedded reporters’ ability to cover the war in this region, there is also a command responsibility to account for the best interests of its service members.”

The change occurred after the wide distribution of a photograph of a dying U.S. Marine. On Sept. 4, the Associated Press released a photo of a mortally wounded Marine in Afghanistan.

The image, which was shot August 14 by AP photographer Julie Jacobson, was released as part of a package of stories and photos about the death of Lance Cpl. Joshua M. Bernard. Both U.S. Secretary of Defense Robert Gates and Bernard’s family had asked the AP not to release the photo. Few newspapers published the image, but it was widely circulated online. (The photograph can be viewed here.)

Based on a review of other embed agreements, the ban issued in early September appears to be unique to the U.S. operation in eastern Afghanistan.

The NATO-controlled International Security Assistance Force, which handles embeds elsewhere in Afghanistan, allows press photos of casualties as long as some conditions are met. For example, photos that identify a dead service member cannot be released before the service member’s next of kin have been notified of the death.

(The AP’s photo of Lance Cpl. Bernard was taken in Helmand province, which is outside of Regional Command East.)

For Multi National Force-Iraq embeds, a ground rules document dated Aug. 14 contains restrictions on casualty images, but does not ban photos of killed-in-action casualties.

The new Regional Command East rule drew little notice before Friday, when it was reported by the blog of the Reporters Committee for Freedom of the Press. It has since appeared on other blogs, including one from PDN sibling publication Editor & Publisher.

The AP is aware of the change. “We have queried the Pentagon about the photo rules and have been told that the matter is being reviewed,” AP spokesperson Paul Colford said this week.

Under the Obama administration, the Pentagon took one step toward making war casualties more visible to the press. In April, it began allowing photographers to cover the returns of remains at Dover Air Force Base in Delaware when next of kin give their consent.

Detroit workers face desperate situation

Detroit workers face desperate situation

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An estimated 65,000 people snatched up applications for federal assistance on Oct. 6 and 7 in Detroit. They were applying for emergency funds to aid those facing imminent eviction and/or utility shutoffs. They hoped to receive some of the $15.2 million in federal stimulus money earmarked for Detroit under the Homeless Prevention and Rapid Re-Housing Program.

Neighborhood city halls ran out of 25,000 applications in less than three hours on Oct. 6. The next day, tens of thousands lined up outside Cobo Hall downtown hoping to receive one of the remaining 5,000 applications.

City officials were unprepared for the tens of thousands of desperate Detroiters who descended on Cobo Hall. Tensions ran high and a near-stampede occurred when the doors to the convention center were finally opened. Media reports say a half-dozen people fainted and many were conveyed by ambulance to local hospitals. Some 150 cops, including members of the gang squad, were deployed to the scene.

Only about 3,500 people will actually receive any of the stimulus funds, which are designated to help defray the costs of rent and utility bills.

Michigan has the highest official unemployment rate in the country at 15.2 percent. In Detroit, however, the epicenter of the auto industry’s downsizing, the official unemployment rate hit 28.9 percent in July. What this means in terms of human suffering is apparent from these figures: Some 45,000 homes in Detroit have had their water shut off. Thousands have either lost their heat and electricity or face imminent shutoffs as the winter cold begins. Eighty thousand homes stand vacant and vandalized.

The median sale price for a home in Detroit is now an incredibly low $5,000, due to the foreclosure epidemic that is destroying neighborhoods throughout the city.

While even the Detroit Free Press editorialized on Oct. 9 that the outpouring of people seeking emergency assistance reflected the “economic tsunami” that has hit the city, Detroit Mayor Dave Bing and Michigan Gov. Jennifer Granholm have been conspicuously silent. Their “solutions” to the economic disaster are more cutbacks in social programs and the layoff of more public workers—which will only exacerbate the crisis.

There is an alternative. Organizers with the Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shutoffs announced they are intensifying their two-year campaign to demand the mayor and Granholm exercise their authority under Michigan law to declare an economic emergency, which would allow them to impose an immediate moratorium to stop foreclosures, evictions and utility shutoffs.

Activists point out that the governor has the legal, constitutional powers to declare a state of economic emergency. During the 1930s, after such an emergency declaration, the Michigan legislature imposed a five-year moratorium on foreclosures. The mayor can likewise request emergency help, as is done when a tornado or flood occurs. Activists are also demanding that President Barack Obama use his authority to similarly declare a state of economic emergency under federal law.

The coalition is asking all community organizations to join the call to demand the declaration of a state of emergency and the implementation of these emergency measures in Detroit and throughout Michigan.

FBI raids home over use of Twitter at G20 summit

FBI raids home over use of Twitter at G20 summit

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On October 1, FBI anti-terrorism agents backed by police helicopters raided the Queens, New York, home of Elliot Madison, a self-described anarchist. Madison had been arrested in Pittsburgh a week earlier for using Twitter to pass information between protesters at the G20 summit.

The federal agents in New York confiscated items from Madison’s home that included political literature, a picture of Lenin and items of clothing. Madison works as a social worker, and the FBI also seized his clients’ case files.

An article in the New York Times stated, “A search warrant executed by the FBI at Mr. Madison’s house authorized agents and officers looking for violations of federal rioting laws to seize computers and phones, black masks and clothes and financial records and address books.” Madison’s attorney has since obtained a court injunction against the FBI examining the seized items.

Rupert Murdoch’s New York Post reported the FBI action under the headline “Queens ‘terror’ raid hits G-20 anarchist.”

The raid came a week after Madison and another individual were arrested in Pittsburgh during the G20 summit and charged with “hindering apprehension or prosecution” and “possession of instruments of crime”—a reference to police scanners. According to the Pennsylvania State Police, Madison was found in his hotel room using the social-networking site Twitter to provide information on police movements to protesters during the G20 summit. Police scanners and several computers were also found in his hotel room.

Madison, 41 and a resident of the Jackson Heights neighborhood of Queens in New York, has denied any wrongdoing. While in Pittsburgh, he participated in the Tin Can Communications Collective, a group formed to use social-networking sites to send mass text messages concerning protest-related events.

Madison is believed to be one of the first people in the US to face criminal charges for using a social-networking site to inform protesters about police movements.

Madison’s lawyer, Martin Stolar, stated, “He and a friend were part of a communications network among people protesting the G20.”

“It’s an outrageous use of criminal law to punish dissent, to punish speech, which tends to support dissent, and it is the most unique application of the criminal law to the use of Twitter that I have ever seen,” said Stolar.

“Essentially we have Elliot accused of taking publicly available information and giving it to another person in the public and then being charged with a crime for doing so,” he said. “I’m missing something here.”

The raid on Madison’s home lasted for 16 hours, with helicopters circling the neighborhood. His lawyer described the raid in an interview with Democracy Now: “And so, they (FBI and the New York Police Department) rambled around and searched and pulled things. They’re not only from Elliot and his wife Elena’s property, but also there were other residents of the house who are living there who had their private property taken and swept up in this, including computers and discs of somebody who’s making a film, computers and discs of somebody who produced a weekly radio show, a computer that actually belonged to the United States Government. One of the residents of the house was a contract employee for one of the federal agencies, and that computer was also taken.”

Apparently, agents even seized stuffed animals belonging to Madison. “Yes, yes, and they took Curious George stuffed animals,” said Madison. “They took magnets from the refrigerator. They took a needlepoint of Lenin that my wife’s grandmother had made, a whole variety of bizarre things that they’ve taken.” Of the books that were seized, Madison said, “I’m an author. I’ve written fiction. I’ve written lots of nonfiction. I’m an anarchist, so I’ve written lots of political works. So they not only grabbed all of my works, they grabbed anything that they felt like grabbing from our pretty large library.”

No additional federal charges have been filed against Madison since the raid. What was seized from his home had nothing to do with the laws he was alleged to have violated in Pittsburgh. On October 2, Madison’s attorney argued in a federal court in Brooklyn that the charges were too vague and overly broad. Judge Dora L. Irizarry ordered authorities to desist from examining the seized material until October 16, pending further orders.

Legal experts have warned that the prosecution of Madison has far-reaching implications for the freedom of speech and basic democratic rights.

Vic Walczak, the legal director of the ACLU of Pennsylvania, stated, “In this age of instant media coverage it has the potential to chill live reporting. This is just the rebroadcasting of information that’s otherwise publicly available, not too different from what the media were doing.”

Protesters around the world have utilized social-networking sites to inform people about planned rallies and to spread word on arrests and police movements. According to the Times, “American protesters first made widespread use of mass text messages in New York, during the 2004 Republican National Convention, when hundreds of people used a system called TXT mob to share information. Messages, sent as events unfolded, allowed demonstrators and others to react quickly to word of arrests, police mobilizations and roving rallies. Mass texting has since become a valued tool among protesters.”

In reporting the arrests and FBI raid, the US mass media has exhibited none of the concern for democratic rights that it has proclaimed in relation to similar acts of repression in other countries.

US officials and media commentators heaped praise on the so-called “Twitter Revolution” in Iran during the protests staged following the victory of President Mahmoud Ahmadinejad over his challenger, Mir Hossein Mousavi, this past summer.

“Has Twitter become the CNN of the masses?” asked Howard Kurtz on CNN. “This revolution will not be televised, but it is definitely being tweeted,” said Rachel Maddow of MSNBC.

Such praise for the use of the social-networking service reflected Washington’s backing for the Mousavi camp, which it sees as more amendable to US strategic interests in the region and more likely to open up the Iranian market to US capital. It was for this reason that the Obama administration supported the pro-Mousavi protests.

The White House’s own Twitter feed read, “We call on the Iranian government to stop all violent and unjust actions against its own people.”

When Iranian officials blocked protesters’ access to Twitter, US officials expressed outrage over the action. Senators Charles Schumer (Democrat-New York) and Lindsey Graham (Republican-South Carolina) wrote: “Following recent elections, the Iranian government has used a new communications monitoring center to interfere with and suppress Internet and cell phone communications as part of efforts to crack down on Iranian citizens peacefully demonstrating…including voice calls, e-mail, text messaging, instant messages, and web traffic as well as posts to social-networking sites such as Twitter, MySpace and Facebook.”

The US State Department even pressured Twitter to delay a previously planned upgrade that would have temporarily cut service to Iran. On October 11, just weeks after Madison’s arrest, Secretary of State Hillary Clinton admitted to CNN’s Christiane Amanpour that the State Department contacted Twitter to convince them not to shut their site down for 48 hours as they had planned.

Human rights activists and the American Civil Liberties Union have pointed to the hypocrisy of the US government in its dealings with protests within the country, as opposed to its support in other countries for protests that serve US state interests. The Pennsylvania ACLU’s Vic Walczak told Reuters, “The same conduct (of authorities) in Iran or China during recent demonstrations would be called human rights violations whereas here it’s called necessary crime control. It’s a real double standard.”

The US actually was largely silent when China recently blocked access to Twitter before the 20th anniversary of the Tiananmen Square massacre and last July in response to ethnic unrest in northwestern Xinjiang. The American silence on China’s Twitter crackdown can be explained by the fact that any sort of social uprising in China would negatively affect US interests in that country.

The arrest and criminal charging of Elliot Madison was explicitly political. Commenting on the real police motive in arresting him, Madison said, “I think what’s very interesting in all these stories about me is that the Tin Can Communications Collective was one Twitter feed. I have found that there were at least 24 Twitter feeds going on, everywhere from the police to the G20 to Ron Paul supporters. Everybody had their own Twitter feeds going on. They decided to criminalize me I think, because of the fact that we were in solidarity with the protesters.”

The protesters in Pittsburgh were kept far away from the actual summit meeting. The number of protesters was relatively small, and their actions were overwhelmingly peaceful. Nevertheless, Pittsburgh police, backed by riot squads brought in from other parts of the country, brutally suppressed the protests using batons, rubber bullets, and OC gas. Sound cannons that had previously been used by the US military in suppressing opposition to the occupation in Iraq were turned against protesters in the US for the first time.

The arrests for the use of Twitter in Pittsburgh and the subsequent police-state raid on the home of Elliot Madison set a dangerous precedent and are an ominous sign of things to come. The only logic behind the criminal prosecution of Madison is that in informing protesters about police movements, his communications interfered with their being beaten and arrested—that is, with the unconstitutional suppression of their right to assemble and express their views.

The use of the FBI in pursuing this prosecution makes it clear that under the Obama administration the introduction of police-state methods is not only continuing but accelerating.

Dow climbs to 10,000 as jobless rate nears 10 percentDow climbs to 10,000 as jobless rate nears 10 percent

Dow climbs to 10,000 as jobless rate nears 10 percent

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Wall Street’s breaking the Dow Jones’s 10,000 mark Wednesday was hailed as a further sign of the recession’s end, even as foreclosures rose to an all-time high and the official unemployment rate continued to edge toward 10 percent.

The New York Times called the Dow’s rise to 10,000 “a milestone of the stock market’s recovery from the depths of the financial crisis.”

Leading the market rally Wednesday were third quarter figures released by one of the country’s biggest banks, JPMorgan Chase, which took in $3.6 billion in profits, and by the computer chip giant Intel, which reported $1.9 billion in net earnings, an 18 percent increase over the last quarter.

The market closed at just over 10,000 Thursday, with rising oil prices pushing up share prices of energy conglomerates, even as financial stocks fell.

The Dow is up more than 50 percent in only seven months, the steepest rise since the aftermath of the stock market collapse in 1987. Still, it has recovered less than half of the losses recorded since the market peaked in October 2007.

Moreover, the surge in the stock market has taken place under conditions in which the rest of the economy remains mired in deep recession.

While Wall Street celebrated its supposed milestone, the growing crisis and misery engulfing ever wider layers of the population found stark expression in a record number of home foreclosures for the three-month period ending in September, with nearly a million homes receiving foreclosure letters during the third quarter.

A total of 937,840 homes received foreclosure letters, including default notices as well as bank repossessions, according to RealtyTrac, a private firm that tracks foreclosure activity and markets foreclosed homes online. Of these, 238,000 homes were actually repossessed by lenders, a 21 percent increase over the previous quarter.

Since the beginning of this year, 623,852 homes have been repossessed.

In the worst-hit states, foreclosures have risen to epidemic proportions, with one in 23 housing units receiving notices in Nevada, and one in 53 in Arizona. Fully a quarter of a million homes faced foreclosure in California during the past quarter.

The impact of the economic crisis has far outstripped the foreclosure prevention program introduced by the Obama administration, “Making Home Affordable.” The program offers little to homeowners who have lost their jobs, under conditions in which mass unemployment is making it impossible for a growing number of people to meet mortgage payments and stay in their homes.

The depth of the housing crisis is partially hidden by the fact that the banks themselves are delaying foreclosures, rather than placing houses on a depressed market and being forced to record the losses on their books, driving down paper profits.

The wiping out of 7.2 million jobs in the US since the onset of the financial crisis is the principal cause of homes falling into foreclosure. This crisis of unemployment is only deepening, with the national unemployment rate set to top 10 percent this month.

When combined with so-called “discouraged workers,” who have given up looking for employment under conditions in which there are six applicants for every job, and workers involuntarily relegated to part-time jobs, the real jobless rate has risen to over 17 percent.

Mass layoffs are continuing. Last week saw the computer giant Dell closing its North Carolina factory and putting 905 workers on the unemployment line, and Thermo Fischer, a medical technology firm, closing plants in New Hampshire and Iowa, laying off 480.

Public sector jobs are also being wiped out as the economic crisis cuts deeply into state and local budgets.

A survey released Thursday by the Nelson A. Rockefeller Institute of Government found that state tax revenues fell by a record 16.6 percent compared with the same period a year ago. The steepest decline was in income taxes, where a 27.5 percent decline reflected the massive increase in unemployment over the past year.

Tax revenues for the fiscal year that ended in June were down $63 billion – twice the amount allotted to the states for fiscal relief under the Obama administration’s stimulus plan. This gap will be made up through draconian budget cuts across the country, gutting social services at precisely the moment that they are most needed due to rising unemployment and falling wages.

Retail sales in September registered their steepest decline so far this year, falling by 1.5 percent. The drop in consumer spending was due in large part to a collapse in auto sales following the end of the government’s “Cash for Clunkers” program. Anemic growth in non-auto sales—0.5 percent—was led in part by the rise in gasoline prices. Given that consumer demand drives 70 percent of total US economic activity, such figures belie the claims of economic recovery.

Other indices of increasing desperation include a 23 percent surge in applications for Social Security, much of which is attributed to older jobless workers who are opting to take the reduced benefits that are paid before age 67 because they have no other source of income.

And, in New York City the number of homeless families forced to sleep in city shelters has risen to the highest level since the Great Depression of the 1930s. The 10,000 families using these facilities each night include some 16,500 children, a 12 percent increase since last year.

Another indication of the immense gulf separating the fortunes of Wall Street and those of the rest of the economy came on Tuesday with the release of the National Federation of Independent Business index, representing some 350,000 small businesses. The index was up barely 10 percent since March, compared to the 50 percent rise on Wall Street, as smaller firms continue to suffer falling profits and carry out cuts in jobs.

“The decoupling represented by the Dow and the NFIB show the economy may be much weaker than we think,” the financial web site MarketWatch commented. “Most economic indicators—payroll growth, retail sales, manufacturing orders—by design do a better job of measuring big business activity. Usually, it doesn’t matter. But it matters now. The health of big business—and the rebound in the stock market—may be blinding us to just how weak the rest of the economy is.”

The fact that the Dow Jones Industrial Average has risen in tandem with the rate of unemployment and the growth in social misery may appear to be a “decoupling” of Wall Street from the rest of the economy, but in reality the two trends are inseparable.

The rise in share prices on Wall Street has been made possible by the biggest transfer of social wealth from working people to a narrow financial aristocracy in US history. More than $12 trillion has been spent, loaned or guaranteed in the government’s bailout of the big banks and Wall Street finance houses. That such immense resources are capable of generating a market rally is hardly a surprise.

Beyond that, what has driven stocks up? Increased corporate profits have been generated not through the expansion of production, nor do they reflect any comparable rise in revenues. Rather they are the product of drastic cost-cutting, which has meant the destruction of jobs, and using the threat of unemployment to impose wage cuts and intensified exploitation on those still working. This is what Wall Street has celebrated with the return to 10,000.

In the case of the huge profit increases for the banks—Goldman Sachs registered a four-fold increase over last year—the source is renewed financial speculation, made possible through the injection of immense public funds: in Goldman’s case $10 billion outright and another $13 billion surreptitiously funneled through the bailed-out insurance giant AIG.

Significantly, Goldman attributed its spectacular rise almost entirely to trading in currencies, commodities and assets, while it registered a continuing drop in its investment banking income.

As the Associated Press reported Thursday: “The big banks are showing they can still make money, even as Main Street struggles — though not from lending, refinancing homes or other bread-and-butter business. Instead, they’re doing what Wall Street does best — betting big on stocks, bonds, commodities and other assets.”

In other words, the banks’ profits are not a reflection of any productive, socially useful activity, but rather speculation. They represent the creation of another asset bubble which is paving the way to another, deeper collapse.

In the meantime, the bankers and financial speculators at the top of Wall Street are determined to appropriate to themselves as much wealth as possible. Goldman Sachs has set aside $16.7 billion for bonuses, and is on track to increase this reservoir of money to $21 billion, just slightly less than the combined total it received in direct funds and money passed through AIG in the bailout.

The ongoing complicity of the Obama administration in this massive transfer of wealth from working people to a ruling financial oligarchy was noted Thursday in a cynical column in the Wall Street Journal entitled “Bonus Outrage? That’s so last March,” a reference to the furor over AIG’s payout of $198 million in bonuses seven months ago.

“After indulging in a round of populist outrage, Congress and the Obama administration have turned down the volume,” the Journal notes.

The column goes on to quote JPMorgan CEO Jamie Dimon as insisting that banks just want to “continue doing what we have been doing.”

This is precisely what the Obama administration has allowed. More than a year after the outbreak of the deepest financial crisis since the 1930s, not a single banker or financier has been held accountable for wrecking the US and world economies. No restrictions or demands have been imposed on the financial markets, even as trillions of dollars in taxpayers’ money have been poured into them. The same methods of accounting fraud and outright criminality continue. And they will produce the same results, an intensified crisis and an even deeper social catastrophe for the working class.

Health Insurer Accused of "Attempted Murder" by Man Stripped of His Coverage

Health Insurer Accused of "Attempted Murder" by Man Stripped of His Coverage

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Ian Pearl has fought for his life every day of his 37 years. Confined to a wheelchair and hooked to a breathing tube, the muscular dystrophy victim refuses to give up.

But his insurance company already has.

Legally barred from discriminating against individuals who submit large claims, the New York-based insurer simply canceled lines of coverage altogether in entire states to avoid paying high-cost claims like Mr. Pearl's.

In an e-mail, one Guardian Life Insurance Co. executive called high-cost patients such as Mr. Pearl "dogs" that the company could "get rid of."

A federal court quickly ruled that the company's actions were legal, so on Dec. 1, barring an order by the federal Department of Health and Human Services, Mr. Pearl will lose his benefits.

His medical treatment costs $1 million a year.

Most of that is for 'round the clock, in-home nursing care -- for operation of his ventilator, hourly breathing treatments and continuous intravenous medication.

A Guardian spokesman said policies such as Mr. Pearl's -- which offered unlimited home nursing -- had simply become too expensive for new small-business customers to buy, and that even Medicaid and Medicare do not cover 24-hour home nursing. His parents, Warren and Susan Pearl of Fort Lauderdale, Fla., said their health insurance premiums had risen over the years to $3,700 a month.

As a last resort, Mr. Pearl would be admitted to a state hospital under Medicaid. But the Pearls consider that a death sentence.

"Ian would be lucky, or unlucky, to survive more than a matter of weeks or months," Mrs. Pearl said. "One-on-one skilled nursing is essential."

Her husband, 60, a wealthy businessman, said the couple have enough savings to pay for their son's care for a few years, and after that, they could mortgage the family's home.

The Pearls' younger son, Matthew, is the best-selling author of "The Last Dickens," a novel published this year by Random House.

"Ian and Matt spend hours on the phone discussing story lines. Matt uses Ian to bounce ideas off of," Mrs. Pearl said.

Ian Pearl became the first wheelchair-bound pupil to be mainstreamed in the Broward County elementary schools, and he was elected president of his high school class at University School of Nova Southeastern University in Fort Lauderdale.

He has Type II spinal muscular atrophy - which often kills victims in infancy. He grew to adulthood only to suffer respiratory arrest at 19. He has required a tracheal tube ever since.

He has been fortunate most of his life to be covered under the Guardian small-business health plan his father bought through his remodeling company, Warren Pearl Construction of New York City.

Generous by modern standards, the health insurance plan covered home nursing, something most small-business plans do not cover today.

Over the years, Guardian has scaled back the benefits in new types of plans it has offered, to the point where it no longer offers in-home nursing coverage.

In the state of New York, where Mr. Pearl's business operates, 54 other employers offered the Guardian plan. Their policies covered nearly 500 employees and dependents, including two other severely ill people.

The Pearls moved to Fort Lauderdale 30 years ago because the humidity there is beneficial to their son. Warren Pearl has commuted back and forth from New York every weekend since.

He said Guardian has for years used private investigators to find pretexts to deny coverage. An investigator came to their door, he said, to get proof that he does in fact fly back and forth to New York and that his two-employee company really operates in New York. Investigators went to Mr. Pearl's job sites.

"The insurance companies are cheating in order to have obscene profits," he said.

Guardian, a 150-year-old mutual company, reported profits of $437 million last year, a 50 percent increase over $292 million in 2007. It paid dividends of $723 million to policyholders and had $4.3 billion in capital reserves, according to its annual report. The company's investment income totaled $1.5 billion that year, a small increase from the year earlier.

The insurer also canceled similar policies in New Jersey and South Carolina, and earlier ceased offering any health plans in Colorado, but did not cancel all of the policies in every state in which they were offered, said John Fried, the Pearls' attorney. The company took the action only against those plans where claims were highest, he said.

The insurer discontinued the coverage late last year, but was required by law to continue paying for Ian Pearl's care for another year.

In 2006, Guardian began an initiative called Moving Forward, which was "designed to increase Guardian's competitive position by reducing what it paid out in claims," wrote Judge William Pauley, of the U.S. District Court for the Southern District of New York, in his summary judgment in Guardian's favor in July.

The move would help the company lower overall rates to compete better for more business.

The judge found that the company had not violated the Employee Retirement Income Security Act (ERISA), because it canceled entire policy lines. The Pearls also claimed Guardian violated the Health Insurance Portability and Accountability Act (HIPAA), but the judge found that only HHS can enforce that law and that private citizens cannot sue under it.

The Pearls appealed to HHS under the Bush administration and were told the agency could do nothing, Warren Pearl said.

They petitioned again in a letter to HHS Secretary Kathleen Sebelius on Oct. 5, with support from their congresswoman, Rep. Debbie Wasserman Schultz, Florida Democrat, but have not heard back.

Contacted by The Washington Times last week, the agency said, "Our Department has been contacted by the Pearl family and we have heard their very serious concerns. We are actively investigating this matter."

The House Energy and Commerce Committee, chaired by Rep. Henry A. Waxman, California Democrat, is also investigating, the Pearls said. The committee held hearings on benefit cancellations earlier this year.

Spokesmen for Mr. Waxman and Ms. Wasserman Schultz did not respond to requests for comment.

In an e-mail to four other Guardian executives entered into evidence in the Pearls' suit, company Vice President Tim Birely discussed how the company could "eliminate this entire block to get rid of the few dogs."

He concluded, "Paul [Saylor], keep in mind that my intent is to be as narrow and laser-like as possible. We may need to broaden some things in NY due to state of domicile and some historical [nonsense] with some of these policyholders."

Asked about the use of the phrases such as "get rid of" and "dogs," Guardian spokesman Richard Jones said, "I'm not aware of any language related to any of the things that you just mentioned, no."

He said plans such as Mr. Pearl's had simply become too expensive to market to employers.

"We certainly sympathize with [Mr. Pearl's]'s condition. As a business, though, we have to offer plans that enough customers want," Mr. Jones said.

"But in this particular case the expense of the plan meant that most small businesses were not able or were not willing to purchase it. As a result we started offering different plans," he said.

"This has been through the courts. Guardian's activities were upheld by the courts as well as by the New York State Department of Insurance.

"We certainly don't think this particular case has anything to do with health care reform," Mr. Jones said.

Mr. Fried argues in his appeal that Judge Pauley misinterpreted the ERISA law.

"I think we're entitled to a trial as to whether Guardian's discontinuation of its policy was in effect discrimination against Ian Pearl," he said.

The Pearls say they are out for justice.

"This is a matter of life and death for my son," Warren Pearl said. "I have to have faith that HHS will enforce the law.

"This is attempted murder, as far as I'm concerned. They targeted us, they never expected to get caught. I believe that justice will prevail."

Escalation of US NATO War in Afghanistan: The Risks of Regional Conflagration

Escalation of US NATO War in Afghanistan: The Risks of Regional Conflagration

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On October 7 the United States' and NATO's war in Afghanistan entered its ninth year. The escalating conflict has over the past year become indistinguishable from military operations in neighboring Pakistan where the U.S. and NATO have tripled deadly drone missile attacks and the Pakistani army has launched large-scale offensives that have displaced over 3 million civilians in the Northwest Frontier Province and the Federally Administered Tribal Areas, with the province of Baluchistan the next battle zone.

On September 29 the U.S. conducted four drone attacks in Pakistan's North Waziristan Agency in twenty four hours and during the past year has fired over 60 missiles into the area causing more than 550 deaths.

Three days later the Pentagon announced 72 more American military deaths in the fifteen-nation Operation Enduring Freedom, Greater Afghan War theater - Afghanistan, Pakistan, Uzbekistan, Cuba (Guantanamo Bay Naval Base), Djibouti, Eritrea, Ethiopia, Jordan, Kenya, Kyrgyzstan, the Philippines, the Seychelles, Sudan, Tajikistan, Turkey and Yemen - bringing the official total to 774.

The U.S. Department of Defense and the North Atlantic Treaty Organization-led International Security Assistance Force (ISAF) acknowledge that so far this year 406 foreign soldiers have been killed, the bulk of which, 240, are American.

On the eight anniversary of the beginning of the war, however, an authoritative Russian news source estimated that overall "The United States has...lost 1,500 servicemen, while its allies have lost several hundred." [1]

American and NATO military deaths this year are the highest since the war commenced and are steadily rising. 2009 has also brought the largest amount of Afghan civilian deaths of the war.

Far from the carnage abating any time soon, events of the past week give every indication that the nation scourged by thirty years of war is to be the site of unprecedented Western troop increases and yet more deadly fighting.

On October 3 an American outpost in Afghanistan's Nuristan province was attacked by over 300 insurgents. Eight U.S. soldiers were killed and three Apache helicopters hit by rifle fire or rockets, with the American troops still alive fleeing and a rebel flag left flying over the camp.

In a reminder that the U.S.'s Afghan war is not eight but thirty years old, a Washington Post report of the attack reminded its readers of the major recipient of billions of dollars of CIA money funneled to Pakistan for the fighting in Afghanistan from 1978-1992:

"The attack involved Taliban fighters and appeared to be led by a local commander of the Hezb-e-Islami Gulbuddin insurgent group, which is run by
Gulbuddin Hekmatyar, a former mujaheddin leader during the Soviet war in Afghanistan during the 1980s." [2]

The former CIA official who boasted that the campaign to support Hekmatyar and his colleagues, Operation Cyclone, was the "most consequential of all" the agency's "successes" was Robert Gates, now U.S. Defense Secretary in charge of waging the war in Afghanistan.

On October 9 the Wall Street Journal reported that the top military commander of both American and NATO forces in Afghanistan, General Stanley McChrystal, presented a report to U.S. President Barack Obama which "includes three different options, with the largest alternative including a request for more than 60,000 troops, according to a U.S. official familiar with the document." [3]

The following day the armed forces publication Stars and Stripes posed the question: "As President Barack Obama ponders whether or how to grant his Afghanistan commander's urgent request for up to 60,000 more troops to expand the flagging war against Taliban insurgents, one obvious question arises: Why not simply transfer thousands of soldiers from nearby Iraq?" [4]

The Pentagon has revealed troop rotation plans that include "a combat brigade and combat aviation brigade totaling approximately 6,100 service members," among them "2,800 soldiers of the 101st Combat Aviation Brigade" to "provide sufficient military capability for the NATO-International Security Assistance Force (ISAF)." [5]

The Stars and Stripes also recently reported that General McChrystal's top deputy, Lieutenant General David Rodriguez, will head up "a revised command structure that will go into effect next week...a new, subordinate headquarters called the ISAF Joint Command."

The division of labor, an integral part of plans for the influx of new American and NATO troops and equipment allotted for a marked escalation of combat operations, will permit McChrystal to "focus more on the political and strategic complexities of the Afghanistan mission" and Rodriguez to "assume control of day-to-day tactical operations." [6]

On the same day, October 10, an article called "Obama picks Army general to lead Afghan training," detailed that the new commander, Lieutenant General Gen. William B. Caldwell IV, was a classmate of McChrystal's at West Point and that his appointment entails "elevating the command from a two-star to three-star general."

The U.S. and NATO military commander selected his former associate as "McChrystal advocates accelerating growth of the Afghan forces from 200,000 soldiers to 400,000." [7]

New commands, new commanders and as many as 60,000 more American and thousands of other NATO nations' troops signal plans for a dramatic intensification of a war that will only extend substantially further into time and expand into broader tracts of South and Central Asia.

As Agence France-Presse reported on October 9, only hours after the announcement that American president Obama had won this year's Nobel Peace Prize he "shouldered his duties as commander in chief of the US armed forces and convened his war council for crucial talks on Afghan strategy."

Participants at the meeting with the president were "Vice President Joe Biden, Secretary of State Hillary Clinton, Secretary of Defense Robert Gates, McChrystal via video link, top military officers and the US ambassadors to Islamabad and Kabul." It was held following McChrystal's offering "the president several alternative options, including a maximum injection of 60,000 extra troops." [8]

In lockstep and unvarying conformity with White House and Pentagon initiatives, Britain's Home Secretary Alan Johnson announced that "All member countries of NATO including the UK will send more forces soon to Afghanistan." [9]

NATO Secretary General Anders Fogh Rasmussen chimed in by affirming to England's Sky News that "NATO troops would stay in Afghanistan 'as long as it takes to finish our job.'" [10]

The new head of the British army, General Sir David Richards, told one of his nation's major newspapers that he "backed calls for more international forces to be deployed to Afghanistan" and that "reinforcements would enable Nato to achieve its objectives...." [11]

British Prime Minister Gordon Brown met with General McChrystal at the former's office on Downing Street recently and in an article titled "Afghan army training to be centre of NATO efforts" was reported to have faithfully parroted his guest's demands in stating he "agreed that accelerated training of Afghan army and police needs to be at the centre of NATO's counter-insurgency efforts in future."

Brown confirmed that he "looked forward to further discussion of General McChrystal's recommendations amongst NATO allies in coming weeks." [12]

As the two met Britain lost its 221st soldier in the nation's fourth Afghan war, its 84th death this year.

Other NATO member states and partners were not remiss in shedding blood, their own and that of others, and in pledging more troops and weapons for the war.

Spain suffered another combat fatality and five other casualties last week, yet "Madrid recently agreed to a Washington request for the deployment of 220 more Spanish troops to Afghanistan." [13]

France announced that it "will order a first batch of infantry medium-range missiles and firing posts for Afghanistan as well as 200 Meteor beyond visual range air-to-air missiles next year" [14] and days later that it will purchase "some 300 missiles and 50 to 60 launchers, with an estimated budget of 70 million euros ($103 million) for an urgent operational requirement for Afghanistan." [15]

Poland recently appointed a new commander for its more than 2,000 troops in Afghanistan - his predecessor had either resigned or been sacked over disagreements with the government on the prosecution of the war - and committed to offering NATO another 200 troops.

Six days later, October 9, two Polish soldiers were killed and four wounded in a bomb attack.

Germany has announced that it will deploy 1,200 police to join some 4,500 troops in Afghanistan. "An official request for the officers would come in the next week from NATO....

"The German officers would be needed for the NATO Training Mission Afghanistan, which is due to start in April.

"Under the program, some 10,000 foreign instructors would train the Afghan security forces." [16]

Earlier this month German forces engaged in a combat operation in Afghanistan's Kunduz province where last month German commanders called in a NATO air strike that killed 150 people.

"[R]ebels engaged German troops in the Kharoti Tapa village of the Chardara district...and the firefight lasted for one hour." [17]

A German news source reported "a Taliban spokesman claimed that the rebel fighters destroyed four German tanks and killed up to 13 soldiers." [18]

A major function of the Afghan war is to train military forces from over fifty nations - in five continents, the Middle East and Oceania - under NATO command for counterinsurgency and other combat operations both in South Asia and afterwards in other parts of the world.

In doing so numerous NATO partnership countries - Armenia, Australia, Austria, Azerbaijan, Bosnia, Colombia, Croatia, Finland, Georgia, Ireland, Japan, Macedonia, Mongolia, Montenegro, New Zealand, Singapore, South Korea, Sweden, Switzerland, Ukraine and the United Arab Emirates - are to varying degrees being integrated into the bloc's plan for history's first global army.

In early October four Finnish soldiers were wounded in a roadside bomb attack in northern Afghanistan, where the nation's troops have already been engaged in firefights. The latest incident resulted in the nation's first wartime casualties since World War II.

Days later two Swedish soldiers were wounded in a deadly exchange of fire. "The Swedish soldiers were patrolling with Finnish soldiers when their ISAF (International Security Assistance Force) armoured vehicle came under rocket fire. The soldiers were then attacked with high calibre rifles.

"The soldiers engaged the enemy fighter and at least three of the attackers were reported to have been killed....Swedish forces have been operating in Afghanistan since 2002. Since then two Swedes have been killed." [19]

Nominally neutral Sweden and Finland are in charge of NATO-led ISAF operations in four Afghan provinces.

The NATO Special Representative for the South Caucasus and Central Asia, Robert Simmons, was in Georgia last week for the annual NATO Week held in that country. U.S. Marines have been training the nation's armed forces for deployment to Afghanistan.

Simmons revealed another critical component of the war in Afghanistan, that of being a gateway to full NATO membership, in stating to Georgia's defense minister that "Georgia-NATO relations are entering a new phase, which confirms Georgia's intention to participate in the Alliance's operations in Afghanistan.

"Georgia's decision on it is very important for NATO, and Georgia's participation in operations in Afghanistan will contribute to Georgia's further integration into the Alliance." [20]

The ensnarement of previously non-aligned nations into NATO's Afghan war operations and from there into its global network is not limited to nations providing troops for the war.

Last week French President Nicolas Sarkozy was in Kazakhstan and in what was described as "a diplomatic coup" by one press agency secured major military and hydrocarbon arrangements with his host country, "clinching a raft of lucrative energy deals."

"France is among several Western nations courting Kazakhstan, a large ex-Soviet republic with rich oil and gas resources and a strategic location bordering China and Russia - long the dominant regional force - north of Afghanistan."

Sarkozy also won "an agreement to allow military hardware for French forces fighting in Afghanistan to pass through Kazakh territory" which "covers both air transit and train transit of French military personnel and equipment via Kazakhstan, according to a French Foreign Ministry spokesman. He said train traffic could then go through neighboring Kyrgyzstan and Tajikistan where France already has a military presence.

"The U.S. also reached an agreement earlier this year with neighboring Kyrgyzstan to continue using the Manas air base, crucial to military operations against the Taliban. France and Spain are trying to win similar agreements to use Manas, while the French military also use an air field in Tajikistan." [21]

In August the head of the Pentagon's Central Command, General David Petraeus, also visited Kazakhstan as well as Kyrgyzstan and Uzbekistan to discuss military transit agreements and in the case of Kazakhstan troops for the war in Afghanistan.

Not only did the Pentagon buy back the right to transit troops and equipment for the war in Afghanistan this July through the Manas base, which an estimated 200,000 American and NATO troops have passed through over the last eight years, but is now planning "the construction of a second runway at the Manas airport" and "has recently promised to allocate $60 million" for the purpose. [22]

In fact last week Kyrgyzstan approved the deployment of French and Spanish NATO troops in the nation. "French and Spanish officials will soon visit the Kyrgyz capital of Bishkek to discuss the details of the agreements." [23]

Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan are - at least for the time being - members of the only security and military alliance in former Soviet space, the Collective Security Treaty Organization (CSTO), and the Shanghai Cooperation Organization (SCO) along with Russia and China. The Afghan war, launched less than four months after the founding of the SCO, is a tool used by NATO to eliminate its only competition in Central Asia and Eurasia as a whole.

The war in Afghanistan is extending its scope outward to all compass points. To Pakistan in the east and south. To the former Soviet Central Asian republics in the north. And to Iran on Afghanistan's western border.

The Pentagon announced on October 2 that "Extra troops called for by the head of foreign forces in Afghanistan would be sent mainly to the north and west of the country," an unnamed American official informed Agence France-Presse. [24]

North means to the borders of Tajikistan, Turkmenistan and Uzbekistan. West means to the Iranian border.

A Fox News poll of earlier this month claimed that 61 percent of Americans support "the use of force to prevent Iran from obtaining nuclear weapons" and that "By a two-to-one margin the public thinks the U.S. will eventually need to use military force to stop Iran from obtaining nuclear weapons...." [25]

The question posed was loaded - "obtaining nuclear weapons" - but the preparation of the U.S. public for military attacks against Iran
is indisputable.

If McChrystal gains the additional 60,000 American troops he's requested and NATO provides several thousand more, combined Western military forces in Afghanistan could number some 180,000. With control of former Soviet airbases in the nation in addition to air fields in Central Asia, Iraq, the South Caucasus, Turkey and the Black Sea nations of Bulgaria and Romania, Washington and its allies could be poised for military operations against Iran far more ambitious than any discussed or rumored before.

The expansion of the South Asian war into Pakistan also allows the West to employ that nation for future attacks against Iran.

On October 10 the Pakistani press reported "the frequent arrival and take-off of heavy US cargo aircraft" in the nation's capital.

"[H]uge Starlifters, used by the US Air Force and Army to transport troops and heavy loads, have been flying in and out of the Benazir International Airport (BIAI) on a regular basis over the past few days." [26]

A day before that The Times of London reported that "Britain is building a training camp for Pakistan's paramilitary Frontier Corps in the southwestern province of Baluchistan." Baluchistan borders southeastern Iran.

"The British personnel will work with six American trainers at the camp, which is designed to house 550 people....The plan is politically sensitive because the British and US trainers will be the first foreign forces formally stationed in Baluchistan since Pakistan's independence in 1947, although US special forces operated there during the invasion of Afghanistan in late 2001." [27]

In what is not an unrelated development, the Pentagon recently revealed that it is completing the deployment of a new "bunker buster" bomb: "At a hefty 30,000 pounds, the new penetrator bomb weighs almost 4 tons more than the U.S. military's former heavyweight champion, the nearly 22,000-pound massive ordnance air blast conventional bomb, known by the acronym MOAB." [28]

From October 12-16 the U.S. and Israel will conduct the biennial Juniper Cobra military exercises in the latter nation, "their biggest joint air-defence exercise...testing missile interceptors that would serve as a strategic bulwark in any future showdown with Iran.

"American forces taking part will include 17 ships and ground personnel operating the Aegis and THAAD missile interceptors, which will be meshed with Israel's Arrow II missile-killer for computer-simulated tests...." [29]

The Pentagon has also begun its biennial Bright Star war games, the largest held in the Middle East, in Egypt.

In addition to American and Egyptian personnel "the coalition of military forces participating in the exercises also includes France, Greece, Italy, Jordan, Saudi Arabia, Turkey, and the United Kingdom....The training exercise will take place in Cairo and Alexandria from Oct. 10-26, and will include airborne, aviation, and naval and Marine field training exercises, along with a multinational command post battle-tracking exercise." [30]

On October 12 the annual Anatolian Eagle exercise will began in Turkey, "which would have involved the forces of several Nato countries" and was "to have included aerial attacks in Turkish airspace near the borders with Syria, Iraq and Iran." [31]

At the last moment Turkey cancelled the participation of its NATO allies over their insistence that the Israeli Air Force take part in the war games. As the Jerusalem Post characterized the incident, "the cancellation of the exercise came after both the US and NATO threatened to pull out if the IAF [Israeli Air Force] did not participate." [32]

Had the exercises gone on as planned, U.S.-led military maneuvers - land, naval, air and missile - would have been held in Israel, Egypt and Turkey at the same time.

At the other end of the Afghanistan-Pakistan war zone - India - on October 12 "US and Indian troops will ...stage their biggest joint manoeuvres, including live-fire exercises, as the two nuclear powers build up military ties....

"Lieutenant General Benjamin Mixon, commander of US Army forces in the Pacific, said 200 US soldiers and 17 Stryker infantry combat vehicles were taking part in the Yudh Abhyas exercises at Babina, south of New Delhi, from October 12 to 29.

"It is the largest contingent sent by the US to the annual joint exercises since they began in 2004....It will be the largest deployment of Strykers outside Iraq or Afghanistan." [33]

The Stryker combat vehicle was first used in Iraq in 2003 and introduced in Afghanistan this June. "Stryker brigades are better suited to the near free-form modern battlefield, rather than the matched-force scenarios envisioned for tanks during the Cold War....The Stryker's ability to deploy more infantryman on the battlefield than any other type of brigade and its wheeled configuration are key advantages over conventional armor formations." [34]

On October 1 the U.S. Army announced a contract for 352 more Strykers.

That Strykers are being used in India, their first overseas deployment outside an active war theater, is a watershed in American plans to recruit the world's second most populous nation into what has come to be labelled Asian NATO.

"[B]esides holding joint military exercises with the U.S. military, India has also been buying U.S. armaments worth billions of dollars.

"The latest India-U.S. defense deal is the sale of this Airborne Early Warning Air Craft, Hawkeye E-2D, developed by American arms manufacturer, Northrop Grumman.

"Woolf Gross, the corporate director at the company, says the reconnaissance plane has yet to be introduced in the U.S. Navy. Its sale to India, he says, is a symbol of how close India/U.S. military relations are."

The same source adds, "Military analysts say the ongoing military cooperation between India and the United States is bound to grow as India plans to spend billions of dollars for modernizing it defense capabilities. India, they say, is preparing for short term threats from Pakistan and long-term deterrence against China." [35]

In announcing the attack against Afghanistan on October 7, 2001, President George W. Bush threatened:

"Today we focus on Afghanistan, but the battle is broader. Every nation has a choice to make. In this conflict, there is no neutral ground...."

The conflict has indeed proven to be much broader than Afghanistan. It has already reached throughout South and Central Asia, dragging in troops from all parts of the planet and crisscrossing much of Eurasia and the Middle East with the transit of soldiers, arms, military cargo planes and armored vehicles. It has become a battleground on which the Pentagon and NATO are forging a worldwide military alliance, hardened in combat and interoperable for deployment to other fronts.

It has also positioned the military forces of all major Western nations, including three possessing nuclear arsenals, at the crossroads of Central, South and Far East Asia where the interests of Russia, China, India, Pakistan and Iran converge.

The U.S. and NATO war in Afghanistan is a threat to that nation, the region and the world.

Notes

1) Voice of Russia, October 7, 2009
2) Washington Post, October 4, 2009
3) Wall Street Journal, October 9, 2009
4) Stars and Stripes, October 11, 2009
5) U.S. Department of Defense, October 9, 2009
6) Stars and Stripes, October 10, 2009
7) Associated Press, October 10, 2009
8) Agence France-Presse, October 9, 2009
9) Press TV, October 7, 2009
10) Deutsche Welle, October 4, 2009
11) BBC News, October 4, 2009
12) 10 Downing Street, October 9, 2009
13) Press TV, October 7, 2009
14) Defense News, October 1, 2009
15) Defense News, October 9, 2009
16) Der Spiegel, October 10, 2009
17) Xinhua News Agency, October 5, 2009
18) Deutsche Welle, October 4, 2009
19) The Local (Sweden), October 9, 2009
20) Trend News Agency, October 8, 2009
21) Associated Press, October 7, 2009
22) Trend News Agency, October 7, 2009
23) Russian Information Agency Novosti, October 5, 2009
24) Agence France-Presse, October 3, 2009
25) Fox News, October 3, 2009
26) Asian News International, October 10, 2009
27) The Times, October 9, 2009
28) American Forces Press Service, October 9, 2009
29) Reuters, October 8, 2009
30) Fayetteville Observer, October 4, 2009
31) The Times (London), October 12, 2009
32) Jerusalem Post, October 11, 2009
33) Reuters, October 8, 2009
34) Defense News, October 5, 2009
35) Voice of America, October 8, 2009

A record year for Wall Street pay

A record year for Wall Street pay

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According to the Wall Street Journal, the major US banks and financial firms are on track to hand out a record $140 billion in compensation this year. This is a 20 percent increase from 2008 and $10 billion more than the previous record, set in 2007.

The stock market celebrated the news, outlined in a front-page Journal article on Wednesday, along with the release of JPMorgan Chase’s third-quarter earnings report, which showed a seven-fold increase in profits from last year to $3.6 billion. The Dow Jones Industrial Average rose 145 points, closing above the 10,000 mark for the first time in a year.

The record pay being handed out by the 23 largest publicly traded banks, hedge funds, asset management firms and stock and commodity exchanges (the report did not include privately held companies) underscores the class interests being served by the Obama administration and the subordination of the entire political system to a financial aristocracy which essentially dictates government policy.

The American financial elite, aided and abetted by the White House and Congress, is profiting from an economic disaster that is driving hundreds of millions of working people in the US and around the world into poverty—a disaster precipitated by its own methods of financial speculation and fraud and its manic pursuit of personal gain.

One year after the financial crash of 2008, the richer-than-ever compensation packages for bankers give the lie to Obama’s occasional protests against Wall Street “excesses” and talk of tough, new banking regulations. It demonstrates that the administration’s economic policies, including trillions in subsidies to the banks, have been devoted to paying off the bad debts of the bankers at public expense and protecting the wealth of a miniscule section of the population.

There is an element of provocation in the pay awards being doled out by the banks. Far from curbing their avarice, they are flaunting their wealth and power in the midst of soaring unemployment and deepening social misery for millions of Americans.

The Journal based its estimate on an analysis of the financial firms’ earnings reports for the first half of 2009 and projected earnings for the rest of the year. It predicted the firms’ total revenues would hit $437 billion this year, surpassing the $345 billion they recorded in 2007, before the financial crisis erupted.

The projected $140 billion in compensation includes salary, bonuses, health benefits, retirement plans and stock awards. Average compensation for employees at the 23 firms will top out at $143,000, but this figure obscures the eight-digit sums that will go to the top executives and traders, who will receive a disproportionate share of the total outlay.

The Journal projects that Bank of America, which has not paid back the $45 billion in cash it received in Troubled Asset Relief Program (TARP) funds, will award more than $30 billion in compensation, a 64 percent increase over last year. JPMorgan Chase will pay out $29.5 billion, an increase of nearly 30 percent. Goldman Sachs is on track to dispense $21.8 billion, nearly double its pay tab for 2008. The average Goldman employee will receive over $743,000.

While bank pay is reaching new heights, workers’ wages are being systematically slashed. The New York Times reported Wednesday that pay cuts in the US “are occurring more frequently than at any time since the Great Depression.” It cited Bureau of Labor statistics showing that weekly pay for production workers, representing 80 percent of the workforce, has fallen for nine consecutive months. This is a record for the 44 years since the bureau began tracking weekly pay. The previous record was a two-month period during the 1981-82 recession.

The assault on workers’ pay reflects a deliberate policy of the Obama administration to use mass unemployment to drive down the wages and living standards of the working class and effect a further redistribution of wealth from the bottom to the top.

While Obama demands that the American people “take responsibility” for the crisis and “live within their means,” he implements policies designed to further enrich the financial elite. Even as he continued and expanded the bank bailout begun under Bush, he intervened last March to scuttle bills in Congress, following the public furor over millions in bonuses awarded by the bailed-out insurance firm AIG, which would have imposed certain restraints on executive pay.

He followed this by rejecting the turnaround plans of General Motors and Chrysler and forcing the auto companies into bankruptcy, in order to impose sweeping layoffs and cuts in pay and benefits for auto workers. This was a sign to big business to launch a wage-cutting drive against the working class as a whole.

The White House is pushing a health care overhaul that will dramatically cut coverage for workers, which is to be a down payment on austerity measures and cuts in basic entitlement programs, such as Medicare, on which tens of millions of people rely.

No government measures are being proposed to create jobs. Nothing is being done to provide relief for millions who are facing foreclosure, the cutoff of utilities, the loss of life savings and the prospect of destitution. The administration has flatly refused to provide additional money to states and localities that are being bankrupted by the fall in tax revenues. As a result, savage cuts are being made in education, health care and other social services across the country, and tens of thousands of public workers are being laid off.

The $140 billion in compensation reported by the Wall Street Journal for a section of the financial industry equals the total amount allocated in the administration’s stimulus plan for aid to the states.

To put this sum in perspective, it is more than twice the federal outlay in 2008 for education ($67 billion), close to three times federal spending that year for highways and mass transit ($53 billion), and far in excess of allocations for unemployment benefits ($37 billion); community and regional development ($27 billion); general science, space and technology ($27 billion); training, employment and social services ($26 billion) and housing and commerce ($7.4 billion). The total federal outlay for homeless assistance programs in 2008 was $2.4 billion.

This $140 billion is greater than the gross domestic product of Egypt, a country of 82 million people, slightly less than the GDP of the Philippines (population—96 million) and nearly three times the GDP of Ecuador (14 million).

This colossal squandering of resources is rooted neither in psychology nor the “culture” of Wall Street, but rather in the capitalist system itself. The profit system subordinates all social needs to the accumulation of personal wealth by the narrow stratum that owns and controls the means of production, dominated by finance capital—the most parasitic and predatory section of the ruling elite.

The working class must break the stranglehold of the financial aristocracy. The ill-gotten gains of the CEOs and financiers must be expropriated, without compensation, and these funds, which add up to trillions of dollars, used to meet the needs of working people for jobs, housing, education and health care, and to rebuild the crumbling social infrastructure.

The books and business dealings of the big banks must be opened to public scrutiny, with criminal investigations undertaken into their illegal practices.

Arctic sea ice 'gone in decade'

Arctic's sea ice 'gone in decade'

The Arctic Ocean will be an "open sea" almost entirely free from ice within a decade, newly-released data has suggested.

Ice cover during the summer months will have entirely disappeared within 20 years, but most of the decrease will happen before 2020, leaving the Arctic Ocean clear for marine transport.

The Catlin Arctic Survey, completed earlier this year by a team led by explorer Pen Hadow, is the latest research into the condition of Arctic ice.

Drilling and observation figures obtained during a 450km route across the northern part of the Beaufort Sea suggest the area is almost entirely made up of young, "first-year" ice, whereas the region traditionally consists of older, thicker "multi-year" ice.

Peter Wadhams, Professor of Ocean Physics and Head of the Polar Physics Group, has spearheaded the team analysing the results.

He said: "The summer ice cover in the Arctic will completely vanish in 20 to 30 years time. There won't be any sea ice there at all

"In much less time than that, the ice in summer will be shrinking back to this last bastion north of Greenland and Ellesmere Island, so within a decade we will see a largely ice-free Arctic Ocean in summer.

"It won't be very long before we have to start thinking of the Arctic as an open sea. Man has taken the lid off the northern end of his planet and we can't put that lid back on again.

"There will be a small enough area left that you can regard the Arctic Ocean as open as far as transport is concerned for instance

"You'll be able to sail across the Arctic Ocean from Bering Strait to the Atlantic without any hindrance."

End to insurers' antitrust exemption proposed

End to insurers' antitrust exemption proposed

Schumer calls for revocation to be put in health-care bill on floor

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Virtual monopolies that health insurers have enjoyed in a multitude of markets face possible breakup under a proposal made Wednesday that calls for revoking the carriers' exemption from antitrust laws.

U.S. Sen. Charles Schumer, D-N.Y., said the exemption granted to insurers under the McCarran-Ferguson Act of 1945 should be repealed in light of repeated concerns that individual insurers often have a stranglehold in major markets. The act granted exemptions to such entities as Major League Baseball and the railroads.

"The health insurance's antitrust exemption is one of the worst accidents of American history," Schumer said in a press release. "It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable. It is time to end this special status and bring true competition to the health insurance industry."

Schumer is asking that a floor amendment be attached to whatever healthcare legislation that Senate Majority Leader Harry Reid, D- Nev., brings to the floor later this month.

Calls to the industry group, America's Health Insurance Plans, were not immediately returned. There appears, however, to be some backing for reforming McCarran-Ferguson while in the process of healthcare reform.

In testimony before the Senate Judiciary Committee Wednesday, Christine Varney, assistant attorney general for the Justice Department's antitrust division, said that a commission examining how to modernize the nation's antitrust rules found that it was not necessary for insurers to be granted the exemption.

The panel, known as the Antitrust Modernization Commission, found that insurers "would bear no greater risk than companies in other industries engaged in data sharing and other collaborative undertakings," Varney said.

"The department is generally opposed to exemptions from the antitrust laws, whether they be industry-specific or general, in the absence of a strong showing of a compelling need," Varney went on to say.

According to one study from the American Medical Association, 94% of the nation's top 314 metropolitan areas are considered to be anticompetitive. The study, published in early 2008, found that Blue Cross/Blue Shield of Alabama controlled 89% of the market in that state.

Though that study did not examine conditions in North Dakota, a 2006 check of the market in that state found that the Blue Cross/Blue Shield provider there controlled more than 90% of the market.

The move by Schumer comes a day after the Senate Finance Committee approved a much-publicized version of health-care reform by a vote of 14-9. The legislation likely will have to be reconciled with several other health reform bills now before Congress.

Despite the approval of the health-care legislation on Tuesday, coupled with the calls to eliminate the antitrust exemption Wednesday, health insurers' shares were up in afternoon trading.

UnitedHealth Group Inc. , Wellpoint Inc. and Aetna Inc. all rode the general market's climb and the Dow Jones Industrial Average's push toward the 10,000 mark. Each of the three were up roughly 2%.

Cigna Inc. and Coventry Health added 3%.

Colorado minimum wage to drop as living costs fall

Colorado minimum wage to drop as living costs fall

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Colorado will become the first state to reduce its minimum wage because of a falling cost of living.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That's lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour.

Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up.

But because Colorado's provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.

"We can't see that there would be any other option" except lowering the wage, department spokesman Bill Thoennes said Tuesday. He said there will still be a public hearing on the question in early November, though the drop appears inevitable. The lower wage will take effect Jan. 1.

Advocacy groups for the poor have been warning of the wage drop since August, when the consumer price index for the Denver area was released. The index fell 0.6 percent between the middle of 2008 and the middle of 2009, mostly as a result of falling fuel prices.

Other states with adjustable minimum wages have seen their consumer price indexes fall, such as Ohio. But Colorado is one of the few states where the law is interpreted to mean the wage can fall. Other states are planning to keep wages flat.

In Florida, deflation would reduce the minimum wage to $7.21, but the state's minimum wage already matches the federal wage, so Florida workers' paychecks won't change.

Other states with minimum wages that rise with inflation are Arizona, Missouri, Montana, Nevada, Oregon, Vermont and Washington.

Colorado voters approved an adjustable minimum wage in 2006. Supporters of that amendment said they did not intend for wages to fall, but the provision allowing it to fall was crucial to its passage. They have pointed out employers of the estimated 50,000 to 70,000 Coloradans making minimum wage are free to leave wages flat.

Ben Hanna, Colorado organizer for the Association of Community Organizations for Reform Now, or ACORN, said the difference is small but significant for poor workers.

"I can't imagine many employers would see this as an opportunity to lower wages," Hanna said in August.

The people vs Wall Street

The people vs Wall Street

Bear Stearns bankers on trial in first criminal case of the credit crunch

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Amidst the economic wreckage, after 7 million job losses and approaching 2 million home foreclosures in the US alone, with businesses and consumers around the world still struggling to get finance after the long credit crunch, Wall Street is finally on trial. A little piece of Wall Street, at least.

In the first major case against bankers at the heart of the financial meltdown, a jury of 12 mainly working-class New Yorkers will decide the fate of the two Bear Stearns managers whose hedge funds imploded in 2007, signalling the start of the crisis. Ralph Cioffi, 53, and Matt Tannin, 48, pocketed millions of dollars in pay during the boom years, but the events of 2007 left their investors nursing losses of $1.6bn (£1bn) and ruined forever the reputation of Bear Stearns, one of the oldest investment banks on Wall Street.

Dressed as if for a funeral, the pair sat impassively in the brightly lit courtroom in downtown Brooklyn yesterday as assistant US attorney Patrick Sinclair recounted what he said was a litany of lies that they told to investors. The two men were desperate to stop investors deserting their funds when the sub-prime mortgage market began to plunge, Mr Sinclair said. Mr Cioffi alone was paid $32m in the two years before the funds collapsed.

They "violated a special relationship of trust" between fund managers and investors, he added. "They lied to investors to save their multimillion dollar bonuses. In the US, that is a crime, a serious crime. It's called securities fraud." The prosecution plans to lean heavily on private emails written by the men which suggest they knew much earlier that the sub-prime market was - in a word used by Mr Tannin - "toast". Yet the men glossed over the situation and deceived investors in two ways, it is alleged.

First, Mr Tannin said he was putting more of his own money into the funds, when in fact he did not invest a single cent of the $1m that was available in his bank account. Mr Cioffi, meanwhile, secretly withdrew $2m of his money. Second, Mr Cioffi denied any major investor was planning to pull out, when he had already received a major redemption request. More than a dozen friends and family crammed in to the few public benches, and more spilled into an overflow room as the trial got under way. While the prosecution aimed to distil the case for jurors into a handful of straightforward lies, it was clear yesterday that the defence will portray the events of 2007 as much more nuanced - and highly complicated. In an idiosyncratic opening statement, Mr Cioffi's lawyer, Dane Butswinkas, launched into an educational session on high finance. At one point, he used waste-paper baskets in an attempt to explain how hedge funds worked.

The prosecution is unfairly "cherry-picking from thousands and thousands of emails", Mr Butswinkas complained. "It is easier to call the right play on Monday morning after the game on Sunday, and it is always easier to pick the right investment strategy after the fact. Hindsight is 20-20."

Mr Cioffi was described by Mr Butswinkas as a man who reached a high level on Wall Street through talent and hard work. He came to New York in the late Seventies "with $200 in a slightly worn-out pouch" and "with hopes of being a banker". Mr Tannin's defence team will give their opening arguments this morning.

The trial promises to be a bitter fight between prosecutors, who accuse the pair of lying and manipulating evidence, and defence lawyers, who say the men are being made scapegoats for a financial crisis that was not of their making. The outcome could also be a harbinger of things to come, as the US Justice Department considers bringing cases against even bigger fish on Wall Street.

"This is not a revenge opportunity," the 75-year-old judge, Frederic Block, had told prospective jurors. Neither Mr Cioffi nor Mr Tannin is charged with "causing" the credit crisis. They are charged with behaving dishonestly when the crisis began to break. The pair were traders in mortgage securities, curators of two hedge funds that invested in debt which is now known to have been toxic but which had seemed to promise great riches. They worked at the long end of the chain that stretched from overheated housing markets in the south and west of the US, where millions of buyers were tempted into taking on mortgages they could not afford. Those mortgages were sliced and diced by Wall Street and turned into securities which could be bought and sold as if they were shares. Credit rating agencies had certified the Bear Stearns funds' mortgage derivative portfolio as super-safe; the defendants' superiors at Bear Stearns and the funds' outside investors believed they were taking little risk. The question is when the two managers realised this was far from true.

Messrs Cioffi and Tannin face 20 years in jail if they are found guilty of the securities fraud. Mr Cioffi is additionally charged with insider dealing

Judge Blocks Public From Blackwater Hearings

Judge Closes Off Pretrial Blackwater Hearings

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A federal judge blocked the public Wednesday from attending a critical set of pretrial hearings in the prosecution of five U.S. security contractors accused of killing 14 unarmed Iraqi civilians in 2007.

The hearings, which are expected to last through next week, will examine whether the government improperly used immunized statements by the Blackwater Worldwide security guards in its investigation. The guards gave the statements to the State Department shortly after the controversial shooting Sept. 16, 2007, in a busy Baghdad square.

U.S. District Judge Ricardo M. Urbina said Wednesday that he was closing the hearings because he wanted to shield witnesses and potential jurors from pretrial publicity. He said he wanted to ensure the guards a fair trial.

The hearings in the District's federal court were not listed on the public docket, and filings by prosecutors and defense attorneys over the immunity issue have been sealed. A Washington Post reporter learned about the hearings several weeks ago and was told they would be open to the public. Last week, a court clerk told The Post that Urbina intended to close the hearings.

In a letter Tuesday, The Post asked Urbina to reconsider. Post attorney James McLaughlin said the court should have put the proceedings on the open docket and given the public an earlier chance to challenge the basis for the closure of the hearing. He said concerns about the impact of pretrial publicity were "highly speculative" unless supported by factual findings in open court.

Urbina denied The Post's request. He said the rights of the five guards to a fair trial outweighed the public's interest in attending the proceedings. He said he was concerned about how news accounts of the statements might affect witnesses, some as far away as Baghdad.

The judge added that he did not see a way to partially open the hearings because they will deal heavily with grand jury information. Grand jury proceedings are, by law, kept secret.

The five guards -- Paul Slough, Nicholas Slatten, Evan Liberty, Dustin Heard and Donald Ball -- are charged with voluntary manslaughter and weapons violations in the killing of 14 civilians and the wounding of 20 others. The Justice Department alleges that the guards unleashed an unprovoked attack on Iraqi civilians in Nisoor Square while in a convoy. One guard, Jeremy P. Ridgeway, has pleaded guilty and is expected to testify against the others.

Blackwater, which has since renamed itself Xe, had a contract to provide security for the State Department in Iraq.

The Justice Department's investigation has been complicated by many factors.

Agents and prosecutors were barred from gleaning information from immunized statements the guards gave to officials with the State Department Bureau of Diplomatic Security. When officials took the statements from the guards, the State Department was under pressure to quickly assess what happened.

The proceedings underway, known as Kastigar hearings, will probe how well investigators gathered evidence without being tainted by those immunized statements. If the judge finds the government's case is tainted, he might throw out the indictment.

The End of Money and the Future of Civilization

The End of Money and the Future of Civilization

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It’s too late for anyone to pretend that the U.S. government, whether under President Barack Obama or anyone else, can divert our nation from long-term economic decline. The U.S. is increasingly in a state of political, economic, and moral paralysis, caught as it were between the “rock” of protracted recession and the “hard place” of terminal government debt.

Even if the stock market can be shored up by more government borrowing for “stimulus” spending, it’s a temporary reprieve, because nothing can bring back the consumer purchasing power that was lost when the banks stopped pumping money into the economy through out-of-control mortgage lending. We simply no longer have the job base for people to earn the income they need to live.

The underlying cause of the crisis is in fact the debt-based monetary system, whereby the U.S. ruling class long ago sold out our nation and its people to the international banking cartel of which the Rockefeller and Morgan interests have been the chief representatives for over a century. It was lending on a previously unheard of scale for overpriced assets to people and businesses unable to repay that created the bubbles that burst in 2008, not only in the housing market but also in such areas as commercial real estate, equities, commodities, and derivatives. It was an explosion that reverberated throughout the world.

The Obama administration’s response to the crisis has been to print Treasury bonds both for the financial system bailouts and the sputtering Keynesian stimulus that so far has gone substantially into military infrastructure. This bond bubble is what I have referred to as “Obama’s Last Picture Show.” http://www.globalresearch.ca/index.php?context=va&aid=12512

Government debt is fundamentally inflationary. For a generation, the U.S. dollar has been inflating at an increasing rate, with the economy being kept in a growth posture by selling our debt instruments abroad or allowing foreigners holding dollars to purchase property and other assets on our own soil. The website EconomyinCrisis.org reports that in 2007, the most recent year for which data are available, “foreign entities spent $267.8 billion to acquire or establish U.S. businesses.” http://www.economyincrisis.org/articles/show/2801

Foreigners are spending their dollars as fast as possible, because they are now plummeting in value. It’s increasingly clear that sooner rather than later, the dollar will be dumped by foreign purchasers of bonds, particularly China, and possibly even the oil-producing nations.

These nations know full well that bonds denominated in dollars can never be completely repaid, even if the bonds can be rolled over into fresh debt. It’s this dynamic that is dragging the U.S. economy to the cliff, because real economic growth stopped long ago when our manufacturing jobs were exported. This is because most of the growth since Ronald Reagan was elected president in 1980 has been only on paper through financial bubbles. This included the dot.com bubble of the Clinton years that blew up in 2000-2001.

Now, after the Treasury bond bubble of 2009, there is nothing left in America to inflate. With so many jobs gone, the American family home was the last thing of value we owned.

So the air is going out of the tires. Americans who are struggling to work for a living are passive spectators as their jobs, savings, health insurance, pensions, and homes continue to erode in value or even disappear. Last Sunday the Washington Post reported a massive crisis in state and local government pensions. Reporter David Cho wrote, “The financial crisis has blown a hole in the rosy forecasts of pension funds that cover teachers, police officers and other government employees, casting into doubt as never before whether these public systems will be able to keep their promises to future generations of retirees.”

So what, if anything, can be done about it?

Well, the first thing an intelligent physician does is diagnose the disease. Thomas Greco, in his new book The End of Money and the Future of Civilization (Chelsea Green: 2009) , outlines the increasingly familiar story of how things got so bad, and he tells it as well as anyone has ever done. His style is precise and sometimes academic. Behind it, though, is a passion for truth and the type of rock-solid integrity that refuses to sugar-coat a very bitter pill.

More than that, Greco writes about how to change what has gone wrong. His credentials as an engineer, college professor, author, and consultant are impeccable. His book is among the most important written in this decade. It is truly a book that can alter the world and, if taken seriously, give large numbers of people a practical way to survive the gathering catastrophe.

But unlike most commentators, what Greco offers is not another phony prescription for what the financiers and government should do for us, whether through “restarting” lending or another round of stimulus spending. Rather it’s what we should do for ourselves, and could do much better, if we understood what to do and if big banking and big government just got out of the way.

As I said, at the root is the monetary system, whose failure cannot be understood without a history lesson. So Greco writes about the struggle between banking and democracy that took place in the 1790s when the ink on our new national constitution was barely dry.

It was Alexander Hamilton, the first secretary of the treasury, who compromised the new nation, through what he admitted was “corruption,” by giving the wealthy speculators in Revolutionary War bonds the benefit of federally-sponsored redemption and then by establishing the First Bank of the United States. This early drift toward elitist rule was opposed by Thomas Jefferson, James Madison, and others who figured in the creation of what later became the Democratic Party.

Greco writes: “While Jefferson favored a stronger union than that which emerged under the Articles of Confederation, he was vehemently opposed to the reconstruction of monarchic government on the American continent.” Hamilton had said frankly that the British monarchy was the best system of government known to man. Part of the monarchic system was the Bank of England, which Hamilton copied when setting up the First Bank.

But Jefferson, who repudiated Hamilton’s elitist platform, was elected president in what was then called “The Revolution of 1800.” Congress refused to renew the Bank’s charter by a single vote when it was up for renewal in 1811.

But the Second Bank of the United States was chartered in 1816 due to the government debt left behind from the War of 1812 against Great Britain. Thus was set up what became known as the “Bank War.”

It was President Andrew Jackson who dethroned the bankers from power by pulling government funds out of the Second Bank in 1833. Greco writes that in Jackson’s view: “The ‘Bank War’ was a contest for rulership—would the United States be governed by the people through their elected president and representatives, or by an unelected financial elite through their central bank instrument?”

The modern takeover began in earnest during the Civil War when Congress passed the National Banking Acts in 1863-64 which mandated use of government bonds as bank lending reserves, thereby creating a direct linkage between bank profits and the debt the government was starting to load on the shoulders of taxpayers.

The nation’s fate was sealed with the passage of the Federal Reserve Act in 1913. The deal was that the bankers would control the currency, and thereby the nation’s economy, while the government would be provided with an unlimited amount of inflated dollars to fight its wars.

The bookkeeper’s trick of creating money out of thin air, charging interest for its use, then forcing it down the throats of weaker nations by threat of violence, is what has allowed the Anglo-American empire, since the founding of the Bank of England in 1696, gradually to conquer the world. Though President Woodrow Wilson signed the Federal Reserve Act into law, he saw what that action meant. Greco cites Wilson as writing: “There has come about an extraordinary and very sinister concentration in the control of business in the country... The great monopoly in this country is the monopoly of big credits.”

Among other ill effects, the system has ruined the value of the currency. The inflation caused by large issues of bank-created loans is seized upon by the government which goes along because inflation reduces the cost of its deficits. Investors buy Treasury bonds denominated in Federal Reserve Notes then watch their value evaporate over time. In fact Federal Reserve Notes have lost over 95 percent of their value since they were first introduced.

Moreover, it’s additional inflation caused by bank-generated interest that drives up the costs of goods and services, forcing everyone in the economy to try to defend themselves by raising their prices to the max. Greco spells this out too, which almost every economist in the world, with the exception perhaps of Australia’s James Cumes, overlooks.

Bank interest has other tragic effects. It was high interest rates, for instance, that destroyed the Idaho potato industry. A farmer from that region told me at a conference a few years ago that when interest rates skyrocketed in the early 1980s, he asked the president of one of the Federal Reserve Banks why they did it. The answer was they were “ordered” to raise interest rates by the international banking system.

Make no mistake, it’s the banking system, facilitated by the Fed, not unwary borrowers, who brought on the collapse of 2008.

Now, in 2009, the bankers, mainly those in the U.S., have so shattered the world economy by debt mounted on debt that there may be no reprieve except the creation of a slave society based on rule by the rich over the masses of whatever peons should happen to survive the downturn and its tragic effects on employment, health, the food and water supply, and even our ability to cope with climate change.

The political establishment, expressing itself in pronouncements by organizations like the Council on Foreign Relations, see a future, not of economic democracy or increased financial pluralism, but consolidation of world currencies into a small number overseen at the top by the world’s financial oligarchy. Citing the writings of Benn Steil, the CFR’s Director of International Economics, Greco writes: “The ostensible plan is to reduce global exchange media to three—one each for Europe, the Americas, and Asia. One might reasonably suppose that at a later stage, those three would be combined into one currency also under the control of the global banking elite.”

Greco concludes: “The New World Order is upon us.”

With ample justification, he even goes apocalyptic, citing The Book of Revelation in demonstrating the import on a spiritual plane of the elitist takeover: And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. (Revelation 13: 16-17)

But is it really the end, or is there a new world waiting to be born? Greco thinks so. He speaks of the end of an era when unlimited economic growth fed by massive influxes of debt-based money is no longer sustainable. He writes: “That our global civilization cannot continue on its current path seems evident... But I think our collective consciousness is beginning to change. We are becoming aware of limits and are reaching that part of our evolutionary program that says, ‘Stop!’”

Part of the awareness of how to stop must focus on the institutions responsible for the crisis. Greco praises Ron Paul for calling out the Federal Reserve in the 2008 presidential campaign. He cites a statement Paul made to Federal Reserve Chairman Alan Greenspan in a 2004 hearing where Paul told Greenspan that the power of the Fed “challenges the whole concept of freedom and liberty and sound money.” Thus Paul and other monetary reformers, though largely ignored by the mainstream media and political establishment, have made it clear that change must start with what really lies at the bottom of elite control: how money is made and who makes it.

Unfortunately, few progressive economists, including Paul Krugman, Joseph Stiglitz, and Robert Reich comprehend the monetary causes of today’s disasters. Instead of demanding reforms that would make money the proper servant of a sustainable economy, most call for more stimulus spending; i.e., more government debt, along with “reform” of a financial system that is corrupt down to its very DNA.

So do we really need the bankers’ fake currency, today backed by nothing but a federal deficit of $12 trillion and growing by the day?

Greco says we don’t, and this is what his book about. But it’s not about doing without the necessities of life, or heading for the hills with a gun and backpack. Nor is it about important efforts at macro-level monetary reform like those of the American Monetary Institute, Congressman Dennis Kucinich, or advocates for a basic income guarantee. Rather it’s about individuals, groups, and communities taking control of the monetary system at the grassroots level and creating an entirely new basis for trade than bank-owed debt.

Greco writes about “a new paradigm approach to the exchange function.” The solution, he says, “is to provide interest-free credit to producers within the process of mutual credit clearing. That is the process of offsetting purchases against sales within an association of merchants, manufacturers, and workers. It will eventually include everyone who buys and sells, or makes and receives disbursements of any kind.”

Greco is one of the world’s leading experts in describing alternative or complementary currencies. These are self-regulating systems that facilitate “reciprocal exchange,” not using government legal tender but which are still allowed under the currency laws so long as taxes are not evaded.

Greco discusses the large and growing worldwide “LETS” movement—Local Exchange Trading Systems, like the Ithaca HOURS system in Ithaca, New York. He describes the Swiss WIR Bank, the longest-running credit clearing system in the world, with over 70,000 members. He writes about the national and international barter exchanges that involve over 400,000 businesses trading at an annual level of $10 billion.

Greco also describes the world-famous Mondragon Cooperatives from the Basque region of Northern Spain. Started by a Roman Catholic priest in 1941, the Mondragon system, he says, is “the hub of what is probably the most successful and progressive social cooperative economy in modern history.”

He also tells the inspiring story of the Argentine trading clubs—the trueques—which, when used with “provincial bonds” issued by regional governments, rescued that country during the 2001 economic collapse brought on by the collusion between the Argentine government and the International Monetary Fund.

Credit clearing is not new. Greco traces it to the medieval European fairs. These exchanges are like banking clearing houses. The world’s largest is the automated clearing house—ACH—operated by the Federal Reserve.

But as Greco points out: “The clearing process need not be restricted to banks; it can be applied directly to transactions between buyers and sellers of goods and services. The LETS systems that have proliferated in communities around the world use the credit clearing process, as do commercial trade exchanges. Credit clearing systems are, in essence, clearing houses—but their members are businesses and individuals instead of banks.”

Alternative currency and trading systems, says Greco, are the wave of the future. Even though most only mount up to partial local successes, they show what can be done. Greco likens these efforts to the Wright Brothers’ first flight that covered 120 feet. They show, he says, that the potential exists for local, regional, then national and international money-free exchanges that eventually could be joined by a single web-based trading platform. This could eventually get rid of the corruption of debt-money altogether.

Chapter 16 of the book is about “A Regional Economic Development Plan Based on Credit Clearing” that shows the potential. Greco writes, “The credit clearing exchange is the key element that enables a community to develop a sustainable economy under local control and to maintain a high standard of living and quality of life.”

This would be a real revolution. What can governments do to help? Perhaps only by removing, as Greco recommends, the privileged position of bank debt-money as legal tender. Instead, let bank money compete with market-based alternative currencies and credit exchanges, if it can.

Greco’s book is a how-to-do-it manual that updates and expands on his previous books, Money and Debt: A Solution to the Global Crisis, New Money for Healthy Communities, and Money: Understanding and Creating Alternatives to Legal Tender. Greco also operates a website that offers advice and support to worthwhile community initiatives. Click Here

My own view is that no one should wait to see who takes the lead in creating the monetary and credit-clearing systems of the future. The time is now. There is no more reason to delay. If the people of the world do not join together in this kind of action, they can likely kiss their economic future and perhaps their livelihoods good-bye. The controllers of the world, those with the big money, the ones who run the banking systems, who own the global corporations, and who finance politicians like Obama, the Bushes, and the Clintons, are now poised in their blindness to extinguish the light of democracy on the planet for good.

Greco is implying that the power of the elite is not only dated but illusory. Thus the way to proceed is not just to oppose them. If they are opposed, they’ll do what they always do, which is to roll out the SWAT teams, the military in the streets, the tear gas, the sound cannon, the concentration camps, the Patriot Acts, the torture chambers, because that is all they know, and it’s what they do best.

The money monopoly translates into a monopoly on violence on an ascending scale. We know that the U.S. sells more weapons abroad than any other nation, and we know that it is war above all that makes the bankers rich.

So let them have their weapons and wars. With all due respect to those brave enough to protest, it’s time for people simply to walk away and set up their own economic and monetary systems as a prelude to a rebirth of humanity as ethical beings in sustainable communities of choice.

The keys, says Greco, are simple: “Promote the establishment of private complementary exchange systems—and use them. Buy from your friends and neighbors wherever possible. Contribute your time, energy, and money to whatever moves things in the right direction.”

Greco also recommends that the unit of exchange for alternative currencies be based on the value of commodities—not necessarily gold or silver, which bankers and governments manipulate, but those commodities readily available within a trading system. State and local governments should do everything possible to protect, encourage, nourish, and participate in these systems.

The irony is that what may appear on the surface to be technical changes in how the exchange of goods and services takes place can have such profound effects. The answer is that systems of exchange reflect entirely different perceptions of the world. Bank-money exchange reflects and creates a system of elite control and human slavery. Reciprocal credit exchange reflects and creates a democratic system on a level monetary playing field.

The difference points to the fact that such reform is, above all, a spiritual endeavor. Thomas Greco has devoted decades to this quest and is one of its foremost visionaries. In an Epilogue he writes: “We will either learn to put aside sectarian differences, to recognize all life as one life, to cooperate in sharing earth’s bounty, and yield control to a higher power—or we will find ourselves embroiled in ever-more destructive conflicts that will leave the planet in ruins and avail only the meanest form of existence for the few, if any, who survive.”

It’s a vision we can all strive to embrace.