Saturday, October 31, 2009

US wages and salaries rise at record-low levels

US wages and salaries rise at record-low levels

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Employment costs in the US rose at the lowest annual amount in at least 27 years, according to data released Friday by the Labor Department. Stagnant wages and salaries are the outcome of government policies designed to lower the living standards of workers.

Over the past 12 months, the Labor Department’s Employment Cost Index rose by 1.5 percent, marking the lowest wage and salary growth since these figures started to be collected in 1982.

Meanwhile, compensation costs for the three-month period ending in September increased by 0.4 percent, among the lowest level since quarterly records began in 2001. This figure was unchanged from the previous quarter, and up slightly from the 0.3 percent growth in the first quarter of the year.

In the 12-month period before September 2008, employment costs rose by 2.6 percent.

These figures were led by falling government wages, which shrank by 0.1 percent in the third quarter, while benefits rose by a smaller-than average 0.3 percent. Compensation costs in private industry rose by 0.5 percent, with benefits rising 0.3 percent.

The decline in government wages is a direct result of policies initiated by states and cities in response to their budget crises. Local governments have laid off thousands of teachers, city workers, and bus drivers in response to their budget shortfalls. Those workers who remain have been forced to take furloughs and pay cuts.

In Detroit, Michigan, for instance, both city workers and teachers have been told to take a 10 percent pay cut.

These cuts are the direct outcome of the Obama administration’s policies, which have left states to fend for themselves amid falling tax revenues. The administration has made it clear that states must balance their budgets through spending cuts. Many states are required to have a balanced budget, and nearly all have resorted to wage and salary cuts, together with layoffs, to meet their obligations.

Consumer spending, meanwhile, fell significantly in September, according to figures released Friday by the Commerce Department. Spending fell by 0.5 percent last month, negating a good chunk of the 1 percent gain in the previous month. Disposable income for households also fell by 0.1 percent in September, in the fourth consecutive monthly decline.

The fall in consumer spending, the largest since December, is in part the result of the end of the government’s cash-for-clunkers program on August 24. Economists have said that this program, among others, accounts for much of the increase in third-quarter consumer spending and GDP.

Lori Helwig, an economist at Merrill Lynch, told MarketWatch that she expects consumer spending to grow 0.5 percent in the last quarter of the year, down significantly from the 3.4 percent growth in the third quarter.

The Commerce Department said Thursday that the US economy grew at a rate of 3.5 percent in the third quarter of the year, after falling consecutively for three quarters. However, as numerous commentators have pointed out, this so-called recovery is unsustainable.

The Financial Times wrote on Thursday, “Household disposable incomes actually fell during the quarter, by 3.4 percent, but consumer spending rose, also by 3.4 percent. This is not a pattern that can be sustained for long.” The uptick in spending was largely financed by the government’s cash-for-clunkers program, along with homebuyer tax credits, which will expire later this year.

A picture of the real state of things emerges from these figures. Real wages in the US are declining, while consumer spending can only be maintained, at least in the short term, by government stimulus programs.

Meanwhile, the real living conditions for regular people are becoming more and more intolerable. Wages for non-managerial workers have fallen by 1.4 percent so far this year, according to an article in USA Today, and are on track for even further declines. The official unemployment rate has reached 9.8 percent, and when one takes into account discouraged workers and people who are underemployed, it is at 17 percent.

While the Obama administration has spent trillions to bail out the banks and financial speculators, it has done next to nothing to address the massive employment crisis.

The White House released a report on Friday cynically claiming that its stimulus program had “saved or created” 640,239 jobs, based on data from a non-governmental monitoring board. This is based largely on inflated estimates of how many additional jobs might have been destroyed—in addition to the far higher figure that have in fact been destroyed.

The number of workers the federal government has actually employed in new projects is miniscule—estimated at 30,000 by the administration itself in a report released earlier this month.

In some states, the impact of federal programs has been negligible—including about 400 in Michigan, which has the highest unemployment rate in the country at 15.2 percent.

In reviewing these figures, the Associated Press found significant reporting errors, with certain new positions being counted as many as five times. The analysis showed that, based on the government’s records, the figure should have been 25,000, not 30,000.

Similar overestimations were quickly discovered in the figures released on Friday. For example, the Salt Lake Tribune reported that the White House claimed that 6,598 jobs were saved or created in Utah. “But discrepancies were easy to find,” the newspaper noted. “Some entities seemed to create their own criteria, while others double counted employees over multiple contracts. The most common error appeared to be counting temporary or part-time work as a full-time job.”

Since the recession began in December 2007, 7.6 million jobs have been eliminated from the economy, and 3 million since Obama’s stimulus program was approved. Even if one were to accept the government’s estimates, a stimulus program that would address the unemployment crisis would need to be at least ten times the size of the one that has been passed. Instead, the Obama administration has rejected any further stimulus measures.

In fact, mass unemployment has been part of a deliberate policy, allowing for corporations to exploit workers’ fears over the poor labor market. The financial and corporate elite has used the economic crisis it created to carry out a massive redistribution of wealth. The bank bailouts will be paid for through attacks on the working class—including austerity measures, cuts in social programs and a continual attack on wages and benefits.

Obama's banker-friendly financial overhaul

Obama’s banker-friendly financial overhaul

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In the wake of a financial meltdown that precipitated the deepest recession since the 1930s, the Obama administration and Democratic congressional leaders are working to institute regulatory changes that avoid any serious constraints on Wall Street banks and financial institutions.

The so-called legislative process itself is a mockery of democracy. An army of financial industry lobbyists is at work wining and dining key legislators, whose elections were funded by millions in campaign contributions from banks, insurance companies, hedge funds, etc. Wall Street lawyers are helping draft the details of regulatory bills in closed-door meetings, while Obama and his top economic advisers—many of whom are former investment bankers and all of whom are longstanding proponents of bank deregulation—confer with the CEOs of the most powerful firms.

The guiding premise of the enterprise is that the capitalist “free market” must at all costs be safeguarded, along with the personal fortunes of the financial oligarchy. Flowing from this, the informing notion behind the proposed changes is to allow the banks to return to business as usual, recouping their gambling losses at the expense of this and future generations of working people, while setting in place mechanisms for the government to more effectively manage the next financial debacle.

On Thursday, Treasury Secretary Timothy Geithner testified before the Financial Services Committee of the House of Representatives in support of a bill jointly sponsored by the White House and committee Chairman Barney Frank (Democrat of Massachusetts). The bill would give the Treasury and the Federal Reserve Board so-called “resolution authority” to order the seizure of a major financial firm whose failure would destabilize the financial system.

The idea is to prevent the type of panic that accompanied the collapse of Lehman Brothers in September of 2008. Geithner, Frank and the White House are selling the bill as a boon to taxpayers. It is supposedly an alternative to the multibillion-dollar bailouts at taxpayer expense that followed last year’s crash.

In fact, the proposal would give the executive branch and the Fed unlimited powers, without the need for congressional consent, to allocate taxpayer money to prevent the failure of a major commercial or investment bank, insurance firm (such as AIG) or other financial company by placing the firm in receivership. Supposedly, the seized firm’s shareholders and unsecured creditors would take large losses, the firm’s top management would be sacked, and the firm’s assets would be sold off to investors.

The cost of the rescue, according to the bill, would be repaid through fees levied on other banks with more than $10 billion in assets (around 120 banks). However, these fees would be assessed over an indefinite period, while the taxpayers would pay the bill upfront.

One provision of the bill which has garnered little comment either by its official proponents or the media would give the Federal Deposit Insurance Corporation, with the consent of the treasury secretary and the Fed, the power to “extend credit or guarantee obligations … to prevent financial instability during times of severe economic distress.”

This amounts to a blank check to use public funds to bail out Wall Street. What is actually being proposed is the replacement of the ad hoc bailouts that characterized the past year with an institutionalized mechanism for looting the public purse for the benefit of the financial aristocracy.

Little wonder that Jamie Dimon, the CEO of JPMorgan Chase, has broadly endorsed the administration’s bank “reform.” He told a conference in New York this week that “we need a resolution mechanism so that the system isn’t destroyed.” Dimon knows full well that such a law will expand the profits of the big banks by making their borrowing costs cheaper, far outstripping any fees they might be required to pay in the event of a government seizure of a major firm.

There are those within the financial and political establishment who are warning that the administration’s policies are enhancing the power of the biggest banks and making an even greater financial disaster all but inevitable. Asked by CNN on October 21 whether the administration’s regulatory changes will avert another financial meltdown, Neil Barofsky, the special inspector general of the Treasury’s Troubled Asset Relief Program (TAPR), said:

“I think actually what’s changed is in the other direction. These banks that were too big to fail are now bigger. Government has sponsored and supported several mergers that made them larger… The idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit.

“So, if anything, not only has there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely. Potentially, we could be in more danger now than we were a year ago.”

Paul Volcker, the former Fed chairman who heads Obama’s Economic Recovery Advisory Board, is evidently alarmed. He has been publicly calling for the reinstatement of the legal wall between commercial banking and investment banking that was a cornerstone of the Depression-era bank reforms instituted by Franklin D. Roosevelt. Under the Glass-Steagall Act of 1933, commercial banks—which take deposits from ordinary consumers—were banned from owning and trading risky securities, the very practice that brought the biggest banks to the brink of collapse in 2008.

This would mean breaking up such behemoths as JPMorgan Chase, Citigroup, Bank of America and Wells Fargo. Volcker has no support within the Obama administration. Wall Street is adamantly opposed to such a reform, as are Obama’s top economic advisers. The director of the White House’s National Economic Council, Lawrence Summers, pushed through the repeal of Glass-Steagall in 1999 when he was treasury secretary in the Clinton administration.

Daniel Tarullo, a Fed governor appointed by Obama, last week dismissed Volcker’s proposal as “more of a provocative idea than a proposal.”

As for the claims that the public will not be forced to pay for the government “resolution” of major financial firms facing collapse, their worth can be judged by looking at the other major planks of the administration’s financial regulatory plan.

Frank’s Financial Services Committee this month passed a bill on derivatives—the unregulated $592 trillion market in complex and murky financial contracts that led to the collapse of AIG—which exempts from government oversight a huge portion of such deals, including so-called “customized” credit default swaps and derivatives contracts of non-financial companies. It also places the management of “standard” derivatives in the hands of privately owned clearinghouses closely aligned to the big Wall Street banks.

The Consumer Financial Protection Agency bill passed by Frank’s committee, nominally establishing a new agency to police consumer lending fraud and abuse, exempts 98 percent of the nation’s banks as well as car dealerships from oversight, and allows the federal government to override state consumer protection laws that are tougher than federal regulations.

All of these loopholes were inserted at the behest of bank lobbyists.

Then there are the sham bank pay restraints announced last week by Obama’s “pay czar,” Kenneth Feinberg. Not only do these rules apply only to the 25 highest-paid executives and employees of seven companies still holding TARP money, including just two banks, they apply only for November and December of this year. And the limits in cash salaries and bonuses imposed by Feinberg are to be largely offset by stock issued to the affected multimillionaires.

The Wall Street Journal published an analysis Wednesday showing that Feinberg actually increased the base salaries of 89 of the 136 people under his remit, raising their average regular salaries to $438,000, an average increase of 14 percent. At Citigroup, which is 34 percent owned by the US government, Feinberg agreed to more than double salaries for 13 of the 21 employees, upping them by an average of $202,000.

The Generals' Revolt

The Generals' Revolt

As Obama rethinks America's failed strategy in Afghanistan, he faces two insurgencies: the Taliban and the Pentagon

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In early October, as President Obama huddled with top administration officials in the White House situation room to rethink America's failing strategy in Afghanistan, the Pentagon and top military brass were trying to make the president an offer he couldn't refuse. They wanted the president to escalate the war — go all in by committing 40,000 more troops and another trillion dollars to a Vietnam-like quagmire — or face a full-scale mutiny by his generals.

Obama knew that if he rebuffed the military's pressure, several senior officers — including Gen. David Petraeus, the ambitious head of U.S. Central Command, who is rumored to be eyeing a presidential bid of his own in 2012 — could break ranks and join forces with hawks in the Republican Party. GOP leaders and conservative media outlets wasted no time in warning Obama that if he refused to back the troop escalation being demanded by Gen. Stanley McChrystal, the commander overseeing the eight-year-old war, he'd be putting U.S. soldiers' lives at risk and inviting Al Qaeda to launch new assaults on the homeland. The president, it seems, is battling two insurgencies: one in Afghanistan and one cooked up by his own generals.

"I don't understand why the military is putting so much pressure on the White House now over Afghanistan," says a former U.S. ambassador to Pakistan. "Unless it has something to do with the presidential ambitions of a certain Centcom commander."

The military's campaign to force Obama's hand started in earnest in September, when the Commander's Initial Assessment of the war — a highly classified report prepared by McChrystal — was leaked to The Washington Post. According to insiders, the leak was coordinated by someone close to Petraeus, McChrystal's boss and ally. Speculation has centered on Gen. Jack Keane, a retired Army vice chief of staff and Petraeus confidant, who helped convince George W. Bush to get behind the "surge" in Iraq. In the report, McChrystal paints a dire picture of the American effort in Afghanistan, concluding that a massive increase in troop levels is the only way to prevent a humiliating failure.

On Capitol Hill, hawkish GOP congressmen seized the opening to turn up the heat on Obama by demanding that he allow McChrystal and Petraeus to come to Washington to testify at high-profile hearings to ask for more troops. "It is time to listen to our commanders on the ground, not the ever-changing political winds whispering defeat in Washington," declared Sen. Kit Bond, a Republican from Missouri. Attempting to usurp Obama's authority as commander in chief, Sen. John McCain introduced an amendment to compel the two generals to come before Congress, but the measure was voted down by the Democratic majority.

As the pressure from the military and the right built, McChrystal went on 60 Minutes to complain that he had only talked to Obama once since his appointment in June. Then, upping the ante, the general flew to London for a speech, where he was asked if de-escalating the war, along the lines reportedly suggested by Vice President Joe Biden, might work. "The short answer is: no," said McChrystal, dismissing the idea as "shortsighted." His comment — which bluntly defied the American tradition that a military officer's job is to carry out policy, not make it — shocked political observers in Washington and reportedly angered the White House.

"Petraeus and McChrystal have put Obama in a trick bag," says Col. Lawrence Wilkerson, a former top aide to Secretary of State Colin Powell. "We had this happen one time before, with Douglas MacArthur" — the right-wing general who was fired after he defied President Truman over the Korean War in 1951.

It isn't clear how far McChrystal and his boss, Petraeus, are willing to go. There have been rumors around the Pentagon that McChrystal might quit if Obama doesn't give him what he wants — a move that would fuel Republican criticism of Obama. "He'll be a good soldier, but he will only go so far," a senior U.S. military officer in Kabul told reporters.

For his part, Obama moved quickly to handle the insurrection. One day after McChrystal's defiant London speech, the president unexpectedly summoned the general to a one-on-one meeting aboard an idling Air Force One in Copenhagen. No details of the discussion were released, but two days later Jim Jones, the retired Marine general who now serves as Obama's national-security adviser, publicly rebuked McChrystal, declaring that it is "better for military advice to come up through the chain of command."

The struggle between the White House and the Pentagon is an important test of whether the president can take command in a political storm that could tear his administration apart. Obama himself is partly to blame for the position he finds himself in. During the presidential campaign last year, Obama praised the Afghan conflict as "the right war," in contrast to the bungled and unnecessary invasion of Iraq. Once in office, he ordered 21,000 additional troops to Kabul, painting the war as vital to America's national security. "If the Afghan government falls to the Taliban or allows Al Qaeda to go unchallenged," the president declared, "that country will again be a base for terrorists who want to kill as many of our people as they possibly can." He also fired the commanding general in Afghanistan, David McKiernan, and replaced him with McChrystal, a close Petraeus ally and an advocate of the doctrine of counterinsurgency.

When it comes to COIN, as it's known in military jargon, Petraeus literally wrote the book: the Counterinsurgency Field Manual, which has become the bible for proponents of COIN. In its essence, counterinsurgency demands an extremely troop-intensive, village-by-village effort to win hearts and minds among the population of an occupied country, supported by a lethal killing machine and an expensive "clear, hold and build" program to eliminate the enemy from an area and consolidate those gains. Within the military, COIN has developed a cult following. "It has become almost a religion for some people," says Paul Pillar, a former top intelligence official with wide expertise in terrorism and the Middle East.

Supporters of Petraeus and McChrystal acknowledge that applying COIN to Afghanistan means a heavy U.S. commitment to war, in both blood and treasure. Even if Obama dispatches 40,000 additional troops, on top of the 68,000 Americans already committed, we won't even know if it's working for at least a year. "That is something that will certainly take 12 to 18 months to assess," said Kim Kagan, the president of the Institute for the Study of War, who helped write McChrystal's request for more troops. Bruce Riedel, a COIN advocate and veteran CIA officer who led Obama's review of the war last March, is even more blunt. "Anyone who thinks that in 12 to 18 months we're going to be anywhere close to victory," he said, "is living in a fantasyland."

In addition, the doctrine of counterinsurgency virtually assures long-running military campaigns in other hot spots, even as we're engaged in combat and rebuilding operations in Afghanistan. "We're going to be involved in this type of activity in a number of countries for the next 15 to 20 years," said Lt. Gen. David Barno, a COIN advocate who served as commander of U.S. forces in Afghanistan.

So far, though, COIN hasn't exactly delivered on its promises. Despite the addition of 21,000 troops in March, the Taliban have continued to make gains across Afghanistan, establishing control or significantly disrupting at least 40 percent of the country. According to McChrystal's own report, Taliban leaders "appoint shadow governors for most provinces," set up courts, levy taxes, conscript fighters and boast about providing "security against a corrupt government." What's more, U.S. casualties have skyrocketed: In the four months since McChrystal took over, 165 Americans have died in Afghanistan — nearly one-fifth of those killed during the entire war.

By late summer, some in the Obama administration began to have doubts about the efficacy of McChrystal's counterinsurgency strategy — doubts that greatly increased in the wake of Afghanistan's disastrous presidential election in August. Hamid Karzai, Washington's hand-picked president, was accused of widespread fraud, including ballot-box stuffing and "ghost" polling stations. Without a credible Afghan government, COIN can't succeed, since its core idea is to build support for the Afghan government.

Even before the election fiasco, Obama had sent Jones, his national-security adviser, to Kabul to deliver a message to his military commander: The White House wouldn't look favorably on sending more soldiers to Afghanistan. If the Pentagon asked for more troops, Jones told McChrystal's top generals, the president would have "a Whisky Tango Foxtrot moment" — that is, What the fuck? According to The Washington Post, which reported the encounter, the generals present "seemed to blanch at the unambiguous message that this might be all the troops they were going to get."

Not long after the Afghan elections, Obama began a top-to-bottom strategy review of the war. Among those who started to question the basic assumptions of McChrystal and his COIN allies were Jones, many of his colleagues on the National Security Council, and Vice President Biden. By contrast, Secretary of Defense Robert Gates and Secretary of State Hillary Clinton remained remarkably quiet during the assessment, seeming to defer to the White House when it came to challenging the Pentagon brass.

The issue has presented the most difficult political decision of Obama's presidency thus far. The White House knew that if Obama were to "fully resource" the military campaign, he would be going to war without his own political base, which has turned strongly against the Afghan war. For the first time since 2001, according to polls, a majority of Americans believe that the war in Afghanistan is "not worth fighting." Fifty-seven percent of independents and nearly three-quarters of Democrats oppose the war — and overall, only 26 percent of Americans support the idea of adding more troops. Indeed, if Obama were to escalate the war, his only allies would be the Pentagon, Congressional Republicans, an ultraconservative think tank called the Foreign Policy Initiative, whose supporters include Karl Rove, Sarah Palin and a passel of neoconservatives and former aides to George W. Bush.

On the other hand, rejecting McChrystal's demands for more troops would make Obama vulnerable to GOP accusations that he was embracing defeat, and give congressional Republicans another angle of attack during midterm elections next year. Even worse, the administration has to take into account the possibility of a terrorist attack, which would allow the GOP to put the blame on the White House. "All it would take is one terrorist attack, vaguely linked to Afghanistan, for the military and his opponents to pounce all over him," says Pillar.

Within the administration, Biden has emerged as the leading opponent of McChrystal's approach to never-ending war. "He's proposing that we stop doing large-scale counterinsurgency, that we rely on drones, U.S. Special Forces and other tools to combat Al Qaeda," says Stephen Biddle, an expert at the Council on Foreign Relations who served on McChrystal's advisory team. Biden's view, which has support among a significant number of officials and analysts in and out of government, is that rather than trying to defeat the Taliban, the United States ought to focus on targeting Al Qaeda and other terrorist groups that want to strike at American targets.

That Biden took the lead, says one former national-security official, may be a sign that he has the president's support. "Biden is playing a very inside game," says the official. "He's in every meeting." In early October, the vice president held a private session to discuss war strategy with two members of the administration who are considered among the more hawkish members of Obama's team: Hillary Clinton and Richard Holbrooke, the State Department's special adviser on Afghanistan and Pakistan. In addition, Biden and Obama, both former senators, are said to be relying on the counsel of a pair of relatively dovish former colleagues, Sen. Jack Reed of Rhode Island and Sen. John Kerry of Massachusetts. Kerry, the chairman of the Senate Foreign Relations Committee, has recently made comparisons between Afghanistan and Vietnam. Also weighing in, apparently to advise against sending more troops, has been Colin Powell, who met quietly with Obama in mid-September.

Supporters of Biden's view argue that adding more troops would actually make the problem worse, not better, because the Taliban draw support from the fiercely nationalist Pashtun ethnic group in Afghanistan and Pakistan, who will mobilize to resist a long-term occupation. "The real fact is, the more people we put in, the more opposition there will be," says Selig Harrison, a longtime observer of Afghanistan at the Center for International Policy, a think tank formed in the wake of the Vietnam War by former diplomats and peace activists. The only exit strategy that might work, say Harrison and others, is dramatically reducing the U.S. military role in Afghanistan, shifting the focus from the Taliban to Al Qaeda, and stepping up political and diplomatic efforts. Such an initiative would also require an intensive push to secure support from Pakistan and Saudi Arabia — which maintain links to the Taliban — as well as Iran, Russia, India and China.

"There's only one mission there that we can accomplish," says Michael Scheuer, who led the CIA's anti-Osama bin Laden unit for years. "To go into Afghanistan, kill Al Qaeda, do as much damage to the Taliban as possible and leave."

Opponents of that approach insist that it would allow Al Qaeda to re-establish a safe haven in Afghanistan and resume plotting attacks. But many terrorism experts point out that Al Qaeda doesn't need Afghanistan as a base of operations, since it can plan actions from Pakistan or, for that matter, from a mosque in London or Hamburg. "We deal with Al Qaeda in every country in the world without invading the country," says Sen. Russ Feingold, a Democrat who serves on both the Senate foreign-relations and intelligence committees. "We deal with them in Indonesia, the Philippines, Yemen, Somalia, in European countries, in our own country, with various means that range from law enforcement to military action to other kinds of actions."

Feingold, who has proposed setting a flexible timetable for the withdrawal of U.S. forces, says that the administration must listen to advisers like Biden who favor shifting course in Afghanistan. "If they do not, if they refuse to, then we in Congress have to start proposing our own timetables, just as we did when we were stonewalled by the Bush administration," Feingold says. "I'm prepared to take whatever steps I need to, in consultation with other members of Congress, to make those proposals if necessary."

Other Democrats have also expressed doubts about appropriating more money for the conflict. Monthly spending on the war is rising rapidly — from $2 billion in October 2008 to $6.7 billion in June 2009 — and Obama has requested a total of $65 billion for 2010, even without another troop surge. "I don't think there is a great deal of support for sending more troops to Afghanistan in the country or in Congress," said House Speaker Nancy Pelosi. Sen. Carl Levin, chairman of the Senate Armed Services Committee, has declared his preference for sending trainers to Afghanistan to build that country's armed forces, instead of U.S. combat troops. And Rep. Jim McGovern recently got 138 votes for an amendment that would have required the administration to declare its exit strategy. "The further we get sucked into this war, the harder it will be to get out of it," McGovern says. "What the hell is the objective? Tell me how this has a happy ending. Tell me how we win this. How do we measure success?"

Given the political pressure from both sides, Obama appears to favor sidestepping the issue. At a meeting with congressional leaders from both parties at the White House on October 6th, the president said he won't significantly reduce the number of troops in Afghanistan, as many Democrats had hoped — but he also seemed unlikely to endorse the major troop buildup proposed by McChrystal. While that approach may quell the Pentagon's insurrection for now, it only prolongs the conflict in Afghanistan, postponing what many see as an inevitable withdrawal. Wilkerson, the former aide to Colin Powell, hopes Obama will follow the example of President Kennedy, who faced down his generals during the Cuban Missile Crisis. "It's going to take John Kennedy-type courage to turn to his Curtis LeMay and say, 'No, we're not going to bomb Cuba,'" Wilkerson says. "It took a lot of courage on Kennedy's part to defy the Pentagon, defy the military — and do the right thing."

Obama Administration Launches Deceptive Swine Flu Propaganda Blitz

Obama Administration Launches Deceptive Swine Flu Propaganda Blitz

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President Obama and his top health officials are engaging in a major public relations effort to divert attention away from whether its swine flu vaccine is effective and safe – to whether there is enough of it to go around. And the media, as always, is cooperating fully. This echoes the way media debate was manipulated during the Vietnam and Iraq Wars. Instead of debating whether we should even be fighting those wars, the media debated only whether we were using the correct military strategy.

Increasing numbers of scientists and doctors are issuing harsh criticisms of the Government’s plan to vaccinate (forcibly if necessary) virtually the entire U.S. population with what they claim is a poorly tested vaccine that is not only ineffective against swine flu, but could cripple and even kill many more people than it helps.

The CDC’s public relations campaign has been running “scare” ads that portray swine flu as a full-blown “pandemic” responsible for snuffing out countless lives, and which, unless stopped by universal vaccination, could kill millions of American citizens. But scientists and health officials throughout the world have called the governments claims unjustified and deliberately misleading.

For example, Dr. Anthony Morris, a distinguished virologist and former Chief Vaccine Office at the U.S. Federal Drug Administration (FDA), states that “There is no evidence that any influenza vaccine thus far developed is effective in preventing or mitigating any attack of influenza” and that “The producers of these vaccines know they are worthless, but they go on selling them anyway.”

And in November 2007, the UK newspaper The Scotsman, made public warnings by the inventor of the “flu jab,” Dr. Graeme Laver. Dr. Laver was a major Australian scientist involved in the invention of a flu vaccine, in addition to playing a leading scientific role in the discovery of anti-flu drugs. He went on record as saying the vaccine he helped to create was ineffective and [that] natural infection with the flu was safer. “I have never been impressed with its efficacy,” said Dr. Laver.

We hear the assumption being made by the Centers for Disease Control (CDC) that the number of deaths from the H1N1 virus is at pandemic levels and now a “national emergency.” One would assume that with all of its resources, the New York Times’ October 26 front page story on the CDC’s statistics would be accurate: 20,000 hospitalizations and 1,000 deaths due to the swine flu. However, this is all fiction. And it is a fiction solely based upon the CDC’s own contradictory statements and actions.

Our independent investigations into the clinical trials and statistical studies of influenza vaccines reveal glaring discrepancies. Let us not forget that it is this same New York Times, with its “star” reporter Judith Miller, who led America into believing that Saddam Hussein possessed weapons of mass destruction, tried to purchase yellow cake uranium from Niger, and had dealings with al-Qaeda. And let us also remember that it is the same CDC and health officials in Washington, including President Ford and his top health advisor F. David Matthews, who pushed through and propagandized an untested vaccine during the 1976 swine flu scare, which resulted in thousands of severely neurologically damaged Americans and about 500 reported deaths. Aside from permanent paralysis, many of these vaccine victims also underwent torturous processes for many years to get the government to recognize their illnesses and help cover their costs. Not only was the CDC’s prediction and vaccination campaign for the 1976 flu season a total disaster, it also turned into a deadly scandal, witnessed across the United States on 60 Minutes when Dr. David Sencer, then head of the CDC, confirmed that the vaccine was never field tested, that there were only several reported incidents of H1N1 infection and none of these had been officially confirmed, and then lied about the CDC having no prior evidence that the swine flu vaccine could cause severe and permanent neurological damage. The end result from the 1976 debacle cost the government $3.5 billion in damages, two-thirds were for severe neurological injury and death directly due to the CDC’s vaccination campaign.

Therefore, being anti-vaccine or pro-vaccine is not the most urgent issue. What is critical is whether or not there is legitimate, sound science to support either position; in this regard, the vaccine manufacturers and our federal health agencies have failed in the past, and continue to fail today. And they fail dismally. There is absolutely no evidence for sound-scientific protocol or anything resembling a gold-standard behind the swine flu infection statistics and vaccine efficacy and safety clinical trials to support Obama’s and his health advisors’ claims. Instead, the reports on hospitalizations and deaths due to the H1N1 virus are grossly distorted. What we are really witnessing is “official” science and statistics that are little more than propaganda.

One unfortunate development over the years is the notion that there is such a thing as a “flu season.” The truth is that we move annually into periods where there are dramatic increases in flu-like causing pathogens, however, the majority of these are unrelated to any strain of influenza virus. There can between 150 and 200 different infectious pathogens—adenovirus, rhinovirus, parainfluenza, the very common coronavirus and, of course, pneumonia—that produce flu-like symptoms, and worse, during a “flu season.” For example, how many people have heard of bocavirus, which is responsible for bronchitis and pneumonia in young children, or metapneumovirus, responsible for more than 5 percent of all flu-related illnesses? This is true during every flu season and this year is no different. Furthermore, all flu vaccinations, including the swine flu, are useless for protecting people from these many prevalent infectious organisms.

If we take the combined figure of flu and pneumonia deaths for the period of 2001, and add a bit of spin to the figures, we are left believing that 62,034 people died from influenza. The actual figures determined by Peter Doshi, then at Harvard University, are 61,777 died from pneumonia and only 257 from flu. Even more amazing, among those 257 cases only 18 were confirmed positive for influenza. A separate study conducted by the National Center for Health Statistics for the flu periods between 1979 through 2002 revealed the true range of flu deaths were between 257 and 3006, for an average of 1,348 per year.

The recent CBS Investigative Report, published on October 21, is one example. After the CDC refused to honor CBS’s Freedom of Information request to receive flu infection data for each individual state, the network performed independent outreach to all fifty states to get their statistics. Their report contradicts dramatically the CDC’s public relations blitz. For example, in California, among the approximate 13,000 flu-like cases, 86 percent tested negative for any flu strain. In Florida, out of 8,853 cases, 83 percent were negative. In Georgia and Alaska, only 2.4 percent and 1 percent respectively tested positive for flu virus among all reported flu-like cases. If the infectious-rate ratios obtained by CBS are accurate, the CDC’s figures are significantly reduced and agree with earlier predictions that the H1N1 virus will be simply an unwelcomed annoyance. So we are in the midst of an enormous medical hoax, a design and purpose that has yet to unfold completely, that will nevertheless reap huge revenues for the vaccine industrial complex.

Another example is a recent alarmist report issuing from Georgetown University, also usurped by federal health officials and their multimedia comrades to fuel a campaign of fear and panic. The report announced that over 250 students were infected by swine flu when in fact none of these students were tested for H1N1 infection. The university’s figure was based solely on a count of student visits to the health clinic and calls into an H1N1 hotline.

This is not the first time the CDC’s predictions for influenza strains have been overstated and miscalculated. In an interview on Swedish television, Dr. Tom Jefferson, head of vaccine studies at the prestigious international Cochrane Database Collaboration, after reviewing hundreds of influenza studies and statistical analyses, has said the WHO’s and CDC’s “performance is not very good.” And in an ITN News interview last month, Jefferson called the swine flu pandemic a “juggernaut they [the WHO, government agencies and vaccine makers] created.” For the 1992-1993 season, the prediction was off by 84 percent. For the 1994-1995 season, it was off 43 percent for the primary strain and off 87 percent and 76 percent for two other strains. The Laboratory Center for Disease Control’s study comparing vaccine strains with the strains appearing during the 1997-1998 season found the match was off by 84 percent. Again Dr. Jefferson in a Der Spiegel interview remarked,

“there are some people who make predictions year after year, and they get worse and worse. None of them so far have come about, and these people are still there making these predictions. For example, what happened with the bird flu, which was supposed to kill us all?... Swine flu could have even stayed unnoticed if it had been caused by some unknown virus rather than an influenza virus... An influenza vaccine is not working for the majority of influenza-like illnesses because it is only designed to combat influenza viruses. For that reason, the vaccine changes nothing when it comes to the heightened mortality rate during the winter months.”

Our review of all clinical trial studies conducted by the H1N1 vaccine makers for pre-licensing in the American market—CSL, Novartis, Sanofi-Pasteur, Medimmune and now GlaxoSmithKline—reveals they were poorly designed and feebly executed. Any professor in molecular biology or virology would fail a graduate student who presented a paper relying on research conducted in the manner of the studies the vaccine corporations submit to the FDA. Nevertheless, it is this lack of sound randomized, double-blind controlled placebo studies, particularly for inactivated virus vaccines, that our government is declaring definitive and is using to justify mass vaccination of our population.

Last week, Switzerland’s health authorities rejected Novartis’ new swine flu vaccine, Celtura, being targeted for women and children, because the company’s studies were insufficient to guarantee its safety. In addition, the new Novartis vaccine, which uses a cell base from dogs, was found to be contaminated with canine-specific bacteria. The Swiss newspaper, Tagesanzeiger, also noted there remains some suspicion that Novartis’ new vaccine may be a repackaging of an earlier 2008 vaccine responsible for killing almost two dozen homeless people during an illegal clinical trial in Poland. This is the same Novartis whose Fluvirin H1N1 vaccine being distributed in the US relied only on a hasty clinical efficacy and safety trial enrolling only a small number of health adults. Novartis likely remains unperturbed. The Swiss pharmaceutical giant has reported a $6.1 billion profit so far this year and expects to boost sales for the final quarter with its swine flu vaccine.

In July, the CDC announced it would cease testing and counting H1N1 virus infections. Their public reason was simply that they are convinced there is a pandemic and, therefore, accurate monitoring was unnecessary. On August 30, the CDC declared the states should report influenza and pneumonia-associated hospitalizations and deaths together, not singling out actual cases of H1N1 infection if there happen to be any actually confirmed from a laboratory. This has always been the CDC’s policy, and the 36,000 figure of annual flu deaths repeated ad nausea on their website and spewed from the media’s health pulpits for several years straight, does not distinguish between pneumonia, influenza and other flu-like pathogenic deaths. Perhaps it would make very little difference because the current rapid diagnostic tests for the H1N1 virus can range in only 10-50 percent accuracy.

Elsewhere in the world, particularly in Europe, civilians are increasingly rejecting the H1N1 vaccine. Recent polls in Germany and Austria show only 13 and 18 percent respectively willing to take the shot. In Sweden, four vaccine related deaths have been announced and almost 200 healthcare workers have reported becoming more seriously ill from the vaccination than they might have from a flu infection. In the US, anywhere from 90-99 percent of adverse events go unreported.

If people would simply shut off the CDC’s supported propaganda noise being blasted across the airwaves and newspapers— the spectacle of newscasters being inoculated, interviews with government health officials or private doctors and academics receiving consultation fees from drug makers, and the drivel of the New York Times—and simply do their homework, Americans would wake up and realize the hoax behind the swine flu pandemic. All of the information is before us. Nothing is hidden. All the contradictions and hypocrisies are contained within the massive vaccine industrial complex—including the government health agencies and professional medical associations. The lie is too large for them to not expose themselves if we simply look.

FBI agents assassinate Michigan Islamic leader

FBI agents assassinate Michigan Islamic leader

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A well-known African-American Islamic leader in Detroit was shot to death by Federal Bureau of Investigation agents on Oct. 28 at a warehouse in Dearborn. Imam Luqman Ameen Abdullah, 53, who headed the Masjid Al-Haqq mosque on the city’s west side, was killed during a series of raids by both federal agents and local police departments that resulted in the arrest of 11 people.

Corporate media reports on the killing of Imam Abdullah and the arrest of the others frame this as a “counter-terrorism’ operation, even though the criminal complaints said to be the basis for the raids made no specific allegations of violations of federal law or acts of terrorism.

A joint statement issued by the FBI and the U.S. Attorney’s office states that “The 11 defendants are members of a group that is alleged to have engaged in violent activity over a period of many years and known to be armed.”

However, many people who knew Imam Abdullah and the members of Masjid Al-Haqq say that the group worked to rid the severely oppressed community where the mosque existed of the social ills resulting from years of exploitation and neglect.

Even the mosque itself fell victim to the economic crisis that is worsening in Detroit. On Jan. 20, Masjid Al-Haqq was evicted from the building where it had been housed for years as a result of tax foreclosure. The mosque relocated at a home on Clairmount, which was also raided on Oct. 28.

Dawud Walid, executive director of the Council on American-Islamic Relations, Michigan chapter, said of Imam Abdullah that “I know him as a respected imam in the Muslim community.”

Walid continued, “We have no information about illegal activity going on at that mosque.” Walid said Imam Abdullah “would give the shirt off his back to people. The congregation he led was poor. He fed very hungry people in the neighborhood who were Christian. He helped and assisted a lot of troubled youth. People would come up to him who were hungry and he would let them sleep in the mosque. He would let them in from the elements.” (Detroit News, Oct. 29)

The CAIR leader said, “They have no linkage to terrorism nationally or internationally. What in the world does Islam have to do with these charges? Why is religion being brought into play?”

Resurrecting Cointelpro

Not only are the FBI and the corporate media utilizing the false construct of “Islamic extremism,” they are also attempting to draw a direct link between the revolutionary movements that emerged during the 1960s and the arrest of the Masjid Al-Haqq members and the death of Imam Abdullah.

Because of a close relationship between Imam Jamil Abdullah al-Amin, formerly known as H. Rap Brown, and Imam Abdullah during previous years, the role of the Student Nonviolent Coordinating Committee (SNCC) and the Black Panther Party (BPP) have been evoked in news coverage of the FBI and police raids. Imam Al-Amin first served as a field organizer for SNCC and later national chair of the civil rights and black power group in 1967-68.

Al-Amin, who is currently serving a life sentence in Georgia after being convicted in the death of a deputy sheriff and the wounding of another in Atlanta in 2000, also briefly held the position of Minister of Justice in the Black Panther Party during 1968. Imam Al-Amin served as SNCC chair during a period of extreme repression against the organization in 1967-68.

Al-Amin has always maintained his innocence in the deaths of the law-enforcement officers in Atlanta and for many years has sought to win an appeal of his case. Reports from the Georgia prison system where he is being held indicate that he has been harassed and placed in isolation on numerous occasions.

SNCC was partly blamed by the FBI and the corporate media during 1967-68 for the urban rebellions that erupted in more than 200 cities. The Black Panther Party was to suffer the brunt of the Counter Intelligence Program (Cointelpro) operations that were directed against the African-American community.

More than two dozen members of the BPP were killed between 1968 and 1971 when former FBI Director J. Edgar Hoover had labeled the organization as the most dangerous threat to the national security of the United States. Hundreds of Panthers and other revolutionaries of the time were arrested and railroaded through the courts. Many others were driven into exile abroad and forced underground inside the United States.

According to the FBI complaint, which consists of 45 pages of highly spurious allegations, Abdullah “calls his followers to an offensive jihad” and says they should “have a weapon and should not be scared to use their weapon when needed.”

Nonetheless, David Nu’man, who lives in Detroit and considered Imam Abdullah a friend, stresses that he is very skeptical about the claims made against the Islamic leader and his followers. “It doesn’t seem to be of his character.” (Detroit News, Oct. 29)

Ron Scott, one of the founding members of the Detroit chapter of the Black Panther Party in 1968, spoke to the Pan-African News Wire about the death of Imam Abdullah and the arrests of the Masjid Al-Haqq members.

Scott, now the spokesperson for the Detroit Coalition Against Police Brutality and a media host on the locally broadcast “For My People” television show, as well as the “Fighting for Justice” radio program aired every week, expressed disbelief at the allegations made against Abdullah and those arrested.

“This reflects a standard of repression that we have not seen in a long time,” Scott told the Pan-African News Wire on Oct. 29. “There should be an independent investigation into the circumstances surrounding the death of Imam Abdullah.”

The Michigan Emergency Committee Against War & Injustice (MECAWI) discussed the killing of Imam Abdullah at their weekly meeting on Oct. 28 in Detroit. The next day, in a telephone call to the offices of the Council of American-Islamic Relations, a MECAWI representative expressed the organization’s condolences and solidarity with the Islamic community.

MECAWI offered its support to any protest efforts geared towards seeking justice in the death of Imam Abdullah and the arrests of the other Muslim members of Masjid Al-Haqq. Walid, the executive director who took MECAWI’s call, expressed his appreciation for the sympathy and concern conveyed by the anti-war organization.

Backdrop to the death of Imam Abdullah

Since the Sept. 11, 2001, attacks on the World Trade Center and the Pentagon, repression against the Islamic, Middle-Eastern and South Asian communities in the U.S. has escalated at an alarming rate. A number of people have been attacked and even killed in racist violence.

Many more people from these communities have been imprisoned unjustly and deported. A number of charitable organizations have been taken into court for allegedly funding “terrorist” groups and some have been forced to shut down by the U.S. government.

Even the CAIR has been targeted by these governmental efforts. In Texas during 2007, members of an Islamic charity were put on trial for supposedly funding Hezbollah in Lebanon.

Conversion to the Islamic faith within the African-American community has been taking place at a phenomenal rate over the last few decades. The federal government has used both the scourge of anti-Islamic hysteria and racism to enhance the repressive apparatus in the United States. This pattern of surveillance, harassment and entrapment is utilized in a desperate attempt by Homeland Security and the Pentagon to build support for the ongoing wars against Iraq, Afghanistan and Pakistan.

In addition to these Middle-Eastern and Asian nations, the countries of Sudan and Somalia on the African continent, which are predominantly Muslim, have also been focal points for U.S. imperialist intervention over the last several years. Many of the developing nations that have been identified by the U.S. imperialists for destabilization and occupation have majority Muslim populations of people of color.

Consequently, anti-war, civil rights and human rights organizations should view the current wave of repression against the Islamic community as having both a domestic and foreign policy objective. Demonizing the Islamic community, whether the Muslims are of African, Middle-Eastern or Asian descent, provides a mechanism for the repressive apparatus of the state to justify the continuation and escalation of military involvement abroad.

At the same time, the increasing repression against the African-American, Islamic, Latino/a and other working class communities inside the United States is designed to hamper the ability of people to organize against the growing economic crisis that is disproportionately affecting the oppressed peoples inside the domestic confines of the country.

Nonetheless, the fight against this wave of repression can potentially bring together workers and the oppressed from broad sections of the United States into an alliance with the developing countries that are under increasing threat by U.S. imperialism.

GMAC seeking third bailout

GMAC seeking third bailout - report

U.S. Treasury likely to inject another $2.8 billion to $5.6 billion in troubled lender, Wall Street Journal says.

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GMAC Financial Services is seeking a third round of bailout funds from the U.S. Treasury Department, according to a report in the Wall Street Journal.

Talks over a fresh lifeline are at an advanced stage and the U.S. government could provide an additional $2.8 billion to $5.6 billion to the lender, the report said, citing people familiar with the matter.

The U.S. has already injected $13.4 billion in the lender since December 2008 and owns a 35.4% stake in the firm, which is the primary lender to customers of General Motors and Chrysler.

If GMAC receives the additional taxpayer money, it would likely be in the form of preferred stock, the Journal said.

GMAC provides financing for both General Motors (GM, Fortune 500) and Chrysler customers. The company, which is also a home mortgage lender, has been wracked by huge losses in recent quarters and hit hard by the decline in auto sales and turmoil in the housing market.

The company reported a net loss of $3.9 billion on revenue of $1 billion for its second quarter ended June 30. At that time, GMAC also said it had assets totaling $184 billion.

GMAC was once a major driver of General Motors' earnings before GM sold a majority stake to private equity firm Cerberus Capital Management LP and other investors in 2006.

Ohio Boy Given H1N1 Vaccine Against Mom's Wishes

Ohio Boy Given H1N1 Vaccine Against Mom's Wishes

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A furious Ohio mother says her 7-year-old son, who has had problems with medications, was vaccinated for swine flu at school against her wishes.

Kim Lutheran works as a nurse and says her son, Matthew, has had bad reactions to medicine. So, she says she signed for "no consent" on a vaccination form and then circled her intentions with a black marker to make things clear to the boy's public school in the Toledo suburb of Oregon.

Lutheran says she learned Matthew still received a shot on Monday. She says the local health department must be held accountable.

Deputy Health Commissioner Larry Vasko says his agency has responded by changing the consent forms, telling parents not to sign or return them if they do not want their children vaccinated.

Lutheran told the Toledo Blade that her son was sent back to his classroom after handing in his no consent form, only to sent back to the nurse's office a short time later where he was given the H1N1 Vaccine.

"He got sent back again by himself into strange room with these strange people," she told the newspaper. "Supposedly three people looked at this piece of paper before he went to the R.N. who gave him the immunization. ... He's 7. He didn't know."

Matthew did not have a reaction to the vaccine.

Dozens in Congress under ethics inquiry

Dozens in Congress under ethics inquiry


Document was found on file-sharing network

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House ethics investigators have been scrutinizing the activities of more than 30 lawmakers and several aides in inquiries about issues including defense lobbying and corporate influence peddling, according to a confidential House ethics committee report prepared in July.

The report appears to have been inadvertently placed on a publicly accessible computer network, and it was provided to The Washington Post by a source not connected to the congressional investigations. The committee said Thursday night that the document was released by a low-level staffer.

The ethics committee is one of the most secretive panels in Congress, and its members and staff members sign oaths not to disclose any activities related to its past or present investigations. Watchdog groups have accused the committee of not actively pursuing inquiries; the newly disclosed document indicates the panel is conducting far more investigations than it had revealed.

Shortly after 6 p.m. Thursday, the committee chairman, Zoe Lofgren (D-Calif.), interrupted a series of House votes to alert lawmakers about the breach. She cautioned that some of the panel's activities are preliminary and not a conclusive sign of inappropriate behavior.

"No inference should be made as to any member," she said.

Rep. Jo Bonner (Ala.), the committee's ranking Republican, said the breach was an isolated incident.

The 22-page "Committee on Standards Weekly Summary Report" gives brief summaries of ethics panel investigations of the conduct of 19 lawmakers and a few staff members. It also outlines the work of the new Office of Congressional Ethics, a quasi-independent body that initiates investigations and provides recommendations to the ethics committee. The document indicated that the office was reviewing the activities of 14 other lawmakers. Some were under review by both ethics bodies.

A broader inquiry

Ethics committee investigations are not uncommon. Most result in private letters that either exonerate or reprimand a member. In some rare instances, the censure is more severe.

Many of the broad outlines of the cases cited in the July document are known -- the committee announced over the summer that it was reviewing lawmakers with connections to the now-closed PMA Group, a lobbying firm. But the document indicates that the inquiry was broader than initially believed. It included a review of seven lawmakers on the House Appropriations defense subcommittee who have steered federal money to the firm's clients and have also received large campaign contributions.

The document also disclosed that:

-- Ethics committee staff members have interviewed House Ways and Means Chairman Charles B. Rangel (D-N.Y.) about one element of the complex investigation of his personal finances, as well as the lawmaker's top aide and his son. Rangel said he spoke with ethics committee staff members regarding a conference that he and four other members of the Congressional Black Caucus attended last November in St. Martin. The trip initially was said to be sponsored by a nonprofit foundation run by a newspaper. But the three-day event, at a luxury resort, was underwritten by major corporations such as Citigroup, Pfizer and AT&T. Rules passed in 2007, shortly after Democrats reclaimed the majority following a wave of corruption cases against Republicans, bar private companies from paying for congressional travel.

Rangel said he has not discussed other parts of the investigation of his finances with the committee. "I'm waiting for that, anxiously," he said.

-- The Justice Department has told the ethics panel to suspend a probe of Rep. Alan B. Mollohan (D-W.Va.), whose personal finances federal investigators began reviewing in early 2006 after complaints from a conservative group that he was not fully revealing his real estate holdings. There has been no public action on that inquiry for several years. But the department's request in early July to the committee suggests that the case continues to draw the attention of federal investigators, who often ask that the House and Senate ethics panels refrain from taking action against members whom the department is already investigating.

Mollohan said that he was not aware of any ongoing interest by the Justice Department in his case and that he and his attorneys have not heard from federal investigators. "The answer is no," he said.

-- The committee on June 9 authorized issuance of subpoenas to the Justice Department, the National Security Agency and the FBI for "certain intercepted communications" regarding Rep. Jane Harman (D-Calif.). As was reported earlier this year, Harman was heard in a 2005 conversation agreeing to an Israeli operative's request to try to obtain leniency for two pro-Israel lobbyists in exchange for the agent's help in lobbying House Speaker Nancy Pelosi (D-Calif.) to name her chairman of the intelligence committee. The department, a former U.S. official said, declined to respond to the subpoena.

Harman said that the ethics committee has not contacted her and that she has no knowledge that the subpoena was ever issued. "I don't believe that's true," she said. "As far as I'm concerned, this smear has been over for three years."

In June 2009, a Justice Department official wrote in a letter to an attorney for Harman that she was "neither a subject nor a target" of a criminal investigation.

Because of the secretive nature of the ethics committee, it was difficult to assess the current status of the investigations cited in the July document. The panel said Thursday, however, that it is ending a probe of Rep. Sam Graves (R-Mo.) after finding no ethical violations, and that it is investigating the financial connections of two California Democrats.

The committee did not detail the two newly disclosed investigations. However, according to the July document, Rep. Maxine Waters, a high-ranking member of the House Financial Services Committee, came under scrutiny because of activities involving OneUnited Bank of Massachusetts, in which her husband owns at least $250,000 in stock.

Waters arranged a September 2008 meeting at the Treasury Department where OneUnited executives asked for government money. In December, Treasury selected OneUnited as an early participant in the bank bailout program, injecting $12.1 million.

The other, Rep. Laura Richardson, may have failed to mention property, income and liabilities on financial disclosure forms.


The committee's review of investigations became available on file-sharing networks because of a junior staff member's use of the software while working from home, Lofgren and Bonner said in a statement issued Thursday night. The staffer was fired, a congressional aide said.

The committee "is taking all appropriate steps to deal with this issue," they said, noting that neither the committee nor the House's information systems were breached in any way.

"Peer-to-peer" technology has previously caused inadvertent breaches of sensitive financial, defense-related and personal data from government and commercial networks, and it is prohibited on House networks.

House administration rules require that if a lawmaker or staff member takes work home, "all users of House sensitive information must protect the confidentiality of sensitive information" from unauthorized disclosure.

Leo Wise, chief counsel for the Office of Congressional Ethics, declined to comment, citing office policy against confirming or denying the existence of investigations. A Justice Department spokeswoman also declined to comment, citing a similar policy.

Steelworkers Form Collaboration with Mondragon

Steelworkers Form Collaboration with Mondragon

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Steelworkers Form Collaboration with MONDRAGON, the
World's Largest Worker-Owned Cooperative

The United Steelworkers (USW) and MONDRAGON Internacional, S.A. today announced a framework agreement for collaboration in establishing MONDRAGON cooperatives in the manufacturing sector within the United States and Canada. The USW and MONDRAGON will work to establish manufacturing cooperatives that adapt collective bargaining principles to the MONDRAGON worker ownership model of "one worker, one vote."

"We see today's agreement as a historic first step towards making union co-ops a viable business model that can create good jobs, empower workers, and support communities in the United States and Canada," said USW International President Leo W. Gerard. "Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants. We need a new business model that invests in workers and invests in communities."

Josu Ugarte, President of MONDGRAGON Internacional added: "What we are announcing today represents a historic first—combining the world's largest industrial worker cooperative with one of the world's most progressive and forward-thinking manufacturing unions to work together so that our combined know-how and complimentary visions can transform manufacturing practices in North America."

Highlighting the differences between Employee Stock Ownership Plans (ESOPs) and union co-ops, Gerard said, "We have lots of experience with ESOPs, but have found that it doesn't take long for the Wall Street types to push workers aside and take back control. We see Mondragon's cooperative model with รข€˜one worker, one vote' ownership as a means to re-empower workers and make business accountable to Main Street instead of Wall Street."

Both the USW and MONDRAGON emphasized the shared values that will drive this collaboration. Mr. Ugarte commented, "We feel inspired to take this step based on our common set of values with the Steelworkers who have proved time and again that the future belongs to those who connect vision and values to people and put all three first. We are excited about working with Mondragon because of our shared values, that work should empower workers and sustain families and communities," Gerard added.

In the coming months, the USW and MONDRAGON will seek opportunities to implement this union co-op hybrid approach by sharing the common values put forward by the USW and MONDGRAGON and by operating in similar manufacturing segments in which both the USW and MONDRAGON already participate.

The full text of the Agreement is available here.


The MONDRAGON Corporation mission is to produce and sell goods and provide services and distribution using democratic methods in its organizational structure and distributing the assets generated for the benefit of its members and the community, as a measure of solidarity. MONDRAGON began its activities in 1956 in the Basque town of Mondragon by a rural village priest with a transformative vision who believed in the values of worker collaboration and working hard to reach for and realize the common good.

Today, with approximately 100,000 cooperative members in over 260 cooperative enterprises present in more than forty countries; MONDRAGON Corporation is committed to the creation of greater social wealth through customer satisfaction, job creation, technological and business development, continuous improvement, the promotion of education, and respect for the environment. In 2008, MONDRAGON Corporation reached annual sales of more than sixteen billion euros with its own cooperative university, cooperative bank, and cooperative social security mutual and is ranked as the top Basque business group, the seventh largest in Spain, and the world's largest industrial workers cooperative.

About the USW:

The USW is North America's largest industrial union representing 1.2 million active and retired members in a diverse range of industries.

GDP figure masks deepening economic crisis

GDP figure masks deepening economic crisis

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The Commerce Department on Thursday reported that the US gross domestic product (GDP) grew 3.5 percent on an annualized basis in the third quarter (July through September), breaking a string of four consecutive quarters of negative growth.

President Barack Obama hailed the report as “welcome news” and “an affirmation that the recession is abating and the steps we’ve taken have made a difference.” Wall Street rallied on the report. The Dow gained 200 points, reversing a week of losses and nearing the 10,000 mark once again.

The reported increase in the growth rate topped most forecasts. Economists surveyed by Dow Jones Newswires had forecast 3.2 percent GDP growth for the quarter.

Many media outlets and economists were quick to declare that the GDP rise meant the recession which officially began in December of 2007 was over.

However, as a number of analysts pointed out, the scale of the increase provided a distorted picture of the real state of the economy, which remains dominated by rising unemployment, falling wages and near-record low rates of factory usage.

Nearly 63 percent (2.2 percent) of the 3.5 percent increase in GDP was due to temporary government tax credits to consumers that have either expired or are set to expire next month. Federal outlays added another 0.6 percent to growth.

More generally, the GDP rise was the inevitable result of an unprecedented funneling of public funds into the financial system, totaling at least $11 trillion to date, according to most estimates. This diversion of resources to the financial elite has resulted in vast and unsustainable budget deficits and precipitated a sharp decline of the dollar on world currency markets, undermining the status of the US currency as the world reserve and trading currency. The outcome is a short-term boost in growth—one that is still insufficient to bring down the jobless rate—which paves the way for even greater financial and economic convulsions in the coming months.

The temporary spurt in economic growth has been carried out at the expense of the working class. Corporate profits have rebounded, but almost entirely on the basis of deep and widespread job cuts and reductions in wages and hours of work for those able to hold onto their jobs. Profits at some of the major Wall Street banks that received tens of billions of dollars in government cash as well as many billions more in cheap loans, debt guarantees and other subsidies have also surged. The big banks are leveraging their government handouts to return to the speculative practices that precipitated last year’s financial crash, while awarding their executives and traders record bonuses and pay packages.

A vast redistribution of wealth from the bottom to the top, combined with intensified exploitation of the work force, has helped fuel an upsurge on the stock market. The S&P 500 stock index has risen by 60 percent since its low point last March.

The GDP figure reflects, in short, a fragile recovery for the ruling elite based on growing economic distress and social misery for working people.

Fully 1.7 percentage points, or nearly half, of the 3.5 percent growth figure came from motor vehicle output—the result of last summer’s “cash for clunkers” subsidy to car buyers, which expired at the end of August. That spurt in auto production was reversed in September, which saw a 35 percent decline in vehicle sales.

The government’s $8,000 credit for first-time home buyers produced a 23.4 percent jump in homebuilding, which boosted GDP for the quarter by another 0.5 percent. This program is set to expire on November 30, raising fears of another plunge in home sales and prices.

One measure of the ongoing crisis underlying the GDP figure is the fact that business spending reduced the growth rate by 0.24 percentage points. Business outlays fell by 2.5 percent in the third quarter.

Another is the Labor Department report on initial jobless claims issued the same day as the Commerce Department’s GDP estimate. The number of US workers filing new claims fell by only 1,000, less than the 6,000 predicted by economists. The total for the week ended October 24 was 530,000, far higher than the 325,000 figure considered to be in line with a healthy economy.

This followed the previous week’s 11,000 increase in initial jobless claims. The number of continuing claims—those drawn by workers for more than one week—remained at the extremely high level of 5,800,000 for the week ended October 17.

These figures presage a further rise in the official jobless rate from the current 9.8 percent to 10 percent and beyond. The real unemployment rate—taking in account those who have given up looking for work and those forced to work part-time—is at 17 percent, embracing 30 million Americans.

Mass unemployment is being used by the Obama administration as a weapon in its drive to “reduce consumption” and boost US exports on the basis of a falling dollar and low wages.

Average weekly earnings of production workers rose by only 0.7 percent in September, as the average number of weekly hours worked fell to a record low of 33 hours. This represents the lowest annualized weekly earnings growth since such data began to be tracked in 1964—nearly half a century ago.

Since hitting a recent peak in December 2008, real average weekly earnings have fallen by 1.9 percent, according to the Bureau of Labor Statistics.

Factory use was at 67.5 percent in September, just above its all-time low and well off its 80 percent average.

This downward spiral in workers’ wages and income is combined with a sharp increase in productivity, producing conditions for a sharp increase in the rate of corporate profit. As USA Today gloated on Thursday:

“Corporate earnings are blowing away analysts’ estimates by the widest margin ever.… Half of the companies in the Standard & Poor’s 500 index have reported, and a staggering 81 percent have topped expectations, says Thomson Reuters.”

Noting that these profits have come despite a 10 percent decline in third quarter revenues, the newspaper wrote, “Rampant layoffs and assaults on corporate expenses are showing real benefits.”

Meanwhile, mortgage defaults and home foreclosures are continuing to rise, increasingly effecting middle- and upper-income households hit by long-term unemployment. Failures of small and midsize banks are increasing, and state and local governments are dealing with budget shortfalls by slashing services, imposing unpaid furloughs and cutting jobs.

Just this week, major corporate layoffs were announced by Caterpillar, US Airways, American Airlines and Shell Oil. Milwaukee County announced plans to shed up to 200 jobs.

The banks, rather than using their government handouts to expand lending to businesses and consumers, are doing the opposite. The New York Times noted Thursday that consumer credit from commercial banks in August was some $45 billion less than at the end of last year. As for business financing, banks’ outstanding commercial and industrial loans fell to $1.411 trillion in September, $170 billion less than a year earlier.

The social crisis is reflected in a sharp drop in consumer confidence, according to a report released this week by the Conference Board, a private research group. The Conference Board’s latest index of consumer confidence fell from 53.4 in September to 47.7 in October, the biggest drop in eight months. Even more dire was the fall in sentiment about “current conditions,” which fell to a 26-year low.

In a further sign of deepening crisis, the Commerce Department on Wednesday released a report showing that sales of new homes in the US unexpectedly fell in September for the first time in half a year, as buyers opted for bargains on existing and foreclosed homes. New home sales fell by 3.6 percent from August to September.

The drop in new home sales, combined with the expiration of the tax credit for first-time home buyers and an expected rise in foreclosures, paves the way for a renewed decline in home prices, which are already down 11.3 percent from a year ago.

Despite the Obama administration’s touting of the new GDP figure, it has acknowledged that the official unemployment rate will breach 10 percent and still be at least 9.6 percent by the end of 2010. Last week, Christina Romer, the head of Obama’s Council of Economic Advisers, told Congress that the main growth impact of last February’s $787 billion stimulus package has already been spent.

Most economic forecasters are predicting GDP growth of 2.5 to 3 percent through most of next year. Since it takes 2.5 percent just to keep employment steady, such a growth rate would do little to reduce shrink the unemployment numbers. “You need four to five percent GDP growth to get job growth,” Romer said on Thursday.

Nevertheless, the Obama administration is opposing a new stimulus package, and preparing to introduce plans for austerity measures to reduce the deficit, including cuts in Medicare, Medicaid and Social Security.

Obama signs bills for record Pentagon, Homeland Security spending

Obama signs bills for record Pentagon, Homeland Security spending

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In a ceremony Wednesday, US President Barack Obama signed legislation authorizing the largest ever military budget, a gargantuan $680 billion for the Pentagon, including $130 billion for the wars in Iraq and Afghanistan. On Thursday, he signed a spending bill funneling another $44 billion into the Department of Homeland Security, to strengthen the apparatus of state repression within the United States.

The back-to-back bill signings are a clear demonstration that Obama is extending and intensifying the program of militarism and attacks on democratic rights for which the Bush administration was deservedly hated, in the United States and worldwide.

Each of the bills contained provisions aimed at further restricting democratic rights. The Pentagon budget bill authorizes the use of military tribunals to try prisoners at Guantanamo Bay and others seized illegally, either overseas or within the US, as part of the “war on terror.” It also bars the release of Guantanamo prisoners—even those found completely innocent—into the United States. It prohibits bringing Guantanamo prisoners to trial on US soil without a 45-day advance notice to Congress.

The Department of Homeland Security appropriations bill effectively prohibits the release of photographs taken by US military personnel during torture sessions at US bases in Iraq, Afghanistan and Guantanamo Bay. It exempts these photos from the provisions of the Freedom of Information Act, under which the American Civil Liberties Union and several media outlets have filed suit in federal court. The exemption would apply, not just to the photos sought by the ACLU, but to any photos taken between September 11, 2001 and January 22, 2009 to which the Pentagon has objections.

Obama signed the record Pentagon budget less than three weeks after receiving the Nobel Peace Prize. He then traveled to Dover Air Force Base in Delaware to be photographed late Wednesday night standing at attention as the coffins of 18 US military personnel killed in Afghanistan in the last few days arrived in the United States.

A decision on how many additional US troops will be sent to Afghanistan is expected late next week, likely in the interval between the runoff presidential election in Afghanistan November 7 and Obama’s departure for a lengthy trip to Asian capitals November 11. Obama ordered 21,000 more troops to the war last March, and the top US commander in Afghanistan, General Stanley McChrystal, has requested an even greater number this fall to escalate the war.

The $680 billion authorized for the Pentagon in fiscal year 2010 is an increase of about 4 percent over the $654 billion authorized for fiscal year 2009, despite the pledged drawdown of US forces deployed in Iraq. The number of US troops in Iraq is projected to fall from 120,000 today to about 50,000 by September 2010. If the drawdown is significantly slower, or the war in Afghanistan escalates rapidly, the Obama administration will request a supplemental appropriations bill that could take total military spending beyond the highest level reached under George W. Bush.

At the signing ceremony, Obama singled out defense secretary Robert Gates, a holdover from Bush, for special praise, declaring, “this effort would not have been possible without an extraordinary secretary of defense…on behalf of the American people, I want to thank you, Bob, for your extraordinary efforts.”

The Pentagon bill includes a 3.4 percent pay raise for all military personnel, and increases troop levels by 55,000, to a total of 1,425,000 in the US armed forces. The military buildup had overwhelming bipartisan support, with all but one Senate Democrat backing the legislation, while some Republicans opposed because of the unrelated gay rights provision that was attached to the bill.

The US media paid relatively little attention to the bill’s passage, or to the perfunctory, rubber-stamp character of the congressional debate. Absurdly, the New York Times headlined its report on Obama’s signing of the largest-ever military spending bill, “Victory for Obama Over Military Lobby,” claiming that the deletion of a few big-ticket weapons systems, notably the F-22 fighter jet, represented “reform.”

The combined total of $724 billion for war and repression demonstrates the real priorities of the Obama administration, and the American ruling elite as a whole. At that rate, the Pentagon and DHS will spend more in 18 months than the entire cost of Obama’s so-called health care reform. Two months of Pentagon/DHS spending would cover the budget deficits of all 50 states.

The appropriations bill for the Department of Homeland Security includes a raft of reactionary provisions:

  • Continued funding for the next three years of the E-Verify program, requiring employers to check the immigration status of workers against a federal database.
  • Funding a new program to monitor visitor exits from the United States, in addition to the current system of recording entries.
  • A 27 percent increase in cybersecurity spending, to $397 million.
  • $800 million for security measures along the US-Mexico border.
  • $1.5 billion to accelerate deportation of immigrants facing criminal charges.

One component of the Pentagon authorization bill is the Military Commissions Act of 2009, which retains the military tribunals established by the Bush administration with a few cosmetic changes, such as prohibiting the use of prisoner testimony derived from torture. Administration lobbyists successfully watered down more restrictive provisions adopted in the House version of the bill earlier this month.

A Department of Justice spokesman told Time magazine that the military commissions would be a “viable option” for certain Guantanamo prisoners. White House officials have already made clear that they will not meet the January 20, 2010 deadline for emptying Guantanamo, set by Obama amid much fanfare when he took office.

Obama’s cynical attitude toward democratic rights was on display after the signing ceremony for the Pentagon bill. He hailed the portion of the bill that extends federal hate crimes laws to include violence against gays and lesbians, meeting with the parents of Matthew Shepard, the young gay man beaten to death in Wyoming in 1998.

The next day, the Obama administration moved quickly to enforce the prohibition on the release of military torture photos. Solicitor General Elena Kagan sent a letter Thursday to the Supreme Court, apprising it of the legislation and declaring that she would file a supplemental brief on its effect on the ongoing ACLU lawsuit before the Court’s conference November 6.