Saturday, November 7, 2009

The Pentagon budget: largest ever and growing

The Pentagon budget: largest ever and growing

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On Oct. 28, President Barack Obama signed the 2010 Defense Authorization Act, the largest military budget in U.S. history.

It is not only the world’s largest military budget but is larger than the military expenditures of the whole rest of the world combined. And it is growing nonstop. The 2010 military budget—which doesn’t even cover many war-related expenditures—is listed as $680 billion. In 2009 it was $651 billion and in 2000 was $280 billion. It has more than doubled in 10 years.

What a contrast to the issue of health care.

The U.S. Congress has been debating a basic health care plan—which every other industrialized country in the world has in some form—for more than six months. There has been intense insurance company lobbying, right-wing threats, and dire warnings that a health care plan must not add one dime to the deficit.

Yet in the midst of this life-and-death debate on medical care for millions of working and poor people who have no health coverage, a gargantuan subsidy to the largest U.S. corporations for military contracts and weapons systems—a real deficit-breaker—is passed with barely any discussion and hardly a news article.

Physicians for a National Health Program estimates that a universal, comprehensive single-payer health plan would cost $350 billion a year, which would actually be the amount saved through the elimination of all the administrative costs in the current private health care system—a system that leaves out almost 50 million people.

Compare this to just the cost overruns each year in the military budget. Even President Obama on signing the Pentagon budget said, “The Government Accountability Office, the GAO, has looked into 96 major defense projects from the last year, and found cost overruns that totaled $296 billion.” (, Oct. 28)

Bernard Madoff’s $50-billion Ponzi scheme, supposedly the biggest rip-off in history, pales in comparison. Why is there no criminal inquiry into this multibillion-dollar theft? Where are the congressional hearings or media hysteria about $296 billion in cost overruns? Why are the CEOs of the corporations not brought into court in handcuffs?

The cost overruns are an integral part of the military subsidy to the largest U.S. corporations. They are treated as business as usual. Regardless of the party in office, the Pentagon budget grows, the cost overruns grow and the proportion of domestic spending shrinks.

Addicted to war

This year’s military budget is only the latest example of how the U.S. economy is kept afloat by artificial means. Decades of constantly reviving the capitalist economy through the stimulus of war spending has created an addiction to militarism that U.S. corporations can’t do without. But it is no longer large enough to solve the capitalist problem of overproduction.

The justification given for this annual multibillion-dollar shot in the arm was that it would help to cushion or totally avoid a capitalist recession and could curb unemployment. But as Workers World Party founder Sam Marcy warned in 1980 in “Generals Over the White House,” over a protracted period more and more of this stimulant is needed. Eventually it turns into its opposite and becomes a massive depressant that sickens and rots the entire society.

The root of the problem is that as technology becomes more productive, workers get a smaller and smaller share of what they produce. The U.S. economy is more and more dependent on the stimulant of superprofits and multibillion-dollar military cost overruns to soak up a larger and larger share of what is produced. This is an essential part of the constant redistribution of wealth away from the workers and into the pockets of the superrich.

According to the Center for Arms Control and Non-Proliferation, U.S. military spending is now significantly more, in 2009 inflation-adjusted dollars, than it was during the peak years of the Korean War (1952: $604 billion), the Vietnam War (1968: $513 billion) or the 1980s Reagan-era military buildup (1985: $556 billion). Yet it is no longer enough to keep the U.S. economy afloat.

Even forcing oil-rich countries dependent on the U.S. to become debtor nations with endless weapons purchases can’t solve the problem. More than two-thirds of all weapons sold globally in 2008 were from U.S. military companies. (Reuters, Sept. 6)

While a huge military program was able in the 1930s to pull the U.S. economy out of a devastating collapse, over a long period this artificial stimulus undermines capitalist processes.

Economist Seymour Melman, in books such as “Pentagon Capitalism,” “Profits without Production” and “The Permanent War Economy: American Capitalism in Decline,” warned of the deterioration of the U.S. economy and the living standards of millions.

Melman and other progressive economists argued for a rational “economic conversion” or the transition from military to civilian production by military industries. They explained how one B-1 bomber or Trident submarine could pay the salaries of thousands of teachers, provide scholarships or day care or rebuild roads. Charts and graphs showed that the military budget employs far fewer workers than the same funds spent on civilian needs.

These were all good and reasonable ideas, except that capitalism is not rational. In its insatiable drive to maximize profits it will always choose immediate superprofit handouts over even the best interests of its own long-term survival.

No “peace dividend”

The high expectations, after the end of the Cold War and the collapse of the Soviet Union, that billions of dollars could now be turned toward a “peace dividend” crashed against the continued astronomical growth of the Pentagon budget. This grim reality has so demoralized and overwhelmed progressive economists that today almost no attention is paid to “economic conversion” or the role of militarism in the capitalist economy, even though it is far larger today than at the highest levels of the Cold War.

The multibillion-dollar annual military subsidy that bourgeois economists have relied on since the Great Depression to prime the pump and begin again the cycle of capitalist expansion is no longer enough.

Once corporations became dependent on multibillion-dollar handouts, their appetite became insatiable. In 2009, in an effort to stave off a meltdown of the global capitalist economy, more than $700 billion was handed over to the largest banks. And that was just the beginning. The bailout of the banks is now in the trillions of dollars.

Even $600 to $700 billion a year in military spending can no longer restart the capitalist economy or generate prosperity. Yet corporate America can’t do without it.

The military budget has grown so large that it now threatens to overwhelm and devour all social funding. Its sheer weight is squeezing out funding for every human need. U.S. cities are collapsing. The infrastructure of bridges, roads, dams, canals and tunnels is disintegrating. Twenty-five percent of U.S drinking water is considered “poor.” Unemployment is officially reaching 10 percent and in reality is double that. Black and Latino/a youth unemployment is more than 50 percent. Fourteen million children in the U.S. are living in households below the poverty level.

Half of military costs are hidden

The announced 2010 military budget of $680 billion is really only about half of the annual cost of U.S. military expenditures.

These expenditures are so large that there is a concerted effort to hide many military expenses in other budget items. The War Resisters League annual analysis listed the real 2009 U.S. military expenses at $1,449 billion, not the official budget of $651 billion. Wikipedia, citing several different sources, came up with a total military budget of $1,144 billion. Regardless of who is counting, it is beyond dispute that the military budget actually exceeds $1 trillion a year.

The National Priorities Project, the Center for Defense Information and the Center for Arms Control and Non-Proliferation analyze and expose many hidden military expenses tucked into other parts of the total U.S. budget.

For example, veterans’ benefits totaling $91 billion are not included in the Pentagon budget. Military pensions totaling $48 billion are stuck into the Treasury Department budget. The Energy Department hides $18 billion in nuclear weapons programs in its budget. The $38 billion financing of foreign arms sales is included in the State Department budget. One of the largest hidden items is the interest on debt incurred in past wars, which totals between $237 billion and $390 billion. This is really an endless subsidy to the banks, which are intimately linked to the military industries.

Every part of these bloated budgets is expected to grow by 5 to 10 percent a year, while federal funding to states and cities is shrinking by 10 to 15 percent annually, leading to deficit crises.

According to the Office of Management and Budget, 55 percent of the total 2010 U.S. budget will go to the military. More than half! Meanwhile, federal block grants to states and cities for vital human services—schools, teacher training, home-care programs, school lunches, basic infrastructure maintenance for drinking water, sewage treatment, bridges, tunnels and roads—are shrinking.

Militarism breeds repression

The most dangerous aspect of the growth of the military is the insidious penetration of its political influence into all areas of society. It is the institution that is the most removed from popular control and the most driven to military adventure and repression. Retired generals rotate into corporate boardrooms, become talking heads in major media outlets, and high-paid lobbyists, consultants and politicians.

It is not a coincidence that along with having the world’s largest military machine, the U.S. has the world’s largest prison population. The prison-industrial complex is the only growth industry. According to the U.S. Justice Department’s Bureau of Justice Statistics, more than 7.3 million adults were on probation or parole or incarcerated in 2007. More than 70 percent of the incarcerated are Black, Latino/a, Native and other people of color. Black adults are four times as likely as whites to be imprisoned.

Just as in the military, with its hundreds of thousands of contractors and mercenaries, the drive to maximize profits has led to the growing privatization of the prison system.

The number of prisoners has grown relentlessly. There are 2.5 times more people in the prison system today than 25 years ago. As U.S. capitalism is less and less able to provide jobs, job training or education, the only solutions offered are prisons or the military, wreaking havoc on individuals, families and communities.

The weight of the military pushes the repressive state apparatus into every part of society. There is an enormous growth of police of every kind and countless police and intelligence agencies.

The budget for 16 U.S. spy agencies reached $49.8 billion in fiscal year 2009; 80 percent of these secret agencies are arms of the Pentagon. (Associated Press, Oct. 30) In 1998 this expense was $26.7 billion. But these top secret agencies are not included in the military budget. Nor are the repressive agencies of immigration and border control.

U.S. armed forces are stationed at more than 820 military installations around the world. This doesn’t count hundreds of leased bases and secret listening posts and many hundreds of ships and submarines.

But the more the military machine grows, the less it can control its world empire because it offers no solutions and no improvements in living standards. Pentagon high-tech weapons can read a license plate on a car from a surveillance satellite; their night vision goggles can penetrate the dark; and their drones can incinerate an isolated village. But they are unable to provide potable water, schools or stability to the nations attacked.

Despite all the Pentagon’s fantastic high-tech weapons, the U.S. geopolitical position is slipping year after year. Regardless of its massive firepower and its state-of-the-art weaponry, U.S. imperialism has been unable to reconquer the world markets and position of U.S. finance capital. Its economy and its industries have been dragged down by the sheer weight of maintaining its military machine. And as the resistance in Iraq and Afghanistan has shown, that machine cannot match the determination of people to control their own future.

As the mighty U.S. capitalist economy is able to offer less and less to working people here in the U.S., that level of determined resistance is sure to take root here as well.

Unemployment Rate Jumps to 26-Year High

U.S. Economy: Unemployment Rate Jumps to 26-Year High

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The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, casting a pall over the prospects for a sustained recovery and risking further erosion of President Barack Obama’s popularity.

Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed today in Washington. The jobless rate rose from 9.8 percent in September. Factory payrolls dropped by the most in four months, and the average workweek held at a record low.

Treasury two-year notes rose on bets the Federal Reserve is more likely to maintain its pledge to keep interest rates near zero. The figures prompted Obama, who signed a bill today extending jobless benefits, to promise fresh measures to help put some of the 15.7 million unemployed Americans back to work.

“We will certainly have very bad payroll numbers in November and December,” said Harm Bandholz, an economist at UniCredit Global Research in New York, whose forecast for a 10.1 percent unemployment rate matched the highest among economists surveyed by Bloomberg. “We don’t foresee businesses going on a hiring spree anytime soon.”

Two-year note yields fell four basis points, or 0.03 percentage point, to 0.84 percent at 4:45 p.m. in New York. The yield touched 0.83 percent, the lowest since Oct. 2. The Standard & Poor’s 500 Stock Index closed up 0.3% to 1069.30 after falling as much as 0.7 percent.

Steeper Drop

Payrolls were forecast to drop 175,000 after an initially reported 263,000 decline for September, according to the median estimate of 84 economists surveyed by Bloomberg News. The jobless rate was projected to rise to 9.9 percent.

Obama signed into law a measure extending a tax credit of up to $8,000 for homebuyers and benefits for unemployed workers, and he promised to pursue further measures to create jobs.

“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and business to make buildings more energy efficient,” additional tax cuts, and more steps to ease the flow of credit to small business and promote exports, he said today at the White House.

Jason McKinnon, 34, a San Francisco resident, is among those who could benefit from the measure Obama signed today to add up to 20 additional weeks of unemployment insurance.

Expired Benefits

McKinnon lost his $18-an-hour job in April as a video-game software analyst, and last month his benefits ran out. He said he has sent out hundreds of resumes to companies such as Facebook Inc. and Sony Corp., received about 50 responses and no offers. “I’m feeling like there’s less jobs out there and more qualified people,” he said in a telephone interview. Now he plans to take night classes at City College of San Francisco to improve his chances.

For congressional Democrats facing challengers in midterm elections next year, the continuing erosion in the job market puts them at political risk. Voters on Nov. 3 overwhelmingly cited unease with the economy and worries about jobs as they ousted the Democratic governor of New Jersey and installed a Republican governor in Virginia after eight years of Democratic rule there. Obama carried both states in 2008.

The entire House of Representatives, 34 senators and 37 governors are up for re-election in 2010.

Since Obama took office in January, the economy has lost 3.49 million jobs. The U.S. economy has lost 7.3 million jobs since the recession began in December 2007, when the unemployment rate stood at 4.9 percent.

The administration said last week that the $787 billion stimulus package plan signed into law in February was directly responsible for saving or creating about 640,000 jobs.

Under-Employment Record

The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 17.5 percent from 17 percent in September, today’s report showed.

“We’ve got lots of people just giving up and leaving the labor force,” said Julia Coronado, a former Fed economist who now works at BNP Paribas in New York. “Consumer incomes are under pressure, and that raises questions about the sustainability of the improvement we’ve seen in consumer spending.”

Some people are pulling up stakes and moving to where they think the job prospects may be brighter. Beth Rubin, 41, lost her position as a receptionist at the law firm Goldstein Bershad & Fried, PC in Southfield, Michigan, in October. The resident of Ferndale, a Detroit suburb, is now selling her furniture and moving to Georgia. “I’m looking to get a job in Georgia, and I don’t know about the job market there, but I can tell you Michigan is horrible,” Rubin said in a telephone interview.

Average Work Week

The average work week held at a record low of 33 hours in October, while average weekly earnings rose to $617.76 from $616.11 a month earlier. Workers’ average hourly earnings were 2.4 percent higher than October 2008, the smallest gain since 2004.

Some companies are cutting payrolls amid concern spending will cool as government-assistance programs wane. The New Brunswick, New Jersey-based Johnson & Johnson, the world’s largest health-products company, said Nov. 3 it will shrink its workforce by as much as 7,000 workers.

Factory payrolls dropped 61,000 after decreasing 45,000 in the prior month, today’s report showed. The median forecast by economists called for a drop of 42,000. The decline included a gain of 4,600 jobs in auto manufacturing and parts industries.

Auto Sales

Sales of cars and light trucks rebounded last month after plunging in the wake of the government’s so-called cash-for- clunkers incentive plan. Vehicles sold at a 10.5 million annual pace in October, up from a 9.2 million rate in September.

Inventories at U.S. wholesalers dropped in September for a 13th consecutive month, a separate report today from the Commerce Department showed, clearing the way for a pickup in orders as sales improve.

Today’s report contained some bright spots. Revisions added 91,000 to payroll figures previously reported for September and August, and the number of temporary workers rose by 34,000, the third consecutive gain.

Payrolls at temporary-help agencies often turn up before total employment because companies are not certain increases in demand will be sustainable enough to warrant the expense of taking on permanent staff.

‘Very Ugly’

“The rise in the unemployment rate is very ugly,” Ethan Harris, head of North America economic research at BofA Merrill Lynch Global Research, said in an interview with Bloomberg Television in New York.

The U.S. economy expanded last quarter for the first time in a year, growing at a 3.5 percent pace as government incentives spurred consumers to spend more on homes and automobiles.

Some companies are gaining confidence. Deere & Co., the world’s largest maker of agricultural equipment, said last week it’s recalling 452 workers, the majority of manufacturing employees dismissed earlier this year at a factory in Iowa.

Fed officials met in Washington this week and signaled that a return to economic growth alone won’t result in higher interest rates. Economist Joseph LaVorgna of Deutsche Bank Securities Inc. in New York said in a note to clients that the central bank “has never raised rates with unemployment rising.”

House Shames Itself on Goldstone Report

House Shames Itself on Goldstone Report

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Shame on the House of Representatives, and on the Democratic leadership of the House, for pushing through a resolution once again blindly taking the side of Israeli aggression.

I’m referring to the vote on Tuesday, by a lopsided 344-to-36 margin*, to condemn the Goldstone report on Gaza.

That report, by South African jurist Richard Goldstone for the UN, showed that both Israel and Hamas had committed war crimes in the lead-up to and during Israel’s invasion of Gaza almost a year ago. (To read the executive summary, click here)

It noted that Israel deliberately attacked civilian targets, and did not take sufficient action to minimize civilian loss of life. For instance, it found that Israel even refused to allow the evacuation of the injured by ambulance.

The report also condemned Hamas for its rocket attacks into Israel, which the report said were designed to create terror.

Even as the U.N. was about to consider the report, the House measure called it “irredeemably biased and unworthy of further consideration or legitimacy.” And it urged the Obama Administration to “strongly and unequivocally oppose” any discussion of it at the UN.

This reflexive attitude that Israel can do no wrong is morally bankrupt and exceedingly unhelpful in resolving, in a just manner, the conflict between Israel and Palestinians.

Dennis Kucinich had it right when he denounced the House majority for going along with this. His statement is so powerful that I’m excerpting it at length here.

“Today we journey from Operation Cast Lead to Operation Cast Doubt,” he said on the House floor on Tuesday. “Almost as serious as committing war crimes is covering up war crimes, pretending that war crimes were never committed and did not exist.

“Because behind every such deception is the nullification of humanity, the destruction of human dignity, the annihilation of the human spirit, the triumph of Orwellian thinking, the eternal prison of the dark heart of the totalitarian.

“The resolution before us today, which would reject all attempts of the Goldstone Report to fix responsibility of all parties to war crimes, including both Hamas and Israel, may as well be called the ‘Down is Up, Night is Day, Wrong is Right: resolution.’ . . .

"How can we ever expect there to be peace in the Middle East if we tacitly approve of violations of international law and international human rights, if we look the other way, or if we close our eyes to the heartbreak of people on both sides by white-washing a legitimate investigation?

"How can we protect the people of Israel from existential threats if we hold no concern for the protection of the Palestinians, for their physical security, their right to land, their right to their own homes, their right to water, their right to sustenance, their right to freedom of movement, their right to human security of jobs, education and health care?

"We will have peace only when the plight of both Palestinians and Israelis is brought before this House and given equal consideration in recognition of that principle that all people on this planet have a right to survive and thrive, and it is our responsibility, our duty to see that no individual, no group, no people are barred from this humble human claim."

Until most members of Congress show some respect for international law and some humanity toward Palestinians, there’s no reason for Israel to.

*Nays: Baird • Baldwin • Blumenauer • Boustany • Capps • Carson (IN) • Clarke • Clay • Davis (KY) • Dingell • Doggett • Edwards (MD) • Ellison • Filner • Grijalva • Hinchey • Johnson, E. B. • Kilpatrick • Kucinich • Lee (CA) • Lynch • McCollum • McDermott • McGovern • Miller • George • Moran (VA) • Olver • Pastor (AZ) • Paul • Price (NC) • Rahall • Snyder • Stark • Waters • Watt • Woolsey

Present: Becerra • Cooper • Dahlkemper • DeFazio • Delahunt • Duncan • Eshoo • Farr • Heinrich • Hirono • Honda • Johnson (GA) • Jones • Kaptur • Loebsack • Lofgren, Zoe • Luj├án • Obey • Speier • Tierney • Welch •Wu

TARP on Steroids

TARP on Steroids

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I recall that September day like it was yesterday--the explosion so stunning, so memorable. It wasn't 9/11/01, it was 9/29/08--a moment when a rare blast of populist democracy briefly singed the economic terrorists who hold the Capitol hostage.

It had been a dark and stormy month of financial collapse, culminating in an attempted power grab. Pushed by his fellow Wall Street Ponzi schemers, Treasury Secretary Henry Paulson--a former Goldman Sachs CEO--was threatening Armageddon unless Congress ratified his pamphlet-sized decree for a no-strings-attached bank bailout. The straightforward proposal, backed by President George W. Bush and President-to-be Barack Obama, would have turned Paulson into King Henry--a despot allowed to autonomously dole out $700 billion to any of his business cronies.

This was too outrageous even for a rubber-stamp Congress that had long been ceding power to both the executive branch and the corporate boardroom. And so rank-and-file House Democrats and Republicans, backed by an angry public, overrode their leaders and voted down the measure.

Admittedly, the conflagration was brief. After a few days of industry lobbying, the House ultimately passed the Troubled Assets Relief Program (TARP) bailout--but one with at least some mild restrictions. For a time, 9/29's fleeting blast of defiance appeared to establish a maximum limit to robbery and presidential authoritarianism.

For a time.

Today, the episode--if considered at all in Washington--seems merely to have set minimum standards for chicanery. As evidenced by two little-noticed sections of the Obama administration's Wall Street "reform" bill, presidents and their bank benefactors are back to thinking they can pilfer whatever they want--only now they have learned to camouflage their demands by burying them in the esoterica of lengthier bills.

Finding this latest giveaway means digging all the way down to sections 1109 and 1604 of the White House's mammoth proposal. These passages look like typical legislative asterisks--perfunctory "oh, by the ways" inserted by some overeager law school intern in the Treasury Department's basement as a matter of meaningless parliamentary etiquette.

They are anything but.

At a recent hearing, Rep. Brad Sherman, D-Calif., called the language "TARP on steroids," noting the provisions would deliberately let the executive branch enact even bigger, more unregulated bailouts than ever--and by unilateral fiat.

Whereas the original TARP included some oversight language and power to limit Wall Street bonuses, TARP on Steroids includes no specific oversight or executive pay constraints. Whereas TARP permitted the government to underwrite both small and large banks, TARP on Steroids allows taxpayer cash to go only to the behemoths (which, not coincidentally, tend to make the biggest campaign contributions). And whereas TARP limited the Treasury Secretary's check-writing authority to two years and $700 billion, TARP on Steroids would let him spend as much as he wants for as long as he wants.

This last point is what poker players call "the tell"--the inadvertent tip exposing a scam. Treasury Secretary Tim Geithner's tell came when he publicly said the Obama administration would oppose amendments limiting the new bailout power--even if the limit was a $1 trillion cap.

The former financial executives inside the Obama administration have labeled their bill the "Financial Stability Improvement Act," and some might say that's like Bush officials oxymoronically calling their own anti-environment initiatives a "Clear Skies" agenda. But that's not a totally fair comparison because there's an underlying consistency here: While these new "financial stability" powers may destabilize the nation's finances, they would more than stabilize Wall Street's larcenous profits.

That thievery, of course, has been the big problem all along--and now, only another 9/29 can prevent it from getting worse.

War, Peace and Obama’s Nobel

War, Peace and Obama’s Nobel

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The hopes and prospects for peace aren't well aligned--not even close. The task is to bring them nearer. Presumably that was the intent of the Nobel Peace Prize committee in choosing President Barack Obama.

The prize "seemed a kind of prayer and encouragement by the Nobel committee for future endeavor and more consensual American leadership," Steven Erlanger and Sheryl Gay Stolberg wrote in The New York Times.

The nature of the Bush-Obama transition bears directly on the likelihood that the prayers and encouragement might lead to progress.

The Nobel committee's concerns were valid. They singled out Obama's rhetoric on reducing nuclear weapons.

Right now Iran's nuclear ambitions dominate the headlines. The warnings are that Iran may be concealing something from the International Atomic Energy Agency and violating U.N. Security Council Resolution 1887, passed last month and hailed as a victory for Obama's efforts to contain Iran.

Meanwhile, a debate continues on whether Obama's recent decision to reconfigure missile-defense systems in Europe is a capitulation to the Russians or a pragmatic step to defend the West from Iranian nuclear attack.

Silence is often more eloquent than loud clamor, so let us attend to what is unspoken.

Amid the furor over Iranian duplicity, the IAEA passed a resolution calling on Israel to join the Nuclear Non-Proliferation Treaty and open its nuclear facilities to inspection.

The United States and Europe tried to block the IAEA resolution, but it passed anyway. The media virtually ignored the event.

The United States assured Israel that it would support Israel's rejection of the resolution--reaffirming a secret understanding that has allowed Israel to maintain a nuclear arsenal closed to international inspections, according to officials familiar with the arrangements. Again, the media were silent.

Indian officials greeted U.N. Resolution 1887 by announcing that India "can now build nuclear weapons with the same destructive power as those in the arsenals of the world's major nuclear powers," the Financial Times reported.

Both India and Pakistan are expanding their nuclear weapons programs. They have twice come dangerously close to nuclear war, and the problems that almost ignited this catastrophe are very much alive.

Obama greeted Resolution 1887 differently. The day before he was awarded the Nobel Prize for his inspiring commitment to peace, the Pentagon announced it was accelerating delivery of the most lethal non-nuclear weapons in the arsenal: 13-ton bombs for B-2 and B-52 stealth bombers, designed to destroy deeply hidden bunkers shielded by 10,000 pounds of reinforced concrete.

It's no secret the bunker busters could be deployed against Iran.

Planning for these "massive ordnance penetrators" began in the Bush years but languished until Obama called for developing them rapidly when he came into office.

Passed unanimously, Resolution 1887 calls for the end of threats of force and for all countries to join the NPT, as Iran did long ago. NPT non-signers are India, Israel and Pakistan, all of which developed nuclear weapons with U.S. help, in violation of the NPT.

Iran hasn't invaded another country for hundreds of years--unlike the United States, Israel and India (which occupies Kashmir, brutally).

The threat from Iran is minuscule. If Iran had nuclear weapons and delivery systems and prepared to use them, the country would be vaporized.

To believe Iran would use nuclear weapons to attack Israel, or anyone, "amounts to assuming that Iran's leaders are insane" and that they look forward to being reduced to "radioactive dust," strategic analyst Leonard Weiss observes, adding that Israel's missile-carrying submarines are "virtually impervious to preemptive military attack," not to speak of the immense U.S. arsenal.

In naval maneuvers in July, Israel sent its Dolphin class subs, capable of carrying nuclear missiles, through the Suez Canal and into the Red Sea, sometimes accompanied by warships, to a position from which they could attack Iran--as they have a "sovereign right" to do, according to U.S. Vice President Joe Biden.

Not for the first time, what is veiled in silence would receive front-page headlines in societies that valued their freedom and were concerned with the fate of the world.

The Iranian regime is harsh and repressive, and no humane person wants Iran--or anyone else--to have nuclear weapons. But a little honesty would not hurt in addressing these problems.

The Nobel Peace Prize, of course, is not concerned solely with reducing the threat of terminal nuclear war, but rather with war generally, and the preparation for war. In this regard, the selection of Obama raised eyebrows, not least in Iran, surrounded by U.S. occupying armies.

On Iran's borders in Afghanistan and in Pakistan, Obama has escalated Bush's war and is likely to proceed on that course, perhaps sharply.

Obama has made clear that the United States intends to retain a long-term major presence in the region. That much is signaled by the huge city-within-a city called "the Baghdad Embassy," unlike any embassy in the world.

Obama has announced the construction of mega-embassies in Islamabad and Kabul, and huge consulates in Peshawar and elsewhere.

Nonpartisan budget and security monitors report in Government Executive that the "administration's request for $538 billion for the Defense Department in fiscal 2010 and its stated intention to maintain a high level of funding in the coming years put the president on track to spend more on defense, in real dollars, than any other president has in one term of office since World War II. And that's not counting the additional $130 billion the administration is requesting to fund the wars in Iraq and Afghanistan next year, with even more war spending slated for future years."

The Nobel Peace Prize committee might well have made truly worthy choices, prominent among them the remarkable Afghan activist Malalai Joya.

This brave woman survived the Russians, and then the radical Islamists whose brutality was so extreme that the population welcomed the Taliban. Joya has withstood the Taliban and now the return of the warlords under the Karzai government.

Throughout, Joya worked effectively for human rights, particularly for women; she was elected to parliament and then expelled when she continued to denounce warlord atrocities. She now lives underground under heavy protection, but she continues the struggle, in word and deed. By such actions, repeated everywhere as best we can, the prospects for peace edge closer to hopes.

When the Dollar Rallies, the Market will Crash

When the Dollar Rallies, the Market will Crash

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Interest rates. The Fed does not need slinky women in plunging necklines to peddle money. All it needs is low interest rates. When rates are pushed lower than the rate of inflation, the Fed provides a subsidy for borrowing. This is not as hard to grasp as it sounds. If I offered to give you $1.00 for very 90 cents you gave me in return, you would buy as many dollars from me as you could. The Fed operates the same way. It generates market activity by creating incentives for borrowing. Borrowing leads to speculation, and speculation leads to steadily rising asset prices. This is how the game is played. The Fed is not an unbiased observer of free market activity. The Fed drives the market. It fuels speculation and controls behavior by fixing interest rates.

When Lehman Bros flopped last year, markets went into freefall. A sharp correction turned into a full-blown panic. The bubble burst and trillions of dollars in credit vanished in a flash. Trading in exotic debt-instruments stopped overnight. A global sell-off ensued. Markets crashed. For a while, it looked like the whole system might collapse.

The Fed's emergency intervention pulled the system back from the brink, but the economy is still wracked with deflation. Billions in toxic waste now clog the Fed's balance sheet. The dollar has fallen like a stone.

When the financial system blows up and credit is sucked down a capital-hole, the economy goes into a downward spiral. Businesses slash inventory and lay off workers, workers have to cut back on spending and credit. That creates less demand for products, which leads to more lay offs. This is the vicious circle policymakers try to avoid. That's why Fed chair Ben Bernanke wheeled out the heavy artillery and launched the most aggressive central bank intervention in history.

The Fed dropped rates to zero, but its Quantitative Easing (QE) program (which monetizes the debt) actually pushes rates even lower to roughly negative 2 percent.

Bernanke has underwritten every sector of the financial system with government guarantees. He has provided full-value loans for dodgy collateral which is worth only a fraction of its original value. The market can no longer operate without the Fed. The Fed IS the market, which is why it is foolish to talk about a "recovery". The idea of recovery implies a free-standing system based on supply and demand. But, for now, the government provides the demand, which is why there is no market and no recovery. Analysts at Goldman Sachs sum it up like this:

"How much of the rebound in real GDP was due to the fiscal stimulus, and where do we stand in terms of the effects of stimulus thus far? Although precise answers are impossible at this juncture, several aspects of the report are consistent with our estimates that the fiscal package enacted in mid-February as the American Recovery and Reinvestment Act (ARRA) would have accounted for virtually all of the growth reported for the third quarter." (

Positive growth is an illusion created by government spending. The economy is still flat on its back. Consumer spending and credit are in sharp decline. Unemployment is steadily rising (although at a slower pace) and wages are flatlining with a chance of falling for the first time in 30 years. Deflationary pressures are building. The talk of a "jobless recovery" is intentionally misleading. Jobs ARE recovery; therefore a jobless recovery merely points to asset-inflation brought on by erratic monetary policy. Surging stocks shouldn't be confused with a genuine recovery.

The Fed faces stiff headwinds ahead. Low interest rates can have unintended consequences. The "cheapness" of the greenback has made the dollar the funding currency for the carry trade. Investors are borrowing low cost dollars and using them to purchase higher interest assets elsewhere. The process, which is rapidly escalating, is fraught with peril as economist Nouriel Roubini points out in an article in the Financial Times:

"Since March there has been a massive rally in all sorts of risky assets... and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply, while government bond yields have gently increased but stayed low and stable...

But while the US and global economy have begun a modest recovery, asset prices have gone through the roof since March in a major and synchronized rally... Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.

So what is behind this massive rally? Certainly it has been helped by a wave of liquidity from near-zero interest rates and quantitative easing. But a more important factor fueling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates...

Every investor who plays this risky game looks like a genius – even if they are just riding a huge bubble financed by a large negative cost of borrowing...

...This policy feeds the global asset bubble it is also feeding a new US asset bubble...
The reckless US policy that is feeding these carry trades is forcing other countries to follow its easy monetary policy... This is keeping short-term rates lower than is desirable... So the perfectly correlated bubble across all global asset classes gets bigger by the day.

But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate... the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments." ("The Mother of all Carry Trades Faces an Inevitable Bust", Nouriel Roubini, Financial Times)

Everyone who watches the market has noticed the inverse correlation of stocks to the dollar. When the dollar fades, stocks soar. And when the dollar strengthens, stocks plunge. Eventually, the dollar will reverse-course and stage a comeback, probably when Bernanke stops his printing operations. That will trigger the next severe correction which will burst bubbles across all asset classes.

Bernanke's success in reflating sagging asset prices has depended entirely on interest rate manipulation and liquidity injections. There's been no effort to patch household balance sheets, increase production, or strengthen overall demand. It's a clever trick by a master illusionist, but it has its costs. When the dollar rallies, markets will crash. And Bernanke will be responsible.

Documents reveal SEC complicity in Madoff Ponzi scheme

Documents reveal SEC complicity in Madoff Ponzi scheme

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Documents relating to the investigation of Bernard Madoff released last Friday by the Securities and Exchange Commission (SEC) highlight the complicity of the US regulatory agencies in one of the biggest financial frauds in history.

Madoff pleaded guilty on March to 11 felonies, for which he was sentenced to 150 years in jail. From the late 1980s or early 1990s, Madoff turned his well-connected investment firm into the largest pyramid scheme in history. When the fraud collapsed in December 2008, it wiped out $61 billion in investments. Prominent and wealthy investors, induced to invest with Madoff because of his stature as a major figure on Wall Street and his phenomenal record of providing healthy returns of 12 percent of more in good times and bad, lost millions.

Banks and hedge funds around the world lost hundreds of millions and even billions. University endowments, charities and other institutions that entrusted their money to Madoff or to hedge funds that invested in Madoff’s firm suffered massive losses. Numerous charities were forced to close. Thousands of retirees of modest means whose life savings were tied to Madoff’s operations lost everything.

The first chairman of the NASDAQ Stock Exchange and a member of the board of governors of the National Association of Securities Dealers, Madoff was something of a Wall Street legend. In 2000, he was appointed by then-SEC Chairman Arthur Levitt to a committee of academics, regulators and executives formed to advise the SEC on new stock market rules in response to the growth of electronic trading.

The documents released last week show that Madoff’s firm was investigated at least five times by the SEC, but that each time the commission failed to take rudimentary steps that would have revealed his Ponzi scheme. The SEC repeatedly gave Madoff’s firm a clean bill of health, which he used to reassure his clients that his operation was legitimate.

Had regulators made an even minimal effort, they would have found that Madoff made no trades with his clients’ money over a period of decades. Rather, in a classic Ponzi scheme, he used money from new investors to pay dividends to his previous clients.

SEC investigators relied solely on Madoff’s own records, and did not check either with Madoff’s counterparties or with Wall Street’s major clearing house, which kept records of his transactions, or lack thereof.

In one of the documents, a jailhouse interview between Madoff and David Kotz, inspector-general of the SEC, Madoff said that finding a Ponzi scheme of his type is “very easy if you want. You must do a third-party check. It’s absolutely a must.” He added, “It’s Accounting 101.”

Madoff told Kotz that after being interviewed by SEC investigators, he fully expected to be arrested within days, and was “amazed” when nothing happened.

The regulators merely went through the motions, despite suspicions about Madoff’s operation among professional investors and dealers. In 1999, Harry Markopolos, a securities industry executive, wrote to the SEC, saying, “Madoff Securities is the world’s largest Ponzi Scheme.” Markopolos repeatedly pressed the SEC to expose Madoff, but to no avail.

Internal records show that Madoff lied to the SEC about whether he gave investment advice to clients. Even though lying to investigators is a prosecutable offense, the SEC took no action. As one SEC investigator wrote in a 2006 e-mail, “I don’t think we should worry about Bernie finding out to whom we speak…. [W]e are not telling anybody that we have found anything improper (except for his lies to us, of course).”

These documents confirm that the SEC instigations were merely pro-forma operations that did not aim to find or prosecute any wrongdoing. “When potential investors expressed hesitation about investing with Madoff, he cited the prior SEC examinations to establish credibility and allay suspicions on investor doubts,” Kotz told the Senate Banking Committee two months ago.

During his interview with Kotz, Madoff said that Mary Shapiro, the current head of the SEC, is his “dear friend.” Madoff also said that he knew Arthur Levitt, head of the SEC from 1993 to 2001, “very well” and had lunched with him.

Madoff on a number of occasions prior to the collapse of his scam boasted of his influence in regulatory circles. He told Kotz that he “wrote good portions of the rules when it comes to trading.”

The entire episode is an example of the corruption that pervades Wall Street and the relations between major Wall Street players and the government. In his interview, Madoff admitted that he did not know how to properly record a credit default swap. He said he called a number of major banks, and none of them knew either. They had just been keeping their transactions off their official records. Madoff said that “today, lots of trades are done off the books because people don’t know what to do with them.”

Such practices are common and are protected by the government agencies that supposedly regulate the banks and financial institutions.

In an op-ed piece published Tuesday, Washington Post columnist Richard Cohen sets out to whitewash the role of the government in the Madoff fraud by attributing the complicity of financial regulators to the incompetence of individual investigators. He writes: “It would be reassuring if the IG [inspector-general] discovered that some of the investigators were on the take or that Madoff had offered them Wall Street jobs when they grew up. But this was not the case. The investigators were honest—just blazingly incompetent.”

This is an example of damage control by the media, including liberal pundits such as Cohen. The attempt to reduce the government’s role in the Madoff fraud to the mistakes of low-level operatives is absurd.

The issue is not whether individual SEC investigators were directly bribed by Madoff. They were carrying out a long-established policy emanating from the highest echelons of the regulatory system, at the direction of both Republican and Democratic administrations and Congress, to shield major players on Wall Street from prosecution for dubious and outright illegal practices that are standard operating procedure within the financial establishment. Madoff’s fraud was only a particularly crude form of the type of financial speculation and swindling that plays a major role in generating huge profits by banks and finance houses and sustaining the eight-digit bonuses awarded to top executives and traders.

Investigators and regulatory officials who “play ball” with the likes of Madoff are routinely rewarded with jobs on Wall Street that make them overnight multimillionaires.

One example of the direct role of the government in running interference for Wall Street was documented last month in an episode of the PBS series “Frontline.” Entitled “The Warning,” the program dealt with the brief career of Brooksley Born as head of the Commodities Futures Trading Commission during the Clinton administration. Born was forced out by then-Federal Reserve Chairman Alan Greenspan and top Clinton financial officials Robert Rubin and Lawrence Summers when she pressed for regulation of the derivatives market.

In the documentary, sources around Born describe her first meeting with Greenspan, during which the Fed chairman was said to have announced that the two of them were destined to disagree, particularly on the need to make rules against fraud. He was reported to tell Born “you feel that there need to be rules against it and I feel that the market will sort it out.”

In December 2008, after Madoff turned himself in, the World Socialist Web Site wrote, “Madoff’s scam could not have been carried out without the complicity of the highest echelons of the financial elite and the government…. The role of the SEC epitomizes the transformation of government regulatory agencies into the facilitators of financial fraud on a colossal scale. Its job has become running interference for the skullduggery of brokerage houses, hedge funds and banks.

“The removal of any regulatory restraint on the operations of the banks and finance houses over the past three decades is itself an expression of the crisis and decay of American capitalism. The hallmark of this process is the growth of financial parasitism. It is the other side of the coin of the systematic dismantling of large sections of industry and the relentless attack on the jobs and wages of the working class. This assault, in tandem with the unfolding economic crisis, is entering a new and even more brutal stage.”

The presence of figures such as SEC head Mary Shapiro, National Economic Council Director Lawrence Summers and former New York Federal Reserve Bank President Timothy Geithner at the summit of the Obama administration’s financial and regulatory apparatus makes clear that the government’s role in shielding Wall Street remains intact.

Wall Street bonuses to rise by 40 percent

Wall Street bonuses to rise by 40 percent

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The authors of the biggest financial catastrophe in world history—executives and traders at US investment and commercial banks—will see their year-end bonuses rise by an average of 40 percent compared to last year, according to a report issued Wednesday by Johnson Associates, a Wall Street-based compensation consulting firm.

Traders in stocks, bonds and derivatives are likely to significantly exceed even that lofty average, with projected bonuses 60 percent higher than in 2008, the company said. Wall Street is making the bulk of its profits this year from such financial speculation, not from more traditional lending to finance business activities in industry and commerce.

According to a Johnson Associates press release, “The improved trading performance we are seeing at investment and commercial banks this year is translating into significantly higher bonuses for traders.” It noted that results on trading of derivatives, the most volatile and lucrative form of speculation, were “solid.”

Bankers engaged in commercial and retail banking will see bonuses lower than 2008, as will most hedge fund operators and private equity firms, since the financial assets they manage are still well below the peak reached in late 2007. While the Dow-Jones Industrial Average is up 3,500 points from its low of March 2009, it is still some 4,000 points below the 2007 record level of more than 14,000.

In a considerable understatement, the bonus survey said that the banks were “outpacing [the] recovery of [the] broader economy.” In 2008, Wall Street firms awarded more than $20 billion in bonuses in the midst of the greatest financial crash since 1929. This year, according to the published estimate, the bonus pool could reach $28 billion.

The Wall Street Journal, in its article on the survey, reported, “A typical senior fixed-income trader can expect a total pay package of about $930,000 in cash and stock, compared with a package last year of about $695,000.”

The bonuses for executives at the leading investment houses are in seven and eight figures—Goldman Sachs CEO Lloyd Blankfein, for instance, made over $50 million last year—while hedge fund operators have raked in as much as $1 billion compensation for a single year of “work.”

Spokesmen for the banks were at pains to justify the vast sums being paid out to the speculators under conditions of rising mass unemployment and wage-cutting for the working people, who are the vast majority and perform all the socially useful labor.

In a speech this week, John Varley, CEO of the biggest British bank, Barclays PLC, declared, “I must of course be sensitive to the views of many stakeholders that bankers are paid too much,” but added, “our shareholders and our customers expect Barclays to field the best people we can.” He concluded, “Our objective is to pay the minimum compensation consistent with competitiveness.”

This argument is hard to swallow after the wrecking operation “the best people” have carried out against the world economy over the past two years. Even in boom years, financial speculators do no useful labor. They create nothing of actual value to the human race, but have become expert in financial manipulations that increase, at least temporarily, the monetary value of the resources entrusted to their management by the capitalist ruling elite.

Just what Wall Street traders actually do for a living was underscored by the announcement Wednesday by J.P. Morgan Securities that it will forfeit $722 million in fees and penalties stemming from the bribing of government officials in Jefferson County, Alabama (Birmingham), to buy derivatives from Morgan and sell county bonds through it.

The Securities and Exchange Commission charged in a lawsuit that two former J.P. Morgan managing directors had funneled $8 million to friends of the county commissioners. Jefferson County is near bankruptcy from $3 billion in losses on the derivatives, mainly interest-rate swaps, while J.P. Morgan was still pressing it for another $647 million in fees on the purchases.

The former president of the county commission, Larry Langford, now mayor of Birmingham, was convicted last week of accepting luxury gifts and cash totaling $235,000 in connection with the scheme. He was automatically removed as mayor upon conviction.

The working-class population of Jefferson County faces a social calamity because of the financial crisis, with cuts in county programs, jobs and benefits. Meanwhile, according to the SEC, J.P. Morgan not only secured the county’s business by paying bribes, it added the bribes to the bill it presented to the county—effectively compelling county residents to pay the cost of the bribing their own elected officials.

As has been many times observed, the real scandal in American capitalism is not what’s illegal, it’s what’s legal. The crude local bribery in Birmingham, Alabama, has bankrupted one county. The vast and more sophisticated financial skullduggery on Wall Street—and in official Washington—is bankrupting an entire society.

Fannie Mae seeks $15B more in government aid after 3Q loss

Fannie Mae seeks $15B more in government aid after 3Q loss

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Fannie Mae is asking for an additional $15 billion in government aid after posting another big loss in the third quarter as the taxpayer bill from the housing market bust keeps rising.

The government-controlled company continued to see a dramatic surge of borrowers fall behind as the unemployment rate climbs. At the end of last month, about 4.7% of Fannie Mae's borrowers had missed at least three payments. That's nearly triple last year's level.

Seized by federal regulators 14 months ago, the problems at Fannie Mae and sibling company Freddie Mac have proven far worse than most experts had foreseen. Fannie Mae's request Thursday will bring the tab for rescuing both companies to about $111 billion. The government has promised up to $400 billion in assistance.

And Fannie Mae cautioned: "We do not expect to operate profitably in the foreseeable future."

Fannie Mae (FNM) and Freddie Mac play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.

The two companies lowered their standards for borrowers during the real estate boom and are reeling from the consequences. High-risk loans, now defaulting at a record pace, have come back to haunt the companies. Worse still, the recession is causing formerly reliable homeowners with good credit to default.

Fannie Mae posted a quarterly loss of $19.76 billion, or $3.47 a share. The loss includes $883 million in dividends paid to the Treasury Department and compares with a loss of $29.41 billion, or $13 a share, in the year-ago period.

The results were driven by $22 billion in credit losses as the company continued to build its reserves for sour mortgages.

Thursday's request for financial aid — Fannie Mae's fourth — brings the company's total to about $60 billion.

Secret copyright treaty leaks.

Secret copyright treaty leaks. It's bad. Very bad.

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The internet chapter of the Anti-Counterfeiting Trade Agreement, a secret copyright treaty whose text Obama's administration refused to disclose due to "national security" concerns, has leaked. It's bad. It says:

  • * That ISPs have to proactively police copyright on user-contributed material. This means that it will be impossible to run a service like Flickr or YouTube or Blogger, since hiring enough lawyers to ensure that the mountain of material uploaded every second isn't infringing will exceed any hope of profitability.

  • * That ISPs have to cut off the Internet access of accused copyright infringers or face liability. This means that your entire family could be denied to the internet -- and hence to civic participation, health information, education, communications, and their means of earning a living -- if one member is accused of copyright infringement, without access to a trial or counsel.

  • * That the whole world must adopt US-style "notice-and-takedown" rules that require ISPs to remove any material that is accused -- again, without evidence or trial -- of infringing copyright. This has proved a disaster in the US and other countries, where it provides an easy means of censoring material, just by accusing it of infringing copyright.

  • * Mandatory prohibitions on breaking DRM, even if doing so for a lawful purpose (e.g., to make a work available to disabled people; for archival preservation; because you own the copyrighted work that is locked up with DRM)
The ACTA Internet Chapter: Putting the Pieces Together

Unanswered questions in FBI killing of Detroit Mosque leader

Unanswered questions in FBI killing of Detroit Mosque leader

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The Federal Bureau of Investigation’s (FBI) killing of a Detroit-area African-American Muslim religious leader, Luqman Ameen Abdullah, on October 27, raises a number of troubling questions.

Abdullah, 53, was shot 18 times by an FBI “counterterrorism” squad in a warehouse in the suburb of Dearborn, after allegedly firing his gun. Abdullah and ten followers were not accused of terrorism, but mail fraud, conspiracy to sell stolen goods, and illegal possession of firearms. These are comparatively minor charges for which the government has thus far provided little evidence, and would carry a prison sentence, not the death penalty effectively applied by the federal agents.

Abdullah was a member of the predominantly African-American Muslim religious movement called Ummah, or “the Brotherhood.” Only Abdullah was involved in what the FBI claims was a “shootout.” The other ten have been arrested.

FBI agents claim that Abdullah first opened fire on them before they fired dozens of rounds at him. No agents were injured, but authorities say Abdullah shot a police dog. The dog was given a life flight to a suburban Detroit veterinary clinic, where it perished. After being shot, Abdullah was reportedly handcuffed to a stretcher. It has not been reported whether or not he died instantly, or if he was offered medical assistance.

“I’m comfortable with what our agents did,” said Andrew G. Arena, of the Detroit division of the FBI. “They did what they had to do to protect themselves.”Two other raids were carried out in Detroit simultaneously, and on Thursday Canadian agents arrested Abdullah’s son, Mujahid Carswell, 30, across the border in Windsor, Ontario. Carswell was turned over to US authorities, and a judge ordered him released with an electronic tether to monitor his movements. Windsor police later arrested two more suspects.

Carswell’s arrest in Windsor was described by his pregnant girlfriend. “The phone rings, we look out the window and there’s snipers pointed all around the house,” she said. “This is absolutely surreal. My husband is a good brother. He was scared, man. They just killed his dad.”

The US Attorney for the Eastern District Michigan, Terrence Berg, dismissed the fact that Abdullah was killed by a counterterrorism unit even though he was not charged with terrorism, telling reporters “the charges speak for themselves.” In fact they do not.

The basis of the FBI’s complaint against Abdullah and his mosque was gleaned through information handed over by informants and provocateurs who had infiltrated the mosque, Masjid Al-Haqq. These agents allegedly convinced some mosque members to sell stolen furs and laptops, and quoted Abdullah as making vaguely menacing statements against the police and the FBI.

Early media coverage—as well as much of the police complaint—focused on these sensational allegations. But they were not part of the indictment, which focused on the petty property crimes arranged by the informants.

Yet even if the informants’ statements regarding Abdullah’s comments are accepted at face value, they hardly prove violent intent. According to one informant’s claim, Abdullah said he would not support terrorist activities when the Super Bowl was held in Detroit in 2006. “Abdullah said he would not be involved in injuring innocent people for no reason: ‘If there’s something to be done ... it’s going to be legitimate,’” the complaint says.

Scandalously, the Detroit Free Press reported Abdullah’s rejection of attacking the Super Bowl with the following sub-headline: “Abdullah spoke of attacking Super Bowl XL.”

Informants also claim Abdullah said, in various instances, that he would give the Atlanta Police Department “trouble” if they attempted to arrest him when he visited the city, “America must fall,” and “we have to know how to fight.”

FBI statements and its criminal complaint make clear that the most prominent part of the case against him was in fact political, with government court filings portraying him as a radical Islamist, a black separatist, and a proponent of overthrowing the US government.

The government has made no argument that Abdullah ever acted on these alleged positions in a violent manner—acquaintances and his organization dispute the characterizations—though it had monitored him and his mosque for two years.

By most accounts, Abdullah and his followers were hardly dangerous. In January the group was kicked out of its mosque for failure to pay taxes, and relocated to a two story home “with exposed walls and electrical boxes with no switches,” according to the Detroit News. The FBI claims it found firearms as a result of the forced relocation.

As the New York Times reports, the FBI complaint “shows how much trouble Mr. Abdullah and his associates had in executing even basic criminal schemes, like switching the vehicle identification numbers on a stolen truck, or selling stolen laptops.” The members of Ummah were “far from masterminds,” the article points out.

The FBI “knew a long time ago that this was a penny ante operation, and they could have stopped it,” Abdullah El-Amin, an imam at a largely African-American mosque told the Times. “It didn’t have to get to this point, people getting killed.”

El-Amin and others who knew Abdullah downplayed the notion that even his rhetoric was violent. His alleged desire to form a separate nation based on Sharia law was “sort of like the Pennsylvania Dutch have their own communities and stuff,” El-Amin said.

The Muslim Alliance in North America, on whose governing board Abdullah sat, condemned the killing in a statement. “Reference to the Ummah as a ‘nationwide radical fundamentalist Sunni group consisting primarily of African-Americans’ is an offensive mischaracterization,” it said. “To those who have worked with Imam Luqman A. Abdullah, allegations of illegal activity, resisting arrest, and ‘offensive jihad against the American government’ are shocking and inconsistent. In his ministry he consistently advocated for the downtrodden and always spoke about the importance of connecting with the needs of the poor.”

“The very incendiary rhetoric that the F.B.I. alleges, I never heard that from him,” Dawud Walid of the Michigan chapter of the Council on American-Islamic Relations said to the Times. “There was nothing extraordinary about him.”

Others pointed to the poverty of Abdullah’s neighborhood and those who attended his mosque. A number of those who knew Abdullah said he fed the hungry once a week and opened up his mosque to the homeless.

“They’re living in the hood, the ghetto of Detroit, one of the worst parts of Detroit,” Omar Regan, Abdullah’s son, said. “They don’t have anything! If my dad was involved in what they said, my dad would have some money—he didn’t ever have any money.”

Some groups have called for an investigation of the FBI raid, including the American Muslim Taskforce on Civil Rights and Elections and the Muslim Public Affairs Council.

The FBI complaint notes that each of the eleven suspects, including Abdullah, converted to the Ummah movement while in prison. This is hardly unusual. Black Muslims have long focused their efforts on prison inmates, with the most famous such convert being Malcolm X, who converted to the variety of Islam promoted by the Nation of Islam while jailed in 1948.

Ummah was founded by Jamil Abdullah Al-Amin, formerly H. Rap Brown. Brown was a member of the Student Non-violent Coordinating Committee (SNCC) in the 1960s, joining the radical black power movement the Black Panthers in 1968. Targeted by the FBI, then arrested and imprisoned, he converted to Islam in the 1970s. Al-Amin was convicted of killing two police officers in 2001 and sentenced to life in prison.

Obama Resuming G.W. Bush’s “Extraordinary Renditions”

Obama Resuming G.W. Bush’s “Extraordinary Renditions”

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Even though Barack Obama, the candidate, pledged to end “the practice of shipping away prisoners in the dead of night to be tortured in far-off countries,” his FBI has been rendering kidnap victims to the U.S. The practice is still kidnapping, however; and it’s still illegal.

Unlucky victim No. 1 was Raymond Azar, 45, flown from Afghanistan to Alexandria, Va., not to a foreign country. The construction manager for Sima International, a Lebanese outfit that did work for the U.S. military, Azar said he was tortured by his abductors. He might just as well have been flow to Egypt under the Bushies.

Interestingly, Azar was never charged as a dangerous terrorist, only with conspiracy to commit bribery for wiring $106,000 in kickbacks to a U.S. employee’s bank account in hopes of getting $13 million in unpaid bills okayed.

For this comparatively trivial white collar crime, Azar’s lawyers said when arrested he was stripped naked, hooded, and subjected to a body cavity search. What’s more, according to an article by Scott Horton, writing on “Common Dreams,” Azar claims a federal agent showed Azar a photo of his wife and four children and told him to confess or else he might “never see them again.” Azar confessed, and pled guilty to conspiracy to commit bribery.

Azar alleged he was shackled to an office chair for seven hours, put in an unheated metal shipping container and given only a thin blanket despite near freezing temperature, denied sleep and food for 30 hours, had his ears covered by earphones and blindfolded during his plane ride from Kabul, Afghanistan, to the U.S., Horton reported. Court records indicate Azar was shackled at the ankles, waist, and wrists.

“These procedures---particularly the blindfolding and shackling---correspond to standard Bush-era enhanced interrogation techniques, which President Obama declared banned immediately on his arrival in office,” Horton noted.

The arrest of this manager was made by no fewer than 10 men wearing flak jackets and carrying military style assault weapons, according to legal papers filed by Azar’s lawyers. Maybe they expected him to be toting a wrecking ball.

“Bizarre,” is how Joanne Mariner of Human Rights Watch described the rendition. “He was treated like a high-security terrorist instead of someone accused of a relatively minor white-collar crime,” she told the Los Angeles Times August 22nd.

Removing Azar from Afghanistan would only be legal with approval of that government but Interior Ministry officials there said no such approval was requested by the U.S.

International law professor Philippe Sands of London University is quoted by Horton as terming Azar’s allegations “deeply troubling” in that they indicate “clear violations of international norms on due process and detainee treatment.”

Under “extraordinary rendition,” alleged terror suspects in the past have been abducted by the CIA and flown to be tortured (and/or murdered) to Egypt, Saudi Arabia, Syria, Morocco, Jordan and Uzbekistan, among other venues. The practice was started in 1996 under President Bill Clinton, who is said to have rendered 80 suspects, and was vastly expanded by President George W. Bush after 9/11.

Rendition on its face is a violation of Article 3 of the United Nations Convention Against Torture, ratified by the U.S. in 1994. As Wikipedia notes, “Rendered suspects are denied due process because they are arrested without charges and deprived of legal counsel.”

During his appearance before the Senate Intelligence Committee last February, CIA nominee Leon Panetta, now Agency Director, said, “I think renditions where we return individuals to another country where they prosecute them under their laws, I think that is an appropriate use of rendition,” the Associated Press reported.

Obama’s aides have said they will count on the diplomatic assurances of the other countries not to torture suspects. Amrit Singh, a lawyer with the American Civil Liberties Union, said such assurances have “proven completely ineffective in preventing torture.”

With some modifications, the Obama administration appears to be carrying forward the ugly practices of the Bush and Clinton imperial presidencies, hardly the “change” for which the American people had hoped. Unless you count “chump change.”

US Offers Taliban 6 Provinces for 8 Bases

US Offers Taliban 6 Provinces for 8 Bases

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The emboldened Taliban movement in Afghanistan turned down an American offer of power-sharing in exchange for accepting the presence of foreign troops, Afghan government sources confirmed.

"US negotiators had offered the Taliban leadership through Mullah Wakil Ahmed Mutawakkil (former Taliban foreign minister) that if they accept the presence of NATO troops in Afghanistan, they would be given the governorship of six provinces in the south and northeast," a senior Afghan Foreign Ministry official told requesting anonymity for not being authorized to talk about the sensitive issue with the media.

He said the talks, brokered by Saudi Arabia and Turkey, continued for weeks at different locations including the Afghan capital Kabul.

Saudi Arabia, along with Pakistan and the United Arab Emirates, were the only states to recognize the Taliban regime which ruled Afghanistan from 1996 to 2001.

Turkish Prime Minister Reccap Erodgan has reportedly been active in brokering talks between the two sides.

His emissaries are in contact with Hizb-e-Islami (of former prime minister Gulbadin Hikmatyar) too because he is an important factor in northeastern Afghanistan."

A Taliban spokesman admitted indirect talks with the US.

"Yes, there were some indirect talks, but they did not work," Yousaf Ahmedi, the Taliban spokesman in southern Afghanistan, told IOL from an unknown location via satellite phone.

"There are some people who are conveying each others’ (Taliban and US) messages. But there were no direct talks between us and America," he explained.

Afghan and Taliban sources said Mutawakkil and Mullah Mohammad Zaeef, a former envoy to Pakistan who had taken part in previous talks, represented the Taliban side in the recent talks.

The US Embassy in Kabul denied any such talks.

"No, we are not holding any talks with Taliban," embassy spokeswoman Cathaline Haydan told IOL from Kabul.

Asked whether the US has offered any power-sharing formula to Taliban, she said she was not aware of any such offer.

"I don't know about any specific talks and the case you are reporting is not true."

Provinces for Bases

Source say that for the first time the American negotiators did not insist on the "minus-Mullah Omer" formula, which had been the main hurdle in previous talks between the two sides.

The Americans reportedly offered Taliban a form of power-sharing in return for accepting the presence of foreign troops.

"America wants 8 army and air force bases in different parts of Afghanistan in order to tackle the possible regrouping of Al-Qaeda network," the senior official said.

He named the possible hosts of the bases as Mazar-e-Sharif and Badakshan in north, Kandahar in south, Kabul, Herat in west, Jalalabad in northeast and Ghazni and Faryab in central Afghanistan.

In exchange, the US offered Taliban the governorship of the southern provinces of Kandahar, Zabul, Hilmand and Orazgan as well as the northeastern provinces of Nooristan and Kunar.

These provinces are the epicenter of resistance against the US-led foreign forces and are considered the strongholds of Taliban.

Orazgan and Hilmand are the home provinces of Taliban Supreme Commander Mullah Omer and Afghan President Hamid Karzai.

"But Taliban did not agree on that," said the senior official.

"Their demand was that America must give a deadline for its pull out if it wants negotiations to go on."

Ahmedi, the Taliban spokesman in southern Afghanistan, confirmed their principal position.

"Our point of view is very clear that until and unless foreign forces do not leave Afghanistan, no talks will turn out to be successful."

The ruling Taliban were ousted by the United States, which invaded Afghanistan shortly after the 9/11 attacks in 2001.

Since then, the Taliban have engaged in protracted guerrilla warfare against the US-led foreign troops and the Karzai government.

Colour-Coded Revolutions and the Origins of World War III

Go To Original

This is Part 2 of the Series, "The Origins of World War III"

Part 1: An Imperial Strategy for a New World Order: The Origins of World War III


Following US geo-strategy in what Brzezinski termed the “global Balkans,” the US government has worked closely with major NGOs to “promote democracy” and “freedom” in former Soviet republics, playing a role behind the scenes in fomenting what are termed “colour revolutions,” which install US and Western-friendly puppet leaders to advance the interests of the West, both economically and strategically.

Part 2 of this essay on “The Origins of World War III” analyzes the colour revolutions as being a key stratagem in imposing the US-led New World Order. The “colour revolution” or “soft” revolution strategy is a covert political tactic of expanding NATO and US influence to the borders of Russia and even China; following in line with one of the primary aims of US strategy in the New World Order: to contain China and Russia and prevent the rise of any challenge to US power in the region.

These revolutions are portrayed in the western media as popular democratic revolutions, in which the people of these respective nations demand democratic accountability and governance from their despotic leaders and archaic political systems. However, the reality is far from what this utopian imagery suggests. Western NGOs and media heavily finance and organize opposition groups and protest movements, and in the midst of an election, create a public perception of vote fraud in order to mobilize the mass protest movements to demand “their” candidate be put into power. It just so happens that “their” candidate is always the Western US-favoured candidate, whose campaign is often heavily financed by Washington; and who proposes US-friendly policies and neoliberal economic conditions. In the end, it is the people who lose out, as their genuine hope for change and accountability is denied by the influence the US wields over their political leaders.

The soft revolutions also have the effect of antagonizing China and Russia, specifically, as it places US protectorates on their borders, and drives many of the former Warsaw Pact nations to seek closer political, economic and military cooperation. This then exacerbates tensions between the west and China and Russia; which ultimately leads the world closer to a potential conflict between the two blocs.


Serbia experienced its “colour revolution” in October of 2000, which led to the overthrow of Serbian leader Slobodan Milosevic. As the Washington Post reported in December of 2000, from 1999 on, the US undertook a major “electoral strategy” to oust Milosevic, as “U.S.-funded consultants played a crucial role behind the scenes in virtually every facet of the anti-Milosevic drive, running tracking polls, training thousands of opposition activists and helping to organize a vitally important parallel vote count. U.S. taxpayers paid for 5,000 cans of spray paint used by student activists to scrawl anti-Milosevic graffiti on walls across Serbia, and 2.5 million stickers with the slogan "He's Finished," which became the revolution's catchphrase.” Further, according to Michael Dobbs,writing in the Washington Post, some “20 opposition leaders accepted an invitation from the Washington-based National Democratic Institute (NDI) in October 1999 to a seminar at the Marriott Hotel in Budapest.”

Interestingly, “Some Americans involved in the anti-Milosevic effort said they were aware of CIA activity at the fringes of the campaign, but had trouble finding out what the agency was up to. Whatever it was, they concluded it was not particularly effective. The lead role was taken by the State Department and the U.S. Agency for International Development, the government's foreign assistance agency, which channeled the funds through commercial contractors and nonprofit groups such as NDI and its Republican counterpart, the International Republican Institute (IRI).”

The NDI (National Democratic Institute), “worked closely with Serbian opposition parties, IRI focused its attention on Otpor, which served as the revolution's ideological and organizational backbone. In March, IRI paid for two dozen Otpor leaders to attend a seminar on nonviolent resistance at the Hilton Hotel in Budapest.” At the seminar, “the Serbian students received training in such matters as how to organize a strike, how to communicate with symbols, how to overcome fear and how to undermine the authority of a dictatorial regime.”[1]

As the New York Times revealed, Otpor, the major student opposition group, had a steady flow of money coming from the National Endowment for Democracy (NED), a Congress-funded “democracy promoting” organization. The United States Agency for International Development (USAID) gave money to Otpor, as did the International Republican Institute, “another nongovernmental Washington group financed partly by A.I.D.”[2]


In 2003, Georgia went through its “Rose Revolution,” which led to the overthrow of president Eduard Shevardnadze, replacing him with Mikhail Saakashvili after the 2004 elections. In a November 2003 article in The Globe and Mail, it was reported that a US based foundation “began laying the brickwork for the toppling of Georgian President Eduard Shevardnadze,” as funds from his non-profit organization “sent a 31-year-old Tbilisi activist named Giga Bokeria to Serbia to meet with members of the Otpor (Resistance) movement and learn how they used street demonstrations to topple dictator Slobodan Milosevic. Then, in the summer,” the “foundation paid for a return trip to Georgia by Otpor activists, who ran three-day courses teaching more than 1,000 students how to stage a peaceful revolution.”

This US-based foundation “also funded a popular opposition television station that was crucial in mobilizing support for [the] ‘velvet revolution,’ and [it] reportedly gave financial support to a youth group that led the street protests.” The owner of the foundation “has a warm relationship with Mr. Shevardnadze's chief opponent, Mikhail Saakashvili, a New York-educated lawyer who is expected to win the presidency in an election scheduled for Jan. 4.”

During a press conference a week before his resignation, Mr. Shevardnadze said that the US foundation “is set against the President of Georgia.” Moreover, “Mr. Bokeria, whose Liberty Institute received money from both [the financier’s foundation] and the U.S. government-backed Eurasia Institute, says three other organizations played key roles in Mr. Shevardnadze's downfall: Mr. Saakashvili's National Movement party, the Rustavi-2 television station and Kmara! (Georgian for Enough!), a youth group that declared war on Mr. Shevardnadze [in] April and began a poster and graffiti campaign attacking government corruption.” [3]

The day following the publication of the previously quoted article, the author published another article in the Globe and Mail explaining that the “bloodless revolution” in Georgia “smells more like another victory for the United States over Russia in the post-Cold War international chess game.” The author, Mark MacKinnon, explained that Eduard Shevardnadze’s downfall lied “in the oil under the Caspian Sea, one of the world's few great remaining, relatively unexploited, sources of oil,” as “Georgia and neighbouring Azerbaijan, which borders the Caspian, quickly came to be seen not just as newly independent countries, but as part of an ‘energy corridor’.” Plans were drawn up for a massive “pipeline that would run through Georgia to Turkey and the Mediterranean.” It is worth quoting MacKinnon at length:

When these plans were made, Mr. Shevardnadze was seen as an asset by both Western investors and the U.S. government. His reputation as the man who helped end the Cold War gave investors a sense of confidence in the country, and his stated intention to move Georgia out of Russia's orbit and into Western institutions such as the North Atlantic Treaty Organization and the European Union played well at the U.S. State Department.

The United States quickly moved to embrace Georgia, opening a military base in the country [in 2001] to give Georgian soldiers "anti-terrorist" training. They were the first U.S. troops to set up in a former Soviet republic.

But somewhere along the line, Mr. Shevardnadze reversed course and decided to once more embrace Russia. This summer, Georgia signed a secret 25-year deal to make the Russian energy giant Gazprom its sole supplier of gas. Then it effectively sold the electricity grid to another Russian firm, cutting out AES, the company that the U.S. administration had backed to win the deal. Mr. Shevardnadze attacked AES as "liars and cheats." Both deals dramatically increased Russian influence in Tbilisi.

Following the elections in Georgia, the US-backed and educated Mikhail Saakashvili ascended to the Presidency and “won the day.”[4] This is again an example of the intimate relationship between oil geopolitics and US foreign policy. The colour revolution was vital in pressing US and NATO interests forward in the region; gaining control over Central Asia’s gas reserves and keeping Russia from expanding its influence. This follows directly in line with the US-NATO imperial strategy for the new world order, following the collapse of the USSR. [This strategy is outlined in detail in Part 1 of this essay: An Imperial Strategy for a New World Order: The Origins of World War III].


In 2004, Ukraine went through its “Orange Revolution,” in which opposition and pro-Western leader Viktor Yushchenko became President, defeating Viktor Yanukovych. As the Guardian revealed in 2004, that following the disputed elections (as happens in every “colour revolution”), “the democracy guerrillas of the Ukrainian Pora youth movement have already notched up a famous victory - whatever the outcome of the dangerous stand-off in Kiev,” however, “the campaign is an American creation, a sophisticated and brilliantly conceived exercise in western branding and mass marketing that, in four countries in four years, has been used to try to salvage rigged elections and topple unsavoury regimes.”

The author, Ian Traynor, explained that, “Funded and organised by the US government, deploying US consultancies, pollsters, diplomats, the two big American parties and US non-government organisations, the campaign was first used in Europe in Belgrade in 2000 to beat Slobodan Milosevic at the ballot box.” Further, “The Democratic party's National Democratic Institute, the Republican party's International Republican Institute, the US state department and USAid are the main agencies involved in these grassroots campaigns as well as the Freedom House NGO” and the same billionaire financier involved in Georgia’s Rose Revolution. In implementing the regime-change strategy, “The usually fractious oppositions have to be united behind a single candidate if there is to be any chance of unseating the regime. That leader is selected on pragmatic and objective grounds, even if he or she is anti-American.”

Traynor continues:

Freedom House and the Democratic party's NDI helped fund and organise the "largest civil regional election monitoring effort" in Ukraine, involving more than 1,000 trained observers. They also organised exit polls. On Sunday night those polls gave Mr Yushchenko an 11-point lead and set the agenda for much of what has followed.

The exit polls are seen as critical because they seize the initiative in the propaganda battle with the regime, invariably appearing first, receiving wide media coverage and putting the onus on the authorities to respond.

The final stage in the US template concerns how to react when the incumbent tries to steal a lost election.

[. . . ] In Belgrade, Tbilisi, and now Kiev, where the authorities initially tried to cling to power, the advice was to stay cool but determined and to organise mass displays of civil disobedience, which must remain peaceful but risk provoking the regime into violent suppression.[5]

As an article in the Guardian by Jonathan Steele explained, the opposition leader, Viktor Yushchenko, who disputed the election results, “served as prime minister under the outgoing president, Leonid Kuchma, and some of his backers are also linked to the brutal industrial clans who manipulated Ukraine's post-Soviet privatization.” He further explained that election rigging is mainly irrelevant, as “The decision to protest appears to depend mainly on realpolitik and whether the challengers or the incumbent are considered more ‘pro-western’ or ‘pro-market’.” In other words, those who support a neoliberal economic agenda will have the support of the US-NATO, as neoliberalism is their established international economic order and advances their interests in the region.

Moreover, “In Ukraine, Yushchenko got the western nod, and floods of money poured in to groups which support him, ranging from the youth organisation, Pora, to various opposition websites. More provocatively, the US and other western embassies paid for exit polls.” This is emblematic of the strategic importance of the Ukraine to the United States, “which refuses to abandon its cold war policy of encircling Russia and seeking to pull every former Soviet republic to its side.”[6]

One Guardian commentator pointed out the hypocrisy of western media coverage: “Two million anti-war demonstrators can stream though the streets of London and be politically ignored, but a few tens of thousands in central Kiev are proclaimed to be ‘the people’, while the Ukrainian police, courts and governmental institutions are discounted as instruments of oppression.” It was also explained that, “Enormous rallies have been held in Kiev in support of the prime minister, Viktor Yanukovich, but they are not shown on our TV screens: if their existence is admitted, Yanukovich supporters are denigrated as having been ‘bussed in’. The demonstrations in favour of Viktor Yushchenko have laser lights, plasma screens, sophisticated sound systems, rock concerts, tents to camp in and huge quantities of orange clothing; yet we happily dupe ourselves that they are spontaneous.”[7]

In 2004, the Associated Press reported that, “The Bush administration has spent more than $65 million in the past two years to aid political organizations in Ukraine, paying to bring opposition leader Viktor Yushchenko to meet U.S. leaders and helping to underwrite an exit poll indicating he won last month's disputed runoff election.” The money, they state, “was funneled through organizations such as the Eurasia Foundation or through groups aligned with Republicans and Democrats that organized election training, with human rights forums or with independent news outlets.” However, even government officials “acknowledge that some of the money helped train groups and individuals opposed to the Russian-backed government candidate.”

The report stated that some major international foundations funded the exit polls, which according to the incumbent leader were “skewed.” These foundations included “The National Endowment for Democracy, which receives its money directly from Congress; the Eurasia Foundation, which receives money from the State Department, and the Renaissance Foundation,” which receives money from the same billionaire financier as well as the US State Department. Since the State Department is involved, that implies that this funding is quite directly enmeshed in US foreign policy strategy. “Other countries involved included Great Britain, the Netherlands, Switzerland, Canada, Norway, Sweden and Denmark.” Also involved in funding certain groups and activities in the Ukraine was the International Republican Institute and the National Democratic Institute, which was chaired by former Secretary of States Madeline Albright at the time.[8]

Mark Almond wrote for the Guardian in 2004 of the advent of “People Power,” describing it in relation to the situation that was then breaking in the Ukraine, and stated that, “The upheaval in Ukraine is presented as a battle between the people and Soviet-era power structures. The role of western cold war-era agencies is taboo. Poke your nose into the funding of the lavish carnival in Kiev, and the shrieks of rage show that you have touched a neuralgic point of the New World Order.”

Almond elaborated:

"Throughout the 1980s, in the build-up to 1989's velvet revolutions, a small army of volunteers - and, let's be frank, spies - co-operated to promote what became People Power. A network of interlocking foundations and charities mushroomed to organise the logistics of transferring millions of dollars to dissidents. The money came overwhelmingly from Nato states and covert allies such as "neutral" Sweden.

[ ...] The hangover from People Power is shock therapy. Each successive crowd is sold a multimedia vision of Euro-Atlantic prosperity by western-funded "independent" media to get them on the streets. No one dwells on the mass unemployment, rampant insider dealing, growth of organised crime, prostitution and soaring death rates in successful People Power states.

As Almond delicately put it, “People Power is, it turns out, more about closing things than creating an open society. It shuts factories but, worse still, minds. Its advocates demand a free market in everything - except opinion. The current ideology of New World Order ideologues, many of whom are renegade communists, is Market-Leninism - that combination of a dogmatic economic model with Machiavellian methods to grasp the levers of power.”[9]

As Mark MacKinnon reported for the Globe and Mail, Canada, too, supported the efforts of the youth activist group, Pora, in the Ukraine, providing funding for the “people power democracy” movement. As MacKinnon noted, “The Bush administration was particularly keen to see a pro-Western figure as president to ensure control over a key pipeline running from Odessa on the Black Sea to Brody on the Polish border.” However, “The outgoing president, Leonid Kuchma, had recently reversed the flow so the pipeline carried Russian crude south instead of helping U.S. producers in the Caspian Sea region ship their product to Europe.” As MacKinnon analyzes, the initial funding from western nations came from Canada, although this was eventually far surpassed in amount by the United States.

Andrew Robinson, Canada’s ambassador to Ukraine at the time, in 2004, “began to organize secret monthly meetings of Western ambassadors, presiding over what he called "donor co-ordination" sessions among 28 countries interested in seeing Mr. Yushchenko succeed. Eventually, he acted as the group's spokesman and became a prominent critic of the Kuchma government's heavy-handed media control.” Canada further “invested in a controversial exit poll, carried out on election day by Ukraine's Razumkov Centre and other groups, that contradicted the official results showing Mr. Yanukovich had won.” Once the new, pro-Western government was in, it “announced its intention to reverse the flow of the Odessa-Brody pipeline.”[10]

Again, this follows the example of Georgia, where several US and NATO interests are met through the success of the “colour revolution”; simultaneously preventing Russian expansion and influence from spreading in the region as well as advancing US and NATO control and influence over the major resources and transport corridors of the region.

Daniel Wolf wrote for the Guardian that, “For most of the people gathered in Kiev's Independence Square, the demonstration felt spontaneous. They had every reason to want to stop the government candidate, Viktor Yanukovich, from coming to power, and they took the chance that was offered to them. But walking through the encampment last December, it was hard to ignore the evidence of meticulous preparation - the soup kitchens and tents for the demonstrators, the slickness of the concert, the professionalism of the TV coverage, the proliferation of the sickly orange logo wherever you looked.” He elaborated, writing, “the events in the square were the result of careful, secret planning by Yushchenko's inner circle over a period of years. The true story of the orange revolution is far more interesting than the fable that has been widely accepted.”

Roman Bessmertny, Yushchenko's campaign manager, two years prior to the 2004 elections, “put as many as 150,000 people through training courses, seminars, practical tuition conducted by legal and media specialists. Some attending these courses were members of election committees at local, regional and national level; others were election monitors, who were not only taught what to watch out for but given camcorders to record it on video. More than 10,000 cameras were distributed, with the aim of recording events at every third polling station.” Ultimately, it was an intricately well-planned public relations media-savvy campaign, orchestrated through heavy financing. Hardly the sporadic “people power” notion applied to the “peaceful coup” in the western media.[11]

The “Tulip Revolution” in Kyrgyzstan

In 2005, Kyrgyzstan underwent its “Tulip Revolution” in which the incumbent was replaced by the pro-Western candidate through another “popular revolution.” As the New York Times reported in March of 2005, shortly before the March elections, “an opposition newspaper ran photographs of a palatial home under construction for the country's deeply unpopular president, Askar Akayev, helping set off widespread outrage and a popular revolt.” However, this “newspaper was the recipient of United States government grants and was printed on an American government-financed printing press operated by Freedom House, an American organization that describes itself as ’a clear voice for democracy and freedom around the world’.”

Moreover, other countries that have “helped underwrite programs to develop democracy and civil society” in Kyrgyzstan were Britain, the Netherlands and Norway. These countries collectively “played a crucial role in preparing the ground for the popular uprising that swept opposition politicians to power.” Money mostly flowed from the United States, in particular, through the National Endowment for Democracy (NED), as well as through “the Freedom House printing press or Kyrgyz-language service of Radio Free Europe/Radio Liberty, a pro-democracy broadcaster.” The National Democratic Institute also played a major financing role, for which one of the chief beneficiaries of their financial aid said, “It would have been absolutely impossible for this to have happened without that help.”

The Times further reported that:

"American money helps finance civil society centers around the country where activists and citizens can meet, receive training, read independent newspapers and even watch CNN or surf the Internet in some. The N.D.I. [National Democratic Institute] alone operates 20 centers that provide news summaries in Russian, Kyrgyz and Uzbek.

The United States sponsors the American University in Kyrgyzstan, whose stated mission is, in part, to promote the development of civil society, and pays for exchange programs that send students and non-governmental organization leaders to the United States. Kyrgyzstan's new prime minister, Kurmanbek Bakiyev, was one.

All of that money and manpower gave the coalescing Kyrgyz opposition financing and moral support in recent years, as well as the infrastructure that allowed it to communicate its ideas to the Kyrgyz people."

As for those “who did not read Russian or have access to the newspaper listened to summaries of its articles on Kyrgyz-language Radio Azattyk, the local United States-government financed franchise of Radio Free Europe/Radio Liberty.” Other “independent” media was paid for courtesy of the US State Department.[12]

As the Wall Street Journal revealed prior to the elections, opposition groups, NGOs and “independent” media in Kyrgyzstan were getting financial assistance from Freedom House in the US, as well as the US Agency for International Development (USAID). The Journal reported that, “To avoid provoking Russia and violating diplomatic norms, the U.S. can't directly back opposition political parties. But it underwrites a web of influential NGOs whose support of press freedom, the rule of law and clean elections almost inevitably pits them against the entrenched interests of the old autocratic regimes.”

As the Journal further reported, Kyrgyzstan “occupies a strategic location. The U.S. and Russia both have military bases here. The country's five million citizens, mostly Muslim, are sandwiched in a tumultuous neighborhood among oil-rich Kazakhstan, whose regime tolerates little political dissent; dictatorial Uzbekistan, which has clamped down on foreign aid groups and destitute Tajikistan.”

In the country, a main opposition NGO, the Coalition for Democracy and Civil Rights, gets its funding “from the National Democratic Institute for International Affairs, a Washington-based nonprofit funded by the U.S. government, and from USAID.” Other agencies reported to be involved, either through funding or ideological-technical promotion (see: propaganda), are the National Endowment for Democracy (NED), the Albert Einstein Institute, Freedom House, and the US State Department.[13]

President Askar Akayev of Kyrgyzstan had referred to a “third force” gaining power in his country. The term was borrowed from one of the most prominent US think tanks, as “third force” is:

"... which details how western-backed non-governmental organisations (NGOs) can promote regime and policy change all over the world. The formulaic repetition of a third "people power" revolution in the former Soviet Union in just over one year - after the similar events in Georgia in November 2003 and in Ukraine last Christmas - means that the post-Soviet space now resembles Central America in the 1970s and 1980s, when a series of US-backed coups consolidated that country's control over the western hemisphere."

As the Guardian reported:

"Many of the same US government operatives in Latin America have plied their trade in eastern Europe under George Bush, most notably Michael Kozak, former US ambassador to Belarus, who boasted in these pages in 2001 that he was doing in Belarus exactly what he had been doing in Nicaragua: "supporting democracy".


"The case of Freedom House is particularly arresting. Chaired by the former CIA director James Woolsey, Freedom House was a major sponsor of the orange revolution in Ukraine. It set up a printing press in Bishkek in November 2003, which prints 60 opposition journals. Although it is described as an "independent" press, the body that officially owns it is chaired by the bellicose Republican senator John McCain, while the former national security adviser Anthony Lake sits on the board. The US also supports opposition radio and TV."[14]

So again, the same formula was followed in the Central Asian Republics of the former Soviet Union. This US foreign-policy strategy of promoting “soft revolution” is managed through a network of American and international NGOs and think tanks. It advances NATO and, in particular, US interests in the region.


The soft revolutions or “colour revolutions” are a key stratagem in the New World Order; advancing, through deceptions and manipulation, the key strategy of containing Russia and controlling key resources. This strategy is critical to understanding the imperialistic nature of the New World Order, especially when it comes to identifying when this strategy is repeated; specifically in relation to the Iranian elections of 2009.

Part 1 of this essay outlined the US-NATO imperial strategy for entering the New World Order, following the break-up of the Soviet Union in 1991. The primary aim was focused on encircling Russia and China and preventing the rise of a new superpower. The US was to act as the imperial hegemon, serving international financial interests in imposing the New World Order. Part 2 outlined the US imperial strategy of using “colour revolutions” to advance its interests in Central Asia and Eastern Europe, following along the overall policy outlined in Part 1, of containing Russia and China from expanding influence and gaining access to key natural resources.

The third and final part to this essay analyzes the nature of the imperial strategy to construct a New World Order, focusing on the increasing conflicts in Afghanistan, Pakistan, Iran, Latin America, Eastern Europe and Africa; and the potential these conflicts have for starting a new world war with China and Russia. In particular, its focus is within the past few years, and emphasizes the increasing nature of conflict and war in the New World Order. Part 3 looks at the potential for “A New World War for a New World Order.”


[1] Michael Dobbs, U.S. Advice Guided Milosevic Opposition. The Washington Post: December 11, 2000:

[2] Roger Cohen, Who Really Brought Down Milosevic? The New York Times: November 26, 2000:

[3] Mark MacKinnon, Georgia revolt carried mark of Soros. The Globe and Mail: November 23, 2003:

[4] Mark MacKinnon, Politics, pipelines converge in Georgia. The Globe and Mail: November 24, 2003:

[5] Ian Traynor, US campaign behind the turmoil in Kiev. The Guardian: November 26, 2004:

[6] Jonathan Steele, Ukraine's postmodern coup d'etat. The Guardian: November 26, 2004:

[7] John Laughland, The revolution televised. The Guardian: November 27, 2004:

[8] Matt Kelley, U.S. money has helped opposition in Ukraine. Associated Press: December 11, 2004:

[9] Mark Almond, The price of People Power. The Guardian: December 7, 2004:

[10] Mark MacKinnon, Agent orange: Our secret role in Ukraine. The Globe and Mail: April 14, 2007:

[11] Daniel Wolf, A 21st century revolt. The Guardian: May 13, 2005:

[12] Craig S. Smith, U.S. Helped to Prepare the Way for Kyrgyzstan's Uprising. The New York Times: March 30, 2005:

[13] Philip Shishkin, In Putin's Backyard, Democracy Stirs -- With U.S. Help. The Wall Street Journal: February 25, 2005:

[14] John Laughland, The mythology of people power. The Guardian: April 1, 2005: