Saturday, November 14, 2009

America’s Dismal Future

America’s Dismal Future

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It did not take the Israel Lobby long to make mincemeat out of the Obama administration’s “no new settlements” position. Israeli prime minister Netanyahu is bragging about Israel’s latest victory over the US government as Israel continues to build illegal settlements on occupied Palestinian land.

In May President Obama read the Israelis the riot act, telling the Israeli government that he was serious about ending the Israeli conflict with the Palestinians and that a lasting peace agreement required the Israeli government to abandon all construction of new settlements in the occupied West Bank.

On November 10 Obama’s White House chief of staff, Rahm Israel Emanuel, surrendered for his boss at the annual conference of the United Jewish Communities. The ongoing Israeli settlements, he said, should not be a “distraction” to a peace agreement.

Allegedly, the US is a superpower and Israel is a client state whose very existence depends entirely on US military and economic aid and diplomatic protection. Yet, in the real world it works the other way. Israel is the superpower and the US is its client state.

This true fact is proved to us at least once every week and sometimes two or three times in one week. A few days ago the US House of Representatives voted 344 to 36 in favor of disavowing the UN report by the distinguished Jewish judge Richard Goldstone that found that Israel had committed war crimes in its attack on the civilian population in the Gaza Ghetto. The Israel Lobby demanded that the House repudiate the fact-filled report, and the servile House did as its master ordered.

US Rep. Dennis Kucinich spoke to his colleagues for 2 minutes in an effort to make them see that their vote against the Goldstone report would be a great embarrassment to the US government and demean the House in the eyes of the world. But none of that matters when Israel gives its servants an order. The US House of Representatives preferred to demean itself and to embarrass the US Government rather than to cross the Israel Lobby.

Retribution quickly fell upon Kucinich for his 2 minute speech. On November 9, Kucinich was forced to withdraw as the keynote speaker for the Palm Beach County (Florida) Democratic Party’s annual fundraising dinner. The Israel Lobby gave the order--dump Kucinich or there’s no money and no one is coming to the dinner. County Commissioner Burt Aaronson called Kucinich “an absolute horror.”

Kucinich is the rare Democrat who stands up for his party’s principles, the working class, and tried to get health care for those Americans the corporations have thrown out on the street. But helping Americans doesn’t count. Israel uber alles.

Meanwhile, the US dollar continues to decline relative to other traded currencies. Since spring, anyone could have made a double-digit rate of return betting on most any currency against the US dollar.

The International Monetary Fund (IMF) recently expressed concern that despite the dollar’s continuing slide, it might still be over-valued. The Federal Reserve’s low interest rate policy encourages speculators to use the dollar for the “carry trade.” Speculators, whether individuals or financial institutions borrow dollars at rock bottom interest rates and use the almost free capital to purchase higher yielding instruments in other countries. The demand for dollars to finance the “carry trade” keeps the dollar higher than it would otherwise be.

Last year it was the Japanese Yen that was used for the “carry trade” due to the practically zero Japanese interest rates. The next scare that unwinds the “carry trade” will cause another big drop in financial asset values. This means that the stock market is very volatile. It is based on speculation, not on fundamentals.

When the “carry trade” next unwinds, the demand for US dollars to pay off the loans will temporarily boost the dollar. But don’t be fooled. The large US trade and budget deficits are the dollar’s death warrant.

When the dollar finally goes, so will the government’s ability to conduct wars of aggression, underwrite Israel, finance its red ink and pay for imports. That’s when the printing press will really get going

Foreclosures rise, consumer sentiment falls in US

Foreclosures rise, consumer sentiment falls in US

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Home foreclosures in the US increased 19 percent in October over a year ago, according to a report released by RealtyTrac, Inc., on Thursday. The number of filings was more than 300,000 for the eighth month in a row.

The figures reflect the continued crisis facing millions of US homeowners who face declining wages and soaring unemployment.

The state with the highest foreclosure rate in the country continues to be Nevada, where one out of 80 homes received a foreclosure filing in October.

The state with the highest absolute number of foreclosures was California, with more than 85,000, followed by Florida, Illinois, and Michigan. These four states accounted for more than 50 percent of all foreclosures in the country.

RealtyTrac reported that the number of foreclosures declined slightly from September, down 3 percent. This was the third straight month-on-month decline. James Saccacio, CEO of RealtyTrac, noted, “However, the fundamental forces driving foreclosure activity in this housing downturn―high-risk mortgages, negative equity, and unemployment―continue to loom over any nascent recovery.”

A separate report released Tuesday from the National Association of Realtors found that the median sale price for a single-family home fell 11.2 percent from a year ago. This includes a price decline in 80 percent of the country’s metropolitan areas.

Lawrence Yun, the group’s chief economist, has expressed hope that the prices are bottoming out, pointing to a shrinking supply of unsold homes. “But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining recovery.”

The housing market, however, intersects with the social crisis facing millions of workers in the US, which shows no signs of letup and makes this “steady stream of financially qualified buyers” unlikely. Official unemployment is now at 10.2 percent and rising, while a broader measure, which includes involuntary part-time workers and those who have left the labor market, has surged to 17.5 percent.

Employers are using high unemployment as a lever to drive down wages and benefits. Total compensation costs for private employers rose by only 1.2 percent from a year ago in September, the lowest increase since the government began recording the measure nearly 30 years ago.

This situation helped push down consumer confidence in November, ahead of the traditional holiday shopping period in the US, which begins after Thanksgiving (November 26). The Reuters/University of Michigan index, released on Friday, fell from 70.6 in October to 66 in November.

According to the report released along with the new figures, “Confidence tumbled in early November due to the grim financial realities faced by consumers as well as weaker economic prospects for the year ahead―importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2 percent on November 6.”

An article in Bloomberg on the confidence figures noted, “Rising joblessness puts the economy at risk of slipping into a vicious circle of firings and declines in consumer spending that will limit the emerging recovery.”

Wall Street traders shrugged off the weaker-than-expected consumer confidence figures and an 18.2 percent increase in the US trade deficit to send stock markets up on the day, thanks to profit reports from several major companies. American corporations as a whole have been able to boost profits by cost-cutting, job cuts, and the increased exploitation of remaining workers. Thanks to these measures, productivity―output per unit labor cost―is surging.

While planned layoffs fell for the third straight month in October, several major companies have announced mass layoffs over the past week.

On Monday, Sprint Nextel said it was aiming to cut $350 million in annual expenses, in part by laying off 2,500 workers―6 percent of its labor force. The move follows 8,000 job cuts earlier this year.

California-based computer chip equipment maker Applied Materials said on Wednesday that it would cut 1,300 to 1,500 jobs as part of a plan to trim costs by $450 million a year. The layoffs will amount to more than 10 percent of its global workforce.

Another California-based technology company, computer game manufacture Electronic Arts, said on Monday that it will lay off 1,500 workers and shift its production focus to higher-profit games.

The continued jobs crisis has been met with indifference by the Obama administration. In a brief statement made on Thursday, Obama emphasized the “limits to what government can and should do, even during such difficult times.” It was necessary to avoid any “ill-considered decision…when our resources are so limited,” he added. (See “Obama announces fraudulent ‘jobs’ summit”)

These remarks pledged to fiscal austerity and “limited government” made clear that the administration will continue to reject any government jobs program or additional stimulus measures. They come after the Obama administration has already handed out trillions of dollars to the banks and continues to spend hundreds of billions on the attempted military conquest of the Middle East and Central Asia.

Army Sends Infant to Protective Services, Mom to Afghanistan

Army Sends Infant to Protective Services, Mom to Afghanistan

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U.S. Army Specialist Alexis Hutchinson, a single mother, is being threatened with a military court-martial if she does not agree to deploy to Afghanistan, despite having been told she would be granted extra time to find someone to care for her 11-month-old son while she is overseas.

Hutchinson, of Oakland, California, is currently being confined at Hunter Army Airfield near Savannah, Georgia, after being arrested. Her son was placed into a county foster care system.

Hutchinson has been threatened with a court martial if she does not agree to deploy to Afghanistan on Sunday, Nov. 15. She has been attempting to find someone to take care of her child, Kamani, while she is deployed overseas, but to no avail.

According to the family care plan of the U.S. Army, Hutchinson was allowed to fly to California and leave her son with her mother, Angelique Hughes of Oakland.

However, after a week of caring for the child, Hughes realised she was unable to care for Kamani along with her other duties of caring for a daughter with special needs, her ailing mother, and an ailing sister.

In late October, Angelique Hughes told Hutchinson and her commander that she would be unable to care for Kamani after all. The Army then gave Hutchinson an extension of time to allow her to find someone else to care for Kamani. Meanwhile, Hughes brought Kamani back to Georgia to be with his mother.

However, only a few days before Hutchinson's original deployment date, she was told by the Army she would not get the time extension after all, and would have to deploy, despite not having found anyone to care for her child.

Faced with this choice, Hutchinson chose not to show up for her plane to Afghanistan. The military arrested her and placed her child in the county foster care system.

Currently, Hutchinson is scheduled to fly to Afghanistan on Sunday for a special court martial, where she then faces up to one year in jail.

Hutchinson's civilian lawyer, Rai Sue Sussman, told IPS, "The core issue is that they are asking her to make an inhumane choice. She did not have a complete family care plan, meaning she did not find someone to provide long-term care for her child. She's required to have a complete family care plan, and was told she'd have an extension, but then they changed it on her."

Asked why she believes the military revoked Hutchinson's extension, Sussman responded, "I think they didn't believe her that she was unable to find someone to care for her infant. They think she's just trying to get out of her deployment. But she's just trying to find someone she can trust to take care of her baby."

Hutchinson's mother has flown to Georgia to retrieve the baby, but is overwhelmed and does not feel able to provide long-term care for the child.

According to Sussman, the soldier needs more time to find someone to care for her infant, but does not as yet have friends or family able to do so.

Sussman says Hutchinson told her, "It is outrageous that they would deploy a single mother without a complete and current family care plan. I would like to find someone I trust who can take care of my son, but I cannot force my family to do this. They are dealing with their own health issues."

Sussman told IPS that the Army's JAG attorney, Captain Ed Whitford, "told me they thought her chain of command thought she was trying to get out of her deployment by using her child as an excuse." '

Major Gallagher, of Hutchinson's unit, also told Sussman that he did not believe it was a real family crisis, and that Hutchinson's "mother should have been able to take care of the baby".

In addition, according to Sussman, a First Sergeant Gephart "told me he thought she [Hutchinson] was pulling her family care plan stuff to get out of her deployment".

"To me it sounds completely bogus," Sussman told IPS, "I think what they are actually going to do is have her spend her year deployment in Afghanistan, then court martial her back here upon her return. This would do irreparable harm to her child. I think they are doing this to punish her, because they think she is lying."

Sussman explained that she believes the best possible outcome is for the Army to either give Hutchinson the extension they had said she would receive so that she can find someone to care for her infant, or barring this, to simply discharge her so she can take care of her child.

Nevertheless, Hutchinson is simply asking for the time extension to complete her family care plan, and not to be discharged.

"I'm outraged by this," Sussman told IPS, "I've never gone to the media with a military client, but this situation is just completely over the top."

Coalition wins foreclosure victories

Coalition wins foreclosure victories

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The Michigan Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shutoffs has recently scored important victories in the fight against home foreclosures and evictions.

After a one-year battle, the coalition, along with neighborhood activists, stopped the eviction of Belva Davis and forced Ocwen Loan Servicing to modify her mortgage. The effort included rallies at her home; a picket at Wachovia/Wells Fargo, the administrator for the trust fund that owned Davis’ mortgage; and a massive telephone and e-mail campaign to Ocwen CEO Ronald Faris.

Attorneys who work with the coalition won a significant court victory on an appeal in a foreclosure eviction case. The Macomb County Circuit Court held that a lender’s failure to modify a loan in accordance with the federal Home Affordable Modification Program can be asserted as a defense to void a foreclosure, and that this defense can be raised by homeowners in an eviction proceeding stemming from the foreclosure. This is one of the first cases in the country to affirm this right.

Despite these victories, coalition organizers report that the foreclosure and eviction crisis is intensifying. Jerry Goldberg, a foreclosure attorney and coalition leader, noted how increasingly the government, through Fannie Mae and Freddie Mac, is the main culprit in eviction actions stemming from foreclosures.

Goldberg told Workers World: “These entities have announced programs to allow renters in foreclosed homes to remain in the homes after foreclosure or receive significant relocation funds. However, in 36th District Court I have seen tenant after tenant being evicted by Fannie Mae illegally, without having been afforded this rental option. I’ve observed lender after lender evicting homeowners without affording them their rights to loan modifications pursuant to the new federal program.”

In response to this illegal activity, the coalition met with law students from the University of Michigan National Lawyers Guild on Nov. 5. They will be preparing a fact sheet for mass distribution at 36th District Court in Detroit, the busiest eviction and foreclosure court in the country. It will contain information on how to challenge foreclosures and evictions, and detail how to fight utility shutoffs—as winter approaches and thousands are threatened with cut-offs.

According to Goldberg, “The government takeover of Fannie Mae and Freddie Mac, along with more and more loans being backed up by the Federal Housing Authority, is in reality a newly disguised bailout for the banks and lenders.”

Fannie Mae and Freddie Mac own or guarantee slightly more than half of all U.S. mortgages, valued at more than $5 trillion. Fannie Mae’s delinquency rate on single family mortgages jumped to 4.17 percent in July 2009, the highest it has been in the 11 years for which records are available. A year ago the delinquency rate was 1.45 percent. (Real Estate Economy Watch, Sept. 29)

The percentage of mortgages owned or guaranteed by Fannie Mae or Freddie Mac is growing, with 70 percent of U.S. mortgages made in the first half of 2009 going through Fannie or Freddie. (Associated Press, Sept. 4) In addition, FHA-insured loans are also on the rise. In July 2008, 30 percent of new loan applications had FHA backing, compared to 2 percent in 2006. (forbes.com, Aug. 26, 2008)

Goldberg notes, “When a mortgage loan that is backed up, insured or owned by Fannie Mae, Freddie Mac or the FHA is foreclosed, the government pays off the lender for the value of the loan. As a result, the banks are receiving the full amount on loans they deliberately overvalued. The government then sells off the home at a reduced amount, with the taxpayer picking up the difference.”

Fannie Mae had nearly $171 billion in troubled loans as of June, with only $55 billion to cover the losses, while Freddie had nearly $78 billion in troubled loans with reserves of only $25 billion. (AP, Sept. 4) That means another $169 billion of taxpayer money will have to be appropriated to cover the losses.

The federal Home Affordable Modification Program, while offering some relief in the form of reduced payments to borrowers, actually perpetuates this government bailout, as the loans are modified based on the existing principal (with arrearages tacked on to the end of the loans), even though the actual value of the home has drastically declined.

Coalition activists say it’s time to bail out the people, not the banks. They demand that home loans be reset to the actual value of the homes, with the banks absorbing the loss in principal that stems from their predatory lending practices. Mortgage payments must be set at a reasonable amount for all homeowners and suspended for the unemployed. Most importantly, there must be an immediate moratorium on all foreclosures and evictions until the mess created by the banks and backed up by the government is undone.

US-China tensions overshadow Obama's trip to Asia

US-China tensions overshadow Obama’s trip to Asia

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US President Barack Obama arrives today in Tokyo at the start of his first trip to Asia. While he will also stop off in South Korea and attend the Asia-Pacific Economic Cooperation (APEC) summit in Singapore, the central focus of the tour is China and the underlying economic and strategic rivalry between Beijing and Washington.

Speaking from the White House on Monday, Obama described the US-China economic relationship as “deeply unbalanced”, pointing in particular to the huge US trade deficit with China and China’s large holdings of US government debt. “The flipside of that is that if we don’t solve some of these problems, then I think both economically and politically it will put enormous strains on the relationship,” he warned.

Trade frictions between the two countries have already flared this year. In September, Obama imposed a 35 percent tariff on Chinese-made tyre imports, prompting Beijing to initiate anti-dumping investigations into US auto and chicken exports to China. Earlier this month, the US instituted tariffs of up to 99 percent on the import of Chinese steel pipes, leading China to expand its previous auto and chicken import investigations.

The punitive US trade measures have prompted fears of a wider trade war. In the first nine months of the year, the US initiated 14 investigations into Chinese exports worth a total of $5.84 billion. Last year, Chinese steel pipe exports to the US were worth $3.2 billion. Chinese Commerce Ministry spokesman Yao Jian complained that more than 90 steel firms would be impacted by the decision.

Obama is under pressure from weaker sections of US business and the trade unions to take a far tougher stance on trade with China. United Steel Workers union head Leo Gerard told the Financial Times: “The most valuable thing on the planet is access to the US market—and we’ve been giving it away for free… We cannot keep giving away our jobs to Asia.”

Protectionism and the stirring up of anti-Asian sentiment has nothing to do with defending American workers. Rather trade union bureaucrats like Gerard resort to the rhetoric of trade war amid the greatest crisis of capitalism since the 1930s to divert attention from their own collaboration with management and government in the destruction of jobs and conditions in the name of “international competitiveness”.

Obama has indicated that in Beijing he will press for the revaluation of the Chinese currency—making Chinese imports dearer in US markets and American goods cheaper in China. China is not only under pressure from the US to revalue the yuan, but also from Japan and Europe as well as countries like Russia and Brazil. As the value of the US dollar has fallen in recent months, the yuan, which is pegged to the dollar, has also dropped against other currencies, provoking protests over unfair competition from cheap Chinese goods.

Beijing hinted earlier this week that the revaluation of the yuan might be under consideration. However, China has its own concerns about the sliding value of the US dollar and has raised the issue of its replacement as the international reserve currency. With more than $800 billion in US bonds, China is currently the largest holder of US government debt outside the United States. Any fall in the dollar impacts directly on Chinese reserves. But to end or even lessen the dollar’s role as the global reserve currency would have a devastating impact on the US financial system and could lead to the emergence of antagonistic currency blocs as in the 1930s.

Underlying these trade and currency tensions is the dramatic shift in the relative economic strength between the two powers over the past two decades. While the US remains the world’s largest economy, China is set to overtake Japan in the next year or so as the world’s second largest economy.

In his comments on Monday, Obama declared: “I see China as a vital partner, as well as a competitor.” While blandly expressing his hope that the competition would remain friendly, Obama comments point to the underlying preoccupation in US ruling circles with China’s emergence as a major strategic and economic rival.

Sections of the American political establishment were bitterly critical of the previous Bush administration not only for failing to focus on the war in Afghanistan but also for its neglect of Asia. Central to both issues is US competition with China—in the first case, for influence in energy-rich Central Asia, and in the second, for economic and strategic hegemony in East and South East Asia. Obama was backed for the presidency as a means of affecting a tactical shift in foreign policy.

In relation to East Asia, the Obama administration signalled a shift in emphasis when the newly appointed Secretary of State Hillary Clinton made the region the destination of her first foreign visit in February. The overriding purpose of Obama’s present tour is to reinforce existing American alliances in the region and to demonstrate that the US has no intention of giving ground to China. National Security Council official Jeffrey Bader declared last Friday: “Through President Obama’s trip, I think it will be vividly clear to the peoples of Asia that the US is here to stay in Asia.”

On the sidelines of the APEC meeting in Singapore, Obama will hold a meeting with leaders of the Association of South East Asian Nations (ASEAN)—a first for a US president. Since the 1997-98 Asian financial crisis, China has played an increasingly important role as a trading partner and source of aid and investment for many ASEAN countries. As a result, Washington has become increasingly concerned that ASEAN, which was originally formed as a Cold War bloc of US allies, is increasingly coming within Beijing’s orbit.

At the ASEAN summit in Thailand last month, discussion centred on the formation of a closer Asian economic community. Already ASEAN has planned to establish a regional common market by 2015. Japan proposed an East Asian Community based on ASEAN that would eventually have a common currency. Already the region is becoming more closely integrated through more than 70 bilateral free trade deals. Only a handful are with the US and talks over deals with South Korea, Thailand and Malaysia have stalled.

The ability of the US to counter China’s growing regional weight is, however, compromised by the continuing financial crisis. Far from being a source of credit and aid, the US is the world’s largest debtor, heavily reliant on a continuing inflow of investment, particularly from China and Japan. The weakness was graphically on display during Clinton’s trip to China in February, when she openly touted for continued Chinese purchases of US bonds and pledged US budgetary restraint in return.

Several commentators have noted that Obama’s “back in Asia” message is compromised by waning US economic strength. Michael Green, senior adviser at the Center for Strategic and International Studies, told the Wall Street Journal: “There’s a feeling among the business community and foreign policy experts that we really can build a lot of momentum for a trans-Pacific series of agreements that would keep the US locked in. The problem is, the US brings absolutely nothing to the table.”

China’s growing economic strength also overshadows Obama’s trip to Japan. A focus of concern in the Japanese media is the fact that the US president is only spending one night in Japan, as compared to three in China. While apparently trivial, the discussion does highlight deep fears in the Japanese ruling elite that Japan, which has long been the most important economic partner and strategic ally of the US in Asia, is being eclipsed by Beijing.

Obama’s visit will focus on shoring up the US-Japan alliance amid the political shift in Japanese politics ushered in by the recent victory of the Democratic Party of Japan over the Liberal Democratic Party that has held power for most of the past half century. Newly elected Prime Minister Yukio Hatoyama has already indicated that his government will seek closer ties with Asia, including China, reflecting China’s emergence as Japan’s top trading partner. At the same time, Hatoyama has reaffirmed his support for the US alliance, which Japan regards as a vital counter to China’s growing military strength.

Japan’s support for US wars of aggression in Afghanistan and Iraq has, however, provoked widespread popular opposition, forcing the Democrats to adopt a more critical attitude. In the course of the election campaign, Hatoyama pledged to end a Japanese naval refuelling mission in support of the US occupation of Afghanistan and to revise an agreement on the repositioning of US military bases on Okinawa. Last Sunday more than 20,000 protesters gathered in Nago City in Okinawa to demand all US forces leave. Obama and Hatoyama appear likely to sidestep both issues during talks.

While economic competition and trade rivalry will be the main topic being publicly discussed during Obama’s trip, the danger of future military conflict hovers in the background. As its relative economic strength has declined, the US has aggressively used its military muscle to assert its economic and strategic dominance. The occupation of Afghanistan is part of a far broader US strategy aimed at containing China by establishing a string of military agreements and bases stretching from Japan and South Korea through South East Asia to the Indian subcontinent and Central Asia. As a result, the US has raised tensions and been a profoundly destabilising factor in virtually every corner of Asia.

US, British media transform tragedies into war propaganda

US, British media transform tragedies into war propaganda

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With the Obama administration on the verge of announcing an escalation that will almost certainly send tens of thousands more troops into the war in Afghanistan, popular opposition to the war continues to grow.

According to a CNN poll released this week, 58 percent of the American people oppose the war. Across the Atlantic, antiwar sentiments in Britain, which has the second largest troop contingent in Afghanistan, is even higher. The latest poll shows just 21 percent supporting the war and 63 percent in favor of withdrawing British troops.

Casualties have risen sharply, with 288 US and 95 British troops having died so far this year. Many more have suffered wounds, resulting in an increasing number of amputations and cases of brain damage.

The US-led military intervention has faced one reversal after another. Armed resistance has spread throughout most of the country, with large areas now under the effective control of the Taliban and local militias opposed to occupation. Politically, the fraudulent and farcical presidential election has only underscored the corruption of Washington’s puppet government headed by Hamid Karzai and deepened the hostility of the Afghan population towards his regime.

America’s senior commander in Afghanistan, General Stanley McChrystal, has advocated winning the “hearts and minds” of the Afghan people supposedly by providing them security and reducing the use of air power so as to limit civilian casualties. Two recent reports, however, make clear that these are just fig leafs for a major military escalation.

The Afghans whom US forces would supposedly make “secure” are fleeing them in huge numbers. The Wall Street Journal Thursday cited the Afghan regime’s ministry of refugee affairs in reporting that “150,000 people—and possibly many more—have been displaced from their homes due to fighting” that has erupted since US troops have been sent into the country’s south. The Journal quoted one 60-year-old refugee who complained of “foreign airstrikes” and explained, “Our children were killed; our crops were destroyed; our homes were damaged. There was nothing left for us there.”

Such airstrikes have escalated once again, McChrystal’s earlier statements notwithstanding. The Air Force Times quoted the Air Forces Central Command as reporting that US and other NATO warplanes dropped 647 bombs on Afghanistan last month while flying 2,359 close-air support sorties. It was the highest bomb total since July 2008.

It was in this context of ever growing antiwar sentiment and the deepening crisis gripping the US-led intervention that the American military suffered an unprecedented calamity, when Major Nidal Hasan shot to death 12 soldiers and one civilian at a Fort Hood in Texas.

The incident is a byproduct of the war itself. Hasan, an Army psychiatrist, was opposed to the wars in Iraq and Afghanistan, apparently traumatized by his six years of counseling of wounded and mentally shattered soldiers at Walter Reed Army hospital and disturbed by anti-Muslim harassment suffered in the military. Former colleagues quoted by National Public Radio described themselves as “deeply troubled” by Hasan’s behavior, which they characterized as “disconnected, aloof, paranoid, belligerent and schizoid.”

Instead of intervening to prevent Hasan from doing harm to himself or others, the military decided to send him to Afghanistan, knowing that he was desperate to avoid going to war. Last Thursday, Hasan snapped, carrying out his deadly shooting spree.

In response, the political establishment and the corporate-controlled media have intervened to transform the mass shooting into a terrorist attack, supposedly demonstrating the necessity to redouble the “war on terrorism” both at home and abroad.

Right-wing commentators initiated this turn, denouncing the rest of the media for “political correctness” in its failure to make the major’s belief in Islam the motivation for the shootings and proof that they constituted an act of terrorism. The fact that he was manifestly psychologically disturbed was dismissed as beside the point.

In a column published Thursday in the Wall Street Journal, the paper’s deputy editorial page director, Daniel Henninger, blamed the Fort Hood massacre on those who had questioned domestic surveillance, “waterboarding, renditions and secret prisons.” The lesson of Fort Hood, he claimed, was that “over there or here at home, they will keep trying to kill us.”

The rest of the media has followed suit, focusing its attention on email messages between Hasan and an imam in Yemen and his statements of religious conviction, while questioning how federal investigators failed to pursue a security investigation involving the major.

The grief over the deaths of the 13 shooting victims at Fort Hood has been milked by the media for all its worth, with the well-heeled television announcers using the tragedy to glorify the military and the wars of aggression that Washington is waging for control of the oil-rich Persian Gulf and Central Asia. In remarks on Tuesday, Obama himself exploited the event to support US militarism, including the planned escalation in Afghanistan.

A similar and in some ways even more tawdry spectacle has been provided by the media in Britain, spearheaded by the Sun tabloid newspaper of the right-wing media mogul Rupert Murdoch.

In this case, the mounting combat deaths of British troops, which have intensified hostility to the war, are being exploited to promote its escalation. The instrument chosen for this operation is the poor penmanship exhibited by Prime Minister Gordon Brown in a letter of condolence to the mother of a Jamie Janes, a soldier killed by a roadside bomb in Afghanistan.

The Sun not only published the letter together with Jacqui Janes’s condemnation of Brown for allegedly misspelling her son’s name and for failing to provide the British troops with adequate equipment. It also put on its site a recording of an acrimonious conversation between Brown and the mother, secretly recorded when the prime minister sought to make a phoned apology.

The patent aim of Murdoch and the Sun is to counter opposition to the war by claiming that the problem is military incompetence on the part of the Labour government that can be cured with the election of the Tories and the war’s escalation.

The soldier’s uncle, Ian Cox, an Army veteran, expressed disgust over the entire episode, telling the daily Mirror, “It’s very wrong to hijack the grief of a woman who has lost her son to make a political point.”

The point is well made, but such “hijacking” of popular sentiments in order to promote militarism abroad and social reaction at home is the mass media’s stock-in-trade. It was put into practice most infamously with the concerted propaganda campaign to falsely tie the war in Afghanistan and the US invasion of Iraq to the September 11, 2001 attacks.

Now, the deaths of soldiers—those slain by a disturbed officer at Fort Hood as well as those killed in Afghanistan—are being exploited in an attempt to intimidate mass antiwar sentiment and support a military escalation that will lead to many more deaths of both Afghan civilians and those sent by the US and British military to suppress opposition to foreign occupation.

Va. teen suffers rare illness after swine flu shot

Va. teen suffers rare illness after swine flu shot

Boy diagnosed with Guillain-Barre syndrome, but CDC says no clear link

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A 14-year-old Virginia boy is weak and struggling to walk after coming down with a reported case of Guillain-Barre syndrome within hours after receiving the H1N1 vaccine for swine flu.

Jordan McFarland, a high school athlete from Alexandria, Va., left Inova Fairfax Hospital for Children Tuesday night in a wheelchair nearly a week after developing severe headaches, muscle spasms and weakness in his legs following a swine flu shot. He will likely need the assistance of a walker for four to six weeks, plus extensive physical therapy.

“The doctor said I’ll recover fully, but it’s going to take some time,” the teenager said.

Jordan is among the first people in the nation to report developing the potentially life-threatening muscle disorder after receiving the H1N1 vaccine this fall. His alarming reaction was submitted via msnbc.com's reader reporting tool, First Person, by his stepmother, Arlene Connin.

Increased cases of GBS were found in patients who received a 1976 swine flu vaccine, but government health officials say they've seen no rise in the condition associated with the current outbreak.

So far, the federal Centers for Disease Control and Prevention have received five reports of GBS in people who received the H1N1 vaccine since Oct. 6, not including Jordan’s case, said Dr. Claudia J. Vellozzi, deputy director for immunization safety.

Out of about 40 million doses of H1N1 vaccine available to date, that’s a far lower rate of GBS than the 1 case that develops in every 1 million people who receive the regular flu vaccine.

"It's much less than we'd expect," she said, adding that many cases go unreported.

In 1976, about 1 additional case of GBS developed in every 100,000 people who were vaccinated against the swine flu, according to the CDC.

Jordan's parents said doctors diagnosed the teen with GBS, a rare muscle disorder that develops when a person’s own immune system attacks the nerves, causing muscle weakness, difficulty walking and sometimes paralysis and death.

Hospital officials didn't dispute that the boy had GBS, but refused to comment on the boy's condition or treatment, even after his family granted permission.

“They don’t want to create a fear or panic in the community,” said Jordan's stepmother, Connin.

Connin and Jordan’s father, Calvin McFarland, both 38, believe the shot sparked the illness that came on 18 hours after the boy’s vaccination.

No clear link
But Vellozzi said there’s no clear link between the new vaccine and the disease.

“We know that GBS and other illnesses occur routinely in the U.S.,” Vellozzi said, noting that 80 to 120 cases are diagnosed each week in the general population.

“There are events that follow vaccination. That’s what they are, they happened to follow vaccination.

GBS is among the most severe adverse events being tracked with updated systems developed by the CDC, the Food and Drug Administration and the American Academy of Neurology in order to monitor the rollout of the H1N1 flu vaccine.

So far, CDC officials have received about 1,700 reports of adverse events linked to the new shot, Vellozzi said. Of those, only about 4 percent, or 68, were coded as serious. That’s on par with reports regarding seasonal vaccine.

While any harmful side effect can be devastating for an individual, when it comes to larger public health issues, the H1N1 virus is considerably riskier than the vaccine, experts say.

“The H1N1 illness is making lots of children very ill," Vellozzi said. "There’s lots of illness and lots of death."

So far, more than 4,000 people have died from H1N1 infection in the U.S., according to latest estimates by the CDC.

Since the start of the H1N1 vaccine campaign, the CDC has repeatedly warned that certain conditions, such as miscarriage, heart attack and even GBS occur regardless of immunization, and officials have urged the public not to blame the vaccine for the illnesses, but to report promptly any suspected side effects.

As of early Wednesday, CDC officials said they had received no report from Inova Fairfax about Jordan's condition. Later in the day, however, hospital spokesman Tony Raker indicated the hospital had submitted the report.

After hearing about Jordan's case from msnbc.com, CDC officials advised the family to report Jordan's case themselves.

Vaccine critic Barbara Lowe Fisher, president of the National Vaccine Information Center in Vienna, Va., said assuming all potential side effects are coincidence is a mistake. Such an attitude is likely to prevent doctors and other health workers from reporting adverse events in a timely manner, obscuring a true picture of any problems.

Fisher said only between 1 percent and 10 percent of adverse events are reported to the government's Vaccine Adverse Event Reporting System, which was set up to track problems with vaccines. A 1986 law requires reporting of certain adverse events to VAERS, but there are no sanctions for not reporting, Fisher noted. CDC officials said general reporting to VAERS is voluntary.

Fisher said she suspects that many more cases of GBS have occurred in the wake of the H1N1 vaccines.

"We basically have people blowing it off," she said. "We need to make sure people are reporting."

Eager for protection
Like many parents across the country, Arlene Connin said she was eager to protect Jordan and his brother, Lleyton, 7, against the flu. When she took the boys to their pediatrician for seasonal flu shots on Nov. 5, the provider said H1N1 vaccine was available, too.

There was “not even a thought,” that either boy would have a reaction, Connin said. Within hours, however, Jordan developed severe headaches, chills and back spasms. The family rushed him to the closest hospital, Dewitt Army Community Hospital, where doctors conducted neurological exams, a CT scan and an EKG test.

The small hospital didn’t have the facilities to diagnose or treat Jordan’s illness, so he was transferred by ambulance on Nov. 6 to Inova Fairfax Hospital in Falls Church, Va., a spokesman said. Doctors there quickly gave Jordan intravenous immunoglobulin, a standard treatment for GBS, Connin said.

“GBS, that’s the diagnosis they gave us and that’s how they were treating him,” Connin said.

A hospital spokesman, Tony Raker, declined further comment on Jordan's case. When an msnbc.com photographer asked to view Jordan's chart, even with his father's permission, hospital officials refused.

Doctors are reluctant to discuss GBS in connection with vaccines, Connin said. Anti-vaccine groups frequently cite the disorder as evidence of vaccine dangers, which public health officials fear will discourage people from getting life-saving protection, especially in the case of H1N1.

Jordan’s experience has made his parents think hard about immunization, even though they’ve always insisted on annual flu shots. Under CDC guidelines for children 9 and younger, Lleyton should receive another booster shot of H1N1 vaccine to protect him fully against the virus.

“I have mixed emotions on that one,” Calvin McFarland, the boys’ father, said. “We’re not sure what we’re going to do about that.”

Russia-India-China: The Bush Curse

Russia-India-China: The Bush Curse

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Moscow is trying to draw India and China closer to put out the flames now flaring across the continent, from the Caucasus and Central Asia, to Iran and Pakistan

United States President Barack Obama has shown a flicker of independence in shaping US Eurasian politics. To secure transit routes through Russia to Afghanistan, he loudly proclaimed the end to US missile base plans for Poland and the Czech Republic, and downplayed any further NATO expansion in Russia’s backyard. He resisted jumping on the Gates-Clinton-McChrystal escalation bandwagon, insisting that it would be counterproductive to blindly back the thoroughly discredited Karzai, and hinting that negotiations with the Taliban and Iran could mean an about-face on the Bush strategy of total war in the region.

Obama’s strategy is now described as focussed on securing the main cities in Afghanistan, while abandoning most of the country to the Taliban. This can only be a holding measure while attempts are made to lure moderate elements in the Taliban away from their comrades to join the Karzai clique. In talks with former Taliban foreign minister Mullah Wakil Ahmed Mutawakkil brokered by Saudi Arabia and Turkey, US negotiators supposedly offered governorship of six provinces in the south and northeast, a senior Afghan Foreign Ministry official told IslamOnline.net – if they accept the presence of NATO troops in Afghanistan and eight US bases.

But the latest is he will bow to McChrystal’s demand for up to 40,000 more troops, US drone attacks continue apace in AfPak with his blessing, and the US is urging Pakistan on in its civil war against its frontier provinces of Baluchistan and Waziristan, pouring in massive military aid.

And missile and other plans in Eastern Europe are proceeding apace, with or without Obama’s blessing. US officials have gone out of their way to assuage the Poles and Czechs with assurances that the bases were not really cancelled. Under Secretary of State for Arms Control and International Security Affairs Ellen Tauscher recently said the command centre for the new version of anti-missile defence could be stationed in the Czech Republic.

Now Poland is asking not only for missiles, but US troops, apparently “alarmed” by military exercises conducted by the Russian army in Belarus. “We would like to see US troops stationed in Poland to serve as a shield against Russian aggression,” Polish Foreign Minister Radek Sikorski was quoted by Interfax. “If you can still afford it, we need some strategic reassurance,” he added sarcastically. When asked to comment, a Russian Foreign Ministry official told Kommersant, “It is better to ask the World Health Organisation for an assessment of Mr Sikorski’s words.” Estonia, which has sent a hefty 10 per cent of its armed forces to Afghanistan, is also asking for US troops.

NATO assurances to Georgia and Ukraine about joining up are still a dime a dozen. Georgia’s army is being armed by the US, Israeli and Ukraine, according to Alexander Shlyakhturov, head of Russia’s Main Intelligence Directorate, encouraging Georgian President Mikheil Saakashvili in his plans to reincorporate South Ossetia and Abkhazia.

All this can only mean that talk of real cooperation with Russia is an illusion, as is vague talk of accommodation with Iran. Obama may mean well, but the inertia of US empire is hard to stop.

Russian politicians are not blind. Nor are the Chinese. Both Russia and China refuse to accede to US fiat on Iran, and are cooperating on many fronts these days looking for ways to ease the world towards a “multipolar world”.

This is the backdrop to the 9th meeting of the Russia-India-China (RIC) trilateral meeting which took place in Bangalore in late October, attended by Russian Foreign Minister Sergei Lavrov, Indian External Affairs Minister SM Krishna and Chinese Foreign Minister Yang Jiechi. Said Lavrov after the meeting, “RIC is a group of countries that are integrally needed to mobilise regional efforts. But they are not enough. All of Afghanistan ’s neighbours are needed. The US, the main supplier of troops is needed. Iran is needed. The Central Asian countries are needed.” He politely refrained from saying that it is only because of the US invasion that the US has any role at all in the region.

As Lavrov rightly points out, it is the regional countries China, Russia, India and Iran that are the ones left to pick up the pieces in AfPak after the US finally packs its many bags. Russia has the Collective Security Treaty Organization. Russia and China have the Shanghai Cooperation Organisation. Even Iran has initiated its own trilateral format with Pakistan and Afghanistan. However, as MK Bhadrakumar writes in Asia Times, so far Lavrov’s efforts to fashion the three mini-superpowers into a united front on regional issues have been fruitless. Bad karma between the two most populous countries in the world lingers on; namely, the India-China frictions over borders and the Dalai Lama.

It is not only its Chinese neighbour that India can’t get along with. Deriving from its perennial distrust of anything to do with Pakistan, Delhi refuses to acknowledge the fact that the Taliban are an Afghan political reality and are part (let alone “all”) of any solution. Having drifted into the US orbit (curiously, along with its rival Pakistan), India risks being left behind, as the US-inspired war in Afghanistan continues to go nowhere, Pakistan descends into anarchy, China surges ahead, and the Russians and Chinese intensify their cooperation.

Of course, this and RIC’s inability to address Afghanistan suits the US just fine. Regional powers working together independently of the US to solve their problems would leave the US and its many SEATOs and NATOs out of the picture. Japan would like to fashion an East Asian community no longer subservient to Washington, but, according to President of the Japan Foundation Kazuo Ogoura, “It is intolerable [for Washington] to see Asians considering their relations among each other in a form that excludes the US.”

Obama is visiting Beijing and Tokyo this week. Oblivious to Asian disinterest in marching to US orders, Mark Brzezinski (son of Zbigniew) advised him in the New York Times to include in his “China List” establishing a formal mechanism among the leaders of the US, China and Pakistan – China is after all Pakistan’s oldest friend as counterweight to India. This pointedly leaves out Russia and India and ties China to US plans for the region. Good luck, Mr Obama.

Surprisingly, Moscow hasn’t given up entirely on Obama. Lavrov told Russian journalists in Bangalore, “Obama has announced a different philosophy – that of collective action, which calls for joint analysis, decision-making and implementation rather than for all others to follow Washington ’s decisions. So far inertia lingers at the implementers’ level in the US, who still follow the well-trodden track. This is a process which will take time before the president’s will is translated into the language of practical actions by his subordinates.”

However distasteful US actions are, the Russian leadership cannot risk closing the door completely on US efforts to end the war in Afghanistan, considering it was on the losing end against the Afghan resistance 20 years ago and is less than enamoured by an avowedly Islamic state there. But it is unlikely that China will join India and Pakistan as a US client state, and if India buries the hatchet with China and reconsiders its position on the Taliban, the situation for the US – and Afghanistan – could yet change dramatically. There is small reason for any of the RICs to be haunted by Bush’s curse – the US-inspired wars and subversion in their backyard.

Surveillance State, U.S.A.

Surveillance State, U.S.A.

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Wars come home in strange, unnerving ways -- as Americans have just discovered at Fort Hood. Even before Major Nidal Malik Hasan went on his killing spree, that base, a major military embarkation point for our war zones, was already experiencing the after-effects of eight years of war and repeated tours of duty. The suicide rate at Fort Hood was soaring (with 10 on the base in 2009 alone). Divorce rates were on the rise, as were mental health problems, drug and alcohol use, domestic abuse (up 75% since 2001), and murders among war-zone returnees. Even violent crime in Killeen, the town that houses the base, was up 22% (though it was down, according to the New York Times, "in towns of similar size in other parts of the country"). In an era in which our last president urged Americans to support his Global War on Terror by shopping and visiting Disney World, it often seemed that, except for soldiers and their families, our wars abroad affected little in this country.

And yet for an imperial power past its prime, foreign wars, even ones fought thousands of miles from home, have a way of coming back to haunt. Alfred W. McCoy tends to be ahead of the curve in his writing. In the Vietnam era, he had to fight the CIA to get his book, The Politics of Heroin: CIA Complicity in the Global Drug Trade, published; in the Bush years, he was perhaps the first person to recognize that the photos from Abu Ghraib represented no anomaly but the product of a long history of CIA torture research -- and published a powerful book, A Question of Torture, on the subject.

His latest book, Policing America's Empire: The United States, the Philippines, and the Rise of the Surveillance State, meets counterinsurgency, another topic direct from today's headlines, head on. It ends on these lines: "...a state, like the United States, that rules a foreign territory through political repression and pervasive policing soon finds many of those same coercive methods moving homeward to degrade its own democracy. Such are the costs of empire." In his latest TomDispatch post, McCoy lays out just how that impulse for repression and policing, so vividly and violently expressed abroad in these last years, is now quietly taking aim at us. Tom

Welcome Home, War!

How America's Wars Are Systematically Destroying Our Liberties
By Alfred W. McCoy

In his approach to National Security Agency surveillance, as well as CIA renditions, drone assassinations, and military detention, President Obama has to a surprising extent embraced the expanded executive powers championed by his conservative predecessor, George W. Bush. This bipartisan affirmation of the imperial executive could "reverberate for generations," warns Jack Balkin, a specialist on First Amendment freedoms at Yale Law School. And consider these but some of the early fruits from the hybrid seeds that the Global War on Terror has planted on American soil. Yet surprisingly few Americans seem aware of the toll that this already endless war has taken on our civil liberties.

Don't be too surprised, then, when, in the midst of some future crisis, advanced surveillance methods and other techniques developed in our recent counterinsurgency wars migrate from Baghdad, Falluja, and Kandahar to your hometown or urban neighborhood. And don't ever claim that nobody told you this could happen -- at least not if you care to read on.

Think of our counterinsurgency wars abroad as so many living laboratories for the undermining of a democratic society at home, a process historians of such American wars can tell you has been going on for a long, long time. Counterintelligence innovations like centralized data, covert penetration, and disinformation developed during the Army's first protracted pacification campaign in a foreign land -- the Philippines from 1898 to 1913 -- were repatriated to the United States during World War I, becoming the blueprint for an invasive internal security apparatus that persisted for the next half century.

Almost 90 years later, George W. Bush's Global War on Terror plunged the U.S. military into four simultaneous counterinsurgency campaigns, large and small -- in Somalia, Iraq, Afghanistan, and (once again) the Philippines -- transforming a vast swath of the planet into an ad hoc "counterterrorism" laboratory. The result? Cutting-edge high-tech security and counterterror techniques that are now slowly migrating homeward.

As the War on Terror enters its ninth year to become one of America's longest overseas conflicts, the time has come to ask an uncomfortable question: What impact have the wars in Afghanistan and Iraq -- and the atmosphere they created domestically -- had on the quality of our democracy?

Every American knows that we are supposedly fighting elsewhere to defend democracy here at home. Yet the crusade for democracy abroad, largely unsuccessful in its own right, has proven remarkably effective in building a technological template that could be just a few tweaks away from creating a domestic surveillance state -- with omnipresent cameras, deep data-mining, nano-second biometric identification, and drone aircraft patrolling "the homeland."

Even if its name is increasingly anathema in Washington, the ongoing Global War on Terror has helped bring about a massive expansion of domestic surveillance by the FBI and the National Security Agency (NSA) whose combined data-mining systems have already swept up several billion private documents from U.S. citizens into classified data banks. Abroad, after years of failing counterinsurgency efforts in the Middle East, the Pentagon began applying biometrics -- the science of identification via facial shape, fingerprints, and retinal or iris patterns -- to the pacification of Iraqi cities, as well as the use of electronic intercepts for instant intelligence and the split-second application of satellite imagery to aid an assassination campaign by drone aircraft that reaches from Africa to South Asia.

In the panicky aftermath of some future terrorist attack, Washington could quickly fuse existing foreign and domestic surveillance techniques, as well as others now being developed on distant battlefields, to create an instant digital surveillance state.

The Crucible of Counterinsurgency

For the past six years, confronting a bloody insurgency, the U.S. occupation of Iraq has served as a white-hot crucible of counterinsurgency, forging a new system of biometric surveillance and digital warfare with potentially disturbing domestic implications. This new biometric identification system first appeared in the smoking aftermath of "Operation Phantom Fury," a brutal, nine-day battle that U.S. Marines fought in late 2004 to recapture the insurgent-controlled city of Falluja. Bombing, artillery, and mortars destroyed at least half of that city's buildings and sent most of its 250,000 residents fleeing into the surrounding countryside. Marines then forced returning residents to wait endless hours under a desert sun at checkpoints for fingerprints and iris scans. Once inside the city's blast-wall maze, residents had to wear identification tags for compulsory checks to catch infiltrating insurgents.

The first hint that biometrics were helping to pacify Baghdad's far larger population of seven million came in April 2007 when the New York Times published an eerie image of American soldiers studiously photographing an Iraqi's eyeball. With only a terse caption to go by, we can still infer the technology behind this single record of a retinal scan in Baghdad: digital cameras for U.S. patrols, wireless data transfer to a mainframe computer, and a database to record as many adult Iraqi eyes as could be gathered. Indeed, eight months later, the Washington Post reported that the Pentagon had collected over a million Iraqi fingerprints and iris scans. By mid-2008, the U.S. Army had also confined Baghdad's population behind blast-wall cordons and was checking Iraqi identities by satellite link to a biometric database.

Pushing ever closer to the boundaries of what present-day technology can do, by early 2008, U.S. forces were also collecting facial images accessible by portable data labs called Joint Expeditionary Forensic Facilities, linked by satellite to a biometric database in West Virginia. "A war fighter needs to know one of three things," explained the inventor of this lab-in-a-box. "Do I let him go? Keep him? Or shoot him on the spot?"

A future is already imaginable in which a U.S. sniper could take a bead on the eyeball of a suspected terrorist, pause for a nanosecond to transmit the target's iris or retinal data via backpack-sized laboratory to a computer in West Virginia, and then, after instantaneous feedback, pull the trigger.

Lest such developments seem fanciful, recall that Washington Post reporter Bob Woodward claims the success of George W. Bush's 2007 troop surge in Iraq was due less to boots on the ground than to bullets in the head -- and these, in turn, were due to a top-secret fusion of electronic intercepts and satellite imagery. Starting in May 2006, American intelligence agencies launched a Special Action Program using "the most highly classified techniques and information in the U.S. government" in a successful effort "to locate, target and kill key individuals in extremist groups such as al-Qaeda, the Sunni insurgency and renegade Shia militias."

Under General Stanley McChrystal, now U.S. Afghan War commander, the Joint Special Operations Command (JSOC) deployed "every tool available simultaneously, from signals intercepts to human intelligence" for "lightning quick" strikes. One intelligence officer reportedly claimed that the program was so effective it gave him "orgasms." President Bush called it "awesome." Although refusing to divulge details, Woodward himself compared it to the Manhattan Project in World War II. This Iraq-based assassination program relied on the authority Defense Secretary Donald Rumsfeld granted JSOC in early 2004 to "kill or capture al-Qaeda terrorists" in 20 countries across the Middle East, producing dozens of lethal strikes by airborne Special Operations forces.

Another crucial technological development in Washington's secret war of assassination has been the armed drone, or unmanned aerial vehicle, whose speedy development has been another by-product of Washington's global counterterrorism laboratory. Half a world away from Iraq in the southern Philippines, the CIA and U.S. Special Operations Forces conducted an early experiment in the use of aerial surveillance for assassination. In June 2002, with a specially-equipped CIA aircraft circling overhead offering real-time video surveillance in the pitch dark of a tropical night, Philippine Marines executed a deadly high-seas ambush of Muslim terrorist Aldam Tilao (a.k.a. "Abu Sabaya").

In July 2008, the Pentagon proposed an expenditure of $1.2 billion for a fleet of 50 light aircraft loaded with advanced electronics to loiter over battlefields in Afghanistan and Iraq, bringing "full motion video and electronic eavesdropping to the troops." By late 2008, night flights over Afghanistan from the deck of the USS Theodore Roosevelt were using sensors to give American ground forces real-time images of Taliban targets -- some so focused that they could catch just a few warm bodies huddled in darkness behind a wall.

In the first months of Barack Obama's presidency, CIA Predator drone strikes have escalated in the Pakistani tribal borderlands with a macabre efficiency, using a top-secret mix of electronic intercepts, satellite transmission, and digital imaging to kill half of the Agency's 20 top-priority al-Qaeda targets in the region. Just three days before Obama visited Canada last February, Homeland Security launched its first Predator-B drones to patrol the vast, empty North Dakota-Manitoba borderlands that one U.S. senator has called America's "weakest link."

Homeland Security

While those running U.S. combat operations overseas were experimenting with intercepts, satellites, drones, and biometrics, inside Washington the plodding civil servants of internal security at the FBI and the NSA initially began expanding domestic surveillance through thoroughly conventional data sweeps, legal and extra-legal, and -- with White House help -- several abortive attempts to revive a tradition that dates back to World War I of citizens spying on suspected subversives.

"If people see anything suspicious, utility workers, you ought to report it," said President George Bush in his April 2002 call for nationwide citizen vigilance. Within weeks, his Justice Department had launched Operation TIPS (Terrorism Information and Prevention System), with plans for "millions of American truckers, letter carriers, train conductors, ship captains, utility employees and others" to aid the government by spying on their fellow Americans. Such citizen surveillance sparked strong protests, however, forcing the Justice Department to quietly bury the president's program.

Simultaneously, inside the Pentagon, Admiral John Poindexter, President Ronald Reagan's former national security advisor (swept up in the Iran-Contra scandal of that era), was developing a Total Information Awareness program which was to contain "detailed electronic dossiers" on millions of Americans. When news leaked about this secret Pentagon office with its eerie, all-seeing eye logo, Congress banned the program, and the admiral resigned in 2003. But the key data extraction technology, the Information Awareness Prototype System, migrated quietly to the NSA.

Soon enough, however, the CIA, FBI, and NSA turned to monitoring citizens electronically without the need for human tipsters, rendering the administration's grudging retreats from conventional surveillance at best an ambiguous political victory for civil liberties advocates. Sometime in 2002, President Bush gave the NSA secret, illegal orders to monitor private communications through the nation's telephone companies and its private financial transactions through SWIFT, an international bank clearinghouse.

After the New York Times exposed these wiretaps in 2005, Congress quickly capitulated, first legalizing this illegal executive program and then granting cooperating phone companies immunity from civil suits. Such intelligence excess was, however, intentional. Even after Congress widened the legal parameters for future intercepts in 2008, the NSA continued to push the boundaries of its activities, engaging in what the New York Times politely termed the systematic "overcollection" of electronic communications among American citizens. Now, for example, thanks to a top-secret NSA database called "Pinwale," analysts routinely scan countless "millions" of domestic electronic communications without much regard for whether they came from foreign or domestic sources.

Starting in 2004, the FBI launched an Investigative Data Warehouse as a "centralized repository for... counterterrorism." Within two years, it contained 659 million individual records. This digital archive of intelligence, social security files, drivers' licenses, and records of private finances could be accessed by 13,000 Bureau agents and analysts making a million queries monthly. By 2009, when digital rights advocates sued for full disclosure, the database had already grown to over a billion documents.

And did this sacrifice of civil liberties make the United States a safer place? In July 2009, after a careful review of the electronic surveillance in these years, the inspectors general of the Defense Department, the Justice Department, the CIA, the NSA, and the Office of National Intelligence issued a report sharply critical of these secret efforts. Despite George W. Bush's claims that massive electronic surveillance had "helped prevent attacks," these auditors could not find any "specific instances" of this, concluding such surveillance had "generally played a limited role in the F.B.I.'s overall counterterrorism efforts."

Amid the pressures of a generational global war, Congress proved all too ready to offer up civil liberties as a bipartisan burnt offering on the altar of national security. In April 2007, for instance, in a bid to legalize the Bush administration's warrantless wiretaps, Congressional representative Jane Harman (Dem., California) offered a particularly extreme example of this urge. She introduced the Violent Radicalization and Homegrown Terrorism Prevention Act, proposing a powerful national commission, functionally a standing "star chamber," to "combat the threat posed by homegrown terrorists based and operating within the United States." The bill passed the House by an overwhelming 404 to 6 vote before stalling, and then dying, in a Senate somewhat more mindful of civil liberties.

Only weeks after Barack Obama entered the Oval Office, Harman's life itself became a cautionary tale about expanding electronic surveillance. According to information leaked to the Congressional Quarterly, in early 2005 an NSA wiretap caught Harman offering to press the Bush Justice Department for reduced charges against two pro-Israel lobbyists accused of espionage. In exchange, an Israeli agent offered to help Harman gain the chairmanship of the House Intelligence Committee by threatening House Democratic majority leader Nancy Pelosi with the loss of a major campaign donor. As Harman put down the phone, she said, "This conversation doesn't exist."

How wrong she was. An NSA transcript of Harman's every word soon crossed the desk of CIA Director Porter Goss, prompting an FBI investigation that, in turn, was blocked by then-White House Counsel Alberto Gonzales. As it happened, the White House knew that the New York Times was about to publish its sensational revelation of the NSA's warrantless wiretaps, and felt it desperately needed Harman for damage control among her fellow Democrats. In this commingling of intrigue and irony, an influential legislator's defense of the NSA's illegal wiretapping exempted her from prosecution for a security breach discovered by an NSA wiretap.

Since the arrival of Barack Obama in the White House, the auto-pilot expansion of digital domestic surveillance has in no way been interfered with. As a result, for example, the FBI's "Terrorist Watchlist," with 400,000 names and a million entries, continues to grow at the rate of 1,600 new names daily.

In fact, the Obama administration has even announced plans for a new military cybercommand staffed by 7,000 Air Force employees at Lackland Air Base in Texas. This command will be tasked with attacking enemy computers and repelling hostile cyber-attacks or counterattacks aimed at U.S. computer networks -- with scant respect for what the Pentagon calls "sovereignty in the cyberdomain." Despite the president's assurances that operations "will not -- I repeat -- will not include monitoring private sector networks or Internet traffic," the Pentagon's top cyberwarrior, General James E. Cartwright, has conceded such intrusions are inevitable.

Sending the Future Home

While U.S. combat forces prepare to draw-down in Iraq (and ramp up in Afghanistan), military intelligence units are coming home to apply their combat-tempered surveillance skills to our expanding homeland security state, while preparing to counter any future domestic civil disturbances here.

Indeed, in September 2008, the Army's Northern Command announced that one of the Third Division's brigades in Iraq would be reassigned as a Consequence Management Response Force (CMRF) inside the U.S. Its new mission: planning for moments when civilian authorities may need help with "civil unrest and crowd control." According to Colonel Roger Cloutier, his unit's civil-control equipment featured "a new modular package of non-lethal capabilities" designed to subdue unruly or dangerous individuals -- including Taser guns, roadblocks, shields, batons, and beanbag bullets.

That same month, Army Chief of Staff General George Casey flew to Fort Stewart, Georgia, for the first full CMRF mission readiness exercise. There, he strode across a giant urban battle map filling a gymnasium floor like a conquering Gulliver looming over Lilliputian Americans. With 250 officers from all services participating, the military war-gamed its future coordination with the FBI, the Federal Emergency Management Agency, and local authorities in the event of a domestic terrorist attack or threat. Within weeks, the American Civil Liberties Union filed an expedited freedom of information request for details of these deployments, arguing: "[It] is imperative that the American people know the truth about this new and unprecedented intrusion of the military in domestic affairs."

At the outset of the Global War on Terror in 2001, memories of early Cold War anti-communist witch-hunts blocked Bush administration plans to create a corps of civilian tipsters and potential vigilantes. However, far more sophisticated security methods, developed for counterinsurgency warfare overseas, are now coming home to far less public resistance. They promise, sooner or later, to further jeopardize the constitutional freedoms of Americans.

In these same years, under the pressure of War on Terror rhetoric, presidential power has grown relentlessly, opening the way to unchecked electronic surveillance, the endless detention of terror suspects, and a variety of inhumane forms of interrogation. Somewhat more slowly, innovative techniques of biometric identification, aerial surveillance, and civil control are now being repatriated as well.

In a future America, enhanced retinal recognition could be married to omnipresent security cameras as a part of the increasingly routine monitoring of public space. Military surveillance equipment, tempered to a technological cutting edge in counterinsurgency wars, might also one day be married to the swelling domestic databases of the NSA and FBI, sweeping the fiber-optic cables beneath our cities for any sign of subversion. And in the skies above, loitering aircraft and cruising drones could be checking our borders and peering down on American life.

If that day comes, our cities will be Argus-eyed with countless thousands of digital cameras scanning the faces of passengers at airports, pedestrians on city streets, drivers on highways, ATM customers, mall shoppers, and visitors to any federal facility. One day, hyper-speed software will be able to match those millions upon millions of facial or retinal scans to photos of suspect subversives inside a biometric database akin to England's current National Public Order Intelligence Unit, sending anti-subversion SWAT teams scrambling for an arrest or an armed assault.

By the time the Global War on Terror is declared over in 2020, if then, our American world may be unrecognizable -- or rather recognizable only as the stuff of dystopian science fiction. What we are proving today is that, however detached from the wars being fought in their name most Americans may seem, war itself never stays far from home for long. It's already returning in the form of new security technologies that could one day make a digital surveillance state a reality, changing fundamentally the character of American democracy.

Alfred W. McCoy is the J.R.W. Smail Professor of History at the University of Wisconsin-Madison and the author of A Question of Torture, among other works. His most recent book is Policing America's Empire: The United States, the Philippines, and the Rise of the Surveillance State (University of Wisconsin Press) which explores the influence of overseas counterinsurgency operations throughout the twentieth century in spreading ever more draconian internal security measures here at home.

Whistleblowers Say Oil Reserve Numbers Deliberately Inflated to Avoid Panic, Appease the US

Whistleblowers Say Oil Reserve Numbers Deliberately Inflated to Avoid Panic, Appease the US

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World oil reserves are far lower than officially reported, the situation far more serious than publicly admitted, and we're already past peak oil. That's the word from two anonymous IEA whistleblowers, The Guardian reports. To add insult to industry, the figures were deliberately massaged, at least in part, to appease the United States:

Apparently the IEA was concerned that reporting the true reserve numbers -- and keep in mind that determining oil reserves is as much art as science -- it would trigger a buying panic.

The US enters the picture encouraging the IEA to underplay the rate at which oil fields are being depleted -- something which the IEA has admitted in recent months is occurring more quickly than previously acknowledged -- while at the same time overplaying the possibility of new large discoveries.

Indeed, when one does the math on how much recent new oil finds, touted as 'huge', actually add to world reserves, the result is usually in days or weeks of additional world supply, not months, still less years.

Little Room to Expand Global Production
Drilling into the numbers, the first whistleblower -- who is still at the IEA and wished to remain anonymous out of fear of reprisal -- says that while the IEA has maintained that world oil production can be increased to 105 million barrels per day, from the current 83 million barrels, "Many inside the organization believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible."

The second whistleblower, who is no longer with the IEA, said that it was agency policy to not "anger the Americans" and added that we are already past peak oil and that "the situation is really bad."

Check out the original Guardian piece for their analysis and background, but here are some things that immediately pop to mind....

Slow Change of Position to Avoid Panic?
First of all, it seems that the IEA is coming around a bit on the idea of peak oil and has been increasingly willing to talk about the economic impact of this. If I was a more conspiracy-minded person, I might think that this change in messaging was some sort of deliberate pacing to defuse the perceived possibility of financial panic. But then again, that's pure speculation.

The Same Head In The Sand Thinking...
Second, to entirely avoid some significant economic disruption because of peak oil, we would have had to gone on an oil crash diet starting a decade ago. Right now it's not a question of whether there's going to be a crash, but whether we try to slow down and avoid the worst of it.

So, more than anything, this illustrates the same head in the sand thinking that dogs climate change negotiations. Out of fear of disrupting current activity, profit, lifestyles, what have you, you put off action for the future, even though it's inevitable that those have to change.

Rather than take difficult proactive steps while there is time to reduce damage, we obfuscate, delay, debate uncertainty rather than solutions. We'd rather deal with symptoms than causes, continue engaging in compartmentalized rather than holistic action. Addressing environment, healthcare, terrorism... the same myopic thinking.

Third, it all seems painfully, even boringly, expected.

Ten US states face budget disaster

Ten US states face budget disaster

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Two reports made public Wednesday underscore the colossal dimensions of the social and financial crisis in the United States. One study warns that California and nine other US states face near-term budget crises that will force mass layoffs of public employees and cuts in schools and other services. The other forecasts that as many as one million jobs will be at risk when the full impact of the economic crisis hits state governments early next year.

The study released by the Pew Center on the States is entitled, “Beyond California: States in Fiscal Peril.” It examines nine states that face California-style budget crises, including Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

The ten states, counting California, are in every region of the country: the Northeast, the South, the Midwest, the Pacific Northwest, and nearly the entire Southwest. They have a combined population of more than 100 million people and account for one-third of total US economic output.

According to the study, the same pressures—the worldwide recession and the collapse of the housing bubble—that forced California to issue IOUs to state employees and suppliers during the summer “are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.”

In four of the states, California, Nevada, Arizona and Florida, the housing collapse has had the biggest impact. New Jersey’s budget deficit is largely a byproduct of the 2008 collapse on Wall Street, which accounts for one-third of the state’s economic activity. The other five states have been devastated primarily by the collapse of manufacturing industries.

Pew reviewed state statistics available July 31, 2009, so that further economic deterioration, particularly in industrial states like Michigan and Illinois, is not accounted for. Overall, the combined budget deficits for all 50 states were $162 billion in July, and that figure is estimated to have since risen by another $16 billion.

The study ranked the 50 states based on the change in state government revenues, the size of the state budget gap, the change in the unemployment rate, the foreclosure rate, and political obstacles like the requirement of a supermajority in the state legislature to approve budgets or tax increases. The study did not include such factors as long-term debt or pension liabilities for public employees, which would produce an even darker picture.

While California’s gargantuan $46 billion deficit exceeds those of the other nine states combined, these states face shortfalls equally substantial considering their size and population. Among the findings of the Pew study is that Michigan, with the bankruptcy of two of the three big auto makers and an unemployment rate over 15 percent, is “trying to deal with today’s problems on a 1960s-sized budget.”

Oregon has been hit by the combined collapse of both low-tech and hi-tech industries—lumber and computer-chip manufacturing. Florida’s population is actually shrinking for the first time since World War II. Illinois has the second largest state budget deficit, some $13.2 billion, and has been forced to borrow money to cover pension obligations.

The second study, by the Center on Budget and Policy Priorities, warned that the fiscal crisis of the states will become even worse next year.

For fiscal year 2010, which in most states began last July 1, 48 of 50 states faced deficits, all but Montana and North Dakota, but the severity of the crisis was partially alleviated by federal aid under the stimulus program enacted last March. This aid is to terminate in most cases by December 31, 2010, so the new fiscal 2011 state budgets will face the double impact of the deepening recession and the withdrawal of federal support.

The CBPP report declared: “The federal assistance that states received for their Medicaid programs under this year’s economic recovery legislation is scheduled to end with a ‘cliff’ on December 31, 2010, and the assistance states received for education and other services also will be largely exhausted by then. Although that date is more than a year away, the problem is coming to a head now.”

The reason is that state governments will start budget planning for FY 2011 soon, since most governors must send budget proposals to the legislature between December 2009 and February 2010, to allow time for debate and passage. This means that most state governors will propose massive budget cuts and tax increases before the coming spring.

Assuming that there is no further federal assistance to the states—the position taken by the Obama administration and the leaders of both parties in Congress—the deficit reduction measures taken by the states, according to the CBPP report, “will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year.”

State and local government operations account for one-eighth of US GDP, so that the estimated 25 percent fall in state revenues, if translated into a similar decline in spending, will have a significant effect on the entire US economy.

According to the CBPP study, “The revenue decline in this recession is unprecedented; it is the largest on record in the post-World War II period. State tax revenues have been declining since the fourth quarter of 2008. In the critical April-June quarter, when a major portion of state tax revenues are collected, revenues dropped 16.6 percent in 2009 compared to the previous year. The income tax was down 27.5 percent, and the sales tax was down 9.5 percent.”

The federal stimulus package covered between 30 and 40 percent of the current-year fiscal deficits of the states, enabling the states to preserve 255,000 education jobs and 63,000 jobs in other areas, according to estimates by the Department of Education and the White House. All these jobs will be at risk, along with hundreds of thousands more, in the coming year.

The ongoing recession, which has already driven the unemployment rate over 10.2 percent, puts the states in a fiscal squeeze. The receipts from both sales and income taxes plunge, while outlays for state services increase, particularly for programs like Medicaid that are need-driven. With the jobless rate expected to hit 11 percent early next year, and record demand for food stamps, heating and housing assistance, many of the states will face outright bankruptcy.

The dimensions of the social needs generated by the financial crisis greatly exceed the budgets of the state governments. But these sums are insignificant compared to the resources which the Obama administration and the Democratic-controlled Congress are devoting to their two principal priorities: bailing out the Wall Street financial interests, and continuing (and in the case of Afghanistan, escalating) the two wars launched by the Bush administration.

Total spending for the wars in Iraq and Afghanistan—$130 billion in the Pentagon budget and another $40-50 billion in an expected “emergency” spending bill—would by itself cover all the state budget shortfalls. And the bailout of the super-rich, with an estimated $23.7 trillion in loans, guarantees and direct cash injections, is more than 100 times as large as the total state deficit.

Thus the crisis of the states is not an inevitable byproduct of the recession, regrettable but unavoidable. It is a deliberate policy choice made by Obama and the congressional Democrats—and fully supported by the congressional Republicans and the corporate-controlled media—to devastate the living conditions of tens of millions of people. There is not a single “mainstream” political voice calling for the diversion of major federal resources in order to prevent state bankruptcies and safeguard essential services like education and public health, which are largely funded and operated by state and local government.

How the US Funds the Taliban

How the US Funds the Taliban

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On October 29, 2001, while the Taliban's rule over Afghanistan was under assault, the regime's ambassador in Islamabad gave a chaotic press conference in front of several dozen reporters sitting on the grass. On the Taliban diplomat's right sat his interpreter, Ahmad Rateb Popal, a man with an imposing presence. Like the ambassador, Popal wore a black turban, and he had a huge bushy beard. He had a black patch over his right eye socket, a prosthetic left arm and a deformed right hand, the result of injuries from an explosives mishap during an old operation against the Soviets in Kabul.

But Popal was more than just a former mujahedeen. In 1988, a year before the Soviets fled Afghanistan, Popal had been charged in the United States with conspiring to import more than a kilo of heroin. Court records show he was released from prison in 1997.

Flash forward to 2009, and Afghanistan is ruled by Popal's cousin President Hamid Karzai. Popal has cut his huge beard down to a neatly trimmed one and has become an immensely wealthy businessman, along with his brother Rashid Popal, who in a separate case pleaded guilty to a heroin charge in 1996 in Brooklyn. The Popal brothers control the huge Watan Group in Afghanistan, a consortium engaged in telecommunications, logistics and, most important, security. Watan Risk Management, the Popals' private military arm, is one of the few dozen private security companies in Afghanistan. One of Watan's enterprises, key to the war effort, is protecting convoys of Afghan trucks heading from Kabul to Kandahar, carrying American supplies.

Welcome to the wartime contracting bazaar in Afghanistan. It is a virtual carnival of improbable characters and shady connections, with former CIA officials and ex-military officers joining hands with former Taliban and mujahedeen to collect US government funds in the name of the war effort.

In this grotesque carnival, the US military's contractors are forced to pay suspected insurgents to protect American supply routes. It is an accepted fact of the military logistics operation in Afghanistan that the US government funds the very forces American troops are fighting. And it is a deadly irony, because these funds add up to a huge amount of money for the Taliban. "It's a big part of their income," one of the top Afghan government security officials told The Nation in an interview. In fact, US military officials in Kabul estimate that a minimum of 10 percent of the Pentagon's logistics contracts--hundreds of millions of dollars--consists of payments to insurgents.

Understanding how this situation came to pass requires untangling two threads. The first is the insider dealing that determines who wins and who loses in Afghan business, and the second is the troubling mechanism by which "private security" ensures that the US supply convoys traveling these ancient trade routes aren't ambushed by insurgents.

A good place to pick up the first thread is with a small firm awarded a US military logistics contract worth hundreds of millions of dollars: NCL Holdings. Like the Popals' Watan Risk, NCL is a licensed security company in Afghanistan.

What NCL Holdings is most notorious for in Kabul contracting circles, though, is the identity of its chief principal, Hamed Wardak. He is the young American son of Afghanistan's current defense minister, Gen. Abdul Rahim Wardak, who was a leader of the mujahedeen against the Soviets. Hamed Wardak has plunged into business as well as policy. He was raised and schooled in the United States, graduating as valedictorian from Georgetown University in 1997. He earned a Rhodes scholarship and interned at the neoconservative think tank the American Enterprise Institute. That internship was to play an important role in his life, for it was at AEI that he forged alliances with some of the premier figures in American conservative foreign policy circles, such as the late Ambassador Jeane Kirkpatrick.

Wardak incorporated NCL in the United States early in 2007, although the firm may have operated in Afghanistan before then. It made sense to set up shop in Washington, because of Wardak's connections there. On NCL's advisory board, for example, is Milton Bearden, a well-known former CIA officer. Bearden is an important voice on Afghanistan issues; in October he was a witness before the Senate Foreign Relations Committee, where Senator John Kerry, the chair, introduced him as "a legendary former CIA case officer and a clearheaded thinker and writer." It is not every defense contracting company that has such an influential adviser.

But the biggest deal that NCL got--the contract that brought it into Afghanistan's major leagues--was Host Nation Trucking. Earlier this year the firm, with no apparent trucking experience, was named one of the six companies that would handle the bulk of US trucking in Afghanistan, bringing supplies to the web of bases and remote outposts scattered across the country.

At first the contract was large but not gargantuan. And then that suddenly changed, like an immense garden coming into bloom. Over the summer, citing the coming "surge" and a new doctrine, "Money as a Weapons System," the US military expanded the contract 600 percent for NCL and the five other companies. The contract documentation warns of dire consequences if more is not spent: "service members will not get food, water, equipment, and ammunition they require." Each of the military's six trucking contracts was bumped up to $360 million, or a total of nearly $2.2 billion. Put it in this perspective: this single two-year effort to hire Afghan trucks and truckers was worth 10 percent of the annual Afghan gross domestic product. NCL, the firm run by the defense minister's well-connected son, had struck pure contracting gold.

Host Nation Trucking does indeed keep the US military efforts alive in Afghanistan. "We supply everything the army needs to survive here," one American trucking executive told me. "We bring them their toilet paper, their water, their fuel, their guns, their vehicles." The epicenter is Bagram Air Base, just an hour north of Kabul, from which virtually everything in Afghanistan is trucked to the outer reaches of what the Army calls "the Battlespace"--that is, the entire country. Parked near Entry Control Point 3, the trucks line up, shifting gears and sending up clouds of dust as they prepare for their various missions across the country.

The real secret to trucking in Afghanistan is ensuring security on the perilous roads, controlled by warlords, tribal militias, insurgents and Taliban commanders. The American executive I talked to was fairly specific about it: "The Army is basically paying the Taliban not to shoot at them. It is Department of Defense money." That is something everyone seems to agree on.

Mike Hanna is the project manager for a trucking company called Afghan American Army Services. The company, which still operates in Afghanistan, had been trucking for the United States for years but lost out in the Host Nation Trucking contract that NCL won. Hanna explained the security realities quite simply: "You are paying the people in the local areas--some are warlords, some are politicians in the police force--to move your trucks through."

Hanna explained that the prices charged are different, depending on the route: "We're basically being extorted. Where you don't pay, you're going to get attacked. We just have our field guys go down there, and they pay off who they need to." Sometimes, he says, the extortion fee is high, and sometimes it is low. "Moving ten trucks, it is probably $800 per truck to move through an area. It's based on the number of trucks and what you're carrying. If you have fuel trucks, they are going to charge you more. If you have dry trucks, they're not going to charge you as much. If you are carrying MRAPs or Humvees, they are going to charge you more."

Hanna says it is just a necessary evil. "If you tell me not to pay these insurgents in this area, the chances of my trucks getting attacked increase exponentially."

Whereas in Iraq the private security industry has been dominated by US and global firms like Blackwater, operating as de facto arms of the US government, in Afghanistan there are lots of local players as well. As a result, the industry in Kabul is far more dog-eat-dog. "Every warlord has his security company," is the way one executive explained it to me.

In theory, private security companies in Kabul are heavily regulated, although the reality is different. Thirty-nine companies had licenses until September, when another dozen were granted licenses. Many licensed companies are politically connected: just as NCL is owned by the son of the defense minister and Watan Risk Management is run by President Karzai's cousins, the Asia Security Group is controlled by Hashmat Karzai, another relative of the president. The company has blocked off an entire street in the expensive Sherpur District. Another security firm is controlled by the parliamentary speaker's son, sources say. And so on.

In the same way, the Afghan trucking industry, key to logistics operations, is often tied to important figures and tribal leaders. One major hauler in Afghanistan, Afghan International Trucking (AIT), paid $20,000 a month in kickbacks to a US Army contracting official, according to the official's plea agreement in US court in August. AIT is a very well-connected firm: it is run by the 25-year-old nephew of Gen. Baba Jan, a former Northern Alliance commander and later a Kabul police chief. In an interview, Baba Jan, a cheerful and charismatic leader, insisted he had nothing to do with his nephew's corporate enterprise.

But the heart of the matter is that insurgents are getting paid for safe passage because there are few other ways to bring goods to the combat outposts and forward operating bases where soldiers need them. By definition, many outposts are situated in hostile terrain, in the southern parts of Afghanistan. The security firms don't really protect convoys of American military goods here, because they simply can't; they need the Taliban's cooperation.

One of the big problems for the companies that ship American military supplies across the country is that they are banned from arming themselves with any weapon heavier than a rifle. That makes them ineffective for battling Taliban attacks on a convoy. "They are shooting the drivers from 3,000 feet away with PKMs," a trucking company executive in Kabul told me. "They are using RPGs [rocket-propelled grenades] that will blow up an up-armed vehicle. So the security companies are tied up. Because of the rules, security companies can only carry AK-47s, and that's just a joke. I carry an AK--and that's just to shoot myself if I have to!"

The rules are there for a good reason: to guard against devastating collateral damage by private security forces. Still, as Hanna of Afghan American Army Services points out, "An AK-47 versus a rocket-propelled grenade--you are going to lose!" That said, at least one of the Host Nation Trucking companies has tried to do battle instead of paying off insurgents and warlords. It is a US-owned firm called Four Horsemen International. Instead of providing payments, it has tried to fight off attackers. And it has paid the price in lives, with horrendous casualties. FHI, like many other firms, refused to talk publicly; but I've been told by insiders in the security industry that FHI's convoys are attacked on virtually every mission.

For the most part, the security firms do as they must to survive. A veteran American manager in Afghanistan who has worked there as both a soldier and a private security contractor in the field told me, "What we are doing is paying warlords associated with the Taliban, because none of our security elements is able to deal with the threat." He's an Army veteran with years of Special Forces experience, and he's not happy about what's being done. He says that at a minimum American military forces should try to learn more about who is getting paid off.

"Most escorting is done by the Taliban," an Afghan private security official told me. He's a Pashto and former mujahedeen commander who has his finger on the pulse of the military situation and the security industry. And he works with one of the trucking companies carrying US supplies. "Now the government is so weak," he added, "everyone is paying the Taliban."

To Afghan trucking officials, this is barely even something to worry about. One woman I met was an extraordinary entrepreneur who had built up a trucking business in this male-dominated field. She told me the security company she had hired dealt directly with Taliban leaders in the south. Paying the Taliban leaders meant they would send along an escort to ensure that no other insurgents would attack. In fact, she said, they just needed two armed Taliban vehicles. "Two Taliban is enough," she told me. "One in the front and one in the back." She shrugged. "You cannot work otherwise. Otherwise it is not possible."

Which leads us back to the case of Watan Risk, the firm run by Ahmad Rateb Popal and Rashid Popal, the Karzai family relatives and former drug dealers. Watan is known to control one key stretch of road that all the truckers use: the strategic route to Kandahar called Highway 1. Think of it as the road to the war--to the south and to the west. If the Army wants to get supplies down to Helmand, for example, the trucks must make their way through Kandahar.

Watan Risk, according to seven different security and trucking company officials, is the sole provider of security along this route. The reason is simple: Watan is allied with the local warlord who controls the road. Watan's company website is quite impressive, and claims its personnel "are diligently screened to weed out all ex-militia members, supporters of the Taliban, or individuals with loyalty to warlords, drug barons, or any other group opposed to international support of the democratic process." Whatever screening methods it uses, Watan's secret weapon to protect American supplies heading through Kandahar is a man named Commander Ruhullah. Said to be a handsome man in his 40s, Ruhullah has an oddly high-pitched voice. He wears traditional salwar kameez and a Rolex watch. He rarely, if ever, associates with Westerners. He commands a large group of irregular fighters with no known government affiliation, and his name, security officials tell me, inspires obedience or fear in villages along the road.

It is a dangerous business, of course: until last spring Ruhullah had competition--a one-legged warlord named Commander Abdul Khaliq. He was killed in an ambush.

So Ruhullah is the surviving road warrior for that stretch of highway. According to witnesses, he works like this: he waits until there are hundreds of trucks ready to convoy south down the highway. Then he gets his men together, setting them up in 4x4s and pickups. Witnesses say he does not limit his arsenal to AK-47s but uses any weapons he can get. His chief weapon is his reputation. And for that, Watan is paid royally, collecting a fee for each truck that passes through his corridor. The American trucking official told me that Ruhullah "charges $1,500 per truck to go to Kandahar. Just 300 kilometers."

It's hard to pinpoint what this is, exactly--security, extortion or a form of "insurance." Then there is the question, Does Ruhullah have ties to the Taliban? That's impossible to know. As an American private security veteran familiar with the route said, "He works both sides... whatever is most profitable. He's the main commander. He's got to be involved with the Taliban. How much, no one knows."

Even NCL, the company owned by Hamed Wardak, pays. Two sources with direct knowledge tell me that NCL sends its portion of US logistics goods in Watan's and Ruhullah's convoys. Sources say NCL is billed $500,000 per month for Watan's services. To underline the point: NCL, operating on a $360 million contract from the US military, and owned by the Afghan defense minister's son, is paying millions per year from those funds to a company owned by President Karzai's cousins, for protection.

Hamed Wardak wouldn't return my phone calls. Milt Bearden, the former CIA officer affiliated with the company, wouldn't speak with me either. There's nothing wrong with Bearden engaging in business in Afghanistan, but disclosure of his business interests might have been expected when testifying on US policy in Afghanistan and Pakistan. After all, NCL stands to make or lose hundreds of millions based on the whims of US policy-makers.

It is certainly worth asking why NCL, a company with no known trucking experience, and little security experience to speak of, would win a contract worth $360 million. Plenty of Afghan insiders are asking questions. "Why would the US government give him a contract if he is the son of the minister of defense?" That's what Mahmoud Karzai asked me. He is the brother of President Karzai, and he himself has been treated in the press as a poster boy for access to government officials. The New York Times even profiled him in a highly critical piece. In his defense, Karzai emphasized that he, at least, has refrained from US government or Afghan government contracting. He pointed out, as others have, that Hamed Wardak had little security or trucking background before his company received security and trucking contracts from the Defense Department. "That's a questionable business practice," he said. "They shouldn't give it to him. How come that's not questioned?"

I did get the opportunity to ask General Wardak, Hamed's father, about it. He is quite dapper, although he is no longer the debonair "Gucci commander" Bearden once described. I asked Wardak about his son and NCL. "I've tried to be straightforward and correct and fight corruption all my life," the defense minister said. "This has been something people have tried to use against me, so it has been painful."

Wardak would speak only briefly about NCL. The issue seems to have produced a rift with his son. "I was against it from the beginning, and that's why we have not talked for a long time. I have never tried to support him or to use my power or influence that he should benefit."

When I told Wardak that his son's company had a US contract worth as much as $360 million, he did a double take. "This is impossible," he said. "I do not believe this."

I believed the general when he said he really didn't know what his son was up to. But cleaning up what look like insider deals may be easier than the next step: shutting down the money pipeline going from DoD contracts to potential insurgents.

Two years ago, a top Afghan security official told me, Afghanistan's intelligence service, the National Directorate of Security, had alerted the American military to the problem. The NDS delivered what I'm told are "very detailed" reports to the Americans explaining how the Taliban are profiting from protecting convoys of US supplies.

The Afghan intelligence service even offered a solution: what if the United States were to take the tens of millions paid to security contractors and instead set up a dedicated and professional convoy support unit to guard its logistics lines? The suggestion went nowhere.

The bizarre fact is that the practice of buying the Taliban's protection is not a secret. I asked Col. David Haight, who commands the Third Brigade of the Tenth Mountain Division, about it. After all, part of Highway 1 runs through his area of operations. What did he think about security companies paying off insurgents? "The American soldier in me is repulsed by it," he said in an interview in his office at FOB Shank in Logar Province. "But I know that it is what it is: essentially paying the enemy, saying, 'Hey, don't hassle me.' I don't like it, but it is what it is."

As a military official in Kabul explained contracting in Afghanistan overall, "We understand that across the board 10 percent to 20 percent goes to the insurgents. My intel guy would say it is closer to 10 percent. Generally it is happening in logistics."

In a statement to The Nation about Host Nation Trucking, Col. Wayne Shanks, the chief public affairs officer for the international forces in Afghanistan, said that military officials are "aware of allegations that procurement funds may find their way into the hands of insurgent groups, but we do not directly support or condone this activity, if it is occurring." He added that, despite oversight, "the relationships between contractors and their subcontractors, as well as between subcontractors and others in their operational communities, are not entirely transparent."

In any case, the main issue is not that the US military is turning a blind eye to the problem. Many officials acknowledge what is going on while also expressing a deep disquiet about the situation. The trouble is that--as with so much in Afghanistan--the United States doesn't seem to know how to fix it.