Saturday, November 21, 2009

15 Signs American Society Is Coming Apart at the Seams

15 Signs American Society Is Coming Apart at the Seams

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Editor's note: The following is an edited excerpt from the Amped Status report, "The Critical Unraveling of U.S. Society."

The economic elite have launched an attack on the U.S. public and society is unraveling at an increased rate. You may have missed it in the mainstream news media, but statistical societal indicators are reading red across the board. Let’s look at the top 15 statistics that prove we are under attack.

1) The inequality of wealth in the United States is soaring to an unprecedented level. The U.S. already had the highest inequality of wealth in the industrialized world prior to the financial crisis. Since the crisis, which has hit the middle class and poor much harder than the top 1 percent, the gap between the top 1 percent and the remaining 99 percent of the U.S. population has grown to a record high.

2) As the stock market went over the 10,000 mark and just surged to a 13-month high, the three big banks that took taxpayer money and benefited the most from the government bailout have just set a new global economic record by issuing $30 billion in annual bonuses this year, “up 60 percent from last year.” Bloomberg reported: “Goldman Sachs, the most profitable securities firm in Wall Street history, had a record profit in the first nine months of this year and set aside $16.7 billion for compensation expenses.” Goldman Sachs is on pace for the best year in the firm’s history, and it is also benefiting by only paying 1 percent in taxes.

3) The profits of the economic elite are “now underwritten by taxpayers with $23.7 trillion worth of national wealth."

As the looting is occurring at the top, the U.S. middle class is just beginning to collapse.

4) Workers between the ages of 55 to 60, who have worked for 20 to 29 years, have lost an average of 25 percent off their 401k. During the same time period, the wealth of the 400 richest Americans went up by $30 billion, bringing their total combined wealth to $1.57 trillion.

5) Home foreclosure filings "hit a record high in the third quarter (of 2009)… They were the worst three months of all time… 937,840 homes received a foreclosure letter" in this three-month period; “3.4 million homes are expected to enter foreclosure by year’s end, with some experts estimating that next year will be even worse.”

President Obama has enacted a $75 billion taxpayer funded program that has been a spectacular failure in stemming the foreclosure crisis and has proven to be another massive waste of billions of taxpayer dollars.

6) 25 million people are unemployed or underemployed.

This means we have 25 million people who urgently need to increase their income, and they’re quickly running out of options. The unemployment rate is expected to rise further and remain high for several years. “The president’s chief economic adviser warned that the nation’s unemployment rate could stay ‘unacceptably high’ for years to come."

The New York Times reports: "Americans now confront a job market that is bleaker than ever in the current recession, and employment prospects are still getting worse. Job seekers now outnumber openings six to one, the worst ratio since the government began tracking….” As this ratio continues to grow, it will lead to a further reduction in wages -- average worker wages have seen a sharp decline over the past year.

Economist Nouriel Roubini, a man who accurately predicted our current crisis, just reported on unemployment stating: “Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening…. So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.”

7) As the few elite banks thrive, there have been 123 U.S. bank failures thus far this year. Recently, three banks that the government declared “healthy” and gave taxpayer money, have folded. The Wall Street Journal reports: “U.S. regulators have seized or threatened at least 27 banks that got capital infusions from the Troubled Asset Relief Program, including some lenders government officials knew were troubled when they awarded the money. The troubles put taxpayers at risk of losing as much as $5.1 billion invested in the banks since TARP was launched in October 2008.”

8) As bankruptcies surge across the board, 10 U.S. states are on the verge of bankruptcy, with several ready to declare a financial state of emergency. California, Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin are all “barreling toward economic disaster, raising the likelihood of higher taxes, more government layoffs and deep cuts in services."

9) This is occurring at a time when the “federal budget deficit for the fiscal year that just ended was $1.4 trillion, nearly a trillion dollars greater than the year before." In total, "U.S. public debt topped $12 trillion for the first time in history… The public debt topped $10 trillion in September 2008. The debt is quickly approaching the statutory limit of $12.104 trillion, meaning Congress would have to raise the ceiling to prevent a shutdown of government operations."

Economist Dean Baker explains the risk of running such a large deficit: "The debt limit must be increased at regular intervals in order to allow the government to function normally because the government is currently operating at a deficit. If the debt limit is not passed, then at some point the government will not be able to pay workers and contractors. It won’t be able to send out Social Security checks or make payments for Medicaid and unemployment insurance to state governments. And, it will not be able to make interest payments on government bonds, effectively defaulting on the national debt."

Needless to say, all of this will make life drastically more difficult for American citizens. As the middle class continues on the path of economic decline, the number of citizens living in poverty has already hit an all-time high.

10) Although the government’s official figure tries to low-ball the number, 47.4 million U.S. citizens live in poverty, and the U.S. poverty rate is the highest in the industrialized world.

Predictably, homelessness is rising at an increased rate as well. "The U.S. government does not tally the numbers but interested organizations say that more than 3 million people were homeless at some point over the past year…. The fastest growing segment of the homeless population is families with children.”

Children have been hit especially hard by the economic crisis:

11) * 50 percent of U.S. children, one out of every two children, will need to use food stamps to eat.

One out of every two children in the United States of America will need to use a food stamp… to EAT!

If you didn’t think starvation was a serious threat in the U.S., just read this new Washington Post report: “The nation’s economic crisis has catapulted the number of Americans who lack enough food to the highest level since the government has been keeping track, according to a new federal report, which shows that nearly 50 million people — including almost one child in four — struggled last year to get enough to eat… Several independent advocates and policy experts on hunger said that they had been bracing for the latest report to show deepening shortages, but that they were nevertheless astonished by how much the problem has worsened. 'This is unthinkable. It’s like we are living in a Third World country,' said Vicki Escarra, president of Feeding America."

The United States Department of Agriculture released these findings in a study that was completed in December 2008, which means these numbers don’t take into account the millions more unemployed throughout 2009. The numbers of people living in poverty and struggling to eat has seen a significant increase since then.

This a national tragedy. But it gets much worse.

12) In 2008, according to the Census Bureau, the number of U.S. citizens without health care grew to a record 46.3 million. “The new figures, however, understate the severity of the economic downturn because a large portion of the nation’s job losses and unemployment rate increases occurred after the Census survey data was collected in March as part of the annual Current Population Survey."

13) Lack of health insurance has caused 45,000 preventable U.S. citizen deaths in the past year. The American Journal of Medicine recently released a study that stated, “Nearly two out of three bankruptcies stem from medical bills, and even people with health insurance face financial disaster if they experience a serious illness.”

A Johns Hopkins Children’s Center study reported that 17,000 children have died due to lack of health care. You can also add in a recent report that revealed that 2,266 U.S. veterans have died in 2008 due to lack of insurance.

The 50 million now uninsured and the 45,000 preventable deaths per year statistics are expected to drastically rise over the next few years. As the Senate continues to strip meaningful amendments from a health care bill that wouldn’t even take effect until 2013, it has become clear that, despite the media hype, the health care bill is going to fall far short of meaningful reform and continue to rig the game in favor of large insurance company profits at the expense of the U.S. population. With the highest cost healthcare in the world, current trends will continue and much needed change is not on the horizon.

Never before has the United States had so many citizens with so little means, little to no income and heavy debt. Debt and costs of living have now shackled U.S. citizens just as they have shackled people throughout the world. The economic hit men have now hit the United States as well and millions of American citizens are now effectively sentenced to a slow death.

Economic Imperial blowback has hit the mainland.

And the clock is ticking louder by the day…

And here’s two more facts for you:

14) The gun and ammunition manufacturing industry in the United States has over 200 companies producing billions of dollars in annual revenues. This huge manufacturing base cannot fulfill demand quickly enough. The demand for guns and ammunition has hit a record high and the gun industry cannot produce enough bullets to keep up with orders.

Americans are arming themselves to the teeth!

15) In the past year, 100 new armed militia groups have been formed, as militia members have doubled in numbers. Federal authorities are gravely concerned about the “uptick in militia activities." One federal authority recently said, “All it’s lacking is a spark. I think it’s only a matter of time before you see threats and violence."

So let’s break down these numbers.

You have a population of 50 million people who are in desperate need of money, they most likely have no health insurance and can’t afford to get health care or help of any kind. Part of this population probably also has loved ones who can’t get life sustaining medical treatments, or loved ones who have already died due to lack of costly medical treatment. The clock is ticking loud for these people and they are running out of options fast, and time delayed is time closer to death.

While the richest 1 percent have never had it so good, a significant percentage of the U.S. population now has firsthand experience in this. Millions upon millions of Americans are poor, broke, struggling, starving, desperate… and armed.

We are sitting on a powder keg!

We are now witnessing the critical unraveling of U.S. society.

You can read the rest of the report here.

An American Catastrophe

An American Catastrophe

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In many ways, it’s like a ghost town. It’s eerily quiet. Driving around in the middle of the afternoon, in a city that once was among the most productive on the planet, you see very little traffic, minimal commercial activity, hardly any pedestrians.

What you’ll see are endless acres of urban ruin, block after block and mile after mile of empty and rotting office buildings, storefronts, hotels, apartment buildings and private homes. It’s a scene of devastation and disintegration that stuns the mind, a major American city that still is home to 900,0000 people but which looks at times like a cross between postwar Berlin and the ruin of an ancient civilization.

Detroit was the arsenal of democracy in World War II and the incubator of the American middle class. It was the city that taught mass production to the rest of the world. It was a place that made cars, trucks and other tangible products, not derivatives. And it was the architect of the quintessentially American idea of putting people to work and paying them a decent wage. It’s frightening to think seriously about what we’ve allowed to happen to this city and what is now happening to the middle class and the American economy as a whole.

I was in Detroit with Harley Shaiken, a professor at the University of California, Berkeley, who specializes in labor issues. He grew up in Detroit and his love for the city and its people are palpable, as is his grief for the horrors the city has endured.

The popular narrative of what happened to Detroit contains a great deal of truth but its focus is too narrow to account for the astonishing decline of this former industrial colossus. Yes, there were the riots of 1967, and white flight; and political leadership that was not just shortsighted but at times embarrassingly incompetent and corrupt. And, yes, the auto industry was a case study in self-destruction.

But as Mr. Shaiken points out, Detroit was still viable enough for the Republican Party to hold its convention here in 1980, when it nominated Ronald Reagan. And it was not the riots, but the devastating recession of the early ’80s that really knocked the city senseless. “That’s when the place really cracked,” said Mr. Shaiken, “and that was about aggressive globalization and the lack of an industrial policy, not the riots.”

Detroit and its environs are suffering the agonies of the economic damned because of policies, crafted at the highest national and corporate levels, that resulted in the implosion of crucially important components of America’s manufacturing base. Those decisions have had a profound effect on the fortunes not just of Detroit, or even Michigan, but the entire U.S. economy.

“We’ve been living with the illusion that manufacturing — making things — is so 20th century,” said Mr. Shaiken, “and that we could succeed by concentrating, for example, on complex financial instruments while abandoning the industrial base that sustained so many American families.”

The idea that the fallout from the wrongheaded economic concepts of the past 30 or 40 years could be contained, with the damage limited to the increasingly troubled urban areas while sparing prosperous suburbia, has now proved as phony as Bernie Madoff’s fortune. Americans, whether they live in big cities, suburban towns or rural areas, need jobs, and when those jobs are eliminated (for whatever reasons — technological advances, globalization) without being replaced, the national economy is guaranteed at some point to hit a wall.

Professor Shaiken and I drove past vast lots filled with rubble and garbage and weeds, past the old Michigan Central Terminal, which was once Detroit’s answer to New York’s Grand Central Terminal but which has long since been abandoned; past a onetime Cadillac manufacturing plant that is now an empty lot.

We stopped at an old Ford plant and stood in a stiff, cold wind, reading a plaque put up by the Michigan Historical Commission: “Here at his Highland Park plant, Henry Ford began the mass production of automobiles on a moving assembly line. By 1915 Ford built a million Model T’s. In 1925 over 9,000 were assembled in a single day. Mass production soon moved from here to all phases of American industry and set the pattern of abundance for 20th century living.”

Professor Shaiken’s grandfather, Philip Chapman, took a job at the Highland Park plant in 1914, earning five dollars a day, and worked on production at Ford until his retirement in the mid-1950s.

We’re at a period no less significant to the U.S. than Mr. Chapman’s early years at Ford. We need a revitalized industrial policy, including the creation of whole new industries, if American families are to prosper in the coming decades. If there is any sense of urgency about this in the hearts and minds of our corporate and government leaders, I’ve missed it.

SocGen Sounds The Alarm, Again

SocGen Sounds The Alarm, Again

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French bank Societe Generale has made the headlines many times in the past two years, but two particular occasions stand out. The first was in January 2008 when, under cover of a US holiday, the bank dumped billions of dollars worth of shares onto the market which had been surreptitiously accumulated by a "rogue" in SocGen's midst. While the end result made little difference, that trade set the tone for 2008.

By May of 2008, SocGen was stealing the limelight once more, announcing it had moved its balanced investment portfolio to its statutory minimum weighting of 30% equity, predicting a stock market collapse of 50-75%. In January world markets had been trying to recover out of Christmas. In May, markets had managed a 50% retracement of the fall from the highs, figuring the collapse of Bear Stearns was the end of the crisis.

In both cases, SocGen helped turn sentiment around.

And the analysts weren't too far off the mark. The complacent bulls laughed off such a dire prediction in May, but we ended up down about 55%. We have now, once again, retraced 50% of the drop from the high in 2007, this time post-Lehman rather than just post-Bear Stearns. Things are clearly looking brighter than they did, and thoughts of SocGen's 75% have been put to bed. Or have they?

SocGen is not making a specific prediction this time, rather the analysts have issued a warning against a possible worst-case scenario. And it's all to do with global debt. Start shorting cyclical equities, they say, including those in emerging markets. Sell the US dollar and buy government bonds. Buy agricultural commodities and gold. Buy lots of gold.

SocGen is readying its clients for a possible "global economic collapse" over the next two years, with its warning contained in a report entitled "Worst-Case Debt Scenario". What the analysts base their fears on is simple and patently obvious, to wit, the public "rescue" of the private sector has not solved any pre-GFC problems in regards to excessive debt levels in the developed world. It has simply transferred the debt from the private to the public balance sheet.

Total public and private debt in the US has now reached a level of 350% of GDP. That's like saying an individual would need to use all of three and a half year's worth of income just to pay off his credit card. Public debt alone will reach dangerous levels within two years, says SocGen, at 105% of GDP in the UK, 125% in the US, 125% in the EU and 270% in Japan. Total world state debt will reach US$45 trillion, representing a two and a half times what it was only ten years ago.

This is an underlying debt burden greater than what it was after the Second World War. One might thus suggest "well we survived that okay", but remember that following the war was the baby-boom, the explosion of mass production and the advent of the consumer society. It was a golden age of growth.

This time around, the baby-boomers are ageing and threatening to place a huge burden on the public purse. And growth is in the labour-unintensive information and technology industry. In short, there seems no golden age ahead.

SocGen believes we have all but reached a "point of no return" for government debt. Put simply, developed economies will never to be able to produce enough income to net reduce debt levels. A deflationary spiral will prevail, making the whole of the world look like Japan in its "lost decade". Emerging markets will be dragged down as well given they are more leveraged to the US economy than even Wall Street is.

Governments may only have one choice, and that is to hyperinflate their way out of debt by simply printing money. When money is printed, everything loses value, including debt. Welcome to Weimar.

Government bonds would be purchased by central banks just as has been the case in quantitative easing measures to date. Yields would fall to near zero on longer dates. Gold would absolutely soar. Food would become very expensive.

I repeat: this is not a prediction, this is a warning.

Things Could Get Ugly Fast

Things Could Get Ugly Fast

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Things could get ugly fast. With the Democrats backing-off on a second round of stimulus, the Fed signaling an end to quantitative easing, and Obama moaning about rising deficits; there's a good chance that the stumbling recovery could turn into another sharp plunge. Bank lending is shrinking, consumers spending is off, housing prices are falling, unemployment is soaring and the wholesale credit markets are in a shambles. This isn't the time to slash government support in the name of "fiscal responsibility". Obama needs to ignore the gloomsters and alarmists and pay attention to the Nobel laureates like Joe Stiglitz and Paul Krugman. They're the guys who know how to steer the ship to safe water.

But there are troubling signs that Obama has joined the ranks of the deficit hawks and is planning a policy-reversal that will pitch the economy into a nosedive. Here's what he said on his tour through Asia:

"I think it is important to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession."

So it's true. Obama has aligned himself with the faux-prophets and dollar demagogues who think that the end is nigh. But trimming the deficits now (when they should be expanding) will lead to a viscous cycle of debt deflation that will push-down asset prices, increase defaults, force more layoffs, slow consumer spending, lower earnings and send the economy into a downward spiral. The president is paving the way to a double-dip recession, a slump that could be worse than the first.

Has Obama perused the jobless figures lately? Has he noticed the Fed shoving more than a $1 trillion under the collapsing housing market with no sign of improvement? Has anyone told our blinkered accountant-in-chief that the entire financial system is propped-up with $11.4 trillion of dodgy scaffolding that could buckle in the first big gust?

Obama has either taken leave of his senses or he's spending too much time listening to the cheerless Jeremiahs on the Internet. He needs break their spell and seek the counsel of the experts who get paid to crunch the numbers---real economists. Cutting government spending and raising taxes--the two ways that deficits are paid off--is the fast-track to disaster. Don't go there.

If Obama needs more proof that the economy is still flatlining, he should thumb through Fed chair Ben Bernanke's speech to the Economic Club of New York which was delivered on Tuesday. The presentation was a sobering snapshot of lingering depression with precious few glimmers of light. Here's an excerpt:

"The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible....How the economy will evolve in 2010 and beyond is less certain....

Access to credit remains strained for borrowers who are particularly dependent on banks, such as households and small businesses. Bank lending has contracted sharply this year, and the Federal Reserve's Senior Loan Officers Opinion Survey shows that banks continue to tighten the terms on which they extend credit for most kinds of loans...

Household debt has declined in recent quarters for the first time since 1951. For their part, many small businesses have seen their bank credit lines reduced or eliminated, or they have been able to obtain credit only on significantly more restrictive terms. The fraction of small businesses reporting difficulty in obtaining credit is near a record high, and many of these businesses expect credit conditions to tighten further.

The demand for credit also has fallen significantly....Because of weakened balance sheets, fewer potential borrowers are creditworthy, even if they are willing to take on more debt. Also, write-downs of bad debt show up on bank balance sheets as reductions in credit outstanding. Nevertheless, it appears that, since the outbreak of the financial crisis, banks have tightened lending standards by more than would have been predicted by the decline in economic activity alone.

Many securitization markets remain impaired, reducing an important source of funding for bank loans. In addition, changes to accounting rules at the beginning of next year will require banks to move a large volume of securitized assets back onto their balance sheets. Unfortunately, reduced bank lending may well slow the recovery by damping consumer spending, especially on durable goods, and by restricting the ability of some firms to finance their operations.  

The best thing we can say about the labor market right now is that it may be getting worse more slowly. (Fed Chairman Ben Bernanke Speech Before Economic Club of New York)

Is this really Bernanke speaking, or is the Fed chief channeling Roubini?

Okay, so credit is tight. Consumers aren't borrowing and banks aren't lending. Unemployment is rising and deflation is pushing down asset prices while the burden of personal debt is rising in real terms. Bleak, bleak, bleak. The only sign of improvement is that "things are getting worse more slowly". Now that's encouraging.

What the economy needs is a hefty dose of stimulus aimed at job creation and strengthening demand. Only the government can provide sufficient resources to rev up economic activity and put people back to work. Unfortunately, the TARP bailout soured the public on deficit spending due to the shabby (and possibly criminal) way it was handled. That will make it harder to do what is necessary. The political support for more stimulus on Capital Hill has vanished. But, without it, another hard landing is certain.

Despite rumors in the media, stimulus works. It speeds up recovery, minimizes unemployment and stops asset prices from overshooting on the downside. Here's an excerpt from "The effectiveness of fiscal and monetary stimulus in depressions" a scholarly analysis of stimulus by economist-authors Miguel Almunia, Agustin S. Benetrix, Barry eichengreen, Kevin O' Rourke, and Gisela Rua:  

"Where tried, fiscal policy was effective in the 1930s....The details of the results differ, but the overall conclusions do not. They show that where fiscal policy was tried, it was effective.

Our estimates of its short-run effects are at the upper end of those estimated recently with modern data....This is, in fact, what one should expect if one believes that the effectiveness of fiscal policy is greatest when interest rates are at the zero bound, leading to little crowding out of private spending. It is what one should expect when households are credit constrained by a dysfunctional banking system. Given similar circumstances in 2008, this underscores the advantages of using 1930s data as a source of evidence on the effects of current policy." (The effectiveness of fiscal and monetary stimulus in depressions" by Miguel Almunia, Agustin S. Benetrix, Barry eEchengreen, Kevin O' Rourke, and Gisela Rua, 18 November 2009 vox)

Stimulus works in multiple ways. It also helps increase inflation expectations which is necessary to get people spending again. In a deflationary environment, consumers shut-down and stop spending. The Fed tries to spur economic activity by convincing people that the dollars they hold will be worth less tomorrow. That's why Bernanke keeps pointing out that the Fed will keep rates at zero indefinitely. Regrettably, only the goldbugs take him seriously, which is why gold prices have zoomed to the stratosphere. Personal savings rates are still rising. There's been a sharp drop-off in consumption. Bernanke's psychological experiment has flopped. The masses still believe we're in recession. Without a gigantic fiscal expansion to jolt the economy out of its lethargy, the severe contraction could drag on for a decade or more. We're becoming Japan.  

Obama's deficit cutting plan is madness. It offers no hope at all. It draws from the half-baked theories of amateur economists on the Net who think that massive liquidation and years of bitter retrenchment and high-unemployment are the path to recovery. They're wrong.

Canada: The Killer H1N1 Vaccine

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"It is a serious thing [vaccine] that has the potential to kill" according to Dr. Neil Rau, an infectious disease expert, in a CTV interview, but do not worry: "leading experts insist, the benefits of the H1N1 vaccine vastly outweigh the risks" (Swine Flu Support Center, emphasis added)

A new development in the H1N1 Vaccine Saga is unfolding in Canada.

Whereas health officials are pushing for an acceleration of the vaccination program, there is evidence of so-called "unusual adverse reactions" including three recently recorded deaths directly resulting from the vaccine.

In the meantime, health authorities have called for the withdrawal of 170,000 (higher risk) doses of the vaccine produced by GlaxoSmithKline. The initiative, of which the importance is being downplayed, is said to have come from the manufacturer GlaxoSmithKline, which expressed concern on higher than normal adverse reactions to the vaccine.

"Canada's H1N1 flu vaccine manufacturer has asked the provinces to temporarily discontinue vaccinating Canadians from a lot of vaccine shipped in October due to a higher risk of adverse reactions, says a Manitoba health official.

Dr. Joel Kettner, Manitoba's chief public health officer, said Thursday that GlaxoSmithKline has asked that the October batch be taken out of circulation because it produced serious and immediate anaphylactic reactions in one out of 20,000 vaccinations, compared with one out of 100,000 in other shipments.

"We've been asked by the manufacturer GSK to not use this vaccine at this time pending further investigation," he said. (Winnipeg Free Press, 20 November 2009)

The government is involved in a cover-up. The initial headlines stated "more than 100,000 doses", but then read on, the number is 170,000 doses.

The CTV report admits that "it is a serious thing, it has the potential to kill".

Too Late to Withdraw the 170,000 Defective Doses

The question is whether the doses can be withdrawn or whether they have already been used. The first news reports from Manitoba indicate that:

Of the 63,000 doses shipped [to Manitoba], only 630 remained unused by the four regional health authorities in Manitoba that received them. (Ibid)

This report would suggest that the risky GSK vaccine doses have already been used.

A subsequent report confirms that out of the 63,000 doses, 900 unused doses of the H1N1 were withdrawn by health authorities "after health authorities received word other vaccines from the same batch have been causing higher rates of allergic reactions than expected." (Flu vaccine batch pulled in Manitoba, Winnipeg Sun, 20 November 2009).

The question is what happened to the remaining 62,100 doses of the higher risk vaccine batch, which were used to vaccinate people in Manitoba?

Has there been a followup regarding those people in Manitoba who received the higher risk H1N1 vaccine injection.

Manitoba Health authorities casually confirm, in this regard, that "most of the vaccine Manitoba received from the suspect lot had already been used by the time the province received the alert on Wednesday" [November 18, 2009]. (Winnipeg Free Press, 20 November 2009, emphasis added)

Manitoba and Quebec : Three deaths resulting from the H1N1 Vaccine

The news reports have highlighted deaths allegedly resulting from the H1N1 flu, while obfuscating several recorded deaths resulting directly from the vaccine. These vaccine related deaths are occurring at the very outset of the vaccination program,

According to CTV News, 20 November 2009) "The province is currently investigating two deaths -- both adults who died within seven days of getting the H1N1 shot" (Family questions if H1N1 shot caused Manitoba woman's death, November 20, 2009, emphasis added).

Manitoba officials acknowledge 69 "adverse events" after people received the swine flu shot, including the two deaths. ( report, 17 November 2009)

However, unless the families speak out, the authorities will not provide details. CTV interviewed the family of one of the victims. No details on the other death in Manitoba are available:

"The family of a 38-year-old Manitoba woman who died five days after receiving the H1N1 vaccine are looking for answers as to why it happened.

Soo Lee Wong and her daughter, Angela Truong, both got the H1N1 shot on November 5th.

The family says Wong, who had diabetes, started getting sick a day after getting vaccinated and died a few days later.

Doctors told the family Wong died of a blood infection. More tests will be done to see if the vaccine played any role.

Wong's husband, Thoon Truong, is also caring for his seven-year-old daughter Angela, who has been in the hospital with a fever and swollen, painful legs.

He wants to know whether the two cases related to the vaccine or to something else.

The province is currently investigating two deaths -- both adults who died within seven days of getting the H1N1 shot.

Although it's still early, Manitoba's chief medical officer of health Dr. Joel Kettner says immunizations were not likely the cause of the deaths. CTV News | Family questions if H1N1 shot caused Manitoba woman's death, November 20, 2009)

It should be noted that these two deaths in Manitoba may have been associated with the injection of the higher risk H1N1 vaccine doses, which health authorities had called for withdrawal.

Quebec: One Death

An 80-year-old Quebec man was reported dead after taking the H1N1 Swine Flu vaccination. Health officials have dismissed the case, "stating that it's too soon to link the death and vaccine." Quebec man dies after taking H1N1 vaccine, Digital Journal, 18 November 2009).

The Quebec health authorities have refused to provide details:

"Quebec's Director of Public Health Protection, Dr. Horacio Arruda, did not know why the man took the vaccine and that final test results, which are expected to come in December, will determine whether or not the man died from the vaccine. reports the man died in the last three weeks but provincial officials declined to reveal details, citing confidentiality concerns. Arruda has said that most allergic reactions occur right away, which is the reason why many patients are asked to stay in the centers, “We can't say there is a causal association between the death and the flu shot.”

Nevertheless, Arruda is confident that the death will not discourage people from taking the vaccine but urged that serious reactions to the H1N1 shot are rare, “I understand that everyone is worried.”" (Quebec man dies after taking H1N1 vaccine, Digital Journal, 18 November 2009)

The statements by senior health officials are notoriously ambiguous: while they concur that: "there is no evidence the vaccine is dangerous.", they nonetheless acknowledge the deaths resulting from the vaccine (Statement of Quebec's Director of Public Health Protection, Dr. Horacio Arruda, (The Canadian Press: Quebec health officials investigating possible death from H1N1 vaccine. November 18, 2009).

Revealed: 50 oil tankers loitering off British coast as they lie in wait for fuel price hikes

Revealed: 50 oil tankers loitering off British coast as they lie in wait for fuel price hikes

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More than 50 oil tankers are anchored off Britain - pieces in a game in which the only winners are market speculators.

The losers are the millions of British motorists paying over the odds for their petrol and diesel.

After yesterday's report in the Daily Mail on how several so-called 'oil shark' tankers were moored near the Devon coast, dozens more vessels were revealed to be loitering off-shore.

oil tankers map

Some are carrying aircraft fuel or fuel for homes. Others are empty, waiting to be restocked before setting off around the globe.

But according to industry experts, a significant number are 'oil sharks' - tankers that have been cynically told to wait for crude prices to be driven up before they unload their cargo.

With values soaring on the international markets, fuel made from their oil is unlikely to appear on a petrol station forecourt any day soon.

Paul Watters of the AA said: 'Tankers are off the UK coast and also off the U.S. They are acting as storage tanks. As always, motorists are the victims in this. They are at the end of the food chain.'

daily mail

How the Daily Mail broke the story yesterday

The Daily Mail has learnt that 54 tankers are anchored around the British Isles.

Six are off the Essex and Kent coasts, five are moored in Lyme Bay, while four are lurking next to the Isle of Wight.

But the biggest fleet - around 30 ships - lies around ten miles from Southwold, Suffolk in the only waters around the UK where ship-to-ship transfers of oil are allowed.

They come from as far afield as Malaysia, Liberia and Singapore - and include 1,000ft vessels capable of carrying more than 300,000tons of oil.

Locals in Suffolk watched with growing anger over the summer as more and more tankers dropped anchor.

Southwold mayor Susan Doy said: 'It is wrong that tankers should be left off our coast for reasons of profiteering. Ordinary people are left to suffer as petrol prices go up.'

Andrew Reid, of ship owners and managers Charles M Willie & Co, said the flotilla off the Devon coast, pictured in the Mail yesterday, was 'a drop in the ocean compared to the much bigger fleet full of crude oil off Suffolk'.

He added: 'They are all just waiting there for the price of crude oil to rise, enabling huge profits to be taken. If all this crude were to be delivered there would doubtless be a fall in the crude price and petrol prices.'

Oil tankers moored of the Suffolk coast

Waiting game: The Limerick Spirit off the Suffolk coast yesterday

Southwold Tory councillor Simon Tobin said: 'There have been ship-to-ship transfers of oil going on off the coast here for around 15 years. But there began to be a huge increase in the number of these tankers around seven months ago.

'We are massively concerned. These tankers are treating the coast like a car park while they wait for the right time to take their oil to shore. There is nothing to stop them staying here as long as they like. There might be a catastrophic oil spillage which could ruin our beautiful coastline.'

Small tankers bringing oil from Russia often use the spot to transfer their cargo to larger vessels. Others drop anchor there while waiting for business because it is cheaper than tying up in a port.

The price of a barrel of oil has risen from $40 to $80 over the last year. It is expected to soar even further over the next few months as the world eases its way out of recession and demand rises.

The supply of oil is strictly controlled by producers and owners - to ensure that prices remain as high as possible.

In the course of its journey from wells to the refineries, a barrel of oil may be bought and sold by different traders many times on the international markets.

New York City homeless population at an all-time high

New York City homeless population at an all-time high

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According to a report released last month by the New York City advocacy group Coalition for the Homeless, there are currently almost 37,000 people in the city shelter system. This includes approximately 10,000 homeless families with 16,500 children.

The number of homeless housed by the city marks an 11 percent increase over last year and is the highest number of people seeking shelter on record. These figures are all the more significant because they reflect the state of the homeless population before the cold weather has started.

The report notes, “The growing homeless family shelter population has been driven by historically high numbers of newly homeless families entering the municipal shelter system.” In August, over 1,900 families sought shelter in the city’s system. For the last fiscal year (FY), over 120,000 homeless people used the city’s shelters.

The emergence of mass unemployment in the city has been the leading cause of the increase in homelessness. The official figure now stands at 10.3 percent, with a loss of 111,000 jobs since last year. Among Blacks and Hispanics, the figure is over 20 percent. If part-time workers who want full-time jobs and those who have stopped looking for work are counted, the overall unemployment rate rises to 15.8 percent.

Antonietta Bertucci, Director of Part of the Solution (POTS) Justice Center, a nonprofit agency that supplies services to the poor in the Bronx, told the WSWS: “We’ve seen people that would never have imagined they would be seeking our services. One woman who came to us is sleeping her car. She was evicted because she lost her job.”

The city’s capacity to shelter the homeless is being severely strained. Mary Brosnahan, executive director of the Coalition for the Homeless, wrote in the Daily News, “New York City is in the midst of a homeless emergency. … As of Sept. 30, there were only two empty beds left in the entire New York City shelter system for homeless men and only eight empty beds for homeless women—10 available beds in a system of more than 7,000 for homeless single adults.”

The city spent over $856 million providing these services in FY 2009.

On November 7, the Department of Homeless Services announced that it would close the city’s largest drop-in shelter to make way for the construction of a new subway line. The Open Door on 41st St. near the Port Authority Bus Terminal serves meals to homeless men and women. According the Daily News, although the shelter does not have beds, an average of 94 people slept there each night in September.

Robert Hess, the chairman of the Department of Homeless Services, the city will not replace the center, but seek to add beds to churches and synagogues that house the homeless. But Patrick Markee, a policy analyst for the Coalition for the Homeless, told the News: “With all-time record homelessness, this is no time for the Bloomberg administration to close the city’s largest drop-in center for homeless people”.

Bloomberg’s policies, like those of his predecessor, Rudolph Giuliani, are more concerned with hiding the homeless from view than with addressing the needs of people in distress.

One of these schemes involves providing homeless individuals and families with one-way bus or plane tickets to wherever they have contacts that could give them a place to stay. The New York Times reported that at least 550 families have been relocated in this fashion. City Hall would much rather ship families off rather than spend the funds necessary to house them. People have been relocated to many states and to a number of countries around the world.

According to the Times, many of these families are often long-time residents of the city, while others are newcomers. Hector Correa, an immigrant from Puerto Rico, told the Times, “I didn’t expect the city to be the way it is. I was expecting something different, something better.”

Ruby Davis told WCBS TV that she felt the city was trying to give her the boot when she was offered a one-way ticket to North Carolina, where her estranged mother lived. She said, “I didn’t take it because when I was living in North Carolina, I was sleeping on a broken pull-out couch, and I wasn’t getting along with my mom at the time.” Domestic violence and domestic disputes often lead to homelessness—a fact the one-way ticket program obviously does not consider.

Arnold S. Cohen, president of the Partnership for the Homeless, criticized the policy for failing to address the underlying causes of homelessness. He said, “What we’re doing is passing the problem of homelessness to another city. We’re taking people from a shelter bed here to the living room couch of another family. Essentially, this family is still homeless.”

In a grotesque scheme, the city’s Department of Homeless services began charging rent (see “New York City demands rent from the homeless”) to some families living in shelters in May. After a public outcry, the city backed off. Based on WSWS interviews with families seeking shelter from the city, it is clearly difficult for families to obtain services to begin with.

In addition to mass unemployment, the irrationality of the housing market and the very high cost of housing in New York City aggravate homelessness. Millions of working-class and middle-class people sacrifice huge portions of their income to pay rent or mortgages. When someone in a family loses a job or has a medical emergency, it can become impossible to pay rent or make payments on a house.

In New York City, however, blocks of units remain unfinished or unoccupied because big landlords cannot make a profit by completing or renting them. Often wealthy property owners chose to hold back empty apartments from the market, hoping to make a return on them later. Three years ago, the group Picture the Homeless estimated that 24,000 units in Manhattan alone are empty and available.

The New York Times noted recently that, despite city financing for the creation of affordable housing, over 200,000 apartments for lower-income working-class families have been eliminated since 2002. According to data supplied by New York University’s Furman Center, the city now has only 991,591 units that it considers affordable for families that make less than 80 percent of the city’s median income, $37,000 a year. This is a loss of 17 percent since 2002.

Antonietta Bertucci of POTS told the WSWS that over the last year, a number of landlords have taken advantage of a program sponsored by the Department of Homeless Services. The DHS will pay up to $3,000 to rent an apartment as a shelter for the homeless. This has prompted mass evictions from some buildings, especially in the Bronx, because landlords see it as a way to make more money. “They take their tenants to housing court and accuse them of violating their leases,” Bartucci said. “The tenants are obligated to prove that they did not”.

She added, “Everybody is suffering because of the recession, including the landlords. They can’t afford their mortgages and pass the cost on to their tenants. Many apartments are in awful condition. It is quite widespread in the Bronx for tenants not to have hot water”.

The housing crisis in New York City and nationwide is so egregious that the United Nations Human Rights Council recently appointed a special rapporteur on the right to affordable housing in the US. The rapporteur, a professor of city planning from the University of São Paulo in Brazil named Raquel Rolnik, was denied entry into the US by the Bush administration. Admitted to the US after the election of Barack Obama, she found that little had changed in US government attitudes to the homeless: “One of the first meetings I had at the State Department, they clearly told me: here, adequate housing is not a human right.”

Obama’s public education race to the bottom

Obama’s public education race to the bottom

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Recent days have seen an unlikely threesome promoting the Obama administration’s “Race to the Top” public schools initiative. Education Secretary Arne Duncan has joined with Al Sharpton and former Republican House Speaker Newt Gingrich to tour the country in support of the plan.

The basic idea is to force state governments to compete for $4.35 billion in federal assistance, with the money going to those states which do the most to promote charter schools, utilize standardized testing, and weaken workplace rules for teachers. Essentially, the scheme sets up a bidding war among the states for desperately needed funds on the basis of an anti-public education agenda that has been promoted for decades by the right wing.

Pairing the Democratic Party demagogue Sharpton with Gingrich is aimed at suggesting that a broad coalition has formed behind Obama’s education agenda.

Sharpton’s role is to defuse opposition in largely African-American urban schools that will be particularly devastated by Obama’s policies. Citing the “achievement gap” that remains between black and white students, Sharpton now champions the same policies he opposed when they were put forward by the Bush administration.

The teachers unions are also on board. The American Federation of Teachers and the National Education Association now support essentially the same policies they opposed under the previous administration. The difference is that they were shut out of education “reform” by the Bush administration, while Obama and the Democrats are eager to utilize their services in attacking teachers and undermining the foundations of public education.

Further underscoring the true nature of the “reforms” being put in place is the support offered by Gingrich, a diehard opponent of government social programs and partisan of school privatization.

As for Obama’s education secretary, while CEO of the Chicago public education system Duncan forced the shutdown of dozens of schools, the tearing up of rules for teachers relating to seniority and academic freedom, and the creation of a wave of charter schools, including military-style academies.

What are the results of Duncan’s years in Chicago? The graduation rate from the city’s high schools is little better than 50 percent, and dozens of high schoolers have been killed, many as a result of traversing hostile gang territory en route to distant schools, their neighborhood schools having been closed.

Presented by Duncan as an enormous amount of money, the $4.35 billion fund is a tiny fraction of Obama’s outlays for the military and the wars in Iraq and Afghanistan, and about 2 hundredths of 1 percent of the $23 trillion Washington has made available to the finance industry. The grand total allotted for education is less than the individual personal fortunes of about 60 Americans, and a fraction of the Christmas bonuses that Wall Street will pay its executives and traders next month.

By 2011, the combined state-level funding gap for schools will be $20 billion. This does not include local revenue shortfalls, much of it resulting from collapsing real estate tax assessments. Scores of school districts will be bankrupt by the end of the year. The state of Hawaii has gone so far as to cut the school week to four days.

Only a handful of states will receive any “Race to the Top” money, possibly fewer than 15, according to the Wall Street Journal. “This is going to be highly competitive, and there are going to be a lot more losers than winners,” Duncan bluntly declared in announcing the 30-plus criteria that will be used to judge the states.

These blackmail tactics are already having the desired effect. A number of states have in recent months passed legislation promoting charter schools, expanding testing and other metrics, and channeling funding to those schools whose students perform well. These policies will starve the very schools that need funding the most.

Obama’s policies encourage the development of an openly class-based system of education. Wealthy districts will prosper, while the great majority of schools—in the cities, rural areas and even the suburbs—will suffer or vanish.

Many teachers, students and parents oppose Obama’s education policies. After Duncan outlined the plan in July, “1,200 public comments poured into the Department of Education” condemning the plan, the New York Times noted.

The Obama administration responded with its usual contempt for popular opinion. “Even after all the comments, the rules are as comprehensive and demanding as before, they haven’t changed,” said Rahm Emanuel, the president’s chief of staff. “We’re seeking reforms, so we haven’t backed off anything.”

As it becomes clear what Obama’s education policies mean and as the public school system continues to collapse, teachers, students and parents will move to defend public education, which has for nearly two centuries been bound up with egalitarian and democratic principles.

Obama leaves Asia empty-handed

Obama leaves Asia empty-handed

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South Korea, the final leg of US President Obama’s Asian trip, was no more successful that his other stops. In Japan, Singapore and China, Obama failed to secure any significant economic concessions and came under fire for growing US protectionism. In South Korea on Thursday, he made no advance with an equally uncompromising South Korean President Lee Myung-bak toward a free-trade deal between the two countries—a major item on the agenda.

The Bush administration signed a free-trade agreement (FTA) with the previous South Korean president, Roh Moo-hyun, but it has stalled in the legislatures of both countries. Democrats in the US Congress have demanded the removal of tax and regulatory obstacles that restrict the sale of American autos and white goods in South Korea. Seoul is insisting on the protection of its agricultural sector from US exports.

Sharp differences over these issues were barely papered over. After meeting with Lee, Obama declared that he was committed to moving the agreement forward, but acknowledged that major issues remained. Lee in turn said that he was ready to address the sensitive auto issue, but added: “The one thing I want to clarify is that Korea’s agricultural and services industries also feel the FTA with the US is unfair.”

Like Obama, Lee is under strong pressure from protectionist lobbies in South Korea. Opening up the country to US farm products would destroy an estimated 130,000 jobs in the agricultural sector. Lee’s decision to resume US beef imports in 2008 unexpectedly triggered massive anti-government protests over a confused mixture of issues, including fear of mad cow disease and job losses, combined with rising anti-American sentiment.

In the auto sector, the Wall Street Journal noted that Hyundai-Kia sold 100 times as many vehicles in the US last year than Cadillac, Chrysler and Ford sold in South Korea, even though the US market was only 13 times larger than South Korea’s. But South Korean officials point out that half of the South Korean cars sold in the American market were made in the US and that GM owns South Korea’s third largest auto company, Daewoo.

Lee fears that further job cuts in the already hard-hit auto sector will provoke further social unrest. In August, he sent thousands of riot police into the Ssangyong Motor plant at Pyeongtaek to break up a 77-day occupation by workers after the company announced it was slashing around 2,600 jobs. At the same time, Lee, like other Asian leaders, is concerned about rising protectionism in the US, as indicated by recent punitive measures against Chinese goods.

A free-trade agreement with South Korea would be the first between the US and any major Asian economy. South Korea is the US’s seventh largest trade partner, with two-way trade reaching $US82.9 billion in 2008. Efforts to reach trade deals with Thailand and Malaysia have also run into difficulties. The US is largely being left out as more than 70 trade deals turn Asia into a regional trade bloc centred in China and Japan.

Singapore’s former prime minister Lee Kuan Yew recently warned that protectionist sentiment in the US would have long-term consequences, saying: “If it goes on like that, after eight years—assuming that President Obama goes for a second term—anti-free trade, you are out of the economic race.” Lee added that “if you are out of the economic race, you will lose in the long run,” particularly to China.

As elsewhere in the region, China’s rising economic power is having its impact in South Korea. As the Financial Times commented, “the US is no longer the only show in the town”. When President George Bush senior visited Seoul 20 years ago, the US was the country’s main trade partner and there was only one weekly flight from South Korea to China. Today, China has replaced the US as South Korea’s largest trading partner and the number of weekly flights to China has soared to 642.

Referring to Obama’s visit to China, an editorial in South Korea’s largest daily, Chosun Ilbo, declared: “The US is no longer in a position to tell China what to do.” The editorial argued that South Korea had to attempt to balance between the two powers. “As a new era dawns, Seoul’s diplomatic strategies must change. It is time to go beyond the single-track approach and come up with a multi-layered plan,” it stated.

South Korea is still heavily dependent on the US militarily, however. Seoul maintains its Cold War alliance with Washington and continues to host US military bases and 28,500 US troops. South Korean President Lee belongs to the right-wing Grand National Party that was the political face of the successive US-backed police state regimes that ruled until the late 1980s.

Obama and Lee confirmed their common hard-line approach to North Korea and its nuclear programs—the other major issue to be discussed. “The thing I want to emphasise is that President Lee and I both agreed on the need to break the pattern that has existed in the past, in which North Korea behaves in a provocative fashion and then returns to talks for a while and then leaves the talks seeking further concessions,” Obama declared.

At the joint press conference, Obama announced that US special envoy Stephen Bosworth would travel to Pyongyang on December 8, but insisted that the mission was limited to pressing North Korea back to six-party talks that involve the US, China, Japan, Russia and the two Koreas. Obama also declared that he agreed with Lee’s proposal for a “grand bargain” to use economic leverage to pressure North Korea to dismantle its nuclear facilities.

For all the propaganda about North Korea’s provocative behaviour, Lee, with US backing, has deliberately raised tensions between the two Koreas. Hostile to the so-called “Sunshine policy” of previous administrations, Lee stopped the shipments of food and fertiliser to North Korea after coming to power in 2007. The move has deprived North Korea of an estimated one million tonnes of food a year and threatens to cause starvation. Lee’s “grand bargain” is more a policy of economic blackmail.

According to the Washington Post, the Obama administration has ruled out providing food aid as part of any dealings with North Korea. The Bush administration had provided just 169,000 tonnes of food, out of a promised half a million tonnes, as part of a six-party accord reached in February 2007. By December 2008, the agreement had virtually collapsed after the US made new verification demands—a policy continued by Obama. In March this year, the Obama administration seized on a North Korean missile test to suspend all food aid.

Obama’s visit was accompanied by the most extensive security measures surrounding any foreign guest. Concerned about antiwar protests, South Korean authorities mobilised 13,000 troops and security personnel for the one-day visit. Last Saturday, hundreds of people demonstrated outside the US embassy in Seoul against South Korean plans to send 300 combat troops to Afghanistan. The troop numbers could eventually increase to 500, under the guise of protecting 130 Korean specialists sent to assist so-called “reconstruction”.

South Korean support for the US-led occupations of Iraq and Afghanistan is widely unpopular. Former President Kim Dae-jung sent South Korean medical and engineering units to Afghanistan. In 2004, President Roh dispatched 3,600 troops to Iraq, the third largest deployment after the US and Britain. They were withdrawn last year. A wave of protests erupted after the Taliban captured 23 South Korean aid workers in 2007, forcing an end to South Korea’s presence in Afghanistan.

Limited support for his escalating neo-colonial war in Afghanistan was all that Obama had to show for his trip to Asia. On top of Lee’s small commitment of troops, Japanese Prime Minister Yukio Hatoyama pledged $5 billion in aid to Afghanistan over five years—but only as compensation for ending Japan’s unpopular naval refuelling mission in support of the occupation.

Civil liberties attorney Lynne Stewart ordered to prison

Civil liberties attorney Lynne Stewart ordered to prison

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A three-judge panel of a US federal appeals court has upheld the conviction of outspoken civil liberties lawyer Lynne Stewart, convicted in 2005 of assisting terrorism by transmitting the contents of a press statement by her client, the blind Egyptian cleric Sheik Omar Abdel Rahman, in 2000. Also convicted at that time were Ahmed Abdel Sattar, who is presently serving a 24-year term for assisting the cleric, and Mohamed Yousry, a translator who was sentenced originally to 20 months.

The appellate court also ordered the revocation of Stewart’s bond, and she surrendered to prison authorities on November 19 to begin serving a 28-month sentence.

The latest decision was not unexpected considering the present political and civil liberties climate. An additional ominous note was injected, however, by the judges from the Second Circuit of the US Court of Appeals; they ordered the trial judge, John Koeltl of the Federal District Court, to hold another hearing on December 2 to consider resentencing Stewart to a longer term on the grounds that she had lied at the trial.

Koeltl had shocked the authorities in October 2006 when he sentenced Stewart to a term less than 10 percent as long as the 30 years called for the prosecution. At the time, Koeltl, in part voicing a broad and widespread sympathy for Stewart, especially in New York, called her “a dedicated public servant who had, throughout her career, represented the poor, the disadvantaged and the unpopular.”

This positive evaluation undoubtedly angered federal prosecutors. The latest decision comes about as close as the appellate judges legally can to demanding a longer sentence. It forces Koeltl to increase the sentence for the 70-year-old Stewart, who was treated for breast cancer in the period between her conviction and sentencing, or to explain why he will not. Judge Robert Sack, who wrote the appellate decision, said Koeltl should have determined whether Stewart lied in court. “We think that whether Stewart lied under oath at her trial is directly relevant to whether her sentence was appropriate,” he wrote.

A further indication of the mood of the higher court judges was the partial dissent of Judge John M. Walker, who called the sentence “breathtakingly low.” Walker was not satisfied with the majority decision merely sending the case back for resentencing, claiming that it “trivializes Stewart’s extremely serious conduct with a ‘slap on the wrist.’”

Stewart denounced the appellate decision, pointing in particular to the recent decision to try some of the Guantanamo defendants at criminal trials in New York. She said that the timing of the decision in her case, “coming as it does on the eve of the arrival of the tortured men from offshore prison in Guantanamo,” was intended to intimidate lawyers who would be defending these men.

“If you’re going to lawyer for these people, you’d better toe very close to the line that the government has set out,” said Ms. Stewart. Otherwise, she added, you “will end up like Lynne Stewart. … This is a case that is bigger than just me personally.” Stewart’s attorney, Joshua Dratel, said that an appeal to the Supreme Court was possible.

The National Lawyers Guild, of which Lynne Stewart is a member, issued a statement as she reported to jail. “The National Lawyers Guild issues its continued support of longtime member and former veteran civil rights attorney Lynne Stewart,” it stated. NLG President David Gespass was quoted as saying, “We are proud that Lynne has been, is and continues to be a member of the National Lawyers Guild. Her long history of vigorous advocacy on behalf of the most unpopular of clients is an example to all of us and reflects a commitment to justice and due process that is too often only given lip service by the bar.”

Stewart was first indicted in 2002, at which time then Attorney General John Ashcroft held a press conference to trumpet his attack on civil liberties. Now a Democrat is in the White House and the Attorney General is Eric Holder, but the vindictive attack on Stewart, part of the bipartisan assault on civil liberties and democratic rights, continues.

U.S. Mortgage Delinquencies Reach a Record High

U.S. Mortgage Delinquencies Reach a Record High

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The economy and the stock market may be recovering from their swoon, but more homeowners than ever are having trouble making their monthly mortgage payments, according to figures released Thursday.

Nearly one in 10 homeowners with mortgages was at least one payment behind in the third quarter, the Mortgage Bankers Association said in its survey. That translates into about five million households.

The delinquency figure, and a corresponding rise in the number of those losing their homes to foreclosure, was expected to be bad. Nevertheless, the figures underlined the level of stress on a large segment of the country, a situation that could snuff out the modest recovery in home prices over the last few months and impede any economic rebound.

Unless foreclosure modification efforts begin succeeding on a permanent basis — which many analysts say they think is unlikely — millions more foreclosed homes will come to market.

“I’ve been pretty bearish on this big ugly pig stuck in the python and this cements my view that home prices are going back down,” said the housing consultant Ivy Zelman.

The overall third-quarter delinquency rate is the highest since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008.

The combined percentage of those in foreclosure as well as delinquent homeowners is 14.41 percent, or about one in seven mortgage holders. Mortgages with problems are concentrated in four states: California, Florida, Arizona and Nevada. One in four people with mortgages in Florida is behind in payments.

Some of the delinquent homeowners are scrambling and will eventually catch up on their payments. But many others will slide into foreclosure. The percentage of loans in foreclosure on Sept. 30 was 4.47 percent, up from 2.97 percent last year.

In the first stage of the housing collapse, defaults and foreclosures were driven by subprime loans. These loans had low introductory rates that quickly moved to a level that was beyond the borrower’s ability to pay, even if the homeowner was still employed.

As the subprime tide recedes, high-quality prime loans with fixed rates make up the largest share of new foreclosures. A third of the new foreclosures begun in the third quarter were this type of loan, traditionally considered the safest. But without jobs, borrowers usually cannot pay their mortgages.

“Clearly the results are being driven by changes in employment,” Jay Brinkmann, the association’s chief economist, said in a conference call with reporters.

In previous recessions, homeowners who lost their jobs could sell the house and move somewhere with better prospects, or at least a cheaper cost of living. This time around, many of the unemployed are finding that the value of their property is less than they owe. They are stuck.

“There will be a lot more distressed supply entering the market, and it will move up the food chain to middle- and higher-price homes,” said Joshua Shapiro, chief United States economist for MFR Inc.

Many analysts say they believe that foreclosures, instead of peaking with the unemployment rate as they traditionally do, will most likely be a lagging indicator in this recession. The mortgage bankers expect foreclosures to peak in 2011, well after unemployment is expected to have begun falling.

There was one sliver of good news in the survey: the percentage of loans in the very first stage of default — no more than 30 days past due — was down slightly from the second quarter. If that number continues to decline, at least the ranks of the defaulted will have peaked.

“It’s arguably a positive, but it doesn’t undermine the fact that there are still five or six million foreclosures in process,” Ms. Zelman said.

The number of loans insured by the Federal Housing Administration that are at least one month past due rose to 14.4 percent in the third quarter, from 12.9 percent last year. An additional 3.3 percent of F.H.A. loans are in foreclosure.

The mortgage group’s survey noted, however, that the F.H.A. was issuing so many loans — about a million in the last year — that it had the effect of masking the percentage of problem loans at the agency. Most loans enter default when they are older than a year.

When the association removed the new loans from its calculations, the percentage of F.H.A. mortgages entering foreclosure was 30 percent higher.

The association’s survey is based on a sample of more than 44 million mortgage loans serviced by mortgage companies, commercial and savings banks, credit unions and others. About 52 million homes have mortgages. There are 124 million year-round housing units in the country, according to the Census Bureau.

GAO: Fraud in gov't contracts for disabled vets

GAO: Fraud in gov't contracts for disabled vets

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Companies fraudulently collected at least $100 million in federal contracts from a $4 billion government program designated for disabled military veterans who run small businesses, congressional investigators charge.

The Small Business Administration failed to check if companies were eligible for the no-bid contracts for veterans with service-related injuries, allowing, for example, a contracting employee at a military base in Tampa, Fla., to improperly funnel a $900,000 Air Force contract to his wife's firm.

Moreover, because there are few penalties for companies found ineligible, many were still being handed tens of millions of dollars in government work even after they were found to be flouting the rules, according to the report released Thursday by the Government Accountability Office.

In many cases, small business owners falsely claimed they had a service-related injury to get the federal work — such as a $7.5 million FEMA contract for Hurricane Katrina work — and were only caught when competitors protested. In other situations, the small veteran-owned businesses were legitimate but then improperly passed the work to large or foreign-based corporations.

"It is absolutely unacceptable that some businesses have been allowed to fraudulently and shamefully profit at the expense of our veterans," said Rep. Glenn Nye, D-Va., who chairs a House subcommittee on small business contracting.

Nye said he plans to hold hearings and work to develop legislation to hold firms accountable. "If we are serious about honoring our commitment to our veterans, then this program must be more than an empty promise," he said.

Responding, the SBA generally agreed with the recommendations but contended it was not obligated to implement fraud controls because it was the contracting officers at the federal agencies who ultimately were responsible for monitoring the contracts.

But in its report, the GAO disagreed, saying federal rules require the SBA to verify a company's eligibility and to impose penalties if a firm misrepresents itself. The GAO also faulted a broader lack of accountability that allowed abuses to continue.

"By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud or abusing the intent of the veterans program," investigators wrote.

Among the cited abuses, based on the GAO's spot review of cases since 2003:

_A Las Vegas firm falsely claimed it was a veteran-owned small business to compete for $200 million in contracting work to maintain trailers for Katrina victims. After a competitor protested, the misrepresentation was uncovered and work was stopped, but the company had already received $7.5 million. The firm received no other punishments.

_Using veteran-owned businesses as a front, a septic tank company in Austin, Texas, received an Army contract for work at Fort Drum, N.Y., and Fort Irwin, Calif. After its status was challenged last year and it was found to be ineligible, the Austin company was allowed to continue work on the Army contract through 2013 for a total value of up to $1.1 million.

_A contracting employee at MacDill Air Force Base in Tampa, Fla., set up a veteran-owned business and then passed along a $900,000 furniture contract to his wife's non-veteran-owned firm, who in turn gave the work to a furniture manufacturer who actually performed the contract. Contracting officials acknowledged they were aware the employee had little involvement or experience in performing the furniture contract when making the award.

The GAO recommended that the SBA work to develop penalties that would prohibit companies from getting federal work if they are found to knowingly misrepresent their status as veteran-owned businesses. It also urged the Veterans Affairs Department to expand its database of validated veteran-owned small businesses, so that the SBA and contracting officials can access it to verify eligibility.

Rep. Nydia Velazquez, D-N.Y., who requested the GAO report, said more efforts will likely be needed to root out ineligible companies. She noted that "the VA has no way of verifying whether the listings in their database are actually small businesses or large companies."

The findings come as President Barack Obama is expected within the next week to sign an executive order aimed at cracking down on government waste and fraud. Officials say part of that order will seek to impose penalties on contractors, such as suspension, if they fail to report and return improper payments made by the government.

Violent Deaths Are Now Following Evictions, Foreclosures and Job Losses

Violent Deaths Are Now Following Evictions, Foreclosures and Job Losses

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Despite ever rosier economic predictions and a surging stock market, the body count from the economic crisis is destined only to grow in the weeks and months ahead.

In 2007, Jason Rodriguez was fired from his position at an Orlando, Florida engineering firm and ended up taking a job as a "sandwich artist" at a Subway restaurant. His salary was cut nearly in half and his debts mounted until, last May, he filed for bankruptcy, listing his assets at just over $4,600 and his liabilities at nearly $90,000. Although he lived only 30 minutes away, according to his former mother-in-law, America Holloway, Rodriguez barely saw his son. When the boy asked why his father didn't visit, Holloway said Rodriguez told him: "'Because I don't have any money. I don't have a job. I don't have anything to eat. When things get better, I'll come see you.'"

Things never got better. On November 6th, the 40-year-old Rodriguez went back to the downtown high-rise office building where he had worked and reportedly opened fire, killing one person and wounding five others at his old firm. Asked to comment following the shooting, a local lawyer who represented Rodriguez in his bankruptcy proceedings, said "That's how it is right now. He's a very typical client. Of people that are suffering through the economy right now, there's nothing extraordinary about him… except that."

In the wake of the massacre at Fort Hood -- which took place a day before the Florida incident -- there has, quite understandably, been a search for answers as to the cause of the shooting that left more than 50 dead or injured. Much less attention, however, has been devoted to uncovering the reasons for the much larger number of men and women -- including those allegedly shot by Jason Rodriguez -- who have fallen victim to violence stemming from the global economic crisis.

An analysis of national, regional, and local news reports from 2008-2009 indicates a largely silent, nationwide epidemic of drastic measures and extreme acts for which the economy seems to have been a catalyst. News of such deeds linked to economic woes -- from armed robberies to pay the rent to financially-motivated suicides to familicides (murder/suicides in which both parents and their children die) in the face of financial ruin -- has filtered out of cities and towns in most U.S. states. Since only a fraction of these acts ever receive media coverage, what is being reported -- most of it in local newspapers -- is startling. And while it's impossible to know the myriad factors, including deeply personal ones, that contribute to people resorting to drastic measures, violent or otherwise, many press reports suggest that the global economic crisis has played no small part in a wide range of extreme acts.

Going to Extremes

Earlier this year, for example, "Binghamton Shooter" Jiverly Wong garnered front-page headlines nationwide and set off a cable news frenzy when, "bitter over job loss," he massacred 13 people at an immigration center in upstate New York. Similarly, coverage was brisk after Pittsburgh resident Richard Poplawski, "upset about recently losing a job," shot four local police officers, killing three of them. Many others have directed violence inward, sometimes shooting themselves as sheriff's deputies stood at the door with eviction papers, other times engaging in armed standoffs designed to end in a suicide-by-cop killing.

One such case occurred recently when 64-year-old Kurt Aho of Phoenix, Arizona decided to take a stand. Aho had been struggling to find work and was preparing for his daughter and grandson -- who had lost their house to foreclosure -- to move in with him, but on September 29th, his own foreclosed home of 30 years was sold at auction. Vowing that he wouldn't just walk away, Aho cracked open a beer and had drink with neighbor Jeffrey Hobson who recalled, "He said, 'When the cops get here, either I'm gonna die by them or I'm gonna kill myself." When the two new owners arrived, Aho promptly shot out the tires of their trucks. He then retrieved a .357 Magnum from his house and chased the pair away. Next came the police who rolled up and ordered Aho to drop his weapon. Instead, the self-employed contractor ignored them and walked into his house to grab a few more beers. Neighbors warned the cops that Aho was suicidal and that he would fire on them if they advanced, but the SWAT team stepped up the confrontation by shooting Aho with rubber bullets. Aho responded by firing his pistol twice, striking the SWAT team's armored vehicle with one of the bullets. With that, a SWAT team member fired on Aho, killing him.

In the days that followed, as they have all year long, other economically-motivated extreme acts were carried out across the country. In an attempt to save their home from foreclosure, Daniel Weston and Mary Ann Parmelee, both 52, hired a pair of loan modification agents. Believing they had been ripped off, the Los Angeles couple later lured the men into an ambush, on October 20th, in which "Weston and another man, Gustavo Canez, 36, allegedly beat and robbed them" using a handgun and wooden knuckles.

On October 29th, in New Orleans, Louisiana, a man facing eviction armed himself with a rifle and barricaded himself inside his home. The act wasn't an isolated extreme for the area. "We've had a couple of suicides," Lambert Boissiere Jr., New Orleans's 1st City Court Constable remarked recently. "When the deputies get there, they find the person inside. Or sometimes you knock on the door and boom, they commit suicide."

One such incident took place on November 5th when Patrick Sanchez of Irvine, California answered his door to find a sheriff's deputy serving him an eviction notice. Sanchez asked the deputy to wait, walked back into his home and shot himself. It was, reportedly, at least the third eviction-related suicide in that area this year.

Elkhart Revisited

Right now, having suffered 13 deaths at the hands of a lone gunman, Fort Hood, Texas is the media's anguished community du jour. In February, however, it was the former "RV capital of the world," Elkhart, Indiana -- a financially-devastated community where President Barack Obama made an appearance to push his economic recovery package. In his speech at Elkhart's town hall, Obama caught the town's plight dramatically: "[This] area has lost jobs faster than anywhere else in the United States of America, with an unemployment rate of over 15 percent when it was 4.7 percent just last year… We're talking about people who have lost their livelihood and don't know what will take its place… That's what those numbers and statistics mean. That is the true measure of this economic crisis."

In reality, however, the "true measure" has only become clear as the year has ground on. As of early November there had been 22 confirmed suicides in Elkhart and two other likely self-inflicted deaths, outpacing the county average of 16. According to coroner John White, in more than a quarter of the suicides financial distress or job loss was a deciding factor for the victims. "They left notes specifically stating that the reason they did this was because of the economy," he said recently. He continued, "Everyone needs to be more aware with the stresses of 17 percent to 18 percent unemployment."

People do need to be aware of the stresses -- and the dire costs associated with them, but the chances of that happening are slim. The massacre at Fort Hood is bound to produce volumes of analyses resulting from multiple government inquiries into the killings. But neither the FBI nor Congress nor any other government agency will ever convene an investigation into the slow motion bloodbath resulting from the global economic crisis. For this reason, there will never be anything approaching a full tally of all the victims who were killed or died or were wounded or psychologically devastated as a result of evictions, foreclosures, job losses, and other forms of financial distress over the last years. Nor will President Obama head back to Elkhart, or anywhere else for that matter, to attend a memorial service to the fallen from this less spectacular, but far deadlier bloodbath. As a result of the inattention, and despite ever rosier economic predictions and a surging stock market, the body count from the economic crisis is destined only to grow in the weeks and months ahead.

Obama’s China trip

Obama’s China trip

Go To Original

At the beginning of his eight-day tour of Asia, President Obama declared himself the “first Pacific president” and announced that his trip would reassert American leadership in the region. For US imperialism, maintaining its dominant position in a part of the globe that accounts for half of world gross domestic product is a life-and-death question.

In the event, the trip, most importantly Obama’s three-day visit to China, only highlighted the pronounced decline in the world position of the United States and the fact that leaders in Asia and elsewhere are increasingly cognizant of this momentous fact. The shifting tectonics of world relations, accelerated by a global economic crisis that erupted in the US, have imparted to world affairs a degree of instability and tension without precedent since World War II.

Beneath the diplomatic niceties of presidential summitry in Japan, Singapore and China, the growth of conflicts over trade, currencies and economic influence made themselves felt, at times in unusually blunt ways.

America has emerged from the first stages of the current economic crisis further weakened in relation to its emerging challengers, most notably China. This is most poignantly symbolized by the fact that Washington’s chief economic lever for asserting its interests is the threat to its rivals posed by its policy of allowing the dollar to slide. By thereby cheapening its exports and making the imports of competing nations more expensive, and threatening the vast dollar holdings of China, Japan and India, the US is attempting to leverage its long-term decline into a means of offloading its crisis onto other economies.

In so doing, it is only further undermining world confidence in the dollar and in American capitalism itself.

Among the raft of commentaries on the starkly changed position of the US vis-a-vis China was a November 15 article in the New York Times that began: “When President Obama visits China for the first time on Sunday, he will, in many ways, be assuming the role of profligate spender coming to pay his respects to his banker.

“That stark fact—China is the largest foreign lender to the United States—has changed the core of the relationship between the United States and the only country with a reasonable chance of challenging its status as the world’s sole superpower.”

Another variation on the same theme was an editorial in the November 14 Financial Times that began: “When Mr. Obama visits Asia, he does so as the head of state of a battered superpower. No better symptom of US frailty can be found than the dollar—the currency in which Asians have invested so much of their people’s hard-earned wealth. But Mr. Obama can only grin and ask his hosts to bear it.”

The Wall Street Journal placed greater emphasis on the provocative and aggressive nature of US monetary policy, noting that “the Obama administration seems to be trotting out an updated if more subtle version of Nixon-era Treasury Secretary John Connally’s famous quip that the dollar may be ‘our currency’ but it’s ‘your problem.’”

Indeed, the change since Nixon became the first US president to visit China is instructive. In 1972, the US, although already in decline, was still the world’s dominant industrial power and biggest creditor.

Even more notable is the change since President Clinton held court in Beijing just eleven years ago. Already by then the world’s biggest debtor nation, the United States, as the Washington Post put it on November 18, “was still basking in its position as the Cold War victor and the world’s sole superpower.” China was then “the seventh-biggest holder of US Treasury securities. Today, China is the nation’s biggest creditor and its trade with the United States has grown sevenfold.”

This time around, Obama’s mission was to convince nations in East and Southeast Asia that they could rely on the US as a counterweight to the growing economic, political and potential military power of China, which next year will become the second largest economy after the US, surpassing Japan.

At the Asia-Pacific Economic Cooperation summit and the Association of Southeast Asian Nations meeting in Singapore, Obama sought to prevent the US from being frozen out of an emerging Asian trade bloc over which China is poised to exert the dominant influence.

He sought to channel the anger among Asian nations over the negative trade impact of the falling dollar and the growing danger of asset bubbles fueled by near-zero US interest rates, and the Federal Reserve’s policy of printing dollars in prodigious quantities, by diverting it away from the US and directing it toward China. The latter has gained a trade advantage against its neighbors by keeping its currency, the yuan, pegged to the dollar, thereby allowing it to fall in tandem with the greenback.

But it was the US which came in for public denunciations of protectionism, including from Mexico. China succeeded in blocking a US-backed resolution on allowing currencies to move in accord with market forces.

Obama’s plan to put the onus for “rebalancing” the global economy on China by insisting that it revalue its currency was thwarted by preemptive thrusts from Chinese officials, who denounced US monetary policy as a threat to any global economic recovery and attacked the US for protectionism. They were able to point to growing concerns in the region over the inflationary threat from cheap US dollars and Washington’s recent imposition of import duties on Chinese tire and steel pipe exports to the US.

For China’s ruling elite, which presides shakily over a huge, restless and mostly impoverished population, acceding to Washington’s demands would be tantamount to political suicide. Over the past year, despite its nominally healthy economic growth rate, China’s exports have declined 20 percent and some 40 million workers have lost their jobs. The social implications of a further decline in exports that would accompany a major revaluation of the yuan are explosive in a still backward country riddled with ethnic, demographic and class tensions.

The realities of financial dependency compelled Obama to proceed with the utmost caution in his public remonstrations with the Chinese over their monetary policy and other issues. The joint appearance of Obama and Chinese President Hu Jintao following private talks was a frosty affair. Hu refused to bow to Obama’s pressure for agreement on tougher sanctions against Iran and said nothing about the yuan, lecturing the US president instead on the evils of protectionism.

Obama made great play of welcoming China’s rise and endorsing its status as a major actor in world affairs. He sought to reassure America’s biggest creditor—which holds some $800 billion in US Treasury notes—that he was serious about reining in soaring US deficits and imposing fiscal discipline on the backs of the American people.

But the real frame of mind within the US establishment and that of its closest Western allies was expressed by media commentators, who felt less inhibited. Particularly venomous were the rants of liberals who pride themselves on their free trade credentials.

In the run-up to Obama’s Asian trip, New York Times columnist and Nobel Prize-winning economist Paul Krugman vented (October 23) against China’s “outrageous currency policy,” concluding that “beggar-thy-neighbor policies by major players can’t be tolerated. Something must be done about China’s currency.”

While Obama was in China, Krugman returned to this theme (November 16), warning of “a potentially ugly confrontation looming unless China mends its ways,” and urging Obama to tell the Chinese “that they’re playing a dangerous game.”

Martin Wolf of the Financial Times in a November 18 column suggested the following script for Obama in his discussions with the Chinese leadership: “What you may fail to understand is the speed with which democracies can shift their attitude from the open hand to the clenched fist.”

Ambrose Evans-Pritchard, writing in the British Telegraph, was even more explicit. “It is fashionable,” he wrote, “to talk of America as the supplicant. That misreads the strategic balance. Washington can bring China to its knees at any time by shutting market. There is no symmetry here. Any move by Beijing to liquidate its holdings of US Treasuries could be neutralized—in extremis—by capital controls. Well-armed sovereign states can do whatever they want.”

Such ravings must be taken seriously, not on their own merits, but as reflections of the explosive and violent tensions building up between major powers engaged in a struggle to redivide a world thrown into flux by the breakdown of an old world order based on American hegemony. They strongly indicate that there is no peaceful transition to a “multipolar” carve-up of the world capitalist system.