Sunday, November 29, 2009

US imperialism, 9/11 and the Iraq war

US imperialism, 9/11 and the Iraq war

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While the American corporate media has given little attention to it, an official British inquiry into the war with Iraq has brought to light damning testimony about the Bush administration’s deliberate launching of an invasion to overthrow the regime of Saddam Hussein and subjugate Iraq to American domination.

Former British diplomats and security officials from the 2001-2003 period began testifying this week under oath before a panel headed by Sir John Chilcot, charged with examining the entire course of the war, from its origins to the final British pullout in June 2009.

More than enough evidence has already been produced to indict top Bush administration leaders, including Bush, Cheney, Rumsfeld, Powell and Rice, on the same charge for which Nazi leaders were convicted at the 1946 Nuremberg Tribunal—deliberately waging an aggressive war.

Jeremy Greenstock, British ambassador to the United Nations from 1998 to 2003, described the Bush administration as “hell bent” for a war with Iraq for more than a year before the actual invasion in March 2003. He described the US and British diplomacy to obtain a UN resolution that could be used as a pretext for war, and the impatience of US officials with the delays imposed by maneuvering at the UN Security Council.

The feedback from Washington “included noises about ‘this is a waste of time, what we need is regime change, why are we bothering with this, we must sweep this aside and do what’s going to have to be done anyway—and deal with this with the use of force,’” Greenstock testified.

The sole effect of British diplomacy was to delay the invasion by two weeks, he said. “The momentum for earlier action in the United States was much too strong for us to counter,” he said in a written statement to the inquiry.

Greenstock claimed that the US-led invasion was legal under international law, but admitted that it was of “questionable legitimacy” and did not have “democratically observable backing” either among the member states of the UN, or from the population of Great Britain. Some two million people marched in protest of the war in London in February 2003, the largest demonstration in at least a generation, and perhaps in British history.

Both Greenstock and Christopher Meyer, former British ambassador to the United States, told the inquiry that a meeting between Bush and British Prime Minister Tony Blair at the Bush ranch in Crawford, Texas was the key decision point for war. This took place in April 2002, nearly a year before the invasion and well before the discussions at the United Nations Security Council in the fall of 2002.

Their testimony confirms the notorious “Downing Street Memo,” leaked to the press in 2005, which pinpointed the April 2002 meeting and declared that all subsequent US and British diplomacy was merely posturing to delude public opinion.

Even more important is the testimony from senior British security officials that the overthrow of Saddam Hussein was being openly discussed in British-US talks two years before the invasion, even before the terrorist attacks of September 11, 2001.

Sir Peter Ricketts, then chairman of the Joint Intelligence Committee, said that while regime change was discussed as desirable, an invasion for that purpose “was something that we thought there could be no legal basis for.” He said that US and British officials were concerned that the sanctions regime against Iraq was collapsing and that more direct action would be required to oust Saddam Hussein.

Ricketts added that he was “conscious that there were other voices in Washington, some of whom were talking about regime change,” citing in particular an academic article written in 2000 by President Bush’s National Security Adviser, Condoleezza Rice, which warned that “nothing will change” in Iraq until Saddam was removed from power.

Sir William Patey, a former Foreign Office official, said that he had commissioned the drafting of a paper on regime change as one of a variety of options in dealing with Iraq. He said the references to regime change were removed as the paper was moved up to the Cabinet level, because this option “was dismissed at the time as having no basis in law.”

He added that the main change brought about by the 9/11 attacks was that responsibility for US policy towards Iraq was shifted from the State Department to the Pentagon, headed by Defense Secretary Donald Rumsfeld, a hardline supporter of war with Iraq.

Former ambassador Meyer described a conversation with then US National Security Adviser Condoleezza Rice, on September 11, 2001, in which she first suggested that Saddam Hussein might be connected to the terrorist attacks—one of the principal lies used by the Bush administration to justify the US invasion.

The other major lie was that Iraq possessed vast stockpiles of “Weapons of Mass Destruction” (WMD). But Sir William Ehrman, director of international security for the Foreign Office from 2000 to 2002 and director-general of defense and intelligence from 2002 to 2004, told the inquiry that British intelligence was aware, before the US-British invasion, that Saddam Hussein’s regime had dismantled its chemical and biological weapons and hence had no WMD capability.

Meyer added that US officials also cited the anthrax-contaminated letters, which killed five people in the eastern United States in the months after 9/11, as further reason for targeting Saddam Hussein. Bush “just wanted to get over there and kick Saddam out,” he said. “The US military timetable was already in place before the weapons inspectors went in.”

In other words, the Bush administration came into office with a preconceived foreign policy agenda, which included an aggressive push for regime change in Iraq, to “finish the job” begun in the first Gulf War. The 9/11 attacks—carried out by a group formed out of the CIA-organized Islamic fundamentalist guerillas in Afghanistan—was seized on as a useful pretext for justifying an open-ended program of military aggression.

None of this will come as a shock to long-time readers of the World Socialist Web Site. From the inception of the Bush administration propaganda campaign for war with Iraq, the WSWS exposed and denounced the lies about an Iraqi role in the 9/11 attacks, Saddam’s alleged ties to Al Qaeda, and the “danger” of Iraqi WMD—this coming from the country with by far the largest stockpile of weapons of mass destruction on the planet.

But this record is worth pondering as Bush’s successor prepares to make his propaganda case for another unprovoked imperialist war of aggression—the US war against Afghanistan. Barack Obama goes on national television next Tuesday to claim that—more than eight years after September 11, 2001—tens of thousands more American troops must be sent to Afghanistan to fight those responsible the 9/11 attacks. At the same time, the occupation of Iraq continues and none of those responsible for launching this war crime have been held accountable.

Millions voted for Obama in the illusion that he would put an end to the militaristic foreign policy of the Bush administration. Instead, more American troops are fighting in Iraq and Afghanistan than at the height of the Bush “surge” in Iraq. The “commander-in-chief” is different, the lies have somewhat refined, but the axis of imperialist foreign policy remains: the defense of the strategic and economic interests of the financial aristocracy that rules America, served by Obama no less than by Bush.

US food charities overwhelmed by demand

US food charities overwhelmed by demand

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As the holiday season begins, charities across the US are reporting unprecedented demand for food assistance. Driving the increased demand is the unemployment crisis, the charities say. They also cite state budget cuts, the foreclosure crisis, and the ineffectiveness of the federal-state food stamp program, the Supplemental Nutrition Assistance Program (SNAP).

Feeding America, a national food assistance organization, recently released details of an economic impact survey of some of its 63,000 member food charities. It found that between summer 2008 and summer 2009, demand for food assistance increased by over 30 percent nationally. Ninety-nine percent of participating charities reported an increase in demand and 92 percent witnessed an increase of newly unemployed workers seeking assistance.

Food banks and food pantries are reporting that those seeking assistance describe themselves as “middle class” or say that “never thought they would have to ask for help.”

“We’re hearing from more and more middle class who have never in their life gone to a food pantry,” Diane Doherty, director of the Illinois Hunger Coalition told the Associated Press. “They’re very, very frustrated and angry.”

Ninety-one percent of food banks report unemployment as a primary cause in rising demand, while another 79 percent report underemployment—those working short hours—as a contributing factor to increased hunger, the survey reveals. In contrast, in May 2008 43 percent of food charities reported unemployment as a critical factor, while 90 percent reported the high price of fuel and food.

The survey concludes that the nation’s food charities are not able to meet the needs of the hungry. Fifty-five percent of surveyed charities report that within the last year they have had to turn away those seeking help, and one in five did so “frequently.” Over three fourths say that they have had to reduce the quantity of food they give away, and about a third report that they did so often.

The shortfall comes in spite of a record number of volunteers and a record distribution of food between July of 2008 and July 2009. Feeding America’s network distributed 2.63 billion pounds of food in that time span, an increase of about 21 percent over the previous year.

Feeding America reported a similar 30 percent increase in demand one year ago.

The new report comes on the heels of a recent US Department of Agriculture (USDA) study revealing a record 49.1 million Americans in 17 million households lacked dependable access to adequate food in 2008—even before the full onset of the economic crisis. The Feeding America report suggests that the level of hunger in the US has risen rapidly since then. (See: A record 49 million Americans faced hunger in 2008.)

The Obama administration has responded to the mounting evidence of mass malnourishment in the US by calling on Americans “to help feed their neighbors.”

Obama will modestly increase the appropriation for the food stamp program by $4.3 billion and that for school lunches by $1.9 billion this year. These sums, which no one expects to reverse the growth in hunger and malnourishment, are minuscule compared to the trillions of dollars Obama has doled out to the finance industry and the estimated $1 trillion his proposed “surge” in Afghanistan will cost over the next ten years.

“[T]he money is just part of it,” Agriculture Secretary Tom Vilsack sanctimoniously declared. “It is important for people in communities across the country to understand that this is a problem in their community.”

Responses to the Feeding American survey from local charities make clear that the scourge of hunger has spared no region of the country. They paint a portrait of a nation in the throes of a social crisis without parallel since the Great Depression.

The Harry Chapin food bank of Fort Myers, Florida, reported that it is serving 130 percent more people than two years ago. “Most of these clients are what the media describes as the ‘new poor,’ people that never had to ask for help before,” it reports. It blamed unemployment and the inadequacy of the joint federal-state food stamp program for the increase.

“Our pantries report they are serving more ‘working’ people,” a Peoria, Illinois food charity wrote. “The problem is by the time they pay their basic bills, such as gas bill, electric, clothing, etc., there is no money left for food.”

An Oklahoma food charity reported a 50 percent increase in demand. “Our rural areas are being particularly hard hit because of plant closings, layoffs, downturn in drilling in the energy sector and crop prices,” it wrote. “People are teaching each other how to build fire pits in their back yards to cook because their utilities are turned off. Families are finding themselves needing food for the first time in their lives and our partner agencies’ resources are being stretched to their limits.”

Gleaners Community food bank of Detroit described a desperate situation. It calculates that a staggering 600,000 residents of Southeast Michigan “are believed to be at risk” of hunger, and fears that 250,000 children will go hungry next summer after the school year ends—and with it free and reduced-price lunch programs. Gleaners estimates that area charities can now feed fewer than 90,000 of these children. “To compound the crisis, in December an estimated 90,000 residents in Southeast Michigan will see their unemployment benefits expire,” it added. “The non-profit sector is asked to be the safety net for increasing numbers of people in crisis.”

Second Harvest food bank of Duluth, Minnesota said unemployment was the biggest factor in increased demand for its services. “The Iron Mines throughout Northeast Minnesota have laid of hundreds of workers,” it explained. “Duluth based companies such as an aircraft design company and those working with them have also laid off workers. Our increase is primarily unemployment and underemployment.”

A similar report came from a food charity in Maine. Describing the cause of increased hunger, it listed “Mill layoffs in Millinockett, Ashland closure, Marsadis layoffs, Baileyville layoff, Old Town layoffs, Washington County has high unemployment rate and no new jobs.”

And this from Montana: “Several lumber mills, railroads and oil refineries [have closed] since January of 2009. Many of the families displaced by the closure of those businesses are new to the emergency food system in Montana. All three industries provided decent living wages to families and have left them with nothing. Due to the vast area of our state and our relatively low population, individuals and families find it difficult to relocate or seek alternative forms of employment. It was only recently that minimum wage was raised from $6.15 to $6.90. This is what most individuals can expect to earn, if they are fortunate enough to secure employment at this time.”

A food bank in Elizabethtown Kentucky reported it was struggling to feed the hungry in its area, citing unemployment and a 66 percent falloff in corporate donations. “Agency managers report daily how their demand is increasing every day; a demand that they are not able to satisfy with the dwindling food bank product we have available to provide them,” it wrote.

Demand for food relief increased sharply in California and Nevada, where local charities coupled joblessness with the foreclosure crisis as the main culprits.

Food charities in Los Angeles and Orange country reported 30 percent increases in demand. Further down the coast in San Diego, the increase was more marked. “In Summer 2008 we served 46,000 individuals,” Feeding America San Diego wrote. “In Summer 2009 we are serving 109,822 individuals, this is a 138% growth.”

A Fresno, California, food bank saw a doubling of its clients. “We are experiencing higher than national average unemployment, nearing Depression era rates upwards of 40 percent,” it wrote. “This year a severe drought impacted the West side of Fresno County where over 600,000 acres were left fallow as a result. Thousands of our clients each week stand in line for hours at a time in triple digit weather just so they can have something to feed their families because their agriculture related jobs have disappeared and their communities lack meaningful employment alternatives.”

Las Vegas saw an increase in demand for food assistance of between 121 and 168 percent. A local charity described the situation in the following terms:

“Las Vegas has one of the highest foreclosure rates in the nation, and Nevada now has the third highest unemployment rate of all the states...Much of the housing assistance that has been passed doesn’t help homeowners here...For a family to lose a job, then not be able to pay for the mortgage, then lose the house...all these factors can be crippling to families who otherwise would be getting by...The situation is just very bad here. Unemployment continues to rise, property tax values are poised to go down (reducing revenue for county social services), the expected wave of commercial property foreclosures has yet to hit, construction will soon be finished on the last major Strip property undergoing work, there’s talk of a special State Legislative Session to cut the budget yet further.”

The Fredericksburg Area Food Bank of Virginia noted the foreclosure crisis as a prime cause of hunger, and pointed out that the Obama stimulus package had done nothing to help. “Challenges include foreclosures, unemployment, and homelessness,” it said. “Some people are just trying to keep the roof over their heads and need food to make ends meet. School just started and agencies are getting calls all the time for everything, including school supplies. Foreclosures are still very much on the rise and people are being forced into hotels and whole families, even employees, are living in one hotel room. There is no help for these people in the economic stimulus package, no one is helping these people to keep their homes.”

A New York City food charity, the Community Kitchen and Food Pantry of West Harlem, reported that 250 of the 1,000 people who come each day are first time users. “The line has grown so long that when you walk outside, it’s overwhelming,” said Jesse Taylor, senior director at the pantry, told the Associated Press. “A lot of people are coming out in suits, they’re carrying brief cases.”

Thanksgiving, a holiday associated with food bounty, saw reports from across the US of long lines outside food pantries.

Hundreds lined up at food banks in the central Washington towns of Richland and Kennewick. “If this is any indication of the volume of individuals we’ll have during Christmas, it’s going to be a real challenge,” John Neill, deputy executive director for the Tri-Cities Food Bank told the

A Hartford, Connecticut soup kitchen, Loaves and Fishes, was full ten minutes after it opened its door on Thanksgiving, with a line outside. “Everyone is feeling the effects,” Cynthia Hudson, who was at the soup kitchen with her brother, told the Hartford Courant. “It’s bad. It’s really bad on the poor.”

“We’re seeing people come in who normally wouldn’t be using our services,” said Judy Hart, Hartford coordinator for the Salvation Army. “It’s getting to a point where this is their survival.”

In west Texas, the Andrews Food Pantry was able to provide a Thanksgiving meal box for all comers. Some in nearby towns were not so fortunate.

“We have one agency that had to close because they couldn’t handle the need, they served 21 in January, and it went up to 92 in August,” Executive Director for the West Texas Food Bank, Hyta Folsom told a local news station. “Need has exploded this year.”

Food Stamp Use Soars Across U.S., and Stigma Fades

Food Stamp Use Soars, and Stigma Fades

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With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children.

It has grown so rapidly in places so diverse that it is becoming nearly as ordinary as the groceries it buys. More than 36 million people use inconspicuous plastic cards for staples like milk, bread and cheese, swiping them at counters in blighted cities and in suburbs pocked with foreclosure signs.

Virtually all have incomes near or below the federal poverty line, but their eclectic ranks testify to the range of people struggling with basic needs. They include single mothers and married couples, the newly jobless and the chronically poor, longtime recipients of welfare checks and workers whose reduced hours or slender wages leave pantries bare.

While the numbers have soared during the recession, the path was cleared in better times when the Bush administration led a campaign to erase the program’s stigma, calling food stamps “nutritional aid” instead of welfare, and made it easier to apply. That bipartisan effort capped an extraordinary reversal from the 1990s, when some conservatives tried to abolish the program, Congress enacted large cuts and bureaucratic hurdles chased many needy people away.

From the ailing resorts of the Florida Keys to Alaskan villages along the Bering Sea, the program is now expanding at a pace of about 20,000 people a day.

There are 239 counties in the United States where at least a quarter of the population receives food stamps, according to an analysis of local data collected by The New York Times.

The counties are as big as the Bronx and Philadelphia and as small as Owsley County in Kentucky, a patch of Appalachian distress where half of the 4,600 residents receive food stamps.

In more than 750 counties, the program helps feed one in three blacks. In more than 800 counties, it helps feed one in three children. In the Mississippi River cities of St. Louis, Memphis and New Orleans, half of the children or more receive food stamps. Even in Peoria, Ill. — Everytown, U.S.A. — nearly 40 percent of children receive aid.

While use is greatest where poverty runs deep, the growth has been especially swift in once-prosperous places hit by the housing bust. There are about 50 small counties and a dozen sizable ones where the rolls have doubled in the last two years. In another 205 counties, they have risen by at least two-thirds. These places with soaring rolls include populous Riverside County, Calif., most of greater Phoenix and Las Vegas, a ring of affluent Atlanta suburbs, and a 150-mile stretch of southwest Florida from Bradenton to the Everglades.

Although the program is growing at a record rate, the federal official who oversees it would like it to grow even faster.

“I think the response of the program has been tremendous,” said Kevin Concannon, an under secretary of agriculture, “but we’re mindful that there are another 15, 16 million who could benefit.”

Nationwide, food stamps reach about two-thirds of those eligible, with rates ranging from an estimated 50 percent in California to 98 percent in Missouri. Mr. Concannon urged lagging states to do more to enroll the needy, citing a recent government report that found a sharp rise in Americans with inconsistent access to adequate food.

“This is the most urgent time for our feeding programs in our lifetime, with the exception of the Depression,” he said. “It’s time for us to face up to the fact that in this country of plenty, there are hungry people.”

The program’s growing reach can be seen in a corner of southwestern Ohio where red state politics reign and blue-collar workers have often called food stamps a sign of laziness. But unemployment has soared, and food stamp use in a six-county area outside Cincinnati has risen more than 50 percent.

With most of his co-workers laid off, Greg Dawson, a third-generation electrician in rural Martinsville, considers himself lucky to still have a job. He works the night shift for a contracting firm, installing freezer lights in a chain of grocery stores. But when his overtime income vanished and his expenses went up, Mr. Dawson started skimping on meals to feed his wife and five children.

He tried to fill up on cereal and eggs. He ate a lot of Spam. Then he went to work with a grumbling stomach to shine lights on food he could not afford. When an outreach worker appeared at his son’s Head Start program, Mr. Dawson gave in.

“It’s embarrassing,” said Mr. Dawson, 29, a taciturn man with a wispy goatee who is so uneasy about the monthly benefit of $300 that he has not told his parents. “I always thought it was people trying to milk the system. But we just felt like we really needed the help right now.”

The outreach worker is a telltale sign. Like many states, Ohio has campaigned hard to raise the share of eligible people collecting benefits, which are financed entirely by the federal government and brought the state about $2.2 billion last year.

By contrast, in the federal cash welfare program, states until recently bore the entire cost of caseload growth, and nationally the rolls have stayed virtually flat. Unemployment insurance, despite rapid growth, reaches about only half the jobless (and replaces about half their income), making food stamps the only aid many people can get — the safety net’s safety net.

Support for the food stamp program reached a nadir in the mid-1990s when critics, likening the benefit to cash welfare, won significant restrictions and sought even more. But after use plunged for several years, President Bill Clinton began promoting the program, in part as a way to help the working poor. President George W. Bush expanded that effort, a strategy Mr. Obama has embraced.

The revival was crowned last year with an upbeat change of name. What most people still call food stamps is technically the Supplemental Nutrition Assistance Program, or SNAP.

By the time the recession began, in December 2007, “the whole message around this program had changed,” said Stacy Dean of the Center on Budget and Policy Priorities, a Washington group that has supported food stamp expansions. “The general pitch was, ‘This program is here to help you.’ ”

Now nearly 12 percent of Americans receive aid — 28 percent of blacks, 15 percent of Latinos and 8 percent of whites. Benefits average about $130 a month for each person in the household, but vary with shelter and child care costs.

In the promotion of the program, critics see a sleight of hand.

“Some people like to camouflage this by calling it a nutrition program, but it’s really not different from cash welfare,” said Robert Rector of the Heritage Foundation, whose views have a following among conservatives on Capitol Hill. “Food stamps is quasi money.”

Arguing that aid discourages work and marriage, Mr. Rector said food stamps should contain work requirements as strict as those placed on cash assistance. “The food stamp program is a fossil that repeats all the errors of the war on poverty,” he said.

Suburbs Are Hit Hard

Across the country, the food stamp rolls can be read like a scan of a sick economy. The counties of northwest Ohio, where car parts are made, take sick when Detroit falls ill. Food stamp use is up by about 60 percent in Erie County (vibration controls), 77 percent in Wood County (floor mats) and 84 percent in hard-hit Van Wert (shifting components and cooling fans).

Just west, in Indiana, Elkhart County makes the majority of the nation’s recreational vehicles. Sales have fallen more than half during the recession, and nearly 30 percent of the county’s children are receiving food stamps.

The pox in southwest Florida is the housing bust, with foreclosure rates in Fort Myers often leading the nation in the last two years. Across six contiguous counties from Manatee to Monroe, the food stamp rolls have more than doubled.

In sheer numbers, growth has come about equally from places where food stamp use was common and places where it was rare. Since 2007, the 600 counties with the highest percentage of people on the rolls added 1.3 million new recipients. So did the 600 counties where use was lowest.

The richest counties are often where aid is growing fastest, although from a small base. In 2007, Forsyth County, outside Atlanta, had the highest household income in the South. (One author dubbed it “Whitopia.”) Food stamp use there has more than doubled.

This is the first recession in which a majority of the poor in metropolitan areas live in the suburbs, giving food stamps new prominence there. Use has grown by half or more in dozens of suburban counties from Boston to Seattle, including such bulwarks of modern conservatism as California’s Orange County, where the rolls are up more than 50 percent.

While food stamp use is still the exception in places like Orange County (where 4 percent of the population get food aid), the program reaches deep in places of chronic poverty. It feeds half the people in stretches of white Appalachia, in a Yupik-speaking region of Alaska and on the Pine Ridge Indian Reservation in South Dakota.

Across the 10 core counties of the Mississippi Delta, 45 percent of black residents receive aid. In a city as big as St. Louis, the share is 60 percent.

Use among children is especially high. A third of the children in Louisiana, Missouri and Tennessee receive food aid. In the Bronx, the rate is 46 percent. In East Carroll Parish, La., three-quarters of the children receive food stamps.

A recent study by Mark R. Rank, a professor at Washington University in St. Louis, startled some policy makers in finding that half of Americans receive food stamps, at least briefly, by the time they turn 20. Among black children, the figure was 90 percent.

Need Overcomes Scorn

Across the small towns and rolling farmland outside Cincinnati, old disdain for the program has collided with new needs. Warren County, the second-richest in Ohio, is so averse to government aid that it turned down a federal stimulus grant. But the market for its high-end suburban homes has sagged, people who build them are idle and food stamp use has doubled.

Next door, in Clinton County, the blow has been worse. DHL, the international package carrier, has closed most of its giant airfield, costing the county its biggest employer and about 7,500 jobs. The county unemployment rate nearly tripled, to more than 14 percent.

“We’re seeing people getting food stamps who never thought they’d get them,” said Tina Osso, the director of the Shared Harvest Food Bank in Fairfield, which runs an outreach program in five area counties.

While Mr. Dawson, the electrician, has kept his job, the drive to distant work sites has doubled his gas bill, food prices rose sharply last year and his health insurance premiums have soared. His monthly expenses have risen by about $400, and the elimination of overtime has cost him $200 a month. Food stamps help fill the gap.

Like many new beneficiaries here, Mr. Dawson argues that people often abuse the program and is quick to say he is different. While some people “choose not to get married, just so they can apply for benefits,” he is a married, churchgoing man who works and owns his home. While “some people put piles of steaks in their carts,” he will not use the government’s money for luxuries like coffee or soda. “To me, that’s just morally wrong,” he said.

He has noticed crowds of midnight shoppers once a month when benefits get renewed. While policy analysts, spotting similar crowds nationwide, have called them a sign of increased hunger, he sees idleness. “Generally, if you’re up at that hour and not working, what are you into?” he said.

Still, the program has filled the Dawsons’ home with fresh fruit, vegetables, bread and meat, and something they had not fully expected — an enormous sense of relief. “I know if I run out of milk, I could run down to the gas station,” said Mr. Dawson’s wife, Sheila.

As others here tell it, that is a benefit not to be overlooked.

Sarah and Tyrone Mangold started the year on track to make $70,000 — she was selling health insurance, and he was working on a heating and air conditioning crew. She got laid off in the spring, and he a few months later. Together they had one unemployment check and a blended family of three children, including one with a neurological disorder aggravated by poor nutrition.

They ate at his mother’s house twice a week. They pawned jewelry. She scoured the food pantry. He scrounged for side jobs. Their frustration peaked one night over a can of pinto beans. Each blamed the other when that was all they had to eat.

“We were being really snippy, having anxiety attacks,” Ms. Mangold said. “People get irritable when they’re hungry.”

Food stamps now fortify the family income by $623 a month, and Mr. Mangold, who is still patching together odd jobs, no longer objects.

“I always thought people on public assistance were lazy,” he said, “but it helps me know I can feed my kids.”

Shifting Views

So far, few elected officials have objected to the program’s growth. Almost 90 percent of beneficiaries nationwide live below the poverty line (about $22,000 a year for a family of four). But a minor tempest hit Ohio’s Warren County after a woman drove to the food stamp office in a Mercedes-Benz and word spread that she owned a $300,000 home loan-free. Since Ohio ignores the value of houses and cars, she qualified.

“I’m a hard-core conservative Republican guy — I found that appalling,” said Dave Young, a member of the county board of commissioners, which briefly threatened to withdraw from the federal program.

“As soon as people figure out they can vote representatives in to give them benefits, that’s the end of democracy,” Mr. Young said. “More and more people will be taking, and fewer will be producing.”

At the same time, the recession left Sandi Bernstein more sympathetic to the needy. After years of success in the insurance business, Ms. Bernstein, 66, had just settled into what she had expected to be a comfortable retirement when the financial crisis last year sent her brokerage accounts plummeting. Feeling newly vulnerable herself, she volunteered with an outreach program run by AARP and the Ohio Association of Second Harvest Food Banks.

Having assumed that poor people clamored for aid, she was surprised to find that some needed convincing to apply.“I come here and I see people who are knowledgeable, normal, well-spoken, well-dressed,” she said. “These are people I could be having lunch with.”

That could describe Franny and Shawn Wardlow, whose house in nearby Oregonia conjures middle-American stability rather than the struggle to meet basic needs. Their three daughters have heads of neat blond hair, pink bedroom curtains and a turtle bought in better times on vacation in Daytona Beach, Fla. One wrote a fourth-grade story about her parents that concluded “They lived happily ever after.”

Ms. Wardlow, who worked at a nursing home, lost her job first. Soon after, Mr. Wardlow was laid off from the construction job he had held for nearly nine years. As Ms. Wardlow tells the story of the subsequent fall — cutoff threats from the power company, the dinners of egg noodles, the soap from the Salvation Army — she dwells on one unlikely symbol of the security she lost.

Pot roast.

“I was raised on eating pot roast,” she said. “Just a nice decent meal.”

Mr. Wardlow, 32, is a strapping man with a friendly air. He talked his way into a job at an envelope factory although his boss said he was overqualified. But it pays less than what he made muscling a jackhammer, and with Ms. Wardlow still jobless, they are two months behind on the rent. A monthly food stamp benefit of $429 fills the shelves and puts an occasional roast on the Sunday table.

It reminds Ms. Wardlow of what she has lost, and what she hopes to regain.

“I would consider us middle class at one time,” she said. “I like to have a nice decent meal for dinner.”

Financial Crisis in Dubai: Towards a Nightmare Scenario?

Financial Crisis in Dubai: Towards a Nightmare Scenario?

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The default in Dubai is not the beginning of Financial Meltdown 2. Don't look for dominoes here. Yes, it does raise serious questions about the vast debt-overhang in emerging economies--particularly East Europe. But, this is not a "sovereign default" in the strict sense, nor is there any great risk of contagion. Oil-rich Abu Dhabi is loaded with liquid assets, possibly as much as $800 billion. They could pay off Dubai World's measly $60 billion debt without batting an eye. But Abu Dhabi wants to send its wastrel younger brother a wake-up-call by forcing Dubai to restructure its debt. That means that banks, bondholders and contractors will have to take a haircut, which is not surprising given the abysmal condition of the commercial real estate market.

Dubai World owners were caught up in the same heady debt-fueled commercial construction-binge that swept across the United States. The problem can be traced back to lax lending standards and low interest rates. Now demand has fallen off a cliff and credit is getting tighter. Dubai World can't roll over its debt or meet its obligations. That's what typically happens when credit bubbles burst.

On Thursday, Bank of America analysts issued a statement: “One cannot rule out — as a tail-risk — a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s.”

This is nonsense. There will be no sovereign default. Abu Dhabi is not going to send global markets into a nosedive to save a few billion dollars. B of A is blowing smoke. Oil has already slipped $3 per barrel since the crisis began. There will probably be a tentative resolution by the time the markets open on Monday. That doesn't mean that there aren't important lessons to be learned from this latest financial calamity. There are.

First, it illustrates that the financial crisis is not over---households, businesses and countries are still deleveraging. This ongoing process will slow spending and increase defaults, bankruptcies and foreclosures. Government guarantees and stimulus programs will not reverse prevailing trends. More incidents like Dubai World should be expected. These "credit events" will disrupt the recovery and spur greater risk-aversion which will push stocks downward.

Arnab Das of RGE Monitor sums it up like this: "We’re bound to see a rise in risk aversion. The Dubai situation signifies that although the major central banks around the world have stabilized the financial system, they can’t make all the excesses simply disappear. We still have to work out those balance sheet stresses. The recovery is proceeding, but significant challenges still lie ahead.” (Bloomberg News)

Second, when these incidents take place, there's likely to considerable collateral damage from the unregulated insurance policies (credit default swaps) which underwrite the bonds. These CDS derivatives are not sold on a public exchange so no one knows who holds them, in what amount, or whether the issuer has sufficient capital reserves to pay off claims. We should expect a repeat of AIG over and over again (although smaller) until the system is either regulated or CDS are banned. The bottom line, is that the current financial architecture is not designed to work; it is designed to make a handful of speculators very rich. These speculators own congress, the White House and the financial media, which is why there has been no meaningful change in regulations.

Dubai is not Argentina. There will be a resolution and contractors will get paid, although not "in full." There will be losses. Big losses. But no contagion.

News of Dubai's payment "standstill" roiled global markets where investor confidence was already thin. The dollar and yen strengthened and US Treasurys surged. The "flight to safety" is making it doubly hard for the Fed to reflate asset prices. Dubai-like credit events make investors jittery and they pull in their horns. That extends the slump and deepens the recession.

If the Dubai crisis drags on, the dollar will get stronger and the flourishing carry trade will crash. That means that the maxed-out banks (which are heavily invested in high-risk positions) will get clobbered once again. That's the nightmare scenario.

The Fed has wrapped its arms around the financial system and provided unlimited guarantees on trillions of dollars of dodgy collateral. But that might not be enough.

The Devastating Impacts of a Corporate Health Care Bill

Medicare in Crisis: The Devastating Impacts of a Corporate Health Care Bill

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Wading through the endless debate over health care has exhausted the patience of most Americans — the zigzags, obscure language, and long-winded discussion is inherently repulsive.

But now the dust is starting to settle, and the Congressional vision for health care in the U.S. is emerging. Instead of being “progressive,” it will amount to a massive, corporate-inspired attack on American workers, the elderly, and the poor.

After months of confusion and delay, Congress has shipwrecked the popular energy over health care onto the jagged rock of corporate interests. More spectacularly, health care “reform” is being used as an opportunity to greatly advance corporate influence over social spheres long-dedicated to the working-class — seemingly harmless provisions carry with them enormous implications.

These devils hide in the details of the competing health care bills in Congress; both contain debilitating right-wing policies hidden within a progressive shell. Obama is indeed acting as the agent of change, to the great benefit of the U.S. corporate elite.

And although the final bill has yet to be crafted, there exists general agreements as to what the end version will look like. Americans will be forced to buy shoddy corporate insurance with no limit to the cost, no guarantee of quality, with large premiums and other tricks to further gouge consumers. If a public option emerges in the final bill — by no means a guarantee — it will be shrunken enough to insure very few people (2 percent of the U.S. population).

But it gets worse. How this health care “reform” will be paid for has implications that dwarf the above atrocities.

For example, the Democrats were determined to pass a health care bill that “will not add one cent to the deficit.” And they have succeeded: the House and Senate health care bills both plan to reduce the deficit by over $100 billion. But a second-grader could do the math here: more service does not equal less cost — a truism that dominates the for-profit health care industry.

So how does the government plan to save billions of dollars as they “help” millions of people?

The two biggest cost saving schemes are the most damaging. The first is the enormous attack on Medicare. Since its inception, the corporate elite wanted this program struck down. Now they have their man for the job — a Republican could never get away with such obvious treachery.

The Congressional Budget Office estimates that the Senate version of health care would cut $404 billion from Medicare and Medicaid; the house version would cut $570 billion. The final cut could be much more. Obama made the ridiculous claim that only “wasteful” parts of Medicare would be cut. The truth is far different.

One way that both Congressional health care bills will gut Medicare is referred to as “forced productivity gains” — cost saving measures essentially; trimming the fat.

What are these savings? The most mentioned device — by politicians and media alike — is the reduction of “wasteful tests” and procedures that doctors routinely perform, an idea that the health care mega-corporations love. It will save them billions, while having catastrophic effects on the health care of millions of people.

For example, the recent announcement that women will now be persuaded to cut back on screenings for breast cancer and cervical cancer have caused an uproar nationwide: people are correctly making the connection behind Congress’ “forced productivity gains” and the new “recommendations” that will be used by insurance companies to justify cutting these services, both of which will boost profits. The general agreement behind rationing health care in this way will be an attack on not only Medicare, but serve as the backbone of any health care bill passed, negatively effecting everyone unable to afford luxury health care.

Another piece of Medicare that’s being trimmed is Medicare Advantage, a favorite program of the elderly because of its comprehensive services. Premiums for this program are already rising drastically in anticipation of the health care bill’s passage, considered by Congress to be “wasteful.” Without this program, Medicare will be greatly devalued and be more appropriately named: “band-aides for seniors.”

Finally, The Senate health care bill attacks Medicare by reducing payments to doctors by 25 percent. If doctors receive such a drastic reduction in pay, they will simply refuse to see Medicare or Medicaid patients; people will thus be insured only on paper. The newly insured Medicaid patients under any new congressional bill will be sorely disappointed.

Once Medicare is undermined in the above ways, the corporate sponsored right-wing will make a very convincing argument that “Medicare doesn’t work”, leading to future cuts that will further destroy the program.

The second hidden disaster in financing a congressional health care bill is the tax on so-called “gold-plated” or “Cadillac” health insurance policies that some employers offer their workers. This tax is supposedly meant to apply to the health care policies that “elite” employees receive.

And while there should exist no complaints about taxing corporations, the motives behind this particular tax are intentionally deceiving. As it turns out, many, if not most workers in unions will be included in this tax, which, under the Senate version, will include any plan worth more than $8,000 for individuals and $21,000 for families. Hardly elite, considering the still-soaring costs for health care.

If this provision were to pass — and it’s very popular in Congress — the immediate reaction would be very predictable: employers would immediately drop their health care plans, forcing workers into the now-forced purchasing of inadequate health care. This is why unions oppose such a plan. California Democrat Pete Stark agrees: “Employers and insurers will reduce their benefits to avoid paying the proposed tax.”

Workers fortunate to have union contracts will be heavily pressured to concede their plans, which in the past they’ve sacrificed wage-increases to keep. Ultimately, employers will have a new excuse not to provide health care to workers.

Obama again used his superb intelligence to totally obscure the issue in support of the tax:

“I do think that giving a disincentive to insurance companies to offer Cadillac plans that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term.” Translation: he supports taxing the health care of union workers.

Overall, a compromise bill between the Senate and House versions will create utter disaster for the working-class. It will not signal a progressive “step in the right direction,” as many liberals claim. At minimum, it will be a step backward, though more likely such a bill will be an enormous regression, to a time where health care was the exclusive privilege of the wealthy.

The right-wing attacks on “Obamacare” — along with the media’s lack of questioning — have shielded the Democrats from any serious debate about the above questions, including many other concerns unmentioned here.

The trash legislation that Congress is producing is the direct consequence of the Democratic Party being dominated by giant corporations — in this case the health care industry. The two-party system is the political system of the corporate elite, who switch party affiliations when they find it convenient; many of them throw equal money at both parties.

A crucial prop in this broken political system needs to be removed and organized under its own strength. If the unions took their support from the Democrats, organized their members and resources into a new political party, and aggressively pushed reforms that benefited the majority of working-class Americans, U.S. democracy would be tremendously strengthened. Medicare could not only be saved, but expanded to everyone from birth to death and be considered a fundamental human right.

America's Pending Collapse

America's Pending Collapse

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The truth that most people realize but can’t openly talk about is that America has seen better days and that the system of capitalism has long outlived its usefulness. The last part of that sentence, that capitalism has outlived its usefulness, is thoroughly the fault of the capitalists themselves.

For many years now, transnational corporations have sent much of America’s manufacturing overseas in order to take advantage of low cost workers. About the only manufacturing this country does on a large scale is earth moving equipment (Caterpillar) and military equipment. Boeing, Northrop-Grumman, Raytheon, General Electric and firms like that are the major remnants of a once thriving industrial base that made America. Detroit is still trying to hang in there, but shortfalls in sales have left it up to the workers in these plants to take it on the chin as their pay and benefits get cut.

The Dow is trying to make a comeback but the way I see it, much of the rise of “blue-chip” stocks is really more wishful thinking than serious thought. The stocks being sold on the backs of some of these companies are being bought on speculation that the market will go higher based on the rise of the GDP. The question that I would like to ask, is how far can the GDP go when 70% of the GDP is based on consumer spending? Where is consumer spending going to come from when realistically over 16% of the people in America aren’t working?

In an essay, written by Richard Heinberg entitled “Should We Prop-up a Dying Economy” (19 October 2009), he argues that the economists and the people who follow physical science disagree sharply about where this economy is going. Peak Oil, whether it is present now or just years away, will mean that the economy will contract. The economists state that growth can happen in any environment, yet it is apparent that when oil prices spiked in 2008, the auto industry and the airline industry almost went belly-up. Shrinkage of energy means shrinkage in the economy, we have all been under the notion that we can borrow against a growing economy. The facts are that if the economy does not grow, there will be very little in the growth of capital to repay debts that are leveraged at an average of an average of 350% of debt to GDP ratio. Where will new capital come from?

As the price of petroleum becomes higher, imported goods will become more expensive. When our government fails to repay our foreign creditors, or pays them back in hyper-inflated dollars, there will be no credit issued to this country. This can be a significant problem because we currently use 25% of the world’s oil supply and we buy that oil on credit. He says;

“We have entered a new economic era in which the former rules no longer apply. Low interest rates and government spending no longer translate to incentives for borrowing and job production. Cheap energy won't appear just because there is demand for it. Substitutes for essential resources will in most cases not be found. Over all, the economy will continue to shrink in fits and starts until it can be maintained by the energy and material resources that Earth can supply on ongoing basis.”

That is frightening to say the least. I believe that what our government should be doing is to listen to the scientists and stop listening to the economists. We have already borrowed almost 24 BILLION dollars, that is $80,000 for every man, woman and child in the U.S. We are robbing our future to pay for an economy that is unsustainable. Without economic growth, the banks, the investment houses and the insurance companies are bound to fail anyway. We might as well let them fail and get on with the business of restoring a sustainable economy.

In a talk called “The Five Stages of Collapse”, by Dmitry Orlov, a former Russian that watched the collapse of the Soviet Union, they are;

The Five Stages of Collapse

1. Stage one: Financial Collapse

2. Commercial Collapse

3. Political Collapse

4. Social Collapse

5. Cultural Collapse

This isn’t the warning of a horror show, but unless we start to prepare for a full or partial collapse, it could be worse than it has to be. He envisions a breakdown of society gradually replaced by stronger knit communities that must depend on each other for basic needs or it could be a complete breakdown of utter anarchy.

Meanwhile the Eagle sits on its perch, fighting wars in foreign lands while spending billions of American dollars doing it. The average American will see no benefit or harm whether we win or lose against the Taliban in Afghanistan. What we will have done however, is strap Americans with more debt and more use of precious resources. The American eagle is getting a little bit wobbly on its perch and it wouldn’t surprise me to see all American soldiers taken from all overseas assignments and brought back to this country just to deal with the economic collapse, and because we can no longer afford to keep them overseas.

We need to start thinking about where we live and how we will survive an economic collapse. When the federal government can no longer function, what will we do to replace it? How are individuals to survive when essential goods and services become extinct? This isn’t a future scenario that will happen twenty or thirty years from now, no! We are already experiencing it.

We can continue to live our daily lives watching TV and the advertisements that lull us into a false sense of security that everything is well, or we can start making provisions to deal with the calamity that lies ahead. We can provision staples, use alternative energy sources to heat our homes or assist us in heating them, and we can start talking with each other and get to know the neighbor that lives across the street that you have never talked to.

I’m really not an alarmist, but I see the merit of what so many scientists are predicting. Not only will Peak Oil stop economic growth, but climate change according to a UN report will bring desertification to 70% of the planet by 2025. Maybe petroleum peaking out is in reality what may save our planet. Maybe a return to simpler ways to live and work will stop the CO2 emissions, but I don’t think so. Third world countries are surpassing the industrialized countries in carbon emissions by burning coal. What I would like to know is who is really minding this nation’s business? What is the Federal government doing when scientific fact is thrown in their face? While Obama listens to Timothy Geitner and Ben Bernanke and other Goldman Sacks alumni, a company that produces nothing and makes money by buying low and selling high with government funds, where are the people that see what’s happening? If I can understand the ramifications of what is happening in front of my face, what about the President of the United States? Is he really ignorant or does he just not wish to deal with it? I’m curious; maybe someone in the executive branch can give us answers. It would be in everyone’s best interest to have people starting to deal with reality instead of putting their head in the sand. Maybe the American eagle should be replaced with the ostrich.

Deepening economic crisis in eastern Europe

Deepening economic crisis in eastern Europe

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Recent reports indicate that the economies of many central and eastern European states are headed for new shocks. Despite attempts to conjure up optimism over the prospects for these countries, institutions such as the European Bank for Reconstruction and Development (EBRD) and the International Monetary Fund (IMF) are warning of the danger of further economic decline in the region, which would have serious consequences for Europe as a whole.

“The consequences of the world economic crisis will burden this region more than the rest of the world in coming years,” declared the chief economist of the EBRD, Erik Berglöf, speaking on the fringes of a conference held by the Austrian Central Bank in Vienna last week.

In its Transition Report, issued at the beginning of November, the EBRD examined the reasons why central and eastern Europe had been hit particularly hard by the crisis. One of the main problems identified by the ERBD was the manner in which economies in the region had been financed in those years when they experienced sustained growth.

This growth was made possible almost entirely by foreign direct investment. As a result, many national economies in eastern Europe collapsed when foreign investment suddenly stopped following the eruption of the global financial crisis. The EBRD expects that in the coming months the current outflow of capital from the east back to western banks will continue.

The ERBD expressed concern over the extent to which eastern European economies were dependent on foreign currency loans. In many countries, loans are made only in euros, dollars or Swiss francs. In Austria, generally grouped among the western European economies, foreign currency loans total 17 percent of gross domestic product. The corresponding percentage in Latvia is 90 percent; in Estonia, 80 percent; and in Bulgaria, 50 percent of GDP.

For broad layers of the population, foreign currency credits have become a huge debt trap. The indebtedness of private households has risen rapidly. In the Baltic states, it amounts to nearly 100 percent of GDP. This compares to an average of 50 percent for western European states.

This tendency has been encouraged by the banks. Ordinary citizens were led to believe that they could avoid the high interest rates linked to their national currency by taking out loans in other currencies. However, financial institutions in the region were themselves burdened with foreign loans and sought to pass on the risk to their customers.

The ERBD now declares that eastern Europe must shed its “dependence on foreign currencies,” although it played a major role in promoting just such a policy. The ERBD was created in 1991 precisely to accelerate investment projects in central and eastern Europe. The bank remains the single biggest investor in the region and was responsible for drawing up the investment concepts that contributed to the 2008-2009 economic crash.

The International Monetary Fund has also issued a number of blunt warnings about developments in eastern Europe. The Austrian Standard quotes IMF economist Christoph Rosenberg, who declares that the recent recovery of financial markets in the region is almost exclusively due to the increased appetite for risk on the part of investors and has little to do with any improvements in the real economy. Rosenberg warns of a new stock market bubble, which will have dire consequences when it collapses.

Rosenberg was not prepared to commit himself when asked if conditions would improve for eastern European markets. “We can only do what we did prior to the economic crisis—warn of the dangers,” he said.

However, when one examines the state of economic conditions, one can only conclude that it is already too late for warnings. The situation is most dire in the Baltic states. In Latvia, bankers are speaking of a “dramatic development.” Despite draconian austerity measures by the government, the country is moving ever closer to bankruptcy.

The rates for credit default swaps, which reflect the perceived risk of state bankruptcy, currently lie between 500 and 600 points for the Baltic states. In comparison, the rate for credit default swaps for Austria is around 60 points.

Western European banks, which invested heavily in the region in the boom years that preceded the financial crash, are reacting with increasing nervousness. “Patience is coming to an end,” Swedish Finance Minister Anders Borg said recently. He threatened to block previously agreed new lines of credit to eastern states. Sweden is taking a particularly hard line in insisting that debtor states increase their savings. The two largest banks active in the Baltic region are the Swedish banks Swedbank and SEB.

Due to the close economic ties between economies in the region, the crisis in Riga is having a knock-on effect. CDS rates for the neighboring countries of Estonia and Lithuania have climbed significantly in recent weeks.

It is not only the Baltic countries that are facing serious difficulties. The crisis is also deepening in southeastern Europe. A number of reports have pointed out that the full impact of the economic crisis has been delayed in Romania and Bulgaria, and it is assumed that 2010 will be a very turbulent year in both countries.

The ongoing crisis has delayed prospects for the introduction of the euro as the common currency in the eastern European member states of the European Union. Only the two smallest countries in the region, Slovenia and Slovakia, have thus far introduced the euro. Eight other east European EU member states still retain their national currencies.

The German business newspaper Handelsblatt noted that the current economic crisis has “once again increased the economic gulf between east and west, which will in turn delay the process of euro-conversion for years.” The newspaper continued: “Recently, both the EU commissioner for currency, Joaquín Almunia, and Gertrude Tumpel Gugerell, a member of the presiding board of Eurozone countries, warned of overly hasty moves to introduce the euro.”

The banks, big business interests and governments are united in their conviction that the burden of the crisis must under all circumstances be borne by the general population. All the governments in eastern Europe have slashed budgets and introduced cost-cutting measures in response to pressure from the IMF, the European Union and western European banks.

In Latvia, this has already led to a social disaster. The government has decided to close half of the hospitals in the country by the end of the year, which means there will no longer be any guarantee of medical care for broad layers of the population. As the social and medical infrastructure collapses, virulent diseases such as the H1N1 virus are spreading rapidly. For the first time last week, the authorities referred to the outbreak of an epidemic in the country.

More and more citizens are experiencing a sharp decline in their living conditions as a consequence of government attacks. A report in the Standard recently related the case of a Latvian school rector. Because his salary was cut by around 60 percent, he is now forced to work after school hours as a night watchman to provide for his family.

Such conditions will inevitably lead to intensified conflicts between the working population and the political elite. Protests and demonstrations broke out against government policies at the start of the year in Latvia.

Twenty years after the collapse of the Stalinist regimes, there is growing popular sentiment in eastern Europe that the introduction of capitalism, notwithstanding hatred for the repressive Stalinist governments, represented a disastrously regressive step.

AfPak War and geo-political tensions cast long shadow over Indo-US summit

AfPak War and geo-political tensions cast long shadow over Indo-US summit

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The Obama administration’s plans to expand the AfPak war and mounting world geo-political tensions—tensions between India and Pakistan, India and China, the US and India, and, last but not least, the US and China—cast a very long shadow over Indian Prime Minister Manmohan Singh’s four day visit to the US this week.

The head of India’s Congress Party-led coalition government, Singh was the first foreign head of government since Barack Obama became US President to be accorded an official state visit with all the requisite trappings. On Tuesday evening Obama hosted a lavish state dinner in heated tents set up on the White House lawn. The 300 guests included top Obama administration officials, leading Democratic and Republican politicians, business leaders, Hollywood celebrities, and prominent Indo-Americans.

The pomp and ceremony were in part an attempt to placate an Indian government and elite that fear Washington under Obama has significantly downgraded Indo-US ties.

With a view to countering a rising China, George W. Bush’s Republican administration forged a “global strategic partnership” with India and declared the US ready to help India become a “world power.” As proof, the Bush administration negotiated a unique exemption for India from the world nuclear regulatory regime that allows India to trade for civilian nuclear technology and fuel, although it developed nuclear weapons in defiance of the Nuclear Non-Proliferation Treaty.

Since assuming office last January the Obama administration has focused, however, not on the Indo-US partnership, but rather on the US’s relations with India’s two principal rivals, Pakistan and China.

Pakistan’s support is crucial for the US war to subjugate Afghanistan. As part of its attempt to bully and bribe Islamabad into suppressing any support for the Afghan insurgency in Pakistan’s Pashtun-speaking borderlands, Washington has increased both economic and military aid to Islamabad.

As for China, whose treasury bill purchases finance the US’s spiraling national debt, the Obama administration has had to solicit its support in seeking to deal with the greatest economic crisis since the Great Depression.

Repeatedly the Indian establishment has expressed concerns and fears that in its rush to please Islamabad and Beijing the Obama administration is giving India’s interests short shrift.

A passage in the report that the US’s Afghan commander, General Stanley McChrystal, submitted to Obama at the end of August in which he observed that the growing Indian influence in Afghanistan could “exacerbate regional tensions” and encourage “countermeasures” by Pakistan was much commented on in the Indian press.

Obama’s trip to East Asia earlier this month served to crystallize the view in Indian political and geo-strategic circles that Washington has forsaken New Delhi.

First, in a major speech in Japan on the US’s view of the evolution of the geo-political order in Asia, Obama failed to make any mention of India. Then, at the conclusion of his summit with Chinese president Hu Jintao, the US president signed on to a communiqué that suggested Beijing has a role to play, along with Washington, in working to “promote peace, stability and development” in South Asia.

India, which fought a brief border war with China in 1962 and resents Beijing’s decades’ long “all-weather” alliance with Islamabad, would at any time have found such a suggestion objectionable. But, adding insult to injury, it was made at a time when relations between New Delhi and Beijing are fraught with tension. In recent months, India and China have been involved in a series of diplomatic spats, with the Indian press trumpeting charges that Chinese troops have repeatedly crossed into Indian territory.

India’s Foreign Ministry quickly issued a statement angrily rejecting any “third party” involvement in Indo-Pakistani relations.

Indian press commentary was uniformly critical if not outright antagonistic to Obama and his administration.

“In the end,” declared Deccan Chronicle columnist S. Raghotham, “all America can think of is its own national interest. India’s interests be damned. Perhaps it is the price India has to pay for letting the Americans decide our security policy in general and our Pakistan policy in particular over the last decade. “And to think that our Prime Minister will be skipping the Winter Session of Parliament to go to meet this man [Obama] who cares two hoots for India’s self-respect and security.”

In a column entitled “Obama just doesn’t get it,” B. Raman a former government and intelligence official, declared, “At a time when concerns in India over the increasing Chinese strategic presence and influence in India’s neighbourhood have been increasing, it is an amazingly shocking act of insensitivity on the part of Obama and his policy advisers to project China as a benign power with a benevolent role in South Asia …”

Lalit Mansingh, a former Indian ambassador to the US and former foreign secretary told the New York Times, Obama’s “bowing before the emperor of Japan was an act of courtesy, but his bending over backwards before the Chinese was an act of appeasement.”

During Singh’s visit this week, Obama and his aides tried to repair the damage by propounding loudly and often on the importance of the US’s relations with India, by championing India’s leading role in Asia, affirming support for India’s involvement in Afghanistan, echoing New Delhi’s demands for Pakistan to suppress anti-Indian insurgents, and matter-of-factly describing India as a nuclear-weapons state.

The joint statement issued by Obama and Singh at the conclusion of their talks Tuesday “reaffirmed the global strategic partnership between India and the United States,” proclaimed it “indispensable for global peace and security,” and urged further expansion of the burgeoning Indo-US military ties, including through joint “security, peacekeeping [and] humanitarian” missions and operations to police the seas.

At a joint press conference Obama said the US “welcomes and encourages India’s leadership role” in shaping Asia and spoke of India playing a leading role in the “Asian-Pacific.” India lies many, many miles to the west of the Pacific and is not a member of the Asian Pacific Economic Forum (APEC). But it certainly aspires to a leading role in East Asia, currently the world’s most dynamic economic region. The US, for its part, is anxious to prevent China and/or Japan creating any East Asian trade bloc from which it is excluded and sees India as an ally in this.

The joint statement issued by Obama and Manmohan Singh also affirmed “a shared interest” in Afghanistan and declared that the US president “appreciated India’s role in reconstruction and rebuilding efforts in Afghanistan.”

The Indian prime minister, speaking before the US-India Business Council Monday, declared full support for the US-NATO occupation of Afghanistan, warning against any “premature exit.” India views the Taliban as little more than Pakistani proxies and is eager to scupper any suggestion that Washington or Kabul try to negotiate or reconcile with any section of the Afghan insurgency.

The joint statement also spoke to another Indian concern. While the US has been unrelenting in its demands that Islamabad strike against elements in Pakistan who are supporting the Taliban insurgency, it has not, to New Delhi’s chagrin, pressed with anything like the same urgency for Islamabad to choke off support from Pakistan for the anti-Indian insurgency in Kashmir.

“The two leaders,” declared the statement, “agreed that resolute and credible steps must be taken to eliminate safe havens and sanctuaries that provide shelter to terrorists and their activities.”

Earlier this month, Indian home minister P. Chidambaram effectively threatened a cross-border strike on Kashmiri insurgent bases in Pakistan in the event of another major terrorist attack in India. “I have been warning Pakistan,” said Chidambaram, “not to play games with us. The last game should be the [Nov 2008] Mumbai attacks. Stop it there.… If terrorists from Pakistan try to carry out any attacks in India, they will not only be defeated but will be retaliated against.”

As the Hindu observed in an editorial, such action by India “could snowball into a conflict that would bring misery to all of the peoples of South Asia.”

While the Obama administration clearly was anxious to reassure Singh that the US wants to deepen economic and military-security ties with India, many commentators noted that it proved impossible at the summit to announce the successful conclusion of longstanding negotiations on agreements to “operationalize” the Indo-US civilian nuclear accord and allow for sales of advanced US military equipment.

Singh dismissed the significance of the failure to finalize the nuclear deal, saying it was only a matter of dotting “i’s and crossing “t’s.” But it is well known that the Obama’s administration’s calls for India to sign on to the Comprehensive Ban on Nuclear Tests, lend support for a treaty outlawing the production of fissile materials for nuclear weapons, and accept aggressive international inspections of its civilian nuclear sites are vehemently opposed by India’s geo-political and military establishments, which view them as unacceptable impediments to the development of India’s nuclear weapons program. (Confident of its vast nuclear superiority, the US favors such measures as a means of safeguarding its nuclear advantage and providing a legal and “progressive” disarmament political cover for its campaign against Iran.)

New Delhi and Washington are also at odds on a host of other issues, including the economic burdens and costs of limiting climate change and the stalled Doha trade negotiations.

In the run-up to Singh’s visit, several former members of the Bush administration urged Obama to revitalize the Indo-US partnership, arguing that it is critical to any US effort to contain and, if necessary staunch, China’s ambitions. Writing in the Boston Globe, Nicolas Burns, one of the architects of the Indo-US nuclear accord, declared, “[A]s America looks to a future where China’s growing power will be a central challenge, building this new US-India partnership is fundamental to all we seek to accomplish in Asia. Stronger Indian political and military bonds with the United States, Japan and Australia are the best way to ensure these democratic powers can balance and limit the potentially dangerous aspects of China’s rise in the decades ahead.”

Singh, for his part, spoke about India’s frictions with China both publicly and privately in his meeting with Obama. “In remarks before the Council on Foreign Relations on Monday night,” reported the Washington Post, “Singh took a few not-so-subtle swipes at China that sent titters through the crowd. He noted ‘a certain amount of assertiveness on the part of the Chinese over longtime border disputes between the two countries and said that although China’s development has been faster than India’s, ‘I’ve always believed that there are other values which are [more] important than the growth of the gross domestic product’.”

Singh claimed not to “fully understand the reasons” for China’s “greater assertiveness.” In fact they are very much bound up with India’s burgeoning ties with the US. For obvious reasons, Beijing is much less apprehensive about pushing back against India, than it is against Washington.

One further point needs to be made. As the previously quoted Indian commentary demonstrates, the Indian establishment has done at least as much as Beijing to ratchet up tensions. India’s geo-political and military establishments are angered by China’s growing economic and political influence in South Asia—in what they view to be by right India’s region of dominance—and Indian business is riled by the success Chinese-based companies have enjoyed in penetrating the Indian domestic market.

On Tuesday, just hours before Singh met Obama, Richard Holbrooke, Obama’s special envoy for Afghanistan and Pakistan, made a speech in which he said that “no one in Pakistan should see” the attention lavished on India’s prime minister “as a diminution of the importance we attach to them.”

The reality is that the Pakistan is angered and agitated that Washington is consulting with India on its plans for the AfPak war, while largely leaving Islamabad in the dark and, more fundamentally, pursuing a strategic partnership with India that can only be to its disadvantage.

Indeed as Singh and Obama met in Washington, Indo-Pakistani tensions were on a boil.

This week, India’s Army Chief General Deepak Kapoor charged that Pakistan is poised to send 2,500 militants into Kashmir before winter sets in, adding that “a limited war under a nuclear overhang is still very much a reality at least in the Indian sub-continent.” Pakistan’s Foreign Office responded by charging that India was actively preparing for a limited war against Pakistan and Pakistani prime minister Yousuf Raza Gilani said Islamabad would soon present evidence showing that India has been supporting insurgents in Pakistani Balochistan and using Afghanistan to do so.

US imperialism’s ever-growing thrust into South and Central Asia—in an effort to secure control over the oil resources of Central Asia and contain China—is sowing the seeds of even more ruinous conflagrations.

America and Russia: Has the Cold War Really Ended?

America and Russia: Has the Cold War Really Ended?

US nuclear doctrine, missile defence in Europe and NATO expansion

Go To Original

This article was first published in The Caucus, a political science and international development journal published by the University of Ottawa. The article raises an important question in relation to the twentieth anniversary of the fall of the Berlin Wall (November 9, 1989):

Has the Cold War really ended?

The article deals with Russian anxieties with the U.S., American nuclear doctrine, American missile defence in Europe, and NATO expansion.

The twentieth anniversary of the fall of the Berlin Wall is approaching, but has the Cold War really ended and is it really a historic relic of the not too distant past? The Soviet Union may no longer exist and the Warsaw Pact may have long been dissolved, but many of the remnants of the Cold War still exist, like the conflict in the divided Korean Peninsula, the North Atlantic Treaty Organization (NATO), and finally the issue of missile defense. In the last few years the relations between NATO and the Russian Federation have become tense and described in terms reminiscent of the Cold War. One of the main impetuses for this resumption of Cold tensions has been the U.S. missile shield project in the European continent. The Russians have consistently made no secret about maintaining that the missile defense shield, above all else, is a threat to them.

The idea of a missile shield project in not new. During the Cold War, the idea was inaugurated by Ronald Reagan as part of a grand strategy to deploy missiles, technical facilities, and military bases around the world and in space, which led to the project being called “Star Wars.” Since its inauguration the Pentagon has spent billions of U.S. dollars in research and study for the project. While the U.S. government has claimed that the intended purpose of establishing a missile shield is to protect America and Europe from the threat of hypothetical North Korean or Iranian ballistic missile attacks, the Kremlin regards the missile shield project as a serious threat to the national security of Mother Russia. Moscow is adamant on calling the justifications for deploying the missile shield as mere pretext to get closer to Russia.

What is the foundation for these Russian views and anxieties? Russian hostility towards the U.S. program is based on long-standing U.S. strategic goals. These goals include the military doctrine of full spectrum dominance, a revamped nuclear first strike policy that now includes the concept of nuclear primacy, and NATO expansion onto the borders of Russia – despite NATO’s guarantees that it would not expand beyond the borders of Germany.

U.S. nuclear policy has radically changed since the Cold War. In 2001, the Nuclear Posture Review (NPR) of the United States acknowledged that Russia was a target for possible nuclear attacks by the U.S. military. The 2001 NPR can be recapitulated by the following summary:

During the Cold War, Russia [sic.; the Soviet Union] was the principal nuclear threat to the United States. The demise of the Soviet Union shifted U.S. nuclear weapons planning away from mainly targeting Russia. Nonetheless, Russia remains the only nation that can conceivably destroy the United States because of the size of its nuclear arsenal. Moreover, uncertainty over the future course of Russian foreign policy motivates the United States to keep a massive nuclear weapons reserve force. For these reasons, Russia still occupies a place on the list of potential targets for U.S. nuclear weapons. In addition, the new NPR explicitly lists six other countries as targets: North Korea, Iran, Iraq, Syria, Libya, and China. This nuclear targeting list reflects previous administrations’ planning. [1]

Russia is a nuclear target for the Pentagon because it is the primary nation capable of militarily challenging America, but this alone is not what has put Moscow on edge. In 2001, America announced that it would unilaterally withdraw from the Anti-Ballistic Missile (ABM) Treaty, which put legal limitations on the number of U.S. and Russian ballistic missile systems. This was also one of the recommendations of Dick Cheney and the neo-conservative think-tank named the Project for a New American Century (PNAC) in their manuscript “Rebuilding America’s Defenses: Strategies, Forces, and Resources For a New Century.” In the PNAC document, published in September 2000, it is categorically stated that America must “DEVELOP AND DEPLOY GLOBAL MISSILE DEFENSES to defend the American homeland and American allies, and to provide a secure basis for U.S. power projection around the world.” [2] The unilateral withdrawal of the U.S. from the ABM Treaty was later followed by further announcements of changes in U.S. military doctrine, which was first accentuated by the NPR, and then by the Doctrine for Joint Nuclear Operations (DJNO) and then CONPLAN 8022-02 that made offensive nuclear attacks available options for both pre-emptive and conventional warfare. [3]

In the eyes of Russia the missile shield project is about America establishing nuclear primacy. With the missile shield in place Russia would become unable to react to a nuclear first strike by the United States and the Kremlin’s nuclear arsenal would virtually be useless. In other words the U.S. would eliminate the threat of “mutually assured destruction” (MAD), which was present during the Cold War, by eliminating the threat of a nuclear response from Moscow. This would also disallow any Russian retaliation to an American nuclear “first strike.” During the Cold War the possibility of nuclear retaliation or a “second strike” and MAD were widely seen as the factors that had prevented a global nuclear war between the U.S. and the Soviets. Nuclear primacy, however, changes all this and upsets the Russian ability to retaliate, which the Kremlin feels leaves Russia and its allies exposed to possible hostility from the U.S. and NATO.

NATO still exists even though the Cold War has ended. NATO’s eastward expansion and the organization’s shift from a formerly defensive pact to an interventionist organization have unnerved Russia. The strategic nature of American missile defense, which disturbs nuclear parity between Russia and the U.S., is further compounded by NATO. Moscow feels threatened by the offensive military characteristics that NATO has adopted since the end of the Cold War, which has taken NATO from intervention in the former Yugoslavia to fighting in Afghanistan, and both security and training missions in the Middle East and Africa. In this regard, Vladimir Putin’s caustic speech on global security should come as no shock. In it Putin accused the U.S. of pursing the objective of establishing a uni-polar world through military might:

Today we are witnessing an almost uncontained hyper use of force – military force – in international relations, force that is plunging the world into an abyss of permanent conflicts. As a result we do not have sufficient strength to find a comprehensive solution to any one of these conflicts. Finding a political settlement also becomes impossible.

We are seeing a greater and greater disdain for the basic principles of international law. And independent legal norms are, as a matter of fact, coming increasingly closer to one state’s legal system. One state and, of course, first and foremost the United States, has overstepped its national borders in every way. [4]

Putin also alluded to NATO expansion as being target against Russia:

I think it is obvious that NATO expansion does not have any relation with the modernisation of [NATO] itself or with ensuring security in Europe. On the contrary, it represents a serious provocation that reduces the level of mutual trust. And we have the right to ask: against whom is this expansion intended? And what happened to the assurances our western partners made after the dissolution of the Warsaw Pact? Where are those declarations today? No one even remembers them. But I will allow myself to remind this audience what was said. I would like to quote the speech of NATO General Secretary Mr Woerner in Brussels on 17 May 1990. He said at the time that: “the fact that we are ready not to place a NATO army outside of German territory gives the Soviet Union a firm security guarantee”. Where are these guarantees? [5]

The apprehension of a looming war is very real amongst Russian planners. The Kremlin believes that the Russian Federation is simultaneously being encircled by NATO, a growing number of military bases, and finally American missiles.

Is the idea of a war between Russia and America and NATO even conceivable? The 2008 war between Georgia and Russia in the Caucasus presents such a possibility. The Russo-Georgian War has also been called a proxy war by Russian officials. The Kremlin has stated that Mikheil Saakashvili, the leader of Georgia, represents American interests in the former Soviet Union. Georgia in this sense is seen as an American proxy or client state by Moscow. [6] Russian suspicions were further corroborated when the U.S. declare that the Caucasus was a vital area to American strategic interests during the Russo-Georgian War. In it not coincidental that Georgia is one of the fasting militarizing states in the world and one of the largest recipients of American military aid. What is most important about the war between Russia and Georgia over South Ossetia is that Russia said it would have not changed its course of action even if Georgia were a member of NATO. This alone demonstrates that the threat of a broader war involving Russia and the U.S. is no mere illusion.

So has a reset button really been pushed in Russo-American relations by the Obama Administration with the 2009 announcement of a halt to American missile defense plans in Eastern Europe? President Barack Obama’s celebrated September 17 announcement that the U.S. is scrapping the components of the missile shield stationed close to Russia’s border in the Czech Republic and Poland is misleading. Shortly after Obama’s announcement the U.S. launched two experimental missile defense satellites into space from Cape Canaveral, Florida. [7] What Obama actually announced was not the scrapping of the missile shield, but a much more extensive and effective missile shield under revised plans that will include naval deployments onboard Aegis-equipped ships. [8] The deployment of the missile shield is actually being expanded in Europe and beyond, from Turkey and the Mediterranean to the Baltic Sea.

The response of a Polish official to Obama’s revised plans only substantiates Russian fears. “We were never really threatened by a long-range missile attack from Iran,” Slawomir Nowak who is a senior advisor to Poland’s Prime Minister Donald Tusk informed TVP INFO Television shortly after Obama’s announcement. [9] So was securing Poland, amongst others, from an Iranian missile threat a real motive for the missile shield? The Kremlin would argue no. To Moscow it became apparent that U.S. policy makers correlated the deployment of global missile defenses not with an Iranian or North Korean threat, but in the words of the PNAC as a means to “provide a secure basis for U.S. power projection around the world.”[10] So has the Cold War really ended? Maybe the answer lies in joint military preparations by Russia and Belarus and the bilateral war games they held to prepare their armed forces for a NATO attack involving a land, sea, and air invasion. [11]


[1] Charles D. Ferguson, Nuclear Posture Review (Nuclear Threat Initiative, August 2002):

[2] The Project for a New American Century (PNAC), Rebuilding America’s Defenses: Strategy, Forces, and Resources (PNAC, September 2000), p.v.

[3] William Arkin, “Not Just A Last Resort?: A Global Strike Plan, With a Nuclear Option,” The Washington Post, May 15, 2005:

[4] Vladimir Putin, Speech and the Following Discussion at the Munich Conference on Security Policy (Address, Munich Conference on Security Policy, Munich, Bavaria: February 10, 2007).

[5] Ibid.

[6] Ian Traynor, “Putin accuses US of starting Georgia crises as election ploy,” The Guardian, August 29, 2008:

[7] “US sends 2 missile defense satellites into orbit,” Associated Press (AP), September 25, 2009.

[8] Ian Sample, “US missile system’s track record: test, delays, failed launches, missed targets,” The Guardian, September 17, 2009:

[9] Gareth Jones, “Poland sees merit in new Obama missile plan: aide,” Reuters, September 24, 2009:

[10] PNAC, “Rebuilng America’s Defenses,” Op. cit.

[11] Lucian Kim, “Russian Paratroopers Stage War Games Simulating NATO Attack,” Bloomberg, September 27, 2009: