Saturday, February 6, 2010

Secret summit of top bankers

Secret summit of top bankers

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THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.

Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.

Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.

Speculation that the chairman of the US Federal Reserve, Dr Ben Bernanke, would make an appearance could not be confirmed last night.

The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India.

The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt.

Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors.

Australia's ASX 200 slumped 2.4 per cent, to a its lowest close since November 5, echoing a sharp fall on Wall Street.

Asian share markets were also pummelled, with Japan's Nikkei 225 down almost 3 per cent and Hong Kong's Hang Seng slumping 3.3 per cent.

The damage was also being felt by European markets last night with London's FTSE 100 down sagging 1 per cent in early trade.

Sovereign debt fears rippled through to the Australian dollar which was hammered to a four-month low of US86.43 and was trading at US86.77 cents last night.

"This does feel like '08 and '07 all over again whereby we had these sort of little fires pop up and they are supposedly contained but in reality they are not quite contained,'' said H3 Global Advisors chief executive Andrew Kaleel.

"Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain.''

It wasn't all bad news with the RBA yesterday upping its Australian growth forecasts and flagging more interest rate rises this year.

The central bank estimates the economy grew 2 per cent in 2009, and will expand by 3.25 per cent in 2010, and by 3.5 per cent in 2011.

The outlook for global growth is likely to be a key theme of the high level central bank talks.

The gathering also comes at an important time for the BIS as it initiates an overhaul of the global banking system which will include new capital rules applying to banks and more stringent standards regulating executive pay.

A key part of the two-day talkfest will be a special meeting of Asian central bankers chaired by the governor of the Central Bank of Malaysia, Dr Zeti Akhtar Aziz.

Influential BIS general manager Jaime Caruana is also expected to take a prominent role in the talks.

Federal Treasurer Wayne Swan will address the central bank officials at a dinner on Monday night.

Sovereign debt fears signal new stage of global crisis

Sovereign debt fears signal new stage of global crisis

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Stock markets in Europe and Asia fell sharply Friday in the second day of a near-panic selloff fueled by fears that the debt crisis facing weaker European economies will throw the world economy into a “double-dip” recession.

Commodity prices—oil and gold, in particular—also fell sharply.

In the US, triple-digit losses on the Dow Jones Industrial Average were recouped in the final hour, resulting in small gains for the Dow and the other major indexes in volatile trading, following a sharp selloff on Thursday.

The Dow ended the day with a 10-point gain, following a 268-point plunge on Thursday. The index, which was below the 10,000 mark for most of the day, has lost 6.5 percent over the past two weeks.

All of the major European indexes closed down, with France’s CAC-40 falling the most—3.4 percent, its biggest one-day drop since November 26. The Pan-European Dow Jones Stoxx 600 Index was off 2.2 percent, its lowest close since November 3.

Japan’s Nikkei fell 2.89 percent and the Shanghai Composite was off by 1.87 percent.

Stocks were down for the second day in Greece, Portugal and Spain, three heavily indebted eurozone countries whose ability to redeem bondholders—including major European and US banks—is increasingly in doubt. Prices of government bonds of all three countries continued to fall and interest rates rose further, as global investors increased pressure on the three governments to impose draconian austerity measures on their respective populations.

The cost of credit default swap (CDS) contracts on the debt of the three countries rose even more dramatically. Credit default swaps—now a multi-trillion-dollar market—are a form of unregulated derivatives in which CDS sellers guarantee the value of bonds held by CDS buyers. Rising CDS prices reflect eroding confidence in corporate or government bonds insured by the sellers of the CDS contracts.

The CDS market is a hotbed of speculation, since investors, including banks and hedge funds, can bet on the price of CDS contracts without holding the underlying bonds. The threat of sovereign default, most immediately by Greece, but also by Portugal and Spain, has provided an opportunity for speculators to drive up the price of insuring the countries’ bonds by speculating on the likelihood of a default, thereby further undermining confidence in the countries’ debt and increasing the prospects of such an outcome.

All three countries have pledged to impose sweeping cuts in public-sector jobs and wages and in social benefits, along with new consumption taxes, in line with demands from the European Union that they sharply reduce their budget deficits, currently 10 percent or more of their respective gross domestic products.

Greek President George Papandreou of the social-democratic PASOK party, who was elected last year on the basis of promises to reverse the right-wing policies of the preceding conservative government, this week announced plans for an across-the-board freeze on public sector wages along with a cut in allowances, which amounts to a wage cut of 4 percent. He also called for a pension “reform,” which entails raising the retirement age, as well as higher fuel taxes.

The social-democratic Portuguese and Spanish governments have pledged to impose similar austerity measures.

Signs of mounting resistance by the working class in these countries are playing an enormous role in the tremors rippling through the global financial markets. There is a growing sense in governments and board rooms around the world that a major confrontation with the working class is coming, with potentially revolutionary implications.

The banks and the media are demanding that heads of state and parliaments demonstrate the “political will” and “political consensus” necessary to impose historic attacks on the working class. These phrases are euphemisms for a degree of ruthlessness that implies a readiness to employ state repression. However, the financial markets are at once skeptical over the willingness of political leaders to employ the required measures and anxious over the outcome of such a confrontation.

On Thursday, Greek workers launched the first in a series of strikes to protest the government’s austerity package. Customs and tax officials began a 48-hour strike that shut ports and border crossings throughout the country. Strikes by other public and private-sector workers have been called for next week.

Greek farmers have been blockading highways in protest against government austerity proposals.

A major cause of the global stock selloff that began Thursday was the announcement by the Greek unions of a one-day general strike set for February 24. The unions had initially indicated their willingness to assist the PASOK government in carrying out its austerity plans, but have been forced by pressure from the working class to call the strike actions.

Union leaders hope to use the partial labor mobilizations to defuse popular anger and channel it behind nationalist slogans, while they maneuver to work out a deal with the government acceptable to the banks and the European Union. However, there are fears within ruling circles that the unions may not be able to contain the anger of workers and young people, who are already facing mass unemployment and declining living standards.

Portuguese and Spanish unions are also threatening to call strikes and protests.

Among other factors that precipitated the stock selloff was the failure of the Portuguese government to find buyers for the full amount of a government bond offering on Wednesday, and the defeat of its austerity package at the hands of opposition parties in parliament.

The debt crisis of the weaker countries in the 16-nation eurozone, including Ireland and Italy in addition to Greece, Portugal and Spain, is raising questions about the viability of the euro itself. There is increasing public speculation that the 11-year-old currency could collapse under the pressure of the economic and financial crisis.

In recent weeks, the euro has fallen precipitously against the US dollar and the yen. On Friday, it fell to $1.3620. It has declined 9 percent against the dollar since December.

This does not reflect any inherent strength of the US currency. On the contrary, looming above the debt crisis in Europe is the far greater crisis of the world’s biggest debtor—the United States. It is no accident that the European crisis has erupted in the aftermath of last week’s budget announcement by President Obama. The US budget plan revealed that the current deficit is $1.6 trillion, equivalent to 10.6 percent of the country’s’ gross domestic product, a record high since the end of World War II.

This approaches Greece’s deficit ratio of 12.7 percent of GDP, is higher than that of Spain and twice the eurozone average. The US budget, moreover, projects trillion-dollar deficits for years to come.

As in every other industrialized country, the American state responded to the financial crash of 2008 by taking on the debts of its banks and essentially bankrupting its treasury in order to preserve the wealth of its financial elite. The Obama administration, no less than the governments of Europe, is demanding that the cost be borne by the general population in the form of sweeping cuts in basic social programs and a reduction in consumption—i.e., a permanent and dramatic decline in working class living standards.

Unlike in previous international financial crises, such as the Asian debt crisis of the 1990s, the United States cannot play the role of lender of last resort. The United States has irretrievably lost its previous position as the dominant world economic power, and its decline is reflected in growing challenges to the role of the dollar as the world reserve and trading currency.

At last month’s World Economic Forum in Davos, French President Nicolas Sarkozy in his keynote speech said he would use his upcoming presidency of the Group of 20 nations to push for a new international monetary system in which the dollar would no longer be the primary reserve currency. And on Wednesday, Moody’s Investors Service warned that the United States faces the loss of its triple-A sovereign credit rating unless Obama moves to slash the federal deficit by carrying out more draconian spending cuts than he has thus far announced.

It is the erosion of US economic power and solvency that lends to the sovereign debt crises in Greece, Portugal and other European countries such an explosive and universal character.

The recent rise in the dollar is the result of a “flight to safety” by investors who fear a collapse in world asset bubbles and consider US Treasury bonds, along with German government debt, to be a temporary haven. In important respects, the short-term reversal in the dollar’s decline is an expression of a deepening of the crisis on world financial markets.

As a number of economists warned last year, the US policy of flooding financial markets with cheap credit on the basis of near-zero interest rates and the electronic equivalent of printing a trillion dollars—designed to prop up the major US banks and enable them to record bumper profits despite double-digit unemployment—fueled a huge wave of speculation on risky assets such as stocks, bonds, commodities and currencies. These economists predicted that a major rise in the value of the dollar would pull the rug out from under this speculation, which was based on the assumption of a continued decline in the dollar, and force a rapid and destabilizing selloff of inflated assets.

It now appears that this collapse in asset bubbles has begun.

US to launch Fallujah-style attack in Afghanistan

US to launch Fallujah-style attack in Afghanistan

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As US and British troops prepare to attack the town of Marjah in Afghanistan’s Helmand Province, military commanders and the media are openly comparing the operation to the November 2004 siege of Fallujah, one of the bloodiest war crimes of the Iraq war.

The operation in central Helmand province, long an area of intense resistance to the US-led occupation, will constitute the largest military offensive since Washington invaded the country in October 2001. At least 15,000 troops are expected to lay siege to the Helmand river valley town, which has 80,000 inhabitants and is said by the US military to be a stronghold of the Taliban.

A total of 125,000 people live in the district around Marjah, which is an agricultural center 350 miles west of Kabul. The population has been swelled by Afghans fleeing villages occupied by US Marines last summer, following President Barack Obama’s order shortly after he took office to send 21,000 more troops into Afghanistan.

US Marines, frustrated and enraged over casualties suffered at the hands of an unseen enemy who is able to attack and then blend back into the local population, will be unleashed against the town in a violent military assault, with predictable results.

Brigadier General Larry Nicholson, commander of the US Marines in southern Afghanistan, spelled out the character of the upcoming offensive. Those found in Marjah would have three options. “One is to stay and fight and probably die,” he said. “The second one is to make peace with his government and reintegrate.” The third would be to attempt to escape, “In which case we’ll probably have some people out there waiting on them as well.”

“We're going to go in big,” said Nicholson, commander of the 2nd Marine Expeditionary Brigade. “I’m not looking for a fair fight,” he added.

In a highly unusual move, the US command has publicly announced plans for the offensive. “It’s a little unconventional to do it this way, but it gives everybody a chance to think through what they’re going to do before suddenly in the dark of night they’re hit with an offensive,” said General Stanley McChrystal, the senior US commander in Afghanistan.

The stated intention of revealing the target of the upcoming offensive is to allow civilians to flee before the Marines move in. It also provides a preemptive alibi for the US offensive by painting those who fail to heed the warning as die-hard Taliban who deserve to be killed.

Stratfor, a military-intelligence web site with close ties to the US state apparatus, reported Thursday that “the assault is likely to include the cordoning off of the area, so many of the fighters dedicated to its defense will probably be forced to fight to the death or surrender.”

The article continued: “With assaults on Fallujah and Ramadi in Iraq under their belts, the Marines are experienced with this sort of urban assault.”

What is the record of urban assaults of “this sort”?

The Marine assault on Fallujah in November 2004 reduced most of the city of 300,000 people to rubble, as warplanes dropped thousands of tons of explosives and helicopter gunships and battle tanks fired missiles into buildings and strafed the area with cannon fire.

The US military command claimed to have killed 2,000 “insurgents,” but the real death toll remains unknown. Civilians who remained in the town were subjected to the same bombardment. Some were shot to death during the door-to-door raids that followed, and others were killed while fleeing. Wounded fighters were summarily executed, and medical facilities were targeted for military attack. All those in the city were denied food, water and electricity for more than 10 days.

The operation was a vicious exercise in collective punishment against the population of Fallujah for the killing there of four Blackwater mercenaries and the city’s protracted resistance to foreign occupation. It embodied the criminality of the entire war and was characterized by multiple and gross violations of the laws of war.

If American military commanders are to be believed, a similar operation is being prepared in Afghanistan, and for similar reasons. The town of Marjah is to be turned into a killing field.

As in Fallujah, vengeance plays a role. US military forces have seen a steady escalation in casualties over the past year, while the CIA suffered a humiliating attack at the end of December that left seven of its operatives dead on the Afghan border.

In Afghanistan, as in Iraq, the US military command sees value in making an example of a population center known as a center of resistance to occupation, sending a message to the entire country that such resistance is futile and will be met with slaughter and destruction.

This bloodletting is officially justified in the name of a never-ending struggle against terrorism. Behind the propaganda, the driving force of the war in Afghanistan, like the war in Iraq, is the attempt by America’s ruling elite to counter the crisis of US capitalism through the use of force and the seizure of strategic positions in the Persian Gulf and Central Asia, both centers of vast energy reserves.

A year ago, when Barack Obama entered the White House, there existed hope among broad layers of the American people that his inauguration would turn such words as Fallujah, Abu Ghraib, Guantánamo, Blackwater, torture and rendition into the lexicon of a dark and shameful, but closed, chapter in US history.

The preparation of the Marjah offensive only underscores that, far from being ended, the crimes of the Bush administration are continuing and escalating under the Democratic president.

Today there are more US troops deployed abroad in colonial-style wars and occupations than under Bush, and the killing has spread from Iraq and Afghanistan to Pakistan and Yemen. The Obama administration is seeking $322 billion for the two ongoing wars and occupations, a figure that will doubtless be swelled by further demands for “supplemental” funding.

The supposed candidate of “hope” and “change” has emerged ever more clearly as the hand-picked agent of sections of the political establishment and military-intelligence complex that wanted to effect certain tactical changes in policy, while continuing to employ militarism abroad and wage a relentless assault on the working class at home.

American working people cannot accept a new round of war crimes carried out in their name. The demand for the immediate and unconditional withdrawal of all US and other foreign troops from Afghanistan must be joined with a political offensive against the Obama administration and the financial oligarchy that it defends.

Haiti: Still Starving 23 Days Later

Haiti: Still Starving 23 Days Later

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You can walk down many of the streets of Port-au-Prince and see absolutely no evidence that the world community has helped Haiti.

Twenty-three days after the earthquake jolted Haiti and killed over 200,000 people, as many as a million people have still not received any international food assistance.

On February 4, the UN World Food Program reported they had given at least some food, mostly 55-pound bags of rice, to over a million people. The UN acknowledged that it still need to reach another one million people. The 55-pounds of rice are expected to provide a two-week food ration for a family. Beans and cooking oil are scheduled to come later.

The Associated Press reported that people in Haiti, at small protests, were holding up banners reading, "Help us, we're starving."

Over a million people are displaced. About 10,000 families are in tents, the rest are living under sheets, blankets and tarps.

One of the people living under a sheet is a brand new mother with her one-day-old baby. The New York Times reported that Rosalie Antoine, 33, and her one-day-old baby were living in a neighbor's yard with puppies and chickens under a sheet in the Bel-Air neighborhood of Port-au-Prince.

Haiti and the United Nations estimate 250,000 children under the age of seven are living in temporary housing. Most need vaccinations.

Flavia Cherry, of the Caribbean Association for Feminist Research and Action, this week witnessed a pregnant, double amputee give birth on the ground in one of the tent camps without any medical assistance at all. "This poor mother had nothing, no milk, no clothing for the baby, nothing!"

Even people who can afford to purchase food are having a difficult time. A 55-pound bag of rice costs 40 percent more today than it did before the earthquake. Dr. Louise Ivers, a Partners in Health physician in Port-au-Prince, reported a 25 kg (55 pounds) bag of rice that sold for $30 US dollars (1,207 Haitian gourdes) before the quake, now costs $42 US dollars (1,690 Haitian gourdes).

The World Food Program reported prices are still rising and people outside the earthquake zone are having difficulty meeting their basic food needs.

Twenty-three days after the quake.

Bush, Cheney and the Great Escape

Bush, Cheney and the Great Escape

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With each passing day, it becomes more and more astonishing to encompass the fact that George W. Bush, Dick Cheney and their henchmen from the prior administration have managed thus far to escape any accounting whatsoever for the massive battery of criminal activity committed during their time in office. More than a year has passed since these men had their hands on the levers of power, and evidence of their myriad crimes and frauds is laying all over the countryside, yet nothing has come of it.

The British government has been running a wide-ranging inquiry into the manner in which the UK and United States were led to war in Iraq by then-President Bush and then-Prime Minister Tony Blair. An astonishing amount of damning evidence and information has been uncovered and publicly aired, including the following statements delivered by a senior member of Parliament (MP) on Tuesday:

A senior Welsh MP said last night he knew "for certain" Tony Blair and George Bush struck a deal to invade Iraq at their notorious Crawford Ranch meeting in 2002 - a year before war was declared. Elfyn Llwyd, Plaid Cymru's parliamentary leader, said he had seen a confidential memo to that effect, although he would not divulge its exact contents.

Critics of the military action in Iraq have long suspected Mr Blair and President Bush came to an agreement at the president's ranch in Crawford, Texas in April 2002, a claim Mr Blair denied in evidence to the Chilcot Inquiry last week. Mr Llwyd said he had offered to give evidence to the Chilcot Inquiry himself, in private if necessary.

The Meirionnydd Nant Conwy MP said: "I think other things should have been pursued [at the inquiry], in particular the detailed conversation at the ranch in Crawford in April 2002. I do know that the deal was struck, I know for certain it was struck at that stage so just to pretend months down the road that no deal had been struck I think is unforgivable. I have offered to give evidence and Chilcot has said 'I'll come back to you'. At that stage I will have private discussions with him."

MP Llwyd refers here to the infamous Downing Street Memos, a collection of British government documents that lay out George W. Bush's intent to invade and occupy Iraq whether or not there was any WMD/terrorism evidence to support the action, documents that further demonstrate Prime Minister Tony Blair's willing acquiescence to the plan. Most damning of all is the secret memo dated 23 July 2002, explaining that war in Iraq was coming, and if the facts did not support the action, those facts would be twisted and buried. "There was a perceptible shift in attitude," read the memo [emphasis added]. "Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy. The NSC had no patience with the UN route, and no enthusiasm for publishing material on the Iraqi regime's record. There was little discussion in Washington of the aftermath after military action."

These documents, along with testimony from the likes of MP Llwyd, offer a vivid portrait of a Bush administration far gone in the pursuit of its own militant plans, and more than willing to break laws and deceive the public to achieve the ends they sought. It was a nest of criminals that occupied the White House for those eight long years, proof of this continues to pile up in vast drifts, and nothing comes of it.

Quite the contrary, in fact. A recent report from the Justice Department's Office of Professional Responsibility slapped a big fat "Not Guilty" stamp on the jackets of John Yoo and Jay Bybee, the two central authors of the notorious "torture memos" that argued the legal justifications for the use of torture by the Bush administration. Worse, it appears Obama's DOJ went out of the way to make sure Bybee and Yoo escaped free and clear from any censure for their despicable activities. According to a recent Newsweek report:

An upcoming Justice Department report from its ethics-watchdog unit, the Office of Professional Responsibility (OPR), clears the Bush administration lawyers who authored the "torture" memos of professional-misconduct allegations.

While the probe is sharply critical of the legal reasoning used to justify waterboarding and other "enhanced" interrogation techniques, NEWSWEEK has learned that a senior Justice official who did the final review of the report softened an earlier OPR finding. Previously, the report concluded that two key authors - Jay Bybee, now a federal appellate court judge, and John Yoo, now a law professor - violated their professional obligations as lawyers when they crafted a crucial 2002 memo approving the use of harsh tactics, say two Justice sources who asked for anonymity discussing an internal matter.

But the reviewer, career veteran David Margolis, downgraded that assessment to say they showed "poor judgment," say the sources. (Under department rules, poor judgment does not constitute professional misconduct.) The shift is significant: the original finding would have triggered a referral to state bar associations for potential disciplinary action - which, in Bybee's case, could have led to an impeachment inquiry.

The truth of the matter is plain enough. Yoo and Bybee are not going to turn themselves in. Neither are any of the other actors in this gruesome play. If any measure of justice is going to be achieved, it will fall upon Congress, President Obama and his Department of Justice to get it done. Subpoenas must be issued, evidence gathered and testimony heard for the truth to be brought forth and for punishment to be meted out.

But this DOJ cannot even accept the judgment of its own OPR on two comparatively minor foot soldiers of the Bush administration without sanding down the conclusions enough to spare Yoo and Bybee the punishment they so richly deserve. Is there any hope at all that the larger players in the Bush-era criminal activities - Bush, Cheney, Rumsfeld, Rove, Perle, Feith and Wolfowitz most prominently - will be brought to justice when those two lesser lights are allowed to return to a law school classroom and a seat on the federal bench?

Disgraceful as it is to say, don't hold your breath.

Speaking of evidence, there is this: a bomb in Karbala exploded on Wednesday, killing and wounding dozens of Shiite pilgrims. Another bomb in Karbala was attached to a military vehicle and killed and wounded dozens on Wednesday. Another bomb killed and wounded several other pilgrims outside Baghdad on Wednesday. Gunmen shot and killed a police officer in Kirkuk on Wednesday. The day before, a suicide bomber killed 54 and wounded dozens more in the outskirts of Baghdad. As of Wednesday, almost 5,000 US soldiers had been killed in Iraq, and nearly 50,000 more have been wounded. More than a million Iraqi civilians have likewise been killed and wounded.

Bush, Cheney, Rumsfeld, Rove, Perle, Feith, Wolfowitz, Rice, and a dozen other members of the Bush administration, including Yoo and Bybee, are directly responsible for this carnage. They lied through their teeth and broke any number of laws to see it done. They are guilty of much more than the war crimes they committed in both Iraq and the United States. They are guilty of bankrupting this nation with two wars begun on false pretenses and perpetuated to enrich the few, while further cementing the stranglehold "defense spending" has on our growth as a civilized nation.

Thanks in no small part to the Iraq debacle, there is no political impetus to lay a finger on the wildly bloated "defense" budget, even as the fabric of our society shreds and shatters under the economic yoke placed upon our necks by the previous administration. Ours is a government staffed from stem to stern with political cowards who refuse to heal these wounds, and with those who are just as culpable as those members of the Bush administration (read: members of Congress who voted to support each and every criminal act that led us to this place).

Justice? When it comes to the Bush administration, the word has no meaning. They have escaped that justice, and we are all less free because of it.

How the U.S. — and Google — censors the Internet

How the U.S. — and Google — censors the Internet

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Since mid-January, hardly a day has gone by without some report in the big-business-controlled media about China and censorship of the Internet. The primary reports were about Google’s declaration in early January that it may stop complying with Chinese laws that are meant to block illegal Internet activity, including spying. This was followed by Secretary of State Hillary Clinton’s blistering cold-war-style speech that directly attacked China.

Such threats, coming from the U.S. government, must be taken seriously. After all, this kind of speech from the heads of the State Department preceded the U.S. invasions of Yugoslavia, Iraq and Afghanistan. Not that an invasion of China is imminent, but this is war talk from the State Department and must be treated as such.

Outside the U.S., the events are seen quite differently than the carefully-coiffed version presented in the U.S. media. China has done nothing out of the norm for any country with respect to regulating the Internet. Even the U.S. has similar laws and restrictions on criminal activities.

Given the way the U.S. media report this, it is important to make it clear that China does not control the Internet. Control of the Internet lies completely in the hands of the U.S., or more precisely, the U.S. military-industrial complex. And access to the core services is 100 percent controlled in the U.S. In fact, U.S. domination of the Internet was reflected in a bill that was proposed in the U.S. Senate last August that sought to give the president the authority to take full control of the Internet with a national security declaration.

As for censorship of the Internet, no country does more to block global access to the Internet than the U.S. government.

This was illustrated on Jan. 1. That’s the day that a hammer went down and all access to a substantial number of Web sites was blocked to all people from countries on a list created by the State Department. Cuba, Syria, Sudan and Iran are included on the list. A search of the State Department’s Web site and a Google search did not turn up the names of other countries on this list.

SourceForge is a Web site that’s now blocked. SourceForge says it “offers free access to hosting and tools for developers of free/open source software.” As of Jan. 1, all access to SourceForge, including downloads of free software, has been blocked to any user from a country on the State Department’s list. Previously in 2008, SourceForge started blocking access to any free software developer who wished to contribute to any free software project.

This development at SourceForge, because it is a central point for free and open access to software, has produced an international storm of protest. But SourceForge is not alone. Sun Microsystems, Mathworks and Microchip — companies that sell software used by developers — have also made their Web sites unreachable to any user from the State Department’s list. And most prominent in all this turns out to be Google and the Google Code Web site that is also for free software projects.

There is already a protest movement among free software developers to move projects off Google Code and SourceForge and onto Web sites in countries that allow open access to all. One prominent free software project, NautilusSVN, has done this in response to the blockage by Google of access to Google Code. The developers have moved their project onto Ubuntu Linux’s Launchpad and renamed it RabbitVCS, though there is some concern that the London-based Launchpad could become subjected to the U.S. blockade.

In a report on ArabCrunch, Syrian computer engineer Abdulrahman Idlbi says, “It’s worth mentioning that Internet content blockage against some countries is not restricted to getting software or services. It is really disappointing to try to participate in a global humanitarian event such as Earth Hour or the Google Haiti crisis response to make a donation, to find out that parts of those Web sites (powered by Google) are blocked.” Idlbi found that he was not able to make a donation to Haiti relief efforts.

The Planning of War Behind Closed Doors

The Planning of War Behind Closed Doors

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The defense chiefs of all 28 NATO nations and an undisclosed number of counterparts from non-Alliance partners gathered in Istanbul, Turkey on February 4 to begin two days of meetings focused on the war in Afghanistan, the withdrawal of military forces from Kosovo in the course of transferring control of security operations to the breakaway province's embryonic army (the Kosovo Security Force) and "the transformation efforts required to best conduct the full range of NATOs agreed missions." [1]

Istanbul was the site of the bloc's 2004 summit which accounted for the largest expansion in its 60-year history - seven new Eastern European nations - and its strengthening military partnerships with thirteen Middle Eastern and African nations under the Istanbul Cooperation Initiative.

The Chairman of the NATO Military Committee, Admiral Giampaolo Di Paola, NATO's Supreme Allied Commander Europe Admiral James Stavridis and the top commander of all U.S. and NATO troops in Afghanistan - soon to reach over 150,000 - General Stanley McChrystal are also in attendance, as are European Union High Representative for Foreign Affairs and Security Policy Catherine Ashton and United Nations High Representative for Afghanistan Kai Eide as well as the defense and interior ministers of Afghanistan.

The meetings follow by a week the International Conference on Afghanistan held in London, which in turn occurred the day after two days of meetings of the NATO Military Committee with the Chiefs of Defense of the military bloc's 28 member states and 35 more from what were described as Troop Contributing Nations; presumably NATO partner nations with troops stationed in the Afghan war theater. In all, the military chiefs of 63 countries.

The U.S.'s McChrystal was present there also as were Israeli Chief of General Staff Lieutenant General Gabi Ashkenazi and Pakistani Chief of Army Staff General Ashfaq Parvez Kayani. Beforehand the bloc's website reported that "The various meetings will focus on the progress made in ongoing operations and the New Strategic Concept for NATO." [2] That 35 top military commanders from non-NATO countries were present to hear plans for the escalation of what is already the largest war in the world is understandable, as their forces are on the ground as part of a 50-nation plus force under NATO military command.

That the same conference discussed the bloc's 21st century new global military doctrine - former U.S. secretary of state Madeleine Albright delivered an address on the topic - raises the question of how many of the 35 partner states' military chiefs may have joined their 28 NATO colleagues for that phase of discussions. That such a high percentage of the world's leading military commanders attended a two-day affair which deliberated on both the war in South Asia and the expansion of the world's only military bloc's activities even further outside the Euro-Atlantic area (when it has already conducted operations in four continents) confirms that the Afghan war serves more than one purpose for the West. It is the laboratory for strengthening military ties with nations on every inhabited continent and for building the nucleus of and foundation for a potential future world army.

The London conference on Afghanistan, presented in the West as a benign undertaking tantamount to an economic development or humanitarian aid planning event - the conference's website described it as "The international community [coming] together to fully align military and civilian resources behind an Afghan-led political strategy" [3] - was preceded by two days of meetings between top military commanders of almost a third of the world's nations at NATO headquarters and followed by two days of meetings by NATO and allied defense chiefs this week. Many of the same people - EU foreign policy chief Baroness Ashton and the UN's Eide (who formerly occupied comparable posts in Bosnia and Kosovo and was Norway's ambassador to NATO from 2002 to 2006) - attended both the London conference and are attending the Istanbul NATO defense ministers conclave.

(Ashton's predecessor's Javier Solana was Secretary General of NATO from 1995 to 1999 before becoming the EU's High Representative for Common Foreign and Security Policy - the title slightly adjusted after the Lisbon Treaty - from 1999 until December of 2009, effecting the transition seamlessly.)

By way of reciprocity, the London conference was addressed by NATO Secretary General Anders Fogh Rasmussen who said, inter alia, "with more than 85,000 troops from 44 nations deployed to Afghanistan and with over 39,000 additional forces arriving over the coming weeks and months - the NATO-led International Security Assistance Force remains NATOs top priority." [4]

If any further evidence was required that the United Nations is at the service of NATO and not vice versa, that the EU is NATO's civilian valet de chambre, and that all three are subordinated to the United States, the last week's events and the roster of attendees at them should suffice.

The chain of command begins in Washington and orders barked out there work their way down to Brussels and New York City.

The two organizations based in the Belgium capital, the "military alliance of democratic states in Europe and North America" (NATO's self-definition) and the "European military superstate" (Irish opposition parties' reference to the effects of the Nice and Lisbon treaties), are afflicted with political echolalia, parroting the U.S. position on conflicts armed and with the potential to become so around the world - Afghanistan, Iraq, Georgia-Russia, Georgia-Abkhazia, Georgia-South Ossetia, Russia-Ukraine, Kosovo, Bosnia, Somalia, Yemen, Colombia, Myanmar, Sudan, Chad, the Central African Republic, North Korea, Zimbabwe, Israel-Lebanon, Lebanon-Syria, Israel-Palestine, Macedonia, Ivory Coast, Djibouti-Eritrea, Transdniester and all those to come - with truly impressive fidelity in this otherwise inconsistent age.

Condemnations, tirades and threats issued by the U.S. secretary of state and ambassador to the United Nations may as well be presented in triplicate.

Permanent Security Council members Russia and China may occasionally - all too occasionally - block hostile Western actions against defenseless third parties in the United Nations, but Washington always walks away with a mandate and the final say in the selection of viceroys to complement U.S. and NATO military forces on the ground in subjugated nations.

As a recent example, during the second day of the NATO Military Committee meetings in Brussels and the day before the Afghan conference in London, an "international" conference on Yemen was also held in London which "Britain's Prime Minister Gordon Brown called response to the failed bomb attack on an airliner over Detroit on December 25." [5]

That bears repeating. The apprehension in the U.S. of a Nigerian national alleged to have been trained in Yemen led the head of state of the United Kingdom to summon representatives of the Group of Eight (Britain, Canada, France, Germany, Italy, Japan, Russia and the U.S.), the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), Egypt, Jordan - but not the Arab League - Turkey and the European Union, United Nations, World Bank and International Monetary Fund "to bolster Yemen's fight against al Qaeda...." [7] Soon 50,000 non-American NATO troops will be bogged down in Afghanistan because the bloc invoked its Article 5 collective defense provision in fight against al-Qaeda.

Ever-compliant UN Secretary-General Ban Ki-moon lent legitimacy to this American and British charade, as he did the following day's Afghan conference where he delivered a speech in the presence of 28 NATO and perhaps dozens of its International Security Assistance Force non-member states foreign ministers.

Yemen has joined the former Yugoslavia, Afghanistan and Iraq as a target for Western "assistance and stabilization." NATO will conduct more planning sessions with scores of military chiefs and defense and foreign ministers and not only for the war in Afghanistan.

Its new Strategic Concept knows no geographical bounds.


1) NATO, February 3, 2010]
2) NATO, January 25, 2010
3) Afghanistan: The London Conference
5) Deutsche Presse-Agentur, January 28, 2010
6) Reuters, January 27, 2010

Airport Body Scanning Raises Radiation Exposure, Committee Says

Airport Body Scanning Raises Radiation Exposure, Committee Says

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Air passengers should be made aware of the health risks of airport body screenings and governments must explain any decision to expose the public to higher levels of cancer-causing radiation, an inter-agency report said.

Pregnant women and children should not be subject to scanning, even though the radiation dose from body scanners is “extremely small,” said the Inter-Agency Committee on Radiation Safety report, which is restricted to the agencies concerned and not meant for public circulation. The group includes the European Commission, International Atomic Energy Agency, Nuclear Energy Agency and the World Health Organization.

A more accurate assessment about the health risks of the screening won’t be possible until governments decide whether all passengers will be systematically scanned or randomly selected, the report said. Governments must justify the additional risk posed to passengers, and should consider “other techniques to achieve the same end without the use of ionizing radiation.”

President Barack Obama has pledged $734 million to deploy airport scanners that use x-rays and other technology to detect explosives, guns and other contraband. The U.S. and European countries including the U.K. have been deploying more scanners at airports after the attempted bombing on Christmas Day of a Detroit-bound Northwest airline flight.

“There is little doubt that the doses from the backscatter x-ray systems being proposed for airport security purposes are very low,” Health Protection Agency doctor Michael Clark said by phone from Didcot, England. “The issue raised by the report is that even though doses from the systems are very low, they feel there is still a need for countries to justify exposures.”

3-D Imaging

A backscatter x-ray is a machine that can render a three- dimensional image of people by scanning them for as long as 8 seconds, the report says. The technology has also raised privacy issues in countries including Germany because it yields images of the naked body.

The Committee cited the IAEA’s 1996 Basic Safety Standards agreement, drafted over three decades, that protects people from radiation. Frequent exposure to low doses of radiation can lead to cancer and birth defects, according to the U.S. Environmental Protection Agency.

Most of the scanners deliver less radiation than a passenger is likely to receive from cosmic rays while airborne, the report said. Scanned passengers may absorb from 0.1 to 5 microsieverts of radiation compared with 5 microsieverts on a flight from Dublin to Paris and 30 microsieverts between Frankfurt and Bangkok, the report said. A sievert is a unit of measure for radiation.

European Union regulators plan to finish a study in April on the effects of scanning technology on travelers’ privacy and health. Amsterdam, Heathrow and Manchester are among European airports that have installed the devices or plan to do so.

The U.S. Transportation Security Administration has said that it ordered 150 scanners from OSI Systems Inc.’s Rapiscan unit and will buy an additional 300 imaging devices this year. The agency currently uses 40 machines, which cost $130,000 to $170,000 each, produced by L-3 Communications Holdings Inc. at 19 airports including San Francisco, Atlanta and Washington D.C.

FBI wants records kept of Web sites visited

FBI wants records kept of Web sites visited

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The FBI is pressing Internet service providers to record which Web sites customers visit and retain those logs for two years, a requirement that law enforcement believes could help it in investigations of child pornography and other serious crimes.

FBI Director Robert Mueller supports storing Internet users' "origin and destination information," a bureau attorney said at a federal task force meeting on Thursday.(Credit: Anne Broache/CNET)

As far back as a 2006 speech, Mueller had called for data retention on the part of Internet providers, and emphasized the point two years later when explicitly asking Congress to enact a law making it mandatory. But it had not been clear before that the FBI was asking companies to begin to keep logs of what Web sites are visited, which few if any currently do.

The FBI is not alone in renewing its push for data retention. As CNET reported earlier this week, a survey of state computer crime investigators found them to be nearly unanimous in supporting the idea. Matt Dunn, an Immigration and Customs Enforcement agent in the Department of Homeland Security, also expressed support for the idea during the task force meeting.

Greg Motta, the chief of the FBI's digital evidence section, said that the bureau was trying to preserve its existing ability to conduct criminal investigations. Federal regulations in place since at least 1986 require phone companies that offer toll service to "retain for a period of 18 months" records including "the name, address, and telephone number of the caller, telephone number called, date, time and length of the call."

At Thursday's meeting (PDF) of the Online Safety and Technology Working Group, which was created by Congress and organized by the U.S. Department of Commerce, Motta stressed that the bureau was not asking that content data, such as the text of e-mail messages, be retained.

"The question at least for the bureau has been about non-content transactional data to be preserved: transmission records, non-content records...addressing, routing, signaling of the communication," Motta said. Director Mueller recognizes, he added "there's going to be a balance of what industry can bear...He recommends origin and destination information for non-content data."

Motta pointed to a 2006 resolution from the International Association of Chiefs of Police, which called for the "retention of customer subscriber information, and source and destination information for a minimum specified reasonable period of time so that it will be available to the law enforcement community."

Recording what Web sites are visited, though, is likely to draw both practical and privacy objections.

"We're not set up to keep URL information anywhere in the network," said Drew Arena, Verizon's vice president and associate general counsel for law enforcement compliance.

And, Arena added, "if you were do to deep packet inspection to see all the URLs, you would arguably violate the Wiretap Act."

Another industry representative with knowledge of how Internet service providers work was unaware of any company keeping logs of what Web sites its customers visit.

If logs of Web sites visited began to be kept, they would be available only to local, state, and federal police with legal authorization such as a subpoena or search warrant.

What remains unclear are the details of what the FBI is proposing. The possibilities include requiring an Internet provider to log the Internet protocol (IP) address of a Web site visited, or the domain name such as, a host name such as, or the actual URL such as

While the first three categories could be logged without doing deep packet inspection, the fourth category would require it. That could run up against opposition in Congress, which lambasted the concept in a series of hearings in 2008, causing the demise of a company, NebuAd, which pioneered it inside the United States.

The technical challenges also may be formidable. John Seiver, an attorney at Davis Wright Tremaine who represents cable providers, said one of his clients had experience with a law enforcement request that required the logging of outbound URLs.

"Eighteen million hits an hour would have to have been logged," a staggering amount of data to sort through, Seiver said. The purpose of the FBI's request was to identify visitors to two URLs, "to try to find out...who's going to them."

A Justice Department representative said the department does not have an official position on data retention.

Spying on Americans: A Multibillion Bonanza for the Telecoms

Spying on Americans: A Multibillion Bonanza for the Telecoms

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Court Tosses NSA Spy Suits, Sides with White House Over Illegal Surveillance

In late January, the Justice Department's Office of the Inspector General released a report that provided startling new details on illegal operations by the FBI's Communications Analysis Unit (CAU) and America's grifting telecoms.

For years, AT&T, Verizon, MCI and others fed the Bureau phone records of journalists and citizens under the guise of America's endless, and highly profitable, "War on Terror."

Between 2002 and 2007, the FBI illegally collected more than 4,000 U.S. telephone records, citing bogus terrorism threats or simply by persuading telephone companies to hand over the records. Why? Because the FBI could and the telecoms were more than willing to help out a "friend"--and reap profits accrued by shredding the Constitution in the process.

So egregious had these practices become that "based on nothing more than e-mail messages or scribbled requests on Post-it notes, the phone employees turned over customer calling records" to the FBI, The New York Times reported.

And when questions about these dodgy practices were raised internally, top FBI managers "up to the assistant director level" approved CAU's blatantly illegal methodology and responded by "crafting a 'blanket' national security letter to authorize all past searches that had not been covered by open cases," The Washington Post disclosed.

"On some occasions" according to the Times, "the phone employees allowed the F.B.I. to upload call records to government databases. On others, they allowed agents to view records on their computer screens, a practice that became known as 'sneak peeks'."

"But in a surprise buried at the end of the 289-page report" Wired disclosed, "the inspector general also reveals that the Obama administration issued a secret rule almost two weeks ago saying it was legal for the FBI to have skirted federal privacy protections."

Investigative journalist Ryan Singel revealed that the "Obama administration retroactively legalized the entire fiasco through a secret ruling from the Office of Legal Counsel nearly two weeks ago."

"That's the same office" Singel writes, "from which John Yoo blessed President George W. Bush's torture techniques and warrantless wiretapping of Americans' communications that crossed the border."

While corporate media frame these stories as if they were practices of the far-distant Bushist past, former telephone technician and AT&T whistleblower Mark Klein, who leaked documents on the existence of secret NSA-controlled spy rooms embedded in AT&T switching offices across the country, believes otherwise.

Klein told Wired journalist David Kravets January 29, that the President's Surveillance Program (PSP) and internal AT&T documents suggest that the program "was just the tip of an eavesdropping iceberg."

According to Klein, these programs are not "targeted" against suspected terrorists but rather "show an untargeted, massive vacuum cleaner sweeping up millions of peoples' communications every second automatically."

Yet despite overwhelming evidence of lawbreaking by the secret state and their corporate partners, on January 21 U.S. District Chief Judge Vaughn Walker tossed out the EFF's lawsuit, Jewell v. NSA, filed on behalf of AT&T customers fighting the National Security Agency's illegal operations that target millions of citizens' phone calls, emails and web searches.

In a cowardly ruling that skirts the issue of Americans' privacy rights, Walker reaffirmed the unlimited power of the so-called "Unitary Executive," Bushist double-speak for a presidential dictatorship; a position embraced by current Oval Office resident, the discredited "change" President, Barack Obama.

In a further sign that the Executive Branch and secret state agencies are above the law, Walker ruled that harm done to U.S. citizens and legal residents under the PSP, was not a "particularized injury" but instead was a "generalized grievance" because almost everyone in the United States has a phone and Internet service.

Chillingly, Walker asserted that "a citizen may not gain standing by claiming a right to have the government follow the law." This pitiful summary judgement merely affirms the obvious: America is a lawless state where neither citizens nor "co-equal" branches of government, Congress and the Courts, can challenge the quintessentially political decisions made in secret by the Executive Branch.

Despite the fact that an audit by the Justice Department's own Office of the Inspector General found that the FBI and telecom grifters colluded together to violate federal wiretapping laws, to wit, the Electronic Communications Protection Act (ECPA) and continue to do so today, Walker's ruling means that Americans are left without an legal mechanism to redress the systematic destruction of their rights.

According to enforcement provisions of ECPA: "A court issuing an order under this section against a telecommunications carrier, a manufacturer of telecommunications transmission or switching equipment, or a provider of telecommunications support services may impose a civil penalty of up to $10,000 per day for each day in violation after the issuance of the order or after such future date as the court may specify."

It is all-too-clear that were these lawsuits to go forward and the telecoms lose, the giant phone companies and internet service providers, which the Justice Department was forced to admit in court papers are an "arm of the government ... when it comes to secret spying," as Wired reported in October, would potentially face astronomical fines.

Strip away Walker's mendacious reasoning and what we're left with is another in an endless series of moves by the capitalist state to defend the interests of their political masters: the corporate oligarchy and financial swindlers who resort to police state methods of rule to shore-up a crumbling empire.

EFF Senior Staff Attorney Kevin Bankston denounced the ruling and said, "The alarming upshot of the court's decision is that so long as the government spies on all Americans, the courts have no power to review or halt such mass surveillance even when it is flatly illegal and unconstitutional."

Last June, Walker dismissed EFF's Hepting v. AT&T lawsuit that targeted illegal collaboration between AT&T and the NSA. In that case, the court ruled that the telecoms enjoyed retroactive immunity from liability when the Democratic-controlled Congress, and then-Senator and corporatist presidential candidate Barack Obama, voted in favor of the despicable FISA Amendments Act (FAA).

Antifascist Calling reported that the Obama administration argued that Jewell too, must be dismissed on similar grounds. Taking a page from the Bush/Cheney playbook, the government claimed that should Jewell go forward, it would require disclosure of "privileged state secrets."

As I wrote at the time, the claim of "sovereign immunity" and a "state secrets" privilege means that the government can never be held accountable for blatant illegalities under any federal statute. In other words, under such conditions the "rule of law" is a fraudulent exercise and gross criminality, when sanctioned at the highest levels of the state, becomes the norm as formerly democratic and republican forms of self-governance slip ineluctably towards the abyss of presidential dictatorship.

Following in the footsteps of his White House predecessor, the cynical nature of Obama's rhetoric is all the more remarkable, considering that the president announced last September amid great fanfare that his administration will "impose new limits on the government assertion of the state secrets privilege used to block lawsuits for national security reasons," according to The New York Times.

Despite administration posturing that it would be the most "open" in history, "more than 300 individuals and groups have sued the government to get records" in the year since Obama assumed office, The Washington Post reported January 27.

"In case after case" the Post disclosed, "plaintiffs say little has changed since the Bush administration years, when most began their quests for records. Agencies still often fight requests for disclosure, contending that national security and internal decision-making need to be protected."

Nowhere is this penchant for secrecy more pronounced then by the Obama administration's steadfast refusal to turn over the names of telecom lobbyists who bought-off their congressional allies in the run-up to the passage of the FISA Amendments Act of 2008.

The Electronic Frontier Foundation has been litigating a Freedom of Information Act request against the government, demanding that the administration turn over the names of corporate lobbyists who had contacted Congress, the Department of Justice and the Office of the Director of National Intelligence on behalf of their telecom clients bid for retroactive immunity under the FAA.

According to EFF, AT&T, Sprint and Verizon lobbyists forked over bundles of cash, as the watchdog group MAPLight revealed in 2008, when they published a list of campaign contributions to congressional Democrats who changed their votes on FAA once the wheels had been sufficiently greased.

Despite claims of "openness" and "transparency," the administration is still fighting hard to conceal the names of these lobbyists from the American people. In December, EFFreported that the Justice Department "argued to the appeals court that 'there is no public interest in the compelled disclosure of the representatives' identities'."

Having pledged to the American people that his would be an administration based on the rule of law and public accountability, the Obama presidency has proven itself to be just as secretive and mendacious as the Bush/Cheney cabal that ruled the roost for eight long and bloody years.

Our "forward looking" president, and the ruling class elites who have presided over the destruction of our democracy demonstrate on a daily basis the accountability-averse culture that has been a staple of American political life for decades.

While the federal courts toss out suits by citizens demanding that their right to privacy not be sacrificed to corporate looters and their police state accomplices, the architects of torture and driftnet surveillance get a free pass.

Newsweek reported January 29, that a long-awaited report from the Justice Department's Office of Professional Responsibility (OPR) "clears the Bush administration lawyers who authored the 'torture' memos of professional-misconduct allegations."

Leaving aside Newsweek's placement of quotation marks around the word "torture," a practice fully in keeping with the corporate media's consensus that such heinous practices have "kept us safe," Michael Isikoff and Daniel Klaidman write that while the probe "is sharply critical" of the "legal reasoning" used to justify CIA and Pentagon crimes however, "a senior Justice official who did the final review of the report softened an earlier OPR finding."

That earlier version had concluded that two of the key authors of Bushist torture and surveillance policies, Federal Appeals Court Judge Jay Bybee and University of California law professor John Yoo, "violated their professional obligations as lawyers when they crafted a crucial 2002 memo approving the use of harsh tactics."

"But the reviewer" Newsweek notes, "career veteran David Margolis, downgraded that assessment to say they showed 'poor judgment'."

By downgrading OPR's original finding, the Justice Department is no longer obligated to send a referral to state bar associations "for potential disciplinary action--which, in Bybee's case, could have led to an impeachment inquiry."

Despite the tortured reasoning of blind Obama loyalists, Dick Cheney's "Unitary Executive" is alive and well.

US intelligence chief claims right to assassinate Americans overseas

US intelligence chief claims right to assassinate Americans overseas

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US Director of National Intelligence Dennis Blair said on Wednesday that government agencies have a policy of assassinating Americans overseas as required by the “war on terror.”

In testimony before the House intelligence committee, Blair said the assassinations would be justified if US citizens were “taking action that threatens Americans.” This is an extremely broad category, giving the US intelligence apparatus general authority to engage in what amount to extra-judicial executions.

Such killings are illegal under international law, but they have become standard procedure for the American military and intelligence agencies, under the euphemism of “targeted killings.” They are now common as part of the full-scale military occupations in Iraq and Afghanistan, as well as in other countries targeted by the US, including Pakistan and Yemen.

The question of killing Americans has come up specifically in relation to the US-born Yemeni cleric, Anwar al-Awlaki, who has been linked by the US government to the suspect in the attempt to blow up Northwest Airlines Flight 253 on Christmas Day. On December 24, the US launched strikes on an Al Qaeda compound in Yemen, and it was initially thought that al-Awlaki may have been among those killed.

Al-Awlaki has not been charged with any crimes. CNN reported, however, “Privately many administration officials said he is one of the next American citizens abroad with whom the US intelligence community wants to deal.” CNN did not say who else was on the list of citizens to be “dealt with.”

The US follows “a set of defined policy and legal procedures that are very carefully observed,” Blair claimed. He also said that the US intelligence agencies seek “specific permission”—presumably from the White House, though Blair was not explicit—to carry out actions that will involve killing US citizens.

Peter Hoekstra, the ranking Republican on the intelligence committee, said he was “surprised” that Blair had made the statement in open session. “So there is a framework and a policy…a clear path as to when this person may be engaging in free speech overseas and when he may have moved into recruitment or when he may have moved into actually coordinating and carrying out attacks against the United States?” he asked.

Blair responded by saying that he preferred to go into the details in “closed session,” but added, “We don’t target people for free speech.”

That the head of US intelligence had to assure the population that the government does not kill US citizens on the basis of their political views and opinions only underscores the far-reaching criminalization of the state.

The Obama administration is continuing, and in many cases deepening, the attack on democratic and constitutional rights implemented by Bush. During the Bush administration, the question of warrantless monitoring of communications involving US citizens provoked a storm of controversy. Now, the US government openly asserts the right to kill US citizens abroad without protest from either political party.

Blair’s comments were given amidst escalating warnings from US intelligence about imminent terrorist attacks. Blair said that an attempted attack in the US within the next three to six months was “certain,” echoing comments made by CIA Director Leon Panetta on Tuesday.

“We have been warning in the past several years that al Qaeda itself and its associated affiliates and al Qaeda-inspired terrorists remain committed to striking the United States,” Blair said, “and in the past year we have some names that go behind these warnings.”

In the midst of these warnings, it is remarkable that not a single congressman questioned Blair or Panetta on reports that US intelligence agencies intervened to block the revocation of the visa of Umar Farouk Abdulmutallab, the man who attempted to blow up Northwest Flight 253.

There has been a systematic blackout by the media and the political establishment of congressional testimony by State Department official Patrick Kennedy since the publication by the Detroit News of an article last week under the headline, “Terror Suspect Kept Visa to Avoid Tipping off Larger Investigation.”

The News reported, “Patrick F. Kennedy, an undersecretary for management at the State Department, said Abdulmutallab’s visa wasn’t taken away because intelligence officials asked his agency not to deny a visa to the suspected terrorist over concerns that a denial would’ve foiled a larger investigation into al-Qaida threats against the United States.”

The intelligence agency in question was the National Counter Terrorism Center, which operates under the direction of the Director of National Intelligence—Dennis Blair.

The warnings from these same intelligence agencies of an imminent attack have an ominous character. Under the Bush administration, the government regularly manipulated warnings and threat assessments for political reasons—to justify unpopular policies, influence elections, or distract attention from embarrassing revelations. These warnings generally had very little basis in reality.

At the same time, any successful terrorist attack—whether or not it is facilitated by US intelligence agencies—will be seized on as a pretext for a further escalation of war and attack on democratic rights.

Sovereign debt fears trigger plunge in global markets

Sovereign debt fears trigger plunge in global markets

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Stock markets in the US, Europe and other regions plunged yesterday in response to growing fears over the size of sovereign debt in several countries. Greece is on the verge of national bankruptcy and international investors are sceptical about the government’s ability to implement the savage cuts to wages and social spending required to lower its deficit from 12.7 percent of gross domestic product to just 3 percent by 2012. Portugal and Spain face a similar situation.

Underlying the crisis in the eurozone is the question as to whether US capitalism can finance its mounting debts and remain solvent in the long term. On Wednesday, Moody’s Investors Service warned that America’s triple-A sovereign credit rating will soon come under pressure unless economic growth is higher than forecast, or the Obama administration moves to reduce the fiscal deficit by initiating new and deeper spending cuts. Moody’s warned that the current US debt trajectory was “clearly continuously upward”.

This year’s US budget deficit of nearly $1.6 trillion is equivalent to 10.6 percent of GDP, a record high since 1945. As a proportion of GDP, the US deficit is not far off Greece’s but is higher than Spain’s and twice the eurozone average. Only the dollar’s status as the world currency has so far prevented Washington from coming under the same pressures as Greece and other southern European countries.

Yesterday’s market decline began in Europe after European Central Bank President Jean-Claude Trichet issued what was reported as an “unusually stern warning” that other eurozone countries as well as Greece required “strong reforms” to cut their deficits. Spain’s leading share index closed 6 percent lower, Portuguese shares lost 5 percent, and the Greek index declined 3.3 percent. London’s FTSE100 finished down 2.2 percent to its lowest level since last November. The euro fell to a seven-month low against the dollar.

Yesterday’s sell-off on Wall Street was partially due to worse than expected employment data. Initial claims for jobless benefits rose last week, dampening expectations of any improvement in the official unemployment rate that is to be updated today. The Dow Jones index briefly fell below the 10,000 mark before closing at 10,002—2.6 percent lower. This was its worst one-day decline since April 2009. The Dow has lost 6.5 percent in the past fortnight. Other New York indexes also finished lower yesterday—the S&P 500 lost 3.1 percent and the Nasdaq 3 percent.

Asian markets were mostly lower. Japan’s Nikkei index was down 0.5 percent while China’s Shanghai Composite lost 0.3 percent.

A Barclays Capital spokesman said the European Union may need to invoke emergency treaty powers to guarantee Greek debt. “If not contained, this could result in a ‘Lehman-style’ tsunami spreading across much of the EU,” Barclays’ Julian Callow told the British Telegraph.

This threat underscores the reality that the measures taken in response to the 2008 financial crash—including unprecedented bank bailouts, coordinated global stimulus spending measures, and near-zero official interest rates in many economies—have only compounded the underlying contradictions that gave rise to the crisis. Moreover, the latest share market gyrations may point to the imminent winding back of the stimulatory fiscal and monetary policies that triggered something of a rebound in the financial sector’s fortunes over the past 10 months.

The International Monetary Fund recently warned governments that withdrawing emergency stimulus spending too soon risked triggering a “double dip” recession. “But if bond markets decide that sustained public spending and high deficits in some countries risk creating an unsustainable debt position, then they will take matters into their own hands,” a Wall Street Journal article noted. “Schroders on Wednesday became the latest big investor to warn that the debt markets are in no mood to forgive politicians who fail to grasp their concerns. Faced with this pressure from the markets, policy makers in highly indebted countries will face an unpalatable choice: cut voluntarily, and take the risk the recovery is damaged; or have cuts forced on them in the midst of a market crisis. They may not have long to make up their minds.”

This now applies to many of the world’s major economies. “The issue of sovereign debt dominated many discussions in the Davos World Economic Forum last week,” the Financial Times explained. “While much attention focussed on the fiscal crisis in Greece, considerable concern was also voiced about the outlook for countries such as the US and UK... At the heart of investor concerns is whether countries such as the US with its rising debt burdens has the political will, or the sense of consensus, to take decisive measures to cut debt.”

Put more directly, “investor concerns” centre on whether national governments are going to be able to ram through draconian cuts to public spending—including welfare support, social infrastructure, health, education, and public sector jobs and wages—in the face of overwhelming opposition within the population. The global financial elites are now being forced to take note of a new factor in the situation—the re-emergence of the class struggle, with the working class beginning to intervene in defence of its interests.

The Wall Street Journal yesterday noted that investors had initially welcomed the EU’s endorsement of the Greek government’s plan to slash the deficit, but the country’s bonds were promptly sold off again after trade unions announced that a general strike would be held on February 24.

One WSJ commentator, Paul Hannon, wrote a piece for the newspaper’s internet blog section titled “Is Greece Governable?” Bemoaning a lack of “obedience and sense of common purpose” among ordinary Greeks, Hannon equated “governability” with Prime Minister George Papandreou’s ability to crush resistance to his austerity drive. “Having questioned the governability of Greece, bond investors are now having the same doubts about some other countries with large budget deficits, which explains why the cost of insuring Portuguese government bonds against default has risen to a record high, and why investors are also selling Spanish government bonds,” the article continued.

Portuguese workers are reportedly staging their first protest against spending cuts today. The country’s minority social democratic government is in a major crisis, with opposition parties pressing a regional finance bill that could increase overall spending. Parliamentary Affairs Minister Jorge Lacao has warned that approval of the legislation “brings problems for governability”, adding that “what is at stake is the credibility of the Portuguese state at a time when it is absolutely indispensable that the state shows rigour in its public accounts”.

The question of “governability” is increasingly relevant to every advanced capitalist state, not just the most vulnerable eurozone economies, which have been dubbed the PIIGS (Portugal, Ireland, Italy, Greece, and Spain). That includes the US where unemployment is continuing to climb and the Obama administration is preparing massive inroads into social programs, including Social Security, Medicare and Medicaid.

A dangerous rise in US-China tensions

A dangerous rise in US-China tensions

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The US announcement of a $6.4 billion arms sale to Taiwan last Friday has provoked sharp opposition from China and a marked increase in tensions between the two major powers. The determination of both sides to take a tougher stance, regardless of the consequences, raises the spectre of an open rift in diplomatic and political relations.

On the part of the US, the decision to announce the arms sale, knowing full well that China would react, is a calculated move aimed at countering Beijing’s growing global economic and political influence. An article in the New York Times on Monday declared that the Obama administration had “started to push back”. By announcing the arms package, the US had “leveled a direct strike at the heart of the most sensitive diplomatic issue that has existed between the two countries since America affirmed the one-China policy in 1972.”

The New York Times explained that the sale was “doubly infuriating to Beijing, coming so soon after President Bush announced a similar arms deal with Taiwan in 2008, and right as Beijing and Taiwan are in the middle of a détente of sorts in their own relations”. The announcement came on the same day as US Secretary of State Hillary Clinton publicly criticised Beijing for not agreeing to new penalties against Iran over its nuclear programs. Washington rubbed further salt in the wound by insisting that a meeting between Obama and the Tibetan Dalai Lama would go ahead despite China’s objections.

China’s refusal to be bullied into taking a tougher stance against Iran is just one of the issues provoking frustration in Washington. During his visit to Beijing last year, Obama also pressed his Chinese counterparts on revaluing the yuan against the dollar and agreeing to definite limits on carbon emissions. Not only was the US president rebuffed over currency revaluation but lectured on the need for sound economic management. At the Copenhagen climate summit, the Chinese premier pointedly snubbed Obama, sending low-level officials to key, last minute negotiations.

Washington has chosen to “push back” on issues that are particularly sensitive to China. Steve Clemons, foreign policy director at the New America Foundation, told the New York Times: “China is feeling very confident these days, but the one thing that the Chinese freak out about consistently are sovereignty issues… So anything related to Taiwan or Tibet will get them going.”

Beijing regards Taiwan as a renegade province and has threatened to invade if Taipei ever declares formal independence. Washington backed the Kuomintang dictatorship established on the island after the 1949 Chinese revolution, but in 1972 reached a rapprochement with China. The arrangement was always fraught with contradictions: the US recognised Beijing’s control over one-China, including Taiwan, but continued to oppose any forcible reunification and to sell arms to Taipei despite China’s objections.

China is particularly sensitive over Taiwan because any move toward independence would encourage separatist movements in other parts of China—including Tibet and among the Uighur population of Xinjiang province. When the US first hinted at the Taiwan arms sale last month, Beijing showed its displeasure by testing its anti-ballistic missile system, destroying a missile sent into outer space.

Following last week’s announcement, the Chinese regime took the unprecedented step of threatening sanctions against US firms involved in the arms sale—a move that would impact on major American corporations such as Boeing, United Technologies, Lockheed Martin and Raytheon. Boeing is worried that it could lose out to rival Airbus in a market estimated at 3,770 new aircraft worth $400 billion by 2028. China also announced an immediate freeze on military exchanges with the US and summoned the US ambassador in Beijing to issue a formal protest.

Trade tensions between the US and China had already been rising. Beijing has reacted angrily to Washington’s imposition of tariffs on Chinese steel product and tyres, threatening retaliation of its own. President Obama, however, is pressing on, telling Senate Democrats this week that his administration would “get much tougher about the enforcement of existing [trade] rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways”. In this heated atmosphere, sanctions by China on Boeing could ignite a full-blown trade war.

The escalating tensions are an expression of deep-going changes in geopolitics. The US as a declining but still dominant power faces growing economic and strategic challenges from rising China in every corner of the globe as Beijing seeks secure access to resources and markets. The US is aggressively attempting to consolidate its neo-colonial occupations in Afghanistan and Iraq in an effort to secure a hegemonic position in the key energy rich-regions of the Middle East and Central Asia. China is trying to consolidate its own alliances to keep the US out of what it regards as its Central Asian “backyard” and to guarantee vital oil and gas supplies.

After assuming office a year ago in the midst of the global financial crisis, Obama sought China’s assistance. Faced with huge deficits, Obama officials appealed to Beijing to keep purchasing US bonds and brought Beijing into discussions of the crisis through the G20 grouping. Some optimists even speculated about the formation of a G2—the US and China—that would resolve the world’s economic and problems in the spirit of cooperation.

The confrontational approach now adopted by the US, and China’s determined response, underscore the intractable economic, political and social contradictions facing the capitalist class in both countries. With double-digit unemployment at home and the necessity of making huge budget cutbacks, Obama is aggressively playing the China card to advantage the American economy at China’s expense and politically to divert attention from its own responsibility for the deepening social crisis in the United States.

As for China, despite its “booming” growth rate, Beijing confronts rising unemployment and mounting social unrest, which will be further compounded if its key export industries are hit by protectionist measures. The regime’s huge stimulus measures have led to an orgy of speculation in shares and real estate, raising fears of a financial collapse. Like Obama, Chinese leaders are playing the chauvinist card, declaring that they will defend China’s interests, in order to obscure their role in creating one of the most socially unequal societies in the world.

The very real danger is that Taiwan, Tibet or another issue can become the flashpoint for a rapid breakdown of relations and the eruption of trade war and ultimately military conflict—as occurred during the last great crisis of world capitalism in the 1930s.

The Corporate Takeover of U.S. Democracy

The Corporate Takeover of U.S. Democracy

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Jan. 21, 2010, will go down as a dark day in the history of U.S. democracy, and its decline.

On that day the U.S. Supreme Court ruled that the government may not ban corporations from political spending on elections--a decision that profoundly affects government policy, both domestic and international.

The decision heralds even further corporate takeover of the U.S. political system.

To the editors of The New York Times, the ruling "strikes at the heart of democracy" by having "paved the way for corporations to use their vast treasuries to overwhelm elections and intimidate elected officials into doing their bidding."

The court was split, 5-4, with the four reactionary judges (misleadingly called "conservative") joined by Justice Anthony M. Kennedy. Chief Justice John G. Roberts Jr. selected a case that could easily have been settled on narrow grounds and maneuvered the court into using it to push through a far-reaching decision that overturns a century of precedents restricting corporate contributions to federal campaigns.

Now corporate managers can in effect buy elections directly, bypassing more complex indirect means. It is well-known that corporate contributions, sometimes packaged in complex ways, can tip the balance in elections, hence driving policy. The court has just handed much more power to the small sector of the population that dominates the economy.

Political economist Thomas Ferguson's "investment theory of politics" is a very successful predictor of government policy over a long period. The theory interprets elections as occasions on which segments of private sector power coalesce to invest to control the state.

The Jan. 21 decision only reinforces the means to undermine functioning democracy.

The background is enlightening. In his dissent, Justice John Paul Stevens acknowledged that "we have long since held that corporations are covered by the First Amendment"--the constitutional guarantee of free speech, which would include support for political candidates.

In the early 20th century, legal theorists and courts implemented the court's 1886 decision that corporations--these "collectivist legal entities"--have the same rights as persons of flesh and blood.

This attack on classical liberalism was sharply condemned by the vanishing breed of conservatives. Christopher G. Tiedeman described the principle as "a menace to the liberty of the individual, and to the stability of the American states as popular governments."

Morton Horwitz writes in his standard legal history that the concept of corporate personhood evolved alongside the shift of power from shareholders to managers, and finally to the doctrine that "the powers of the board of directors "are identical with the powers of the corporation." In later years, corporate rights were expanded far beyond those of persons, notably by the mislabeled "free trade agreements." Under these agreements, for example, if General Motors establishes a plant in Mexico, it can demand to be treated just like a Mexican business ("national treatment")--quite unlike a Mexican of flesh and blood who might seek "national treatment" in New York, or even minimal human rights.

A century ago, Woodrow Wilson, then an academic, described an America in which "comparatively small groups of men," corporate managers, "wield a power and control over the wealth and the business operations of the country," becoming "rivals of the government itself."

In reality, these "small groups" increasingly have become government's masters. The Roberts court gives them even greater scope.

The Jan. 21 decision came three days after another victory for wealth and power: the election of Republican candidate Scott Brown to replace the late Sen. Edward M. Kennedy, the "liberal lion" of Massachusetts. Brown's election was depicted as a "populist upsurge" against the liberal elitists who run the government.

The voting data reveal a rather different story.

High turnouts in the wealthy suburbs, and low ones in largely Democratic urban areas, helped elect Brown. "Fifty-five percent of Republican voters said they were `very interested' in the election," The Wall St. Journal/NBC poll reported, "compared with 38 percent of Democrats."

So the results were indeed an uprising against President Obama's policies: For the wealthy, he was not doing enough to enrich them further, while for the poorer sectors, he was doing too much to achieve that end.

The popular anger is quite understandable, given that the banks are thriving, thanks to bailouts, while unemployment has risen to 10 percent.

In manufacturing, one in six is out of work--unemployment at the level of the Great Depression. With the increasing financialization of the economy and the hollowing out of productive industry, prospects are bleak for recovering the kinds of jobs that were lost.

Brown presented himself as the 41st vote against healthcare--that is, the vote that could undermine majority rule in the U.S. Senate.

It is true that Obama's healthcare program was a factor in the Massachusetts election. The headlines are correct when they report that the public is turning against the program.

The poll figures explain why: The bill does not go far enough. The Wall St. Journal/NBC poll found that a majority of voters disapprove of the handling of healthcare both by the Republicans and by Obama.

These figures align with recent nationwide polls. The public option was favored by 56 percent of those polled, and the Medicare buy-in at age 55 by 64 percent; both programs were abandoned.

Eighty-five percent believe that the government should have the right to negotiate drug prices, as in other countries; Obama guaranteed Big Pharma that he would not pursue that option.

Large majorities favor cost-cutting, which makes good sense: U.S. per capita costs for healthcare are about twice those of other industrial countries, and health outcomes are at the low end.

But cost-cutting cannot be seriously undertaken when largesse is showered on the drug companies, and healthcare is in the hands of virtually unregulated private insurers--a costly system peculiar to the U.S.

The Jan. 21 decision raises significant new barriers to overcoming the serious crisis of healthcare, or to addressing such critical issues as the looming environmental and energy crises. The gap between public opinion and public policy looms larger. And the damage to American democracy can hardly be overestimated.