Wednesday, February 10, 2010

Housing crisis deepens in New York City

Housing crisis deepens in New York City

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As big investors face bankruptcy or walk away from failed real estate deals, renters are joining the many thousands of homeowners in New York City confronting the impact of the foreclosure crisis. Thousands of tenants in large multi-dwelling buildings face deteriorating conditions and an uncertain future as their landlords are unable to meet debt payments.

The massive Stuyvesant Town-Peter Cooper Village complex in lower Manhattan along the East River, consisting of 110 buildings and more than 11,000 apartments, is the largest and most-publicized case, but it is far from the only development affected by the crisis.

Stuyvesant Town and Peter Cooper Village have seen the recent collapse of the $5.4 billion deal that brought in new owners only three years ago. According to the city’s Department of Housing Preservation and Development, however, there are more than 100,000 apartments in the city, housing as many as 300,000 people and perhaps more, that are in buildings that are “underwater,” with their landlords owing more than their current worth.

Built more than 60 years ago by the Metropolitan Life Insurance Company, Stuyvesant Town and the smaller Peter Cooper Village comprise a community of some 25,000 people. For decades, they were known for their affordability for working class New Yorkers, although many of the apartments have been deregulated in recent years with their rents skyrocketing in line with the market in the increasingly wealthy area.

More than three years ago, as the real estate asset bubble continued to grow, MetLife put the developments up for sale, and the giant Tishman Speyer and BlackRock Realty companies put together a $5.4 billion deal, the biggest real estate transaction in US history. Existing rental income came nowhere near meeting the massive loan payments required by this deal, but the new owners, counting on a continuation of the real estate boom, planned to get rid of thousands of tenants and welcome wealthy new renters who were willing to pay two and three times current rents.

These plans ran into difficulty almost immediately, as tenants resisted strong-arm tactics seeking their removal, and the turnover of apartments fell below estimates. The deal was blown to smithereens by the financial and housing collapse that began in 2008 and continues today. Rents fell fast, especially for higher-priced apartments. The owners defaulted on $4.4 billion in scheduled loan payments in January and then announced that they were turning Stuyvesant Town and Peter Cooper Village over to their creditors, simply walking away from the properties.

BlackRock and Tishman Speyer will each lose their original investment of $112 million, but secondary investors who bought into the deal, including such diverse entities as the Church of England, the government of Singapore and the California state pension system, after becoming enmeshed in what amounted to a kind of legal Ponzi scheme, stand in many cases to lose much more.

“The fact that they have given the keys back is going to have a chilling effect,” one real estate analyst told the New York Times. “There’ll be some other spectacular blowups, but this will be at the top of the pecking order,” said another investor.

Further complicating the situation, New York State’s Court of Appeals ruled last year that the owners had illegally raised the rents on 4,400 apartments. Negotiations on $215 million in rent rebates were ongoing as Tishman Speyer and BlackRock announced their intention to abandon the properties.

The foreclosure crisis is affecting many thousands of tenants in addition to the single-family homeowners, mostly in New York’s outer boroughs, who have lost jobs and now face foreclosure on their homes. Just days after the latest Stuyvesant Town announcement, a state judge ordered the foreclosure sale of another landmark development in New York, the Riverton Houses in Harlem. With 1,228 apartments in seven buildings, this complex, between 135th and 138th Streets, has been home to sections of New York’s African-American middle class and elected officials like former Mayor David Dinkins since its construction in the 1940s, also by Metropolitan Life.

Like Stuyvesant Town, Riverton was snapped up a few years ago by another multimillionaire developer, who hoped to deregulate half or more of the apartments and came up far short as the financial collapse took its toll.

In Riverton’s case, the developer, Stellar Management, reportedly made a killing before the real estate bubble burst. Refinancing of the deal in 2006 allowed for return of the original $44 million investment plus tens of millions of dollars in profit.

This highlights the class gulf between the wealthy dealmakers and the vast majority of tenants, who are left to contend with the consequences of the failed gambles.

Alexander H. Schmidt, a lawyer who represents Stuyvesant Town tenants, said, “This is not a blow to the tenants; it doesn’t change or alter anything of significance in the case. Whoever the owners of the property are, they will be liable for the tenants’ claims…. Tenants have nothing to fear.”

The tenants remain in limbo, however, unsure of the level of maintenance and service they can expect in the immediate and longer-range future, of when or even if they will see the rent money they are owed, and also facing the possibility that new owners will attempt to continue the process of gentrification and massive rent increases. As another observer told the press in connection with the Riverton foreclosure, “We’re about to see a wave of foreclosure sales throughout New York City. This is the first. For tenants, there’s good news and bad news. Excessive debt will be eliminated, but they will be at the mercy of the auction process as to who the new owner will be.”

Yet another prominent example of the crisis facing tenants is the fate of 1520 Sedgwick Avenue in the Bronx, a 102-unit building that owes its prominence partly to the fact that is considered by many to have played a significant role in the evolution of hip-hop music in the 1970s. The Sedgwick Avenue building was recently discussed in a report in the Times. It was well maintained and affordable for decades, but it changed hands in 2008 when its owner left the state’s Mitchell-Lama rent-protection program and sold it to real estate investors. In the year since the sale, the number of violations at the building has jumped from 82 to 598. Longtime tenants complain bitterly about deteriorating conditions, and a dozen families have either moved or plan to in the near future. More than 20 tenants have filed a lawsuit against the current owners, citing these violations and conditions that include flooding toilets, dirty floors, no repair service and other complaints.

The Sedgwick Avenue building was bought as an investment vehicle by a private equity group that included Mark Karasick, a prominent investor who had earlier sold the Bank of America Center in San Francisco to a group that included Donald Trump. The fate of the Bronx tenants clearly meant little to these investors.

The building is now among the many hundreds in the city that are endangered. According to the city’s housing agency, there are about 4,000 apartments that are almost uninhabitable because of these conditions, at least 90,000 apartments that are in danger but not facing immediate collapse, and 16,000 apartments, including the 100 in the Sedgwick Avenue building, that are in growing disrepair.

Goldman Sachs made billions by pushing AIG to bankruptcy

Goldman Sachs made billions by pushing AIG to bankruptcy

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An investigative report published Sunday by the New York Times provides a glimpse of the predatory practices of major Wall Street banks that played a central role in the financial meltdown and global economic crisis.

The article, headlined “Testy Conflict With Goldman Helped Push AIG to Precipice,” documents the role of Goldman Sachs, the biggest and most profitable US investment bank, in pushing the insurance giant American International Group (AIG) to the brink of bankruptcy.

At the height of the financial crisis, in mid-September 2008, the Bush administration stepped in to rescue AIG with $85 billion in taxpayer money. Since then, under Bush and then Obama, government aid to the company has grown to $182.3 billion. The firm is currently 80 percent owned by the US Treasury.

AIG has used its government bailout to award its top traders and executives hundreds of millions of dollars in bonuses. In the face of public outrage, the Obama administration has intervened to shield the company and block any moves to limit these pay awards.

The Times article, by Gretchen Morgenson and Louise Story, is based on a review of internal AIG documents and a recording of a January 28, 2008, conference call between Goldman Sachs executives and AIG. It describes how Goldman, in the two years preceding AIG’s bailout, worked to undermine investor confidence in the insurer, then the biggest seller of credit default swap contracts, and drive down the market value of mortgage-backed securities.

During this period, Goldman was betting on a collapse of the housing bubble, which it had helped inflate by promoting sub-prime mortgages. Even as Goldman’s top traders were structuring credit default contracts with AIG on mortgage-backed securities in a manner that enabled the bank to profit from a decline in the price of these securities, Goldman was making money by purchasing the same type of securities for clients and charging fees for bundling home loans into so-called “collateralized debt obligations” and selling the mortgage-backed CDOs into the market.

By means of the unregulated multi-trillion-dollar credit default swap market, banks and corporations purchase insurance against the default of bonds issued by other banks, companies and governments. If a seller of swaps—AIG was by far the biggest—goes bankrupt, its counterparties stand to lose billions.

By the fall of 2008, AIG was vastly over-leveraged and hemorrhaging cash due to demands from its counterparties, including major banks and financial firms in the US and internationally, that it fulfill its guarantee to make good on mortgage-backed CDO losses. Its failure threatened to tip some of the biggest banks, including Goldman and Morgan Stanley in the US, into bankruptcy.

The Times article suggests that Goldman was using its close relationship with AIG to manipulate the housing market and encourage a panic selloff of mortgage-backed assets, in part by pressing the insurer to make billions of dollars in collateral payments based on Goldman’s “low-ball” estimates of the value of mortgage-backed CDOs it had insured with AIG.

The article notes that Elias Habayeb, an AIG accounting executive, testified before Congress in January that Goldman’s payment demands were a major factor in AIG’s downfall.

The implication is that the financial crash was not simply the result of disembodied “market forces.” Highly conscious profit-driven calculations by financial giants such as Goldman played a critical role.

The Times reports: “The SEC [Securities and Exchange Commission] wants to know whether any of [Goldman’s demands on AIG] improperly distressed the mortgage market, according to people briefed on the matter who requested anonymity because the inquiry was intended to be confidential.”

The authors write, “Well before the federal government bailed out AIG, in September 2008, Goldman’s demands for billions of dollars from the insurer helped put it in a precarious financial position by bleeding much needed cash.”

They continue, “Goldman stood to gain from the housing market’s implosion because in late 2006 the firm had begun to make huge trades that would pay off if the mortgage market soured. The further mortgage securities’ prices fell, the greater were Goldman’s profits.”

The article indicates that Goldman made billions of dollars by extorting cash from AIG and then made billions more at taxpayer expense from the government bailout of the insurer. According to the Times, the bank collected over $7 billion from AIG in just one year before the government bailout of the insurer, and received another $12.9 billion when the government, as part of the federal rescue of AIG, covered in full the money AIG owed Goldman on insured housing securities.

At the time of the AIG bailout, then-Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and then-President of the Federal Reserve Bank of New York Timothy Geithner secretly funneled a total of $62 billion from the rescue of the insurer to AIG’s major bank counterparties. Goldman was by far the biggest beneficiary of this back-door taxpayer bailout of the banks.

Other recipients included Morgan Stanley and JPMorgan Chase, each of which netted billions of dollars in the furtive transaction. The French bank Société Générale received $11 billion. According to the Times article, a portion of that money was subsequently transferred to Goldman Sachs under an agreement the two banks had made.

The Times reports that in December 2006 Goldman began to increase its negative bets on the mortgage market. Some months later it began to demand that AIG pay it billions of dollars on mortgage-backed securities the bank valued considerably lower than either AIG or third-party entities. AIG objected to Goldman’s valuations and attempted for more than year to resolve the dispute, to no avail.

The article cites a January 28, 2008, conference call between 21 Goldman executives and AIG that lasted more than an hour and ended without any retreat by Goldman from its hard-line position. The Times reports AIG’s suspicions that Goldman was encouraging other banks to take a similarly aggressive position.

Finally, on August 18, 2008, “Goldman’s equity research department published an in-depth report on AIG. The analysts advised the firm’s clients to avoid the stock because of a ‘downward spiral which is likely to ensue as more actual cash losses emanate’ from the insurer’s financial products unit.” This was tantamount to a death sentence for the insurance firm.

While the Times article paints a damning picture of the predatory role of Goldman Sachs, it omits any mention of the most crucial aspect of the story. What emboldened Goldman to pursue a course that could easily have backfired and driven it into bankruptcy along with AIG?

The answer is its certainty that the government would step in to cover its potential losses from an AIG collapse. At the heart of the Goldman saga is the incestuous and corrupt relationship between the most powerful Wall Street firms and the government.

For many years, the subordination of the US political system—including both parties and extending from the White House to Congress, to the courts and the media, to the financial elite—has been exemplified by the role of Goldman in Washington. Known on Wall Street as “Government Sachs,” the bank has funneled top executives into the highest government positions, in Democratic as well as Republican administrations.

The Obama administration is stacked with Wall Street insiders, including protégés of Robert Rubin, the former top Goldman executive who served as Bill Clinton’s treasury secretary. These include Obama’s chief economic adviser, Lawrence Summers, and his treasury secretary, Timothy Geithner.

Henry Paulson was chairman of the board and CEO of Goldman before he took the post of treasury secretary under George Bush in June of 2006. Paulson, working closely with then-New York Fed President Geithner, engineered the bank bailout in the fall of 2008, including the AIG rescue that was used to cover the potential losses of Goldman and AIG’s other bank counterparties.

With Paulson at the head of the Treasury Department, Goldman launched its strategy of profiting from and encouraging the collapse of the housing market and AIG. Since the AIG bailout, it has been revealed that Paulson was in constant communication with his successor at the helm of Goldman, Lloyd Blankfein, during the height of the financial meltdown in the fall of 2008.

Paulson, working with Geithner and Bernanke, not only organized the backdoor bailout of the banks via the AIG rescue, he personally fired the then-CEO of AIG and replaced him with a Goldman board member, Edward M. Liddy, who at the time owned Goldman shares now valued at more than $4 million.

Geithner has been implicated in efforts, recently revealed in emails between the New York Fed and AIG, to conceal the use of taxpayer funds handed to AIG to pay off its bank counterparties at 100 cents on the dollar. Obama’s elevation of this long-time Wall Street fixer to the post of treasury secretary unequivocally demonstrated the class character of his administration as an instrument of the American financial aristocracy.

These facts confirm that the financial crisis was deliberately exploited to usher in a fundamental restructuring of class relations in the US, aimed at resolving the crisis of the capitalist system through the impoverishment of the American and international working class.

The actions of Wall Street banks such as Goldman and their government accomplices are criminal in the full sense of the word. As the World Socialist Web Site wrote of Paulson last August (See: “Paulson and Goldman Sachs: A dirty secret of the Wall Street bailout”), “There is every basis for launching a criminal investigation, and aside from potential violations of law, the destructive social consequences for hundreds of millions of people in the US and around the world of his policies—which are being continued by Obama—are incalculable.

“Paulson, however, is not an aberration. The multi-millionaire banker turned cabinet official is rather an embodiment of the domination of social and political life by a financial oligarchy, whose leading representatives partake in the revolving door between the corporate suite and the highest levels of the state. This Augean stable of reaction and corruption can be cleaned out only through the independent mobilization of the working class on the basis of a revolutionary socialist program.”

US pushes for new sanctions against Iran

US pushes for new sanctions against Iran

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The Obama administration is pressing for the rapid imposition of new punitive UN sanctions against Iran over its nuclear programs. As a pretext, the US seized on Sunday’s announcement by Iranian President Mahmoud Ahmadinejad that the country would begin enriching uranium to the 20 percent level needed to fuel its research reactor in Tehran.

US Defence Secretary Robert Gates told Fox News on Monday that Washington would press for new sanctions within “weeks, not months”. The deadline was reiterated yesterday by Pentagon spokesman Geoff Morell who added: “In all his meetings he [Gates] discussed this sense of urgency.”

At a joint press conference with Gates on Monday, French Defence Minister Herve Morin stressed that France was in “complete agreement” with the US, saying there was no option other than more sanctions. French Foreign Minister Bernard Kouchner denounced Ahmadinejad’s announcement as “real blackmail”, adding: “The only thing that we can do, alas, is apply sanctions, given that negotiations are not possible.” French President Nicolas Sarkozy later declared that Iran should face “strong sanctions”.

The US/European push for new sanctions has been prepared for some time. President Obama initially set the end of December as the deadline for Iran to accept a deal sponsored by the International Atomic Energy Agency (IAEA) to ship the bulk of its low-enriched uranium to Russia and France for further enrichment and processing into fuel rods for the Tehran reactor. The US subsequently delayed any action to coincide with France taking over this month as president of the UN Security Council from China, which has resisted further sanctions.

The renewed push is being accompanied by a strident campaign in the US and international media accusing Iran of taking a further step toward building nuclear weapons—an allegation that Tehran has repeatedly denied. Iran has a stockpile of uranium enriched to around 4 percent, but is preparing to enrich it to the 20 percent required for the Tehran reactor’s fuel rods. Weapons-grade uranium requires enrichment to about 90 percent or higher.

To raise suspicions about Tehran’s plans, US officials questioned Iran’s ability to transform the enriched uranium into reactor fuel rods. The US ambassador to the IAEA, Glyn Davies, told the New York Times that Iran could not fabricate reactor fuel in time to ensure an uninterrupted supply of medical isotopes. “This calls into question the true motivation of going from 3.5 percent to 20 percent enrichment,” he said.

The US, however, has deliberately placed Iran in this position and could justifiably be accused of blackmail. The Obama administration backed the IAEA fuel-swap deal last year in order to eliminate most of Iran’s present stockpile of enriched uranium. But it refused point blank to amend the agreement after the Ahmadinejad administration proposed changes to counter widespread criticism in Tehran. Last week Washington dismissed out of hand statements by Ahmadinejad that Iran was still open to finalising the deal.

In other words, the US has left Iran with no other options but to agree to the arrangement and face further criticism at home, or to try to manufacture fuel rods itself. If it is unable to do so, the impact will be severe. A major function of the Tehran Research Reactor is to produce medical isotopes for an estimated 850,000 kidney, heart and cancer patients. If the reactor is not refuelled, the isotopes will have to be imported, making them more expensive and their supply more uncertain.

The US already has the support of most of the so-called P5+1—the permanent members of the UN Security Council plus Germany—for further sanctions. Along with Britain and Germany, Russia has indicated its backing. The Russian foreign ministry issued a statement declaring that Iran’s actions “raise doubts” about the purpose of its nuclear programs. Nikolai Patrushev, secretary of presidential Security Council, hinted at support for sanctions, saying: “Political-diplomatic methods are important for a resolution, but there is a limit to everything.”

China, which wields a veto in the UN Security Council, has continued to resist further punitive measures. In Europe for the Munich security conference, Chinese Foreign Minister Yang Jiechi told the media: “To talk about sanctions at the moment will complicate the situation and might stand in the way of finding a diplomatic solution.” The foreign ministry issued a statement urging all sides to conclude the IAEA deal.

The international media continues to highlight the substantial economic interests that China has at stake in Iran. The Financial Times published an article yesterday reporting that China had overtaken the European Union as Iran’s largest trading partner, if transshipments via the Gulf States were taken into account. Total Iran-China trade is estimated to be at least $36.5 billion and Iran accounts for 11 percent of China’s energy needs.

It is certainly true that China is acting in its self-interest by resisting sanctions on Iran. But the US is doing likewise. After 30 years of unilateral sanctions, the US has little investment in or trade with Iran. Sanctions would therefore impact most heavily on Washington’s European and Asian rivals. At the same time, the US is aiming to fashion a regime in Tehran more conducive to its economic and strategic ambitions in Iran and throughout the energy-rich regions of the Middle East and Central Asia.

The sanctions regime proposed by the Obama administration is also determined by its political objectives. Initially, US officials proposed “crippling” sanctions, including a ban on the sale of refined petroleum products to Iran, which relies on imports for about 40 percent of its gasoline needs. Now Washington is focussing on Iran’s central bank, the Revolutionary Guard Corps, shipping firms and the energy sector as possible targets and cynically declaring that it wants to avoid hurting ordinary Iranians.

The main purpose of these more refined sanctions is to avoid alienating sections of the middle class that backed opposition figures, including defeated presidential candidate Mir Hossein Moussavi. An article in Wall Street Journal yesterday summed up the challenge to the US as weaving “together three disparate [policy] strands: engagement with the regime in Iran, economic sanctions against the same regime and at least subtle support for those opposing the regime”.

American support of Ahmadinejad’s opponents is not so subtle. Large marches of pro-government and opposition supporters are expected in Iran tomorrow to mark the anniversary of the 1979 revolution that brought the Islamic regime to power. Leaving no doubt where they stand, the US and EU issued a joint statement on Monday, demanding the Iranian government “end its abuses against its own people [and] hold accountable those who have committed abuses”.

In tailoring its punitive measures, the Obama administration is also compelled to keep Israel, the chief US ally in the Middle East, onside. Like the US, Israel has repeatedly threatened to take military action to prevent Iran from becoming a nuclear-armed power. Responding to Iran’s decision to produce more highly enriched uranium, Israeli Prime Minister Benjamin Netanyahu declared: “Iran is racing forward to produce nuclear weapons. This means crippling sanctions and these sanctions must be applied right now.”

In his comments in France, Gates declared that he still wanted “to try and find a peaceful way to resolve the issue”. Earlier in Italy, he described Iran’s actions as “disappointing” then added: “I believe there is still time for sanctions and pressure to work.” The obvious implication is that should sanctions fail, the only option left is the military one. Such threats serve multiple purposes, including reassuring Israel and obliquely warning China of worse consequences if it fails to support sanctions.

Such reckless brinkmanship can easily spill over into actual military conflict that threatens to embroil the broader region. That danger is heightened as Iran becomes the focus of sharpening rivalry on the international stage between the major powers—especially the US and China.

The class divide between US auto workers and the UAW

The class divide between US auto workers and the UAW

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Late last month, in an incident that revealed the irreconcilable conflict between the working class and the trade union apparatus, hundreds of workers clashed with officials of the United Auto Workers (UAW) at a meeting in the Bay Area, California town of Fremont.

The episode, which was captured on video by rank-and-file union members (See YouTube video), was an expression of the class antagonism between the workers and the UAW, which functions as an industrial policeman for the corporations and the government.

Anger boiled over against UAW Local 2244 officials who have done nothing to stop the closure of the New United Motor Manufacturing (NUMMI) plant, or even secure an adequate severance package for the 4,500 workers who will lose their jobs when the factory ceases production on March 31.

The fate of the factory—the last remaining auto assembly plant in California—was sealed last June, when General Motors liquidated its share in the joint GM-Toyota operation as part of the forced bankruptcy and restructuring of GM at the hands of the Obama administration.

While giving the US auto company a free ride, the UAW launched a chauvinist campaign against Toyota, including a petition drive calling for a boycott of the company and protests in front of the Japanese embassy in Washington urging the White House to launch trade war measures against Asian auto makers.

This reactionary campaign has won little support among NUMMI workers, some of whom have charged that the UAW is not pressing GM for severance payments because the union has a 17.5 percent ownership stake in the company. While doing nothing to stop the plant closing, the nationalist campaign appears aimed at extorting a $72 million payment from Toyota to a union-controlled retiree health care investment fund.

The anger of workers against the UAW exploded at a January 24 meeting of the Fremont local attended by some 400 union members. The eruption began during comments by UAW Local 2244 Bargaining Chairman Javier Contreras, who was booed and jeered as he attempted to present details of the severance deal. Contreras did not try to conceal his contempt for the workers, declaring that no matter how many spoke out at the meeting, “at the end of the day, on April 1, everybody in this room will not have a job, no matter what you say.”

When an older worker demanded to know “where the hell” the union officials had been for the last six months, Contreras shouted, “Shut the f— up, you motherf——!” At that point, furious workers rushed to the front of the room and chairs began to fly. Contreras and other UAW personnel gathered around the podium to defend themselves against the workers, while other officials pleaded for calm and called in the police.

The event was the latest sign of growing anger and militancy in the working class that foreshadows a renewal of the class struggle, as workers resist the drive to make them pay for the crisis of American capitalism and the multitrillion-dollar bailout of Wall Street. Late last year, Ford workers overwhelmingly rejected a concessions contract pushed by the UAW. In towns and cities across the country, hundreds are turning out at public meetings to protest the closure of schools and cuts in basic social services.

The clash at the Fremont meeting revealed fundamental class divisions. Behind the podium were the bureaucrats-turned-executives of the UAW, the corrupt and well-paid junior partners of the auto companies and the ruling elite. On the other side were auto workers whose opposition to the attack on their jobs and living standards expresses the common interests of the entire working class.

After decades of betrayals, culminating in the complicity of the UAW in mass layoffs, plant closures and the gutting of wages and benefits at GM and Chrysler, workers rightfully look upon this organization as alien and hostile to their interests.

The critical question, however, is what political conclusions are to be drawn and what perspective must the working class adopt to assert its interests.

The degeneration of the UAW and its transformation into an adjunct of the corporations and the government are rooted in the union’s defense of the capitalist profit system and its promotion of nationalism. The alternative for auto workers and the American working class as a whole is to unite workers in the US and internationally in the struggle for socialism.

The profit system has failed, and so have all “labor” organizations that subordinate the working class to that system and the modern-day plutocrats who preside over it.

The so-called unions are auxiliary agencies for the exploitation and impoverishment of the workers, not their defense. They cannot be reformed.

The precondition of any serious struggle by auto workers is a break with the UAW and the building of new organizations of the rank-and-file, independent of the official trade unions, to mobilize mass resistance to plant closings, wage and benefit cuts and the assault on social programs.

This must be guided by a new political strategy. The working class must reject the unions’ alliance with the Democratic Party, which is no less a political tool of the financial aristocracy than the Republican Party, as the Obama administration has so clearly demonstrated.

Haiti, Forgive Us

Haiti, Forgive Us

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The tragedy of the Haitian earthquake continues to unfold, with slow delivery of aid, the horrific number of amputations performed out of desperate medical necessity, more than a million homeless, perhaps 240,000 dead, hunger, dehydration, the emergence of infections and waterborne diseases, and the approach of the rainy season, which will be followed by the hurricane season. Haiti has suffered a massive blow, an earthquake for which its infrastructure was not prepared, after decades—no, centuries—of military and economic manipulation by foreign governments, most notably the United States and France.

Haiti was a slave plantation controlled by France. In 1804, inspired by Toussaint L’Ouverture (after whom the now barely functioning airport in Port-au-Prince is named), the slaves rebelled, founding the world’s first black republic. Under military threat from France in 1825, Haiti agreed to pay reparations to France for lost “property,” including slaves that French owners lost in the rebellion. It was either agree to pay the reparations or have France invade Haiti and reimpose slavery. Many Haitians believe that original debt, which Haiti dutifully paid through World War II, committed Haiti to a future of poverty that it has never been able to escape. (While France, as part of the deal, recognized Haiti’s sovereignty, slave-owning politicians in the United States, like Thomas Jefferson, refused to recognize the black republic, afraid it would inspire a slave revolt here. The U.S. withheld formal recognition until 1862.)

The U.S. Marines occupied Haiti from 1915 until 1934. In 1956, Francois “Papa Doc” Duvalier took control in a military coup and declared himself president for life, initiating a period of brutal, bloody dictatorship, with U.S. support. Papa Doc died in 1971, at which point his 19-year-old son, Jean-Claude “Baby Doc” Duvalier, took over, maintaining the same violent dictatorial control until he was driven into exile by popular revolt in 1986. Jubilee USA, a network calling for elimination of debt owed by poor countries, estimates that Baby Doc alone diverted at least $500 million in public funds to his private accounts, and that 45 percent of Haiti’s debt in recent decades was accumulated during the corrupt reign of the Duvaliers.

Loans from the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) imposed “structural adjustment” conditions on Haiti, opening its economy to cheap U.S. agricultural products. Farmers, unable to compete, stopped growing rice and moved to the cities to earn low wages, if they were lucky enough to get one of the scarce sweatshop jobs. People in the highlands were driven to deforest the hills, converting wood into salable charcoal, which created an ecological crisis—destabilizing hillsides, increasing the destructiveness of earthquakes and causing landslides during the rainy season.

Haiti’s first democratically elected president was Jean-Bertrand Aristide, a Catholic priest committed to the poor. He was elected in 1990, then ousted in a military coup in 1991. In 1994, with Haitian refugees flooding into Florida, the Clinton administration was forced to restore Aristide to power, but only with additional structural-adjustment demands. Aristide was re-elected in 2000, only to be deposed again in a U.S.-backed coup in 2004, Haiti’s bicentennial.

The destruction of Haiti’s rice industry, which was replaced with U.S. government-subsidized rice that Haitians refer to as “Miami rice,” as well as the sale of critical state-owned enterprises, like Haiti’s sole flour mill and cement factory, have left the country dependent on foreign trade and aid, keeping Haiti at a permanent disadvantage.

It is critical now to cancel Haiti’s ongoing foreign debt, so that the country can devote its scant resources to rebuilding and not to repaying debt. The G-7 finance ministers met in Canada this week and announced the forgiveness of the bilateral debt between member states and Haiti. But the World Bank, IMF and IDB debts remain (the IMF controversially promised a $100 million loan after the earthquake, eliciting condemnation, and has since pledged to convert it to a grant).

Earthquakes alone do not create disasters of the scale now experienced in Haiti. The wealthy nations have for too long exploited Haiti, denying it the right to develop in a secure, sovereign, sustainable way. The global outpouring of support for Haitians must be matched by long-term, unrestricted grants of aid, and immediate forgiveness of all that country’s debt. Given their role in Haiti’s plight, the United States, France and other industrialized nations should be the ones seeking forgiveness.

Give Peace Spending a Chance

Give Peace Spending a Chance

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Last week, when President Obama requested the largest-ever military budget since World War II, hardly anyone batted an eyelash. The Bush years immunized many of us to the shock of colossal defense spending bills skating across the table - and zipping through Congress to sure passage - regardless of shriveling public approval.

Perhaps, more eyelashes would have started batting if Americans realized that this year the US will spend more on its occupation of Afghanistan alone than any other country except China spends on its entire defense budget.

There's no question that war spending for Iraq and Afghanistan will top $1 trillion after Obama's request is implemented. That's enough money to stretch - in dollar bills - from the earth to the sun. It's also enough to pay for ten years of universal primary education for all of the world's children, according to UN statistics.

It costs $1 million to keep one soldier in Afghanistan for a year. The same amount of money could build 30 or 40 girls' schools in Afghanistan - one surefire way to reduce the number of men joining the Taliban over the long term.

This simple numbers game begs a painful question: as we fling ever more money toward war and occupation, where's the funding for peace?

The answer: it's there, but you'll miss it if you blink. US defense spending has long been notoriously imbalanced between military and nonmilitary priorities, and Obama's 2011 budget is no exception. In fact, it's even worse than usual. Military spending towers over spending on preventative measures by a ratio of 12 to 1, according to statistics from the Institute on Policy Studies. Last year, it was 11 to 1 - roughly the same as the ratio under Bush.

Despite a Democratic Congress and administration - and a Nobel Peace Prize-winning president - nonmilitary security funding is still being squashed by its nasty counterpart.

Maybe, our leaders have lost sight of what "security" means beyond violent defense. What can we do to prevent potential threats besides bombing the hell out of them before they get us? Travis Sharp of the Center for Arms Control and Non-Proliferation has some good ideas:

With the additional $30 billion to be spent in Afghanistan during 2010, the United States could:

  • Double the amount spent on nuclear nonproliferation, anti-terrorism [focusing on specific terror threats] and de-mining ($1.6 billion)
  • Double US support of migrants and refugees throughout the world ($3 billion)
  • Quadruple the Civilian Stabilization fund for operations in Afghanistan and Iraq ($1.5 billion)
  • Triple federal funding for renewable energy research and development ($7.4 billion)
  • Double overall contributions to international institutions like the WHO and IAEA ($2.1 billion)
  • Double federal funding for DHS First Responder and CDC Disease Prevention programs ($4.2 billion)
  • Strengthen capacity of Coast Guard to close off the far-more-likely route of nuclear weapons coming into the United States - through ports ($6 billion)

Steps like providing disaster assistance, aiding refugees and contributing to international health care would go a long way toward deterring potential terrorist wannabes. Plus, decreasing our dependence on oil, shoring up our homeland security and finding safe ways to reduce nuclear weapons could deter future hawkish US leaders from waging war for stupid reasons.

Other diplomatic priorities, such as foreign service personnel and intercultural educational exchange programs, could also use a raise. A November report from Foreign Policy in Focus cites a sobering example of our diplomatic deficiency:

During the violent conflict that erupted in Kenya during its 2007 national elections, an American NGO called the State Department to consult with the appropriate people on the Kenya desk. They were told that these people were out of the office and not available. Asked when they would be available, the person on the phone replied that only two people covered Kenya, and both were on extended leave. In other words, nobody was home at the US government, it appeared, to be "first diplomatic responders" to this crisis.

Nobody home to respond to an international crisis, in a government whose "security" budget now reaches solar-systemic proportions? It's time to redivvy up this pie.

Nonmilitary programs are the true security measures. Not only are they a whole lot less likely to kill innocent people, but they also offer further-reaching, longer-term rewards.

In this age of never-ending wars, military spending is band-aid money, in a ghastly sort of way: as conflicts erupt, we continually attempt to bandage them with bombs, instead of addressing the root cause of each injury.

If we want to salvage "security" policy, we must reconceptualize what it means to keep our country safe. Otherwise, we risk simply reapplying the bloody band-aid until the money runs dry.

The Myth of the Good War: America in World War II

The Myth of the Good War: America in World War II

60 Years Ago, February 13-14, 1945: Why was Dresden Destroyed

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In the night of February 13-14, 1945, the ancient and beautiful capital of Saxony, Dresden, was attacked three times, twice by the RAF and once by the USAAF, the United States Army Air Force, in an operation involving well over 1,000 bombers. The consequences were catastrophic, as the historical city centre was incinerated and between 25,000 and 40,000 people lost their lives.[1] Dresden was not an important industrial or military centre and therefore not a target worthy of the considerable and unusual common American and British effort involved in the raid. The city was not attacked as retribution for earlier German bombing raids on cities such as Rotterdam and Coventry, either. In revenge for the destruction of these cities, bombed ruthlessly by the Luftwaffe in 1940, Berlin, Hamburg, Cologne and countless other German towns big and small had already paid dearly in 1942, 1943, and 1944. Furthermore, by the beginning of 1945, the Allied commanders knew perfectly well that even the most ferocious bombing raid would not succeed in terrorizing [the Germans] into submission,[2] so that it is not realistic to ascribe this motive to the planners of the operation. The bombing of Dresden, then, seems to have been a senseless slaughter, and looms as an even more terrible undertaking than the atomic obliteration of Hiroshima and Nagasaki, which is at least supposed to have led to the capitulation of Japan.

In recent times, however, the bombing of countries and of cities has almost become an everyday occurrence, rationalized not only by our political leaders but also presented by our media as an effective military undertaking and as a perfectly legitimate means to achieve supposedly worthwhile objectives. In this context, even the terrible attack on Dresden has recently been rehabilitated by a British historian, Frederick Taylor, who argues that the huge destruction wreaked on the Saxon city was not intended by the planners of the attack, but was the unexpected result of a combination of unfortunate circumstances, including perfect weather conditions and hopelessly inadequate German air defenses.[3] However, Taylors claim is contradicted by a fact that he himself refers to in his book, namely, that approximately 40 American heavies strayed from the flight path and ended up dropping their bombs on Prague instead of Dresden.[4] If everything had gone according to plan, the destruction in Dresden would surely have been even bigger than it already was. It is thus obvious that an unusually high degree of destruction had been intended. More serious is Taylors insistence that Dresden did constitute a legitimate target, since it was not only an important military centre but also a first-rate turntable for rail traffic as well as a major industrial city, where countless factories and workshops produced all sorts of militarily important equipment. A string of facts, however, indicate that these legitimate targets hardly played a role in the calculations of the planners of the raid. First, the only truly significant military installation, the Luftwaffe airfield a few kilometres to the north of the city, was not attacked. Second, the presumably crucially important railway station was not marked as a target by the British Pathfinder planes that guided the bombers. Instead, the crews were instructed to drop their bombs on the inner city, situated to the north of the railway station.[5] Consequently, even though the Americans did bomb the station and countless people perished in it, the facility suffered relatively little structural damage, so little, in fact, that it was again able to handle trains transporting troops within days of the operation.[6] Third, the great majority of Dresdens militarily important industries were not located downtown but in the suburbs, where no bombs were dropped, at least not deliberately.[7]

It cannot be denied that Dresden, like any other major German city, contained militarily important industrial installations, and that at least some of these installations were located in the inner city and were therefore wiped out in the raid, but this does not logically lead to the conclusion that the attack was planned for this purpose. Hospitals and churches were also destroyed, and numerous Allied POWs who happened to be in the city were killed, but nobody argues that the raid was organized to bring that about. Similarly, a number of Jews and members of Germanys anti-Nazi resistance, awaiting deportation and/or execution, were able to escape from prison during the chaos caused by the bombing,[8] but no one claims that this was the objective of the raid. There is no logical reason, then, to conclude that the destruction of an unknown number of industrial installations of greater or lesser military importance was the raison dêtre of the raid. The destruction of Dresdens industry like the liberation of a handful of Jews was nothing more than an unplanned by-product of the operation.

It is frequently suggested, also by Taylor, that the bombing of the Saxon capital was intended to facilitate the advance of the Red Army. The Soviets themselves allegedly asked their western partners during the Yalta Conference of February 4 to 11, 1945, to weaken the German resistance on the eastern front by means of air raids. However, there is no evidence whatsoever that confirms such allegations. The possibility of Anglo-American air raids on targets in eastern Germany was indeed discussed at Yalta, but during these talks the Soviets expressed the concern that their own lines might be hit by the bombers, so they requested that the RAF and USAAF would not operate too far to the east.[9] (The Soviets fear of being hit by what is now called friendly fire was not unwarranted, as was demonstrated during the raid on Dresden itself, when a considerable number of planes mistakenly bombed Prague, situated about as far from Dresden as the Red Army lines were.) It was in this context that a Soviet general by the name of Antonov expressed a general interest in air attacks that would impede enemy movements, but this can hardly be interpreted as a request to mete out to the Saxon capital which, incidentally, he did not mention at all or to any other German city the kind of treatment that Dresden received on February 13-14. Neither at Yalta, nor at any other occasion, did the Soviets ask their Western Allies for the kind of air support that presumably materialized in the form of the obliteration of Dresden. Moreover, they never gave their approval to the plan to bomb Dresden, as is also often claimed.[10] In any case, even if the Soviets would have asked for such assistance from the air, it is extremely unlikely that their allies would have responded by immediately unleashing the mighty fleet of bombers that did in fact attack Dresden.

In order to understand why this is so, we have to take a close look at inter-Allied relations in early 1945. In mid- to late January, the Americans were still involved in the final convulsions of the Battle of the Bulge, an unexpected German counter-offensive on the western front which had caused them great difficulties. The Americans, British, and Canadians had not yet crossed the Rhine, had not even reached the western banks of that river, and were still separated from Berlin by more than 500 kilometers. On the eastern front, meanwhile, the Red Army had launched a major offensive on January 12 and advanced rapidly to within 100 kilometers of the German capital. The resulting likelihood that the Soviets would not only take Berlin, but penetrate deep into Germanys western half before the war ended, greatly perturbed many American and British military and political leaders. Is it realistic to believe that, under those circumstances, Washington and London were eager to enable the Soviets to achieve even greater progress? Even if Stalin had asked for Anglo-American assistance from the air, Churchill and Roosevelt might have provided some token assistance, but would never have launched the massive and unprecedented combined RAF-USAAF operation that the bombing of Dresden revealed itself to be. Moreover, attacking Dresden meant sending hundreds of big bombers more than 2,000 kilometers through enemy airspace, approaching the lines of the Red Army so closely that they would run the risk of dropping their bombs by mistake on the Soviets or being fired at by Soviet anti-aircraft artillery. Could Churchill or Roosevelt be expected to invest such huge human and material resources and to run such risks in an operation that would make it easier for the Red Army to take Berlin and possibly reach the Rhine before they did? Absolutely not. The American-British political and military leaders were undoubtedly of the opinion that the Red Army was already advancing fast enough.

Towards the end of January 1945, Roosevelt and Churchill prepared to travel to Yalta for a meeting with Stalin. They had asked for such a meeting because they wanted to make binding agreements about postwar Germany before the end of the hostilities. In the absence of such agreements, the military realities in the field would determine who would control which parts of Germany, and it looked very much as if, by the time the Nazis would finally capitulate, the Soviets would be in control of most of Germany and thus be able to unilaterally determine that countrys political, social, and economic future. For such a unilateral course of action, Washington and London themselves had created a fateful precedent, namely when they liberated Italy in 1943 and categorically denied the Soviet Union any participation in the reconstruction of that country; they did the same thing in France and Belgium in 1944.[11] Stalin, who had followed his allies example when he liberated countries in Eastern Europe, obviously did not need or want such a binding inter-allied agreement with respect to Germany, and therefore such a meeting. He did accept the proposal, but insisted on meeting on Soviet soil, namely in the Crimean resort of Yalta. Contrary to conventional beliefs about that Conference, Stalin would prove to be most accommodating there, agreeing to a formula proposed by the British and Americans and highly advantageous to them, namely, a division of postwar Germany into occupation zones, with only approximately one third of Germanys territory the later East Germany being assigned to the Soviets. Roosevelt and Churchill could not have foreseen this happy outcome of the Yalta Conference, from which they would return in an exultant spirit.[12] In the weeks leading up to the conference, they expected the Soviet leader, buoyed by the recent successes of the Red Army and enjoying a kind of home-game advantage, to be a difficult and demanding interlocutor. A way had to be found to bring him down to earth, to condition him to make concessions despite being the temporary favourite of the god of war.

It was crucially important to make it clear to Stalin that the military power of the Western Allies, in spite of recent setbacks in the Belgian Ardennes, should not be underestimated. The Red Army admittedly featured huge masses of infantry, excellent tanks, and a formidable artillery, but the Western Allies held in their hands a military trump which the Soviets were unable to match. That trump was their air force, featuring the most impressive collection of bombers the world had ever seen. This weapon made it possible for the Americans and the British to launch devastating strikes on targets that were far removed from their own lines. If Stalin could be made aware of this, would he not prove easier to deal with at Yalta?

It was Churchill who decided that the total obliteration of a German city, under the noses of the Soviets so to speak, would send the desired message to the Kremlin. The RAF and USAAF had been able for some time to strike a devastating blow against any German city, and detailed plans for such an operation, known as Operation Thunderclap, had been meticulously prepared. During the summer of 1944, however, when the rapid advance from Normandy made it seem likely that the war would be won before the end of the year, and thoughts were already turning to postwar reconstruction, a Thunderclap-style operation had begun to be seen as a means to intimidate the Soviets. In August 1944, an RAF memorandum pointed out that the total devastation of the centre of a vast [German] citywould convince the Russian alliesof the effectiveness of Anglo-American air power.[13]

For the purpose of defeating Germany, Thunderclap was no longer considered necessary by early 1945. But towards the end of January 1945, while preparing to travel to Yalta, Churchill suddenly showed great interest in this project, insisted that it be carried out tout de suite, and specifically ordered the head of the RAF Bomber Command, Arthur Harris, to wipe out a city in Germanys east.[14] On January 25 the British Prime Minister indicated where he wanted the Germans to be blasted, namely, somewhere in their [westward] retreat from Breslau [now Wroclaw in Poland].[15] In terms of urban centres, this was tantamount to spelling D-R-E-S-D-E-N. That Churchill himself was behind the decision to bomb a city in Germanys east is also hinted at in the autobiography of Arthur Harris, who wrote that the attack on Dresden was at the time considered a military necessity by much more important people than myself.[16] It is obvious that only personalities of the calibre of Churchill were able to impose their will on the czar of strategic bombing. As the British military historian Alexander McKee has written, Churchill intended to write [a] lesson on the night sky [of Dresden] for the benefit of the Soviets. However, since the USAAF also ended up being involved in the bombing of Dresden, we may assume that Churchill acted with the knowledge and approval of Roosevelt. Churchills partners at the top of the United States political as well as military hierarchy, including General Marshall, shared his viewpoint; they too were fascinated, as McKee writes, by the idea of intimidating the [Soviet] communists by terrorising the Nazis.[17] The American participation in the Dresden raid was not really necessary, because the RAF was undoubtedly capable of wiping out Dresden in a solo performance. But the overkill effect resulting from a redundant American contribution was perfectly functional for the purpose of demonstrating to the Soviets the lethality of Anglo-American air power. It is also likely that Churchill did not want the responsibility for what he knew would be a terrible slaughter to be exclusively British; it was a crime for which he needed a partner.

A Thunderclapstyle operation would of course do damage to whatever military and industrial installations and communications infrastructure were housed in the targeted city, and would therefore inevitably amount to yet another blow to the already tottering German enemy. But when such an operation was finally launched, with Dresden as target, it was done far less in order to speed up the defeat of the Nazi enemy than in order to intimidate the Soviets. Using the terminology of the functional analysis school of American sociology, hitting the Germans as hard as possible was the manifest function of the operation, while intimidating the Soviets was its far more important latent or hidden function. The massive destruction wreaked in Dresden was planned in other words, was functional not for the purpose of striking a devastating blow to the German enemy, but for the purpose of demonstrating to the Soviet ally that the Anglo-Americans had a weapon which the Red Army, no matter how mighty and successful it was against the Germans, could not match, and against which it had no adequate defenses.

Many American and British generals and high-ranking officers were undoubtedly aware of the latent function of the destruction of Dresden, and approved of such an undertaking; this knowledge also reached the local commanders of the RAF and USAAF as well as the master bombers. (After the war, two master bombers claimed to remember that they had been told clearly that this attack was intended to impress the Soviets with the hitting power of our Bomber Command.)[18] But the Soviets, who had hitherto made the biggest contribution to the war against Nazi Germany, and who had thereby not only suffered the biggest losses but also scored the most spectacular successes, e.g. in Stalingrad, enjoyed much sympathy among low-ranking American and British military personnel, including bomber crews. This constituency would certainly have disapproved of any kind of plan to intimidate the Soviets, and most certainly of a plan the obliteration of a German city from the air which they would have to carry out. It was therefore necessary to camouflage the objective of the operation behind an official rationale. In other words, because the latent function of the raid was unspeakable, a speakable manifest function had to be concocted.

And so the regional commanders and the master bombers were instructed to formulate other, hopefully credible, objectives for the benefit of their crews. In view of this, we can understand why the instructions to the crews with respect to the objectives differed from unit to unit and were often fanciful and even contradictory. The majority of the commanders emphasized military objectives, and cited undefined military targets, hypothetical vital ammunition factories and dumps of weapons and supplies, Dresdens alleged role as fortified city, and even the existence in the city of some German Army Headquarters. Vague references were also frequently made to important industrial installations and marshalling yards. In order to explain to the crews why the historical city centre was targeted and not the industrial suburbs, some commanders talked about the existence there of a Gestapo headquarters and of a gigantic poison gas factory. Some speakers were either unable to invent such imaginary targets, or were for some reason unwilling to do so; they laconically told their men that the bombs were to be dropped on the built-up city centre of Dresden, or on Dresden tout court.[19] To destroy the centre of a German city, hoping to wreak as much damage as possible to military and industrial installations and to communication infrastructures, happened to be the essence of the Allied, or at least British, strategy of area bombing.[20] The crew members had learned to accept this nasty fact of life, or rather of death, but in the case of Dresden many of them felt ill at ease. They questioned the instructions with respect to the objectives, and had the feeling that this raid involved something unusual and suspicious and was certainly not a routine affair, as Taylor presents things in his book. The radio operator of a B-17, for example, declared in a confidential communication that this was the only time that [he] (and others) felt that the mission was unusual. The anxiety experienced by the crews was also illustrated by the fact that in many cases a commanders briefing did not trigger the crews traditional cheers but were met with icy silence.[21]

Directly or indirectly, intentionally or unintentionally, the instructions and briefings addressed to the crews sometimes revealed the true function of the attack. For example, a directive of the RAF to the crews of a number of bomber groups, issued on the day of the attack, February 13, 1945, unequivocally stated that it was the intention to show the Russians, when they reach the city, what our Bomber Command is capable of doing.[22] Under these circumstances, it is hardly surprising that many crew members understood clearly that they had to wipe Dresden from the map in order to scare the Soviets. A Canadian member of a bomber crew was to state after the war to an oral historian that he was convinced that the bombing of Dresden had aimed to make it clear to the Soviets that they had to behave themselves, otherwise we would show them what we could also do to Russian cities.[23]

The news of the particularly awful destruction of Dresden also caused great discomfort among British and American civilians, who shared the soldiers sympathy for the Soviet ally and who, upon learning the news of the raid, likewise sensed that this operation exuded something unusual and suspicious. The authorities attempted to exorcize the publics unease by explaining the operation as an effort to facilitate the advance of the Red Army. At an RAF press conference in liberated Paris on February 16, 1945, journalists were told that the destruction of this communications centre situated close to the Russian front had been inspired by the desire to make it possible for the Russians to continue their struggle with success. That this was merely a rationale, concocted after the facts by what are called spin doctors today, was revealed by the military spokesman himself, who lamely acknowledged that he thought that it had probably been the intention to assist the Soviets.[24]

The hypothesis that the attack on Dresden was intended to intimidate the Soviets explains not only the magnitude of the operation but also the choice of the target. To the planners of Thunderclap, Berlin had always loomed as the perfect target. By early 1945, however, the German capital had already been bombed repeatedly. Could it be expected that yet another bombing raid, no matter how devastating, would have the desired effect on the Soviets when they would fight their way into the capital? Destruction wreaked within 24 hours would surely loom considerably more spectacular if a fairly big, compact, and virginal i.e. not yet bombed city were the target. Dresden, fortunate not to have been bombed thus far, was now unfortunate enough to meet all these criteria. Moreover, the British American commanders expected that the Soviets would reach the Saxon capital within days, so that they would be able to see very soon with their own eyes what the RAF and the USAAF could achieve in a single operation. Although the Red Army was to enter Dresden much later than the British and the Americans had expected, namely, on May 8, 1945, the destruction of the Saxon capital did have the desired effect. The Soviet lines were situated only a couple of hundred of kilometers from the city, so that the men and women of the Red Army could admire the glow of the Dresden inferno on the nocturnal horizon. The firestorm was allegedly visible up to a distance of 300 kilometers.

If intimidating the Soviets is viewed as the latent, in other words the real function of the destruction of Dresden, then not only the magnitude but also the timing of the operation makes sense. The attack was supposed to have taken place, at least according to some historians, on February 4, 1945, but had to be postponed on account of inclement weather to the night of February 13-14.[25] The Yalta Conference started on February 4. If the Dresden fireworks had taken place on that day, it might have provided Stalin with some food for thought at a critical moment. The Soviet leader, flying high after the recent successes of the Red Army, would be brought down to earth by this feat of his allies air forces, and would therefore turn out to be a less confident and more agreeable interlocutor at the conference table. This expectation was clearly reflected in a comment made one week before the start of the Yalta Conference by an American general, David M. Schlatter:

I feel that our air forces are the blue chips with which we will approach the post-war treaty table, and that this operation [the planned bombing of Dresden and/or Berlin] will add immeasurably to their strength, or rather to the Russian knowledge of their strength.[26]

The plan to bomb Dresden was not cancelled, but merely postponed. The kind of demonstration of military potency that it was supposed to be retained its psychological usefulness even after the end of the Crimean conference. It continued to be expected that the Soviets would soon enter Dresden and thus be able to see firsthand what horrible destruction the Anglo-American air forces were able to cause to a city far removed from their bases in a single night. Afterwards, when the rather vague agreements made at Yalta would have to be put into practice, the boys in the Kremin would surely remember what they had seen in Dresden, draw useful conclusions from their observations, and behave as Washington and London expected of them. When towards the end of the hostilities American troops had an opportunity to reach Dresden before the Soviets, Churchill vetoed this: even at that late stage, when Churchill was very eager for the Anglo-Americans to occupy as much German territory as possible, he still insisted that the Soviets be allowed to occupy Dresden, no doubt so they could benefit from the demonstration effect of the bombing.

Dresden was obliterated in order to intimidate the Soviets with a demonstration of the enormous firepower that permitted bombers of the RAF and the USAAF to unleash death and destruction hundreds of kilometers away from their bases, and the subtext was clear: this firepower could be aimed at the Soviet Union itself. This interpretation explains the many peculiarities of the bombing of Dresden, such as the magnitude of the operation, the unusual participation in one single raid of both the RAF and USAAF, the choice of a virginal target, the (intended) enormity of the destruction, the timing of the attack, and the fact that the supposedly crucially important railway station and the suburbs with their factories and Luftwaffe airfield were not targeted. The bombing of Dresden had little or nothing to do with the war against Nazi Germany: it was an American British message for Stalin, a message that cost the lives of tens of thousands of people. Later that same year, two more similarly coded yet not very subtle messages would follow, involving even more victims, but this time Japanese cities were targeted, and the idea was to direct Stalins attention to the lethality of Americas terrible new weapon, the atomic bomb.[27] Dresden had little or nothing to do with the war against Nazi Germany; it had much, if not everything, to do with a new conflict in which the enemy was to be the Soviet Union. In the horrible heat of the infernos of Dresden, Hiroshima and Nagasaki, the Cold War was born.

Notes

[1] Frederick Taylor. Dresden: Tuesday, February 13, 1945, New York, 2004, pp. 354, 443-448; Götz Bergander, Dresden im Luftkrieg. Vorgeschichte, Zerstörung, Folgen, Weimar, 1995, chapter 12, and especially pp. 210 ff., 218-219, 229;

Luftangriffe auf Dresden, http://de.wikipedia.org/wiki/Luftangriffe_auf_Dresden, p. 9.

[2] See for example the comments made by General Spaatz cited in Randall Hansen, Fire and fury: the Allied bombing of Germany, 1942-45, Toronto, 2008, p. 243.

[3] Taylor, p. 416.

[4] Taylor, pp. 321-322.

[5] Olaf Groehler. Bombenkrieg gegen Deutschland, Berlin, 1990, p. 414; Hansen, p. 245; Luftangriffe auf Dresden, http://de.wikipedia.org/wiki/Luftangriffe_auf_Dresden, p.7.

[6] Luftangriffe auf Dresden, http://de.wikipedia.org/wiki/Luftangriffe_auf_Dresden, p. 7.

[7] Taylor, pp. 152-154, 358-359.

[8] Eckart Spoo, Die letzte der Familie Tucholsky, Ossietzky, No. 11/2, June 2001, pp. 367-70.

[9] Taylor, p. 190; Groehler, pp. 400-401. Citing a study about Yalta, the British author of the latest study of Allied bombing during World War II notes that the Soviets clearly preferred to keep the RAF and the USAAF away from territory they might soon be occupying, see C. Grayling, Among the Dead Cities: Was the Allied Bombing of Civilians in WWII a Necessity or a Crime?, London, 2006, p. 176.

[10] Alexander McKee. Dresden 1945: The Devils Tinderbox, London, 1982, pp. 264-265; Groehler, pp. 400-402.

[11] See e.g. Jacques R. Pauwels, The Myth of the Good War: America in the Second World War, Toronto, 2002, p. 98 ff.

[12] Ibid., p. 119.

[13] Richard Davis, Operation Thunderclap, Journal of Strategic Studies, 14:1, March 1991, p. 96.

[14] Taylor, pp. 185-186, 376; Grayling, p. 71; David Irving. The Destruction of Dresden, London, 1971, pp. 96-99.

[15] Hansen, p. 241.

[16] Arthur Travers Harris, Bomber offensive, Don Mills/Ont., 1990, p. 242.

[17] McKee, pp. 46, 105.

[18] Groehler, p. 404.

[19] Ibid., p. 404.

[20] The Americans preferred precision bombing, in theory if not always in practice.

[21] Taylor, pp. 318-19; Irving, pp. 147-48.

[22] Quotation from Groehler, p. 404. See also Grayling, p. 260.

[23] Cited in Barry Broadfoot, Six War Years 1939-1945: Memories of Canadians at Home and Abroad, Don Mills, Ontario, 1976, p. 269.

[24] Taylor, pp. 361, 363-365.

[25] See e.g. Hans-Günther Dahms, Der Zweite Weltkrieg, second edition, Frankfurt am Main, 1971, p. 187.

[26] Cited in Ronald Schaffer. American Military Ethics in World War II: The Bombing of German Civilians, The Journal of Military History, 67: 2, September 1980, p. 330.

[27] A. C. Grayling, for example, writes in his new book on Allied bombing that it is recognized that one of the main motives for the atomb-bomb attacks on Hiroshima and Nagasaki was to demonstrate to the Russians the superiority in waponry that the United States had attainedIn the case of Dresden something similar is regrettably true.

Feds admit wrongly tracking Wis. abortion groups

Feds admit wrongly tracking Wis. abortion groups

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The U.S. Department of Homeland Security conducted a threat assessment of local pro- and anti-abortion rights activists before an expected rally last year, even though they did not pose a threat to national security.

The DHS destroyed or deleted its copies of the assessment after an internal review found it violated intelligence-gathering guidelines by collecting and sharing information about "protest groups which posed no threat to homeland security," according to a department memo written last year.

The report was only shared with police in Middleton and with the director of the Wisconsin Statewide Information Center, an intelligence-gathering hub, according to the memo, which was signed by general counsel Ivan Fong and inspector general Richard Skinner.

It concluded the report was unlikely to "have any impact on civil liberties or civil rights" given its limited dissemination. But anti-abortion groups and the American Civil Liberties Union of Wisconsin on Monday both criticized the federal government's collection of information on law-abiding protesters.

The report was compiled prior to a February 2009 meeting in Middleton by the University of Wisconsin Hospital board to decide whether to open a clinic that would offer late-term abortions.

The analyst who compiled the report - the agency's representative to Wisconsin's intelligence center - received improper guidance that he could perform the assessment "to support local police and public safety efforts," according to the memo. The analyst was given remedial training and department lawyers counseled supervisors who were involved, it said.

The memo was made public as part of a lawsuit filed by the Electronic Frontier Foundation, which was seeking reports from an intelligence oversight panel. After The New York Times reported on its contents in December, a lawyer representing anti-abortion activists who attended the rally asked Middleton police to release a copy of the assessment under Wisconsin's open records law.

In the department's Feb. 4 response, Capt. Noel Kakuske confirmed the department kept a copy of the report but declined to release it. He said the Wisconsin Department of Justice, which runs the intelligence center, and the Department of Homeland Security agreed the report should be withheld because it contains sensitive law enforcement information.

"Disclosure would result in the identification and public disclosure of individuals affiliated with groups on both sides of the issue, which would place them in danger from opposing radical extremists," he wrote.

On Monday, Kakuske told The Associated Press that the assessment was prepared after his department asked state officials for help identifying potential risks associated with the hospital board meeting. He said it's unusual for the department to handle a large protest, and "we wanted to make sure we had the best information we could get."

He said the department had received no specific threat in connection with the meeting, but was worried about the potential for violence.

The UW Hospital and Clinic Authority Board voted 11-3 to approve the plan to start the clinic at the Madison Surgery Center. Those attending the meeting at a suburban office building went through police checkpoints. No problems were reported, and protesters on both sides acted peacefully.

Peggy Hamill, state director of Pro-Life Wisconsin, said her group was considering other options to try to get the report, including appealing to the district attorney or suing.

"It's very disturbing that a local police department has tapped into the security apparatus of the federal government to potentially obstruct free speech," she said. "It's additionally disconcerting they will not release the documents in order for we the public to examine them."

Israeli warplanes target Gaza airport

Israeli warplanes target Gaza airport

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Israeli warplanes have launched an overnight attack on the southern Gaza Strip, pounding an international airport in the Hamas-run Palestinian territory.

The air strike came Tuesday night when Israeli F-16 fighter jets targeted the Yasser Arafat International Airport in Dahaniya, Rafah.

Locals said the warplanes fired five missiles into the facility, but there were no immediate reports of casualties.

An Israeli army spokesperson confirmed the strike and claimed that the attack came in retaliation for projectiles launched into the western Negev desert in recent days.

In a separate statement, the army threatened to "continue to operate firmly" against the Palestinian resistance fighters, claiming "Hamas is solely responsible for maintaining peace and quiet in the Gaza Strip."

A week earlier, Israeli forces targeted the Gaza airport and a tunnel across the Gaza-Egypt border, leaving three Palestinians wounded.

The southern city of Rafah has been under constant Israeli air strikes that aims to disrupt Palestinian underground tunnels across the border with Egypt.

Israel accuses Palestinian fighters operating in the Gaza Strip of using the tunnels to smuggle and store arms. However, the Palestinians dismiss such allegations, describing the network as the last resort to bring in food, fuel and other vital commodities to keep the 1.5 million Gazans from suffocation under the Israeli-imposed blockade of the whole territory.

Insurer Denies Life-Prolonging Treatment To Five-Year-Old Boy With Cancer

Insurer Denies Life-Prolonging Treatment To Five-Year-Old Boy With Cancer

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Kyle Van Nocker

One of the worst abuses of private insurance companies is the practice of using spurious reasons to deny claims for medical treatments, which are often necessary for saving patients’ lives.

Kyler Van Nocker’s story shows that even 5-year-old kids are not exempt from this insurance company abuse. Van Nocker has neuroblastoma, which is a very rare form of childhood cancer that targets the nervous system and creates tumors throughout the body.

Due to successful treatment in 2007, Van Nocker’s cancer went into remission, giving him 12 months of pain-free life. Unfortunately, in Sept. 2008, the cancer returned, and Van Nocker was once again in need of treatment. Unfortunately, his health insurer, HealthAmerica, refused to pay for one form of treatment doctors believe could save his life (MIBG treatment) because they consider it “investigational/experimental” since it has yet to be approved by the FDA.

Yet in April 2008, the insurer approved cheaper treatment for Van Nocker that was also “experimental,” prompting Philadelphia Daily News columnist Ronnie Polaneczky to ask, “So why, pray tell, is HealthAmerica playing the ‘experimental therapy’ card in the case of the MIBG treatment Kyler now needs? Gee, money couldn’t have anything to do with the decision, could it?”

Van Nocker’s parents are suing HealthAmerica, citing the fact that the company has apparently been dishonest about its criteria for the types of treatment it will cover and is denying payment for treatment in this case because of the high cost of the procedure — $110,000 pays for only two rounds of MIBG treatment. “These companies have to be brought to the courthouse to get them to do the right thing,” says the VanNockers’s family attorney. “This child needs this treatment, or else.”

The sad truth is that Van Nocker is certainly not alone in having his claim denied by a major health insurer. The California Nurses Association (CNA), a nurses’ union and health care advocacy group, recently released a comprehensive study of claims denials across California. The study found that the six largest insurers in California rejected 47.7 million claims in the first half of 2009, nearly 22 percent of all claims submitted.

The United States is the only industrialized nation without cradle-to-the-grave, universal health care. In no other developed country would a child with cancer have to go without care because an insurance company decided it was not profitable enough to cover him.

Obama Bows to the Whining of the Rich

Obama Bows to the Whining of the Rich

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The Heritage Foundation, the right wing’s most lavishly funded think tank, doesn't much like the federal budget plan the Obama White House released last week. Heritage hired guns are blasting the Obama blueprint for fiscal 2011 as perhaps the “most irresponsible budget ever.”

What has the wealthy and their biggest fans so upset? Certainly not the deficit, the cause for concern they profess so earnestly.

Growing budget deficits, as economist Polly Cleveland pointed out last week, can actually work to rich people’s advantage, in part because the rich hold so much of the government’s debt. The interest payments the rich collect on that debt “tips” America’s top-heavy distribution of wealth even more their way.

The rich can live — quite well — with budget deficits. But taxes drive them crazy, and President Obama’s second budget is proposing, over the next decade, $970 billion in new taxes on America’s most affluent.

But do these tax hikes, as critics charge, “soak the rich”? Not hardly. Obama’s budget, if adopted, will inconvenience the rich, not soak them.

For the rich, that may be almost as bad. Rich people simply detest inconveniences. Unlike people of modest means, they can afford to avoid them — and the U.S. tax code, for years now, has made that affording ever easier.

Just how easy becomes painfully clear upon perusing the fine print of the tax changes the Obama White House is proposing.

One example: Under current law, corporate CEOs can classify their workers as “independent contractors,” a neat maneuver that denies workers the benefits normal employees receive and saves corporations vast sums that end up inflating executive paychecks. The Obama budget proposes new rules that would make these corporate misclassifications more difficult to cook up.

Current law also lets corporate execs who get nailed cheating consumers deduct off their taxes the punitive damages courts order them to pay. How convenient. The new White House budget would make executives and their companies much more likely to eat these damages, on their own.

Tax rates

Another convenience the rich enjoy and exploit: Current law gives the IRS only three years to discover whether wealthy tax filers are neglecting to report income from foreign assets on their tax returns. After three years, the IRS can’t levy any penalties on the wealthy tax avoiders they catch. The Obama budget proposes to double this statute of limitations to six years.

The income the wealthy do already report, meanwhile, will face higher tax rates under the Obama budget plan. In the 2011 federal fiscal year, couples making over $250,000 a year — and individuals over $200,000 — will pay taxes at a 39.6 percent rate on ordinary income over $373,650.

These taxpayers, under the Obama plan, would also pay higher taxes on dividends and “capital gain” income from the sale of stocks and other assets. The current 15 percent tax rate on these income streams would jump to 20 percent.

Some super-rich taxpayers — the top guns at hedge funds, venture capital firms, and other investment partnerships — would pay even more under the Obama budget plan. These power suits have been claiming the bulk of their income as “capital gains.” The Obama budget, if Congress goes along, would nix that claim.

In 2008, 25 hedge fund managers took home at least $75 million. In 2011, under the new Obama budget, the top 25 would pay taxes on most of their millions at a 39.6 percent rate, over double the current 15 percent capital gains rate.

But these hedgies and their awesomely affluent friends really have little reason to angst about these new rates. By any reasonable historical yardstick, they’ll be doing just fine if the new Obama budget gets through Congress as is.

A half-century ago, in 1961, income over $400,000 — around $3 million today — faced a 91 percent tax. In 2011, if the Obama budget plan goes into effect, the top rate on income over $3 million would sit at 39.6 percent, less than half the top tax rate on America’s richest back in the mid-20th century.

Politicos and pundits ignored this historical perspective last week. Debate in and around Congress instead revolved almost totally around hand wringing over the size of the federal budget deficit.

Lawmakers and commentators worried about the deficit, in a more rational world, wouldn't be ignoring America's tax-the-rich history, since higher taxes on the wealthy — and the corporations that manufacture them — offer one obvious route to deficit reduction. But mainstream policy wonks in Washington have essentially written off higher taxes on the rich as a viable deficit-reduction strategy.

The latest evidence of that write-off: The mainstream wonks at Washington’s Brookings Institution Tax Policy Center last week promoted a new paper said to prove that “raising taxes only on the rich won't close our budget deficits.”

This paper, condescendingly entitled Desperately Seeking Revenue, argues that tax increases on the rich would have to be “huge” to bring the federal budget deficit down to manageable levels by 2019, so huge that these rates would imperil national “economic efficiency.”

How high, under this mainstream Brookings Tax Policy Center analysis, would taxes on the rich have to go to significantly narrow the deficit in 2019?

If taxes rose only on couples making over $250,000 and individuals over $200,000, the analysis notes, the top tax rate would have to rise to 77 percent to bring the deficit down to 3 percent of GDP in 2019, the target Obama budget director Peter Orszag has set. To meet the 2 percent target the Tax Policy Center prefers, that top rate would have to rise “to nearly 91 percent.”

That the United States had a 91 percent top tax rate in effect for most of the quarter century after World War II — and survived quite nicely — goes unmentioned in this mainstream analysis.

A curious omission. In the 1950s and early 1960s, with a 91 percent top rate in effect, the annual federal deficit never once hit as high as 3 percent of GDP and only once hit as high as 2 percent. These same years saw the greatest increases ever in U.S. middle class prosperity.

Tax rates on the rich, a closer look at the Tax Policy Center analysis makes clear, wouldn’t even have to go all the way to 91 percent to work some serious deficit-reduction magic. The Tax Policy Center experts, in their analysis, have made a series of assumptions that, taken together, overstate the actual tax rate on the rich needed to get the deficit, a decade from now, down significantly.

These assumptions dramatically reveal just how incredibly stunted — on taxing the rich and powerful — the mainstream political imagination has become.

The Tax Policy Center analysts assume, first, that top tax rates between now and 2015 cannot possibly be raised beyond the 39.6 percent the Obama White House has proposed. Second, they assume no increase in corporate taxes.

But if corporate tax rates were hiked — to the point where the federal government received as much of its income from corporate taxes as the government regularly received before the 1980s — and if tax rates on top-bracket income rose over 39.6 percent before 2015, taxes on the rich wouldn’t have to hit 91 percent a decade from now to significantly reduce the deficit.

The new Obama budget actually does include a variety of tax increases on corporations, particularly on those that use their foreign operations to avoid U.S. taxes. But the White House has, notes tax analyst Linda Beale, “scaled back its proposals aimed at companies that shift profits offshore” since last year.

What happened? General Electric, Microsoft, Caterpillar, and other corporate giants have been complaining. The White House listened.

The White House now needs to listen to the rest of us. And we need to raise our voices loud enough to be heard.

Haiti Numbers – 27 Days After Quake

Haiti Numbers – 27 Days After Quake

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890 million. Amount of international debt that Haiti owes creditors. Finance ministers from developing countries announced they will forgive $290 million. Source: Wall Street Journal

644 million. Donations for Haiti to private organizations have exceed $644 million. Over $200 million has gone to the Red Cross, who had 15 people working on health projects in Haiti before the earthquake. About $40 million has gone to Partners in Health, which had 5,000 people working on health in Haiti before the quake. Source: New York Times.

1 million. People still homeless or needing shelter in Haiti. Source: MSNBC.

1 million. People who have been given food by the UN World Food Program in Port au Prince – another million in Port au Prince still need help. Source: UN World Food Program.

300,000. People injured in the earthquake, reported by Haitian Prime Minister Jean-Max Bellerive. Source: CNN.

212,000. People reported killed by earthquake by Haitian Prime Minister Jean-Max Bellerive. Source: CNN..

63,000. There are 63,000 pregnant women among the people displaced by the earthquake. 7,000 women will deliver their children each month. Source: UN Populations Fund.

17,000. Number of United States troops stationed on or off coast in Haiti, down from a high of 22,000. Source: AFP.

9,000. United Nations troops in Haiti. Source: Miami Herald.

7,000. Number of tents distributed by United Nations. Miami Herald. President Preval of Haiti has asked for 200,000 tents. Source: Reuters.

4,000. Number of amputations performed in Haiti since the earthquake. Source: AFP.

900. Number of latrines that have been dug for the people displaced from their homes. Another 950,000 people still need sanitation. Source: New York Times.

75. An hourly wage of 75 cents per hour is paid by the United Nations Development Program to people in Haiti who have been hired to help in the clean up. The UNDP is paying 30,000 people to help clean up Haiti, 180 Haitian Gourdes ($4.47) for six hours of work. The program hopes to hire 100,000 people. Source: United Nations News Briefing.

1.25. The U.S. is pledged to spend as much as $379 million in Haitian relief. This is about $1.25 for each person in the United States. Source: Canadian Press.

1. For every one dollar of U.S. aid to Haiti, 42 cents is for disaster assistance, 33 cents is for the U.S. military, 9 cents is for food, 9 cents is to transport the food, 5 cents to pay Haitians to help with recovery effort, 1 cent is for the Haitian government and ½ a cent is for the government of the Dominican Republic. Source: Associated Press.