Wednesday, August 31, 2011

Economic relapse threatens lasting damage

Economic relapse threatens lasting damage

The Great Recession hit a nation that was flying high, but the current slowdown is striking a nation already on its economic knees.

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Even if the U.S. economy avoids sliding back into recession, the continuing weakness is beginning to inflict long-term damage on many families and businesses that will make a full-blown recovery much harder to achieve.

The devastating recession that started four years ago hit a nation flying high on a housing boom and helium-inflated clouds of consumer spending. But the current slowdown is striking a nation already on its economic knees.

"That's the danger right now: You've got an economy that didn't recover," said Ethan Harris, Bank of America's chief economist for North America.

"We've had some healing," he said, noting that banks are in better financial shape, as are some households. "But the rehabilitation hasn't been completed," and a relapse would be like "hitting an already sick patient."

On Friday, Federal Reserve Chairman Ben S. Bernanke is expected to discuss the economic outlook and the central bank's role in the months ahead, but he is unlikely to announce any immediate policy changes despite widespread anticipation of new action.

Also, new numbers scheduled to be released Friday on overall economic growth are not expected to brighten prospects.

What worries economists such as Harris is that an economy that shows little or no growth does more than cause immediate pain. It inflicts damages and costs that have lasting effects.

The last recession, which technically ended in June 2009, was the worst in six decades. It cost the country about $2.5 trillion, including the government's stimulus spending, losses at mortgage lenders Fannie Mae and Freddie Mac, and additional funds for unemployment benefits, according to Moody's Analytics.

As the weak economy lingers, the tab to taxpayers will keep growing and put additional pressure on the already strained fiscal budget. Additionally, the lost income, lost business opportunities and other private-sector costs were far higher.

Economists worry about the possibility that the growing disparity between the rich and everybody else will widen, that the nation's entrepreneurial energy will be sapped and that a generation of young workers whose earning power and confidence have already suffered will decline even more.

"These are things slowly undercutting the underlying resilience of the economy," Harris said.

The likelihood of another recession has risen sharply since spring amid signs of deteriorating employment, manufacturing and business and consumer confidence — accompanied by wild swings on Wall Street.

Many analysts see at least a 1 in 3 chance of a fallback into outright economic decline in the next six months or so.

U.S. gross domestic product in the first half of this year is now seen as having grown by even less than the tiny 0.8% rate previously estimated. A negative GDP rate, which measures the change in goods and services produced, would be one sign that the nation is in recession. Another sign would be declining employment.

GDP expanded 3% in 2010, but the size of the U.S. economy still hasn't caught up to where it was at the fourth quarter of 2007 when the Great Recession hit. And total payroll employment remains nearly 7 million jobs shy of where it was at the end of 2007.

By comparison, China's GDP has surged more than 40% between 2007 and 2011, and economists at IHS now see the Chinese economy overtaking the U.S. in 2019 — much faster than what analysts were predicting only a few years ago.

The GDP comparisons are more than just academic. They also speak to economic clout and people's living standards, which for many in the U.S. have been further eroded in the last few years.

Little by little, economists have been ratcheting down their forecasts for the rest of this year. Layoffs and new jobless claims have been climbing again. And with the housing market still depressed, state and local governments cutting back and industrial production wavering, it's hard to see from where the U.S. economy could get a big lift.

Paul Dales, an economist at Capital Economics, said a second recession probably would be mild and short, if for no other reason than that the "fat-purging process" has already taken place.

During the Great Recession, many companies slashed payrolls and other costs, leaving them with lean inventories and much less excess staff and unused production capacity.

Take Darlene Miller, president of Permac Industries, a precision-machining shop in the Minneapolis suburb of Burnsville. Miller said her sales had returned to 85% of where they were before the recession. The firm has clawed back by becoming more productive and getting new certifications to build its aerospace and medical lines.

Over the long recovery, she has added just one net new employee, even though she cut a dozen positions during the recession.

Judging by her orders and surveys of other machining shops like hers, she doesn't foresee a double-dip recession. But she's ready. Not only is Permac operating leanly, but Miller is also keeping a sharp eye on possible danger signs such as later payments from customers.

"We are better staged for it," she said.

Many families in the U.S. also look better prepared. Overall, they're carrying less credit card and other debt. Many have curbed spending and are socking away more money.

But evidence suggests that the biggest beneficiaries of the economic recovery thus far have been individuals with higher incomes and better educations, who were rewarded when stock prices rebounded and corporate profits rose — often to record levels.

In 2009, the top 5% of households had an average income exceeding $295,000, according to Commerce Department statistics. That compared with just under $79,000 for households in the middle.

The gap in income has widened 26% over the last decade and figures to grow even more if the economy stagnates or slips into recession.

"Everybody is going to suffer" in a downturn, "but the folks in the bottom will get creamed," Mark Zandi of Moody's Analytics said.

David Linehan, 44, who lives in the Boston area, looks at the gray economic skies and is deeply worried about what might come to pass.

When the last recession swept through, Linehan lost his energy-trading job. When unemployment benefits ran out, he went through $25,000 in savings. Finally, he cashed in the $15,000 in his 401(k) savings plan.

Last summer Linehan landed a part-time job as a driver for a rental car company. He started at $8.50 an hour, without benefits. Since then, he has gotten a 30-cent-an-hour raise, but no additional hours. He continues to look for full-time work.

Any setback would be a disaster. "I've lost the cushion I had," he said.

Global Land Grab

Global Land Grab

Fear of unrest and hunger for profit are sparking massive acquisitions of farmland.

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A 21st-century land rush is on. Driven by fear and lured by promises of high profits, foreign investors are scooping up vast tracts of farmland in some of the world's hungriest countries to grow crops for export.

As the climate changes and populations shift and grow, billions of people around the globe face shortages of land and water, rising food prices and increasing hunger. Alarm over a future without affordable food and water is sparking unrest in a world already tinder-dried by repression and recession, corruption and mismanagement, boundary disputes and ancient feuds, ethnic tension and religious fundamentalism.

World leaders feel the heat. Calling food security concerns "extremely significant," a 2009 U.N. report noted, "The acquisition of land internationally is one possible strategic choice to address the challenge."

Fortunately for nervous rulers, the strategy of growing food abroad as shelter against the fires of revolution dovetails nicely with the goals of private and public capital. Governments drawing on sovereign wealth funds, and rich investors accessing state subsidies, have negotiated deals to acquire tens of millions of acres of farmland in Africa, South America and South Asia. When they export the food to their home countries, the valuable water used to grow the crops will ride along as a free bonus.

The largest investors in foreign croplands hail from China, India and South Korea, along with Saudi Arabia and other oil-rich Gulf states. What these countries have in common is that all were shaken financially or politically by the 2007-08 food crisis. And all lack sufficient land or water to ensure that they can feed their populations in the coming years--especially if, as the Food and Agriculture Organization (FAO) warns, climate change continues to "exacerbate land degradation and water scarcity in many places, and to increase the frequency of extreme weather events affecting harvests."

Raw dealing

Available for chump change and unsecured promises, land around the world is changing hands at a rate unprecedented since the Colonial Era, when white men applied the ink of nationalism and greed to redraw maps of Africa, Asia and the New World. Seated at polished tables in Europe, they deployed merchants, missionaries and armies to lay claim to cultures and continents--and to the human, agricultural and mineral resources they held.

The "new colonialism" is less like a crusade and more like an ordinary business transaction floated on a promise of "win-win." The deal-makers include international agribusinesses, investment banks, hedge funds and commodity traders, as well as pension funds, foundations and individuals attracted by the lure of cheap land and high profits. Even universities, including Harvard and Vanderbilt, are getting into the act, according to an extensive report by the Oakland Institute, a progressive policy think tank.

Most of the land deals occur in the private sector, "though often with strong financial and other support from government, and significant levels of government-owned investments," according to the FAO. Conforming to this pattern and awash in oil income, the Saudi "government earmarked $5 billion to provide loans at preferential rates to Saudi companies to invest in countries with strong agricultural potential," writes Mae-Wan Ho of the U.K.-based Institute of Science in Society, including large swaths of Indonesia and Thailand for rice, and possibly 6,000 acres for wheat in war-ravaged Sudan.

The investors are negotiating land transfers all the way from the top, with heads of states, down to tribal chiefs and impoverished landowners. Water rights, tax breaks and waivers on labor and environmental standards often sweeten the deals.

When they cannot buy land outright at prices ranging from cheap (a few dollars an acre) to stolen ("You get a bottle of Johnnie Walker, kneel down, clap three times, and make your offer of Johnnie Walker whiskey," in one transaction reported by the Oakland Institute), investors lease vast tracts for as long as 99 years and for as little as 40 cents per acre per year.

According to the U.N.'s International Fund for Agricultural Development (IFAD), some 2 billion people in the developing world depend on 500 million smallholder farms for their livelihoods. In Asia and sub-Saharan Africa, these small farmers produce about 80 percent of the food that local people consume.

But with spectacular speed, patchworks of plots that used to support local populations through subsistence farming and grazing are being amalgamated into massive industrial plantations. In Awassa, Ethiopia, a "plastic and steel structure already stretches over 50 acres--the size of 20 soccer fields," writes John Vidal in South Africa's Mail and Guardian.

With a 99-year lease for 2,500 acres, the developer, Saudi Sheikh Mohammed al-Amoudi, has brought in Spanish engineers and Dutch water technology, and hired 1,000 women to pick and pack 50 tons of food a day, writes Vidal. "Within 24 hours, it has been driven 200 miles to Addis Ababa and flown 1,000 miles to the shops and restaurants of Dubai, Jeddah and elsewhere in the Middle East."

Unappeased hunger

Since long before the days of Roman bread-and-circus politics, leaders have feared the threat of hungry masses. Some have even felt their pain: "[D]uring the last major rise in food prices in 2007 and 2008, [the consequences] were grave," U.S. Secretary of State Hillary Clinton told a May FAO gathering in Rome. "For hundreds of millions of people, the staples of life, like rice, wheat or corn, were suddenly out of reach. People who were already vulnerable fell into an even greater danger zone." But her next sentence made clear that humanitarian concerns were not the only motivation for establishing food security. "Anger and frustration over food prices sparked riots in dozens of countries," she said.

The years 2007 and 2008 marked a turning point for both environmental consciousness and food insecurity. Before then, agricultural land had expanded by less than 10 million acres a year. But with the pile up of evidence for global warming, no one but the ideologically blinkered could see extensive droughts and other weather-related catastrophes as flukes. Sharply diminished yields triggered exporting countries to ban or curb grain sales, pushed prices up and helped trigger a series of riots that shook dozens of countries. World Bank President Robert Zoellick warned in 2008 that "33 countries around the world face potential social unrest because of the acute hike in food and energy prices."

By 2009, deals were being struck for 111 million acres, with 75 percent in sub-Saharan Africa, according to a World Bank report. A year later, the bank upped the total to nearly 140 million acres.

These "land grabs," says Lester Brown, encompass "an area that exceeds the croplands devoted to corn and wheat combined in the United States." Brown, winner of a MacArthur Fellowship and the 1987 U.N. Environment Prize, is the founder of the Worldwatch Institute and the Earth Policy Institute.

Then, as if out of nowhere, the Arab Spring struck this year. Longstanding un- and underemployment and repression were key triggers, but as the London-based International Institute for Strategic Studies noted, a "proximate factor behind the unrest was a spike in global food crises, which in turn was due in part to the extreme weather throughout the globe over the past year." The Pentagon's U.S. Quadrennial Defense Review called climate change a "threat multiplier."

In the seven months before Egypt's President Hosni Mubarak was driven from power in February, the trading price of wheat had more than doubled. In August 2010, faced with droughts and wildfires, Russia had prioritized its own populations and restricted most grain exports, ensuring that prices would skyrocket. The choked supply line seriously impacted Egypt, which imports more than half its food.

By early 2011, some 21 countries had imposed export control measures including limits and outright bans on the foreign sale of particular crops.

Saudi jitters

Saudi Arabia had a ringside seat as the Arab Spring spread across the region. The House of Saud understood that national (i.e., their own) security rests on its ability to buy the quiescence, if not loyalty, of its citizens with affordable food and social welfare programs that make Sweden look like Tea Party paradise.

The sheiks had been watching the writing in the sand since the 1970s, when, after the Arab oil-export embargo, they realized their vulnerability: Just as the West was dependent on them for oil, they were dependent on others for food. The prospect of being forced to bend the stiff royal knee to Western-imposed economic pressures inspired the Saudis to apply their oil technology to drilling deep for water. Within a short period of time, using heavy irrigation, the country became self-sufficient in wheat. But unlike underground water supplies that are replenished by precipitation, fossil aquifers can be drained dry with jaw-dropping rapidity--and that is what is happening under the Arabian Peninsula.

Within a few decades, the prehistoric aquifer was almost exhausted, and by 2007, just when food riots were roiling the region, the Saudi wheat harvest had dropped precipitously. By 2016, the Saudi Ministry of Agriculture predicts the country will have to import 100 percent of the wheat it needs to feed its nearly 26 million people.

Saudi Arabia is one of 18 countries--which together contain half the world's people--where water for irrigation is draining aquifers. But the export of "virtual water" incorporated into growing crops promises not only ecological problems, but political trouble downstream. Large-scale irrigation in Ethiopia and Sudan, for example, diverts water from the upper Nile River basin and cuts into Egypt's already limited water supply.

Despite water woes, Sudan welcomes investors. "It's the first country that gives us land without complicated procedures," Mohammed Rasheed al-Balawi, a former agriculture manager of the Saudi firm Hadco, told the Financial Times. "The area is big, the people are friendly [and] they gave us the land almost free."

Trading in human livelihoods

That characterization of terms is hotly disputed. Although both investors and host countries often refer to acquired land as under-developed or empty, the deals typically displace herders and small farmers, who are not consulted and, in any case, lack legal deeds. The World Bank estimates that between 2 and 10 percent of Africa's land is held under formal land tenure, and most of that is in urban areas.

"The foreign companies are arriving in large numbers, depriving people of land they have used for centuries," Ethiopian Nyikaw Ochalla told Vidal. The deals are done secretly. "The only thing the local people see is people coming with lots of tractors to invade their lands."

As foreign investors pour in--from Arab princedoms, India, South Korea, China and other nations--hundreds of thousands of Ethiopians are being relocated. Many, "viewed as 'squatters,' are forcibly removed with no compensation," Frederic Mousseau, policy director at the Oakland Institute, said in a press release.

Ironically, key targets of foreign agro-investment include the world's hungriest countries: In Ethiopia, 13 million people receive international food aid and 41 percent are undernourished. The country's massive transfer of physical wealth to foreign corporations is overseen by Prime Minister Meles Zenawi. One of the parties he controls, the Tigrayan People's Liberation Front, owns at least five parastatal companies and has major stakes in the agricultural products market. A carefully worded 2009 World Bank report noted that in Ethiopia "there is an impression that endowment and state-owned enterprises benefit from privileged access to policymakers and resources and are consequently able to compete on unfair terms."

Zenawi's regime has granted control of 1.48 million acres to foreign entities. Since 2007 it has approved at least 815 foreign-financed agricultural projects and is now offering up at least 7.4 million acres, some leased for only 40 cents per acre per year, according to the Mail & Guardian.

"Karuturi, an Indian company, which owns large swaths of the region, is heavily involved in burning forests and grasslands to make way for potential farmland" for biofuels, according to Nebiyu Eyassu reporting in Pambazuka News.

Compensation, when it occurs, can be paltry. In Ethiopia's Gambella region alone, 45,000 families in 49 villages have been "dislocated," Ethiopian-born writer and filmmaker Fikre Tolossa told the Commonwealth Club of California this March. "They will be resettled not too far from the lands they have been dispossessed of, so that they will be an ideal resource for cheap labor, should the need arise. After having lost their vast lands, they will end up owning a tiny piece of land: [3.2 acres] per family."

If African men fare poorly in these deals, women often fare worse. Most of Africa's small-scale farming is traditionally done by women who are rarely consulted about land deals. "[W]omen are more likely than men to spend the income they control on food, healthcare and their children's education," the International Food Policy Research Institute wrote in a 2011 report. So taking away the small plots they use to feed their families and generate income removes an important brake on hunger and extreme poverty for current and future generations.

'21st-century colonization'

Foreign investors are banking on a better outcome: up to 25 percent profits, buoyed by loose environmental and labor regulations common in desperately poor and corrupt countries. "Lack of transparency and of checks and balances in contract negotiations creates a breeding ground for corruption," the FAO said, adding with understatement, "and deals that do not maximize the public interest."

One of the public costs, lax environmental regulation, is a key perk for investors. If history is any guide, eventually--but not before great profits can be extracted--industrial monoculture agriculture will deplete soil and water; the perpetual chemical inputs including fertilizers, pesticides and herbicides will poison the environment; and pest and disease problems will strangle biodiversity.

But even when host governments impose contractual restrictions and protections, "there does not appear to be any significant enforcement of lease terms," according to the Oakland Institute report. "Our agreement with government is purely commercial," a foreign investor in Ethiopia told the Institute. "Government is charging us a rent. What we choose to do on the land for our own commercial intent is our own business. There are ... no constraints, no contracts, none of that."

The terms of Ethiopia's land deals and how they are enforced are subject to the will of Zenawi, who was "re-elected" last year by 99.6 percent, down from 99.9 percent in 2008. The U.S. State Department has accused his authoritarian regime of serious human rights violations, including politically-motivated killings and torture by state security services. Human Rights Watch charges that "development assistance is underwriting the Ethiopian government's repression."

The "land grab" in Ethiopia's Gambella and Oromia regions has elements of ethnic cleansing, says Rashid Songolo, chairman for Oromo Community Ireland, a nonprofit association that promotes the integration of the Oromos in Ireland. Property held by Oromos, Ethiopia's largest ethnic group, has been selectively sold to foreign developers, he told In These Times, "as a form of punishment and looting for those societies that sympathize with opposition political groups like OLF [Oromo Liberation Front]. The Oromos are being displaced and forced into refugee camps all over the world and into modern day slavery, because of the new 21st-century colonization."

Evidence gathered by Human Rights Watch tends to support this charge. It described Zenawi's EPRDF party apparatchiks, including militias and spies, as deciding, based on loyalty, who gets donor-financed fertilizer, seeds, food aid and jobs. The New York Times reported that one farmer said he was told: "Unless you join the EPRDF, you could die and your family will starve to death."

One of the largest investors in Ethiopian farmland, Saudi businessman (and Ethiopian-born) Sheikh Mohammed al-Amoudi, is closely linked to the Zenawi's regime and enjoys his support. Amoudi is also "close to the Saudi royal family, which sees him as a can-do guy and encourages his growing business empire in Ethiopia," according to Forbes.

A self-made billionaire 12 times over and the second-richest man in Saudi Arabia, Amoudi grows wheat, rice, vegetables and flowers for the Saudi market on four farms in Ethiopia. His Saudi Star company leases 2,500 acres housing the Awassa greenhouse complex. In the next few years, he plans to spend $2 billion on acquiring and developing 1.25 million acres of farmland.

Amoudi, whose mother was Ethiopian, says his projects are designed "to improve the livelihood of my people and help in the development of my country, and not as some might think to amass personal wealth or siphon my country's wealth. ... I need not prove this. ...

[T]hose who bear responsibility for character defamation and false allegations should learn that there are consequences for their action."

Beyond the 'white man's burden'

Even Saudi oil wealth pales before China's enormous economic engine. With $332 billion in assets, the China Investment Corporation is one of the world's largest sovereign wealth funds. And like the Saudis, China's concerns about growing unrest and food insecurity are factors in its increasing investment in foreign farmland.

China's "embrace of [Africa] is strategic, planned, long-term and still unfolding," writes Deborah Brautigam, an American University specialist in China-Africa relations. She argues that China is more concerned with economic expansion than food security, which significant portions of its leadership believe is better ensured by adequate home production.

That may be difficult to achieve. While the United States has almost 3 acres of farmland per person, China has only .23 acres. And 5,000 years of intensive farming has depleted China's soil, industrialization has poisoned much of its water, and development and urbanization have depleted rivers and land so that even as population and per capita consumption increase, the country has lost more than 20 million acres of arable land--just since the mid-1990s.

Although it is not clear that the outcome is different because of it, China has been described (and not only for the literal reason) as being unencumbered by the old "white man's burden" of having to couch investment as altruism or even win-win. In a diplomatic cable published by WikiLeaks, Ambassador Johnnie Carson, the U.S. Assistant Secretary of State for the Bureau of African Affairs, called China "a very aggressive and pernicious economic competitor with no morals. ... China is not in Africa for altruistic reasons [but] ... for China primarily." The high-horsed pronouncement took place, ironically enough, at a meeting in Nigeria with international oil companies--whose ventures are hardly distinguished by altruism.

In addition to Africa, China is investing in diverse cropland in Australia and New Zealand and looking to Indonesia for biofuels and to South America for soy for livestock production to feed its increasingly affluent population's taste for meat and dairy. China's South American interests are so extensive that some Brazilians, while crediting Chinese investment for their booming economy, fear for their autonomy.

"They are moving in," Carlo Lovatelli, president of the Brazilian Association of Vegetable Oil Industries, told Alexei Barrionuevo of The New York Times, "looking for land and reliable partners. But what they would like to do is run the show alone."

"Some experts," the Times noted, "say the partnership has devolved into a classic neo-colonial relationship in which China has the upper hand." Last year 98 percent of China's exports to Brazil were manufactured products, while almost 84 percent of Brazil's exports to China were raw materials.

But it is not as if Brazil or other countries suddenly lost an idyllic independence. Some Brazilian farmers "say they share Chinese officials' goal of breaking the stranglehold of international trading companies like Cargill and Archer Daniels Midland," Barrionuevo notes.

For the richer, not poorer

Over the last few decades, the United States--which long controlled industrial agriculture around the world, along with much of the global economy--has been losing ground. As the largest holder of U.S. debt, China has become, in effect, Washington's banker, while the United States, the world's largest grain producer, has become China's farmer, a Forbes blog noted. Foreign agricultural land offers China a great place to invest its giant trade surplus--much of it courtesy of the U.S. consumers who buy up Chinese goods--as well as a hedge against food insecurity.

That insecurity is widespread and growing. After decades of promises and thousands of schemes, much of the world remains desperately malnourished. And now, as China, the United States and others jockey for land and power, the weight of shifting empires and changing climate is threatening to crush international cooperation on ending hunger. Over the last few years there has been "an ominous retreat from the idea of common purpose based on shared values," said former U.N. Secretary General Kofi Annan. "We have seen a worrying rise in protectionism, unilateral export bans, land grabs and exclusive deals that meet the food needs of the rich but not the poor."

As fear of food insecurity mounts, even rich countries are not immune to foreign investment schemes that draw resources from one country to feed another.

A new foreign investment strategy aims to secure part of the U.S. grain harvest even before it reaches the open market, Brown told In These Times. South Korea, which imports 70 percent of its grain, has opened an office in Chicago. The public-private enterprise is planning to build grain elevators and "contract for crops directly from U.S. farmers, bypassing the large international trading firms," he says. And "[w]ith China's 1.4 billion increasingly affluent consumers starting to compete with U.S. consumers for the U.S. grain harvest," Brown writes in Foreign Policy, "cheap food, seen by many as an American birthright, may be coming to an end."

The new politics of food scarcity

Many investors say that they give back at least as much as they take. "We've really created something out of nothing in Africa," said Anthony Poorter, Africa director for EmVest, the African subsidiary of Emergent Asset Management. "There are no shady deals."

In areas with hungry people, inadequate roads and other infrastructural deficiencies, foreign capital is sorely needed to develop more rational farming operations that can promote prosperity, food security and jobs. And there is little doubt that monoculture industrial farming, genetically engineered seeds and input from pesticides and chemical fertilizers can more quickly create higher yields than small-scale subsistence farming. Properly managed, supporters of expo-agriculture argue, investment dollars can bring educational opportunities, healthcare and the possibility of safer, higher living standards to subsistence farmers and impoverished rural populations.

Some investors also believe they are serving humanity: "Unless food production is boosted 50 percent before 2050," said Poorter's boss, Emergent CEO Susan Payne, "we face serious shortages globally." Her company, which "went on record in 2007 to identify food security as the next energy security," invests in 14 countries in sub-Saharan Africa and is aiming for an annual return of 25 percent or more.

But just as international development aid schemes, such as USAID's, conform to the geopolitical strategies and economic goals of the dispensing country, private investment is shaped by an inner imperative: the need to turn a profit. Whatever the investors promise, or however decent they are as individuals, their bottom line is the bottom line.

"There is a real risk that the current scramble for land will transfer wealth from the poor and the marginalized to those who have access to capital and markets, with deeply regressive consequences," warned UN Special Rapporteur Olivier de Schutter.

And as with many previous development plans, unintended consequences may pile up the human and economic costs. The investor country's sought-after political and food stability may translate into instability in the host country, and that in turn may boomerang back on the investors and their backers. "This [land grab] is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism," says the Oakland Institute's Mousseau.

Backlashes have already occurred. When word leaked that Madagascar planned to sell 3 million acres to the South Korean firm Daewoo Logistics, popular outrage quashed the deal and toppled Madagascar's government. In the Philippines, as food prices were spiking in 2007, outcries from Filipino farmers stopped China from buying 2.5 million acres on which to grow export crops.

A pro-Oromia website warned that the situation in Ethiopia offered the "potential for a catastrophic unrest and poses a huge security headache not only for the country but for the whole world."

These targeted peoples decry the new "land grab" as a more sophisticated incarnation of old colonialism--driven today by a tangle of factors, including climate change, population growth, fear of social unrest, diminishing water and land, trade restrictions, erosion and pollution, the volatility of commodity prices and markets, speculation, the energy crisis, agro-energy/biofuel production, the global financial crisis, carbon trading and on and on.

Private and government investors defend win-win agro-investment as part of the solution to world hunger and an important step on the path to prosperity. Reliance on the market and private profit-driven investment, they say, is an improvement over decades of failed NGO and "humanitarian" development schemes that failed to feed the planet's almost 1 billion hungry people, or raise up the 2 billion who live on less than $2 a day.

From either viewpoint, it is clear that the geopolitics of food scarcity has undergone a major shift. Land is the new gold and mining it for export food, extracting its water to incorporate into crops and taking advantage of cheap labor and lax environmental laws are now, as Brown puts it, "integral parts of a global power struggle for food security."

And all sides agree: When people are hungry enough, they are likely to choose the risk of revolution over the certainty of starvation. Governments that are unable to secure affordable food for their populations are vulnerable to the kind of social unrest that has long been part of history's hunger not only for food, but for justice.

Budget Talks Have Major Defence Contractors on Edge

Budget Talks Have Major Defence Contractors on Edge

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When an expensive unmanned aircraft built by Lockheed Martin Corporation, a U.S. defense contractor, disappeared during a U.S. military test flight off the Pacific coast earlier this month, the debacle raised eyebrows.

The incident also raised criticism that the U.S. government is spending millions on hefty defense contracts to pay for technology that does not work.

The experimental craft was designed to travel at 20 times the speed of sound and be able to attack targets anywhere on earth within 60 minutes. Part of a defense department programme named "Prompt Global Strike" that has cost about 320 million dollars - this was only the aircraft’s second flight.

But Lockheed Martin, the world’s largest defense contractor, held a press briefing here Wednesday to defend its technology and responded to speculation that a congressional super-committee, appointed in August to identify areas for federal budget cuts, might take a red pen to defense spending.

While company executives did not address the test flight incident, they did reassure reporters that the company’s missile d

According to the Arms Control Association, the U.S. spends about 10 billion dollars on missiles systems annually, which includes spending on missiles as well as satellites, communication, research, and anti- missile technology.

Company executives told reporters that Lockheed Martin has actually saved the U.S. government hundreds of millions of dollars since 2006 by selling its PAC-3 missile defense technology - an interceptor missile the U.S. also buys - to Taiwan, Japan, the Netherlands, Germany, and the United Arab Emirates, a move Lockheed said reduced its production costs.

Designed to intercept targets in mid-air, the technology is also slated for use in the Medium Extended Air Defense System (MEADS) programme, a design-stage missile defense programme paid for by Germany, Italy, and the United States, managed by the North-Atlantic Treaty Organisation and developed by an industry group led by Lockheed Martin.

In March, the U.S. defense department said it will continue to foot its 58 percent share of the bill to develop the MEADS program, at a cost of over 800 million dollars until 2013, even though it plans to exit the tri-national deal before the technology is up and running.

The Pentagon has already spent 1.5 billion dollars on MEADS. Through the arrangement, Lockheed Martin executives said Wednesday that the U.S. would retain intellectual property (IP) rights to the technology that it will be able to "harvest" in the future.

But critics have questioned not only whether spending so much money on technology developed by private defense contractors is worth the money, but whether the science behind the technology is sound.

Nick Schwellenbach, director of investigations for the Washington-based government watchdog group Project On Government Oversight (POGO), said defense contractors often provide the scientific information governments use to evaluate such technologies.

"These contractors are seen by the government as having scientific and technical expertise, especially since the government has largely gutted itself of its own scientific and technical expertise," Schwellenbach told IPS.

"The government is especially reliant on contractors to tell it what works and what doesn’t, to provide data and then do analysis of the data," Schwellenbach said. "Basically contractors have a lot of power to help steer government decision-making regarding major weapons programs."

Schwellenbach said that the positive outlooks presented by contractors could influence government missile defense policy and spending.

"Year after year we have dismal performance by Lockheed Martin," Schwellenbach told IPS. He said issues with the company included cost and schedule overruns on multiple contracts. Lockheed Martin holds the number one ranking at the top of POGO’s Federal Contractor Misconduct Database. "If the cost overruns and schedule delays were minor they could be overlooked - sometimes these contracts double in expense. Sometimes these weapons don’t even work."

Schwellenbach said there are independent groups, such as the Union of Concerned Scientists, which can offer contrary opinions on such missile defense systems. The group, an independent, non-profit composed of citizens and scientists, has been critical of missile defense technology.

"Tax payers have ponied up tens of billions of dollars and we still don’t have a system that works," Schwellenbach told IPS. He said there has never been a realistic test of the missile defense system. "Essentially, you are trying to get a bullet to hit a bullet."

William Hartung, director of the Arms and Security Project at the Center for International Policy and author of ‘Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex’, said talks of defense budget cuts have private defense contractors like Lockheed Martin alarmed.

"In contrast to the last decade or more… the days when the money was flowing easily and they could get everything they wanted are definitely coming to a close," Hartung told IPS.

However, Hartung said Lockheed Martin had plans to bid on a contract worth billions of dollars to build ground-based missile defense silos in Alaska and at the Vandenberg Airforce Base in California - a project that could continue for many more years.

The U.S. Department of Defense frames the need for the project around the idea of a threat from North Korea, but Hartung said North Korea didn’t have missiles strong enough to reach the U.S.

"If (North Korea) attacked the United States it would be terrible but it would not undermine the U.S. ability to retaliate and destroy North Korea," Hartung told IPS. "It would be suicidal for North Korea to do that."

Referring to the fact that the U.S. has justified its defense programs through fear mongering he added, "There is a lot riding on the notion that North Korea is an emerging threat."

U.S. Economy Even Weaker Than Thought

U.S. Economy Even Weaker Than Thought

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Spending increased only 0.4 percent in the second quarter, the weakest growth since the final three months of 2009. People bought fewer long-lasting manufactured goods, such as autos and appliances.

Spending increased only 0.4 percent in the second quarter, the weakest growth since the final three months of 2009. People bought fewer long-lasting manufactured goods, such as autos and appliances.
Scott Olson/Getty Images

Spending increased only 0.4 percent in the second quarter, the weakest growth since the final three months of 2009. People bought fewer long-lasting manufactured goods, such as autos and appliances.

The U.S. economy grew at a meager 1 percent annual pace this spring, a slower rate than previously estimated. The downward revision will likely increase fears that the economy is at risk of another recession.

Fewer exports and weaker growth in business stockpiles led the Commerce Department to lower its estimate for the April-June quarter from its previous rate of 1.3 percent growth. That means the economy expanded only 0.7 percent in the first six months of the year.

Economists note that nine of the past 11 recessions since World War II have been preceded by a period of growth of 1 percent or less. The weaker growth could rattle an already edgy stock market, which has lost 12 percent of its value since July 21.

The report shows the economy was barely expanding even before this month's stock market plunge. Economists worry that the Wall Street sell-off could cause consumers and businesses to pull back on spending and investment.

High gas and food prices have already eroded consumers' buying power. Spending increased only 0.4 percent in the April-June period, the weakest growth since the final three months of 2009. The revision showed spending was a bit higher than the government's first estimate of 0.1 percent growth.

Tracking U.S. Growth

Seasonally adjusted annual rate, in percent

Tracking U.S. Growth

People bought fewer long-lasting manufactured goods, such as autos and appliances. Those purchases fell 5.1 percent this spring, the biggest drop since the final three months of 2008. That partly reflects a shortage of autos on many dealer lots after the March 11 earthquake in Japan. Consumers spending accounts for 70 percent of growth.

"Consumption still barely had a pulse," said Tom Porcelli, chief U.S. economist at RBC Capital Markets.

Government spending contracted for the third straight quarter. And spending by state and local governments declined for the seventh time in eight quarters.

What Can The Fed Do?

Federal Reserve Chairman Ben Bernanke will deliver a highly anticipated speech later Friday in Jackson Hole, Wyo. Investors hope he will signal that the Fed will launch a new effort to boost the economy, but analysts don't expect anything ambitious.

The central bank has already cut the benchmark short-term interest rate it controls to nearly zero, and last week pledged to keep it there until mid-2013. But so far lower interest rates haven't helped: mortgage rates, for example, are already at record lows, and home sales are still falling.

Several dismal economic reports have suggested the economy worsened in the July-September quarter, sending the stock market lower. Manufacturing in the mid-Atlantic region contracted in August by the most in more than two years, a survey by the Federal Reserve Bank of Philadelphia found. A Richmond Fed survey released Tuesday and a New York Fed survey last week also pointed to slowdowns in those areas, although not as severe.

There have been some positive signs. The economy added 117,000 net jobs in July, twice the number added in each of the previous two months. Consumers spent more on retail goods last month than in any month since March. U.S. automakers rebounded last month to boost factory production by the most since the Japan crisis.

Most economists aren't forecasting a recession. JPMorgan Chase projects the U.S. economy will grow only 0.9 percent this year and 1.7 percent in 2012, much lower than the bank's estimates just a few weeks ago. Other economists have made similar downgrades.

Media Blackout: US in Yet Another Illegal War ... in Yemen

Media Blackout: US in Yet Another Illegal War ... in Yemen

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Airstrike Kills 8 Suspected Militants in Yemen ... Officials in Yemen say an airstrike has killed eight militants in the country's south. The officials said Thursday's strike targeted a position held by militants with suspected links to al-Qaida in Yemen. On Wednesday, clashes between Yemeni forces and militants near Zinjibar in southern Abyan province killed at least 30 militants and seven soldiers. Militants have taken control of several areas in southern Yemen during the six-month uprising pressing for President Ali Abdullah Saleh's resignation. – Voice of America

Dominant Social Theme: The US is helping its Yemeni allies fight back against the terror threat.

Free-Market Analysis: How many wars are too many? Unnoticed largely in the press of larger events and obviously downplayed by the controlled Western media, the US and its allies are pursuing yet ANOTHER aggressive, illegal war – this one in Yemen.

How aggressive is it? It is a full-on conflict that has reportedly seen SEALS come ashore on a regular basis at night to engage tribal fighters in Abyan province, this newspaper has learned from sources in Yemen itself that are in a position to know.

The US is now involved in almost innumerable wars in the Middle East, but most have been reported in one way or another. This one has not been fully vetted as it continues to expand. Unconstitutional, secretive and expanding in scope and violence, it includes the massive, violent projection of US naval, air and Special Forces into parts of Yemen.

It is no skirmish but a coordinated, daily attack against hostile forces that supposedly include a number of "al Qaeda" (whatever they are) protected by local tribesman in the south of Yemen who have rebelled against President Ali Abdullah Saleh's regime. It involves considerable military effort and expenditure of what must be a US task force that includes sea, air and land power.

Despite the new war's massive scope, the major media and Congress remain culpably silent on this latest war (is there any other word for it?) even though such a massive military campaign must be well known to top power players in the media, in politics, in the intelligence community and obviously in the Pentagon itself.

This war is at least two months old, but its violence and aggressiveness have remained unreported until now. It has already resulted in the death of numerous civilians, including women and children. These deaths have gone unreported as well.

It is true that there have been a number of GENERAL reports on this new conflict but the scope and aggressiveness of this new war remain unstated. Those who live in Yemen – some 25 million people – are aware that the US is operating with impunity on Yemen's Southern flank, but the rest of the world does not know. Those in positions of power are obviously too frightened or too careful to comment.

The evil of unrestrained violence projected from what was once a US republic continues to expand; the evil of secret wars, secret violence, secret civilian deaths is a corrosive acid that eats away at civil society until the citizens of the West themselves will be exposed to the ruin they are currently visiting on other countries. The danger is not just to "terrorists" overseas but also to anyone who wishes to retain what is left of Western civilization.

In fact, the rights of those who reside in the US republic continue to degrade as the US and the West continue to pursue a phony war on terror. It is no accident in our view, but seemingly a malicious policy pursued by the world's top banking families – the power elite – in hopes of abrogating what remain of the rights of US citizens to understand and shape the military and political policies of their own country.

It is as well an abrogation of the US Constitution to regularly invade another country's shores without Congress holding a debate and declaring war. This is not merely a skirmish or "fly over" but a full-on military confrontation and it is one that has larger ramifications economically.

If Yemen is destabilized, Bahrain and eventually Saudi Arabia itself could become embroiled in domestic turmoil, which many observers believe could eventually end the fragile Saudi regime – the House of Saud. The Saud monarchy recently passed a law making it illegal for anyone to criticize a member of the Saud ruling family. Jail is to be the result, up to five years or more.

A failed Saud regime would likely collapse the US dollar as the world's reserve currency. The results would make the financial turmoil from the current downgrade of US Treasuries look minor, indeed. The failure of the US dollar reserve could create a world depression of the sort that has not been seen since the Great Depression of the 1930s.

Nonetheless, a variety of forces are acting on the core of the Middle East to destabilize it. There are some, in fact, who suggest that President Saleh purposefully allowed the Southern tribes to rebel to pressure the West into supporting his failing government. But as is seemingly always the case, once the initial strategy has been implemented, the conflict spirals out of control.

What may have begun as a pressurizing strategy now threatens to destabilize the entire Southern area of Yemen and cause at the very least a schism between North and South. Perhaps this could result, as in the past, in disunion between North and South. Saleh himself came to power based on his ability to unify the North and South some 30 years ago. Now Yemen looks to be disintegrating.

The current round of military actions are being carried out in conjunction with Saudi Arabia, which increasingly serves as a proxy for US power in the region. Saudi aircraft are supposedly bombing in Abyan along with US planes. The Yemeni air force is not so involved as its pilots apparently proved ineffective in comparison with Saudi and American air power.

The secret war is being carried out in conjunction with the headless government of President Saleh who now resides in Saudi Arabia after having been blown up in a mosque in Yemen and undergoing at least six separate operations for burns and for lung and chest injuries.

Reports are rife in Yemen about the US's newfound aggressiveness, which is over two months old but as yet unreported by a single mainstream media outlet. Not only are US "boots on the ground," day and night a US carrier group pours missiles into the Abyan region, causing the abandonment of large parts of at least one major urban center there.

Planes are launching regular attacks from an aircraft carrier off the coast of Abyan, in addition to the unmanned drones flyover missions. This is a coordinated and massive military action and one of grave import that should have given rise to public debate in the US Congress. But there is only silence as the US military-industrial complex carries out its hostilities.

The gravity of such an engagement is obvious, given that wars once engaged can go on for years, even decades. The US is struggling with economic failure and social unrest. The addition of another apparently major war in the Middle East is a burden that citizens should willingly share if the need is great enough and the threat severe enough.

But there has been no discussion of adding yet another major war to the military actions now being conducted by the US and NATO in such countries Libya, Iraq, Somalia, Afghanistan and Syria.

Elite elements of the West's military, intelligence and political establishment are entirely out of control, it would seem. The determination to project power anywhere and at any time is eroding even the frailest of constraints on powerful men who operate at the behest of the global banking establishment.

Conclusion: The purposeful degradation of civilization itself is apparently the aim of the elites. The goal is world government. Out of chaos, order. With secret, illegal, unconstitutional wars like the one in Yemen, this goal is advanced. The gravity cannot be overstated. The mounting recklessness and lawlessness of these actions provide evidence that opposition to freedom and civil society – embedded in mainstream Western institutions themselves – grow ever more bold.

3 Things That Must Happen for Us To Rise Up and Defeat the Corporatocracy

3 Things That Must Happen for Us To Rise Up and Defeat the Corporatocracy

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Transforming the United States into something closer to a democracy requires: 1) knowledge of how we are getting screwed; 2) pragmatic tactics, strategies, and solutions; and 3) the “energy to do battle.”

The majority of Americans oppose the corporatocracy (rule by giant corporations, the extremely wealthy elite, and corporate-collaborator government officials); however, many of us have given up hope that this tyranny can be defeated. Among those of us who continue to be politically engaged, many focus on only one of the requirements—knowledge of how we are getting screwed. And this singular focus can result in helplessness. It is the two other requirements that can empower, energize, and activate Team Democracy— a team that is currently at the bottom of the standings in the American Political League.

1. Knowledge of How We are Getting Screwed

Harriet Tubman conducted multiple missions as an Underground Railroad conductor, and she also participated in the Union Army’s Combahee River raid that freed more than 700 slaves. Looking back on her career as a freedom fighter, Tubman noted, “I freed a thousand slaves. I could have freed a thousand more if only they knew they were slaves.” While awareness of the truth of corporatocracy oppression is by itself not sufficient to win freedom and justice, it is absolutely necessary.

We are ruled by so many “industrial complexes”—military, financial, energy, food, pharmaceutical, prison, and so on—that it is almost impossible to stay on top of every way we are getting screwed. The good news is that—either through independent media or our basic common sense—polls show that the majority of Americans know enough about the Afghanistan and Iraq wars, Wall Street bailouts, and other corporate welfare to oppose these corporatocracy policies. In the case of the military-industrial complex, most Iraq War polls and Afghanistan War polls show that the majority of Americans know enough to oppose these wars. And when Americans were asked in a CBS New /New York Times survey in January 2011 which of three programs—the military, Medicare or Social Security—to cut so as to deal with the deficit, fully 55 percent chose the military, while only 21 percent chose Medicare and 13 percent chose Social Security.

In the words of Leonard Cohen, “Everybody knows that the deal is rotten.” Well, maybe not everybody, but damn near everybody.

But what doesn’t everybody know?

2. Pragmatic Tactics, Strategies and Solutions

In addition to awareness of economic and social injustices created by corporatocracy rule, it is also necessary to have knowledge of strategies and tactics that oppressed people have historically used to overcome tyranny and to gain their fair share of power.

Even before the Democratic-Republican bipartisan educational policies (such as “no child left behind” and “race to the top”) that cut back on civics being taught in schools, few Americans were exposed in their schooling to “street-smart civics”—tactics and strategies that oppressed peoples have historically utilized to gain power.

For a comprehensive guide of tactics and strategies that have been effective transforming regimes more oppressive than the current U.S. one, read political theorist and sociologist Gene Sharp’s From Dictatorship to Democracy, which includes nearly 200 “Methods of Nonviolent Actions.” Among Sharp’s 49 “Methods of Economic Noncooperation,” he lists over 20 different kinds of strikes. And among his 38 “Methods of Political Noncooperation,” he lists 10 tactics of “citizens’ noncooperation with government,” nine “citizens’ alternatives to obedience,” and seven “actions by government personnel.” Yes, nothing was more powerful in ending the Vietnam War and saving American and Vietnamese lives than the brave actions by critically thinking U.S. soldiers who refused to cooperate with the U.S. military establishment. Check out David Zeigler’s documentary Sir! No Sir! for details.

For a quick history lesson on “the nature of disruptive power” in the United States and the use of disruptive tactics in fomenting the American Revolution, the abolitionist movement, the labor movement, and other democratic movements, check out sociologist Frances Fox Piven’s Challenging Authority: How Ordinary People Change America. Piven describes how “ordinary people exercise power in American politics mainly at those extraordinary moments when they rise up in anger and hope, defy the rules that ordinarily govern their daily lives, and, by doing so, disrupt the workings of the institutions in which they are enmeshed.” In the midst of the Great Depression when U.S unemployment was over 25 percent, working people conducted an exceptional number of large labor strikes, including the Flint, Michigan sit-down strike, which began at the end of 1936 when auto workers occupied a General Motors factory so as to earn recognition for the United Auto Workers union as a bargaining agent. That famous victory was preceded and inspired by other less well-known major battles fought and won by working people. Check out the intelligent tactics (and guts and solidarity) in the 1934 Minneapolis Truckers Strike.

For an example of “the nature of creative power” that scared the hell out of—and almost triumphed—over the moneyed elite, read The Populist Moment by historian Lawrence Goodwyn. The Populist movement, the late-19th-century farmers’ insurgency, according to Goodwyn, was the largest democratic movement in American history. These Populists and their major organization, commonly called the “Alliance,” created worker cooperatives that resulted in empowering economic self-sufficiency. They came close to successfully transforming a good part of the United States into something a lot closer to a democracy. As Goodwyn notes, “Their efforts, halting and disjointed at first, gathered form and force until they grew into a coordinated mass movement that stretched across the American continent ... Millions of people came to believe fervently that the wholesale overhauling of their society was going to happen in their lifetimes.”

In Get Up, Stand Up, I include the section “Winning the Battle: Solutions, Strategies, and Tactics.” However, a major point of the book is that, currently in the United States, even more ignored than street-smart strategies and tactics is the issue of morale, which is necessary for implementing these strategies and tactics. So, I also have a section “Energy to Do Battle: Liberation Psychology, Individual Self-Respect, and Collective Self-Confidence.”

3. The Energy to Do Battle

The elite’s money—and the influence it buys—is an extremely powerful weapon. So it is understandable that so many people who are defeated and demoralized focus on their lack of money rather than on their lack of morale. However, we must keep in mind that in war, especially in a class war when one’s side lacks financial resources, morale becomes even more crucial.

Activists routinely become frustrated when truths about lies, victimization and oppression don’t set people free to take action. But having worked with abused people for more than 25 years, it doesn’t surprise me to see that when we as individuals or a society eat crap for too long, we become psychologically too weak to take action. There are a great many Americans who have been so worn down by decades of personal and political defeats, financial struggles, social isolation and daily interaction with impersonal and inhuman institutions that they no longer have the energy for political actions.

Other observers of subjugated societies have recognized this phenomenon of subjugation resulting in demoralization and fatalism. Paulo Freire, the Brazilian educator and author of Pedagogy of the Oppressed, and Ignacio Martin-BarĂ³, the El Salvadoran social psychologist and popularizer of “liberation psychology,” understood this psychological phenomenon. So did Bob Marley, the poet laureate of oppressed people around the world. Many Americans are embarrassed to accept that we, too, after years of domestic corporatocracy subjugation, have developed what Marley called “mental slavery.” Unless we acknowledge that reality, we won’t begin to heal from what I call “battered people’s syndrome” and “corporatocracy abuse” and to, as Marley urges, “emancipate yourself from mental slavery.”

Whether one’s abuser is a spouse or the corporatocracy, there are parallels when it comes to how one can maintain enough strength to be able to free oneself when the opportunity presents itself—and then heal and attain even greater strength. This difficult process requires honesty that one is in an abusive relationship. One should not be ashamed of having previously believed in corporatocracy lies; and it also helps to forgive and have compassion for those who continue to believe them. The liars we face are often quite good at lying. It helps to have a sense of humor about one’s predicament, to nurture respectful relationships, and to take advantage of a lucky opportunity—often created by the abuser’s arrogance— when it presents itself.

For democratic movements to have enough energy to get off the ground, certain psychological and cultural building blocks are required. Goodwyn, from his study of the Populists in the United States, Solidarity in Poland, and other democratic movements, concluded that “individual self-respect” and “collective self-confidence” constitute the cultural building blocks of mass democratic politics. Without individual self-respect, people do not believe that they are worthy of power or capable of utilizing power wisely, and they accept as their role being a subject of power. Without collective self-confidence, people do not believe they can succeed in wresting power away from their rulers. There are “democracy battlefields” —in our schools, workplace and elsewhere—where such respect and confidence can be regained every day.

No democratic movement succeeds without determination, courage, and solidarity, but modern social scientists routinely ignore such nonquantifiable important variables, and so those trained only in universities and not on the streets can, as Martin-BarĂ³ pointed out, “become blind to the most important meanings of human existence.” Great scientists recognize just how important nonquantifable variables are in certain areas of life. A sign hanging in Albert Einstein’s office at Princeton stated: not everything that can be counted counts, and not everything that counts can be counted.

The battle against the corporatocracy needs critical thinking, which results in seeing some ugly truths about reality. This critical thinking is absolutely necessary. Without it, one is more likely to engage in tactics that can make matters worse. But critical thinking also means the ability to think critically about one’s pessimism—realizing that pessimism can cripple the will and destroy motivation. A critical thinker recognizes how negativism can cause inaction, which results in maintaining the status quo. Antonio Gramsci (1891–1937), an Italian political theorist and Marxist activist who was imprisoned by Mussolini, talked about “pessimism of the intellect, optimism of the will” —a phrase that has inspired many critical thinkers, including Noam Chomsky.

Can one have hope without being an insipid Pollyanna? Until shortly before it occurred, the collapse of the Soviet empire seemed an impossibility to most Americans, who saw only mass resignation within the Soviet Union and its sphere of control. But the shipyard workers in Gdansk, Poland, did not see their Soviet and Communist Party rulers as the all-powerful forces that Americans did. And so Polish workers’ Solidarity, by simply refusing to go away, provided a strong dose of morale across Eastern Europe at the same time other historical events weakened the Soviet empire.

Today in Iceland, citizens have refused to acquiesce to the demands of global financial institutions, simply refusing to be taxed for the mistakes of the financial elite that caused their nation’s recent financial meltdown. In a March 2010 referendum in Iceland, 93 percent voted against repayment of the debt, and Icelandic citizens have been drafting a new constitution that would free their country from the power of international finance (this constitution will be submitted to parliament for approval after the next elections). Yes, participatory democracy is still possible.

The lesson from the 2011 Arab spring in and other periods of history is that tyrannical and dehumanizing institutions are often more fragile than they appear, and with time, luck, morale, and our ability to seize the moment, damn near anything is possible. We never really know until it happens whether or not we are living in that time when historical variables are creating opportunities for seemingly impossible change. Thus, we must prepare ourselves by battling each day in all our activities to regain individual self-respect, collective self-confidence, determination, courage, and solidarity.

Hello Wall Street - We Are Anonymous

This Labor Day We Need Protest Marches Rather than Parades

This Labor Day We Need Protest Marches Rather than Parades

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Labor Day is traditionally a time for picnics and parades. But this year is no picnic for American workers, and a protest march would be more appropriate than a parade.

Not only are 25 million unemployed or underemployed, but American companies continue to cut wages and benefits. The median wage is still dropping, adjusted for inflation. High unemployment has given employers extra bargaining leverage to wring out wage concessions.

All told, it’s been the worst decade for American workers in a century. According to Commerce Department data, private-sector wage gains over the last decade have even lagged behind wage gains during the decade of the Great Depression (4 percent over the last ten years, adjusted for inflation, versus 5 percent from 1929 to 1939).

Big American corporations are making more money, and creating more jobs, outside the United States than in it. If corporations are people, as the Supreme Court’s twisted logic now insists, most of the big ones headquartered here are rapidly losing their American identity.

CEO pay, meanwhile, has soared. The median value of salaries, bonuses and long-term incentive awards for CEOs at 350 big American companies surged 11 percent last year to $9.3 million (according to a study of proxy statements conducted for The Wall Street Journal by the management consultancy Hay Group.). Bonuses have surged 19.7 percent.

This doesn’t even include all those stock options rewarded to CEOs at rock-bottom prices in 2008 and 2009. Stock prices have ballooned since then, the current downdraft notwithstanding. In March, 2009, for example, Ford CEO Alan Mulally received a grant of options and restricted shares worth an estimated $16 million at the time. But Ford is now showing large profits – in part because the UAW agreed to allow Ford to give its new hires roughly half the wages of older Ford workers – and its share prices have responded. Mulally’s 2009 grant is now worth over $200 million.

The ratio of corporate profits to wages is now higher than at any time since just before the Great Depression.

Meanwhile, the American economy has all but stopped growing – in large part because consumers (whose spending is 70 percent of GDP) are also workers whose jobs and wages are under assault.

Perhaps there would still be something to celebrate on Labor Day if government was coming to the rescue. But Washington is paralyzed, the President seems unwilling or unable to take on labor-bashing Republicans, and several Republican governors are mounting direct assaults on organized labor (see Indiana, Ohio, Maine, and Wisconsin, for example).

So let’s bag the picnics and parades this Labor Day. American workers should march in protest. They’re getting the worst deal they’ve had since before Labor Day was invented – and the economy is suffering as a result.

Locked Up Abroad—for the FBI

Locked Up Abroad—for the FBI

Inside the feds' secret program to have American citizens detained and interrogated by foreign governments.
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