Sunday, January 23, 2011

Revival of a Military Option: Israel's Covert War Against Iran Is On

Revival of a Military Option: Israel's Covert War Against Iran Is On

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After talks in Istanbul between Iran and the West on its nuclear program broke down on January 22, the danger of revival of a military option looms large. It may not come in the form of a direct, conventional US and/or Israeli strike against Iran’s nuclear installations, but rather in the guise of the warfare of the future, with cyber-weapons and terrorism. Political forces opposed to such an escalation in the Iran conflict would do well to examine the reasons why dialogue on the nuclear issue has failed thus far, and reshape their approach to dealing with the Islamic Republic.

On the eve of talks between Iran and the West, the German weekly of record published a devastating expose’ of Israeli covert operations against the Islamic Republic, including targeted assassinations. The cover story of the popular weekly Der Spiegel, entitled “David’s Avengers: Israel’s secret killer-commandos,“ hit the newsstands and arrived in subscribers’ mailboxes on Monday January 17, just four days before talks were to open in Turkey, between Iran and the 5+1 group – the five UN Security Council permanent members plus Germany.

The well-researched story, subtitled, “The Invisible War,” documents what every government knows but few will dare to say. “Sabotage and assassination attempts against Iranian scientists are regarded as standard weapons in the arsenal of the Israeli secret service, Mossad,” runs the introductory blurb; “They are supposed to set back the mullahs’ nuclear program. The latter react by arresting presumed perpetrators.” The gist of the report is that, through a coordinated series of operations, from assassinations of nuclear scientists, support for ethnic terrorists, and computer virus attacks (Stuxnet), the Mossad has in fact succeeded in halting progress on Iran’s nuclear program, thus postponing the date when the Mossad and others reckon that Tehran might achieve a military nuclear capability. A clear indication of Mossad’s success cited is the assessment by outgoing chief Meir Dagan, that Iran could not reach that capability before 2015 at the earliest. Dagan, said to be opposed to military action against Iran on grounds it would backfire, is the one who led this invisible warfare. In contrast, those Israeli leaders ideologically committed to conflict with Iran, like Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak, and others, have trumpeted the notion that Iran is on the verge of developing the bomb, as a way of demanding enhanced sanctions as well as continuing threats of military action, by Washington, of course. (1) From the US, the assessment has tended to dovetail with Dagan’s, because the Americans have been not only privy to, but complicit in the covert war.

There is no doubt that such a covert war is raging. On November 29, 2010, two Iranian nuclear scientists were subjects of assassination attempts: Majeed Shahriari died when a car bomb exploded as he left his Tehran home, and his colleague, Feridun Abbasi Davani, narrowly escaped a similar attempt. On January 12, 2011, another nuclear physicist, Massoud Ali Mohammadi, died when a bomb placed on a motorcycle next to the driver’s side of his car exploded. In this case, Iranian authorities arrested a co-national, Majeed Jamali Fash, who later confessed on television to the deed. He declared he had been recruited by the Mossad, trained in Israel, and paid $50,000 for the crime. In addition, the deadly Stuxnet virus reportedly destroyed 20% of Iran’s centrifuges. This, the “most sophisticated cyber-weapon ever produced” was developed in a joint US-Israel program and tested at Israel’s nuclear plant in Dimona


Noteworthy in Der Spiegel’s report is its documentation of the historical continuity of this targeted assassination policy. In the 1970s and 1980s, Mossad’s killer commandos went after “terrorists, persons who produced WMD or supplied them to Israel’s enemies, as well as military leaders of the adversary.” In this period, a long list of Palestinians from Fatah and Hamas, as well as Hezbollah leaders, turned up as corpses. But the policy goes back even farther to the earliest days of Israel’s existence, in the work of groups like Lechi (Stern Gang) and others. Der Spiegel also recalls that leading Israeli political figures, including Yitzhak Shamir, Barak, and Deputy Prime Minister Moshe Yaalon served in such capacities.

The Israel Problem

Why Der Spiegel launched this timely expose’ is an open question, at least for this author. Germany is part of the 5+1 process and the Berlin government has consistently aligned with the US in expanding sanctions, as well as ritually repeating the country’s “historical” responsibility to safeguard Israel’s security. All the more significant that such an expose’ should appear in Germany. There evidently exists at least one faction in the political and security elites that knows that the complex crises hovering over the Middle East/Persian Gulf region cannot be solved without addressing the Israel problem.

Israel is the problem. First, it is the only nuclear military power in the region, yet has neither signed the Non-Proliferation Treaty, nor therefore allowed the International Atomic Energy Agency to pry into its facilities. Yet, the major world powers have tacitly adhered to the “don’t ask, don’t tell” policy whereby Israel does not acknowledge its nuclear warheads, but asserts it will never be the first to use them. And whenever anyone raises the issue at the IAEA or UN, it is shot down.

Secondly, Israel has cheerfully ignored any and all international pressure to seriously engage in negotiations towards peace with the Palestinians. The most blatant expression of Tel Aviv’s impudence in this regard has been its categorical refusal to halt settlements on occupied Palestinian land including East Jerusalem. Now, with release of the Palestine Papers by Aljazeera, insult has been added to injury. The leaked papers make two claims: that the Palestinian Authority, desperate to clinch a deal, made wide-ranging concessions on all critical issues (refugees, land, East Jerusalem, settlements) and that the Israelis consistently demanded more. (How the documents were obtained and given to Aljazeera is an important question. And, who filmed the negotiating sessions? Did the participants know they were being filmed? If one asks cui bono? – who benefits? – then Israel would be the likely answer: the leaks have discredited, if not humiliated, the Palestinian leadership, potentially fuelling the conflict between it and Hamas, while the Israelis come across as obstinately committed to keeping the occupied territories and expelling the Palestinians from a purely Jewish state – nothing new. )

Prior to the release of the Palestine Papers, the Palestinian Authority, rightly fed up with continuing settlement expansion, had appealed to the UN to declare the settlements policy illegal. Despite pressure from Washington not to present a resolution to the Security Council, the Arab League did just that on January 19. The text states that “Israeli settlements established in the Palestinian Territory occupied since 1967, including East Jerusalem, are illegal and constitute a major obstacle to the achievement of a just, lasting and comprehensive peace.” The language reflects earlier statements made by US President Obama himself, as well as other members of the Quartet, and aims at placing the US and its partners between a rock and a hard place. The resolution has up to 120 co-sponsors, and could pass the Security Council on condition the US were not to use its veto. Presumably, no vote will be cast until the Quartet meets, perhaps in early February at the annual Wehrkunde conference in Munich, Germany. Although Secretary of State Hillary Clinton opposes the resolution, Obama, who had rejected the legitimacy of the settlements in his Cairo speech, is under pressure to let the resolution pass. A group of former diplomats has issued a letter to Obama, demanding that he instruct the UN ambassador to vote for it. (2)

This appeal to the UN comes at a time when one after another member nation is declaring its recognition of a Palestinian State within the 1967 borders, and with a capital in East Jerusalem. Brazil, Argentina, Bolivia, Guyana, and Ecuador have recently taken this step, to be followed by Chile, Uruguay, Paraguay, and Peru ( Other Central American states as well as those in Africa are expected to add their names to the 109 or more who have recognized Palestine. (3)Palestinian Authority Prime Minister Salam Fayad is planning to bring the issue to the UN in September. While a two-thirds majority in the General Assembly is almost within reach, in the Security Council the US could kill it with a veto. But pressure on Washington is coming also from those quarters; during a visit to Palestine in January, Russian Federation President Dmitry Medvedev stated that Russia’s recognition of the Palestinian State in 1988 still held.(4) If the General Assembly delivers a majority vote, this will be a step towards welcoming Palestine as a UN member. Palestinian President Mahmoud Abbas has ruled out a unilateral declaration of independence, but as Abdallah Frangi, his foreign policy advisor, told the Frankfurter Allgemeine Zeitung on January 20, “This would strengthen our position. Israel would then no longer be negotiating with the Palestinian Authority but with a state, whose territory it has largely occupied.”

Add to this the turning tide in Europe. While Spain is expected to be the first on the old continent to recognize a Palestinian State, a report compiled by EU consuls in Jerusalem and Ramallah recommended that East Jerusalem be treated as the Palestinian capital, that Israeli products from there be boycotted, and that EU officials not visit Israeli government offices beyond the Green Line, among other measures ( As Haaretz notes, the fact that the EU is not only issuing complaints, but taking operative steps is new, and could “constitute the foundations for sanctions against Israel.” Haaretz columnist Akiva Elder wrote that the report reflects “a dramatic, negative change in the international community’s attitude toward Israel in general, and East Jerusalem in particular” ( east-jerusalem-reflects-negative-turn-toward-israel-1.336112). A further indication of this dramatic turn is the expansion of the boycott, divestment, and sanctions (BDS) campaign worldwide (See “The ‘South Africa moment’: Palestine, Israel and the boycott,”

Israel’s tarnished image continues to fade, even at home. At year’s end, a Tel Aviv district court judged that former President Moshe Katsav was a rapist and sexual molester while occupying the highest office of the land. And a new political mobilization is spreading throughout the country, as human rights activists take to the streets to protest Avigdor Lieberman’s investigation into allegedly illegal funding of NGOs. A Peace Now director leading the demonstrations said at a rally on January 15 that “the Lieberman threat … is a greater threat than Iran.”

Thus, as Iran and the 5+1 met in Istanbul, the political and moral stature of Israel had shrunk considerably.

Swap or No Swap

“Common knowledge” has it that the conflict revolves around Iran’s insistence on pursuing nuclear technology to complete the entire cycle, while the West, suspicious of Tehran’s ultimate motives, demands that the Islamic Republic give up its enrichment program, if not the nuclear program in toto. As I have argued, this is not an accurate depiction of the dispute; in reality, it is a contest between national sovereignty and independence as opposed to technological apartheid (

In an attempt to solve the ostensible problem of suspected military ambitions, the IAEA proposed that Iran send its low-grade enriched uranium abroad in exchange for high-grade fuel. This proposal, discussed in Geneva in October 2009, was rejected by Iran, on grounds that delivery would be uncertain and too late. It then offered its own proposal, that the IAEA safeguard about 30% of Iran’s uranium inside the country, while a supplier would be found. The West said no to this idea. Then, in May 2010, Brazil, Turkey, and Iran announced a breakthrough formula whereby such a swap could take place in Turkey.(5) The response of the West was immediate rejection, not because the formula was faulty, but because it had been impertinent on the part of Brazil and Turkey—after all, only third world countries --to assume an initiative which the Great Powers had not condoned. Instead of supporting it, the US, UN, and EU responded with more sanctions against Iran.

In early October, then-Iranian Foreign Minister Manouchehr Mottaki indicated Iran was ready to enter talks, whereupon Catherine Ashton, Foreign Policy representative of the EU, extended a formal invitation to meet, which Iranian chief nuclear negotiator Saeed Jalili then readily accepted. The first meeting took place on December 6 in Geneva, and was extended for a second day. Although the Geneva gathering occurred in the wake of scientist Shahriari’s killing, countervailing positive signals came from others quarters. The Gulf Cooperation Council issued its backing at the end of a two-day summit on December 7, and reasserted the “right of all countries in the region to develop civilian nuclear energy within the standards and under the supervision of the … IAEA.” This includes Israel (

Although Iran had said it did not want to focus on the nuclear issue, its dialogue partners made sure that that would become the main focus of the multilateral discussions. Iran’s proposal to discuss cooperation on regional issues was rejected. Tehran’s representatives held bilateral talks with Russian and Chinese counterparts as well. Although no breakthrough occurred, all parties described the meeting as constructive and positive. The concrete result was the decision to meet again in January, this time in Istanbul.

The fact that the Istanbul talks yielded no results should come as no surprise to anyone familiar with Iranian politics and mindset. Prior to the meeting, literally all the Iranian politicians had stressed that what they demanded was simply to be treated as equals in an atmosphere of “cooperation, not confrontation,” a phrase repeated ad infinitum. Following the December gathering, Iranian President Mahmoud Ahmadinejad said the talks had been “very good,” and that now it was time for the West to “change the policy of confrontation to engagement.” He went further: “We are in favor of cooperation and they should come and cooperate with us and build us 20 nuclear plants.” He added that the right to enrichment was “not negotiable,” a posture adopted by Parliament Speaker Ali Larijani, negotiator Jalili, and virtually every other official.

The problem was that officials from the 5+1 group continued to insist that Iran’s right to enrichment – or indeed to a nuclear program at all – was a matter for others to decide. US Secretary of State Hillary Clinton’s earlier pronouncement that Iran may be allowed to resume enrichment “at some future date once they have demonstrated that they can do so in a responsible manner,” was typical, and utterly counterproductive. At the outset of the Istanbul talks Iranian negotiator Saeed Jalili said that Iran would negotiate only if its NPT-guaranteed right to enrich were acknowledged, and if the sanctions against it were lifted. These were “prerequisites,” he said, not “preconditions.” After the collapse of the talks, Lady Ashton said it was such unacceptable “conditions” that had led to the breakdown.

What really happened was something else. Behind the scenes, the 5+1, in the person of Ashton, actually put forward a “proposal” to Iran, which amounted to a demand Tehran could not even consider. As reported by Reuters and mentioned only en passant in very few other media, the new proposal increased the amount of low-enriched uranium that Iran must ship abroad, from the 60% discussed in 2009 to 90% (2,800 kilograms), and called for nearly all its 20% enriched uranium (40 kilograms) to leave the country. As the New York Times put it, the aim was “to leave Iran, again, with less low-enriched uranium than required to build a bomb, and with no uranium enriched to 19.75 percent.” So,“Iran here did not even agree to an expert-level meeting on the proposal, diplomats said.”(6) No wonder.

Despite this affront, Jalili said Iran was open to further talks, and Ahmadinejad delivered a major speech saying the same. Ashton stated the EU’s doors and telephone lines “remain open.” So, formally speaking, contacts still exist.

The Subjective Factor: Ahmadinejad in New York

Why the 5+1 group’s position is unacceptable to Tehran is important to understand. It is a cultural question more than anything else. I do not know in detail what else went on in Istanbul, but I think I do have some insight into the thinking of Iran’s elites.

In September, I had the opportunity to participate in a meeting with Iranian President Ahmadinejad. In what has become somewhat of a tradition, he meets with various groups on the sidelines of the UN General Assembly, be it editors of major press, members of the Iranian-American community, or others. The meeting I took part in was a gathering of about 50 Americans: university professors, think-tankers, diplomats, Iran experts, and book authors. There were no neocons or war mongers on hand, but individuals seriously interested in promoting understanding, and providing positive input into the policy-making process in Washington. The session, which was slated to last an hour and a half but ended up being twice as long, constituted, in my eyes at least, a fairly representative example of the nature of the Iranian-American dialogue.

Unfortunately, it was not a normal dialogue, but rather a case study in mutual mistrust. At times, it appeared as if the two sides were speaking mutually exclusive political-cultural languages. Although the good intentions of both sides were not in question, the ability of either side to effectively grasp the rationale of the other side – the way the other side thinks -- remained in doubt. For example: Ahmadinejad opened with a proposal to discuss what he called a “reform in world management,” meaning a new approach to organizing the world economy and international relations, to reestablish legitimacy of institutions and solve urgent political crises from the standpoint of justice. Only one or two people picked up on this theme, while the others preferred to focus on the nuclear program, Iran’s repression of dissidents, factionalization in the Tehran leadership, and so forth.

More important, in a sense, than the content of the questions – and answers – was the tone in which they were delivered, a tone which implicitly communicated underlying assumptions which were either diplomatically uncouth or outright offensive to the other side. One US participant, who said he was eager to improve US-Iranian relations, asked whether Ahmadinejad would nominate an envoy to discuss with a US envoy, were Obama to propose such a formula again. The Iranian president’s reply was, essentially, we don’t need envoys; “I’m prepared to sit down and talk with Obama,” so why not do so? The implicit message was: Obama talks to other heads of state, why not to me?

This is a central concept in Iran’s political thinking, and reemerged several times in the discussion. When asked what Iran wanted the US to say or do, to indicate the kind of change in attitude that Supreme Leader Ali Khamenei had called for in August 2010, the Iranian president answered that if the US wanted to deal with Iran from a position of superiority and if it defined conclusions before negotiations that would not work. If the US treated Iran as its equal, fine.

This came up again regarding the dynamics of the process toward nuclear talks. One American participant said, the US wants to focus on the nuclear issue and you do not. So what can be done? Another questioner followed up, asking whether talks had been held up because Ashton was demanding that the nuclear issue be at the top of the agenda. Ahmadinejad restated his main point: if they define the result of the negotiations prior to the talks, then what is the sense in negotiating? Let us first agree on the agenda, then start talks. If they dictate the issue of the talks from a position of superiority, it will yield nothing.

Another American asked whether or not Iran would develop nuclear weapons in the event that the powers-that-be in the world were to “allow” it. And if so, why: for prestige, or regional deterrence? Ahmadinejad’s answer surprised many: first, he said, nuclear weapons do not confer prestige, but only cause mass deaths. We don’t want a permit to produce weapons, he said, but seek only to develop nuclear energy. Even if we were “allowed,” we wouldn’t want to develop them. And, he added, if we wanted to develop them, we would say so and then do so; i.e. we don’t need your permission. “Who can prevent us?” he asked, “No one.” In another connection, he asked rhetorically, why should anyone with nuclear energy have to convince the US first? Why does the US have to “allow” Iran to have nuclear power? The implicit message was: we Iranians reject the idea that any other nation or power should have the right to dictate to us whether or not we develop these or other weapons. We are a sovereign state.

He added that nuclear weapons were utterly useless anyway in the current strategic context: Israel’s 200 warheads proved to be irrelevant in the wars with Lebanon and Gaza and could not be deployed. Possession of a strategic nuclear arsenal did not prevent the collapse of the Soviet Union, and so forth.

On regional crises, a similar dynamic developed in the discussion. One former diplomat asked if there were a possibility for cooperation to stabilize the Afghan situation, given that the US and Iran shared common perspectives there. Ahmadinejad agreed there were common interests but stressed the problem was the US believed in a military solution, which in Iran’s view, did not exist. Once the US accepted this fact, cooperation would be possible.(7)

The double standard applied by the West to Israel vs. everyone else was a major theme. Asked whether Iran, as a participant in a possible conference on a nuclear weapons free zone in the Middle East, would pose preconditions, Ahmadinejad responded with another question: “What country has nuclear weapons in the region?” As the American replied, Israel, he went on to say, ok, fine, the IAEA should disarm Israel, and then there would be no such need for a conference, since no one else in the region possesses these weapons.

The Iranian president referred to the double standard in several connections. As for the IAEA’s pressures on inspections, he said, if Iran were a friend of the US, they would have a different behavior, and if Iran were a member of the P5, they would get different treatment from the IAEA.

A clear case of double standards is the attitude of the international community to Israel. Ahmadinejad referenced the vehemence with which UN Security Council resolutions against Iran have been implemented, to the tune of tough sanctions, while no action has been taken against Israel for violating decades of resolutions.

On historical issues, he denounced the unequal treatment meted out to Iran and Iraq after the 1980-1988 war. Asked whether the UNSC, which had played a role in bringing about a ceasefire in that terrible conflict, might be used to solve other problems in the Mideast today, Ahmadinejad stated: we need a world in which all have equal rights. The UN Secretary General, he said, had designated the Iran-Iraq war as an imposed war by Saddam Hussein, but, at the time, the Security Council remained mute. After the war, Iran received no compensation, although Kuweit is still enjoying them from the 1991 war.

Heated debate broke out around the issue of the Brazil-Turkey-Iran agreement last May, on a formula for providing Iran nuclear fuel, as referenced above. One participant, who termed the US’s rejection of the deal “regrettable,” asked if it might still provide the basis for diplomacy. Implicit in his question was: if the US shot it down, can it have a future? Ahmadinejad simply asserted that the Tehran Declaration was still valid since it rested on a strong legal basis. He criticized those who, seeing this development as a defeat, responded with sanctions; “they don’t want to solve the problem, but only to put us under their foot and squeeze us.” He went on to state that this deal had established a new trend in international relations, in that two nations (Brazil and Turkey) outside of the veto powers, had established a political role for themselves, which he called a “cultural achievement.” He said the sanctions levied against Iran as a response were actually intended to punish Turkey and Brazil.

Although overall the discussion highlighted mistrust and misunderstanding, there were a few technical matters where they found agreement. Ahmadinejad readily accepted one proposal from a Pugwash representative for dialogue among independent experts, and solicited a specific proposal. He welcomed a call for relaxing visa requirements for Americans eager to study Farsi and related subjects in Iran.

Being a part of this discussion process for me was an educational experience. Although I have been involved in dialogue with Iranians since 1991, this was the first time I had the opportunity to experience US-Iranian interaction at this institutional level. It is not a question of whether one likes Ahmadinejad or not; it is a question of trying to enter into the mind of the other, to gain some insight into how the other side thinks.

After leaving the hotel, Ahmadinejad drove to the CNN studio to give an interview to Larry King. Here another political-cultural non-dialogue unfolded. Larry King naively asked his guest what he thought of the perspectives for a Middle East settlement with Israeli Prime Minister Benjamin Netanyahu, and Ahmadinejad, without pausing a second to reflect, shot back that Netanyahu was a criminal, with the blood of thousands of Palestinians on his hands, and should be brought before a court of law and judged. Not only Larry King was shocked. Again, it is not a question of whether or not you like Ahmadinejad. The question is, in light of the Gaza war and Mavi Marmora event, was his characterization slanderous?

The Next Step

Where does this leave us? Formally speaking, the non-dialogue dialogue could resume. But, unless there is a change in approach, it will lead nowhere. More likely, the failure of the Istanbul gathering will be exploited as a pretext for those in Israel and the West who have argued that only sanctions and the military option can yield results. Der Spiegel has published the facts of the invisible war which is underway, with assassinations, computer sabotage, and ethnic terrorism. Given the reign of lawlessness in Israel – as documented again by the recent “investigation” that justified the military’s assault on Mavi Marmora – one should expect a continuation and escalation of this new form of warfare, especially the deployment of cyber-weapons and targeted killings.

The ball is in the US’s court. Obama, who raised hopes with his verbal pledges to impose justice in the region, is on the dock. How he responds to the UN move on Israeli settlements, and to the increasing political pressure to replace rhetoric with action, will be a test case. The release of the Palestine Papers has thrown a political hand grenade into the equation, and the shrapnel could hit far and wide. Other developments in the region should signal to Washington that time is running out. The crisis is heating up in Lebanon, where the Israeli plan to use the tribunal on the Hariri assassination to incriminate and thus eliminate Hezbollah has backfired. Iraq remains explosive and Tunisians are introducing a revolution into Arab politics. In this context, the “West” would do well to rethink its much touted dedication to the sacrosanct principles of justice, equality, and peace, and redefine its priorities and policies.

1. “Military strike on Iran is what unites Netanyahu and Barak,” Haaretz, January 18,

2. The letter contained this statement: “If the proposed resolution is consistent with existing and established US policies, then deploying a veto would severely undermine US credibility and interests, placing us firmly outside of the international consensus, and further diminishing our ability to mediate this condlict.”

3. It was apparently in response to these international moves that Foreign Minister Avigdor Lieberman proposed a map of a Palestinian state with “provisional borders,” which chief negotiator Saeb Erekat dismissed as “an invention and a joke.” The leaked Palestine Papers reveal that this map was nothing new.

4. Medvedev’s visit to the region was remarkable for many reasons. Although Israel cancelled his visit, on the pretext of a strike at the foreign ministry, Medvedev went ahead to visit Jericho and Amman. While in Palestine, he and Abbas opened the Jericho museum, which Russia built on land returned to it in 2008. Reports say his trip promoted independence and religion. He explicitly called for an immediate settlement freeze, during a joint press conference. Abbas said the Russian president’s visit would “revive the Russian presence in the Holy Land.”

5. On December 16, The Telegraph leaked a story in the context of the Geneva talks, according to which Iran was negotiating with Turkey, Russia, and France for a new swap, whereby it would send 1,000 kilos of low-grade uranium and its stockpile of 20%-enriched uranium to a secure place, in exchange for fuel rods supplied by France and Russia ( Nothing came of it.

6. On how the major press ignored or obfuscated the outrageous details of this package, see

7. In August 2010 Obama told journalists in the White House that he thought Iran should be part of solving the Afghan crisis through regional stability talks. “Iran should be part of that and could be a constructive partner,” he said. See

How Macro-Economic Policy Triggers Worldwide Poverty and Unemployment

How Macro-Economic Policy Triggers Worldwide Poverty and Unemployment

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General Zine el Abidine Ben Ali , the defunct and deposed president of Tunisia is heralded by the Western media, in chorus, as a dictator.

The Tunisian protest movement is casually described as the consequence of an undemocratic and authoritarian regime, which defies the norms of the "international community".

But Ben Ali was not a "dictator". Dictators decide and dictate. Ben Ali was a servant of Western economic interests, a faithful political puppet who obeyed orders, with the active support of the international community.

Foreign interference in Tunisia's domestic affairs is not mentioned in the media reports. The food price hikes were not "dictated" by the Ben Ali government. They were imposed by Wall Street and the IMF.

The role of Ben Ali's government was to enforce the IMF's deadly economic medicine, which over a period of more than twenty years has served to destabilize the national economy and impoverish the Tunisian population.

Ben Ali as head of state did not decide on anything of substance. National sovereignty was foregone. In 1987, at the height of the debt crisis, the left nationalist government of Habib Bourguiba was replaced by a new regime, firmly committed to "free market" reforms.

Macroeconomic management under the helm of the IMF was in the hands of Tunisia's external creditors. Over the last 23 years, economic and social policy in Tunisia has been dictated by the Washington Consensus.

Ben Ali stayed in power because his government obeyed and effectively enforced the diktats of the IMF, while serving the interests of both the US and the European Union.

This pattern has occurred in numerous countries.

Continuity of the IMF's deadly reforms requires "regime replacement". The installation of a political puppet ensures the enforcement of the neoliberal agenda while also creating conditions for the eventual demise of a corrupt and unpopular government which has been draw upon to impoverish an entire population.

The Protest Movement

It is not Wall Street and the Washington based international financial institutions which are the direct target of the protest movement. The social implosion was directed against a government rather than against the interference of foreign powers in the conduct of government policy.

At the outset, the protests were not the result of an organized political movement directed against the imposition of the neoliberal reforms.

Moreover, there are indications that the protest movement was manipulated with a view to creating social chaos as well as ensuring political continuity. There are unconfirmed reports of armed militias conducting acts of repression and intimidation in major urban areas.

The important question is how will the crisis evolve? How will the broader issue of foreign interference be addressed by the Tunisian people?

From the standpoint of both Washington and Brussels, an unpopular authoritarian regime is slated to be replaced by a new puppet government. Elections are envisaged under the supervision of the so-called international community, in which case candidates would be pre-selected and approved.

Were this process of regime change to be carried out on behalf of foreign interests, the new proxy government would no doubt ensure the continuity of the neoliberal policy agenda which has served to impoverish the Tunisian population.

The interim government led by acting president Fouad Mebazza is currently in an impasse, with fierce opposition emanating from the trade union movement (UGTT). Mebazza has promised to "break with past", without however specifying whether this signifies a repeal of the neoliberal economic reforms.

Historical Background

The media in chorus have presented the crisis in Tunisia as an issue of domestic politics, without a historical insight. The presumption is that with the removal of "the dictator" and the instatement of a duly elected government, the social crisis will eventually be resolved.

The first "bread riots" in Tunisia date back to 1984. The January 1984 protest movement was motivated by a 100 percent hike in the price of bread. This hike had been demanded by the IMF under Tunisia's structural adjustment program (SAP). The elimination of food subsidies was a de facto condition of the loan agreement with the IMF.

President Habib Bourguiba, who played a historical role in liberating his country from French colonialism, declared a state of emergency in response to the riots:

While gunfire sounded, police and army troops in Jeeps and armored personnel carriers fanned out through the city to quell the "bread riot." The show of force finally brought an uneasy calm, but only after more than 50 demonstrators and bystanders were killed. Then, in a dramatic five-minute radio and television broadcast, Bourguiba announced that he was reversing the price hike. (Tunisia: Bourguiba Lets Them Eat Bread - TIME, January 1984)

Following president Bourguiba's retraction, the hike in the price of bread was reversed. Bourguiba fired his Minister of the Interior and refused to abide by the demands of the Washington Consensus.

The neoliberal agenda had nonetheless been instated, leading to rampant inflation and mass unemployment. Three years later, Bourguiba and his government were removed in a bloodless coup d'Etat, "on the grounds of incompetence", leading to the instatement of General Zine el Abidine Ben Ali as president in November 1987. This coup was not directed against Bourguiba, it was largely intended to permanently dismantle the nationalist political structure initially established in the mid-1950s, while also privatizing State assets.

The military coup not only marked the demise of post-colonial nationalism which had been led by Bourguiba, it also contributed to weakening the role of France. The Ben Ali government became firmly aligned with Washington rather than Paris.

Barely a few months following Ben Ali's November 1987 instatement as the country's president, a major agreement was signed with the IMF. An agreement had also been reached with Brussels pertaining to the establishment of a free trade regime with the EU. A massive privatization program under the supervision of the IMF-World Bank was also launched. With hourly wages of the order of Euro 0.75 an hour, Tunisia had also become a cheap labor haven for the European Union.

Who is the dictator?

A review of IMF documents suggests that from Ben Ali's inauguration in 1987 to the present, his government had faithfully abided by IMF-World Bank conditionalities, including the firing of public sector workers, the elimination of price controls over essential consumer goods and the implementation of a sweeping privatization program. The lifting of trade barriers ordered by the World Bank was conducive to triggering a wave of bankruptcies.

Following these dislocations of the national economy, cash remittances from Tunisian workers in the European Union became an increasingly important source of the foreign exchange earnings.

There are some 650,000 Tunisians living overseas. Total workers' remittances in 2010 were of the order of US$1.960 billion, an increase of 57 percent in relation to 2003. A large share of these remittances in foreign exchange will be used to service the country's external debt.

The Speculative Hike in World Food Prices

In September 2010, an understanding was reached between Tunis and the IMF, which recommended the removal of remaining subsidies as a means to achieving fiscal balance:

Fiscal prudence remains an overarching priority for the [Tunisian] authorities, who also see the need for maintaining a supportive fiscal policy in 2010 in the current international environment. Efforts in the last decade to bring down the public debt ratio significantly should not be jeopardized by a too lax fiscal policy. The authorities are committed to firmly control current expenditure, including subsidies,... IMF Tunisia: 2010 Article IV Consultation - Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Tunisia

It is worth noting that the IMF's insistence on fiscal austerity and the removal of subsidies coincided chronologically with a renewed upsurge in staple food prices on the London, New York and Chicago commodity exchanges. These price hikes are in large part the result of speculative trade by major financial and corporate agribusiness interests.

These hikes in food prices, which are the result of outright manipulation (rather than scarcity) have served to impoverish people Worldwide. The surge in food prices constitutes a new phase of the process of global impoverishment.

"The media has casually misled public opinion on the causes of these price hikes, focusing almost exclusively on issues of costs of production, climate and other factors which result in reduced supply and which might contribute to boosting the price of food staples. While these factors may come into play, they are of limited relevance in explaining the impressive and dramatic surge in commodity prices.

Spiralling food prices are in large part the result of market manipulation. They are largely attributable to speculative trade on the commodity markets. Grain prices are boosted artificially by large scale speculative operations on the New York and Chicago mercantile exchanges. ...

Speculative trade in wheat, rice or corn, can occur without the occurrence of real commodity transactions. The institutions speculating in the grain market are not necessarily involved in the actual selling or delivery of grain.

The transactions may use commodity index funds which are bets on the general upward or downward movement of commodity prices. A "put option" is a bet that the price will go down, a "call option" is a bet that the price will go up. Through concerted manipulation, institutional traders and financial institutions make the price go up and then place their bets on an upward movement in the price of a particular commodity.

Speculation generates market volatility. In turn, the resulting instability encourages further speculative activity.

Profits are made when the price goes up. Conversely, if the speculator is short-selling the market, money will be made when the price collapses.

This recent speculative surge in food prices has been conducive to a Worldwide process of famine formation on an unprecedented scale." (Michel Chossudovsky, Global Famine, Global Research, May 2, 2008,

From 2006 to 2008, there was a dramatic surge in the prices of all major food staples including rice, wheat and corn. The price of rice tripled over a five year period, from approximately 600$ a ton in 2003 to more than 1800$ a ton in May 2008.

(Michel Chossudovsky,, For further details, see Michel Chossudovsky, Chapter 7 Global Poverty and the Economic Crisis in Michel Chossudovsky and Andrew Gavin Marshall, editors, The Global Economic Crisis, The Great Depression of the XXI Century, Global Research, Montreal 2010, )

The recent surge in the price of grain staples is characterized by a 32 percent jump in the FAO's composite food price index recorded in the second half of 2010.

"Soaring prices of sugar, grain and oilseed drove world food prices to a record in December, surpassing the levels of 2008 when the cost of food sparked riots around the World, and prompting warnings of prices being in "danger territory".

An index compiled monthly by the United Nations surpassed its previous monthly high – June 2008 – in December to reach the highest level since records began in 1990. Published by the Rome-based Food and Agriculture Organisation (FAO), the index tracks the prices of a basket of cereals, oilseeds, dairy, meat and sugar, and has risen for six consecutive months." (Jill Treanor, World food prices enter 'danger territory' to reach record high, The Guardian, January 5, 2011)

Bitter irony: Against a background of rising food prices, the IMF recommends the removal of the subsidies with a view to reaching the goal of fiscal austerity.

Manipulating the Data on Poverty and Unemployment

An atmosphere of social despair prevails, people's lives are destroyed.

While, the protest movement in Tunisia is visibly the direct result of a process mass impoverishment, the World Bank contends that the levels of poverty have been reduced as a result of the free market reforms adopted by the Ben Ali government.

According to the World Bank's country report, the Tunisian government (with the support of the Bretton Woods institutions) was instrumental in reducing the levels of poverty to 7 percent (substantially lower than that recorded in the US and the EU).

Tunisia has made remarkable progress on equitable growth, fighting poverty and achieving good social indicators. It has sustained an average 5 percent growth rate over the past 20 years with a steady increase in per capita income and a corresponding increase in the welfare of its population that is underscored by a poverty level of 7% that is amongst the lowest in the region.

The steady increase in per capita income has been the main engine for poverty reduction. ... Rural roads have been particularly important in helping the rural poor connect to urban markets and services. Housing programs improved the living conditions of the poor and also freed up income and savings to spend on food and non-food items with resulting positive impacts on poverty alleviation. Food subsidies, which have been targeted to the poor, albeit not optimally, have also helped the urban poor. (World Bank Tunisia - Country Brief)

These poverty figures, not to mention the underlying economic and social "analysis", are outright fabrications. They present the free market as the engine of poverty alleviation. The World Bank's analytical framework is used to justify a process of "economic repression", which has been applied Worldwide in more than 150 developing countries.

With a mere 7 percent of the population living in poverty (as suggested by the World Bank "estimate") and 93 percent of the population meeting basic needs in terms of food, housing, health and education, there would be no social crisis in Tunisia.

The World Bank is actively involved in cooking the data and distorting the social plight of the Tunisian population. The official rate of unemployment is 14 percent, the actual level of unemployment is much higher. Recorded youth unemployment is of the order of 30 percent. Social services, including health and education have collapsed under the brunt of the IMF-World Bank economic austerity measures.

Tunisia and the World

What is happening in Tunisia is part of a global economic process which destroys people's lives through the deliberate manipulation of market forces.

More generally, "the harsh economic and social realities underlying IMF intervention are soaring food prices, local-level famines, massive lay-offs of urban workers and civil servants and the destruction of social programs. Internal purchasing power has collapsed, health clinics and schools have been closed down, hundreds of millions of children have been denied the right to primary education."

US youth returns home after torture in Kuwait

US youth returns home after torture in Kuwait

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Gulet Mohamed, a 19-year-old American citizen, returned to the US Friday after being tortured—apparently on Washington’s orders—at the hands of the regime in Kuwait.

Arriving at Washington’s Dulles Airport after a month of incarceration in Kuwait, Mohamed was detained for another two hours at customs as FBI agents attempted to interrogate him without a lawyer present. He was then released into the arms of his family and returned to his home in Northern Virginia. He has been charged with no offense.

The youth’s ordeal began on December 20, when he went to the international airport in Kuwait City to renew his visa. He had been out of the US since March 2009, traveling first to Yemen for three weeks to study Arabic, going on to Somalia, where he had stayed with family members, and finally to Kuwait, where he lived with his uncle and continued his studies. Mohamed, a naturalized American citizen, had lived in the US since he was three years old and intended to return to the US later this year to attend college.

After being held at the office in the Kuwait airport for five hours, he was handcuffed and blindfolded by men in civilian clothes, bundled into a vehicle and transported to a detention and interrogation center.

There, Mohamed was severely beaten, whipped, beaten on the soles of his feet with sticks, forced to stand for hours and subjected to other forms of torture. He was repeatedly threatened with electric shock torture and was told that unless he gave his interrogators the information they were looking for his mother would be detained and killed.

The youth’s family and attorneys representing him from the Council on American-Islamic Relations charged that the interrogations and torture were carried out with the support and participation of the US government.

“The manner of his detention and the questions asked of Mr. Mohamed indicate to him that he was taken into custody at the behest of the United States,” the youth’s lawyer, Gadeir Abbas, wrote in a letter to the US Justice Department earlier this month.

In particular, the Kuwaiti interrogators demanded that Mohamed admit to having known and met with Anwar al-Awlaki, a US citizen and Muslim cleric who is believed to be in Yemen. The Obama administration has declared Awlaki, a prominent advocate of Islamic fundamentalism, a “terrorist” and targeted him for assassination.

The interrogators also questioned Mohamed about a casual conversation he had had at a local mosque in Virginia, something that the Kuwaiti secret police could have known about only through contact with American agents, based on surveillance carried out in the US.

When Mohamed insisted that he had nothing to do with terrorism and did not know Awlaki, he was subjected to further beatings and torture.

After more than two weeks of this ordeal, Mohamed was visited at the detention center by three FBI agents, who told him that he would be released only if he cooperated. The youth told the agents that he had a lawyer and would not submit to interrogation without legal representation.

He was visited by an official from the US Embassy in Kuwait only after being transferred to a deportation center. The official claimed that the embassy had not known of his whereabouts previously, while telling Mohamed that his travel the previous year had raised “red flags.”

The claim that the embassy knew nothing about Mohamed’s fate is a patent lie. It is inconceivable that the Kuwaiti sheikdom, a client state of Washington which hosts multiple American bases and serves as the staging area for the US occupation of Iraq, would detain, interrogate and torture a US citizen for weeks on end without explicit approval from the American government.

While in the deportation detention center, Mohamed was able to borrow a cell phone smuggled in by another inmate and telephone his family—who learned of his fate for the first time—and reporters in the US. “I cannot sleep. I cannot eat. I’m scared to walk to the bathroom because I’m afraid they will hunt me down,” Mohamed said in a telephone interview with the New York Times. Choking back tears, he added, “I’ve been beaten and tortured, physically and mentally. I’m not the same.”

When his family complied with the Kuwaiti regime’s demand that they purchase a one-way ticket for Mohamed to return to the US, the authorities there had him transferred to the airport. However, he was barred from boarding a United Airlines flight because he had secretly been placed on a no-fly list by the US government. As a result, he was thrown back into detention.

It was only after lawyers for the Virginia youth went to federal court in the US seeking a restraining order and preliminary injunction overturning the US government’s preventing him from returning that the government relented and allowed him to fly.

The suit charged that the government had violated Mohamed’s 14th Amendment right as a US citizen to live in the US and subjected to him to “effective banishment.”

“The United States is depriving Mr. Mohamed of perhaps the most basic prerogative of American citizenship: the right to be in the United States,” the lawsuit stated. “This is patently unconstitutional, and it is up to this court to bring Gulet Mohamed—an American citizen—back to his country.”

The American Civil Liberties Union has brought a separate lawsuit on behalf of 14 individuals who have been placed on no-fly lists and, in some cases, similarly prevented from returning to the US.

One, a former US Marine, 32-year-old Ayman Latif, was denied the right to return home to Miami after visiting Egypt with his wife and children. Despite repeated visits to the US Embassy and interviews with FBI agents, he has been unable to get the travel ban lifted. “I didn’t do anything wrong. I’m not a terrorist,” he told the Washington Post. “If I did something, fine, give me due process.”

In another case, Nagib Ali Ghaleb, a naturalized US citizen from San Francisco, was barred from returning home from Yemen last February. According to the ACLU suit, he was told by the FBI that he would be taken off the no-fly list only if he agreed to become a confidential informant, spying on the Yemeni community in California. He refused.

Mohamed’s lawyer, Gadeir Abbas, drew a direct parallel between the treatment of his client and the crimes carried out under the Bush administration by means of the “extraordinary rendition” program, in which people abducted and detained without charges were flown to countries with the express purpose of subjecting them to interrogation under torture.

The government, he said, was “trying to accomplish the same goal: the unlawful torture and detention abroad of an American citizen by a country that is known to engage in human rights abuses.”

Exactly two years ago, Obama signed executive orders that he claimed would end torture and shut down the infamous US detention camp at Guantánamo Bay, Cuba. At the time, these orders were hailed in the media as a “clean break” with the policies of the Bush administration.

Now, two years later, Guantánamo remains open, and the White House is preparing to expand the operations of the extra-legal military tribunals there. And, as the ordeal of Gulet Mohamed demonstrates, torture remains a chosen instrument of US policy, in this case, utilizing the secret police of an overseas client regime to organize the interrogation under torture of a young US citizen, while attempting to employ a no-fly list to prevent him from coming home.

Not only have the crimes carried out under the Bush administration gone unpunished, they are being continued and deepened under the Obama White House, which has arrogated to itself the right not only to torture, but to assassinate American citizens.

Obama's jobs fraud

Obama’s jobs fraud

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The Obama administration on Friday announced the appointment of Jeffrey Immelt, the chief executive officer of energy giant General Electric, to head the new White House Council on Jobs and Competitiveness.

The announcement is a further demonstration that the Obama administration is a government by, for and increasingly of the corporate and financial elite. Immelt, whose pay is about $15 million a year, is one of the country’s most highly compensated executives. His appointment follows on the heels of the selection of multimillionaire William Daley—commerce secretary under Bill Clinton and most recently a top executive at JPMorgan Chase—to be White House chief of staff.

Immelt’s task at the misnamed council on jobs will be to increase US corporate profits and exports. The proclaimed goal of the Obama administration to double exports in five years—an aim that Obama reiterated in announcing Immelt’s selection—is to be achieved by slashing the wages and benefits of US workers while driving up their productivity, combined with trade war measures against American capitalism’s international rivals, particularly China.

The council, Obama said in a pre-announcement statement, would be focused on “finding new ways to encourage the private sector to hire and invest in American competitiveness.” Speaking at a GE plant in Schenectady, New York later in the day, Obama declared that the challenge was “to do everything we can to make it easier for folks to bring products to market, and to start and expand new businesses, and to grow and hire new workers.”

The universal line promoted by both big business parties and the mass media is that job-creation is synonymous with the elimination of all restrictions on corporate profit-making. This is an extension of the poppycock, repeated endlessly by Obama, that the private sector is the true engine of job growth. This claim is belied by some stubborn facts: for example, the fact that over the course of the first decade of the 21st century, the US private sector generated no net increase in jobs. Today, the American private sector is keeping unemployment near 10 percent by sitting on a cash hoard of several trillion dollars and refusing to use it to hire workers.

Obama once again claimed that the basic problem with the American economy is that the working class is living beyond its means. It is necessary, he said, to “go from an economy that was powered by what we borrow and what we consume” to one geared to production.

The demand for reduced consumption does not apply to the wealthy, who, thanks to a deal worked out last month between the Democrats and Republicans, have received a massive windfall in the form of an extension of Bush-era tax cuts. Obama did not mention this in his comments in Schenectady, but he did take the opportunity to praise a number of corporate tax cuts that were included in the package as an example of his administration’s efforts to create jobs.

The selection of Immelt won immediate praise from other banking and corporate executives as well as the US Chamber of Commerce. JPMorgan Chase CEO Jamie Dimon said he “fully supports” Immelt and the creation of the new council.

Among the reasons Dimon was pleased was Immelt’s opposition, in 2009, to any caps on executives receiving bailout funds from the government. “It’s in the best interest of the citizens of the country for Jamie Dimon to run JPMorgan,” Immelt declared at the time. “He’s worth more than $500,000” a year.

GE itself exemplifies the administration’s aim of increasing profits by reducing wages. On Friday, the company announced a significant increase in profits in 2010 over the previous year. In 2007, it was able to push through a new contract, with the support of the unions, which reduced wages for new-hires by $10 an hour.

The attempt to portray an unabashedly pro-corporate agenda as a “jobs program” is also designed to obscure the fact that the Obama administration has pursued a deliberate policy of maintaining high unemployment as a means of forcing workers to accept wage cuts and other concessions. From the beginning of his term in office, Obama has rejected any government hiring program and the administration has now put an end to even the limited “stimulus” measures adopted early on.

The other side of the administration’s campaign to increase exports is the ratcheting up of pressure on China. The selection of Immelt came at the tail end of a state visit by Chinese President Hu Jintao. During the trip, Obama added to the demand that Beijing revalue its currency new demands that it lift all restrictions on US corporate investments in and exports to China. Immelt has in the past voiced strong criticisms of the policy of the Chinese government, and GE has significant commercial interests in the country.

Obama utilized Hu’s visit as an opportunity to hustle for contracts in behalf of US corporations. At a joint press conference following a White House meeting with US and Chinese business leaders, Obama turned to Hu and declared: “We want to sell you all kinds of stuff. We want to sell you planes. We want to sell you cars. We want to sell you software.”

Since the November midterm elections—which, due to widespread disillusionment over Obama’s right-wing policies, produced a victory for the Republican Party—the administration’s courtship of corporate executives has assumed an ever more naked character.

In addition to the choice of Daley and the extension of tax cuts for the wealthy, the selection of Immelt comes less than a week after a new executive order calling on all government agencies to review existing regulations. Any such regulations, Obama wrote in an opinion piece published in the Wall Street Journal, must be evaluated on a “cost-benefit” basis, following extensive prior discussion with businesses.

The deregulation drive has had immediate consequences. The Journal reported Thursday that the Labor Department is withdrawing a proposal on noise in the workplace “that could have forced manufacturers to install noise-reducing equipment.” And the Food and Drug Administration has retreated from plans to tighten rules on the approval process for medical devices.

Also on Thursday, First Lady Michelle Obama lavished praise on retailer Walmart for its participation in a phony healthful foods initiative. “When I see a company like Walmart launch an initiative like this, I feel more hopeful than ever before,” she declared. The Washington Post noted, “The announcement amounted to a very public display of affection for a company that had long been a thorn in the side of Democrats.”

The prostration of the Obama administration before corporate America comes as the social crisis in the United States intensifies. The federal government is moving decisively toward austerity, with major cuts in social programs to be announced this year. State governments throughout the country are facing massive budget deficits that will be addressed by slashing education, health care and other basic social services, while laying off tens of thousands of workers, cutting wages and slashing pension benefits.

Twenty six months after the eruption of the financial meltdown in 2008, the American ruling class and the Obama administration are exploiting the crisis to permanently restructure class relations in the US, increasing the wealth of the financial aristocracy on the basis of the impoverishment of tens of millions of working people.

One Year Later: Hundreds of Millions in Corporate Money Already Pouring into Elections

First Anniversary of Citizens United Decision: Hundreds of Millions in Corporate Money Already Pouring into Elections

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The case: Citizens United. The decision: In a 5-4 vote, the Supreme Court ruled that it was unconstitutional to limit in any way the amount of money corporations can spend on attack ads or other "electioneering communications" to sway a political race.

Before Citizens United, plenty of corporate money had found its way into political PACs and other avenues to influence elections. The court also did nothing to strike down the ban on direct corporate contributions to candidates or political parties.

But the decision opened a massive loophole in our country's already-porous campaign finance system, giving corporations the green light to inject unlimited sums of cash into independent groups -- 527s and 501c4s, references to their IRS tax status -- that can intervene in elections.

After the January 2010 decision, many in the media reported that corporations may be skittish about fully exploiting Citizens United's political windfall, but that proved premature. Millions of dollars began flooding into existing electioneering like Americans for Prosperity, backed by benefactors like the Koch brothers and North Carolina retail magnate Art Pope. New groups like Karl Rove's American Crossroads and American Crossroads GPS were quickly erected to funnel tens of millions of dollars into key congressional races.

A new report released by Public Citizen this week surveys the results:

* Spending by outside groups jumped to $294.2 million in the 2010 election cycle, a nearly four-fold increase from the $68.9 million spent in 2006, the last mid-terms. Nearly half of that ($138.5 million) came from just 10 groups, with the biggest share by far benefiting Republicans.

* In 60 out of 75 congressional races, the candidate benefiting most from outside spending won the race -- a remarkable 80 percent win rate.

* The source of the money flooding into elections after Citizens United largely hidden: Because many of the independent groups aren't required to disclose their donors, barely a third -- 34 percent -- of the groups reported which people and groups gave them money.

As Public Citizen notes, the cloak of secrecy surrounding corporate campaign spending goes against the Supreme Court thinking behind Citizens United, which was that massive corporate spending was acceptable as long as the public knew about it:

Justice Anthony Kennedy's opinion for the majority was based in part on the assumption that any dangers posed by the new flood of corporate spending in elections would be mitigated by disclosure. "This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages," Kennedy wrote.

The DISCLOSE Act, a bill that would have required non-profit groups to reveal the donors behind their election war chests, failed by one vote last spring in the face of a Senate Republican filibuster.

Although not as widely reported, Citizens United proved decisive in state elections as well. As Facing South documented in a series of reports, three independent groups backed by Art Pope in North Carolina -- Americans for Prosperity, Civitas Action and Real Jobs NC -- spent over $2 million targeting 22 state races, helping fuel the Republicans' capture of the N.C. legislature for the first time since Reconstruction.

Some advocates are calling for a new bill to force disclosure of the donors behind outside election spending, although it faces an uphill climb in the Republican-controlled U.S. House and does little to combat the campaign spending arms race exacerbated by Citizens United.

A more ambitious and effective step, says journalist Katrina vanden Heuvel in The Washington Post, is a system of public campaign financing as proposed in the Fair Elections Now Act, which at its high point had 160 supporters in the House. She argues that the bill draws on the successes that reformers have seen at the state level:

A similar system has been adopted in Arizona, and, in 2007, New York City adopted an intriguing mechanism of public finance in which the city matches small donations at a 6-1 ratio, boosting grass-roots fundraising. The result? According to the New York Times, the changes "drastically curtailed the role of businesses, political committees and lobbyists in campaigns" and, importantly, "caused a major drop in donations from those doing business with the city." Such a system, implemented on the national level, could greatly increase the influence of average citizens.

But the state-based experiments in public financing are under attack. The Chamber of Commerce and other groups have lined up to oppose Arizona's "clean money" election system. In North Carolina, the new Republican majority has pledged to dismantle public financing of races for judges -- even though the system is used by 77 percent of state judicial candidates [pdf] -- and three council of state races.

The groups pushing to dismantle these programs are hardly disinterested observers in the debate: In 2010, the Chamber of Commerce was the most powerful outside group in the country, lavishing over $31 million -- all from undisclosed donors -- on races across the country.

In North Carolina, the connection is even more direct: The key advocacy groups pushing to end "taxpayer-funded elections" -- the Civitas Institute (a sister group to Civitas Action) and the John Locke Foundation -- are largely funded by the family foundation of Art Pope, whose money proved so critical in influencing the state's 2010 contests.

But some advocates are pushing to question the Supreme Court's very assumption that corporations are, legally speaking, people with free speech rights. Last year, Rep. Donna Edwards (D-MD) introduced legislation for a constitutional amendment clarifying that corporations aren't people, saying:

"Justice Brandeis got it right," she noted last February. "'We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.'"

Given the current political climate, it may be unrealistic to expect such a campaign to yield quick results. But Rep. Edwards and others see it as a way to educate the public and make the case for reform.

The message may already resonate with voters: A Survey USA poll last August found that, when asked whether corporate campaign contributions represent "free speech" or "bribes," 77 percent said "bribes."

But the public's cynicism will only lead to change of voters believe that something can be done -- and in the wake of Citizens United, those favoring a political system that benefits the powerful have a lot more resources at their disposal to keep things that way.

How Can the Richest 1 Percent Be Winning This Brutal Class War Against 99% of Us?

How Can the Richest 1 Percent Be Winning This Brutal Class War Against 99% of Us?

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Who are they? The richest 1 percent. And maybe the next 9 percent.

Who are we? All the rest.

Which poses an interesting question.

How has a tiny fraction of the population – which is diverse in many ways – arranged for their narrowest economic interests to dominate the economic interests of the vast majority? And, while they’re at it, endanger the economic well-being of our nation, and bring the financial system of the whole world to the brink of collapse.

They have money.

We have votes.

Theoretically, that means we should have the government. Theoretically, government should be a countervailing force against the excesses of big money, take the long view for the good of the nation, and watch out for the majority. Let alone for the poor and downtrodden.

What we actually have is one political party that is flat out the party of big money and another party that sells out to big money.

Well, at least we have safety nets.

George Bush’s biggest regret is that he didn’t privatize social security. Why so eager?

One reason is that it is a big pile of money. Absolutely gigantic. It drives the bankers and brokers crazy that they can’t get their hands on it.

The other is ideological hatred. Stephen Moore (senior fellow at the Cato Institute, contributing editor of National Review and president of the Free Enterprise Fund) wrote, "Social Security is the soft underbelly of the welfare state. If you can jab your spear through that, you can undermine the whole welfare state."

Where Bush failed, Obama has now taken the first step.

His recent tax deal includes cuts on employee contributions to Social Security. Which means defunding, weakening, and setting a new precedent, that Social Security contributions can be cut to “stimulate” the economy.

The crash has put the states in trouble. Rather than raise taxes, or borrow, several have decided on cuts to Medicaid, the program that services several categories of low income people: pregnant women, children under 19, the blind, disabled, or who need nursing home care. If you’re a poor kid who needs a liver transplant, you can beg, rob a convenience store, or die.

This shift to the right is a triumph of a long and very well-funded propaganda campaign.

Every time I read an op-ed in the New York Times that was written by a “senior scholar” from the Hoover Institute or a “fellow” from the Cato Institute, I want to scream, please replace that with “paid whore funded by psychotic right-wing billionaire.” Which is significantly more accurate.

They, in turn, have a great influence on the mainstream media. “As conservatives decried the media's left bias, they saw their institutions mentioned in various media almost 8,000 times in 1995, while liberal or progressive think tanks received only 1,152 citations” (How Conservative Philanthropies and Think Tanks Transform US Policy, by Sally Covington, Covert Action Quarterly, Winter 1998).

Their influence on the national media affects the whole national dialogue.

Now, of course, they’ve taken the think tank concept to a whole new level – Fox News.

What about the media? Aren’t journalists – outside of Fox News – supposed to be objective?

In journalism there is no objective reality. There are only objectively collated quotes. Quotes can only come from “valid” sources. A journalist cannot look at tax cuts and compare them to economic results – job growth, changes in the median wage, and the like – and report that tax cuts do not create jobs. They can only quote politicians, like Bush and Obama, who say that tax cuts are a stimulus, and then look for someone of equal authority – or at least significant authority – to say the opposite, then go Chinese menu, two quotes from column A, one for column B. But what if there are no heavyweights ready to go on record for column B?

Here’s where it gets stranger than strange.

A whole field, economics, has lost its way.

This became obvious when 99.7 percent (that’s a made-up but probably accurate number), failed to predict the crash of ’08. Failed to diagnose the housing bubble, failed to understand the derivatives bubble, and failed to realize the world’s biggest banks were all bankrupt.

After the crash, they failed to cry out against the tax cuts that brought it on. They failed to come up with a way to solve the problems. Which, based on history, seem fairly obvious, raise taxes and spend the money on useful things that private industry can’t or won’t do, like hiring people.

Paul Krugman’s theory, loosely paraphrased, is that economists suffer from physics envy, which is like penis envy, but dumber. Economics is a social science, which is soft. Social scientists look at physics, the hardest of the hard sciences. They see lots of math and formulas. They imagine that if they have lots of math they will get hard, too. In order to create mathematical models out of the messy complexity of human activity, they presume perfect markets. So long as the economy is stable, that frequently works.

Faith in the perfection of markets promotes deregulation and tax cuts. That destabilizes the economy. The economists, therefore, help create the disasters that don’t exist in their mathematical models.

Charles Ferguson, who directed the superb documentary Inside Job, is much more cynical. He believes that academic economists, like doctors who shill for pharmaceutical companies, are on the take from big money interests. He does a marvelous job in the film of demonstrating exactly that.

Indeed, all of academia – except perhaps for English departments – have become part of the business, banking, military, and political nexus.

The ivory tower was supposed to be above the mucky world. That was one of our final defenses in the class war -- a place devoted to knowledge for its own sake and truth just because it was true.

Now, universities pursue truths that someone will fund a grant for.

Tomorrow’s truth is what’s paid for today.

Get Ready For Another Housing Crash

Get Ready For Another Housing Crash

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The best evidence that we're headed for a double-dip in housing is the quality of the mortgages during the recent period in which the housing market seemed to improve in many areas.

In the Freddie Mac review of Citigroup’s performing loans that I mentioned earlier today, the portion rated as “Not Acceptable Quality” was as high as 32 percent in the fourth quarter of 2009. While this has obvious implications for the repurchase or "put-back" liability of Citigroup , it also has broader implications for the housing market and the economy.

Keep in mind that the quarter in which Citi was churning out the highest amount of flawed mortgages was supposedly a good time for housing. The median price of previously owned single-family homes in the fourth quarter of 2009 rose in 67, or 44 percent, of the 151 metropolitan areas, according to a survey by the National Association of Realtors. Sixteen of the areas posted double-digit increases. The Case-Schiller numbers for that quarter showed U.S. home prices were trending up in 155 out of 384 metro areas.

Now there have been indications in the past that a mini-housing bubble was being built during that period. The Federal Housing Authority, for instance, was backing some very questionable loans. The home-buyer tax credit was allowing individuals to buy loans with no money down. All the bad practices of the 2005-2007 bubble seemed to be back again.

And now we know that this perception was correct. Mortgage quality had fallen off a cliff. If Citigroup's mortgages were this bad, we can expect the same level of problems at Wells Fargo , Bank of America and every other major US mortgage lender.

What does this mean for housing? It implies that home prices may be due for a another crash, as lenders try to avoid incurring losses from mortgage put-backs by raising credit quality once again. Much of the supposed health of the housing market may have been just another easy money illusion.

We may be able to avoid a crash if the economy improves rapidly enough to take up the slack created by the loose lending. Alternatively, more cheap money flowing from the Fed through the banks and into shoddily underwritten mortgages, could keep the bubble inflating for a while longer (and maybe, fingers crossed, the economy will improve and rescue housing.) And if a crash occurs it will likely not be as severe as the last one, simply because the improvements in the housing market in 2009 and 2010 were modest.

But one thing seems certain: much of the improvement in housing over the last two years was built on easy credit.