Sunday, June 19, 2011

Most US states lost jobs in May

Most US states lost jobs in May

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A report released Friday by the US Labor Department on state and regional employment in May provides new evidence that the slump is accelerating and the jobs crisis in America is worsening.

The Labor Department’s Bureau of Labor Statistics reported that 27 of the 50 states recorded a net decline in their non-farm payrolls as compared to April. The biggest losses came in California (minus 29,200), New York (minus 24,700) and Pennsylvania (minus 14,200).

Other states with particularly large payroll declines were Michigan (minus 13,400) and Maryland (minus 13,300).

Fewer than half the states (24) reported a decline in their official unemployment rates. The rates rose in 13 states and Washington, DC, and were flat in 13 states.

These figures are significantly worse than those for April, when 42 states gained jobs and 39 reported falling jobless rates.

This fresh statistical evidence that the three-and-a-half-year slump is deepening follows a battery of reports over the past two weeks pointing to a further growth in unemployment. The government’s national employment report for May, released June 3, showed a near collapse in job-creation, with payrolls rising at their slowest rate in eight months and long-term unemployment remaining at near-record levels. The official national jobless rate rose 0.2 percentage points to 9.1 percent.

Last month, the Commerce Department confirmed an earlier report that the US economy had grown by only 1.8 percent in the first three months of this year, a sharp slowdown from the 3.1 percent annual pace in the fourth quarter of 2010.

Friday’s report showed that the slowdown is impacting wide swaths of the country. Nevada continued to have the highest jobless rate, at 12.1 percent, followed by California (11.7 percent) and Rhode Island (10.9 percent). Twenty eight states reported unemployment rates of 8.0 percent or higher, and 19 had jobless rates higher than 9.0 percent.

President Barack Obama did not even bother to comment publicly on the disastrous state-by-state jobs report. Following the release of the employment report for May, the White House made a point of signaling to Wall Street that there will be no retreat from the administration’s rejection of any form of government hiring or public works to put unemployed people back to work. Nor would there be any measures to provide serious relief for the millions of people losing their homes and being thrown into poverty as a result of the crisis.

Instead, at a meeting of his corporate-dominated Jobs and Competitiveness Council, Obama pledged to carry out his promise to gut business regulations and slash trillions of dollars from the deficit by cutting bedrock social programs such as Medicare and Medicaid.

There is no significant section of the political establishment, in either party, that is calling for social programs to provide jobs and alleviate the economic and social distress affecting ever larger numbers of people. The corporate-financial elite opposes any such measures, in line with its determination to use mass unemployment to drive down wages and increase its exploitation of the working class. It exercises a de facto dictatorship over government policy.

Last week, the Federal Reserve banks of New York and Philadelphia issued reports for June which indicate that the slowdown is, if anything, getting worse. The New York Fed said its business conditions index fell below zero for the first time in seven months, reflecting a severe deterioration in manufacturing activity in the New York region. The Philadelphia Fed’s index fell to minus 7.7, the lowest level since July 2009.

Both reports confounded the projections of economists, who had predicted a modest decline in growth rather than the actual contraction that occurred in the two regions. The reports indicate that the unexpected decline of 5,000 manufacturing jobs in the national employment report for May was not a fluke or the result of temporary conditions linked to the earthquake and tsunami in Japan, but rather a sign that the spurt in manufacturing of previous months was collapsing.

Other data is consistent with a slowing economy and deepening jobs crisis. First-time filings for unemployment benefits declined slightly last week, but remained, at 420,000, well above levels indicative of a rebounding jobs market. A survey of small businesses released by the National Federation of Independent Businesses showed that more businesses expect to slash jobs than those expecting to add them. A Labor Department report showed a decrease in job openings at the end of April as compared to the previous month. In April there were roughly 4.6 jobless workers for every opening.

The socially catastrophic impact of the jobs crisis is underscored by reports on joblessness among veterans and prime-age males. USA Today reported that unemployment payments to servicemen and women just out of the military have doubled since 2008. The estimated unemployment rate among male veterans ages 18-24 was more than 30 percent in May.

So much for the supposed high regard in which the ruling elite and the political establishment hold those whom they incessantly laud as “heroes” and “our nation’s finest”! Once their usefulness as cannon fodder in US imperialism’s wars of conquest and plunder is over, they are tossed onto the scrap heap.

Another commentary pointed out that the US has the lowest share of prime-aged males working in the labor force of any industrialized country. Just over 80 percent of those between the ages of 25 and 54 have a job, as compared with 95 percent in the late 1960s. Almost 35 percent of men age 25-54 with no high school diploma have no job, up from 10 percent in the 1960s.

What underlies the barely concealed indifference of Obama and the entire political establishment to the plight of the unemployed is indicated in a front-page article published Sunday in the Washington Post under the headline “Income Gap Widens as Executives Prosper.” The report, the first in a series of articles to be published by the newspaper, describes the staggering rise in the pay of corporate executives over the past several decades, which has played a major role in the vast concentration of wealth and growth of social inequality in America.

The article is based on a new study by economists Jon Bakija, Adam Cole and Bradley T. Heim, who carried out an analysis of the tax returns of the country’s top 0.1 percent of earners over a period of decades. They determined that corporate executives, managers and financial professionals make up nearly 60 percent of those in the elite pay category.

Among the facts brought forward in the article:

* In 2008, the top 0.1 percent of earners (about 152,000 people) took in more than 10 percent of the personal income in the US. The top 1 percent took in more than 20 percent.

* Between 1975 and 2008, the share of the nation’s income going to the top 0.1 percent quadrupled from 2.5 percent to 10.4 percent.

* The share of national income going to the top 0.01 percent rose between 1975 and 2008 from 0.85 percent to 5.03 percent, a nearly six-fold increase. The average income of the 15,000 families in that group now stands at $27 million.

* The top 0.1 percent make at least $1.7 million and average $5.6 million a year.

* In 2008, the wealthiest 10 percent of Americans took in almost the same amount of income as the rest of the country combined.

* Executive compensation at the largest firms in the US has roughly quadrupled in real terms since the 1970s, while pay for 90 percent of the American people has remained flat or declined.

* The rise in income inequality has been more pronounced in the US than in any other industrialized country. In its level of inequality, the US stands just behind Cameroon and Ivory Coast and just ahead of Uganda and Jamaica.

48 Percent Of Americans Believe Another Great Depression Is Likely In The Next 12 Months - 19 Reasons Why They Are Not Completely Crazy

48 Percent Of Americans Believe Another Great Depression Is Likely In The Next 12 Months - 19 Reasons Why They Are Not Completely Crazy

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Do you believe that the U.S. economy is steamrolling toward a depression? If so, you are not alone. According to a recent CNN poll, 48 percent of Americans believe that "another Great Depression" is likely within the next 12 months. Americans have been waiting for almost three years for a "recovery" to materialize, but instead there are all kinds of signs that the economy is about to get worse yet again. Inflation is rising but wages are not. There are millions of Americans that would do just about anything to get a decent job. The "misery index" is the highest it has been in almost 30 years. All of the recent polls show that the American people are more pessimistic about the economy than at any other time in recent memory. World financial markets are incredibly unstable right now and many analysts are expecting a repeat of 2008 (or worse). Meanwhile, our state and local governments are drowning in debt, the federal government is drowning in debt and governments all over Europe are drowning in debt. No, it is not crazy for 48 percent of Americans to believe that we are about to go into another Great Depression.

Just think about that statistic for a moment. Nearly half of the country expects the economy to fall to pieces at some point over the next year.

So do I agree with them?

Yes, I certainly believe that an economic collapse is coming. But that doesn't mean that it will necessarily happen within the next year. The United States is in the midst of a long-term economic decline, and the next big financial crisis could potentially happen in 2011 or 2012.

But it might not.

There are so many variables and it is so hard to predict with certainty the exact timing of how things will play out.

However, it is true that incredibly painful economic times are coming. Our long-term economic future looks unbelievably bleak.

So anyone that believes that we are headed for another depression is certainly not crazy. The following are 19 reasons why it is perfectly rational to be pessimistic about the U.S. economy right now....

#1 Today, 25 million Americans are either unemployed or underemployed. 6 million of those have been out of work for at least 6 months. The average duration of unemployment in the U.S. is now close to 40 weeks.

#2 The unofficial misery index, which is calculated by combining unemployment and inflation, is now at a 28 year high.

#3 Sadly, if unemployment and inflation were calculated the same way that they were back in the 1970s, the misery index would actually be much, much higher. According to John Williams of Shadow Government Statistics, the current "real" rate of inflation is approximately 11.2% instead of the 3.6% figure that the U.S. government wants us to believe.

#4 Greece is on the verge of complete and total financial collapse. The yield on two year Greek bonds is up to 28 percent. The European Central Bank and the German government have been fighting over what to do to solve the Greek crisis. The truth is that without a bailout the Greek government will default. If Greece defaults, it would be a huge nightmare for world financial markets.

#5 Neil MacKinnon, an analyst at VTB Capital, is warning that a Greek implosion could set off a 2008-style financial crisis....

"The risk of a 'Lehman moment' for the eurozone is increasing"

#6 Spain is also potentially a major problem. The Spanish economy is more than twice the size of the Greek, Irish and Portuguese economies combined. Over the past 12 months, the yield on 10 year Spanish bonds has been rising steadily, and many believe that Spain could be the tipping point that pushes the sovereign debt crisis in Europe over the edge.

#7 State and local governments all over the United States are cutting their budgets and are implementing brutal austerity measures. For example, one small town in Alabama has actually decided that they are simply going to stop paying pension benefits to their retirees. In other areas, teachers and police officers are being fired in massive numbers. UBS Investment Research is projecting that state and local governments in the U.S. will combine to slash a whopping 450,000 jobs by the end of next year.

#8 The middle class in the United States is being systematically ripped to shreds. The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States at this point.

#9 It is never a good sign when even the big Wall Street banks start laying off workers. CNBC is reporting that Goldman Sachs, Morgan Stanley and many other big firms on Wall Street are planning some large staff reductions in the months ahead. That is a very bad sign for the economy.

#10 Things have gotten so bad that some mainstream media outlets are actually encouraging Americans to go out and start racking up credit card debt once again. For example, one recent USA Today article was actually entitled "More credit card debt might be good for the economy". Of course the big banks are ready to suck the lifeblood out of anyone that does slip up on making their credit card payments. One major bank has announced that a single late payment could result in a penalty rate as high as 29.99%.

#11 According to the Bureau of Labor Statistics, the share of national income being taken home by American workers is at a post-war low and is rapidly declining.

#12 Reuters is reporting that many of Wall Street's biggest banks plan to cut their use of U.S. Treasuries starting in August. China has already been dumping short-term U.S. debt. But if most of the big players abandon the market, who is going to buy up the massive amounts of debt that the U.S. government needs to issue?

#13 Dean Baker of the Center for Economic and Policy Research apparently believes that we are already in a depression....

"At some point, the pain of high unemployment may lead to some new thinking in Washington – but until that time, welcome to the second Great Depression"

#14 The U.S. banking system could plunge into disaster at any moment. The FDIC is backing up 7 trillion dollars in deposits with an insurance fund that barely has anything in it.

#15 It seems like almost everyone is talking about the next financial collapse. Renowned investor Jim Rogers recently said the following....

"I would expect to see some serious problems in the foreseeable future….By 2011, 2012, 2013, 2013, I don’t know when, we’re going to have an economic slowdown again."

#16 Legendary hedge fund manager Mark Mobius is bracing for the worst. Just consider the following quote from Mobius that recently appeared in Forbes magazine....

There is definitely going to be another financial crisis around the corner," says hedge fund legend Mark Mobius, "because we haven't solved any of the things that caused the previous crisis."

#17 Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period. It is clearly unsustainable for our debt to be growing so much faster than our economy is.

#18 Peter Yastrow, a market strategist for Yastrow Origer, recently told CNBC the following....

"Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything," Yastrow said. "We’re on the verge of a great, great depression. The [Federal Reserve] knows it."

#19 The American people are extremely pessimistic about the economy right now. According to one recent poll, 56 percent of Americans have lost sleep due to the economy and about three-quarters of Americans believe that the nation is on the wrong track.

The nation is in a very sour mood right now, and this is causing even many in the mainstream media to ask some very hard questions.

For example, Jack Cafferty recently asked the following question to viewers on CNN....

"What are the chances the U.S. economy could eventually trigger violence in our country?"

You can view the video of Cafferty asking this question right here or you can just watch it below....

Sadly, we are already starting to see violence erupt all over North America.

Yesterday I highlighted the horrifying violence that we saw in Vancouver this week.

In previous articles I have discussed the insanity that has been going on in major U.S. cities such as Chicago.

Now even the mainstream media is being forced to report on the surge in violence.

A recent USA Today article described some of the most recent mob robberies that have been happening in Chicago....

A Chicago Tribune report tells of a 68-year-old man from Washington State who was set upon while he was smoking a cigar on a bench when youths surrounded him, attacked him and reportedly stole a phone and iPad. The report says a 42-year-old Japanese tourist also was beaten and robbed on a bicycle path by the lakefront. The paper says seven were arrested, but that the group participating in the felonies was estimated at 15 to 20 people strong. One 20something suburbanite told Chicago's WGN TV that he was hit so hard in the head with a baseball that it knocked his motorcycle helmet off. he managed to fight his way out of trouble and hail police, he said.

When people don't have hope, they get desperate.

There are millions of other Americans that are suffering through this economy quietly.

There are so many people out there that have worked hard and have followed all the rules and yet now find themselves struggling just to survive.

For example, a reader named Carolyn recently left a comment in which she shared her story with my readers....

My husband lost his long-term job in 2009 due to budget cuts. Don’t worry, I said. I’m still working, and we have a year of our salary in savings. You’re smart, you’re educated, you’re a hard worker. You’ll find a job soon.

Two months later, my long-term job was sent to India.

I still wasn’t worried. I’m smart, I’m educated, and I’m a smart worker.

A year and a half later, I haven’t found new career yet. I’m 50. No one is going to hire me. I am working – at a Home Depot. At a 79% pay cut from my prior position. But it doesn’t pay for anything. My husband found a new position in his field – at a 62% pay cut from his prior position.

We lived off unemployment and our savings, until both ran out. We put our house and investment property on the market the day after I lost my job.

We haven’t had one offer.

We just had our Chapter 7 bankruptcy discharged. Our foreclosure is still pending. No word yet when that will be done.

To add insult to injury, we owe Federal income taxes on the penalties we used to make withdrawals from our 401(k)’s to live off. My husband took a job in another state, and we were SHOCKED to learn that we owed NEW YORK STATE taxes on the income he earned in Mississippi – to New York state! Apparently there is some loophole that if you are a property owner in New York, but earn income in another state, you have to pay New York state income taxes on out of state earned income.

We’ve been told once our foreclosure is finalized, we may owe taxes on that as well.

What happened to our country?

It is so sad to see what is happening to America.

Things are so hard out there for so many millions of American families right now.

But the truth is that things are much better at the moment than they will be in a few years.

So what is America going to look like when there is no doubt that the economy has collapsed and people have no hope at all?

Housing prices will fall another 20 percent

Housing prices will fall another 20 percent

Housing prices, once on the rebound, are falling again. Inventories of unsold homes mean housing prices will remain weak for years.

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Real estate for sale and Housing and Urban Development (HUD) signs are displayed outside a home in Chandler Heights, Ariz., June 2, 2011. Although building permits for new housing rose an unexpectedly strong 9 percent between April and May, the longer term outlook for housing prices is gloomy.

Many housing optimists a year ago believed not only that the housing collapse was over, but also that a robust rebound was under way. Low mortgage rates and collapsed housing prices, not to mention the $8,000 federal tax credit for new home buyers and other initiatives, seemingly were going to kick-start housing activity nationwide.

Then a funny thing happened on the way to the housing recovery. The tax credits expired, home sales dried up, and prices resumed their declines from their 2006 peak. Excess inventories piled up due to overbuilding and mounting foreclosures. In the meantime, buying those lower-priced houses became more difficult as lenders, burned by the housing crash, tightened lending standards and increased down-payment requirements.

As a result, the housing sector not only has failed to bolster the weak economic recovery but is also likely to continue to struggle for years. And that's bad news for the economy, which has softened in recent months.

Excess inventories are the mortal enemy of housing prices. Lower prices are needed to unload surplus inventory, but in turn, lower prices bring forth more inventory from anxious sellers. The anxiety of house sellers and the reluctance of buyers are enhanced by the realization that house prices can fall – and are falling for the first time in 70 years.

Those excess inventories are huge. Historically, new and existing inventories listed for sale have averaged about 2.5 million. So that's the normal working inventory level, and anything above 2.5 million is excess. It's currently about 4 million, implying excess inventories of 1.5 million. But wait! There's more! As foreclosures keep mounting, a "shadow" inventory of as many as 500,000 additional homes will become visible as many more Americans choose to sell rather than endure further price declines.

This huge and growing surplus inventory of houses – at least 2 million above normal working levels – will probably depress prices considerably from here, perhaps another 20 percent over the next several years. That would bring the total decline in house prices from the April 2006 peak to 45 percent. My forecast may be optimistic, because declines tend to overshoot on the downside just as bubbles do on the upside.

Homeownership is becoming less attractive as many are realizing that it may be many years before house prices stop falling and stabilize, much less revive. Indeed, the homeownership rate nationally has fallen from its late 2009 peak of 69.2 percent to 66.4 percent in the first quarter of this year – precisely where it stood in late 1998.

As homeownership continues to lose its luster, rental apartments will gain. I'm a big believer in reversions to trends, and I expect the home-ownership rate to continue to decline to its earlier long-term trend of around 64 percent as people continue to separate their abodes from their investments and as the baby boomers age, retire, and downsize. That will mean about 4.5 million new renters in coming years. Apartment construction, which normally runs 300,000 per year, will be robust once surplus vacancies disappear.

Housing revival is normally a key component in rekindling robust growth in an economic recovery. But not this time. Its absence from the already-weak recovery highlights the lack of significant strength – such as in job creation, personal spending, and retail sales – in the sputtering economy.

Food price explosion 'will devastate the world's poor'

Food price explosion 'will devastate the world's poor'

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After a 40% rise in global prices over the past year, droughts and floods threaten to seriously damage this year's harvest

    stranded boats
    Boats stranded by drought in central China last month; experts say this year's global harvest is in a 'critical' condition. Photograph: David Gray/Reuters

    Food prices will soar by as much as 30% over the next 10 years, the United Nations and Organisation for Economic Co-operation and Development have predicted.

    Angel Gurría, secretary-general of the OECD, said that any further increase in global food prices, which have risen by 40% over the past year, will have a "devastating" impact on the world's poor and is likely to lead to political unrest, famine and starvation. "People are going to be forced either to eat less or find other sources of income."

    The joint UN Food and Agriculture Organisation (FAO) and OECD report predicted that the cost of cereals is likely to increase by 20% and the price of meat, particularly chicken, may soar by up to 30%.

    World food prices are already at a near-record high as droughts and floods threaten to seriously damage this year's harvest. The report said the global harvest is in a "critical" condition and warned that prices will continue to rise until depleted stocks are rebuilt.

    Global food prices hit a record high in February, prompting demonstrations across the world. The last extreme food price rise in 2008 led to riots in 20 countries across three continents.

    Gurría called on world leaders to ban speculators from pushing up food prices. The G20 will meet in Paris next week to thrash out a deal aimed at imposing strict rules on trading in food commodities and policies that distort global food market.

    French president Nicolas Sarkozy has repeatedly attacked hedge funds and specialised financial institutions for pushing up food prices. "Speculation, panic and lack of transparency have seen prices soaring," he said. "Is that the world we want? France is saying quite clearly it is not."

    He compared the lack of regulation on food price speculators to lax regulation that drove financial markets to the "edge of the abyss" during the 2008 financial crisis.

    The report predicted global agricultural production would grow at an annual rate of 1.7% a year over the next decade, compared with 2.6% the past 10 years. "Slower growth is expected for most crops, especially oilseeds and coarse grains," it said. "The global slowdown in projected yield improvements of important crops will continue to exert pressure on international prices."

    The slowdown in production comes as new forecasts predict the global population will climb to 9.2 billion by 2050, compared with the current level of 6.9 billion. The FAO said agricultural production would have to increase by 70% to match the expected increase.

    Meat exports are expected to rise by only 1.7% by 2021, compared with a 4.4% increase over the previous decade. In contrast, fish production is expected to increase by 14.7% over the same period. Most of this will come from fish farms, which are due to overtake open sea fishing by 2015.

Libya: Connect the Dots-You Get a Giant Dollar Sign

Libya: Connect the Dots-You Get a Giant Dollar Sign

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Qaddafi plus Goldman plus oil equals war

Article summary: THE FAKE ARAB SPRING

It’s true that Arab Spring is a good thing. It’s true Qaddafi is a bad guy. But connect the dots, and you will see that he is being set up. The evidence points to a plan to create an “Arab Spring” for the Good Old Boys—CIA, banks, oil companies. Read and see if you don’t agree.

In an earlier article [2], we posed the question, “Why are we in Libya?” We offered some thoughts.

Now, more pieces are falling into place. Those pieces have names of your favorite players: oil companies, banks like Goldman Sachs, and they paint a picture of endless corporate intrigue. The sort that never seems to come out in the corporate media.

Let’s go for a ride.


This February, several days after Hosni Mubarak resigned in Egypt, civil protest began in neighboring Libya. Quickly, Muammar Qaddafi’s Justice Minister turned against him and became a rebel leader. And, he made the dramatic claim [3] that his ex-boss was the culprit behind the bombing of Pan Am 103:

Libyan leader Muammar Gaddafi ordered the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland, a former Libyan cabinet minister was quoted as saying by a Swedish newspaper on Wednesday.

Former Justice Minister Mustafa Mohamed Abud Al Jeleil, reported to have resigned this week over the violence used by the government against protesters, told the tabloid Expressen he had evidence Gaddafi ordered the bombing that killed 270 people.

“I have proof that Gaddafi gave the order for (the) Lockerbie (bombing),” Expressen quoted Al Jeleil as saying in an interview at an undisclosed large town in Libya.

The newspaper did not say what the evidence of Gaddafi’s involvement in the bombing was.

A Libyan, Abdel Basset al-Megrahi, was tried and jailed in Scotland for the bombing, and Gaddafi, in power since 1969, was branded an international pariah for years.

In 2009, the Scottish government freed al-Megrahi on humanitarian grounds after doctors said he had terminal prostate cancer, a decision strongly criticized by the United States. He returned to Libya and is still alive.

“In order to conceal it (his role in ordering the bombing), he did everything in his power to get Megrahi back from Scotland,” al Jeleil was quoted as saying.

“He (Gaddafi) ordered Megrahi to do it.”

This story made it into major news media throughout the world, without anyone stopping to raise questions about the propaganda benefit of the statement, or of the timing. For example, the UK paper, The Telegraph, interviewed [4] Jeleil/Jalil:

In an interview with The Daily Telegraph, Mustafa Abdel Jalil, the head of the provisional rebel government in Benghazi and Libya [5]’s former justice minister, said he had evidence of Gaddafi’s involvement in the 1988 bombing of Pan Am Flight 103 over Lockerbie.

“The orders were given by Gaddafi himself,” he told Rob Crilly.

Mr Abel Jalil claimed he had evidence that convicted bomber Abdelbaset Ali Mohmed al-Megrahi worked for Gaddafi.

“This evidence is in our hands and we have documents that prove what I have said and we are ready to hand them over to the international criminal court,” he added.

Since then, I haven’t seen any sign that Jalil’s evidence has been shown to anyone. So we don’t know that it actually exists, or that he was telling the truth. But the original headlines did the trick—anyone watching television or reading stories then would have been led to believe that Qaddafi was behind this dastardly deed.

A couple of days later, for the first time, President Obama called for Qaddafi to step down. And not long thereafter, the US, UK and their allies were getting ready to pitch military action against Qaddafi, originally characterized as solely humanitarian, “to protect civilians.” (Eventually, the top British military figure would indiscreetly admit [2] that the relentless bombing was intended to remove the Libyan leader.)

We’ll get back to the propaganda machine and its effectiveness later, but let’s now examine the relationship between the Western governments and Qaddafi. Was it, as presented in the media, merely a case of doing the right thing against a brutal tyrant? One also accused of being behind the murder of those airline passengers?


This is not the place to recount the entire back history between Qaddafi and the alliance. Suffice to say that Qaddafi is one of a long string of foreign leaders who insisted on an independent course, including requisite regional bigfooting, and got in trouble. Specifically, we could look at some skirmishes with the US Navy during the Reagan-Bush administration, but there’s a long list of grievances. This, as in the case of Hugo Chavez of Venezuela, is compounded by the fact that he sits on massive oil reserves. Add in his brutality, avarice and bizarre manner, and you’ve got an attractive target, and an easy one for his enemies’ publicity departments.

As animosity grew, Libya started being labeled a terrorist force, possibly with some truth, and then connected to a series of major outrages with which it may or may not have had anything to do.

One was the death of several US soldiers in a Berlin nightclub in 1986, and another the alleged sponsorship of a hijacking that same year. But the thing that turned much of the world against Qaddafi was the alleged role of Libya in blowing Pan Am 103 apart.

Most of us probably remember, vaguely, that Libya’s role in that is an established fact. If so, we’re off base. Let’s start with this [6] 2001 BBC report, following the conviction of Megrahi, a Libyan intelligence officer:

Robert Black, the Scottish law professor who devised the format of the Netherlands-based trial, was quoted on Sunday as saying he was “absolutely astounded” that Al Megrahi had been found guilty.

Mr Black said he believed the prosecution had “a very, very weak circumstantial case” and he was reluctant to believe that Scottish judges would “convict anyone, even a Libyan” on such evidence.

The view, published in British newspapers, echoes that of some of the families of UK victims of the Lockerbie bombing, who are calling for a public inquiry to find “the truth of who was responsible and what the motive was”.


Wednesday’s verdict sparked angry protests in Libya on Saturday, as Washington and London demanded the Libyan Government accept responsibility for the atrocity and pay compensation to the victims’ families.

The protesters condemned what they called a “CIA-dictated” verdict and demanded compensation for the victims of the 1986 US air raids on Tripoli and Benghazi.

For more on doubts about Libya’s role in the bombing, see the excellent summary of powerful evidence that the Libyans may have been framed, evidence not presented at trial, on Wikipedia [7]. (While Wikipedia should not be considered a definitive source, it is often a good roundup of what may be found elsewhere and thus a starting point for further inquiry.) The troubling elements, which constitute a very long list, include an alleged offer from the FBI of $4 million for certain incriminating testimony, the subsequent admission by a key witness that he had lied, details of strange goings-on in the FBI’s crime lab, and indications that the bomb may have been introduced at an airport where the defendant was not present.

Nevertheless, Megrahi’s conviction, and the media’s dutiful reporting of it as justice done, meant that Libya, and Qaddafi, would continue under sanctions that had already isolated the country for a decade from the international community.

Qaddafi had sought to undo the cordon, including handing Megrahi over for trial in 1999. But that had not done the trick, and the January 31, 2001 conviction, coming 11 days after the inauguration of George W. Bush, threatened to make things worse—much worse. Qaddafi particularly had to worry about how it might impact his own survival.

By May 2002, with US troops in Afghanistan having ousted the Taliban and four months after Bush listed Iraq, Iran, North Korea and Syria as part of an “axis of evil” seeking “weapons of mass destruction”, Libya was feeling the heat. That month, it offered staggered payments to the Lockerbie victims’ families, as part of a trade for the cancellation of UN and US trade sanctions, and removal of Libya from the State Department’s list of states sponsoring terrorism. By August, 2003, several months after the invasion of Iraq and removal of Saddam Hussein, Qaddafi cut a deal [8], as reported in the New York Times:

Libya and lawyers for families of the victims of the 1988 midair bombing of Pan Am Flight 103 over Lockerbie, Scotland, signed an agreement today to create an account for $2.7 billion in expected compensation, a lawyer said.

”Libya and the lawyers representing families of the victims have signed an agreement to create the escrow account at the Bank for International Settlements,” said the lawyer, Saad Djebbar, an Algerian living in London who has followed the case since 1992.

As a result, he said United Nations sanctions might be lifted.

With the agreement, Libya is expected to deposit the money in the account and to send the United Nations Security Council a letter accepting responsibility for the bombing, in which 270 people died.

In Washington, family members said today that the State Department had invited the victims’ families to a briefing on Friday.

It was a package deal, with many tentative aspects. Libya told the UN it “accepted responsibility” in the bombing—though, notably, it did not admit guilt. Indeed, as late as 2008, Qaddafi’s son Saif told a BBC documentary crew that the only reason Libya “admitted responsibility” was to get the sanctions removed. The documentary noted that several victims’ families had declined compensation because they felt Libya had not actually been behind the bombing.

The 2003 deal was enough, however, to begin welcoming Libya back into the family of nations. The Bush administration moved quickly to begin trade with Libya. By December, 2003, Libya had agreed to give up whatever WMD programs it purportedly had in return for the US lifting sanctions.

This heartened not only Libya, but also major Western companies, which had been champing at the bit for years to get a piece of Libya’s assets, including its vast oil reserves and the income they generated.

The inexorable trade machine kept grinding along. Within a few weeks, Bush signed an executive order restoring Libyan immunity from terror lawsuits and ended pending US compensation cases.

In 2007, strongly encouraged by the UK oil company BP, Britain began pushing for a transfer of Megrahi back to prison in Libya, resulting in a series of events that concluded with his 2009 release from incarceration—on purported medical grounds. (New information on BP’s role has come out recently, with Hillary Clinton and key US senators expressing outrage and declaring their intent to investigate–see here [9]. No mention by the Dems of the doubts about his guilt, just indignation that a “murderer” had been freed.)

In 2009, the same year Megrahi was released, Qaddafi, faced with stiff ongoing Lockerbie payments, began pressing oil companies to pay more to help cover his debt.

We learned of the pressure on the oil companies during the recent propaganda effort to build support for military action against Qaddafi. In a New York Times article [10] headlined “Shady Dealings Helped Qaddafi Build Fortune and Regime”—the crux of which was Qaddafi’s shadiness (though not necessarily that of the oil companies)—was this gem of an item. It was easily missed and as easily misconstrued:

In 2009, top aides to Col. Muammar el-Qaddafi called together 15 executives from global energy companies operating in Libya’s oil fields and issued an extraordinary demand: Shell out the money for his country’s $1.5 billion bill for its role in the downing of Pan Am Flight 103 and other terrorist attacks.

If the companies did not comply, the Libyan officials warned, there would be “serious consequences” for their oil leases, according to a State Department summary of the meeting.

Now why would Qaddafi be desperate for cash? The article didn’t say. But if I’m connecting dots correctly, I’d say that you have to read another paper, then link the two.

Here’s [11] the Wall Street Journal with an exclusive from May 31 that is hugely important but has thus far been seen in isolation, unconnected to the oil demand above. I recommend reading the lengthy excerpt that follows:

In early 2008, Libya’s sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades. The investments lost 98% of their value, internal Goldman documents show.

…In 2004, the U.S. government had lifted an earlier set of sanctions…That opened the door for dozens of U.S. and European banks, hedge funds and other investment firms to pile into the North African nation.

The Libyan Investment Authority set up shop on the 22nd floor of what was then Tripoli’s tallest building and launched in June 2007 with about $40 billion in assets. Libya approached 25 financial institutions, offering each of them a chance to manage at least $150 million, recalls a person familiar with the fund’s plans.

Soon it was spreading chunks of the money to firms around the world. In addition to Goldman, those institutions included Société Générale SA, HSBC Holdings PLC, Carlyle Group, J.P. Morgan Chase & Co., Och-Ziff Capital Management Group and Lehman Brothers Holdings Inc., according to internal fund records reviewed by the Journal.

… “The country made a conscious decision to join the major leagues,” says Edwin Truman, a senior fellow at the Peterson Institute for International Economics and former assistant Treasury secretary. Until then, the investment fund’s money was held in Libya’s central bank, earning ho-hum returns on high-quality bonds.

Goldman seized the opportunity. In May 2007, several Goldman partners met with the Libyans at Goldman’s London office. Mustafa Zarti, then the fund’s deputy chairman, and Hatem el-Gheriani, its chief investment officer, invited the Goldman partners to see the fund’s Libyan headquarters for themselves. Mr. Zarti was a close associate of one of Col. Gadhafi’s sons, Saif al-Islam Gadhafi, and reported to a longtime friend of the Libyan ruler.

…Goldman soon carved out a new business with the Libyans, in options—investments that give buyers the right to purchase stocks, currencies or other assets on a future date at stipulated prices. Between January and June 2008, the Libyan fund paid $1.3 billion for options on a basket of currencies and on six stocks: Citigroup Inc., Italian bank UniCredit SpA, Spanish bank Banco Santander, German insurance giant Allianz, French energy company Électricité de France and Italian energy company Eni SpA. The fund stood to reap gains if prices of the underlying stocks or currencies rose above the stipulated levels.

But that fall, the credit crisis hit with a vengeance as Lehman Brothers failed and banks all over the world faced financial crises. The $1.3 billion of option investments were hit especially hard. The underlying securities plunged in value and all of the trades lost money, according to an internal Goldman memo reviewed by the Journal. The memo said the investments were worth just $25.1 million as of February 2010—a decline of 98%.

Officials at the sovereign-wealth fund accused Goldman of misrepresenting the investment deals and making trades without proper authorization, according to people familiar with the situation. In July 2008, Mr. Zarti, the fund’s deputy chairman, summoned Mr. Kabbaj, Goldman’s North Africa chief, to a meeting with the fund’s legal and compliance staff, according to Libyan Investment Authority emails reviewed by the Journal.

One person who attended the meeting says Mr. Zarti was “like a raging bull,” cursing and threatening Mr. Kabbaj and another Goldman employee. Goldman arranged for security to protect the employees until they left Libya the next day, according to people familiar with the matter.

…Following the showdown in Tripoli, the fund demanded restitution and issued vague threats of legal action.

The Journal goes on to describe Goldman’s response—which “audacious” doesn’t begin to describe. Goldman offered to make it all up to Libya by selling it a huge stake…in Goldman itself. That Journal piece is well worth reading, as is this [12] essay from Rolling Stone, but a bit off our topic beyond the notion that Western companies loved rubbing this rube’s nose in it.

The point, at least to me, is that Libya had taken the advice of an American firm and invested, and lost, a huge amount of the funds that are supposed to generate profits used in governing Libya. Including providing the kinds of services that kept Libyans loyal to Qaddafi in the first place.

Is it any surprise that just as this banking disaster unfolded, Qaddafi in 2009 turned desperately to the Western oil companies, which were doing well by Libya, and wanted them to pay more royalties to fund the Lockerbie settlements? Settlements he perhaps should not have had to pay in the first place?


By December 2010, when a Tunisian man set himself on fire, the Arab Spring revolt was under way—in Egypt, Bahrain, and elsewhere. Pretty quickly, it was clear to everyone that the Western powers were in danger of losing crucial oil suppliers—and vital military bases.

It certainly was convenient that, right about that time, Libya showed signs of moving in the opposite direction—into the US camp. Read our piece here [13] about the CIA ties to the Libyan uprising.

Then consider the timing of February’s ramped-up claim by the defecting Libyan official, that Qaddafi himself had ordered the Lockerbie bombing.

If that wasn’t enough in the propaganda department to get the global public worked up, next came the Libya rape story. The average person doesn’t have the time or appetite to follow the kinds of complex corporate maneuverings that fascinate us here, but they do understandably get upset about bombs on civilian aircraft and rape.

We wrote about that rape story back here [14]. Our point, which still stands, is that it is highly unusual for rape victims and their families to come forward publicly. It is almost unheard of in Arab countries, where the consequences can be severe. (Update: the woman and her family are being relocated in the West [15]¸ and she’s said she’d like to come to America.)

We noted the timing of the story, the alacrity with which the Western press grabbed it and spread it, and the simple fact that there’s no evidence tying Qaddafi in any way to any such act. Even the woman herself doesn’t claim that. Yet it infuriated untold millions and postings all over the Web show that it moved a lot of public opinion into the column supporting military action to remove the Libyan leader.

That the corporate media cannot see what is going on here, or refuses to see, tells us how far we have not come since the Gulf of Tonkin Resolution [16].

Still, we can hear the other shoe dropping if we listen carefully enough. For example, the website Politico ran a little item the other day on a powwow between Hillary Clinton and corporate executives over business opportunities in Iraq.

FIRST LOOK: WALL STREET IN IRAQ? – Secretary of State Hillary Clinton and Deputy Secretary Tom Nides (formerly chief administrative officer at Morgan Stanley) will host a group of corporate executives at State this morning as part of the Iraq Business Roundtable. Corporate executives from approximately 30 major U.S. companies – including financial firms Citigroup, JPMorganChase and Goldman Sachs – will join U.S. and Iraqi officials to discuss economic opportunities in the new Iraq. Full list of corporate participants: [17]

Give it a couple of years, and they’ll be having the same party celebrating a more sympathetic regime in Libya.


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Full Meltdown: Fukushima Called the 'Biggest Industrial Catastrophe in the History of Mankind'

Full Meltdown: Fukushima Called the 'Biggest Industrial Catastrophe in the History of Mankind'

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"Fukushima is the biggest industrial catastrophe in the history of mankind," Arnold Gundersen, a former nuclear industry senior vice president, told Al Jazeera.

Japan's 9.0 earthquake on March 11 caused a massive tsunami that crippled the cooling systems at the Tokyo Electric Power Company's (TEPCO) nuclear plant in Fukushima, Japan. It also led to hydrogen explosions and reactor meltdowns that forced evacuations of those living within a 20km radius of the plant.

Gundersen, a licensed reactor operator with 39 years of nuclear power engineering experience, managing and coordinating projects at 70 nuclear power plants around the US, says the Fukushima nuclear plant likely has more exposed reactor cores than commonly believed.

"Fukushima has three nuclear reactors exposed and four fuel cores exposed," he said, "You probably have the equivalent of 20 nuclear reactor cores because of the fuel cores, and they are all in desperate need of being cooled, and there is no means to cool them effectively."

TEPCO has been spraying water on several of the reactors and fuel cores, but this has led to even greater problems, such as radiation being emitted into the air in steam and evaporated sea water - as well as generating hundreds of thousands of tons of highly radioactive sea water that has to be disposed of.

"The problem is how to keep it cool," says Gundersen. "They are pouring in water and the question is what are they going to do with the waste that comes out of that system, because it is going to contain plutonium and uranium. Where do you put the water?"

Even though the plant is now shut down, fission products such as uranium continue to generate heat, and therefore require cooling.

"The fuels are now a molten blob at the bottom of the reactor," Gundersen added. "TEPCO announced they had a melt through. A melt down is when the fuel collapses to the bottom of the reactor, and a melt through means it has melted through some layers. That blob is incredibly radioactive, and now you have water on top of it. The water picks up enormous amounts of radiation, so you add more water and you are generating hundreds of thousands of tons of highly radioactive water."

Independent scientists have been monitoring the locations of radioactive "hot spots" around Japan, and their findings are disconcerting.

"We have 20 nuclear cores exposed, the fuel pools have several cores each, that is 20 times the potential to be released than Chernobyl," said Gundersen. "The data I'm seeing shows that we are finding hot spots further away than we had from Chernobyl, and the amount of radiation in many of them was the amount that caused areas to be declared no-man's-land for Chernobyl. We are seeing square kilometres being found 60 to 70 kilometres away from the reactor. You can't clean all this up. We still have radioactive wild boar in Germany, 30 years after Chernobyl."

Radiation monitors for children

Japan's Nuclear Emergency Response Headquarters finally admitted earlier this month that reactors 1, 2, and 3 at the Fukushima plant experienced full meltdowns.

TEPCO announced that the accident probably released more radioactive material into the environment than Chernobyl, making it the worst nuclear accident on record.

Meanwhile, a nuclear waste advisor to the Japanese government reported that about 966 square kilometres near the power station - an area roughly 17 times the size of Manhattan - is now likely uninhabitable.

In the US, physician Janette Sherman MD and epidemiologist Joseph Mangano published an essay shedding light on a 35 per cent spike in infant mortality in northwest cities that occurred after the Fukushima meltdown, and may well be the result of fallout from the stricken nuclear plant.

The eight cities included in the report are San Jose, Berkeley, San Francisco, Sacramento, Santa Cruz, Portland, Seattle, and Boise, and the time frame of the report included the ten weeks immediately following the disaster.

"There is and should be concern about younger people being exposed, and the Japanese government will be giving out radiation monitors to children," Dr MV Ramana, a physicist with the Programme on Science and Global Security at Princeton University who specialises in issues of nuclear safety, told Al Jazeera.

Dr Ramana explained that he believes the primary radiation threat continues to be mostly for residents living within 50km of the plant, but added: "There are going to be areas outside of the Japanese government's 20km mandatory evacuation zone where radiation is higher. So that could mean evacuation zones in those areas as well."

Gundersen points out that far more radiation has been released than has been reported.

"They recalculated the amount of radiation released, but the news is really not talking about this," he said. "The new calculations show that within the first week of the accident, they released 2.3 times as much radiation as they thought they released in the first 80 days."

According to Gundersen, the exposed reactors and fuel cores are continuing to release microns of caesium, strontium, and plutonium isotopes. These are referred to as "hot particles".

"We are discovering hot particles everywhere in Japan, even in Tokyo," he said. "Scientists are finding these everywhere. Over the last 90 days these hot particles have continued to fall and are being deposited in high concentrations. A lot of people are picking these up in car engine air filters."

Radioactive air filters from cars in Fukushima prefecture and Tokyo are now common, and Gundersen says his sources are finding radioactive air filters in the greater Seattle area of the US as well.

The hot particles on them can eventually lead to cancer.

"These get stuck in your lungs or GI tract, and they are a constant irritant," he explained, "One cigarette doesn't get you, but over time they do. These [hot particles] can cause cancer, but you can't measure them with a Geiger counter. Clearly people in Fukushima prefecture have breathed in a large amount of these particles. Clearly the upper West Coast of the US has people being affected. That area got hit pretty heavy in April."

Blame the US?

In reaction to the Fukushima catastrophe, Germany is phasing out all of its nuclear reactors over the next decade. In a referendum vote this Monday, 95 per cent of Italians voted in favour of blocking a nuclear power revival in their country. A recent newspaper poll in Japan shows nearly three-quarters of respondents favour a phase-out of nuclear power in Japan.

Why have alarms not been sounded about radiation exposure in the US?

Nuclear operator Exelon Corporation has been among Barack Obama's biggest campaign donors, and is one of the largest employers in Illinois where Obama was senator. Exelon has donated more than $269,000 to his political campaigns, thus far. Obama also appointed Exelon CEO John Rowe to his Blue Ribbon Commission on America's Nuclear Future.

Dr Shoji Sawada is a theoretical particle physicist and Professor Emeritus at Nagoya University in Japan.
He is concerned about the types of nuclear plants in his country, and the fact that most of them are of US design.

"Most of the reactors in Japan were designed by US companies who did not care for the effects of earthquakes," Dr Sawada told Al Jazeera. "I think this problem applies to all nuclear power stations across Japan."

Using nuclear power to produce electricity in Japan is a product of the nuclear policy of the US, something Dr Sawada feels is also a large component of the problem.

"Most of the Japanese scientists at that time, the mid-1950s, considered that the technology of nuclear energy was under development or not established enough, and that it was too early to be put to practical use," he explained. "The Japan Scientists Council recommended the Japanese government not use this technology yet, but the government accepted to use enriched uranium to fuel nuclear power stations, and was thus subjected to US government policy."

As a 13-year-old, Dr Sawada experienced the US nuclear attack against Japan from his home, situated just 1400 metres from the hypocentre of the Hiroshima bomb.

"I think the Fukushima accident has caused the Japanese people to abandon the myth that nuclear power stations are safe," he said. "Now the opinions of the Japanese people have rapidly changed. Well beyond half the population believes Japan should move towards natural electricity."

A problem of infinite proportions

Dr Ramana expects the plant reactors and fuel cores to be cooled enough for a shutdown within two years.
"But it is going to take a very long time before the fuel can be removed from the reactor," he added. "Dealing with the cracking and compromised structure and dealing with radiation in the area will take several years, there's no question about that."

Dr Sawada is not as clear about how long a cold shutdown could take, and said the problem will be "the effects from caesium-137 that remains in the soil and the polluted water around the power station and underground. It will take a year, or more time, to deal with this".

Gundersen pointed out that the units are still leaking radiation.

"They are still emitting radioactive gases and an enormous amount of radioactive liquid," he said. "It will be at least a year before it stops boiling, and until it stops boiling, it's going to be cranking out radioactive steam and liquids."

Gundersen worries about more earthquake aftershocks, as well as how to cool two of the units.

"Unit four is the most dangerous, it could topple," he said. "After the earthquake in Sumatra there was an 8.6 [aftershock] about 90 days later, so we are not out of the woods yet. And you're at a point where, if that happens, there is no science for this, no one has ever imagined having hot nuclear fuel lying outside the fuel pool. They've not figured out how to cool units three and four."

Gundersen's assessment of solving this crisis is grim.

"Units one through three have nuclear waste on the floor, the melted core, that has plutonium in it, and that has to be removed from the environment for hundreds of thousands of years," he said. "Somehow, robotically, they will have to go in there and manage to put it in a container and store it for infinity, and that technology doesn't exist. Nobody knows how to pick up the molten core from the floor, there is no solution available now for picking that up from the floor."

Dr Sawada says that the creation of nuclear fission generates radioactive materials for which there is simply no knowledge informing us how to dispose of the radioactive waste safely.

"Until we know how to safely dispose of the radioactive materials generated by nuclear plants, we should postpone these activities so as not to cause further harm to future generations," he explained. "To do otherwise is simply an immoral act, and that is my belief, both as a scientist and as a survivor of the Hiroshima atomic bombing."

Gundersen believes it will take experts at least ten years to design and implement the plan.

"So ten to 15 years from now maybe we can say the reactors have been dismantled, and in the meantime you wind up contaminating the water," Gundersen said. "We are already seeing Strontium [at] 250 times the allowable limits in the water table at Fukushima. Contaminated water tables are incredibly difficult to clean. So I think we will have a contaminated aquifer in the area of the Fukushima site for a long, long time to come."

Unfortunately, the history of nuclear disasters appears to back Gundersen's assessment.

"With Three Mile Island and Chernobyl, and now with Fukushima, you can pinpoint the exact day and time they started," he said, "But they never end."

Why Does Europe Take Better Care of Its People Than America?

Why Does Europe Take Better Care of Its People Than America?

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An abiding belief in American exceptionalism is more or less ubiquitous across the political spectrum. But in many ways, what makes America different from other advanced democracies are relatively modest differences in priorities. While all wealthy democracies share the same basic model --they derive the bulk of their economic activity from the private sector while offering some form of social safety net for those who fall through the cracks -- even slight differences in priorities can have a huge impact on the lives of their people.

Here are 9 countries that do a better job providing for their citizens than we do.

Taking Care of the Ill: France

If you have access to the best health care in the United States, then you have some of the best care in the world. But that comes with an extremely steep price, and not everyone has that kind of access.

In 2008, the U.S. spent 16 percent of its economic output on health-care and covered 85 percent of its citizens. It was the only OECD country other than Mexico and Turkey to cover less than 90 percent of its people. We have the 37th longest average life expectancy, and a recent study found that American “life expectancy has been stagnant for much of the country and is actually decreasing over much of the Southern portion of the United States.”

France, which has a health-care system ranked number one in the world by the WHO, spent 11.2 percent of its economy to cover everyone.

There are a number of drivers of health-care costs, but one statistic stands out: in the European (and European-style) economies, upwards of 70 percent of the total health-care bill is picked up by the government, meaning that people are insured in large pools with lots of bargaining clout to hold down providers' costs. In the U.S., less than half of our health care is in the public sector, resulting in a patchwork system of private insurers with much higher administrative costs. When you plug what France pays per person for health care into our own government's fiscal projections, you get balanced budgets by around 2014, which then turn into surpluses after 2040.

Collective Bargaining: France

At around 12 percent (in 2008), the United States doesn't have the lowest unionization rate among the wealthy countries. That distinction goes to France, where under 8 percent of the workforce belongs to a union.

But union membership isn't important, collective bargaining is; and around 90 percent of non-managerial French workers – union members or not -- are covered under collective bargaining agreements.

Honorable mention goes to the Scandinavian countries – with 53 percent of its workforce in a union, Norway comes in dead last among them; 68 percent of Swedes belong to a union, topping the list.

Inequality: Denmark

A large body of research shows that higher union density correlates with less inequality. The U.S. is the most unequal society among the wealthy countries – in the OECD, only three middle-income countries (Turkey, Mexico and Chile) have a more lopsided distribution of wealth.

Denmark leads the way, with the flattest distribution among the high-income countries in the OECD.

Poverty: Denmark

Inequality is a measure of how much income those at the top of the pile take in compared to what those at the bottom grab. So, in countries with equal wealth, more inequality means more poverty – the piece of the economic pie shared by those at the bottom end of the scale will be smaller by definition.

Not surprisingly, Denmark, at 5.4 percent, has the lowest poverty rate among the European-style countries.

The OECD uses a different standard of poverty than does the U.S. government. It counts anyone making less than half of the median income as living in poverty. By that standard, we are plagued with a poverty rate of over 17 percent, higher than all the OECD countries other than Mexico, Israel and Chile. (The average among OECD countries in general is 11.1 percent.)

Child Poverty: Denmark

One of the most tragic comparisons for America, among the richest countries in the world, is that more than one in five children live in poverty, as measured by the OECD (PDF). The OECD average is under 13 percent, and Denmark again comes in last, with childhood poverty at around 4 percent. (Following it are Finland, Norway, Austria and Sweden.)

Gender Gap: Italy

Because women are disproportionately represented in lower paying jobs, and people at the bottom of the wage ladder get the most benefits of union membership, high unionization rates are also correlated with lower gender pay-gaps – it's one of several factors, but it's a key one.

Italy has the second highest union rate outside of Scandinavia, and also boasts the smallest gender gap. A female worker in the middle of the pack makes just 1.3 percent less than her male counterpart in Italy. Compare that with American women, who earn more than 20 percent less than American men. (The OECD average is 16 percent, and we're not the worst – that distinction goes to Japan among the European-style economies.)

Taking Care of the Young

At 6.7 deaths per 1,000 live births, the U.S. had the highest infant mortality rate among the high-income nations in 2006. Iceland, with 1.4 deaths/ 1,000 live births, had the lowest.

Among high-income countries, only Canada spent a lower share of its economic output on family benefits, services and tax breaks than the U.S., which devoted about 1.25 percent of GDP. France, which has battled low fertility rates for years, spends almost 4 percent.

The U.S. is the only advanced country that doesn't offer paid maternity and/or paternity leave.

Sweden offers the longest paid leave – 16 months – at about 80 percent of one's income. Denmark allows the parents to divide a year off, with full pay.

Early childhood care and preschool programs confer long-lasting benefits on children who participate in them. About a third of American kids aged 3-5 were enrolled in such programs in 2008, compared with about two-thirds of kids in Denmark.

Taking Care of the Old: Luxembourg

Conservatives paint more progressive countries as being mired with chronically high unemployment. But there's a bit of sleight-of-hand at work: looking only at workers in their prime years, the U.S. has a low employment rate relative to most European countries. Ten of them -- as well as Australia, Canada and Japan – had higher employment rates for people in their prime working years.

But we work our elderly a lot harder than they do in other countries. Among those aged 55-64, over 60 percent of Americans work, compared with just 35.3 percent in Belgium.

The Social Security system in the U.S. replaces 42 percent of the median salary – only the UK is stingier among the wealthy countries (but it pays a bigger share of the wages of lower-income workers). Iceland replaces 109 percent of the earnings of someone in the middle of the economic pack; Luxembourg and the Netherlands replace about 90 percent. The OECD average is 60 percent.

Among the wealthy countries, only Norway and Iceland have a higher retirement age (67) than we do in the U.S. (66). People in Luxembourg can retire with full benefits at 57, and the Italians join them just three months later.

Taxing Corporations Versus Individuals: Luxembourg

The U.S. government collects less in taxes than the other rich countries, on average, but that doesn't tell us who pays what.

It's worth noting that the U.S. is tied for the OECD country that collects the lowest share of the economy in corporate taxes, at 1.8 percent of GDP (in 2008), or about half the group's average.

That means that more of the burden falls on individuals and households. Americans fork over more in personal income taxes than the OECD average as a result – we pay 9.9 percent while the OECD as a whole pays 9 percent.

Denmark leads the world in corporate taxes, and the Slovak Republic has the lowest personal income taxes, but the most “balanced” system (an admittedly arbitrary standard) is arguably Luxembourg's, where corporations were taxed at 5.1 percent and individuals and families at 7.7 percent in 2008.

Aren't They Taxed to Death in General?

What about the “economy-killing” taxes under which those crazy European socialists suffer? Well, in 2007 we paid 7.5 percent of our economic output less in taxes than the average of OECD countries, but citizens of the other wealthy countries got a lot more for their tax dollars than we did – free or very low-cost health care, college educations, better unemployment benefits, job training and the list goes on.

In the United States, we paid the equivalent of 8.2 percent of our economy more in social spending out of our own pockets than the people in other rich countries did that year. So the savings we enjoyed on our tax bills were more than offset by what we paid for those things our counterparts bought with their taxes. When private and public spending on our social welfare are added together, Americans pay just a little bit more than the other citizens of the world's leading economic powers.

But What About the Debt?

Perhaps these countries just ran up piles of debt in the course of taking better care of their people?

That's not the case; among the world's wealthy democracies only six – Japan, Greece, Ireland, Iceland, Belgium and Italy – had a higher ratio of debt to GDP than the United States last year.

Denmark's debt level was less than half of our own.

Much has also been made of the Europeans' supposedly slower growth and lower average incomes. It is true that over the last decade, gross domestic product grew by about 1 percentage point more annually in the United States than in the core countries of the EU-15. But when we talk about “growth,” we mean a growing population as well as increasing productivity: more people making stuff means more total stuff.

The differences in population growth between the United States and the EU are stark. Since 1980, the population of the United States has increased by more than a third, compared with 7 percent in the EU (as a whole). Adding people, however, doesn’t necessarily make countries more affluent. A better standard is the growth of GDP per person. As Paul Krugman pointed out, “Since 1980, per capita real G.D.P.—which is what matters for living standards—has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there.” That’s essentially a rounding error.

The Wall Street Journal’s editorial board got terribly excited a few years back when a study by a right-wing think tank in Sweden “found that if Europe were part of the U.S., only tiny Luxembourg could rival the richest of the 50 American states in gross domestic product per capita.” A “rising tide still lifts all boats,” the Journal reminded us, “and U.S. GDP per capita was a whopping 32% higher than the EU average in 2000, and the gap hasn’t closed since.”

As far as the raw data go, that’s true. (But several individual European states have GDP per capita that are either higher than, or comparable to, that enjoyed in the United States.) The thing is, those data tell only part of the story about a country’s economic health. We do have different priorities, and European workers expect six to eight weeks of vacation, paid sick days, and fewer hours of overtime—Europeans simply don’t work themselves to the bone as we do. American men and women worked an average of 41 hours per week in 2005, while European men averaged 38 hours and European women only 30. As the OECD noted, “As for holiday and paid leave entitlements, the striking differences between Europe and the United States (including sickness and maternity) obviously explain some of the transatlantic gap in annual working hours.”

When you factor in the difference in time spent on the job, the income gap essentially disappears. Now, is this simply a matter of Americans’ having a superior work ethic, unblunted by the perfidy of the nanny state? Well, no. Overworked Americans are miserable. According to research cited by Boston College’s Sloan Work and Family Research Network, four in 10 workers who work a lot of extra hours say they “feel very angry toward their employers,” versus 1 percent who work only a few extra hours. Just 3 percent of two-income couples who work long hours said they were content with the effort, and nine out of 10 U.S. workers said either, “My job requires that I work very hard,” or “I never seem to have enough time to get everything done on my job.”

So, again, what we see is merely a difference in priorities.

Eisenhower's worst fears came true. We invent enemies to buy the bombs

Eisenhower's worst fears came true. We invent enemies to buy the bombs

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Britain faces no serious threat, yet keeps waging war. While big defence exists, glory-hungry politicians will use it

    Why do we still go to war? We seem unable to stop. We find any excuse for this post-imperial fidget and yet we keep getting trapped. Germans do not do it, or Spanish or Swedes. Britain's borders and British people have not been under serious threat for a generation. Yet time and again our leaders crave battle. Why?

    Last week we got a glimpse of an answer and it was not nice. The outgoing US defence secretary, Robert Gates, berated Europe's "failure of political will" in not maintaining defence spending. He said Nato had declined into a "two-tier alliance" between those willing to wage war and those "who specialise in 'soft' humanitarian, development, peacekeeping and talking tasks". Peace, he implied, is for wimps. Real men buy bombs, and drop them.

    This call was echoed by Nato's chief, Anders Fogh Rasmussen, who pointed out how unfair it was that US defence investment represented 75% of the Nato defence expenditure, where once it was only half. Having been forced to extend his war on Libya by another three months, Rasmussen wanted to see Europe's governments come up with more money, and no nonsense about recession. Defence to him is measured not in security but in spending.

    Joe Magee Missi9le Toon Joe Magee: Guardian

    The call was repeated back home by the navy chief, Sir Mark Stanhope. He had to be "dressed down" by the prime minister, David Cameron, for warning that an extended war in Libya would mean "challenging decisions about priorities". Sailors never talk straight: he meant more ships. The navy has used so many of its £500,000 Tomahawk missiles trying to hit Colonel Gaddafi (and missing) over the past month that it needs money for more. In a clearly co-ordinated lobby, the head of the RAF also demanded "a significant uplift in spending after 2015, if the service is to meet its commitments". It, of course, defines its commitments itself.

    Libya has cost Britain £100m so far, and rising. But Iraq and the Afghan war are costing America $3bn a week, and there is scarcely an industry, or a state, in the country that does not see some of this money. These wars show no signs of being ended, let alone won. But to the defence lobby what matters is the money. It sustains combat by constantly promising success and inducing politicians and journalists to see "more enemy dead", "a glimmer of hope" and "a corner about to be turned".

    Victory will come, but only if politicians spend more money on "a surge". Soldiers are like firefighters, demanding extra to fight fires. They will fight all right, but if you want victory that is overtime.

    On Wednesday the Russian ambassador to Nato warned that Britain and France were "being dragged more and more into the eventuality of a land-based operation in Libya". This is what the defence lobby wants institutionally, even if it may appal the generals. In the 1980s Russia watched the same process in Afghanistan, where it took a dictator, Mikhail Gorbachev, to face down the Red Army and demand withdrawal. The west has no Gorbachev in Afghanistan at the moment. Nato's Rasmussen says he "could not envisage" a land war in Libya, since the UN would take over if Gaddafi were toppled. He must know this is nonsense. But then he said Nato would only enforce a no-fly zone in Libya. He achieved that weeks ago, but is still bombing.

    It is not democracy that keeps western nations at war, but armies and the interests now massed behind them. The greatest speech about modern defence was made in 1961 by the US president Eisenhower. He was no leftwinger, but a former general and conservative Republican. Looking back over his time in office, his farewell message to America was a simple warning against the "disastrous rise of misplaced power" of a military-industrial complex with "unwarranted influence on government". A burgeoning defence establishment, backed by large corporate interests, would one day employ so many people as to corrupt the political system. (His original draft even referred to a "military-industrial-congressional complex".) This lobby, said Eisenhower, could become so huge as to "endanger our liberties and democratic processes".

    I wonder what Eisenhower would make of today's US, with a military grown from 3.5 million people to 5 million. The western nations face less of a threat to their integrity and security than ever in history, yet their defence industries cry for ever more money and ever more things to do. The cold war strategist, George Kennan, wrote prophetically: "Were the Soviet Union to sink tomorrow under the waters of the ocean, the American military-industrial complex would have to remain, substantially unchanged, until some other adversary could be invented."

    The devil makes work for idle hands, especially if they are well financed. Britain's former special envoy to Kabul, Sherard Cowper-Coles, echoed Kennan last week in claiming that the army's keenness to fight in Helmand was self-interested. "It's use them or lose them, Sherard," he was told by the then chief of the general staff, Sir Richard Dannatt. Cowper-Coles has now gone off to work for an arms manufacturer.

    There is no strategic defence justification for the US spending 5.5% of its gross domestic product on defence or Britain 2.5%, or for the Nato "target" of 2%.

    These figures merely formalise existing commitments and interests. At the end of the cold war soldiers assiduously invented new conflicts for themselves and their suppliers, variously wars on terror, drugs, piracy, internet espionage and man's general inhumanity to man. None yields victory, but all need equipment. The war on terror fulfilled all Eisenhower's fears, as America sank into a swamp of kidnapping, torture and imprisonment without trial.

    The belligerent posture of the US and Britain towards the Muslim world has fostered antagonism and moderate threats in response. The bombing of extremist targets in Pakistan is an invitation for terrorists to attack us, and then a need for defence against such attack. Meanwhile, the opportunity cost of appeasing the complex is astronomical. Eisenhower remarked that "every gun that is made is a theft from those who hunger" – a bomber is two power stations and a hospital not built. Likewise, each Tomahawk Cameron drops on Tripoli destroys not just a Gaddafi bunker (are there any left?), but a hospital ward and a classroom in Britain.

    As long as "big defence" exists it will entice glory-hungry politicians to use it. It is a return to the hundred years war, when militaristic barons and knights had a stranglehold on the monarch, and no other purpose in life than to fight. To deliver victory they demanded ever more taxes for weapons, and when they had ever more weapons they promised ever grander victories. This is exactly how Britain's defence ministry ran out of budgetary control under Labour.

    There is one piece of good news. Nato has long outlived its purpose, now justifying its existence only by how much it induces its members to spend, and how many wars irrelevant to its purpose it finds to fight. Yet still it does not spend enough for the US defence secretary. In his anger, Gates threatened that "future US leaders … may not consider the return on America's investment in Nato worth the cost". Is that a threat or a promise?