Tuesday, August 7, 2012

Sobering: Almost Half of Americans Die Close to Penniless

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A new economic study has found that nearly half of Americans reach the end of their lives with virtually no assets, relying entirely on government programs like Social Security, Medicare and Medicaid. The results indicate that any changes to these safety net programs would indeed threaten the welfare of older Americans.

From MIT (h/t Huffpo): [1]

Indeed, about 46 percent of senior citizens in the United States have less than $10,000 in financial assets when they die. Most of these people rely almost totally on Social Security payments as their only formal means of support, according to the newly published study [2], co-authored by James Poterba of MIT, Steven Venti of Dartmouth College, and David A. Wise of Harvard University.


That means many seniors have almost no independent ability to withstand financial shocks, such as expensive medical treatments that may not be covered by Medicare or Medicaid, or other unexpected, costly events.

Given the costs of funerals, it's fair to say that less than $10,000 is virtually penniless. The study also confirmed, but couldn't pinpoint, the relationship between wealth and longevity:

The study also revealed a “strong correspondence” between wealth in 1993 and the length of time that people lived. That relationship held true across a variety of asset classes: People whose homes were worth more, who had larger retirement incomes, and who had more financial savings all tended to live longer than those who had fewer assets.

While there is, Poterba observes, a “very active debate” among social scientists about the precise causal relationship between wealth and health, the study helps confirm, he notes, that “the patterns of health status in these years are quite persistent.”

Finally, the replacement of fixed-pension plans with 401Ks may make this situation even more dire in the future, as market fluctuations hurt individual finances.

Poverty Rising

"New figures show capitalism can’t meet people’s needs"

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An Associated Press investigation has revealed that poverty is increasing at a significant rate inside the United States. This conclusion was drawn from a survey of economists, research centers and academics.

Census data show that the poverty rate, which was 15.1 percent in 2010, rose to 15.7 percent in 2011 — the same level as in 1965.

As the capitalist crisis continues and deepens, the number of people affected by unemployment, underemployment, the lowering of salaries and cuts in work benefits, industrial restructuring, and the foreclosure and eviction epidemic is accelerating. Economic growth overall is miniscule.

The increase in poverty is most severe among nationally oppressed communities. African Americans have the highest rate of poverty at 27.5 percent. Latinos/as are not far behind at 26.7 percent.

Estimates are that 47 million people are living in poverty in the U.S. This represents one out of six people.

The federal government says that in 2010 a family of four needed an income of more than $22,314 to rise above the poverty level. An individual would have had to earn more than $11,139. However, these income figures are quite low. Most families who earn more than these figures say they are still living in poverty.

The intensifying attacks on public education and public sector jobs, incomes and benefits also contribute to the impoverishment of the working class and oppressed. High foreclosure rates will further exacerbate the decline in municipal employment because of the subsequent drain of tax revenue and consumer spending.

Poverty is predicted to remain above the pre-recession level for many years to come and will increase in the suburbs, too, where it is now 11.8 percent. Part-time workers and people over 65 will get poorer, while the poverty rate among children will climb above the 2010 level of 22 percent.

Presidential election politics & poverty

In this election year, it is not surprising that this survey on U.S. poverty has not gained widespread media exposure or become a focus of debate between the Republican and Democratic contenders. In fact, there has been virtually no discussion on the deepening economic crisis and the way forward regarding job creation and poverty elimination.

In 1959, the first year that poverty rates were measured by the federal government, the rate stood above 22 percent. The lowest level was 11.1 percent in 1973.

The decline in poverty between the late 1950s and the early 1970s can be attributed to the upsurge in the Civil Rights and Black Power movements, which then reached unprecedented heights. The Kennedy, Johnson and Nixon administrations were forced to address the mass demonstrations, rebellions and labor actions among the African-American population and other oppressed and progressive forces.

The federal government implemented reforms that created Medicaid, Medicare and other social welfare programs. Affirmative action programs were enacted to give meaning to the civil rights, voting rights and fair housing bills of 1964-68.

Peter Edelman, the director of the Georgetown Center on Poverty, Inequality and Public Policy, says, “The issues aren’t just with public benefits. We have some deep problems in the economy. … The problem is that the tidal wave of low-wage jobs is dragging us down and the wage problem is not going to go away anytime soon.”

Even Federal Reserve Chair Ben Bernanke stated that the current unemployment rate of 8.2 percent would not improve much over the next several years.

The stagnation of the U.S. capitalist economy and the worsening conditions for the masses of working and oppressed people will not be eased by providing more tax cuts to the rich. Neither can progress be made by job creation initiatives that largely involve tax credits and other incentives to businesses to hire workers, including youth.

Both political parties allied with the capitalist class have no plans or programs to eliminate joblessness and poverty. Consequently, the solutions to these problems must come from those most seriously affected — the working class and the oppressed.

Demands must be issued for programs that will mandate the creation of tens of millions of jobs. A livable annual income must be guaranteed for everyone, as well as health care coverage, housing and quality education.

Socialism: The only way out

The economic crisis is not limited to the U.S., but is worldwide. The rates of joblessness in Spain, France, Germany and Italy are very high. The national debt is skyrocketing in European countries.

Municipal debt is increasing exponentially in U.S. cities. Many cities are facing bankruptcy and other emergency financial measures imposed by courts and state governments under the aegis of the banks and corporations.

Since the capitalist crisis shows no sign of abating, it is necessary for those who are committed to the liberation of the workers and the oppressed to raise the necessity of a new economic system in the U.S. and throughout the imperialist world. This economic system is socialism, where the wealth of society as a whole is used for the benefit of the majority.

Socialism could bring full employment for workers and oppressed people. Workers would produce goods and services that people need. Wealth, property and land would be collectively owned and would be used for the benefit of the masses to increase incomes and provide the necessary conditions for the elimination of exploitation and class stratification.

Discrimination, inequality and bigotry, which are experienced by so many groupings under capitalism, would be addressed in a socialist society. Nationally oppressed groups — African Americans, Latinos/as, Asians, Indigenous peoples and Arabs — would be able to realize self-determination and full equality.

For this to take place there must be a revolutionary party that can organize and provide the ideological basis for the transformation of society. The utter bankruptcy of the two-party system in the U.S. is reflected in the lack of real debate and discussion around fundamental issues of concern to the majority of people.

Today’s organizers must raise the need for a programmatic struggle to address the concerns of the workers and oppressed. This can only be done through a movement that is independent of both capitalist parties.

Beating Back the CEO Attack on Social Security and Medicare

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Last week, I wrote about the conspiracy of corporate chieftains to impose a budget plan involving large cuts to Social Security and Medicare, regardless of who wins the elections in November. According to veteran Washington Post columnist Steven Pearlstein, who wrote approvingly of these efforts, many of the top executives of the country's biggest companies are meeting behind closed doors to design such a budget plan.

This plan is expected to follow the designs of the plan crafted two years ago by Morgan Stanley Director Erskine Bowles and former Sen. Alan Simpson, the co-directors of President Obama's deficit commission. The Bowles-Simpson plan called for a reduction in the annual cost of living adjustment for Social Security that is equivalent to a 3 percent cut in benefits. It also called for gradually raising the normal retirement age to 69 and phasing in lower benefits for workers who earned more than $40,000 a year. The Bowles-Simpson plan would also raise the age of eligibility for Medicare to 67.

Pearlstein indicated that these corporate honchos were prepared to spend hundreds of millions of dollars to get their plan put into law. He put the necessary figure at $278 million. This target is made easier by virtue of the fact that the CEOs sit on trillions of dollars of corporate revenue and, thanks to the Supreme Court, all their contributions for this effort will be fully tax deductible.

That's the state of play, at least according to Pearlstein's assessment, or my interpretation of his assessment. The question is whether this juggernaut can be stopped.

Well, if it were a straight question of where the money lies, the answer is clearly no. The CEOs seeking to cut back or dismantle Social Security and Medicare can probably outspend the defenders of these programs ten to one. However, there is still the simple fact that the voters overwhelmingly support these programs.

This is a result reported by every poll every conducted on these issues. Both Social Security and Medicare enjoy extremely high approval ratings across the political spectrum. There is almost nothing that unites the public as much as support for these programs. Well over 70 percent of Republicans, Democrats and Independents indicate strong support for Social Security and Medicare.

The same holds by ideology. There is little difference between people who call themselves liberals and conservatives; both groups overwhelmingly support Social Security and Medicare and are opposed to cuts in these programs. Even self-described supporters of the Tea Party overwhelmingly support Social Security and Medicare.

The question is how to make it so that popular sentiment overrides the big bucks of the corporate chieftains. The obvious answer would be to make the protection of these programs central issues in the election. Members of Congress and candidates for seats should be pressed to indicate where they stand on the proposed cuts to these programs.

That means getting them to answer specific questions, like whether they support reducing the annual cost of living adjustment or raising the normal retirement age for Social Security or the age of eligibility for Medicare. These are among the most important issues in people's lives and voters should not have to go to the polls not knowing where the candidates for the House, the Senate or the presidency stand on them.

People should also be aware that politicians are true masters of evasion on these questions. A response like, "I support Social Security and Medicare," should be taken to mean that they are prepared to support cuts for these programs. All of the people running for office are smart enough to know how to say that they oppose the cuts being put on the table and they undoubtedly would say that they oppose the cuts, if it were true.

Similarly, a statement like, "I oppose the privatization of Social Security and Medicare" should also be taken to mean that they are prepared to support cuts to these programs. Again, they are not being asked about privatization; it's not immediately on the table. So, why would they give an answer about privatization except to avoid admitting their support for cuts?

The news media should also be pressed into service in this effort. It is their job to tell us the candidates' positions on important issues and there are few issues more important to voters than Social Security and Medicare. People should harangue their local newspapers and television stations to ask candidates their positions on cuts to these programs. This is far more important than most of the gossip about the campaigns that dominates news coverage.

The whole effort here must be focused on smoking out politicians on where they stand on cuts to Social Security and Medicare. The CEOs want to do this behind closed doors because they know that politicians who have to answer to their constituencies will never be able to get away with these cuts. The key is to force the debate into the sunlight.

Almost a Billion People Go Hungry Worldwide

As global starvation spreads, charities warn that the total number of severely malnourished children is also rising


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An unparalleled number of severe food shortages has added 43 million to the number of people going hungry worldwide this year. And millions of children are now at risk of acute malnutrition, charities are warning. One week ahead of David Cameron's "hunger summit", they say that unless action is taken urgently, many more could fall victim.

For the first time in recent history, humanitarian organisations have had to respond to three serious food crises – in West Africa, Yemen and East Africa – in the past 12 months, according to Oxfam. Almost a billion people are now hungry – one in seven of the global population – and the number of acutely malnourished children has risen for the first time this decade.

But these issues are well known. When the hunger crisis hit the headlines last year, it was only after famine had already been declared in Somalia, killing an estimated 100,000 people and affecting 12 million. Needless deaths occurred and millions of extra dollars were spent simply because the international community had failed to act on early warnings.

The Harry Potter actress Bonnie Wright, 21, has just returned from Senegal, a country in the Sahel region of West and Central Africa, where more than 18 million people are threatened by food shortages. She told The Independent on Sunday: "We are now at a moment where we can prevent a famine. That's the most powerful position we could be in – to help now, rather than wait until we're in such an extreme situation that we're already losing people by the second."

Charities are urging David Cameron to announce the "biggest ever push on hunger" at his global nutrition event, to be held next week to coincide with the closing day of the Olympics. World leaders, NGOs and leading business people are expected to attend – and among other issues, it is expected that the Prime Minister will announce targets to reduce the number of under-fives– currently the figure is 180 million – who suffer from irreversible physical and mental stunting as a result of poor nutrition. More than two and a half million children die from malnutrition each year.

Barbara Stocking, Oxfam GB's chief executive, called the summit "a positive step forward", but stressed: "It must be the start of concerted action to address the shocking fact that while we produce enough food to feed everyone on the planet, about a billion will tonight go to bed hungry.

"Dwindling natural resources and the gathering pace of climate change mean that without urgent action, things will only get worse, and multiple major crises could quickly move from being an exception to being the norm."

She added that Mr Cameron should call for increased investment in small farmers, greater transparency in commodity markets and an end to biofuel subsidies.

If the world failed to listen when charities warned about the food crisis in the Horn of Africa, experts say they must pay attention when it comes to the Sahel. Six million people are already facing severe food insecurity in the region, and more than a million children are at risk of severe malnutrition.

Cycles of drought combined with low levels of agricultural investment, environmental degradation, high population growth and acute levels of poverty contribute to a context of "chronic" vulnerability, according to Oxfam. Conflict in Mali and high food prices – across the region food prices are higher by on average 25 to 50 per cent compared with the last five-year average – have exacerbated the crisis. The charity has launched an appeal and is aiming to reach 1.8 million people with emergency assistance across Senegal, Burkina Faso, Chad, Mali, Mauritania, Niger and Gambia.

Justin Forsyth, chief executive of Save the Children, said the region was in a "permanent food crisis". He added: "It is lurching from one crisis to the next. One bad year tips families over the edge, and the world responds to the emergency, but this is the tip of the iceberg. Below the surface, there is a huge ongoing crisis we don't address."

The Prime Minister told The IoS that he and Brazil's Vice President, Michel Temer, who is co-hosting next week's event, want to "use the summit to find new ways of tackling malnutrition – fostering innovation in biotechnology, encouraging stronger co-operation between governments and ensuring better accountability by Governments who receive aid".

He added that he hopes to "agree a package of measures" to "transform the lives of millions of children" before the Rio Olympics. Save the Children estimates that there will be four million more stunted children by the next Games, if current trends continue.

Unicef UK said that lack of nutrition is the "silent challenge" to global development. In 2008, eight of world's leading economists, including five Nobel laureates, ranked providing young children with micronutrients as the most cost-effective way to advance global welfare.

David Cameron added: "For every £1 spent effectively tackling malnutrition, £30 of benefit is generated."

Case studies

Assan Adaman, a 33-year-old mother of six, has lived in the same village in Kédougou, Senegal, all her life. A rice farmer, she is used to producing six bags in a good season; last year, production levels were cut in half. As she runs low on food, she is worried about the next few months and how she will ensure her children have enough to eat.

"I grew rice last year, but three bags is not enough to feed my family. I'm really worried about how I will feed them over the next few months, as we approach a bad period. I can't be calm when my children do not have enough to eat; I have to keep them healthy. We have to rely on our neighbours and our communities to help us through these harder times.

"When I receive Oxfam money, I will be able to give my children food. But I hope that the future will change for my children when they grow up."

Aissatou Kanle is a 40-year-old father of eight, living in Kédougou. He is a maize and rice farmer by trade but now works as a miner – a six-hour round trip from home – to feed his family, which he has left behind.

"Last year the maize was destroyed by floods, then rain destroyed my rice harvest. So, over the last year, I didn't have enough rice or maize to sell or for my family to eat... I had to go and find work building toilets in the mines, so I could raise money to give to my wife to provide for 10 people in my family. I had to walk three hours there and back but with very little food inside me.

"The future for my family is education. I can't just feed them without seeing them go to school, and yet I can't let them go to school without them eating, but I will fight. I don't want to see them having the same life as me."

Bonnie Wright, Ambassador for Oxfam GB, visits Senegal: www.youtube.com/watch?v=csEiUF2fk2M

An unparalleled number of severe food shortages has added 43 million to the number of people going hungry worldwide this year. And millions of children are now at risk of acute malnutrition, charities are warning. One week ahead of David Cameron's "hunger summit", they say that unless action is taken urgently, many more could fall victim.

For the first time in recent history, humanitarian organisations have had to respond to three serious food crises – in West Africa, Yemen and East Africa – in the past 12 months, according to Oxfam. Almost a billion people are now hungry – one in seven of the global population – and the number of acutely malnourished children has risen for the first time this decade.

But these issues are well known. When the hunger crisis hit the headlines last year, it was only after famine had already been declared in Somalia, killing an estimated 100,000 people and affecting 12 million. Needless deaths occurred and millions of extra dollars were spent simply because the international community had failed to act on early warnings.

The Harry Potter actress Bonnie Wright, 21, has just returned from Senegal, a country in the Sahel region of West and Central Africa, where more than 18 million people are threatened by food shortages. She told The Independent on Sunday: "We are now at a moment where we can prevent a famine. That's the most powerful position we could be in – to help now, rather than wait until we're in such an extreme situation that we're already losing people by the second."

Charities are urging David Cameron to announce the "biggest ever push on hunger" at his global nutrition event, to be held next week to coincide with the closing day of the Olympics. World leaders, NGOs and leading business people are expected to attend – and among other issues, it is expected that the Prime Minister will announce targets to reduce the number of under-fives– currently the figure is 180 million – who suffer from irreversible physical and mental stunting as a result of poor nutrition. More than two and a half million children die from malnutrition each year.

Barbara Stocking, Oxfam GB's chief executive, called the summit "a positive step forward", but stressed: "It must be the start of concerted action to address the shocking fact that while we produce enough food to feed everyone on the planet, about a billion will tonight go to bed hungry.

"Dwindling natural resources and the gathering pace of climate change mean that without urgent action, things will only get worse, and multiple major crises could quickly move from being an exception to being the norm."

She added that Mr Cameron should call for increased investment in small farmers, greater transparency in commodity markets and an end to biofuel subsidies.

If the world failed to listen when charities warned about the food crisis in the Horn of Africa, experts say they must pay attention when it comes to the Sahel. Six million people are already facing severe food insecurity in the region, and more than a million children are at risk of severe malnutrition.

Cycles of drought combined with low levels of agricultural investment, environmental degradation, high population growth and acute levels of poverty contribute to a context of "chronic" vulnerability, according to Oxfam. Conflict in Mali and high food prices – across the region food prices are higher by on average 25 to 50 per cent compared with the last five-year average – have exacerbated the crisis. The charity has launched an appeal and is aiming to reach 1.8 million people with emergency assistance across Senegal, Burkina Faso, Chad, Mali, Mauritania, Niger and Gambia.

Justin Forsyth, chief executive of Save the Children, said the region was in a "permanent food crisis". He added: "It is lurching from one crisis to the next. One bad year tips families over the edge, and the world responds to the emergency, but this is the tip of the iceberg. Below the surface, there is a huge ongoing crisis we don't address."

The Prime Minister told The IoS that he and Brazil's Vice President, Michel Temer, who is co-hosting next week's event, want to "use the summit to find new ways of tackling malnutrition – fostering innovation in biotechnology, encouraging stronger co-operation between governments and ensuring better accountability by Governments who receive aid".

He added that he hopes to "agree a package of measures" to "transform the lives of millions of children" before the Rio Olympics. Save the Children estimates that there will be four million more stunted children by the next Games, if current trends continue.

Unicef UK said that lack of nutrition is the "silent challenge" to global development. In 2008, eight of world's leading economists, including five Nobel laureates, ranked providing young children with micronutrients as the most cost-effective way to advance global welfare.

David Cameron added: "For every £1 spent effectively tackling malnutrition, £30 of benefit is generated."

Case studies

Assan Adaman, a 33-year-old mother of six, has lived in the same village in Kédougou, Senegal, all her life. A rice farmer, she is used to producing six bags in a good season; last year, production levels were cut in half. As she runs low on food, she is worried about the next few months and how she will ensure her children have enough to eat.

"I grew rice last year, but three bags is not enough to feed my family. I'm really worried about how I will feed them over the next few months, as we approach a bad period. I can't be calm when my children do not have enough to eat; I have to keep them healthy. We have to rely on our neighbours and our communities to help us through these harder times.

"When I receive Oxfam money, I will be able to give my children food. But I hope that the future will change for my children when they grow up."

Aissatou Kanle is a 40-year-old father of eight, living in Kédougou. He is a maize and rice farmer by trade but now works as a miner – a six-hour round trip from home – to feed his family, which he has left behind.

"Last year the maize was destroyed by floods, then rain destroyed my rice harvest. So, over the last year, I didn't have enough rice or maize to sell or for my family to eat... I had to go and find work building toilets in the mines, so I could raise money to give to my wife to provide for 10 people in my family. I had to walk three hours there and back but with very little food inside me.

"The future for my family is education. I can't just feed them without seeing them go to school, and yet I can't let them go to school without them eating, but I will fight. I don't want to see them having the same life as me."

Horrors of war: Mass grave discovered in Damascus

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As the Syrian Army expelled rebel forces out of the capital of Damascus, soldiers discovered a mass grave of 20 corpses buried under rocks and other debris.

­The mass grave was uncovered in the Yelda district of Damascus, which had been under rebel control for the past few days. The 20 corpses the army dug up were burnt and defaced, said China’s Xinhua news agency.

Armed men harassed and killed the civilians, and then buried the bodies, locals told RT Arabic’s correspondents. Some described the stench of dead corpses blanketing entire areas of the city. The victims reportedly include both civilians and military personnel. Others claimed that the number killed is much higher than the 20 reported.

RT Arabic filmed footage of the gravesite, but it was confiscated by police as they were leaving.

Evidence of acts of mass-murder has been surfacing in the past month. An amateur video from Syria emerged online showing the apparent mass execution of Assad supporters in Aleppo by Free Syria Army rebels on July 31. The footage showed several bloodied men in their underwear being forced to kneel by a wall amidst an excited crowd, before they were shot dead.

This latest violence comes days after Kofi Annan announced that he will resign as the UN-Arab League Special Envoy to Syria at the end of August.

(Screenshot from Syrian State TV station video)
(Screenshot from Syrian State TV station video)

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Screenshot from Syrian State TV station video
Screenshot from Syrian State TV station video

The Ascendancy of a Criminal Financial Elite

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“The rotten heart of finance” The Economist

“There is a degree of cynicism and greed which is really quite shocking” Lord Turner Bank of England , Financial Service Authority

Introduction

Never in the history of the United States have we witnessed crimes committed on the scale and scope of the present day by both private and state elites.

An economist of impeccable credentials, James Henry, former chief economist at the prestigious consulting firm McKinsey & Company, has researched and documented tax evasion. He found that the super-wealthy and their families have as much as $32 trillion (USD) of hidden assets in offshore tax havens, representing up to $280 billion in lost income tax revenue! This study excluded such non-financial assets as real estate, precious metals, jewels, yachts, race horses, luxury vehicles and so on. Of the $32 trillion in hidden assets, $23 trillion is held by the super-rich of North America and Europe .

A recent report by a United Nations Special Committee on Money Laundering found that US and European banks laundered over $300 billion a year, including $30 billion just from the Mexican drug cartels.

New reports on the multi-billion dollar financial swindles involving the major banks in the US and Europe are published each week. England ’s leading banks, including Barclay’s and a host of others, have been identified as having rigged the LIBOR, or inter-bank lending rate, for years in order to maximize profits. The Bank of New York, JP Morgan, HSBC, Wachovia and Citibank are among scores of banks, which have been charged with laundering drug money and other illicit funds according to investigations from the US Senate Banking Committees. Multi-national corporations receive federal bailout funds and tax exemptions and then, in violation of publicized agreements with the government, relocate plants and jobs in Asia and Mexico .

Major investment houses, like Goldman Sachs, have conned investors for years to invest in ‘garbage’ equities while the brokers pumped and dumped the worthless stocks. Jon Corzine, CEO of MF Global (as well as a former CEO of Goldman Sachs, former US Senator and Governor of New Jersey) claimed that he “cannot account” for $1.6 billion in lost client investors funds from the collapse of MF Global in 2011.

Despite the growth of an enormous police state apparatus, the proliferation of investigatory agencies, Congressional hearings and over 400,000 employees at the Department of Homeland Security, not a single banker has gone to jail. In the most egregious cases, a bank like Barclay’s will pay a minor fine for having facilitated tax evasion and engaging in speculative swindles. At the same time, the principle ‘miscreant’ in the LIBOR swindle, Chief Operating Officer (COO) of Barclay’s Bank, Jerry Del Missier, will receive a severance payout of $13 million dollars.

In contrast to the ‘lax’ law enforcement practiced by the burgeoning police state with regard to the swindles of the banking, corporate and billionaire elites, it has intensified political repression of citizens and immigrants who have not committed any crime against public safety and order.

Millions of immigrants have been seized from their homes and work-places, jailed, beaten and deported. Hundreds of Hispanic and Afro-American neighborhoods have been the target of police raids, shootouts and killings. In such neighborhoods, the local and federal police operate with impunity – as was illustrated by shocking videos of the police shootings and brutality against unarmed civilians in Anaheim , California . Muslims, South Asians, Arabs, Iranians and others are racially profiled, arbitrarily arrested and prosecuted for participating in charities and humanitarian foundations or simply for attending religious institutions. Over 40 million Americans engaged in lawful political activity are currently under surveillance, spied upon and frequently harassed.

The Two Faces of the US Government: Impunity and Repression

Overwhelming documentation supports the notion that the US police and judicial system has totally broken down when it comes to enforcing the law of the land regarding crimes among the financial, banking, corporate elite.

Trillion-dollar tax-evaders, billionaire financial swindlers and multi-billionaire money launderers are almost never sent to jail. While some may pay a fine, none have their illicit earnings seized even though many are repeat criminals. Recidivism among financial criminals is rife because the penalties are so light, the profit are so high and the investigations are infrequent, superficial and inconsequential. The United Nations Office on Drugs and Crime (UNODC) reported that $1.6 trillion was laundered, mostly in Western banks, in 2009, one fifth coming directly from the drug trade. The bulk of income from the cocaine trade was generated in North America ($35 billion), two-thirds of which were laundered in North American banks. The failure to prosecute bankers engaged in a critical link of the drug trade is not due to ‘lack of information’, nor is it due to the ‘laxness’ on the part of regulators and law enforcement. The reason is that the banks are too big to prosecute and the bankers are too rich to jail. Effective law-enforcement would lead to the prosecution of all the leading banks and bankers, which would sharply reduce profits. Jailing the top bankers would close the ‘revolving door’, the golden portal through which government regulators secure their own wealth and fortune by joining private investment houses after leaving ‘public’ service. The assets of the ten biggest banks in the US form a sizeable share of the US economy. The boards of directors of the biggest banks inter-lock with all major corporate sectors. The top and middle financial officials and their counterparts in the corporate sector, as well as their principle stockholders and bondholders, are among the country’s biggest tax evaders.

While the Security and Exchange Commission, the Treasury Department and the Senate Banking Committee all make a public pretense of investigating high financial crimes, their real function is to protect these institutions from any efforts to transform their structure, operations and role in the US economy. The fines, which were recently levied, are high by previous standards but still only amount to, at most, a couple of weeks’ profits.

The lack of ‘judicial will’, the breakdown of the entire regulatory system and the flaunting of financial power is manifested in the ‘golden parachutes’ routinely awarded to criminal CEOs following their exposure and ‘resignation’. This is due to the enormous political power the financial elite exercise over the state, judiciary and the economy.

Political Power and the Demise of ‘Law and Order’

With regard to financial crimes, the doctrine guiding state policy is ‘too rich for jail, too big to fail’ , which translates into multi-trillion dollar treasury bailouts of bankrupt kleptocratic financial institutions and a high level of state tolerance for billionaire tax-evaders, swindlers and money launderers. Because of the total breakdown of law enforcement toward financial crimes, there are high levels of repeat offenders in what one British financial official describes as ‘cynical (and cyclical) greed’.

The current ‘banner’ under which the financial elite have seized total control over the state, the budget and the economy has been ‘change’. This refers to the deregulation of the financial system, the massive expansion of tax loopholes, the free flight of profits to overseas tax havens and the dramatic shift of ‘law enforcement’ from prosecuting the banks laundering the illicit earnings of drug and criminal cartels to pursuing so-called ‘terrorist states’. The ‘state of law’ has become a lawless state. Financial ‘changes’ have permitted and even promoted repeated swindles, which have defrauded millions and impoverished hundreds of millions. There are 20 million mortgage holders who have lost their homes or have been unable to maintain payments; tens of millions of middle class and working class taxpayers who were forced to pay higher taxes and lose vital social services because of upper class and corporate tax evasion. The laundering of billions of dollars in drug cartel and criminal wealth by the biggest banks has led to the deterioration of neighborhoods and rising crime, which has destabilized middle and working class family life.

Conclusion

The ascendancy of a criminal financial elite and its complicit, accommodating state has led to the breakdown of law and order, the degradation and discrediting of the entire regulatory network and judicial system. This has led to a national system of ‘unequal injustice’ where critical citizens are prosecuted for exercising their constitutional rights while criminal elites operate with impunity. The harshest enforcement of police state fiats are applied against hundreds of thousands of immigrants, Muslims and human rights activists, while financial swindlers are courted at Presidential campaign fund raisers.

It is not surprising today that many workers and middle class citizens consider themselves to be ‘conservative’ and ‘against change’. Indeed, the majority wants to ‘conserve’ Social Security, pubic education, pensions, job stability, and federal medical plans, such as MEDICARE and MEDICAID against ‘radical’ elite advocates of ‘change’ who want to privatize Social Security and education, end MEDICARE, and slash MEDICAID. Workers and the middle class demand stability of jobs and neighborhoods and stable prices against run-away inflation of medical care and education. Wage and salaried citizens support law and order, especially when it means the prosecution of billionaire tax evaders, criminal money-launderering bankers and swindlers, who, at most, pay a minor fine, issue an excuse or ‘apology’ and then proceed to repeat their swindles.

The radical ‘changes’ promoted by the elite, have devastated life for millions of Americans in every region, occupation and age group. They have destabilized family life by undermining job security while undermining neighborhoods by laundering drug profits. Above all they have totally perverted the entire system of justice where the ‘criminals are made respectable and the respectable treated as criminals’.

The first defense of the majority is to resist ‘elite change’ and to conserve the remnants of the welfare state. The goal of ‘conservative’ resistance will be to transform the entire corrupt legal system of ‘functional criminality’ into a system of ‘equality before the law’. That will require a fundamental shift in political power, at the local and regional level, from the bankers’ boardrooms to neighborhood and workplace councils, from compliant elite-appointed judges and regulators to real representatives elected by the majority groaning under our current system of injustice.

US Stokes Disputes In South China Sea

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The Obama administration has further inflamed disputes in the South China Sea with a US State Department statement on Friday criticising China for formally establishing the city of Sansha and a garrison in the Paracel Islands.

State Department spokesman Patrick Ventrell maintained that the US was not taking sides in the competing territorial claims by China and several South East Asian countries. However, in noting “an uptick in confrontational rhetoric” and “disagreements over resource exploitation”, he singled out China’s upgrading of Sansha City and the stationing of troops as running “counter to collaborative diplomatic efforts to resolve differences and risk further escalating tensions in the region”.

Ventrell also pointed to “coercive economic actions, and the incidents around the Scarborough Reef, including the use of barriers to deny access”—an oblique criticism of China’s actions in the ongoing dispute with the Philippines, a US ally, over the reef. He called for agreement between the Association of South East Asian Nations (ASEAN) and China over a code of conduct in the South China Sea—again cutting across Beijing’s call for disputes to be settled bilaterally, not multilaterally.

The US statement was calculated not to lower, but to raise regional tensions by giving implicit support to ASEAN countries, especially the Philippines and Vietnam, to press their maritime claims in the South China Sea against China. The Obama administration has been exploiting the territorial disputes to drive a wedge between ASEAN and China as part of its broader efforts to undermine Chinese influence throughout Asia.

The US Senate last Thursday called for restraint between China and its neighbours, but then pointedly added that the US was committed to assisting South East Asian countries remaining “strong and independent”.

China’s Foreign Ministry issued a formal protest against the State Department statement, summonsing the deputy US chief of mission in Beijing, Robert Wang, on Saturday to make “serious representations” about the issue. In a press statement, assistant foreign minister Zhang Kunsheng expressed China’s “strong dissatisfaction and resolute opposition” to the US action, warning that it did not help “to maintain peace and stability in the South China Sea or the Asia Pacific.”

In separate remarks, Chinese foreign ministry spokesman Qin Gang pointed to the hypocrisy of Washington’s stance. “Why does the US turn a blind eye to the facts that certain countries opened a number of oil and gas blocks and issued domestic laws illegally appropriating Chinese islands and waters?” he asked.

The Philippines and Vietnam have recently offered energy exploration contracts in disputed areas of the South China Sea. China has done the same. In June, Vietnam passed legislation proclaiming its jurisdiction over the Paracel and Spratly Island groups also claimed by China. Both countries have condemned China’s establishment of Sansha City and a garrison based on Woody Island in the Paracel group.

China’s state-run media also reacted to the US statement. The overseas edition of the People’s Daily, the official mouthpiece for the Chinese Communist Party (CCP), declared: “We are entirely entitled to shout at the United States, ‘Shut up’. How can meddling by other countries be tolerated in matters that are within the scope of Chinese sovereignty?” The domestic edition of the newspaper accused the US of “fanning the flames and provoking division, deliberately creating antagonism with China.”

China’s sharp response is a measure of the escalating tensions that the Obama administration has deliberately fuelled. In 2010, US Secretary of State Hillary Clinton provocatively declared for the first time that the US had a “national interest” in ensuring “freedom of navigation” in the South China Sea. Washington’s intrusion into what it had previously regarded as a regional issue encouraged other claimants, especially the Philippines and Vietnam, to ramp up their maritime disputes with China.

The American navy routinely asserts its “freedom of navigation” in the South China Sea and other strategically sensitive waters near the Chinese mainland. The US is also developing closer military ties with its former colony, the Philippines, including the transfer of two former US coastguard cutters to bolster its naval capacity. The US and the Philippines are also in talks over a basing arrangement similar to that announced with Australia last November. Under that deal, a US marine presence is being built up in the northern Australian city of Darwin and US warships and warplanes will have greater access to Australian military bases.

There is nothing benign about the US strategic focus on the South China Sea. The American military build-up in Australia, the Philippines and Singapore, as well as its strengthening of strategic ties with Vietnam and other South East Asian countries, is aimed at establishing Washington’s ability to deny “freedom of navigation” to China in the event of a conflict. China is heavily dependent on shipping lanes through the South China Sea to the Indian Ocean for importing energy and raw materials from the Middle East and Africa.

In a statement last week to the US House Armed Services Committee, David Berteau and Michael Green—analysts from the Center for Strategic and International Studies (CSIS)—commented: “The central geostrategic uncertainty the United States and its allies and partners face in the Asia Pacific region is how China’s growing power and influence will impact order and stability in the years ahead.”

Berteau and Green are the authors of “US Force Posture Strategy in the Asia Pacific Region: an Independent Study”. While not government policy, the CSIS study was commissioned by the Pentagon and is broadly in line with the Obama administration’s confrontational “pivot” to Asia. The document makes a number of proposals to strengthen the US strategic position throughout the Indo-Pacific region, especially in South East Asia.

In their testimony, Berteau and Green declared that it was not a matter of preparing to fight China, but then contradicted themselves by adding: “At the same time, US force posture must demonstrate a readiness and capacity to fight and win—particularly in Northeast Asia—even under more challenging circumstances associated with anti-access and area denial and other threats to US military operations in the Western Pacific posed by [China’s] PLA military modernisation.”

The Obama administration’s actions in Asia are of a piece with its reckless interventions in the Middle East in Libya and now Syria, along with its military threats against Iran. The US is attempting to exploit its military strength to boost its political and economic position internationally against its European and Asian rivals. In doing so, it raises the danger of conflicts that escalate out of control and embroil all the major military powers.

Haiti: A Century Of Occupation, Oppression And Resistance

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The situation for Haitian workers and peasants has gone from grim to dire. The United Nations High Commissioner for Refugees reports that thousands of Haitians are fleeing their homeland in unseaworthy, rickety boats.

Spokesperson Melissa Fleming says: “Although no firm statistics exist, it is estimated that hundreds of deaths occur yearly as a result.” (U.N. News Centre, July 13) Haitian refugees are reported to be drowning in waters off the Bahamas and Florida. The U.S. Coast Guard says it has intercepted 652 fleeing Haitians and sent them back.

Poor Haitians are again talking of “Clorox hunger” because of the burning sensation in their stomachs caused by lack of food.

More than 400,000 Haitians still live under tents and tarps because their homes were destroyed in the world’s most devastating earthquake in January 2010. The pressure on these tent dwellers has been great. Wealthy people with political connections are trying to charge them rent on very spurious grounds. Money is demanded for the use of property the rich claim is theirs, while services like sanitation, water and electricity are being withdrawn.

Thishas led many tent dwellers to return to their destroyed or damaged homes. Others move in with family outside the quake zone. A few have been able to build something more permanent. Some nongovernmental organizations have put up temporary plywood shelters.

Numerous demonstrations and protests have opposed attacks on the camps and demanded essential services ever since the camps were set up.

In Pétionville, an affluent suburb of the capital, Port-au-Prince, there is a poor neighborhood called Jalousie. It was built up on the side of a ravine in the late 1930s. Some of its houses have fallen down, endangering the nearby homes of wealthy Haitians. So the government of President Michael Martelly has decided to bulldoze homes in Jalousie “to protect the environment” for the rich.

On July 12, some 2,000 people marched from Jalousie through the city, waving the green-leafed tree branches associated with popular opposition and chanting: “Martelly hasn’t built any houses! He doesn’t have the right to tear them down!” They ended their march in front of the National Palace, which is still in ruins from the earthquake.

Holding demonstrations and protests has grown riskier in the past few months. Oxygène David and Charles Dukens, leaders of the Movement of Liberty and Equality for the Fraternity of Haitians, a very active and militant movement that participated in the Jalousie march, were arrested and imprisoned on June 19. Now political prisoners, they are being held without charges. The police are threatening that other activists might face similar treatment if they bother the government.

U.S. occupations met by resistance

July 28 is the 97th anniversary of the first U.S. military occupation of Haiti, which lasted until 1934. There have been three others — in 1994, 2004 and 2010.

During World War I, Washington claimed its first invasion was to protect U.S. interests in the Caribbean, such as the Panama Canal, Puerto Rico and Cuba. Haiti was going through political upheavals at the time. The agricultural potential of Haiti was also a major enticement for U.S. imperialism. The occupation forces made sure that whatever economic development took place in Haiti, it primarily benefited the U.S. economy,

A largely peasant guerrilla army called the “cacos” resisted the occupiers. It was under the leadership of Charlemagne Péralte, who was betrayed and then assassinated by U.S. Marines in 1919. Intense popular pressure in Haiti and the arrival of the Great Depression pushed the U.S. to withdraw its troops in 1934, but they left behind an army and an economy firmly tied to Wall Street’s interests.

The state structure — the army, courts and police — left by the U.S. occupation allowed François Duvalier and then his son, Jean-Claude, to rule for 29 years, from 1957 to 1986. During this period, the U.S. tightened its control of Haiti’s economy to the detriment of the Haitian people.

The brutal Duvalier regimes were met with a stubborn, tenacious and increasingly effective resistance that pushed Jean-Claude Duvalier to flee on a U.S. Air Force jet to France in 1986. In the four years after the “dechoukaj” [uprooting] that rid Haiti of the Duvaliers — but not Duvalierism – there were many coups by various factions and continuing, growing protests.

An overwhelming majority of the people elected the progressive priest, Jean-Bertrand Aristide, president in 1990.

A military coup overthrew Aristide in 1991, eight months after he took office. After thousands of deaths and much brutality, the U.S. Army escorted him back to Haiti in 1994. Shortly before Aristide left office in February 1996, he dissolved the Haitian army.

Aristide began a second term in 2001. Former Haitian soldiers, with U.S. financial and organizational support, soon started to carry out guerrilla attacks along the Dominican border and in Port-au-Prince. Even after a full-scale insurgency began in Gonaïves in February 2004, Aristide hung on to power. U.S. Special Forces then staged a coup-kidnapping, putting Aristide and his family on a U.S. Air Force jet and delivering them to the Central African Republic.

The next month, a joint U.S., French and Canadian force invaded Haiti to “stabilize” the situation and set up an interim government. Hundreds of Aristide supporters were massacred. A few months later, a military force — Minustah, the U.N. Mission for the Stabilization of Haiti — took over from the U.S. and its allies and still remains. This occupying force had to be propped up when its headquarters was destroyed and many of its leaders were killed in the earthquake.

Minustah acted like the occupation forces it replaced. The U.N.’s poor sanitation systems spread cholera, which some of its soldiers brought to Haiti. The country hadn’t previously had a case in more than a century. Within two years, cholera killed more than 8,000 Haitians and sickened hundreds of thousands.

Because there is no army, it has been harder for the U.S. to organize a military coup. One of Martelly’s main election planks was to restore the army. Ex-military officers seized old barracks, but there was so much popular resistance that Haiti’s national police had to evict them.

Minustah is backed up by the U.S., whose imperialist motives for maintaining such a tight grip on Haiti are fairly clear. The underlying economic rationale is becoming more and more apparent.

At the end of May, Newmont Mining, a U.S. company with worldwide operations in gold mining, announced it had signed contracts with Haiti to exploit at least $20 billion of gold deposits lying under one-third of the country’s northern region. On May 30, Haiti Grassroots Watch clarified that the vast bulk of the profits will flow north and all the skilled jobs will go to non-Haitians. In a related matter, rumors of significant oil deposits are floating around the French press.

Moreover, cheap labor hasn’t been forgotten. With substantial financing from the U.S. Agency for International Development, and using donations that had been intended to supply and repair housing in the earthquake zone, 3,000 new, small, tract houses have been built in Caracol, where an industrial park is underway. This is far from the earthquake zone in northeast Haiti.

Sae-A Trading, a South Korean firm that produces clothing for Walmart, Target, the Gap and other big retailers, will operate large garment factories there. This corporation has a history of repressing labor unions. Sae-A will be allowed to pay Haitian workers $3.75 a day — even though the minimum daily wage in Haiti is $5 — because it is producing garments for export. The company knows that Haitians will take the jobs because they must work to survive.

This new industrial park was the site of the Chabert Post sisal plantation during the first U.S. occupation of Haiti. Run by U.S. Marines, a Haitian newspaper referred to the operation as “organized slavery.” Laurent Dubois, author of “Haiti: The Aftershocks of History,” says that the Marines’ prison camp there was infamous for its brutal treatment of captured rebels. The U.S. troops also buried Haitian liberation fighter, Péralte, wrapped in a Haitian flag, in concrete in an unmarked grave there.

The Haitian masses will continue to protest imperialist exploitation and occupation. They will carry on their proud history of resistance to intervention by the U.S. and its allies, in keeping with the legacy of their hero, Charlemagne Péralte.

The Science of Genocide

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On this day in 1945 the United States demonstrated that it was as morally bankrupt as the Nazi machine it had recently vanquished and the Soviet regime with which it was allied. Over Hiroshima, and three days later over Nagasaki, it exploded an atomic device that was the most efficient weapon of genocide in human history. The blast killed tens of thousands of men, women and children. It was an act of mass annihilation that was strategically and militarily indefensible. The Japanese had been on the verge of surrender. Hiroshima and Nagasaki had no military significance. It was a war crime for which no one was ever tried. The explosions, which marked the culmination of three centuries of physics, signaled the ascendancy of the technician and scientist as our most potent agents of death.

“In World War II Auschwitz and Hiroshima showed that progress through technology has escalated man’s destructive impulses into more precise and incredibly more devastating form,” Bruno Bettelheim said. “The concentration camps with their gas chambers, the first atomic bomb … confronted us with the stark reality of overwhelming death, not so much one’s own—this each of us has to face sooner or later, and however uneasily, most of us manage not to be overpowered by our fear of it—but the unnecessary and untimely death of millions. … Progress not only failed to preserve life but it deprived millions of their lives more effectively than had ever been possible before. Whether we choose to recognize it or not, after the second World War Auschwitz and Hiroshima became monuments to the incredible devastation man and technology together bring about.”

The atomic blasts, ignited in large part to send a message to the Soviet Union, were a reminder that science is morally neutral. Science and technology serve the ambitions of humankind. And few in the sciences look beyond the narrow tasks handed to them by corporations or government. They employ their dark arts, often blind to the consequences, to cement into place systems of security and surveillance, as well as systems of environmental destruction, that will result in collective enslavement and mass extermination. As we veer toward environmental collapse we will have to pit ourselves against many of these experts, scientists and technicians whose loyalty is to institutions that profit from exploitation and death.

Scientists and technicians in the United States over the last five decades built 70,000 nuclear weapons at a cost of $5.5 trillion. (The Soviet Union had a nuclear arsenal of similar capability.) By 1963, according to the Columbia University professor Seymour Melman, the United States could overkill the 140 principal cities in the Soviet Union more than 78 times. Yet we went on manufacturing nuclear warheads. And those who publicly questioned the rationality of the massive nuclear buildup, such as J. Robert Oppenheimer, who at the government lab at Los Alamos, N.M., had overseen the building of the two bombs used on Japan, often were zealously persecuted on suspicion of being communists or communist sympathizers. It was a war plan that called for a calculated act of enormous, criminal genocide. We built more and more bombs with the sole purpose of killing hundreds of millions of people. And those who built them, with few exceptions, never gave a thought to their suicidal creations.

“What are we to make of a civilization which has always regarded ethics as an essential part of human life [but] which has not been able to talk about the prospect of killing almost everyone except in prudential and game-theoretical terms?” Oppenheimer asked after World War II.

Max Born, the great German-British physicist and mathematician who was instrumental in the development of quantum mechanics, in his memoirs made it clear he disapproved of Oppenheimer and the other physicists who built the atomic bombs. “It is satisfying to have had such clever and efficient pupils,” Born wrote, “but I wish they had shown less cleverness and more wisdom.” Oppenheimer wrote his old teacher back. “Over the years, I have felt a certain disapproval on your part for much that I have done. This has always seemed to me quite natural, for it is a sentiment that I share.” But of course, by then, it was too late.

It was science, industry and technology that made possible the 20th century’s industrial killing. These forces magnified innate human barbarity. They served the immoral. And there are numerous scientists who continue to work in labs across the country on weapons systems that have the capacity to exterminate millions of human beings. Is this a “rational” enterprise? Is it moral? Does it advance the human species? Does it protect life?

For many of us, science has supplanted religion. We harbor a naive faith in the godlike power of science. Since scientific knowledge is cumulative, albeit morally neutral, it gives the illusion that human history and human progress also are cumulative. Science is for us what totems and spells were for our premodern ancestors. It is magical thinking. It feeds our hubris and sense of divine empowerment. And trusting in its fearsome power will mean our extinction.

The 17th century Enlightenment myth of human advancement through science, reason and rationality should have been obliterated forever by the slaughter of World War I. Europeans watched the collective suicide of a generation. The darker visions of human nature embodied in the works of Fyodor Dostoevsky, Leo Tolstoy, Thomas Hardy, Joseph Conrad and Frederick Nietzsche before the war found modern expression in the work of Sigmund Freud, James Joyce, Marcel Proust, Franz Kafka, D.H. Lawrence, Thomas Mann and Samuel Beckett, along with atonal and dissonant composers such as Igor Stravinsky and painters such as Otto Dix, George Grosz, Henri Matisse and Pablo Picasso. Human progress, these artists and writers understood, was a joke. But there were many more who enthusiastically embraced new utopian visions of progress and glory peddled by fascists and communists. These belief systems defied reality. They fetishized death. They sought unattainable utopias through violence. And empowered by science and technology, they killed millions.

Human motives often are irrational and, as Freud pointed out, contain powerful yearnings for death and self-immolation. Science and technology have empowered and amplified the ancient lusts for war, violence and death. Knowledge did not free humankind from barbarism. The civilized veneer only masked the dark, inchoate longings that plague all human societies, including our own. Freud feared the destructive power of these urges. He warned in “Civilization and Its Discontents” that if we could not regulate or contain these urges, human beings would, as the Stoics predicted, consume themselves in a vast conflagration. The future of the human race depends on naming and controlling these urges. To pretend they do not exist is to fall into self-delusion.

The breakdown of social and political control during periods of political and economic turmoil allows these urges to reign supreme. Our first inclination, Freud noted correctly, is not to love one another as brothers or sisters but to “satisfy [our] aggressiveness on [our fellow human being], to exploit his capacity for work without compensation, to use him sexually without his consent, to seize his possessions, to humiliate him, to cause him pain, to torture and to kill him.” The war in Bosnia, with rampaging Serbian militias, rape camps, torture centers, concentration camps, razed villages and mass executions, was one of numerous examples of Freud’s wisdom. At best, Freud knew, we can learn to live with, regulate and control our inner tensions and conflicts. The structure of civilized societies would always be fraught with this inner tension, he wrote, because “… man’s natural aggressive instinct, the hostility of each against all and of all against each, opposes this program of civilization.” The burden of civilization is worth it. The alternative, as Freud knew, is self-destruction.

A rational world, a world that will protect the ecosystem and build economies that learn to distribute wealth rather than allow a rapacious elite to hoard it, will never be handed to us by the scientists and technicians. Nearly all of them work for the enemy. Mary Shelley warned us about becoming Prometheus as we seek to defy fate and the gods in order to master life and death. Her Victor Frankenstein, when his 8-foot-tall creation made partly of body pieces from graves came to ghastly life, had the same reaction as Oppenheimer when the American scientist discovered that his bomb had incinerated Japanese schoolchildren. The scientist Victor Frankenstein watched the “dull yellow eye” of his creature open and “breathless horror and disgust” filled his heart.” Oppenheimer said after the first atomic bomb was detonated in the New Mexican desert: “I remembered the line from the Hindu scripture, the Bhagavad-Gita. Vishnu is trying to persuade the Prince that he should do his duty and to impress him takes on his multi-armed form and says, ‘Now I am become Death, the destroyer of worlds.’ I suppose we all thought that, in one way or another.” The critic Harold Bloom, in words that could be applied to Oppenheimer, called Victor Frankenstein “a moral idiot.”

All attempts to control the universe, to play God, to become the arbiters of life and death, have been carried out by moral idiots. They will relentlessly push forward, exploiting and pillaging, perfecting their terrible tools of technology and science, until their creation destroys them and us. They make the nuclear bombs. They extract oil from the tar sands. They turn the Appalachians into a wasteland to extract coal. They serve the evils of globalism and finance. They run the fossil fuel industry. They flood the atmosphere with carbon emissions, doom the seas, melt the polar ice caps, unleash the droughts and floods, the heat waves, the freak storms and hurricanes.

Growing Signs Of Global Slump

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The impact of the continuing crisis of the euro zone is spreading outwards through the global economy, bringing signs of a gathering world slump.

In the United States, the announcement that jobs had increased by 163,000 last month was greeted as the sign of an uptick, but the unemployment rate increased from 8.2 to 8.3 percent even as the number of people in the labour force fell by 150,000. In the longer term, even if the economy continues to grow, the rate of expansion will not be sufficient to bring down unemployment levels.

In a recent update on the US economy, the International Monetary Fund said it would grow at a “tepid pace” of around only 2 percent. Already the US is experiencing the worst “recovery” of any period since World War II and, according to the IMF, “the outlook remains difficult.”

The IMF warned that the US faced “negative risks” stemming from a “further deterioration of the euro debt crisis,” which would lower the demand for exports and impact on financial markets. The economy would also be hit by any failure to reach an agreement on raising the US debt ceiling.

The head of the IMF US team, Gian Maria Milesi-Ferretti, said “fiscal consolidation”—cuts in government spending—combined with a fall in household credit would continue to slow the US “recovery” in the near future, and that the “US contribution to global demand will be lower than what we saw before the financial crisis.”

The continued expansion of the Chinese economy played a major role in lifting the world economy out of recession in 2008-2009, but it will not be able to play the same role in the future.

Recent data show that the Chinese economy grew by 7.6 percent for the second quarter, the slowest pace in three years, amid numerous indications that the rate could fall further. One of the key factors in sustaining the Chinese economy after the financial crisis of 2008 was the fiscal stimulus provided by the government—estimated to be more than $500 billion—and the increased credit provided by the banks. But these policies are not likely to be repeated.

Prior to the financial crisis, the major imbalance in the Chinese economy was its trade surplus. Today the current account surplus is a third of what it was in 2007. However, a new imbalance has emerged, with the economy heavily dependent on investment, which is now running at around 50 percent of gross domestic product, and consumption spending at just 35 percent.

The Chinese economy and Asian economies more broadly are being heavily impacted not only by the slow growth in the US but also by the crisis in Europe. “The problems in Asia that are causing the slowdown come predominantly from outside the region,” Rob Subbaraman, chief economist for Asia at Nomura in Hong Kong, told Reuters. “Europe is bigger than the US as an export market for most Asian countries and it’s a bigger investor in the region.”

Operating on low profit margins, Chinese firms, especially those in manufacturing, are being hard hit by the slowdown in growth. Chinese steel companies have recorded a 96 percent plunge in their profits for the first half of the year, turning the sector into what one industry newspaper described as a “disaster zone.” Zhu Jimin, chairman of the China Iron and Steel Association, said that the weakening demand for steel had been brought on by “a big drop in investments in property and also in railways, cars and ships” in the first half of the year.

The downturn extends throughout manufacturing, with profits at the state-owned enterprises, still a major component of the Chinese economy, falling 11.6 percent in the first six months of the year, the worst showing since the eruption of the global financial crisis in 2008.

The official factory purchasing managers’ index (PMI) fell to 50.1 points in July, down from 50.2 in June, the lowest level in eight months. The figures showed that while factory output had expanded slightly—anything above 50 indicates growth—new orders and exports experienced a decline.

The slump in manufacturing is steepest in Europe, where the Markit Purchasing Managers’ Index dropped to 44 in July, down from 45.1 in June, to reach its lowest level since June 2009. Significantly, the decline is not confined to the debt-ridden countries. Markit chief economist Chris Williamson said the rates of decline for Germany and France were the fastest for more than three years.

Britain has now entered its second recession in four years, with the economy contracting by 0.7 percent in the June quarter, largely due to government spending cuts and the turmoil in the euro zone. The fall in the Markit PMI for the UK to 45.4 in July points to a further decline.

Markit economist Rob Dobson commented: “The domestic market shows no real signs of renewed life, while hopes of exports charting the course to calmer currents were hit by our main trading partner, the euro zone, still being embroiled in its long-running political and debt crises.” Companies have scaled back their operations to the levels reached in March 2009 in the midst of the global financial crisis.

A measure of the overall global situation was provided by the JPMorgan Global Manufacturing PMI. It fell to 48.4 in July from its level of 49.1 in June. JPMorgan said more jobs losses could be on the way. “Recent cost reductions are providing some respite, but this will be of little long-term benefit if underlying demand fails to pick up,” a spokesman for the company warned.

The fall in economic activity to levels not seen since the recession that followed the eruption of the financial crisis in 2008 is significant in itself. But the situation is even more serious given the fact that all the measures aimed at providing economic stimulus since then, including the trillions of dollars handed out to the banks, have failed to provide any lasting solution. In no country do the ruling financial and political elites have any policies capable of bringing about an economic upturn. On the contrary, they are all focused on intensifying their attacks on the social position of the working class.

The Low-Wage, No-Raise Economy

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The Obama administration hailed Friday’s jobs report from the Labor Department’s Bureau of Labor Statistics (BLS), claiming that the 163,000 net new jobs in July represented a positive development after three months, April through June, in which US payrolls increased by less than half that number. The American media took a similar view in its coverage, and the stock market responded favorably, with its third-largest rise of the year.

What they were celebrating, however, is far from a genuine recovery in the labor market. Wall Street regarded the jobs report as providing sufficient momentum to avoid an uncontrolled economic collapse, while ensuring that the conditions facing the working class remain so precarious that there will be no significant pressure on corporations to raise wages. The White House no doubt takes a similar view.

The actual share of the adult population that is employed fell from 58.6 percent to 58.4 percent in July, while the broadest measure of unemployment, counting both those who are discouraged and have stopped looking for work and those working part-time involuntarily, rose from 14.9 percent to 15 percent—nearly one in every six workers.

There is ample reason to doubt whether the jobs report accurately describes the real situation in the labor market. A separate report by the Labor Department, based on its survey of households, found a decline of 195,000 jobs in July. Moreover, the BLS figure of a rise in 163,000 jobs was based on raw data showing a decline of 1.2 million jobs, which was seasonally adjusted to yield an increase. This may well be overstated because the historical pattern for July is heavily influenced by the traditional auto industry changeover period, which did not take place this year.

More significant than the exact number of jobs created or lost in July is the quality of those jobs. The vast majority of the new jobs created in the course of 2012 have been part-time or low-paying or both. Full-time jobs have actually declined by 750,000 since March.

At the same time, wage rises are virtually nonexistent. Since March 2010, when official employment figures hit bottom, non-supervisory workers have seen a weekly raise of just 3 cents an hour, when inflation is taken into account. This is the product of two processes: the inability of workers to press for wage increases when they have no job security, and the disproportionately low wages being paid to those who have obtained new jobs during the past two years.

According to a report issued recently by the Economic Policy Institute (EPI), 28.3 percent of all workers are receiving poverty-level wages today, and that figure is projected to be virtually unchanged, at 28 percent, in the year 2020. Based on employer surveys of where jobs will be created in the next eight years, the EPI found that an amazing 25 percent would not require even a high school education, even though barely 8 percent of the work force falls into that category.

In other words, despite the incessant claims that getting a college education is essential to getting a decent job, American capitalism has something very different in store for the new generation of the working class: low-wage jobs in industries like retail, health care, office temps and food service, where the bulk of new workers will make the minimum wage or slightly more.

The Labor Department reported that the ratio of job-seekers to jobs available was 3.7 to 1, down somewhat from the 6 to 1 figure during the worst of the slump, but far worse during the present “recovery” than during previous recessions. During the 2001 recession, for example, the highest figure for the job seekers to jobs ratio was 2.9 to 1.

While these figures document the failure of American capitalism to provide work for vast sections of the working class, the political representatives of big business propose nothing to address the crisis. Neither President Obama nor his Republican challenger Mitt Romney have offered any policy for creating jobs, except the inevitable tax cuts for corporations and business.

The Republican-controlled House of Representatives and the Democratic-controlled Senate adjourned for their five-week-long August recess without any action on the social crisis. And the Federal Reserve Board, the US central bank, has limited its response to providing cheap credit for business to drive up stock prices and profits.

Obama’s rose-colored presentation of the report and his barely disguised indifference to the plight of the working class conceal a calculated policy of high unemployment that is being pursued by his administration and the Federal Reserve, in service to corporate America. The US ruling elite is carrying out an historic and permanent lowering of wages, job conditions and working class living standards.

The stagnation and outright decline in real wages is not a calamity as far as the Democratic and Republican politicians are concerned, but rather a positive good. They welcome the deteriorating living standards of working people because it has produced record profits for American corporations despite the ongoing economic slump. Indeed, US gross domestic product has returned to the level before the 2008 financial crash, but with five million fewer workers employed.