Monday, March 30, 2009

Defending Zionism - Defending the Indefensible

Pro-Zionism: Defending the Indefensible - by Stephen Lendman

This article responds to a March 15 Los Angeles Times Judea Pearl one headlined: "Is anti-Zionism hate?" Pearl teaches computer science at UCLA, is the father of slain journalist Daniel Pearl, and president of the Daniel Pearl Foundation. It was " continue Danny's mission and to address the root causes of this tragedy in the spirit" of the man it represents, including "uncompromised objectivity and integrity....and respect for people of all cultures...."

Some of its honorary board member belie this purpose:

-- former president Bill Clinton, an unindicted war criminal and backer of neoliberal plunder;

-- Elie Wiesel, a shameless self-promoter, "Holocaust" exploiter, and apologist for the most outrageous Israeli crimes;

-- Jordan's Queen Noor, wife of King Abdullah II, who, like his father Hussein, rules with dictatorial police state powers; and

-- Christiane Amanpour and Ted Koppel, two notables in the corporate media who never let facts conflict with their views and support for the powerful.

Pearl calls anti-Zionism "hate more dangerous than anti-Semitism, threatening lives and peace in the Middle East." Zionism is precisely the opposite as numerous Jewish writers, including this one, have addressed.

In his book "Overcoming Zionism," Joel Kovel explained how it fosters "imperialist expansion and militarism (with) signs of the fascist malignancy;" that it turned Israel "into a machine for the manufacture of human rights abuses" led by terrorists posing as democrats. Kovel's book and his work got him fired from the Bard College faculty effective July 1 when his current contract expires - for daring to criticize Israel, its Zionist ideology, state-sponsored terror, and decades of lawlessness and egregious behavior.

Kovel expressed outrage that institutions like Bard aren't bothered; that they grant Israel impunity, suppress dissent, then marginalize, punish, and remove the "heretics," ones like Kovel who honorably and courageously write truths.

Pearl railed about a UCLA Center for Near East Studies symposium invitation to "four longtime Israel bashers" so they could attack Zionism's legitimacy and "its vision of a two-state solution...." - a scheme to consign Palestinians to isolated cantons and steal their most valuable land.

He equates legitimate Israeli criticism and anti-Zionism with "criminaliz(ing) Israel's existence, distort(ing) its motives and malign(ing) its character, its birth, even its conception." He cites "Jewish leaders (condemning) this hate-fest as a dangerous invitation to anti-Semitic hysteria" even though one has nothing to do with the other and conflating them masks the real issue - Zionism's corrosive effects and the myths on which it's based.

Ones Pearl ignores in stating "Anti-Zionism rejects the very notion that Jews are a nation - a collective bonded by a common history - and, accordingly denies Jews the right to self-determination in their historical birthplace. It seeks the dismantling of the Jewish nation-state: Israel, (what it) 'grants' to other historically bonded collectives (e.g. French, Spanish, Palestinians), the right to nationhood...."

Pearl can't accept the hard facts that Tel Aviv University Professor Shlomo Zand documented in his important 2008 book: "When and How Was the Jewish People Invented?" It exposes biblical nonsense comprising core Zionist beliefs about Jews:

-- that ancient Romans expelled them;

-- their exodus from Egypt, then left to wander the earth rootless;

-- enslaved, oppressed, and tormented for centuries; and

-- the myth that God bestowed a "Greater Israel" for Jews alone - "A land without people for a people without land."

According to Israeli journalist Tom Segev and others:

-- there never was a Jewish people, just a Jewish religion;

-- there was no exile, therefore no return, and much of the Jewish Diaspora was voluntary; and

-- the story was a Zionist invention, a conspiracy to justify a future Jewish state, and now vilify Palestinian self-determination as a plot to destroy it.

With regard to other "bonded collectives," France, Spain, America and other states are nationalities, not religions. Israel is a Jewish state with rights for Jews alone. They matter. Others don't, and therein lies the difference. Palestinians, in contrast, are occupied, impoverished, oppressed, driven from their land, vilified for being Muslims, and victimized by slow-motion genocide to destroy them and any hope for self-determination.

"Are Jews a nation," asks Pearl? "Some philosophers would argue Jews are a nation first and religion second." He cites the usual mythology:

-- the Exodus and return to the "promised land before they received the Torah at Mt. Sinai;"

-- "the unshaken conviction in their eventual repatriation to (their) birthplace (since) the Roman expulsion;" and

-- their "shared history, not religion (as) the primary uniting force behind the secular, multiethnic society of Israel" - favoring Jews alone in a quasi secular/religious state where practicing another one is dangerous.

The "Jewish identity today feed(s) on Jewish history (more precisely folklore and myths) and its natural derivatives -

-- the state of Israel" despite its illegitimate birth and mythological roots;

-- "its struggle for survival" in spite of being the world's fourth most powerful military, nuclear-armed; with no enemies except the ones it makes; and having a history of aggressive wars; violence over conciliation; confrontation, not diplomacy; and claiming self-defense as justification when there is none;

-- "its cultural and scientific achievements," much of the latter involving militarism and hard line security; and

-- "its relentless drive for peace."

Pearl like most others can't accept the fact that Israel disdains peace, thrives on violence, and needs it as justification. The very notion of peace and conflict resolution terrifies it. What prime minister Yitzhak Shamir once admitted about Israel's 1982 Lebanon war - that there was "terrible danger....not so much a military one as a political one" so a pretext was invented to attack when no threat or justification existed.

It took 18,000 lives and left South Lebanon occupied until Israel Defense Forces withdrew in May 2000, except for the 25 square km Shebaa Farms area illegally retained to this day.

Yet Pearl insists that "anti-Zionism targets the most vulnerable part of the Jewish people, namely, the Jewish population of Israel, whose physical safety and personal dignity depend crucially on maintaining Israel's sovereignty. Put bluntly, the anti-Zionist 'plan' to do away with Israel condemns 5.5 million human beings, mostly refugees or children of refugees, to eternal defenselessness in a region where genocidal designs are not uncommon."

He adds that "anti-Zionist rhetoric (shows) academic sophistication and social acceptance in certain extreme yet vocal circles. (It's also) a stab in the back to the Israeli peace camp (and) gives credence (to) the hidden agenda of every Palestinian (for) the eventual elimination of Israel."

Now some facts misrepresented, distorted, or unstated by Pearl and other like-minded apologists:

-- There never was nor is there now an "Israeli peace camp," as explained above.

-- Israel's sovereignty isn't the issue. It exists, is accepted, and anti-Zionists don't dispute it. Further, since at least the late 1980s, Palestinian leaders (including Arafat and Hamas) have been willing to extend recognition. But Israel rejects all peace and reconciliation overtures, yet the dominant media and Zionists won't mention it.

-- Palestinians and other Arabs don't target Israel and haven't since the 1973 war. However, they justifiably defend themselves when attacked as international law allows.

-- Anti-Zionists, like this writer, have no plan or desire to destroy Israel, harm its people, or render them defenseless. Demanded, however, is that Israel behave, act civilized, practice the democracy it preaches, observe international and its own laws, and be held fully accountable when it doesn't, including its leaders for their crimes of war and against humanity to deter future ones from committing similar violations.

-- Israel alone menaces Palestinians and other regional states, including Lebanon, Syria, and Iran. Those nations, nor any others, threaten Israel, yet again media and Zionist propaganda say otherwise.

-- Zionist ideology is extremist, undemocratic, and hateful. It claims Jewish supremacy, specialness, and uniqueness - God's "chosen people." It harms Jews and non-Jews alike. Former Israeli scholar, critic, and life-long human rights activist, Israel Shahak (1933 - 2001), explained the dangers of Jewish chauvinism, religious fanaticism, and its influence on America's polity.

He called the notion of self-hating Jews "nonsensical" and explained the definition of a Jew:

...."if either their mother, grandmother, great-grandmother (or) great-great-grandmother were Jewesses by religion; or if the person (converted) to Judaism in a way satisfactory to the Israeli authorities, and on condition that the person has not converted from Judaism to another religion." According to the Talmud and post-Talmudic rabbinic law, "conversion (must be) performed by authorized rabbis in a proper manner." For females, it entails an outlandish ritual - "their inspection by three rabbis while naked in a 'bath of purification' " to confirm it.

Shahak wrote extensively on how Israel discriminates in favor of Jews in most every aspect of life, including the three he called most important - "residency rights, the right to work (and to have) equality before the law."

Zionist ideology demeans non-Jews and denies them equal rights in Israel. A body of law enforces it - to legally discriminate against non-Jewish Israeli citizens (for their religion) and Palestinians in the Territories, something unimaginable in all developed states and most others on every continent.

Shahak stated: "The obvious intention of such discriminatory measures is to decrease the number of non-Jewish citizens of Israel (to affirm its existence as a) 'Jewish' state" quite hostile to and demeaning of other religious faiths.

This is the Zionist message and why growing numbers of Jews and many others oppose it. Supporting Zionism is repugnant, indefensible, and equivalent to defending cancer, a malignancy relentlessly destroying its host. It must be exposed, denounced, and once and for all expunged from the body politic. A CIA study suggested the alternative - that beyond 20 years, Israel won't survive in its present form.

The Agency predicts "an inexorable movement away from a two-state to a one-state solution, as the most viable model based on democratic principles of full equality that sheds the looming specter of colonial Apartheid while allowing for the return of the 1947/1948 and 1967 (Palestinian) refugees. The latter (is) the precondition for sustainable peace in the region."

According to international lawyer Franklin Lamb, "the on the wall....history will reject the colonial enterprise sooner or later."

The report also predicts the return of all Palestinian refugees to their homeland and the exodus of two million Israeli Jews to America in the next 15 years. They're fed up and want to leave. Omitted from the report, or at least unrevealed, is that short of an equitable resolution to the long-standing Palestinian conflict, Israel eventually will destroy itself. Nations that live by the sword, die by it, and Israel is no exception.

The alternative is peace and reconciliation, something Israel flatly rejects. Unless that changes, its very existence is at stake, what history teaches but Israel has yet to learn.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Friday, March 27, 2009

Obama's Latest No Banker Left Behind Scheme

Obama's Latest No Banker Left Behind Scheme - by Stephen Lendman

On Wall Street, that is. So hyped by advance fanfare, Timothy Geithner unveiled his Public-Private Investment Program (PPIP) on March 23, the latest in a growing alphabet soup of handouts topping $12.5 trillion and counting - so much in so many forms, in "gov-speak" language, with so many changing and moving parts, it's hard for experts to keep up let alone the public, except to sense something is very wrong. They're being fleeced by a finance Ponzi scheme, sheer flimflam, and here's how from what we know:

-- $400 billion in taking over Fannie and Freddie;

-- $42 billion for the auto giants; billions more coming for their suppliers;

-- approaching $200 billion for AIG with more coming on request;

-- $350 billion to Citigroup in handouts and loan guarantees;

-- tens of billions to other banks, including $87 billion to JP Morgan Chase for bad Lehman Brothers trades;

-- $700 billion for TARP I; half the money released under TARP II;

-- over $200 billion and counting for the Term Asset-Backed Securities Loan Facility (TALF) to extend government-guaranteed loans for investors to buy "certain AAA-rated asset-backed securities (as a) component" of the Consumer and Business Lending Initiative (CBLI), established under the Emergency Economic Stabilization Act (EESA) of 2008;

-- the $787 billion stimulus under the American Recovery and Relief Act of 2009 (ARRA);

-- around $300 billion under the Homeowner Affordability and Stability Plan (HASP) - the so-called mortgage bailout plan;

-- $50 billion backing for short-term corporate IOUs held by money market funds - from the Exchange Stabilization Fund (ESF), a vehicle established by a provision in the 1934 Gold Reserve Act for foreign exchange intervention to stabilize the value of the dollar;

-- $500 billion for various credit market rescues;

-- $620 billion for industrial nations' currency swaps;

-- $120 billion for emerging economies' currency swaps;

-- $1.25 trillion for Fannie and Freddie mortgage backed securities;

-- $200 billion for Fannie, Freddie, and Federal Home Loan Bank bonds;

-- way more than the announced $300 billion for longer-term Treasuries (mostly with 7 - 10 year maturities); the Fed's been buying billions of them since last year;

-- Fed-expanded overnight lending to $2.4 trillion - free money at 0% interest;

-- a reported $750 billion for banks in the FY 2010 budget - yet to be voted on and appropriated;

-- a proposed $470 billion increase for the FDIC to borrow from the Treasury;

-- perhaps hundreds of billions more in unannounced or hidden handouts in amounts and to whom the Fed and Treasury won't say; on March 14, AIG named its big counterparties for the first time with firms like Goldman Sachs, Societe Generale, Deutsche Bank, and Barclays showing up prominently; and now

-- PPIP - the latest gift to Wall Street courtesy of taxpayers getting none of the gain and all the pain.

A Treasury Fact Sheet explains it on its web site. In "gov-speak," it cites the "challenge of legacy assets" comprised of (distressed commercial and household) "loans"/mortgages and (toxic) "securities" (mortgage-backed and others) with a new Public-Private Investment Program (PPIP) in conjunction with the FDIC and Fed to finance and guarantee it. The idea is to "repair balance sheets," encourage banks to lend, and "help drive us toward recovery." It expands TALF "to bring private investors back into the market" by offering deals too sweet to pass up:

-- a public-private (open-ended) trillion dollar partnership with Washington contributing up to 95-97% of the cash and investors the other 3-5%;

-- the Fed and FDIC (through low-cost loans and guarantees) acting as middlemen to transfer "legacy asset" losses to the public while buyers get government financing and guarantees (for no-risk investments) to purchase them on the cheap for themselves and well above fair value for the banks;

-- PPIP particulars are for $100 billion in mostly TARP and some private capital with Fed and FDIC $500 billion in leverage financing to expand it to $1 trillion or more in purchasing power.

In a March 23 Wall Street Journal op-ed, Geithner called it "My Plan for Bad Bank Assets (to) increase the flow of credit and expand liquidity (and do it by) shar(ing) risk with the private sector (to) rid banks of legacy assets." These "policies will work," says Geithner, even though everything tried to date failed, and the only achievement is what they planned - the greatest ever wealth transfer in the shortest span of time, now increased by another trillion or more through PPIP and whatever else the masters of the universe have in mind.

"Toxic-Asset Plan Lifts Stocks," headlined the Wall Street Journal, after surging around 7% on March 23 with banks and other financials in the lead, buoyed by the prospect of more free money, hundreds of billions for the taking, and plenty more where that came from.

If It Works, A Win-Win for the Money Trust

Here's how economist Jeffrey Sachs explains it:

Geithner's plan will have the Fed and FDIC "subsidize investors to buy toxic assets from the banks at inflated prices." If done, it will be another in a series of massive wealth transfers in the hundreds of billions of dollars "to bank shareholders from taxpayers." If investors incur losses, the Fed and FDIC will absorb them, meaning heads or tails they win.

"The investment funds will have the following balance sheet. For every $1 of toxic assets (bought), the FDIC will lend up to 85.7 cents, and the Treasury and private investors (only) 7.15 cents in equity to cover the remaining balance. FDIC loans will be non-recourse, meaning that if the toxic assets (bought) fall in value below the amount of FDIC loans, the investment funds will default on the loans and the FDIC will end up holding the toxic assets...."

In other words, "The FDIC is giving a 'heads you win, tails the taxpayer loses' offer to private investors.' " Economist Paul Krugman agrees calling it a one-way bet, "a disguised way to subsidize purchases of bad assets."

Economist James Galbraith calls it another massive "ineffective" giveaway to banks with taxpayers getting hosed from a repackaged trash removal scheme that's been around since last fall when Geithner, as New York Fed president, planned it with Wall Street CEOs. They see it as a temporary liquidity problem (which it's not) so the idea is to clean up the system and get banks lending again. But here's the rub:

"If Geithner's plan to fix the banks would also fix the economy," maybe the idea makes sense. "But no smart economist we know thinks that it will." It's a giant swindle, but that aside, Geithner has "five fundamental misconceptions:"

(1) The trouble with the economy is that banks aren't lending, he says.

In fact, it's because businesses and mainly households are way over-extended and "are now collapsing under the weight of it. As consumers retrench (of necessity), companies that sell to them (must also), thus exacerbating the problem. The banks, meanwhile, are lending," just not as much as they used to.

"Also, the shadow banking system (securitization markets), which actually provided more funding to the economy than the banks, has collapsed."

(2) The banks aren't lending because their balance sheets are loaded with 'bad assets.'

In fact, "banks aren't lending (enough) because they have decided to stop making loans to people and companies who can't pay them back" or don't want more loans in the first place. They're also scared that new debt will cause more write-offs, greater losses, and the threat they'll be wiped out entirely. So their strategy is hunker down and wait for a better time to do business.

(3) Bad assets are "bad" because the market doesn't understand how much they're really worth.

In fact, they're bad because "they are worth (lots) less than banks say they are." A major factor is the near-30% drop in house prices wiping out over $5 trillion in valuations. Lenders want households to take losses because if they do it themselves they'll be wiped out. So PPIP arranges it for them.

(4) Once "bad assets" are off balance sheets, banks will start lending again.

In fact, banks will stay cautious until the housing market and economy improve. So far, that's nowhere in sight.

(5) Once banks start lending, the economy will recover.

In fact, house prices are falling, savings have been wiped out, huge job losses are continuing, and "consumers will have debt coming out of their ears" that will take years to work off.

Geithner's plan just shifts debt from lenders to taxpayers "where it will sit until the government finally admits that a major portion will never be paid back." Galbraith's conclusion: Geithner's plan is "extremely dangerous" besides being a scam to cheat the public. Why does Wall Street love it? Because it wrote it in the first place, so the whole scheme is arranged for its benefit - if it works.

It's a big "if" as investors want the lowest possible prices and banks the highest. The question is will they compromise and for what - the better quality junk investors want or the most toxic stuff banks want to offload for whatever they can get.

Even a Wall Street Journal editorial raised doubts about "Geithner's Asset Play. At least it's an attempt to clean up bank balance sheets," it said, but hold the cheers. "The best news (is that Geithner has) a strategy. The uncertainty was almost as toxic as those securities. Now all (he) has to do is find private investors willing to 'partner' with the feds to bid for those rotten assets, coax the banks to sell them at a loss, and hope the economy doesn't keep falling...."

"Other than that, general, how (did) the siege of Moscow" go?

In a front of the paper article, a trio of Journal writers said "visions of vilification of Wall Street executives on Capitol Hill remain fresh in the minds of potential (bad asset) buyers....numerous (ones) express(ing) concern that they, too, might be hauled before Congress for a grilling, or be subjected to new taxes if they profit from partnerships with the federal government."

They quoted Washington lobbyist, Lendall Porterfield, whose clients include hedge funds and banks, saying: "There are still some very serious reservations about doing business with the government, because you don't know what the rules may be tomorrow, next week or next month."

Economist Nouriel Roubini wants two firmly in place:

-- force banks to sell toxic assets at true value and take the losses; and

-- shut down the insolvent ones.

For his part, Financial Times writer Martin Wolf expressed deep concerns about PPIP in his March 25 column headlined: "Successful bank rescue still far away." He's "ever more worried" and says why:

-- he expected a "popular new president to be decisive;"

-- he fears a "Congress indulging in a populist frenzy" and an administration "hoping for the best;"

-- instead of letting businesses succeed or fail on their own, "bailouts have poured staggering sums into the failed institutions that brought the economy down;"

-- PPIP is a "vulture (investor) relief scheme," cash for trash, with Washington putting up most of the money, bearing nearly all the risk, while private parties get all the gain - if the plan works;

-- PPIP masks a "more fundamental problem" of "chronic under-capitalization of US finance" and it may make achieving it harder - given growing public anger, a "timid" president, Congress on the "warpath," and being less likely to put up the kind of money needed to do it;

-- enriching vulture investors may "convince ordinary Americans that their government is a racket run for the benefit of Wall Street;" and

-- when all is said and done, PPIP may not work.

As a result, "Nobody can be confident that the US yet has a workable solution to its banking disaster....If this is not frightening, I do not know what is."

Economist Jack Rasmus calls PPIP a "win they win vs. lose they win proposition -- i.e. free money with which to leverage to make even more money" with government taking nearly all the risk. It's "an offer that no capitalist speculator could ever refuse" with nothing for the public except the bill.

It's why Dean Baker, co-director of the Center for Economic and Policy Research, called it "another Rube Goldberg contraption intended to funnel taxpayer dollars to bankrupt banks...." However, the process plays out, "much of the toxic waste (will) stay on the banks' books (since it's) likely that the gap between the asking price and the offer (won't) be closed for a large portion of these assets, even with the government subsidy."

So what's next? "The Obama administration will be forced to go to Congress with yet another bailout proposal. (It's) hard to understand this plan as anything other than a last ditch effort to save Wall Street banks. (Obama) seems prepared to risk his presidency on their behalf" and odds are he'll lose.

Whatever happens going forward, the uncertainties and dangers are enormous:

-- Eurointelligence refers to "Geithner's trillion dollar gamble" despite the positive market reaction;

-- will taxpayers stand for it, how long, and at what cost;

-- will enough buyers settle for the best deals they can get, and/or will banks compromise enough to matter; put another way - will government "grease" attract enough buyers willing to invest at valuations banks will accept; so far, they've stubbornly refused to take losses, preferring instead to keep junk on their books at fictitious values hoping eventually they'll be real or close enough; another disincentive is talk that the Financial Accounting Standards Board (FASB) will ease mark-to-market accounting rules to legitimize fake values;

-- whatever they do, can banks offload enough to matter or are they so over-indebted that nothing can work;

-- how much in the way of deficits, money printing and dollar debasing can the nation stand, and how long will sovereign and private debt buyers put up with it;

-- going forward, how many banks are too weak to survive no matter what's done to save them - that is, ones big enough to matter (like Citigroup), not others targeted to be bought up or closed down - and globally that's what's behind this scheme in the first place;

-- what about the CEOs that caused the global crisis and left their banks insolvent; issues of fraud and bailouts aside, why weren't they fired long ago; why are they still in charge drawing big salaries and bonuses; why wasn't the main demand to fire these guys and replace them with responsible managers; and

-- skeptics call Geithner's plan much like Paulson's, except for some differences in details.

On March 24, Dan Roberts in the London Guardian headlined: "US follows UK - on the wrong road." Geithner's plan "aims to achieve roughly the same as the British government's (bad loans) insurance for the Royal Bank of Scotland and Lloyds. So how do the two schemes compare?"

Details aside, they "work on the same principle: that banks will (behave) normally again and (benefit) the economy (once) they're protected from past mistakes. But these responses underestimate the scale of the crisis." Geithner's plan covers not just toxic assets but many ordinary bank loans as well.

"Similarly, the assets put forward by Lloyds in the UK insurance scheme include every buy-to-let mortgage issued by HBOS, not just the ones already in default. Judge the banks on their actions (not just their words), and you would conclude this crisis has some way to go. Yet both governments assume banks (suffer) from a crisis of confidence (simply cured) by removing (toxic debt) uncertainty. What neither seems willing to acknowledge is the likelihood that much of their lending has gone for good; that this is not a liquidity crisis, but a solvency (one)." Britain's plan didn't work and neither will Washington's.

No comment from the Journal except to say: "Whatever the Geithner plan's pitfalls, we sincerely hope it works. The feds so thoroughly botched the TARP and (other) bailouts that Treasury has few options left."

Indeed so. No accounting magic can erase losses, inspire investors, and turn a sick economy around. Especially since all Washington schemes make it sicker, and now Geithner's thrown more fuel on the fire. Problem one is reducing the huge debt overhang and helping beleaguered households. His solutions:

-- help Wall Street, not people and

-- pile on more debt but hope bank "operating" results improve enough to create an illusion of recovery.

It won't work, and at the same time, the latest Fed Flow of Funds data show trillions in vanished household wealth - $12.9 trillion from real estate, savings, investments, and other personal losses. So while insolvent banks are partying, the crisis is deepening. It's far from being resolved, at best has a long way to run, so Bank of America's Richard Bernstein advised clients to sell bank stocks after their rally because PPIP won't stop their profits from falling.

Worse still, according to financial expert and investor safety advocate Martin Weiss, Washington greatly underestimates the "magnitude of the debt crisis." He cites the following:

-- the current FDIC "Problem List" includes 252 banks with $159 billion in assets;

-- from his analysis, he lists 1568 troubled banks and thrifts by name with $2.32 trillion "at risk of failure" - because of "weak capital, asset quality, earnings, and other factors;"

Last year when TARP was announced, Treasury officials thought it would stabilize the economy and improve the health of recipients like Citigroup. However, it quickly learned that Citi and other major banks needed emergency capital to keep from collapsing - for their credit default swap (CDS) problems alone.

AIG's $2 trillion CDS portfolio triggered a government takeover, but it's not alone. Citi has $2.9 trillion, JP Morgan Chase $9.2 trillion, and the Bank of International Settlements reports a global $57 trillion burden, much of it toxic and plenty to sink holders of enough of it.

The problem in America is so great that "the money available to the government is too small for a crisis of these dimensions." Forced mergers, buyouts and handouts have done "little more than shift toxic assets like DDT up the food chain." Further, Washington's "promises to buy up the toxic paper have done little more than encourage banks to hold on, piling up even bigger losses."

Another CDS is also worrisome, one no one talks about but should, on US sovereign debt - Treasury bills, notes and bonds. "A small but growing number of investors are not only thinking the unthinkable, they're actually spending money on it, bidding up the premiums on Treasury bond (CDSs) to 14 times their 2007 level" because they're worried about the Treasury's credibility and borrowing power.

Their message is clear and important - "there's no free lunch; the government (can't) bail out every failing giant with no consequences; and contrary to popular belief, even Uncle Sam must face his day of reckoning with creditors."

Also, "the public knows intuitively that (too much debt) got us into trouble. Yet the solution being offered is to encourage banks to lend more and people to (save less and) borrow (and spend) more." The only way forward is to change course because there's "no other choice....We have to bite the bullet, pay the penalty for our past mistakes," and make hard sacrifices for a sound recovery.

That includes shuttering insolvent banks and other companies (even big ones), not bail them out. Even Kansas City Fed president Thomas Hoenig recommends that:

"public authorities....declare any financial institution insolvent whenever its capital level falls too low to support its ongoing operations and claims against it, or whenever the market loses confidence in the firm and refuses to provide funding and capital."

The wrong choices are trillions more in handouts, reckless money creation, dollar debasing, and an eventual inflation destroying the purchasing power for millions. So far, that's where Congress and Obama's money managers are heading us, and already the bill for their actions is past due.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Wednesday, March 25, 2009

Incriminating Evidence of Israeli War Crimes in Gaza

Incriminating Evidence of Israeli War Crimes in Gaza - by Stephen Lendman

Throughout its history, Israel has willfully and repeatedly committed crimes of war and against humanity, always with impunity. Yet under customary legal standards and norms (including Geneva, Hague, the UN Charter, S.C. and G.A. resolutions), it's lawless, a serial abuser, a threat to the region and humanity, mostly as an oppressive occupier. Attacking Gaza is the latest episode in its six-decade reign of terror satisfying the definition of genocide against defenseless Palestinian civilians. This article covers more evidence from some disturbing but unsurprising newly published information.

On March 19, in the first of a series of articles, Haaretz headlined: "IDF killed civilians in Gaza under loose rules of engagement." Military correspondent Amos Harel revealed Israeli soldier and pilot ("dirty secret") testimonies of being ordered to kill unarmed civilians and destroy their property - accounts at variance with official claims that only military targets were attacked and that "Israeli troops observed a high level of moral behavior during the operation." Defense Minister Ehud Barak calls the IDF "the most moral army in the world."

"Moral" examples included an infantry squad leader recounting the shooting of a mother and her two children: "There was a house with a family inside....We put them in a room. Later we left the house and another platoon entered it, and a few days after that there was an order to release the family....The platoon commander let the family go and told them to go to the right. One mother and her two children didn't understand and went to the left," after which a rooftop sniper "shot them straight away....I don't think he felt too bad about it, because after all, as far as he was concerned, he (followed orders, and, besides, Palestinian lives are) less important" than our own soldiers.

Other incidents included:

-- a squad leader telling of a company commander ordering an elderly Palestinian woman to be shot and killed;

-- soldiers saying "we should kill everyone (in the center of Gaza); everyone there is a terrorist;"

-- soldiers writing "death to the Arabs on walls" and spitting on family pictures;

-- a squad leader saying: "At the beginning, the directive was to enter a house with an armored vehicle, break the door down, (and) start shooting inside - I call it murder - to shoot at everyone we identify;" commanders called it OK "because everyone left in the city is culpable because they didn't run away;"

-- soldiers ordered to indiscriminately destroy property and farmland;

-- orders given to enter a house, "switch on loudspeakers and tell (occupants) you have five minutes to run away and whoever doesn't will be killed;"

These and other accounts typify regular incidents in occupied Gaza and the West Bank. When revealed, official denials follow or in response to clear evidence, officers, like military advocate general Avichai Mendelblit, say the incidents will be investigated, after which everything is whitewashed, quietly forgotten, none of the guilty are prosecuted, and security forces keep using disproportionate force against defenseless Palestinian civilians.

In a March 19 analysis, Harel concluded that this "happen(s) in the field most of the time (and) as usual, reality is completely different from the gentler version provided by the military commanders to the public and media during (an) operation and after. The soldiers are not lying, for the simple reason that they have no reason to" and every reason to stay silent. The rule is: "You don't ask, we won't tell," but these soldiers, squad leaders, pilots and commanders did.

Further, there's a "continuity of testimony from different sectors that reflects a disturbing and depressing picture" of a rogue military willfully committing war crimes because they know they can get away with them. Harel concluded: "The IDF's ethical problems did not start in 2009." They go back decades, but according to some, military "deterioration" has been continuous from the 1967 war to Operation Cast Lead. Worse still is that Israeli history reveals six decades of relentless and continuous terror. Attacking Gaza for 22 days is just the latest episode.

On March 21, the London Independent's Donald Macintyre wrote: "Israelis (were) told to fight a 'holy war' in Gaza....a religious war" against Arabs, according to a soldier citing "the martial role of military rabbis during the operation." In rabbinate literature distributed to the troops, the message was: "We are the Jewish people, we came to this land by a miracle, God brought us back to this land, and now we need to fight to expel the Gentiles who are interfering with our conquest of this holy land."

According to the Israeli human rights group, Yesh Din, IDF head chaplain, Rabbi Avichai Rontzki, a brigadier general, distributed booklet material saying that it was "terribly immoral" to show mercy to a "cruel enemy" and that soldiers were fighting "murderers." Imagine rabbis claiming to be men of God, yet violating core Jewish dogma by preaching hate, premeditated murder, and lying about innocent civilians they're vilifying. Another example of the viciousness of a so-called civilized state, acting like barbarians (in the name of God) and calling it just.

There's more. On March 22 in Haaretz, Amira Hass headlined: "IDF soldiers ordered to shoot at Gaza rescuers" in citing a Hebrew handwritten document, "Rules of Engagement - Open fire also upon rescue." It confirms numerous reports and testimonies like the above that soldiers shot Palestinian civilians in cold blood, murdered them (and their rescuers), or in cases where they were still alive prevented their evacuation and let them bleed to death.

Hass stated: "The (above-mentioned) document provides written proof that IDF commanders ordered their troops to shoot at rescuers" besides ordering the killing of unarmed civilians and destruction of their property.

On March 22, London Observer writer Peter Beaumont headlined: "Gaza war crime claims gather pace as (still) more troops speak out." He cited a yet to be published "Breaking the Silence" report containing statements from 15 former soldiers. From their contacts with Operation Cast Lead participants, they corroborate the above claims of random killings and vandalism. According to the group's Mikhael Manekin:

"We have spoken to a lot of different people who served in different places in Gaza, including officers. We are not talking about some units being more aggressive than others, but underlying policy. So much so that we are talking to soldiers who said that they were having to restrain the orders given." According to one, Amir Marmor, orders from a Lt. Col. who briefed the troops were: "Shoot and don't worry about the consequences."

On March 20, Haaretz reporter Uri Blau disclosed that IDF soldiers ordered T-shirts marking the end of Operation Cast Lead featuring grotesque images of dead babies, mothers weeping at their children's graves, a gun aimed at a child and bombed-out mosque, and a pregnant Palestinian woman with a bull's eye depicted on her stomach with the English slogan, "1 shot, 2 kills."

These aren't just anecdotes from what Ehud Barak calls "the most moral army in the world." On March 22, Haaretz correspondent Gideon Levy wrote: "IDF ceased long ago being 'most moral army in the world.' " Moreover, imagining the military will investigate the charges is "propagandistic, ridiculous (and) meant not only to deceive the public, but also to offer shameless lies" as part of a cover-up the way these revelations are always handled.

These practices have gone on for decades. Orders come right from the top - to kill Arabs and commit atrocities and vandalism, and according to one Operation Cast lead soldier: "That's what is so nice, as it were, about Gaza - You see a person on a road....and you can just shoot him." This message is ingrained in young recruits, to see Jews as superior, Arabs as sub-humans, so it's "morally" OK to slaughter them.

Yet on March 22, Haaretz published GOC Home Front Command General Yair Golan's reply saying: "The reports were exaggerated and any deviations from the IDF's moral standards will be dealt with."

Then on March 23, it added IDF Chief Gabi Ashkenazi's claim that he did not believe Israeli soldiers harmed Palestinian civilians in "cold blood." He and Golan lied the way top commanders and government officials always do.

Yet Ashkenazi echoed Ehud Barak saying that "the IDF is the most moral army in the world" despite volumes of clear evidence to the contrary. He added that any "incidents" were "isolated," but Haaretz stated:

"The soldiers' testimonies run counter to the IDF's claims throughout the operation that troops observed a high level of moral behavior. A number of officers told Haaretz....that the testimonies did not surprise them, as 'anyone with eyes in his head knows that these things happened during the fighting in Gaza,' and they weren't 'isolated' incidents."

Gaza Civilian Testimonies

Documented by the Palestinian Centre for Human Rights (PCHR), they recount Operation Cast Lead's horror - highlighted by an Israeli soldier's message on Abu Hajaj's bedroom wall: "Death will find you....Soon."

PCHR noted the importance of finding "sanctuary in the comfort of one's home" at times of trauma, but Gazans lost it for 22 days and still suffer the effects. Briefly some examples:

-- the IDF occupied Mos'ab Dardona's Jabal Al Rayes northeast Gaza home, leaving behind wall drawings of soldiers urinating on toppled mosques and "devouring Palestinians villages;"

-- next door in Ibrahim Dardona's home, instead of using the bathroom, they left behind dozens of bags of feces and crude sexual diagrams on walls;

-- the defacing and other actions show a disturbing picture of racial hatred throughout Israeli society, according to PCHR's democratic development director, Hamdi Shaqqura; PCHR says thousands of Gazans are homeless, displaced, and forced to find shelter with relatives or move back to partially destroyed homes and cope as best they can;

-- in the agricultural area of Johr-ad-Dik, the IDF took over homes, displaced half the 2500 population and maliciously destroyed hundreds of olive and citrus trees;

-- the IDF ordered local residents near Saleh Abu Hajaj's home to leave; Saleh's daughter tied a white scarf to a stick, led out a group of civilians, then along with her mother was shot dead by the military;

-- in the Zeytoun district, IDF desecrated walls with messages like: "Die you all..Make war not peace..Arabs need to die," and on a gravestone "Arabs 1948 - 2009;"

-- inside Rashad Helmi Al Samouni's home, soldiers wrote: "There will be a day when we kill all the Arabs....Bad for the Arabs is good for me....A good Arab is an Arab in the grave (and) Peace now, but between Jews and Jews, not Jews and Arabs."

PCHR's conclusion was that whatever war crimes investigations reveal and what, if anything, follows from them, "it will do little to comfort the thousands of civilians whose sense of safety (in their own homes was) so categorically violated," something they no longer feel and for many never did.

PCHR published the names of 1417 Gazans killed by Israeli forces. It said 926 were civilians, 236 fighters, and 255 others civilian security forces, mostly police. Israel disputes the list claiming most targets "legitimate" despite clear evidence to the contrary, including from its own soldiers. In response, it's preparing its own list identifying most of the slain as "combatants or legitimate targets" without a shred of evidence for proof and plenty to disprove it.

PCHR also reported that in the week ending March 18:

-- IDF forces shot and injured 19 Palestinian civilians, including nine children and a US human rights activist;

-- the Israeli air force bombed selected Gaza sites, forcing civilians to abandon their homes and property in the areas;

-- Israeli forces conducted 39 incursions into West Bank communities, a practice occurring nearly daily; 39 Palestinian civilians were arrested, including six children for the crime of being Arab under Israeli occupation;

-- additional IDF arrests occurred at West Bank checkpoints, and measures to remove East Jerusalem Palestinians continue to make room for new Jewish settlements;

-- five West Bank homes were demolished leaving 49 Palestinians homeless; three other families were ordered from their homes in preparation for demolition;

-- West Bank settlement construction goes on unabated as part of an ethnic cleansing process;

-- settlers regularly attack Palestinians with impunity, and the Mossawa Advocacy Center for Arab Citizens reported (on March 21) a 1000% rise in 2008 crime rates over 2007 on Israeli Arab citizens; its leader, Jafar Farah, called it a "moral collapse;"

-- Gaza remains under siege with no progress made to end it; and

-- on March 23, PCHR reported that the IDF violated medical ethics during Operation Cast Lead by preventing Palestinian and ICRC medical teams from reaching the wounded; it also said Israel attacked 34 medical facilities, including eight hospitals, killing 16 medics and wounding 25 others.

Meanwhile on March 19, Richard Falk, UN Special Rapporteur on Human Rights in the Palestinian Territories, said: "If the (IDF) cannot (distinguish between civilians and military targets), its attack becomes unlawful and constitutes a war crime of the greatest magnitude under international law." He added that the UN (and human rights groups like Amnesty International) has clear evidence to support this conclusion and called for a formal investigation of IDF shelling of schools, mosques, ambulances, educational facilities, and homes as well as use of illegal weapons like white phosphorus.

Whatever follows, Gaza remains under siege. Allowed in humanitarian aid falls way short of supplying 1.5 million people with the barest subsistence they need. Through March 2, the UN Office for the Coordination of Humanitarian Affairs (OCHA) reported that Israeli violence continues and "authorities (still) limit the amount and range of goods allowed into Gaza....A range of essential goods, including supplies and equipment needed for rebuilding, are not being allowed into the territory." They're still kept out.

Basic items like medical equipment, veterinary supplies, macaroni, chickpeas, and lentils were suspended or delayed, and border crossings remain closed, except for brief periods. Like before, everything is in short supply or not available, including essential medical care, food and fuel. Earlier Amnesty International said "Gaza (was) reduced to bare survival." Today, it's no better under a continuing Israeli siege, illegal and brutal in the extreme, yet not denounced by world leaders to give Israel cover to maintain it.

The Adalah Legal Center for Arab Minority Rights in Israel's Position Paper on Israeli Civilian Killings in Gaza

Adalah (meaning justice in Arabic) is a 1996-established independent, non-profit, human rights organization serving Arab Israeli citizens' rights on issues of land, civil, political, cultural, social, religious, and economic matters among others. In February 2009, it examined the legality of Israel's 22 day Gaza attack, specifically the killing of civilian police and bombing of government buildings and Hamas institutions.

In citing the laws of war, it identified four central principles:

-- military necessity - that only those targets intended to "weaken or overcome the enemy or bring the battle to an end may be attacked;"

-- distinction - that must be drawn between combatants and military targets on the one hand, and civilians and non-military objects on the other; international law prohibits attacking the latter; doing so is a war crime; non-combatant civilians are protected by law under all circumstances; also, targets must clearly be military ones and nearby civilians must be warned in advance so they may leave;

-- proportionality - that prohibits disproportionate force likely to cause damage to or loss of human lives or objects; in other words, disproportionate to an intended military objective or that in any way is indiscriminate; and

-- the prevention of unnecessary suffering, especially for non-combatant civilians.

Beginning December 27 and continuing for 22 days, the IDF attacked uniformed police cadets and officers killing them and other civilians. During the period of fighting, non-combatant civilian Hamas members were also struck, including from its government.

International law prohibits attacking non-combatant civilian security forces, especially police whose role is to maintain law enforcement and public order.

Further, and despite using "rocket attacks" as a pretext, Israel attacked preemptively and aggressively, not in response to Hamas-initiated hostilities, and most initial targets were civilian ones. The IDF erroneously claimed that attacking uniformed police was legitimate because their role for 22 days changed from enforcers to combatants. By this logic, all civilians are legitimate targets because under attack they may defend themselves. That, in fact, is what Israel claims.

Under international law, civilians may only be harmed accidently or inadvertently as a result of attacks on legitimate military targets but never for reasons of military necessity, even when large numbers of combatants are present.

Adalah concluded:

"Members of a civilian police should benefit from the protection which is conferred upon them as civilians under customary international law. Given that the conditions for the exception to this rule - i.e., taking a direct part in hostilities at the time of the attack - were not met, the attack ran counter to customary international humanitarian law" and was illegal.

The same holds for attacking government buildings and institutions - a total of 68 buildings plus 31 offices belonging to NGOs, completely destroyed or damaged during the conflict. According to Major Avital Leibovitz, Head of International Communications Section in the IDF's Spokesperson's Office: "Anything affiliated with Hamas is a legitimate target," meaning all 1.5 million Gazans, the vast majority being non-combatant civilians, including women, children, and infants.

International law refutes Israeli policy, including under the principles of military necessity and distinction. These principles demand that military targets be differentiated from civilians and civilian objects (including government ones) to prevent deliberate attacks on them.

The only allowed exceptions relate to narrowly defined "vital and immediate military need" to defeat the enemy and end the battle, matters to which Israel didn't comply. Also, Israel ignored the requirement "to take all feasible precautions in attack, in particular the obligation to verify that objects (and individuals) to be attacked are military objectives," legitimate targets under international law.

Again Adalah: "Thus it is apparent that the attack on government buildings and institutions (as well as non-combatant civilians) on the basis of the claim that they formed part of the Hamas regime is illegal" under international law.

"Attacks that fail to distinguish between combatants and military targets and civilians and civilian objects constitute grave breaches of customary international law and are considered as war crimes. Attacks perpetrated against a civilian population may also be considered crimes against humanity if they are committed 'as part of a wide or systematic attack directed against any civilian population, with knowledge of the attack.' "

Planned months in advance, Israel's attack was premeditated, and under Article 8(2)(a)(1) and Article 8(2)(b)(1) of the Rome Statute of the International Criminal Court (ICC) constitutes a war crime. It's also a crime against humanity under the statute's Article 7(1) relating to the deliberate killing of civilians or deliberately attacking non-combatant ones.

Further, attacking government buildings and institutions is also a war crime under Article 8(2)(a)(1), Article 8(2)(b)(8), and Article 8(2)(b)(13) of the Rome Statute that prohibits the destruction of property and civilian objects for non-military necessity reasons.

Even though Israel is not party to the Statute, its Articles 7 and 8, relating to crimes of war and against humanity, reflect customary international law under which Israel, its officials, and military commanders at all levels may and should be held accountable.

Under international law, responsibility relates to perpetration, planning, inciting, and/or ordering a crime to be committed as well as "vicarious" (indirect) responsibility of civilian leaders and commanders for crimes committed by their subordinates. These conditions apply in the case of the 22 day Gaza attack - planned well in advance by high-level government and military officials and launched with overwhelming force against multiple targets on December 27.

Again, the evidence is clear, unequivocal, overwhelming, and conclusive that high-level Israeli government and military officials planned and willfully committed systematic crimes of war and against humanity of such gravity that justice demands they be held to account in an international court of law - either the ICC in the Hague or a special International Criminal Tribunal for Israel (ICTI).

Doing so will warn future Israeli governments and all others that no one is exempt from the law and they, too, will be prosecuted if evidence provides justification. The rule of law is sacrosanct, especially for wanton killing that when ongoing for sustained periods satisfies the definition of genocide. Israel long ago passed that threshold. No longer can its lawlessness go unpunished.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Monday, March 23, 2009

"Down the Memory Hole," Alan Greenspan Style

"Down the Memory Hole," Alan Greenspan Style- by Stephen Lendman

He's back and in denial in a March 11 Wall Street Journal op-ed headlined: "The Fed Didn't Cause the Housing Bubble." He lied, the way he did throughout his career and for 18.5 years as Fed chairman. How else could he have kept the job, be knighted in the UK for his "contribution to global economic stability, wisdom and skill," then afterwards be extolled by the Money Trust he enriched.

So now he's preserving his "legacy" by expunging its dark side the way Orwell described in 1984 - "down the memory hole," a convenient slot for "any document....due for destruction," politically inconvenient truths to be erased to preserve only sanitized versions for the public. It's called historical revisionism, but even some on the right aren't convinced.

The Ludwig von Mises Institute is a libertarian research and educational center espousing the Austrian School economics of its namesake. Robert Murphy is one of its adjunct scholars, and in an April 14, 2008 article he asked: "Did the Fed Cause the Housing Bubble?"

"The straightforward," he stated. "...Greenspan slashed the federal funds target from 6.5% in January 2001 down to a ridiculous 1% by June 2003. After holding rates at 1% for a year, the Fed then steadily ratcheted them back up to 5.25% by June 2006," a pumping and popping process that "seemed to be more than just a coincidence." It led to speculative "malinvestments," then needing a "recession" to correct.

"The Fed's role in the housing boom and bust is a classic illustration of the Austrian business cycle theory," according to Murphy. "Indeed, the Misesian explanation is so compelling that more and more economists and financial analysts are being persuaded." But not Greenspan who made his own case and got the Wall Street Journal to publish it. The problem is what he said, even worse what he omitted.

That as Fed chairman he led a pump and dump scheme, a financial coup d'etat, to defraud the public for Wall Street. It continues unabated, with new schemes, sucking trillions of dollars of wealth from the many to the few through fraudulently engineered housing, asset, and debt bubbles, illegally offshoring vast sums of capital globally, and shifting government assets to private interests, then their liabilities onto the government leaving taxpayers stuck with the bill.

Across the board, his Fed tenure outraged William Greider enough to call him one of "the most duplicitous figures (ever) in modern American government" who used his position to "corrupt the political dialogue" to sell snake oil to Congress and the public and be a willing co-conspirator in the theft of trillions going back to the early 1980s before his Fed days. He championed derivatives, securitization, and deregulation. He believed unfettered markets work best so let them and told a congressional committee in the mid-1990s:

"Risks in financial markets, including derivative markets, are being regulated by private parties. There is nothing involved in federal regulation per se which makes it superior to market regulation." In other words, let capital operate freely, plunder at will, and have no regulatory restraints regardless of the harm caused.

He sanctioned fraud as a tool of the Money Trust, and as Fed chairman engineered multiple bubbles in stocks, housing, mortgages, bonds, derivatives, currencies, and commodities, yet took no responsibility for the fallout. When asked, he said he has "no regrets on any of the Federal Reserve's policies that we initiated." In fact, he championed them.

He let house prices become an $8 trillion wealth bubble, yet had regulatory authority to prevent it. He chided his critics, ignored the public interest, and even encouraged use of risky no down payment adjustable rate mortgages (including subprime ones) at the worst possible time to buy property. He bears full responsibility for the greatest ever economic collapse costing millions their homes, jobs, savings, pensions, and futures - yet he has "no regrets" for any of his actions.

Here's his account of the housing bubble with a warning to the unwary. Take a strong dose of antacid before reading.

Greenspan admits that "lower interest rates spawned the speculative euphoria (but the) rate that matters was not the federal-funds rate. (It was) the rate on long-term, fixed-rate mortgages....The correlation between home prices and mortgage rates was highly significant, and a far better indicator of rising home prices than the fed-funds rate."

While it's true that longer rates affect mortgage ones, as important is how investors view the economy and prospects for inflation. In addition, short rates affect all others. They influence longer rates, including on Treasury notes, bonds and mortgages. Markets set all rates except one, Fed-funds, but it's the prime mover for others with added power from the central bank's bully pulpit.

Significant also is the close correlation between mortgage and Fed-funds rates. From 1971 - 2002, the average spread between them was 2.85%. Thereafter the relationship changed for a reason - because Fed- funds fell so low while mortgage rates bottomed at around 5.75% and didn't top 6% again until the Fed target rate approached 4%. If a 2.85% spread had held, 30-year mortgages would have been sub-4%. Today at 0% Fed-funds, 30-year fixed-rate mortgages are around 5%, and take note - historically the lowest ever 20th and 21st century mortgage rate was around 4.7% right after WW II.

However, in the wake of the Fed's announced intention to buy $1.25 trillion in Freddie and Fannie mortgage backed securities, $200 billion in Freddie, Fannie and Federal Home Loan Bank bonds, and $300 billion in longer-term Treasuries, mortgage rates may challenge or even better the previous low.

Greenspan blamed the housing bubble on success, or in his words: "the tectonic shift in the early 1990s by much of the developing world (away) from central planning to increasingly dynamic, export-led market competition. The result was a surge (in growth) that led to an excess in savings." That, in turn, "propelled global long-term interest rates progressively lower between 2000 and 2005," and guess who takes credit.

The "Maestro," of course, with Greenspan quoting Milton Friedman for support. In evaluating the 1987 - 2005 period, he said: "There is not another period in which the Federal Reserve System has performed so well. It is more than a difference of degree; it approaches a difference of kind." From one defrocked icon about another, his comment rings hollow, and, according to Catherine Austin Fitts, the evidence is compelling from her experience as an insider.

Replying to the Wall Street Journal, she explained that her "company served as lead financial advisor to the Federal Housing Administration between 1994 and 1997. (She) watched both the Administration and (Fed) aggressively implement policies that engineered the housing bubble," and gave an example involving securitizing mortgages for pooling, then repackaging and selling them in tranches to investors.

"Even in 1995, (she) could see that these plans would create unserviceable debt loads in communities struggling with" globalization-caused declining incomes. The fallout would be mortgage defaults combined with mortgage-backed securities (MBS) "drain(ing) retirement savings from 401(k)s and pension plans."

Taxpayers would get the bill "but insiders would make bundle." She accused an administration official involved in the scheme with "planning on issuing more mortgages than there were houses or residents." His reply: "Shut up, this is none of your business."

It gets worse the result of the "long standing partnership of narcotics trafficking and mortgage fraud," then combining them "to target and destroy minority and poor communities with highly profitable economic warfare. The model is global" and very profitable throughout the world and across America with numerous examples as proof. She cited one.

In October 1996, Rep. Maxine Waters (D-CA) released documents showing evidence of CIA links to the South-Central Los Angeles crack epidemic at least since the mid-1980s, attributable to fund-raising efforts for the Nicaraguan Contras.

Fitts wrote in May 1999 that in December 1997, "the CIA Inspector General delivered Volume I of their report to the Senate Select Committee on Intelligence" on the charges. It documented "the continued (money laundered) flow of an estimated $500 billion - $1 trillion a year....into the US financial system." To placate Waters, Greenspan met with her in January 1998 and "pledged billions (would) come to her district." It began in February when Al Gore announced it "was awarded Empowerment Zone status....and made eligible for $300 million in federal grants and tax benefits."

Fitts called Greenspan a "liar" and accused him of being complicit with the Treasury in engineering the housing bubble "as part of a financial coup d'etat" - documented in her writing "Dillon, Read & Co. Inc. (where she served as a Managing Director and Board member) and the Aristocracy of Stock Profits." She explained how:

"America's aristocracy makes money ensnaring our youth in a pincer movement of drugs and prisons and wins middle class support through (government-funded) contracts for War on Drugs activities at federal, state and local levels. This consensus (is sustained) by the gush of growing debt and derivatives used to bubble the housing and mortgage markets, manipulate the stock and precious metals markets, and finance trillions missing from the US government in the largest pump and dump in history....of the entire economy."

It's "more than a process designed to wipe out the middle class. (It's) genocide - a much more subtle and lethal version than ever before perpetrated by" legions of previous scoundrels. She described a process of insider deals designed to:

-- hollow out America,

-- centralize power and knowledge,

-- shift wealth to the privileged,

-- destroy communities and local infrastructure,

-- create new wealth by rebuilding them, and

-- leave human despair in its wake.

It's no accident that they crushed world economies to enrich the Money Trust, wrecked lives and impoverished millions, and the scheme remains very much ongoing. Yet Greenspan remains unapologetic, indeed smug in his Journal op-ed.

He deflected blame on "global forces beyond the control of domestic monetary policy makers" while claiming that "Global market competition and integration in goods, services and finance have brought unprecedented gains in material well-being." For whom he wouldn't say. He didn't have to, just look at the winners and losers.

Then explain it to the victims, the millions of Americans losing homes, jobs, pensions, savings and futures, the growing numbers with inadequate safety net protection for emergencies. Explain the greatest ever economic collapse, not an accident but willfully engineered, the lack of regulatory restraints that allowed it, and the devastating toll from its fallout.

Tell those affected how "the appropriate policy response is not to bridle financial intermediation with heavy regulation" but free it save for minor reforms too little to matter and simple to remove once the heat's off. Justify the "ret(ention of) a dynamic world economy capable of producing prosperity and future sustainable growth" based on business as usual policies - ones you describe as not "rely(ing) on governments to intermediate saving and investment flows" but freeing capital to grow more of it to enrich the few at the expense of the rest.

Justify the global economic collapse, the billions harmed, the human misery, and the fear that's it's just beginning. Explain how that jibes with democratic freedoms, equal opportunity, and the best of all possible worlds. At age 83 as a prominent figure, a well-paid private advisor and speaker, historical revisionism is how, and let the devil take the hindmost.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Thursday, March 19, 2009

Hopeful Change in El Salvador?

Hopeful Change In El Salvador? - by Stephen Lendman

Like other Latin American nations, El Salvador has had a long and troubled history, ruled from one decade to the next by successive military dictatorships, then since 1989 by the right wing National Republican Alliance or ARENA Party.

Long-suffering Salvadorans recall the 1980s struggles when the Farabudo Marti National Liberation Front (FMLN) failed to end what the civil-military Junta leader, Jose Napoleon Duarte, told New York Times reporter Raymond Bonner in 1980:

"Fifty years of lies, fifty years of injustice, fifty years of frustration. (El Salvador's) history (is pockmarked by) people starving to death, living in misery. For fifty years, the same people had all the power, all the money, all the jobs, all the education, all the opportunities." Finally they rebelled but failed.

Throughout the decade, billions in US aid poured in, including weapons, munitions, training, and US advisors, troops, and CIA operatives on the ground supporting the government against resistance fighters in a struggle they had little chance of winning.

Roberto D' Aubuisson founded ARENA in 1981 and was notorious for organizing and leading many of the right-wing death squads that still operate in El Salvador as "hired guns" or criminally embedded elements in the National Civilian Police (PNC), fully supported by Washington and the country's business elites.

They tortured, disappeared, disabled, and murdered tens of thousands of Salvadorans, including Archbishop Oscar Romero in 1980 for his outspoken Liberation Theology, compassion for the poor and oppressed, and denunciation of the "war of extermination and genocide against a defenseless civilian population." It's now down-shifted to a lower gear but very much an ongoing enterprise.

ARENA took power in 1989 and held it for the past 20 years until March 15 when The New York Times headlined the next day: "Leftist Party Wins Salvadoran Vote" with Mauricio Funes the new president of a country troubled by crime, an epidemic of violence, corruption, deep poverty (between 60 - 70% of the population), and the specter of Washington in the wings. It's why 500 - 700 undocumented Salvadorans come to America daily to earn money to send home to their families.

The FMLN won a plurality and will share power with a right wing National Assembly majority ARENA - PCN (National Conciliation Party) coalition.

It was a dirty campaign, replete with scare tactics, very similar to most others in the region with Washington calling the shots. Funes was called a communist, a foreign agent, and a Hugo Chavez/Castro tool. Bitter vitriol accused them of funding his campaign and plotting a dictatorship with his election.

Around 46 Republicans asked Obama to punish 260,000 undocumented Salvadorans in America, end their Temporary Protected Status (TPS), order them deported, and halt the $3 - 4 billion in annual remittances they send home to their families if Funes wins.

On March 11, Republican Dana Rohrabacher called the FMLN "pro terrorist," and accused them of being "an ally of Al-Qaeda and Iran" for celebrating the 9/11 attack and burning the American flag in response. He cited a "new world reality of terrorism (and) the global offensive waged by terror groups against the United States and free world." He said it's "imperative to review our policies to protect the national security" in light of a possible FMLN victory.

He reflects the worst of American politics determined to deny Funes a moment's peace and subversively plot against him unless he surrenders his government's sovereignty to Washington. More on that below.

For the moment at least, El Salvador's mood was celebratory after the Supreme Electoral Tribunal (TSE) announced the results with over 90% of votes counted - 51.27% for the FMLN v. 48.73% for ARENA, so for the first time in 20 years, Salvadoran politics shifts left, but hardly enough to matter.

Funes promised change, a fresh start, and offered "a new accord on peace and reconciliation." He congratulated ARENA, said they'll now be the opposition, but "in that capacity, rest assured that the party will be respected and heard." He invited social and political groups to improve welfare for the people (with no specifics) and "appeal(ed) to other political forces to work for unity." He promised to make El Salvador "the most dynamic economy in Central be the president of social change and reconstruction (and) leave behind the revenges of the past."

He also assured Washington and El Salvador's elite that he'll "build a dynamic, efficient and competitive economy and promote the creation of a broad business base." He promised to respect "private property (and work for) macroeconomic stability and a responsible fiscal policy." He told the Washington Post that he'll "work to strengthen the relationship with the United Stats, to make the US more of a partner, and I think we will work well together." His economy is closely tied to America, accounting for 60% of its exports with the dollar as its reserve currency.

He promised not to alter US - Salvadoran trade practices under DR-CAFTA or join Venezuela's ALBA (the Bolivarian Alternative of the Americas). He likens himself to Brazil's Lula, not Hugo Chavez or Ecuador's Rafael Correa, and intends to be very friendly to business. Perhaps too much, so it's hard imagining that Salvadorans will benefit from him any more than Americans do under Obama or Brazilians from Lula.

During his campaign, he had right wing support, including from a group called "Amigos de Mauricio Funes," whose members come from El Salvador's ruling elite, and who apparently decided two decades of ARENA were enough and the country needed change, or at least its appearance given the extreme privation and fear it could boil over. For now it's quieted.

Washington agreed, and it showed in a State Department Robert Wood statement "specifically congratulat(ing) Mauricio Funes as the winner of the presidential election....we look forward to working with the new government of El Salvador on our bilateral agenda." US Charge d'Affaires in San Salvador, Robert Blau, added: "We have said many times that our intention is to continue with the good relations with El Salvador from government to government, and from people to people." It's clear Washington is comfortable with Funes, and that should be cause for worry.

In 1992, the party ended its armed struggle, signed a peace accord with ARENA, became the loyal opposition politically, and agreed to a law granting amnesty to its officials and death squad killers. During his campaign, Funes said he'll honor it if elected and (sounding much like Obama) told Tecnovision news that "We have to look to the future; not more to the past. We cannot change the past of hatred, clashes and confrontation. But the future we can build in a different way." That despite last fall others in FLMN demanding that amnesty be repealed so that murderers and torturers will be punished.

No longer in a direct affront to his supporters. Instead he assured business and the ruling elite he's reliable while the message to Salvadorans is that promised change was just talk, not policy once he's in office.

Funes is a political outsider, a new face, a moderate so he says, a former TV host and CNN reporter who gained prominence from his 1980 - 1992 civil war coverage. He's young (age 49), intelligent, articulate and much like Obama in those respects. Last September 28, the FLMN nominated him to run against ARENA's Rodrigo Avila, an establishment figure and former National Police director.

From most early signs, the power structure rests easy knowing Funes represents continuity; business as usual, not hoped for change; so Salvadorans, like Americans, soon enough will know they were fooled again. And if they need more convincing, the painful global economic collapse will be the clincher.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Wednesday, March 18, 2009

Treatment of Imprisoned Muslims at Terre Haute's Communications Management Unit (CMU)

Treatment of Imprisoned Muslims at Terre Haute's Communications Management Unit (CMU) - by Stephen Lendman

In February 2007, it was learned that Washington had a secret new facility for so-called "high-security risk" Muslim and Middle Eastern prisoners in violation of federal law that prohibits severely limiting or cutting them off entirely from other inmates as well as outside contacts and communications. Segregating prisoners by race, national origin, or language violates the Supreme Court's February 2005 decision in Johnson v. California that affirmed 14th Amendment protection against racial discrimination. Specifically, the Court:

"rejected the notion that separate can ever be equal-or 'neutral' - 50 years ago in Brown v. Board of Education (this Court repudiated it and) refuses to resurrect it today."

US Prison Bureau regulations also stipulate that "staff shall not discriminate against inmates on the basis of race, religion, national origin, sex, disability, or political belief (including) administrative decisions (involving) access to work, housing and programs." Nonetheless, the Bush administration instituted these practices, and they continue under Barack Obama at the Terre Haute federal prison's Communications Management Unit (CMU). Perhaps at other federal and state facilities as well at a time Muslims are vilified and persecuted.

September 11, 2001 events unleashed a torrent of fear, repression, and a war on Islam, henceforth targeting innocent Muslims as terrorists, Islamofascists, and criminals for their faith, ethnicity, prominence, and/or charity.

Ever since, numerous innocent men and some women have suffered grievously. Besides "unlawful enemy combatants" in global "torture prisons," they've been unfairly harassed, arrested, prosecuted, and interned as political prisoners for being Muslims at the wrong time in America. Most end up in federal facilities like the CMU at the Federal Correctional Institution (FCI), Terre Haute, Indiana, established to segregate and discriminate against Muslims and Middle Eastern internees.

Treatment thereafter has been demeaning, unpleasant, and in violation of US Prison Regulations covering normal day-to-day operations. For example, punishment may be ordered for any reason, or none at all. Communications by phone, mail, email, and visitations are monitored and must be in English. The latter, when allowed, are non-contact only. CMU prisoners get an "Institution Supplement" stating that "all contact" between inmates, "persons in the community," or anyone outside it, is restricted and only permissible "according to national policy."

It's so Muslims get fewer rights and privileges than others, including allowable communications. Also:

-- food quality, amount, and that conforms to a strict Muslim diet;

-- medical care; and

-- virtually everything else with prison authorities given much latitude to do as they please.

Early reports were that prison staff were struggling to understand the new rules and make sense of how to apply them. So at first, though segregated and denied privacy, Muslims were mostly treated like other inmates, including allowed free religious practice and a permissible diet.

Recently that changed, and below are some of the ways:

-- food quality has deteriorated; at times it's rotten and inedible; the amount has been reduced, and strict religious diet restrictions aren't being observed;

-- commissary prices have risen sharply, way above the allowed markup;

-- emergency medical care takes days to get; less urgent but needed care takes weeks or months, and inmates aren't informed of any problems;

-- mail is unduly delayed, denied, and like other communications the content may be censored;

-- the entire CMU is monitored with cameras and listening devices; privacy is impossible, even for the most personal and intimate things;

-- mistreatment and disrespect are increasing;

-- prisoner written complaints have risen from very few at first to many about virtually everything;

-- retaliation follows through harassment, intimidation, food rationing, the serving of forbidden-to-eat kinds, frequent "shake-downs" and removal or theft of personal possessions; rejection of simple requests; delay or denial of mail and other communications; and whatever else prison authorities decide ad hoc;

-- CMU tap water is inferior to the rest of the prison; it contains sediment, causing itching after showering, hair loss, and kidney stones in several prisoners;

-- except for poor quality salad and some fruit, all food is processed, never fresh; and

-- prisoner complaints are called obstructing justice and punished.

Given how conditions have deteriorated, prisoners have reason to worry. A new administration is in charge. It vowed to close Guantanamo and end torture. Yet CMU conditions are worse and unaddressed by an uncaring government, no different under Obama than George Bush. It's the wrong time to be Muslim in America.

The "war on terror" continues, yet who but family members, if they're lucky, know how their loved ones are treated - innocent men, some women, targeted for their faith, ethnicity, prominence and charity. This is how America treats the vulnerable - with contempt and disregard for the law. It's vital to denounce it at a time we're all equally at risk.

Stephen Lendman is a Research Associate of the Center for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday through Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Monday, March 16, 2009

Monetary and Fiscal Failure, Fraud, and Fear of What's Next

Monetary and Fiscal Failure, Fraud, and Fear of What's Next - by Stephen Lendman

Even the powerful are worried with the IMF on February 7 saying advanced economies are in "depression (and) the worst cannot be ruled out." Forecasting a 2010 recovery is "very uncertain" at this time as further financial turmoil may disrupt it regardless of policies adopted, and trouble is outpacing resources to alleviate it.

On March 10, its Managing Director Dominique Strauss-Kahn forecast "below zero" 2009 global growth - what he termed "the worst performance in most of our lifetimes."

In a March 8, report, the World Bank expressed similar gloom saying:

-- "developing countries face a financing shortfall of $270 - 700 billion this year, as private sector creditors shun emerging markets, and only one quarter of the most vulnerable countries have the resources to prevent a rise in poverty;"

-- international financial institutions alone can't cover the (public, private and trade deficit) shortfalls for these 129 countries, so other help is needed - a "global solution" to prevent an economic catastrophe;

-- the global economy "is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential;"

-- by mid-2009, global industrial production may be 15% lower than 2008 levels, a shocking differential reminiscent of the 1930s;

-- 2009 "world trade is on track to record its largest decline in 80 years, with the sharpest losses in East Asia;"

-- "the financial crisis will have long-term implications for developing countries" (and developed ones as well); they face higher borrowing costs, lower capital flows, weaker investment, and slower future growth at a very grim time globally.

At the same time, the Asian Development Bank (ADB) reported 2008 shrinkage of over $50 trillion in investor wealth, a shocking decline reflecting financial asset losses in stocks, bonds, currencies, real estate, and various other investments as well as a "surprising run" to the dollar in search of a safe-haven.

ADB said world's financial markets experienced "the most violent shock" since the Great Depression and global economies have rapidly deteriorated. Bank president Haruhiko Kuroda stated: "I'm afraid things may get worse before they get any better," maybe much worse. Yet his solution (like the IMF's and World Bank) is worse than the problem by proposing more debt on top of today's burden. He wants a 200% ADB capitalization increase, similar to though not as extreme as Fed policy, so instead of reducing Asian debt, he wants to increase it, make heavily-indebted nations more indebted, and let taxes, borrowing, and fewer social services bear the burden of a growing calamity the way America is doing it.

The solution to over-indebtedness, of course, is get free of it, but that doesn't work well for bankers, and in the end they generally get what they want, so the rest of us lose out and today's crisis will continue to worsen.

Warren Buffett to the Rescue - Again

It's so bad that Wall Street rolled out Warren Buffett for the second time to do what he rarely does - last October in a New York Times op-ed to calm investors and affirm his faith in "the long-term prosperity of the nation's many sound companies."

On CNBC March 9, he wasn't as sanguine saying the economy has "fallen off a cliff. (It's) in a shambles. Not only has (it) slowed down, people have changed their behavior like nothing I have ever seen (and government policy or at least its message has been) muddled." Then commenting on the importance of personal housing wealth and how much of it's been lost, he went the old adage one better about "the emperor ha(ving) no clothes."

"On top of that," he said, "the emperor doesn't have any underwear either." As a result, "We are in a very, very vicious negative feedback cycle" because people are scared to death and with good reason.

But Buffett didn't do a lengthy Q & A to scare people. He was there as a pitchman, a hawker like in a carnival, and his product is his own company, Berkshire-Hathaway, and America. When asked "Will everything be all right," he responded:

"Everything will be all right. We do have the greatest economic machine that man has ever created....(It's because) we ha(ve) a system that work(s). (It's gotten us through) six panics in the 19th century (and) in the 20th century we had the Great Depression and World Wars, all kinds of things. But we have a system, largely free market, rule of law, equality of opportunity (unleashing) human potential (so) your grandchildren will live better than your kids."

"The machine works (and buying) equities (is) the way to (profit from it). If (you) buy the right businesses, (you'll) do very well....American business will be worth more over time....Stocks will be worth more over time. I guarantee you that the Dow will be a lot higher."

Last October in his New York Times op-ed, Buffett said he's "buying American stocks." On March 9, he repeated the message even though the economy "is a shambles." Serious enough to need "the Oracle of Omaha" to save it, or at least try by making a public spectacle of himself on TV, and it wasn't the first time although others were more focused on his business or general view of things.

This time, stressing America's long-term strength, he ignored its fundamental weaknesses and systemic failure at the root of today's problems:

-- a system so unstable, crisis-prone, exploitive, unfair, self-destructive, and corrupted it can't endure;

-- Keynes warning about the consequences of "enterprise becom(ing) the bubble on a whirlpool of speculation;"

-- the inevitable decay that Marx and others predicted;

-- the untenability of great wealth disparities with few having too much and many too little - something untenable in the long run;

-- Lincoln's June 16, 1858 message to the Illinois Republican State Convention - that "A house divided against itself cannot stand;" slavery was the issue then; today it's inequality, human need, and growing poverty under a fundamentally unworkable system favoring wealth over public welfare.

Something else bothered Buffett as well - that Berkshire Hathaway (B-H) stock lost half its value, and the company had its worst ever year in 2008 since Buffett took it over in 1965 when it was a family-run textile maker. He's also not immune to credit default swap (CDS) problems, having increased his position to $14 billion as of year end 2008, and last year took hundreds of millions in write-offs as a result.

Further, some question B-H's health going forward given the current environment, insurance being his main business, and the worrisome CDS spreads on his debt. According to Merrill Lynch's Michaels Hartnett and Penn, they trade at wider spreads than those for Vietnam. They point out that GE is no better off as their swaps are wider than Russia's at a time its economy is reeling like many others.

Through March 11, B-H and GE were two of the six remaining companies rated AAA by S & P, according to The others are ExxonMobil, Toyota, J & J, and ADP. In the late 1970s, 58 companies had the rating. That was then. This is now as two more of the mighty have fallen.

On March 12, the Wall Street Journal online reported that "General Electric Co. and its finance arm (GE Capital) have lost their coveted AAA long-term credit rating from Standard & Poors Ratings Service" when the agency cut it to AA+ in a move many analysts think was long overdue but not enough given the company's troubled state.

On the same day, Bloomberg reported that Fitch Ratings "cited concern about (B-H's) potential for losses on (its) equity and derivatives holdings" in cutting it to AA+ and its senior unsecured debt to AA." Bloomberg added: "Some investors (believe) the derivatives may saddle (B-H) with billions of (future) losses."

Economists and Financial Writers on The Global Research News Hour

Notable ones like F. William Engdahl, Michael Hudson, Ellen Brown, Jack Rasmus, Richard Wolff, John Bellamy Foster, and John Williams continue explaining the nature and consequences of the global economic crisis, and how it affects ordinary people. For example, Rasmus and Williams believe that the economy lost from 800,000 - 1,000,000 jobs for the past four months (not the Labor Department's lower figures) on top of all those lost earlier, and no end to the carnage is in sight.

According to the Economic Policy Institute (EPI), over 23 million Americans were either out of work or underemployed in February, and the numbers are growing. In addition, 60.3% of the population has some form of employment, down from 63.4% in December 2006. EPI reported that BLS figures show job openings fell 7.2% in January to three million, down 32% from year end 2007. Currently there are over four unemployed workers for every job, and seekers "are seeing their chances of finding (employment) grow ever dimmer."

Reports are that jobs are being lost at the rate of one every five seconds, and according to Manpower International's US employer survey, hiring plans are the lowest since the company began polling in 1982. A slim 1% of firms expect to hire in Q 2, down from 10% in Q 1 and off 15% from Q 2, 2008. A company official said: "That's about as bad as it gets with our survey," but it looks like worse is still ahead.

Consider the latest initial jobless claim filings for the week ending March 6 - a record 654,000 following the previous week's upwardly revised 645,000. People getting benefits for more than a week increased by 193,000 to 5.3 million, another record high, and it's the sixth time in the past seven weeks that new records have been set. The proportion of the work force getting unemployment benefits is the highest since June 1983 when the economy began emerging from a deep recession. One year ago, only 2.8 million got benefits. Today the numbers are skyrocketing with no end of it in sight. It shows in the monthly payroll data.

In his latest ShadowStats report, Williams said February's payroll loss was 899,999 and unemployment reached 19.1%, when discouraged and involuntary part-time workers are included. He compared it to Great Depression 25% levels but noted then they may have been higher because measures included only non-farm workers at a time agriculture was over one-fourth of the economy and farm labor much greater in numbers than today. According to the US Department of Agriculture, it's now less than 2% of all workers so its impact on employment is marginal.

Challenger, Gray & Christmas (CG&C) tracks monthly announced job cuts, now making grim reading. On February 4, it reported:

"Company layoff announcements were unusually heavy in January, indicating that the shock to the labor force is increasing in intensity and pointing to severely depressed readings in Friday's employment report." CG&C cited 241,749 compared to 166,348 in December, or the highest figure since the end of the last recession. By comparison, January layoffs a year ago were only 74,986. Of great concern is how much higher numbers will go and for how many more months.

CG&C's February total slipped to 186,350, but it cautioned to "distinguish between layoffs scheduled for the short-term or the long-term, or whether job cuts are handled through attrition or actual layoffs." Most important is the trend, not monthly blips up or down that obscure it, and the latest home foreclosure data aren't reassuring.

On March 11, Dow Jones Newswires reported that completed US foreclosures soared 67% in February over January, putting them at their highest since the start of the crisis, according to

Most worrisome is that they came in spite of Fannie, Freddie, and several major banks putting a temporary halt to the process, yet it persists at severely high levels. In addition, pre-foreclosure filings (an indicator of future foreclosures) jumped 27% to 207,703, topping December's highest ever number by 9%. Three of the hardest-hit states continued impacted with California soaring 67% from January, Florida 42%, and Arizona more than doubling. The data suggest more of the same ahead with perhaps millions more homeowners facing loss of their most valued asset and little in the way of government help to prevent it.

Citigroup on the Ropes, or Are They?

Believe the former despite its CEO saying that January and February were profitable. Take it with a grain of salt given its $37 trillion derivatives portfolio, much of it toxic, and its stock price at a buck - until The New York Times published a "leaked" confidential memo from Vikram Pandit to employees saying the company was on track for its best quarter since late 2007 when the market started to implode.

Left out was how numbers are calculated - based on operating, not reported earnings, excluding lots of write-offs but mostly ones left undeclared hoping investors won't notice and think the bank healthy again. On March 10, the market responded positively with Citi and other financials doing best, but for how long. Nothing changed in a very weak economy, and Citi is among the sickest banks in it, insolvent and on the edge of bankruptcy or being nationalized.

The McKinsey & Company consulting firm may agree in its recent bank profitability forecast. It states "2009 will be unprofitable (and) net investment income "drops dramatically in 2009 as deposit spreads compress (reflecting consumer and commercial), then (begin to recover) going forward. Yet by 2013, McKinsey sees revenues at $142 - 153 billion compared to $156 billion in 2008 with profits beginning to pick up after up after $53 billion in 2009 operating losses. For 2008, McKinsey said banks posted a $1 billion profit, excluding all taken and untaken write-offs. It affirms a very sick industry with no prospect of profits if they're included.

Institutional Risk Analytics co-founder and managing director Chris Whalen agrees in his March 13 analysis titled: "Stress Test Zombies - Not Too Big to Fail? Tough Tootsies Little Banks!" He refers to Bernanke and Geithner "cowardly feed(ing) the zombies." It's "not sustainable financially" nor workable politically and must eventually be changed. At some point, "the Obama administration may need to choose between our (banks and) foreign creditors and American voters."

"The Bernanke/Geithner approach to not dealing with the financial crisis amounts to a hideous public subsidy, a transfer of wealth from American taxpayers to the institutional investors who hold the bonds and derivative obligations tied to the zombie banks, AIG and the GSEs." All these companies will need continued cash subsidies in the trillions of dollars to keep them out of bankruptcy.

Yet imagine, Bernanke and Geithner are proceeding on their own. "No legislation has been passed and no meaningful debate has occurred. The biggest danger facing the markets is that Ben and Tim still do not seem to have a clue what to do about the big banks -- other than to write more checks against the public trust. The conflict over this decision to pass the cost to the taxpayer, between the Fed, Treasury and the Congress, on the one hand, and the Wall Street dealer banks is staggering, yet nothing is said in the Big Media."

The fact is that "bailing out toxic waste sites....could cost trillions of dollars....The only issue is whether we recognize it directly, via a public resolution, or hide (it) via public subsidies and future inflation."

The right strategy is to break up or close down zombie banks, keep taxpayers out of it, and let bond and equity holders absorb the cost of "marking (their) assets to market" and ending the charade that they're profitable or heading toward it.

On March 10, the Wall Street Journal's front page reported that repeated Citi bailouts haven't helped so "US officials are examining what fresh steps they might need to take to stabilize the bank if its problems mount, according to people familiar with the matter....(called) 'contingency planning.' " Weekend discussions were held with Citi officials downplaying their seriousness. But given the bank's condition, profitability claims (the next day) are deceptive, so how long can the charade continue.

Further, on March 12 according to, there's more. "Four Citigroup Inc. executives who bought the bank's stock last week have already generated a $2.2 million paper profit, regulatory filings show." Insiders included:

-- director Roberto Hernandez bought six million shares on March 2 at an average $1.25 price; after briefly dipping below $1, it closed on March 5 at $1.52 for a paper profit of $1.7 million;

-- Latin America CEO Manuel Medina-Mora bought 1.5 million shares on March 3 at an average $1.24; and

-- other buyers included vice-chairman Lewis Kaden buying 100,000 shares and controller and chief accounting officer John Gerspach 65,000 shares - in each case ahead of Pandit's profitability claim and the day earlier Wall Street Journal front page story saying Citi is in trouble.

Another key point is that the US Securities Exchange Act of 1934 "prohibit(s) the making of false or misleading statements to a public company's auditors." It's also "a crime to knowingly and willfully make a false or fraudulent statement in any matter within the jurisdiction of the executive, legislative, or judicial branch of the US government" (18 U.S.C. 1001, January 2007). Further, it's unlawful to mislead investors or violate any provision of the 1934 act. True or false, Pandit's memo was internal and only covered a two-month period, not the full Q 1 filing for after March 31, so likely no violation occurred.

That aside, there's the issue of stock manipulation and insider trading with the above-cited evidence casting suspicion. It's illegal for anyone to buy or sell securities based on non-public information, and those doing it face prosecution if caught. A high-profile case was against former Qwest CEO Joseph Nacchio - indicted in December 2005 on 42 insider trading counts involving $100 million worth of his company's stock, then convicted on 19 counts in April 2007. He was sentenced to six years in prison and ordered to forfeit $52 million in fraudulently earned profits plus a $19 million fine, $1 million for each count.

The Wages of Reckless Spending

They're painful, costly and, according to Michel Chossudovsky, heading the country for "fiscal collapse" in an analysis that's stunning but unsurprising. A "Second New Deal?" Quite the contrary to:

-- continue the most massive wealth transfer in history;

-- achieve it by looting the Treasury;

-- build a crushing debt burden;

-- undertake "the most drastic curtailment in public spending in American history;"

-- govern under a war budget directing most revenues for defense, militarism, and foreign wars; trillions for "the Wall Street bank bailout;" and servicing the enormous public debt - in 2008 an astonishing $451 billion;

-- provide no fiscal stimulus for the economy; in fact, do the opposite by requiring no mandate that banks lend; instead, let them speculate and use hundreds of billions to buy real assets (the "real economy") on the cheap after their stock prices have been manipulated to crash;

-- impoverish tens of millions of Americans through reduced social services when they're losing jobs, homes, savings, pensions and futures; and at the same time

-- privatize America to pay for reckless spending - everything: "public services," infrastructure, highways, national parks, various other state assets, the entire State sold on the cheap to plunderers for profit - "the State is being taken over by the banks, the State is being privatized;" the public has no idea what's happening or that their government is betraying them.

America is for sale as a commodity. Serfdom is planned for most people, and Obama is as much at fault as Bush so let's be clear. He's either a consenting co-conspirator in the looting of the country or a willing dupe letting it happen in his name. Either way, he's part of a crime syndicate driving world economies and most people everywhere to ruin to enrich and further empower a select Wall Street elite - the same ones and their lobbyists that provided millions for his campaign.

On March 12 at the Business Roundtable, Obama assured attending CEOs that serving corporate America is Priority One, especially the financial elite with as much of the nation's resources as they need. He said that the "only way we can truly unlock credit and heal our financial system for good is to address the state of our banking system. And I know that this crisis is at the top of your immediate concerns - and I promise you, it is at the top of mine as well." He means that he'll continue to:

-- stiff-arm the public with empty rhetoric, hollow promises, and little in the way of real help;

-- strip-mine the nation's wealth for Wall Street and the rest of the FIRE sector (finance, insurance and real estate); and

-- provide smaller amounts for other business sectors at his discretion but not enough to keep bankers and vulture investors from buying much of it on the cheap.

Follow the data as the plot unfolds. On March 12, the Fed reported that American household net worth plunged by the largest amount in over half a century during 2008 Q 4 - a record 9% from Q 3 and the sixth quarterly drop in a row. Net worth represents total consumer wealth - homes, savings, pensions, investments, and other material assets minus liabilities.

It hit an all-time high of $64.36 trillion in 2007 Q 2, then fell every quarter ever since. Through 2008 Q 4, it's at $51.48, or a drop of 20% from its peak and declining. At the same time, US credit quality is deteriorating as measured by the cost of buying default insurance (CDSs) on government debt - it's soaring as it is for private companies like GE and Berkshire-Hathaway.

It costs US bond investors 98 basis points for protection, up from 7 basis points in late 2007, or a 14-fold increase, and it's no surprise why. Debt creation has skyrocketed to unimaginable levels raising the specter that today's deflation will become tomorrow's inflation, perhaps hyperinflation, and that's bearish for bonds, stocks, the economy, and ordinary people losing purchasing power.

It's got China worried according to a March 13 New York Times report. As the largest US debt holder, Premier Wen Jiabao wants assurance that the investment is safe at a time he has reason to have doubts. "To be honest," he said, "I am definitely a little worried," and why not. Money creation has been excessive. Interest rates are rock bottom, and America is reeling under a mountain of unsustainable debt as it continues to add more of it. According to some, interest rates have only one way to go - up, although it's likely to be a while before it happens.

Bond expert Henry Kaufman (the original "Dr. Doom" for his 1970s and early 1980s bearish bond forecasts) believes the secular bond bull market is over. In a February 14 Wall Street Journal op-ed, he tracked the rise in the cost of long-term government debt from 1946 to its 1981 peak, then down to around 2.5% early this year, "which probably marks the end of this extended wave." Yet conditions today compared to 1946 are "strikingly different" and very worrisome given the private sector debt overload, the federal government issuing an unprecedented volume of new obligations, and the Fed printing money like confetti.

In 1946, "the nation stood on the brink of an unprecedented boom (whereas) today wealth is contracting massively and the economy" teeters on the edge of depression. "Which raises (serious) questions: Why are we so poor at managing our key economic institutions while at the same time so accomplished in medicine, engineering and telecommunications? Why can we land men on the moon with pinpoint accuracy, yet fail to steer our economy away from the rocks? Why do our computers work so well - except when we use them to manage derivatives and hedge funds?"

Securitization, globalization and the explosion of debt changed everything for the worst and "altered financial behavior in ways that econometric models miss....Let's hope that is about to change. A central goal of new financial legislation should be to rein in extreme financial behavior."

What Kaufman left out is that none of this was happenstance. It could never go on without high-level government-institutional complicity, so a good place to start would be to clean out the corruption in Washington. Fire and punish those in charge of running it, and establish a legislative mandate henceforth to serve all Americans, not just Wall Street's criminal class.

For the latter, Philip Stephens, in a March 9 Financial Times op-ed, proposed: "Fix the banks first - and then shoot the bankers" in commenting on the collapsed UK banking system and lack of decisive action to correct it. Sounds like a sensible way to address America's problems as well.

The Thud of More Shoes Dropping

Deteriorating commercial real estate is another with experts saying it resembles the housing decline with about a one-year lag, so right now it's increasingly apparent. Look at the signs.

On January 12, Financial Week headlined: "Banks gird for commercial property collapse (as a) spike in loan defaults batter balance sheets," and it's just beginning. According to Fitch Ratings managing director Eric Rothfeld:

"Loans originated at market peaks experienced from 2005 - 2007 will face increasing defaults as real estate performance declines during the stressed economic climate of 2009 and beyond." More defaults mean greater losses for exposed banks, already reeling from the housing collapse and trillions of toxic debt on their books.

Developers are also hard hit given empty buildings, vacant shopping malls, and for-sale signs everywhere. On March 5, the Washington Post said "Not a single office building has been started in (D.C) since October, a sign that the slowdown that began in the far-out suburbs has now reached prime city locations." According to Gerry Widdicombe, director of economic development for the city's Downtown D.C. Business Improvement District, "Things are frozen. Nobody's doing anything." It's the same most everywhere across the country except for occasional small deals that are owner and investor-financed.

More signs include idle cranes, empty lots, few new tenants, rising evictions, falling rents, a 95% year-over-year drop in commercial mortgage backed securities (CMBS) issuance, and soaring CMBS delinquencies. The American Institute of Architects reported that its Architecture Billings Index (ABI) hit a historic 33.3 low in January, reflecting the worst conditions seen since the index's 1995 inception.

On March 10, Moody's reported that corporate bond defaults will triple their 2008 level, be 15 times more than in 2007, and said bankruptcies usually follow. They placed 283 companies on its bottom-rung listing, up from 157 last year, and added 73 companies since last reporting.

Well-known companies made the list, including General Motors, Chrysler, Eastman-Kodak, AMR (parent of American Airlines), UAL (parent of United Airlines), AirTran, Advanced Micro Devices, R.H. Donnelly, Rite-Aid, Reader's Digest Association, and numerous top retailers because of reduced consumer spending.

According to experts, many, perhaps all, large US banks are zombies. They're insolvent "dead men walking" and should be on the list as well. So is the US economy suggests Nouriel Roubini in a March 5 article headlined: "The US Financial System is Effectively Insolvent." In it he explains the "grave risk of a global L-shaped depression, (much) worse than the current, painful U-shaped global recession" that's deepening as conditions continue to deteriorate. "Shoot(ing) the bankers" may indeed be a good start to fix it.

Perhaps also help the "1 in 50 children in America (who) are homeless each year" also, according to a new National Center on Family Homelessness report titled: "America's Youngest Outcasts - State Report Card on Child Homelessness." It calls it "unacceptable for one child in the United States to be homeless for even one day, (and says) children without homes are on the frontline of the nation's economic crisis." The problem continues to worsen as foreclosures increase, yet the administration and Congress aren't helping.

"The year 2008 will long be a time when grossly overpaid bankers (and) captains of industry....hobbled to Washington (asking) for bailouts (in the billions of dollars). Ignored by....Congress and the media were (many thousands) of children - many still infants and toddlers - who were (and still are) homeless in the midst of this economic (calamity). Without a voice, more than 1.5 million (of them) go to sleep (each night) without a home each year....they endure (too little food), a lack of safety, comfort, privacy....adequate health care, uninterrupted schooling, sustaining relationships, and a sense of community." Their deprivation is inflicting "profound and lasting scars," yet public discourse excludes them from consideration and consigns them to be another lost generation - unwanted, unnoticed and ignored by an uncaring government.

Militarizing America for Business and All Contingencies

Since WW II, America has had contingency plans in case of large-scale disasters or attacks. However, since the late 1960s, at the height of anti-Vietnam war protests, focus has been mainly on controlling dissent.

On October 30, 1969, Richard Nixon signed Executive Order (EO) 11490, "Assigning Emergency Preparedness Functions to Federal Departments and Agencies." It consolidated 21 previous emergency preparedness EOs and two Defense Mobilization Orders issued between 1951 - 1966.

In 1976, Gerald Ford signed EO 11921 ordering the Federal Emergency Preparedness Agency (FEPA) to let government take over all essential functions in case of an undefined "national emergency." In other words, to give government dictatorial powers by simply seizing them.

In 1979, Jimmie Carter signed EO 12148 establishing the Federal Emergency Management Agency (FEMA) to replace FEPA. Clinton later made its director a cabinet position, and Bush gave DHS control under its Emergency Preparedness and Response Directorate.

On inception, FEMA mandated an interface with the Defense Department (DOD), appointed an "emergency czar," and authorized the strategic relocation of industries, services, government, and other essential economic activities should conditions warrant. Little known is that FEMA spends most of its budget for "black operations," not disaster relief, although the latter makes headlines. Further, the president has emergency powers to declare martial law, activate FEMA's extraordinary powers, and run the country with other agencies like a police state for no other reason than to quell legitimate dissent - against war, abusive federal power, or an economic depression.

In 1988, Ronald Regan signed EO 12656 empowering the National Security Council as the principal body in charge of emergency powers and let the government increase domestic intelligence and surveillance of US citizens. It also restricted free movement, authorized the seizure of property, construction of detention camps, and isolation of US civilians in them.

Numerous other EOs followed to let government control:

-- all forms of transportation, including highways, airports, rail, seaports, inland waterways, and more;

-- the media and all forms of communication;

-- all forms of energy;

-- food and farms;

-- brigades in which civilians would be placed under government supervision;

-- health, education, and welfare functions;

-- the registration of all persons into a national database;

-- the relocation of communities, areas to be abandoned, and building of new housing in designated places;

-- implementation of all emergency measures in times of international tensions and economic or financial crises; and

-- empowering the Justice Department (DOJ) to operate penal and correctional institutions along with FEMA for its own camps.

The Bush administration funded FEMA with hundreds of millions of dollars to retrofit former military bases and construct other facilities as detention camps. According to a November 2008 Wall Street Journal article, "Intelligence Policy (will) Stay Largely Intact" under Obama who recognized and legitimized its existence for use in case of a "national emergency" declarable for any reason, real or contrived.

Currently, over 800 camps are in every state, ready for use if ordered, with enough capacity for many tens of thousands of internees. They're not ordinary in any sense. They're concentration prison camps in the true sense of the term for dissidents or whomever is to be interned for whatever reason, at any time, and for any designated period on command of the president, others he directs, and FEMA as a police state operational arm. Some may turn into Guantanamo on the Mississippi, the Chesapeake Bay, the Lake Michigan lakefront outside Chicago, or neighborhoods anywhere or close by.

Local police have been militarized to help and much more, according to a March 13 Paul Joseph Watson Prison article headlined: "Police Trained Nationwide That Informed Americans Are Domestic Terrorists." In other words, enemies of the state are people who know their rights and demand them, who support progressive issues, who want more from government than betrayal, and who believe democracy and the rule of law are sacred and must be defended.

Prison Planet got a copy of a Missouri Information Analysis Center (MIAC) report it described as "outlandish (and) shocking," and most likely it's replicated throughout the country. It concentrated mostly on a so-called "militia movement" but "conflate(d) it with supporters of Ron Paul, Constitution Party presidential nominee Chuck Baldwin, and former congressman Bob Barr as 'militia' influenced terrorists and instructs the Missouri police to be on the lookout for supporters" of libertarian parties, issues, and people opposed to the North American Union and New World Order.

The MIAC report is similar to a Phoenix FBI and Joint Terrorism Task Force one under Clinton that designated constitutional defenders as "right-wing extremists." The MIAC document "expands significantly on the earlier" one and represents the latest example of police state plans under Democrat as well as Republican administrations - a very disturbing prospect at a very grim time for most people.

A Final Comment

Everything discussed above is real and worrisome at a time the greatest ever economic crisis is deepening, government policies are corrupted, broken, and uncaring for deprived millions, so sooner or later public anger will erupt, but when it does severe crackdowns await it.

Obama promised change. Few understood that he meant abandoning the millions who elected him, looting the national wealth for fraudsters, and crushing public dissent should it erupt. Given growing impoverishment and pain, it's hard imagining it won't. It's only a matter of when and how much - but then what.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Monday through Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.