Let Them Eat Cake – Chelsea’s Wedding
By PAUL CRAIG ROBERTS | July 31, 2010
It is not unusual for members of the diminishing upper middle class to drop $20,000 or $30,000 on a big wedding. But for celebrities this large sum wouldn’t cover the wedding dress or the flowers.
When country music star Keith Urban married actress Nicole Kidman in 2006, their wedding cost $250,000. This large sum hardly counts as a celebrity wedding. When mega-millionaire real estate mogul Donald Trump married model Melania Knauss, the wedding bill was $1,000,000.
The marriages of Madonna and film director Guy Ritchie, Tiger Woods and Elin Nordegren, and Michael Douglas and Catherine Zeta-Jones pushed up the cost of celebrity marriages to $1.5 million.
Tom Cruise and Katie Holmes upped the ante to $2,000,000.
Now comes the politicians’s daughter as celebrity. According to news reports, Chelsea Clinton’s wedding to investment banker Mark Mezvinsky on July 31 is costing papa Bill $3,000,000. According to the London Daily Mail, the total price tag will be about $5,000,000. The additional $2,000,000 apparently is being laid off on US Taxpayers as Secret Service costs for protecting former president Clinton and foreign heads of state, such as the presidents of France and Italy and former British Prime Minister Tony Blair, who are among the 500 invited guests along with Barbara Streisand, Steven Spielberg, Oprah Winfrey, Ted Turner, and Clinton friend and donor Denise Rich, wife of the Clinton-pardoned felon.
Before we attend to the poor political judgment of such an extravagant affair during times of economic distress, let us wonder aloud where a poor boy who became governor of Arkansas and president of the United States got such a fortune that he can blow $3,000,000 on a wedding.
The American people did not take up a collection to reward him for his service to them. Where did the money come from? Who was he really serving during his eight years in office?
How did Tony Blair and his wife, Cherrie, end up with an annual income of ten million pounds (approximately $15 million dollars) as soon as he left office? Who was Blair really serving?
These are not polite questions, and they are infrequently asked.
While Chelsea’s wedding guests eat a $11,000 wedding cake and admire $250,000 floral displays, Lisa Roberts in Ohio is struggling to raise contributions for her food pantry in order to feed 3,000 local people, whose financial independence was destroyed by investment bankers, job offshoring, and unaffordable wars. The Americans dependent on Lisa Roberts’ food pantry are living out of vans and cars. Those with a house roof still over their heads are packed in as many as 14 per household according to the Chillicothe Gazette in Ohio.
The Chilicothe Gazette reports that Lisa Roberts’ food pantry has “had to cut back to half rations per person in order to have something for everyone who needed it.”
Theresa DePugh stepped up to the challenge and had the starving Ohioans write messages on their food pantry paper plates to President Obama, who has just obtained another $33 billion to squander on a pointless war in Afghanistan that serves no purpose whatsoever except the enrichment of the military/security complex and its shareholders.
The Guardian (UK) reports that according to US government reports, one million American children go to bed hungry, while the Obama regime squanders hundreds of billions of dollars killing women and children in Afghanistan and elsewhere.
The Guardian’s reporting relies on a US government report from the US Department of Agriculture, which concludes that 50 million people in the US–one in six of the population–were unable to afford to buy sufficient food to stay healthy in 2008.
US Department of Agriculture Secretary Tom Vilsack said that he expected the number of hungry Americans to worsen when the survey for 2010 is released.
Today in the American Superpower, one of every six Americans is living on food stamps. The Great American Superpower, which is wasting trillions of dollars in pursuit of world hegemony, has 22% of its population unemployed and almost 17% of its population dependent on welfare in order to stay alive.
The world has not witnessed such total failure of government since the final days of the Roman Empire. A handful of American oligarchs are becoming mega-billionaires while the rest of the country goes down the drain.
And the American sheeple remain acquiescent.
Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com
South of the Border – Interview with Oliver Stone
Red Pepper | July 28, 2010
Oliver Stone’s new documentary ‘South of the Border’ chronicles the emergence of progressive governments in Latin America’s, their quest for social and political transformation and their growing independence from Washington. Roberto Navarrete interviews Oliver Stone and Tariq Ali (one of the film’s scriptwriters) to find out some background
RN: You have made three films on Latin America, two of them on Fidel Castro. What motivated you to make this new documentary about Latin America?
OS: Also don’t forget about ‘Salvador’ in 1986. That was about El Salvador, in Central America, which was a tragedy. So I went back, I like Latin America; I view South America as the underdog in this situation. As a moviemaker I tend to make movies about people who don’t get a fair shake. I think it’s wrong what’s going on. I met Chavez for the first time in 2007, then I went back in 2008 and he said don’t take my word for it, go and talk to my neighbours. I did. We met seven Presidents in six countries. I said, what’s all the fuss about? Why are we making such a stink about Chavez? There is something going wrong. When the United States gets so self-interested in destroying somebody, which has happened repeatedly in South America and Central America, there is some motivation. We are looking for that motivation.
RN: The mainstream US media has been rather critical about your film. Are you surprised about this?
OS: No, I’m surprised we were able to take it as far as we have. People will see the movie. There will be an uphill battle, because when the New York Times says don’t see this movie they are lobbying against it.
TA: That also has an opposite effect. A lot of people will say, the way these guys are writing about the movie means there is something fishy here. It encourages people to see it.
RN: It’s more worrying when the Village Voice is so negative.
OS: The Voice for years has been doing that. They are not a liberal organisation in my mind. I think that they are pseudo-liberals. You can get into a whole argument about what it is to be a liberal, or a progressive in America. It’s nitpicking. Nitpicking.
RN: So it’s like The Guardian here in relation to Venezuela?
TA: The Guardian correspondent in Venezuela lives in the leafy suburbs of eastern Caracas and his reporting from Venezuela is totally biased.
RN: You seem to be fascinated by the charisma of the Latin American ’caudillo’, leaders such as Fidel Castro and Hugo Chavez. But Latin America is also the birthplace of social movements that have for a long time been fighting for change. How do you see the dynamic relationship between the two, between the leaders on the one hand and the social movements on the other?
TA: These leaders would not be in power were it not for the social movements. There is a link between the two. The social movements in Bolivia helped create the Movement for Socialism, the party of Evo Morales that propelled him into power. The big social movements against the IMF in Venezuela that led to the massacre, the ‘Caracazo’, in which three thousand people were killed produced Chavez. The same movements occurred in Ecuador, in Paraguay. So I don’t see a big divide. Each depends on the other. This divide largely exists in the West where the social movements have died out because they weren’t able to achieve anything. There is hardly a social movement left now in Western Europe. A country like Italy, which had huge social movements – now all gone. Whereas, in South America, one reason they have lasted is because they have managed to achieve something, not a huge amount, but structural reforms to the system.
OS: I would add, not only do I like ‘caudillos’ or strong men, that’s not the same as a dictator, he [Chavez] has obviously been elected. I much admire Nestor Kirchner, an intellectual with volition to do something. Because intellectuals tend to get lost in their will power. Kirchner was strong enough to carry through a reform based on his thinking on economic reform. He is a shining example of a hero to me. He said, himself, in the documentary, my friend Hugo should consider a successor, because too much of one man will backfire and I think that is the problem that Hugo is going to face. He’s too much in the news. He is too controversial. They are making an argument about Hugo Chavez, instead of the argument about right versus left in Latin America.
Footnote
Roberto Navarrete is an editor of www.alborada.net, a website covering politics, media and culture in Latin America.
South of the Border is released in UK cinemas on Friday 30 July www.southoftheborder.dogwoof.com
The Tipping Point Film Fund will hold a screening of South of the Border (including a panel discussion entitled: Radical Latin American leadership – what’s to be afraid of?) on Friday 30 July at 6:30 PM (details here).
Be sure to see the movie.
Israel declares village closed to foreigners
Ma’an – 31/07/2010
Nablus – Israeli forces turned away Palestinian medical teams at a checkpoint erected at Iraq Burin on Saturday morning, telling international medical volunteers that the area was a “closed military zone.”
Head of the Palestinian Medical Relief Society in Nablus Ghassan Hamdan said the volunteers tried to enter the Nablus-area village where the society had prepared to offer a free treatment day at a local clinic.
Hamdan said the team was told by Israeli soldiers at the village entrance that they must turn back because the village was a closed zone. He said that medics and society officials had made several attempts to explain the humanitarian nature of the mission, but soldiers responded saying their orders were to restrict all entry into the area.
An Israeli military spokeswoman confirmed that the area was declared a “closed military zone for all non-Palestinians,” but said that an exception was made for the doctors at 11a.m., hours after the group arrived at the checkpoint.
Officials from the society confirmed that the Palestinian and international medical workers were permitted into the area, and condemned the delay, saying it would cause a serious reduction in available medical services for villagers.
The society regularly organizes volunteer programs for doctors, nurses and medics from around the world who donate their time and perform free checkups and treatment to Palestinians without regular access to medical services.
The declaration follows one week after the detention of two young men at a checkpoint installed in the same location the previous Saturday.
Iraq Burin, cut off from Nablus by several checkpoints and roadblocks preventing access to the nearby settlement of Yizhar and Bracha, has held regular protests against continued land confiscations by the settlements and settler-only roads. The two detained were accused of having participated in protests in previous weeks.
According to a report by the Israeli human rights group B’Tselem, a new Israeli military order passed in January 2010 made gatherings of more than ten people illegal, by reenacting a 1967 law. The group said the law violated the right of assembly for Palestinians, guaranteed by the fourth Geneva Convention.
Israeli occupation forces deliver demolition notice against mosque, declare village closed
Palestine Information Center – 31/07/2010
TOBAS: Israeli occupation forces (IOF) served demolition notices against a mosque and four houses in Yerza village, Tobas district, on Friday, the municipal council chairman Mokhles Masa’eed said.
He told Safa news agency that the notices included the demolition of four houses in addition to the newly built mosque in the village, noting that it was built over an area of 100 square meters.
Masa’eed pointed out that the IOF soldiers also handed him another notification that a villager would stand trial for building in the village’s vicinity.
He underlined that his village inhabitants are constantly targeted by IOF search campaigns, recalling that the soldiers previously halted the work of a bulldozer that was paving a new road linking the village to Tobas city.
He said that the village inhabitants walk on foot or in tractors along rugged land for nine kilometers in order to reach the nearest service center in Tobas city.
Meanwhile, the IOF command announced on Saturday the closure of the Irak Burin village, Nablus district, blocking activists and medical teams from entering it.
Eyewitnesses said that the soldiers stationed at the entrance to the village were blocking anyone from outside the village to enter it so that none would take part in its weekly protest march.
The village is the target of a ferocious campaign on the part of IOF troops and Jewish settlers who plan to confiscate a large chunk of its land.
Israel releases ice-cream equipment damaged and unusable
Ma’an – July 30, 2010
Gaza – A factory owner in Gaza was shocked to find that equipment he ordered from overseas, which was held in an Israeli port for several years, has been dismantled, with some parts missing and others broken.
Mohammad Al-Telbani, owner of Al-Auda ice-cream and biscuit factory, hoped to develop new lines of potato chips and biscuits with the equipment, which Israeli authorities have held in Ashdod for the last four years. The damaged equipment was worth more than €1.5 million.
Al-Telbani said, “after all of this suffering and all of these huge losses I received the machines dismantled, broken, and with missing parts from the Israelis who released them after being pressured by International and Israeli organizations.” He added that he will not be able to use the machines.
The businessman said his losses were compounded as he had paid more than 1500 shekels ($400) in storage fees while Israeli authorities impounded his goods.
Israeli officials said they withheld the machinery as its pipes could have been used to manufacture home-made projectiles.
The ice-cream manufacturer noted that Israel’s claims to have eased the siege are misleading attempts to improve its public image, and urged international organizations to pressure the Israeli government to release all of his machinery, including the missing parts, so he can upgrade his factory.
Larijani: Iran proud of backing Hezbollah
Press TV – July 30, 2010
Iranian Parliament (Majlis) Speaker Ali Larijani says Iran takes pride in Lebanon’s Islamic resistance movement for its steadfast Islamic stance.
Speaking in Iran’s northern Mazandaran Province on Thursday, Larijani praised Hezbollah for its resistance against oppression and said, “Hezbollah nurtures the original ideas of Islamic Jihad,” IRNA reported.
The Iranian official further slammed the West for charging Iran with “its support of terrorism” and said, “The real terrorists are those who provide the Zionist regime with military equipment to bomb the people” in the region.
Larijani also made a reference to the Western-brokered sanctions on Iran over its nuclear energy program and said the Islamic Republic has always emphasized negotiations but will not bow down under pressure from the bullying powers.
“They speak of the Iranian threat against the Zionist regime… but never elicit public opinion on the Zionist regime’s atomic warheads and other missiles,” he noted.
The UN Security Council passed a US-sponsored anti-Iran resolution on June 9 that imposes restrictions on the country’s economy and energy sectors.
The move was to pressure the Islamic Republic to resume nuclear talks.
Iranian President Mahmoud Ahmadinejad has recently said that Tehran would return to talks only if certain conditions are met.
The Iranian chief executive pointed out that the Western countries should announce their stance on Israeli “bombs” and say whether they abide by the regulations of the nuclear Non-Proliferation Treaty.
The rich tapestry of Israeli apartheid
By Jonathan Cook on July 30, 2010
The recent announcement that Palestinian communities in Israel will be provided with a bus service for the first time since Israel’s founding – that is, in 62 years – surprised observers who had not realised second-class citizenship also extends to being deprived of a bus line.
People often object to the comparison of Israel within the Green Line to apartheid South Africa. After all, there are no segregated park benches or buses (apart from those kosher lines that the Haredi vigilantes patrol). True enough, but who needs to segregate buses on an ethnic basis if they are simply not provided to Palestinian communities in the first place?
A couple of interesting elements to this story, however, have been missed in the telling.
The first is that – assuming the new bus service actually starts, as promised – it will be restricted to a very small number of Palestinian towns and larger villages. How regular it will be is still far from clear. Compare the minimal service Palestinian citizens can belatedly expect with the service offered to Jews throughout not only Israel but also the occupied territories.
In fact, an Egged bus line is one of the first services provided to small Jewish settlement outposts when they are established in remote West Bank locations. Buses arrive frequently, even though they serve a tiny number of families living there. The outposts, of course, are illegal – not only under international (as are all the settlements) but also in Israeli law. So Egged, the national bus company, and the transport ministry conspire with the settlers in flagrant law-breaking to make the outposts viable places to live.
By contrast, transport officials have grudgingly agreed to provide a very limited service to a few Palestinian communities six decades after Israel’s establishment.
Another point is that the new bus service to Palestinian communities inside Israel will not end Israel’s special type of veiled segregation. The bus lines will effectively serve Palestinians only, running between the main Palestinian towns and villages. From what is known so far, they will not be integrated into the larger “Jewish” bus network. This seriously erodes the significance of the service.
Palestinian communities suffer from very high levels of unemployment, particularly among women, where the rates are among the worst in the world. Israeli Jews tend to take comfort in blaming a “primitive” and chauvinist Arab society for chaining their women to the kitchen sink.
Actually, Palestinian women in Israel generally have a better level of education than the men, and many are keen to work. The chief obstacle is that Palestinian citizens are largely excluded from what is effectively a “Jewish economy”. Men can usually find employment as casual workers on building sites and in agriculture. But most women do not want to engage in hard manual labour, and in any case their communities lack the state-subsidised creche and nursery facilities common in Jewish communities.
The few lucky women who still manage to find an office job, however, need to reach places that provide such employment – which almost always means in a Jewish community. An integrated transport system would make that possible. For the past 62 years it has not existed and the new service looks like it will still do nothing to address this key problem.
A further reason a useful public transport system is so desperately needed in Palestinian communities is that, without it, Palestinians have to own a car to search for and keep their jobs. Why should that matter? Because owning a car automatically disqualifies a worker from receiving unemployment benefit if he or she loses their job or fails to find one. The law applies equally to all citizens but, given the lack of a proper bus service only in Palestinian communities, its effect is chiefly to harm Palestinian citizens.
A related, but little-known catch adds to the precariousness of welfare entitlements for Israel’s Palestinian workforce – and again clearly discriminates against them compared to Israeli Jews. Unemployment benefits are also not available to those who own their own home. Again, the ruling applies to Jewish and Palestinian citizens alike, so why call it discriminatory? Well, that is the beauty of Israel’s apartheid – it looks so clean to the uninitiated.
In fact, as is well known, 93 per cent of the land in Israel has been nationalised – for the benefit of the Jewish people. Apart from a tiny number of wealthy Jewish private land owners, Israeli Jews hold only long-term leases on their land and homes from the state. They therefore qualify for unemployment benefits.
But Palestinian citziens live on private land – about 2.5 per cent of Israeli territory the state has not yet confiscated. Almost all Palestinian citizens own the land on which they have built their homes, often with their own labour. They are therefore denied unemployment benefits.
The lack of proper bus services is one thread woven into a rich tapestry of discriminatory laws and practices designed to marginalise, weaken and exclude Israel’s 1.3 million Palestinian citizens. Unpicking them is a vital task.
Jonathan Cook is a writer and journalist based in Nazareth, Israel. His website is http://www.jkcook.net.
Bomb Iran?
Neocon Nutballs Ramp Up Campaign
By GARETH PORTER | July 30, 2010
Reuel Marc Gerecht’s screed in the Weekly Standard seeking to justify an Israeli bombing attack on Iran coincides with the opening of the new Israel lobby campaign marked by the introduction of House resolution 1553 expressing full support for such an Israeli attack.
What is important to understand about this campaign is that the aim of Gerecht and of the right-wing government of Benjamin Netanyahu is to support an attack by Israel so that the United States can be drawn into direct, full-scale war with Iran.
That has long been the Israeli strategy for Iran, because Israel cannot fight a war with Iran without full U.S. involvement. Israel needs to know that the United States will finish the war that Israel wants to start.
Gerecht openly expresses the hope that any Iranian response to the Israeli attack would trigger full-scale U.S. war against Iran. “If Khamenei has a death-wish, he’ll let the Revolutionary Guards mine the strait, the entrance to the Persian Gulf,” writes Gerecht. “It might be the only thing that would push President Obama to strike Iran militarily….”
Gerecht suggests that the same logic would apply to any Iranian “terrorism against the United States after an Israeli strike,” by which he really means any attack on a U.S. target in the Middle East. Gerecht writes that Obama might be “obliged” to threaten major retaliation “immediately after an Israeli surprise attack.”
That’s the key sentence in this very long Gerecht argument. Obama is not going to be “obliged” to join an Israeli aggression against Iran unless he feels that domestic political pressures to do so are too strong to resist. That’s why the Israelis are determined to line up a strong majority in Congress and public opinion for war to foreclose Obama’s options.
In the absence of confidence that Obama would be ready to come into the war fully behind Israel, there cannot be an Israeli strike.
Gerecht’s argument for war relies on a fanciful scenario of Iran doling out nuclear weapons to Islamic extremists all over the Middle East. But the real concern of the Israelis and their lobbyists, as Gerecht’s past writing has explicitly stated, is to destroy Iran’s Islamic regime in a paroxysm of U.S. military violence.
Gerecht first revealed this Israeli-neocon fantasy as early as 2000, before the Iranian nuclear program was even taken seriously, in an essay written for a book published by the Project for a New American Century. Gerecht argued that, if Iran could be caught in a “terrorist act,” the U.S. Navy should “retaliate with fury”. The purpose of such a military response, he wrote, should be to “strike with truly devastating effect against the ruling mullahs and the repressive institutions that maintain them.”
And lest anyone fail to understand what he meant by that, Gerecht was more explicit: “That is, no cruise missiles at midnight to minimize the body count. The clerics will almost certainly strike back unless Washington uses overwhelming, paralyzing force.”
In 2006-07, the Israeli war party had reason to believed that it could hijack U.S. policy long enough to get the war it wanted, because it had placed one of its most militant agents, David Wurmser, in a strategic position to influence that policy.
We now know that Wurmser, formerly a close adviser to Benjamin Netanyahu and during that period Vice President Dick Cheney’s main adviser on the Middle East, urged a policy of overwhelming U.S. military force against Iran. After leaving the administration in 2007, Wurmser revealed that he had advocated a U.S. war on Iran, not to set back the nuclear program but to achieve regime change.
“Only if what we do is placed in the framework of a fundamental assault on the survival of the regime will it have a pick-up among ordinary Iranians,” Wurmser told The Telegraph. The U.S. attack was not to be limited to nuclear targets but was to be quite thorough and massively destructive. “If we start shooting, we must be prepared to fire the last shot. Don’t shoot a bear if you’re not going to kill it.”
Of course, that kind of war could not be launched out of the blue. It would have required a casus belli to justify a limited initial attack that would then allow a rapid escalation of U.S. military force. In 2007, Cheney acted on Wurmser’s advice and tried to get Bush to provoke a war with Iran over Iraq, but it was foiled by the Pentagon.
As Wurmser was beginning to whisper that advice in Cheney’s ear in 2006, Gerecht was making the same argument in The Weekly Standard:
“Bombing the nuclear facilities once would mean we were declaring war on the clerical regime. We shouldn’t have any illusions about that. We could not stand idly by and watch the mullahs build other sites. If the ruling mullahs were to go forward with rebuilding what they’d lost–and it would be surprising to discover the clerical regime knuckling after an initial bombing run–we’d have to strike until they stopped. And if we had any doubt about where their new facilities were (and it’s a good bet the clerical regime would try to bury new sites deep under heavily populated areas), and we were reasonably suspicious they were building again, we’d have to consider, at a minimum, using special-operations forces to penetrate suspected sites.”
The idea of waging a U.S. war of destruction against Iran is obvious lunacy, which is why U.S. military leaders have strongly resisted it both during the Bush and Obama administrations. But Gerecht makes it clear that Israel believes it can use its control of Congress to pound Obama into submission. Democrats in Congress, he boasts, “are mentally in a different galaxy than they were under President Bush.” Even though Israel has increasingly been regarded around the world as a rogue state after its Gaza atrocities and the commando killings of unarmed civilians on board the Mavi Marmara, its grip on the U.S. Congress appears as strong as ever.
Moreover, polling data for 2010 show that a majority of Americans have already been manipulated into supporting war against Iran – in large part because more than two-thirds of those polled have gotten the impression that Iran already has nuclear weapons. The Israelis are apparently hoping to exploit that advantage. “If the Israelis bomb now, American public opinion will probably be with them,” writes Gerecht. “Perhaps decisively so.”
Netanyahu must be feeling good about the prospects for pressuring Barack Obama to join an Israeli war of aggression against Iran. It was Netanyahu, after all, who declared in 2001, “I know what America is. America is a thing you can move very easily, move it in the right direction. They won’t get in the way.”
Gareth Porter is an investigative historian and journalist with Inter-Press Service specialising in U.S. national security policy. The paperback edition of his latest book, “Perils of Dominance: Imbalance of Power and the Road to War in Vietnam“, was published in 2006.
The death of the postindustrial dream
By Ian Fletcher | Online Journal | July 29, 2010
Remember postindustrialism? Not long ago, this catchphrase was supposed to define America’s future: no more grubby hard industries, just a clean bright world of services and high technology.
Its most succinct formulation is as follows: Manufacturing is old hat and America is moving on to better things.
This idea played a large role during the 1980s and 1990s in getting Americans to accept deindustrialization. It was promoted by writers as varied as futurist Alvin Toffler, capitalist romantic George Gilder, techno-libertarian Virginia Postrel, futurist John Naisbitt, and globalist Thomas Friedman. Newt Gingrich seized upon it as the supposed economic basis of his Republican Revolution of 1994.
Unfortunately, postindustrialism is now a blatantly dead letter, as the U.S. economy has ceased generating any net new jobs in internationally traded sectors of any kind: manufacturing or services, industrial or postindustrial.
The comforting myth still lingers that America is shifting from low-tech to high-tech employment, but we are not. We are losing jobs in both and shifting to non-tradable services, which are mostly low value-added, and thus ill-paid, jobs. According to the Commerce Department, all our net new jobs are in categories such as security guards, waitresses, and the like. The vaunted New Economy has not contributed a single net new job to America in this century.
Thanks-for-nothing.com
Nevertheless, postindustrialism remains popular in some very important circles. In the 2006 words of the prestigious quasi-official Council on Competitiveness, a group of American business, labor, academic and government leaders:
Services are where the high value is today, not in manufacturing. Manufacturing stuff per se is relatively low value. That is why it is being done in China or Thailand. It’s the service functions of manufacturing that are where the high value is today, and that is what America can excel in.
But the above paragraph is simply not true: manufacturing, which is vital to America’s recovery, is not an obsolescent sector of the economy. Let’s burrow into the details a bit to understand why.
“Screwdriver plant” final-assembly manufacturing can indeed increasingly be done anywhere in the world. This lays it open to labor arbitrage and thus low wages. But this doesn’t mean that this one stage of the long supply chain from raw materials to the consumer has become unimportant. Every link in the chain still matters, albeit in different ways. Manufacturing involves continuous feedback loops where every stage — from the initial idea to the R&D to the prototype to full-scale production to marketing of the final product — is related to every other. Losing control of any one stage can easily lead to the loss of the whole industry, including skill sets needed for moving to the next product or level of industrial sophistication. As Stephen Cohen and John Zysman explain in their book Manufacturing Matters:
America must control the production of those high-tech products it invents and designs — and it must do so in a direct and hands-on way . . . First, production is where the lion’s share of the value added is realized . . . This is where the returns needed to finance the next round of research and development are generated. Second and most important, unless [research and development] is tightly tied to manufacturing of the product . . . R&D will fall behind the cutting edge of incremental innovation . . . High tech gravitates to the state-of-the-art producers.
A small American company named Ampex in Redwood City, California, encapsulates everything that is wrong with postindustrialism. This leading audio tape firm invented the video cassette recorder in 1970 but bungled the transition to mass production and ended up licensing the technology to the Japanese. It collected millions in royalties all through the 1980s and 1990s and employed a few hundred people. Its licensee companies collected tens of billions in sales and employed hundreds of thousands of people. Thus an entire vast industry never existed in the U.S. All the jobs — and the industrial base and the profits to finance the next generation of products, like DVDs — ended up in the Far East.
That some individual companies like Apple Computer make a success out of keeping design functions at home and offshoring the manufacturing does not make this a viable strategy for the economy as a whole. Apple is a unique company; that is why it succeeds. And even fabled Apple is not quite the success story one might hope for, from a trade point-of-view. Due to its foreign components and assembly, every $300 iPod sold in the U.S. adds another $140 to our deficit with China. If sophisticated American design must be embodied in imported goods in order to be sold, it will not help our trade balance.
About the only thing postindustrialism gets right is that selling a product with a high value per embodied man-hour almost always means selling embodied know-how. But know-how must usually be embodied in a physical package before reaching the consumer, and manufactured goods are actually a rather good package for embodying it in. Exporting disembodied know-how like design services is definitely an inferior proposition, as indicated by the fact that since 2004, America’s deficit in high-technology goods has exceeded our surplus in intellectual property, royalties, licenses, and fees.
So when someone like self-described “radical free trader” Thomas Friedman writes that, “there may be a limit to the number of good factory jobs in the world, but there is no limit to the number of good idea-generated jobs in the world,” this is simply false. There is nothing about the fact that ideas are abstract and the products of factories concrete that causes there to be an infinite demand for ideas. The limit on the number of idea-generated jobs is set by the amount of money people are willing to pay for ideas (either in their pure form or embodied in goods) because this ultimately pays the salaries of idea-generated jobs.
The final killer of the postindustrial dream is, of course, offshoring, as this means that even if capturing primarily service industry jobs were a desirable strategy, America can’t reliably capture and hold these jobs anyway. The complexity of the jobs being offshored, which started with jobs such as call centers, is relentlessly rising. According to a 2007 study by Duke University’s Fuqua School of Business and the consulting firm Booz Allen Hamilton:
Relocating core business functions such as product design, engineering and R&D represents a new and growing trend. Although labor arbitrage strategies continue to be key drivers of offshoring, sourcing and accessing talent is the primary driver of next-generation offshoring . . . Until recently, offshoring was almost entirely associated with locating and setting up IT services, call centers and other business processes in lower-cost countries. But IT outsourcing is reaching maturity and now the growth is centered around product and process innovation.
Among complex business functions, product development, including software development, is now the second-largest corporate function being offshored. Offshoring of sophisticated white-collar tasks such as finance, accounting, sales, and personnel management is growing at 35 percent per year. Meanwhile, despite a few individual companies bringing offshored call centers back home, offshoring of call centers and help desks continues to grow at a double-digit pace.
Thankfully, some of America’s corporate elite are now starting to question postindustrialism, about which they were utterly gung-ho only a few years ago. In the 2009 words of General Electric’s CEO, Jeffrey Immelt:
I believe that a popular, 30-year notion that the U.S. can evolve from being a technology and manufacturing leader to a service leader is just wrong. In the end, this philosophy transformed the financial services industry from one that supported commerce to a complex trading market that operated outside the economy. Real engineering was traded for financial engineering.
Immelt has since argued that the U.S. should aim for manufacturing jobs to comprise at least 20 percent of all jobs, roughly double their current percentage. Only a few years ago, this idea would have been dismissed as an ignorant and reactionary piece of central planning, especially if it had not been proposed by a respected Fortune 500 CEO. But despite his welcome public statements, Immelt is still closing US plants and offshoring jobs, a sign that the free market well may not solve this problem on its own.
Can deindustrialization be fought? The evidence suggests it can. Some high-wage foreign nations, the best examples being Germany and Japan, are already doing a much better job at defending manufacturing industry than we are. (GM went bankrupt; Toyota and BMW somehow didn’t.) As a result, these nations now have higher factory wages than we do — a stunning reversal of America’s 250-year status as the best country for ordinary workers. They are doing it by hanging tough in manufacturing and by having serious national industrial strategies. They are export powerhouses. They lack our naiveté about free trade and do not really embrace it, preferring various local varieties of mercantilism.
Manufacturing is essential to America’s economy recovery. Unfortunately, the longer we dally about getting back to real industries as the basis of real wealth, the more our industries get hollowed out, so the harder it gets. There is probably still enough time to turn things around, but not much.
Ian Fletcher is the author of the Free Trade Doesn’t Work: What Should Replace It and Why (USBIC, 2010, $24.95) An Adjunct Fellow at the San Francisco office of the U.S. Business and Industry Council, a Washington think tank founded in 1933, he was previously an economist in private practice, mostly serving hedge funds and private equity firms. He may be contacted at ian.fletcher@usbic.net.
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Guarded Israeli settlers seize new house in Jerusalem neighborhood
Palestine Information Center – 29/07/2010
OCCUPIED JERUSALEM: Palestinian sources said that Israeli settlers escorted by policemen took over a two-story house at an early hour Thursday in Sa’diya neighborhood in the old city of occupied Jerusalem.
The sources added that the house is owned by a Palestinian citizen called Suleiman Handal and is inhabited by the family of Kamal Qirsh.
One of the neighbors reported that the residents of the neighborhood rushed to confront the Israeli assailants when women inside the house screamed for help, but the policemen encircled the house to prevent them from approaching.
Fatah revolutionary council member Dmitry Dliani said the policemen tried to expel the women from the house, but the women locked themselves inside three rooms of 11 and refused to leave the house, while the settlers seized the other rooms.
Dliani expressed fears that the settlers would turn the house into a religious school because of its large area and its sensitive location near the Aqsa Mosque.
With this new takeover raid on the house, the number of buildings seized by Israeli settlers in this neighborhood rose to five.
Israel linked to exiled sheikh’s bid for ‘coup’ in Gulf emirate
By Robert Booth and Ian Ferguson | The Guardian | 28 July 2010
Israel is aiding an exiled Arab sheikh who is vying to seize control of a strategically important Gulf emirate only 40 miles from Iran.
The Israeli ambassador to London, Ron Prosor, has met Sheikh Khalid bin Saqr al-Qasimi, the exiled crown prince of Ras al-Khaimeh (RAK), who asked him to help with his campaign to oust the leadership of the northernmost state in the United Arab Emirates.
The meeting took place in London in March and has been followed by phone calls and wider assistance and advice, according to records of the relationship seen by the Guardian.
Khalid, who has been based in London and has hired a solicitor from Ickenham as his agent, is bidding to replace his ailing father, Sheikh Saqr, and half brother, Sheikh Saud, to take control of RAK.
Israel’s involvement in what would be a bloodless coup in one of the most sensitive regions in the world, would be “extremely uncomfortable”, according to Dr Christopher Davidson, an expert on the politics of the UAE at Durham University.
Khalid, who was sent into exile in 2003, claims RAK is now acting as a trafficking hub for nuclear arms parts to Iran and has spent more than £4m on an international public relations and lobbying campaign to persuade American politicians and the pro-Israel lobby in the US that it would be safer if he were in charge.
The alliance with Israel is the latest twist in the already extraordinary saga of Khalid’s bid to return to power. In June the Guardian revealed that his fighting fund was being channeled through Peter Cathcart, a 59-year-old miniature steam railway enthusiast and parish council chairman who runs a family firm of solicitors in Ickenham, west London.
He in turn was spending it on top Washington lobbyists, Californian PR consultants and military experts to draw up dossiers damning the regime in RAK.
Prosor has pressed his contacts in the US government on behalf of Khalid whose aides asked for help setting up meetings in Washington with anyone interested in their claims about RAK’s alleged sanctions busting, particularly concerning parts for the Iranian nuclear programme, plot records seen by this newspaper show.
An email from Cathcart to the ambassador’s office reports that “His Highness … very much enjoyed his meeting with the ambassador”.
In April Cathcart arranged for the two men to speak on the phone when the sheikh was in Oman and a note of the conversation recorded by Cathcart shows the ambassador “is working with certain people from his side” and “promised that the matter will be solved in his [the sheikh’s] favour”.
Sheikh Saqr is understood to be dying in hospital in Abu Dhabi and his son, Sheikh Saud, 54, the sitting crown prince, has been told to begin preparations for his wake, a significant event in emirates politics, which is likely to be attended by Abu Dhabi’s rulers, who will have a large influence over which of the sons will succeed him.
“By meeting with the Israeli ambassador, he is sending out signals to Abu Dhabi and Washington DC that he will be hawkish on Iran if it comes to war,” said Davidson. “This is a new kind of coup. It doesn’t involve slitting throats, but instead spending large sums of money on global communications. It is the first of its kind and I am betting on it being successful. I think by the end of the summer we will have a verdict.”
Asked about Israel’s involvement, Peter Ragone, a spokesman for Khalid, said: “There is significant interest in the current RAK regime’s relationship to Iran, particularly in the context of trying to stop the flow of arms, goods and technology from going through RAK to the Islamic Republic. Sheikh Khalid and representatives from his team meet with elected officials, high-ranking government officials and media representatives of various countries all the time. In fact, this week Sheikh Khalid’s representatives are in Washington DC meeting representatives of the US foreign policy/national security establishment who are very concerned about the activity in RAK.”
Odelia Englander, a spokeswoman at the Israeli embassy in London, declined to comment.