Egypt: Social Movements, the CIA and the Mossad
By James Petras | Palestine Chronicle | February 16, 2011
The mass movements which forced the removal of Mubarak reveal both the strength and weaknesses of spontaneous uprisings. On the one hand, the social movements demonstrated their capacity to mobilize hundreds of thousands, if not millions, in a successful sustained struggle culminating in the overthrow of the dictator in a way that pre-existent opposition parties and personalities were unable or unwilling to do.
On the other hand, lacking any national political leadership, the movements were not able to take political power and realize their demands, allowing the Mubarak military high command to seize power and define the “post-Mubarak” process, ensuring the continuation of Egypt’s subordination to the US, the protection of the illicit wealth of the Mubarak clan ($70 billion), and the military elite’s numerous corporations and the protection of the upper class. The millions mobilized by the social movements to overthrow the dictatorship were effectively excluded by the new self-styled “revolutionary” military junta in defining the political institutions and policies, let alone the socio-economic reforms needed to address the basic needs of the population (40% live on less than $2 USD a day, youth unemployment runs over 30%). Egypt, as in the case of the student and popular social movements against the dictatorships of South Korea, Taiwan, Philippines and Indonesia, demonstrates that the lack of a national political organization allows neo-liberal and conservative “opposition” personalities and parties to replace the regime. They proceed to set up an electoral regime which continues to serve imperial interests and to depend on and defend the existing state apparatus. In some cases they replace old crony capitalists with new ones. It is no accident that the mass media praise the ‘spontaneous’ nature of the struggles (not the socio-economic demands) and put a favorable spin on the role of military (slighting its 30 years as a bulwark of the dictatorship). The masses are praised for their “heroism”, the youth for their “idealism”, but are never proposed as central political actors in the new regime. Once the dictatorship fell, the military and the opposition electoralists “celebrated” the success of the revolution and moved swiftly to demobilize and dismantle the spontaneous movement, in order to make way for negotiations between the liberal electoral politicians, Washington and the ruling military elite.
While the White House may tolerate or even promote social movements in ousting (“sacrificing”) dictatorships, they have every intention of preserving the state. In the case of Egypt the main strategic ally of US imperialism was not Mubarak, it is the military, with whom Washington was in constant collaboration before, during and after the ouster of Mubarak, ensuring that the “transition” to democracy (sic) guarantees the continued subordination of Egypt to US and Israeli Middle East policy and interests.
The Arab revolt demonstrates once again several strategic failures in the much vaunted secret police, special forces and intelligence agencies of the US and Israeli state apparatus none of which anticipated, let along intervened, to preclude successful mobilization and influence their government’s policy toward the client rulers under attack.
The images which most writers, academics and journalists project of the invincibility of the Israeli Mossad and of the omnipotent CIA have been severely tested by their admitted failure to recognize the scope, depth and intensity of the multi-million member movement to oust the Mubarak dictatorship. The Mossad, pride and joy of Hollywood producers, presented as a ‘model of efficiency’ by their organized Zionist colleagues, were not able to detect the growth of a mass movement in a country right next door. The Israeli Prime Minister Netanyahu was shocked (and dismayed) by the precarious situation of Mubarak and the collapse of his most prominent Arab client – because of Mossad’s faulty intelligence. Likewise, Washington was totally unprepared by the 27 US intelligence agencies and the Pentagon, with their hundreds of thousands of paid operatives and multi-billion dollar budgets, of the forthcoming massive popular uprisings and emerging movements.
Several theoretical observations are in order. The notion that highly repressive rulers receiving billions of dollars of US military aid and with close to a million police, military and paramilitary forces are the best guarantors of imperial hegemony has been demonstrated to be false. The assumption that large scale, long term links with such dictatorial rulers, safeguards US imperial interests has been disproven.
Israeli arrogance and presumption of Jewish organizational, strategic and political superiority over “the Arabs”, has been severely deflated. The Israeli state, its experts, undercover operatives and Ivy League academics were blind to the unfolding realities, ignorant of the depth of disaffection and impotent to prevent the mass opposition to their most valued client. Israel’s publicists in the US, who scarcely resist the opportunity to promote the “brilliance” of Israel’s security forces, whether it’s assassinating an Arab leader in Lebanon or Dubai, or bombing a military facility in Syria, were temporarily speechless.
The fall of Mubarak and the possible emergence of an independent and democratic government would mean that Israel could lose its major ‘cop on the beat’. A democratic public will not cooperate with Israel in maintaining the blockade of Gaza – starving Palestinians to break their will to resist. Israel will not be able to count on a democratic government, to back its violent land seizures in the West Bank and its stooge Palestinian regime. Nor can the US count on a democratic Egypt to back its intrigues in Lebanon, its wars in Iraq and Afghanistan, its sanctions against Iran. Moreover, the Egyptian uprising has served as an example for popular movements against other US client dictatorships in Jordan, Yemen and Saudi Arabia. For all these reasons, Washington backed the military takeover in order to shape a political transition according to its liking and imperial interests.
The weakening of the principle pillar of US imperial and Israeli colonial power in North Africa and the Middle East reveals the essential role of imperial collaborator regimes. The dictatorial character of these regimes is a direct result of the role they play in upholding imperial interests. And the major military aid packages which corrupt and enrich the ruling elites are the rewards for being willing collaborators of imperial and colonial states. Given the strategic importance of the Egyptian dictatorship, how do we explain the failure of the US and Israeli intelligence agencies to anticipate the uprisings?
Both the CIA and the Mossad worked closely with the Egyptian intelligence agencies and relied on them for their information, confiding in their self-serving reports that “everything was under control”: the opposition parties were weak, decimated by repression and infiltration, their militants languishing in jail, or suffering fatal “heart attacks” because of harsh “interrogation techniques”. The elections were rigged to elect US and Israeli clients – no democratic surprises in the immediate or medium term horizon.
Egyptian intelligence agencies are trained and financed by Israeli and US operatives and are amenable to pursuing their master’s will. They were so compliant in turning in reports which pleased their mentors, that they ignored any accounts of growing popular unrest or of internet agitation. The CIA and Mossad were so embedded in Mubarak’s vast security apparatus that they were incapable of securing any other information from the grassroots, decentralized, burgeoning movements which were independent of the “controlled” traditional electoral opposition.
When the extra-parliamentary mass movements burst forward, the Mossad and the CIA counted on the Mubarak state apparatus to take control via the typical carrot and stick operation: transient token concessions and calling out the army, police and death squads. As the movement grew from tens of thousands to hundreds of thousands, to millions, the Mossad and leading US Congressional backers of Israel urged Mubarak to “hold on”. The CIA was reduced to presenting the White House with political profiles of reliable military officials and pliable “transitional” political personages, willing to follow in Mubarak’s footsteps. Once again the CIA and Mossad demonstrated their dependence on the Mubarak apparatus for intelligence of who might be a “viable” (pro-US/Israel) alternative, ignoring the elementary demands of the masses. The attempt to co-opt the old guard electoralist Muslim Brotherhood via negotiations with Vice-President Suleiman failed, in part because the Brotherhood was not in control of the movement and because Israel and their US backers objected. Moreover, the youth wing of the Brotherhood pressured them to withdraw from the negotiations.
The intelligence failure complicated Washington and Tel Aviv’s efforts to sacrifice the dictatorial regime to save the state: the CIA and MOSSAD did not develop ties to any of the new emerging leaders. The Israeli’s could not find any ‘new face’ with a popular following willing to serve as a crass collaborator to colonial oppression. The CIA had been entirely engaged in using the Egyptian secret police for torturing terror suspects (“exceptional rendition”) and in policing neighboring Arab countries. As a result both Washington and Israel looked to and promoted the military takeover to preempt further radicalization.
Ultimately the failure of the CIA and MOSSAD to detect and prevent the rise of the popular democratic movement reveals the precarious bases of imperial and colonial power. Over the long-run it is not arms, billions of dollars, secret police and torture chambers that decide history. Democratic revolutions occur when the vast majority of a people arise and say “enough”, take the streets, paralyze the economy, dismantle the authoritarian state and demand freedom and democratic institutions without imperial tutelage and colonial subservience.
– James Petras’ most recent books are: What’s Left in Latin America?, coauthored with Henry Veltmeyer (Ashgate Press, 2009), and Global Depression and Regional Wars (Clarity Press, 2009).
Arab MK calls on police to release murder victim’s body to family
Palestine Information Center – 16/02/2011
NAZARETH — Arab MK Jamal Zahalka called on the Israeli police to release the body of Hossam al-Rawaidi to his family to be buried alongside their deceased in Jerusalem.
Israeli authorities not only persecute the living in Jerusalem, but also persecute the dead, he said in a letter to the Ministry of Homeland Security on Tuesday.
”What right do Israeli forces have to impose the burial site of the deceased? Burial according to all races and religions is the right of the family and no one has the right to impose on them a place they don’t want or deny them burial at the site it deems.”
”It is unreasonable that the body remains without being buried for six days. This is a crime over the crime of murder committed by extremist Jews in Jerusalem.”
Rawaidi was brutally murdered last Thursday when a band of Jewish settlers intercepted him on his way home from work and proceeded to use abusive language against him and another man. One of the assailants used a Japanese sword in a deep laceration to Ruwaidi’s ear that stretched to his neck killing him. The second victim was assaulted after trying to block the attack.
Police have placed tough conditions before releasing Ruwaidi’s body to his family, denying permission for his burial before 10:00pm and with the help of more than ten people. They later became more stringent and ordered that he be buried outside of Jerusalem claiming a Jerusalem burial would lead to clashes.
The Ruwaidi’s have refused to bury him outside of Jerusalem and insist on receiving his body to be buried in the holy city and prayed over in the Aqsa Mosque.
Obama allocates $44 billion for Homeland Security to purchase more naked body scanners
By Ethan A. Huff | NaturalNews | February 16, 2011
The Obama administration recently announced its $3.73 trillion dollar budget plan for the 2012 fiscal year beginning on October 1. The new budget includes a more than $44 billion allocation for the U.S. Department of Homeland Security (DHS) to purchase 275 more naked body scanners to be installed at U.S. airports, despite continued outcry from health experts and the public about the machines’ safety hazards, threats to personal privacy, and complete ineffectiveness.
Up three percent from last year’s budget, the DHS allocation is just the start of the Obama administration’s efforts to have 1,275 naked body scanners installed in airports by the end of 2012. The plan disregards the numerous testimonies from security experts who have dubbed the machines “useless,” and say they fail to detect explosive materials any better than conventional scanners.
“I don’t know why everybody is running to buy these expensive and useless machines,” said Rafi Sela, former chief of security at the Israel Airport Authority and expert in airport security. “I can overcome the body scanners with enough explosives to bring down a Boeing 747. That’s why we haven’t put them in our airport.”
The machines are also a huge health threat, as they bombard travelers with low intensity radiation in a way that spreads it across the skin of the entire body. This full-body radioactive blast has not been fully investigated and nobody knows for sure what the long-term consequences of exposure will be.
“It concerns me a great deal,” said University of California – San Francisco (UCSF) professor Robert Stroud in an interview with CBS 5 San Francisco, concerning the machines. “We simply don’t know enough about low intensity radiation. Skin is where a lot of this particular radiation probably will be the most damaging.”
Egyptian Revolution in Israeli Eyes
By Seraj Assi | Palestine Chronicle | February 14, 2011
The Arab World is suffering and in its suffering it threatens Israel. ‘Israeli citizens are frightened,’ said Israeli opposition leader Tzipi Livni in a moment of deep confession. In fact, what Livni was saying, to paraphrase Franz Fanon, is this: “Mama America, see the Arab! I’m frightened! Frightened! Frightened!”
This is a typical colonial scene where the “frightening victims” are captured in a game that involves dehumanization and empowering and rendered silent and dangerous subjects at the same time. Never can they escape this colonial capacity to invite and contain contradictions and opposites.
Yet in the Israeli case the irony is far more acute. For not only does Israel see its victim as dangerous and potentially evil, but has itself become the victim. It is within this irony that the ritual of victimization came to dominate the master narrative of Israel’s colonial discourse and foreign policy. Not only has Israel become a country whose entire existence is dependent on the suppression of all Arab and Muslim peoples, but it has relentlessly contributed to their suppression.
According to Israel’s imperial logic, it is only reasonable to suppress the lives of three hundred million people for the “security” of a few million Israeli Jews, no matter how fictitious this security claim is. The irony is while Israel continues to bill Egyptian revolution as a threat to its national security, its Palestinian citizens- for decades Israel’s internal “dangerous victims”- are taking to the streets to celebrate the victory of their Egyptian brothers. Motivated by human and national solidarity, they have never felt as secure as they do now.
Israel’s security is fundamentally the security of vision. And since the vision of Arab and Muslim despotism is the only guarantee for Israel’s cultural narcissism and ethnic superiority in the region, it must be preserved by any means, and precisely by brutal force for “Arabs only understand force”, as Zionists believe.
Yet Israel’s fear has a performative colonial function. Its obsessive insistence to remain “the only democracy in the Middle East” is not merely a representational fantasy, but an effective colonial strategy. It is precisely this vision that gives Israel’s colonial policies in the region its moral justification and authentic validity. Its “civilizing mission” in the region is completely dependent on its vision of Arab and Muslim undemocratic spirit.
It is Israel’s cultivated vision on Arab despotism that permits its former Prime Minister Ehud Barak to boast that “Israel is a villa in a jungle” and its President Shimon Perez to contrast democracy with peace: “Mubarak is a great man committed to peace, but Egyptian youth want democracy.” And when Israeli Prime Minister Benjamin Netanyahu issued his paternalistic warning to Egypt from “becoming another Iran” he was operating into the same imperial logic.
Here Israel’s ambition to reorder the world by the brutal force of Zionist propaganda reaches its extreme absurdity. Indeed, it is in Israel where suppression is equivalent to stability. It is there where Egypt, its people, history and culture are all reduced to one word: Camp David. And it is in Israel where international sympathy for Egyptian struggle for freedom and dignity is violently placed under what an Israeli journalist has recently called “the betrayal of the West.”
Even when the moment has arrived to contradict these proclamations, Israel continues to see itself as the civilization custodian surrounded by uncivilized enemies and unruly protestors. There is no doubt then that Israel’s fear of any prospective democracy in the Arab world is steeped in racism. For Arab democracy simply threatens Israel’s undisputed vision of Arabs that maintained itself regardless of any historical evidence disputing it. And since the evidence this time is too visible to be denied, it becomes too intimidating for the Israeli observer. As the vision is now defeated by the narrative, as it is yielding to the pressure of history, Israel’s fear turns into collective phobia and racist hysteria. The scene of an Arab getting out of the iron cage fashioned by the Israeli observer to violate the serenity of history is precisely what frightens Israel.
On February 02, 2011, an article published in Haaretz opened with the following:
“Edward Said was right. We are all infected with Orientalism, not to mention racism. For the site of an entire people shaking off the yoke of tyranny and bravely demanding free elections – instead of uplifting our spirits, fills us with fear, just because they are Arabs.”
This clearly illustrates how, by a strange change of fortune, Israel came to inherit Western Orientalist racism and produce its own “Orientals”. Indeed, it is in Israel where, to steal a line from Naomi Klein, “Jews made the shift from victims to victimizers with terrifying ease.” This ironic legacy of Western Orientalism now produced by the Zionist racist machinery is precisely what enables Binyamin Fuad Ben-Eliezer, himself an Arab Jew born in Basra in Iraq, to lament Mubarak’s departure by claiming that “Arabs are not ready for democracy.”
Yet Israeli Jews are not alone to inherit the ironic legacy of Western Orientalism in the region. Just a week after the Egyptian revolution broke up Mubarak too introduced his version of Orientalism. Not so different from Livni’s was his message to President Obama on ABC that “you don’t understand Egyptian culture and what would happen if I step down now”. One might wonder what was left of Egyptian culture under Mubarak regime but a bunch of corrupt muftis and semi-intellectuals. In fact, one does not need a revolution to discover that Mubarak is the last one in Egypt to understand what Egyptian culture is.
Perhaps the most hilarious scene of Mubarak’s Orientalist doctrine was his “camelization” of the demonstrations in Egypt. By unleashing his thugs riding in on camels and horses to crush and terrorize peaceful civilian protestors on the streets Mubarak was sending a clear message to his friends in the West. That is Egyptians, when left to their devices, are nothing but a bunch of unruly savages unsuited to democracy and civilization. His barbaric response to one of the most civilized revolutions in the region shows how deeply he believes in what he says and does.
Mubarak’s response is an extraordinary example of how local dictators act as colonial agents towards their people and how they too feed on the irony of “dangerous victims.” Victimization in Mubarak’s version depends on the same logic of radical inversion. That is by presenting Egyptian protestors as collaborators and foreign agents Mubarak is following the Arab proverb: “He hit me and cried, he raced me to complain.” Yet Mubarak certainly knows, as well as his Israeli and Western interlocutors, that one of the motivations behind the revolution was precisely his scandalous collaborative role in the region.
It is in this context that the revolution against Mubarak regime becomes an anti-colonial struggle. His dehumanization of his people tied with his brutal violence against peaceful civilians is an unmistakably colonial symptom. Here the recent events in Tunisia and Egypt should not make us forget how Western violence was exported to the Arab world from the dawn of colonialism up to the present day, how it was brought home by ruling elites whose links to neo-colonial and post-colonial metropolises are maintained through multiple forms of agency, and how authoritarian Arab regimes continue to feed on Western hypocrisy in regard to democracy and liberty, the same slogans that have provided the foot-hold for Western expansion in the region.
Nor should we forget that Western political stability in comparison to the Arab world should be interpreted against the background of its exploitation of the region which provided it with the wealth to support its relatively decorous life. To make no mistake about it, the obsessive emphasis in Arab and Western media on formal U.S. announcements and responses to events in Egypt and Tunisia can only show how deeply neocolonialism is steeped in the region.
Isn’t it then a bitter irony to expect the United State to liberate Egyptians from the very conditions that make it function in the region? Wasn’t this very same discourse on the liberation of Arabs what allowed its imperial venture to take place in the region? Don’t all kinds of critique of Israel’s support for Mubarak’s regime seem absurd given the fact that by supporting Mubarak Israel behaves in accordance with its colonial interests in the region and any critique of it must begin with its colonial foundations instead of its contemporary political hypocrisy?
– Seraj Assi is a PhD student in Arabic and Islamic Studies at Georgetown University, Washington DC.
The Fed’s policy of creating inflation: A massive wealth transfer
By Rodrigue Tremblay | Intrepid Report | February 16, 2011
“If once [the people] become inattentive to the public affairs, you and I, and Congress and Assemblies, Judges and Governors, shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions.”—Thomas Jefferson (1743–1826), 3rd US President
“If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”—Thomas Jefferson (1743–1826), 3rd US President
[Corruption in high places would follow as] “all wealth is aggregated in a few hands and the Republic is destroyed.”—Abraham Lincoln (1809–1865), American 16th US President (1861–65)
“When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.”—Frederic Bastiat (1801–1850), French economist
“Inflation made here in the United States is very, very low.”—Ben Bernanke, Fed Chairman, Thursday, February 10, 2011
Let us begin with some macroeconomic indicators of reference.
In October 2010, the world value of total production (all Gross Domestic Products or GDPs) was estimated to be $61.96 trillion U.S. dollars at current nominal prices. The U.S.GDP was estimated at $16.11 trillion or 26 % of world GDP.
The two largest financial markets in terms of trading values are the global foreign exchange market (all currency markets) that has an average daily turnover in global foreign exchange transactions of about $4 trillion per day, and the privately-traded and mostly unregulated world derivatives market (all the derivatives markets) whose total world outstanding contracts has been estimated by the Bank for International Settlements in Switzerland to have a notional or face value of about $791 trillion in 2010.
In terms of real wealth, however, the two most important financial markets are the world bond market and the world stock market. In 2009, for example, the global bond market had an outstanding value of $US 91 trillion, with the U.S. bond market, at a value of $US 35.5 trillion, being the largest domestic bond market.–In mid-2010, the global equity market capitalization on regulated exchanges was estimated at $US 54.9 trillion, with the U.S. stock market having a value of some $US 19.8 trillion.
With such a large amount of financial assets, it is understandable that shifts in prices and interest rates have important effects on each market. If long-term interest rates go up, the nominal value of bonds goes down, and conversely, when interest rates decline, bond prices go up. As for stocks, many factors, such as company earnings, future profit prospects and inflation expectations, as well as political and taxation considerations, can influence their value. However, in general, they tend to fare better when short-term interest rates are low rather than high.
Sometimes, these two important financial markets move up together, especially in an environment of general disinflation, when interest rates tend to decline. They also tend to decline in tandem when real interest rates are on the rise, both bond prices and stock prices are then falling.
Sometimes, however, they can move in different directions, especially in the early phase of an inflationary period, such unexpected inflation being good for the stock market but bad for the bond market. Since last fall, this has been case, with the bond market falling and the stock market rising. The question is how long this decoupling can last.
And how does the Fed’s monetary policy fit into such an environment of oncoming inflation, and what should the Fed do?
Last November 3rd, the day after the 2010 mid-term elections, the Bernanke Fed announced that it will be embarking on a second round of quantitative easing (QE2), a fancy word for printing new money in exchange for government bonds—in other words, monetizing the public debt. It seems that Chairman Bernanke and the Fed board felt that months of lending to the large American banks trillions of dollars at close to zero interest rate, while paying them 0.25 percent to keep their excess reserves on its books, was not enough. They announced that the Fed would buy $600 billion-worth of additional Treasury bonds until June 2011, while reinvesting some $300 billion of principal payments from its portfolio holdings of mortgage-backed securities.
In doing so, the Fed professed to follow two somewhat interrelated objectives; 1- to lower long-term real interest rates in order to stimulate economic activity and create employment; and 2- to simultaneously raise inflation expectations in order to avoid the effect of deflation on the U.S. debt-leveraged economy. It should be remembered that from 1913 to 1977, the Fed had only one objective to pursue, i.e. price stability. Currently, however, the Fed has officially a double mandate. As a matter of fact, since 1977, the amended Federal Reserve Act of 1913 stipulates that the U.S. central bank should set its monetary policy in order to promote employment while maintaining price stability. It says that the Fed should promote “maximum employment, stable prices, and moderate long-term interest rates.”
Of course, a central bank in a fiat currency system can always create inflation through monetary policy and its printing press, but, in a market economy, it has little direct influence on job creation and on long-term interest rates. Employment depends on investments, innovation and market opportunities at home and abroad, while long-term interest rates depend on the amount of savings available, on investment demand and on long-term inflation expectations, all factors that are more or less out of the reach of a central bank. It is easy to delude oneself into thinking otherwise, but that’s the reality.
What the Fed can do with certainty, however, is to create inflation by expanding the monetary base and the money supply; it can also reign in inflation by draining liquidity from the system. If it goes overboard one way or the other, it can also create asset price bubbles by maintaining its managed short-run interest rates too low for too long, or it can create a credit crunch by putting the brakes too hard on credit creation, usually in a haste to correct its previous mistake.
These short-term gyrations in monetary policy are very destabilizing to the real economy, sometimes creating a temporary boom; sometimes precipitating an economic downturn. They are also accompanied by massive shifts of wealth between creditors and debtors.
In the first instance, when the Fed (or any central bank for that matter) creates too much money by buying financial assets and writing checks on itself, inflation and inflation expectations ensue. This pushes short-term interest rates down and long-term interest rates up (a steepening of the yield curve) and the price of long bonds goes down, with the effect of imposing an inflation tax on all the holders of fiat dollars. This inflation tax results in a transfer of wealth between unsuspecting dollar holders and bond holders who see the real value of their holdings go down, while net debtors and stock owners see their real debt load being reduced by inflation and the value of most shares in the stock market going up.
In the second instance, the reverse can happen if the economy is starved of liquidity: the yield curve inverts with short-run interest rates moving way up as compared to long-term interest rates. A stock market crash and an economic recession generally follow.
—That’s pretty much what the Fed has been doing over its nearly 100 years of existence, keeping short-run interest rates too low for too long, creating unsustainable asset bubbles, and then applying the monetary brakes to kill inflation expectations that it has created on its own. Sometimes, the Fed has maintained price stability and the value of the U.S. dollar; but at other times, it has willingly acted to destroy the purchasing power of the dollar by printing too much of it.
As a general principle, if inflation expectations increase faster than nominal long-term interest rates, real interest rates, i.e. the real cost of capital for investors and home buyers, would decline and this would, hopefully, stimulate economic activity and employment.
Unfortunately for the Fed, its Nov. 3rd announcement translated into an important loss of confidence in its ability to design and pursue an appropriate monetary policy and was immediately decried by other central banks and by America’s biggest creditor, China, as a blatant attempt to generate and export inflation. Bond prices began immediately to fall and bond yields to rise. It seems that bondholders began selling longer-term Treasuries at a faster rate than the Fed could buy them.
Chairman Ben Bernanke and his board seem to have forgotten that the United States is now a debtor nation, not a creditor nation. A creditor nation could get away with an outspoken policy of creating inflation—but not a debtor nation. In 2010 alone, the U.S. registered another half a trillion-dollar trade deficit with the rest of the world. This has to be financed, and it is done with foreign borrowings. To a large extent, foreign creditors now decide the final outcome of American monetary policy.
The 10-year Treasury yield, which hit a low at 2.40 percent in October 2010, was at 2.63 percent the day before the Fed’s announcement on November 2, 2010. As it turned out, it closed at 3.64 on Friday February 11, after hitting a high of 3.75 percent on February 8. The same is true of the 30-year Treasury yield that hit a high of 4.76 percent on February 8, thus approaching the dangerous threshold of 4.90 percent. The latter stood at 3.93 percent on Nov. 2, 2010.
Obviously, the Fed’s ultra loose monetary policy has backfired. Its intended policy of printing money in excess of what the economy demands has resulted in raising real long-term interest rates, not lowering them. Indeed, with long-term nominal rates on the rise while inflation will take many months to surface, the immediate effect of the Fed’s November announcement was to raise real long-term Treasury rates, not to lower them. Mortgage rates are also on the rise, threatening to postpone the long anticipated recovery in the housing market.
It is certainly possible that we are entering a period when the already observed rise in real interest rates can derail the stock market rally that has been in force since early March 2009. Later on, however, a slowdown in the economy coupled with fiscal compressions can be expected to push long-term rates down again. Such a roller-coaster path for interest rates is not very helpful.
The current Fed board seems to believe that the Fed is more than a central bank, that it is a sort of a government unto itself that can both control monetary conditions and solve the structural problems in the real economy at the same time, irrespective of what the rest of the world thinks. This would seem to be most unrealistic. Perhaps a dose of humility would be salutary at this time, before irreparable damage is done.
~
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com. He is the author of the book “The Code for Global Ethics.”
Bahrain crackdown on protests slammed
Press TV – February 15, 2011
The United Nations human rights chief has slammed Bahrain’s use of “disproportionate force” against peaceful demonstrators, urging an immediate end to any violent crackdown.
“I urge the authorities to immediately cease the use of disproportionate force against peaceful protestors and to release all peaceful demonstrators who have been arrested,” UN High Commissioner for Human Rights Navi Pillay said in a statement.
On Tuesday, large crowds of Bahraini protesters poured into the streets of the capital, demanding a regime change in the Persian Gulf kingdom. The call inspired by the recent revolutions in Egypt and Tunisia came after two protesters were killed in clashes with police.
Fadel Salman Matrouk was gunned down in front of a hospital on Tuesday where mourners assembled for the funeral of the 20-year-old Ali Msheymah, who died of his wounds after police resorted to violence to disperse a protest in a village east of Manama the day before.
Pillay noted that both victims were killed by members of Bahrain’s security forces.
“Too many peaceful protestors have recently been killed across the Middle East and North Africa,” the UN rights chief regretted.
“Authorities everywhere must scrupulously avoid excessive use of force, which is strictly forbidden in international law,” said Pillay, calling for “prompt, impartial and transparent investigations where there have been breaches of this obligation.”
~
Bahrain Police Rampage
smohd92 | February 14, 2011
Largest Brazilian Trade Union backs Boycott!
Community Voices | Palestinian Grassroots Anti-Apartheid Wall Campaign | February 7, 2011
In an important gain for the global movement for boycott, divestment and sanctions (BDS) campaign against Israel, Brazil’s largest Trade Union Confederation (CUT), voiced its support of the BDS call and called for the suspension of Israeli-Brazilian economic agreements and military ties on January 28.
In a statement signed by National President of CUT as well as its General Secretary and International Relations Secretary, the union stated:
“The advancement of the Israeli offensive, symbolized by the construction of the wall of apartheid and the constant bombing of Gaza requires solidarity with the Palestinian People from us all to carry out policies that go beyond humanitarian assistance and can contribute in a relevant way to build peace in Palestine. Thus we urge trade unions, social and popular movements to support the campaign for Boycott, Divestment and Sanctions to policies of occupation of Palestinian territory by Israel.”
According to research done by Stop the Wall, Israeli companies began in 2000 to become a critical part of the Brazilian police and military forces, with Elbit Systems taking the lead. This was primarily in high-tech areas, but also extended to conventional arms. Currently, a number of major Israeli arms companies have their sights set on Brazil as the key market in South America. In its statement, CUT singled out the growing military trade and economic links being built between Brazil and Israel:
“We regret that Brazil is the third largest consumer of arms from Israel through the Plan of National Defense Strategy of the Ministry of Defense of Brazil, and that arms agreements contribute indirectly to the occupation of Palestinian territory. It is therefore necessary that the Brazilian government suspend current agreements and bilateral economic / military negotiations between Brazil and Israel. It is unacceptable that the Free Trade Agreement between MERCOSUR and Israel becomes a reality.”
The BDS movement is spreading rapidly in Latin America, as more trade unions and social movements take up the call. In December a campaign against the Israeli water carrier Mekerot was launched in Argentina while workers movements and community radios in the same country backed boycott, divestment and sanctions.
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Obama Administration Says It Can Spy On Americans, But Can’t Tell You What Law Allows It
TechDirt | February 14, 2011
Remember how President Obama, while campaigning, promised to reject the questionable spying practices of the federal government of President Bush? Yeah, forget all that. Over the past two years, we’ve seen time and time again that he’s actually extended those abuses even further. The latest to come out is that the Justice Department is now claiming that the FBI has the right to get phone records on any call made from inside the US to an international number without any oversight. You may recall a few years back that there was a similar controversy, when it came out that the FBI would regularly just call up phone companies and ask for records — despite the fact that this violates certain laws designed to protect consumer privacy. Sometimes, they would just use post-it notes.
Apparently, a year ago, McClatchy newspapers put in a FOIA request, asking for the details of a particular Office of Legal Counsel (OLC) memo that was mentioned in the (previously released, but highly redacted) report that showed how frequently the FBI abused the law in this manner. The OLC took its sweet time responding, but finally responded, and in the cover letter admitted that the Obama administration believes it is perfectly legal for the FBI to route around the in-place oversight for getting access to such records and claimed that the law said so.
Which law says so? Oh, see, that they can’t say. Yes, the part of the letter that explains which law lets the FBI get these records without oversight was redacted.
It’s a secret law! And here I thought, in the US, if the government was going to base actions on a particular law, at the very least, they were supposed to tell you what law. Apparently, the Justice Department under the Obama administration does not believe that to be the case.
Basically, what this means is that the federal government believes that it’s free to request information without first getting court approval — and without telling the public what law says they’re allowed to get this information. That’s not what the laws on the books seem to say at all. But, of course, big telcos such as AT&T, who are so closely tied to the government, are going to roll over and give the government such info (or, perhaps, give them direct access to the info), even if it violates other laws. Why do you think President Obama voted to support giving telcos retroactive immunity on this issue, while he was running for President despite having earlier said he was against it? Now that he’s in power, he apparently is perfectly happy to let the FBI twist the clear intentions of the law to spy on Americans without oversight, and then to refuse to reveal what law he’s relying on to make such spying on Americans without oversight legal.
McClatchy quotes Michael German, a former FBI agent, who now works for the ACLU pointing out the obvious:
“It’s wrong that they’re withholding a legal rationale that has to do with the authorities of the FBI to collect information that affects the rights of American citizens here and abroad…. The law should never be secret. We should all understand what rules we’re operating under and particularly when it comes to an agency that has a long history of abuse in its collection activities.”
And so far, it doesn’t seem like most people care. About the only politician who really seems concerned about this is Senator Wyden, who says this level of secrecy “is a serious problem” and he’s “continuing to press the executive branch to disclose more information to the public about what their government thinks the law means.” Once again, kudos to Senator Wyden for being one of a very small number of politicians who seems to consistently be concerned about the rights of individuals. But it’s sad that the rest of our elected officials aren’t up in arms about this. The government shouldn’t be spying on Americans, and if it is, it should at least have to tell Americans what law it’s basing that decision on.
A Warning for Egyptian Revolutionaries: Courtesy of People-Power in the Philippines
By Michael Barker | February 15, 2011
Much like Mubarak, the former democratic reformer turned long serving US dictator for the Philippines, Ferdinand Marcos, demonstrates what can happen to even stalwart defenders of capitalism when they are opposed by their citizens en masse. Like Mubarak, Marcos previously provided a ray of hope for Western elites intent on quelling popular resistance within their own countries; after President Ronald Reagan launched his “worldwide campaign for democracy” before the British Parliament at Westminster in June 1982, he then decided to visit Marcos in the Philippines “where he announced in a public homage to the dictator, Ferdinand Marcos, that ‘the Philippines has been moulded in the image of American democracy.’” This commitment to ‘democracy’ in the Philippines was not new; the previous year vice-president George Bush “raised a toast to Marcos during his visit to Manila, declaring ‘We love your adherence to democratic principle and to the democratic process.’”[1]
Little wonder that when the US government institutionalized their commitment to democracy, it took the form an Orwellian organization called the National Endowment for Democracy (NED) — an organization that was set up by the US government to overtly carry out the ‘democracy promoting’ interventions that had formerly been undertaken covertly by the Central Intelligence Agency. Since then, the NED has assumed a pivotal position in defusing revolutionary movements all over the world, but their central role in the eventual ouster of Marcos is worth retelling, especially bearing in mind the similarity of his regime of oppression to Mubarak. Thankfully the history of the US government’s ‘democratic’ invention in the Philippines has already been analysed in William I. Robinson’s ground breaking book Promoting Polyarchy: Globalization, US Intervention, and Hegemony (Cambridge University Press, 1996); consequently this article merely aims to encapsulate some of his key points.
To begin with, there should be no doubt that the ouster of President Marcos in 1986 was due to any long-range conspiracy hatched in the White House: his removal from power was entirely due to a popular uprising. On the other hand, the US government did belatedly succeed in undermining and co-opting the revolutionary ferment that was in the air. What is clear is that throughout the 1970s and 1980s, the poor and oppressed citizens of the Philippines had been gathering political strength. This emerging power was significantly bolstered by the August 1983 assassination of the most visible leader of the elite opposition, Benigno Aquino Jr. — a murder which had the effect of ensuring that the non-Marcos elite was finally “galvanized… into active opposition.” This galvanization had the effect of drawing the middle-classes into the already popular and vocal opposition movement, and with the potential for a broad-based increasingly radicalized opposition movement developing in the Philippines, the US government became more than a little interested in intervening in the region. Elite concern in the United States was further aggrieved when in late 1984, the wife of the assassinated Benigno, Cory Aquino — who was now a serious contender for power — worked with other opposition leaders to draw up plans that “spelled out a nationalist-orientated program of social reform and development and also called for the removal of US military bases from the Philippines.”[2]
The US had always been interested in the Philippines because of the Subic Bay Naval Base and Clark Air Force Base: military bases which were key strategic sites from which every US invasion of Asia had gone through since 1898. Concern really heightened and got greater in about 1984, because of the people’s movement, including the New People’s Army (NPA), a fighting force of over 20,000 fighters and led by the Communist Party of the Philippines.
If it wasn’t obvious before, it now became evident to US planners that a “diverse and well organized” movement was gaining momentum in the Philippines, “ranging from the NPA insurgency, to the mass, left-of-center civic movement BAYAN (New Patriotic Federation, which went by its acronym in Tagalog), which brought together millions of Philippine citizens, to numerous parties and groups of the center, center-right and right.” Noting that “[p]erhaps the weakest among the opposition were the center and conservative sectors which, as in Nicaragua and other authoritarian Third World regimes, had vacillated during many years between support for, and opposition to, the dictatorship,” ‘democracy’ aid was quickly funnelled to these needy sectors of civil society.[3]
Between 1984 and 1990, Philippine organizations received at least $9 million from the NED and other US sources. These included: the Philippine Chamber of Commerce and Industry (PCCI), which mobilized the business community against Marcos; the Trade Union Congress of the Philippines (TUCP), a minority, conservative union federation affiliated with the International Confederation of Free Trade Unions (ICFTU) and which competed with more radical and left-leaning labor organizations; Philippine “youth clubs” established under the guidance of US organizers to mobilize Philippine youth; the KABATID Philippine women’s organization (KABATID is the Tagalog acronym for Women’s Movement for the Nurturing of Democracy), also established under the guidance of US organizers; and the National Movement for Free Elections (NAMFREL).[4]
Here one should note that Robinson’s figure of $9 million is based on publicly available NED annual reports, and as he observes, “the actual amount is probably much higher, since millions more were sent to the Philippines circuitously via such organizations as the AAFLI [Asian-American Free Labor Institute] and via the CIA and other ‘national security’ related spending, which is classified.”[5] To be sure the TUCP, which was the local affiliate of the AFL-CIO’s Asian-American Free Labor Institute, was a creation of the Marcos Dictatorship pure and simple, and its goal was to keep the labor sector under control. Indeed, after Aquino’s assassination, the US Government channelled millions of dollars to the TUCP through AAFLI as a way to help the TUCP — and the Marcos Dictatorship — survive. On the other hand, the most significant pro-worker, anti-management part of the labor movement in the Philippines was the Kilusang Mayo Uno (KMU-May First Movement) — which was a nationalist, militant labor center of unions built in the various regional political economies across the nation that united on a national level on May 1, 1980, in Manila. KMU specifically challenged the TUCP, and they were central to the nationalist challenge to the dictatorship.
Living in fear of the evolution of a “left-center popular alliance,” the US State Department dispatched their finest experts in conflict resolution to meet with Cory Aquino and the leader of the right-wing opposition, Salvador “Doy” Laurel, to “convince them to run under a united ticket that would stress anti-communism and refrain from opposing US bases in the Philippines (Laurel subsequently became Aquino’s running-mate as candidate for vice-president).” Having laid the groundwork for a change of leadership, events then heated up when Marcos decided to ignore the results of the snap election held on February 7, 1986, in which the people of the Philippines elected the Aquino/Laurel ticket to power. Contrary to US interests, Marcos’ adverse Dictatorial reaction further inflamed popular resistance, providing further fuel for the popular insurrection.[6]
The US wanted to do whatever it could to contain the growing insurrection, and an important part of the US’s ultimately successful intervention in the Philippines was to get the military onside and ready for the ‘democratic’ transition; and a key player in this regard was General Fidel Ramos, a long-time loyalist to Marcos who was acting as Chief of Staff of the Armed Forces of the Philippines (AFP). It was in this way, with a ‘little’ prodding by the United States, that in mid-1985 General Ramos came to see the futility of supporting Marcos’s crumbling regime and joined with Defense Minister Juan Ponce Enrile in helping organize a reformer’s revolt which split the military shortly after the contested election.[7] Thus when the people subsequently rose up in defiance of Marcos to protect the military reformers and their forces in Manila, Marcos’ only choice at that time — if he had wanted to crush the military revolt — was to order the Army to slaughter the masses, and the US didn’t want that!
With few other options left on the table, the US turned all its resources to bring pressure to bear on Marcos , and they did this by dispatching “at-large ambassador Philip Habib to Manila to urge Aquino to keep her followers off the streets and to convince Marcos to step down.”[8] However, when Habib failed to make the US’s case firmly enough, Paul Laxalt, a right-wing US Senator from Nevada, called Marcos (on February 24) and told him to “cut and cut clean”; and within twenty-four hours Marcos was gone and Aquino had been sworn into office.[9] Taken together, these actions served to undermine the growing political power of the people’s power movement, as they circumscribed the need for the massive (potentially revolutionary) social protests that were in the pipeline — which were to include economic boycotts and a general strike.
Significantly, “[s]uch actions would have greatly enhanced the labor movement, with its militant base and left-wing tendencies, in both removing Marcos and in shaping the post-Marcos government and policies.” Yet one should note that there was never any question of Aquino — soon to be Time magazine women of the year — supporting labor, and particularly KMU, over the military. All the same, the big question for the US was could she re-establish social stability, and be won away from wanting to close the US military bases. Consequently after Aquino assumed power, there were several military coup efforts against her by the Marcos-inspired military,[10] in which her side eventually prevailed: Ramos and Enrile played key roles here, with Ramos becoming more important of the two over time. Both Enrile and Ramos were long time allies of the US — Ramos is a graduate of West Point — and they were able to convince her to keep the US bases. At the same time, the US government provided tons of money, and a direct address by Aquino to the US Congress to keep her on their side, which wasn’t hard: Aquino herself had gone to college in the US, and was very pro-American. She also agreed to pay debt incurred by the Dictatorship, seeing them as legitimate.
In the aftermath of the US’s ‘democratic’ intervention in the Philippines there has been a vigorous debate about the significance of the US’s role in the process. Yet as Robinson points out, “whether or not US intervention was itself the determining factor in the overthrow of Marcos obscured a much more significant issue: US intervention was decisive in shaping the contours of the anti-Marcos movement and in establishing the terms and conditions under which Philippine social and political struggles would unfold in the post-Marcos period.”[11] Moreover it is critical to observe that the post-Marcos era has not been a happy period for the majority of the Philippines’ citizens, In fact, Walden Bello and John Gershman described this new post-Marcos environment as “politically sanitized” to such an extent that “anti-elite candidates with radical political programs have been driven from the electoral arena by the threat of force — so that even intense electoral competition would not be too destabilizing.”[12] Likewise in a stark reminder of what might happen in Egypt, Philippines labor specialist Kim Scipes writes how…
… replacing Marcos with Aquino left a brutal state apparatus intact, which Aquino used to kill peasants, workers and the urban poor. In fact, KMU leaders told me that the human rights abuses under democrat Aquino were worse than under dictator Marcos: she couldn’t control her generals. However, whether she couldn’t control them or if she didn’t want to control them — Alfred W. McCoy in Policing America’s Empire (University of Wisconsin Press, 2009) claims the latter — the fact is that unless the brutal state apparatus is dismantled, and especially the Police and the torture agencies, the repression could be re-instituted.[13]
The Egyptian people have struck a great blow for freedom from tyranny, and have complicated US and Israeli foreign policy in the region immensely, and such external forces will want to re-establish control at very first opportunity. However, not only foreigners but remnants of the Egyptian elite want to re-establish the control they’ve long had, and will do anything they can to do so. The Egyptian people need to learn from the Philippine experience, and do all they can to keep that from happening.
[1] William I. Robinson, Promoting Polyarchy: Globalization, US Intervention, and Hegemony (Cambridge University Press, 1996), p.117, p.122.
[2] Robinson, Promoting Polyarchy, p.123, p.126.
[3] Robinson, Promoting Polyarchy, p.125. “In November 1984, a secret NSC Study Directive made the call for a concerted US intervention in the Philippines to facilitate a transition. ‘The United States has extremely important interests in the Philippines… Political and economic developments in the Philippines threaten these interests,’ stated the directive. ‘The US does not want to remove Marcos from power to destabilize the GOP [Government of the Philippines]. Rather, we are urging revitalization of democratic institutions, dismantling “crony” monopoly capitalism and allowing the economy to respond to free market forces, and restoring professional, apolitical leadership to the Philippine military to deal with the growing communist insurgency.’ ‘These efforts,’ it went on, ‘are meant to stabilize (the country] while strengthening institutions which will eventually provide for a peaceful transition.’” Robinson, Promoting Polyarchy, pp.124-5.
[4] Robinson, Promoting Polyarchy, pp.125-6. The reactionary Trade Union Congress of the Philippines (TUCP) received almost US$7 million from the National Endowment for Democracy between 1984 and 1991. (p.135) One of the reasons for such emphasis on Philippine labor was the challenge from the militant KMU and the importance of labor in national political struggles.” (p.136) For an excellent historical study of the KMU, see Kim Scipes, KMU: Building Genuine Trade Unionism in the Philippines, 1980-1994 (New Day Publishers, 1996). Scipes is also the author of AFL-CIO’s Secret War Against Developing Country Workers: Solidarity or Sabotage? (Lexington Books, 2010), which provides an excellent historical overview of the interaction between the US government and the National Endowment for Democracy and organized labor. Needless to say, this labor movement imperialism is not being done through labor movement procedures, but behind the backs of members.
[5] Robinson, Promoting Polyarchy, p.403.
[6] Robinson, Promoting Polyarchy, p.127.
[7] Robinson, Promoting Polyarchy, p.128.
[8] Robinson, Promoting Polyarchy, p.127.
[9] With the ouster of Marcos, Ramos was now rewarded for his assistance by the newly elected Aquino administration who appointed him Chief of Staff of the AFP, and later Secretary of Defense. In 1992 when Cory Aquino left office, Ramos was elected president of the Philippines, a position he held until 1998. After his presidency, Ramos became a committed ‘champion for democracy’ by taking up a position as the Asia advisory board Member for the Carlyle Group, that is, until the board was disbanded in 2004. He is presently a trustee of the ‘democracy promoting’ International Crisis Group, and is a patron of the related Global Centre for the Responsibility to Protect. http://www.webofdemocracy.org/foundations-anthropology-an.html
[10] Robinson, Promoting Polyarchy, p.141.
[11] Robinson, Promoting Polyarchy, p.129.
[12] Robinson, Promoting Polyarchy, p.141.
[13] Kim Scipes, Email to Author, February 12, 2011. For a must-read analysis of the post-Marcos developments in the Philippines, see Kim Scipes, “Review of the Month: Global Economic Crisis, Neoliberal Solutions, and the Philippines,” Monthly Review, 51 (7), December 1999, pp. 1-14. http://www.monthlyreview.org/1299scip.htm
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Does Kevin Barrett Seek to “Absolve Islam of a Terrible Crime”?
The Kevin Barrett-Chomsky Dispute in Historical Perspective – Last part of the series titled “9/11 and the Zionist Question”
By Prof. Tony Hall | American Herald Tribune | August 28, 2016
Amidst his litany of condemnations, Jonathan Kay reserves some of his most vicious and vitriolic attacks for Kevin Barrett. For instance Kay harshly criticizes Dr. Barrett’s published E-Mail exchange in 2008 with Prof. Chomsky. In that exchange Barrett castigates Chomsky for not going to the roots of the event that “doubled the military budget overnight, stripped Americans of their liberties and destroyed their Constitution.” The original misrepresentations of 9/11, argues Barrett, led to further “false flag attacks to trigger wars, authoritarianism and genocide.”
In Among The Truthers Kay tries to defend Chomsky against Barrett’s alleged “personal obsession” with “vilifying” the MIT academic. Kay objects particularly to Barrett’s “final salvo” in the published exchange where the Wisconsin public intellectual accuses Prof. Chomsky of having “done more to keep the 9/11 blood libel alive, and cause the murder of more than a million Muslims than any other single person.” … continue
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