US fines oil giant $232 million over Iran trade
Press TV – March 26, 2015
The US government has slapped oil services giant Schlumberger with a $232.7 million fine for “violating” its sanctions on Iran and Sudan.
The US Justice Department says the company had admitted “knowingly and willfully conspiring to violate” unilateral American sanctions.
The French-US services company is charged with secretly providing services to Iran and Sudan.
While Schlumberger Oilfield Holdings was allowed to work in both countries, the government says the fine involved the company’s US Drilling and Measurements unit which was not.
Schlumberger is incorporated in the British Virgin Islands.
“Over a period of years, Schlumberger Oilfield Holdings Ltd. conducted business with Iran and Sudan from the United States and took steps to disguise those business dealings,” John Carlin, US assistant attorney general for national security, was quoted as saying.
US companies have coveted Iran’s lucrative energy sector with utmost attention despite unilateral American sanctions which are in place since the Islamic Revolution.
They see the punishments a case of lost opportunities where European and Asian rivals have used the absence to their advantage.
According to the Economist, citing unnamed foreign businessmen, American enterprises are using local middlemen to seal initial deals in Iran.
“If there is a nuclear deal (with Iran), you will find overnight that the Americans have signed one-year options on the best projects,” the weekly newspaper recently quoted one middleman as saying.
“The Europeans will be queuing up, but they will end up negotiating with ExxonMobil and Chevron, just as happened in Libya,” he said.
The Roots of Netanyahu’s Electoral Victory: Colonial Expansion and Fascist Ideology
By James Petras :: 03.24.2015
“It is always a meritorious deed to get hold of a Palestinian’s possessions” – The code of Jewish Law revised and updated by Benjamin Netanyahu
Benjamin Netanyahu’s re-election makes him the longest serving prime minister in Israel’s history. His 20% margin of victory (30 Knesset seats to 24 for his nearest opponent) underlines the mass base of his consolidation of power.
Most critical commentators cite Netanyahu’s racist pronouncements; his rejection of any two state solution and his overt appeal for a mass Jewish voter turnout to counteract the ‘droves of Arab voters’ for his electoral victories.
There is no question that the majority of Israeli Jewish leaders and parties support Netanyahu’s racist pronouncements and ‘no-state’ solution and joined him in a coalition government. But the larger issue is the positive mass response to Netanyahu’s call to action. Nearly three quarters of the electorate turned out (73%) to elect him. Moreover, Netanyahu has been elected prime minister for four terms: between 1996-99 and more recently 2009-20.
What is more, the opposition has not differed from the Netanyahu coalition regime’s Judeo-centric policies and pronouncements. In other words, ‘racist’ ideology per se is not what drives the Israeli majority to repeatedly support Netanyahu.
Jewish-centered racism is an integral and accepted part of Israel’s political culture.
Social Colonialism and Netanyahu’s Popularity
There is a more fundamental, ongoing material basis which accounts for Netanyahu’s electoral victories and mass appeal: His regime’s aggressive, perpetual and escalating seizure and dispossession of Palestinians land and his massive financing of Israel’s Jewish colonial towns.
In other words, Netanyahu’s appeal is rooted in the large-scale, long-term housing which hundreds of thousands of low and middle income Israeli Jews have obtained via his brutal land-grabbing policy. The so-called ‘settlers’ are in part armed Israeli Jewish colonists who engage in open theft and defend Netanyahu, because they materially benefit from his policies… It is not only those who have already colonized Palestinian land grabbed after 1967 – over 650,000 Jews – who vote for Netanyahu, but there are the hundreds of thousands of others in Israel, priced out of the Israeli real estate bubble, who cannot afford comfortable housing and look to the West Bank and Jerusalem for a ‘Jewish solution’ at the expense of the Palestinian inhabitants.
Racism, the foul language directed at Palestinians, which pervades Israeli-Jewish culture (‘Arab scum’ is one of many such common expressions) found expression even among the songs celebrating Netanyahu’s latest electoral victory. Racism serves to justify the land grabbing. Can the settler mind even imagine that an ‘inferior people’ should complain about land grabs by the ‘chosen people’ ? Modern educated Jewish professionals wax indignant that shepherds and olive farmers should hold back the development of glitzy shopping malls, million dollar community centers (for Jews only, of course), hospitals, sports complexes and high tech industrial parks.
And if they – ‘the Arabs’ – object to their own displacement, all the better: Their resistance provides an excellent pretext for armed Jewish settler thugs to invade a village, drive out the inhabitant and call in Netanyahu’s bulldozers, as a prelude to establishing an ‘outpost’, first steps to a new Jews only colony!
The key to Netanyahu’s big vote is that he responds favorably and forcefully in favor of new colonies. The self-styled Israeli Defense (sic) Force (IDF) is dispatched to protect the local vandals and to shoot live ammo at any rock-throwing Palestinian adolescent defending the family patrimony.
Netanyahu acts and speaks for the rapacious Jewish colonial masses. The opposition criticized Netanyahu on the basis of his neglect of socio-economic issues in Israel, especially, the soaring prices of housing in the major cities. But they failed to attract many Jewish voters because Netanyahu offers a more attractive alternative solution – the seizure of more Palestinian land and the construction of Jewish homes, instead of fighting powerful Jewish real estate moguls, land speculators and corporate landlords inside Israel.
Extremism at the Service of Jewish Housing is No Vice
For the mass of Israeli Jews, looking for a cheap, easy and government-financed road to comfortable middle class housing, seizing and occupying Palestinian property is a very attractive and viable ‘solution’.
Netanyahu’s ‘final solution’ for the Palestinians – no state – is a guarantee that land, which is seized and housing which is built, will remain under Jewish jurisdiction. The ‘final solution’ for Palestinians is the housing solution for the Jewish masses.
Under Netanyahu, from 2013 to 2015, two-thirds of new housing construction (for Jews only) has taken place on stolen Palestinian lands. His regime spends $252 million dollars a year on Jews-only colonies (‘settlements’). The Netanyahu regime spends $950 for each Jewish colonist in the West Bank, double what is invested for each Jewish Israeli resident in Tel Aviv. For the most aggressive Jewish colonists, those who destroy the productive olive groves, torch Palestinian homes and who establish ‘settler outposts’, Netanyahu spends $1,483 a year . . . with promises of roads, electricity, schools, swimming pools and air conditioning to come!
Owning the Holy City Secures the Unsavory Vote
Netanyahu’s big vote in Jerusalem can be accounted for by the fact that over 300,000 Jews have been the beneficiaries of land grabs and sparkling high-rise condos in what had been centuries-old Palestinian neighborhoods.
Netanyahu assures the Jerusalem Jews that ‘their city’ is and always will be the capital of Israel, an undivided Jewish city.
Sticking his finger in the eyes of the EU and US officials, who claim otherwise, energizes and emboldens the Jewish voters
Netanyahu’s ethnic cleansing is unrelenting: That is why he is re-elected over and over again. Israeli colonial settlements grew by over 5% each year from 2009 – 2015. There is no backtracking with Bibi Netanyahu: at this rate of ‘erasure’ all of historical Palestine will be Judified by 2050 at the latest!
Netanyahu claims that Israeli Jews must have their ‘lebensraum’ . . .
Israel and other colonial powers, like England in the 19th century and Germany in the 20th century, ‘solve’ their domestic social problems and social unrest by exporting populations across borders. The attractiveness of this solution is that it preserves the power and privileges of the domestic economic elite and provides an ‘escape valve’ for the local disaffected masses.
Emigration to settler colonies requires violent dispossession of the local inhabitants. If stiff resistance emerges – the imperial powers resort to genocide; extermination of native peoples by the English, Slavic peoples by the Germans, Palestinian Arabs and other non-Jews by the Israeli Jews.
Long past is the notion that Israeli Jews would solve their social -economic problems via a collectivist economy and popular struggle against Jewish plutocrats.
Today Jewish-Israeli millionaires flourish alongside orthodox, secular, Sephardic, Ashkenazi, Sabra and Russian emigrant colonists. The former exploits labor and markets, while the latter dispossesses Palestinians. Netanyahu has discovered a formula for uniting quarrelsome Jewish parties, leaders and voters and for winning elections.
Moreover, Netanyahu has secured the financial and political backing of numerous overseas Jewish-Zionist billionaires. He has secured the unconditional support of tens of thousands of middle class Israel-First activists, academics and professionals who operate AIPAC and dozens of similar propaganda mills in Washington and Christian Zionists throughout the US. Netanyahu’s overseas backers ensure that the US government may grumble and criticize, but will never disrupt Netanyahu’s ‘plan’ of an ethnically pure ‘Greater Israel’ with Jerusalem as its ‘eternal’ capital. Obama may whine and talk to the press about ‘reconsidering US-Israeli relations’ but he has assured Israel and Netanyahu that military and economic ties will remain intact.
Conclusion
Netanyahu has succeeded in setting a colonial agenda for all Israeli-Jewish parties (bar one).
He has established the fact that competitive elections and opposition political parties are compatible and even facilitate violent colonial expansion.
He has established the fact that Israel and its people embrace a racist ideology and receive the endorsement of most Western leaders, and mass media and the unconditional support of its overseas fifth column.
Israel’s project for Palestine, the creation of a single Jewish state, is far more than the demented vision of one man. It has been taken to heart by the great mass of the Israeli-Jewish people and their overseas supporters. The victory of Netanyahu and his supporters marks a historic victory for all those regimes and people across the world who believe and fight for an imperial dominated world.
Wall Street Journal Gets the Numbers Wrong on Venezuelan Health Care Spending
By Mark Weisbrot | CEPR Americas Blog | March 20, 2015
I have sometimes noted that in the current “four legs good, two legs bad” discourse about Venezuela, journalists can write almost anything about the country and no one will question it – so long as it is something negative. On Saturday, March 13, the Wall Street Journal published this chart on its front page in the print edition, below, and claimed health care spending as a percent of economic output was “lower in Venezuela than in all other major economies in Latin America.” The chart shows Venezuela’s health care spending at 1.6 percent of GDP.
The chart and text don’t say it, but they are referring to public (i.e., government) spending on health care, which one can find by looking at the original data from the World Health Organization. When I read this, I thought, this can’t be true: The Venezuelan government spends about the same percentage of GDP on health care as Haiti? The lowest of 19 countries in the hemisphere? Less than some of the poorer countries in Sub-Saharan Africa? And these numbers are for 2012, when the economy was booming (5.7 percent real GDP growth), Venezuelan oil was at 103 dollars per barrel, and the government built more than 200,000 homes. They had no money for health care?
This should have set off some alarm bells at the WSJ, if any editors were paying attention. This number is not plausible because it is wrong. When the government of Hugo Chávez in Venezuela decided to make health care a priority after getting control over the national oil industry in 2003, it was unable to accomplish very much by going through the health ministry and the public hospitals – running into various bureaucratic and political obstacles. So it created Misión Barrio Adentro, a system of health clinics that served people in both urban and rural areas where many did not previously have access to health care.
The short story is that the numbers used by the WSJ apparently didn’t include most of Venezuela’s health care spending, since it has gone through the misiones. In 2012, the national oil company contributed $5.5 billion for Misión Barrio Adentro. Also, the government of Venezuela has an actual agreement with Cuba, which provides specifically for the supply medical care through Misión Barrio Adentro in exchange for 98,000 barrels of oil per day, which Venezuela has provided. The value of that oil in 2012 was $3.44 billion. The medical services include not only 40,000 doctors but also medical equipment, medicines, and other health care services.
If we add in these expenses, and use the IMF’s 2012 exchange rate to convert to domestic currency, this adds another 3 percent of GDP to the government’s health care spending.
This would bring Venezuela’s health care spending to 4.6 percent of GDP. In the above chart, that would move Venezuela from 19th to 7th place among the 19 countries shown. And this figure does not include all of Venezuela’s government health care spending.
(Note: the WSJ article also claims that “the share of state spending on health, at 6%” was also “lower in Venezuela than in all other major economies in Latin America.” This is also false, for the same reasons discussed above.)
UK creates ‘political & economic reform’ fund for Eastern Europe to contain Russia
RT | March 20, 2015
Prime Minister David Cameron has announced the creation of a money pot specifically designed to aid Eastern European countries in tackling any future ‘aggression’ from Russia.
The “Good Governance Fund” is aimed at strengthening democratic institutions in areas that are wary of Russia’s influence. The fund will total £20 million ($30 million, €28 million) in 2015 and 2016.
It is broken down into £5 million for Ukraine, and continuing grants for Moldova, Georgia, Bosnia-Herzegovina and Serbia.
The announcement comes as leaders of the European Union agreed to extend the economic sanctions currently in place against Russia until the end of 2015, in a move to force Moscow to undertake a full ceasefire in eastern Ukraine.
The Minsk Agreement was reached in February after lengthy talks, but the truce has remained shaky. There have been reports of continuing skirmishes between Ukrainian forces and rebels.
EU leaders have criticized Russian President Vladimir Putin’s alleged “web of influence” across Europe after the reunification of Crimea in March 2014.
Earlier this month, the prime minister of Crimea said the former Ukrainian territory had returned to its historical homeland.
Russia has also formed an alliance with Cyprus, after Putin agreed a £1.8 billion loan for the country in return for the use of its docks for Russian military vessels.
Putin further created powerful western European allies following Marine Le Pens visit to Russia in the autumn. Russia has agreed to loan her party, the right-wing Front National, £6.5 million.
The Kremlin’s interests also extend to Greece, where Putin offered support to anti-austerity party Syriza when it campaigned for the country’s withdrawal from NATO two years ago.
When the party came to power in January, the Russian ambassador to Athens was one of the first to visit Prime Minister Alexis Tspiras.
The new fund is based on a Cold War program created by Margaret Thatcher in 1989.
At the time, her “Know-How-Fund” was used to help countries that had recently left the Soviet Union to develop, such as Hungary and Poland.
Russia denies it is providing rebels in Ukraine with arms and assistance.
The conflict has cost over 6,000 lives to date.
U.S. Dominates Weapons Export Market as Profits Grow with Sales to the Middle East
By Noel Brinkerhoff | AllGov | March 17, 2015
The global arms trade business continues to thrive, with the United States being the biggest beneficiary of an ever-growing market that’s being fueled by Middle East purchases.
IHS Inc., an international information and analytics firm based in Colorado, reported in its Global Defense Trade Report that worldwide arms sales increased last year for the sixth straight year. The total in military trade went from $56.8 billion in 2013 to $64.4 billion in 2014—a 13.4% increase.
The U.S. was responsible for one-third of all defense exports and “was the main beneficiary of growth,” IHS reported. American exports of weapons were particularly popular among buyers in the Middle East.
Saudi Arabia surpassed India to become the largest defense market for U.S. weapons makers, as the oil sheikdom increased its defense imports 54% from 2013 to 2014. This year is expected to be another strong year for Saudi imports, IHS says, rising another 52% to $9.8 billion.
“One out of every seven dollars spent on defense imports in 2015 will be spent by Saudi Arabia,” according to IHS.
Ben Moores, senior defense analyst at IHS Aerospace, Defense & Security, said: “The Middle East is the biggest regional market, and there are $110 billion in opportunities in coming decade.”
To Learn More:
Saudi Arabia Replaces India as Largest Defence Market for US, IHS Study Says (IHS Inc.)
Charted: The World’s Biggest Arms Importers (by Alan Tovey, The Telegraph )
The SIPRI Top 100 Arms-Producing and Military Services Companies, 2013 (by Aude Fleurant and Sam Perlo-freeman, SIPRI) (pdf)
Obama Steps Up Foreign Weapons Sales, Overwhelming Other Arms Makers (by Noel Brinkerhoff and David Wallechinsky, AllGov )
Banks Say “Thanks for the Bailout,” Now We’ll Park our Profits in Overseas Tax Havens
By Steve Straehley | AllGov | March 16, 2015
Giant financial institutions that benefitted from federal bailouts during the depths of the recession have repaid the American people’s largesse by hiding profits overseas to avoid paying their fair share of taxes.
According to a report (pdf) commissioned by Senator Bernie Sanders (I-Vermont), four big banks—Citigroup, Goldman Sachs, Bank of America and JPMorgan Chase—which received massive amounts of money and loan guarantees to keep them afloat in the wake of the financial crisis, park large amounts of money in tax haven nations.
Citigroup got the most help of the four in the bailout, $2.5 trillion. That company has at least 427 offshore divisions where it squirrels away profits out of reach of the American people. Those funds, as of early 2014, totaled $43.8 billion, which would mean $11.7 billion in tax revenue for the United States if they were brought to this country. Citigroup CEO Michael Corbat was rewarded with $1.5 million in salary, $4.5 million in bonuses and $8 million in stock for his work in 2014.
Bank of America received a $1.3 trillion bailout from the American people. In 2014, it had $17 billion in profits stashed offshore, which would bring $4.3 billion in funding for education, infrastructure and other badly needed projects in the United States. Bank of America CEO Brian Moynihan made $1.5 million in salary, $13 million in bonuses and $11.5 million in stock in 2014.
JPMorgan Chase got a $416 billion bailout from American taxpayers. That bank has hidden $28.5 billion overseas which would bring in $6.4 billion to the U.S. Treasury. Chase CEO Jamie Dimon was paid $1.5 million in salary, $7.4 million in bonuses and $11.1 million in company stock in 2014.
Goldman Sachs was the recipient of $814 billion in virtually zero-interest loans, as well as $10 billion from the government. It’s holding $22.5 billion offshore that would bring $4.1 billion back to the American people. Goldman CEO Lloyd Blankfein made $2 million in salary, $7.33 million in bonuses and $7.33 million in stock in 2014.
Of course, banks aren’t the only companies taking advantage of tax havens. Apple, for instance, famously worked it out so two of its subsidiaries have no home country to which to pay taxes. But then Apple didn’t come hat-in-hand begging the American people not to let it go under.
To Learn More:
Legalized Tax Fraud: How Top U.S. Corporations Continue to Profit Through Offshore Tax Havens (by Senator Bernie Sanders, U.S. Senate) (pdf)
Offshore Shell Games (U.S. PIRG) (pdf)
The Bailouts 4 Years Later: Were They Worthwhile Investments? (by Matt Bewig, AllGov )
Quantitative Easing for Whom?
Why the European Central Bank’s Trillion Euro Plan will Only Help Keep the Banks Afloat
By MICHAEL HUDSON and SHARMINI PERIES | CounterPunch | March 13, 2015
SHARMINI PERIES: In an effort to relieve some pressure on the struggling European economies, Mario Draghi, president of the European Central Bank, announced a 1 trillion euro quantitative easing package on Monday. Quantitative easing is an unconventional form of monetary policy where a central bank creates new money electronically to buy financial assets like government bonds. And this process aims to directly increase private-sector spending in the economy and return inflation to target.
Well, what does that mean and what might be wrong with it is our next topic with Michael Hudson. Michael Hudson is a distinguished research professor of economics at the University of Missouri-Kansas City. His two newest books are The Bubble and Beyond and Finance Capitalism and Its Discontents. His upcoming book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
Michael, the Fed and some economists will argue that this is what got the U.S. out of its 2008 financial crisis. In fact, they put several QE measures into place. So what’s wrong with quantitative easing?
MICHAEL HUDSON: Well, the cover story is that it’s supposed to help employment. The pretense is an old model that used to be taught in textbooks a hundred years ago: that banks lend money to companies to invest and build equipment and hire people.
But that’s not what banks do. Banks lend money mainly to transfer ownership of real estate. They also lend money to corporate raiders. They lend money to buy assets. But they don’t lend money for companies to invest in equipment and hire more workers. Just the opposite. When they lend money to corporate raiders to take over companies, the new buyers outsource labor, downsize the work force, and try to squeeze out more work. They also try to grab the pensions.
The Fed was pretty open in what quantitative easing is supposed to do since 2008. It’s supposed to lower the interest rates, which raises bond prices and inflates the stock market. Since 2008 they’ve had the largest monetary inflation history – $4 trillion of quantitative easing by the Fed. But it’s gone via the banks into the stock and bond market.
What has this done for the economy as a whole? For starters, it’s obviously helped stock and bond holders get richer. And who are they? They’re the 1 percent and the 10 percent.
People are wringing their hands and saying, why isn’t the economy getting richer? Why is it that since 2008, economic inequality and the distribution of wealth have worsened instead of gotten closer together? Well, it’s largely because of quantitative easing. It’s because quantitative easing has increased the value of the stocks and the bonds that are held mainly by the 1 percent or the 10 percent hold. This hasn’t helped the economy because the Fed is really concerned with its constituency, which are the banks.
Quantitative easing hasn’t helped one class of investors in particular: pension funds. It’s done just the opposite. Pension funds made the assumption a few years ago that in order to break even with the rate of contributions that corporations, states and municipalities are paying, they have to make eight percent or eight and a half percent a year as a rate of return. But quantitative easing lowers the interest rate.
Today’s lower interest rates have made pension funds desperate. The risk-free rate of return is less than 1 percent on short-term Treasury bills. If you buy longer-term treasuries you can make 2 percent, but then if the interest rates ever go up, you’re going to take a loss as the bond price declines. So pension funds have said, “We’re desperate; what are we going to do?”
They’ve turned their money over to Wall Street money managers and hedge funds. The hedge funds take a huge rake off of fees to begin with. But even worse, when hedge funds and the big banks – Goldman Sachs, Citibank – see a pension fund manager coming through the door, they think, “How can I take what’s in his pocket and put it in mine?” So they rip them off. That is why there are so many big lawsuits against Wall Street for mismanaging pension fund money.
To summarize, the effect of the quantitative easing has been to make pension funds desperate, and to support real estate prices, as if higher costs to obtain housing will help recovery. It doesn’t help recovery, because to the extent that quantitative easing supports a re-inflation of housing prices, new homeowners have to pay even more of their income to the banks as mortgage interest. That means they have less money to pay for goods and services, so markets for goods and services continue to shrink.
What the quantitative easing has not been used for is what was promised in 2008. Before President Obama won the election and took office, Congress said that the TARP bailout and TALF were supposed to go for debt reduction. Some was to write down mortgages, so that people could afford to stay in their homes rather than the millions of home owners that have been foreclosed on and thrown out. But even before Obama came into office, Hank Paulson, the Secretary of the Treasury, told Democrats in Congress, yes, we’re willing to write down debts. But as Barney Frank explained in exasperation, Obama said no, he’s not going to do that. Obama ended up supporting the banks. So almost none of the TARP bailout money has been used for debt write-downs.
The same phenomenon is happening in Europe.
PERIES: So, Michael, what’s wrong with what the ECB has announced in terms of a trillion euros worth of quantitative easing for Europe?
HUDSON: They head of the European Central Bank, Mario Draghi, has said that he’ll do whatever it takes to keep banks afloat. He doesn’t say that he’ll do whatever it takes to help economic recovery, or to help labor more. The ECB’s job is to help banks make more money.
Draghi was vice chairman of Goldman Sachs during 2002 to 2005. His view is that of Wall Street. It’s not a vantage point helping labor or helping economies grow. So it’s not surprising that the trillion euros of new money that the eurozone’s central bank is creating hasn’t gone to help Greece, for instance, survive. It hasn’t gone to help Greece, Spain, Italy, or Portugal get out of depression by fueling government spending. It’s simply been given away to the banks to buy bonds and stocks, including buying American stocks and bonds.
Behind this policy is the trickle-down theory that if you can make the financial sector richer, if you can make the one percent and the 10 percent richer, it’s all going to trickle down. This is the view of Paul Krugman, and it’s the view of the advisers that Obama has had. But instead of trickling down, the stock and bond price gains by the 1% and 10% drive a wedge in the economy, by increasing the value of stocks and bonds and real estate and wealth against labor. So quantitative easing is largely behind the fact that the distribution of wealth has become worse rather than better since 2008.
PERIES: One of the things that has happened in Europe that you wrote to me actually in an email was the disappearing central banks’ role in stimulating economies. Why is this an issue?
HUDSON: Central banks originally were designed to monetize government deficits. Governments are supposed to spend money into the economy, because that helps economies grow. But in Europe the Lisbon agreements say governments can’t run a deficit more than 3 percent of national income.
Furthermore, the role of the European Central Bank is not to give a penny to governments. They say that if you give a penny to government, you’ll have hyperinflation like you had in Weimar. So the central bank can only give money to banks – to invest in stocks and bonds. But the ECB won’t buy fresh bonds to finance new government spending. The result of this policy of not funding government deficits is that if the economy is to grow, it has to be entirely dependent on commercial banks for credit.
We had this situation in the United States in the last few years of the Clinton administration when the United States actually ran a budget surplus instead of a deficit. Now, how do you think the United States could grow when there’s a budget surplus sucking money out of the economy?
The answer is that commercial banks and bondholders have to supply the money. But the banks only supplied money in the form of junk mortgages and other forms of an economic bubble, such as takeover loans and a stock market bubble.
The interest of banks is not to help economies grow; it’s to extract interest from the economy. The financial sector uses part of its rising wealth to lobby for privatization sell-offs. The problem with this is that when you privatize a public utility, you give away a monopoly – and if you deregulate the economy, you let the monopoly set up tollbooths over the economy, for toll roads, communications or whatever is being privatized.
The ECB is telling Greece to privatize to raise the money to pay its bondholders, the ECB and IMF. So you have quantitative easing going hand-in-hand with the insistence on privatization. The result is debt deflation as the economy is forced to depend more and more on banks for the money to grow, instead of on government spending into the economy. You’re having the governments not being able to spend on infrastructure, letting it fall apart, as is happening with bridges and tunnels in the United States.
The next step is for the government to say, “I’m sorry, the central bank doesn’t have enough money to help us build new infrastructure. So we’ve got to sell it off to private investors who do have the money.” The next thing you know, you have the economy ending up looking like Chicago. That city sold off its sidewalks and its parking meters to Goldman Sachs and to other Wall Street firms. All of a sudden the prices of parking, driving, and living in Chicago went way, way up instead of lowering the costs as privatization promised.
You have the same phenomenon here that England suffered under Margaret Thatcher: costs for hitherto public services go up. Transportation costs go way up. Road costs go up. Communications, internet costs, telephone costs, everything that is privatized goes way up. Financialization leads to a rent-extractive, almost neo-feudal economy.
In that sense, quantitative easing and the refusal of central banks to fund governments (except to pay bondholders and bail out commercial banks) is a new kind of class war. It’s not the old kind of class war, which was between employers and their workforce over what wages will be. It’s by the financial sector trying to take over the economy, and especially to take over the public sector, to take over the public domain, to take over public utilities and whatever assets a government has. If governments cannot borrow from central banks, they have to begin selling off property.
PERIES: Michael, this is exactly what’s happening in Greece right now. The SYRIZA government is somewhat forced to continue privatization as a part of the agreement of the loans that they have been given by European banks. What could they do in this situation?
HUDSON: This is really a scandal, because most privatizations are corrupt insider dealings. The SYRIZA Party came in and said, wait a minute, the privatizations that have been done are by governmental officials to their own cronies at a giveaway price. How can we balance the budget if we’re giving away the public utilities instead of getting a fair price for them?
The European Central Bank said, no, you have to give away privatization to cronies at pennies on the dollar just like Russia did under Yeltsin, just like the United States did with the railroad giveaways of the 19th century.
Remember, the American privatization to the railroad barons and their financial backers created essentially the ruling class of the 20th century. It created the American stock market. The same thing is happening in Greece. It’s being told to continue the former politicians’ drive to endow a new oligarchy, a new kind of a feudal monopoly lord, by these privatization giveaways. The ECB says that if you don’t do that, we’re going to bankrupt the banking system.
Yanis Varoufakis went back to the party congress in Parliament and asked whether they would approve this. The left wing in Greece has said, no, we won’t approve the giveaways.
The pretense is that privatization is to make money, but the European Central Bank is saying, no, you can’t make money; you have to give it away to our cronies. It’s all one happy financial family. This is escalating financial warfare.
I can assure you that neither Varoufakis nor SYRIZA has any interest in this kind of privatization giveaway. It’s trying to figure out some way of perhaps prosecuting the cronies for bribery, for internal connections, or figuring out some way of legally stopping the rotten policies that they’re told to follow by the European Central Bank – which isn’t giving a single euro to help Greece get over the economic depression that debt deflation has brought on. The euros are only given to the financial sector, basically to help declare war on the Greek government, the Spanish government, the Italian government.
This financial warfare is trying to achieve the same thing that military warfare did in the past. It’s aim is to grab the land, to grab control of the public infrastructure, to grab control of governments themselves. But it’s doing it financially rather than militarily.
PERIES: Right. The SYRIZA Party last week did agree to the conditions of privatization, that they would not roll back on the existing agreements that had been made by previous government. They agreed to not roll back on ones that are underway, and that they’re actually not even averse to privatization as a statement by Yanis Varoufakis. What does all this mean for Greece?
HUDSON: The financial gun was put to their head. If they wouldn’t have said that, there would have been a total breakdown, and the European Central Bank would have tried to bankrupt the Greek banks. So he didn’t have much of a choice. Everything that Varoufakis has written, and all that the political leader of SYRIZA has said, has been exactly the opposite. But they had to give lip service to what they were told to do, and any agreement that’s made has to be ratified by Parliament. So, what they’ve said is, okay, we’re going to play good cop, bad cop. We’ll be the good cops with you, and let Parliament and our left wing be the bad cops and say that we’re not going to stand for this.
‘New IMF loan to Ukraine will go down the drain’
RT | March 11, 2015
President Poroshenko’s government is far more corrupt and less efficient than the previous one, according to Martin Sieff, columnist for the Baltimore Post-Examiner. It’s like a black hole, the more money you pour in the less you will have, he added.
The International Monetary Fund (IMF) is to decide Wednesday whether to give a $17.5 billion bailout package to Ukraine. The Ukrainian parliament has already passed a series of austerity reforms to cut pensions and increase taxes in order to meet the creditors’ conditions, but more changes are going to be needed to gain this financial aid.
RT: About $4.6 billion in credit was extended to Ukraine in 2014, but its economic performance has scarcely improved. Does that mean the aid had no effect?
Martin Sieff: Pretty much yes, it does. It had the effect on keeping Ukraine afloat in the short-term. But this is an unconstitutional government in Ukraine which was really established by a violent coup in Kiev last year which has waged an aggressive war of repression against two secessionist provinces of its own country, which doesn’t have any real social contract with its own people. Its efforts to conscript large numbers of forces for the regular army have been met with peaceful but very clear resistance. This is a very weak disorganized government, it’s a black hole. The more money you pour in, the less effect you will have. You can keep it stable for a year or two but no longer than that.
RT: The IMF has agreed on a new $17.5 billion lifeline to Ukraine. Do you think that will be enough to stabilize the country’s economy even if fully implemented?
MS: The aid went at least in theory to what it was supposed to, but no doubt there was a great deal of corruption. It’s ironic that the government of President Yanukovich was accused of corruption and incompetence. This government is far more corrupt than the previous government was and it’s infinitely more incompetent. So simply money leaches away, but the real problem is the lack of credibility of governance. This government is even purging its civil service of anyone remotely accused or suspected of being efficient and loyal to President Yanukovich and his predecessors. You cannot have an efficient and credible government under these circumstances.
RT: The IMF is requesting a package of economic and political reforms to be carried out when providing financial assistance to any country. Are we seeing it carried out in Ukraine at least judging by its economic performance?
MS: No, no way. First of all, there is still unrest and violence in the two eastern provinces and spreading into other parts of the country. The security conflict and the conflict with Russia have to be settled first by this government. And they are not yet ready to settle it on terms that would be acceptable and reassuring to Moscow, but that has to be resolved first. Secondly, we saw even last year President Yanukovich broke off his negotiations with the EU, but he recognized that the terms under which the EU was ready to grant association to Ukraine would be disastrous and ruinous for the Ukrainian economy and the Ukrainian people. A year ago, the EU didn’t have the resources by itself to lift up even a peaceful Ukraine under democratically elected governance. The prospects of doing that now under President Poroshenko and his war-government, his war junta are very much less. So this would be $17 billion down the drain. You know they are all saying from Washington DC, I’m paraphrasing a little “$17 billion here, $17 billion there and soon you are talking about real money”.
RT: When signing the IMF program Ukraine makes certain financial obligations, do you think they could be committed at all in the current state of its economy or is it going to be a black hole of international aid?
MS: There is no question about that. This is very unwise economic policy that has a political motivation. The EU itself and the US government both plunged in recklessly to topple the Yanukovich government last year and to support President Poroshenko. And now we have the dominant mythology, the dominant narrative in Washington, and in Brussels, and in London is that this is “a stable democratic government which is being under threat from evil totalitarian forces to the East.” That is not the truth even remotely, but that is almost universally believed by policymakers in London and Washington and many of them in Brussels and therefore there is a political motivation to try and prop up Ukraine. But you can’t fix what’s already broken. You are pouring good money after bad. Ukraine’s problems first of all have to be solved in the security sphere then they have to be solved in the political sphere restoring the political amity and credibility and the incompetent but nevertheless stable civil service that existed until February 2014 a year ago. It was the EU and the US that broke Ukraine and they cannot fix it now by simply pouring money into a black hole.
Government deems security risks too low to ‘exempt defense from austerity,’ says think tank
RT | March 9, 2015
The government believes strategic threats posed to Britain are not serious enough to merit insulating military spending from budget cuts, according to a report by a top defense think-tank.
The paper by the Royal United Services Institute (RUSI) centers on the economics of defense under austerity.
It concludes: “The government is not yet convinced that strategic security risks are high enough to justify an exemption for defense from austerity.”
The findings jar with recent statements by politicians and leading generals on the dangers faced by the UK.
In February, the top British officer in NATO – General Sir Adrian Bradshaw – referred to Russia as an “obvious existential threat to our whole being,” while Prime Minister David Cameron has called the rise of the Islamic State a “mortal threat.”
The investigation also indicates Britain is unlikely to meet the symbolic spending of 2 percent of GDP on defense, expected by NATO in coming years, and that thousands of soldiers could be cut irrespective of who wins the general election this year.
It warns that up to 30,000 service personnel could be axed. Given the Royal Navy may be largely exempt from redundancies, to ensure it can crew Britain’s aircraft carriers, the army could be forced to handle 80 percent of the intended reductions.
The report comes at a difficult time for David Cameron who this week faces a rebellion by a number of Tory MP’s over defense cuts.
Last week Bob Stewart, an army colonel turned Tory MP, argued defense is in a “parlous state” and that service chiefs should resign over cuts. He suggested he might step down himself, either as an MP or from the influential Defence Select Committee.
UK allies are also worried. General Raymond Odierno, chief of staff of the US Army, recently told the Telegraph he was “very concerned” at the cuts being made to the UK’s armed forces.
He criticized Chancellor George Osborne’s refusal to confirm whether the UK will meet NATO member states’ spending target of 2 percent of respective national GDP.
“What has changed, though, is the level of capability. In the past we would have a British Army division working alongside an American army division,” he added. Cuts mean the US Army now expects Britain to provide only half its previous commitment.
Pharmageddon: America’s bitter pill
RT | December 27, 2011
The United States has a passion for pills, being the world’s biggest users of psychotropic drugs, consuming 60 per cent of them. And pharmaceutical firms are keen to keep cashing in on the multibillion-dollar market, even if it costs people’s health.
America is regarded as a country with a prodigious appetite for consumption. Today, a widespread fondness for pharmaceuticals has turned the US into a nation of pill-poppers.
With over $14 billion in annual sales, antipsychotics remain the top-selling therapeutic class of prescription drugs in the US.
Dr. Harriet Fraad believes Big Pharma has manufactured a climate of insanity by manipulating and even creating illness for capital gain.
“One of the things that drives Big Pharma is to find a diagnosis that is very vague, so that everybody can fall into that,” she told RT. “Everybody is sad sometimes. There are good reasons. The point is to market pharmaceuticals. And the advertising strategy is to have vague diagnosis and then find wiggle room so that they apply to everyone.”
The US is the only Western country that allows direct-to-consumer advertising of prescription drugs. For example, an ad for Attention Deficit Hyperactivity Disorder warns that untreated patients will likely end up divorced. Another commercial promises to make you happier, but side-effects may include dry mouth, insomnia, sexual dysfunction, diarrhea, nausea and sleepiness.”
Critics also say Big Pharma uses its financial muscle to ply doctors with gifts, cash kick-backs and research funding in exchange for endorsing or prescribing the latest and most lucrative drugs.
Harriet Fraad says there is a whole network of doctors hustling these drugs.
“If a patient comes in with a knee injury and says, ‘I’m so sad.’ Oh, are you depressed? Hey write a prescription! They’re given out like M&Ms.”
Last year, prescription drug abuse became the number one cause of accidental death, with more than 30,000 Americans overdosing.
For instance, Seroquel, medication for bi-polar disorder, generated $4.4 billion in sales last year.Listing all its side-effects requires 49 seconds of air-time.
The number of children consuming antipsychotic medication has doubled in the past decade. Millions of American adolescents are taking drugs like Adderall, doled out by doctors to treat hyperactivity.
Author of Surviving America’s Depression Epidemic, psychologist Bruce Levine, told RT that, “All these drugs are very similar to illicit or illegal drugs, except they’re more dangerous. Marijuana is a little safer. But kids have no choice.”
Pfizer, America’s most profitable multinational pharmaceutical company makes anti-depressants not only for people, but also for animals. In 2009, the pharmaceutical giant paid $2.3 billion to settle civil and criminal allegations over illegally marketing one of its drugs. It was the largest healthcare fraud settlement and criminal fine in US history.That being said, the fine amounted to less than three weeks of Pfizer’s drug sales.
“The money is so huge that the fines are immaterial. They’re not thinking about the social effects of what they’re doing. They’re thinking about the profits they accrue,” says psychotherapist Harriet Fraad.
The pharmaceutical industry remains the most profitable business in the US. More success and financial gain for the companies will always remain possible as long as more Americans are encouraged to take drugs.
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Iran UN ambassador calls for destruction of all nuclear weapons
Iran’s ambassador to the UN Gholamali Khoshroo
Press TV – March 29, 2017
Iran’s ambassador to the UN Gholamali Khoshroo has called for the total eradication of nuclear weapons.
Khoshroo reiterated Iran’s call during a UN conference aimed at creating a nuclear weapons ban treaty in New York on Tuesday.
“Iran, as a victim of chemical weapons, strongly feels the danger posed by the existence of weapons of mass destruction and is determined to engage actively in international diplomatic efforts to save humanity from the menace of nuclear weapons,” he said.
Khoshroo stressed that Iran is committed to its Non-Proliferation Treaty (NPT) obligations, which include negotiations based on effective nuclear disarmament measures.
He added that several countries continue to ignore international calls and treaties for nuclear disarmament and even continue to increase their nuclear stockpiles. “They do not have political determination to abandon doctrines of nuclear deterrence and nuclear terror,” he went on to say.
Iran’s UN ambassador noted that boycotting the talks by many countries, including the US, shows that the world’s nuclear powers are by no means committed to the eradication of nuclear arms. Britain and France were also among the some 40 countries that did not join the talks.
“We note that prohibition of nuclear weapons must be accompanied by the elimination of such weapons. There can be no doubt that without complete abolition of nuclear weapons, there will be no absolute guarantee against the danger of nuclear war and the use of such weapons,” Khoshroo added.
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