Economics « Aletho News

The Revolution Within the Revolution Will Continue

By Kevin Zeese and Margaret Flowers | Dissident Voice | March 5th, 2013

The death of Hugo Chávez is a great loss to the people of Venezuela who have been lifted out of poverty and have created a deep participatory democracy. Chavez was a leader who, in unity with the people, was able to free Venezuela from the grips of US Empire, bring dignity to the poor and working class, and was central to a Latin American revolt against US domination.

Chávez grew up a campesino, a peasant, raised in poverty. His parents were teachers, his grandmother an Indian whom he credits with teaching him solidarity with the people. During his military service, he learned about Simon Bolivar, who freed Latin America from Spanish Empire. This gradually led to the modern Bolivarian Revolution he led with the people. The Chávez transformation was built on many years of a mass political movement that continued after his election, indeed saved him when a 2002 coup briefly removed him from office. The reality is Venezuela’s 21st Century democracy is bigger than Chávez. This will become more evident now that he is gone.

The Lies They Tell Us

If Americans knew the truth about the growth of real democracy in Venezuela and other Latin American countries, they would demand economic democracy and participatory government, which together would threaten the power of concentrated wealth. Real democracy creates a huge challenge to the oligarchs and their neoliberal agenda because it is driven by human needs, not corporate greed. That is why major media in the US, which are owned by six corporations, aggressively misinform the public about Chávez and the Bolivarian Revolution.

Mark Weisbrot of the Center for Economic and Policy Research writes:

The Western media reporting has been effective. It has convinced most people outside of Venezuela that the country is run by some kind of dictatorship that has ruined it.

In fact, just the opposite is true. Venezuela, since the election of Chávez, has become one of the most democratic nations on Earth. Its wealth is increasing and being widely shared. But Venezuela has been made so toxic that even the more liberal media outlets propagate distortions to avoid being criticized as too leftist.

We spoke with Mike Fox, who went to Venezuela in 2006 to see for himself what was happening. Fox spent years documenting the rise of participatory democracy in Venezuela and Brazil. He found a grassroots movement creating the economy and government they wanted, often pushing Chávez further than he wanted to go.

They call it the “revolution within the revolution.” Venezuelan democracy and economic transformation are bigger than Chávez. Chávez opened a door to achieve the people’s goals: literacy programs in the barrios, more people attending college, universal access to health care, as well as worker-owned businesses and community councils where people make decisions for themselves. Change came through decades of struggle leading to the election of Chávez in 1998, a new constitution and ongoing work to make that constitution a reality.

Challenging American Empire

The subject of Venezuela is taboo because it has been the most successful country to repel the neoliberal assault waged by the US on Latin America. This assault included Operation Condor, launched in 1976, in which the US provided resources and assistance to bring friendly dictators who supported neoliberal policies to power throughout Latin America. These policies involved privatizing national resources and selling them to foreign corporations, de-funding and privatizing public programs such as education and health care, deregulating and reducing trade barriers.

In addition to intense political repression under these dictators between the 1960s and 1980s, which resulted in imprisonment, murder and disappearances of tens of thousands throughout Latin America, neoliberal policies led to increased wealth inequality, greater hardship for the poor and working class, as well as a decline in economic growth.

Neoliberalism in Venezuela arrived through a different path, not through a dictator. Although most of its 20th century was spent under authoritarian rule, Venezuela has had a long history of pro-democracy activism. The last dictator, Marcos Jimenez Perez, was ousted from power in 1958. After that, Venezuelans gained the right to elect their government, but they existed in a state of pseudo-democracy, much like the US currently, in which the wealthy ruled through a managed democracy that ensured the wealthy benefited most from the economy.

As it did in other parts of the world, the US pushed its neoliberal agenda on Venezuela through the International Monetary Fund (IMF) and World Bank. These institutions required Structural Adjustment Programs (SAP) as terms for development loans. As John Perkins wrote in Confessions of an Economic Hit Man, great pressure was placed on governments to take out loans for development projects. The money was loaned by the US, but went directly to US corporations who were responsible for the projects, many of which failed, leaving nations in debt and not better off. Then the debt was used as leverage to control the government’s policies so they further favored US interests. Anun Shah explains the role of the IMF and World Bank in more detail in Structural Adjustment – a Major Cause of Poverty.

Neoliberalism Leads to the Rise of Chávez

A turning point in the Venezuelan struggle for real democracy occurred in 1989. President Carlos Andres Perez ran on a platform opposing neoliberalism and promised to reform the market during his second term. But following his re-election in 1988, he reversed himself and continued to implement the “Washington Consensus” of neoliberal policies – privatization and cuts to social services. The last straw came when he ended subsidies for oil. The price of gasoline doubled and public transportation prices rose steeply.

Protests erupted in the towns surrounding the capitol, Caracas, and quickly spread into the city itself. President Perez responded by revoking multiple constitutional rights to protest and sending in security forces who killed an estimated 3,000 people, most of them in the barrios. This became known as the “Caracazo” (“the Caracas smash”) and demonstrated that the president stood with the oligarchs, not with the people.

Under President Perez, conditions continued to deteriorate for all but the wealthy in Venezuela. So people organized in their communities and with Lieutenant Colonel Hugo Chávez attempted a civilian-led coup in 1992. Chávez was jailed, and so the people organized for his release. Perez was impeached for embezzlement of 250 million bolivars and the next president, Rafael Caldera, promised to release Chávez when he was elected. Chávez was freed in 1994. He then traveled throughout the country to meet with people in their communities and organizers turned their attention to building a political movement.

Chávez ran for president in 1998 on a platform that promised to hold a constituent assembly to rewrite the constitution saying:

I swear before my people that upon this moribund constitution I will drive forth the necessary democratic transformations so that the new republic will have a Magna Carta befitting these new times.

Against the odds, Chávez won the election and became president in 1999.

While his first term was cautious and center-left, including a visit by Chávez to the NY Stock Exchange to show support for capitalism and encourage foreign investment, he kept his promise. Many groups participated in the formation of the new constitution, which was gender-neutral and included new rights for women and for the indigenous, and created a government with five branches adding a people’s and electoral branches. The new constitution was voted into place by a 70 percent majority within the year. Chávez also began to increase funding for the poor and expanded and transformed education.

Since then, Chávez has been re-elected twice. He was removed from power briefly in 2002, jailed and replaced by Pedro Carmona, the head of what is equivalent to the Chamber of Commerce. Fox commented that the media was complicit in the coup by blacking it out and putting out false information. Carmona quickly moved to revoke the constitution and disband the legislature. When the people became aware of what was happening, they rapidly mobilized and surrounded the capitol in Caracas. Chávez was reinstated in less than 48 hours.

One reason the Chávez election is called a Bolivarian Revolution is because Simon Bolivar was a military political leader who freed much of Latin America from the Spanish Empire in the early 1800s. The election of Chávez, the new constitution and the people overcoming the coup set Venezuela on the path to free itself from the US empire. These changes emboldened the transformation to sovereignty, economic democracy and participatory government.

In fact, Venezuela paid its debts to the IMF in full five years ahead of schedule and in 2007 separated from the IMF and World Bank, thus severing the tethers of the Washington Consensus. Instead, Venezuela led the way to create the Bank of the South to provide funds for projects throughout Latin America and allow other countries to free themselves from the chains of the IMF and World Bank too.

The Rise of Real Democracy

The struggle for democracy brought an understanding by the people that change only comes if they create it. The pre- Chávez era is seen as a pseudo Democracy, managed for the benefit of the oligarchs. The people viewed Chávez as a door that was opened for them to create transformational change. He was able to pass laws that aided them in their work for real democracy and better conditions. And Chávez knew that if the people did not stand with him, the oligarchs could remove him from power as they did for two days in 2002.

With this new understanding and the constitution as a tool, Chávez and the people have continued to progress in the work to rebuild Venezuela based on participatory democracy and freedom from US interference. Chávez refers to the new system as “21st century socialism.” It is very much an incomplete work in progress, but already there is a measurable difference.

Mark Weisbrot of CEPR points out that real GDP per capita in Venezuela expanded by 24 percent since 2004. In the 20 years prior to Chávez, real GDP per person actually fell. Venezuela has low foreign public debt, about 28 percent of GDP, and the interest on it is only 2 percent of GDP. Weisbrot writes:

From 2004-2011, extreme poverty was reduced by about two-thirds. Poverty was reduced by about one-half, and this measures only cash income. It does not count the access to health care that millions now have, or the doubling of college enrollment – with free tuition for many. Access to public pensions tripled. Unemployment is half of what it was when Chávez took office.

Venezuela has reduced unemployment from 20 percent to 7 percent.

As George Galloway wrote upon Chávez’s death:

Under Chávez’ revolution the oil wealth was distributed in ever rising wages and above all in ambitious social engineering. He built the fifth largest student body in the world, creating scores of new universities. More than 90% of Venezuelans ate three meals a day for the first time in the country’s history. Quality social housing for the masses became the norm with the pledge that by the end of the presidential term, now cut short, all Venezuelans would live in a dignified house.

Venezuela is making rapid progress on other measures too. It has a high human development index and a low and shrinking index of inequality. Wealth inequality in Venezuela is half of what it is in the United States. It is rated “the fifth-happiest nation in the world” by Gallup. And Pepe Escobar writes that:

No less than 22 public universities were built in the past 10 years. The number of teachers went from 65,000 to 350,000. Illiteracy has been eradicated. There is an ongoing agrarian reform.

Venezuela has undertaken significant steps to build food security through land reform and government assistance. New homes are being built, health clinics are opening in under-served areas and cooperatives for agriculture and business are growing.

Venezuelans are very happy with their democracy. On average, they gave their own democracy a score of seven out of ten while the Latin American average was 5.8. Meanwhile, 57 percent of Venezuelans reported being happy with their democracy compared to an average for Latin American countries of 38 percent, according to a poll conducted by Latinobarometro. While 81 percent voted in the last Venezuelan election, only 57.5 percent voted in the recent US election.

Chávez won that election handily as he has all of the elections he has run in since 1999. As Galloway describes him, Chávez was “the most elected leader in the modern era.” He won his last election with 55 percent of the vote but was never inaugurated due to his illness.

Beyond Voting: The Deepening of Democracy in Venezuela

This is not to say that the process has been easy or smooth. The new constitution and laws passed by Chávez have provided tools, but the government and media still contain those who are allied with the oligarchy and who resist change. People have had to struggle to see that what is written on paper is made into a reality. For example, Venezuelans now have the right to reclaim urban land that is fallow and use it for food and living. Many attempts have been made to occupy unused land and some have been met by hostility from the community or actual repression from the police. In other cases, attempts to build new universities have been held back by the bureaucratic process.

It takes time to build a new democratic structure from the bottom up. And it takes time to transition from a capitalist culture to one based on solidarity and participation. In “Venezuela Speaks,” one activist, Iraida Morocoima, says “Capitalism left us with so many vices that I think our greatest struggle is against these bad habits that have oppressed us.” She goes on to describe a necessary culture shift as, “We must understand that we are equal, while at the same time we are different, but with the same rights.”

Chávez passed a law in 2006 that united various committees in poor barrios into community councils that qualify for state funds for local projects. In the city, community councils are composed of 200 to 400 families. The councils elect spokespeople and other positions such as executive, financial and “social control” committees. The council members vote on proposals in a general assembly and work with facilitators in the government to carry through on decisions. In this way, priorities are set by the community and funds go directly to those who can carry out the project such as building a road or school. There are currently more than 20,000 community councils in Venezuela creating a grassroots base for participatory government.

A long-term goal is to form regional councils from the community councils and ultimately create a national council. Some community councils already have joined as communes, a group of several councils, which then have the capacity for greater research and to receive greater funds for large projects.

The movement to place greater decision-making capacity and control of local funds in the hands of communities is happening throughout Latin America and the world. It is called participatory budgeting and it began in Porto Alegre, Brazil in 1989 and has grown so that as many as 50,000 people now participate each year to decide as much as 20 percent of the city budget. There are more than 1,500 participatory budgets around the world in Latin America, North America, Asia, Africa, and Europe. Fox produced a documentary, Beyond Elections: Redefining Democracy in the Americas, which explains participatory budgeting in greater detail.

The Unfinished Work of Hugo Chávez Continues

The movements that brought him to power and kept him in power have been strengthened by Hugo Chávez. Now the “revolution within the revolution” will be tested. In 30 days there will be an election and former vice president, now interim president, Nicolas Maduro will likely challenge the conservative candidate Chávez defeated.

If the United States and the oligarchs think the death of Chávez means the end of the Bolivarian Revolution he led, they are in for a disappointment. This revolution, which is not limited to Venezuela, is likely to show to itself and the world that it is deep and strong. The people-powered transformation with which Chávez was in solidarity will continue.

• This article is a modified version of “The Secret Rise of 21st Century Democracy,”which originally appeared in Truthout.

March 6, 2013 Posted by aletho | Economics, Solidarity and Activism, Timeless or most popular | Bolivarian Revolution, Carlos Andrés Pérez, Chavez, Hugo Chávez, International Monetary Fund, Latin America, Venezuela | Leave a comment

No Cuts! Tax the Rich!

By MARK VORPAHL | CounterPunch | March 5, 2013

It’s no secret that most cities, counties, states and school districts in the U.S. are facing big deficits. What is less understood is the extent to which austerity cuts have become politicians’ bi-partisan response to the situation. The dramatic measures being implemented in Portland, Oregon are no exception.

By “austerity” is meant a bag of policies intent on “reforming,” that is, reducing spending by cutting jobs and public services, tearing up social contracts that workers have benefited from, and, in general, making workers and the poor do all the sacrificing to close budgetary imbalances. These austerity measures range from potential cuts to Social Security and Medicare to cuts on a local level that go after our schools, social services, parks, and infrastructure.

While this “sacrificing” is imposed on the vast majority of citizens, obscenely low tax rates for big business and the wealthy are being left in place as their profits swell and their dominance over the political system increases. To appreciate the scope of this trend, one need merely note The New York Times report that there are “nearly $1.1 trillion in annual deductions, credits and other tax breaks that flow disproportionately to the highest income Americans and that cost more, each year, than Medicare and Medicaid combined.”

The Case in Portland

Portland’s newly elected Democratic Mayor Charlie Hales has announced that there is a $25 – $40 million hole in the city’s budget. In response, he is demanding that all 27 city bureaus submit budget proposals with 10 percent cuts. This latest round follows several consecutive years of budget cuts.

The cuts already put into effect have resulted in lost jobs, underfunded services and a decline in Portland’s livability. While it is not clear yet how Hales will wield his cleaver, he is signaling that his cuts will be the deepest yet. The programs that he has already targeted — at-risk teen summer internships, job-training efforts and youth bus passes, among others — will have an immediate impact on great numbers of households, shifting the costs of these publicly funded programs onto the shoulders of families that can least take the burden.

The majority of Portland’s residents can ill afford the costs of trying to close the deficit without damaging the regional economy further. Portland’s unemployment rate is 7.9 percent. According to the Business Journal, 8.3 percent of Portland families live below the poverty level; for families with children the number is 12.9 percent, and 27.4 percent for single, divorced and separated women. If he gets his way, Mayor Hales’ austerity axe will continue to swing at the city’s most vulnerable citizens.

Portland’s top companies make hundreds of millions, if not billions, every year. In Oregon the share of total state income collected by the wealthiest 1 percent increased by 70 percent from 1979 to 2009. In contrast, during that same period, the bottom 80 percent of Oregonians saw their income decline.

In 2009 the highest effective state tax rate for corporations with profits over $10 million was less than 1 percent. For a middle income Oregon household, the average effective rate of payment was 4.1 percent.

If corporations paid the same rate of state and city income taxes that is expected of most citizens, there would be no deficit, no crisis, no need for cuts. Given the vast amount of untouched revenue tucked away in these corporate coffers, Hales’ call for public “sacrifice” to balance the city’s budget amounts to a shell game to distract people from asking, “Where is the money?”

Portland is not broke. The problem is that those with the money are being let off the hook.

Special Arrangements

In addition, Portland’s city budget is far from transparent. It is divided into a General Fund, which is where the so-called deficit is located, as well as Internal Service Funds (ISF). ISFs are unrestricted net assets of the city. They can be used for any purpose. The amount of money in this part of the budget has been steadily increasing. In 2010-2011, the ISF balance was $120.6 million.

But rather than using this money to benefit Portland’s working class communities, the City Council keeps it stashed away for pet projects to lure wealthy investors to the city. Since the ISF lacks transparency and accountability, it is difficult to determine how the money in these funds is used; we only know that it isn’t available when the tax paying public needs it.

Another way Portland’s politicians stash away huge sums to benefit big business is through the use of Urban Renewal (UR). UR requires that money be spent on development projects in a certain area. The revenue created by this development, including property taxes, remains locked up in the area for decades — from 20 to 50 years.

UR taxes in 2010-2011 amounted to $35 million for the city of Portland alone. These funds can only be spent in the UR areas from which they were collected. Consequently, while the posh UR area of Portland’s Pearl District enjoys more public funds than it needs, elsewhere in Portland school closures are looming, streets remain unpaved and infrastructure and park maintenance is done on the cheap, if at all.

Put simply, UR is a means of enriching developers and other corporate interests — like big contributors to politicians’ campaign funds — to the detriment of Portland’s working class communities. The fact that this model, which results in widening inequality, continues to be pursued by those advocating cuts to public programs could not make more clear where these politicians’ allegiances lie.

While Mayor Hales is blaming the city’s deficit on several factors, the math does not add up. When low corporate tax rates, the millions kept in shady city funds, and the revenue drain of development programs such as UR are taken into account, it becomes clear that Portland’s deficit hawks are manufacturing a crisis in order to continue arrangements where workers are left to pay for big business’ greed.

Our Priorities, Our Budget

In addition to the “I feel your pain” displays by Mayor Hales towards those affected by his cuts, he will also employ the tactic of divide and conquer. Those threatened by these cuts will be told the lie that raising revenue by taxing big business and the wealthy is off the table. “The pie is only so big,” promoters of the cuts moan, “you must decide your own priorities.” And in this way they hope to set different communities and unions against one another.

It should be clear, for reasons already discussed, how false this storyline is. While there is likely more than a little padding in upper management that can be cut, and plenty of taxes that remain uncollected, the truth is that a real solution to Portland’s deficit won’t emerge until these priorities are confronted and turned around.

What would a budget that prioritizes peoples’ needs look like? Rather than job cutting, it would fund job creation. Instead of slashing social programs, it would build a thriving and accountable public sector. And corporate interests would take second place behind the health of working class communities. A people’s budget could easily be funded if the 1 percent paid their fair share in taxes and were not given the driver’s seat in determining Portland’s development and political policies.

To change business as usual in Portland will require mobilizing an independent grassroots social force to oppose Hales’ cuts and the corporate interests behind them. It will take a unified Labor and community movement capable of expanding its goals towards winning a people’s budget.

The demands to unite such a movement must be those that the greatest numbers are willing to mobilize behind. “No Cuts! Tax the Rich!” would be a good place to start. While each union and community group has its own priorities, highlighting those which build the broadest unity in mass campaigns and rallies is the best way to bring these organizations’ specific concerns and struggles to the greatest number.

With his austerity cuts, Mayor Hales has issued a challenge to the grassroots. A unified fightback is necessary to meet it. With such a movement it will be possible to shift the political dialogue towards measures that serve the vast majority of citizens. Without it, Portland will be left with Hales’ cuts and worse.

At the same time, a big fight is gearing up as Oregon’s democratic governor has threatened cuts to public workers’ jobs and retirement benefits, on the tail of passing emergency legislation to lock in Nike’s absurdly low tax rate for 30 years. In building a citywide response, Labor and community groups will be strengthening their capacity to take on austerity at a statewide level as well.

Every city, county and statewide struggle against the corporate austerity attacks can set an example for and strengthen our ability to resist cuts to Medicare, Social Security and other socially needed federal programs. From this resistance a movement can develop with the ability not only to resist attacks — but to fight for and implement policies that benefit all working people.

Mark Vorpahl is a union steward, social justice activist and a writer for Workers Action and Occupy.com. He can be reached at Portland@workerscompass.org

March 5, 2013 Posted by aletho | Economics, Supremacism, Social Darwinism | Austerity, Mayor Hales, Oregon, Portland, Portland Oregon, United States | Leave a comment

Ricardo Haussmann – a reliable commentator for the Guardian on Venezuela?

By Dr Francisco Dominguez | Venezuela Solidarity Campaign | March 3, 2013

Last Monday the Guardian Comment is Free website carried a piece by Ricardo Haussmann on Venezuela entitled The legacy of Hugo Chávez: Low growth, high inflation, intimidation.

The piece painted a doomsday scenario for modern day Venezuela, arguing that “Venezuelan leader Hugo Chávez is a master at holding onto power, but it has cost his country and people dearly.”

Ironically this came out just days before the Venezuelan economy was announced to have grown 5.6% in 2012 on the back of a huge housing stimulus.

Worse still, the piece appeared just a couple of days before the anniversary of the ‘Caracazo’ of 1989. The Caracazo is the day when the Venezuelan people rose up against a package of cuts forced on them. Over two thousand people were then brutally executed by state security forces in what has been termed Venezuela’s worst human rights disaster in history. In stark contrast, precisely on February 27 (2013), Venezuela was elected by about three quarters of the governments represented in the UN to become permanent member of the United Nations Human rights Council for three years.

What is the link between this and Ricardo Haussmann?

In 1989, he was an economic advisors to the soon-to-be-disgraced president Carlos Andres Perez who carried out the cuts and subsequent Caracazo violence.

As this academic paper points out:

“Pérez appointed to his economic cabinet a team of radically pro-market technocrats largely recruited from the Instituto de Estudios Superiores de Administración (IESA). These ministers–among whom were Miguel Rodríguez, Moisés Naím, Ricardo Haussmann, Gerver Torres, and Julián Villalba–became known as the “IESA Boys,” by analogy to the “Chicago Boys” of Pinochet’s Chile. This team designed the shock “paquete” that Pérez promised in his inaugural address in February 1989 and put into effect two weeks later”.

After that, from 1992 to 1993, Haussmann served as Minister of Planning in Venezuela and as a member of the Board of the Central Bank of Venezuela also under Carlos Andres Perez. Clearly the ‘Caracazo’ was not severe enough to break his link with President Perez.

Around the same time, Haussmann was Chair of the IMF-World Bank Development Committee. Judging by the nature and tone of his attack on the current Venezuelan government, one may have expected this to have been the dawn of some golden IMF-sponsored growth across Latin America.

Yet as economist Mark Weisbrot has pointed out, this period marked the worst economic performance of the Continent in a century. Only with the recent leftward shift (in many ways led by Venezuela) was there a much needed combination of economic growth and social justice.

Rejected by the Carter Centre

Haussmann later based himself in the US at Harvard, but came to prominence again following the 2004 recall referendum against Hugo Chavez, when he published a paper claiming that “statistically” the outcome could have been the result of fraud. At the time, the Wall Street Journal was amongst those who recycled the claim. The well respected Carter Centre debunked the myth and the politically motivated claims of fraud by stating clearly that “the results were accurate”.

Haussmann’s and Venezuela’s new right

In the run up to last October’s election, won by Hugo Chavez in a landslide victory, it was Haussmann (acting as an advisor to the defeated right-wing candidate Henrique Capriles) who claimed the right-wing opposition would have 200,000 people at polling stations and could then announce their own results before the official ones.

Luckily this plan – which was seen by many as the start of a worrying destabilisation aimed at getting the legitimate results not recognised internationally – failed to pick up momentum due to the scale of Hugo Chavez’s victory, with Capriles himself recognising the results. But this was not before the Spanish newspaper ABC had published a fake exit poll claiming Hugo Chavez had lost.

Surely his role as an advisor to the right-wing political candidate should have featured in the Guardian piece. This would better explain the reasons for the content of the piece.

Likewise sections of the British media have also recently quoted Diego Arria (who denies the 2002 coup in Venezuela was even a coup!) and the 2002 coup-supporting, hard right-wing MP (and friend of George W.Bush) María Corina Machado. Both are prominent signatories to a recent public petition calling on the Venezuelan military to overturn the country’s elected government.

Of course, people are entitled to express their views on Venezuela. But it’s clear that the Venezuelan people have time and again rejected the views pushed by Haussmann and the other members of the Venezuelan right recently attracting such interest in certain quarters of the British media.

March 4, 2013 Posted by aletho | Deception, Economics, Mainstream Media, Warmongering | Caracazo, Instituto de Estudios Superiores de Administración, Venezuela | Leave a comment

ASA Summit Promotes South-South Ties, Regional Integration

Venezuelanalysis | March 1, 2013

The signing of twenty-seven new economic and social agreements between the nations of South America and Africa was the product of three days of meetings held between representatives of more than 60 countries in Equatorial Guinea last week.

The Third South America Africa Summit (ASA) took place just outside the capital of Malabo, where heads of states and high-ranking officials outlined ways to improve commercial, technological and transportation collaboration between the two continents.

Brazilian President Dilma Rousseff as well as Bolivia’s President Evo Morales were in attendance on Friday as were the presidents of Nigeria, South Africa, Senegal, Suriname and Cape Verde, among others.

“We are here to contribute with our experiences together, always thinking about the liberation of our countries in Africa as well as in Latin America and the Caribbean”, said President Morales on Friday.

During his speech, Morales drew attention to the need to take back the natural resources that have been “looted” by the United States and Europe, highlighting the gains that have been made as a result of such policies in the Americas.

“We began to take back our resources and the result has been a change in the economic and financial history of much of the countries in Latin America and the Caribbean”, the Bolivian head of state asserted.

“Unity for the dignity of our peoples, unity for equality, and, above all, unity for our liberation”, he added.

This sentiment of economic and political independence was echoed by the majority of ASA representatives including Nigerian Foreign Minister, Viola Adaku Onwuliri.

“Let’s show our ability to make tangible decisions that will lead to economic development and the integration of Africa and South America.

With true political will, we will be able to achieve it, just a s we have already been able to overcome the burdens of colonialism and racism”, Onwuliri said.

For his part, Venezuelan Foreign Minister Elias Jaua read a letter written by Hugo Chavez who apologized for his inability to participate personally in the conference.

“I truly lament, in the deepest of ways, my inability to be physically present with you and I reiterate once again…my most irrevocable commitment to the cause of union between our people”, the Venezuelan President wrote.

In his missive, Chavez hailed the “indivisible historic ties” that bind the regions and which have obliged the two continents “to walk together until the very end”.

“I will never be tired of saying it: we are one people. We must find each other, beyond the formalities and the speeches, in the feeling of unity.”

“In this way we will take our people out of the labyrinth where they had been cast by colonialism and, in the 20th century, by neoliberal capitalism”, the head of state said.

EXPANDING THE ALLIANCE

Apart from the commercial accords inked on Saturday, participating countries also expressed their support for Argentina in its territorial dispute with the United Kingdom over the Falkland Islands.

A further resolution saw the condemnation of the more than 50 year-old US blockade on Cuba and a declaration calling for Palestine to become a full member of the United Nations.

Many countries expressed their desire for the expansion of the ASA alliance, advocating the inclusion of all of Latin America and the Caribbean, not only those members belonging to the Union of South American Nations (Unasur) bloc.

President Nguema of Equatorial Guinea described the absence of these nations as “unjustifiable” given the important commonalities that exist between Africa and the developing nations of the Americas.

“The history of our continents, largely exploited by other countries, compels us to take measures of South-South cooperation which will allow us to emerge with liberty, independence and coexistence in this globalized world of confronting interests”, Nguema said.

Following this line, the President of the Spanish-speaking African nation proposed that ASA be incorporated into the recently established Community of Latin American and Caribbean States (CELAC) alliance that includes all countries in the Americas except the United States and Canada.

Venezuelan Foreign Minister Jaua reported that Nguema’s proposal has received the support of many allied Latin American nations and that “what needs to be done is to discuss [the proposal] with Unasur and then with CELAC”.

Jaua additionally informed that there will be an encounter between the leading members of ASA next month in the Venezuelan capital of Caracas to guarantee the materialization of the agreements signed last weekend.

“On April 26, there will be a meeting of the Follow-Up Commission which is made up of Nigeria, Brazil, and Equatorial Guinea to see through the accords that have been solidified in this third summit,” the Venezuelan Minister said.

FINDING ITS FOOTING

The tri-annual ASA first took place in Abuya, Nigeria in 2006 and was followed by a second encounter in Margarita Island, Venezuela in 2009.

While many member nations agree that more needs to be done to strengthen the alliance, trade between the continents has grown from $7.2 billion in 2002 to $39.4 billion in 2011.

Ecuadoran Foreign Minister Ricardo Patino explained that relations between the two regions have not been easy over the years “because we don’t know each other very much and we don’t have much work experience together.”

At the same time, Patino affirmed that there are great possibilities for collaboration and that the two continents “have much to offer one another” in ways that go beyond pure commercial relations.

Ecuador is slated to host the next ASA summit in 2016.

Venezuela’s Chavez to Africa – South America Summit: We Must Unite (venezuelanalysis.com)

March 1, 2013 Posted by aletho | Economics, Solidarity and Activism | Africa, ASA, Latin America, South America, Venezuela | Leave a comment

Gasoline prices, a challenge to Obama

By Ralph Nader | February 28, 2013

Here we go again. A sudden surge in the price of gasoline and heating oil is followed by reported expressions of frustrated despair by hard-pressed consumers in the midst of silence from the oil companies and abdication of responsibility by the elected and appointed officials of federal and state governments.

The price of gasoline is up by about 50 cents in the past month, according to AAA, making the average gallon go for close to $4 per gallon in many parts of the country. Prices are even higher in California. AAA says that this “is the most expensive we’ve seen gasoline in the dead of winter.”

Every penny increase in the annual price of gasoline takes over $1.6 billion dollars from the pockets of American consumers (Source). That doesn’t even count the higher prices for heating oil homeowners are paying.

There was a time when even a few cents increase in the price of gasoline or natural gas would provoke Congressional investigations, actions by state Attorneys General, and condemnations of the producer countries, the OPEC cartel and Big Oil from presidents and the heads of antitrust divisions of the Justice Department or the Federal Trade Commission. That is, until smooth, smiling Ronald Reagan came to Washington, D.C. with his mantra that “government is not the solution; government is the problem.”

Well, now the multi-layered petroleum cartel has become institutionalized, having “gotten government off its back” and they’ve put the New York Mercantile Exchange speculators at the gaming tables.

There seems to be an adequate supply of crude oil in this recessionary global economy. What could be the cause of this latest price spike? The news media offer a spectrum of possible factors – restrictions on exports of Iranian oil imposed by western governments, instability in Syria and elsewhere in the volatile Middle East, oil hungry China, oil speculators on Wall Street and reduced refinery capacity in the U.S.

Each price surge in recent decades seems to have different principal causes. This time it seems to have been precipitated by surging prices of crude – easily manipulated – and in the U.S. the permanent or temporary shutdown for repairs, of too many refineries.

Believe it or not, the U.S. is now a net refined petroleum importer because of the continuing refusal by the industry to rebuild or expand refinery capacity on the very sites where many refineries have been shut down, often in favor of offshore, cheaper installations.

Whenever supply and demand for refined oil products is tight, all it takes is for one or two refineries to suspend operations, other than for repairs, and the prices surge all over the country.

This happened in January to a refinery in California, due to a fire, and more prominently the closure of a key refinery in Port Reading, New Jersey, owned by the Hess company. Five dollars a gallon gas “is a real possibility,” John Kilduff, partner at Again Capital, told Yahoo! Finance, adding “this is partly being driven by the lost refinery capacity of about one million barrels per day…that’s a lot.” (The U.S. consumes about 19 million barrels a day of refined petroleum products.)

So what can our so-called representatives in Washington do about a gouge that has angered almost all conservative and liberal consumers? Well, the Democratically-controlled Senate can start by holding investigatory hearings. The President can speak out more forcefully and indicate he may release some of the government’s crude oil reserves to increase supply.

He can order his Justice Department to at the very least subpoena pertinent oil industry information for starters.

Mr. Obama can forcefully back up Gary Gensler, his appointed, savvy Chairman of the Commodity Futures Trading Commission, who has been trying to rein in excessive speculation that drives up prices and punishes the motoring public.

In 2011 CFTC data showed that massive inflows of speculative money drove up prices. At that time, even Goldman Sachs analyst, David Greely, claimed Wall Street speculation in the futures market was driving up oil prices. Earlier, Rex Tillerson, the head of ExxonMobil, estimated that speculation was responsible for a more than $40 per barrel price increase when oil was just over $100 per barrel. Over the last month crude oil has ranged in price from $93-$120 per barrel.

Admiral Hyman Rickover who, more than 40 years ago, wisely said that there should always be government-owned shipyards to provide a yardstick by which to restrain the high prices and cost overruns being charged by private ship buildings manufacturing the Navy’s ships. That means, in this oil price context, that the government should own and operate some refineries for the armed forces. Any excess capacity could loosen the market with gasoline and heating oil when the corporate interests maneuver tight supplies for which they get immediately rewarded with cold cash.

Were Obama to direct some of his bully pulpit heat on those members of Congress who are marinated in oil, he might find more support from Capitol Hill for all these initiatives.

So call the switchboard at the White House comment line (202-456-1111) and tell the president that you are fed up and determined to drive less, carpool and walk more where possible, but that he, the president, must be more aggressive in taking on the staggeringly profitable and tax-favored big oil companies.

March 1, 2013 Posted by aletho | Corruption, Economics, Malthusian Ideology, Phony Scarcity | Commodity Futures Trading Commission, ExxonMobil, New York Mercantile Exchange, OPEC, Rex Tillerson | Leave a comment

Iraq: No Agreement with US on Imposing Sanctions against Iran

Fars News Agency | February 28, 2013

TEHRAN – The Iraqi foreign ministry in a statement underlined the importance of bilateral relations with Iran for the country, and announced that Baghdad will not impose the US-sponsored sanctions against Tehran.

Iraq opposed Washington’s request to comply with the US-led sanctions imposed against Iran over its nuclear energy program.

“Our relations with Iran are more important than all other issues or benefits,” the Iraqi Foreign Ministry said in a statement on Wednesday.

Referring to the meetings held between the Iraqi government and US Undersecretary for Terrorism and Financial Intelligence David Cohen, the statement said that the two sides had not reached any agreements on enforcing sanctions against Iran.

The Iraqi Foreign Ministry added that Baghdad has requested an exemption from the US-led sanctions imposed against Iran.

“Our economic relations with Iran will continue and are not in conflict with international resolutions,” an Iraqi official said. … Full article

The collective punishment of anti-Iran sanctions (alethonews.wordpress.com)
Pakistan risks sanctions over Iran gas deal: WSJ (dawn.com)
Netanyahu urges ‘military sanctions’ threat against Iran (dailystar.com.lb)
The Coming Collapse of Iran Sanctions (theuglytruth.wordpress.com)

February 28, 2013 Posted by aletho | Economics | Fars News Agency, Iran, Iraq, Sanctions against Iran | Leave a comment

U.S.-EU Trade Deal is the Foundation For a New Global Economic Order

By Dana Gabriel | Be Your Own Leader | February 25, 2013

The U.S. and EU have agreed to launch negotiations on what would be the world’s largest free trade deal. Such an agreement would be the basis for the creation of an economic NATO and would include trade in goods, services and investment, as well as cover intellectual property rights. There are concerns that the U.S. could use these talks to push the EU to loosen its restrictions on genetically modified crops and foods. In addition, the deal might serve as a backdoor means to implement ACTA which was rejected by the European Parliament last year. A U.S.-EU Transatlantic trade agreement is seen as a way of countering China’s growing power and is the foundation for a new global economic order.

In his recent State of the Union address, President Barack Obama officially announced that the U.S. would launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union (EU). A joint statement issued by European Commission President Jose Manuel Barroso, European Council President Herman Van Rompuy and U.S. President Obama explained that, “Through this negotiation, the United States and the European Union will have the opportunity not only to expand trade and investment across the Atlantic, but also to contribute to the development of global rules that can strengthen the multilateral trading system.” In a separate speech, European Commission President Barroso also emphasized that, “A future deal between the world’s two most important economic powers will be a game-changer. Together, we will form the largest free trade zone in the world. So this negotiation will set the standard – not only for our future bilateral trade and investment, including regulatory issues, but also for the development of global trade rules.”

The decision to pursue a free trade deal was based on the recommendations put forth by the High Level Working Group on Jobs and Growth which was created to deepen U.S.-EU economic integration. In their final report, they called on leaders from both sides to, “initiate as soon as possible the formal domestic procedures necessary to launch negotiations on a comprehensive trade and investment agreement.” According to U.S. and EU officials, talks could start in June with the hopes of completing a deal by the end of 2014. The proposed trade pact would include removing import tariffs, dismantling hurdles to trade in goods, services, and investment, as well as harmonizing regulations and standards. It would also cover intellectual property protection and enforcement. This could be used as an opportunity for a backdoor implementation of the Anti-Counterfeiting Trade Agreement (ACTA). It was a result of public pressure associated with risks to internet freedom and privacy which lead to ACTA being rejected by the European Parliament in July of 2012. There have already been attempts to use Canada-EU trade negotiations to sneak in parts of ACTA.

Public Citizen’s Global Trade Watch Director, Lori Wallach cautioned how U.S.-EU talks, “are aimed at eliminating a list of what multinational corporations call ‘trade irritants’ but the rest of us know as strong food safety, environmental and health safeguards.” She went on to say, “European firms are targeting aspects of the U.S. financial reregulation regime, our stronger drug and medical device safety and testing standards and more.” Wallach further added, “U.S. firms want Europe to gut their superior chemical regulation regime, their tougher food safety rules and labeling of genetically modified foods.” In a press release, Earth Open Source warned that, “An EU-U.S. free trade deal would obliterate EU safeguards for health and the environment with regard to genetically modified (GM) crops and foods.” Research Director Claire Robinson pointed out, “If the new trade agreement goes through, it will be illegal under World Trade Organisation rules for the EU to have a stronger regulatory system for GMOs than the U.S. system.” This is disturbing considering that in many cases, GM foods in the U.S. do not require any special regulatory oversight or safety tests.

Overshadowed by the proposed U.S.-EU trade deal are ongoing Canada-EU negotiations on a Comprehensive Economic and Trade Agreement (CETA). Despite talks being in their final stages, both sides still have some important gaps to be bridged before a deal can be reached. Thomas Walkom of the Toronto Star acknowledged that, “Europe’s real interest in negotiating a trade deal with Ottawa was to demonstrate to the Americans that a trans-Atlantic free trade pact was possible.” He noted, “EU negotiators will be even more reluctant to make concessions to Canada for fear of weakening their bargaining hand with the Americans.” Walkom argued that, “Canada is under more pressure to make a deal while Europe is under less.” He concluded that. “A Canada-EU deal seems inevitable. But now, with America in the mix, the terms for Canada may be even less favorable than expected.” The Globe and Mail recently reported that the EU is demanding additional concessions from Canada before any agreement can be signed. In order to wrap things up, a desperate Canada may be willing to give up even more. This was a bad deal from the start and it would be in their best interest to just walk away from CETA.

In the coming months, you can expect the anti-corporate globalization movement on both sides of the Atlantic to mobilize against the U.S.-EU trade agreement. It is big business and financial institutions who are pushing this deregulation agenda which threatens health, environmental and food safety standards. Just like NAFTA, the proposed U.S.-EU trade deal is also likely to include an investor-state dispute process which would give corporations the right to challenge government policies that restrict their profits. A trade agreement between the U.S. and EU is a building block for a new global trading system. If you combine NAFTA, the Trans-Pacific Partnership and a U.S,-EU Transatlantic trade deal, you have the makings for a global free trade area.

Dana Gabriel is an activist and independent researcher. He writes about trade, globalization, sovereignty, security, as well as other issues. Contact: beyourownleader@hotmail.com Visit his blog at Be Your Own Leader

February 28, 2013 Posted by aletho | Civil Liberties, Economics | Anti-Counterfeiting Trade Agreement, European Union, Genetically modified food, United States | Leave a comment

Why Isn’t Closing 129 Chicago Public Schools National News?

A Black Agenda Radio Commentary by Bruce A. Dixon | February 27, 2013

If you don’t live in Chicago you might not know that the CEO and the dozens of other six figure a year mayoral cronies who run the Chicago Public Schools want to close 129 public schools this year, more than a third of the city’s total. It’s not national news for the same reason that closing 40 public schools in Philadelphia last year wasn’t national news, and massive school closings in the poorer neighborhoods of cities across the country is not news either.

It’s not news because school closings and school privatization, the end game of the bipartisan policies the Obama administration, Wall Street, the US Chamber of Commerce, a host of right wing foundations and deep pockets and hordes of politicians in both parties from the president down are pushing down the throats of communities across the country, are deeply unpopular. The American people, and especially the parents, teachers, grandparents, and other residents of poorer neighborhoods where closings and privatization are happening emphatically don’t want these things.

Even the word describing their policy, “privatization” is so vastly unpopular that they’ve taken it out of circulation altogether. The best way, our leaders imagine, to contain and curtail resistance to their deeply unpopular policies is to avoid naming them for what they are, to keep them on the down low, to not report on their implementation, and certainly to not cover any civic resistance to them.

Local elites in each city and school district concoct real or imaginary “crises” to which the solution is always firing more experienced teachers, hiring more temps in their place, instituting more high-stakes testing, closing more public schools and substituting more unaccountable (and often profitable) charter schools, frequently in the same buildings that once housed public schools. In Chicago the “crisis” is precipitated every year when the CPS (that’s Chicago Public Schools – Chicago’s never had an elected school board, they’re all mayoral appointees) honchos announce the schools are in a billion dollar hole. The Chicago Teachers Union of course, took a look over the same books and revealed that despite the host of top $100,000 a year officials whose jobs never seem to be cut, the system was nine figures in the black, not ten in the red. Naturally, local and national media didn’t report that either.

Chicago’s teachers have done what those in New York, Houston, Dallas, L.A. and others have not, and spent their union dues funding outreach and collaboration with parents across the city, so neighborhood hearings on the school closings are packed to overflowing with outraged parents, indignant local business people, angry teachers and concerned students. If CNN, MSNBC, or Fox News gave the school closings and privatization story a fraction of the coverage they gave deceptive and dishonest pro-privatization movies like Waiting For Superman and Won’t Back Down, the outrage against the move to privatize education would be unstoppable. The most coverage the wave of school closings have received lately was a misleading segment on Melissa Harris-Perry’s weekly TV show on whether school closings were “racist” or not, with no examination of the how or why they happen or the growing resistance to them.

Oceans of ink and hot air have been expended claiming that “social media” would somehow take up the slack created by the disappearance of local news gathering organizations, and how these things can somehow fuel and sustain a wave of public outrage that can topple unjust authority and make the will of the people felt. But when it comes to the war of our elite waged to privatize public education, we haven’t seen it yet.

Contact Bruce A. Dixon at bruce.dixon(at)blackagendareport.com.

February 27, 2013 Posted by aletho | Economics, Mainstream Media, Warmongering, Progressive Hypocrite | Chicago, Chicago Public School, CPS, Education, Obama, United States | Leave a comment

NYT’ Steven Davidoff Doesn’t Consider the Successful 300 Years of Financial Transactions Taxes In London

CEPR Beat the Press | February 26, 2013

Steven Davidoff really doesn’t like financial transactions taxes (FTT) but is not honest enough to acknowledge this fact. Instead he tells readers that proponents of a tax haven’t thought about its consequences and uncritically repeats every piece of nonsense produced by the financial industry to attack the idea.

In the course of a 1300 word essay we get assessments of the tax from Credit Suisse, Blackrock, and the Partnership for the City of New York, which is effectively the New York City Chamber of Commerce. All of these accounts are presented uncritically, as though the purveyors of this information had no interest other than conveying the truth. We are also told that the New York Stock Exchange “threatened to jump across the Hudson River to New Jersey” in reaction to a plan to increase the city’s stock tax in the 1966 (interesting image). Davidoff apparently never heard of businesses making threats to extract concessions from governments.

The NYT running a column like Davidoff’s is like the Iowa City Press Citizen running a column on a plan to cut back farm subsidies where the views of the state’s leading wheat and corn farmers are presented as unquestioned truth, along with a study from the corn growers trade organization. I suspect that the Press Citizen has higher standards.

Meanwhile when it comes to the proponents of the tax, Davidoff lectures:

“advocates of this neat idea conveniently ignore the century of less-than-successful experience with this tax, including New York State’s own failed attempt.”

This comment is more than a little bizarre. Davidoff writes as though proponents of the tax are completely ignorant of economics and have not done research into the history of financial transaction taxes.

Contrary to this assessment, the proponents of the tax include some of the world’s most prominent economists. Furthermore, there is extensive research on the history of financial transactions taxes. Much of it can be found right here on the European Commission’s (EC) website.

Contrary to Davidoff’s bizarre comment, implying the New York tax is a rare example of a government implementing such taxes, nearly all financial markets operated with financial transactions taxes for long periods of time (more than 300 years in the case of London’s market). Most of the world’s major financial centers, including London, Switzerland, Hong Kong and Singapore, still have financial transactions taxes on their stock exchanges. Perhaps Davidoff should be lecturing these governments on how their taxes really don’t work.

As far as the substance, Davidoff tells us that research shows that the tax will increase rather than decrease volatility. There are two different notions of volatility at play here. One is the volatility associated with normal price fluctuations over the course of a day or week. This is likely to be increased by a tax since it will increase the costs for arbitragers to enter a market. That means that we may see somewhat larger divergences between prices than would otherwise be the case. This could mean that the gap in the price of oil between two markets may rise to 0.4 percent rather than 0.3 percent before arbitragers whittle it down again.

Proponents of FTTs are probably not much concerned about this sort of volatility. The economic consequences are likely close to zero. Furthermore, since the levels of taxation being debated would just raise transactions costs back to where they were 10-15 years ago, it is difficult to believe that the effects could be too severe. (We did have very liquid capital markets in the 1990s.)

The type of volatility that more likely concerns proponents of FTTs are the sharp movements that are not driven by fundamentals, such as the 1987 crash and the flash crash in the spring of 2011. While it is difficult to prove that a FTT will reduce the likelihood of such sharp movements, it is worth noting that such events did not occur in the 50s, 60s, and 70s, when trading costs were much higher than in the last three decades.

As far as the incidence of the tax, Davidoff gives us the assessment of Blackrock:

“that if the financial transaction tax were set at 0.1 percent per trade, an investor putting $10,000 in its global equity fund would lose more than $2,300 in expected returns over a 10-year period. This amount would rise to $15,000 if the money were invested in a more actively managed European fund.”

Incredibly, Blackrock assumes that its trading does not in any way respond to the tax. If this were true then Blackrock’s funds would quickly go out of business since their cost would be far higher than others in the industry. There have been a range of trading elasticities estimated by various studies (see the EC research), with most estimates close to -1.0. (None are near zero.) If the elasticity is near -1 then trading volume would decline by roughly the same amount that the tax increases trading costs.

This means that if the tax doubled trading costs, then trading volume would be roughly cut in half. That means that if Blackrock’s fund managers responded as the research suggests, then they would cut back the number of trades by enough so that the non-tax trading costs for their $10,000 account would fall by roughly $2,300 over the course of a decade or $15,000 in the case of its more actively managed European fund. This would be revenue lost to Blackrock, not to its clients.

In this respect it is worth noting that the sharp decline in trading costs over the last four decades has not been associated with higher returns to investors, but rather to a more than proportionate increase in trading volume. This has caused the total amount spent on trading financial assets to rise sharply relative to the size of the economy. These trading costs are money out of investors’ pockets and a drain on the economy.

Davidoff’s effort to claim that the tax could not raise any revenue approaches the bizarre. He tells readers:

“In Britain, for example, where the financial transaction tax has fluctuated from half a percent to 2 percent, the tax has raised significantly less revenue than one might expect, about £3 billion a year. The reason is that investors who trade regularly in Britain use options to avoid the tax, which applies only to trading in stock. The result may be that the tax pushes investors into more risky securities in their efforts to avoid it.”

First, it is worth noting that £3 billion comes to 0.2 percent of UK’s GDP. (The UK had raised almost 0.3 percent of GDP from this tax before the 2008 crash [Table 2].) This would be the equivalent of almost $400 billion over the 10-year budget horizon in the United States. That is almost 3 times as much as President Obama has proposed to save by cutting the Social Security cost of living adjustment. In other words, in the current budget debates it would be regarded as real money.

Second, the decision to not tax derivatives like options is a political one made by governments that have been closely allied with the financial industry. The tax being put in place by 11 countries in the European Union would tax options and other derivatives. In the 1980s Japan had a broadly based tax that was imposed on a wide range of financial assets including options. This tax raised an amount of revenue that was close to 1.0 percent of its GDP. This would amount to $2 trillion over the 10-year budget horizon in the United States.

At one point Davidoff tells readers:

“As for seeking revenue gains to solve budget problems, if the tax is too small, it will have no effect.”

Huh? The Securities and Exchange Commission imposes a tax of 0.002 percent on stock trades in the United States. This tax raises roughly $1.2 billion to finance its budget. Is Davidoff suggesting that the SEC should get rid of this tax because it is not really raising money?

As I said, Davidoff doesn’t like FTTs, that’s pretty clear from reading this piece even though he tells us:

“This is not to say that a financial transaction tax by itself is such a terrible idea.”

He has a case built with non-sequitors (one example of the horror of FTTs is that traders fled a tax imposed by Sweden in the 1980s and instead did their trades in London, which also had a tax). And he ignores all sorts of evidence that FTTs can and do raise large amounts of revenue without disrupting capital markets. This piece lets us know where Davidoff stands on FTTs, it doesn’t provide much information on the merits of the policy.

Economist: Financial Transactions Tax Would Bring in Hundreds of Billions a Year (voicerussia.com)
5 Reasons Why The U.S. Needs A Financial Transactions Tax (thinkprogress.org)

February 27, 2013 Posted by aletho | Deception, Economics, Mainstream Media, Warmongering | Blackrock, Davidoff, Financial transaction tax, New York Stock Exchange, New York Times | Leave a comment

LIBOR: Viewing the Biggest Financial Crime in History

By DARWIN BOND-GRAHAM | CounterPunch | February 26, 2013

It’s been five years since a few academics and journalists began to dig up evidence that something was wrong with the London Inter-Bank Offered Rate, or LIBOR (pronounced appropriately as “lie-bore.”) The data that curious researchers were compiling couldn’t be explained using the prevailing definition of what LIBOR supposedly was: a trustworthy interest rate that accurately gauged the market price of borrowed US dollars held overseas by the world’s biggest banks. Instead, their findings pointed toward something other than an idealized neoliberal market, influenced only by impersonal supply and demand forces. Many began to realize that the data could easily be explained if the banks were rigging the LIBOR rate in their favor. Strange discrepancies in LIBOR’s correlation to other rates, and to the economic fundamentals of the bank companies responsible for formulating the rate, showed something seriously amiss, but it made sense if the banks were cheating.

The motives of the banks have been clear from the beginning. A few banks that dominate the marketplace for derivatives stand to make billions if LIBOR moves in their favor on particular days when contractual payments between them and their customers come due. They therefore suppressed the rates in order to skim billions of dollars off derivatives and investments. Later these same banks suppressed LIBOR rates to create the illusion that their balance sheets were robust during the financial crisis. This also allowed them further rounds of money-siphoning from their unwitting derivatives customers.

Until recently LIBOR rates have been set by a panel of banks that are members of the British Bankers Association (BBA). The BBA is a private industry group established almost 100 years ago to lobby for the financial industry in one of its global hubs, London. The BBA really came into power in the mid-1980s with the creation of LIBOR. LIBOR was created to further integrate the giant global money market in US dollars held in overseas banks or holding companies, and therefore unregulated by the US Federal Reserve. Called “Eurodollars,” because they originally were dollar savings accumulated in European banks, especially banks in London, these funds quickly became a de facto global currency. LIBOR began as a way for the banks to standardize investment products for these vast pools of American dollars flowing through Europe, and later Japan, the Middle East, and Latin America. By the 1990s LIBOR had become such an important set of interest rates, and US dollars held overseas had becomes such an important source of credit for US consumers, that LIBOR became the key global interest rate around which many financial products were pegged. As LIBOR became more and more important to the globalization of finance, it accrued a sort of official, trusty gloss; nearly everyone assumed that LIBOR was a market rate reflecting competition. Instead, LIBOR has probably all along been a fudged rate, determined less by vast market forces and invisible hands, and more by the vulgar self-interest and power of the elite banks that set LIBOR rates.

Last year government investigations into this globe-spanning crime —rightly called the biggest financial scam in all of history— led to multi-billion dollar fines against Barclays, the Royal Bank of Scotland, and UBS, the 7th, 8th, and 20th largest banks in the world, respectively. Criminal investigations spearheaded by US, UK, Japanese, Canadian, Swiss, and Singaporean authorities are ongoing and aimed at other banks such as Citigroup, JP Morgan, Bank of America, and other “too big to fail” institutions. More details of the crime will be forthcoming as e-mails, internal documents, phone tapes, text messages, and other evidence, is made public, and as the banks are forced to pay significant fines, and sign plea agreements.

While this scandal might seem worlds away, concerning complex financial concepts and obscure money market instruments dealt by bankers out of skyscraper offices in the City of London, the importance of uncovering the complete truth about the LIBOR rigging conspiracy cannot be overstated for local communities across the United States, especially here in California.

Why? First, LIBOR has been used since the 1990s to determine cash flows on interest rate swaps that local governments have purchased from banks to insure themselves against wild swings in variable interest rates owed on billions of municipal debt. Messing with LIBOR messes with the payments due on these instruments.

Second, LIBOR has also been used as a main interest rate of reference for an array of investment products that yield a variable return, dipping and rising in concert with LIBOR. Local and state governments have used these investment products, called “municipal derivatives reinvestment products” to temporarily park public funds, while pension systems and government enterprises like utilities use them make investments. Governments and public agencies earn LIBOR rate returns on their dollars invested in numerous kinds of municipal derivatives, so if LIBOR is illegally fixed downward, they earn less income.

Through both of these forms of exposure, local governments have potentially been harmed by LIBOR-fixing perpetrated by the banks, often times the very same banks that have sold them swaps or municipal derivatives investment products.

California is fast emerging as a center of investigation and litigation into the LIBOR-fixing conspiracy. California is the largest single municipal debt market in the United States, and one of the largest in the world. Last year alone the state of California and its cities, counties, school districts, and other public entities issued $65.7 billion in total public debt. Because of California’s regressive tax structure and chronic budget crises, the state’s multitude of governments have been among the most aggressive in issuing variable rate debt hedged with interest rate swaps.

The Golden State’s local governments have also been the largest purchasers of municipal derivatives contracts from banks because streams of tax and fee revenues often don’t match up with the dates that payments to public employees and contractors come due. Collusive suppression of LIBOR rates by the 16-member panel who were trusted to provide accurate quotes could mean that California local governments have paid untold millions to their interest rate swap counterparties (the banks) that should otherwise have remained in budgets and used to fund school construction, bus lines, street paving, water and sewerage services, etc.

In the 1990s and 2000s local governments across California increasingly issued bonds with variable rates. Investment bank underwriters and municipal debt advisers from the private sector encouraged variable rate bond financing because it promised lower interest rates for California’s cash-strapped municipalities. To hedge against the risk that variable rates might explode, as they did in the 1980s, the banks sold interest rate swaps to local governments. The swaps effectively converted floating rate debt into a fixed rate. Under a typical swap contract the bank seller agrees to pay a floating rate designed to mimic the variable rate interest on the bond debt, and in return the local government agrees to pay a fixed rate. I’ve written elsewhere about how this deal blew up and created a financial injustice when variable interest rates plummeted during and after the Financial Crisis, but the LIBOR rigging conspiracy adds to these harms. The US government bailed out the banks and assisted them in taking “toxic” derivatives assets off their hands, but stood idly by while cities, counties, and public agencies suffered without aid during the Financial Crisis, allowing derivatives instruments on the public’s books to blow up and drain budgets. At this very moment the banks perpetrated an illegal scam to suck even more money from the public via further depression of LIBOR.

Barclays, RBS, UBS, and other banks worked together to suppress LIBOR below even the depths to which it sank after 2008. A number of lawsuits filed by various cities, counties, and public agencies in California asserts the banks did this to skim off an unknown, but very large, amount of money from their public victims, and also to bolster their own balance sheets during the crisis. By suppressing LIBOR the banks ensured that the net difference between the variable rates they owed, and the fixed rates the public was paying on swaps, was wider than it would otherwise have been. This net difference meant that the public owed the banks higher amounts when the interest rate swap payments came due (usually twice a year).

For San Francisco this could mean that millions have been stolen from the capital budget of its Airport. SFO currently has seven interest rate swaps it has purchased to convert variable rate bond debt into synthetic fixed rates. The airport’s counterparties on its swaps included JP Morgan Chase, Merrill Lynch (owned by Bank of America), and Goldman Sachs. Each of these banks likely benefited from conspiratorial suppression of LIBOR, even if it was by just a few basis points (hundredths of a percent). JP Morgan Chase and Merrill’s parent Bank of America are both members of the panel that sets LIBOR, and are both believed to have played a role in the conspiracy.

San Francisco’s pension system may have also been raided by the banks through its speculative investments in swaps. According to the most recent audit of the San Francisco Retirement System’s portfolio, the city’s pension system holds two interest rate swaps on its books with a notional value of $15 million. In prior years, SFERs held other swaps. In 2010, the Retirement System’s audit showed three interest rate swaps with a total notional value of $41 million. Over the last two years these swaps drained $5.3 million from the pension system, and some of these losses might have been due to the downward manipulation of LIBOR. Also on the Retirement System’s books are other investments in bank loans, options, and other securities that might have been impacted by the LIBOR fraud.

San Francisco’s LIBOR damages are probably small in comparison to other local governments and public agencies. The East Bay Municipal Utility District has already filed a lawsuit in federal court alleging damages from bank rigging of LIBOR. The water district’s complaint, filed in January of 2013, alleges that LIBOR suppression drained potentially millions, again from interest rate swap agreements with some of the very banks that sit on the LIBOR-panel: Citibank, JP Morgan Chase, and Bank of America. East Bay MUD lists nine interest rate swaps potentially affected by LIBOR rigging in its lawsuit.

East Bay MUD’s swaps had a total notional amount of $481 million in 2012, according to the utility’s most recent financial report. Downward manipulation of LIBOR by just 10 to 50 basis points (1/10th to 1/2 of a percent) could have drained between $481,000 to $2,400,000 through East Bay MUD’s swap payments every six months. Over a few years, say the conspiracy’s 2007-2010 time-frame alleged in EBMUD’s lawsuit, this would add up to millions of dollars stolen by the banks.

The cities of Richmond, San Diego, and Riverside, and the County of San Mateo, are other California governments that have now filed lawsuits against the banks responsible for setting LIBOR. All of these lawsuits have been consolidated into a larger class action case currently being heard in the U.S. District Court, Southern District of New York, before Judge Naomi Buchwald. There are now about two dozen LIBOR manipulation lawsuits that have been filed and consolidated in New York. The lead case is the City of Baltimore and the New Britain Firefighters’ and Police Benefit Fund lawsuit against the 16-bank LIBOR panel, filed in April of 2012.

More California cities, counties, and public agencies are expected to file their own lawsuits soon, however. CalPERS, which has numerous investments that fluctuate in value and yield with LIBOR, is also said to be investigating its own exposure to rate rigging.

Darwin Bond-Graham is a sociologist and author who lives and works in Oakland, CA. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion.

California Cities Sue Banks Over Libor Rates, Law Firm Says (bloomberg.com)
Rabobank Faces Libor-Rigging Fine of $440 Million Plus (bloomberg.com)
The Royal Bank of scot-free (morningstaronline.co.uk)

February 26, 2013 Posted by aletho | Corruption, Deception, Economics | British Bankers Association, LIBOR, London Interbank Offered Rate, Royal Bank of Scotland, UBS | Leave a comment

Reporting on Romer’s Charter Cities: How the Media Sanitize Honduras’s Brutal Regime

By Keane Bhatt | NACLA | February 19, 2013

On the evening of Saturday, September 22, human rights lawyer Antonio Trejo stepped outside a wedding ceremony to take a phone call. Standing in the church parking lot of a suburb of Tegucigalpa, Honduras, he was shot six times by unknown assailants. Despite his requests, he had been granted no police protection in the face of death threats; Trejo had believed he would be targeted by wealthy landowners over his outspoken advocacy on behalf of small farmers seeking to reclaim seized territories.¹ In his death, Trejo joined dozens of fallen peasant leaders whom he had defended, as well as murdered opposition candidates, LGBT activists, journalists, and indigenous residents. All were victims of the violence and impunity that has reigned in Honduras since the 2009 coup d’état against its democratically elected and left-leaning president, Manuel Zelaya.

Earlier that day, Trejo had appeared on television, denouncing the powerful interests behind the government’s push for ciudades modelos—swaths of land to be ceded to international investors and developed into autonomous cities, replete with their own police forces, taxes, labor codes, trade rules, and legal systems. He had helped prepare motions declaring the proposal unconstitutional.

This concept of “charter cities” has been promoted for a couple of years by Paul Romer, a University of Chicago–trained economist teaching at New York University. He described his brainchild in a co-authored op-ed as “an effort to build on the success of existing special zones based around the export-processing maquila industry.” A “new city on an undeveloped site, free of vested interests” could bypass the “inefficient rules” that hinder “peace, growth and development” worldwide, he argued. With new and stable institutions, the charter city could become an “attractive place for would-be residents and investors.”²

The international press swooned over Romer’s revolutionary idea: Foreign Policy magazine named him one of its Top 100 Global Thinkers of 2010 for “developing the world’s quickest shortcut to economic development”;³ that same year, The Atlantic dedicated a 5,400-word paean to Romer and his “urban oases of technocratic sanity,” which held the promise that “struggling nations could attract investment and jobs; private capital would flood in and foreign aid would not be needed.”

But the applicability of Romer’s radical vision in Honduras always depended on the enthusiasm of the authoritarian, post-coup government of Porfirio Lobo. Lobo owes his presidency to the sham elections of 2009, which took place under the U.S.-backed de facto military government that overthrew Zelaya and were marred by violent repression and media censorship. With the exceptions of the U.S.-financed International Republican Institute and National Democratic Institute, international observers boycotted the electoral charade that foisted Lobo into power.

Romer’s lofty theories also remained utterly detached from the brutal nature of the collaborating government. “Setting up the rule of law” from scratch in a new city, he contended, would be an antidote to “weak governance” (weak in no small part due to Lobo’s appointment of coup perpetrators to high-level government positions).⁴ In a co-authored paper, Romer also mischaracterized his allies, the “elected leaders in Honduras,” as earnest in their intent to end a “cycle of insecurity and instability that stokes fear and erodes trust.”⁵ (Romer offered no comment when Lobo designated Juan Carlos “El Tigre” Bonilla, accused of past ties to death squads, as the national chief of police.)⁶

Even on its own terms, Romer’s development theory is disconnected from reality. He has repeatedly invoked Hong Kong as the sunny inspiration for the remaking of Honduras: “In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” he claimed.⁷ Romer neglected to add that the city developed as a hub for the largest narcotrafficking operation in world history, through which Britain inflicted untold misery on the Chinese mainland. Britain dealt a humiliating military defeat to China (which had attempted to prohibit illegal British opium from entering its borders), took over Hong Kong, and forced China to abandon its tariff controls in 1842. Given that Hong Kong was one of the spoils of a drug war, and that its inhabitants were permitted democratic elections only 152 years after its incorporation into an empire, Romer’s dream for Honduras could just as easily be considered a nightmare.

Romer’s focus on good rule making is similarly fanciful; his effort to change the rules that engender poverty conspicuously excludes the international legal privileges that allow undemocratic leaders to sell a country’s resources and borrow in its name (he wrote positively of a trade agreement that Lobo struck with Canada this summer).⁸ Romer also approved of the legal architecture that “gives the United States administrative control in perpetuity over a piece of sovereign Cuban territory, Guantanamo Bay,” through a 1901 treaty that he failed to mention was ratified by a militarily occupied Cuba. Whether Romer knows it or not, his endorsement of power politics is clear: Investor-owned cities would be safe from future efforts by governments to repossess sovereign territory, because “Cuba respects the treaty with the United States, even as they complain bitterly about it.”⁹

Romer rebutted criticisms that his idea smacks of neocolonialism: “There are some things that it shares with the previous colonial enterprises,” he admitted, “but there’s this fundamental difference: at every stage, there’s an absolute commitment to freedom of choice on the part of the societies and the individuals that are involved.”¹⁰Which choices are available to individuals living under a coercive, illegitimate government is a question left unanswered, and the adulating press could not be bothered to probe further.

After all, it would be impolite to reveal Romer’s close cooperation with a government whose security forces—many of whom are personally vetted, armed, and trained by the United States—killed unarmed students Rafael Vargas, 22, and Carlos Pineda, 24, as well as pregnant indigenous Miskitu women Juana Jackson Ambrosia and Candelaria Trapp Nelson, among others.¹¹ Indeed, the Committee of Families of the Detained and Disappeared of Honduras observed that more than 10,000 official complaints have been filed against Honduras’s military and police since the coup. Such unsavory details might have chastened The Atlantic’s ebullient portrait of the “elegant, bespectacled, geekishly curious” professor, and would have tarnished President Obama, who praised Lobo for his “strong commitment to democracy” while providing his brutal security apparatus with $50 million in aid last year.¹²

In their coverage of Romer’s charter cities, the media have almost entirely excised the innumerable human rights violations occurring under the undemocratic Honduran regime. The New York Times is a case in point. About a week after Amnesty International, Human Rights Watch, the Inter-American Commission on Human Rights, and even the U.S. State Department were compelled to release statements of condemnation over Antonio Trejo’s assassination, Times reporter Elisabeth Malkin fawned over Romer’s idea while ignoring the killing of one of its most prominent critics. (Romer himself offered no public statement in the wake of Trejo’s death-squad-style killing.) Charter cities promised to “simply sweep aside the corruption, the self-interested elites, and the distorted economic rules that stifle growth in many poor countries,” asserted the imperturbable Malkin. She added with uncommon journalistic authority, “Nobody disputes that impoverished, violent Honduras needs some kind of shock therapy.”¹³

This is not the first instance in which the Times has glossed over inconvenient facts to laud shock therapy, a doctrine of massive privatization and investor-friendly deregulation developed at the University of Chicago.¹⁴ Many years after Chile’s coup government pushed through a rash of measures designed by economist Milton Friedman and his acolytes, the Chicago Boys, the Times reported that “Chile has built the most successful economy in Latin America, and one of the vital underpinnings of that growth was the open economic environment created by the former military dictator, Gen. Augusto Pinochet.”¹⁵ Leaving aside Pinochet’s torture and murder of tens of thousands of dissidents, Chile’s per capita gross domestic product was practically unchanged 13 years after the coup; Pinochet’s “free-market” experiment also ended with re-nationalizations in banking and copper extraction, the institution of capital controls, and continuous state support for Chile’s exports.¹⁶

Following in this dubious tradition of portraying a reactionary societal experiment as a formula for prosperity, the Times’ first piece on Honduran charter cities appeared in its Sunday magazine in May 2012. Author Adam Davidson, co-creator and host of National Public Radio’s Planet Money program, considered charter cities a “ridiculously big idea” for fixing an “economic system that kept nearly two-thirds of [Honduras’s] people in grim poverty.” Davidson related the story of Octavio Sánchez, Lobo’s chief of staff, who met with Romer to develop a “secure place to do business—somewhere that money is safe from corrupt political cronyism or the occasional coup.”¹⁷Davidson, however, scrupulously avoided Sánchez’s own role as an apologist for the 2009 military overthrow of Zelaya. Days after Zelaya’s ouster, Sánchez advised Christian Science Monitor readers not to “believe the coup myth,” and in an Orwellian flourish, the Harvard Law graduate declared that “the arrest of President Zelaya represents the triumph of the rule of law.”¹⁸

In November, Planet Money provided an obsequious follow-up on Romer and Sánchez’s collaboration, scrubbing any mention of the 2009 coup and Lobo’s emergence from it, and portraying Sánchez as an idealistic dreamer. “Instead of fighting to do two, three or four reforms during the life of a government,” Sánchez asked, “why don’t you just do all of those reforms at once in a really small space? And that’s why this idea was appealing. It’s really the possibility of turning everything around.”¹⁹

Planet Money’s co-hosts unwittingly conveyed the fundamental obstacle to shock therapy: “Paul Romer has this killer idea and no real country to try it in; Octavio has the same idea, but no way to sell it to his people.” They acknowledged that even with “a government that’s ready to go,” the “people in Honduras” viewed Romer’s plan as “basically Yankee imperialism.” The episode concluded by explaining the apparent collapse of the charter cities initiative, resulting partly from the post-coup government’s lack of transparency (Romer was “stunned”), as well as a Honduran Supreme Court ruling in October that found charter cities unconstitutional. Romer remains unfazed, the hosts said. He has a promising lead in North Africa—another opportunity to answer “one of the oldest problems in economics: how to make poor countries less poor.”

Regardless of what Romer and his media sycophants think of the charter city’s (questionable) efficacy, their deafening silence on its antidemocratic implications and Honduras’s human rights abuses is unconscionable. In this insulated world, Honduran victims of economic hardship and state terror, and their own proposals to solve poverty, remain invisible. Pinochet, the original administrator of shock therapy, distilled the insouciance of today’s intellectual and media culture when, in 1979, he remarked, “I trust the people all right; but they’re not yet ready.”²⁰

Keane Bhatt is a regular contributor to the MALA section of NACLA Report and the creator of the Manufacturing Contempt blog on the NACLA Website.

1. Alberto Arce, “Slain Honduran lawyer Complained of Death Threats,” Associated Press, September 25, 2012.

2. Paul Romer and Octavio Sánchez, “Urban Prosperity in the RED,” The Globe and Mail: April 25, 2012.

3. “The FP Top 100 Global Thinkers,” Foreign Policy, November 26, 2012. Sebastian Mallaby, “The Politically Incorrect Guide to Ending Poverty,” The Atlantic, July/August 2012.

4. Romer and Sánchez, “Urban Prosperity.” Dana Frank, “Honduras: Which Side Is the US On?,” The Nation, May 22, 2012.

5. Brandon Fuller and Paul Romer, “Success and the City: How Charter Cities Could Transform the Developing World,” Macdonald-Laurier Institute, April 2012.

6. Katherine Corcoran and Martha Mendoza, “New Honduras Top Cop Once Investigated in Killings,” Associated Press, June 1, 2012.

7. Sebastian Mallaby, “Politically Incorrect Guide.”

8. Romer and Sánchez, “Urban Prosperity.”

9. Can “Charter Cities” Change the World? A Q&A With Paul Romer,” Freakonomics.com, September 29, 2009.

10. Jacob Goldstein and Chana Joffe-Walt, “Episode 415: Can a Poor Country Start Over?” NPR’s Planet Money, November 9, 2012.

11. Javier C. Hernandez, “An Academic Turns Grief Into a Crime-Fighting Tool,” The New York Times, February 24, 2012; Annie Bird and Alexander Main, “Collateral Damage of a Drug War,” Center for Economic and Policy Research and Rights Action, August 2012.

12. U.S. Office of the Press Secretary, “Remarks by President Obama and President Lobo of Honduras Before Bilateral Meeting,” whitehouse.gov, October 5, 2011; Dana Frank, “Honduras.”

13. Elisabeth Malkin, “Plan for Charter City to Fight Honduras Poverty Loses Its Initiator,” The New York Times, September 30, 2012

14. Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (Metropolitan Books, 2007).

15. Nathaniel C. Nash, “Terrorism Jolts a Prospering Chile,” The New York Times, April 9, 1991.

16. Paul Krugman, “Fantasies of the Chicago Boys,” The Conscience of a Liberal (blog), The New York Times, March 3, 2010.

17. Adam Davidson, “Who Wants to Buy Honduras?,” The New York Times Magazine, May 8, 2012.

18. Octavio Sánchez, “A ‘Coup’ in Honduras? Nonsense,” The Christian Science Monitor, July 2, 2009.

19. Goldstein and Joffe-Walt, “Can a Poor Country.”

20. John B. Oakes, “Pinochet in No Rush”, The New York Times, May 3, 1979.

Honduras: Murdered Lawyer’s Brother Killed in Aguán (alethonews.wordpress.com)
NPR Examines One Side of Honduran “Model Cities” Debate (alethonews.wordpress.com)
IMF Ignores Proven Alternatives With Recommendations to Honduras (alethonews.wordpress.com)
Killings Continue in Bajo Aguán as New Report Documents Abuses by U.S.-Trained Honduran Special Forces Unit (alethonews.wordpress.com)
Honduras: Miguel Facusse is Tragically Misunderstood (alethonews.wordpress.com)

February 26, 2013 Posted by aletho | Civil Liberties, Deception, Economics, Mainstream Media, Warmongering | Honduras, Human rights, Lobo, Manuel Zelaya, New York Times, Paul Romer | Leave a comment

David Cameron’s Mission to India

By Deepak Tripathi | February 24, 2013

Leaving the scandal of horsemeat contamination of processed meat products behind, the British prime minister David Cameron flew to India for a three-day visit (February 18-20), boasting the largest-ever trade delegation he had led to a foreign country. The aim of young Cameron was to clinch multi-million pound deals with the world’s second most populous nation, and a vibrant and rising economy. The reasons behind his mission to India were domestic as well as foreign.

Cameron leads a wobbly government in coalition with the Liberal Democratic Party, which has all but abandoned many of its policies on civil liberties, minority rights, the nature of Britain’s relationship with the European Union and the welfare state. In essence, the Liberal Democrats, whose leader Nick Clegg has the title of deputy prime minister with no portfolio, have become the enablers keeping in power a Conservative Party that is itself fatally divided over how far right to move on some of the most fundamental issues.

Britain’s Conservative prime minister, his finance minister George Osborne, and a group of ministers to the right, are enforcing draconian cuts that, many experts complain, are making economic recovery more difficult. The Liberal Democrats have become supporters of war. A former Liberal Democrat leader, now a party grandee, Lord Paddy Ashdown, recently defended President Obama’s drone wars that, according to several authoritative studies including one by Stanford and New York Universities, have killed thousands of innocent people. In an astonishing defense of Obama’s “kill list,” Lord Ashdown asserted that the president’s policy had more accountability than ever before. A U.S. president secretly ordering to kill specific individuals, and others who happen to be in the targeted area, without Congressional or judicial scrutiny, is somehow “more accountable than ever”? One does not know what to say––except that power has clearly elevated Lord Ashdown and deputy prime minister Nick Clegg to a different planet.

Against this backdrop, Prime Minister Cameron went to India to seduce politicians in government and big business with a basket of offers. He reminded his hosts of India’s colonial links with Britain, and sought to press the Indian government to buy Eurofighters, in which Britain has a stake, instead of French multi-role combat planes already being negotiated. Cameron had been promising his party MPs that he would be pushing the deal aggressively, failing to realize that the Indians do not like being told by the British, especially by a Conservative prime minister. In such an event, the Indian response would likely be to buy from any one except India’s former colonial rulers.

Cameron leads a party which continues to live in the Churchillian past. He simply misread India’s historical development, and was badly advised as he embarked on his visit. Cameron failed to accept the reality that India, a country twenty times larger in population than the United Kingdom, was not a client state that could be pressured. The Indians would be courteous in welcoming him, but were quite capable of turning the tables, and would rebuff unwanted offers. The signs were there some while ago when India told Britain that it did not want a few hundred million pounds worth of British aid, describing it as “peanuts.” The British government’s increasingly hostile anti-immigrant rhetoric and policies to placate the political right at home were alienating many Indian residents and new students coming to Britain. The consequences of this went largely unnoticed in Cameron’s circle.

There is an unmistakable propensity in today’s Britain to blame “immigrants” and “asylum-seekers” for all the ills––from filth to chaos and crime in the streets, as well as unemployment among white Britons. Alienation and frustration of those less fortunate are alarming, but their causes are easier to explain. However, the eagerness of the political class to join in the chorus of xenophobic hysteria, and to craft legislation to placate the Right are much harder to understand because of the risks this entails. News reaches distant places with lightning speed in a globalized world. Indian students, increasingly better informed and direct, told the BBC, as Cameron sought to woo them, that they thought the British attitudes were a “little racist.” They would rather seek other destinations for education, or stay in their own country.

As he visited the historic Golden Temple of Amritsar and the nearby site of the 1919 Jallianwala massacre of hundreds of men, women and children, committed on the orders of General Reginald Dyer, Prime Minister Cameron described the episode as a “deeply shameful event.” But he stopped short of issuing an outright apology. That was not enough for historians and ordinary citizens alike in India. Among other questions raised was whether the British government would please return the Koh-i-noor to India. The world’s most precious diamond had been taken to Britain following the imperial power’s annexation of the Punjab into the Empire in 1849. For ten years prior to that, the British administrators had failed to execute the last will of the Punjab ruler Ranjit Singh, who had the diamond until his death. Cameron could not have agreed, so he said that he did not believe in “returnism.”

By the time the British prime minister met his Indian counterpart Manmohan Singh in Delhi, the deal to sell AgustaWestland helicopters to India seemed to have been scuppered. It was suggested to Cameron that Britain cooperate with the Indian authorities in providing more information about allegations that the Anglo-Italian helicopter manufacturer based in the United Kingdom had attempted to bribe influential figures to secure the deal with India. The British prime minister promised to do so, and returned home, leaving a “wish list” behind.

February 25, 2013 Posted by aletho | Corruption, Economics, Timeless or most popular | Britain, Cameron, David Cameron, India, Liberal Democrat | Leave a comment

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Aaron Siri’s Book: Vaccines, Amen

By Maryanne DemasiMaryanne Demasi | Brownstone Institute | June 15, 2026

For decades, vaccines have been treated as the sacred cow of modern medicine. I was taught that they were the holy grail. To question them was heresy. To raise concerns about safety was to risk professional exile.

Aaron Siri makes it clear in Vaccines, Amen: The Religion of Vaccines that the story we’ve been told about vaccine science rests far more on belief than proof.

“No child should be sacrificed on the altar of the religion of vaccines,” Siri writes, as he turns his focus to America’s overcrowded childhood immunisation schedule.

I assumed little in this book would surprise me. I’ve spent years reporting on drug safety, regulatory capture, and the corruption of science. But Siri showed me how wrong I was.

Siri is not a doctor or a scientist. He is an attorney, and this, he says, is his advantage. In court, rhetoric won’t save you. Evidence does. As he puts it, he doesn’t get to say “trust me” the way many doctors do. “I need to prove claims with real data.”

And he does. … continue

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