I gave my daughter a tip on being a media critic: “If you see a newspaper article with the words ‘Social Security’ in the title,” I told her, “it’s probably bad.”
Sure enough, the article we were looking at–”Fixing Social Security,” by Washington Post columnist Allan Sloan (4/29/12)–was pretty terrible.
Sloan’s argument is that cuts in Social Security benefits are “inevitable” because of “projections that Social Security’s cash expenses will exceed its cash income as far as the eye can see.” Note the important qualifier: “cash income.” That means excluding Social Security’s investment income. Including that income, Social Security is in the black for the next 21 years, according to the Social Security Trustees’ projections.
Why exclude that investment income? Sloan explains:
We will skip all that stuff about the Social Security trust fund (which has accounting and political significance but no economic significance) and go straight to the number that matters.
To wit: Last year, the Treasury had to borrow $160 billion to give to Social Security so that its checks (okay, its electronic deposits) wouldn’t bounce.
Let’s not skip the part about the Social Security trust fund–it’s important. It’s got $2.5 trillion in U.S. Treasury bonds in it–I’d say that’s rather significant, economically speaking.
Why does the Social Security trust fund have so many Treasury bonds? Because back in the 1980s, the federal government decided to “save” Social Security by raising the payroll tax (and cutting benefits as well). The idea was that Social Security would take in more than it needed in the late 20th and early 21st centuries, loan that money to the Treasury, and then in the mid-21st century, the Treasury would pay it back, thus helping to pay for the Baby Boomers’ retirement.
The loaning money to Treasury part worked as planned. Now that it’s time for the paying back part–suddenly the trust fund has “no economic significance.”
Look at the word game Sloan’s playing: “The Treasury had to borrow $160 billion to give to Social Security….” Paying one’s debts isn’t a gift–it’s a legal requirement.
It’s true that Congress could rewrite the laws so that Social Security would forgive those debts–but why should it do that? It would implicate Congress in the grandest of all larcenies–diverting money from the paychecks of working Americans with a promise that it will be used to help pay for their retirements, and then refusing to make good on that promise on the grounds that it has “no economic significance.”
April 30, 2012
Posted by aletho |
Deception, Economics, Timeless or most popular | Allan Sloan, Jim Naureckas, Social Security, Social Security Trust Fund, Trust law, United States Treasury security, Washington Post |
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Over 300 economists, including three Nobel Laureates, recently signed a petition that encourages the president, Congress, governors and state legislatures to carefully consider marijuana legalization in America. The petition draws attention to an article by Harvard economist Jeffrey Miron, whose findings highlight the substantial cost-savings our government could incur if it were to tax and regulate marijuana, rather than needlessly spending billions of dollars enforcing its prohibition.
Miron predicts that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement, in addition to generating $2.4 billion annually if taxed like most consumer goods, or $6 billion per year if taxed similarly to alcohol and tobacco. The economists signing the petition note that the budgetary implications of marijuana prohibition are just one of many factors to be considered, but declare it essential that these findings become a serious part of the national decriminalization discussion.
The advantages of marijuana legalization extend far beyond an opportunity to make a dent in our federal deficit. The criminalization of marijuana is one of the many fights in the War on Drugs that has failed miserably. And while it’s tempting to associate only the harder, “scarier” drugs with this botched crusade, the fact remains that marijuana prohibition is very much a part of the battle. The federal government has even classified marijuana as a Schedule 1 substance (its most serious category of substances), placing it in a more dangerous category than cocaine. More than 800,000 people are arrested for marijuana use and possession each year, and 46 percent of all drug prosecutions across the country are for marijuana possession. Yet this costly and time-consuming targeting of marijuana users by law enforcement and lawmakers has done little to quell use of the drug.
The criminalization of marijuana has not only resulted in a startlingly high number of arrests, it also reflects the devastating disparate racial impact of the War on Drugs. Despite ample evidence that marijuana is used more frequently by white people, Blacks and Latinos account for a grossly disproportionate percentage of the 800,000 people arrested annually for marijuana use and possession. These convictions hinder one’s ability to find or keep employment, vote or gain access to affordable housing. The fact that these hard-to-shake consequences – bad enough as they are — are suffered more frequently by a demographic that uses marijuana less makes our current policies toward marijuana all the more unfair, unwise and unacceptable.
Our marijuana policies have proven ineffective, expensive and discriminatory. Our courtrooms, jails and prisons remain crowded with nonviolent drug offenders. And yet, the government persists in its costly, racist and counterproductive criminalization of marijuana. We learned our lesson decades ago with alcohol prohibition; it is long overdue for us to do the same with marijuana prohibition. In the face of Miron’s new report, and its support from hundreds of economists, we are hopeful that not only will the national conversation surrounding marijuana change, but so will our disastrous policies.
April 27, 2012
Posted by aletho |
Civil Liberties, Economics | Cannabis, Drug war, Jeffrey Miron, Legality of cannabis, Miron, United States |
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“I watched Obama closely at the famous ‘summit gathering.’ Fatigue sometimes overcame him, he involuntarily closed his eyes and occasionally slept with his eyes open.”
– Fidel Castro [1]
The Sixth Summit of the Americas, held April 14 and 15 in Cartagena de Indias, Colombia was supposed to be about what President Barak Obama wanted to talk about; instead it was about everything he didn’t want to hear.
The theme of the summit was “Connecting the Americas: Partners for Prosperity,” but what most of the 33 leaders present wanted to discuss with Obama was decriminalizing drugs, supporting Argentina’s claim to sovereignty over the Islas Malvinas (Falkland Islands) and an end to US exclusion of Cuba from the summits.
Having no good answers on these and other matters Obama shut down, — if Fidel observed correctly — put his mouth on auto pilot, recited the words to the anthem about free trade, national security, and prosperity for all and then refused to sign the final declaration.
The US agenda of prosperity through promotion of market capitalism, asymmetric free trade agreements, privatizations, unfettered flow of capital, and excessive protection of intellectual property rights is currently out of favor in most of the region.
Free trade of the kind pedaled by Bill Clinton and George W. Bush is no longer a regional issue. In a sense, all of these summits have been pointless if one recalls their main purpose. When Clinton convened the first one in Miami in 1994, it was not to address the forever problems of the region but to follow up on the successful negotiation of a dubious free-trade agreement with Mexico (NAFTA) by extending US commercial and financial penetration into the rest of the region under a Free Trade Area of the Americas (FTAA). That drive was stopped cold at Mar del Plata, Argentina during the 2005 summit.
Led by Brazil, – the largest regional economy and the “B” in the BRICS — many leaders in Cartagena saw Obama’s free trade and monetary obsessions as his way to help resolve US economic problems but not theirs. The cheap-dollar strategy may help US exports, job growth and narrow its trade deficit but those gains are seen as other people’s losses.
Meanwhile, the Federal Reserve makes nearly interest-free dollars available to financial institutions that then can engage in the lucrative carry trade – moving cheap dollars to places like Brazil where, perforce, interest rates are higher.
Brazil’s President Dilma Rouseff has complained to Obama’s face that the Fed’s actions have caused a “monetary tsunami” and are driving up Brazil’s currency. [2] The central bank has tried to reduce upward pressure on the Brazilian real through capital controls and dollar purchases, a situation that seems at odds with Obama’s “partnership for prosperity.”
Cuba: the Phantom of the Summit
Most or all the delegates (except Obama and his faithful Canadian companion Stephen Harper) wanted an end to the US policy of excluding Cuba from the summits and to the 50-year old blockade of the island. The Bolivarian Alliance for the Peoples of Our America (ALBA), which includes Bolivia, Cuba, Ecuador and Venezuela, had already formally demanded that Cuba be invited to Cartagena. Ecuador’s President Evo Morales reported that it was not just ALBA but Rouseff and other leaders in the Caribbean and South America who were saying, “there will not be another summit without Cuba.” [3]
In his speech opening the Cartagena summit, host President Juan Manuel Santos said that another summit without Cuba was ”unacceptable.” [4]
Of all the speeches and rumors of speeches in this hermetically sealed summit perhaps Santos’ remarks were the most striking. Here was a conservative president of one of the few loyal US allies left in Latin America, the recipient of billions in US aid to fight a proxy war on Colombia’s coca leaves under Clinton’s 1999 Plan Colombia, one of the few countries to sign a free trade pact with the United States and host to US troops on seven Colombian military bases telling Obama that his views on Cuba were based on an “outmoded ideology.” It was a “cold war anachronism,” he said. [5]
The Cuba issue could not have taken Obama by surprise. What did he expect after it was pounded into him when the previous summit foundered on the issue? At the 2009 summit in Port of Spain, Trinidad and Tobago, his colleagues wanted to talk about readmitting Cuba to the OAS. The summit ended with no agreement on the final declaration, which only the host government signed, but there was consensus that Cuba could re-apply for admission. That is not going to happen because Cuba does not want to rejoin the OAS and even if it did, Obama could impose the majority-crushing one-country veto arguing that Cuba isn’t democratic.
The constant harping about the lack of democracy in Cuba seems especially odd considering that the US government has never paid attention to the annual lopsided vote in the UN condemning the blockade. And in this very summit there was little exercise of majority rule when the United States and Canada blocked agreement on a final declaration because it contained inconvenient resolutions.
Obama, in office only a few weeks when he went to Port of Spain in April 2009, was well regarded in the region. He talked about cooperation and admitted that mistakes were made by his predecessors. He was generally praised for dropping Bush’s harsh restrictions on Cuban-American travel to Cuba. He has tried to live on those meager crumbs ever since, pretending that by reverting to the travel rules in play under Clinton he was “easing” Cuba policy when in reality the policy has remained the destruction of the Cuban revolution.
Soon after Port of Spain, however, Obama supported the June 2009 Honduran coup that followed the arrest and defenestration of President Jose Manuel Zelaya — who of course was democratically elected. Then as now Obama never tired of calling upon Cuban President Raul Castro to hold elections, without which, the island could never attend a Summit of the Americas.
Honduran President Porfirio Lobo, the direct beneficiary of that coup, attended the summit.
The lesson of Port of Spain was that John F. Kennedy’s 1962 expulsion of Cuba from the OAS was now reversed. The lesson of Cartagena was that there wouldn’t be any more of these summits without Cuba.
Who said summits are pointless?
A war on the war on drugs
Latin American leaders of all political hues have been murmuring recently about legalization or decriminalization of drugs. Guatemala’s President Otto Perez Molina is probably the furthest to the right in that group, which includes ex-presidents Cesar Gaviria of Colombia, and Ernesto Zedillo and Vicente Fox of Mexico and current Mexican President Felipe Calderon, who, against a background of some 50,000 deaths in his militarized war on drugs, has lately suggested the idea should be on the table.
Appearing slightly flexible on the issue, Obama told Univision News, “I don’t mind a debate around issues like decriminalization,” but added, “I personally don’t agree that’s a solution to the problem.” [6]
Whether or not there was a debate on drugs during the closed-door sessions, Vice President Joe Biden had already made the rounds in Mexico and Central America to promise there would be no legalization while Obama was in office.
And, as if to drive the point home, the summit had barely closed when General Douglas Fraser, chief of the US Southern Command, (Was there a democratic vote among the peoples of the region to include themselves in a US military zone?) made it clear that what Obama doesn’t like, the United States doesn’t like. The general called for greater cooperation from the region on planning for the naval side of the war on drugs. It seems that Operation Hammer, which will cover the Caribbean coast of Central America and the Pacific coast of South America, is about to begin and he wants “the naval forces of all the region” to get with the plan. [7]
If Obama’s views on legalization were not clearly spelled out in Cartagena, they are in his 2012 National Drug Control Strategy, which “rejects the false choice between an enforcement-centric ‘war on drugs’ and the extreme notion of drug legalization.” [8]
His 2012 budget to pay for that strategy authorizes $15.1 billion for traditional enforcement methods and $10.1 billion for prevention and treatment. The Marijuana News and Information blog notes that the percentage for enforcement is the same or higher than what Bush proposed spending. [9]
While hinting at flexibility on the drug issue, Obama announced at the summit that the United States was increasing funds for the foreign war on drugs led by “our Central American friends” and pledged more than $130 million dollars for it in 2012. [10]
As for the Malvinas, President Cristina Fernandez de Kirchner argued for inclusion in the final declaration of Argentina’s claims of sovereignty.
Pressed to declare himself, Obama pleaded neutrality. That’s a “no.”
There was a certain airy dismissiveness about Obamas demeanor at the summit. He danced away from the serious issues and, apparently forgetting he was the U.S. president, said, “I’m not somebody who brings to the table here a lot of baggage from the past, and I want to look at these issues in a new and fresh way.” [11]
That was a curious, even astonishing statement by a man who has willingly shouldered a good deal of imperial baggage. Of course the baggage is his to dump or carry: 54 years of it since Dwight Eisenhower tried to block Fidel from taking power, 51 years of it since the Bay of Pigs, 50 years of it since JFK got Cuba kicked out of the OAS and now nearly four years of Obama continuing the blockade, instituting his own cyber warfare against Cuba and continuing to pay Cubans to act as agents of US policy inside the island.
What baggage has he not made his own?
The other summit
Obama’s election-year intransigence on the issues at Cartagena has badly damaged and probably sunk the Americas summitry and with it maybe even the OAS. The best thing for Obama is to let the summits die and blame it on Fidel and Raul Castro (also on Santos, Rouseff, Morales, Rafael Correa, among many others).
Waiting to take its place is the Community of Latin American and Caribbean States (CELAC), inaugurated in Caracas last December as an OAS without the United States and Canada.
Behind it is ALBA, which held its own, little noticed meeting in Caracas just before the Cartagena summit. It was the summit that most of the Cartagena delegates most likely would have preferred. Its final declaration supported Argentina on the Malvinas, condemned the blockade of Cuba and called the exclusion of Cuba from the Americas summits “unacceptable.” [12]
“Perhaps,” wrote Fidel, “CELAC will become what it should be, a hemispheric political organization without the United States and Canada. The decadent and unsustainable empire has earned the right to rest in peace.” [13]
Robert Sandels is a writer for Cuba-L and CounterPunch.
Notes.
[1] Fidel Castro, Reflexiones, Granma, 04/17/12,
http://www.granma.cu/espanol/reflexiones/17abril-reflexiones.html.
[2[Reuters, 04/14/12,
<http://www.vancouversun.com/news/Scandal+mars+Obama+wooing+Latin+America+wi
th+video/6473757/story.html>.
[3] ALBA-TCP website, http://www.alianzabolivariana.org/modules.php?
name=News&file=article&sid=8495.
[4] La Jornada (Mexico), 04/14/12,
http://www.lajornadajalisco.com.mx/2012/04/14/inaceptable-una-nueva-cumbre-s
in-cuba-santos/.
[5] Ibid.
[6] Interview, Univision News, 04/14/12,
http://univisionnews.tumblr.com/post/21081359245/obama-dont-mind-debating-le
galization-of-drugs.
[7] United States Southern Command website, 04/18/12,
http://www.southcom.mil/newsroom/Pages/Western-Hemisphere-Defense,
-Security-Leaders-Gather-to-Discuss-Transnational-Organized-Crime-in-Central
-America.aspx.
[8] White House,
http://www.whitehouse.gov/ondcp/2012-national-drug-control-strategy.
[9] Marijuana News and Information, 04/20/12,
http://www.theweedblog.com/obamas-2012-drug-strategy-is-a-reminder-the-feds-
are-addicted-to-the-drug-war/.
[10] Xinhua, 04/14/12,
http://news.xinhuanet.com/english/world/2012-04/15/c_131527076.htm.
[11] Washington Post, 04/15/12,
http://www.washingtonpost.com/world/the_americas/obama-concludes-summit-of-t
he-americas-on-the-defensive-about-inviting-cuba/2012/04/15/gIQAVrgAKT_story
.html.
[12] Granma Internacional, 04/18/12,
http://www.granma.cu/ingles/cuba-i/18abr-17gobierno.html.
[13] Fidel Castro, Reflexiones, Granma Internacional, 04/17/12,
http://www.granma.cu/espanol/reflexiones/17abril-reflexiones.html.
April 27, 2012
Posted by aletho |
Economics, Progressive Hypocrite, Solidarity and Activism | Americas Summit, Colombia, Cuba, Free Trade Area of the Americas, Joe Biden, Obama, Port of Spain |
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By Raúl Zibechi* | La Journada | 26 April 2012
After the recent sixth Summit of the Americas there remains little doubt that the Latin American region has changed. It stopped being the back- yard of a decadent empire that has very little to offer save military bases and threatening fleets. The double failure of the United States, by Barack Obama in Cartagena and by Hillary Clinton the following week in Brasilia, shows the lack of constructive proposals for the region.
As Dilma Rousseff pointed out, countries of the region demand “ relations among equals,” which was interpreted by some analysts as “a rebellion against the United States.” The summit’s principal consequence is proof of US isolation and the non-existence of policies capable of attracting the region jointly as happened until the middle of the 1990s. I find five reasons for the deterioration of Washington’s relations with the entire continent, which anticipate the new scenario in formation.
The first is the double failure of the drug war and the embargo of Cuba. After the fall of the Soviet Union, Washington had to fabricate an enemy to continue forcing the militarization of international relations. Illegal drug trafficking fulfilled that function for a while, despite never being credible because it did not include a reduction of consumption in northern countries, the big consumers of illegal drugs.
Now the war against drugs lost the battle for legitimacy. The International Institute of Strategic Studies just launched a study in which it affirms that it not only failed in combating consumption and trafficking, but also the war against drugs “has created an important threat to international security” (La Jornada, April 17). Was that not perhaps the desired objective?
The second is the end of the OAS’ time and the consolidation of Unasur (Union of South American Nations) and Celac (Community of Latin American and Caribbean States), both of which exclude the United States and Canada and adjust to the new global reality. Following the already marked tendency by Unasur since 2009, Celac is rapidly becoming the organism capable of resolving the region’s problems and of tracing the direction of its sovereignty before the extra-continental powers. It can be discussed whether that is the type of integration that the Latin American peoples need, but there is no room for doubt that, whatever the path they elect, they are excluding the old property owners from the back yard.
In third place, the United States no longer is the principal trade associate of the region’s principal countries, particularly of South America, and its decreasing internal market no longer has the attraction of old nor is it in any condition to capture Latin American exports. The tendency is that China and the Asia group substitute for the role that the United States had from the beginning of the 20th Century until the 2008 crisis as the decisive trade and political ally.
Until 2005, the United States purchased 1.5 million barrels per day from Venezuela, a number that fell in 2011 to less than one million. To the contrary, Venezuelan exports to China, which were almost non-existent in 2005, climbed to almost a half million barrels per day n 2011 (Geab No. 60, December 2011). The tendency is that one market substitutes for the other.
The United States and the European Union, in fourth place, are on the way to being displaced as the principal investors in Latin America. China is the principal investor in Venezuela, the first world reserve for oil, third for bauxite, fourth reserve for gold, in sixth position in natural gas and tenth reserve of iron in the world. China also has strong investments in Argentina and Brazil, the two largest South American economies.
The second Chinese oil company, Sinopec, was interested in buying a part of Repsol in YPF for 15 billion dollars before the nationalization decided by the government of Cristina Fernández (Financial Times, April 18, 2012). Now it can expand its investments in Argentina, where it is responsible for 6 percent of the offer of crude and for 1.7 percent of gas.
The region also has endogenous capabilities for investment. The best example is the announcement of the investment of 16 billion dollars by three Brazilian companies (Petrobras, Odebrecht and Braskem) in Peru, to extract gas in Camisea, to construct a gas duct of more than a thousand kilometers toward the south and a petrochemical pole in the port city of Ilo, the first on the Pacific Coast.
In fifth place, the United States no longer is the region’s only military ally. Venezuela maintains a solid alliance with Russia, Brazil has co-operation agreements with India in aeronautics and with China in the space industry. But the most notable is the progressive integration of the region’s military industries, in other words the coupling of the South American countries with the growing Brazilian military industry.
The most notable case is the strategic alliance between Brazil and Argentina, which translates into joint development of protection, a military carrier that will substitute for the Hercules, the development of air-to-air missiles that Brazil worked on with South Africa, and unmanned planes for border vigilance. Both countries form a critical mass capable of trumping the rest to set up a regional military industry autonomous from the north.
The imminent victory of the socialist François Hollande in the French elections “will activate a series of strategic changes” that accelerate the geopolitical transitions underway, according to what the European Laboratory of Political Anticipation (Laboratorio Europeo de Anticipación Política) estimates. See: (Geab No. 54, April 17, 2012). One of the principal turns will be the formation of a Europe-BRICS strategic alliance. In some way, this alliance already started with the 2009 France-Brazil military agreement to construct submarines and attack planes. The region’s autonomization can have unexpected allies.
* Translation by Chiapas Support Committee
April 27, 2012
Posted by aletho |
Economics, Militarism | Brazil, China, Community of Latin American and Caribbean States, Dilma Rousseff, Latin America, Raúl Zibechi, South America, United States |
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The provision of under-priced natural gas to Israel under the Mubarak government has long been fuel for public anger, but critics predict that the current powers will not be willing to permanently sever the old deals.
Cairo – The Egyptian General Petroleum Corporation’s decision to halt natural gas supplies to Israel – not in order to end the squandering of public funds, but due to overdue Israeli payments – has failed to impress campaigners who have long demanded the scrapping of the deal under which Israel has imported 1.7 million cubic meters of Egyptian gas annually since 2008.
The arrangement, which provides Israel with 40 percent of its gas needs, has been a subject of public anger for the past five years. Over that time, experts estimate that Egypt sustained losses amounting to Egyptian pounds (LE) 28 million (US$4.6 million) per day, as a result of exporting gas to a number of states such as Turkey, Spain, Jordan, and Israel at a price of US$0.705 per million British Thermal Units (MMBtu) at a time when world prices were fluctuating between US$2 and US$6 per MMBtu. The gas is exported through a 100 kilometer-long pipeline from Sinai to Asqalan on the Mediterranean coast.
The gas was supplied under the terms of an agreement signed by the Egyptian government and Israel in 2005, brokered by businessman Hussein Salem, a friend of deposed former President Hosni Mubarak. It guarantees nearly 2 billion cubic meters of Egyptian gas being exported annually to Israel for a 20-year period from the Eastern Mediterranean Gas (EMG) Company – a partnership involving Salem, the Israeli Merhav group, the Ampal American Israel Corporation, the Thai firm PTT, and American businessman Sam Zell – at a price below half the cost of extracting and transporting it.
Despite objections raised by some Egyptian MPs at the time, the agreement was rubber stamped by parliament, thanks both to the dominance of the then-ruling National Democratic Party (NDP) and the fact that a presidential confidant was involved (Mubarak’s sons Gamal and Alaa were also rumored to have been paid commissions by Salem for facilitating the deal). EMG was also granted a three-year tax exemption from 2005 to 2008 by the government.
Public opposition to the deal persisted, however. Political groups held demonstrations against it, legal challenges were mounted in the courts, and campaigning organizations were set up to stop it. But the regime was undeterred, even when geologists joined political activists in opposing the agreement, warning that Egypt’s gas reserves were being depleted to dangerously low levels. Jurists, too, opined that the agreement encroached on Egypt’s sovereignty and control over an important national resource.
A later bid by the Egyptian government to improve the terms of the deal was snubbed by the Israelis, according to Judge Adel Ferghalli, former head of the Administrative Courts division. He told Al-Akhbar that in 2008, the government referred seven agreements related to the export of gas to Israel to the Council of State’s legislation department, the judicial authority which reviews agreements and bills before they are put to parliament. The government requested that the accords be reviewed with a view to raising the export price from US$.705 to US$3.65 per MMBtu. This was duly done, but the Israeli side refused to agree to the higher price and insisted that the Israeli importing companies were bound by the 2005 agreement which set prices from US$.705 to a maximum of US$1.75.
This did not prevent Mubarak’s government from concluding further agreements with Israel in late 2010 to increase the quantity of gas supplied from 1.7 to 2.9 billion cubic meters, for a 20-year period starting in 2010 and at the old prices. This was claimed by a number of Israeli companies about two months before Mubarak was ousted from office, and not denied by the Egyptian government at the time.
With the outbreak of the January 2011 revolution and the assumption of power by the Supreme Council of the Armed Forces (SCAF), demands for an end to gas sales to Israel became more vociferous. In response, former prime minister Essam Sharaf indicated shortly after he was appointed in early April last year that while Egypt could not breach contractual obligations to export gas to Israel it could review the terms, and promised to do that so as to raise Egypt’s yearly revenues from its gas deals by US$4 billion.
But time went by and nothing was done. So Egyptians took things into their own hands, as Ibrahim Yousri, a former ambassador and coordinator of the pressure group No Gas Sales to the Zionist Entity, put it. “They started relying on themselves to express their rejection of the squandering of public funds and the export of Egyptian gas at below world prices to a number of countries, especially Israel, which they consider their enemy,” he said. The pipeline supplying the gas to Israel has been bombed on 13 occasions in the year since Mubarak was ousted.
Yousri was dismissive of the decision to halt exports, suspecting it will prove temporary.
“If the military had wanted to salvage their reputation and avoid the accusation of squandering national resources, the agreement would have been scrapped completely,” he remarked.
He said the reason exports were halted was that the Israeli company importing the gas had withheld Egypt’s dues since 2010. Otherwise, SCAF had been doing exactly what Mubarak had done since 2008, effectively donating some US$10 million dollars daily to the Israeli treasury – the value of the gas supplied by Egypt. “That is not going to make them cancel the agreement outright, but just temporarily halt exports,” he said.
~
SCAF’s Image Vis a Vis Israel
By Bisan Kassab
Cairo – The decision to halt Egyptian gas exports to Israel cannot be seen in isolation from the impending end of the transitional period in Egypt, or the apparent falling out between the Muslim Brotherhood and the SCAF.
The ruling generals are badly in need of an “image boost,” according to Hassan Nafaa, professor of political science at Cairo University and a former member of the SCAF’s civilian advisory council.
While Cairo, represented by the head of the Egyptian Natural Gas Holding Company (EGAS) Muhamad Shuaib, officially attributed the move to the Israeli side’s failure to comply with its contractual obligations, the decision “is in essence political and not commercial,” Nafaa remarked.
He said the SCAF would certainly use the announcement, which was bound to receive wide public acclaim, to try to bolster its political standing. But he judged that any additional popularity it gained would be fleeting, and would not give it a political edge over its critics – especially in light of the recent legislation proposing the disqualification from politics of senior figures in the Mubarak regime, which has narrowed the SCAF’s room to maneuver.
He added that the dispute over late payments by the Israeli side provided the SCAF with a convenient means of acting without inviting undue pressure from the United States and Israel.
Nafaa’s skepticism seems well placed.
Minister of Planning and International Cooperation Fayza Abul-Naga – the Mubarak-era holdover who spearheaded the recent campaign against NGOs that receive foreign funding – has said that EGAS informed the Israelis that “the Egyptian side had no objections to reaching a new contract with new conditions and a new price.”
She stressed that the decision to halt exports was not taken suddenly, but after Israel had been notified five times that it was not meeting its financial obligations under the old contract, adding that the last deadline it was given for making its overdue payments was March 31.
Husam Issa, a professor of international law and member of a group seeking to recover public funds embezzled during the Mubarak years, remarked that the Israelis had no grounds for objecting. Non-payment was clearly a sufficient reason for terminating a contract without being accused of acting out of political motives or under public pressure, he said.
April 25, 2012
Posted by aletho |
Economics, Timeless or most popular | Ampal American Israel Corporation, EGAS, Egypt, Egyptian General Petroleum Corporation, Hosni Mubarak, Israel |
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French Elections: Cracks in the Neoliberal Consensus
Democratic elections in the NATO member states serve one clear purpose. They contribute to the self-satisfaction concerning “our values” needed to justify military intervention in the imperfect internal affairs of other countries. But do the citizens really decide policy through their votes, or is electoral democracy fatally corrupted by the power of money?
At least in its form, the French presidential election is a model of resistance to the power of money that so blatantly dominates presidential elections in the United States.
While the United States is locked in a two-party system where both parties depend on millions of dollars from rich donors, the French two-round system allows as many candidates as can gather the required number (500) of mayors’ signatures to run in the first round. Then voters can decide between the two front-runners in the second round.
For the final phase of the first round campaign, which ended with the election this Sunday, April 22, all candidates receive equal television time to get across their message, without having to pay for it.
This time around, there were ten candidates, five of whom had at least a chance at the start to make it into the second round, even though polls showed the incumbent Nicolas Sarkozy and the Socialist Party candidate François Hollande leading the pack. But an upset was at least theoretically possible, as happened in 2002, when the National Front candidate Jean-Marie Le Pen knocked out the Socialist Party candidate Lionel Jospin in the first round, handing Jacques Chirac a landslide victory in the run-off.
The most suspenseful aspect of the first round turned out to be the duel for third place between Jean-Marie’s daughter and political successor Marine Le Pen and the Left Front candidate Jean-Luc Mélenchon. Marine set out to beat her father’s score ten years ago, while Mélenchon set himself the goal of beating her. The two adversaries were the most charismatic of the ten candidates. As candidate of the Left Front, Mélenchon lost his bid to come in third, but thanks to his extraordinary verbal skills has succeeded in reviving a political force to the left of the Socialist Party.
Percentage results of candidates in April 22 first round of French Persidential election
François Hollande, Socialist Party 29 %
Nicolas Sarkozy, outgoing President 26 %
Marine Le Pen, National Front 18 %
Jean-Luc Mélenchon, Left Front 11 %
François Bayrou, centrist 9 %
Eva Joly, Greens 2 %
Nicolas Dupont-Aignan, Social Gaullist 1.8%
Philippe Poutou, New Anti-Capitalist Party (Trotskyist) 1.2%
Nathalie Arthaud, communist (Lutte Ouvrière, Trotskyist) 0.7%
Jacques Cheminade, progressist (Lyndon Larouche influence) 0.2%
Participation was high, at around 80%. The first round is altogether more entertaining and interesting than the second round. It provides more information about the real preferences of voters than the second round, which, like U.S. presidential elections, is often decided on the “lesser evil” principle, with increasing numbers of voters aware that whoever wins, the policies will be much the same.
A few observations:
Every candidate except Sarkozy, the self-styled centrist Bayrou and the Green candidate Eva Joly singled out the world of finance as the main adversary. Hollande did so quite explicitly in his main campaign speech, although shortly afterwards he watered his wine considerably during a visit to London, the City oblige. This hostility toward banks has horrified Anglo-American commentators, from The Economist to John Vinocur of the International Herald Tribune, for whom realism consists in docile obedience to the demands of “the markets”. Acting uppity toward finance capital is close to insanity. If “the right” is defined first of all by subservience to finance capital, then aside from Sarkozy, Bayrou and perhaps Joly, all the other candidates were basically on the left. And all of them except Sarkozy would be considered far to the left of any leading politician in the United States.
This applies notably to Marine Le Pen, whose social program was designed to win working class and youth votes. Her “far right” label is due primarily to her criticism of Muslim practices in France and demands to reduce immigration quotas, but her position on these issues would be considered moderate in the Netherlands or in much of the United States. Even she stressed that the immigration problem, as she saw it, was not the fault of the immigrants themselves but of the politicians and the elite who brought them here. The main tone of her political message was resolutely populist, attacking the “Paris elite”. Demagogic, yes, often vague and playing fast and loose with statistics, but a model of reason compared to the utterances of the “Tea Party”. Her political challenge was to hold onto her father’s ultra-conservative constituency while wooing discontented low income voters. She apparently won more working class votes than Mélenchon.
Mélenchon left the Socialist party to found the Left Party in 2008. As candidate for the broader Left Front, he has raised the spirits of the demoralized French Communist Party, which fell below 2% in the 2007 election and gave up running a candidate of its own. Its militants have responded enthusiastically to Mélenchon’s revival of red flags and fiery rhetoric. He would put lower and upper limits on wages and salaries. His program, including calls for constitutional revision that would guarantee such progressive measures as gay marriage, assisted suicide and the right to abortion, surely goes far beyond the demands of his constituency, more concerned with jobs and wages, and reflects his personal adherence to the progressive philosophy of French Free Masonry. It is certainly his quick witted debating skill that appeals to voters more than the details of his ambitious program.
Disillusion with the euro and Europe
The two leading candidates remain faithful to the dogma of “European construction”. But elsewhere splits are beginning to show. Marine Le Pen condemns the euro as a failure which had wrecked European economies and is doomed to disappear.
Certainly, François Asselineau, who has founded his own party, the Union Populaire Républicaine, with the sole object of leaving the European Union, has been totally deprived of any media coverage, and was unable to gather the necessary signatures for candidacy. But the social Gaullist Nicolas Dupont-Aignan, who is only beginning to be known to the French public, is adamant that France should return to the franc, retaining the euro only as a reserve currency around which EU member state currencies should be allowed to fluctuate. Dupont-Aignan calls the euro a “racket” and a “poison” for EU economies, which are too diverse for a single currency. To the objection that leaving the euro would cause huge inflation, he accuses present EU leaders of creating inflation by allowing private banks to borrow at 1% and then ruin member States by lending to them at higher and higher rates. After France recovers its sovereignty by leaving the euro, Dupont-Aignan would have the Bank of France finance the state at zero interest, which would allow the government to reduce its debt and hire more teachers, policemen and researchers, instead of reducing their number. He would also take measures to protect French industry from cheap imports.
In contrast, Mélenchon advocates strongly interventionist economic policies without accounting for the fact that they would go against European Union directives as well as the monetarist policy governing the euro. Mélenchon speaks of using the economic weight of France to persuade Germany to change its deflationist policies. This raises the problem of the clear contradiction between social policies to which the French are attached and the European Union’s control of economic policy that is fatal to those social policies.
Foreign policy confusion
Foreign policy has been almost entirely absent from this campaign. This could be because voters are not thought to be interested, or because there is no strong opposition between the candidates. François Hollande conforms to the mainstream consensus, saying he would support military intervention in Syria if based on a UN resolution. Much of the French left has swallowed the “Responsibility to Protect” ideology.
Already last year, Mélenchon dismayed a certain number of his admirers by supporting the war in Libya, on the grounds that it was based on a UN Resolution. He now calls for withdrawal from NATO and construction of an independent United Nations intervention force.
Not surprisingly, the Gaullist Dupont-Aignan opposes arming the Syrian opposition, pointing to the fact that arms provided to Libyan rebels ended up in the hands of militias who are destabilizing the whole region. He maintains that France should have acted differently in Libya and with Russia, instead of following the anti-Russian policy of the United States.
Among the leading candidates, the only clear anti-war policy is that of Marine Le Pen, who favors immediate withdrawal from both Afghanistan and the NATO command, describes the current French government policy of supporting the Syrian opposition as “totally irresponsible”, calls for recognition of a Palestinian State and opposes threats to bomb Iranian nuclear sites, which have not been proven to be military. And she adds: “As far as I know, no nation which has atomic weapons has ever asked for permission from anyone, neither the United States, nor France, nor Israel, nor Pakistan… Must we then plunge the world into a war whose extent we will not control because certain foreign counties ask us to?”
Marine Le Pen is regularly stigmatized as “racist” for her desire to reduce immigration. But which is worse: refusing entry to Muslim immigrants, or bombing them in their home countries?
The worst is yet to come
Even before the vote, John Vinocur raged against the “miserable precedent” represented by the fact that what he dubbed the “Rejection Front” made up of Marine Le Pen and Jean-Luc Mélenchon was almost sure to beat the first round score of either mainstream candidate. Thus, he said, France would have “legitimatized two political currents that spurn serious solutions for France’s economic grief, reject civility and common sense and variously propose regression through loony yet authoritarian economics, class warfare, class or racial prejudices, anti-Western instincts, and the politics of endless rage.”
Wow, take that you frogs. Look to the calm, intelligent debate of U.S. Republican primaries for guidance, and remember that whatever foolish things you want, like jobs, medical care or a roof over your head, it’s the markets that have the last word.
Exit polls pointed to a solid victory for Hollande in the second round. The standard description of Marine Le Pen as “the far right” could suggest that her voters would turn to the right wing candidate, Sarkozy, in the runoff. But this is far from the case. The social and foreign policy positions of Marine Le Pen have won over a number of voters disenchanted with the left. Her voters may split fifty-fifty in the second round. She herself clearly looks forward to the defeat of Sarkozy in order to become the undisputed leader of a recomposed right-wing opposition, which could make life difficult for the future President Hollande. Perhaps the only thing that could save Sarkozy would be massive abstention, but that does not look likely.
Actually, the timing of this election is favorable to a fairly limp, ill-defined candidate like Hollande, because the future is as unclear as he is. The Greek disaster, the financial woes of Portugal, Spain and Italy are ominous for France, and the French are worried. But most French people are still too well off to be seriously alarmed. The critics like Vinocur or The Economist seem to think that a French candidate for president should run on a campaign of telling people that they should happily prepare to give up all the comforts they enjoy, because that is what the financial markets demand. If things are as bad as these champions of financial globalization are predicting, then this first round may provide better hints to the French future than the final round of the Hollande-Sarkozy election in two weeks time.
DIANA JOHNSTONE is the author of Fools Crusade: Yugoslavia, NATO and Western Delusions. She can be reached at diana.josto@yahoo.fr
April 24, 2012
Posted by aletho |
Economics, Militarism, Wars for Israel | Eva Joly, François Bayrou, François Hollande, France, Jean-Luc Mélenchon, Marine Le Pen, Nicolas Sarkozy |
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Improving the Lives of the Poor and the Disadvantaged
If the the international press is to be believed, President Hugo Chávez of Venezuela is a dictator, a menace to the region and is driving his country to the ground. If that is so, why do his people vote for him in landslide numbers? Why does he have an enormous following of the women of his country? Are they all deluded? Are they all paid or coerced to vote? It would seem so to the casual reader of headlines because the achievements of the Chávez government are treated like a top secret: Venezuela’s new participatory democracy should not be advertised. A new form of economic and social development that does not pay homage to global capital should be shunned. Nevertheless, a new world is being formed in a Latin America that has refused to be any power’s “back yard”. These developments are not ignored in Latin America where the Venezuela revolution has had a deep impact. The women of Venezuela have especially embraced the Bolivarian Revolution of Venezuela, not because they are “followers” but because actually, they have become protagonists of a social, economic and, cultural revolution that has transformed Venezuela and the region.
It all started with the Constitution of 2000, written by an elected assembly in clear and inclusive language, which contained legislation that would transform the lives of Venezuelans and particularly, of women. It gave women the right of equal pay for equal work, (Article 91); the right to a life without violence, according to International Convention against Discrimination against Women (Article 21): the right to protection and public assistance during maternity in all its phases (Article 76); and the now world famous Article 88 that recognizes women’s domestic work as productive economic activity entitled to public pensions. The constitution also adheres to the International UN Declaration of the Rights of the Child.
When the Constitution was only two years old and by no means was its mandate entirely implemented in law, in April of 2002, President Chávez was deposed and kidnapped in a coup d’etat orchestrated by the financial elites and abetted by the United States. It lasted 48 hours. The catalyst for its end was the tens of thousands of ordinary people who took to the streets to demand the return of their democratically elected president. They faced sharpshooters who were shooting indiscriminately at the crowds to create chaos. Masses of these people were women – women who realized that this government that they had elected now had been taken from them. The loyal armed forces then chose to side with the people and not the elites, and President Chávez was returned to his rightful position, becoming the first president in modern history to be deposed only to brought back due to widespread popular protest.[i]
There have been many accounts of heroic interventions during this critical time in which women figured prominently. Such as the older women of the slum area of El Valle who assumed leadership of the multitude that surrounded the country’s largest military headquarters, Fuerte Tiuna, and diffused a potentially deadly situation by shaming soldiers to put down their guns. Or the girl who gathered together her friends with motorbikes and actually took back the government’s TV station that had been ransacked and shut down by the coup supporters. President Chávez has often paid tribute to the extraordinary role women assumed in fighting the coup.
Today, 13 years after President Chavez’s first election, the lives of Venezuelan women have dramatically changed. The constitutional promises have been implemented in regulation and policy concerning gender equality and for the prevention violence against women. Laws have outlawed discrimination and have categorized 19 types of violence against women and created the institutions necessary to make the rights of women a reality.[ii] Granted, these issues all call for cultural and attitudinal changes in the relationships between men and women, which take time and education, but a clear legal basis is a strong impulse for such changes.
One of the main factors for the popularity of the Chávez Government is the reduction of poverty. This was largely attained because the government took back control of the national petroleum company PDVSA, and has used the abundant oil revenues, not for benefit of the rich as previous governments had done, but to build needed infrastructure and invest in the social services that Venezuelans so sorely needed. During the last ten years, the government has increased social spending by 60.6%, a total of $772 billion. [iii]
Women tend to be the majority among the poor all over the world due to their economic and social disadvantages and Venezuela has not been an exception. The Chavez government has significantly reduced general poverty from 49% in 1998 to 27% in 2011 and extreme poverty has been reduced from 27.4% (5.5 m) in 1998 to 7.3% (2.5m) today. [iv] The Organization of American States and the UN Development Program have both stated that Venezuela is at the head of the list of countries of the region that have reduced poverty the most.[v]
Economic milestones these last ten years include a reduction in unemployment from 11.3% to 7.7%; doubling the amount of people receiving social insurance benefits, and the public debt has been reduced from 20.7% to 14.3% of GNP. [vi] In general, the Venezuelan economy has grown 47.4% in ten years (4.3% per annum).
Among the many initiatives to promote popular economic enterprises, BAN MUJER was established in 2001, a bank solely for women. A very successful instrument helping women create their own businesses, it has given out 150,000 micro-credits to 2.5 million women, along with technical expertise and support for cooperatives.[vii] The substantive land reform also favours women, as women head of households are given priority when it comes to land redistribution. Furthermore, Venezuela is the country in the region with the least inequality (0.389 Gini index) and best redistribution of wealth between social classes.[viii]
Women in Venezuela have become not only the majority of the users but also the majority of providers of social services and anti-poverty programs[ix]. They are the majority in the election units of the governing party (PSUV) and very impressively, 70% of the members of the approximately 30,000 Communal Councils in the country are women. These Communal Councils play a pivotal role in decision making at the grass roots level to satisfy community social and economic needs and are the basis of participatory democracy.
Women hold some key and powerful positions in the government: as several ministers, President of the Supreme Court, Attorney General, National Ombudsman, National Elections Council, and Vice-presidency of the governing party PSUV are all women. Indeed, Venezuela is the country in the region with the highest inclusion of women in education and professional fields, according to the UN Human Development Program.
Health is an issue very dear to women’s hearts. In the new Venezuela, it is considered a human right, which the government is obliged to promote. Perhaps the most important, anti-poverty program that has galvanized women’s support is the government’s health care services and policies.
In 1998, access to medical care was abysmal and expensive, with only 20 physicians per 100,000 inhabitants. A creative arrangement with Cuba whereby in exchange for 100,000 barrels of petroleum, Cuba sends to Venezuela 45,000 health care workers, mostly physicians, [x]has made possible the health delivery program Barrio Adentro that places experienced physicians throughout urban poor neighborhoods, rural villages, and indigenous settlements. The huge majority of Cuban physicians in Venezuela are women. This program since its inception in 2003 has saved 302,171 lives and reduced maternal mortality as 99.3% of women giving birth attended by the Barrio Adentro physicians survive. [xi]
Today there are 59 physicians per 100,000 inhabitants, new clinics, and renovated and new hospitals throughout the country. There are now hundreds of emergency clinics, primary health clinics, and rehabilitation centres where a decade ago they were scarce. There is a new medical curriculum with the help of Cuban medical professors that emphasizes health as a human right and medical services grounded in the community. And, 70% of the new physicians graduating in the country are women.
One of the most important indicators of the welfare of a nation is the infant mortality rate. In 1998, that rate in Venezuela was 21 baby deaths per 1000 births. In 2011, the rate is 13.7 per 1000 births, the third lowest in Latin America, and an astounding achievement. [xii] Infant malnutrition went from 7.7% in 1998 to 3.2% in 2011, that is a 58.5% reduction, the 5th lowest in the region. [xiii] There are five laws that protect and promote breastfeeding, which is considered the very first act of food sovereignty. Breastfeeding increased from 7% a decade ago to 40% in 2010, and there are breast milk banks for babies at risk. In 70% of public schools, 4 million children are provided with free quality hot breakfast, hot lunch, and a nutritious snack before they leave school. There are 6,000 food dispensaries that feed 900.000 people in dire need– in total, about 5 million Venezuelans are provided with free food. [xiv] Thirteen years ago, there were approximately 8,000 children living on urban streets, and today they are practically negligible due to the programs to support street children.
Malnutrition in general has decreased due to these government food security measures plus others such as a real land reform, investment in agriculture, and promotion of cooperatives among rural workers and fishermen, and breaking up food distribution monopolies with a public food distribution network.
The better health of the population is not entirely due to medical services, but to the combined action on the social determinants of health: better nutrition, clean water and sanitation, more jobs and income per families, greater educational and training facilities, and greater social support and networking at the local levels, a literate and politically active and conscious population. And the government has had environmental initiatives and policies like no other previous administration, including, environmental assessments and protection, tree planting, water protection, energy efficiency and educational campaigns.
The government’s educational policies have rendered sterling results. Backed by UNESCO, Venezuela can claim to have eliminated illiteracy using the Cuban method of adult education with which 2 million people learned to read in less than 2 years. There are programs to help students finish High School, adult education to help people go to university, and a number of new universities in the country. The rate of students in primary school has increased from 85% to 93.6% and students in high school has increased even more, a 14% increase equivalent to 400,000 adolescents who are now continuing their studies.[xv] There are 20% more women than men continuing their studies.[xvi] And in the military field, which was a decade ago an exclusively masculine domain, today the majority of students at the military university UNEFA, are women. It is estimated that about 1/5 to 1/3 of the population of the country is enrolled in some educational program. Venezuela has met its educational Millennium Goals.
The United Nations has rated Venezuela among the countries with high level of human development, ranked #69 in its Human Development Index having advanced six places in ten years. [xvii]This indicator is supported by the Gallup Poll measuring happiness published by the Washington Post this year, that ranks Venezuela as the 5th most happy county tied with Finland.[xviii] This in itself should have made headlines around the world, but unfortunately, the international campaign to discount and denigrate everything related to the present Venezuelan government, denies the public knowledge of its considerable achievements.
While problems inherent to developing countries still persist in Venezuela, the progress that its government has made to satisfy its people’s real needs is impressive, and it is the reason that it has overwhelming support of women because it has improved their lives and those of their families. It is an indictment of the sorry state of the media in the northern developed countries, supposedly “independent” but prisoners of their political biases, that those achievements are not better known. On October 7 of this year, when President Chávez is elected with a handsome majority, those who have been fed by the mainstream media distorted views of the situation in Venezuela will be shaking their heads, not understanding that there are pivotal reasons why people in Venezuela vote for him, especially the women.
Maria Páez Victor, Ph.D., lives in Toronto.
Notes.
[i] Se video: The Revolution will Not be Televised” http://video.google.com/videoplay?docid=5832390545689805144
[ii] George Gabriel, Gender Advance in Venezuela: a two-pronged affair, 13 March 2009, http://www.opendemocracy.net/article/gender-advance-in-venezuela-a-two-pronged-affair
[iii] National Institute of Statistics, AVN March 4, 2012
[iv] AVN Prensa, 27 March 2012; National Institute of Statistics, AVN November 14, 2011
[v] Adrián Carmona, Algunos datos sobre Venezuela, Rebelión, marzo 2012
[vi] Adrián Carmona, Algunos datos sobre Venezuela, Rebelión, marzo 2012
[vii] Alba Carosio, Banmujer: 10 años impulsando la economía popular con igualdad, Rebelion, Feb. 4, 2011
[viii] National Institute of Statistics, AVN/ November 17/2010
[ix] The Guardian, Women Back Chávez, Feb. 25, 2005,
[x] http://www.aporrea.org/misiones/n199049.html
[xi] AVN Prensa 26 August 2010; YVKE Mundial/AVN/18 April 2011
[xii] Adrián Carmona, Algunos datos sobre Venezuela, Rebelión, marzo 2012
[xiii] YVKE/ 1 April 2011
[xiv] Statement by the Vice-President Elías Jaua, AVN April 23, 2012
[xv] Adrián Carmona, Algunos datos sobre Venezuela, Rebelión, marzo 2012
[xvi] UNESCO report, 2012
[xvii] AVN , January 13, 2009
[xviii] http://www.gallup.com/poll/147167/High-Wellbeing-Eludes-Masses-Countries-Worldwide.aspx#1
April 24, 2012
Posted by aletho |
Economics, Mainstream Media, Warmongering, Solidarity and Activism, Timeless or most popular | Hugo Chávez, Venezuela |
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Introduction
The economic, political and social outlook for the second decade of the 21st century is profoundly negative. The almost universal consensus, even among mainstream orthodox economists, is pessimistic regarding the world economy.
Although, even here, their predictions understate the scope and depth of the crises, there are powerful reasons to believe that beginning in the second decade of this century, we are heading toward a steeper decline than what was experienced during the Great Recession of 2008 – 2009. With fewer resources, greater debt and increasing popular resistance to shouldering the burden of saving the capitalist system, the governments cannot revive the economic system.
Many of the major institutions and economic relations which were cause and consequence of world and regional capitalist expansion over the past three decades are in the process of disintegration and disarray. The previous economic engines of global expansion, the US and the European Union, have exhausted their potentialities and are in open decline. The new centers of growth, China, India, Brazil, Russia, which provided a new impetus for world growth during the first decade are de-accelerating rapidly and will continue to do so throughout the new decade.
The political and military outlook is equally bleak, especially in the Middle East and South Asia where the US and the EU are engaged in prolonged colonial wars, either directly or through proxies. Imperial wars are deepening the economic crises, draining resources, rather than extracting wealth, and in particular with regard to US-Israeli war preparations against Iran threatening to provoke a major economic depression.
We will proceed with an overview of the principal regions of the world political economy beginning with the ongoing crises in the European Union and follow with a discussion of the causes and consequences of the decay of the US Empire. We will then analyze the negative impact of the US proxy wars for Israel in the Middle East before turning to the dynamic growth, conflicts and reforms in the BRICs: China as it emerges as a major world economic power; Russia under the dynamic leadership of President Putin and Brazil as an emerging hegemon in Latin America. We will conclude by examining the social and political consequences of prolonged crises, especially the effects of prolonged class based austerity programs and new colonial wars on the class struggle and the reshaping of the global configuration of power in a world without a dominant hegemon.
The Crises of the European Union
The Eurozone faces a triple economic crises: an economy immersed in an ongoing recession including a depressed manufacturing sector; a severe decline in trade; and a precarious financial sector in which bankers in Greece, Italy, Spain, and Portugal are on the verge of bankruptcy [1].
A crisis is developing in the empire resulting from sequential costly colonial wars and economic sanctions toward the Arab-Islamic world – Syria, Libya, Iraq, Afghanistan and Iran.
A constitutional crises as rising mass protests have led to the extension of police state measures including the suspension of constitutional guarantees and the criminalization of social protests in Spain, Greece and England.
Throughout 2012 unemployment rose to the highest levels since the introduction of the single currency in 1999. Annual trade with the EU’s main-commercial partners in Asia fell precipitously – over 18% with China, 14% with South Korea and a similar downturn with Japan [2].
Specifically, the crises wracked European Union is on the verge of a break up and the de facto multi-tiered structure is turning into a series of bilateral/multi-lateral trade and investment agreements. Germany-France the Low and Nordic countries are best placed to attempt to weather the downturn. England, namely the City of London – in splendid isolation – is sinking into negative growth, its financiers scrambling to find new speculative opportunities among the Gulf petrol-states and other ‘niches’. Eastern and central Europe, particularly Poland and the Czech Republic, have deepened their ties to Germany but are suffering the consequences of the general decline of world markets. Southern Europe (Greece, Spain, Portugal and Italy) are in a deep depression suffering double digit negative growth over the period 2009-2013 while unemployment skyrockets to over 20% as the massive debt payments fueled by savage assaults on wages and social benefits and the decline of public investments, severely reduce consumer demand [3].
Depression level unemployment and under-employment, running to one-third of the labor force and youth (17-24) unemployment of nearly 50% in southern Europe, detonates prolonged social conflicts, repeated general strikes in Greece, Spain, Portugal, Italy intensifying into popular uprisings. A break-up of the European Union is almost inevitable. The euro as a currency of choice may be replaced followed by a return to national currencies, accompanied by devaluations and protectionism. Nationalism and class struggle are the order of the day. Banks in Germany, France and Switzerland are preparing to suffer “haircuts” – huge losses on their loans to the South. Major bailouts have become necessary, polarizing German and French societies, between the tax-paying majorities and the bankers. Trade union militancy and rightwing pseudo ‘populism’ (neo-fascism) are challenging incumbent rightist (Spain, Portugal), social democratic and “technocratic” regimes (Greece, Italy).
In response to crises and mass protest, police state measures have increased in Spain. The neo-Franco regime of Mariano Rajoy has implemented new repressive laws, which penalize social movements for engaging in passive or active resistance to public authority, with jail terms ranging from one to three years [4]. In Britain, Prime Minister Cameron has approved measures allowing police to intervene in any and all personal e-mails or other correspondence without any judicial authorization.
A depressed, fragmented and polarized Europe is less likely to join in any Zionist inspired US-Israeli military interventions. Already economic sanctions against Libya, Iran and even Syria, have caused a crippling 20% increase in the price of oil in 2012, undermining any chances of economic recovery. If crises ridden Europe follows Washington’s confrontationalist approach to Russia and China it will limit access to two of the most dynamic markets for its exports.
Wars and economic crises, each mutually reinforce the other in a downward spiral. As costly imperial wars multiply, the Eurozone domestic economy decays.
The US Crisis Continues
The US crisis has several inter-related dimensions: a decline in world market shares and hegemony especially in Asia and Latin America; rising class based inequalities and differential economic ‘recovery’ between capital and labor; and a increasingly repressive police state designed to forestall domestic opposition to new overseas wars (especially with Iran) and a long term decline in living standards.
Nothing illustrates the decline of the US empire as clearly as its shrinking share of world trade and manufacturing, in the latter case by China’s forceful entry as the “workplace of the world” [5]. Even in traditional US “spheres of influence”. Latin America and the Caribbean the US no longer is the dominant trader and financier [6].
Between 2005-2010 Chinese state banks lent more than $75 billion to Latin America more than the World Bank, the Inter-American Development Bank and the Ex-Imp Bank combined. The US has been displaced by China as the leading trading partner of Brazil, Argentina, Chile, Peru and Ecuador – specializing in agro-mineral exports [7]. US de-facto devaluation of its currency and state subsidized interest rates has prejudiced Brazilian exports and created what its Finance Minister describes as a “currency war” – setting the US on a collision course with the biggest and most important economy in the region [8]. The US came up with no major economic initiatives to recast US relations with Brazil in recent meetings with President Rouseff. Nor did the US succeed in imposing its oil sanctions policy toward Iran in Latin America and Asia. India and China have rejected US policy and have continued to purchase Iranian oil [9].
Despite a slight and tenuous decline in unemployment, mainly a result of the shrinking o the labor force due to the fact that many long term unemployed workers have given up looking for jobs, the US economy has been incapable of dealing with a ballooning $1.6 trillion fiscal deficit. Because of cumulative public and household debt, Washington is finding it difficult to spend its way toward a robust recovery. Nor can it count on ‘exporting’ its way out of stagnation by turning to Asia, as China, India and the rest of Asia are losing economic steam. China’s growth for 2012 is likely to be 7.5% far below its 9% average and India will decline from 8% to 5% or lower [10].
The US economic crisis has hit the working and middle class the hardest They received nothing similar to the trillion dollar Wall Street bailout to ameliorate their socio-economic plight [11].
According to one report “about 12 million borrowers, or one in five of US homeowners with mortgages, owe more than their property is worth” depressing the housing market and reducing the net worth of US households by several trillion dollars [12].
The “decline in unemployment” claimed by the Obama regime is largely a result of the decline of the labor force from 146 million in 2007 to 140 million in 2011. In 2008 62.7% of the population was employed by 2012 it had dropped to 58.5%, thus accounting for the decline in unemployment from 9.3% to 8.3%. If the same number of workers were seeking work in 2012 as there were in 2007, unemployment [13] would be over 11%. The decline of the median income is cause and consequence of the sharp decline in the “middle class”. Well paid manufacturing jobs are replaced by low paid “service jobs”: over 90% of the 27.3 million new jobs added over the last two decades are in the service sector [14].
Exploitation of labor is evidenced in the growing productivity of labor even as the number of workers decreases: all the gains from technological innovations accrues to capital, as robots replace line workers. As efficiency rises, jobs dissolve and profits increase. Labor’s share of national income has fallen from 63% to 58% over the past 20 years. While median wages declined 2.7% since the recession of 2008-2010, profits have increased nearly 30%. While the domestic market shrinks, the Standard and Poor 400 draw 33% of their profits from exploiting cheap labor overseas. Globalization has clearly prejudiced US labor and benefited the multinational corporations (MNC). A case in point is General Motors which in 2011 recorded $7.6 billion, its largest profit ever in 2011 [15]
The Obama 2013 budget plan proposes to deepen the social divide by cutting health care and social security by $364 billion while only increasing taxes on the rich by less than one-third that amount. [16]
Faced with growing discontent with the economic crisis, overseas imperial wars, rising oil prices and declining living standards, the US has vastly increased police state legislation allowing the state to assassinate citizens suspected of fraternizing with ill-defined terrorists, suspending judicial oversight (habeas corpus) on the use of police intervention in homes and offices and cyber sites.
A presidential decree on March 16, 2012, authorized the state seizure of all major work sites and the militarization of labor in time of “emergency” – including in peace time. [17]
The US and England are the biggest losers from the Iraqi post war economic reconstruction. Of $1.86 trillion dollars in infrastructure projects, US and UK corporations will gain less than 5% [18]. A similar outcome is likely in Libya and elsewhere. US imperial militarism destroys an adversary, plunging into debt to do so, and non-belligerents reap the lucrative post-war economic reconstruction contracts. In fact empire building drains trillions in military spending without any commensurate extraction of economic wealth. In fact the domestic economy is drained to fund the military empire of 700 military bases. As the wars multiply, domestic consumption shrinks.
US economic stagnation and jobless recovery is evident in the rising number of Americans dependent on food kitchens, the epidemic in home foreclosure – over 10 million are 3 months or more behind in mortgage payments – and 30% of school children dependent on free lunches and breakfasts.
Labor exploitation (“productivity”) has intensified as capitalists force workers to produce more, for less pay, thus widening the income gap between wages and profits. [19] Several decades ago the average US CEO to worker salary differential was 70 to 1. Today it is 350 to 1. Inequalities have reached unprecedented levels and are increasing: over the past 10 years the top 1% of the class structure received 90% of the growth of income, leading to a real decline in median income of over 5%.
The economic downturn and growth of unemployment is accompanied by savage cuts in social programs to pay for the bailout of financially troubled banks, Wall Street investment houses and the automobile industry. The debates among the Democratic and Republican parties are over how much to cut the public health programs for retirees (Medicare) and for the poor (Medicare) and how to proceed in privatizing Social Security in order to secure the ‘confidence’ of the bondholders. Faced with limited political choices, the electorate is reacting by voting out incumbents, abstaining in large numbers – over 60% in congressional elections and 50% in presidential elections – or via spontaneous and organized mass movements, such as the “occupy Wall Street” protest. Dissatisfaction, hostility and frustration pervade the North American political culture. Both major parties attempt to deflect criticism and distract discontented voters by demonizing Islamic citizens and countries as “threats to national security” and augmenting the police powers of the state at the expense of constitutional freedoms. Democratic Party demagogues blame unfair trading practices of China rather than the massive flight of US MNC to mainland China. The Republican Party demagogues blame largely Latin American immigrant workers for “stealing American jobs” for Wall Street’s financial destruction of US manufacturing sector. Both, following the lead of the “Israeli Lobby, fulminate against Iran’s Islamo-fascists.
New Wars in the Midst of Crises: Zionists Pull the Trigger
In what is likely a first in world history, a global imperial power the US is subject to the dictates and pays tribute (in the form of military and economic aid to the tune of over a hundred billion dollars over the past half century) to a marginal state, Israel, with little significance to the world economy and few allies. [20] Never in past empires, has a tiny minority, US Zionists forcefully acted on behalf of the tributary state, and had such a powerful influence in harnessing an imperial state to serve the military interests of a foreign power. Never in history has a prosperous elite, educated in the most prestigious schools and occupying strategic economic, cultural and political positions of power, driven an empire into a series of prolonged colonial wars which prejudice major private institutions (oil) industry, drain the public treasury, impoverish the vast majority of taxpayers and consumers of energy in pursuit of the goal of a “Greater Israel”.
Finally never in the history of modern social analysis has the public and blatant display of elite power and political manipulation on behalf of a foreign regime been so deliberately slighted and obfuscated, by complicit or intimidated scholars and journalists, another instance of the pervasive power of intimidation of the Zionist power configuration [21].
It is precisely this elite exercise of power on behalf of a foreign regime that explains the repeated costly imperial wars against Arab and Islamic countries, even in the midst of a major prolonged economic crisis. Since the Israeli Lobby’s first and abiding loyalty is to Israel, they have no qualms about deepening the US fiscal deficit based on trillion dollar military expenditures for wars to advance Israeli domination in the Middle East.
The 52 Presidents of the Major American Jewish Organizations and their “Israel First” followers in Congress, State, Treasury and the Pentagon have escalated economic sanctions and military preparations for war with Iran despite the loss of a major market for US exports and the sidetracking of scarce economic resources to unproductive military expenditures. As a result of war threats emanating from Washington and Tel Aviv, speculators have pushed up the price of oil by 20% in the first 6 months of 2012, further undercutting any hope of an economic recovery. A US-Israeli attack on Iran will not result in a short localized war: it will result in a regional conflagration, sharply reducing the flow of oil, sending prices skyrocketing and in short order lead to a world depression. [22] Given the extremist Israeli regime’s success in securing blind obedience to its war polices from the US Congress and White House, with regard to Iraq (2003), Libya (2011), Lebanon (2006) any doubts about the real possibility of an attack on Iran, with a major catastrophic outcome, can be set aside.
China: Neo-Liberalism and the Compensatory Mechanisms in 2012
China’s dynamic growth over the past 30 years owes as much to the socialist revolution in 1949 as it does to capitalist investment from 1980 to the present. The revolution created the modern state and defeated the Japanese imperial army, local warlords and corrupt political rulers of the Kuo Ming tan and ended Euro-US foreign coastal enclaves. The revolution laid the bases for a unified country. By mobilizing labor, it created the essential infrastructure linking economic sectors; via an agrarian reform liberated the peasantry from semi-feudal constraints and created a domestic market; via universal free public education and health programs it created a modern healthy, educated labor force and an army of scientists, engineers and technicians, producing innovations and spurring double digit growth. The capitalist transition began in 1980 and accelerated thereafter via the de-collectivization of agriculture, privatization of industry, trade and urban land and the large scale, long-term entry of major MNCs.
The transition and consolidation of capitalist China had a dual effect: it unleashed the forces of production leading to double digit growth and it polarized class relations between a super-rich ruling class, a privileged ‘new petty bourgeois’ and a vast army of poorly paid exploited factory workers and migrant construction and domestic service workers.
As China became the ‘workplace of the world’ it also became the locus of the world’s worst social inequalities. Chinese capital in partnership with foreign capital turned it into the world’s second biggest economy. But China’s second and third generation of post-socialist working class increasingly has engaged in mass action demanding a greater share of the wealth, a return to free public health and education and low cost housing[23]. China’s elite is faced with dual pressures: on one side from private capital demanding greater financial de-regulation to allow for overseas investment and on the other side from labor’s clamor for greater political freedom and social spending on housing and an end to vast networks of corruption between Party officials and business elites[24]. As China’s economy matured it turned to greater investments in basic research and advanced engineering, moving China up the value chain toward complex and innovat6ive manufacturing[25]. Faced with shrinking trade surpluses due to declining demand from the crises ridden Euro zone and the US an increasingly sharp inter-elite struggle emerged, pitting neo-liberals against populists. The core leadership around premier Wen Jiabao embraced the opening of financial markets, the entry of foreign finance capital, the liberalization of the political system to allow for competing elites and the repression of advocates of neo-populist policies such as those proposed by former mayor of Chongging and ex- politburo member Bo Xilai. Bo promoted greater social insurance, environmental protection and social housing, greater social equality and robust prosecution of corrupt business-Party mafias [26]. The defeat of the symbolic head of the “populist faction”, with the arrest of BoXilai, heralded by the western financial press as a victory over “neo-Maoist demagogy”, signals the deepening and open embrace of neo-liberalism and the gradual discarding of the public regulatory regime over foreign financial flows [27]. This in turn increases China’s vulnerability to financial turmoil and opens opportunities for outward flows of capital by China’s new rich billionaires. The announced growth of domestic social spending has yet to ameliorate the class inequalities: China and its elite have become a mecca for luxury goods manufacturers and fashion designers both domestically and overseas in Paris, London, Milan and New York.
Faced with intensifying pressures from below and especially in light of the deepening of the neo-liberal option [28], the Chinese elite also has to deal with the crises in its principal export markets in the Euro zone.
China faces the US-EU crises of the new decade with several possibilities for ameliorating its impact. Beijing is shifting toward producing goods and services for the 700 million domestic consumers currently out of the economic loop. By increasing wages, social services and environmental safety, China is compensating for the loss of overseas markets. China is vastly increasing public spending on expanding public health coverage, increasing wages, and plowing billions into basic research and technology. China’s economic growth, which depended on real estate speculation, has shifted gears, as the regime has tightened lending and demanded greater municipal investment in low cost social housing for the middle and working class. To avoid a sharp downturn, leading to job losses, municipal bankruptcies and increased social and class conflicts, China is prepared to launch a massive stimulus package as it did in 2008/9. Faced with rising demands for greater economic and political liberalization from the new economic elite and working class demands for social equality and higher wages, the different factions in the Communist Party debate over greater liberalization and gradual democratization [29]. The outcome will profoundly affect China’s class structure, political institutions as well as the relative strength of market – state relations. A turn toward greater liberalization and deregulation of financial markets, as appears most likely could heighten class conflicts and provoke an economic crisis which will likely strengthen opposition to the market.
Russia Faces the Crises
The post-Soviet decade (1990-1999) witnessed the greatest peacetime human catastrophe: life expectancy fell from 66 years to 58 years in the course of three years, with over 3 million Russians dying prematurely, as newly minted capitalist oligarchs plundered the economy and public treasury [30]. Incumbent dictator Yeltsin literally bombarded the opposition led parliament in buttressing his regime. He was elected President in 1996 thanks to oligarchical media manipulation, gangster dominated regional electoral processes and massive State and private funding. Over a trillion dollars of public resources, from diverse sectors including oil, gas ,banks and transport, were seized by thugs and oligarchs for a fraction of their value [31]. Living standards plunged, pensioners suffered extreme hardships and many were evicted from public housing in choice locations.
At the height of the neo-liberal onslaught over 60% of the Russian population fell below the poverty life – the greatest decline since the end of WW II. Russia fell from co-equal world superpower to a vassal state of the Euro-US Empire.
With the advent of the Putin era, at the onset of the new century, Russia began a rapid and steep recovery. During the first decade of the 21st century poverty was reduced to less than 20% of the population. Wages and salaries were paid on time and increased by over 90%. The Russian economy grew by nearly 8% per annum and its trade surpluses led to foreign reserves exceeding 300 billion dollars, Russia regained its status as a respected power in the international political arena, forming part of the rising BRIC quartet (Brazil, Russia, India and China).
Putin, while not reversing the privatization or prosecuting the oligarchic elites for illicit enrichment, did limit their stranglehold over public policy. For his pursuit of Russian national interests and opposition to US missile encroachment on its borders, he was targeted by the western media as “hardline” [32]. For winning elections and imposing some restraints on the western funded and influenced propaganda – think tanks, NGOs and media outlets – he was dubbed “authoritarian” by the imperial mass media. Nevertheless, Putin’s stabilization and state promoted prosperity marginalized the western backed opposition and received the popular backing of close to two-thirds of the electorate.
The election of President Putin with over 60% of the vote in 2012 was a major blow to the western backed opposition intent on turning the clock back to the Yeltsin era … Putin promised a more independent policy and less collaboration in backing US promoted uprisings and sanctions against Russian allies like Syria and trading partners like Iran. Putin has turned toward greater trade and diplomatic ties with China. Russia benefits from the rise in oil prices, exceeding $120 a barrel. The crisis of the EU and weakening of NATO makes Obama’s planned missile placements pointed at Russia less palatable and more a provocation.
The western media backed opposition, despite its financial clout failed to degrade Putin’s image: its investment boycotts went nowhere and they were thoroughly beaten in the Presidential elections by a big margin. The recession has not weakened the Russian economy. Putin continues to rely on public ownership and greater dependency on overseas oil giants and oligarchs to sustain growth, an unstable and contradictory coalition.
The Transition 2011 – 2012: From Regional Stagnation and Recession to World Crises
The year 2011 laid the groundwork for deepening the crisis of the European Union. The crisis began with the recession in the Eurozone, stagnation in the US and the outbreak of mass protests against the brutal austerity programs that slashed living standards on a continent wide scale. The events of 2011 were a dress rehearsal for a new year of popular rebellions and general strikes. Moreover, the escalation of Zionist orchestrated war fever against Iran in 2011 led to brutal sanctions and the greater likelihood of the biggest regional war since the US-Indo-Chinese conflict. The electoral campaigns and outcomes of Presidential elections in the US and France offer no relief or alternatives – neither of the leading candidates offers an alternative to the deepening global conflicts and economic crises.
During 2011 the Obama regime announced a policy of military confrontation with Russia and military encirclement of China. His policies are designed to undermine Russia’s strategic defense and degrade China’s rise as a world economic power. In the face of a deepening economic recession and with the decline of overseas markets, especially in Europe, Washington perversely and aggressively pursues policies limiting lucrative export to the China market and the inflow of its investments. The White House effort to disrupt China’s trade and investments in Asia, Africa and elsewhere has been a dismal failure. In fact China has replaced the US as the principal aid beneficiary in Latin America and even the Caribbean. US efforts to exploit China’s internal ethnic and popular conflicts and to increase its military presence off China’s coastline has only encouraged China to increase its defense budget by 12% annually and to increase its investments in domestic security and social programs. A major provocation or fabricated offshore incident in this context is not to be excluded. US failed efforts to stem the rise of China has led to rabid chauvinist calls by right-wing pundits for a costly new ‘Cold War’. Obama’s Far East military build-up has provided the framework and justification for a large-scale, long-term costly confrontation with China. This is a desperate effort to prop up declining US influence and strategic positions in Asia. However, the US military “quadrangle of power” – US-Japan-Australia-South Korea – with satellite support from the Philippines is no match to China’s deepening trade, investment and currency ties with regional partners in Asia, and its growing financial links with Latin America and Africa. Washington’s military build-up exists in an economic vacuum, devoid of any new economic initiatives. It only serves to exacerbate the domestic fiscal deficit, while its military bases, troop emplacements, and arms spending add to the balance of payments deficit.
The austerity programs imposed in Europe, from England to Latvia to southern Europe took hold with a vengeance in 2012. Massive public sector firings and reduced private sector salaries and job opportunities, led to a year of permanent class warfare and regime challenges. The ‘austerity policies’ in Southern Europe were accompanied by debt defaults resulting in substantial bank losses in France, Germany and England. The British financial ruling class successfully pressured the Conservative/Liberal coalition regime to increase regressive taxes, reduce corporate taxes, privatize public health and education and repress popular unrest. A new tough neo-Thatcherite style of autocratic rule based on greater police powers over private communications has been legislated. The opposition Labor-trade union alliance has relied on vacuous verbal protest while tightening the leash on the rebellious rank and file. The regressive socio-economic policies put in place from 2008 to 2012 throughout Europe have set the stage for new non-elected technocratic and police-state regimes which in turn lead to more acute social confrontations. The second decade looms as a “lost decade” for workers and unemployed youth with no future.
The Coming Wars that End America “As We Know It”
The impossible demands that the Israeli regime dictated when the P-5 plus one announced the opening of a new round of negotiations with Iran have become the bases for Washington’s ‘non-negotiable demands’. Israel, via Washington, demands that Iran dismantle its newly built multi-billion dollar modern nuclear research center at Fordo, stop all uranium enrichment, destroy what they call “military grade enriched material”, (uranium enrichment to 20%) and allow permanent and pervasive International Atomic Energy Agency monitoring of all Iranian defense facilities [33]. No country among the over one hundred engaged in nuclear research is subject to these conditions. In fact, Iran is well within the parameters of international law and the non-proliferation agreement – while Israel rejects any international inspection of its nuclear weapons stockpile and never signed the non-proliferation agreement.
The Iranians propose to negotiate the terms of enrichment limiting the quantity, level of enrichment and inspection. But certainly and justifiably they will not destroy their advanced research facilities, nor end all enrichment. In other words the Israeli-Zionist-Washington position is devised specifically to sabotage a reasonable compromise that assures the peaceful usage of Iran’s nuclear program. The purpose is to create a pretext for claiming that “negotiations” were “tried” but failed and that a military attack is “justified”. [34]
Under Obama, as with his predecessor, the US has demonstrated its unyielding embrace of the doctrine of foreign policy by unilateral fiat in pursuit of a unipolar world.
Washington rejected a negotiated settlement of the Libyan crisis: it backed an all-out air and maritime war, marked by military success and the total destruction of its economy, society and political order. [35]
The US and its NATO satraps and Gulf state clients demand that the Syrian government unilaterally curtail its military defense of the country while they continue to provide arms, financial aid and mercenaries to the armed opposition. In effect the US backs a unilateral cease fire to facilitate the advance of their client mercenary “rebels”. [36]
The US, alone and without a single supporting country, insisted that Cuba be excluded from the “summit of the Americas” in Cartagena, Colombia on April 14-15, 2012 [37]. The attending countries made it clear to Obama that this will be that last summit in which Cuba will be excluded [38]. A unilateral US veto over Latin America’s progressive policies is dead and buried. In contrast the US, the Euro zone and Israel ally with the most retrograde regimes, like the Gulf petrol-dictators in pursuit of their colonial wars. Policies rejected by the major power in Asia (China, India) Latin America (Brazil, Argentina) Africa (South Africa) and Russia. In other words, despite growing international isolation and the tremendous chaos and destruction which colonial wars bring in their wake, the Zionist-militarist-Wall Street complex that rules the US and therefore NATO, refuses to reflect and reconsider the realities of the 21st century. Washington fails to recognize a multi-polar world, that colonial wars destroy empires and that an imperial policy dictated by a minority elite aligned to a racist-military-colonial regime can only lead to disasters.
Obama has laid the groundwork for a new and bigger war in the Middle East by relocating troops from Iraq and Afghanistan and concentrating them against Iran. To undermine Iran, Washington is expanding clandestine military and civilian operations against Iranian allies in Syria, Pakistan, Venezuela and China. The key to the US and Israeli bellicose strategy toward Iran is a series of wars in neighboring states, world- wide economic sanctions , cyber-attacks aimed at disabling vital industries and clandestine terrorist assassinations of scientists and military officials. The entire push, planning and execution of the US policies leading up to war with Iran can be attributed to the Zionist power configuration occupying strategic positions in the US Administration, mass media and ‘civil society’. Even the financial press highlights the political influence of Jewish money in the election and selection of presidential candidates and policy makers: The Financial Times highlights the role of the 1% Jewish power elite in its tittle article “The Jewish Vote: Small segment but a big role in raising funds” [39]. Equally important, it is public knowledge that leading Israeli backed and Zionist run foundations play a deciding role in designing US and Euro- zone sanctions policy toward Iran, which prejudices their economies. According to the Financial Times “Mark Dubowitz, executive director of the Washington-based Foundation for Defense of Democracies (sic) who helped write the latest sanctions bill admits that there is a risk oil prices could rise even further” [40]. A systematic analysis of policymakers designing and implementing economic sanctions policy in Congress finds prominent roles for leading Zionists such as Waxman, Ileana Ros-Lehtinen, Levin, Cantor, Berman and their numerous camp followers. Dennis Ross in [concert with] the White House, Jeffrey Feltman in the State Department and David Cohen in the Treasury, ensure that the White House toes the Israeli line. The Obama regime, in the midst of the presidential re-election campaign, is especially beholden to multi-millionaire Zionist fund raisers and takes its cue from the ‘52 Presidents of the Major American Jewish Organization. Combined they raise over 50% of the Democratic party campaign funds. The Israeli-US Zionist strategy is to encircle Iran, weaken it economically and attack its military. The Iraq war is the US “model” for its current build up for an attack on Iran. Israel is the principal political and military beneficiary of the Iraq and Libyan wars as is the case in the current proxy war against Syria. These wars have destroyed Israel’s adversaries or are in the process of doing so. But the economic, political and human cost to the US has been enormous: trillions of dollars in war debts have bled the US treasury, without any economic returns, as US oil profits have been sacrificed in Iraq and Iran.
Economic sanctions, which were designed to create domestic discontent in Iran, are the principal weapon of choice. This policy has backfired as it boosted the price of oil by 20% in 2012, undermining any economic recovery in the EU and the US. The global sanctions campaign which engaged the energies of the major Jewish-Zionist lobbies succeeded as the Obama regime followed with an escalation of financial sanctions. The US-NATO- Israeli regimes have faced no opposition from the mass media, Congress or the White Office. The Zionist power configuration (ZPC) is even virtually exempt from criticism by most progressive writers, peace movements and leftist grouplets – with a few notable exceptions. The past year’s re-positioning of US troops from Iraq, the dispatch of aircraft carriers off the coast of Iran, the economic sanctions and the rising pressure from Israel’s “lobby” in the US increases the likelihood of war in the Middle East. This likely means a “surprise” aerial and maritime missile attack by US-Israel forces. Israel’s pretext of an “imminent nuclear attack” and White House claims that the “failure” of Iran to negotiate in good faith will be faithfully transmitted by the Israel lobby to their lackeys in the US Congress and to the western public for consumption and transmission to the rest of the western world. Contrary to Israeli leaders this will not be a limited war: Iran is capable of sustaining a prolonged war, extending across the Gulf region. Iran is capable of crossing borders into Iraq aided by its Shi’a allies. It can paralyze the flow of oil in the Hormuz Straits. It can send missiles into the Saudi oilfields. A US-Israeli war on Iran will be a destructive, bloody, prolonged war which could provoke a global depression. The US will bear the direct military cost by itself and the rest of the world will pay a dear economic price. The Zionist promoted US war will convert the recession of 2008- 2012 into a major depression and probably provoke mass upheavals.
Conclusion
The world configuration of power in the new decade is far more complex than the designation concocted by the leading banking houses[41]. For example, the “BRICs” includes a truly global power, China, a center of manufacturing, science and growth; Russia a military power highly dependent on energy exports and lacking a competitive manufacturing sector; Brazil is a commodity-dependent export economy suffering economic stagnation; and India where three quarters of the populace live at a or below $3 a day. The decline of the US-EU axis is not accompanied by a new multi-polar global power configuration. The crises engendered by neo-liberalism in the West is accompanied by its growth in Asia, especially China, India, South Korea and Indonesia. The decline of neo-liberalism is not accompanied by the rise of socialism: in Southern Europe, authoritarian rightist regimes buttress the crises-racked neo-liberal order by imposing policies by fiat and by criminalizing the social movements and civil disobedience and by centralizing executive power. By ignoring financial speculation as the detonator of the crises and the state bailout of the banks for the high indebtedness, the regimes perversely blame popular social program for the crises and impose harsh anti-popular austerity programs which lower living standards and increase profits. The debate between neo-liberals and neo-keynesians focuses on ‘austerity’ versus ‘spending’ – neither of which faces the class bases of state policy and the class relations which define economic costs and benefits. What is clear throughout the prolonged socio-economic crises is the impermeability of the state: despite mass disaffection, repeated general strikes and multitudinous and demonstrations, the capitalist state ignores majoritarian interests and persists in imposing savage retrograde reductions in living standards. Capitalist rule in the West is based on a reversal of seventy years of social gains. The reality of growing immiseration replaces the idea of social progress. We have passed from the so-called “golden age” of post-World War II capitalism to the long night of the “dark ages” of capitalism, an epoch of decay and descent into barbarism.
All indications point to the second decade of the 21st century being an epoch of unrelenting economic crises spreading outward from Europe and the US to Asia and its dependencies in Africa and Latin America. Catastrophic imperial and proxy wars accelerate the continued decay of the US empire and facilitate the rise of Asia as the epicenter of world capitalism and as the site for rising class conflict. The crisis in capitalist class rule is truly global and is spilling over into sharpening inter-imperialist trade confrontations. Colonial wars are undermining any efforts to ameliorate this crisis. Prolonged economic crises and a never ending downward spiral in living standards, fueled by class based austerity programs designed to reduce wages and social benefit and increase profits. In response emerging mass social movements are playing a dominant role within the anti-capitalist opposition. Direct action is gradually overshadowing electoral politics, moving over time from protests and rebellions, toward overt struggles for state power.
[1] On the continuing recession in the euro zone especially in Greece, see Financial Times, 2/16/12, p.2.
[2] Financial Times, 12/15/11, p. 3.
[3] BBC Business News, 4/2/12.
[4] LaJornada, 4/12/12.
[5] Edward Luce, Time to Start Thinking: America and the Spectre of Decline (Little, Brown: 2012)
[6] Financial Times, 2/16/12.
[7] ibid
[8] LaJornada, 4/10/12, and Financial Tines 1/11/12, p.7.
[9] Financial Times 3/2/12
[10] International Monetary Fund “Projections for Growth 2012”, March 2012.
[11] Financial Times, 4/11/12, p. 6.
[12] ibid
[13] Financial Times, 12/12/11, p. 1.
[14] Financial Times, 12/15/11, p. 1
[15] Earthlink news 2/6/2012
[16] BBC News 2/13/2012
[17] Executive Order – National Defense Resource Preparedness, March 16, 2012; Stephen Lendman, “Police State America”, http://www.FreedomsPhoenix.com
[18] Financial Times 12/16/2011 p 3
[19] Financial Times 12/16/2011 p6
[20] James Petras, The Power of Israel in the United States (Clarity Press, Atlanta 2006).
[21] James Petras, “On Bended Knee: Zionist Power in American Politics” in James Petras War Crimes in Gaza (Clarity: Atlanta 2010) pp. 69 -104
[22] James Petras, “US-Israeli War on Iran: The Myth of Limited Warfare”, Axis of Logic, 4/15/2012; New York Times, 3/21/2012; Financial Times, 3/24/2012 p 7. http://petras.lahaine.org/?p=1894
[23] Chinaworker.info 3/18/12.
[24] Financial Times 2/29/12, p. 13.
[25] “A Bumper Year for Chinese Science” Science Vol. 335, March 9, 2012, p. 1156.
[26] Dexter Roberts “Chinese Premier Wen Jialao Talks Like a Bold Reformer”, Bloomberg Business Week, 4/4/12.
[27] Editorial Financial Times, 4/13/12, p. 8.
[28] Martin Hart-Landsberg, “China and Neoliberalism” http://media.1clark.edu
[29] Martin Wolf, “China is Right to Open Slowly”. Financial Times, 2/29/12, p. 13.
[30] David Hoffman, The Oligarchs (Public Affairs: New York 2002).
[31] Hoffman op. cit. Part Two, pp. 177 – 324.
[32] The entire western press including the New York Times: the Financial Times, to the Washington Post and El País, Le Monde have waged a savage propaganda campaign against Putin and in defense of the Yeltsin era, overlooking the enormous differences in quality of life.
[33] BBC News, 4/5/12.
[34] Financial Times, 3/6/12, p. 9.
[35] BBC News, 4/15/12.
[36] BBC News, 4/16/12.
[37] LaJornada 4/16/12.
[38] Ibid.
[39] Financial Times 3/6/12, p. 9.
[40] Ibid.
[41] Claudio Katz “El ajedrez global de la crisis” http://www.lahaine.org/index.php?p=27426, p. 7.
April 24, 2012
Posted by aletho |
Economics, Timeless or most popular, Wars for Israel | China, European Union, Germany, Greece, Middle East, Portugal, Spain, United States |
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The Fed Works for the Very Rich
Late last week Princeton University economist and New York Times columnist Paul Krugman wrote a piece on his NY Times blog that history will view as the best evidence to appear in at least several decades of the utter irrelevance of mainstream economics. The piece purported to respond to a Wall Street Journal editorial by Mark Spitznagel in which Mr. Spitznagel argued broadly the Austrian economists’ line that all government spending favors one group over another and more specifically that the Fed’s Quantitative Easing (QE) programs of recent years favor banks and the rich.
Mr. Krugman could have argued his New Keynesian shtick that government investment can prevent deflationary spirals in economic downturns and all would be as it was. Instead, he chose to argue (Plutocrats and Printing Presses – NYTimes.com), an astonishing amount of evidence to the contrary, that Fed QE policies have not disproportionately benefited banks and the very rich and were in fact enacted against their wishes and interests.
The basis of his argument has two parts:
(1) conservative economists argue that QE is “printing money,” they also argue that printing money causes inflation, banks hate inflation (because loans get repaid in less valuable dollars), therefore banks opposed QE and
(2) that banks earn profits from the difference between long term interest rates and short term interest rates (NIM, or Net Interest Margin), QE has reduced this difference, therefore the banks have seen their profits fall from QE.
Were these arguments used when writing about a (1) solvent banking system whose (2) profits still came from making prudent loans to creditworthy borrowers and (3) whose shadow banking system was immaterial (couldn’t destroy the global financial system), then Mr. Krugman might have had a point. The facts, however, suggest that if bank loans and other bank assets were fairly valued the big banks would be conspicuously insolvent, that the entire impetus of banking consolidation and deregulation (as explained by bankers) was to reduce the impact of NIM on bank profits, and that building out the shadow banking system was the way that banks intended to accomplish this.
The housing crisis that began in 2006 is well known to most people, but it was part of a much larger build-up of debt by households and corporations at the behest of bankers. Among the “innovative” home mortgage types that put people who couldn’t afford regular loans into houses were “adjustable-rate mortgages” (ARMs). What set off the initial stages of the financial crisis was the realization that (1) a large percentage of people who had taken out mortgages couldn’t repay them under any circumstances and (2) if rising interest rates caused the mortgage payments on ARMs to rise then a much larger group of people would also default on their home mortgages. In 2007 – 2008 both of these realizations caused the value of the mortgage loans held by banks either directly or through securitizations (the banks’ own creations) to fall precipitously.
The same principle that rising interest rates cause the market value of loans and loan-type instruments to fall applied to an unprecedented quantity of assets held by banks in 2008, and still does today. However, the opposite is also true, when interest rates fall the market value of loans on bank books and in financial markets rises. As too much un-repayable private debt in the economy was what made the banks insolvent, lowering both short and long term interest rates has had far more impact on restoring the banks to faux health by raising asset values than profits from interest margin (NIM) possibly could have. The banks killed their ready supply of credit-worthy borrowers along with the economy in the 2000s— the only game they could play was to restore the market values of the garbage assets that they held. The Fed willingly accommodated this strategy.
The Fed wasn’t alone in its efforts to save the banks at all costs– the utterly corrupt actions by ex-New York Fed Chair, now Treasury Secretary, Timothy Geithner, and current Fed Chair Ben Bernanke to move bad loans made by the banks to other government agencies including FHA, Fannie Mae, Freddie Mac and an astonishing array of seemingly unrelated others, was tied to Fed asset purchases through QE. Readers may remember the low interest, non-recourse government loans that were used to induce hedge funds to buy garbage assets at no risk to themselves (non-recourse) to (1) get the assets off of bank books and (2) to create faux market prices for garbage assets based on contrived economics to thereby induce less sophisticated buyers to pay higher prices for the assets. The Fed itself bought assets at higher prices that it had driven higher.
The way that the Fed’s QE directly benefited the very richest Americans, in addition to the most recent vintage of richest Americans being bankers, is by running up the value of all financial assets. Fed Chair Bernanke gave a veiled explanation of how this works in his Jackson Hole speech from 2010 that can be found online. Mr. Bernanke calls his method the “portfolio balance channel,” and it is premised on two basic economic concepts, supply and demand and substitution. When the Fed buys assets it takes those interest-paying assets out of circulation and replaces them with cash. This reduces the supply of interest bearing assets in financial markets and replaces them with cash with which to buy other assets. It also reduces market interest rates thereby making stocks and other assets (substitution) more attractive.
But we need not rely on theory to see if this works the way that Mr. Bernanke theorized that it would. There are a significant number of rigorous analyses that were done demonstrating that when the Fed (or the ECB) is buying assets through QE financial markets rise and when the Fed stops buying they fall. The evidence is both unambiguous and voluminous. And in an anecdotal sense, there was some skepticism from Wall Street in 2009 when QE began but few if any doubters remain—it is absolutely the perceived wisdom on Wall Street that the reason that financial asset prices have been rising when they have is because the Fed is causing them to. The only question still out there for Wall Street is whether or not the Fed will continue to run prices up further?
How does running up the prices of financial assets directly benefit the richest Americans? Ironically, every three years the Fed also produces a survey of income and wealth distribution in the U.S. that is available on the Fed’s website. The data is broken out by income and wealth deciles. The quick answer to who benefits from rising financial asset prices is that the rich do because they own all the financial assets. See for yourself on the Fed’s website.
So far the Fed has tried to save the banks by keeping interest rates low and through various programs to dump toxic assets on the rest of us and it has revived the fortunes of the kind folks who looted the banks and stole our wealth (the very rich) by running-up stock prices. The Fed did this with QE1, QE1.5, QE2, QE2.5, “Operation Twist” and various less publicized programs with similar intent. The banks and bankers have absolutely loved these programs—read their research and you will see. On his very own blog Mr. Krugman referenced UC Berkeley economist Emmanuel Saez’s recent report stating that since the recession theoretically ended in 2009, the top one percent of income earners has received 93% of income gains. Mr. Saez’s research illustrates that it is the revival of capital gains from rising financial asset prices (including stock options granted to corrupt executives) that is behind the gains.
Finally, Mr. Krugman claims that the only way that banks could have benefited from the Fed buying assets was if the Fed overpaid for the assets. Fed Chair Bernanke publicly stated at the time Fed purchases commenced in 2009 that the Fed was going to overpay for the MBS (Mortgage-Backed Securities) it purchased in order to induce banks to sell them to the Fed. This was widely reported in the financial press at the time. It was also widely viewed as part of the ongoing (never ending) bank bailouts. Readers may recall the news reports from all of the Wall Street banks of perfect trading records (banks earned profits from trading financial assets every day) for several quarters in 2009. If the banks are winning then someone else is losing—thank you Federal Reserve. If Mr. Krugman can’t find credible contemporaneous reports of this then he should try a little harder.
Last, there is no ax to grind here with Paul Krugman. Mr. Krugman has put a human face on his politics for which he should be thanked. But legitimate criticism of his economics includes the absence of the class struggle that Wall Street and the Federal Reserve clearly understand as evidenced by their actions—they are fighting for America’s rich and their policies are intended to benefit them alone. The sleight of hand that sustains mainstream economics is the claim that we all benefit if the system benefits. Take a look around and you’ll see that no, we don’t all benefit. In fact, were it not for the ideological drivel disguised as mainstream academic research, this would be evident to even the least interested among us. When in doubt, look a little harder.
Rob Urie is an artist and political economist in New York.
April 23, 2012
Posted by aletho |
Deception, Economics, Mainstream Media, Warmongering, Timeless or most popular | Ben Bernanke, Bernanke, Mark Spitznagel, Net Interest Margin, New York Times, Paul Krugman, Quantitative easing, Wall Street |
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The head of the Egyptian Natural Gas Holding Company said Sunday it has terminated its contract to ship gas to Israel because of violations of contractual obligations, a decision Israel said overshadows the peace agreement between the two countries.
Ampal-American Israel Corporation, a partner in the East Mediterranean Gas Company (EMG), which operates the pipeline, said it had notified Egypt it was “terminating the gas and purchase agreement”.
The company said in a statement that the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company (EGAS) had notified them of the decision, adding that “EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal”.
Mohamed Shoeib, chairman of EGAS, told Al-Masry Al-Youm that EGAS is using its right to terminate the contract due to EMG’s breach of the gas supply agreement. He added that the decision was made after a thorough legal review by local and international legal experts.
A source within the petroleum ministry told Al-Masry Al-Youm that the dispute is purely commercial and has no other connotations.
The 2005 natural gas deal has become a symbol of tensions between Israel and Egypt since the uprising. For many Egyptians, it typifies the close relations the regime of deposed President Hosni Mubarak forged with Israel, despite wide hostility toward the Jewish state among his people.
Critics charge that Israel got the gas for bargain prices and that Mubarak cronies skimmed millions of dollars off the proceeds.
Egyptian militants have blown up the gas pipeline to Israel 14 times since the uprising.
Israel insists it is paying a fair price for the gas.
Companies invested in the Israeli-Egyptian venture have taken a hit from numerous explosions of the cross-border pipeline and are seeking compensation from the Egyptian government of billions of dollars.
The pipeline was financed by the National Egyptian Bank.
Ampal and two other companies have sought $8 billion in damages from Egypt for not safeguarding their investment.
Shoeib told the Associated Press said Israel has not paid for its gas in four months. Israeli Foreign Ministry spokesman Yigal Palmor denied that.
He told Egyptian TV the decision has been in place since Thursday.
The English website of the Israeli daily Haaretz on Sunday quoted sources close to EMG as saying “Egypt does not understand what it is doing. This move will bring back the country – politically and economically – by 30 years. This is a breach of the peace agreement with Israel.”
On Sunday, Israel Finance Minister Yuval Steinitz said the unilateral Egyptian announcement was of “great concern” politically and economically.
“This is a dangerous precedent that overshadows the peace agreements and the peaceful atmosphere between Israel and Egypt,” he said in a statement. Israel and Egypt signed a peace treaty in 1979, but relations have never been warm.
The Israeli side said the decision was “unlawful and in bad faith,” accusing the Egyptian side of failing to supply the gas quantities it is owed.
Israel insists it is paying a fair price for the gas. Israel’s electricity company has been warning of possible power shortages this summer, partly because of the unreliability of the natural gas supply from Egypt.
For the long term, Israel is developing its own natural gas fields off its Mediterranean coast and is expected to be self-sufficient in natural gas in a few years.
Hussein Salem, a close friend of Mubarak was among the shareholders of East Mediterranean, the joint Egyptian-Israeli company that carries the gas to Israel.
On the Israeli side, EMG sought international arbitration in October because of the Egyptian side’s failure to supply the quantity of gas stipulated in the contract — because of the frequent bombings.
Under the 2005 deal, the Cairo-based East Mediterranean Gas Co. sells 1.7 billion cubic meters of natural gas to the Israeli company at a price critics say is set at $1.50 per million British thermal units — a measure of energy.
The gas deal has been the subject of litigation in Egypt. An appellate court last year overturned a lower court ruling that would have halted gas exports to Israel. Opposition groups that filed the suit before the uprising claimed that Israel got the gas too cheaply under the 15-year fixed price deal between a private Egyptian company, partly owned by the government, and the state-run Israel Electric Corporation.
Ibrahim Yousri, a former Egyptian diplomat who had brought the issue to court, welcomed the decision announced Sunday.
“It has become a scandal bigger than the (ruling) military council can withstand,” he told the privately-owned channel CBC.
He said there are gas shortages in Egypt, and growing economic woes, further inflaming popular unrest. He called the business deal “treason” to national interests, adding, “This is a great political step.”
April 22, 2012
Posted by aletho |
Economics | Al-Masry Al-Youm, East Mediterranean Gas Company, EGAS, Egypt, Egyptian General Petroleum Corporation, Israel |
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South Sudan’s army has completed its withdrawal from Sudan’s main Heglig oil field, the military said Sunday, but condemned the north for bombing the area.
Juba seized the flashpoint oil hub on April 10, claiming that Khartoum was using Heglig as a base to attack the South’s oil-producing Unity State.
Although South Sudan disputes it, Heglig is internationally regarded as part of Sudan.
The South’s Sudanese Peoples Liberation Army (SPLA) “completed its withdrawal from Heglig yesterday,” the South’s military spokesman Philip Aguer told AFP.
However, Sudan’s presidential assistant, Nafie Ali Nafie, has accused South Sudan’s government of deceiving its people by saying that its army withdrew from Heglig, Sudan Tribune reported.
Addressing a mobilization rally of Sufi groups in the capital Khartoum on Saturday, Nafie claimed that Juba had in fact pleaded with international mediators to stop Khartoum from shelling SPLA troops inside Heglig.
UN chief Ban Ki-Moon branded Juba’s 10-day occupation of the region illegal and US President Barack Obama has said the long-time rivals must negotiate to avoid further military escalation along their contested and volatile border.
For his part, The Sudanese First Vice President Ali Osman Taha ruled out quick return to negotiations with S. Sudan, suggesting that negotiations with the South are pointless.
In an interview with Blue Nile TV, Taha also accused Juba of launching economic war on Sudan when SPLA damaged the operating system software of Heglig oil facilities and set the main controls of the plants on fire. The details and scope of the destruction will be revealed in the coming hours, he added.
Sudan state TV aired footage from inside Heglig showing major destruction in the town while oil facilities were still burning and efforts were made to put out the fires.
The Washington-based Satellite Sentinel Project (SSP) said in a statement today that new satellite imagery revealed that a key part of the pipeline infrastructure was destroyed.
“The damage appears to be so severe, and in such a critical part of the oil infrastructure, that it would likely stop oil flow in the area,” SSP’s statement read.
The Heglig violence was the worst since South Sudan won independence in July after a 1983-2005 civil war in which about two million people died.
Tensions have gradually mounted over the disputed border and other unresolved issues.
April 22, 2012
Posted by aletho |
Economics | Ali Osman Taha, Heglig, South Sudan, Sudan, Sudan People's Liberation Army/Movement |
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The US has joined Spain and Britain in condemning Argentina’s expropriation of the Spanish-owned oil and gas company, YPF, Press TV reports.
US State Department spokesman Mark Toner condemned Argentina’s nationalization of the oil company, saying his country views the act with negativity.
Toner also warned that the move would ultimately hurt Argentina’s economy.
However, the Argentine government has responded firmly to the criticism, arguing that the decision was taken based on the country’s national interests.
“The project aims at certain states’ rules to lead a strategic company. We do not govern on behalf of the US and the Spanish people,” Argentine Interior Minister Florencio Randazzo said.
Argentine President Cristina Fernandez has slammed the company for failing to re-invest in local oil and gas production, which forced Buenos Aires to pay more than USD 9 billion to import fuel last year.
On Monday, Fernandez announced the decision to reclaim YPF, which was formerly a state-owned Argentine oil company, at a meeting with her cabinet and provincial governors. She said that Argentina had to take back the oil company since it is the only nation in Latin America “that does not manage its natural resources.”
The move to declare YPF Gas a public utility by taking 51 percent of its shares is an extension of the takeover of YPF Oil Company, the major subsidiary of Repsol.
Repsol President Antonio Brufau said on Tuesday that the company would take legal action against Argentina, seeking compensation of about $10 billion.
Meanwhile, the Spanish government has also criticized the move by claiming that Argentina is taking a risk of becoming “an international pariah” if it takes control of the YPF, in which Repsol has a 57.4 percent stake.
April 20, 2012
Posted by aletho |
Economics | Argentina, Cristina Fernández de Kirchner, Florencio Randazzo, Repsol, Repsol YPF, Spain, YPF |
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