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BRICS agree to local currency credits to ease dollar dependency

RT | March 29, 2012

The BRICS – Brazil, Russia, India, China and South Africa – have agreed to provide credit to each other in local currencies. Officials say the deal will facilitate economic growth in times of crisis.

­The currency swap deal is aimed at promoting trade and investment in local currencies as well as to cut transaction costs. It’s also seen as a step to replace the dollar as a reserve currency in trade between BRICS.

“The idea is in line with many interests and economic exigencies in the world economy,” Yaroslav Lissovolik, the chief economist at Deutsche Bank told RT. “The euro and dollar are no longer seen as unquestionable monopolies in the role of reserve currencies. Clearly the world needs more reserve currencies.”

The deal would also increase the BRICS influence on the international arena and will make their cooperation less sensitive to sanctions from the West, experts say.

“The BRICS countries are in the first rank to do the job that international financial system now needs. What the BRICS said was a very welcomed wake up call,” John Kirton, the Co-Director of the BRICS Research Group told RT.

Russia and China have been trading in the ruble and yuan for several years, now Russia plans to expand local currency settlement with India.

“With China it took us three years to (evolve) from initial conversations to trading in local currencies,” Vladimir Dmitriev, the chairman of Russia’ s VEB told reporters. “I think we will meet similar terms with India”.

Meanwhile the swap requires a lot of technical work by each country such as the synchronization of national banking legislation, according to Mr. Dmitriev.

The BRICS countries are also going to announce plans on a joint development bank which is considered a possible rival to the World Bank and the IMF. If established, it would function as a lending agency and would provide finance for joint BRICS projects.

“They made it very clear it would be built to benefit not only BRICS countries themselves, but developing countries more broadly,” said KIrton. “But the big message was to give the World Bank more resources, only then would they see how the BRICS bank would fit in the supplement what they’ve already got.”

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March 29, 2012 Posted by | Economics | , , , , , , | Leave a comment

Partisan Confusion

By Kevin Zeese | Dissident Voice | March 28th, 2012

I was standing outside the U.S. Supreme Court holding a sign that said: “Single Payer Now, Strike Down the Obama Mandate.” It was the second day of argument on the Affordable Care Act. As I watched the crowds it was evident this was an organized partisan event.

As the Washington Post reports, the mandate was a Republican idea that originated with conservatives: “The tale begins in the late 1980s, when conservative economists such as Mark Pauly, a professor at the University of Pennsylvania’s Wharton School of business, were searching for ways to counter liberal calls for government-sponsored universal health coverage. Pauly then proposed a mandate requiring everyone to obtain this minimum coverage, thus guarding against free-riders…Health policy analysts at the conservative Heritage Foundation, led by Stuart Butler, picked up the idea and began developing it for lawmakers in Congress. The Heritage Foundation worked with then-Gov. Mitt Romney (R) to pass Massachusetts’ 2006 health reform law, which required all Bay State citizens to purchase coverage.”

Someone from the Heritage Foundation came up to us, wanting to take a photo of our sign. I asked him – does the Heritage Foundation oppose the mandate? He said “yes.” I told him that the idea came out of the Heritage Foundation. He looked confused, mumbled an unclear answer “not since 2006” and walked away.

Of course, Democrats opposed this Republican idea. They saw it for what it is: a massive giveaway to the insurance industry that will lead to their entrenchment and continued domination of heath care. The idea was used by Republicans to oppose the Clinton health plan. Of course, the Clinton’s opposed it. But, by the 2008 presidential campaign, Hillary Clinton supported the mandate (by then the insurance industry was a big financial backer of hers), but candidate Barack Obama opposed it. One of his campaign advertisements said: “What’s she not telling you about her health-care plan? It forces everyone to buy insurance, even if you can’t afford it, and you pay a penalty if you don’t.”

So, while I was out there watching groups like the National Organization for Women, who supports single payer favoring this pro-insurance law, as part of a coalition of Democratic Party aligned groups, I thought, what if President McCain had passed this law. My conclusion, we’d have the same people out here protesting, they’d just reverse sides. This was really not about healthcare, it was about Obama vs. the Republicans in this 2012 election year.

The people protesting followed their leader’s orders, said the chants they were told to say, and held the signs they were given to hold, but they were confused. When we talked to people on both sides the partisan confusion was evident.

My colleague, Margaret Flowers, asked two women carrying an Americans for Prosperity sign (a group opposed to Obama’s law) whether they were on Medicare. They said “yes.” “Do you like it?” Again, “yes.” “Do you know Medicare is a government program?” A confused look. “Do you know the Republicans want to end Medicare, make it into private insurance?” “You don’t know what you’re talking about. You probably support Obama”; and they started to walk away. “No, we oppose ObamaCare,” the women stopped and listened again, “We think everyone should have Medicare. Don’t you think it would be a good idea if every American could have the Medicare you have and like?” “Hmm, yes” then, more confusion in their faces.

Then, talking to the Democrats showed equal partisan confusion. I explained: “We oppose the Obama mandate because we want to end insurance control of health care. We support single payer, Medicare for all?” Response: “So do I.” I asked: “Single payer ends insurance, and Obama’s law entrenches insurance more deeply in control of health care, aren’t those opposites?” Response, obviously not understanding what ‘opposite’ means: “It’s a step in the right direction.” I ask: “How can it be a step in the right direction when it is going in the opposite direction?” No longer able to say it is the right direction, spouts another talking point: “This is the best we can get, we can build on this.” Me, trying to figure out what the Democrat thinks there is to build on, asks: “But, if we want to end insurance domination, how do we build on a law that is based on insurance?” Unable to explain it, the Democrat answers: “We can’t get what we want.” I say: “Of course, not, if people like you and organizations like yours who support single payer, spend their time advocating for the insurance industry, we can’t get what we want. But, if people who support single payer work for it we could.” Answer: “But, we have to re-elect President Obama.”

Partisan confusion reigned.

And, sadly partisan confusion dominates our airwaves as well. Of course, the right wing radio continues to attack Obama and confusingly calls a market-based, insurance-dominated health law socialism. But, sadly the “liberal” media sends out equal partisan confusion. We were able to go into Radio Row, where all the liberal radio outlets were interviewing “experts” on health care. The talking points, like in the conversation, were repeated and repeated. When one radio host wanted to interview me, really debate me since he was a Democratic apologist, I sat down. An organizer in the room asked the host to speak with her. She came back and told me I had to leave. This was private property and only people allowed to be here were allowed to be here. I explained I was invited by a station to be interviewed. She explained: “I tell them who to interview. The stations have slots and we fill them.” I asked: “Do you mean only people who support Obama can be interviewed.” She explained “The Republicans do it to.”

So, partisan confusion reigns and it permeates the airwaves leaving many people confused. We need to clear the FOG (Forces Of Greed) and get the truth on the air.

Despite all this supermajorities of Americans have consistently supported single payer, whether inaccurately called socialism or correctly described as “Medicare for all” 60% or more support it. Why? For the same reason that the great salesman President Obama and his superb marketing team have been unable to sell forced purchase of health insurance: Every family, business whether large or small; and every doctor or other health care provider have suffered insurance abuse. Two thirds of those who go bankrupt from a health problem have health insurance. The American experience is that health insurance is expensive, provides inadequate coverage and tries to avoid paying for health care. We all know this. So, no matter what the politicians say – Americans do not trust the health insurance industry.

But, one thing the two parties in Washington agree on – they will protect health insurance at all costs. After-all, they are a great source of campaign contributions – as the two politicians responsible for forcing Americans to buy insurance, President Obama and Mitt Romney, well know.

Kevin Zeese is executive director of Voters for Peace.

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March 28, 2012 Posted by | Deception, Economics, Progressive Hypocrite | , , , , , , | Leave a comment

Real Health Care Advocates Should Support Repeal of the Insurance Mandate

By Kevin Zeese | Dissident Voice | March 26th, 2012

It’s Our Economy, the organization I co-direct with Margaret Flowers, MD, Single Payer Action and 50 doctors filed an amicus brief in HHS v. Florida, the challenge to the Affordable Care Act being heard in the Supreme Court this week.

We support health care reform but oppose the insurance mandate.  Merely removing two words from existing law will achieve the President’s stated goals of universal, affordable and guaranteed health care.  By removing the words “over 65” from the Medicare law, every American will have health care based on a proven public health care model that has been in existence since 1965.  This will control costs and immediately provide health care to everyone in the United States.

Forcing Americans to buy insurance is both unconstitutional and bad policy.  Even the most favorable estimates of the Affordable Care Act predict that tens of millions of Americans will not have health insurance when it is fully implemented in 2019. The number of employers offering health benefits will decline under the ACA pushing employees into the individual insurance market where coverage is skimpier and more expensive.  The cost of premiums continues to rise and insurance coverage continues to shrink, putting patients at risk of personal bankruptcy when they suffer a serious accident or illness.

The United States already spends enough to provide health care to all.  As the amicus brief states:

Studies conducted by the nonpartisan General Accounting Office and the nonpartisan Congressional Budget Office have consistently concluded that if a national single payer system were implemented in the United States, administrative cost-savings alone would be enough to guarantee universal coverage without increasing overall healthcare spending.

In addition, improved Medicare for all will slow the growth in the cost of health care. The cost of health care under Medicare is growing more slowly than private insurance-based health care, despite the fact that it deals with America’s elderly and disabled populations, groups that generally need more health care services.  Unlike private insurance, under Medicare the increased cost is not due to administrative costs and bureaucracy. Medicare’s administrative costs have been consistently about 2% while private insurance is 16% administrative costs.

Instead, the ACA builds and expands the system of private insurance. This system is among the least efficient of any healthcare system currently operating in developed nations.  The brief states:  “In 2009, 28 healthcare expenditures accounted for 17.4 percent of GDP in the United States, compared with only 9.6 percent in the average OECD [The Organization for Economic Co-operation and Development] nation” and “measured per capita, healthcare expenditures in the United States ‘are by far the highest among OECD countries.’”

Medicare provides health services that people like, as the brief points out:  “In addition to achieving universal coverage for Americans aged 65 and older and maintaining consistently low administrative costs, Medicare is also highly rated by senior citizens who are its primary beneficiaries – 51 percent of whom give their health insurance an ‘excellent” rating.’”

If the US Congress had considered an evidence-based approach to health reform instead of writing a bill that funnels more wealth to insurance companies that deny and restrict care, it would have been a no brainer to adopt improved Medicare for all. All the data points to a single payer system as the only way to accomplish universal health care and control health care costs.

It is also bad precedent to allow the federal government to mandate all Americans buy a corporate product.  This takes corporate welfare to new levels of extreme.  If this is upheld, will a future president facing an economic crisis require Americans to buy cars made in the USA – of course, with a government subsidy?  Or, will the pension crisis in the United States be ‘solved’ by setting up a pension exchange of JP Morgan, Bank of America, Well Fargo, Chase and Citibank and require Americans to buy a federally subsidized pension from Wall Street?

Finally, an improved Medicare for all system will give everyone in the United States the greatest control of their own healthcare.  The insurance industry will be removed from between doctors and patients.  Doctors will not have to convince an insurance, profit-minded, bureaucrat to pay for a treatment.  And, people will no longer be threatened with increased premiums, decreased coverage and financial ruin caused by an insurance industry that puts profits before people.

We filed the amicus brief because forcing people to purchase a flawed product, private health insurance, is not necessary and will not achieve the goals of universal, guaranteed and affordable health care. There is a health care model in the US already that will achieve these goals – that’s improved Medicare for all. Medicare for all is constitutional and simple to attain – just drop a few words from existing law and we will be on the path to joining the rest of the civilized world when it comes to health care.

Kevin Zeese is executive director of Voters for Peace.

March 26, 2012 Posted by | Corruption, Economics, Progressive Hypocrite | , , , , , , | Leave a comment

Police attack Portuguese people protesting austerity measures


A policeman strikes a photojournalist of AFP during the Portuguese general strike in Lisbon March 22, 2012.
Press TV – March 22, 2012

Portuguese police have attacked demonstrators protesting nationwide against the government’s austerity measures.

Demonstrations were held on Thursday in 38 cities and towns across Portugal, including the capital city of Lisbon, Oporto – the second largest city after Lisbon — and Coimbra, AFP reported.

In Lisbon, police resorted to baton charge and arrests to disperse the protesters.

At least one demonstrator was arrested in Oporto as protesters expressed outrage at Prime Minister Pedro Passos Coelho during a visit to the northern city’s university.

The nationwide protests were part of a 24-hour strike against austerity measures adopted by the government in return for an international bailout. During the Thursday strike which was led by Portugal’s biggest union — the General Confederation of Portuguese Workers (CGTP) – public services across the country ground to a halt.

The trains and subways in Lisbon and Oporto, and the majority of ports, including the port of Lisbon and Viana do Castelo in the north, were shut down.

The strike is aimed at opposing changes to labor laws that make it easier to fire workers, reduce holidays and cut layoff compensation. The government argues that these changes will revive the economy.

Some European economies have introduced strict austerity plans to tackle their debt crises. The spending cuts have caused deep discontent among people in those countries.

Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, said in a Thursday interview that the eurozone needs a bailout fund of at least 1 trillion euros ($1.3 trillion) to prevent its debt crisis from expanding to other European states.

March 24, 2012 Posted by | Economics, Solidarity and Activism | , , , , | Leave a comment

Jeffrey Sachs’ Grab for the World Bank

By LAURA FLANDERS | CounterPunch | March 20, 2012

There may be worse candidates for the presidency of the World Bank than Jeffrey Sachs (Larry Summers, also a candidate, comes to mind,) but Sachs is well worth raising an alarm about. He combines a new fangled profile as a progressive with policies that amount to full steam ahead for global growth. And he’s running as the candidate of “change”  clearly hoping no one looks too closely at his record as an economic hit-man.

In the US (if not in much of the rest of the world and certainly not CounterPunch) Sachs’s closeness with the singer/crusader Bono bestows a liberal glow. He directs the Earth Institute at Columbia University, advises the UN and the Congressional Progressive Caucus, and he’s winning endorsements from among others, Congressman John Conyers and economist Mark Weisbrot.  He’ll attract predictable opposition from the Right who bristle at any mention of foreign aid, but although his media pals like to forget it now, Sachs was once evangelist number one for exactly the heavy-handed “fly-in-fly-out” development tactics that have made the world financial institutions so passionately hated.

Last week, John Cavanaugh of the Institute for Policy Studies and American University development professor Robin Broad laid out a raft of concerns to which Sachs responded thus: “I would be the first-ever development practitioner and anti-poverty professional to be World Bank President, just what is needed given the bank’s mission of a “world free of poverty.”

In Europe’s post-Soviet “transition” years, Sachs’s professional poverty expertise was mostly in increasing it. Russia, following Sachs’s callous “shock therapy” prescription, sold off state companies, suspended public subsidies and drove employment and life expectancy into the ground, with brutal long-term consequences, exacting the most savage costs in terms of death and suffering since the Second World War and the results of the Sachs experiment in Poland, Estonia and Slovenia weren’t much better.  While a handful of global gamblers got rich off the disaster, former World Bank economist David Ellerman, said of Sachs “Only the mixture of American triumphalism and the academic arrogance of neoclassical economics could produce such a lethal dose of gall.”  If Sachs could double suicide rates in Russia as a cocky young Harvard advisor, it’s hard to imagine what he could do to the world as World Bank President.

In recent years, Sachs has taken a few turns. He embraces debt forgiveness (some) and has some nasty things to say about world military spending in his book “The End of Poverty.” But the business of “poverty reduction” is a complex one. The World Bank’s calculations have been incisively discussed here by Adam Parsons. Suffice to say, there’s extreme poverty and there’s just getting by. In the same way when it comes to development, there’s total exclusion from the world economy — and there’s becoming a cog in it. Sachs’s vision of a “world free of poverty” has more cogs in more wheels, but it’s the same deadly machine driving the planet to the same nasty brink.

To cite one example. in his 2007 Reith lecture series “Bursting at the Seams” Sachs pushes new agricultural technology and commercial fertilizers to increase yields in low-life expectancy countries. “Africa can and must have a Green Revolution as India initiated nearly forty years ago.” He celebrates increased yields and dismisses concerns about environmental damage and rising debt, claiming that “Older techniques for replenishing soil nutrients, such as the rotation of farm lands, allowing the replenishment of nutrients on land left to fallow for 10 or 20 years, are no longer feasible.”  To top things off, there’s a dose of “population control” in Sachs’s mix.  “The evidence is overwhelming that it’s possible and necessary to have a rapid demographic transition on a voluntary basis to greatly reduce fertility rates in poor countries,” said Sachs.

Old arguments linking high population with high poverty are back in vogue in the context of contemporary planet-panic, but really, they miss the point. While growing population in poor countries has its environmental impacts, high-level consumption lifestyles in rich countries are much more of an immediate threat. Listen to the small scale farmers of countries like Mali and Burkina Faso who gathered at the World Social Forum in Kenya a few years back and they report that traditional farming techniques like fortifying soil with manure and mixing the crops grown on the same piece of land are rehabilitating degraded farms and farmers, both. Lying fallow for a generation doesn’t come up.

It’s here that one sees the “old” Sachs in the new. To return to Ellerman– the analysts of “shock therapy” have long gotten it wrong, he writes in an essay, Lessons from Eastern Europe’s Voucher Privatization. In the post-Soviet states, the crucial distinction wasn’t so much between the fast-shockers and the incrementalists, rather, Ellerman points out, “Reform-mongers, in their strategies and even more so in their rhetoric, could be divided into those who take an ideological, fundamental, and root-and-branch approach versus those who take an incremental, piecemeal, home-grown, and adaptive approach.”  From what he says now about global agribusiness and it seems that not much has changed in Sachs’s approach to the adaptive, home-grown initiative — even as the sane world is increasingly convinced that those are the only strategies with any chance of heading

The fact that he’s campaigning for the World Bank job as the candidate of the new regime makes all this particularly hard to take. Since Paul Wolfowitz resigned under a cloud in 2007, new rules at the World Bank are finally permitting countries other than the US and Europe to determine who heads the world’s financial institutions (since world war two it’s been the World Bank for the US, and a European at the IMF). Europe nominated Christine Lagarde for IMF president last year. She won over other candidates. For the World Bank post, the U.S. has quietly floated names like Susan Rice, John Kerry and Larry Summers to replace Robert Zoellick when he steps down June 30. Predicting he won’t be the US’s official pick, Sachs has gotten seven countries to endorse him, including Haiti, Jordan, Kenya, Malaysia and east Timor.

By March 23, we’ll know how all this plays out. Meanwhile, according to the open-source website, WorldBankPresident.org which is tracking these developments, a slate of countries with new financial capacity to compete with the US are taking steps to form a World Bank alternative. Quite possibly, at a meeting in India later this month, Brazil, Russia, India, China and South Africa may set up their own development bank with the goal, they say, ”to escape the dollar and the euro hegemonies and, if Chinese plans go well, making the yuan a global currency.” We’ll see what Sachs has to say about that adaptive initiative.

LAURA FLANDERS is the host of The Laura Flanders Show coming to public television stations later this year. She was the host and founder of GRITtv.org. Follow her on Twitter: @GRITlaura.

March 20, 2012 Posted by | Economics, Malthusian Ideology, Phony Scarcity, Timeless or most popular | , , , , | Leave a comment

Muslim Brotherhood wary of Egypt IMF loan

Al Akhbar | March 20, 2012

Egypt’s Muslim Brotherhood, the country’s largest political force, on Tuesday held off from backing a request for a loan from the International Monetary Fund, urging more government transparency.

The Brotherhood’s Freedom and Justice Party said it met with an IMF delegation in Cairo to discuss the loan which has raised fears of strangling Egypt’s economy to mostly Western lenders.

“The loan will be a burden on the shoulders of Egyptian people, who have the right to know how it will be spent and how it will be paid off,” its head Mohammed Mursi said in a statement.

The Muslim Brotherhood said it did not object to the IMF or assistance from abroad, but cautioned that it needed to meet Egyptian interests.

The party “would certainly accept any help from these institutions in any way that would serve public interests,” Mursi said.

The Islamist party, the largest in parliament, said the government “has not yet submitted a plan of economic measures relating to the loan” and did not say “how this loan will be used, or how it will be paid off.”

The IMF is seeking assurances from the Muslim Brotherhood that it would back the loan, diplomatic sources told AFP.

Egypt had spurned an IMF loan last year but reversed its decision amid a stalling economy.

The IMF loan has come under fierce criticism in Egypt, with many fearful that it will allow Western powers to gain control of the country’s weakened economy.

Egypt’s foreign currency reserves have fallen while the budget deficit increased due to public spending.

In addition to the IMF loan, Egypt has sought US$1 billion from the World Bank and US$500 million from the African Development Bank.

(Al-Akhbar, AFP)

March 20, 2012 Posted by | Economics | , , , , , , | Leave a comment

‘Iran-Pakistan trade rises despite US sanctions’

Press TV – March 17, 2012

A Pakistani minister says trade levels with Iran have increased over the past few years despite US sanctions imposed against the Islamic Republic over its nuclear energy program.

“The balance of trade USD 410.438 million remained in favor of Iran [in 2010-2011]. During the last few years there has generally been a positive trend in trade relations between Pakistan and Iran,” Pakistani Federal Minister for Commerce Makhdoom Amin Fahim said.

Islamabad exports to Tehran stood at USD 161.941 million in 2010-11, whereas imports from Iran accounted for USD 572.379 million, Pakistan’s biggest financial daily Business Recorder reported on Saturday.

Amin Fahim said Pakistan’s major exports to Iran in 2010-11 include rice, fruit, chemical material and products, cotton fabric, and manufactures of non-ferrous metals.

Pakistan’s major imports from Iran during the same period were petroleum, chemical compounds, chemical material and products, machinery and its parts, and ores and concentrates of iron, he said.

Earlier in January, Pakistani President Asif Ali Zardari said Islamabad would not limit trade relations with Iran “because of the political whims of any outside power.”

Pakistan has no choice but to seek greater ties with its neighbors – Iran, China, India and Afghanistan – “because the economies of the West are in trouble and not in a position to help us,” Zardari added.

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March 17, 2012 Posted by | Economics | , , , | Leave a comment

Dealing With Iran

By ISMAEL HOSSEIN-ZADEH | CounterPunch | March 16, 2012

Dr. James Zogby, president of the Arab American Institute and brother of the well-known pollster John Zogby, recently published an article on “Dealing with Iran” in Huffington Post  that is problematic on a number of grounds.

To begin with, Dr. Zogby claims that Iran harbors “aspirations for regional hegemony,” and it is therefore a “threat” to its neighbors: “Make no mistake, the regime in Tehran is a meddlesome menace and their aspirations for regional hegemony do pose a threat, not to Israel . . . but to the Arab Gulf States.” Dr. Zogby goes even one step further, arguing that Iran is more than just a threat; it is “the real danger to its … neighbors.”

Israel’s Education Minister Gideon Sa’ar recently admitted (boastfully) that the Israeli government had succeeded in distracting the attention of the entire world away from the Palestinians to the Iranians. Dr. Zogby’s argument that Iran is “the real danger to its neighbors” shows that Mr. Sa’ar is, indeed, justified in boasting about the fantastic success of Israel’s policy of distraction. Instead of blaming the US-Israeli axis of aggression for the never-ending and escalating turbulence in the Middle East, Dr. Zogby blames Iran!

But let us examine Dr. Zogby’s allegation in light of reality: (1) Iran has not invaded (or threatened invasion of) any country for over 250 years. (2) Iran was invaded in 1980 by Saddam Hussein, which culminated in the devastating 8-year war—a war that was instigated, supported and sustained by Western powers and their proxy regimes in the Persian Gulf region. (3) The “Arab Gulf States,” headed by the Saudi kingdom, are collaborating with the US-Israeli axis of aggression in their efforts to destabilize and overthrow the Iranian government. (4) The “Arab Gulf States,” not Iran, serve (literally) as military bases of Western powers that support Israel and its policies of settlements and occupation.

Against this background, Dr. Zogby’s claim that Iran is a “meddlesome menace” is obviously counterfactual and preposterous.

Ironically, Dr. Zogby’s claim that Iran poses “the real danger to its neighbors” is flatly rejected by the Arab people. Public opinion polls have consistently shown that the overwhelming majority of the Arab neighbors of Iran view the U.S. and Israel as the real threats, not Iran. For example, the most recent recent (2011) and most comprehensive public opinion survey to date, which covered 12 Arab/Muslim counties and 16,731 face-to-face interviews, and which was conducted by the Arab Center for Research and Policy Studies (ACRPS), found that “by a 15-1 ratio, Israel and the US are seen as more threatening than Iran.”

Since Dr. Zogby does not tell his readers why or how Iran is “the real danger to its neighbors,” let me offer an explanation for his allegation. The “threat” he is talking about is not a military threat. Nor is it a threat to Arab people or their territory—Iran has no territorial ambitions. It is, rather, the threat to the autocratic Arab rulers; a threat that results from Iran’s example or model of national sovereignty, not its “aspirations for regional hegemony,” as Dr. Zogby claims. As Iran’s policies of national independence and resistance to external pressure make the client Arab regimes look bad in the eyes of the Arab people, they tend to discredit and threaten their dictatorial rulers. And as those policies earn respect from the Arab people, they also earn the wrath of the Arab leaders. This means that Dr. Zogby’s arguments against the Iranian government reflect the views of the dictatorial Arab leaders, and their imperialist backers, not those of the Arab people.

One salutary point in Dr. Zogby’s article seems to be his advice against military threats against Iran. Unfortunately, he does so for the wrong reasons; he opposes military actions against Iran not because such actions would be unlawful and immoral, but because (a) military threats “only serve to embolden Iran,” which is not clear why or how; and (b) “continued targeted sanctions… are having a real impact.”

Dr. Zogby is either uniformed about the sanctions on Iran, or uses a peculiar definition of targeted sanctions. The brutal sanctions imposed on Iran are way beyond targeted sanctions; they are a most comprehensive sanctions, designed to be “crippling” as they include Iran’s oil exports and its banks, which, in effect, means its international trade. Targeted sanctions are almost always expanded to broader, comprehensive sanctions, as has been the case with Iran. Furthermore, sanctions are essentially a disguised and an insidious form of war whose primary victims are the poor, the children, the elderly, and the infirm. And when sanctions fail to bring about “regime change,” military actions follow logically “to do the job.”

In his article Dr. Zogby also writes (with a dash of sarcasm): “What, one might ask the leaders of Iran, will they do with their nuclear program and their provocation? Can it feed their people, rebuild their neglected and decayed infrastructure, give hope to their unemployed young, or secure their role in the community of nations? . . . As the Gulf States make significant progress, providing a model for development and growth, Iran remains trapped in an archaic system which feeds off of fear and anger, and goes nowhere.”

It is only fair to ask Dr. Zogby: how can “Arab Gulf States provide a model of development for Iran” when they are essentially consumer markets for foreign products? What product line, manufacturing process or technological know-how can Iran learn from these states? Dr. Zogby seems to confuse financial services, extravagant consumerism (made possible by abundant oil and smaller populations), unrestricted import of luxury goods from abroad, glossy shopping malls, ballooning  skyscrapers, and man-made islands with manufacturing, industrialization, labor productivity and real development. With the exception of oil, which is produced, processed and managed largely with the help foreign experts, Persian Gulf kingdoms do not produce much of what they consume.

By contrast, Iran produces much of what it needs or consumes. It has made considerable progress in scientific research and technological know-how. It has taken advantage of the imperialist sanctions and boycotts to become self-reliant in many technological areas.

For example, Iran is now self-sufficient in producing many of its industrial products such as home and electric appliances (television sets, washers and dryers, refrigerators, washing machines, and the like), textiles, leather products, pharmaceuticals, agricultural products, processed food, and beverage products. The country has also made considerable progress in manufacturing steel, copper products, paper, rubber products, telecommunications equipment, cement, and industrial machinery. Iran has the largest operational stock of industrial robots in West Asia.

Iran’s progress in automobile and other motor vehicle production has especially been impressive. Motor vehicles, including farming equipment, now count among Iran’s exports. Most remarkable of Iran’s industrial progress, however, can be seen in the manufacture of various types of its armaments needs. Iran’s defense industry has taken great strides in the past few decades, and now manufactures many types of arms and equipment. Iran’s Defense Industries Organization (DIO) now produces its own tanks, armored personnel carriers, guided missiles, radar systems, military vessels, submarines, fighter planes, and more. Despite these achievements, Iran’s military spending is relatively modest. For example, while Iran’s military spending is currently about $7 billion, or nearly 2% of its GDP, that of Saudi Arabia is about $43 billion, or nearly 11.2% of its GDP, and that of Israel is about $13 billion, or 6.3% of its GDP. And while Iran produces most of its military equipment at home, Saudi Arabia imports its military hardware.

Contrary to Dr. Zogby’s claims, Iran’s military preparedness and its nuclear program, have not meant neglect of its infrastructure. Iran has, indeed, invested considerably in both physical infrastructures (such as transportation and communication) and soft/social infrastructures (such as education and healthcare services). Health care is free for those who can’t pay. All public education, including university, is free.

Although women are required to comply with the official dress code, they are encouraged (both by their families and the government) to excel in educational and professional pursuits. The results have been quite impressive. Women now constitute the majority of university students. Despite the very high level of unemployment, which is largely due to the criminal economic sanctions and military threats from abroad, more and more women are joining the workforce. They are doctors, engineers, teachers, scientists, writers, artists, business owners, salespersons, firefighters and taxi drivers. Working women in Iran are entitled to 90 days of maternity leave at two-thirds pay, with the right to return to their previous jobs. Women in the US do not have these benefits. Sex change operations and abortion under certain circumstances (and before the ensoulment, i.e. during the first four months of pregnancy) are legal.

In a number of the “Arab Gulf States,” by contrast, women can’t hold public office, are denied the right to vote, cannot get a university education, drive a car, or even leave home without a chaperone. How or why Dr. Zogby thinks that these states can “provide a model of development and progress for Iran” is unfathomable.

Dr. Zogby also chides Iran for not supporting the ongoing efforts by the US and its allies, including the “Arab Gulf States,” to overthrow the Syrian regime. Yet, there is undeniable evidence that the Syrian opposition is hatched largely by NATO, Israel and their cringing allies in the Arab League. “The Free Syria Army (FSA) fighting against Assad inside Syria is a creation of NATO. Sources indicate 600 to 1,500 fighters from the Islamic Fighting Group in Libya, now known as al-Qaeda in Libya, are working with the FSA to topple the Assad regime. An Arab League report revealed last month that Mossad, MI6, the CIA, and British SAS are in Syria working with the Free Syrian Army and the Syrian National Council.” It is a shame that Dr. Zogby would allow himself to support this orgy of mercenary forces, benignly called the “Syrian opposition.”

In his Article Dr. Zogby refers to the Persian Gulf simply as the “Gulf,” without the word “Persian.” I suspect this omission is not fortuitous. Let me explain why. As mentioned earlier, Iran’s resistance to US-Israeli axis of aggression infuriates the autocratic Arab rulers as such resistance to injustice, which Dr. Zogby calls Iran’s “provocations,” exposes the complicity of these rulers with the imperialist-Zionist powers in the occupation and militarization of their lands. To counter this “problem” and to turn the Arab public opinion against Iran, the Arab client regimes (with the help of their imperialist patrons) have in recent years cooked up a scheme that is based on a harebrained idea that the word “Persian” should be dropped from the name of Persian Gulf and replaced with the word “Arab,” that is, it should be the Arab Gulf, not the Persian Gulf! The scheme is, obviously, part of an insidious strategy that is designed to pit the Persians/Iranians against the Arabs and the Shias against the Sunnis. Regrettably, Dr. Zogby seems to have fallen for this age-old divide-and-conquer ploy.

~

Ismael Hossein-zadeh is Professor Emeritus of Economics, Drake University, Des Moines, Iowa. He is the author of The Political Economy of U.S. Militarism (Palgrave – Macmillan 2007) and the Soviet Non-capitalist Development: The Case of Nasser’s Egypt (Praeger Publishers 1989). He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, forthcoming from AK Press.

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March 16, 2012 Posted by | Deception, Economics, Mainstream Media, Warmongering | , , | Leave a comment

SWIFT cuts financial ties with Iran over EU sanctions

Press TV – March 16, 2012

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) says it has decided to discontinue services to Iranian banks which are subject to financial sanctions imposed by the European Union.

“Disconnecting banks is an extraordinary and unprecedented step for SWIFT. It is a direct result of international and multilateral action to intensify financial sanctions against Iran,” the Associated Press quoted SWIFT CEO Lazaro Campos as saying on Thursday.

The Financial Times described the service as “one of the key bits of plumbing in the world’s interbank payment systems,” adding that 30 Iranian banks will be cut off from the service as of Saturday, March 17.

The US and EU charge Iran with pursuing military goals under the cover of its civil nuclear energy program and have imposed several rounds of international and unilateral sanctions against Iran to force the country give up its nuclear energy program.

On January 23, the EU foreign ministers approved new sanctions on Iran’s financial and oil sectors, which ban member countries from importing Iranian crude or dealing with its central bank.

Experts believe that SWIFT’s new action is meant to fully enforce EU sanctions, as global financial transactions are impossible without using SWIFT.

Despite tightening sanctions, some analysts have noted that Iran is still able to skirt the sanctions in a few ways. The country, they say, may exchange oil for cash, gold or other commodities directly. Also, Iranian banks that have not been targeted by EU sanctions can still sell oil.

“Throughout the history of the oil trade, someone always gets around trade embargoes one way or another,” said Jim Ritterbusch, a veteran oil trader and analyst.

SWIFT is a clearing system, which oversees the network used by most of the world’s largest banks to conduct financial wire transfers.

SWIFT handles cross-border payments for more than 10,000 financial institutions and corporations in 210 countries. It enables users to exchange financial information securely and reliably, thereby lowering costs and reducing risks.

Established in 1973, the system has been overseen by major central banks, including the US Federal Reserve and the European Central Bank.

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March 16, 2012 Posted by | Economics, Wars for Israel | , , | Leave a comment

India, South Korea increase oil purchases from Iran: IEA

Press TV – March 15, 2012

India and South Korea have increased oil imports from Iran despite the United States’ plea for the two countries to reduce their dependence on the Iranian crude, says the International Energy Agency (IEA).

According to an IEA report, released on Wednesday, both Seoul and New Delhi sharply raised their oil purchases from Iran in January.

The rise in the purchase of the Iranian crude comes despite Washington’s appeals for a reduction of oil imports from Iran by around 15 percent in volume.

The White House is now concerned that it may have to impose sanctions on New Delhi for its refusal to cut back on crude purchases from Tehran.

Earlier on Tuesday, Turkey’s Minister of Energy and Natural Resources Taner Yildiz announced that Turkey is continuing to purchase crude oil from the Islamic Republic.

Oil prices have remained high following Iran’s decision to cut oil sales to some European countries in response to the EU’s sanctions on the country.

On January 23, EU foreign ministers approved sanctions against Iran, including a ban on Iranian oil imports, a freeze on the assets of the Central Bank of Iran within the bloc’s states and a ban on selling diamonds, gold, and other precious metals to Tehran.

The US, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear energy program.

Iran has repeatedly refuted the Western allegations regarding its nuclear energy program, arguing that as a signatory to the nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it is entitled to develop and acquire nuclear technology for peaceful purposes.

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March 15, 2012 Posted by | Economics, Wars for Israel | , , | Leave a comment

A Toxic System

An Inside Glimpse Into the Nefarious Operations of Goldman Sachs

By DARWIN BOND-GRAHAM | CounterPunch | March 15, 2012

Goldman Sachs employee Greg Smith’s very public resignation, replete with a pointed letter published in the New York Times yesterday, has landed upon the investment bank like a bomb. Slamming a “toxic and destructive environment” within Goldman Sachs, Smith says the firm’s internal culture has devolved to the point where the entire staff not only tolerates, but expects workers at all levels, from senior partners to associates, to pursue nothing but ever-more sophisticated means of “ripping their clients off.”

Apologists for the financial sector —including the editors of the major business newspapers and television networks— predictably have shot back with a flurry columns and reports, mostly designed to discredit the former vice president by making fun of Smith and his concerns. If you strip away the ad hominem layers to these responses though, the core problems raised by Smith remain, and the reaction of the business press seems all the more absurd, for Goldman’s pesky turncoat isn’t saying anything that’s news to the public: Goldman Sachs is characterized by a toxic culture of greed? Stop the presses!

There is much more to be said about Goldman Sachs’ derivatives operation, however, and Smith’s provocative resignation provides an opportunity because he was working in the belly of it.

At the center of Smith’s critique are derivatives, the arcane financial instruments that transformed the world’s splintered national economies and regional banking systems into a single, if complicated, global system. Evangelists of derivatives claim they have made new heights of economic growth, trade, and prosperity possible. Critics have pointed out since the beginning of the derivatives boom in the 1980s how perfectly suited they are to fraud and systemic catastrophe via the greed of the few and the powerful.

Derivatives, many close observers have reminded us, were at the center the Enron meltdown, the demise of Long Term Capital Management, the Asian Financial Crisis, and most recently the Great Recession and its various flares, from the housing bubble that exploded from junked collateralized debt obligations, to the current Greek debt imbroglio and the credit default swaps haunting the background. In each case, and many less-known fiascos, derivatives traders in Wall Street’s leading banks played key roles either as the major villains, or enabling partners in vast crimes of information, leverage, and risk. Time and again we find derivatives at the center of scandalous greed. Now we have a high-profile banker denouncing not just some bad apples in his firm, but the firm’s entire culture.

There’s a deeper and more disturbing truth still further below the surface though. To get there it’s instructive to know a little more about Goldman’s derivatives operation, and the wider industry of which Goldman is a small part.

Who are the clients on the receiving end of Goldman’s “toxic and destructive” tendencies? Many times the victims have been other corporations, industrial firms with less sophisticated and perhaps naive financial officers. Quite often though the victims of Goldman’s derivatives operation have been cities, counties, and local government agencies. A key client category for derivatives has been large local governments and agencies that issue hefty sums of long-term debt.

Goldman, and the handful of other global banks that dominate the derivatives industry, sold local governments on the idea that a particular set of derivative products could provide wondrous solutions to hedge against the risks inherent in issuing long term debt. The banks claimed that interest rate swaps could shield counties, cities, and agencies from possible spikes in floating interest rates attached to their bonds. Thus many governments agreed to complex, multi-decade deals involving the swapping of payments on fictive amounts of money associated with real debt. In no time at all interest rate swaps became the single largest category of derivatives, dwarfing all others.

Today interest rate swaps make up 82% of the total market in derivatives, measured by total notional amounts. This is partly the result of governments all over the world entering into interest rate swaps, agreeing to tie cash flows to trillions of notional dollars. What’s key is that none of this has required duplicity or reckless greed on the part of bankers at Goldman Sachs or other firms. Let’s be clear; this is a structural transformation of capitalism on a global scale, and it has sucked up all corporate and government entities into the new logic of hedging and efficiency. That a few powerful financial corporations have placed themselves in strategic positions to benefit from this structural shift should come as no surprise.

In California’s Bay Area, multiple governments have come to find themselves on the paying end of Goldman’s derivatives department where apparently traders referred to clients as “muppets.” The most obvious example is the city of Oakland where a chronic budget crisis has led to the shuttering of schools and cuts to elder services, housing, and public safety. Oakland signed an interest rate swap with Goldman in 1997. The terms of the deal, revised once in 2003, were typical of interest rate swaps except that Oakland’s financial officers, based on this author’s research and impressions, seem to have agreed to a somewhat higher fixed rate obligation than most other cities that signed swap deals for similar amounts of debt with comparable ratings. Oakland partly did this, I am guessing, to receive upfront payments of roughly $5 and $10 million from Goldman Sachs, cash that the city wished to have on hand immediately. The bank seemed eager to do this because the original terms, and renegotiated terms in 2003, were much to its favor. It would earn the $15 million back, and then some over the twenty-four year life of the swap.

Across the Bay, Goldman Sachs signed an interest rate swap agreement with the San Francisco International Airport in 2007 to hedge $143 million in debt. Today this agreement has a negative value to the Airpot of about $22 million, even though its terms were much better than those Oakland agreed to. The Airport, like Oakland, must now pay millions each year to Goldman Sachs until the agreement expires, or until the floating LIBOR interest rate rises enough to offset the net balance of payments. Goldman sold derivatives up and down California and across the United States to cities, counties, and agencies, promising them a means of reducing debt payments over the long haul.

Business press pundits who are now slamming Smith say it’s absurd to expect that Goldman Sachs was doing anything less than trying to make money off these deals, and that counter-parties to the firm’s dealings knew well what they were signing up for. This mischaracterizes the entire problem, however, and threatens to steer the conversation into a narrow, and politically irrelevant one about whether Goldman Sachs is or isn’t a den of fraud.

When governments signed up for interest rate swap deals with Goldman Sachs they certainly did know that the bank would be making money off the agreement, first in the form of up-front fees, and then off of savings produced by the pairing of comparative advantages in debt markets that interest rate swaps are designed to achieve. If you don’t understand that last point, don’t worry. What it means simply is that Goldman Sachs sold interest rate swap products to governments by promising to both protect a government against interest rate volatility, and to also likely reduce the overall long-term cost of borrowing money. It was supposed to be a win-win game.

The truly impressive thing about the whole derivatives market is that it is supposed to ratchet up the efficiency of the entire global economy, making dollars go much further, protecting all parties from volatility, transcending previous market barriers and smoothing flows of cash… at least in theory. The theory seemed to be working in the 1990s and through most of the 2000s. Goldman didn’t have to convince anyone of this for the results were plain to see.

That it hasn’t panned out in practice, that the whole derivatives-based economy nearly collapsed in 2008 and continues to falter, isn’t so much the result of Goldman’s toxic culture of greed as it is the outcome of a much more troubling feature of our economic system. While I agree with Smith’s observation —which is important because it’s based on insider knowledge— that Goldman Sachs is an especially predatory corporation, I see a larger pattern of power relations embodied in the new economy, structured as it is by derivatives, that isn’t based on any specific firm’s internal culture or corruption, or the supposed naivety and stupidity of financial officers in government and less profitable sectors of the economy.

Consider the fact that Goldman Sachs isn’t even the biggest fish in the pond, nor is it profiting the most from the blizzard of derivative products that structure the capitalist economy today. Of the five financial corporations that “dominate in derivatives,” as the U.S. Office of the Comptroller of the Currency puts it, Goldman Sachs ranks fourth, behind by Bank of America, Citibank, and far behind the absolute king of derivatives, JP Morgan Chase.

In February JP Morgan Chase let slip that it cleared $1.4 billion in revenue on trading interest rate swaps in 2011, making these instruments one of the bank’s biggest sources of profit. According to some reports, JP Morgan Chase made billions more in 2008 and 2009 when the financial crisis and federal response combined to make floating-to-fixed interest rate swaps into extremely profitable assets for the banks on the floating side of the deal. Similar things can be said for Mogan Stanley, HSBC, Wells Fargo, Bank of America, Bank of New York, and the dozens of smaller interest rate swap peddlers currently profiting from direct transfers of public dollars.

Are all these banks poisoned by toxic cultures of greed? Surely there are similarities in the internal cultures of large banks, and greed and a little sociopathic ability to profit from another’s loss is a professional asset in these sorts of organizations. In contemporary corporate culture the euphemism for this is “competition.”

Toxic culture and greed, or “competitiveness” if you prefer, in the investment banks isn’t a sufficient answer to why derivatives have become the foundation of today’s global economy, however. The criminal activities of some bankers, driven by these more pervasive cultures, can’t explain the economic crisis and the vast injustices that are being perpetrated still in the name of “economic recovery.” The interest rate swap crisis stinging local governments and enriching the banks is a case in point.

The windfall of revenue accruing to JP Morgan, Goldman Sachs, and their peers from interest rate swap derivatives is due to nothing other than political decisions that have been made at the federal level to allow these deals to run their course, even while benchmark interest rates, influenced by the Federal Reserve’s rate setting, and determined by many of these same banks (the London Interbank Offered Rate, LIBOR) linger close to zero. These political decisions have determined that virtually all interest rate swaps between local and state governments and the largest banks have turned into perverse contracts whereby cities, counties, school districts, water agencies, airports, transit authorities, and hospitals pay millions yearly to the few elite banks that run the global financial system, for nothing meaningful in return. These perfectly legal cash flows measuring globally in the hundreds of billions, from the public to the banks, dwarf anything that is the result of fraud.

Back when the economy was in a “normal” stasis of growth, the early and mid-2000s, interest rate swaps and other derivatives promised security against risk, and a new vista for capitalism and public finance. Tellingly, when the crisis struck, swaps were allowed to become a one way flow of funds from the public to the banks. This shadow bailout for the banks has done considerable damage to already cash-strapped local governments suffering from declines in tax revenues and federal aid.

Whether Goldman Sachs is or isn’t an organization gripped by a toxic culture isn’t all that important when one considers the destructive impact that derivatives have had, and continue to have upon society. Capitalism as it functions today is completely dependent upon derivatives. Interest rate swaps are the single largest type of derivative, measured by notional amount, because they achieve an integration of different national, regional, and sectoral financial markets into one global financial system. It’s in the genetics of the project of financial globalization, fueled by derivatives, that the real problem lies, not in the internal culture of Goldman Sachs, or the illegal behaviors of some bankers across many firms. The real crime lies in perfectly legal and legitimated activities whereby a few powerful corporations design a system that puts the welfare of the world’s vast majority at grave risk. It’s the system that’s toxic. Goldman Sachs merely operates well within the toxicity.

Nevertheless, Greg Smith’s effort to pull back the curtain on one of the most nefarious and powerful corporations in history is most welcomed, especially for the deeper conversations it can stoke about the origins of the current crisis.

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

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March 15, 2012 Posted by | Corruption, Deception, Economics | , , , | Leave a comment

Obama approval ratings fall despite improving jobs data: Poll

Press TV – March 14, 2012

The results of a new poll show US President Barack Obama’s approval ratings have plunged to 41 percent despite improving jobs data.

The last Monday survey, carried out by The New York Times newspaper and CBS News TV channel, show Obama’s approval rating has hit 41 percent, down nine percent from the 50 percent threshold, which an incumbent president generally needs to win a reelection, AFP reported.

With 47 percent of respondents disapproving of Obama’s overall performance, the poll results have cast doubt on his prospects for the upcoming November presidential election.

An earlier poll conducted by The Washington Post newspaper in conjunction with ABC news network also registered a drop in Obama’s approval rating, though the decrease was not quite so severe.

Only 46 percent of the surveyed individuals approved of Obama’s handling of his presidential duties and 50 percent disapproved due to rising gas prices.

The situation, the AFP report said, was a reversal from early February when 50 percent approved of the president’s performance and 46 percent disapproved.

Two-thirds of the respondents said they disapproved of the way Obama was handling rising pump prices which now average nearly four dollars a gallon (3.8 liters).

Meanwhile, another poll conducted by the University of Maryland’s Program on International Policy Attitudes, whose results were published on Tuesday, indicated that three out of four Americans are opposed to an attack against Iran’s nuclear facilities by the Israeli regime.

Moreover, 69 percent of American respondents stated that the US should pursue the policy of negotiations with Iran, with a large majority, adding that such talks should primarily take place through the United Nations Security Council.

According to the poll, the opposition of the Americans to a military strike against Iran was expressed by 79 percent of Democrats, 58 percent of Republicans, and 67 percent of independents.

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March 15, 2012 Posted by | Economics, Militarism, Progressive Hypocrite | , | Leave a comment

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