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Bankers Seize Europe

Yet Another Goldman Sachs Take Over

By PAUL CRAIG ROBERTS | CounterPunch | November 28, 2011

On November 25, two days after a failed German government bond auction in which Germany was unable to sell 35 per cent of its offerings of 10-year bonds, the German finance minister, Wolfgang Schaeuble said that Germany might retreat from its demands that the private banks that hold the troubled sovereign debt from Greece, Italy, and Spain must accept part of the cost of their bailout by writing off some of the debt. The private banks want to avoid any losses, either by forcing the Greek, Italian, and Spanish governments to make good on the bonds by imposing extreme austerity on their citizens, or by having the European Central Bank print euros with which to buy the sovereign debt from the private banks. Printing money to make good on debt is contrary to the ECB’s charter and especially frightens Germans, because of the Weimar experience with hyperinflation.

Obviously, the German government got the message from the orchestrated failed bond auction. As I wrote at the time, there is no reason for Germany, with its relatively low debt to GDP ratio compared to the troubled countries, not to be able to sell its bonds.  If Germany’s creditworthiness is in doubt, how can Germany be expected to bail out other countries?  Evidence that Germany’s failed bond auction was orchestrated is provided by troubled Italy’s successful bond auction two days later.

Strange, isn’t it. Italy, the largest EU country that requires a bailout of its debt, can still sell its bonds, but Germany, which requires no bailout and which is expected to bear a disproportionate cost of Italy’s, Greece’s and Spain’s bailout, could not sell its bonds.

In my opinion, the failed German bond auction was orchestrated by the US Treasury, by the European Central Bank and EU authorities, and by the private banks that own the troubled sovereign debt.

My opinion is based on the following facts. Goldman Sachs and US banks have guaranteed perhaps one trillion dollars or more of European sovereign debt by selling swaps or insurance against which they have not reserved. The fees the US banks received for guaranteeing the values of European sovereign debt instruments simply went into profits and executive bonuses. This, of course, is what ruined the American insurance giant, AIG, leading to the TARP bailout at US taxpayers’ expense and Goldman Sachs’ enormous profits.

If any of the European sovereign debt fails, US financial institutions that issued swaps or unfunded guarantees against the debt are on the hook for large sums that they do not have. The reputation of the US financial system probably could not survive its default on the swaps it has issued. Therefore, the failure of European sovereign debt would renew the financial crisis in the US, requiring a new round of bailouts and/or a new round of Federal Reserve “quantitative easing,” that is, the printing of money in order to make good on irresponsible financial instruments, the issue of which enriched a tiny number of executives.

Certainly, President Obama does not want to go into an election year facing this prospect of high profile US financial failure.  So, without any doubt, the US Treasury wants Germany out of the way of a European bailout.

The private French, German, and Dutch banks, which appear to hold most of the troubled sovereign debt, don’t want any losses. Either their balance sheets, already ruined by Wall Street’s fraudulent derivatives, cannot stand further losses or they fear the drop in their share prices from lowered earnings due to write-downs of bad sovereign debts.  In other words, for these banks big money is involved, which provides an enormous incentive to get the German government out of the way of their profit statements.

The European Central Bank does not like being a lesser entity than the US Federal Reserve and the UK’s Bank of England. The ECB wants the power to be able to undertake “quantitative easing” on its own. The ECB is frustrated by the restrictions put on its powers by the conditions that Germany required in order to give up its own currency and the German central bank’s control over the country’s money supply. The EU authorities want more “unity,” by which is meant less sovereignty of the member countries of the EU. Germany, being the most powerful member of the EU, is in the way of the power that the EU authorities desire to wield.

Thus, the Germans bond auction failure, an orchestrated event to punish Germany and to warn the German government not to obstruct “unity” or loss of individual country sovereignty.

Germany, which has been browbeat since its defeat in World War II, has been made constitutionally incapable of strong leadership. Any sign of German leadership is quickly quelled by dredging up remembrances of the Third Reich. As a consequence, Germany has been pushed into an European Union that intends to destroy the political sovereignty of the member governments, just as Abe Lincoln destroyed the sovereignty of the American states.

Who will rule the New Europe?  Obviously, the private European banks and Goldman Sachs.

The new president of the European Central Bank is Mario Draghi. This person was Vice Chairman and Managing Director of Goldman Sachs International and a member of Goldman Sachs’ Management Committee. Draghi was also Italian Executive Director of the World Bank, Governor of the Bank of Italy, a member of the governing council of the European Central Bank, a member of the board of directors of the Bank for International Settlements, and a member of the boards of governors of the International Bank for Reconstruction and Development and the Asian Development Bank, and Chairman of the Financial Stability Board.

Obviously, Draghi is going to protect the power of bankers.

Italy’s new prime minister, who was appointed not elected, was a member of Goldman Sachs Board of International Advisers. Mario Monti was appointed to the European Commission, one of the governing organizations of the EU. Monti is European Chairman of the Trilateral Commission, a US organization that advances American hegemony over the world. Monti is a member of the Bilderberg group and a founding member of the Spinelli group, an organization created in September 2010 to facilitate integration within the EU.

Just as an unelected banker was installed as prime minister of Italy, an unelected banker was installed as prime minister of Greece. Obviously, they are intended to produce the bankers’ solution to the sovereign debt crisis.

Greece’s new appointed prime minister, Lucas Papademos, was Governor of the Bank of Greece. From 2002-2010. He was Vice President of the European Central Bank. He, also, is a member of America’s Trilateral Commission.

Jacques Delors, a founder of the European Union, promised the British Trade Union Congress in 1988 that the European Commission would require governments to introduce pro-labor legislation. Instead, we find the banker-controlled European Commission demanding that European labor bail out the private banks by accepting lower pay, fewer social services, and a later retirement.

The European Union, just like everything else, is merely another scheme to concentrate wealth in a few hands at the expense of European citizens, who are destined, like Americans, to be the serfs of the 21st century.

~

Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury.  His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com

November 28, 2011 Posted by | Corruption, Economics, Timeless or most popular | Leave a comment

UK anti-war campaigns to join labor unions in strike

Press TV – November 27, 2011

British anti-war campaigns have thrown their weight behind the nationwide strike against the government’s cuts in pensions and welfare services, urging the government to cut warfare not welfare.

Stop the War Coalition (SWC) and Campaign for Nuclear Disarmament announced that they would participate in the November 30 strike action organized by the Trade Union Congress (TUC) to call on the government to cut war and Trident spending not pensions.

The campaigns stressed that the government’s spending cuts have only been applied on jobs and public services, while spending on war is mounting without interruption.

Britain spent at least £1.5 billion on the Libya war, and spends about £5 billion per year on the Afghanistan war, SWC revealed. The campaign also said that the overall costs of the war on terror to the US are $3 trillion.

It is estimated that over three million public sector workers will participate in the pension strike across Britain, to defend their pensions against the government’s austerity measures.

The anti-war campaigns proclaimed they would support the strike action of 28 unions, believing the Tory-led government’s wrong policies would boost poverty and misery for the poor people.

“The budget deficits in the US and Britain have been caused in part by the rising cost of wars. Governments have borrowed money to pay for war. They are now asking people to accept cuts and austerity to pay for them,” SWC convener Lindsey German said.

Suggesting an alternative to the cut plans, German said the government could “cut spending on war and the Trident nuclear submarine system and use the money to fund welfare.”

Mark Serwotka, general secretary of Public and Commercial Services union (PCS), also condemned the government’s war policies. “The war in Afghanistan and the war in Libya are wrong. They are misjudged; they are not about what people claim they are about. And we should actually find a way out of those pretty quickly, not make the situation in those countries worse as well as at the same time take valuable resources that could go into schools and hospitals,” he said.

November 27, 2011 Posted by | Economics, Militarism, Solidarity and Activism | Leave a comment

Pakistan defies US over Iran gas deal

Press TV – November 25, 2011

Pakistan says it will press ahead with its Iran gas pipeline deal despite a strong opposition by the United States, Press TV reports.

Pakistan’s Information Minister Firdous Ashiq Awan said on Friday that Islamabad will not accept any dictation regarding its internal affairs from any foreign country, adding that importing gas from Iran is in the country’s best interest.

The remarks came as a reaction to earlier pleas by Washington’s Ambassador to Pakistan Cameron Munter that the Pakistani government abort its multi-billion dollar gas pipeline project with Iran.

“Pak-Iran gas pipeline is not a good idea….However, the plan to get gas from Turkmenistan is a better idea,” Press TV correspondent quoted Munter as saying on Friday.

The USD 7.6 billion gas pipeline deal, which was signed in June 2010, aims to export a daily amount of 21.5 million cubic meters (or 8.7 billion cubic meters per year) of Iranian natural gas to Pakistan.

Last month, Pakistan’s Minister of Oil and Natural Resources Asim Hussain said the Iran-Pakistan natural gas pipeline would be inaugurated before the end of 2013, one year ahead of the original schedule.

Maximum daily gas transfer capacity of the 56-inch pipeline, which runs over 900 km of Iran’s soil from Asalouyeh in Bushehr Province to the city of Iranshahr in Sistan and Baluchestan Province, has been given at 110 million cubic meters.

Iran and Pakistan finalized the details of the deal during bilateral talks held in Tehran in October 2007.

The deal comes in the face of Washington’s efforts to isolate Iran economically through UN Security Council sanctions and its own unilateral penalties over Tehran’s nuclear programs.

Iran ranks second in the world in natural gas resources after Russia with available gas reserves estimated at over 33 trillion cubic meters.

In addition to exporting gas to Turkey, Armenia, and Pakistan, the country is currently negotiating gas exports to Iraq.

November 26, 2011 Posted by | Economics | Leave a comment

French megabank BNP Paribas pulls out of Israel after pressure from boycott campaign

By Saed Bannoura | IMEMC News | November 26, 2011

The French bank, BNP Paribas, has decided to cease operations inside Israel, after the bank was targeted by the international Boycott, Divestment and Sanctions (BDS) campaign, which aims to use economic pressure to get Israel to adhere to its obligations and abide by international law.

Although the bank stated that its withdrawal from Israel was not due to the pressure campaign, but instead due to heavy losses sustained during the Greek financial crisis, Israeli officials and bankers have stated that they believe the bank gave in to pressure from European human rights groups to pull out of Israel.

BNB Paribas will close its offices and lay off sixty employees in Israel, and will end its financing of projects in the Jewish state.

The Governor of the Bank of Israel, Stanley Fischer, told reporters from the Israeli newspaper Ha’aretz that he had met with top executives from BNB Paribas several times, and exchanged harsh words with them when they announced their decision to leave Israel.

The Bank of Israel is a private institution that prints currency for the Israeli government and regulates interest rates in Israel. It is the successor to the Anglo-Palestine Bank, which carried out those functions until 1948, when the state of Israel was created on the land of historic Palestine.

BDS campaigners have targeted banks, financial institutions, businesses and universities around the world that have investments inside Israel. The movement has compared itself to the anti-apartheid movement against the white South African government in the 1980s. Some of the main organizers of the BDS campaign against Israel are South Africans who compare the situation of Palestinians to that of black South Africans under the racist apartheid system. The group includes Archbishop Desmond Tutu, President Nelson Mandela, and the largest trade union in South Africa, COSATU.

In recent years, the BDS movement has succeeded in convincing dozens of businesses to pull out of Israel; including the Deutsche Bank divesting from Elbit, a company involved in construction of the Israeli Annexation Wall; the Norwegian government’s divestment from an Israeli security firm; and Harvard University’s decision to divest from Israeli companies.

The group hopes that by using economic pressure, they can convince the Israeli government to end its occupation of Palestinian land, and cease its discriminatory laws that target Palestinians.

November 25, 2011 Posted by | Economics, Illegal Occupation, Solidarity and Activism, Timeless or most popular | , , , | Leave a comment

‘UK government in blind panic over strike’

Press TV – November 25, 2011

The chief of UK’s leading civil service union has accused the government of being in ‘blind panic’ after Home Office asked some government employees to work as border officers during pension strikes planned for next week.

Selected groups of government employees were contacted to walk through picket lines and check passports as passengers arrive at airports and ports from abroad during the industrial action planned for November 30 by public sector workers against pension reforms, The Guardian reported on Thursday.

The crisis-hit British government hopes to make annual savings of 2.8 billion pounds (USD 4.3 billion) by 2014 through reducing pensions, while forcing employees to work for longer years. Many of the workers are already facing wage freezes.

The General Secretary of Public and Commercial Services Union (PCS), Mark Serwotka said, “They are forcing people to work up to eight years longer, forcing people to pay thousands of pounds for less of a pension; it’s completely unfair.”

He criticized ministers for failing to prevent the move by calling unions in for urgent talks, despite months of warning about the strikes.

Serwotka noted that the government had been more interested in spinning over the issue rather than trying to handle the row, saying, “Yesterday in parliament it was revealed the prime minister misled parliament on the 2 November when he made claims about public sector pensions that have been shown to be false.”

“What that indicates is that rather than worry about the services on the day, rather than plan properly for 30 November, they have been engaging in a PR exercise putting out misleading information to try and force through damaging changes that are unfair. Less than a week before the strike, to suddenly turn round and act in a blind panic is completely irresponsible,” he added.

About four million public sector workers are expected to take part in the protest measure organized by Trade Union Congress (TUC), despite the government’s threats to cut the protesters’ pay and cancel out the concessions it has already made to them if they kept up the demonstrations for longer than 15 minutes.

November 25, 2011 Posted by | Economics, Solidarity and Activism | Leave a comment

Destroying Libya’s Welfare State

NATO’s Great Victory

By DAN KOVALIK | CounterPunch | November 23, 2011

The other day, I was listening to the voice of “liberal” radio, NPR, and was surprised to hear its bizarre, and yet quite candid, report on what it apparently views to be one of the more hideous aspects of the Gadhafi years – a modern welfare state which looked after working people.

Thus, without tongue in cheek, or any note of irony, NPR, in its November 14 report, entitled, “Libya’s Economy Faces New Tests After Gadhafi Era,” explained that the biggest impediment to the new economic era is the Libyan worker who was simply too coddled by Gaddafi.

NPR thus cited a 2007 book on the Libyan economy by authors Otman and Karlberg who called “the Libyan worker under Gadhafi ‘one of the most protected in the world,’” receiving job tenure, government subsidies of around $800 a month for the average Libyan household, and gasoline at a mere 60 cents a gallon.  NPR, citing the same book, explained that workers now freed from such a tyrannical world by NATO bombs, have been left with a “’subsidy mentality’” and a “’job-for-life outlook which has ill-prepared Libyans for the more aggressive and cutthroat world of competition.’”

However, lucky for them, Libya’s new acting finance and oil chief, Ali Tarhouni, is resolved to turn this situation around by disciplining Libya’s workers through “smaller government and a larger and freer private sector.”   NPR describes that, Tarhouni, being the realist that he is, “has no illusions that it will be an easy transition.”    The report thus quotes Tarhouni who states that, “[t]he challenge here is that this is a welfare state,” with Libyan workers expecting too much from their government.   I’m sure Tarhouni, with Western support, will show these workers a thing a two.

Of course, had NPR gone further, they could have also explained that, according to the statistics of the United Nations Development Programme, Libya, at the time of the NATO invasion, had the highest human development indicators (which measure levels of health, education and income) in all of Africa, with a life expectancy of 74.5; undernourishment of the population at under 5%; and adult literacy at over 88%.    Libya was in fact ranked 53 in the world out of 169 comparable countries, ranking, for example, above Turkey, (post-Soviet) Russia, Brazil and Costa Rica in terms of the human development indicators.

For NATO, its corporate allies, and its media mouthpieces, such prosperity for workers simply will not do.   We live in a world where austerity for the workers is the order of the day – for those in Libya, Greece, Italy, Spain, Great Britain and the U.S. as well.   And those who stand in the way of such austerity measures, whether they be a nationalist government in Libya, Communists in Greece or Occupiers in the U.S., must be dealt with accordingly – by violent reaction.

Thankfully, once in a while, we have news sources such as NPR which will, albeit quite unwittingly and clumsily, tell us that this is indeed what our military and police actions are all about.   You just have to be reading and listening between the lines to find out.

Dan Kovalik is Senior Associate General Counsel of the United Steelworkers of America.

November 23, 2011 Posted by | Economics, Timeless or most popular | Leave a comment

Letter to Members of the Congressional Super Committee

As the November 23rd deadline approaches for the “super committee” to find $1.2 trillion in deficit cuts over the next 10 years, I am writing to urge the members of the committee to consider options to cut government spending and raise revenue that extend beyond those typically discussed on Capitol Hill and in the media. Members of Congress – both Democrats and Republicans – often appear to be struggling to find deficit-cutting proposals that will either go far enough or attract bipartisan support. I have two proposals that should on the merits – absent the undue influence of special interests in our nation.

The first place that the super committee should look to cut wasteful government spending lies in the hundreds of billions of dollars in direct and indirect corporate welfare that our nation’s government gives away every year. Cutting wasteful government spending in this area alone could produce savings well above and beyond the desired $1.2 trillion in deficit cuts over the next ten years. Democrats and Republicans alike should champion the elimination of corporate welfare as a drain on our government’s budgets. Subsidizing some of the most profitable industries and largest corporations in this country at the level of billions of dollars per year is not consistent with the values of fair competition and a level playing field that are cherished as a part of a capitalist economic system. Nor do they actually allow for a true free market to exist. Instead they skew the playing field toward the largest and most politically powerful multinational corporations and away from small and mid-sized businesses.

Republicans and Democrats talk of the needs of small businesses throughout the country on a daily basis, but rarely are the needs or interests of those businesses represented in Congress when they are different from the Big Boys’ demands. They certainly aren’t represented when small town businesses go out of business despite their best efforts, but the speculators on Wall Street who cheated and gambled their way to the brink were pulled back from the ledge by a past complicit and compliant Congress. Nor were they represented, by the way, when the reason many of those small businesses failed was because of a mega corporation, Wal-Mart, which itself has received hundreds of millions, if not billions, in subsidies over decades. You can talk the talk when it comes to the value of small businesses, free markets, and a capitalist system – but is it not time to start walking the walk?

Yet another proposal that should be explored is the implementation of a financial speculation tax, which would impose a miniscule tax on all trades of stock, bonds, options, and other more speculative financial instruments. A financial speculation sales tax would curb risky speculative trading and high-frequency trading schemes that contribute little real economic value and instead can create a lot of instability. On top of this, a small tax – ranging to 0.5 % depending upon the financial instrument being taxed – could produce hundreds of billions of dollars annually, perhaps as much as $350 billion.

The Capital Institute’s John Fullerton, a former JPMorgan managing director, says it best when he states that a financial speculation tax would “combat one of the most corrosive realities undermining capitalism itself: short-term speculation has displaced real investment, transforming our economy into a bankrupt financial system that lacks morals and purpose.” He has stated that 70 percent of the equities market is composed of speculative, high-frequency, and “quant” driven trading strategies. It is no wonder that our economy is struggling with that much investment going towards entirely unproductive uses. Mr. Fullerton concludes one of his articles by stating that “the real economy and job creation would be enhanced if FDIC-insured consumer deposits funded productive loans to the real economy instead of leveraged short-term speculation by banks and their hedge fund counterparties, and, if more human capital shifted out of finance and into the productive economy.”

Please reference my testimony that I gave before the Committee on the Budget in the U.S. House of Representatives on June 30, 1999. The testimony chronicles some of the most egregious examples of corporate welfare in the United States and can help you to identify proposals for the super committee to adopt. Also look at my recent op-ed, printed in the Wall Street Journal on November 2, 2011, titled “Time for a Tax on Speculation.”

It is my hope these items may be useful to you over the next several days in finding a means to cut the deficit that benefits the American people for once, and not those pursuing unproductive or unfair maneuvers on Wall Street or in the corporate board rooms.

Sincerely,

Ralph Nader

Source

November 21, 2011 Posted by | Economics | Leave a comment

Occupy Oakland Calls for TOTAL WEST COAST PORT SHUTDOWN ON 12/12

By OccupyWallSt |  November 19, 2011

Proposal for a Coordinated West Coast Port Shutdown, Passed With Unanimous Consensus by vote of the Occupy Oakland General Assembly 11/18/2012:

In response to coordinated attacks on the occupations and attacks on workers across the nation:

Occupy Oakland calls for the blockade and disruption of the economic apparatus of the 1% with a coordinated shutdown of ports on the entire West Coast on December 12th. The 1% has disrupted the lives of longshoremen and port truckers and the workers who create their wealth, just as coordinated nationwide police attacks have turned our cities into battlegrounds in an effort to disrupt our Occupy movement.

We call on each West Coast occupation to organize a mass mobilization to shut down its local port. Our eyes are on the continued union-busting and attacks on organized labor, in particular the rupture of Longshoremen jurisdiction in Longview Washington by the EGT. Already, Occupy Los Angeles has passed a resolution to carry out a port action on the Port Of Los Angeles on December 12th, to shut down SSA terminals, which are owned by Goldman Sachs.

Occupy Oakland expands this call to the entire West Coast, and calls for continuing solidarity with the Longshoremen in Longview Washington in their ongoing struggle against the EGT. The EGT is an international grain exporter led by Bunge LTD, a company constituted of 1% bankers whose practices have ruined the lives of the working class all over the world, from Argentina to the West Coast of the US. During the November 2nd General Strike, tens of thousands shutdown the Port Of Oakland as a warning shot to EGT to stop its attacks on Longview. Since the EGT has disregarded this message, and continues to attack the Longshoremen at Longview, we will now shut down ports along the entire West Coast.

Participating occupations are asked to ensure that during the port shutdowns the local arbitrator rules in favor of longshoremen not crossing community picket lines in order to avoid recriminations against them. Should there be any retaliation against any workers as a result of their honoring pickets or supporting our port actions, additional solidarity actions should be prepared. In the event of police repression of any of the mobilizations, shutdown actions may be extended to multiple days.

In Solidarity and Struggle,

Occupy Oakland

– In Oakland: the West Coast Port Shutdown Coordinating Committee will meet on General Assembly days at 5pm before the GA to organize the local shutdown, and to network with other occupations.

November 20, 2011 Posted by | Economics, Solidarity and Activism | Leave a comment

There’s a Tax on Band-Aids, Why not on Credit Default Swaps?

The Washington Stakeout | November 6, 2011

Two House budget committee members — Rep. Heath Shuler, (D-N.C.), and Rep. Mike Simpson, (R- Idaho) — have been making the media rounds as the new faces of establishment bipartisanship in favor of a letter 100 congress people signed on to stating “all options for mandatory” — presumably including Social Security, which adds nothing to the deficit — “and discretionary spending and revenue must be on the table.”

Sam Husseini questioned them as they left the Fox studios on Sunday morning.

Husseini: Most Americans want to see an increase in taxes on the wealthy and corporations, ending the wars, and Congress doesn’t do that. Is that because Congress is basically bought and paid for?

Shuler: “I think the thing that you look at: here’s an opportunity that we can do so much because once the Supercommittee releases its finding and that becomes a bill, and it’s put on the House floor, there’s no amendments to it, it can’t be altered or changed when it goes from the House to the Senate. So that gives us an opportunity to have a clean slate to be able to put everything on the bill, to increase the revenue. The problem is, you don’t find this very often when you have members of the different political parties working together and acting. It’s much easier to split the screen and let us debate and argue something. But we’re united. We’re together. Now we have 100 members in the House and counting, with the 45 members in the Senate. That is the best, most newsworthy thing we can provide for you under the most difficult situations that we have. And to be able to come up with the cuts that’s necessary and the revenue that’s necessary to put us on a more sustainable path.”

Shuler and Simpson’s handlers begin shouting to try to stop the questioning.

Husseini: “Why aren’t you united to tax the rich and the corporations and end the wars? Why aren’t you united for something that is actually popular rather than pursues monied interests?”

Simpson: “We’ve ought to be looking at everything.”

Husseini [holding up box of Band-Aids just off camera]: “Let me ask you this: yesterday I went to a pharmacy and there’s a tax on Band-Aids. Why isn’t there a tax on financial transactions? I had to pay a 6 percent tax on Band-Aids that people need.”

Simpson: “Probably a state sales tax, right?” [Actually, it’s D.C. and D.C. is not a state, with many of its laws set by a Congress that D.C. residents have no real voice in and which Simpson and Shuler are members of.]

Husseini: “What’s your position on financial transaction tax?”

Simpson: “You’d have to look it up.”

Husseini: “Why can’t JP Morgan pay its transaction tax on their dealings [like ordinary people have to pay on necessities like Band-Aids]?”

Shuler and Simpson walk away.

Special thanks to Chris Belcher (video), Sam McCanne (transcription), Jonathan Schwarz, Matthew Bradley, David Swanson, Wendy Mink, Thomas Ferguson and Elisa Salasin for helping.

November 19, 2011 Posted by | Corruption, Economics, Militarism, Timeless or most popular, Video | Leave a comment

Hunger threatens millions in Afghanistan

Press TV – November 18, 2011

Aid agencies have warned that starvation threatens the lives of millions of people in Afghanistan in the aftermath of a widespread drought ahead of harsh winter weather.

A group of nine charity organizations warned on Friday that up to three million Afghans are facing hunger, malnutrition and disease following a severe drought that ruined their crops, Reuters reported.

Poor rains earlier this year destroyed 80 percent of wheat crops in the north Afghanistan, northeast and west of the country, facing the impoverished farmers with food shortages, the charities stated.

The group, which included Oxfam and Save the Children, also expressed concern that extreme winter weather would add to the Afghans’ plight, cutting off their access to vital food aid.

“Villagers are telling us that this year the drought has destroyed everything. Their food stocks are already low, and they are worried about how they will get through the coming months,” Oxfam’s country director Manohar Shenoy said in a statement.

“Time is running out to be able to provide communities with the help they most desperately need before a harsh winter makes many areas inaccessible. Snow is already falling and many mountainous areas are likely to be cut off within weeks,” he warned.

The pinch of starvation, as a heavy winter looms, has forced Afghan families to cut down on meals, migrate to neighboring Pakistan and Iran or borrow money to buy food. Schools have closed as more children have to work.

In October, the United Nations made an appeal for $142 million to help Afghanistan fight the drought crisis that has hit 14 of the country’s 34 provinces, but international donors have so far failed to fund more than seven percent of the required sum.

“Families are facing being cut off for winter without enough food and clean water,” said David Skinner, Save the Children’s Afghanistan country director.

Skinner warned that if aid efforts were not increased, children could die of hunger and the already high malnutrition levels in Afghanistan.

November 18, 2011 Posted by | Economics | Leave a comment

Sarkozy’s Austerity Package for France

Making the Poor Pay More to Protect the Rich

By PHILIPPE MARLIÈRE | CounterPunch | November 8, 2011

At the G20 summit in Cannes, Nicolas Sarkozy and Angela Merkel successfully bullied George Papandreou into backing down on a referendum after the Greek prime minister had promised to consult his people on a new bailout. The Franco-German pair ordered Silvio Berlusconi to accept surveillance of Italy’s austerity package by the IMF.

Despite presiding over a disastrous summit, Sarkozy saw it fit to mock Paul Mason, Newsnight’s economics editor, for asking a question that was not to his liking. The French president wondered whether the British insular upbringing meant that the BBC journalist could not understand the “subtleties of European construction”. Sarkozy may not have the last laugh, though. François Fillon, the French prime minister, has just announced a package of austerity measures which may well trigger a wave of discontent and popular unrest at home.

Following an “exceptional” cabinet meeting, Fillon made a spectacular, if not muscular declaration about the economic situation in France. Eager to cajole financial markets, the prime minister promised blood, sweat and tears for the French. Under Sarkozy’s presidency, France has caved in to “Anglo Saxon”-style capitalism.

Depressingly, the philosophy of the French plan is a carbon copy of the failed Greek, Portuguese and Spanish plans: the legal minimum retirement age will be further raised in 2017 and public deficits will be brought down to 0% by 2016. According to Les Echos, an economics daily, these measures aim to “send a strong signal to the credit rating agencies”. To put it more bluntly, this austerity package aims to make the poor pay for the banking system mess and goes to great lengths to protect the rich.

Fillon is committed to collecting €8bn by essentially raising VAT on a number of vital services and goods. This indirect taxation will as usual hit salaried workers and the poorest hardest. The government will also make further cuts on state spending, notably on health (€500m). These austerity measures will do nothing to revitalise a moribund French economy and like in other parts of Europe, it will only further aggravate economic recession.

Fillon pointed out that fiscal revenues are down due to weak economic growth (1% in 2012 as opposed to the forecast 1.75% in the summer of 2011). As economic growth is on the wane and compromised France’s commitment to tackling public deficits (by 3% of GDP in 2013), instant and drastic measures ought to be taken to redress the balance. This is all fine, but why is it that European governments do not seem so concerned about public deficits when they are created by bank-related activities?

When it comes to socialising the banks’ losses and privatising their profits, the Fillon government – like any other European government – turns a blind eye to public deficits. Dexia, a Franco-Belgian bank, was recently bailed out by public money: €10bn were found within days by the two governments (that is €2bn more than the current austerity package). Ironically, the decision to rescue Dexia came days after Fillon had suggested that the Belgian state was on the verge of bankruptcy.

Fillon’s speech will have a familiar ring to citizens across Europe. It is argued that the French live “beyond their means”. It is therefore time to “make sacrifices” for the good of the country, otherwise “your children” will be “heavily indebted”.

This dramatised account of the situation aims to fulfill the same objective: to instil fear and to make innocent people feel guilty for the mismanagement of public money by the government itself.

Let’s face it: if France has deep deficits, it is not because it is “living beyond its means” but rather because of the numerous tax cuts that successive governments have made over the past 20 years. Reduction in income tax has fundamentally benefited the richest (since 2007, for instance, the “fiscal shield” or the scrapping of the wealth tax).

A report published in 2010 by two senior civil servants shows that public debt would be 20% of GDP lower if the government had not made these tax cuts. In other words, despite the 2008 bank bailouts and the subsequent recession, France would only be slightly above the Maastricht criteria (that is, public debts should not be more than 60% of GNP).

The French understand what is at stake: under Sarkozy, progressive taxation such as income tax (the richer one becomes, the more tax one pays) is being replaced by regressive taxation such as VAT (the poorer one is, the more tax one pays). Dubbed the “president of the rich”, Sarkozy is using this austerity package to dramatically revise fiscal redistribution, for the benefit of the rich and to the detriment of the poor. This will economically and politically backfire.

PHILIPPE MARLIÈRE is professor of French and European politics at University College, London (UK). He can be reached atp.marliere@ucl.ac.uk.

November 8, 2011 Posted by | Economics | Leave a comment

The new land grab in Africa

By Agazit Abate | PAMBAZUKA NEWS | 03 November 2011

The recent phenomenon of land grab, as outlined in the extensive research of the Oakland Institute, has resulted in the sale of enormous portions of land throughout Africa. In 2009 alone, nearly 60 million hectares of land were purchased or leased throughout the continent for the production and export of food, cut flowers and agrofuel crops.

Land grab was in part spurred by the food and financial crisis of 2008 when international bodies, corporations, investment funds, wealthy individuals, and governments began to re-focus their attention on agriculture and food as a profitable commodity. As outlined in the reports, the consequences of land grab include increased food insecurity, environmental degradation, community repression and displacement, and increased reliance on aid.

MEET THE INVESTORS

While media coverage has focused on the role of countries like India and China in land deals, the Oakland Institute’s investigation reveals the role of Western firms, wealthy US and European individuals, and investment funds with ties to major banks such as Goldman Sachs and JP Morgan. Investors include alternative investment firms like the London-based Emergent that works to attract speculators, and various universities like Harvard, Spelman and Vanderbilt.

Several Texas-based interests are associated with a major 600,000 hectares South Sudan deal which involves Kinyeti Development LLC, an Austin, Texas-based ‘global business development partnership and holding company’ managed by Howard Eugene Douglas, a former United States Ambassador at Large and Coordinator for Refugee Affairs. A key player in the largest land deal in Tanzania is Iowa agribusiness entrepreneur and Republican Party stalwart, Bruce Rastetter.

US companies are often below the radar, using subsidiaries registered in other countries, like Petrotech-ffn Agro Mali which is a subsidiary of Petrotech-ffn USA. Many European countries are also involved, often with support provided by their governments and embassies in African countries. For instance, Swedish and German firms have interests in the production of biofuels in Tanzanian. Addax Bioenergy from Switzerland and Quifel International Holdings (QIH) from Portugal are major investors in Sierra Leone. Sierra Leone Agriculture (SLA) is actually a subsidiary of the UK based Crad-1 (CAPARO Renewable Agriculture Developments Ltd.), associated with the Tony Blair African Governance Initiative.

As the media has reported, Indian firms are involved in land grab with relation to Ethiopia in particular. Food insecure nations like those of the gulf region are also participating in these land deals for the purpose of food production for their home countries.

ECONOMIC DEVELOPMENT?

A major argument by governments and investors is that these investments will lead to economic development for the home countries. The Oakland Institute reports reveal, however, that the land transactions are either for free (in the case of Mali) or very cheap (in the cases of Ethiopia and Sierra Leone). These transactions are largely unregulated with no stipulation or guarantees that they will help the local populations or create infrastructure. While land grab actors focus their rhetoric on foreign direct investment, there is no evidence to show that foreign direct investment will come into the countries in any substantial amount.

Most of these deals come with huge tax breaks and other investment incentives which is a great deal for the investors, but means less money coming into the country that could possibly go to infrastructure or social services. For instance, Sierra Leone allows 100 percent foreign ownership; there are no restrictions on foreign exchange, full repatriation of profits, dividends and royalties and no limits on expatriate employees.

Another justification for the land deals includes the idea that they will increase employment in the areas involved. Again, the lack of stipulation and on-the-ground research reveals that this is overstated at best and completely untrue at worst. The Emvest Matuba investment project summary and staff at Emergent and Emvest promise job creation with majority employment from the local community. A recent head count provided by Emergent reveals that currently only 17 permanent positions are in security (36 staff). In Mali, the area targeted by recent large land deals which could easily sustain 112,537 farm families (over half a million people, 686,478) is instead in the hands of 22 investors and will create at best a few thousand jobs.

To make matters worse, the limited employment created by these land deals is low wage, seasonal and primarily benefits the investors with cheap labour to compliment cheap land.

COMMUNITY DISPLACEMENT

While those involved firmly contend that communities are not being forcibly removed from their lands and those that are asked to move are being compensated, the opposite proves true. Ethiopian government officials, for instance, have stated that the lands being leased are unused or abandoned. Meanwhile, there is a villagisation process that has relocated 700,000 indigenous people who lived in a land that was targeted for investment.

In 2010 in Samana Dugu, Mali, bulldozers came in to clear the land and when the community protested, they were met by police forces who beat and arrested them. In Tanzania, the land investments of AgriSol Energy are focused on Katumba and Mishamo refugee settlements. The MOU between AgriSol Energy and the local government stipulates that these settlements, which house 162,000 refugees that fled Burundi in 1972 and have been farming the land for 40 years, have to be closed. In June 2009, Amnesty International reported refugees being pressured to leave camps. Some of them lost their homes to a fire set by individuals acting under the instructions of the Tanzanian authorities to get them to vacate the camp. Refugee leaders who have attempted to organize affected refugees have been arrested and detained.

Investment sites in various African countries visited by the Oakland Institute revealed a loss of local farmland where the lands held a variety of different uses and social/ecological value. Some of the lands that are claimed to be unused are those where the communities practice shifting cultivation (where plots of land are left idle after periods of cultivation in order to re-vegetate), pastoralism, and those considered communally used areas.

Forests and national reserves that are home to vital animal, fish and plant species and are a place where communities have found alternative sustenance in times of food scarcity have been burned and cleared out. These lands are being destroyed without an understanding of their significance and without assessments to determine how this will affect local communities.

Many of the communities interviewed stated that there was no prior notification of the land investments. They only realized what was happening when the bulldozers arrived in their communities.

FOOD INSECURITY

While most of the countries and regions targeted suffer from food insecurity, these land deals focus on producing export commodities, including food, biofuels and cut flowers for foreign consumption. In Mali, half of the investors with large land holdings in the Office du Niger intend to grow plants used to produce agrofuels such as sugarcane, jatropha or other oleaginous crops. In Mozambique, most of the investments concern timber industry and agrofuels rather than food crops. Food crops represented only 32,000 hectares of the 433,000 hectares that were approved for agricultural investments between 2007 and 2009.

In Ethiopia, much of large scale land deals have focused on food production for a foreign market. Because land grab throughout Ethiopia has led to the clearing of communal lands and plots used for shifting cultivation as well as forests, the communities’ primary source of sustenance along with their buffer systems are threatened. Additionally, commercial farming on these lands will affect fish habitats and other wildlife hunted in times of food scarcity and the loss and degradation of grazing lands will further increase food insecurity.

Water is of a particular concern as runoff from commercial farms will lead to the contamination and reduction of water supplies. Dam construction in investment site areas like the proposed Alwero River dam spark additional concern of the consequential uncertainty of access to water for local and downstream communities. No clause has been found in the lease agreements that discusses water use and there is no evidence that water use from commercial agriculture is managed, monitored or regulated.

In Ethiopia, not only is there no clause in any of the lease agreements that require investors to improve local food security conditions or make food available for the local populations, the federal government has actually provided incentives for those investors that grow cash crops for a foreign market. Abera Deressa, federal minister for agriculture stated that, ‘If we get money we can buy food anywhere. Then we can solve the food problem.’ A major concern of the communities interviewed is that they believe the government is intentionally creating a situation where communities must rely solely on the government for their food, in an attempt to marginalize and disempower them.

THE ENVIRONMENTAL FACTOR

Environmental degradation is a major concern in these land deals that have limited transparency and regulations in terms of their environmental impact. Forests have many uses for the local communities including as food, medicine, fuel wood and building materials. Forests also retain cultural and historical significance. Expected outcomes of clearing the lands and forests include loss and degradation of wetlands, decrease in wildlife populations and habitat, proliferation of invasive species and loss of biodiversity.

These environmental concerns are exemplified in Ethiopia’s Gambela National Park where the Ethiopian Wildlife Conservation Authority (EWCA) estimates that 438,000 hectares of land have been leased in the vicinity of the park. While the park boundaries are not set, lands that the local population considers a part of the park have been cleared by large-scale investors, including Karuturi and Saudi Star. Wetlands have been altered and forests have been cleared. According to recent surveys, the Gambela National Park is home to 69 mammal species, valuable wetland habitat, hundreds of bird species and 92 fish species.

To compound matters, the practice of industrial agriculture will lead to increased toxicity, disruption of nature’s system of pest control, creation of new weeds or virus strains, loss of biodiversity, and the spread of genetically-engineered genes to indigenous plants. […]

Instead of supporting small farmers, these land deals support industrial agriculture while displacing and disempowering the very people that have the ability to shift their communities from insecure to sustainable populations and environments. Land grab puts these countries on a path that will surely lead to increased food insecurity, environmental degradation, increased reliance on aid and the marginalisation of farming and pastoralist communities. With regards to food, the issue at stake is not only one of increased food insecurity, but an attack on food sovereignty or peoples’ right to produce their own food.

Land grab is irrational at best and violent at worst. It’s a violent act to take away peoples’ right to food, access to their ancestral land, their social and historical ties, and their overall right for human dignity. It’s a violent act to strip them of their future and the land of its fertility.

While land deals are going on behind closed doors, communities are resisting. The 2008 food uprisings, the revolt in Madagascar against land grab, and the recent protests in Guinea, all show communities who are standing up for their right for food sovereignty. In fact, in all of the countries visited, the land deals were met by community organising. Knowing what we know, resisting these land deals on all fronts and working towards investments in sustainable agriculture and empowering local populations points to the only rational and humane way forward.

November 6, 2011 Posted by | Economics, Environmentalism | Leave a comment

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