The Ecuadorian Coup: Its Larger Meaning
By James Petras | 10.09.2010
The abortive military-police coup in Ecuador, which took place on September 30, has raised numerous questions about the role of the US and its allies among the traditional oligarchy and the leftist social movements, Indian organizations and their political parties.
While President Correa and all governments in Latin America, and significant sectors of the Ecuadorian public described the violent actions as a coup, the principle organ of Wall Street – The Wall Street Journal – described it as a “police protest”. Spokespersons for Goldman Sachs and the Council of Foreign Relations referred to the police and military power grab against the democratically elected government as a self-induced “political crises” of the President. While the coup was underway the “Indian” movement CONAIE, launched a manifesto condemning the government, while the “Indian” party Pachakutik supported the ouster of the President and backed the police coup as a “just act of public servants”.
In summary, the imperial backers of the coup, sectors of the Ecuadorian elite and Indian movement downplayed the violent police uprising as a coup in order to justify their support for it as just another “legitimate economic protest”. In other words, the victim of the elite coup was converted into the repressor of the people’s will. The factual question of whether there was a coup or not, is central to deciding whether the government was justified in repressing the police uprising and whether in fact the democratic system was endangered.
The Facts about the Coup
The police did not simply “protest” against economic polices, they seized the National Assembly and attempted to occupy public buildings and media outlets. The air force – or at least those sectors collaborating with the police – seized the airport in Quito, concerted actions seizing and blocking strategic transport networks.. President Correa was assaulted and seized and kept hostage under police guard by scores of heavily armed police, who violently resisted the Special Forces who eventually freed the president resulting in scores of wounded and ten deaths. Clearly the leaders of the police uprising had more in mind than a simple “protest” over cancelled bonuses – they sought to overthrow the president and were willing to use their firepower to carry it off. The initial economic demands of public sector employees were used by the coup leaders as a springboard to oust the regime.
The fact that the coup failed is, in part, a result of the President’s vigorous and dramatic appeal to the people to take to the streets to defend democracy – an appeal, which resonated with thousands of supporters and denied the coup makers public support in the streets.
The facts on the ground all point to a violent attempt by the police and sectors of the military to seize power and depose the president – by any definition a coup. And so it was immediately understood by all Latin American governments, from right to left, some of whom immediately closed their frontiers and threatened to break relations if the coup leaders succeeded. The only exception was Washington – whose first response was not to join in the condemnation but to wait and see what would be the outcome or as presidential spokesperson Philip Crowley announced “we are monitoring events”, referring to the uprising as a “protest” challenging the government. When Washington realized that the coup was actively opposed by the Ecuadorian public, all the Latin American governments, the bulk of the armed forces and doomed to failure, Secretary of State Clinton called Correa to announce US “backing” for his government, referring to the coup as merely an “interruption of the democratic order”.
In the run-up to the restoration of democracy, the trade unions were by and large passive observers, certainly no general strikes were discussed or even active mobilizations. The response of top military officials in the army were by and large opposed to the coup, except perhaps in the air force which seized the principle airport in Quito, before handing it over to anti-drug units of the police force. The anti narcotic police were in the forefront of the coup and not surprisingly were under intense US training and indoctrination for the past five years.
Explanation for the Varied Responses to the Coup
The responses to and interpretations of the coup varied according to different sets of objective interests and subjective perceptions. Latin American regimes unanimously rejected the coup, fearing a coup multiplier effect in the region in which other successful coups (after last year’s in Honduras) would encourage the military and police to act in their countries. The memories of the recent past in which the military dismantled all representative institutions and jailed, tortured, killed and exiled political leaders was a key factor in shaping Latin America’s resounding rejection. Secondly, the existing political order benefits the capitalist class in almost all of Latin America and provides the bases for political stability and elite prosperity. No powerful mass movements threaten capitalist socio-economic hegemony, which might require the economic elite to back a coup.
Correa supporters were in the streets, though not in the numbers of his previous calls to action ousting ex-President Lucio Gutierrez.They were mainly party loyalists. Others supported his “anti-imperialist” measures (expelling the US military base from Manta) or were defending democratic institutions even as they have become critical of his recent policies.
The US vacillation, shifting from an initial refusal to condemn to later denouncing the failed coup, was based on longstanding ties to the military but especially the police. Between 2006-2011 US military and police aid will have totaled $94 million, of which $89 million was channeled to the “war on drugs”. From 2006-2008, Ecuadorian military and police trainees numbered 931, 526 of whom were incorporated in the “counter-drugs programs”. It was precisely the anti-drug sector of the police which played a major role in seizing the airports in Quito during the abortive coup. The US certainly had plenty of motives for the coup. Correa came to power by ousting pro-US client Lucio Gutierrez and decimating the oligarchical parties who were responsible for dollarizing the economy and embracing Washington’s free market doctrine. Correa called into question the foreign debt, declining to pay debts incurred under fraudulent circumstances. Most of all Correa was an ally of Venezuelan President Hugo Chavez, a member of ALBA and a strong opponent of Colombia, Washington’s main ally in the region. Ecuador’s policy weakened Washington’s strategy of “encircling Venezuela” with hostile regimes. Having already backed the successful coup against Honduras President Zelaya, an ally of Chavez, Washington had everything to gain from a military coup which ousted another member of ALBA. Washington is pursuing a “triple strategy” of 1) diplomacy, offering to improve relations, 2) subversion, by building subversive capacity by financing the police and military and 3) financing via AID, NED, World Bank and NGO’s sectors of the Indian movement especially Pachacutik and dissident groups linked Lucio Gutierrez.
The leadership of the Indian movement varied in its response to the coup. The most extreme position adopted by the near moribund electoral party Pachacutik (US aid recipient) actually endorsed the police coup and call on the masses to form a “united front”, a call which fell on deaf ears. The bulk of the Indian movement (CONAIE) adopted a complex position of denying that a coup was taking place, yet rejecting the police violence and setting forth a series of demands and criticisms of Correa’s policies and methods of governance. No effort was made to either oppose the coup or to support it. In other words, in contrast to its militant anti dictatorial past, CONAIE was virtually a marginal actor.
The passivity of CONAIE and most of the trade unions has its roots in profound policy disagreements with the Correa regime.
Correa’s Self-Induced Vulnerability: His Right Turn
During the emerging citizens-movement five years ago, Rafael Correa played an important role in deposing the authoritarian, corrupt and pro-imperialist regime of Lucio Gutierrez. Once elected President, he put in practice some of his major electoral promises: evicting the US from its military base in Manta; rejecting foreign debt payments based on illicit accounts; raising salaries, the minimum wage, providing low interest loans and credit to small business. He also promised to consult with and take account of the urban social and Indian movements, in the lead up to the election of a constitutional assembly to write up a new constitution. In 2007 Correa’s list running with his new party Alianza Pais (the country alliance) won a two thirds majority in the legislature. However facing declining revenues due to the world recession, Correa made a sharp turn to right. He signed lucrative contracts with multi-national mining companies granting them exploitation rights on lands claimed by indigenous communities without consulting the latter, despite a past history of catastrophic contamination of Indian lands, water and habitat. When local communities acted to block the agreements, Correa sent in the army and harshly repressed the protestors. In subsequent efforts to negotiate, Correa only heard his own voice and dismissed the Indian leaders as a “bunch of bandits”, and “backward elements” who were blocking the “modernization of the country”.
Subsequently, Correa went on the offensive against the public employees, pushing legislation reducing salaries, bonuses and promotions, repudiating settlements based on agreements between unions and legislators. In the same way Correa imposed new laws on university governance, which alienated the professoriate, administration and students. Equally damaging to Correa’s popularity among the organized sectors of the wage and middle classes, was his authoritarian style in pushing his agenda, the pejorative language he used to label his interlocutors and his insistence that negotiations were only a means to discredit his counterparts.
Contrary to Correa’s claim to be a pathfinder for “21st century socialism”, he was, instead, the organizer of a highly personal strategy for 21st century capitalism, one based on a dollarized economy, large scale foreign investments in mining, petroleum and financial services and social austerity.
Correa’s ‘right turn’, however; also depended on political and financial support from Venezuela and its Cuban and Bolivian allies. As a result Correa fell between two chairs: he lost support from the social left because of “pro-extractive” foreign economic policies and austere domestic programs and did not secure support from the US, because of his ties to Chavez and Cuba.
As a result, Correa so alienated the unions and the Indian and social movements that he was only able to secure a very limited amount of “street power” in closing down the economy to thwart the coup. Equally important, the US and its collaborators saw in his declining organized support and the growth of social protest, an opportunity to test the waters for a possible coup, via their most dependable collaborators in the police and to a lesser degree in the air force. The police uprising was a test run, encouraged to proceed, without any overt, commitment, pending its success or failure. If the police coup secured sufficient military support, Washington and its civilian political oligarchs could intervene, call for a “negotiated outcome” which would either oust Correa or “turn him” into a “pragmatic” client. In other words, a “successful” coup would eliminate another Chavez ally, but even a failed coup would put Correa on notice for the future.
Final Reflections in the Way of a Conclusion
The unfolding of the police coup turned into a farce: the coup makers miscalculated their support within the military as well as among the protesting Indians and unions. They stood alone without glory or success. Lacking national leaders, or even a coherent strategy, they were put down in a matter of hours. They misjudged the willingness of the US to commit, once it became clear that the coup makers lacked any resonance among the military elite and were totally inept. What may have started as a coup ended as a comic opera with a brief shoot-out with the military at a police hospital.
On the other side, the fact that Correa, in the end could only rely on his elite special forces, to free him from police hostage, reveals the tragedy of a popular leader. One who started with immense popular backing, promising to finally fulfill the demand of the campesinos for land reform, the Indians demand for sovereignty to negotiate over mineral riches and urban labor’s demand for just remuneration, and ended returning to the Presidential Palace protected by military armored carriers.
The failed coup in Ecuador raises a larger political question: Does the near demise of Correa spell the end of the experiment of the ‘new center-left regimes’ which attempt to “balance” vigorous export-based growth with moderate social payoffs? The entire success of the center-left regimes has been based on their ability to subsidize and promote agro-mineral foreign and domestic capital while increasing employment, wages and subsistence payments (anti-poverty programs). This ‘political formula’ has been underwritten by the boom in demand from Asia and other world markets and by historically high commodity prices. When the crises of 2008 broke, Ecuador was the weakest link in Latin America, as it was tied to the dollar and was unable to ‘stimulate’ growth or cushion the economy. Under conditions of crises, Correa resorted to repression of the social movements and trade unions and greater efforts to secure support from petro-mining multi-nationals. Moreover, Ecuador’s police and military was much more vulnerable to infiltration by US agencies because of large scale funding and training programs unlike Bolivia and Venezuela which had expelled these agencies of subversion. Unlike Argentina and Brazil, Correa lacked a capacity to “conciliate” diverse sectors of social movements through negotiations and concessions. Of course, the penetration of the Indian communities by imperial funded NGO’s promoting “separatism” and identity’ politics did not make conciliation easy.
Nevertheless, despite the particularities of Ecuador, the failed coup underlines the relative importance of resolving basic socio-economic grievances, if the center-left macro-economic projects are to succeed. Apart from Venezuela, none of the center-left regimes are carrying out structural reforms (land reform) nationalizations of strategic sectors, income redistribution. Even the Chavez regime in Venezuela has lost a great deal of popular support because of neglect of essential services (public safety, garbage collection, delivery of water, electrical power and food delivery) because of corruption and incompetence. Over time, the center-left can no longer depend on “charismatic” leaders to compensate for the lack of structural changes. The regimes must sustain the improvement of wages and salaries and delivery of basic services in an ambience of ‘social dialogue’. The absence of continuous social reforms, while agro-mining elites prosper, opens the door for the return of the right and provokes divisions in the social coalitions supporting the center-left regimes. Most important the implosion of the center-left provides an opportunity for Washington to subvert and overthrow the regimes, reverse their relatively independent foreign policy and reassert its hegemony.
The institutional foundations of the center-left are fragile everywhere, especially the police and army, because officialdom is still engaged in government programs with US military, narco-police and intelligence agencies. The center-left regimes – except Venezuela – have continued to participate in all joint military programs. The center-left has not transformed the state. Equally important it has promoted the economic bases of the pro-US Right via its agro-mineral export strategy. It has ignored the fact that political stability is temporary and based on a balance of social power resulting from the popular rebellions of the 2000-2005 period. The center-left ignores the reality that as the capitalist class prospers, as a result of center-left agro-mineral export strategies, so does the political right. And as the wealth and political power of the export elites increases and as the center-left turns to the Right, as has been the case with Correa, there will be greater social conflict and a new cycle of political upheavals, if not by the ballot box then via the bullet – via coups or via popular uprisings.
The successful coup in Honduras (2009) and the recent failed coup in Ecuador are symptomatic of the deepening crises of “post-neo-liberal” politics. The absence of a socialist alternative, the fragmentation of the social movements, the embrace of “identity politics”, have severely weakened an effective organized alternative when and if the center-left regimes go into crises. For the moment most “critical intellectuals” cling to the center-left in hopes of a “left turn”, of a political rectification, rather than taking the difficult but necessary road of rebuilding an independent class based socialist movement.
FT: “Seoul finds new way to finance Iran trade”
This past September, The Wall Street Journal Asia’s editorial board heralded the Japanese and South Korean enforcement of UN sanctions against Iran as “worth cheering” and a sign that South Korea was “growing up as a democracy.”
But the news today that South Korea has appointed two state-run banks to finance trade with Iran, might make the WSJ editorial board rethink their premature exuberance over the effectiveness of the sanctions regime.
Christian Oliver, Song Jung-a and Anna Fifield write in the Financial Times:
The US had pressured South Korea to cut out trade with Iran following the imposition of sanctions in September. Washington praised Seoul when South Korea announced its own measures.
Soon after the sanctions announcement, however, South Korea quietly reached a financing agreement with the Iranian central bank to buttress trade.
Seoul says that from this month Woori Bank and the Industrial Bank of Korea can finance legitimate trade with Iran in sectors unaffected by sanctions.
South Korea has a $10 billion annual trade relationship with Iran and is clearly eager to retain what commerce they can with the Islamic Republic.
Seoul’s effort to find ways of maintaining its commercial relationships with Iran is yet another example of the challenge of imposing a sanctions regime on Iran, which has a diverse and well established set of trading relationships in the increasingly globalized and interconnected economy.
The FT article says:
But in Washington officials said the South Korean move would increase transparency in dealings with Iran. “This is a measure to ensure that some of the shadier private banks in Iran are not involved [in business transactions],” said a state department spokesman.
The Iranian central bank will deposit proceeds from oil sales in South Korea at Woori and IBK. The funds will be used to ensure payments for South Korean exporters that had been retreating from Iran.
America’s Third World Economy
The Great Transformation
By PAUL CRAIG ROBERTS | October 8, 2010
For a number of years I reported on the monthly non-farm payroll jobs data. The data did not support the praises economists were singing to the “New Economy.” The “New Economy” consisted, allegedly, of financial services, innovation, and high-tech services.
This economy was taking the place of the old “dirty fingernail” economy of industry and manufacturing. Education would retrain the workforce, and we would move on to a higher level of prosperity.
Time after time I reported that there was no sign of the “New Economy” jobs, but that the old economy jobs were disappearing. The only net new jobs were in lowly paid domestic services such as waitresses and bartenders, retail clerks, health care and social assistance (mainly ambulatory health care services), and, before the bubble burst, construction.
The facts, issued monthly by the US Bureau of Labor Statistics, had no impact on the ”New Economy” propaganda. Economists continued to wax eloquently about how globalism was a boon for our future.
The millions of unemployed today are blamed on the popped real estate bubble and the sub-prime derivative financial crisis. However, the US economy has been losing jobs for a decade. As manufacturing, information technology, software engineering, research, development, and tradable professional services have been moved offshore, the American middle class has shriveled. The ladders of upward mobility that made American an “opportunity society” have been dismantled.
The wage and salary cost savings obtained by giving Americans’ jobs to Chinese and Indians have enriched corporate CEOs, shareholders, and Wall Street at the expense of the middle class and America’s consumer economy.
The loss of middle class jobs and incomes was covered up for years by the expansion of consumer debt to substitute for the lack of income growth. Americans refinanced their homes and spent the equity, and they maxed out their credit cards.
Consumer debt expansion has run its course, and there is no possibility of continuing to drive the economy with additions to consumer debt.
Economists and policymakers continue to ignore the fact that all employment in tradable goods and services can be moved offshore (or filled by foreigners brought in on H-1b and L-1 visas). The only replacement jobs are in nontradable domestic services, that is, those jobs that require “hands-on” activity, such as ambulatory health services, barbers, cleaning services, waitresses and bartenders–jobs that describe the labor force of a third world country. Even many of these jobs are now filed with foreigners brought in on R-1 type visas from Russia, Ukraine, Thailand, Romania, and elsewhere.
The loss of American jobs and the compression of consumer income by low wages has removed consumer demand as the driving force of the economy. This is the reason expansionary monetary and fiscal policies are having no effect.
The latest jobs report issued today shows that America’s transformation into a third world economy continues. The economy lost 95,000 jobs in September, mainly due to cuts in local education and federal employment. Part of the loss of 159,000 government jobs was offset by 64,000 new private sector jobs.
Where are the new jobs? They are in nontradable lowly paid domestic services: 32,000 were in health care and social services, and 33,900 were in food services and drinking places.
There you have it. That is America’s “New Economy.”
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 been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com
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Census Data: America Got Poorer in 2009
By Max Fraad-Wolff | t r u t h o u t | 28 September 2010
2009 was a year of accelerating economic pain and loss, according to US Census data released today. Although the National Bureau of Economic Research (NBER) tells us that the “Great Recession” officially ended in December of 2009, the labor force of the US shrank by more than 130,000 from 2008 to 2009. The median family income – a better measure than average income because it reflects the exact middle of income distribution – decreased by $2,254 or 3.5 percent. The median income for all workers in the US fell from $29,868 in 2008 to $28,365 in 2009 – a 5 percent decline.
A staggering 48 percent of households earned less than $50,000 per year in 2008, but in 2009, 49.8 percent of households earned less than $50,000. What’s more, income per person in the US declined from $27,589 in 2008 to $26,409 in 2009.
Are you still surprised by anger at the polls? Might these numbers explain the seeming willingness of voters to try anything that looks different? Rising inequality, falling incomes and increasing poverty are very pronounced. When the data comes in next year for 2010, it is likely to show us that the period from 2008 through 2010 witnessed a historic increase in poverty and inequality in the US. Our massive budget deficits have been directed in ways that lower poverty, increase employment or reduce inequality. Surely, these numbers would have been worse absent many programs. That is true and valid. However, it is way too hard out there to be smug about how much worse it could have been. Yes, it could be worse. Yes, it is getting worse.
Below follows a sketch of just how bad it is- from a poverty perspective. All graphs in this article are based on the recently released census data.
It is clear that the younger you are in America, the more likely you are to live in poverty. Young Americans are nearly twice as likely to be poor as older Americans. The bar graph demonstrates this trend for African-Americans.
Being American gives you a one in seven chance of being poor. Being young raises this chance to one in four. Further, being black in America means a one in four chance of being poor. Being young and black raises your chance of being poor up to one in 2.5.
Education played a role in 2009 poverty rates, as indicated in the graph below. Dropping out of high school puts you on a path to a one in four chance of poverty. Finishing college drops your chance of poverty in 2009 to one in 25.
2009 American Consumer Survey: Selected Economic Characteristics. US Census Bureau.
Urban populations were particularly hard hit. More than 18 percent (18.7 percent) of Americans living in major cities spent 2009 living in poverty, while 27.8 percent of Americans living in major cities and under 18 years of age spent 2009 living in poverty. That means that nearly one in three young, urban Americans were poor last year.
Female-headed households fared especially badly: more than one in three lived in poverty in 2009. More than 17 percent (17.3 percent) of these female-headed households lived in extreme poverty – earning less than 50 percent of the federal poverty level.
BRIC nations urging UN to counter unilateral anti-Iran sanctions
Press TV – September 22, 2010
Brazil, Russia, India and China (BRIC) are urging the UN to reproach countries that impose unilateral sanctions not approved by the UN Security Council, Brazilian foreign minister says.
“We’re beginning to have some political coordination on General Assembly resolutions,” Celso Amorim told Reuters on Tuesday, referring to the coordination among the four nations which make the BRIC group.
“In some cases we’re even against multilateral sanctions, so for sure unilateral sanctions aren’t welcome because they’re outside the UN system,” said Amorim, who is in New York to attend the opening of the UN General Assembly. He further added that the BRIC members discussed the proposed resolution in a meeting of foreign ministers on Tuesday in New York.
According to Reuters, a resolution in this regard, if approved by the UN General Assembly, could lead to depletion of the legitimacy of additional sanctions imposed by the United States and other Western powers against Iran’s nuclear program.
Following the imposition of US-engineered UN Security Council sanctions against the Islamic Republic in June, the United States and the European Union imposed further unilateral sanctions on Tehran over its nuclear program.
Fearing those tensions could escalate into war, Brazil had earlier tried to evade the additional sanctions, intermediating a nuclear fuel swap deal between Iran and Turkey. That agreement was largely ignored by the United States.
Commenting on relations between Brazil and the US, Amorim said relations between the two countries remain good, though they disagree on strategy to prevent Iran’s access to nuclear weapons.
“Government relations remain very good, but in some issues we’re going to disagree,” he concluded.
The progressive dilemma
By Nick Egnatz | Online Journal | September 20, 2010
A self-described representative democracy in which the only two political parties are both funded and controlled by elite corporate interests is a contradiction in terms. Control of the population through government propaganda and a monopoly corporate media have made the domination of the American working class and poor by the wealthy corporate elite consensual. The enormity of the crime against true democratic values is so complete that substantive reform of the present system is an impossibility.
A dilemma is a situation in which one is forced to choose between equally distasteful options. That has always been our consignment as Americans when we venture to the polls (either vote for a wishy-washy Democrat or let the even worse Republican win). Every two years we are told that the fate of our democracy rests on our decision. Well it doesn’t because we don’t have a democracy, representative or otherwise. We have a plutocracy (rule by the wealthy). Our two political parties answer out of necessity to the corporate world. No one represents the people and the monopoly corporate media will not allow for a discussion of democratic alternatives.
The chickens have come home to roost from the last 30 years of economic neoliberal globalization policies championed by both political parties. Supply side economics of massive tax cuts for the wealthy and deregulation of the very modest checks on American capitalism necessitated by the Great Depression have made us the most unequal industrial democracy on earth. Imperial wars of aggression and massive bailouts of the very speculators who engineered the financial collapse leading to the Great Recession have allowed both corporate parties to take the stance that there is no money left for the people’s needs. This is poppycock. How can a consumer driven economy recover if the working class and poor have no jobs or money?
To cut spending on social programs with political cover, Obama came up with the brilliant idea of a budget deficit commission (National Commission on Fiscal Responsibility and Reform) made up of bipartisan hacks from both our two corporate parties, representatives from the corporate world of greed and a single union president. Green Party and socialists need not apply and in fact there are no even mildly progressive Democrats (an oxymoron if there ever was one) on the commission. The commission is not a result of legislation from our Congress. It was formed by Executive Order. This is the way dictators govern, but that’s another issue. The commission is charged to cut the Budget Deficit by cutting social programs only and leaving the military spending intact. If and when 14 of the commission’s 18 members agree on policy it will go straight to Congress for a vote with no amendments allowed.
Co-chairman of the commission Alan Simpson, former Republican Senator from Wyoming received some notoriety recently by referring to seniors on Social Security as “lesser people,” calling Social Security a “cow with 310 million tits” and asking the question of Vietnam veterans “what have they done for us lately?’ None of this bothered our President enough to ask for Simpson’s resignation. Their recommendation is due in December, after the midterm election.
We are expected to accept the government propaganda that the unemployment rate is 9.6 percent, when that figure does not include those no longer receiving or who never received unemployment compensation, part time workers desiring full time work or workers disdainfully referred to as having given up looking for work. Including all these would bring the unemployment figure to 22 percent. But that still doesn’t count those working for less than a livable wage, this would easily bring the figure well beyond the 30 percent range. This assault on the working class has been the goal of the neoliberal globalization policy accepted as gospel by both corporate political parties since Ronald Reagan started selling it in the 70’s and 80’s when he set out to save the country from the scourge of a prosperous working class. The Great Communicator pushed his dogma of bad government/good corporations with the same smile he used to push Twenty Mule Team Borax soap to TV viewers years earlier.
More than 3 million families have already been foreclosed and torn from their homes. Another 11 million families are “underwater” (owing more that the home is worth). Research firm First American Core Logic reports that Nevada with 65 percent of home mortgages underwater, Arizona with 48 percent, Florida with 45 percent, Michigan with 37 percent and California with 35 percent lead the nation in this foreboding statistic.
The Republicans propose fiscal austerity for the poor and working class and continued tax cuts for the wealthy corporate class to find our way our of the Great Recession. Obama and the Democrats say that economic growth will do the trick. Both so called solutions are illogical. We are expected to believe that if the big bad bankers would just pretty please start loaning money to businesses, the economy will start humming and everything will be hunky dory?
I’m not an economist, but I have been a small businessman and I have been told on more than one occasion that I have half a brain. The road to recovery is both simple and difficult. For businesses to thrive, for the economy to hum, the business owners simply need customers with money in their pockets. The first step is to put our citizens back to work at a livable wage and the economy will flourish. It will be difficult, to the point of impossibility, for corporate politicians to consider the people at the bottom first, but that is what needs to be done.
We are told that the fall elections are for the control of our country. Nothing could be further from the truth. We are told that we cannot allow the Republican Party of No to win Congress, yet the Democrats have controlled Congress for four years, the White House for two and there has been no challenge to the draconian policies of social spending cuts, endless imperial war and progressively greater and greater inequality. All now completely part and parcel of the fabric of a nation once founded on the single statement that “all men are created equal.” Regardless of which party wins and controls Congress, elite domination of the poor and working class will continue.
Understand that the system is beyond redemption. Recognize that we have exported the cancer of elite domination through globalization across the globe and that the struggle belongs to all the poor and working people of the world. Boycott elections that give credibility to this monstrous system of inequality and class domination. Organize on the basis of class and struggle for the equality that was promised in 1776.
Or you can support the Democratic Party and continue to see more of the same; continued wars, huge military budgets, depressed home prices, foreclosures, abandoned underwater mortgages, progressively greater and greater inequality and Depression Era unemployment. All done while the Democrats complain that they would like to change things, but that they just don’t have the votes or the heart or the balls. The last two they won’t admit to, but we all know better.
I’m not painting a pretty picture, because it isn’t pretty and wishing it was better won’t make it so. Voting for third party candidates, independents or so called progressive Democrats only serves to give legitimacy to an undemocratic system. The first step toward a true participatory democracy is to vocally and publicly boycott elections and renounce the American system of money controlled policies and politics through the two corporate political parties.
Right-wingers and liberal Democrats both love to say that I advocate for some kind of nebulous utopian dream. If you want nebulous from the right tune in to Glen Beck and Sarah Palin’s call for restoring America’s honor. If you want the equivalent from the Democratic Party listen to Obama’s calls for hope and change. Both appeals are long on rhetoric and bereft of specific steps to alleviate the misery corporate America and their two lackey political parties have trickled down on the poor and working class.
This socialist utopian will instead give specific plans for a new birth of democracy in America:
- 100 percent federal funding for all national elections. Under the proposal below this figure will become minuscule.
- No election commercials allowed. This just allows money to pollute politics. Instead require all media outlets to publish and broadcast periodic side by side statements of all the candidates positions on the various issues. Mandate debates in which all the candidates get a chance to state their positions on the issues.
- Require run-off elections if no candidate polls more than 50 percent of vote. This will facilitate the growth of alternative parties.
- Either eliminate the anti democratic U.S. Senate or require it to do away with the filibuster rule which allows 41 Senators from the smallest states, representing only 11 percent of the U.S. population to halt all legislation with the exception of certain budget votes.
- Return U.S. income tax rate on the most wealthy Americans to 90 percent for their excess income over $1 million. For 45 years (1935-1980) the top tax rate was between 70-94 percent. It is now 35 percent and the ever widening gap between rich and poor has made the U.S. the equivalent of a banana republic.
- Institute a financial transaction tax on all financial transactions such as stock sales.
- Cancel all free trade agreements and renegotiate into fair trade agreements in which tariffs are re-instituted to even the playing field when dealing with nations with substandard wages and environmental regulations. This is in line with the policy instituted by the first Secretary of the Treasury Alexander Hamilton, done at the behest of George Washington and carried forward for almost two centuries. That is until the neo-liberal globalization crowd made their first appearance after WWII and in the last three decades especially have managed to lower tariffs to an average of 2 percent. The rationale behind tariffs is to level the playing field for our workers. If country A has the same wage rate and basic environmental safeguards as we do, a free trade agreement with them is in order. But if country B has a wage rate much lower than ours and pays little attention to environmental safeguards, then we should have tariffs reflecting these differences. Free trade is fine with equal trading partners, but not with countries paying slave wages and polluting the environment like China.
- Give workers a seat at the table on all corporate boards with veto privileges as a protection for the American people from corporate dominance.
- Do away with the minimum wage and institute a living wage guaranteeing all workers a wage allowing for basic necessities. This will vary with the cost of living in different areas and individual family commitments, but for a single worker with no other dependents in an average area it would presently be about $15/hour.
- Institute a massive program similar to the WPA to put all the unemployed to work at a living wage. There is much work to do, let us do it. Our cities need rebuilding, seniors need care, single parents need parenting help, homes need to be made energy efficient, infrastructure needs repair.
- For small businesses that show through their tax returns an inability to pay their workers the living wage, have the federal government make up the difference until such time as the small business can support its workers on its own.
- Abolish the Federal Reserve Bank and institute a national bank with the power to create money presently given to the Federal Reserve. As the population and economy grows there is a need to create money. If this is not done, it causes deflation and things get progressively cheaper. While that might sound nice at first glance, not creating money would be every bit the disaster that high inflation can be. Imagine buying a home with a mortgage and watching the price drop every year. That’s deflation. We now have that with home prices, but for other reasons. Anyway, the new national bank will have the power to create money and the profit from creating this money will benefit all the people instead of the present banking class.
- The mortgage crisis must be addressed. The megabanks and Wall Street brought it on and should be required to adjust all mortgage balances down by the local percentage that home prices have dropped. The federal government might then consider not prosecuting those responsible for the crisis.
- Capitalism requires continual growth. This is at odds with the earth’s environment. We need to create a sustainable economy which does not wreak havoc with the earth’s delicate ecosystems. Economic growth is good only when it is environmentally sustainable.
- Just as the poor and working class are required to pay social security tax on all their income, require the wealthy to do the same.
- Recognize that healthcare is a human right and immediately institute either 100 percent government single payer healthcare for all or have government take over the healthcare apparatus and be both the employer and the payer of all healthcare bills.
- End the wars for U.S. Empire overseas. Close our 700 overseas military bases. Cut the total military budget (now in excess of $1 trillion) in half and then half again.
- Disband the Central Intelligence Agency and apologize to the people of all the countries in which our CIA engineered coups to overthrow democratically elected governments. A partial list would include Chile, Brazil, Nicaragua, Honduras, El Salvador, Haiti, Cuba, Venezuela, Greece, Congo and Iran.
- End military aid to Israel and break off diplomatic relations with them until such time as they agree to abandon all the illegal settlements in the West Bank, tear down the apartheid wall, end the criminal blockade of Gaza and finally allow the Palestinian people a free and independent state based on the 1967 borders that are recognized by the international community of nations.
- The House of Representatives Judiciary Committee Democratic Minority Report in 2005 declared that there was a prima facie case that the Bush Administration broke at least seven federal and international laws in taking us into war in Iraq. If we are to be a country of laws, Bush, Cheney, Rice, Rumsfeld, Powell etc. must be investigated and prosecuted.
- Those responsible at the highest level for our policy of torture must be prosecuted.
- Equal diligence should be given to investigating and prosecuting the financial machinations behind the mortgage derivative bundling and trading scams. If they agree to reduce all mortgages by the local percentage drop in value, rework terms for those facing foreclosure, put already foreclosed families back in their homes and donate the rest of their ill gotten gain to charity, we might want to consider not prosecuting.
- The 9/11 Commission Investigation and Report was a complete whitewash. How can there be independence in the investigation when the President is allowed to appoint all the members of the commission? The American people are owed the truth and an independent investigation is absolutely necessary if we are to call ourselves a nation of laws.
- A democracy cannot exist without an informed citizenry. Media purveyors must be required to present the full spectrum of news and opinion.
Politicians from both political parties will avoid these issues like the plague. The question is, should you? Or are you content to support politicians who use soaring rhetoric in describing the plight of our people and then line up in support of corporate friendly legislation that continues the race to the bottom for the poor and working class of America? Will your vote for Congress and the U.S. Senate go to a Democratic candidate who supports not a single one of the above proposals? If the answer is yes and you consider yourself a progressive or liberal, what exactly does that mean?
We can’t fix this system by voting, petitioning, marching or lobbying. We have to change the system. The first step is to call the system what it is; monstrous, criminal and undemocratic. The next step is to refuse to participate in elections and to not be bashful in telling others why. This won’t save the world now, but it’s the only hope for the future.
IMPERIALISM AND IMPERIAL BARBARISM
By JAMES PETRAS | My Catbird Seat | September 19, 2010
Imperialism, its character, means and ends has changed over time and place. Historically, western imperialism, has taken the form of tributary, mercantile, industrial, financial and in the contemporary period, a unique ‘militarist-barbaric’ form of empire building. Within each ‘period’, elements of past and future forms of imperial domination and exploitation ‘co-exist’ with the dominant mode. For example , in the ancient Greek and Roman empires, commercial and trade privileges complemented the extraction of tributary payments. Mercantile imperialism, was preceded and accompanied initially by the plunder of wealth and the extraction of tribute, sometimes referred to as “primitive accumulation”, where political and military power decimated the local population and forcibly removed and transferred wealth to the imperial capitals. As imperial commercial ascendancy was consolidated, manufacturing capital increasingly emerged as a co-participant; backed by imperial state policies manufacturing products destroyed local national manufacturers gaining control over local markets. Modern industrial driven imperialism, combined production and commerce, both complemented and supported by financial capital and its auxiliaries, insurance, transport and other sources of “invisible earnings”.
Under pressure from nationalist and socialist anti-imperialist movements and regimes, colonial structured empires gave way to new nationalist regimes. Some of which restructured their economies, diversifying their productive systems and trading partners. In some cases they imposed protective barriers to promote industrialization. Industrial-driven imperialism, at first opposed these nationalist regimes and collaborated with local satraps to depose industrial oriented nationalist leaders. Their goal was to retain or restore the “colonial division of labor” – primary production exchanged for finished goods. However, by the last third of the 20th century, industrial driven empire building, began a process of adaptation, “jumping over tariff walls”, investing in elementary forms of ‘production’ and in labor intensive consumer products. Imperial manufacturers contracted assembly plants organized around light consumer goods (textiles, shoes, electronics).
Basic changes in the political, social and economic structures of both the imperial and former colonial countries, however, led to divergent imperial paths to empire-building and as a consequence contrasting development performances in both regions.
Anglo-American financial capital gained ascendancy over industrial, investing heavily in highly speculative IT, bio-tech, real estate and financial instruments. Germany and Japanese empire builders relied on upgrading export-industries to secure overseas markets. As a result they increased market share, especially among the emerging industrializing countries of Southern Europe, Asia and Latin America. Some former colonial and semi-colonial countries also moved toward higher forms of industrial production, developing high tech industries, producing capital and intermediate as well as consumer goods and challenging western imperial hegemony in their proximity.
By the early 1990’s a basic shift in the nature of imperial power took place. This led to a profound divergence between past and present imperialist policies and among established and emerging expansionist regimes.
Past and Present Economic Imperialism
Modern industrial-driven empire building (MIE) is built around securing raw materials, exploiting cheap labor and increasing market share. This is accomplished by collaborating with pliant rulers, offering them economic aid and political recognition on terms surpassing those of their imperial competitors. This is the path followed by China. MIE eschews any attempt to gain territorial possessions, either in the form of military bases or in occupying “advisory” positions in the core institutions of the coercive apparatus. Instead, MIEs’ seek to maximize control via investments leading to direct ownership or ‘association’ with state and/or private officials in strategic economic sectors. MIEs’ utilize economic incentives in the way of economic grants and low interest concessionary loans. They offer to build large scale long term infrastructure projects-railroads, airfields, ports and highways. These projects have a double purpose of facilitating the extraction of wealth and opening markets for exports. MIEs also improve transport networks for local producers to gain political allies. In other words MIEs like China and India largely depend on market power to expand and fight off competitors. Their strategy is to create “economic dependencies” for long term economic benefits.
In contrast imperial barbarism grows out of an earlier phase of economic imperialism which combined the initial use of violence to secure economic privileges followed by economic control over lucrative resources.
Historically, economic imperialism (EI) resorted to military intervention to overthrow anti-imperialist regimes and secure collaborator political clients. Subsequently, EI frequently established military bases and training and advisory missions to repress resistance movements and to secure a local military officialdom responsive to the imperial power. The purpose was to secure economic resources and a docile labor force, in order to maximize economic returns.
In other words, in this ‘traditional’ path to economic empire building the military was subordinated to maximizing economic exploitation. Imperial power sought to preserve the post colonial state apparatus and professional cadre but to harness them to the new imperial economic order. EI sought to preserve the elite to maintain law and order as the basic foundation for restructuring the economy. The goal was to secure policies to suit the economic needs of the private corporations and banks of the imperial system. The prime tactic of the imperial institutions was to designate western educated professionals to design policies which maximized private earning. These policies included the privatization of all strategic economic sectors; the demolition of all protective measures favoring local producers (“opening markets”); the implementation of regressive taxes on local consumers, workers and enterprises while lowering or eliminating taxes and controls over imperial firms; the elimination of protective labor legislation and outlawing of independent class organizations.
In its heyday western economic imperialism led to the massive transfer of profits, interest, royalties and ill begotten wealth of the native elite from the post-colonial countries to the imperial centers. As befits post-colonial imperialism the cost of administrating these imperial dependencies was borne by the local workers, farmers and employees.
While contemporary and historic economic imperialism have many similarities, there are a few crucial differences. For example China, the leading example of a contemporary economic imperialism, has not established its “economic beach heads” via military intervention or coups, hence it does not possess ‘military bases’ nor a powerful militarist caste competing with its entrepreneurial class in shaping foreign policy. In contrast traditional Western economic imperialism contained the seeds for the rise of a powerful militarist caste capable, under certain circumstances, of affirming their supremacy in shaping the policies and priorities of empire building.
This is exactly what has transpired over the past twenty years, especially with regard to US empire building.
The Rise and Consolidation of Imperial Barbarism
The dual processes of military intervention and economic exploitation which characterized traditional Western imperialism gradually shifted toward a dominant highly militarized variant of imperialism. Economic interests, both in terms of economic costs and benefits and global market shares were sacrificed in the pursuit of military domination.
The demise of the USSR and the virtual reduction of Russia to the status of a broken state, weakened states allied to it. They were “opened” to Western economic penetration and became vulnerable to Western military attack.
President Bush (senior) perceived the demise of the USSR as an ‘historic opportunity’ to unilaterally impose a unipolar world. According to this new doctrine the US would reign supreme globally and regionally. Projections of US military power would now operate unhindered by any nuclear deterrence. However, Bush (senior) was deeply embedded in the US petroleum industry. Thus he sought to strike a balance between military supremacy and economic expansion. Hence the first Iraq war 1990-91 resulted in the military destruction of Saddam Hussein’s military forces, but without the occupation of the entire country nor the destruction of civil society, economic infrastructure and oil refineries. Bush (senior) represented an uneasy balance between two sets of powerful interests: on the one hand, petroleum corporations eager to access the state owned oil fields and on the other the increasingly powerful militarist zionist power configuration within and outside of his regime. The result was an imperial policy aimed at weakening Saddam as a threat to US clients in the Gulf but without ousting him from power. The fact that he remained in office and continued his support for the Palestinian struggle against the Jewish state’s colonial occupation profoundly irritated Israel and its zionist agents in the US.
With the election of William Clinton, the ‘balance’ between economic and military imperialism shifted dramatically in favor of the latter. Under Clinton, zealous zionists were appointed to many of the strategic foreign policy posts in the Administration. This ensured the sustained bombing of Iraq, wrecking its infrastructure. This barbaric turn was complemented by an economic boycott to destroy the country’s economy and not merely “weaken” Saddam. Equally important, the Clinton regime fully embraced and promoted the ascendancy of finance capital by appointing notorious Wall Streeters (Rubin, Summers, Greenspan et al.) to key positions, weakening the relative power of oil, gas and industrial manufacturers as the driving forces of foreign policy. Clinton set in motion the political ‘agents’ of a highly militarized imperialism, committed to destroying a country in order to dominate it.
The ascent of Bush (junior) extended and deepened the role of the militarist-zionist personnel in government. The self-induced explosions which collapsed the World Trade Towers in New York served as a pretext to precipitate the launch of imperial barbarism and spelled the eclipse of economic imperialism.
While US empire building converted to militarism, China accelerated its turn toward economic imperialism. Their foreign policy was directed toward securing raw materials via trade, direct investments and joint ventures. It gained influence via heavy investments in infrastructure, a kind of developmental imperialism, stimulating growth for itself and the “host” country. In this new historic context of global competition between an emerging market driven empire and an atavistic militarist imperial state, the former gained enormous economic profits at virtually no military or administrative cost while the latter emptied its treasury to secure ephemeral military conquests.
The conversion from economic to militarist imperialism was largely the result of the pervasive and ‘deep’ influence of policymakers of zionist persuasion. Zionist policymakers combined modern technical skills with primitive tribal loyalties. Their singular pursuit of Israel’s dominance in the Middle East led them to orchestrate a series of wars, clandestine operations and economic boycotts crippling the US economy and weakening the economic bases of empire building.
Militarist driven empire building in the present post-colonial global context led inevitably to destructive invasions of relatively stable and functioning nation-states, with strong national loyalties. Destructive wars turned the colonial occupation into prolonged conflicts with resistance movements linked to the general population. Henceforth, the logic and practice of militarist imperialism led directly to widespread and long-term barbarism-the adoption of the Israeli model of colonial terrorism targeting an entire population. This was not a coincidence. Israel’s zionist zealots in Washington “drank deeply” from the cesspool of Israeli totalitarian practices, including mass terror, house demolitions, land seizures, overseas special force assassination teams, systematic mass arrests and torture. These and other barbaric practices, condemned by human rights organizations the world over, (including those in Israel), became routine practices of US barbaric imperialism.
The Means and Goals of Imperial Barbarism
The organizing principle of imperial barbarism is the idea of total war. Total in the sense that (1) all weapons of mass destruction are applied; (2) the whole society is targeted; (3) the entire civil and military apparatus of the state is dismantled and replaced by colonial officials, paid mercenaries and unscrupulous and corrupt satraps. The entire modern professional class is targeted as expressions of the modern national-state and replaced by retrograde religious-ethnic clans and gangs, susceptible to bribes and booty-shares. All existing modern civil society organizations, are pulverized and replaced by crony-plunderers linked to the colonial regime. The entire economy is disarticulated as elementary infrastructure including water, electricity, gas, roads and sewage systems are bombed along with factories, offices, cultural sites, farms and markets.
The Israeli argument of “dual use” targets serves the militarist policymakers as a justification for destroying the bases of a modern civilization. Massive unemployment, population displacement and the return to primitive exchanges characteristic of pre-modern societies define the “social structure”. Educational and health conditions deteriorate and in some cases become non-existent. Curable diseases plague the population and infant deformities result from depleted uranium, the pre-eminent weapon of choice of imperial barbarism.
In summary the ascendancy of barbarous imperialism leads to the eclipse of economic exploitation. The empire depletes its treasury to conquer, destroy and occupy. Even the residual economy is exploited by ‘others’: traders and manufacturers from non-belligerent adjoining states. In the case of Iraq and Afghanistan that includes Iran, Turkey, China and India.
The evanescent goal of barbarous imperialism is total military control, based on the prevention of any economic and social rebirth which might lead to a revival of secular anti-imperialism rooted in a modern republic. The goal of securing a colony ruled by cronies, satraps and ethno-religious warlords – willing givers of military bases and permission to intervene – is central to the entire concept of military driven empire building. The erasure of the historical memory of a modern independent secular nation-state and the accompanying national heritage becomes of singular importance to the barbarous empire. This task is assigned to the academic prostitutes and related publicists who commute between Tel Aviv, the Pentagon, Ivy league universities and Middle East propaganda mills in Washington.
Results and Perspectives
Clearly imperial barbarism (as a social system) is the most retrograde and destructive enemy of modern civilized life. Unlike economic imperialism it does not exploit labor and resources, it destroys the means of production, kills workers, farmers and undermines modern life.
Economic imperialism is clearly more beneficial to the private corporations; but it also potentially lays the bases for its transformation. Its investments lead to the creation of a working and middle class capable of assuming control over the commanding heights of the economy via nationalist and/or socialist struggle. In contrast the discontent of the ravaged population and the pillage of economies under imperial barbarism, has led to the emergence of pre-modern ethno-religious mass movements, with retrograde practices, (mass terror, sectarian violence etc.). Theirs is an ideology fit for a theocratic state.
Economic imperialism with its ‘colonial division of labor’, extracting raw materials and exporting finished goods, inevitably will lead to new nationalist and perhaps later socialist movements. As EI undermines local manufacturers and displaces, via cheap industrial exports, thousands of factory workers, movements will emerge. China may seek to avoid this via ‘plant transplants’. In contrast barbaric imperialism is not sustainable because it leads to prolonged wars which drain the imperial treasury and injury and death of thousands of American soldiers every year. Unending and unwinable colonial wars are unacceptable to the domestic population.
The ‘goals’ of military conquest and satrap rule are illusory. A stable, ‘rooted’ political class capable of ruling by overt or tacit consent is incompatible with colonial overseers. The ‘foreign’ military goals imposed on imperial policymakers via the influential presence of zionists in key offices have struck a mighty blow against the profit seeking opportunities of American multi-nationals via sanctions policies. Pulled downward and outward by high military spending and powerful agents of a foreign power, the resort to barbarism has a powerful effect in prejudicing the US economy.
Countries looking for foreign investment are far more likely to pursue joint ventures with economic driven capital exporters rather than risk bringing in the US with all its military, clandestine special forces and other violent baggage.
Today the overall picture is grim for the future of militarist imperialism. In Latin America, Africa and especially Asia, China has displaced the US as the principal trading partner in Brazil, South Africa and Southeast Asia. In contrast the US wallows in unwinable ideological wars in marginal countries like Somalia, Yemen and Afghanistan. The US organizes a coup in tiny Honduras, while China signs on to billion dollar joint ventures in oil and iron projects in Brazil and Venezuela and an Argentine grain production. The US specializes in propping up broken states like Mexico and Columbia, while China invests heavily in extractive industries in Angola, Nigeria, South Africa and Iran. The symbiotic relationship with Israel leads the US down the blind ally of totalitarian barbarism and endless colonial wars. In contrast China deepens its links with the dynamic economies of South Korea, Japan, Vietnam, Brazil and the oil riches of Russia and the raw materials of Africa.
James Petras is a Bartle Professor (Emeritus) of Sociology at Binghamton University, New York. He is the author of 64 books published in 29 languages, and over 560 articles in professional journals, including the American Sociological Review, British Journal of Sociology, Social Research, Journal of Contemporary Asia, and Journal of Peasant Studies. He has published over 2000 articles. His latest book is War Crimes in Gaza and the Zionist Fifth Column in America (Atlanta:Clarity Pres 2010)
Turkey to ‘triple’ trade volume with Iran
Press TV – September 16, 2010
Turkish Prime Minister Recep Tayyip Erdogan says the country plans to triple its trade volume with Iran within five years, stressing the importance of ties with Iran.
“Our bilateral trade ties have reached $10 billion … when we complete our preferential trade agreement we can reach a bilateral trade volume of $30 billion in five years,” Reuters quoted Erdogan as saying on Thursday.
“Why can’t we establish a mechanism of unrestricted trade with Iran similar to the one we have with Europe? I personally don’t see any reason why we should not be able to accomplish this,” he said in the Iran-Turkey Business Forum, Anatolia News Agency reported.
“Just as we are Iran’s gate into Europe, Iran is our most important gate into Asia,” Erdogan said, adding that economic cooperation between the two countries could be further expanded, IRNA reported.
The Turkish prime minister said the “geographic proximity” offers the two countries unique opportunities to improve their “commercial and economic ties.”
Earlier Thursday, Iranian First Vice President Mohammad-Reza Rahimi, who also attended the forum, stressed the importance of expanding ties between the two countries’ private sectors.
“We intend to promote economic cooperation with Turkey, Syria, Iraq and other countries in the region,” he said.
Saudi splurges on weapons … for what?
By Teymoor Nabili | Al-Jazeera | September 14th, 2010
Saudi Arabia is about to buy another $60bn worth of military hardware from the US, and even The Guardian is dutiful in parroting, without question, the accepted western narrative :
The sale, under negotiation since 2007, is aimed mainly at bolstering Saudi defenses against Iran, which the US suspects will achieve a nuclear weapons capability within the next few years. The transfer of advanced technology, mainly planes, is to provide Saudi Arabia with air superiority over Iran.
Ignoring the fact that miltary aircraft (which form the bulk of the deal as we know it) are pretty much useless against a nuclear missile, especially one that does not exist, $60bn buys a mind boggling amount of firepower, so that must mean that Saudi Arabia’s military capacity right now is woefully insufficient compared to Iran’s, right?
Er, no.
Saudi military spending already dwarfs Iran’s by a factor of six. Indeed, by head of population, Saudi is the world’s biggest purchaser of military hardware.
Global Firepower has a direct comparison of the two nations’ military strengths, and it turns out that Iran’s military is only superior in terms of manpower numbers.
So if Iran’s intention is to send waves of soldiers marching across the desert, then maybe Saudi has something to fear.
But when it comes to “air-based weapons”, Global Firepower puts the relative numbers (before this deal) at Saudi 453, Iran 84. (Bear in mind also that Iran’s aircraft are widely described as museum pieces by military analysts, because the sanctions mean that Iran has no access to spare parts or modern technology).
So why does Saudi need 84 new F-15 fighter jets, 70 upgraded F-15s, 70 Apaches, 72 Black Hawks and 36 “Little Birds”, just to fight a land army?
And when you consider the reality that Saudi has the full support of all the US military bases in the region, the suggestion that Riyadh has something to fear from Tehran is laughable.
So if the numbers don’t add up, what about the politics? Well, the suggestion that Iran is keen to invade Saudi Arabia makes even less sense than the suggestion that Tehran intends to attack Israel, and the Arab world knows it.
As King Abdullah of Jordan said recently, the Arab world is much more concerned about the Israeli-Palestinian conflict than any Iran issue.
And, as a major survey of the Arab public opinion found recently, the Arab majority not only agrees with King Abdullah but is in fact very sympathetic of Iran’s right to nuclear technology, with a majority saying a nuclear-armed Iran may in fact be a good thing for the region.
Amjad Atalla of New America Foundation has an excellent summary of this whole debate here.
And the American Foreign Policy Project covers many of the myths and nuances of the military and security debates concerning Iran here.
So, if the mainstream media have missed the point, then what is really going on?
Well, with America suffering it’s worst recession in 60 years, the biggest arms contract ever signed would certainly be a welcome boost to earnings in the military industrial sector.
And as I blogged a year ago, Saudi Arabia has always been keen to buy as much favor in Washington as it can, because it’s concerned that any hint of warming relations between DC and Tehran would almost by definition be a threat to Riyadh’s regional hegemony.
States test whether public pension benefits given can be taken away
By Stephen C. Fehr | Stateline | August 10, 2010
State legislators are beginning to challenge one of the ironclad tenets of public pension policy: that states cannot legally reduce pension benefits for current and future retirees. Lawmakers in Colorado, Minnesota and South Dakota voted earlier this year to limit cost-of-living increases they previously had promised to thousands of current and future retirees, who courts historically have protected from benefit reductions. Not surprisingly, retirees in each state have filed lawsuits asking judges to restore their annual benefit increases to what they were previously.
Lawmakers, state retirement systems, public employee unions and others in the pension policy arena are closely watching the outcome of the legal challenges. If the courts do not reinstate the retirees’ benefits, a flood of states could follow the lead of Colorado, Minnesota and South Dakota. The reverse also would be true. “If the plaintiffs are successful, it may discourage legislators in other states from attempting to diminish benefits,” says Keith Brainard, research director at the National Association of State Retirement Administrators.
California Governor Arnold Schwarzenegger and New Jersey Governor Chris Christie, among other officials, favor scaling back pension benefits already promised to current employees and retirees. And a lively debate on the issue is underway in Illinois, where lawmakers reduced the cost-of-living adjustment for newly hired workers. Interest is keen everywhere: Lawmakers from around the country packed a session on modifying public pension benefits at the recent annual meeting of the National Conference of State Legislatures in Louisville.
Up to now, states trying to trim the rising cost of worker retirement benefits have taken the legally safer — and politically easier — approach of targeting benefit cuts at newly hired employees. Steps states have taken this year include increasing the amount employees contribute toward their own pensions, raising the retirement age and adjusting the formula upon which benefits are based.
But many state lawmakers and pension administrators have concluded that cutting benefits for new employees alone will not save enough money in the short term to keep pension plans solvent over time. So they are searching for ways to zero in on the benefits of current retirees and employees.
Colorado lawmakers, facing projections showing the state’s pension system would run out of money within 30 years, approved a package of benefit reductions that lowered the annual 3.5 percent cost-of-living increase for retirees in 2010 to zero. In future years, the increase will be set at 2 percent, barring another sharp decline in investments. If the changes stand, the average retiree would lose more than $165,000 in benefits over the next 20 years, the retirees say in court papers.
South Dakota reduced the cost-of-living increase from 3.1 percent to 2.1 percent this year; future-year amounts will be tied to how well the system’s investments perform in the market. Minnesota eliminated a 2.5 percent cost-of-living increase and set it at between 1 and 2 percent for its different employee pension funds.
Case law and state constitutions
History is on the employees’ side. State statutes, constitutions and case law consistently define a public pension as a contract between the state and its employees that cannot be impaired. For example, Alaska’s state constitution makes it clear that “membership in employee retirement systems of the state or its political subdivisions shall constitute a contractual relationship. Accrued benefits of these systems may not be diminished or impaired.” Eight other states protect workers in their constitutions. They are Arizona, Hawaii, Illinois, Louisiana, Michigan, New Mexico, New York and Texas.
In states without constitutional guarantees — Colorado, Minnesota and South Dakota fall into this category — statutes and court cases consider retirement benefits an unbreakable contract between the state and workers. That same protection is in the contract clause of the U.S. Constitution, which says: “No state shall … pass any … law impairing the obligations of contracts.”
Courts have determined that cost-of-living increases, which keep pension income on pace with inflation, are part of a worker’s benefits that cannot be diminished. (Generally, increasing benefits faces no legal hurdles.) The principle of safeguarding the purchasing power of pension income through a cost-of-living adjustment is well established. Social Security, the federal government’s retirement program, instituted automatic annual cost-of-living increases in 1975. The amount of the increase has averaged about 3.3 percent a year, although for the first time in 2010, there was no increase because the consumer price index did not rise.
The Colorado, Minnesota and South Dakota lawmakers are hoping that the courts will agree that the current financial turmoil facing states imperils public pension systems as never before and calls for a new approach. If legislatures are not permitted to cut retirement costs now, the argument goes, the ability of the public pension systems to pay future benefits will be jeopardized.
“If we don’t reduce these automatic pension increases, the entire fund is poised to go bankrupt,” Republican Josh Penry, minority leader of the Colorado state Senate, told the Denver Post. “Think United [Airlines]. Think GM. That didn’t work out well for the company or the retirees.”
Attorneys for the states say in court filings that limiting cost-of-living increases was justified, and actuarily necessary. “There can be no dispute that preserving the solvency of PERA [The Colorado Public Employees’ Retirement Association] is a legitimate governmental interest,” Colorado officials argue. Minnesota’s pension legislation “was reasonable and necessary to maintain and restore the financial stability of Minnesota’s public pension plans,” say the state’s pleadings.
Managing market swings
Although Colorado lawmakers and state pension officials blame much of the retirement fund’s current financial troubles on investment losses suffered during the 2007-09 recession — the median decline for funds nationally was 25 percent in 2008 — the truth is that Colorado lawmakers failed to make their annually required contributions to state pension funds in good times and bad. They also boosted retiree benefits without considering future costs.
Colorado’s pension fund was fully funded in 2000. Eight years later, before the recession hit, Colorado fell to 70-percent funded and was heading down further, according to a report released in February by the Pew Center on the States, which publishes Stateline. Most pension specialists recommend a funding level of 80 percent or higher.
Minnesota lawmakers also slid on their pension fund payments. Their pension system’s funding level dropped from 101 percent in 1999 to 81 percent in 2008.
“The Legislature was cutting off funds and starving the pension system,” says Stephen Pincus, a Pittsburgh attorney representing the retirees in all three states. “They shouldn’t now be able to cry there’s no money in the pension system. They had a large hand in creating the crisis.”
South Dakota offers a twist. The state Legislature has been one of the best in the nation at financing its public employee pension system over the years; it was 97-percent funded in 2000 and 2008, according to the Pew report. Lawmakers even increased benefits two years ago. The state retirement system investments did lose more than 20 percent in value in 2008, but gained as much in fiscal 2010.
Pincus says that makes South Dakota’s targeting of current employees and retirees suspect. “There’s no crisis in South Dakota,” he says. “They had one bad year. So they’re going to shore up their pension fund by cutting benefits to those who already receive them?”
Rob Wylie, executive director of the South Dakota retirement system, counters that when the funding level fell to 76 percent after the 2008 losses, it triggered for the first time a state law requiring the pension system to take immediate steps to return the funding level to 100 percent. Savings gained from reducing benefits for newly hired employees would have taken too many years for the system to catch up, Wylie says. So after consulting with retirees the pension board chose to ask lawmakers to trim the cost-of-living increase.
“We could have reversed the increase in the funding formula we approved in 2008,” says Wylie. “But the retiree groups said can you find another way to slow the growth in costs without decreasing the formula? So we did.”
Asked why states are taking the risky strategy of aiming at current retirees, Robert Klausner, a Florida attorney who specializes in public pension law, says many state officials believe they have less to lose in the courtroom by challenging pension protections than taking no action at all. “The belief is that if the employer [the state] prevails, it will have been worth the political risk,” Klausner says. “And if they lose, they will be no worse off than before.” Klausner adds that legislatures are taking the politically-difficult step and letting the courts be the “bad guy” if they overturn the law. Retired judges are among the plaintiffs in Colorado and South Dakota.
The first case to be heard is the one in Minnesota, where a September 15 hearing is scheduled on a motion for summary judgment that will be filed by the state. Colorado’s Supreme Court already has sided once with retirees, saying in a 1961 ruling, “Whether it be in the field of sports or in the halls of the legislature it is not consonant with American traditions of fairness and justice to change the ground rules in the middle of the game.”
Meredith Williams, executive director of the Colorado retirement system, says he is confident the state can prove that the system’s current and future financial stress will compel the court to allow the cost-of-living rollback. “PERA has been upfront about the challenges we face,” he says.
See related stories:
Pension overhaul treats lawmakers, other state workers differently (7/29/2010)
In graying West Virginia, a mountain of retiree health bills (7/13/2010)
In some states, pension pain yields budget gains (5/20/2010)
In New Hampshire, a new way on retiree health costs (5/12/2010)
Vermont’s pension experiment (3/25/2010)
States tackling public employee retirement benefits in 2010 (2/19/2010)
—Contact Stephen C. Fehr at sfehr@pewtrusts.org.
Stateline Staff Writer John Gramlich contributed reporting to this piece. Photo illustration by Danny Dougherty, Stateline.
Chavez to open popular tourist scheme using fugitive banker’s yachts
By Patrick J. O’Donoghue | VHeadline | September 13, 2010
Last weekend, President Chavez announced that he would be setting up a tourist scheme from mainland Vargas State to the Orchila island using yachts belonging to a fugitive Banco Federal banker, Nelson Mezerhane.
The yachts, he suggested, will also be used to transport tourists from popular areas and barrios to the Los Roques archipelago.
The President said it was only right that people from popular areas have the chance to visit the islands and he has requested Executive Vice President Elias Jaua to speed up the purchase of a ferry that Venezuela was purchasing from Portugal.
Chavez admitted delays in acquiring the ferry.
People should be able to relax healthily, Chavez mused, stressing that it was difficult for poor people to fly by plane to Margarita island and for that reason he wanted to create a popular tourism company.
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Neocons confess: “We did 9/11-anthrax”
By Kevin Barrett | Press TV | September 6, 2014
As the 13th anniversary of the crimes of September, 2001 approaches, the neoconservatives are shrieking from the rooftops – and effectively confessing that they were the real perpetrators of the 9/11-Anthrax false flag operation. (The neocons, you may recall, openly called for a “new Pearl Harbor” in September, 2000 – and got one exactly one year later.)
Every year at this time, the neocons orchestrate and hype a series of public relations stunts designed to magnify fears of “radical Islam” and reinforce their crumbling 9/11-Anthrax cover story. But this year’s propaganda campaign is so extreme that it represents a tacit confession: The neocons know that the truth about the 9/11-Anthrax operation is slowly closing in on them; so they are over-reacting by desperately trying to stoke the dying embers of the so-called War on Terror, in order to maintain the myth that Muslims (rather than neoconservative Zionists) attacked America in the autumn of 2001.
When a hysterical person exhibits guilty demeanor by trying too hard to blame a crime on someone else, that person is almost certainly the real perpetrator. As the neocons try much too hard to blame Islam for 9/11 and “terrorism” in general, their hysteria inadvertently reveals their own culpability. Like Shakespeare’s Lady MacBeth, the neoconservative movement has blood on its hands and “doth protest too much.” … continue
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