Report Sees Bonanza for U.S., Iran if Sanctions Scrapped
By Abid Aslam | November 24, 2008
WASHINGTON, (IPS) – Think of it as a stimulus package without deficit spending: Were the United States to normalise trade relations with Iran and were the Islamic Republic to liberalise its economy, Washington could cut its fuel costs and add tens of billions of dollars to its economy, say U.S. exporters.
Such moves could lower world oil prices by as much as 10 percent, the National Foreign Trade Council (NFTC) says in a report aimed at the incoming administration of President-elect Barack Obama.
Obama, who is to take office in January, has signaled willingness to explore new approaches to his country’s long standoff with Iran. During his election campaign, opponents lambasted Obama for favouring appeasement at a time when Washington seeks to tighten the screws on Tehran for its alleged support of terrorism and nuclear ambitions.
Few, if any, expect a radical shift in U.S. policy under Obama but presidential transitions always are seen as opportunities for some degree of change.
In this case, says NFTC president Bill Reinsch, the lobby seeks to persuade the incoming administration that “broad unilateral sanctions intended to change the behaviour of problematic regimes often miss that target, but do succeed in generating a number of significant economic consequences.”
According to the NFTC, if the United States were to scrap its unilateral sanctions and, in turn, Iran were to lift prohibitions against foreign investment, particularly in its oil sector, the Middle Eastern nation could boost its crude oil production by about 50 percent and lower world prices by about 10 percent. This would cut the cost of U.S. oil imports by 38 billion — 76 billion dollars a year.
The pro-trade group further estimates that economic liberalisation in Iran would boost that country’s overall trade by up to 61 billion dollars, adding 32 percent to its gross domestic product (GDP). In turn, U.S. non-oil trade and trade in services with Iran also would shoot up, by about 46 billion dollars or 0.4 percent of U.S. GDP.
“Opening Iran’s marketplace to foreign investment could also be a boon to competitive U.S. multinational firms operating in a variety of manufacturing and service sectors,” says the NFTC study.
The Bush administration, which recently has worked through the United Nations to force Iran to stop enriching uranium, last month imposed sweeping new unilateral sanctions designed to cut off key Iranian military and banking institutions from the U.S. financial system.
Israel and the United States say Iran is enriching uranium in order to build nuclear weapons. Tehran has repeatedly said its purposes are peaceful. Washington also has placed Iran on its list of states sponsoring terrorism, chiefly militant factions in Iraq, Afghanistan, Lebanon, and the Gaza Strip.
Under U.S. law domestic and foreign firms are barred from investing more than 20 million dollars in Iran. For its part, Tehran has taken over the operation of its strategic oil and gas sector, which accounts for roughly 40 percent of the national economy. Governments that have voiced support for the U.S. stance have not curbed their firms’ involvement in Iran. Washington has not prosecuted non-U.S. companies for allegedly breaking the law. Federal lawmakers have been weighing measures to force authorities here to pursue foreign sanctions violators.
The NFTC has long opposed unilateral sanctions and has assailed as futile the Iran measures already in place and those under consideration by legislators.
“As with all economic embargoes, the efficacy of the sanctions in forcing political change is controversial,” write report authors Dean DeRosa and Gary Hufbauer, both economists. “In economic terms, however, both sides lose from the geopolitical standoff.”
Hufbauer has spent decades analysing the use of sanctions. In a report earlier this year, he and colleagues at the Peterson Institute for International Economics think tank examined more than 200 cases over the past one hundred years, including those against Iran. They found that the economic restrictions had contributed to achieving foreign policy goals only about one-third of the time. Most of these instances involved only partial success.
Critically, the study released in July found that sanctions tended to work when aimed against friendly and democratic countries, but not when they were brought to bear on adversaries and autocrats. In recent years, the record for multilateral sanctions has been better than that for unilateral U.S. sanctions, it added.
Not that the alternatives have been attractive. Said Hufbauer and colleagues: “Our success rate of one-third overall indicates that in about two-thirds of the cases the foreign policy goal was not achieved or, if it was achieved, other means were decisive — usually military force.”
http://www.ipsnews.net/news.asp?idnews=44832
Auditor: TARP rescue failing to meet key goals
AFP | February 1, 2010
Washington – The 700-billion-dollar US government effort to rescue the financial system has failed to meet key goals such as sparking lending and curbing risky activities by banks, a special auditor said Sunday.
The special inspector general for the Troubled Asset Relief Program said in a report to Congress that it is too soon to measure the overall success of the program passed at the height of the financial crisis in October 2008.
The quarterly report said that because of TARP, “there are clear signs that aspects of the financial system are far more stable than they were at the height of the crisis in the fall of 2008.”
But the report also stated that “many of TARP’s stated goals… have simply not been met” and that the potential for a new crisis looms without major reforms.
“Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” the report said.
The program has fallen short in key areas such as boosting credit, curbing home foreclosures and deterring the risky behavior of financial firms that are considered “too big to fail,” said the report from inspector general Neil Barofsky.
Despite the explicit goal to increase financing to US businesses and consumers, “lending continues to decrease,” said the report from inspector general Neil Barofsky.
It also noted that TARP has failed to live up to the “explicit purpose” stated by Congress of “preserving homeownership and promoting jobs.
“The TARP foreclosure prevention program has only permanently modified a small fraction of eligible mortgages, and unemployment is the highest it has been in a generation,” it said.
“Whether these goals can effectively be met through existing TARP programs is very much an open question at this time.”
The report said that by coming to the aid of the troubled housing market, the US government effectively “has become the mortgage market, with the taxpayer shouldering the risk that had once been borne by the private investor.”
More broadly, the report said the underlying problems that led to the financial crisis remain, including the continued existence of financial firms that are “too big to fail” and engaging in practices that can destabilize the system.
“The substantial costs of TARP — in money, moral hazard effects on the market, and government credibility — will have been for naught if we do nothing to correct the fundamental problems in our financial system and end up in a similar or even greater crisis in two, or five, or 10 years’ time,” the document said.
“It is hard to see how any of the fundamental problems in the system have been addressed to date.” – AFP
‘Iran, Iraq have signed 100 economic agreements’
Press TV – January 31, 2010
Iran and Iraq have signed one hundred memorandums of understanding since 2003 to boost their economic cooperation, an Iranian official says.
The plenipotentiary envoy of the Trade Promotion Organization of Iran (TPOI) to Iraq noted that the high number of agreements reflects the two countries’ determination to enhance the level of their economic ties.
“Iran has exported $15 billion of goods to Iraq since the fall of Saddam Hussein,” Mehr news agency quoted Kheirollah Khadem as saying.
Khadem noted that Iran has formed a committee under the supervision of the Iranian President’s Office to review and implement initiatives to enhance the level of economic ties between the two neighboring countries.
He added that Iran also plans to further activate the Arvandroud Special Economic Zone near the border with Iraq to facilitate trade between the two countries.
Russia finds ‘strategic oil deposit’ in East Siberia
January 29, 2010
MOSCOW, RUSSIA: Russian oil producer Rosneft uncovered a giant oil field in East Siberia with more than 1 billion barrels of oil, the Russian natural resources minister said. Russian Natural Resources Minister Yuri Trutnev said Rosneft made an “important” oil discovery in the Irkutsk Oblast near Mongolia, Russia’s state-run news agency RIA Novosti reports.
“We can report today that we have opened the Sevastyanovo oil field, with reserves of over 1.1 billion barrels,” he said. “This is a strategic deposit.” Trutnev said the amount of natural resources recovered from Russia in 2009 exceeded national expectations.
Russia extracted roughly 3.6 billion barrels of oil in 2009. Discoveries for 2009 eclipsed 4.5 billion barrels.The Sevastyanovo oil field is located in Irkutsk Oblast near the route for the East Siberia-Pacific Ocean oil pipeline that links to Asian markets.
Trutnev made the announcement during a meeting with Russian Prime Minister Vladimir Putin.
(EUNewsNet.com and OfficialWire) – Source
Roubini Calls U.S. Growth ‘Dismal and Poor,’ Predicts Slowing
By Simon Kennedy and Erik Schatzker
Jan. 30 (Bloomberg) — New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth “very dismal and poor” because it relied on temporary factors.
Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.
“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “I think we are in trouble.”
Roubini said while the world’s largest economy won’t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges.
“It’s going to feel like a recession even if technically we’re not going to be in a recession,” he said.
To contact the reporter on this story: Simon Kennedy in Davos at skennedy4@bloomberg.net
Secret Banking Cabal Emerges From AIG Shadows
By David Reilly
Jan. 29 (Bloomberg) — The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.
Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.
The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.
That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc.’s own mid-September bankruptcy filing.
Saving the System
Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. He maintained during Wednesday’s hearing that the New York bank had to buy the insurance contracts, known as credit default swaps, to keep AIG from failing, which would have threatened the financial system.
The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited.
By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.
This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.
Geithner’s Bosses
The New York Fed is one of 12 Federal Reserve Banks that operate under the supervision of the Federal Reserve’s board of governors, chaired by Ben Bernanke. Member-bank presidents are appointed by nine-member boards, who themselves are appointed largely by other bankers.
As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.”
And yet the New York Fed played an integral role in the government’s bailout of banks, often receiving surprisingly free rein to act as it saw fit.
Consider AIG. Let’s take Geithner at his word that a failure to resolve the insurer’s default swaps would have led to financial Armageddon. Given the stakes, you might think Geithner would have coordinated actions with then-Treasury Secretary Henry Paulson. Yet Paulson testified that he wasn’t in the loop.
“I had no involvement at all, in the payment to the counterparties, no involvement whatsoever,” Paulson said.
Bernanke’s Denials
Fed Chairman Bernanke also wasn’t involved. In a written response to questions from Representative Darrell Issa, Bernanke said he “was not directly involved in the negotiations” with AIG’s counterparty banks.
You have to wonder then who really was in charge of our nation’s financial future if AIG posed as grave a threat as Geithner claimed.
Questions about the New York Fed’s accountability grew after Geithner on Nov. 24, 2008, was named by then-President- elect Barack Obama to be Treasury Secretary. Geither said he recused himself from the bank’s day-to-day activities, even though he never actually signed a formal letter of recusal.
That left issues related to disclosures about the deal in the hands of the bank’s lawyers and staff, rather than a top executive. Those staffers didn’t want details of the swaps purchase to become public.
New York Fed staff and outside lawyers from Davis Polk & Wardell edited AIG communications to investors and intervened with the Securities and Exchange Commission to shield details about the buyout transactions, according to a report by Issa.
That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself.
Later, when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: “I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.”
Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark.
This belies the culture of secrecy obviously pervasive within the New York Fed. Committee Chairman Edolphus Towns noted during the hearing that the bank initially refused to disclose even the names of other banks that benefited from its actions, arguing this information would somehow harm AIG.
‘Penchant for Secrecy’
“In fact, when the information was finally released, under pressure from Congress, nothing happened,” Towns said. “It had absolutely no effect on AIG’s business or financial condition. But it did have an effect on the credibility of the Federal Reserve, and it called into question the Fed’s penchant for secrecy.”
Now, I’m not saying Congress should be meddling in interest-rate decisions, or micro-managing bank regulation. Nor do I think we should all don tin-foil hats and start ranting about the Trilateral Commission.
Yet when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.
(David Reilly is a Bloomberg News columnist. The opinions expressed are his own.)
Zardari books fast train to Turkey
By Syed Fazl-e-Haider | Asia Times | January 29, 2010
KARACHI, Pakistan – Turkey and Pakistan agreed this week to undertake a US$20 billion project to upgrade a railway link from Islamabad to Istanbul, basically to transport cargo more efficiently between the two countries and ultimately on to Europe.
During a meeting in Istanbul, visiting President Asif Ali Zardari of Pakistan and his Turkish counterpart, Abdullah Gul, discussed the upgrade of the rail route. Three Turkish companies have shown interest in the five-year project that envisages cutting travel time between Islamabad and Istanbul, via Tehran, from the current 11 days or more to three to four days.
The move follows an agreement in November to increase the level of bilateral trade between the two countries to $2 billion from the existing $741 million in a couple of years. Analysts believe that the 6,566 kilometer rail project from Islamabad to Istanbul, with 1,990km of track in Pakistan, 2,570km in Iran and 2,006km in Turkey, will open new avenues of bilateral cooperation as well as strengthening trade and economic ties.
Zardari was on a four-day visit of Turkey, ending on Wednesday, to attend a trilateral summit with Afghan President Hamid Karzai and the Istanbul summit on Afghanistan, involving Afghanistan and its six immediate neighbors. He also held discussions on bilateral matters with Turkish leaders. Zardari floated the Islamabad-Istanbul cargo train idea last year when an experimental train was run on the route on his initiative on August 14.
“The cargo rail link could provide a speedier option to expand economic ties between the two countries as well as with Iran,” Associated Press of Pakistan reported Zardari as saying. “This rail link will strengthen Pakistan’s economy as well as people-to-people ties not only with brotherly Muslim countries but also onwards to Europe.”
The existing track between the two countries requires considerable improvement if it is to be used for timely cargo services. The August trial trip of a container train service from Islamabad reached Istanbul in two weeks, traveling from Islamabad through the southwestern Pakistani province of Balochistan then on to Iran. Islamabad is also looking to start a passenger train service on the route.
The two sides have worked to negotiate a preferential trading agreement, aimed to increase trade and investments, especially in transport, telecommunications, manufacturing, tourism and other industries. While Pakistan exports rice, leather, textiles and fabric sports goods, and medical equipment, Turkey exports wheat, diesel, lentils, chemicals, transport vehicles, machinery and energy products to Pakistan.
Many Turkish private firms have invested significantly in industrial and construction projects, developing highways, pipelines and canals in Pakistan.
During a two-day visit to Pakistan in October, Turkish Prime Minister Recep Tayyip Erdogan vowed to upgrade his country’s strategic partnership with Pakistan and strengthen economic cooperation. The two nations signed a joint declaration to strengthen relations in trade, investment, agriculture, industry, culture, education and defense and agreed to increase their trade from $741 million a year to $2 billion in a couple of years.
Erdogan, who was accompanied by an 80-member delegation of business executives, termed the present trade volume insignificant and committed the Turkish Cooperation and Development Agency to boost bilateral trade.
In November, the countries agreed to move forward the timeline for signing a preferential trade agreement and abolish the requirement for visas for businessmen traveling between the two countries.
Zardari reportedly impressed on the business community of Turkey not only the importance of enhancing trade relations with Pakistan but also the lucrative investment opportunities in his country.
Islamabad needs foreign investment to bolster its strife-torn economy. Foreign direct investment (FDI) into the country dropped 57%, to US$1.01 billion, in the six months to June compared with a year earlier, according to the central bank. That continued a decline in FDI to $3.72 billion in the fiscal year that ended in June from $5.4 billion 12 months earlier.
Turkey and Pakistan are founding members of the Economic Cooperation Organization (ECO), the only forum with representation of all the countries bordering Afghanistan. Analysts stress the need to make efforts to establish inter-regional oil and gas pipelines as well as power grids from energy-rich to energy-deficient states. Free trade is central to regional economic integration as it can unlock latent energies and transform socio-economic landscapes.
Pakistan has served as a route for international trade for ECO countries. During the Cold War period and after the collapse of the Soviet Union in the early 1990s, this route was disrupted by political instability and the security crises in Afghanistan. The prevailing situation in Afghanistan hinders any revival of economic, trade and cultural relations between the newly independent states in Central Asia and other Asian countries.
The ECO can only become a coherent organization if it creates inter-dependencies and synergies, especially in areas of energy, transportation and trade. Completion of the Gwadar port in Balochistan province in Pakistan will help to revive transit facilities and trade links among the member countries and it offers tremendous prospects for regional trade, as it lies outside traditional areas of conflict. Pakistan has repeatedly offered ECO member countries port and transit facilities at Gwadar to establish trade links with the world that would benefit the entire region. (The members of the ECO are Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan.)
Syed Fazl-e-Haider (www.syedfazlehaider.com) is a development analyst in Pakistan. He is the author of many books, including The Economic Development of Balochistan (2004). He can be contacted at sfazlehaider05@yahoo.com
(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
Stealing Success Tel Aviv Style
By Philip Giraldi, January 28, 2010
A curious op-ed “The Tel Aviv Cluster” by the reliably neoconnish David Brooks appeared in the New York Times on January 12th. Brooks enthused over the prowess of Israel’s high tech businesses, attributing their success in large part to Jewish exceptionalism and genius, which must have provided the ultimate feel good moment for Brooks, who is himself Jewish. That Israel has a booming technology sector is undeniably true, but Brooks failed to mention other contributing factors such as the $101 billion dollars in US economic and military aid over the course of more than four decades, which does not include the additional $30 billion recently approved by President Barack Obama. American assistance has financed and fueled Israel’s business growth while the open access and even “preferential treatment” afforded to Israeli exporters through the Israel Free Trade Implementation Act of 1985 has provided Israelis with the enormous US market to sell their products and services. By act of Congress, Israeli businesses can even bid on most American Federal and State government contracts just as if they were US companies.
Brooks was characteristically undisturbed by the fact that American taxpayer subsidized development of Israeli enterprises combined with the free access to the US economy and government contracts eliminates jobs and damages competing companies on this side of the Atlantic. And there is another aspect of Israel’s growing high tech sector that he understandably chose to ignore because it is extremely sleazy. That is the significant advantage that Israel has gained by systematically stealing American technology with both military and civilian applications. The US developed technology is then reverse engineered and used by the Israelis to support their own exports with considerably reduced research and development costs, giving them a huge advantage against American companies. Sometimes, when the technology is military in nature and winds up in the hands of a US adversary, the consequences can be serious. Israel has sold advanced weapons systems to China that are believed to incorporate technology developed by American companies, including the Python-3 air-to-air missile and the Delilah cruise missile. There is evidence that Israel has also stolen Patriot missile avionics to incorporate into its own Arrow system and that it used US technology obtained in its Lavi fighter development program, which was funded by the US taxpayer to the tune of $1.5 billion, to help the Chinese develop their own J-10 fighter.
The reality of Israeli spying is indisputable. Israel always features prominently in the annual FBI report called “Foreign Economic Collection and Industrial Espionage.” The 2005 report states, “Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel’s sizable armaments industry.” It adds that Israel recruits spies, uses electronic methods, and carries out computer intrusion to gain the information. The 2005 report concluded that the thefts eroded US military advantage, enabling foreign powers to obtain expensive technologies that had taken years to develop.
A 1996 Defense Investigative Service report noted that Israel has great success stealing technology by exploiting the numerous co-production projects that it has with the Pentagon. “Placing Israeli nationals in key industries …is a technique utilized with great success.” A General Accounting Office (GAO) examination of espionage directed against American defense and security industries described how Israeli citizens residing in the US had stolen sensitive technology to manufacture artillery gun tubes, obtained classified plans for a reconnaissance system, and passed sensitive aerospace designs to unauthorized users. An Israeli company was caught monitoring a Department of Defense telecommunications system to obtain classified information, while other Israeli entities targeted avionics, missile telemetry, aircraft communications, software systems, and advanced materials and coatings used in missile re-entry. The GAO concluded that Israel “conducts the most aggressive espionage operation against the United States of any US ally.” In June 2006, a Pentagon administrative judge overruled an appeal by an Israeli who had been denied a security clearance, stating, “The Israeli government is actively engaged in military and industrial espionage in the United States. An Israeli citizen working in the US who has access to proprietary information is likely to be a target of such espionage.” More recently, FBI counter intelligence officer John Cole has reported how many cases of Israeli espionage are dropped under orders from the Justice Department. He provides a “conservative estimate” of 125 worthwhile investigations into Israeli espionage involving both American citizens and Israelis that were stopped due to political pressure from above.
Two recent stories that have been reported in the Israeli media but are strangely absent from the news on this side of the Atlantic demonstrate exactly what is going on and what is at stake. The first story confirms that Israeli efforts to obtain US technology are ongoing. Stewart David Nozette, a US government scientist who was arrested on October 19, 2009 in an FBI sting operation after offering to spy for Israel has been waiting in jail to go to trial on espionage charges. New documents in the case were presented in the Federal court in Washington last week. The documents confirm that Nozette was a paid consultant for Israeli Aerospace Industries (IAI) and it is believed that he passed to them classified material in return for an estimated $225,000 in consulting fees. Examination of his computer by the FBI revealed that he was planning a “penetration of NASA” the US space agency and that he was also trying to crack into other scientists’ computers to obtain additional classified material. Other documents demonstrate that he was cooperating with two Israeli scientists who were administrators with IAI, Yossi Weiss and Yossi Fishman. Nozette made several trips to Israel without reporting them, which he was required to do because of his high security clearance. The FBI reportedly also has incriminating letters and other documents that were obtained from the computer.
The second story relates to the pending sale of twenty-five F-35 fighter planes to Israel. The F-35 is one of the most advanced fighter planes in the world. The $130 million planes would be purchased with US military assistance money, which means they would effectively be a gift from the US taxpayer. But Israel is balking at the sale reportedly because it wants to install some of its own local content in the aircraft. The Pentagon has already made some concessions but is disinclined to grant approval for all the changes because to do so would require giving the Israelis full access to the plane’s advanced avionics and computer systems. Israel also wants to independently maintain the aircraft, which would also require access to all systems. It would be nice to think that the Pentagon wants to keep the maintenance in American hands to preserve jobs, but the Defense Department has never cared about US workers before when the issue is Israel, and the real reason for the standoff is that Lockheed-Martin and the Pentagon both know that Israel will steal whatever it can if it gains access. It would then use the technology to market its own products at a price below that of US defense contractors. The result would be a triple whammy for Uncle Sam: the expensive planes are given to Israel free, the technology is then stolen, and future sales vanish as our Israeli friends market their knock down versions of weapons systems reliant on the stolen technology.
So to David Brooks I would say that there is most definitely an economic surge taking place in high tech Israel, but it is less a miracle than the fruit of a long series of thefts and manipulations fueled by American tax money and the connivance of a Congress that is always willing to do favors for the country that it appears to love beyond all others. I’m sure most Americans would wish the Israelis well and would applaud the prosperity that derives from their own industry and inventiveness but it is also time to put the brakes on business as usual and to take the Israeli hand out of our pocket. I’m sure Brooks’ job is pretty secure and well paid, but many Americans are out of work and suffering, so let’s take some steps to protect our economy from the information thieves from Tel Aviv and keep our money and jobs over here.
Venezuela, Eni Invest $18 Billion to Pump, Refine Oil
By Steven Bodzin
Jan. 26 (Bloomberg) — Eni SpA, Italy’s biggest oil company, and Petroleos de Venezuela SA, the South American country’s state-owned oil company, agreed to develop almost $18 billion worth of projects to pump and refine oil in Venezuela.
The companies’ joint venture will start producing crude in the Orinoco Belt in central Venezuela, Oil and Energy Minister Rafael Ramirez said today on state television, at a ceremony attended by Venezuelan President Hugo Chavez and Eni Chief Executive Officer Paolo Scaroni.
The venture expects to pump 240,000 barrels a day after spending $8.3 billion to develop the Junin 5 block, Ramirez said. First oil will be pumped in 2013, Eni said today on its Web site. It will reach full production in 2016, Scaroni said.
“That gigantic oil reserve — it could not be exploited by Venezuela alone,” Chavez said, referring to the roughly 235 billion barrels of reserves in the Orinoco Belt. “Foreign investment is absolutely necessary.”
Rome-based Eni is seeking oil projects abroad to maintain output. Venezuela, to make up for declining production in its aging Lake Maracaibo fields, is inviting foreign companies to become minority partners in the Orinoco.
Eni also plans to build a $9.3 billion, 350,000 barrel-a- day refinery to convert crude oil from the existing Petromonagas project in the Orinoco into higher-value products, Ramirez said.
Eni will pay a $646 million signing fee, the company said on its Web site. It will pay $300 million when the development joint venture is formed and the remainder will be paid later.
International Arbitration
Eni will hold 40 percent of the venture. PDVSA, as the state company is known, will own the rest.
Eni was granted access to the Orinoco after dropping an international arbitration case against Venezuela in 2008 over an oil field nationalization.
U.S. oil companies Exxon Mobil Corp. and ConocoPhillips continue to pursue arbitration against Venezuela for seizing operations of Orinoco Belt projects that began in the 1990s.
Venezuela expects to complete joint venture agreements with Chinese and Russian companies “soon” and to complete bidding for three projects in the Carabobo blocks, Ramirez said.
Eni also signed a memorandum of understanding to build a 1- gigawatt power plant to be powered by natural gas from the Delta Caribe Oriental offshore fields, Ramirez said, without giving a potential price tag.
To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net.
Sentence Geithner To Prison For Lying To We The American People
John Mica slams Treasury Secretary’s “lame excuses” during fiery hearing
Paul Joseph Watson
Prison Planet.com
Wednesday, January 27, 2010
Treasury Secretary Timothy Geithner’s denial that he played any role in the AIG cover-up is contradicted by emails which confirm that Geithner and the New York Federal Reserve were both intimately involved in keeping details about payments to banks including Goldman Sachs from the public.
Geithner told lawmakers today that he had no involvement in withholding information about the bailout of AIG, much to the chagrin of House Oversight Committee Ranking Member Darrell Issa, who wasn’t buying it for a second.
“He has asserted complete ignorance of the Fed’s efforts to cover up the bailout details,” said Issa, R-Calif. “Many Americans, including members of this Committee, have a hard time believing that Secretary Geithner entered an absolute cone of silence on the day that his nomination was announced.”
Russia Today report on Geithnergate – AIG attempted to hide bailout documents
John Mica of Florida went further, calling for Geithner to quit as a result of the scandal.
“Why shouldn’t we ask for your resignation?” Mica asked Geithner. “We’re not getting the whole story, we’re getting the blame story. You’re either incompetent on the job or you knew what was taking place and you tried to conceal it, and I think that’s grounds for your review.”
Mica characterized Geithner’s denials as “lame excuses” as the Treasury Secretary became visibly angry.
In November and December 2008, The Federal Reserve Bank of New York, headed up by Geithner, instructed the bailed out AIG to hide from the public details regarding payments the insurance giant made to banks, including Goldman Sachs Group Inc. and Societe Generale SA.
Using Fed secured taxpayer bailout money, AIG paid several banks 100 percent of the face value of credit-default swaps, as other financial institutions were negotiating deep discounts for the unregulated paper assets that do not have to be backed by cash.
The decision to pay the banks in full may have cost AIG, and therefore taxpayers, at least $13 billion over the odds.
The “backdoor bailout” of the banks, as it has been dubbed was exposed in March 2009 after the SEC challenged AIG’s filing, however, e-mails obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee, reignited the situation after they conclusively exposed a collusion between AIG and the Fed to deceive the public.
The e-mails between company and regulator show that The New York Fed crossed out reference to the payments and that AIG also omitted the details when the Securities and Exchange Commission filing was made public on Dec. 24, 2008.
The emails, the content of which are highlighted in this Bloomberg News article, also show that the Fed wanted numerous other details about the AIG bailout withheld or delayed from public oversight.
“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, adding that taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”
Geithner’s denial that he, even as President of the New York Fed, had no involvement with the AIG case is contradicted by fresh revelations this week in a new report issued by Issa that show Geithner was “at a minimum, engaged personally in reviewing what information about the AIG bailout would be revealed to Congress and the public.”
On November 6, 2008 Geithner received an email from Sarah Dahlgren, the FRBNY’s lead staff member in AIG’s operations, seeking Geithner’s approval for a proposed statement regarding AIG’s upcoming equity capital raise. The fact that Geithner’s approval had to be obtained merely for putting out statements concerning AIG clearly indicates that he was deeply involved in the matter.
On November 13, Geithner was sent a report on AIG’s restructuring that would be sent to Congress. Sophia Allison, a staff member of the Federal Reserve’s Board of Governors, asked that Geithner point out any information that he believed should not be “publicly disclosed”.
In addition, records of who Geithner met with during his tenure as President of the FRBNY “show that he was regularly engaged with top AIG officials and the FRBNY officials directly responsible for AIG’s disclosures to the SEC. Geithner’s schedule shows that he had at least six formal meetings with top FRBNY staff members about AIG-related issues between November 4, 2008, and November 21, 2008.”
Watch the clip from today’s hearings where Mica demands Geithner’s resignation.
Reappointing Bernanke: We Won’t Get Tarped Again
Dean Baker | The Guardian Unlimited | January 25, 2010
The Senate’s decision on approving Ben Bernanke for a second term as chair of the Federal Reserve Board is coming down to the wire and the Wall Street crew is once again pulling out all the stops. To get the 60 votes they need for Senate approval they are reaching into the treasure chest of tall tales they used to push through the TARP. They are once again telling the American people that the world will end if we don’t do exactly what they want.
The main story they are pushing is that if Bernanke is not approved then the markets will panic and send the economy tumbling. Both parts of this story deserve some serious skepticism. First, there undoubtedly will be some uncertainty in the financial markets if Bernanke is not reappointed. Markets like continuity. A new Fed chair means a break in continuity. Therefore, we can expect to see some decline in the stock market, probably about the same as we get when there is a worse-than-expected jobs report.
However, focusing on day-to-day movements in the stock market is no way to make economic policy. For practical purposes, the daily movements in the market have no impact on the economy. Furthermore, there is no way to move the economy away from its current Wall Street bubble-driven growth path to one built on a productive economy without at least some temporary decline in stock prices.
Such a decline is inevitable if for no other reason than the fact that Goldman Sachs, J.P. Morgan and the rest account for a substantial portion of the value of the stock market. If we can never do anything that even temporarily hurts stock prices then we can forget about ever reining in Wall Street.
Interestingly, the bond market, which is far more important for the economy than the stock market, has been rallying in recent days as Bernanke’s nomination faces increasing difficulty. Bernanke’s troubles may not be the cause of this rally, but they have not prevented the 10-year Treasury rate from falling considerably.
It is also worth pointing out that one supposed source of bad news – a declining dollar – would actually benefit the economy. The country has a huge trade deficit because the dollar is over-valued. If the dollar were to decline as a result of Bernanke not being reappointed, it would give a boost to our exports and cause domestically manufactured products to displace imports.
Bernanke’s troubles don’t seem to be depressing the dollar at the moment, but if the Wall Street fear mongers and their allies push this line, we should realize that they are once again spouting nonsense. A lower-valued dollar is good news for the economy.
To briefly summarize the case against Bernanke, at the top of the list is the fact that his failures at the Fed (both as chairman since 2006 and as a governor since 2002) brought the economy to the brink of a second Great Depression (Bernanke’s assessment, not mine). Anyone else who had failed so completely at his or her job would be fired in a minute.
Only in Washington and on Wall Street could such a disastrous record be rewarded with another term in office.
Second, the focus of his bailout was to return Wall Street to health while leaving the rest of the country reeling. Bernanke rightly tapped the Fed’s virtually unlimited resources to keep the financial system from collapsing; however, he gave out money to the banks at below market interest rates with no strings whatsoever.
They were able to use this money to restore themselves to health, but were not required to do anything about compensation practices, risky trading or helping homeowners facing foreclosure. Nor were their shareholders and bondholders required to incur any losses. In effect, Bernanke gave a huge gift from the taxpayers to the Wall Street boys who were responsible for the crisis in the first place.
Finally, he misled Congress to help get the TARP passed back in October of 2008. He told Congress that commercial paper was shutting down, which meant that even healthy companies would not be able to borrow the money needed to meet their payroll and to pay other bills. This would have quickly led to an economic collapse.
Bernanke did not tell Congress that he was planning to set up a special lending facility to directly buy commercial paper. He announced this facility the weekend after Congress approved TARP. It is not the Fed chairman’s job to deceive Congress. Nor is it his job to bail out Wall Street at the expense of the rest of the country. And, it is his job to prevent the growth of dangerous bubbles. That’s three really big strikes.
Bernanke should be sent out to enjoy his TIME “Person of the Year” status in retirement.
To get through this nonsense we just have the repeat the great mantra: It’s the economy stupid.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of False Profits: Recovering from the Bubble Economy. He also has a blog on the American Prospect, “Beat the Press,” where he discusses the media’s coverage of economic issues.
See article on original website
Rule by the Rich
By Paul Craig Roberts | January 27, 2010
The election of Republican Scott Brown to the U.S. Senate by Democratic voters in Massachusetts sends President Obama a message. Voters perceive that Obama’s administration has morphed into a Bush-Cheney government. Obama has reneged on every promise he made, from ending wars, to closing Gitmo, to providing health care for Americans, to curtailing the domestic police state, to putting the interests of dispossessed Americans ahead of the interests of the rich banksters who robbed Americans of their homes and pensions.
But what can Obama do other then spout more rhetoric?
The Democrats were destroyed as an independent party by jobs offshoring and so-called free trade agreements such as NAFTA. The effect of “globalism” has been to destroy the industrial and manufacturing unions, thus leaving the Democrats without a power base and source of funding.
Obama and the Democrats cannot be an opposition party, because Democrats are as dependent as Republicans on corporate interest groups for campaign funding.
The Democrats have to support war and the police state if they want funding from the military/security complex. They have to make the health care bill into a subsidy for private insurance if they want funding from the insurance companies. They have to abandon the American people for the rich banksters if they want funding from the financial lobby.
Now that the five Republicans on the Supreme Court have overturned decades of U.S. law and given corporations the ability to buy every American election, Democrats and Republicans can be nothing but pawns for a plutocracy.
Most Americans are hard pressed, but the corporations have only begun to milk them.
Wars are too profitable for the armaments industry to ever end. High unemployment is now a permanent state in the U.S., thus coercing job seekers into military service.
The security industry profits from the police state and regards civil liberties as a hindrance to profits. By announcing that he intends to continue the Bush policy of indefinite detention, a violation of the Constitution and U.S. legal procedures, Obama has granted the Democratic Party’s consent to the Republicans’ destruction of habeas corpus, the main bastion of individual liberty.
Jobs offshoring is too profitable for U.S. corporations for Obama to be able to save American jobs and restart the broken economy.
Americans are being squeezed out of health care not only by the loss of job benefits, but also by corporate takeover of medical practice from physicians. Today medical doctors are wage slaves of corporate health providers that leverage doctors by turning them into supervisors of physician assistants, lower paid people without medical degrees who perform the services that doctors once provided. As neither doctor nor physician assistant has any independence, there is no one to represent the patient’s care against the profits of the corporation.
Even environmental concerns are being used to create “cap and trade” rights to buy and sell the ability to pollute. Wall Street is licking its lips over a new source of leveraged derivative instruments.
The American public cannot even get reliable information about their plight as the “mainstream media” has been concentrated into a few corporate hands that do not permit independent reporting. The media is as dependent on corporate money as are politicians.
How can President Obama restart an economy that has been moved offshore? Millions of manufacturing jobs are gone, as are millions of jobs for college graduates, such as software engineering, Information Technology–indeed, any intellectual skill the product of which can be conveyed via the Internet. Even those intellectual skill jobs that do remain in the U.S. are filled increasingly by foreigners brought in on work visas.
The wipe out of blue collar and middle class job growth has stopped the growth of American incomes except, of course, those of the super rich. For a decade American consumers substituted increased personal indebtedness for income growth. In order to maintain and to increase their consumption, Americans consumed their assets, such as their home equity. Americans reached their maximum debt load just as the real estate bubble burst and just as the banksters highly-leveraged, toxic financial instruments brought down the stock market and the values of Americans’ pensions.
The enormous damage done to the U.S. economy by jobs offshoring, work visas, and financial deregulation cannot be offset by government stimulus plans, which expand the debt burdens that are crushing Americans. The federal government’s massive budget deficits and the Federal Reserve’s easy monetary policy are setting the stage for an inflationary depression to follow a deflationary depression.
The Federal Reserve chairman says not to worry about inflation, because the Fed can take the money back out of the economy. But can the Fed take the money out without contracting the economy?
The Federal Reserve says not to worry about financing the federal budget deficit. Banksters are buying the Treasury bonds with the proceeds from their sales of their toxic derivatives to the Fed.
So what is happening to the Federal Reserve’s balance sheet? And when will the Fed have no recourse but to print new money in order to finance the federal deficit?
How long can the dollar retain its reserve currency role in such circumstances, and how does the U.S. pay for its imports when this role is lost?
Don’t look to Washington for answers to these questions.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is the author of How the Economy was Lost, just published by CounterPunch / AK Press. He can be reached at: PaulCraigRoberts@yahoo.com
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Book Review
Shattered Dreams: The HPV Vaccine Exposed (2019)
By Christina England – 30 Q&As – Book Review & Summary
Lies are Unbekoming | September 4, 2026
… Gardasil received FDA fast-track approval in 2006, Cervarix followed in 2009, and Gardasil 9 was approved in December 2014 with more than double the aluminium adjuvant content of the original. The commercial context is specific. Merck was about to lose patent protection on Zocor and faced $18 billion in Vioxx injury claims from a cardiovascular drug the company had marketed while suppressing its own data showing a five-times increase in heart attacks. Analysts projected the global HPV vaccine market at $4 billion by 2011, contingent on government-funded national programs for teenage girls. The 1986 National Childhood Vaccine Injury Act had already granted manufacturers complete liability immunity. By 2013, Japan had withdrawn its HPV vaccine recommendation after cataloguing severe adverse reactions in hundreds of girls. No Western government followed. The establishment position across the UK, US, Australia, and most of Europe held, and still holds, that the vaccines are safe and effective, that reported injuries are coincidental, and that cervical cancer prevention justifies the program. The book was published into this position, not against a vacuum.
Shattered Dreams sits alongside Mary Holland’s The HPV Vaccine On Trial and Viera Scheibner’s foundational vaccination work as part of the documented record on what has been done to a generation of teenage girls under the banner of cancer prevention. The full summary unpacks three specific findings: that Merck used the aluminium adjuvant itself as the “placebo” control in 92.5% of trial subjects, making it structurally impossible to detect excess reactions from the adjuvant; that Dr. Sin Hang Lee found HPV DNA fragments bound to aluminium in every one of sixteen Gardasil samples tested, and in the blood and spleen of a New Zealand girl six months after her third dose; and that in every country with high vaccination coverage, including Australia, the UK, Norway, and Sweden, cervical cancer rates have stopped declining and started rising specifically in the vaccinated cohort. Martínez-Lavín’s 2017 calculation puts the number needed to seriously harm with Gardasil 9 at 140, and the number needed to vaccinate to prevent one case at 1,757. Thirteen young women are seriously harmed for every one who benefits. The vaccine was approved on the basis of trials that could not detect what the trials were supposed to detect, and it is still being given to twelve-year-olds today. … Read full review
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