February 2009

Did the US Learn Anything in Iraq?
Posted: Saturday, February 28, 2009

¤ Can the US and Bolivia get along?
With the Obama administration's policy toward Venezuela pretty much decided, and the embargo on Cuba considered untouchable because no one is willing to risk losing support among Cuban-Americans in the swing state of Florida, that leaves Bolivia as a left government in the region where the hostility of the Bush administration could be quickly reversed.

¤ Venezuela Rejects “Interventionist” U.S. State Department Human Rights Report
In a statement released Thursday, Venezuela's Foreign Relations Ministry said the global human rights report released Wednesday by the U.S. State Department was "false, interventionist, and of malicious intent," and said the report lacks legitimacy because the U.S. government itself has a dismal human rights record.

¤ Hugo Chávez and Venezuela: Tides of Victory
¤ Jewish Leaders Blast Clinton Over Israel Criticism

¤ Clinton warns Israel over delays in Gaza aid
Secretary of State Hillary Clinton has relayed messages to Israel in the past week expressing anger at obstacles Israel is placing to the delivery of humanitarian aid to the Gaza Strip. A leading political source in Jerusalem noted that senior Clinton aides have made it clear that the matter will be central to Clinton's planned visit to Israel next Tuesday.

¤ Hollywood to make 30 anti-Iranian movies

¤ Soros sees no bottom for world financial "collapse"
¤ Obama tries to halt talk of bank nationalization

¤ CIA Signals Continuity With Bush Era
¤ AmEx paying card holders to close their accounts
¤ Netanyahu gets nod to form new Israeli government

¤ From 'axis of evil' to 'clenched fist'
¤ Billion-Dollar Whoops: Buffett Apologizes
¤ The Decline and Fall of an American Newspaper
¤ Iraq and Afghanistan: Consider the Alternative

¤ Obama's Policy on Civil Liberties: Bush Lite?
"Politicians love symbolic acts and Obama’s rapid pledge to shutter the high profile prison at Guantanamo and secret CIA prisons was widely praised. But if civil liberties continue to be violated elsewhere, have we made much progress?"

¤ American-Israeli War Crimes in Gaza need to be known
In the UN Security Council, only the United States opposed calls for an immediate ceasefire. Without America’s unconditional military and political support, Israel could never carry out the destruction of Gaza or its humiliation of Palestinians in the West Bank. America’s indifference to the plight of Gazans makes me wonder if our citizens have lost all capacity for moral outrage."

¤ Freeing Up Resources... for More War
"The reasons why the war in Afghanistan cannot be won are directly connected to why the war is wrong. In essence, people do not like their country occupied for years on end, especially when the occupiers are routinely killing civilians (whatever the rationale). Monochrome words like Taliban and “terrorists” might seem tidy and clear enough as they appear in media coverage, or as they roll off a president’s tongue, but in the real Afghan world the opponents of the U.S. war are diverse and wide-ranging. With every missile strike that incinerates a household or terrorizes a village, the truly implacable “extremists” can rejoice at Uncle Sam’s assistance to their recruiting efforts."

¤ Photographing America's War Dead
¤ California Declares Drought Emergency

¤ US Won't Participate in UN Racism Conference
The United States won't participate in a U.N. conference on racism in April unless the final document is changed to drop all references to Israel and criticism of religion, a senior U.S. official said Friday.

The conference is a follow-up to the contentious 2001 conference in the South African city of Durban, which was dominated by clashes over the Middle East and the legacy of slavery. The U.S. and Israel walked out midway through that eight-day meeting over a draft resolution that singled out Israel for criticism and likened Zionism - the movement to establish and maintain a Jewish state - to racism.

¤ Let’s Talk About Race—or Maybe Not
¤ Shouldn't MoveOn Oppose Obama on Afghanistan?
¤ When People are Fired Illegally

¤ Eric Holder and the Whitewashing of Racism
It was all too predictable that Attorney General Eric Holder would be attacked for his recent remarks about race in America. To suggest that the nation is still haunted by the specter of racism is unacceptable it seems, especially since, with the election of President Obama, we have ostensibly entered the "post-racial" era.
But in truth, the nation's chief law enforcement officer deserves criticism more for what he didn't say than for what he did.

¤ Did the US Learn Anything in Iraq?

¤ Haiti's Harsh Realities
Haiti can teach you a lot about the harsh reality of social affairs.
From the grips of the most barbaric form of plantation economy sprung probably the greatest example of liberation in the history of humanity. The 1791-1804 Haitian Revolution was simultaneously a struggle against slavery, colonialism and white supremacy. Defeating the French, British and Spanish empires, it led to freedom for all people regardless of color, decades before this idea found traction in Europe or North America.

¤ Intelligence for the President--and Everyone Else
¤ Is Free Market Capitalism Possible Without Accountability?
¤ The Fox Guarding the Chicken Coop
¤ Where the Cheats Have No Shame
¤ Is Nancy Pelosi Really Against War Crimes?
¤ Examine the Pope's words, and there's only one thing to conclude
¤ Iraq hero goes on the warpath
¤ Bangladeshi army officers' bodies found as death toll from rebellion rises
¤ Israel launches campaign against UN nuke watchdog chief
¤ Olmert warns Iran over nuclear plant

¤ US repeating old Iran lies at UN

¤ Obama announces plan to continue US military occupation of Iraq

¤ U.S. Government: Refreshing our memories and remembering their lies

Venezuela, An Imaginary Threat
Posted: Thursday, February 19, 2009

¤ A 'fraud' bigger than Madoff
¤ Job Losses Pose a Threat to Stability Worldwide

¤ Motlanthe urges West to lift sanctions against Zimbabwe
SOUTH AFRICAN President Kgalema Motlanthe on Friday lauded Zimbabwe's new government and again called on Western countries to lift sanctions against Zimbabwe. Speaking at the swearing-in of Zimbabwe's new Cabinet in Harare, he congratulated Zimbabwe's political leadership on "this great achievement".

¤ Hamburgers are the Hummers of food in global warming
¤ British, French nuclear subs collide in Atlantic

¤ Obama OKs about 17,000 more troops for Afghanistan

¤ Chavez wins vote to scrap term limits in Venezuela

¤ Chavez: Launching the Third Phase of the Bolivarian Revolution
International Media Censorship Against Venezuela

Far from steering our ships of state towards the safe waters of eternal world peace, towards the harbors of the democratic doldrums of liberty, equality and fraternity, we are living and dying in a dangerous epoch of manifold global contradictions and conflicts, of recession and depression, of local and international wars, of hot blooded genocide and cold blooded ecocide, of social alienation and individual sadomasochism, of personal cyclophrenia (manic-depressive psychosis) and massive schizophrenia, of manslaughter (Manchurian Candidates) and paramilitary death squads, of Lilliputian egoism and Cyclopic megalomania, of 'freedom of speech, of thought, of the press' and 'full spectrum dominance,' of Body and Mind Control and of the most mortal, fatal and lethal of them all: of the War of Ideas. We called this world war: Practice and Ideology versus Praxis and Theory.

¤ In Venezuela, is the extreme right meeting the extreme left?
There we go again! Rumors, rumors, .... Conspiracy, arrests of paramilitary forces, secret meetings in Puerto Rico and Margarita, student 'guarimbas', dangerous marches, workers strikes, killings, clandestine arms factories, fascist propaganda machines, bad weather in the hottest and driest season, heavy rains, permanent headaches, ... .
In La Florida, Caracas, Globovision informs us, that unknown persons threw a hand grenade against the office of the opposition party 'Action Democratica' (AD); -- some say that it was AD itself, others claim that it was the marauding 'terrorist' Bolivarians. This is a world of contradictions, in Venezuela, truth itself is a flowing contradiction.

¤ Pill to erase bad memories

¤ Deadly bacteria defy drugs, alarming doctors

¤ Ecuador expels second US diplomat

¤ Latin Americans fret as Stanford crisis spreads

¤ US commander: Troops 'stalemated' in Afghanistan

¤ Charges Against Stanford a Long Time Coming, Offshore Banking Experts Say

¤ Hunt for Allen Stanford and his billions
The US authorities were scrambling yesterday to find $50 billion of assets connected to Allen Stanford, the Texan cricket impresario, as the fallout from his alleged fraud rippled across the world. Mr Stanford boasted of having customers in 140 countries. Panicked investors in the Caribbean and Latin America rushed to withdraw their savings from banks linked to his financial empire. Many left empty-handed.

¤ U.S. regulators accuse Houston fund firm of fraud

¤ Billionaire Stanford Charged With Fraud

¤ Obama—President Of Special Interests
The big money men cannot conceive of anyone’s suffering except the mega-rich. If billions are not at stake, what is the problem? How can a family losing its house bring down the economy? There was a time in America when the interests of elites were connected to those of ordinary Americans. Henry Ford said that he paid his workers good wages so they could buy his cars. Today American corporations pay foreign workers low wages so CEOs can pay themselves multi-million dollar "performance" bonuses.

¤ Stanford charges spark run on banks

¤ Allen Stanford: How easy is it to do a moonlight flit?

¤ How Ireland Went Bust
The unemployment rolls in the Republic of Ireland are growing by more than 30,000 per month. It might not sound like a lot, but on a straight per-capita comparison, in a state of some four million people, that’s more than three times worse than what’s been afflicting the US. This little country is going to hell in a turbo-charged handbasket. In a country notorious for self-conscious postcolonial agonising about its essential national character, this precipitous collapse has come both as body-blow and fuel for nonsensical palaver. Pundits who would prefer not to dwell on the mechanics of the fall have wondered if perhaps we’re still the work-shy and law-averse rogues of ancient stereotype, if our brief transformation into the entrepreneurial engine of the new millennium wasn’t a mere chimera.

¤ From Western Europe to Kyrgyzstan

¤ A New Attitude at the White House?
There are early signs of change in the Obama State Department. In response to significant political victories by former Bush nemeses Hugo Chavez in Venezuela and Evo Morales in Bolivia, State Department spokespersons praised the democratic processes in these countries, indicating a more open attitude toward the growing independence of Latin American nations. Chavez won his referendum on lifting term limits for elected officials on Feb. 15 by a solid 54% at last count, with a 70% turnout. State Department spokesperson Gordon Duguid stated that, "For the most part this was a process that was fully consistent with democratic process."

¤ Venezuela, An Imaginary Threat
US-Latin American relations fell to record lows during the George Bush years, and there have been hopes - both north and south of the border - that President Barack Obama will bring a fresh approach. So far, however, most signals are pointing to continuity rather than change.
Obama started off with an unprovoked verbal assault on Venezuela. In an interview broadcast by the Spanish-language television station Univision on the Sunday before his inauguration, he accused Hugo Chávez of having "impeded progress in the region" and "exporting terrorist activities".

¤ Holder: US a 'Nation of Cowards' on Race Issue

¤ Bush's 'Icy Smile' Enraged Iraq Shoe-Thrower
BAGHDAD - An Iraqi reporter who hurled his shoes at George W. Bush said in the past he had videotaped himself practicing the Arab insult to use against the president whose "icy smile" had filled him with uncontrollable rage.

¤ Stocks slide as Dow hovers around three-month low

¤ Iraqi shoe-thrower defiant as trial adjourned

¤ The Same Old Game

Zimbabwe: Bennett to face trial for terrorism
Posted: Wednesday, February 18, 2009

FORMER white farmer, Roy Bennett will go on trial commencing March 4 after a magistrate found reasonable grounds for him to stand trial.

Bennett, who is the MDC Treasurer General and a former legislator was designated for the deputy minister of agriculture post, briefly appeared at Mutare magistrate's court on Wednesday.

Magistrate Livingstone Chipadze ruled that there was enough evidence to charge Bennett with with attempt to commit terrorism, banditry and sabotage and for him to face trial.

He was, however, cleared of the immigration offence.

On Sunday Mutare police dropped treason accusations against Bennett who returned from self-imposed exile in South Africa after the MDC-T party had indicated that it would join the inclusive Government with President Mugabe's Zanu PF party.

His court appearance comes as the new inclusive Government began work on Monday, with MDC leader Morgan Tsvangirai as prime minister, after President Robert Mugabe swore in its ministers last week.

Full Article : talkzimbabwe.com

Cricket billionaire Stanford charged over $12.5bn fraud
Posted: Tuesday, February 17, 2009

American cricket promoter and financier Sir Allen Stanford has been charged over a $12.5 billion investment fraud.

The US Securities and Exchange Commission accuses Stanford of orchestrating a fraud involving the use of high-yielding certificates of deposit.
Full Article : abc.net.au

Venezuelans Vote to Eliminate Two-Term Limit
Posted: Monday, February 16, 2009

Venezuelans Vote to Eliminate Two-Term Limit on All Elected Office 54.4% to 45.6%

February 15th 2009
Venezuelanalysis.com

At 9:35pm local time, three and a half hours after polls closed and with 94.2% of voted counted, Venezuela's National Electoral Council announced that Venezuelans had voted 54.4% to 45.6% in favor of a constitutional amendment to eliminate the two-term limit on all elected office.

Chávez supporters celebrated the nearly 9-point victory margin with enthusiasm, as it will allow President Hugo Chávez to run for a third full term in 2012.

According to the CNE, abstention was relatively low, at 33%, with about 11 out 16 million registered voters voting, which is about two million more votes than in 2007, for the failed constitutional reform referendum that would have altered 69 articles of Venezuela's constitution.

Chávez and his supporters had argued that the elimination of term limits is necessary to allow Chávez to govern for longer than the four years remaining in his term, in order to complete Venezuela's transition to "Bolivarian Socialism."

The Surging Trade Deficit and the Recession
Posted: Friday, February 13, 2009

¤ Pakistan says it arrests Mumbai attack plotters
¤ Fed: Americans' net worth hammered by recession
¤ Ex-presidents of Latin America urge legal marijuana
¤ Cost of war in Afghanistan soars to £2.5bn
¤ 49 killed as US plane crashes into house
¤ Home Prices in U.S. Slid 12% in Fourth Quarter, Most on Record

¤ The Surging Trade Deficit and the Recession
The Commerce Department reported the 2008 deficit on international trade in goods and services was $677.1 billion. This is down from $700.3 billion in 2007 but still 4.7 percent of GDP. The trade deficit was smaller in 2008, becasue economic growth and consumer spending began to decline during the second half 2008. Trade deficits and shoddy banking practices pushed the economy into recession, and until both trade and the banks are fixed, sustained economic growth cannot be accomplished. The trade deficit will rise again as the effects of the stimulus package are felt, but if its underling causes are not addressed, the trade deficit will drag the economy back down into a double dip recession.

¤ The Largest Wave of Suicides in History
The number of farmers who have committed suicide in India between 1997 and 2007 now stands at a staggering 182,936. Close to two-thirds of these suicides have occurred in five states (India has 28 states and seven union territories). The Big 5 – Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Chattisgarh– account for just about a third of the country’s population but two-thirds of farmers’ suicides. The rate at which farmers are killing themselves in these states is far higher than suicide rates among non-farmers. Farm suicides have also been rising in some other states of the country.

¤ Binyam Mohamed Torture Evidence 'Hidden From Obama'

¤ A 'Lincoln Scholar' Comes Clean

¤ Barack Obama: Desperately in Need of Emancipation
"Barack Obama desperately is in need of emancipation. He needs to quickly come to grips with reality. Our civilization is crashing under its own weight. His financial supporters in the communities of the elite are the reason for that collapse. America needs change of a profound nature. His role should be to emancipate himself in order to be able to emancipate others."

¤ Obama's Wealth Destruction

¤ Why the Depression

¤ Obama and the Wrong Road
"A magnificent example of the so-called “Lucas critique” is what’s happening in the real estate market in the United States. Faced with an avalanche of unpaid mortgages, the federal government decided to inject money into the banks and promised aid to mortgagers behind in their payments so they wouldn’t lose their homes and the value of their property would not drop. The result? Aside from the fact that keeping housing cost high is not among the State’s functions, the consumers became paralyzed waiting to learn the extent of those measures, provoking an even faster drop in the price of property due to a lack of buyers, multiplying the number of people to whom it is more profitable to lose an undervalued property and move to a rented dwelling than to deal with a ruinous mortgage. It is the State, with its intervention as a philanthropic ogre, that doesn’t allow prices to stabilize and keeps supply and demand from coming together in a natural way."

¤ The Recovery Plan From Hell
¤ Israel’s Crimes

¤ Mafia millions buoying banks: UN
Cash-rich Mafia groups have been channelling funds into banks desperate to survive the global credit crisis, the UN anti-crime chief said on Monday. Antonio Maria Costa of the UN Office on Drugs and Crime said he had collected ample evidence to make such accusations. "Consultations I've had with prosecutors and law-enforcement officials around the world show there is ample evidence that the banking system's illiquidity is providing a unique opportunity for organized crime to launder their money," Costa told Reuters.

¤ Blinded by greed, oblivious to need

¤ Judges Putting Kids Away for Kickbacks
According to an Associated Press report, "Luzerne County Judges Mark Ciavarella and Michael Conahan took $2.6 million in payoffs to put juvenile offenders in lockups run by PA Child Care LLC and a sister company, Western PA Child Care LLC. The judges were charged on Jan. 26 and removed from the bench by the Pennsylvania Supreme Court shortly afterward."

¤ Cocaine cheaper than lager and wine as drug price falls by half

A New Administration, Tired Old Policies
Posted: Wednesday, February 11, 2009

¤ Fire rages at Beijing luxury hotel after fireworks

¤ Witness: Top of Beijing luxury hotel 'exploding'

¤ U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs

¤ 'Doom' talk scored as 'not presidential'
From crisis to catastrophe. Off a cliff. Dark, darker, darkest. Mortal danger of absolute collapse. Armageddon. President Obama and top Democrats on Capitol Hill are deploying these and other stark predictions of doom and gloom to push through their economic-stimulus package. In terms not heard in Washington since the late 1970s under President Jimmy Carter's watch, the new president has sought to terrify Americans into supporting the $800 billion-plus bailout bill.

¤ A New Administration, Tired Old Policies
In Part I of his year-end analysis, money manager and market strategist Jeremy Grantham assessed the global economic crisis: "Greed + Incompetence + A Belief in Market Efficiency = Disaster. Greed and reckless overconfidence on the part of almost everyone caused (risk avoidance) to a degree that is probably unparalleled in breath and depth in American history." The aftershocks hit everywhere. Tremors continue. No safe harbors exist. Buckle up. Turbulence and convulsions are ahead. Grantham is worried and angry.

¤ Change the Lobby

¤ What Americans Can't See About Gaza
People have asked me, since I returned from Gaza, how people manage? How do they keep going after being traumatized by bombing and punished by a comprehensive state of siege? I wonder myself. I know that whether the loss of life is on the Gazan or the Israeli side of the border, bereaved survivors feel the same pain and misery. On both sides of the border, I think children pull people through horrendous and horrifying nightmares. Adults squelch their panic, cry in private, and strive to regain semblances of normal life, wanting to carry their children through a precarious ordeal.

¤ New Media Breaks in, but Tradition Lives On

¤ Breaking Down Media Spin on Obama and Stimulus
The ideological battle continues as progressive leaders seek to save the U.S. economy from collapse. Conservatives in the federal government and beyond have rallied together to challenge the will of the people with the most sophisticated propaganda machine known to politics. Last week, in Calling Out the Conservative Lies on Stimulus, I drew attention to the hidden motives of conservative leaders in Congress. This week I'd like to shift focus and call out some of their spin agents in the mainstream media for their less than savory attempts to undermine the progressive movement.

¤ Slam The Door on Compromise

¤ The 180-Degree Reversal of Obama's State Secrets Position
Apparently, the operative word in that highlighted paragraph -- unbeknownst to most people at the time -- was "the Bush administration," since the Obama administration is now doing exactly that which, during the campaign, it defined as "The Problem," the only difference being that it is now Obama, and not Bush, doing it. For journalists who haven't bothered to learn the first thing about this issue even as they hold themselves out as experts on it, and for Obama followers eager to find an excuse to justify what was done, a brief review of the State Secrets privilege controversy is in order.

¤ Under Obama, Same Stance on Rendition Suit

¤ Seek Truth, But Prosecute Liars

¤ A Commodity Called Misery
Sitting down here in Central America happily abusing my health, occasionally, between the hangovers and the bouts with sand fleas and mosquitoes comes an insight or two, or at least what passes for insight in my lowbrow take on life. One of these is just how damned lucky the Third World is that it cannot afford a sophisticated mental health system. By that I mean the kind in the “developed countries,” where murder and suicide rates are quintuple what they are here in this village.

¤ Dirty Socks

A New Administration, Tired Old Policies
Posted: Monday, February 9, 2009

By Stephen Lendman
February 09, 2009

In Part I of his year-end analysis, money manager and market strategist Jeremy Grantham assessed the global economic crisis:

"Greed + Incompetence + A Belief in Market Efficiency = Disaster. Greed and reckless overconfidence on the part of almost everyone caused (risk avoidance) to a degree that is probably unparalleled in breath and depth in American history." The aftershocks hit everywhere. Tremors continue. No safe harbors exist. Buckle up. Turbulence and convulsions are ahead. Grantham is worried and angry.

The current disaster could have been avoided by moving early against asset bubbles. We didn't, so it will "be devilishly hard" to fix things. "We are deep in the pickle jar, and it seems likely that, in terms of economic pain, 2009 will be the worst year (ever) in the lives" of most everyone.

Blame it on failed leadership, including under Greenspan and Bernanke at the Fed. Neither thought bubbles existed even though Bernanke is a Great Depression scholar. What did he learn?

On January 3, Michael Lewis and David Einhorn addressed "The End of the Financial World as We Know It" in the New York Times and said Americans are viewed around the world as "financial lunatics." It goes beyond greed. People who matter:

-- sacrificed "long-term interests for short-term gains;"

-- the "tyranny of the short-term" took over;

-- players unwilling to go along risked being fired;

-- credit agencies risked loosing customers;

-- investors missed losing market gains and failing to keep up with their peers;

-- the SEC was nowhere in sight; and

-- neither was the media, but The Times writers failed to say it. Neither did they indict the Bush administration for its criminal complicity. They continued:

"....here's the most incredible thing of all: 18 months into the most spectacular man-made financial calamity in modern experience, nothing (that works) has been done (to reverse) bad incentives that (got) us here in the first place."

Here's the record. "In the past year, there have been at least seven different bailouts, and six different strategies." Nothing is working. Failure begot more failure. Promises were made and broken. Billions were given away and lost. "If you want banks to make prudent loans," don't reward them for bad ones. As it's turned out, Wall Street took the money and ran, and the financial world as we know it is collapsing.

Grantham assesses losses so far with lots more coming ahead in his judgment:

-- US equity "write-downs of 50%;"

-- housing around 35%; and

-- commercial real estate 35 - 40% for a total of around $20 trillion of lost wealth in a "$13 trillion" economy, given its decline from around $14 trillion through end of Q 3 2008.

The current debt level is so excessive that Grantham says that $10 - $15 trillion more "will have to disappear." How is the question. There's no easy cure at a time when biting the bullet may be a "grenade." Grantham is supremely unimpressed with Obama's economic team - the same "Rubinesque retreads, yes men, none of whom (saw) the most obvious bubbles in the history of finance; a spineless group" overall.

"There was plenty of intelligence, just not too much wisdom," and not a whisleblower in the bunch to point out the "spiraling Ponzi scheme that our leveraged financial system had become."

Even worse, 2008 "capped in incompetence what will be remembered as the most incompetent eight years of government in modern times, and a contender even" including ancient ones. We "tore up the social contract;" rigged the tax code for the rich; handed the nation's wealth to the super-rich, and, in the process wrecked the economy and "took some giant steps toward ruining the planet" besides. "If you ended the year without becoming disillusioned, you were not paying attention."

Looking ahead, few rays of light are in sight with Grantham expecting S & P values to hit 600 or below before he's ready to signal an all-clear. And knowing how hugely markets over-correct, even that level may be high given the world's greatest ever economic crisis and an administration so far proposing tired old policies in new wrapping.

The "Immoral Hazard" of Multiple Imploding Bubbles

In a spring 2008 analysis, Grantham spoke out about "immoral hazard." More recently, Pimco's managing director, Bill Gross, called America a "Bailout Nation (in) our Ponzi-style economy." Economist Michael Hudson didn't expect American capitalism to become a "kleptocracy" with "handouts" to fraudsters, and financial writer Ellen Brown got right to the point explaining "the collapse of a 300 year Ponzi scheme. All the king's men cannot put the private banking system together again, for the simple reason that (it) reached its mathematical limits."

It needs new borrowers, but doesn't have them. The racket has gone on for 300 years "ever since the founding of the Bank of England in 1694." The world now is "mired in debt to the bankers private money monopoly." The dirty game is exhausted. "The parasite has finally run out of its food source."

Michael Hudson agrees and said "The economy has reached its debt limit and is entering its insolvency phase. We are not in a cycle but (at) the end of an era. The old world of debt pyramiding to a fraudulent degree cannot be restored." Bailouts throw good money after bad and postpone a later reckoning. Yet Obama pledges more plus loads of fiscal stimulus. The question is who'll benefit, who won't, and who'll end up worse off ever than before. More on that below.

Decades of Sound Money Debasing

On January 17, James Turk addressed it in his article titled: "The Fed's blueprint for market intervention" and began with its longest serving chairman, William McChesney Martin (April 1951 under Eisenhower - January 1970 under Nixon). Turk discovered a "1961 (previously) Top Secret Fed Reserve Gold Exchange Report" writer/researcher Elaine Supkis posted on her blog site.

It's from Martin's Missouri Historical Society papers with a copy at the St. Louis Federal Reserve Bank. He's remembered for having said it's the Fed's job "to take away the punch bowl just as the party gets going" to prevent the kind of situation we're in now. According to this document, other things apparently took precedence.

Under his tenure, the dollar went from being "good as gold to a perennially inflated fiat currency backed by nothing (more than) government promises." For nearly 19 years, US gold reserves declined by nearly half - from 633.2 million ounces to 339.5 million ounces and led to Nixon's August 15, 1971 closing of the "gold window." It ended the last link between gold and the dollar and along with it sound money. Also under McChesney, M3 (the broadest measure of total dollar currency) soared more than three-fold - from $190 billion to $616.1 billion.

By the early 1960s, dollar debasing was policy in contravention to Bretton Woods. Martin, like later Fed chairmen, was to blame, and as a consequence, gold reserves kept declining. As Grantham observed above, bad policy = disaster, so world economies are now reeling from one hodgepodge fix after another trying to head off the inevitable.

A View from the UK

On January 24, the UK Daily Mail's Glen Owen revealed that last October 10 British "banks were just three hours from collapse." City Minister Paul Myners disclosed that "the country was very close to a complete banking collapse after major depositors attempted to withdraw their money en masse."

The Treasury was preparing for the worst. "Only frantic behind-the-scenes efforts averted financial meltdown." If it failed, the entire system would have been nationalized. Shareholders would have lost everything, but that possibility may resurface.

Arbuthnot Banking Group economic advisor Ruth Lea said "We are not out of the woods yet" given the fragility of the system, and if conditions keep weakening the government will have no choice but to intervene and "nationalise the entire financial system."

On January 26, The Daily Telegraph's Ambrose Evans-Pritchard headlined his article: "Bad news: we're back to 1931. Good news: it's not 1933 yet." His evidence....take your pick:

-- contracting world economies;

-- huge job losses globally;

-- "the collapse of global trade....setting off another stage of the crisis;" export-dependent Japan had a 35% drop in December; China is sinking fast;

-- "Citigroup and Bank of America have more or less disintegrated; JP Morgan's health is failing fast;"

-- the big three US carmakers are on life support and in the end may go under;

-- as in 1931, we may be entering the depression's "second phase;" that's when things get really dicey; and

-- today's "wash of money" may only buy time, not solve "the deeper problem:" the West's addiction "to Ponzi credit (that so far) has put off the day of reckoning with ever more extreme monetary (madness) with each downturn, stealing prosperity from the future."

Righting things from here remains hazardous. "This will be Barack Obama's grim test of statesmanship," but given his faith in markets and ties to Wall Street, precious little of it is in sight.

In his February 3 Financial Times column, Martin Wolf largely agrees. He slammed the Obama administration for its absence in Davos and said the "crisis had much to do with mistakes its policymakers and private institutions made...."

It's vital, in his view, for America to lead the way to a solution, but instead "what is coming out of the US is desperately discouraging." Instead of well-directed stimulus, what's "emerging is too small, too wasteful, and too ill-focused." Instead of sound practice, "the US may be returning to the immoral and ineffective policy of bailing out those who now hold the 'toxic assets.' Instead of acting as a global leader, there is resort to protectionism and a 'blame game.' This way lies a catastrophe."

Martin Weiss Warning

In his January 26 commentary, financial expert and investor safety advocate Martin Weiss warns that Bank of America and Citigroup "are on life support," and JP Morgan Chase is close behind - in spite of billions in cash infusions to save them.

They're in such bad shape that their stock prices are collapsing, and it's impossible for them to raise capital from investors. "In light of these facts, how can the government save (them). Wall Street is hoping that the Obama administration will create a separate, government-run "bad bank" (a so-called "aggregator bank") to take bad assets off their hands." Others think nationalization is the answer. "Neither approach addresses" the underlying problem: "excess debts and risk-taking" so whatever solution is proposed it most likely will "pile on more of the same (by) spread(ing) and transform(ing) the contagion from a Wall Street debt crisis" to a Washington one given that public debt is already exploding.

Weiss' forecast: "Washington will ultimately lose this epic battle." No matter what it does, it can't "patch back together the busted market for mortgages, derivatives and especially credit default swaps. It cannot stop a pandemic of loan losses among large AND small banks as the economy sinks and traditional bank lending goes bad. It cannot stop the contagion of falling confidence, fear and panic. It cannot outlaw gravity, stop investors from selling," or reverse decades of financial excess. That's Obama's dilemma, but so far he's failing to address it.

On February 1, Weiss added more warnings:

-- Washington faces a "day of reckoning;" its plans to stop economic collapse won't work;

-- ahead will be "a tidal wave of bankruptcies, despair, and even homelessness;" and

-- America's resources are limited; its "credit lines will be severed;" its borrowing needs are exploding; the currency is being debased; buyers are increasingly worried; sovereign ones are slowing their purchases; last year, China dumped $26.1 billion in Fannie and Freddie bonds and ended all new investments in some US companies; "Japan, Russia, Western Europe, the Middle East, and Latin America (are) slowing down, stepping back, or even (selling) US investments."

Bottom line on what's ahead:

-- America's enormous borrowing needs come down to two choices - either pay future interest rates that will "kill the economy" or abandon bailout plans altogether;

-- as a result, the economy, companies, perhaps whole industries, and markets will collapse; "the carnage will be traumatic and terrifying....if you thought 2008 was a nightmare, brace yourself" for what's coming - months "likely to be far more brutal than anything we've seen so far."

Unemployment will top 10%. Including discouraged and part-time workers "at least 16%." The 2009 federal deficit will balloon to "at least $2 trillion." Companies like the auto giants will go bankrupt or be downsized to a shadow of their former selves. Job losses will be enormous. The Dow is headed for 5500. A new, "more advanced" real estate collapse is coming. Home price declines and foreclosures are continuing. Personal bankruptcies will surge. Commercial real estate will plunge, and overall, "2009 will be the year of the Great Financial Dustbowl." It will be remembered as "the year in which America suffered a great money famine of epic proportions." In addition, spending and income will "take a massive hit."

Mike Larson writes often on personal finance, investing, housing, and the mortgage industry. On January 16, he wrote that "the more black holes DC fills, the more open up" and named three:

(1) "Federal Home Loan Banks (FHLBs in 12 cities) following Fannie, Freddie, (and) private banks over a cliff?" FHLBs are burdened with mortgage backed securities (MBSs) worth far less than their purchase price. Compounding the problem are the derivatives they own.

Moody's recently warned that eight of the twelve banks took tens of billions in losses and face capital problems as a result. Collectively, they hold $1.25 trillion in debt and are the country's biggest borrower after the government.

Larson: "If you thought (bailing out Fannie and Freddie was expensive), just you wait; (if) the FHLBs need a bailout, there's no telling how much it will cost;" he calls it "yet another gigantic black hole!"

(2) "Insurance industry's capital and surplus cushions are eroding fast" thanks to their residential mortgage securities, commercial real estate, and other losses. They're also burdened by minimum variable annuity return guarantees. Growing numbers need bailouts of up to $50 billion collectively, and capital markets can't help them.

(3) "Pension funding picture deteriorates dramatically" and affects corporations, states and municipalities. Given current conditions, their promised returns "are being blown to smithereens, causing funding shortfalls of epic proportions" - as high as $409 billion by one estimate. It means issuers must either make up the difference or renege on their obligations to retirees.

Larson explains that the government-backed Pension Benefit Guaranty Corporation (PBGC) "insures basic benefits for more than 29,000 plans. But with so many companies (failing), it's increasingly likely the insurance premiums the PBGC receives won't be enough to cover its obligations." It's already over $11 billion in the red, and that total "is poised to rocket higher."

Bottom line: can Washington bail out everyone? Can the Fed and Treasury fill every black hole? "At what point (will) policy makers (give it up) and let more banks (and companies) fail, and more asset markets trade down" to where they're heading anyway instead of wasting hundreds of billions more dollars trying to stop the inevitable?

Using the "Groundhog Day" analogy, Larson also weighs in on "Another banking 'solution' or yet another failure?" One bad plan begets another, then another. Now we're "shoveling (more) hundreds of billions into (insolvent banks) via TARP (and) guaranteeing (that amount more) of crummy assets (with) taxpayers on the hook for billions in future losses from bad mortgages, bad commercial loans, bad securities," and bad judgment.

Global financial institutions have already written off over $3 trillion, and trillions more may follow. Yet, Wall Street is euphoric about a "bad bank" to buy toxic junk at inflated prices. The idea is to improve bank balance sheets and get credit again flowing. Larson is justifiably skeptical in saying:

"The latest scheme to save the world will fail just like all the others. That is because nothing....NOTHING....can prevent a painful adjustment process" that must run its course for the economy to regain its health. No amount of bad plans or "Washington happy talk" will do it.

"Aggregator Bank" Solution on the Minds of Independent Strategy President David Roche and Paul Krugman.

Both want a "bad" bank but not an "aggregator" one. Krugman raises the specter of "voodoo economics." First Roche.

In a January 22 Wall Street Journal online op-ed, he believes we've "entered the next stage of the financial crisis - most likely the last chapter in this horror story." For America and Britain nationalizing major financial institutions are likely coming, and Roche asks: "How has it come to this?" He cites "both ultimate and proximate causes:"

-- the ultimate one is decades of "ingrained social behavior" in America, the UK and other major economies "that put instant gratification of consumption over the ability to pay for it;" consumerism trumped thrift, and the result is "global imbalances and distortions;"

-- the proximate cause is how "excesses were financed through liquidity creation in innovative" excessive ways.

The party was great while it lasted. Now the bill is due, but measures to restore equilibrium fall way short of the mark. "Policy makers have avoided the painful solution" by misguided bailouts, fiscal stimulus, and the like to keep asset prices inflated, when what's needed is to let them "fall to market levels so they can be cleared. (Instead), "policy makers have just prolonged the crisis."

Workable solutions aren't "rocket science. (They were) successfully carried out by the Scandinavian authorities in 1991." Banks must disclose their bad assets, write them down to market prices, and let equity and fixed income holders take the pain, not taxpayers. "If that means most banks become insolvent, then so be it." The clear fact is they are already so don't hide it. Don't throw good money after bad, buy nothing for the effort, and wind up with a greater problem in the end.

Follow the Swedes example in the early 1990s by setting up a "bad bank." It cleared toxic assets off the books by buying them at market prices and forcing good banks to write them down and take losses. What's worrisome is that an "aggregator bank" may buy them at inflated prices and "become a bad bad bank."

US, UK and EU policy makers so far "have rejected the good bad-bank approach (so we're now into) the third year of credit crunch." Most banks remain on their knees. Some big ones may likely go under, and governments "are still in denial." As a result, "the system remains as corrupted as before." The Obama administration offers more of the same. Bad assets "will continue to suck resources out of the economic system," things will go from bad to worse, so nationalizations will be inevitable.

Even if bad policy for a time works, the result will be new bubbles for old, "with the same ultimate consequences of collapse, though on an even grander scale (making) today's look like kids stuff." As the old saying goes, you can pay me now or a hellova lot more later.

For his part, Krugman worries that Obama policy makers "have become devotees of a new kind of voodoo: the belief that by performing elaborate financial rituals (of throwing good money after bad) we can keep dead banks walking." Major banks in the country are zombies, yet bailouts and more promises keep them afloat.

Krugman prefers the Savings and Loan crisis solution - seizing defunct banks, letting shareholders take the pain, transferring their bad assets to a "special institution," the Resolution Trust Corporation, paying off the bad debt (with taxpayer dollars), and selling "fixed-up banks to new owners."

An "aggregator bank" would buy assets at "fair value," but "what does (that) mean?" Should government decide, save shareholders, socialize the costs, and get no solution anyway? Krugman calls it "bait and switch: a policy that (resembles the S & L) cleanup, but in practice amounts to making huge gifts to shareholders at taxpayer expense, disguised as 'fair value' purchases of toxic assets. Why go through these contortions?"

The big banks are "already wards of the state, utterly dependent on taxpayer support, but nobody (suggests) the obvious solution: an explicit, though temporary, government takeover." Voodoo indeed with officials thinking "financial rituals can reanimate dead banks." It looks like another rescue scheme is coming that will throw more good money after bad and make things even worse in the end. So much for "change to believe in."

On February 1, Krugman continued in his New York Times "Bailout for Bunglers" column saying that the Obama administration should nationalize bad banks in trouble, not bail them out with "other people's money. If taxpayers are footing the bill for rescuing the bank, why shouldn't they get ownership, at least until private buyers can be found? But the Obama administration appears to be tying itself in knots to avoid this outcome."

In return for "a huge subsidy to stockholders, taxpayers will get, well, nothing," but the bill. "There's more at stake than fairness." Saving the economy will be very expensive with "$800 billion....just a down payment. We can't afford to squander money giving huge windfalls to banks and their executives, merely to preserve the illusion of private ownership."

On February 1, Bloomberg reported Joseph Stiglitz's views on an "aggregator bank." From Davos he said it swaps "cash for trash" and throws good money after bad at a time the national debt is exploding. Taxpayers will be stuck for years and Washington will be deprived of vital funds for domestic priorities.

On January 26, Stiglitz told CNN that "financial alchemy" caused this mess in the first place. Now "there is a notion that by moving (bad) assets around, putting (them) in an aggregator bank run by the government, things will get better. Is the rationale that government is better of disposing of garbage, while the private sector is better at making loans? The record....provides little convincing evidence."

"But even if we do this, there is still no assurance" that banks will resume lending. "We are moving in uncharted waters." No one knows what will work. What's being proposed won't square the circle. We need an alternative. Stiglitz proposed the Swedish solution explained above by David Roche, but Obama apparently isn't listening.

On January 29, Bloomberg.com reported that Oppenheimer & Co. banking analyst Meredith Whitney said creating a "bad bank" to buy toxic assets won't get banks to start lending. They won't participate if the Obama administration offers fair market value as their "capital hits would be too dear." Whitney's proposal: have banks sell "crown jewels" to cover losses or as much of them as possible. Further, if banks sell "bad assets to a bad bank, it would still be left with lower earnings power from higher losses on good loans and the requirements to build reserves, lower earnings power from lower assets, and a higher legacy expense structure or both."

Whitney was one of the first to be bearish on banks, and last November said Citigroup was "such a mess Stephen Hawking couldn't turn this company around." Much the same is true for most major banks, deep in red ink and insolvent. Only government largese keeps them going, and Michael Hudson's latest article is instructive: "Obama's New Bank Giveaway."

Plans emerging are for new giveaways to follow old ones. A trillion here, a trillion there, pretty soon we'll stop counting as the currency is relentlessly debased. Hudson asks:

"How many families would like a 'give-back' on every bad investment they've ever made?....No do-over for anyone but the hundred or so billionaires who have just been endowed with enough free money to become America's ruling elite for the rest of the 21st century."

It's a dirty game - privatizing profits, socializing losses. Taxpayers foot the tab, and the super-rich get super-richer. Hudson explains the details of "the new, larger but definitely not improved bank giveaway of between $2 and $4 trillion more" so Mafia dons in Davos can celebrate.

He says that since the 1980s "the financial sector has made a sustained money grab at the expense of labor and 'taxpayers.' More accurately, it has been a debt grab....(with) 'taxpayers' (paying) interest."

"Saving the economy" Obama-style won't work. It'll hurt. Unfreezing credit is the idea to free up lending. Maxed out households (borrowers) are asked to assume more debt instead of reducing their overload.

"But this neglects the fact that today's looming depression is caused by debt deflation. Families, businesses and government (have) to spend more wage income, profits, and tax revenues on debt service instead of buying goods and services." How can assuming more debt solve a "debt overhead? Is there not something more crazy here?"

About $1 trillion can let "the market" cure the debt problem "in the context of renewed debtor-oriented bankruptcy laws." But that's not the scheme being advanced. "The financial sector....has replaced the government as economic planner....today's looming economic depression is manmade." Looting the Treasury will continue. Taxpayers are on the hook for the pain. Obama is exploiting Main Street to benefit Wall Street.

Updating the Global Europe Anticipation Bulletin (GEAB), LEAP/E2020's View of a "Systemic Economic Crisis"

In 2007, LEAP/E2020 believed "US banks and consumers were both insolvent. (Now it) estimates that a new sequence of the fourth ('decanting') phase....has begun: the sequence of global insolvency" in a convulsive 2009.

"Historic interest rate drops and unlimited money creation is not a cause but a consequence of the current crisis....insolvency....is digging black holes where liquidities disappear" in bank balance sheets, households, corporations, and governments.

LEAP/E2020 believes "the world is now facing a situation of general insolvency" with heavily indebted countries, public and private organizations, and those over-dependent on financial services most affected. It believes that "the entire financial sphere is suspected of being a giant black hole:"

-- household debt is over-extended;

-- corporate bankruptcies are increasing;

-- profit eroding;

-- public debt has exploded;

-- corporate outlooks are unreliable because customers stop buying and cancel orders;

-- states and municipalities are in trouble; and

-- America's solvency is in question; the same is true for Britain, Russia, other countries, and "large capital-based pension funds."

As a result, LEAP/E2020 concludes that a process of "global insolvency" has begun, and policy measures aren't stopping it. It's why Michael Hudson calls "handouts" to fraudsters a "con game....unprecedented giveaway of financial wealth." Congress, the Treasury and Fed are wrecking the economy, not stabilizing it. Newly issued debt is eating into the domestic market for goods and services, shrinking sales and profits, and heading the nation for "the very bankruptcy that the bailout (is) supposed to prevent."

As for Obama's economic stimulus, it looks like more of the same - handouts to the rich and precious little for distressed households. Federal funds will go for state infrastructure projects, and those Washington controls will be for private financial, real estate, and other corporate interests as Michael Hudson explains:

Federal, state and local infrastructure spending creates a "vast windfall" for real estate interests and their backers. "To a mortgage banker, a commercial developer or real estate company is a prime customer, the bulk of (its) balance sheet. It's hard to imagine a new American infrastructure program (federal, state, or local) not turning into a new well of real estate gains for the FIRE sector (finance, insurance and real estate). Real estate owners on favorably situated sites will sell out to buyers-on-credit, creating a vast new profitable loan market for banks. The debt spiral will continue upward," public tax dollars will finance it, and an out-of-control problem will get greater.

Obama's idea of change is keep looting the Treasury, direct more wealth to the rich, pay lip service to millions of distressed households, do little to bail them out, nothing to prevent home foreclosures, and not a lot for tens of thousands daily losing jobs. Given the dire state of things, Obama wants "markets" to fix things, unmindful that "markets" created the problem in the first place, and his "economic dream team" bears much of the responsibility.

Nouriel Roubini: "Expect the World Economy to Suffer Through 2009" with Financial System Losses Hitting $3.6 Trillion.

He believes that optimists thinking the worst is over are in for a rude awakening. "We enter the new year grappling with the most serious global economic and financial crisis since the Great Depression." At best, we're halfway through it, but the worst is still ahead. Around $3 trillion in credit losses leaves the US financial system insolvent along with all advanced and most emerging economies in recession "facing severe financial pressure."

"Policy remedies will have limited effect as insolvency problems constrain the effectiveness of monetary stimulus, and the risk of rising interest rates (because of burgeoning public debt) erodes the growth effects of fiscal stimulus. Only when insolvent banks are shut down, others cleaned up, and the debt level of insolvent households is reduced will conditions ease." Achieving that is a long way off with plenty of pain still to come.

"Politics will make matters worse" because governments are "intervening in their economies more broadly and deeply than at any time" since WW II. Stimulus packages contain subsidies, protections, and new rules and regulations that pose dangers for global markets ahead. Coordinated policy isn't happening, and local politics pose "the biggest risk" going forward. It's as true in America and the EU as in China, Russia, India, Brazil, and emerging economies. Add militancy to the mix and instability increases. Sum it up: "The world's first global recession is just getting started," and who can know where it ends or how hard its impact before it does.

Six months ago, Roubini rated "depression" chances at 10%. Given policy blunders to date, he now says it's one-third. "The time to stop dithering is well past; and the time to implement a program of forceful, coherent, credible, globally-coordinated monetary, fiscal, financial clean-up and debt-resolution is now. The US and global economy are truly risking a near-depression if the policy reaction is not bold, aggressive, sustainable and credible." Barely a whiff of it in sight so far. Buckle up. The year ahead will be convulsive.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com

The Deepening Economic Crisis
Posted: Thursday, February 5, 2009

¤ Change (in rhetoric) we can believe in
I've said all along that whatever good changes might occur in regard to non-foreign policy issues, such as what's already taken place concerning the environment and abortion, the Obama administration will not produce any significantly worthwhile change in US foreign policy; little done in this area will reduce the level of misery that the American Empire regularly brings down upon humanity. And to the extent that Barack Obama is willing to clearly reveal what he believes about anything controversial, he appears to believe in the empire.

¤ Evidence of torture 'buried by ministers'

¤ US threats mean evidence of British resident's Guantánamo torture must stay secret, judges rule
Evidence of how a British resident held in the Guantánamo Bay detention camp was tortured, and what MI5 knew about it, must remain secret because of serious threats the US has made against the UK, the high court ruled today. The judges made clear they were deeply unhappy with their decision, but said they had no alternative as a result of a statement by David Miliband, the foreign secretary, that if the evidence was disclosed the US would stop sharing intelligence with Britain. That would directly threaten the UK's national security, Miliband had told the court.

¤ Iraq's Shocking Human Toll: About 1 Million Killed
¤ Afghans want ‘foreigners’ out of Kabul
¤ Shift Zimbabwe policy, Obama urged
¤ Britain shifts policy on Zimbabwe

¤ ALBA Trade Bloc Forms Joint Food Company at Summit in Venezuela
Venezuela, Nicaragua, Ecuador, Bolivia, Honduras, and Dominica created a joint food production company and laid out plans to guarantee food security in the Caribbean, Central, and South American regions during an extraordinary summit of the regional trade bloc known as the ALBA in Caracas on Monday.

¤ The Importance and Symbolism of President Barack Hussein Obama
¤ Last hospital in Sri Lanka war zone evacuated
¤ Iran sends first home-built satellite into orbit

¤ The US is no longer a global hegemon
Changes in the status and power of nations, just like changes in economic conditions, are not always immediately apparent. There is, in the jargon of economics, a recognition lag between the time when an economic shock, such as a sudden boom or bust, occurs and the time when it is recognized by economists, central bankers and the government.
Recognition lag explains why, for example, economists have only recently acknowledged the current economic recession - several months after it began.

¤ Fidel Castro demands unconditional return of Guantanamo
¤ Obama's promise of ethics reform faces early test
¤ Canada's 75 Billion Dollar Bank Bailout

¤ Bailout This!
Idiocy is usually described as "endlessly repeating the same process, hoping for a different result". Lawrence Summers, Timothy Geithner, Nancy Pelosi, Joe Biden et al are straining at the leash to get the Bailout Ball rolling once again. The stabilization of the financial sector, as elusive as it has been so far, has become the Holy Grail of Economic salvation. That makes $8.5 Trillion worth of trying and $0 of result. The Knights of the Oval Table are gathered to plan their mission as their beleaguered subjects are trying to batter down the castle gates. It's no small wonder that Geithner wants to get the money out the door as soon as the end of this week.

¤ Worse than the Great Depression.
¤ Russia, China Blame Woes on Capitalism

¤ The Deepening Economic Crisis
The American economy continues its slide to new depths of brokenness and dysfunction. January 2009 was the worst January ever for the benchmark S&P 500 Index. In the last week of that same month, major corporations announced the layoffs of more than 100,000 workers. The state of New York is borrowing funds in order to pay benefits to an ever growing number of unemployed. The state of California can't pay anyone anything, sending IOUs in lieu of tax refund checks.

¤ A Feast of Vultures

¤ U.S. sets executive pay limits for bailout companies
President Barack Obama took on bailed-out Wall Street firms on Wednesday, setting a $500,000 annual cap on pay for top executives at companies receiving taxpayer funds and tapping popular anger over financial sector excesses. Obama said more measures would be outlined next week to overhaul the crisis-hit U.S. financial sector, which has been propped up with billions of dollars in public funds.

¤ Obama's Salary Cap Could Seriously Hurt New York
¤ Bank of America tumbles on nationalization worries
¤ The War on Terror is a Hoax
¤ Controversial Bestseller Shakes the Foundation of the Israeli State
¤ War crimes accusations rattle Israel

¤ Inequality Alive and Well in US
President Obama and the Democratic majority in Congress face one overriding domestic challenge. Can they reverse a generation-long plunge toward economic inequality not seen since the Gilded Age?
During the campaign, Democrats argued that working and middle-class citizens would be better off under their tax proposals. This debate is important, but it obscures one quintessentially American trait. More workers in the U.S. than in other nations are convinced they are going to become rich. They identify with the interests and ideas of the rich. It is important to reduce taxes on the working class. Nonetheless, fair taxation and economic justice are less likely as long as many believe they are only a little more hard work - or one lottery ticket - away from wealth.

¤ How Taxpayers Finance Fantasy Wars
¤ Bankrupt BanksPodcast
¤ Runaway Wall Street
¤ First, Jail All Bush's Lawyers

Ceasefires, Israeli-Style
Posted: Wednesday, February 4, 2009

by Stephen Lendman
February 04, 2009

Waging war while talking peace is customary Israeli practice. On January 19, Haaretz headlined: "Israel declares unilateral cease-fire. The security cabinet last night authorized a unilateral cease-fire (to take effect) at 2AM (Sunday morning), ending three weeks of intense fighting."

Declaration notwithstanding, nothing changed. Gaza remains occupied, under siege, and totally isolated. Borders are still closed. On January 28, The New York Times said "truckloads of humanitarian aid" are stuck in Egypt because of Israeli and Cairo restrictions. Little can get in, and attacks merely downshifted to a lower gear.

Shortly after Sunday's announcement, an Israeli aircraft killed a Gaza City resident. IDF troops opened fire in Wadi al-Salqa village, southeast of Deir al-Balah. Homes in al-Qarara village were attacked. Helicopter gunships struck areas west of Khan Yunis, and F-16s bombed near the Science and Technology College in the same area. Israeli naval vessels shelled coastal areas and turned back ships with humanitarian aid. Agricultural land was raised. Arrests were made. Gaza continues to be terrorized.

For the week ending January 28th, the Palestinian Centre for Human Rights (PCHR) reported continued Gaza and West Bank incursions and attacks:

-- the IDF shot and killed a Gaza farmer on his land;

-- 17 Gaza and West Bank Palestinians, including four children and two journalists, were wounded;

-- 32 West Bank incursions were conducted;

-- 64 West Bank civilians, including 15 children, were arrested;

-- a private West Bank home near Bethlehem was seized as a military site;

-- Gaza remains under siege and total isolation; conditions overall keep deteriorating;

-- two Jerusalem homes were demolished; 53 civilians were left homeless; and Israel continues Judaizing Jerusalem through repeated land seizures.

The same pattern repeats daily, and reports indicate more American and EU complicity. The US Navy patrols the Red Sea to prevent weapons "smuggling," and Army Corps of Engineers are on the Egyptian - Gaza border to locate tunnels and destroy them. EU nations will monitor Rafah and perhaps other Gaza - Egypt border crossings, and France, Britain and other European countries offered naval vessel patrol help in the Red Sea.

On a January 26 Gaza visit, EU Commissioner for Development and Humanitarian Aid, Louis Michel, refused to meet with Hamas. He called it "a terrorist movement" responsible for three weeks of Gaza fighting, the enormous devastation, and for using civilians as "human shields." In response, Hamas official, Mushir al-Masr, expressed shock "to see a European official giving cover to massacres and terrorism committed by the Zionist enemy against the Palestinian people. Palestinian resistance is as legitimate as the resistance of European countries that fought against foreign occupiers." International law affirms this.

On January 27, Haaretz reported that the fragile ceasefire was near collapse after an IDF soldier was killed. An air strike followed, and Israeli tanks again were on the move. "Heavy gunfire was audible along the border in central Gaza and Israeli helicopters hovered in the air, firing bursts from their machine guns, Palestinian witnesses said."

On January 29, Maan News reported that nine Gazans, mostly children, were wounded by an F-16 missile in Khan Younis following overnight strikes at the As-Salam district of Rafah. In addition, IDF tanks "invaded Gaza near Deir Al-Balah, bulldozing agricultural land," then withdrew in early morning. On the same day, 14 West Bank arrests were made, civilians seized from their homes in Bethlehem, Hebron and Bet Suweif village. A day earlier, the IDF invaded Zboba village, near Jenin, conducted house-to-house searches, enforced a curfew, forced families from their homes, ransacked their belongings, and arrested eight more men.

Incursions like these occur daily. Palestinian Prisoner Society president Qaddura Fares said 300 Gazans were arrested during three weeks of fighting and more when it ended. Israel conceals their names and where they're held. Some are wounded and untreated. All are denied access to lawyers and ICRC representatives.

On January 30, Haaretz reported that "Israel plans more 'pinpoint' strikes against Hamas (and other resistance) in Gaza....to let Hamas know that strikes against Israel would not go unanswered, one source said."

In her first news conference as Secretary of State, Hillary Clinton blamed Hamas, said Israel has a "right to self-defense, (and that) rocket attacks....cannot go unanswered." Hardly surprising from any US official, Republican or Democrat, although Clinton's belligerence is high on the Richter scale.

At a Cairo news conference, US Middle East envoy George Mitchell said America "is committed to vigorously pursuing lasting peace and stability in the region." He met with Egypt's Mubarak, then headed for Tel Aviv meetings with Ehud Olmert, Tzipi Livni, Ehud Barak, Shimon Peres, IDF's chief of staff Gabi Ashkenazi, and Likud leader Benjamin Netanyahu to say America is committed to:

-- Israel's security;

-- the "road map" assuring no possibility of peace;

-- no policy change to allow Palestinians their right of return;

-- Israel's illegal settlement expansions;

-- stopping Hamas weapons "smuggling" to deny their right of self-defense;

-- dealing only with Mahmoud Abbas so "the Palestinian Authority (PA) will get a foot in the door in Gaza;" and

-- in spite of being Palestine's legitimate government and proposing a one and a half year truce (conditional on ending Gaza's siege and reopening all border crossings), Mitchell won't meet with Hamas to "pursue lasting peace and stability in the region;" he rebuffed Hamas' overture; affirmed the Bush administration's one-sided diplomacy; said nothing about continued Israeli attacks, arrests, and settlement expansions, paid lip service only to Gaza's humanitarian crisis, insisted that the PA be in charge of Gaza's borders, reiterated that Hamas is a "terrorist group," then headed for Ramallah to meet with Mahmoud Abbas and his coup d'etat government.

Addressing a (New York-based) World Jewish Congress in Jerusalem on January 28, foreign minister Livni affirmed Israel's "right to act to defend ourselves against those activities in Gaza, including weapons 'smuggling' and build-up of military capabilities. Israel is going to act according to a new equation. We are not going to show restraint anymore. (Anymore?) We need to change the rules of the game until they (Hamas) learn that the rules have changed and the equation has changed."

Haaretz said Olmert told Mitchell that Gaza's borders won't reopen until Hamas releases IDF soldier Gilad Shalit. Unmentioned are thousands of imprisoned Palestinians, many held without charge, hundreds with no access to family or outside contact, most tortured, and all denied due process.

On January 28, Hamas rejected Olmert's terms. The Israeli English language Ynetnews.com quoted a member of its Cairo delegation, Salah al-Bardawil, saying: the ball is in Israel's court. "The demands are known (and so is the price). It is no secret that there are 11,000 Palestinian prisoners sitting in Israeli prisons. No tie shall be made between the truce and Shalit. If Israel wants him released, it must pay the rightful and asked price."

Bardawil rejects a Gaza "security zone" giving Israelis "an excuse to kill anyone who comes close to it, even if they are farmers and innocent civilians, claiming that they are members of the resistance organizations." For Israel, all civilians are legitimate targets, even women, children, the elderly, and infirm. Daily, they suffer grievously throughout Occupied Palestine.

Nonetheless on February 1, Al-Arabiya TV reported that Hamas accepted Egypt's one-year truce proposal beginning February 6. The delay will give its delegation time to make it official in Cairo. Details so far are sketchy but apparently involve PA monitoring/controlling border crossings and Hamas and PA authorities coordinating their activities. Earlier Hamas accepted a one and a half year truce conditional on re-opening borders so humanitarian and other essential aid can enter freely.

Gaza Professor Said Abdelwahed's Email

Three weeks of fighting have taken a terrible toll, yet appalling suffering continues. Consider the children. "Bereaved and traumatized, (they) need psychotherapists and special care! Who will take care of them? Local psychotherapy organizations can't do it and for more than one reason." Yet the need is overwhelming.

"Children have bad memories (from) ugly nights, nightmares and bad dreams. (It's been) an ongoing show of miseries, untold stories, stress and depression! The day before yesterday," fear of renewed Israeli attacks surfaced. Buildings and Gaza City schools "were evacuated immediately! Pupils ran out of schools knowing not where to go. F-16s flew overhead. They broke the sound barrier and scared everyone."

"The world community talks about arms smuggling to Gaza! What kind of arms" are they talking about? The fighting proved that "Palestinians have no weapons that can annoy Israeli aircraft, helicopters or tanks. The whole geography and psychology of Gaza have changed. It's like an earthquake. Homes have been distroyed. Whole neighborhoods. Thousands are now displaced."

"The fact is that words fall short of describing how things look now. It's more horrible than the Holocaust." Referring to dead children, Abdelwahed said: "I did not know before that 450 children and infants were Hamas affiliates or supporters....take care."

World Affirmation of Continued Israeli Attacks

Palestinians remain isolated and abandoned. Disturbing truths are hidden from sight. The dominant media are complicit. BBC management won't air an emergency fundraiser claiming doing so would show bias. A spokesman said: "The decision was made because of question marks about the delivery of aid in a volatile situation and also to avoid any risk of compromising public confidence in the BBC's impartiality in the context of (a) news story."

On January 29, Maan News reported that "Palestinian academics and media personnel as well as international activists, demanded the BBC leave Gaza over its refusal to air an appeal for aid." Academics organized a sit-in near BBC's Gaza office and denounced it for its action. Gaza Professor As'ad Abu Sharkh said: "The BBC has become a partner to Israel in its war on Gaza." Others were equally vocal.

Throughout its history, BBC has been a reliable imperial tool. Its reputation remains unblemished. Veteran UK politician, Tony Benn, called its decision a "public betrayal....incomprehensible and it follows the bias in BBC reporting of this crisis." In America, it's much worse. Victims are vilified, aggressors praised, and no uncomfortable truths are aired or printed. Regardless of its crimes, Israel is untouchable.

EU Failure to Protect Human Rights in Occupied Palestine

On January 28, the Palestinian Centre for Human Rights (PCHR) accused EU nations of failing to protect Palestinians' human rights and demanded that remedial steps be taken. PCHR expressed dismay "by recent statements made by, and actions taken by, EU states regarding human rights violations" in Gaza and the West Bank.

In spite of weeks of slaughter, destruction and trauma, "EU member states abstained from a (January 12) United Nations Human Rights Council resolution condemning the (IDF's) military offensive. A week later, Czech foreign minister and (EU Council) president-in-office, Karl Schwarzenberg, (said the EU) 'should not act as a judge' (against IDF humanitarian law violations)." In solidarity with Israel, he said: "I have never seen a war where humanitarian law was completely respected."

Louis Michel, quoted above, went even further by claiming Hamas bore "overwhelming responsibility" for Israel's offensive. These actions "highlight that the 27 EU member states are blatantly failing in their obligations as High Contracting Parties to the (1949) Fourth Geneva Convention to protect the lives of Palestinians in Gaza. The shameful silence of the entire international community....illustrates its utter failure to hold Israel accountable for its masse violations of human rights (throughout Occupied Palestine) and especially in Gaza." International law demands accountability. Gazans remain imprisoned, and the West Bank is under military occupation.

Letting Israel slaughter, destroy, imprison, terror bomb, use illegal weapons, and willfully target civilians grants it license to keep doing it with impunity. PCHR wants accountability and for the EU not to "upgrade its political and economic relationship (through) the EU-Israel Association Agreement (on trade, political, and regional cooperation). (It's) conditional on Israel's respect for human rights." Tel Aviv blatantly disdains them. This no longer can be tolerated. Palestinians deserve justice. "EU member states must finally make a stand for the respect of law and protection of civilian lives."

Obama's Middle East Policy "A Mirror Image of Bush"

It's from Palestine Chronicle Editor-in-Chief Ramzy Baroud in his article titled: "For Palestinians, Obama's Message is Crystal Clear." Despite promising change, "how different will Obama truly be when his administration is done carrying out a few symbolic gestures to appease the ever-eager public" at a time when great economic distress takes precedence? Despite promising "a new era," continuity remains US - Israeli policy, and note Obama's statements.

His first January 22 public one affirmed one-sided Israeli support in saying: "Let me be clear - America is committed to Israel's security. And we will always support Israel's right to defend itself against legitimate threats....Hamas must meet clear conditions: recognize Israel's right to exist; renounce violence; and abide by past agreements." It must also abandon its right to resist, to self-defense, to self-determination, to a sovereign Palestinian state inside pre-1967 borders, to be free from military occupation, from repeated Israeli incursions, and to remain Occupied Palestine's legitimately elected government.

"Obama's unparalleled clarity" is unequivocal. Israeli rights matter. Palestinian ones don't. "For Gazans, and most Palestinians, things cannot be any clearer." Obama promises continuity, not change. Palestinians are on their own. Their struggle for liberation continues.

Hopeful Justice in Spain

On January 29, AP reported that Spanish judge Fernando Andreu "began an investigation into seven current or former Israeli officials over a 2002 bombing in Gaza that killed a Hamas militant and 14 other people, including nine children." Andreu sees a possible crime against humanity in targeting Salah Shehadeh in which an F-16 dropped a one-ton bomb in Gaza City. He's proceeding "under (the universal jurisdiction) doctrine that allows (Spanish) prosecution of (such crimes and ones alleged to be terrorism or genocide), even if they are....committed in another country."

In June 2008, the Palestinian Centre for Human Rights (PCHR) sued Israeli officials in the National Court of Spain naming then Israeli Air Force commander Dan Halutz, defense minister Binyamin Ben-Eliezer, senior air force commander Doron Almog, national security chief Giora Eiland, defense ministry official Michael Herzog, IDF chief of staff Moshe Ya'alon, and General Security Service head Avi Dichter.

Andreu called the bombing "clearly disproportionate and excessive" and said he agreed to investigate the charges because Israel stonewalled his request for information. He added if he determines that innocent civilians were targeted, he might bring "even more serious" charges. The Spanish National Court said that genocide may be charged if intent to exterminate Palestinians can be proved.

Former Israeli prime minister Benjamin Netanyahu's comment was expected: "It's absurd; Israel is fighting against war criminals and they are charging us with crimes." The charges make "a mockery out of international law." One of the accused, Benjamin Ben-Eliezer, called the charges "ludicrous and outrageous (and that) terrorist organizations are using the courts to prosecute a state that works against terror." Ehud Barak said they're "halluncinatory."

With Washington and western endorsement, blaming victims is customary Israeli practice. It expects a wave of criminal lawsuits and international pressure to investigate IDF war crimes in the aftermath of its terror bombing Gaza.

Amnesty International (AI) Ammunition

On January 17, AI got access to Gaza and "found first hand evidence of war crimes, serious violations of international law, and possible crimes against humanity." More investigation continues, but already "the stories are harrowing," including Israel's "use of white phosphorous." AI calls for "a full-fledged independent investigation" to uncover all crimes in the conflict.

Calls for an Academic and Cultural Boycott

On January 29, Haaretz reported that "In the wake of Operation Cast Lead, a group of American university professors has for the first time launched a national campaign calling for academic and cultural boycott of Israel." Its mission statement says:

"In light of Israel's persistent violations of international law, and Given that, since 1948, hundreds of UN resolutions have condemned Israel's colonial and discriminatory policies as illegal and called for immediate, adequate and effective remedies, and Given that all forms of international intervention and peacemaking have until now failed to convince or force Israel to comply with humanitarian law, to respect fundamental human rights and to end its occupation and oppression of the people of Palestine, and In view of the fact that people of conscience in the international community have historically shouldered the moral responsibility to fight injustice," and joined together in boycott, divestment and sanctions campaigns....

"We representatives of Palestinian civil society, call upon international civil society organizations and people of conscience (everywhere) to impose broad boycotts and implement initiatives against Israel similar to those (against) South Africa." We ask for support "for the sake of justice and genuine peace." Demands listed are:

-- ending Israel's illegal occupation, colonization, and Separation Wall;

-- recognizing full equality for Arab Israelis; and

-- "respecting, protecting, and promoting the rights of Palestinian refugees to return to their homes and properties" as UN Resolution 194 mandates.

A Rare Davos Economic Forum Confrontation

Annually in Davos, Switzerland at the World Economic Forum, the world's corporate Mafia dons meet to discuss prospects for greater global exploitation.

On January 29 to a packed audience and on television, Turkish Prime Minister Recep Tayyip Erdogan faced off with Israeli president Shimon Peres in debate, then stormed off the stage in disgust when the moderator cut him short and ended discussion. After Peres defended attacking Gaza in a lengthy monologue, Erdogan accused him of "killing people. I find it very sad that people applaud what you said. There have been many people killed. And I think that it is very wrong and it is not humanitarian."

Washington Post moderator David Ignatius cut him off. Erdogan said "Please let me finish." Ignatius responded: "We just don't have time. We really do need to get people to dinner." Erdogan again: "Thank you very much. Thank you very much. Thank you very much. I don't think I will come back to Davos after this." The audience appeared stunned. Erdogan brushed past reporters but not before his wife said: "All Peres said was a lie. It was unacceptable."

Erdogan, of course, played to a home audience, and it paid off. Back in Istanbul, he got a rapturous welcome. He later spoke with Peres by phone and agreed not to let the incident affect Turkish-Israeli relations.

Israeli - Turkey confrontation began when Gaza was attacked. It continued in Cairo when Israeli defense ministry political security bureau head, Amos Gilad, refused to meet with Ahmet Davutoglu, Erdogan's senior foreign policy advisor. Davutoglu was Turkey's conduit between Hamas and the West. Israel and Egypt stonewalled him. Israel and Turkey have strategic ties. It remains for high-level fence-mending to repair them.

Israeli Professor Avi Shlaim in the London Guardian

On January 7, he headlined: "How Israel brought Gaza to the brink of humanitarian catastrophe." Shlaim once served in the IDF, never questioned Israel's legitimacy inside the Green Line, and now teaches international relations at Oxford. He examined the conflict in context and said "Establishing the state of Israel in May 1948 involved a monumental injustice to the Palestinians." At the time, British Middle East Cairo office head, John Troutbeck, wrote foreign secretary Ernest Bevin that Americans were responsible for creating a gangster state headed by "an utterly unscrupulous set of leaders."

Given Israel's history of violence and latest Gaza aggression, Troutbeck's comment was prescient, but he omitted his own country's complicity that's still solid to this day.

Shlaim condemns what he calls "Greater Israel('s) permanent political, economic and military control (over Palestine)....the result has been one of the most prolonged and brutal military occupations in modern times." In Biblical language, "Israel turned the people of Gaza (and the West Bank) into the hewers of wood and the drawers of water, into a (reserve) source of cheap labour and a captive market for Israeli goods." Palestine "is a classic case of colonial exploitation in the post-colonial era. Jewish settlements....are immoral, illegal, and an insurmountable obstacle to peace."

"Israel likes to portray itself as an island of democracy in a sea of authoritarianism. Yet Israel has never in its entire history done anything to promote democracy (for its Arab citizens and population in the Territories)."

Palestine under Hamas is "the only genuine democracy in the Arab world," except for perhaps Lebanon. Yet "America and the EU shamelessly joined Israel in ostracising and demonising (its) government...." The situation is "surreal....with a significant part of the international community imposing economic sanctions not against the occupier but against the occupied, not against the oppressor but against the oppressed."

Palestinians are vilified for their own misfortunes. Israel, America, and the West call them "terrorists," Hamas "just a bunch of religious fanatics (besides), and Islam incompatible with democracy" when, in fact, they're normal people with ordinary dreams and have as much right to them as anyone.

Israel claims self-righteous victimhood while unleashing overpowering brute force. In Hebrew it's called "bokhim ve-yorim, crying and shooting....The brutality of (its) soldiers is fully matched by the mendacity of its spokesmen....(its) propaganda is a pack of lies." A chasm separates rhetoric from reality. Indiscriminate terror bombing is how it tries to spare civilians. Its philosophy is "an eye for an eyelash."

Militarism can't bring security. Only reconciliation and diplomacy works, but Israel stays hard line. Shlaim concludes that his country is "a rogue state with an utterly unscrupulous set of leaders." They disdain international law, use terror weapons, slaughter civilians, and hold Islam in contempt.

"Israel's real aim is not peaceful coexistence....but military domination." It compounds past mistakes "with new and more disastrous ones." It pursues a classic definition of insanity: repeating the same mistakes, expecting different results, and using newspeak propaganda for justification. Poor Israel. Its credibility is gradually eroding. Growing millions hold it in contempt. Its choice ahead is simple. Reform or perish, yet Israel persists in staying hard line.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com

Previous Page | Trinicenter Home

Homepage | U.S. Crusade | News Sources | Zimbabwe Special | Venezuela
Back to Top