Thursday, July 10, 2014

Free Market Hipocrisy

1M gallons of oil-drilling byproducts leaked into N. Dakota drinking water

July 10, 2014 RT

A North Dakota pipeline has hemorrhaged about 1 million gallons of oil-drilling saltwater into the ground of a native Indian reservation, with some of the byproduct suspected to have leaked into a lake that provides drinking water.

The spill of a toxic byproduct of oil and natural gas production at the Fort Berthold Indian Reservation was discovered on Tuesday.

The cleanup is expected to last for weeks, according to Miranda Jones, vice president of environmental safety at Crestwood Midstream Services Inc. A subsidiary of Crestwood - Aero Pipeline LLC - owns the underground pipeline.

Jones believes the leak started over the Fourth of July weekend, but was only detected when the company was sorting through production loss reports, according to AP.

"This is something no company wants on their record, and we are working diligently to clean it up," Jones said.

Yet Karolin Rockvoy, a McKenzie County emergency manager, visited the site of the leak and said, based on the amount of devastation done to local vegetation, the spill had probably gone undetected for some time.

The pipeline was not equipped with technology that alerts operators of a leak, Jones said. Last year, the state legislature rejected legislation mandating pipeline flow meters and cutoff switches.

It is as yet unknown how much of this saltwater - between 10 and 30 times saltier than sea water and considered an environmental hazard by the state of North Dakota - found its way into Bear Den Bay, which leads to Lake Sakakawea.

The lake supplies water for the reservation, where the Mandan, Hidatsa, and Arikara tribes live in an area of western North Dakota that is experiencing an unprecedented drilling boom.

Crestwood Midstream Services Inc. and tribal officials maintain, though, that the spill is controlled and has not impacted the lake.

"We have a berm and a dike around it, around that bay area, to keep it from going into the lake," said the Three Affiliated Tribes Chairman Tex Hall.

The briny saltwater byproduct from drilling could contain petroleum and residue from hydraulic fracturing, or fracking, an energy intensive process that involves the injection of highly pressurized water, sand, and chemicals into layers of rock. The practice concerns geologists, and human and environmental health officials alike.

Kris Roberts, environmental geologist with the North Dakota Department of Health, said the spill had already caused widespread damage at the site.

"We've got dead trees, dead grasses, dead bushes, dying bushes," he said, according to AP.

Saltwater spills in the state have increased as the North Dakota energy boom has evolved. The state produced 25.5 million barrels of brine in 2012. There were 141 pipeline leaks reported in the state that same year, 99 of which spilled around 8,000 barrels of saltwater, AP reports.

State regulators say about 6,150 barrels of the leaked saltwater were recovered. One barrel equals 42 gallons of fluid.

Drilling at the Fort Berthold Indian Reservation represents a major portion of the state’s oil production, as more than 300,000 of North Dakota’s 1 million barrels of oil produced daily come from the area, according to figures from the state’s Department of Mineral Resources.

Possibly the worst environmental disaster ever in the state occurred in 2006, when a broken oil pipeline leaked more than a million gallons of saltwater into a creek, aquifer, and pond. Saltwater from the rupture spewed unnoticed for weeks into a tributary of the Yellowstone River near Alexander, North Dakota, causing the death of many fish, turtles, and plants.

Cleanup efforts connected with that spill are ongoing.

Saltwater pipelines in western North Dakota have since been connected in an elaborate network that empties into hundreds of disposal wells, where the brine is permanently stored underground.

Fracking wastewater injected into storage wells has been linked to drastically increased seismic activity in areas with similar energy booms as North Dakota, including Oklahoma.

The US Geological Survey has said that “the injected wastewater counteracts the frictional forces on faults and, in effect, ‘pries them apart’, thereby facilitating earthquake slip.”

Blackwater’s Death Machine

The Privatization of Repression

Obama is excellent at multitasking in navigating the waters of international politics, seeking to construct a political-structural framework of American global hegemony, formally (for who knows the full extent of the forces standing behind him?) presiding over a Juggernaut of irresponsible power in which the US seemingly thwarted in one theater of operations then springs up in another. Obama the jumping jack, but with malice aforethought, ever moving forward through intervention, carefully-delineated war (at least that is the claim), regime change, drone assassination, CIA-JSOC joint-paramilitary operations, alliance systems to rationalize the internationalization of American power (as with NATO and “friends and allies”) often bilaterally arranged, affording joint-exercises and lucrative arms sales, and not least, the subject of this article, the use of PRIVATE ARMIES, which have an increasingly important role as occupation forces and for guarding US interests, facilities, and personnel worldwide.

By multitasking, I mean proving oneself at being adept in the service of ruling groups and the needs and objectives of the political economy, from establishing beachheads for business (commercial-financial penetration) to presenting a counterrevolutionary front onto the world on behalf of the security of US and global capitalism, wrapped in the protective shell of military omnipotence. This entails awareness of multiple pressure points, either to be worked with or destroyed, a geopolitical landscape itself forever in motion, so that, if not Russia, then China, if not China, then Iraq and Afghanistan, etc., etc., which is entirely befitting one who presides over US-defined processes of industrial and trade expansion within a world system unwilling to accept, because of its increasingly multipolar structure, American supervision. This still sporadic, but now more and more resolute, resistance to unconditional US supremacy in all that affects the world system, conforming in power-terms to the realities of structural change occurring over the last several decades, places emphasis on FORCE in maintaining its suzerainty. Diplomacy be damned (except as camouflaged in liberal rhetoric to cover the relentless application of power), humanitarianism now being the spearhead for intervention and the expansion of spheres of influence.

This is not to suggest Obama’s expertise in international politics and economics; he has a pedestrian mind (run-of-the-mill intelligence, impressionable when confronted by financial and military arcanum), nimble mental processes (except becoming congealed when his considerable defense-mechanisms go up), antennae out for what sells, personally ingratiates, or aligns with instruments of power, genial on the surface, harboring desires for recognition based on an imagined sense of hurt and deprivation which gives license for belligerence, power, cruelty in national and world affairs. Consider his engagement with drone assassination, the vaporization of fellow human beings thousands of miles away, or the impoverishment and growing underclass his actions support, again, fellow human beings, as policy further enriches the already very wealthy. His psychological attachment to power brings him closer to financial, military, and intelligence elites, leading to an aggressive role in the massive surveillance of the American people, contrariwise, the near-absolute secrecy of government, in which transparency per se is feared as a form of terrorism (witness the fulsome use of the Espionage Act against whistleblowers).

To know Obama is to understand better the relationship between the government and Blackwater, which is a particularly vicious form of private army, free-wheeling, trigger-happy, cloaked in patriotism, and demanding and receiving for itself complete immunity for the crimes it commits. These, however, are not crimes in ordinary parlance, because sanctioned by, and done in the name of, the government, which shares its ideology of force, righteousness, superiority. Mowing down the innocent, along with engaging in promiscuity on the government’s time, both revealed by investigators, are o.k., so long as counterterrorism can be a screen by which to hide behind. Under Obama’s umbrella, Blackwater was safe because deemed essential—and because there was a tinge of fear about going against it. When strength for questionable purposes is asked, one turns to the strongest, which follows an authoritarian mindset characteristic of the society.

Damage control is one area of his expertise bound to arise, given his record of war, drone assassination, regime change, and now, the use of private contractors, who are accorded (as are the military), through the status-of-forces agreements imposed where American intervention occurs, diplomatic immunity from punishment for the commission of crimes in the assigned country. Getting away with murder is both figurative and literal. A notorious case, in September 2007, occurred when Blackwater trucks entered a busy Baghdad traffic circle and, in a hurry and given prior immunity for their actions, simply cleared the way through spraying the area with machine-gun fire and killing 17 Iraqis. The “Ugly American” of the 1950s was Adonis compared with these mercenaries, themselves well-connected both with right-wing support in Congress and the Executive, and doing guard duty at foreign embassies as well as working with the CIA in conducting armed drone missions of assassination.

A private army, its usage is interrelated with the militarism-driven public policy that has shaped the confrontational posture toward Russia and China, and the broader context of counterrevolution where “Enemies” become defined and visited upon by all the majesty of military might. Proceed with impunity is the watchword for American forces, whether at an Iraqi traffic circle, a Pakistan or Yemen funeral procession (by definition bad guys because at the burial of the Bad Guy we just vaporized via a drone strike), or the numerous black-hole prisons around the globe recruited through rendition. Civilian or military, it makes little difference: impunity bears the imprimatur of Exceptionalism.


When Matt Apuzzo’s article in The Times appeared, “In a U.S. Court, Iraqis Accuse Blackwater of Killings in 2007,” (June 25), the readers in their Comments for the most part blamed Bush for the massacre yet, not the event so much as the cover-up, seeing no relation whatever to Obama and his administration for the subsequent fate of the perpetrators (nil) or participation in the cover-up. Obama, DOJ, Pentagon, even the media, a deafening silence, now broken, but Obama as always sheathed in protective armor. A century-and-a-third ago, ruling groups used Pinkertons to suppress the American labor movement (the Great Railroad Strikes of 1877). Now, ruling groups, better organized, more powerful, use a different private army, Blackwater, to class and systemic hegemony, a similar end, only on a broader basis, across the globe, directly reaching or affecting a wider constituency, all who stand in the way, or even seem to, of US foreign policy. The privatization of repression remains a constant in American history, whether as goons and scabs making up private armies or corporate executives in three-piece suits under marching orders to squeeze every bit of life from the masses through consumerism, indebtedness, and stagnant wages–a social system therefore whose motivating impulse is the differentiation of rich and poor, the former, more concentrated through time, the latter, more numerous.

Barrington Moore’s concept of legitimated violence, in Social Origins of Dictatorship and Democracy, has resonance to our topic—the interrelatedness of actions and developments criminal in any meaningful sense yet falling inside and protected by the law as, if nothing else, the normalization of power, indeed, power as a law to itself, no questions asked, either by political leaders or most historians. Thus falling under his concept, for present purposes, would be a political economy making for the formation of an underclass of today at home and worldwide, and the gunning down of people at a Baghdad intersection, or for that matter, the Washington tricksters seeking to trap Putin and Russia into false moves justifying massive retaliation in the name of an international system they themselves are eroding if not destroying in the name of a higher law, yes, the “moral” utility of Exceptionalism. All of the foregoing come to mind as derivable from Moore’s classification of crimes which Authority in its prerogatives and power defines as noncrimes, erasing lines between the private and public spheres of life, just so long as the System has been served, refined, perpetuated.

Obama is the perfect dramatis personae in microcosm of one who thrives on a legal order to camouflage his illegal acts—which of course cannot be judged illegal because, as in massive surveillance he has a dummy court, the FISA Court, to back him up, and in drone assassination, the presumably authoritative memos of DOJ and the Office of Legal Counsel. So, too, Blackwater, with pick-and-choose justifications from the myriad operations of government and stretched-out interpretations of Congress. Obama did not invent the System, its practices, or its rationales, but neither did he qualify or oppose their workings. To blame Bush for being on the ground floor when Blackwater members exploded in Bagdhad, and stop there, begs the question of what Obama did or didn’t do for six going on seven years after as the CRIME festered in at least the eyes of the victims’ families and Iraqis in general, if not a world encouraged to forget and/or bought off to look the other way. Obama is USG in fact as well as in symbol, and, under his watch, there is a matter of accountability for repression in continuous effect, whatever its origins. One wonders how many other acts of legitimated violence occurred and still occur during his reign, by Blackwater, CIA-JSOC operations, or the use of embargoes to bring civilian populations to their knees?


Apuzzo writes, “The Nisour Square shooting is a signature point in the Iraq war, one that inflamed anti-American sentiment abroad and contributed to the impression that Americans were reckless and unaccountable. The Iraqi government wanted to prosecute the security contractors in Iraq, but the American government refused to allow it.” I must comment at the outset: not only was our stooge-Iraqi government incensed enough by the evident crime to want to prosecute, but USG, by the very terms of the intervention, forbade it. Of the latter point, civilian contractors, coming under the status-of-forces agreements or similar exonerative measures binding local authorities NOT to prosecute for crimes committed in their jurisdiction, are or should be considered war criminals (and the nation employing them, guilty of war crimes) every bit as much as if they were members of the armed forces. In fact, we see government prosecution a solemn farce, and perhaps the use of civilians a deliberate ploy to fend off international condemnation calling for a proper accounting of the nation itself.

The Bush administration in 2008 began a half-hearted effort carried out by DOJ: “When the Justice Department indicted five former Blackwater guards in 2008 and reached a plea deal with a sixth, prosecutors said it was a message that, whether in a war zone or not, nobody was above the law.” Not so, more like damage control because the offense was so flagrant that to do nothing was not an option. Apuzzo notes: “But the case has suffered repeated setbacks, frequently of the government’s own making. In Iraq, the delays contributed to the impression that Blackwater operated with impunity. Prosecutors ultimately dropped charges against one guard, citing a lack of evidence, and have gone to trial against the remaining four.” Yet, given the 17 deaths, the paucity and downgrading of the charges is nauseating, especially when the reporter observes: “For the most part, the horrors of the Nisour Square shooting are uncontested. Nobody disputes that a team of Blackwater guards, working for the State Department [under Hilary, I might add, the firm’s services continued], drove four armored trucks into a busy traffic circle and opened fire.” Of the four standing trial, three faced manslaughter charges, and the fourth, a murder charge.

Even there, the protracted nature of the trial, along with the multiplicity of witnesses brought over one at a time or in small numbers, created conditions which opened the way for inconsistency in testimony, chiefly turning on which of the five fired the first shot, by which to determine the murder charge. Under the circumstances, the defense had a field day gladly jumping into the confusion to discredit witnesses. Too, because the travel arrangements were courtesy of the FBI, I am mistrustful, having observed at first hand during Mississippi Freedom Summer their devotion to civil liberties and the rule of law: browbeat the complainant, not the perpetrator. Bush’s DOJ initiated the prosecution, yet without providing the substantive underpinnings, but six years later, the trickle of witnesses finally begins. My point, however, going back to civilian contractors and questionable court proceedings, is that privatization, in so wide a stretch of society, should not, as seems to happen, be a get-out-of-jail card. More basic still, why such puny charges, instead of handing over the defendants to the International Criminal Court?

The answer is self-explanatory: Obama’s rule-of-thumb, never admit wrongdoing, is similar in spirit and procedure to the Israelis, i.e., never prosecute one of your own, no matter how heinous the crime. For one, using live ammunition to shoot down children throwing stones, for the other, clearing intersections with machine-gun fire, either from impatience for traffic delay or cold-blooded enjoyment of shooting down civilians. It is difficult to determine who learns from whom, Americans learning from Israelis, or Israelis, from Americans. Occurrences of “collateral damage” are so numerous as not to draw attention, much less, if attention is drawn, to call for punishment, the victim’s alleged inferiority often assumed.

(These remarks may seem inappropriate and insensitive in light of the discovery of the bodies of the three Israeli youths who were murdered. I mourn their loss and grieve for their loved ones. But the larger picture does not change. Repression is a sickly force; one speculates that respect for and fair-treatment of the Palestinians would never have brought about the tragedies found on a daily basis. Like the deaths of Schwerner, Chaney, and Goodman, the moral lessons of respect for human life and dignity have not been learned, and perhaps cannot be when the structure of society encourages violence and hatred. As if to underscore the tragedy of domination, cause and consequence of repression in the first place, we see the reprisal, the murder of a Palestinian youth burned alive as shown by forensic evidence, whose death I also mourn, and record here the words of Ahmad Tibi, a Palestinian member of the Israeli Parliament, who contrasts the three-week search for the kidnappers and the actions to find Muhammad Abu Khdeir’s killer or killers: “It’s an ordinary message that the life of Jewish Israelis is much more valuable than the life of others, especially Palestinians. This is a double standard, both moral and political, and it’s part of the anger in the street here, about what the Israelis are doing to our lives.”)

On shooting down civilians in Nisour Square,this is the trial testimony of Sarhan Moniem, a traffic officer, who “held up two hands, showing how he pleaded with the American security contractors to stop.” Apuzzo continues: “’There was a lady. She was screaming and weeping about her son and asking for help,’ Mr. Moniem said. He showed the jurors how she had cradled her dead son’s head on her shoulder. ‘I asked her to open the door so I could help her. But she was paying attention only to her son.’”

Another witness, the first in the trial, Mohammed Kinani, “broke down last week [yes after nearly seven years from the time of the shooting, the trial has just begun in Washington, near the Capitol] as he talked about his 9-year-old son, Ali, who was shot in the head while riding in the back seat of the family car. Mr. Kinani sobbed so uncontrollably that Judge Royce C. Lambeth sent the jury out of the room.” The reporter adds, “The next day, one juror said she had been too haunted to sleep. The judge excused her from service.” Wouldst Obama be “too haunted to sleep,” for the crimes he has committed against humanity, and he, too, be “excused…from service” by the American people.

Finally, Majed Gharbawi, a 55-year-old commodity trader, testified, on the 24th, that “he was riding in a small truck with his friend Osama Abbas when the shooting started directly in front of them. Mr. Gharbawi tried to run away and was hit in the abdomen. As he slumped to the ground, he said, he saw another man who had been shot. ’He was screaming and praying to god, for Allah to save him from this calamity,’ Mr. Gharbawi testified. In Islam, he explained, it is customary for the dying to say a final prayer. ‘So I told him, let’s do that together.’”

Apuzzo concludes the witness’s testimony, a passage I would like to see tacked up in the room off the Situation Room, purported to be where Obama and his advisers look over the hit list for the next round of assassinations—the White House analogue to Blackwater practices in constructing a methodology of death: “As Mr. Gharbawi lay in the street, Mr. Abbas also tried to run. He did not make it far. ‘His body was shaking violently as the bullets were piercing him and hitting the sidewalk,’ Mr. Gharbawi said. He said the American security guards kept shooting at Mr. Abbas EVEN AFTER HE WAS ON THE GROUND, CLEARLY DEAD.” (caps., mine)

Who are the true psychopaths, the ones doing the shootings, those who hire them—in the name of the people—to do the shootings, the American people complicit in the enterprise of global hegemony—or all three, and the framework for legitimating war, intervention, murder, social and economic pillage, in our name?

My New York Times Comment on the Apuzzo article, same date, follows:
The shootings occurred in Sept. 2007. Why nearly seven years delay? Blackwater is pure American, a privatization of mercenaries, murder, and intervention. The State Dept. in all this time has done nothing and probably still keeps Blackwater on the payroll (under its new corporate name and logo). Is it any wonder the US is increasingly despised in the world? Private armies with license to kill, quite a testimony to American democracy.

With the FBI handling details, one can suppose a whitewash. Habeas corpus rights denied to detainees previews the US judicial system (as does the FISA Court), so how expect justice to be done? Clearing that intersection with machine guns was reported at the time as Blackwater impatience to get through a crowded area. Allowed for seven years to remain out of sight speaks volumes about the status of forces agreement, the cynicism of intervention, and yes, the cover-up of US criminal activity.

I’m sorry Moniem and fellow Iraqis participate in this farce. They are hoodwinked. There will be no justice, merely damage control. And what of countless other unjustified killings, which will not even see the semblance of prosecution? Blackwater on one hand, Obama, with his hit list and targeted assassination on the other, and in between, CIA-JSOC paramilitary operations geared to regime change, together constitute the package of Obama’s liberal humanitarianism, bringing democracy to the ignorant at gunpoint.

Virtual Economy’s Phantom Job Gains Are Based on Statistical Fraud

And More Fraud Is in the Works
July 7, 2014 |
Paul Craig Roberts

Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality.

In his analysis of the June Labor Data from the Bureau of Labor Statistics, John Williams ( wrote that the 288,000 June jobs and 6.1% unemployment rate are “far removed from common experience and underlying reality.” Payrolls were overstated by “massive, hidden shifts in seasonal adjustments,” and the Birth-Death model added the usual phantom jobs.

Williams reports that “the seasonal factors are changed each and every month as part of the concurrent seasonal-adjustment process, which is tantamount to a fraud,” as the changes in the seasonal factors can inflate the jobs number. While the headline numbers always are on a new basis, the prior reporting is not revised so as to be consistent.

The monthly unemployment rates are not comparable, so one doesn’t know whether the official U.3 rate (the headline rate that the financial press reports) went up or down. Moreover, the rate does not count discouraged workers who, unable to find a job, cease looking. To be counted among the U.3 unemployed, the person must have actively looked for work during the four weeks prior to the survey.  

The U.3 rate(the headline rate that the financial press reports)  automatically declines as people who have been unable to find jobs cease trying to find one and thereby cease to be counted as unemployed.

There is a second official measure of unemployment that includes people who have been discouraged for less than one year. That rate, known as U.6, is seldom reported and is double the 6.1% rate.
Since 1994 there has been no official measure than includes discouraged people who have not looked for a job for more than a year.  

Including all discouraged workers produces an unemployment rate that currently stands at 23.1%, almost four times the rate that the financial press reports.

What you can take away from this is the opposite of what the presstitute media would have you believe. The measured rate of unemployment can decline simply because large numbers of the unemployed become discouraged workers, cease looking for work, and cease to be counted in the U.3 and U.6 measures of the unemployment rate.

The decline in the employment-population ratio from 63% prior to the 2008 downturn to 59% today reflects the growth in discouraged workers. Indeed, the ratio has not recovered its previous level during the alleged recovery, an indication that the recovery is an illusion created by the understated measure of inflation that is used to deflate nominal GDP growth.

Another indication that there has been no recovery is that Sentier Research’s index of real median household income continued to decline for two years after the alleged recovery began in June 2009. There has been a slight upturn in real median household income since June 2011, but income remains far below the pre-recession level.

The Birth-Death model adds an average of 62,000 jobs to the reported payroll jobs numbers each month. This arbitrary boost to the payroll jobs numbers is in addition to the Bureau of Labor Statistics’ underlying assumption that unreported jobs lost to business failures are matched by unreported new jobs from new business startups, an assumption that does not well fit an economy that fell into recession and is unable to recover.

John Williams concludes that in current BLS reporting, “the aggregate average overstatement of employment change easily exceeds 200,000 jobs per month.”

In other words, the economy did not gain 288,000 new jobs last month. But let’s assume the economy did gain 288,000 jobs and exam where the claimed jobs are reported to be.

Of the alleged 288,000 new jobs, 16,000, or 5.5 percent are in manufacturing, which is not very promising for engineers and blue collar workers. Growth in goods producing jobs has almost disappeared from the US economy. As explained below, to alter this problem the government is going to change definitions in order to artificially inflate manufacturing jobs.

In June private services account for 82 percent of the supposed new jobs. The jobs are found mainly in non-tradable domestic services that pay little and cannot be exported to help to close the large US trade deficit.

Wholesale and retail trade account for 55,300 jobs. Do you believe sales are this strong when retailers are closing stores and when shopping malls are closing?

Insurance contributed 8,500 jobs.

As so few can purchase homes, “real estate rental and leasing” contributed 8,500 jobs.

Professional and business services contributed 67,000 jobs, but 57% of these jobs were in employment services, temporary help services, and services to buildings and dwellings.
That old standby, education and health services, accounted for 33,700 jobs consisting mainly of ambulatory health care services jobs and social assistance jobs of which three-quarters are in child day care services.

The other old standby, waitresses and bartenders, gave us 32,800 jobs, and amusements, gambling, and recreation gave us 3,500 jobs.

Local government, principally education, gave us 22,000 jobs.

So, where are the jobs for university graduates? They are practically non-existent. Think of all the MBAs, but June had only 2,300 jobs for management of companies and enterprises.

Think of the struggle to get into law and medical schools. There’s no job payoff. June had jobs for 1,200 in legal services, which includes receptionists and para-legals. Where are all the law school graduates finding jobs?

Offices of physicians  hired 4,000 people. Outpatient care centers hired 700 people. Nursing care facilities hired 2,400 people. So where are the jobs for the medical school graduates?

Aside from all the exaggerations in the jobs numbers of which has informed us, just taking the jobs as reported, what kind of economy do these jobs indicate: a superpower whose pretensions are to exercise hegemony over the world or an economy in which opportunities are disappearing and incomes are falling?

Do you think that this jobs picture would be the same if the government in Washington cared about you instead of the mega-rich?

Some interesting numbers can be calculated from table A.9 in the BLS press release. John Williams advises that the BLS is inconsistent in the methods it uses to tabulate the data in table A.9 and that the data is also afflicted by seasonal adjustment problems. However, as the unemployment rate and payroll jobs are reported regardless of their problems, we can also report the BLS finding that in June 523,000 full-time jobs disappeared and 800,000 part time jobs appeared.

Employers are terminating full-time employment and replacing the jobs with part-time employment in order to come in under the 50-person full time employment that makes employers responsible for fringe benefits such as health care.

Americans are already experiencing difficulties making ends meet, despite the alleged “recovery.” If yet another half million Americans have been forced onto part-time pay with consequent loss of health care and other benefits, consumer demand is further compressed, with the consequence, unless hidden by statistical trickery, of a 2nd quarter negative GDP and thus officially the reappearance of recession.

What will the government do if a recession cannot be hidden? If years of unprecedented money printing and Keynesian fiscal deficits have not brought recovery, what will bring recovery? How far down will US living standards fall for the 99% in order that the 1% can become ever more mega-rich while Washington wastes our diminishing substance exercising hegemony over the world?

Just as Washington lied to you about Saddam Hussein’s weapons of mass destruction, Assad’s use of chemical weapons, Russian invasion of Ukraine, Waco, and any number of false flag or nonexistent attacks such as Tonkin Gulf, Washington lies to you about jobs and economic recovery. Don’t believe the spin that you are unemployed because you are shiftless and prefer government handouts to work. The government does not want you to know that you are unemployed because the corporations offshored American jobs to foreigners and because economic policy only serves the oversized banks and the one percent.

The federal governments Economic Classification Policy Committee has come up with a proposal to redefine fact as fantasy in order to hide offshoring’s contribution to the US trade deficit, artificially inflate the number of US manufacturing jobs, and redefine foreign-made manufactured products as US manufactured products. For example, Apple iPhones made in China and sold in Europe would be reported as a US export of manufactured goods. Read Ben Beachy’s important report on this blatant statistical fraud in CounterPunch’s July 4th weekend edition.

China will not agree that the Apple brand name means that the phones are not Chinese production. If  Obama succeeds with this fraud, the iPhones would be counted twice, once by China and once by the US, and the double-counting would exaggerate world GDP.

For years I have exposed the absurd claim that offshoring is merely the operation of free trade, and I have exposed the incompetent studies by such as Michael Porter at Harvard and Matthew Slaughter at Dartmouth that claimed to prove that the US was benefitting from offshoring its manufacturing. My book published in 2012 in Germany and in 2013 in the US, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West, proves that offshoring has dismantled the ladders of upward mobility that made the US an opportunity society and is responsible for the decline in US economic growth. The lost jobs and decline in the middle class has contributed to the rise in income inequality, the destruction of tax base for cities and states, and loss of population in America’s once great manufacturing centers.

For the most part economists have turned a blind eye. Economists serve the globalists. It pays them well.

The corruption in present-day America is total. Psychologists and anthropologists serve war and torture. Economists serve globalism and US financial hegemony. Physicists and chemists serve the war industries. Physicists and computer geeks serve NSA. The media serves the government and the corporations. The political parties serve the six powerful private interest groups that rule the country.

No one serves truth and liberty. 

The Deteriorating Economic Outlook

July 8, 2014

Paul Craig Roberts, Dave Kranzler, and John Williams

The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news.

Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams ( provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware.

A reasonable correction to the understated deflator gives a much higher first quarter contraction. The two main causes of inflation’s understatement are the substitution principle introduced during the Clinton regime and the hedonic adjustments ongoing since the 1980s that redefine price rises as quality improvements. Correcting for excessive hedonic adjustments gives a first quarter real GDP contraction of 5%. Correcting for hedonic and substitution adjustments gives a first quarter real GDP contraction of 8.5%.

Realistic economic analysis is a rarity. The financial press echoes Wall Street, and Wall Street economists are paid to help sell financial instruments. Gloomy analysis is frowned upon. Even negative quarters are given a positive spin.

Years of understatement of inflation has resulted in years of overstatement of GDP growth. Thinking about the many years of misstatement, we realized that the typical computation in nominal terms of the ratio of debt to GDP is seriously misleading.

Consider that debt is issued in nominal terms and repaid in nominal terms (except for a few Treasury bonds with inflation adjustments). However, nominal wealth or nominal GDP overstates real economic strength. The debt is growing, but both the nominal and real values of the output of goods and services are not keeping up with the rise in debt.

To understand how risky the rise of debt is, nominal debt must be compared to real GDP. Spin masters might dismiss this computation as comparing apples to oranges, but such a charge constitutes denial that the ratio of nominal debt to nominal GDP understates the wealth dilution caused by the government’s ability to issue and repay debt in nominal dollars. We know that inflation favors debtors, because debts can be repaid in inflated dollars.

The graph below shows three different debt to GDP ratios. The bottom line is nominal debt to nominal GDP, the financial press ratio. The middle line is the ratio of nominal debt to the official measure of real GDP. The top line is the ratio of nominal GDP to Shadowstats’ corrected measure of real GDP that puts back in some of the inflation that is no longer included in official measures. The basis for this corrected measure is also 2000, but as the GDP number for 2000 is lower due to correction, this graph begins with the ratio at a slightly higher point.

The nominal debt to GDP ratio shows that as of the end of the first quarter of 2014 total US Treasury debt outstanding is 103 percent of US GDP.

The ratio of Treasury debt to official real GDP shows debt at 136% of GDP.

The ratio of debt to real GDP deflated with more a more realistic measure of inflation, one more in keeping with the experience of consumers, puts US public debt at 185% of GDP. In other words, the burden of US debt on the real economy is almost twice the burden that is normally perceived.

The Shadowstats adjustment we made to real GDP does not fully correct for what we believe has been a growing understatement of inflation since the 1980s. The adjustment we made corrects the implicit price deflator for a two-percentage point understatement of annual inflation due to hedonic distortion. Real GDP with this correction since 2000 looks like this:

We have calculated the ratios of US public debt to nominal GDP and to two measures of real GDP. The ratios of debt to GDP would be much higher if we used total credit outstanding, or total public and private debt, and if we used the government’s unfunded liabilities. The fact seems clear that debt is a major and unappreciated issue for the US economy. The enormous debt, especially with the middle class economy largely offshored, implies substantially lower living standards for the 99 percent.

The first quarter contraction, especially our corrected number, implies a second quarter negative real GDP. In other words, the years of Quantitative Easing (money printing) by the Federal Reserve has not resulted in economic recovery from the 2008 downturn and has not prevented further contraction.

Massive money creation and huge fiscal deficits have protected the balance sheets of “banks too big to fail” but have harmed the American people. Retirees and pension funds have been deprived for years of interest income as the Federal Reserve engineered zero or negative interest rates for the sake of a handful of oversized banks.

The extraordinary creation of new dollars diluted the dollars held by peoples, companies, institutions, and central banks throughout the world, raising fears that the dollar would lose exchange value and its role as world reserve currency.

Washington’s use of financial sanctions to force other countries to bend to Washington’s will is causing countries to leave the dollar payments system. Russian President Vladimir Putin’s advisor has said that the dollar must be crashed as the only way to prevent US aggression. The Chinese have called for “de-americanizing the world.”

The imperialistic US Foreign Account Tax Compliance Act (FATCA), which comes into full force July 1, 2015, imposes such heavy reporting costs on foreign financial institutions that these institutions might opt out of dollar transactions. All together, the result could be a serious tumble in the value of the US dollar, more wealth contraction, higher inflation via import prices, and less US wealth available to support US debt.

In view of this reality, why is Washington pushing its puppet in Kiev toward war with Russia? Why is Washington pushing NATO to spend more money and build more bases on which to deploy more troops in the Baltics and Eastern Europe, especially when Washington’s contribution will be the largest part of the cost? Why is Washington re-entering the Middle East conflict that Washington began by inciting Sunni and Shia against one another? Why is Washington constructing new naval and air bases from the Philippines to Vietnam in order to encircle China?

If Washington is this unaware of its budget constraints and its financial predicament, it cannot be long before Americans experience economic catastrophe.

Monday, July 7, 2014

Study Finds That Products Made with High-fructose Corn Syrup Contain Mercury

By Robert Preidt, USAToday

Almost half of tested samples of commercial high-fructose corn syrup (HFCS) contained mercury, which was also found in nearly a third of 55 popular brand-name food and beverage products where HFCS is the first- or second-highest labeled ingredient, according to two new U.S. studies.

HFCS has replaced sugar as the sweetener in many beverages and foods such as breads, cereals, breakfast bars, lunch meats, yogurts, soups and condiments. On average, Americans consume about 12 teaspoons per day of HFCS, but teens and other high consumers can take in 80% more HFCS than average.

"Mercury is toxic in all its forms. Given how much high-fructose corn syrup is consumed by children, it could be a significant additional source of mercury never before considered. We are calling for immediate changes by industry and the [U.S. Food and Drug Administration] to help stop this avoidable mercury contamination of the food supply," the Institute for Agriculture and Trade Policy's Dr. David Wallinga, a co-author of both studies, said in a prepared statement.

In the first study, published in current issue of Environmental Health, researchers found detectable levels of mercury in nine of 20 samples of commercial HFCS.

And in the second study, the Institute for Agriculture and Trade Policy (IATP), a non-profit watchdog group, found that nearly one in three of 55 brand-name foods contained mercury. The chemical was found most commonly in HFCS-containing dairy products, dressings and condiments.

But an organization representing the refiners is disputing the results published in Environmental Health.

"This study appears to be based on outdated information of dubious significance," said Audrae Erickson, president of the Corn Refiners Association, in a statement. "Our industry has used mercury-free versions of the two re-agents mentioned in the study, hydrochloric acid and caustic soda, for several years. These mercury-free re-agents perform important functions, including adjusting pH balances."

However, the IATP told the Minneapolis Star Tribune that four plants in Georgia, Tennessee, Ohio and West Virginia still use "mercury-cell" technology that can lead to contamination.

IATP's Ben Lilliston also told HealthDay that the Environmental Health findings were based on information gathered by the FDA in 2005.

And the group's own study, while not peer-reviewed, was based on products "bought off the shelf in the autumn of 2008," Lilliston added.

The use of mercury-contaminated caustic soda in the production of HFCS is common. The contamination occurs when mercury cells are used to produce caustic soda.

"The bad news is that nobody knows whether or not their soda or snack food contains HFCS made from ingredients like caustic soda contaminated with mercury. The good news is that mercury-free HFCS ingredients exist. Food companies just need a good push to only use those ingredients," Wallinga said in his prepared statement.

Just 4 fracking wastewater sites cause 20 percent of all central US earthquakes – study

Published time: July 04, 2014

Just four wastewater wells in Oklahoma – where energy companies dump water after completing the hydraulic fracturing process – have caused scores of earthquakes this year, some 30 km from the site, according to a new study by top US universities.

The report, published in Science magazine, focused on the Midwestern state, which has produced 45 percent of the country’s magnitude 3 or bigger seismic shocks in the past five years – with the numbers rising rapidly to match the intensification of fracking activities in the area.

While hydraulic fracturing, or fracking, – which involves pressuring rock formations with liquid until they crack, and then extracting the oil and gas within – poses an inherent risk of earthquakes, according to the authors, the biggest culprits were the wastewater wells, where the liquids used for fracking are pumped, once a reservoir is opened.

“The disposed fluids are capable of contributing to the seismic activity,” Katie Keranen, a geophysics professor at Cornell, and the lead author of the study, told The Oklahoman newspaper.

“These wells are capable. That doesn’t exclude anything else from contributing, but we have no reason to think these are tectonic. They don’t match tectonic activity in other areas. It does seem these are just linked to wastewater. Our research focuses on wastewater and shows it is sufficient.”

Because of a paucity of real data from the thousands of sites in Oklahoma, the team, which included a member from the US Geological Survey, used a three-dimensional model of the underground formations in the area, and then combined that with real liquid injection rates in the area.

There are more than 4,500 active disposal wells in the state, but scientists found that of those, four large wells collectively responsible for pumping 5 million barrels – the equivalent of more than 200 Olympic swimming pools – of liquid into the ground each month, exceed a threshold beyond which disproportionately large earthquakes can happen.

“These really big wells have the biggest impacts on the system,” said Geoffrey Abers, one of the authors, and a professor at Columbia University's Lamont-Doherty Earth Observator.

“The earthquakes themselves seem to occur on small discrete faults. As the pressure builds up in the sedimentary formation that they are pumped into... They put that fault over the edge by jacking up the pore pressure.”

The researchers have not named the four sites, though they are located around Oklahoma City. This is particularly alarming, as the academics say that the impact of the earthquake in their model was as far as 22 miles away (the previous limit was thought to be about, and also could happen even after the disposal well was shut down.

This is a situation where the pumping starts months or a couple of years before the earthquakes are observed at all,” said Abers.

New Dominion, which operates the biggest wastewater wells in the state, has dismissed the simulation used to draw the conclusions.

"An initial review reflects it is premised on certain false assumptions," said company spokesman Jack Money. "At best these incorrect assumptions are irresponsible."

The oil and gas industry – which directly or indirectly employs 1 in 6 in the formerly lagging state – has also urged caution.

“As an industry, we’ve been saying we need more data and we need to work with regulators and others to help determine what is causing the significant increase in seismic activity,” said Chad Warmington, president of the Oklahoma Oil and Gas Association. “But to unequivocally link it to wastewater injections, I think there still needs to be more research.”

Between 1967 and 2000, there was an average of 21 earthquakes of a magnitude greater than 3.0 – considered strong enough to be noticed - in Oklahoma. Last year there were over a hundred, and this year there have been more than 200.

State industry regulator, the Oklahoma Corporation Commission, said it would not comment on the findings until it had a chance to examine them carefully.

Corporations Are Religious People

Guerilla Open Access Manifesto

Guerilla Open Access Manifesto 

Information is power. But like all power, there are those who want to keep it for themselves. The world's entire scientific and cultural heritage, published over centuries in books and journals, is increasingly being digitized and locked up by a handful of private corporations. Want to read the papers featuring the most famous results of the sciences? You'll need to send enormous amounts to publishers like Reed Elsevier. 

There are those struggling to change this. The Open Access Movement has fought valiantly to ensure that scientists do not sign their copyrights away but instead ensure their work is published on the Internet, under terms that allow anyone to access it. But even under the best scenarios, their work will only apply to things published in the future. Everything up until now will have been lost. 

That is too high a price to pay. Forcing academics to pay money to read the work of their colleagues? Scanning entire libraries but only allowing the folks at Google to read them? Providing scientific articles to those at elite universities in the First World, but not to children in the Global South? It's outrageous and unacceptable. 

"I agree," many say, "but what can we do? The companies hold the copyrights, they make enormous amounts of money by charging for access, and it's perfectly legal — there's nothing we can do to stop them." But there is something we can, something that's already being done: we can fight back. 

Those with access to these resources — students, librarians, scientists — you have been given a privilege. You get to feed at this banquet of knowledge while the rest of the world is locked out. But you need not — indeed, morally, you cannot — keep this privilege for yourselves. You have a duty to share it with the world. And you have: trading passwords with colleagues, filling download requests for friends. 

Meanwhile, those who have been locked out are not standing idly by. You have been sneaking through holes and climbing over fences, liberating the information locked up by the publishers and sharing them with your friends. 

But all of this action goes on in the dark, hidden underground. It's called stealing or piracy, as if sharing a wealth of knowledge were the moral equivalent of plundering a ship and murdering its crew. But sharing isn't immoral — it's a moral imperative. Only those blinded by greed would refuse to let a friend make a copy. 

Large corporations, of course, are blinded by greed. The laws under which they operate require it — their shareholders would revolt at anything less. And the politicians they have bought off back them, passing laws giving them the exclusive power to decide who can make copies. 

There is no justice in following unjust laws. It's time to come into the light and, in the grand tradition of civil disobedience, declare our opposition to this private theft of public culture. 

We need to take information, wherever it is stored, make our copies and share them with the world. We need to take stuff that's out of copyright and add it to the archive. We need to buy secret databases and put them on the Web. We need to download scientific journals and upload them to file sharing networks. We need to fight for Guerilla Open Access. 

With enough of us, around the world, we'll not just send a strong message opposing the privatization of knowledge — we'll make it a thing of the past. Will you join us? 

Aaron Swartz July 2008, Eremo, Italy