Thursday, April 28, 2011

BP Expects to Resume Drilling in Gulf of Mexico within Months

(This is sickeningly ridiculous!--jef)



by Terry Macalister


BP has predicted it will be back drilling in the Gulf of Mexico within a matter of months despite continuing legal threats and rows over pollution from last year's Deepwater Horizon disaster.

"We expect to be back and actively drilling during the second half of the year," Byron Grote, the company's chief financial officer, told financial analysts from the City of London on Wednesday.

The comments are likely to infuriate environmentalists who believe BP should be kept away from the Gulf, and could upset a US offshore regulator still considering whether to grant permits to BP.

Verbal gaffes by former chief executive Tony Hayward in the wake of the Macondo well accident 12 months ago damaged the company's reputation in America as it attracted widespread criticism from the White House downwards.

Grote was speaking as BP revealed it had taken a further $400 million of extra charges relating to Macondo in its first quarter financial results, which helped dent profits.

The company has not drilled any wells in the US Gulf since a moratorium was introduced last summer but formally lifted again in October. Some rival firms have already been granted permission to drill new deepwater wells, but not BP.

A spokesman for the British company said it had applied to resume drilling production wells to keep up output levels at important fields such as Thunderhorse and Atlantis. "This is clearly subject to the regulator's permission being granted," he added.

Hopes that drilling could begin soon come barely a month after the US justice department confirmed it was still considering a range of civil and criminal charges against BP. It also comes amid continuing arguments over how much oil or dispersant chemicals used in the aftermath of Macondo continue to damage the waters of the Gulf.

The financial figures for the first three months of the year were boosted by much higher oil prices but were also damaged by the chancellor, George Osborne, taking a billion dollar bite out of profits. Changes announced in the March budget on North Sea oil fields cost BP $683 million in extra taxes over the first quarter of the year while a further $400m is expected to go in 2012 owing to fiscal treatment covering the decommissioning of platforms.

The higher tax charge in the first three months helped replacement cost profits dip to $5.5 billion from $5.6 billion during the same period a year ago but the figures were also hampered by an 11% slump in production volumes and higher operating costs.

These special items outweighed a substantial increase in oil prices year on year and a very strong performance from its Russian business, TNK-BP, where BP is in conflict with its oligarch partners over a proposed tie-up with another local group, Rosneft.

The tax hit from Osborne has infuriated the North Sea oil and gas industry which claims hundreds of jobs stand to be lost. There has been a series of meetings between company executives and government officials but so far Osborne has shown little sign of backing down.
Osborne presented the move last month as a "fair fuel stabiliser" which would raise the tax rate on oil producers to avoid having to increase the tariff on pump petrol, which has reached record levels.

The chancellor said the change would raise £2 billion of extra taxes but BP's figure of $683 million is the first from a company and BP is still one of the largest in the North Sea. The BP tax rate went up from 30% to 37% over the first quarter as a result of the move, said a company spokesman.

The oil group has gradually been running down its UK interests and is talking to potential buyers about various gas fields it wants to sell along with the Wytch Farm onshore field in Dorset.

BP has disposed of $24 billion worth of assets worldwide as part of a cash-raising move to help pay for the $41billion cost of Deepwater Horizon.

Oil Prices: Gouge Us Baby One More Time

Wednesday, April 27, 2011 by GRITtv
by Laura Flanders

Gas prices have been edging up since February, reaching $4 a gallon this Easter, and Republicans are gearing up to make a stink about it. To blame Democrats, that is, for setting things up this way.

Blaming green energy initiatives for driving up prices, House Republicans are planning to hold hearings on a slurry of bills aimed at expanding domestic oil production in response to high gasoline prices. Even the President admits gas prices effect his standing in the polls.

But it should be easy enough to fight back. While the five biggest oil companies report historically high profit earnings, the same GOP that would slash juice programs for poor kids in school stands firm for federal subsidies for big oil.

It's enough to make your head spin. But then again, so is this country's entire relationship with big oil.

Like a marriage from hell. Americans keep getting beaten up environmentally, politically and at the pump. And even as we're beaten up, we shell out: in subsidies, tax breaks, and troops sent around the world to die and kill in defense of the interests of Big Oil.

While Americans keep paying, Big Oil keeps on profiting. The top five companies together made a greasy trillion dollars profit over the last decade. That's Trillion with a T. Yet Republican budgets would lay off the regulators even as they lay on the corporate welfare.

House Republicans marked the anniversary of the BP oil spill by voting unanimously FOR extending oil subsidies again this year.

It'll come as no surprise that for its first round of political contributions for the 2012 cycle, BP handed out a total $29,000 and it went almost entirely to House Republican leaders.

The President’s response so far has been to initiate a task force to investigate illegal commodities trading. But as Public Citizen reports, it's not the illegal but the legal speculation that's most to blame.

And progressive Democrats offer the President a far stronger way to go. Tax dirty energy companies, end corporate welfare, and impose a tax on commodities trading. Instead of getting on the defensive and easing up on drilling the White House should ask Senator Bernie Sanders about his end-to-subsidies bill.

The President needs to take a moral stand against Big Oil for all our sakes, before Drill Baby Drill becomes Gouge Us Baby One More Time.

Wall Street Tames Washington

Wednesday, April 27, 2011 by Creators.com
by Jim Hightower

They came, they saw, they conquered. This line pretty well sums up a little-reported but important story about the new tea partiers in the U.S. House of Representatives.

No sooner had they arrived than the corporate lobbying corps came to visit, saw what these supposed rebels were made of and quickly conquered them without a fight. The forces of big business needed only to lay out some campaign cash — and quicker than you can say, "Business as usual," the budding lawmakers snatched up the money and immediately began carrying the lobbyists' corporate agenda.

Check out the financial services subcommittee, which handles legislation affecting Wall Street bankers. Five tea partiers got coveted slots on this panel, and all five were suddenly showered with big donations from such financial lobbying interests as Goldman Sachs. Now, all five are sponsoring bills to undo parts of the recent reforms to reign in Wall Street excesses.


Steve Stivers of Ohio, for example, hauled in nearly $100,000 in just his first two months in office — 85 percent of it from the special interests his committee oversees. He insists that the cash he took from Goldman Sachs and others has nothing to do with his subsequent support of bills that Goldman is lobbying so strongly for. Stivers claims that his sole legislative focus is on jobs for Ohio's 15th district.

Really? Among the deform-the-reform bills that Steve is carrying is one to let Wall Street giants avoid disclosing the difference in what the CEO is paid and what average employees make. Another would exempt billionaire private equity hucksters from regulation. I can see that these bills are great job extenders for the barons of Wall Street, but how do either of them create a single job in his district?

This stuff does nothing but shelter the greed-headed banksters who wrecked our economy.

Is that what the tea party rebellion was all about?

While Wall Street is running roughshod all over Americans, it's good to know that the FBI, Justice Department and federal courts are all over the major crime cases that so dramatically affect millions of Americans. Like the seven-year prosecution and $6 million trial of baseball player Barry Bonds.

What a waste of time, tax dollars and prosecutorial credibility. Meanwhile, not a single major player in Wall Street's mugging of our economy has even been charged, much less imprisoned. People were robbed of hundreds of billions of dollars — and millions of jobs, homes and businesses were lost — yet the banksters not only skated free, they're now collecting billions in bonus payments for their work.

A New York Times investigative report reveals that top Washington officials — Republican and Democrats — rushed to the crime scene at the start of the financial crash. They rushed not to arrest anyone, but to stave off any serious investigations of the top Wall Streeters who'd obviously cooked their books, fraudulently awarded bonuses to themselves, cashed in on inside information and lied to regulators.

Barry Bonds might've been juiced up on steroids, but these guys were juiced up on hubris and greed, doing criminal damage to America.

Yet, the FBI was backed off, the Justice Department averted its eyes, and bank regulators failed to build criminal cases. Why? Because top politicos, from George W. Bush to Barack Obama, were convinced by their Wall Street confidants that prosecutions would make big investors jittery and endanger the markets.

A couple of weeks after Japan's nuclear meltdown began, a photograph ran worldwide showing a trio of the nuclear plant's top corporate executives. They were at the hospital bedside of a victim of radiation poisoning, bowing deeply in apology. That's the picture of Wall Street executives that I want to see.

Why Wall Street Is Winning


A Hated Financial Center Is Bouncing Back. How Did They Do It?

 
Two years ago as financial reform was put on the U.S. Congressional agenda, a skeptical Senator, Dick Durbin of Illinois, spoke of the power of the banks over the country’s legislative process.

“They run the place,” he said matter of factly.

The comment was then treated as a sidebar in the few newspapers that carried it, perhaps because it hinted at how interests, not ideology, dictate what happens on Capital Hill.

The remark about a shadowy power structure far more important than all the partisan in-fighting that dominates the news is worth recalling as a way of explaining how little has been done to rain in Wall Street in the years since its crash virtually wrecked the global economy.

It is also worth realizing that the people who “run the place” usually do so in ways that rarely get high profile media scrutiny or even public attention.

During the deliberations on re-regulating banks, they mounted a formidable army of lobbyists. It was reported that there was a many as 25 industry lobbyists were assigned to each member of Congress.

Even as new laws passed to satisfy an angry public, the industry dominated the process of what the laws would cover and how.

They also spread money around to helped politicians that helped them. For years, those donations were made on a non-partisan base with Democrats as well as Republicans a beneficiary of carefully targeted help. Today, they are cutting off the Democrats who pushed financial reform.

The corporate sector is following suit. Nominally “liberal” companies like BP, criticized by the White House sharply for the Gulf Oil spill, is pouring money, not oil, into GOP coffers.

As bi-partisanship fades, and certain ideological lines are drawn more sharply, the bankers are now favoring the Republicans financially, perhaps to thank them for erecting a unified wall against tighter rules for banks.

The GOP, led by the pro-free market slogans of the Tea Party are busy, defunding regulators as well.

Right-wingers in turn are being funded by wealthy billionaire backers including the shadowy Koch Brothers responsible for backing the anti union programs of Governors like Scott Walker in Wisconsin. These campaigns are designed to neuter all opposition to a conservative agenda.

Meanwhile, President Obama reaches into the corporate sector for “help” on his economic “recovery” agenda. In recent months, he named Jeffrey R. Immelt, President of General Electric, a company known for outsourcing jobs as his jobs advisor.

He plucked William Daley from the American Chamber of Commerce to become his Chief of Staff.

Daley recently scolded politicians for calling for the prosecution of Wall Street criminals.  He said that job belongs to producers in Hollywood, not lawmakers.

These efforts have emboldened other arms of Wall Street to intervene in politics. The most visible last week was the statement by the ratings agency Standard and Poors that it was revising the country’s credit rating as “negative,” warning that will consider lowering the long term rating of the United States “within two years.”

Many stocks fell, but bond markets ignored it. Former International Monetary Fund economist Simon Johnson raised questions about their decision of a kind absent in most media outlets.
Writing on his website Baseline Scenario, he noted that few outlets pointed out how inaccurate the ratings agencies had been at the height of the crisis, and how irresponsibly they hyped worthless bonds packed with sub prime junk. Yet once again they were treated as credible despite sloppy analysis.

“The main problem is that S&P did not lay out even the most basic numbers or even point readers towards the nonpartisan and definitive Congressional Budget Office analysis of medium- and longer-term budget issues. This matters, because the CBO numbers definitely do not show debt exploding upwards immediately from today…”

Bloggers like Cannonfire go further arguing that “The revised credit rating is meant to push the administration and lawmakers into going after Social Security and Medicare. The right-wing now has an additional propaganda tool to push for draconian cuts in areas that will most hurt working and middle class Americans.

Here's the kicker: Standard and Poors and Moody's are private firms. They don't work for the United States; they serve the interest of Wall Street banks. 2008 taught us that they are completely unaccountable.”

Doug Smith adds on the influential Naked Capitalism blog that Wall Street should know that joining the Tea Party Jihad on government spending will be counterproductive for economic recovery.

“We know the banksters control both parties and are immune from any threats to their bonuses or their liberty. Still, even on the banksters’ own terms of extend-and-pretend, these cuts are idiotic”

Despite all of its frauds and deceptions, Wall Street has bought its way out of the many pressures that it change its ways.  In a special issue. New York Magazine concludes that in this economic war, “Wall Street Won.”

Their editors write, “In the political realm, Wall Street faced the prospect of root-and-branch re-regulation, up to and including the potential nationalization of the industry’s largest players, and in the cultural realm its transfiguration into a kind of pariah state. Once upon a time, the Street’s leading lights had been glamorized and admired to the point of worship; now the likes of Robert Rubin, Lloyd Blankfein, and Richard Fuld were relentlessly pilloried and demonized….

Yet today on Wall Street, all of that seems a very long time ago. Not only are the banks rolling in dough again, but their denizens’ customs and sense of self-esteem have largely reverted to the status quo ante.”

A retired, well-known journalist, James Clay Miller, notes that media coverage of these issues adds to the confusion because it is often superficial and misleading.
“Corporate media refuse to tell many of the stories of bank fraud, as they decline to tell many of the stories that would show the public the corporate takeover of government, but the facts are available to those who recognize that they won't learn much of importance from CNN.”
The public is not just uninformed; it is unorganized on these issues and not fighting back. The power of the bank lobby can be compared to the pro-Israel lobby in the sense it dominates the discourse on this issue.

With a besieged Democratic administration siding with the banks, unions and activists may not be willing or able to challenge Wall Street. They are so desperate to hold on to the White House, they seem willing to pull any potential punches to make Wall Street a target.

Only a national high profile and populist campaign will be able to stop the financial industry from consolidating its clout. The banks are banking on their ability to stop such a campaign before it starts or gains any traction.

Supreme Court Rejects Class-Action Arbitration

Thursday, April 28, 2011 by the San Francisco Chronicle
Supreme Court Rejects Class-Action Arbitration
by Bob Egelko

In a resounding victory for businesses, the Supreme Court ruled Wednesday that a company can require its customers or employees to arbitrate disputes individually rather than joining forces in a class action.

The 5-4 decision overturned a 2005 California Supreme Court ruling allowing customers who signed arbitration agreements to form a class with other buyers who had similar grievances, even if the arbitration clause prohibited class actions.

A lawyer for the plaintiffs, a Southern California couple contesting a $30.22 cell-phone fee from AT&T, called the ruling "a crushing blow to American consumers." AT&T said the court recognized arbitration as a speedy and effective procedure that often helps consumers.

Justice Antonin Scalia's majority opinion - which said businesses facing class actions "will be pressured into settling questionable claims" - could also signal difficulties for a pending sex-discrimination case on behalf of at least 500,000 past and present female employees of Wal-Mart. The court is due to rule by the end of June on whether that case can proceed as a class action.

The ruling gives new force to the clauses that businesses commonly include in product and service contracts, and sometimes in employment contracts, shifting disputes from the courts to private arbitration panels with little judicial review. Although individuals are theoretically free to refuse, they rarely read the fine-print language and usually have few practical options.

State courts, whose laws regulate contracts, have refused to enforce some arbitration clauses that they consider one-sided and unfair. The 2005 California ruling said class-action bans shield companies from accountability for misconduct, reasoning that individuals with small sums at stake would be unable to find lawyers.

Courts in nearly half the states have issued similar rulings allowing customers and employees to file class actions, either before arbitration panels or in court, said plaintiffs' lawyer Deepak Gupta of the nonprofit group Public Citizen.

His clients, Vincent and Liza Concepcion, had complained that AT&T charged $30.22 in sales taxes for a cell phone the company advertised as free when they signed up for service in 2002.

Their contract required individual arbitration, with a clause that awarded $7,500 to customers who won their cases. But a federal appeals court, relying on the 2005 California ruling, said the Concepcions could pursue a class-action arbitration on behalf of other AT&T customers.

The nation's high court, however, said states that impose such restrictions on arbitration run afoul of a 1925 federal law designed to protect arbitration from "judicial hostility."

That law makes arbitration agreements enforceable on the same terms as other contracts and prohibits states from singling out arbitration for unfavorable treatment, said Scalia, writing for the court's conservative majority. He said the California ruling, which allows customers to pursue class actions in arbitration, "interferes with fundamental attributes of arbitration."

Arbitrating cases for a large number of customers at once "makes the process slower, more costly and more likely to generate procedural morass," said Scalia.

He said class-wide arbitration also "greatly increases the risk to defendants" and may coerce settlements.

Dissenting Justice Stephen Breyer accused the majority of disregarding traditional state authority over the fairness of contracts while leaving consumers in the lurch.

Bans on class actions "can lead small-dollar claimants to abandon their claims rather than to litigate," said Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.

Gupta said the ruling would encourage more companies to impose similar restrictions.

"Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold the companies accountable," the plaintiffs' lawyer said.

But Deborah La Fetra, lawyer for the business-backed Pacific Legal Foundation, said the ruling allows consumers as well as businesses "to freely choose arbitration for settling disputes, and it rebuffs lawyers who want to herd consumers into wasteful and inefficient class-action lawsuits."

The case is AT&T vs. Concepcion, 09-893.

Imagine If They Had a War on Drugs and Nobody Came

Pot, Music and the Feds
By JOHN SINCLAIR

Oxford, Miss. - The War on Drugs was still just a twinkle in Richard M. Nixon's evil eye when the great John Lennon released his classic recording called "Imagine." That was in 1971, and Nixon launched his horribly misconceived attack on recreational drug users the following year as part of the re-election campaign headed by the aptly named Committee to Re-Elect the President (CREEP).

My fantasy of late has been to imagine an America without a War on Drugs — a place where the cynical, old, rich, white men who dominated the United States Senate, and their feral sidekicks in the House of Representatives, had never succeeded in hoodwinking the public into welcoming their rhetoric about the dangers of getting high and the sick, draconian measures they enacted to interdict and punish the millions of recreational drug users among our citizenry.

Forty unrelenting years of this inhuman campaign founded in a passel of lies, untruths and severe misrepresentations has transformed our country from a flawed but still idealistic democracy to an ever-burgeoning police state with a gigantic, self-perpetuating, taxpayer-funded apparatus of persecution and doom directed at everyone who refuses to accept the vicious anti-drug mythology that's been enacted into law.

Let's imagine that the White House and the federal legislative bodies had simply rejected the specious argument advanced by empire-building bureaucrats like Harry J. Anslinger that marijuana was a narcotic with no conceivable medical application and its users presented a clear and present danger to the social order.

What if, instead, they had conducted an unfettered scientific investigation into the actual properties, patterns and methods of usage, physical and mental effects, documented medicinal uses, economic potential, and overall impact of marijuana on the fabric of American society, resulting in the reasonable conclusion that cannabis causes virtually no harm to its users nor to society in general.

With respect to other recreational drugs with certain detrimental effects on their users, the relatively enlightened lawmakers might well have concluded that the resultant problems were likely medical and/or psychological in nature and demanded treatment of some sort to reduce the potentially negative impact on the drug users and, by extension, on the social order itself.

Nowhere would such an informed approach dictate legal sanctions against recreational drug users of any sort. If their behavior were to cause problems in the workplace or in social settings, the usual remedies — demotion, firing, suspension from duties and the like — would be applied to resolve any discrepancies. If laws were broken as a result of their drug use, the mandated responses — arrest, prosecution, conviction, punishment — would be effected as for all similar violators.

The idea of segregating recreational drug users from their fellow citizens as a class unto themselves and punishing them for getting high in their chosen ways would be seen as indefensibly stupid and entirely without basis under our system of jurisprudence and its guarantees of life, liberty and the pursuit of happiness — like arresting and jailing persons for smoking a cigarette or drinking a bottle (or even an entire case) of beer.

Not only could there be no finding suggesting that recreational drug users constitute a criminal class to be treated in the same manner as armed robbers, arsonists, rapists and murderers, stripped of their lives and livelihoods and sentenced to long terms in prison, but it is indeed likely that testimony solicited during the course of such scientific investigations would indicate that there are many positive effects from getting high on drugs and that drug users have made many valuable contributions in the areas of medicine, psychology, philosophy, poetry, literature, painting, cinema and music of many descriptions.

A short list of such exemplars crucial to the development of "America's only original art form" would include Louis Armstrong, the pioneer of jazz improvisation, Lester Young, the president of the tenor saxophone, Charlie Parker and Thelonious Monk, originators of modern jazz, and Miles Davis, perhaps its greatest avatar, as well as sonic explorers like Cecil Taylor, John Coltrane, Pharaoh Sanders and Marion Brown.

With respect to the giants of jazz, the record indicates that a wildly disproportionate number of musical creators were forced to serve lengthy prison terms as a consequence of their arrest for use of marijuana, cocaine, heroin and other illegalized substances — a list that includes Mezz Mezzrow, Prez, Dexter Gordon, Hampton Hawes, Sonny Rollins, Stan Getz and the great tenor saxophonist Gene Ammons, who served a seven-year stretch in the Illinois penitentiary for being a heroin addict.

More familiarly, the popular music of the past 50 years now known as "classic rock" was created and advanced by people deeply steeped in marijuana smoke, LSD and other chemicals, including such originators as Jimi Hendrix, Janis Joplin, Jim Morrison and many others who succumbed to the fatal effects of their habitual drugs of choice.

Further, with regard to popular culture, it's hard to imagine any film or television production that has been realized without the participation of writers, directors, actors, producers and crewmembers under the influence of illegal drugs of some sort. The ranks of record producers, entertainment executives, concert promoters, artists' managers, booking agents and other industry operatives are rife with drug users of every description, yet the show goes on and the profits roll in to the coffers of the corporations who utilize their drug-addled services.

But we're only making little scratches on the surface of the fabric of modern American society. The fact is that millions of people use illegal drugs on a regular, daily basis and suffer primarily from the efforts of the insanely dedicated minions of law and order who are bent on enforcing the letter of the law that proscribes getting high without a prescription and mandates elaborate punishment schemes for those unlucky enough to be apprehended.

Imagine that it's OK to get high and that you could acquire your drug or drugs of choice across the counter at a reasonable cost from a licensed dispensary. Imagine that the police and legal authorities had no stake in what might be going on in your head as long as you weren't hurting anyone or breaking the established codes of social conduct. Imagine that the people who grow, manufacture and supply your drug needs are treated like producers of other essential goods and services, allowed to make a reasonable profit and pay the appropriate taxes into the public treasury.

Imagine that the police had absolutely no power of arrest with respect to recreational drug users unless we were to commit some sort of actual crime. Imagine that they weren't allowed to tear your car or your home apart looking for drugs or the attendant paraphernalia. Imagine the vast number of closed police stations, courtrooms, jails and prisons, the shuttered probation and parole offices and drug treatment centers. Imagine that those police forces that remained were directed toward detecting and confiscating unregistered or illegal weapons of human destruction.

Then imagine the resultant savings in tax dollars and the massive redirection of tax revenues to underwrite music and arts programs in schools, free health care for the sick and damaged among us, expanded human services of every kind instead of money wasted on the idiotic War on Drugs. Imagine a society where you can get high and go about your business without fear of persecution, arrest or punishment of any kind except that which you may inflict upon yourself in the course of your experimentation and habitual use of your drugs of choice.

Decifit Fever

Looney Tune Time Among the Elites
By DEAN BAKER

We already knew that the folks involved in debating and designing economic policy had a weak understanding of economics, that is why they couldn't see the $8 trillion housing bubble that wrecked the economy, but now it seems that they are breaking their ties to reality altogether. The country is still smoldering in the wreckage of the collapsed housing bubble, but the victims have left the policy debate altogether.

Twenty-five million people are unemployed, underemployed or out of the workforce altogether, but that's not on anyone's agenda. Millions of homeowners are underwater in their mortgage and facing the loss of their homes, that's also not on anyone's agenda. Tens of millions of baby boomers are at the edge of retirement and have just lost their life savings. This also is not on anyone's agenda.

Deficit-cutting fever is the current craze in the nation's capital. But even here there is little tie to reality. House budget committee chairman Paul Ryan put out a budget that proposes that in 2050 we will be spending less on defense, domestic discretionary and various non-medical entitlements together than we spend on defense today. And most of the punditry praise its seriousness. Meanwhile, the Progressive Caucus, the largest single bloc in Congress, proposes a way to get to a balanced budget by 2021, and it is virtually ignored.

There are certainly grounds to criticize the caucus' budget, since it is not perfect. My list of deficit reducers would include requiring the Fed to hold $3 trillion in debt, as a way to save $1.5 trillion in interest payments over the course of a decade. I would also give Medicare beneficiaries the option to buy into more efficient health care systems in other countries. This would both save money and show people that we can get top quality care for a hell of a lot less money. And I don't buy the need for major deficit reduction in the first place, but if you want a serious effort to balance the budget, here it is.

Remarkably, the elite media have almost completely ignored it. David Brooks just wrote a new deficit whining track in which he paid zero attention to the Progressive Caucus's budget or any of the proposals it contained. In his discussion of the release of the caucus' budget, Washington Post columnist Dana Milbank turned into a fashion critic. He devoted more space to discussing the tie worn by Representative Raul Grijalva (the chair of the Progressive Caucus) then he did discussing the substance of the proposals.

If the budget cutters were serious then the caucus' proposal would be very much at the center of the debate. All of its proposals poll reasonably well and have been tested in the United States or elsewhere. On the revenue side it calls for raising taxes on the wealthy, but not to levels that are higher than they were in past decades. It also calls for a tax on financial speculation similar to the one that the UK has had for decades and the U.S. actually had prior to 1966.

On the spending side it calls for a quick end to the wars in Iraq and Afghanistan and a return to post-cold war levels of military spending. It calls for a public option for health care to save on the costs of the health care exchanges in the ACA. And it calls for negotiating prescription drug prices in Medicare.

All of these proposals pass the laugh test in terms of being practical and politically feasible in the sense that the public would support them. These proposals may not be politically feasible in the sense that the people who pay for political campaigns and own major news outlets do not like them.

But this is still helpful. The Progressive Caucus has done the country an enormous service in producing its budget. They have helped to show as clearly as possible that the deficit hawks do not give a damn about reducing deficits and balancing the budget. They want to cut the programs that the poor and middle class depend upon -- programs like Social Security, Medicare, and Medicaid -- so that the rich can have more money in their pockets.

Deficit reduction as it is usually discussed is a give to the rich agenda. The fact that the Progressive Caucus budget was so universally ignored drives this point home very well.

Deficit or War: You Can't Do Both

Kinds of Hawks
By MICHAEL TRUE

"If voting made any difference, it would be illegal," according the late Philip Berrigan. This satiric comment seems especially relevant during our present military and economic crisis.

President Obama proposes reasonable remedies, but fails to follow through on them, while Republicans issue counter proposals that are bound to make things worse.

"If it was not clear before, it is obvious now," according to the New York Times editorial (April 19), that the Republican party "is fully engaged in a project to dismantle the foundations of the New Deal and the Great Society, and to liberate business and the rich from the inconveniences of oversight and taxes."

Why do we refuse to recognize the economic consequences of our failed policies, or to halt the Bush/Obama war on Afghanistan? According to a U.S. Army lieutenant, "no one benefits from this war… Only the CEOs and executive officers of war-profiteering corporations find satisfactory returns on their investments."

Some Americans, including politicians, profit from wasteful military expenditures and corporate greed, while 17% of the population remains permanently impoverished. Millions support laying waste to Kandahar, while New Orleans and Detroit deteriorate.

"The remains of villages destroyed by our bombs, the dead killed from our munitions, leave us, too, with bloody hands," as Chris Hedges has said. "We can build a new ethic only when we face our complicity in the cycle of violence and terror."

Flaunting our military power around the globe, we resort to brute force and economic domination,

Must we, as a people, squander our wealth and our young people in wars of conquest and intervention, financing 1,000 military bases around the world, funding corrupt dictatorships, and imposing "democracy" on countries whether they want it or not?

Going along to get along, Democrats and Republicans support policies that justify torture, undermine the right of habeas corpus, destabilize unions, abandon our once-admired educational system, and neglect our own people.

Dismantling a war culture that has undermined democratic governance and cultivating a peace culture mean promoting cooperative rather than domination models, locally, nationally, and internationally. Why not?

Initial steps in this direction require our
(1) reducing the military budget, larger than all military budgets in the world combined;
(2) abolishing tax breaks for the filthy rich and the multinational corporations;
(3) reviving community self-reliance to reduce our dependence on agribusiness and foreign fuel.
Over the past fifty years, creeping militarism and unchallenged corporate greed have undermined our institutions one by one. Preferring comfort and complacency to confrontation, people who should know better, including academics and intellectuals, are silent, while members of the media frequently serve as a public relations agents for the Pentagon and legislators pretending to be "war hawks and deficit hawks" at the same time.

Voting for the right, as Henry David Thoreau said, is not doing anything for the right. Since the founding of the U.S., an active citizenry has succeeded in eradicating slavery, liberating women, upholding human rights, and organizing workers by taking risks essential to cultivating a peace culture.

Nonviolent people power helped to remedy previous crises, to uphold justice and to de-escalate violence. Congress may eventually get around to voting on these issues, but by that time the hard work will have been accomplished by all of us joining to force them to do so.

In commenting on public issues, one wants to be balanced and useful, as well as to retain integrity and to be honest about the present state of affairs. Our present crisis, as in the 1920s or 30s or 60s, appears to require ordinary people resorting to demonstrations, sit-ins, and strikes, to sustain democratic governance and values that are dear to informed citizens.

Hyperinflation? No Way

Don't Invest in Wheelbarrows for Toilet-Paper Greenbacks
By MIKE WHITNEY

The Federal Reserve is not going to push the economy into Zimbabwean hyperinflation. That's pure bunkum. The Fed's plan is to weaken the dollar to boost exports and to force China to let its currency appreciate to its fair-market value. By purchasing $600 billion in US Treasuries (QE2), the Fed effectively reduces the supply of risk-free assets, which sends investors into riskier assets like stocks and commodities. Is there an element of class warfare in the policy?

You bet there is. It's a direct subsidy to the investment class while workers are left to face higher prices on everything from gasoline to corn flakes. It's a royal screw job. But while Ben Bernanke may be a prevaricating class warrior and a charlatan, he's not insane. He's not going to shower the nation with increasingly-worthless greenbacks like they were confetti.

While rising headline inflation (gas and food) is painful for workers and people on fixed income, it actually intensifies the downturn by diverting money from other areas of consumption. So, discretionary spending falls and the economy begins to contract. It's more proof that we're in a Depression. Gloom and Doom has become a cottage industry employing a thriving class of worrywarts who all preach from the very same songbook.

Memo to Inflationists: The economy is not moving. Yes, the Fed can tie QE strings around the hands and feet and make them move like a marionette, but it's all make-believe. Without the props and the support-system, the economy would drop to its knees, gasp for air, and expire. Dead.

Have you noticed that 1st Quarter GDP has been revised-down to 2 percent and could be headed lower still? (Maybe even negative!) Have you noticed that unemployment is stuck at 8.8 percent and underemployment at 16.2 percent with more people falling off the rolls and into abject poverty every day? Did you see that manufacturing is starting to slip and "the production index, a key measure of state manufacturing conditions, fell from 24 to 8, indicating slower growth in output." Do you realize that the downturn in housing is getting more ferocious even after falling steadily for 5 years straight? Have you considered the fact that the government and Fed have pumped trillions of dollars of monetary and fiscal stimulus into the financial system with just about nothing to show for it? And, do you know why? Because we're in a Depression, that's why.

It's ridiculous to wail about "money supply" when velocity is zilch. It's pointless to crybaby over "bank reserves" when people are broke. It's crazy to yelp about "printing presses" when lending is down, credit is contracting and the economy is mired in the most vicious slump in 80 years. We're in a liquidity trap where normal monetary policy doesn't work. Keynes figured it out more than 60 years ago, but since Bernanke is so much smarter than Keynes, we get to relearn it all over again. Now that QE2 is ending, the verdict is in. And what have we learned? That monetary policy doesn't work in a liquidity trap.

The hullabaloo about inflation is vastly overdone. China's not going to dump its $3 trillion stockpile of mainly USD and US Treasuries. Who started that cockamamie story? China's doing everything it can just to keep its currency cheap just so to keep its people working. Are they suddenly going to do an about-face and commit economic harikari just to strike a blow against Uncle Sam? No way.

And, now the naysayers are worried that no one will buy Treasuries when QE2 ends in June. It's a possibility, but is it likely? Here's a piece from the Wall Street Journal that mulls over what will happen in June:

"The direction of interest rates after the Fed ends its bond-buying program is crucial for the economy. The issue will be in sharp focus this week, when Fed policy makers hold a two-day policy meeting, starting Tuesday, to discuss their efforts to steer the economy between the shoals of recession and inflation.

“They face an economy that has shown signs of losing momentum in recent months, with first-quarter economic growth now widely believed to be less than 2% annualized....

“One yardstick for the immediate future of Treasury yields after QE2 could be QE1, which included a $1.25 trillion Fed buying spree of mortgage bonds from late 2008 to March 2010. The mortgage-bond market felt barely a ripple when the Fed stopped buying. Treasuries, some observers reason, may follow the same path.

“Treasury yields ‘moved up significantly at the onset of QE1 but then fell precipitously when it ended,’ Mr. Rieder says. ‘So it's not a given that Treasury yields will rise this time either.’” ("Fund Giants Take Competing Stands On US Bond Outlook", Wall Street Journal)

True, that doesn't guarantee that yields won't rise when QE2 ends, but how high can they go when the economy is still stuck in the mud?

Not very high. And, who's going to buy Treasuries when the economy is "losing momentum"? The same people who always buy them when the economy starts to crater; investors looking for a "safe harbor" from falling stocks or deflation. Don't worry, there will be buyers. It's just a matter of price.

So, forget about inflation. It just diverts attention from the real issue, which is finding a way to dig out of the mess we're in and put people back to work. QE2 has been a total flop; we know that now. It's time to return to traditional fiscal policies that have a proven track record of success.

The Big Shakedown

Bernanke's Boondoggle
By MIKE WHITNEY
The New York Times is bit late to the party but, better late than never, right?

Times economics writer Binyamin Applebaum has just discovered that the Fed's bond buying program--aka QE2--has lit a firecracker under stocks but done zilch for the real economy. 
Applebaum--who apparently never trolls the econo-blogs to expand his understanding of what's going on in the world of finance-- is "shocked" that Bernanke's $600 billion "credit easing" strategy has turned out to be an utter boondoggle that's had no measurable impact on output, unemployment or growth. Who could've known? But let's allow Applebaum to speak for himself:
"The Federal Reserve's experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.
But most Americans are not feeling the difference, in part because those benefits have been surprisingly small. The latest estimates from economists, in fact, suggest that the pace of recovery from the global financial crisis has flagged since November, when the Fed started buying $600 billion in Treasury securities to push private dollars into investments that create jobs...
A study published in February found that interest rates decreased, but only for companies with top credit ratings. "Rates that are highly relevant for households and many corporations — mortgage rates and rates on lower-grade corporate bonds — were largely unaffected by the policy," wrote Arvind Krishnamurthy and Annette Vissing-Jorgensen, both finance professors at Northwestern University.
Another indication of its limited success: Borrowing has not grown significantly, suggesting that corporations — which are sitting on record piles of cash — are not yet seeing opportunities for new investments. Until they do, some economists argue that the Fed is pushing on a string.
"What has it done? It has eased credit conditions, it has pumped up the stock market, it has suppressed the dollar," said Mickey Levy, Bank of America's chief economist. "But does the Fed think that buying Treasuries and bloating its balance sheet is really going to create permanent job increases?" ("Stimulus by Fed is Disappointing, say Economists", Binyamin Applebaum, New York Times)
Correction: The $600 billion in Treasury securities was never intended "to push private dollars into investments that create jobs," as Applebaum opines. That's baloney. There have been numerous studies which have shown that QE has little to no effect on employment. (Note--A study by Macroeconomic Advisors states that an additional $1.5 trillion in bond purchase would only reduce unemployment by two-tenths of 1 percent.) Bernanke is familiar with these studies, which means that the real objective was something else entirely. But just to provide a bit of context, here's a clip from a Washington Post op-ed that Bernanke wrote just prior to the launching of QE2 in November 2010. Judge for yourself whether the man can be trusted or not.

From the Washington Post:
"The Federal Reserve's objectives ---- are to promote a high level of employment and low, stable inflation. Unfortunately, the job market remains quite weak; the national unemployment rate is nearly 10 percent, a large number of people can find only part-time work, and a substantial fraction of the unemployed have been out of work six months or longer. The heavy costs of unemployment include intense strains on family finances, more foreclosures and the loss of job skills.....Low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating. The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed.....the Federal Reserve has a particular obligation to help promote increased employment and sustain price stability. Steps taken this week should help us fulfill that obligation." ("What the Fed did and why: supporting the recovery and sustaining price stability", Ben Bernanke, Washington Post)
By my count, Bernanke mentions employment/unemployment 5 times in the first 3 paragraphs alone. But QE2 has done nothing to reduce unemployment. The only reason unemployment has dipped at all, is because more workers are falling off the unemployment rolls. Is Bernanke taking credit for the people who now live under freeway off-ramps or forage for their meals in dumpsters?

And QE2 hasn't improved bank lending either; that's another fabrication propagated by the financial media. Just check out the Fed's own stats; it's all there in black and white. (Total Loans and Leases at Commercial Banks (LOANS) FRB of St. Louis) Total borrowing at commercial banks continues to decline as it has since the bubble burst in 2008. Also total "consumer credit outstanding" has decreased from that same period. (Ho hum)

Sure, it's boring, but think about it for a minute: Didn't we just fork over $3 trillion to the banks, so they'd start lending again? And, have they?

No.

So, let's review: The banks were given $700 billion when the TARP bailout was enacted. Then they were given $1.25 trillion more in the first round of quantitative easing (QE) where the Fed purchased the banks toxic mortgage-backed securities (MBS) and agency debt. They were given another $900 billion in QE2, in which the Fed exchanged $600 bil in reserves for US treasuries and another $300 bil in recycled proceeds from maturing MBS. So, altogether the banks have been given roughly $3 trillion, not a penny of which has benefited US taxpayers, increased demand, or strengthened the recovery. In fact--as we pointed out earlier--the money has not even increased lending which was the stated objective. (along with lowering unemployment)

So, we've been fleeced, right?

Imagine if that same $3 trillion had been given to smaller banks with the proviso that they temporarily drop interest rates on credit cards to 5 percent for (let's say) two years. Of course, the banks would still make boatloads of money because they borrow from the Fed at zero. 
(0.25%). But think of how much activity that would create if people could borrow at 5% instead of 18%. Most likely, it would lead to another credit expansion. 

But, that's not going to happen because the banks want to borrow money from depositors (you and me) at 0.50% (1-year CD) and then rent it back at 18% (via credit cards), that way they can leverage their gambling operations in the equities markets and still hand out multi-million bonuses to their top predators.

Oh, yeah, and if those gambling operations go belly-up; guess who's on the hook?

You and me. And, if you can't pay, no problem; they'll just subtract it from your Social Security.

Is this the crookedest system you've ever seen?

Yep.

So, let's cut to the chase; what is QE2 really all about?

It's obvious; it's about pumping up stock prices; there's nothing more to it. It's Bubblenomics 101.

Look, even the NY Times is willing to admit it's a farce, and that's quite a concession. But Bernanke is sticking with his story despite the mountain of evidence to the contrary. Why? Because the Fed is is the policy arm of the banking industry and Bernanke is their chief lobbyist. It's that simple. And, his job is to funnel more free capital to his loafer moneybags friends who hate work. That's it. It's not complicated. So, they make up some goofy story about "lowering unemployment" or "increasing lending" and try to hide what they're doing behind a name that sounds "way too smart" for the average guy to understand. "Quantitative Flim-flam" is what it should be called; One-part junk economics and 99% unalloyed hogwash.

Get the picture? What the Fed is doing has a long pedigree; it's called cornhole the taxpayer, and no one does it with such virtuosity and deftness as Ben Bernanke. He's a real pro.

And, one last thing: Bernanke and Co. know the real condition of the economy. They're not fools. They know that each business cycle is weaker than the last, providing fewer jobs, more slack in the economy, and more anemic growth. They know it, just as they know that mature capitalist economies drift inexorably towards stagnation, which is why the capital accumulation process must be endlessly tweaked to maintain profitability for the "lucky few". So, while at one time, the US produced precision widgets and eye-popping techno-gadgetry; the focus has since shifted to ever-wackier debt-instruments and computerized high-speed trading to fatten the bottom line. Because that's where the real gravy is. 

QE2 fits perfectly in this new paradigm of profit-extraction via maximizing debt and goosing the markets. It's a sign that the folks at the Central Bank have completely abandoned the traditional ways of boosting earnings and moved on to Plan B, which involves cannibalizing the system and devouring the society to further enrich the illustrious 1 percent. 
 
So, forget about the "self sustaining recovery". Fed policy has nothing to do with rebuilding the economy and putting people back to work. It's just one big shakedown. They grab you by the ankles, turn you upside-down, and shake. And, when the last copper penny hits the pavement, "PLING" they'll move on to China.

Free Comic Day May 7, 2011

The bestest day of the year! Coming the weekend after this next one.


What would we have done with all that oil from the BP oil spill?

Oil'd from Chris Harmon on Vimeo.

Monday, April 25, 2011

State Department wants passport applicants to reveal lifetime employment history

By David Edwards - RAW Story
Monday, April 25th, 2011

The U.S. Department of State has proposed a new questionnaire that would make it almost impossible for some people to get a passport.

The new document (PDF) would require that certain applicants submit a list of every residence and every job they've ever had since birth.

In February, the department published a request in the Federal Register allowing 60 days for comment before the new rules go into effect.

"The Biographical Questionnaire for a U.S. Passport, form DS-5513, is used to supplement an application for a U.S. passport when the applicant submits citizenship or identity evidence that is insufficient or of questionable authenticity," according to a supporting statement (PDF) issued along with the request for comment.

"This form is used prior to passport issuance and solicits information relating to the respondent’s family, birth circumstances, residences, schooling, and employment," the statement added.

"In addition to this primary use of the data, the DS-5513 may also be used as evidence in the prosecution of any individual who makes a false statement on the application and for other uses as set forth in the Prefatory Statement and the Passport System of Records Notice (State-26)."

The document also requires some applicants to submit information about the mother's pre-natal and post-natal care, the mother's residence one year before and after the birth, the persons in attendance at the birth and religious or institutional recordings of the birth.

"The State Department estimated that the average respondent would be able to compile all this information in just 45 minutes, which is obviously absurd given the amount of research that is likely to be required to even attempt to complete the form," Consumer Traveler's Edward Hasbrouck noted.

The Consumer Travel Alliance opposes the new form as "exceeding the statutory authority of the DOS, unconstitutional, and in violation of U.S. obligations pursuant to international human rights treaties to which the U.S. is a party," according to draft comments (PDF) prepared by the group.

"[C]hoosing to require an applicant for a passport to complete the proposed Form DS-5513, which few if any applicants could complete, would amount to a de facto decision to deny that applicant a passport. And that decision would be standardless, arbitrary, and illegal," they added.

The State Department had not returned a call asking for comment at the time of publication.

Washington on the Rocks

An Empire of Autocrats, Aristocrats and Uniformed Thugs Begins to Totter
Monday 25 April 2011
by: Alfred McCoy and Brett Reilly, TomDispatch

In one of history’s lucky accidents, the juxtaposition of two extraordinary events has stripped the architecture of American global power bare for all to see. Last November, WikiLeaks splashed snippets from U.S. embassy cables, loaded with scurrilous comments about national leaders from Argentina to Zimbabwe, on the front pages of newspapers worldwide. Then just a few weeks later, the Middle East erupted in pro-democracy protests against the region’s autocratic leaders, many of whom were close U.S. allies whose foibles had been so conveniently detailed in those same diplomatic cables.

Suddenly, it was possible to see the foundations of a U.S. world order that rested significantly on national leaders who serve Washington as loyal “subordinate elites” and who are, in reality, a motley collection of autocrats, aristocrats, and uniformed thugs. Visible as well was the larger logic of otherwise inexplicable U.S. foreign policy choices over the past half-century.

Why would the CIA risk controversy in 1965, at the height of the Cold War, by overthrowing an accepted leader like Sukarno in Indonesia or encouraging the assassination of the Catholic autocrat Ngo Dinh Diem in Saigon in 1963? The answer -- and thanks to WikiLeaks and the “Arab spring,” this is now so much clearer -- is that both were Washington’s chosen subordinates until each became insubordinate and expendable.

Why, half a century later, would Washington betray its stated democratic principles by backing Egyptian President Hosni Mubarak against millions of demonstrators and then, when he faltered, use its leverage to replace him, at least initially with his intelligence chief Omar Suleiman, a man best known for running Cairo’s torture chambers (and lending them out to Washington)? The answer again: because both were reliable subordinates who had long served Washington’s interests well in this key Arab state.

Across the Greater Middle East from Tunisia and Egypt to Bahrain and Yemen, democratic protests are threatening to sweep away subordinate elites crucial to the wielding of American power. Of course, all modern empires have relied on dependable surrogates to translate their global power into local control -- and for most of them, the moment when those elites began to stir, talk back, and set their own agendas was also the moment when it became clear that imperial collapse was in the cards.

If the "velvet revolutions” that swept Eastern Europe in 1989 tolled the death knell for the Soviet empire, then the "jasmine revolutions" now spreading across the Middle East may well mark the beginning of the end for American global power.

Putting the Military in Charge

To understand the importance of local elites, look back to the Cold War’s early days when a desperate White House was searching for something, anything that could halt the seemingly unstoppable spread of what Washington saw as anti-American and pro-communist sentiment. In December 1954, the National Security Council (NSC) met in the White House to stake out a strategy that could tame the powerful nationalist forces of change then sweeping the globe.

Across Asia and Africa, a half-dozen European empires that had guaranteed global order for more than a century were giving way to 100 new nations, many -- as Washington saw it -- susceptible to “communist subversion.” In Latin America, there were stirrings of leftist opposition to the region’s growing urban poverty and rural landlessness.

After a review of the “threats” facing the U.S. in Latin America, influential Treasury Secretary George Humphrey informed his NSC colleagues that they should “stop talking so much about democracy” and instead “support dictatorships of the right if their policies are pro-American.” At that moment with a flash of strategic insight, Dwight Eisenhower interrupted to observe that Humphrey was, in effect, saying, “They’re OK if they’re our s.o.b.’s.”

It was a moment to remember, for the President of the United States had just articulated with crystalline clarity the system of global dominion that Washington would implement for the next 50 years -- setting aside democratic principles for a tough realpolitik policy of backing any reliable leader willing to support the U.S., thereby building a worldwide network of national (and often nationalist) leaders who would, in a pinch, put Washington’s needs above local ones.

Throughout the Cold War, the U.S. would favor military autocrats in Latin America, aristocrats across the Middle East, and a mixture of democrats and dictators in Asia. In 1958, military coups in Thailand and Iraq suddenly put the spotlight on Third World militaries as forces to be reckoned with. It was then that the Eisenhower administration decided to bring foreign military leaders to the U.S. for further “training” to facilitate “the ‘management’ of the forces of change released by the development” of these emerging nations. Henceforth, Washington would pour military aid into the cultivation of the armed forces of allies and potential allies worldwide, while “training missions” would be used to create crucial ties between the U.S. military and the officer corps in country after country -- or where subordinate elites did not seem subordinate enough, help identify alternative leaders.

When civilian presidents proved insubordinate, the Central Intelligence Agency went to work, promoting coups that would install reliable military successors --replacing Iranian Prime Minister Mohammad Mossadeq, who tried to nationalize his country's oil, with General Fazlollah Zahedi (and then the young Shah) in 1953; President Sukarno with General Suharto in Indonesia during the next decade; and of course President Salvador Allende with General Augusto Pinochet in Chile in 1973, to name just three such moments.

In the first years of the twenty-first century, Washington’s trust in the militaries of its client states would only grow. The U.S. was, for example, lavishing $1.3 billion in aid on Egypt’s military annually, but investing only $250 million a year in the country’s economic development. As a result, when demonstrations rocked the regime in Cairo last January, as the New York Times reported, “a 30-year investment paid off as American generals... and intelligence officers quietly called... friends they had trained with,” successfully urging the army’s support for a “peaceful transition” to, yes indeed, military rule.

Elsewhere in the Middle East, Washington has, since the 1950s, followed the British imperial preference for Arab aristocrats by cultivating allies that included a shah (Iran), sultans (Abu Dhabi, Oman), emirs (Bahrain, Kuwait, Qatar, Dubai), and kings (Saudi Arabia, Jordan, Morocco). Across this vast, volatile region from Morocco to Iran, Washington courted these royalist regimes with military alliances, U.S. weapons systems, CIA support for local security, a safe American haven for their capital, and special favors for their elites, including access to educational institutions in the U.S. or Department of Defense overseas schools for their children.

In 2005, Secretary of State Condoleezza Rice summed up this record thusly: “For 60 years, the United States pursued stability at the expense of democracy… in the Middle East, and we achieved neither.”

How It Used to Work

America is by no means the first hegemon to build its global power on the gossamer threads of personal ties to local leaders. In the eighteenth and nineteenth centuries, Britain may have ruled the waves (as America would later rule the skies), but when it came to the ground, like empires past it needed local allies who could serve as intermediaries in controlling complex, volatile societies. Otherwise, how in 1900 could a small island nation of just 40 million with an army of only 99,000 men rule a global empire of some 400 million, nearly a quarter of all humanity?

From 1850 to 1950, Britain controlled its formal colonies through an extraordinary array of local allies -- from Fiji island chiefs and Malay sultans to Indian maharajas and African emirs. Simultaneously, through subordinate elites Britain reigned over an even larger “informal empire” that encompassed emperors (from Beijing to Istanbul), kings (from Bangkok to Cairo), and presidents (from Buenos Aires to Caracas). At its peak in 1880, Britain's informal empire in Latin America, the Middle East, and China was larger, in population, than its formal colonial holdings in India and Africa. Its entire global empire, encompassing nearly half of humanity, rested on these slender ties of cooperation to loyal local elites.

Following four centuries of relentless imperial expansion, however, Europe’s five major overseas empires were suddenly erased from the globe in a quarter-century of decolonization. Between 1947 and 1974, the Belgian, British, Dutch, French, and Portuguese empires faded fast from Asia and Africa, giving way to a hundred new nations, more than half of today’s sovereign states. In searching for an explanation for this sudden, sweeping change, most scholars agree with British imperial historian Ronald Robinson who famously argued that “when colonial rulers had run out of indigenous collaborators,” their power began to fade.

During the Cold War that coincided with this era of rapid decolonization, the world’s two superpowers turned to the same methods regularly using their espionage agencies to manipulate the leaders of newly independent states. The Soviet Union’s KGB and its surrogates like the Stasi in East Germany and the Securitate in Romania enforced political conformity among the 14 Soviet satellite states in Eastern Europe and challenged the U.S. for loyal allies across the Third World. Simultaneously, the CIA monitored the loyalties of presidents, autocrats, and dictators on four continents, employing coups, bribery, and covert penetration to control and, when necessary, remove nettlesome leaders.

In an era of nationalist feeling, however, the loyalty of local elites proved a complex matter indeed. Many of them were driven by conflicting loyalties and often deep feelings of nationalism, which meant that they had to be monitored closely. So critical were these subordinate elites, and so troublesome were their insubordinate iterations, that the CIA repeatedly launched risky covert operations to bring them to heel, sparking some of the great crises of the Cold War.

Given the rise of its system of global control in a post-World War II age of independence, Washington had little choice but to work not simply with surrogates or puppets, but with allies who -- admittedly from weaker positions -- still sought to maximize what they saw as their nations’ interests (as well as their own). Even at the height of American global power in the 1950s, when its dominance was relatively unquestioned, Washington was forced into hard bargaining with the likes of the Philippines’ Raymond Magsaysay, South Korean autocrat Syngman Rhee, and South Vietnam’s Ngo Dinh Diem.

In South Korea during the 1960s, for instance, General Park Chung Hee, then president, bartered troop deployments to Vietnam for billions of U.S. development dollars, which helped spark the country's economic "miracle." In the process, Washington paid up, but got what it most wanted: 50,000 of those tough Korean troops as guns-for-hire helpers in its unpopular war in Vietnam.

Post-Cold War World

After the Berlin Wall came down in 1989, ending the Cold War, Moscow quickly lost its satellite states from Estonia to Azerbaijan, as once-loyal Soviet surrogates were ousted or leapt off the sinking ship of empire. For Washington, the “victor” and soon to be the “sole superpower” on planet Earth, the same process would begin to happen, but at a far slower pace.

Over the next two decades, globalization fostered a multipolar system of rising powers in Beijing, New Delhi, Moscow, Ankara, and Brasilia, even as a denationalized system of corporate power reduced the dependency of developing economies on any single state, however imperial. With its capacity for controlling elites receding, Washington has faced ideological competition from Islamic fundamentalism, European regulatory regimes, Chinese state capitalism, and a rising tide of economic nationalism in Latin America.

As U.S. power and influence declined, Washington’s attempts to control its subordinate elites began to fail, often spectacularly -- including its efforts to topple bête noire Hugo Chavez of Venezuela in a badly bungled 2002 coup, to detach ally Mikheil Saakashvili of Georgia from Russia’s orbit in 2008, and to oust nemesis Mahmoud Ahmadinejad in the 2009 Iranian elections. Where a CIA coup or covert cash once sufficed to defeat an antagonist, the Bush administration needed a massive invasion to topple just one troublesome dictator, Saddam Hussein. Even then, it found its plans for subsequent regime change in Syria and Iran blocked when these states instead aided a devastating insurgency against U.S. forces inside Iraq.

Similarly, despite the infusions of billions of dollars in foreign aid, Washington has found it nearly impossible to control the Afghan president it installed in power, Hamid Karzai, who memorably summed up his fractious relationship with Washington to American envoys this way: “If you're looking for a stooge and calling a stooge a partner, no. If you're looking for a partner, yes.”

Then, late in 2010, WikiLeaks began distributing those thousands of U.S. diplomatic cables that offer uncensored insights into Washington’s weakening control over the system of surrogate power that it had built up for 50 years. In reading these documents, Israeli journalist Aluf Benn of Haaretz could see “the fall of the American empire, the decline of a superpower that ruled the world by the dint of its military and economic supremacy.” No longer, he added, are “American ambassadors… received in world capitals as ‘high commissioners'... [instead they are] tired bureaucrats [who] spend their days listening wearily to their hosts' talking points, never reminding them who is the superpower and who the client state.”

Indeed, what the WikiLeaks documents show is a State Department struggling to manage an unruly global system of increasingly insubordinate elites by any means possible -- via intrigue to collect needed information and intelligence, friendly acts meant to coax compliance, threats to coerce cooperation, and billions of dollars in misspent aid to court influence. In early 2009, for instance, the State Department instructed its embassies worldwide to play imperial police by collecting comprehensive data on local leaders, including “email addresses, telephone and fax numbers, fingerprints, facial images, DNA, and iris scans.” Showing its need, like some colonial governor, for incriminating information on the locals, the State Department also pressed its Bahrain embassy for sordid details, damaging in an Islamic society, about the kingdom’s crown princes, asking: “Is there any derogatory information on either prince? Does either prince drink alcohol? Does either one use drugs?"

With the hauteur of latter-day imperial envoys, U.S. diplomats seemed to empower themselves for dominance by dismissing “the Turks neo-Ottoman posturing around the Middle East and Balkans,” or by knowing the weaknesses of their subordinate elites, notably Colonel Muammar Gaddafi’s “voluptuous blonde” nurse, Pakistani President Asif Ali Zardari’s morbid fear of military coups, or Afghan Vice President Ahmad Zia Massoud’s $52 million in stolen funds.

As its influence declines, however, Washington is finding many of its chosen local allies either increasingly insubordinate or irrelevant, particularly in the strategic Middle East. In mid-2009, for instance, the U.S. ambassador to Tunisia reported that “President Ben Ali… and his regime have lost touch with the Tunisian people,” relying “on the police for control,” while “corruption in the inner circle is growing” and “the risks to the regime's long-term stability are increasing.” Even so, the U.S. envoy could only recommend that Washington “dial back the public criticism” and instead rely only on “frequent high-level private candor” -- a policy that failed to produce any reforms before demonstrations toppled the regime just 18 months later.

Similarly, in late 2008 the American Embassy in Cairo feared that “Egyptian democracy and human rights efforts... are being suffocated.” However, as the embassy admitted, “we would not like to contemplate complications for U.S. regional interests should the U.S.-Egyptian bond be seriously weakened.” When Mubarak visited Washington a few months later, the Embassy urged the White House “to restore the sense of warmth that has traditionally characterized the U.S.-Egyptian partnership.” And so in June 2009, just 18 months before the Egyptian president’s downfall, President Obama hailed this useful dictator as “a stalwart ally... a force for stability and good in the region."

As the crisis in Cairo’s Tahrir Square unfolded, respected opposition leader Mohamed ElBaradei complained bitterly that Washington was pushing “the whole Arab world into radicalization with this inept policy of supporting repression.” After 40 years of U.S. dominion, the Middle East was, he said, “a collection of failed states that add nothing to humanity or science” because “people were taught not to think or to act, and were consistently given an inferior education.”

Absent a global war capable of simply sweeping away an empire, the decline of a great power is often a fitful, painful, drawn-out affair. In addition to the two American wars in Iraq and Afghanistan winding down to something not so far short of defeat, the nation’s capital is now writhing in fiscal crisis, the coin of the realm is losing its creditworthiness, and longtime allies are forging economic and even military ties to rival China. To all of this, we must now add the possible loss of loyal surrogates across the Middle East.

For more than 50 years, Washington has been served well by a system of global power based on subordinate elites. That system once facilitated the extension of American influence worldwide with a surprising efficiency and (relatively speaking) an economy of force. Now, however, those loyal allies increasingly look like an empire of failed or insubordinate states. Make no mistake: the degradation of, or ending of, half a century of such ties is likely to leave Washington on the rocks.

The Corporate State Wins Again

Monday 25 April 2011  by: Chris Hedges, Truthdig

When did our democracy die? When did it irrevocably transform itself into a lifeless farce and absurd political theater? When did the press, labor, universities and the Democratic Party—which once made piecemeal and incremental reform possible—wither and atrophy? When did reform through electoral politics become a form of magical thinking? When did the dead hand of the corporate state become unassailable?

The body politic was mortally wounded during the long, slow strangulation of ideas and priorities during the Red Scare and the Cold War. Its bastard child, the war on terror, inherited the iconography and language of permanent war and fear. The battle against internal and external enemies became the excuse to funnel trillions in taxpayer funds and government resources to the war industry, curtail civil liberties and abandon social welfare. Skeptics, critics and dissenters were ridiculed and ignored. The FBI, Homeland Security and the CIA enforced ideological conformity. Debate over the expansion of empire became taboo. Secrecy, the anointing of specialized elites to run our affairs and the steady intrusion of the state into the private lives of citizens conditioned us to totalitarian practices. Sheldon Wolin points out in Democracy Incorporated that this configuration of corporate power, which he calls “inverted totalitarianism,” is not like Mein Kampf or The Communist Manifesto, the result of a premeditated plot. It grew, Wolin writes, from “a set of effects produced by actions or practices undertaken in ignorance of their lasting consequences.”

Corporate capitalism—because it was trumpeted throughout the Cold War as a bulwark against communism—expanded with fewer and fewer government regulations and legal impediments. Capitalism was seen as an unalloyed good. It was not required to be socially responsible. Any impediment to its growth, whether in the form of trust-busting, union activity or regulation, was condemned as a step toward socialism and capitulation. Every corporation is a despotic fiefdom, a mini-dictatorship. And by the end Wal-Mart, Exxon Mobil and Goldman Sachs had grafted their totalitarian structures onto the state.

The Cold War also bequeathed to us the species of the neoliberal. The neoliberal enthusiastically embraces “national security” as the highest good. The neoliberal—composed of the gullible and cynical careerists—parrots back the mantra of endless war and corporate capitalism as an inevitable form of human progress. Globalization, the neoliberal assures us, is the route to a worldwide utopia. Empire and war are vehicles for lofty human values. Greg Mortenson, the disgraced author of Three Cups of Tea, tapped into this formula. The deaths of hundreds of thousands of innocents in Iraq or Afghanistan are ignored or dismissed as the cost of progress. We are bringing democracy to Iraq, liberating and educating the women of Afghanistan, defying the evil clerics in Iran, ridding the world of terrorists and protecting Israel. Those who oppose us do not have legitimate grievances. They need to be educated. It is a fantasy. But to name our own evil is to be banished.

We continue to talk about personalities—Ronald Reagan, Bill Clinton, George W. Bush and Barack Obama—although the heads of state or elected officials in Congress have become largely irrelevant. Lobbyists write the bills. Lobbyists get them passed. Lobbyists make sure you get the money to be elected. And lobbyists employ you when you get out of office. Those who hold actual power are the tiny elite who manage the corporations. Jacob S. Hacker and Paul Pierson, in their book Winner-Take-All Politics, point out that the share of national income of the top 0.1 percent of Americans since 1974 has grown from 2.7 to 12.3 percent. One in six American workers may be without a job. Some 40 million Americans may live in poverty, with tens of millions more living in a category called “near poverty.” Six million people may be forced from their homes because of foreclosures and bank repossessions. But while the masses suffer, Goldman Sachs, one of the financial firms most responsible for the evaporation of $17 trillion in wages, savings and wealth of small investors and shareholders, is giddily handing out $17.5 billion in compensation to its managers, including $12.6 million to its CEO, Lloyd Blankfein.


The massive redistribution of wealth, as Hacker and Pierson write, happened because lawmakers and public officials were, in essence, hired to permit it to happen. It was not a conspiracy. The process was transparent. It did not require the formation of a new political party or movement. It was the result of inertia by our political and intellectual class, which in the face of expanding corporate power found it personally profitable to facilitate it or look the other way. The armies of lobbyists, who write the legislation, bankroll political campaigns and disseminate propaganda, have been able to short-circuit the electorate. Hacker and Pierson pinpoint the administration of Jimmy Carter as the start of our descent, but I think it began long before with Woodrow Wilson, the ideology of permanent war and the capacity by public relations to manufacture consent. Empires die over such long stretches of time that the exact moment when terminal decline becomes irreversible is probably impossible to document. That we are at the end, however, is beyond dispute.

The rhetoric of the Democratic Party and the neoliberals sustains the illusion of participatory democracy. The Democrats and their liberal apologists offer minor palliatives and a feel-your-pain language to mask the cruelty and goals of the corporate state. The reconfiguration of American society into a form of neofeudalism will be cemented into place whether it is delivered by Democrats, who are pushing us there at 60 miles an hour, or Republicans, who are barreling toward it at 100 miles an hour. Wolin writes, “By fostering an illusion among the powerless classes” that it can make their interests a priority, the Democratic Party “pacifies and thereby defines the style of an opposition party in an inverted totalitarian system.” The Democrats are always able to offer up a least-worst alternative while, in fact, doing little or nothing to thwart the march toward corporate collectivism.

The systems of information, owned or dominated by corporations, keep the public entranced with celebrity meltdowns, gossip, trivia and entertainment. There are no national news or intellectual forums for genuine political discussion and debate. The talking heads on Fox or MSNBC or CNN spin and riff on the same inane statements by Sarah Palin or Donald Trump. They give us lavish updates on the foibles of a Mel Gibson or Charlie Sheen. And they provide venues for the powerful to speak directly to the masses. It is burlesque.

It is not that the public does not want a good health care system, programs that provide employment, quality public education or an end to Wall Street’s looting of the U.S. Treasury. Most polls suggest Americans do. But it has become impossible for most citizens to find out what is happening in the centers of power. Television news celebrities dutifully present two opposing sides to every issue, although each side is usually lying. The viewer can believe whatever he or she wants to believe. Nothing is actually elucidated or explained. The sound bites by Republicans or Democrats are accepted at face value. And once the television lights are turned off, the politicians go back to the business of serving business.


We live in a fragmented society. We are ignorant of what is being done to us. We are diverted by the absurd and political theater. We are afraid of terrorism, of losing our job and of carrying out acts of dissent. We are politically demobilized and paralyzed. We do not question the state religion of patriotic virtue, the war on terror or the military and security state. We are herded like sheep through airports by Homeland Security and, once we get through the metal detectors and body scanners, spontaneously applaud our men and women in uniform. As we become more insecure and afraid, we become more anxious. We are driven by fiercer and fiercer competition. We yearn for stability and protection. This is the genius of all systems of totalitarianism. The citizen’s highest hope finally becomes to be secure and left alone.

Human history, rather than a chronicle of freedom and democracy, is characterized by ruthless domination. Our elites have done what all elites do. They have found sophisticated mechanisms to thwart popular aspirations, disenfranchise the working and increasingly the middle class, keep us passive and make us serve their interests. The brief democratic opening in our society in the early 20th century, made possible by radical movements, unions and a vigorous press, has again been shut tight. We were mesmerized by political charades, cheap consumerism and virtual hallucinations as we were ruthlessly stripped of power.

The game is over. We lost. The corporate state will continue its inexorable advance until two-thirds of the nation is locked into a desperate, permanent underclass. Most Americans will struggle to make a living while the Blankfeins and our political elites wallow in the decadence and greed of the Forbidden City and Versailles. These elites do not have a vision. They know only one word—more. They will continue to exploit the nation, the global economy and the ecosystem. And they will use their money to hide in gated compounds when it all implodes. Do not expect them to take care of us when it starts to unravel. We will have to take care of ourselves. We will have to create small, monastic communities where we can sustain and feed ourselves. It will be up to us to keep alive the intellectual, moral and culture values the corporate state has attempted to snuff out. It is either that or become drones and serfs in a global, corporate dystopia. It is not much of a choice. But at least we still have one.

BP Whistleblowers' Mysterious Deaths and/or Fake Criminal Charges

Short Life Expectancy for BP Whistleblowers?
By Pat Shannan

The investigation, if it can properly be so called, of the unsolved murder of the former high ranking Pentagon official and presidential advisor John P. Wheeler III, who was also an expert on chemical and biological weapons, may be taking a turn in the direction of the Gulf of Mexico oil spill.

Wheeler, 67, a West Point grad, was beaten and thrown into a garbage dumpster. His body was discovered in a Wilmington, Del. landfill last New Year’s weekend. Both police detectives and news commentators described it as “an apparent hit,” but little else was ever learned, and no suspects have surfaced.

There was great speculation by many at the time that Wheeler had begun to blow the whistle on the mysterious bird and fish deaths in Arkansas and Texas, and was about to expose the facts tying this to the chemtrails seen in our skies over the past decade.

Now the speculation may be reverting to British Petroleum and the gulf spill because a number of other BP whistle blowing scientists, before and since the Wheeler murder, have also died mysteriously, been jailed on questionable charges or disappeared without a trace.

Matthew Simmons, 67, a former energy advisor to President George W. Bush and admired among survivalist groups for his dire warnings on the upcoming commodity and fuel shortages about to hit this nation, died in his hot tub in Maine last August. Simmons had been gaining popularity as a whistle blower for blaming BP for its covered-up responsibility in defacing and vandalizing the Gulf of Mexico while hiding the truth from the general public.

Only four days later, Ted Stevens, the 87-year-old defrocked senator from Alaska, said to have received communications regarding BP’s faulty blowout preventer, perished in a plane crash. British Petroleum had donated $1 million to the University of Alaska to catalog the papers from Stevens’s long political career.

Roger Grooters began a cross country bike ride in Oceanside, Calif. on Sept. 10 to draw attention to the Gulf Coast oil disaster. On Oct. 6, in front of the horrified eyes of his wife, who was trailing in a support vehicle, Grooters was struck by a truck and killed instantly in Panama City, Fla.

Only a month later, Dr. Geoffrey Gardner of Lakeland, Fla. disappeared. He was investigating the unexplained bird deaths near Sarasota that are suspected to have been caused by the BP oil disaster. No one has heard from or spoken with him since.

On Nov. 15, Chitra Chaunhan was found dead of cyanide poisoning in a Temple Terrace, Fla. hotel. It was officially ruled a suicide. She worked in the Center for Biological Defense and Global Health Infectious Disease Research and left behind a husband and five-year-old child.

The following week, James Patrick Black, director of operations for BP’s restoration organization for the oil spill, died near Destin, Fla. in a small plane crash.

Dr. Thomas B. Manton was one of the first to warn the public that far more oil than what BP had reported was gushing into the gulf every day and that the massive, toxic oil and chemical plumes would travel up the eastern seaboard, contaminating beaches and wildlife all the way.

“Once the winds change, it will come eastward and pollute the beaches of the west coast of Florida, and the ‘loop current’ could carry this oil spill right around Florida, through the Florida Keys and pollute the east coast of Florida as well,” Manton wrote on May 28, 2010.

Dr. Tom Termotto, national coordinator of the Gulf Oil Spill Remediation Conference, says Manton was murdered in prison. Manton had been sentenced to 15 years last August on a phony child pornography charge. Termotto and others say evidence was planted on his computer.

It is not known whether or not Anthony Nicholas Tremonte, 31, posed any threat to BP, but he too was arrested in January and charged with one count of possession of child pornography. Was this charge also faked? As an officer with the Mississippi Department of Marine Resources on the Gulf Coast, he may have known enough to qualify him for membership in this exclusive series of coincidences. He faces up to 40 years in prison if convicted.

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(Someone inevitably will say "well, those are just coincidences." I will respond by saying, "then you are a fool." Remember those names because those individuals gave up their lives to expose corruption at the highest levels of our corporate govt.

The president was elected on a wave of campaign promises--most of which he has either done the exact opposite of what he promised or just 'hasn't gotten around to doing them' or compromised on them to the point that they don't change a thing. One of those promises on which he has done the exact opposite is regarding openness or transparency in the govt. The man said in his campaign, that whistleblowers were courageous and needed to be protected. Yet, by October 2010, the Obama administration has prosecuted more whistleblowers than any other president in US history. Let that sink in for a second. And then consider this: at the rate Obama is prosecuting whistleblowers, by the end of his term--his only term as president, if we're lucky--he will have prosecuted more whisteblowers than all other presidents in US history COMBINED.--jef)



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