Israeli Savagery, American Complicity

November 18, 2012 at 8:23 pm | Posted in Uncategorized | Leave a comment
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Nothing illustrates the gulf between the racist complicity of American imperial policy and the humanitarian concerns of the peoples of the world than President Barack Obama’s blanket support for the brutal Israeli aggression visited on the Palestinians in Gaza.Speaking to reporters in Thailand, President Obama said he “fully” supported Israel’s “right to defend itself,” ignoring that the Palestinians launched missiles only after israel assassinated Ahmed Jabari, the Hamas military commander. In the first instance, Israel is an occupying power and as such cannot claim to be defending itself against the peoples whom they have dispossessed as Noam Chomsky and others have underlined.

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Worse, as Gilad Sharon, the son of the former Israeli prime minister wrote in the Jerusalem Post,

We need to flatten entire neighborhoods in Gaza. Flatten all of Gaza. The Americans didn’t stop with Hiroshima – the Japanese weren’t surrendering fast enough, so they hit Nagasaki, too.

There should be no electricity in Gaza, no gasoline or moving vehicles, nothing. Then they’d really call for a ceasefire.

Were this to happen, the images from Gaza might be unpleasant – but victory would be swift, and the lives of our soldiers and civilians spared.

And Haaretz reported that Eli Yishai, the Israeli Interior Minister said  

The goal of the operation is to send Gaza back to the Middle Ages. Only then will Israel be calm for forty years.

Israel not only bombed Hamas offices in Gaza even if they were in densely populated neighborhoods and hence virtually certain to lead to massive civilian casualties, but also pro-Hamas news organizations and television stations.

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This is the brutal atrocity that the US Administration and Congress is unflinchingly supporting! Supporting the unchecked use of military power supplied by the US against an impoverished and largely defenseless population. In terms of casualties inflicted, the violence done to the Palestianians by Israel is unmatched by all counts.

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Israel’s arrogant and murderous assault on the Palestinians is only possible because of the military and diplomatic support of the United States–even though the Israeli prime minister backed Barack Obama’s opponent in the 2012 elections, Obama has neither the moral backbone or the courage to condemn Israeli aggression! 

 

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Yet. despite the wanton brutality of Israel’s politicians and armed forces, it is clear that there is no military solution to the problem. Ineffective though they may have been, the missiles launched against Tel Aviv and Jerusalem from Gaza indicate a greater sophistication of Palestinian weaponry. As Rami Khoury noted, this is an indication that time is not on the side of Israel. Continued wanton destruction and murder by Israel will lead to the growth of even more extremist organizations like the several Salafist Islamic organizations that have sprouted up all over the Middle East including Gaza. As Nick Kristof noted in a recent tweet, Israel had initially nurtured Hamas to undermine the PLO–only to suffer a blowback as Hamas became a far more obdurate foe of the Zionist state.

Meanwhile, the Arab Spring and the installation of legitimate governments in Egypt and Tunisia implies that they will not be coopted by the United States to be complicit in the continuing Israeli dispossession of the Palestinians–they may not go to war against a lopsidedly powerful Israel but will find meaningful ways to assist the Palestinian resistance.

Israeli “Final Solution’?

November 16, 2012 at 10:45 pm | Posted in Uncategorized | Leave a comment
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Almost four years ago, just before Barack Obama was inaugurated, fearing that the new US president will be less tolerant of Israeli occupation and oppression of the Palestinians than his predecessor, Israel launched a punishing attack on the Gaza Strip in late 2008 and early 2009. Now in a little more than 10 days after Obama’s re-election for a second term, in a targeted, extra-judicial strike, the Israeli forces assassinated Hamas’ military commander, Ahmed Jabari, just hours after he had received the draft of a permanent peace agreement with Israel. Despite this wanton sabotage of a peace deal, despite this illegal, extra-judicial murder by the Israeli Defense Force, and its follow up by air strikes, the Obama Administration chose to pick not on these attacks by the most sophisticated and powerful military against a largely defenseless and impoverished people crowded into a barren land but to highlight the few missiles the Palestinians launched in anger and which caused minor casualties. When Morocco and Egypt brought the attacks on Gaza to the UN Security Council, US Ambassador Susan Rice defended Israel’s ‘right to self-defense.”

 

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By what perversion of commonsense can the conflict between Israelis and Palestinians be seen as a fight between two opposing armies? The Israelis are armed with the most sophisticated US weapons, the Palestinians in Gaza are an impoverished people with no formal military aid, their landlocked territory being virtually a prison camp till the fall of Hosni Mubarak’s collaborationist government last year. More Palestinians, many of them women and children were killed by the Israelis on November 14 than the number of Israelis by Palestinian missiles in the last three years. Yet, the mainstream US media continue to highlight the threat to Israel and to underplay, or worse, simply to ignore, the casualties suffered by the Palestinians.

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 In fact, as Yousef Munayyer writes that while Israeli officials recount the number of rudimentary missiles that the Palestinians fire into Israel–now reaching Tel Aviv and Jerusalem–these largely fall harmlessly or are intercepted by sophisticated anti-missile defenses. Israeli officials are also notably cagey on the brutal punishment they mete out to the people they occupy:

For example, in 2011, the projectiles fired by the Israeli military into Gaza have been responsible for the death of 108 Palestinians, of which 15 where women or children, and the injury of 468 Palestinians, of which 143 where women or children. The methods by which these causalities were inflicted by Israeli projectiles breaks down as follows: 57 percent, or 310, were caused by Israeli aircraft missile fire; 28 percent, or 150, where from Israeli live ammunition; 11 percent, or 59, were from Israeli tank shells; while another 3 percent, or 18, were from Israeli mortar fire.

Through September 2012, Israeli weaponry caused 55 Palestinian deaths and 257 injuries. Among these 312 casualties, 61, or roughly 20 percent, were children and 28 were female. 209 of these casualties came as a result of Israeli Air Force missiles, 69 from live ammunition fire, and 18 from tank shells. It is important to note that these figures do not represent a totality of Israeli projectiles fired into Gaza but rather only Israeli projectiles fired into Gaza which cause casualties. The total number of Israeli projectiles fired into Gaza is bound to be significantly larger.

If President Obama, during his first months in office had offered the Palestinians a “new beginning” in their relationship with the United States in a speech in Cairo, now the US Administration appears to have gone back to the old ways of blindly siding with Israel even if its prime minister Benjamin Netanyahu openly supported Obama’s Republican challenger. Given his own targeted extra-judicial assassinations in Afghanistan, Pakistan, South Yemen, the Philippines and elsewhere, Obama of course has no moral authority to condemn such actions.

 

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Since 1948, the Palestinians have been forced off much of their land and israel’s continuing settlements in violation of international law and a raft of UN Security Council resolutions have confined the Palestinians into ever-narrower bantustans–so much so that even former US President Jimmy Carter was compelled to liken Israeli Occupation to Apartheid. The continuing massacre of the Palestinians now raises one question: will the world allow Israel to implement its Final Solutiion?

The Case against Obama

October 29, 2012 at 8:01 pm | Posted in Uncategorized | 2 Comments
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People on the Left, even while criticizing President Barak Obama, often argue that there is no alternative to voting for him. Chameleon-like Mitt Romney, the Republican challenger, has disavowed his own greatest accomplishment–the Massachussets health care law that he passed when he was governor of that state–to pander to the hard-right Tea Party wing of the Republican party. A Romney victory, if he does not change his policies once elected and there is no indication that he will, would lead to further tax reductions on the wealthy, an increase in defense spending even though the armed forces do not request it, abject support for Israei’s Benjamin Netanyahu not only against the Palestinians but also for a pre-emptive strike against Iran even though the Israeli defense hierarchy is opposed to it, a rollback of Obama’s signature health care law, massive cuts in domestic spending that will have a disproportionately adverse effect on the poor. It would give the Republicans an opportunity to stack the Supreme Court for many years given that 3 justices are in their seventies and are likely to retire during the next presidential term. A Romney presidency would likely try to reverse Roe v. Wade especially if it can stack the Supreme Court and seek to ban gay marriages and reverse a host of social legislation. As indicated by the third and last of the presidential ‘debates’ on October 22, Romney is likely to continue an aggressive foreign policy.

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Yet, because Romney is bad is not cause enough to endorse Obama. As Conor Friedersdorf wrote in the Atlantic Monthly,

 If two candidates favored a return to slavery, or wanted to stone adulterers, you wouldn’t cast your ballot for the one with the better position on health care. I am not equating President Obama with a slavery apologist or an Islamic fundamentalist.

Though President Obama’s policies are not as heinous as promoting chattel slavery, as the New York Times reported on 29 May 2012, every Tuesday, the President discusses and personally approves a “kill list,” of targets intended for assassination without trial or due process by drones in Afghanistan, Pakistan, Somalia, Yemen, the Philippines and elsewhere. In these “Terror Tuesdays,” without any constitutional or legal mandate, Obama decides on the execution of people on macabre “baseball cards” including those of underage American citizens like the 16 year-old Abdulrahman Awlaki.

6a00d8341d417153ef0147e3d900c0970b 800wiObama’s rapid escalation of the drone war has not only killed thousands of innocent civilians but also probably created more enemies than those killed, apart from ruining the lives of hundreds of thousands–the constant noise of drones circling overhead in Afghanistan and Pakistan, driving people crazy by preventing them from sleeping and making them afraid of a strike at any hour of the day or night.

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Domestically, the continuing economic crisis has had a disproportionately adverse impact on African-Americans, but Obama’s 2011 State of the Union speech was the first since 1948 not to mention  poverty or the poor as Frederick C. Harris, director of the Institute for Research on African-Americans at Columbia University observed. Daniel Gillion, a political scientist at the University of Pennsylvania, wrote that  in his first two years in office, President Obama talked less about race than any Democratic president since 1961.

VOTE GREEN!

The Vanishing Middle Class

October 5, 2012 at 3:46 pm | Posted in Uncategorized | Leave a comment
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News today that the US unemployment rate dropped in September 2012 to 7.8 percent from 8.1 percent in August and is now at the lowest level since President Barack Obama took office will undoubtedly boost his campaign for re-election, two days after his dismal performance in the first debate with his Republican opponent, Mitt Romney. If this is good news for the president, the situation is less rosy than it appears. According to the Bureau of Labor Statistics, the number of workers stuck in part-time jobs in September stood at 8.5 million, an increase of 581 million from the previous month and double the level it was in September 2007. Even worse, the number of full-time workers in the US  has declined by 5.9 million since September 2007 while the number of part-time workers has increased by 2.6 million.

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In fact, if the number of part-timers looking for full-time work, the U6 unemployment rate, is considered, it is unchanged

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And as Moira Herbst writes in the Guardian,

 It’s distressing to think that after 20th-century labor struggles won the battle for the 40-hour work week, the 21st-century struggle is a fight for enough working hours to make a living wage.

In another report in today’s New York Times, the average number of employees per new firm declined from 7.7 persons in 1999 to 4.7 in 2011. For almost the last half-century, new companies have accounted for the bulk of jobs created in the United States, In fact, without new start up companies, the United States would have seen a growth in jobs for only 7 years since 1977! The numbers of new jobs created by new companies was the greatest in 1999 as a result of the dot com boom and by 2011, it had declined by some 46 percent.

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One major result of the decline of full-time employment and the rise of part-time employment is that part-timers are denied virtually all benefits. Without healthcare and other benefits, workers are increasingly compelled to rely on Medicaid and emergency room visits for illnesses and as Herbst noted, this leads to a shift in costs from employers to tax payers. This is of course covered up by both political parties in the United States: the Democrats tout the new decline in unemployment figures but never mention that 6.9 million people were working multiple jobs in the US in September. The Republicans stress cutting taxes–making health care even less accessible to the poor.

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Both focus on a middle-class that is rapidly shrinking and not on the increasing numbers of people below the middle class. For them, neither candidate has anything to offer–and therein lies the shame! In today’s politics, the concerns of the masses are silent–the decline of manufacturing not only hollowed out industries but by also kneecapping labor, it has made both major political parties alike–both shifting further and further to the right, and both having nothing to offer to the vast majority of the population.

Massacres, the Gun Lobby, and the Crisis of Capitalism in the United States

August 13, 2012 at 10:33 pm | Posted in Uncategorized | Leave a comment
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With alarming regularity, gunmen have been shooting dead innocent people on college and high school campuses, movie theaters, and most recently in a gurudwara (Sikh temple) in the United States. Each gruesome event reignites the debate on gun control, and when the victims are largely from an ethnic minority, issues concerning racism. Gun control and racism, important in their own right, are however merely symptoms of a deeper malaise–the crisis of capitalism in the United States–that is seldom raised in the mainstream media.

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In recent years, spurred by propaganda by the National Rifle Association (NRA), the right to bear arms enshrined in the US constitution by the Second Amendment has become almost inviolate. Yet, as Jill Lepore wrote in the New Yorker–in an article that was later plagiarized by Fareed Zakaria–the right to bear arms was seen not as Frankln Delano Roosevelt’s solicitor general argued before the US Supreme Court in 1939

not one which may be utilized for private purposes but only one which exists where the arms are borne in the militia or some other military organization provided for by law and intended for the protection of the state.

And this was unanimously upheld by the Court.
 
Later, when the Black Panther Party invoked the Second Amendment to procure guns, the US Congress passed a number of laws that restricted the sale of guns both in response to the assassinations of John and Robert Kennedy and Martin Luther King, and to solve what was still called the “negro problem.” Even the NRA grudgingly supported these measures, and it was only in the 1970s that the organization moved strongly to advocate the right of the people to bear arms. The subsequent success of this move has meant that the US has now the most militarized population on the planet: virtually a gun for every man, woman, and child. Of course not every one has a gun: 
Most Americans do not, however, own guns, because three-quarters of people with guns own two or more. According to the General Social Survey, conducted by the National Policy Opinion Center at the University of Chicago, the prevalence of gun ownership has declined steadily in the past few decades. In 1973, there were guns in roughly one in two households in the United States; in 2010, one in three. In 1980, nearly one in three Americans owned a gun; in 2010, that figure had dropped to one in five.
Yet, the NRA’s powerful lobby makes any changes to the law, unrealistic as state after state further dilutes restrictions on gun ownership and sales.
 
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If loosening restrictions–since 1980, Lepore reports, forty-four states have passed laws permitting the carrying of concealed weapons; five other states had such laws on the books before 1980 and Illinois is the only state still holding out–attacks on racial minorities has a long and sordid history in the United States. Yet, what was different in the news commentaries on the attacks on the gurudwara in the Milwaukee suburb of Oak Ridge was its dominant theme: that the Sikhs were targeted because the gunman mistook them for Muslims because of their turbans, Just as Time magazine produced a racist article on how to distinguish the Japanese from the Chinese in the aftermath of the attack on Pearl Harbor in 1941, Chicago’s Red Eye printed an equally racist ‘Turban Primer” to help people distinguish between Muslims and Sikhs!
 
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Even commentators in the mainstream media showed their complete ignorance! A CBS reporter said that Sikhism is based “on truth and nonviolence and the Muslim religion is just a completely different religion” while CNN’s Don Lemmon wondered whether Sikhs have ‘traditional enemies’–perhaps like a snake and a mongoose! The real question, of course, is not whether it was a case of mistaken religious identity but whether Muslims should be targeted–apparently in post-9/11 America, the targeting of Muslims is not considered as heinous, to put it mildly, as the targeting of adherents of other faiths!
 
Racism and the elimination of restrictions on gun ownership are merely symptoms of a much deeper malaise: the crisis of capitalism in the United States. As Vijay Prashad noted, in highlighting the white supremacist ideology of Wade Michael Page, the gunman who shot dead six Sikhs in the Oak Ridge gurudwara, commentators gloss over the economic malaise of the United States. Unemployment continues to rise while good manufacturing jobs disappear altogether, The gap between the rich and the poor are at an all time high. As good jobs are increasingly hard to find, young men turn to the military where they are trained to use lethal weapons, And after a few tours of duty in Iraq and Afghanistan, they are demobilized and return to a civilian population with little prospect of finding a well paying job, Indeed, a 2009 report  by the US department of Homeland Security noted that
returning veterans who faced trouble reintegrating into their communities could “lead to the potential emergence of terrorist groups or lone wolf extremists capable of carrying out violent attacks
 
Faced with a violent backlash by veterans and the conservative right, Homeland Security Secretary Janet Napolitano apologized for the report and effectively gutted it–and yet the events at the Oak Ridge gurudwara makes it prescient. If the lesson is clear–that the US can lower the incidence of massacres only by promoting widespread economic growth rather than ensuring that most economic gains go to those at the very top: in 2010, 93 percent of the total income increase went to the top 1 percent in the United States (those with incomes over $350,000) and a mere 7 percent to the bottom 99 percent. Unless this vast disparity is reversed, as more veterans are demobilized, there will be more massacres!
The New York Times
March 26, 2012    
 
 

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Copyright 2012 The New York Times Company

Afghanistan, Pakistan and the Intolerable US Arrogance

May 22, 2012 at 10:31 am | Posted in Arms Control, Human Rights, International Relations | Leave a comment
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By what arrogance does NATO invite a head of state to a meeting and then have the head of state of the host nation refuse the visiting dignitary a one-on-one meeting even as his rival is granted an audience and then expect the snubbed leader to obsequiously accede to all demands even as drone aircraft murders the leader’s citizens and even troops with impunity? Yet, this is what President Barack Obama did to Pakistan’s Asif Ali Zardari who was summoned to the NATO conclave in Chicago at the very last minute. When it became apparent that a mere invitation was not going to make him cave in, he was refused a meeting with the US President who nevertheless met with the Zardari’s rival, the Afghan president Hamid Karzai thus humiliating Zardari. When aides scrambled to get the two presidents to “accidentally bump” into each other at the meeting, Obama pointedly told a press conference that that was their only exchange.

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Last November, a strike by a US drone aircraft killed 24 Pakistani soldiers. The United States has refused to apologize for the murders even though it has acknowledged that its drone aircraft was responsible for the deaths. Consider the situation. The US needs Pakistan as an ally–granted that it is a cantankerous and difficult one. Surely, the best way to further alienate its citizens is to indiscriminately kill them by drone planes controlled from bases deep inside the US. The victims have little warning of their impending death–and the controllers of the planes do not put themselves in harm’s way at all. This is blood sport for them without risk–and when innocent civilians or Pakistani soldiers, the very ones the US depends on to stop al-Qaeda and Taliban fighters, are killed, President Obama refuses to apologize!

Given rising anger in Pakistan, the government shut down two key supply routes for the NATO troops in Afghanistan, forcing the North Atlantic alliance to use more circuitous routes through Central Asia and Russia. Again, snubbing President Zardari, the US Secretary of Defense, Leon Panetta, lauded the help and support of Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan–pointedly ignoring Pakistan. It is true that Pakistan has demanded a 20-times hike of the transit fee for trucks–for $250 to $5000. But this could have been negotiated if an apology was forthcoming.

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Without the supply routes from Pakistan, the withdrawal of equipment brought into Afghanistan for more than a decade will be immensely complicated and the chances of lethal weaponry falling into the hands of the Taliban, al-Qaeda, and other militant groups increases geometrically. It would be another nail in the coffin of the US-NATO failure in Afghanistan. After more than 10 years of war, it is unlikely that the Karzai government will survive even for the three years the Soviet supported regime survived before being toppled–and it was toppled not because the insurgents’ military successes but because Moscow stopped deliveries of arms, fuel, and other supplies. As Juan Garriges writes for the Barcelona Centre for International Affairs, the likelihood of a civil war after NATO leaves is steadily increasing.

As Jonathan Steele writes in the Guardian, unlike the Soviets, NATO is not negotiating with the Taliban but is pursuing a garrison strategy that is virtually guaranteed to fail:

Increasing numbers of Afghan troops will sit in bases and go out on patrols instead of US and British ones, but this is nothing more than “Nato with an Afghan face”. Locals see these Afghan troops as occupiers just like the US and British. Less than 4% of the Afghan National Army are southern Pashtuns. Most are Tajiks and Uzbeks who speak a different language and don’t know the area. But if you recruit more southerners in a hurry, you just feed the Taliban’s latest tactic: join the Afghan army and police, get trained by the Americans and British, then shoot them in the camp or mess hall.

In these conditions, to continue to snub Zardari and refuse to apologize for the killing of the soldiers–perhaps for domestic electoral purposes as Obama’s likely Republican opponent, Mitt Romney, will certainly exploit it–is almost to ensure that the Pakistani Inter-Services Intelligence directorate (ISI) will increase its interference in Afghanistan especially since there is little love lost between the Karzai administration and the Pakistani military and political establishment.

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Finally, in NATO’s haste to cover its failure there is nary a word on the condition of Afghan women–sure to regress to the state they were in at the time of the 2001 invasion! The US-led invasion may have temporarily ousted the Taliban from Kabul and eventually killed Osama bin Laden in Abbottabad, but it has also devastated Afghanistan, killed tens (if not hundreds) of thousands of Afghans and thousands of Pakistanis, further destabilized Pakistan, fuelled the spread of al-Qaeda and other Islamic fundamentalists to Iraq, the Arabian peninsula, and east Africa, and expended trillions of dollars when the world-economy is mired in a crisis like no other since the Great Depression, and to the loss of thousands of American lives as well. Constitutional liberties have been suspended and torture has been reintroduced as a matter of state policy. The man who campaigned to change all this has done nothing at all!

Will Barack Obama be the first American president to invade Africa?

April 21, 2011 at 9:29 pm | Posted in Arms Control, democracy, Human Rights, International Relations, Political Economy, World Politics | 1 Comment
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One month into the bombing of Libya by NATO forces, if anything the situation is worse than before. After an initial assault, the United States withdrew to a supporting role but those of its NATO allies that chose to participate in the military attack against Colonel Muammer Gaddafi’s forces–mainly France and the UK, with some support from Spain, Denmark, Canada, and Belgium–have discovered that they do not have the military force required to roll back the Libyan government troops. Without anti-tank planes, they were unable to stop the pro-Gaddafi forces’ advance against the rebels in the east or to relieve the siege of Misurata. President Barack Obama has now authorized the use of US Predator drones and is gradually being drawn out of the supporting role he had sought. Will the NATO allies and the US have to commit ground troops to resolve the impossible situation they have got themselves into? Will Barack Obama go down in history as the first American president to invade an African state?

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Despite the aerial bombardment of Colonel Gaddafi’s forces, the ragtag militia of the rebels do not have the training or the weaponry to withstand his forces which have now adapted measures to blunt the effectiveness of air raids–using human shields, riding in pickup trucks, using camouflage. About the rebels, a New York Times correspondent wrote:

… by almost all measures by which a military might be assessed, they are a hapless bunch. They have almost no communication equipment. There is no visible officer or noncommissioned officer corps. Their weapons are a mishmash of hastily acquired arms, which few of them know how to use.

Military chiefs on both sides of the Altantic had urged caution but France’s Nicholas Sarkozy to boost his domestic poll ratings and Britain’s David Cameron seeking some of the glory that Margaret Thatcher reaped from her victory over Argentina in the Malvinas conflict urged President Obama to support their ‘humanitarian intervention’ in Libya. Yet, there was never any clarity as to who the rebels were–as General Carter Ham, commander of the US Africa Command, told Congressional leaders and it appears that they represent coastal tribes of Cyrenaica while the tribes of the interior and the west continue their allegiance to Colonel Gaddafi.

Most notably, the objectives of the NATO mission in Libya are unclear or cannot be achieved merely by an air campaign. Its efforts have certainly postponed the defeat of the insurgents but without ground troops, it cannot oust the Colonel from power even though Sarkozy, Brown, and Obama have all called for his departure as the only acceptable solution. Note that this was not mandated by the UN Security Council resolution 1973 which sanctions the NATO operation and the resolution had explicitly forbidden ‘foreign occupation troops of any form.’ Yet, Britain, France, and Italy have all said they would send ‘unarmed military advisors‘–a prospect almost certain to involve deeper involvement: what would happen if these ‘unarmed’ advisors were targeted by the Libyan government forces as they surely are a legitimate military target?

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Insistence of the removal of Colonel Gaddafi from power rules out a negotiated settlement. A more likely prospect is that Libya will be partitioned into an eastern part which will effectively become a NATO protectorate with the bulk of Libya’s oil supplies. Neither France nor Britain has sufficient forces to keep pro-Gaddafi forces from attacking the Benghazi enclave–and it would require US boots on the ground–making the first African-American president of the US to be the first American president to invade and occupy an African state! After all, Khalifa Haftar who has been claiming to be the field commander of the rebel forces had been living near the CIA headquarters in Langley, Virginia for 20 years and they had provided him with a training camp.

The whole of Libya–east and west–would require massive reconstruction assistance given the damage done to its infrastructure by civil war and aerial bombardment. Who is going to fund this reconstruction? Is it ‘humanitarian to bomb the hell out of a country and then leave it in shambles? After all, the neo-conversatives claim that Iraq–which has far greater oil reserves–can pay for its own reconstruction remains hollow eight years after the US invasion.

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Even if the Gaddafi regime were to implode due to economic sanctions and the loss of the bulk of its oil revenues, his boast of arming every Libyan is likely to plunge the country into a prolonged phase of violent disruptions.

Iceland–An Independent People

April 20, 2011 at 2:49 pm | Posted in democracy, Free Trade, International Relations, Labor, Political Economy, World Politics | 2 Comments
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In the midst of the NATO campaign against Libya and the budget deal between Republicans and the Democrats in the US, a far more historically significant event appears to have fallen off the radar. On April 9, 2011, the people of Iceland voted for the second time to reject a government proposal for Iceland taxpayers to repay some €4 billion to the governments of Britain and the Netherlands which had compensated their domestic depositors in the collapsed online bank, Icesave. Initially, the British and Dutch governments had pressured the Iceland government to agree to repay them over fifteen years at a 5.5 percent annual interest–which was estimated to cost each household in the tiny island nation about €45,000 over the period. This was rejected by 91 percent of the voters in a referendum in March 2010. After subsequent negotiations, London and Amesterdam agreed to lower the interest to 3.2 percent and stretch the repayment period to 30 years between 2016 and 2046. The deal was accepted by a large majority of 44 in favor and 16 opposed in the Althingi, Iceland’s parliament, which also rejected a clause to submit the bill to another referendum. Nevertheless, as the President, Olafur Ragnar Grimsson, refused to sign the bill, it was automatically subject to a referendum wherein it was rejected by almost 60 percent of the voters.

Iceland

The Dutch and British governments–which had used anti-terrorist legislation to seize assets of the failed Icelandic banks–have threatened to scupper Iceland’s application to join the European Union and to take the island nation to court. Reykjavik has insisted that the two governments would get most of their money back and the assets of the Landsbanki bank which set up the Icesave operation would be sold and was expected to realize 90 percent of the Icesave debt. What was at issue in the referendum was not whether London and Amsterdam would be compensated or not–but whether private citizens should be expected to shoulder the burden of repayment of a bank’s debt in which they had no hand in incurring and from which they did not benefit. The threat to take Iceland to court is important because it is to frighten off other states which also face indebtedness due to the financial crisis like Greece, Ireland, and Portugal. It is simply the question of whether the bankers have to bear the burden of the bad loans they have extended.

Iceland is, in fact, a case study of neo-liberalism gone awry. Before the late 1990s, Iceland’s financial sector had been small and the banks were largely government-owned. In 1998, the two leading parties–the Independence Party and the Centre Party–embarked on a privatization of the banking sector, assigning Landsbanki to grandees of the Independence Party and Kaupthing to the Centre Party. A new private bank, Glitnir, was also set up merging several smaller banks. None of these banks had much experience in international finance, but like South Korean banks a decade earlier, these banks tapped into abundant cheap credit and easy capital mobility. Unlike the South Korean banks, their strong ties to political parties, the merger of commercial and investment banking, and low soveriegn debt meant that they got extremely high grades from the credit ratings agencies and as Robert Wade and Silla Sigurgeirsdottir note: “government policy was now subordinated to their ends.”

With the government relaxing mortgage rules to permit loans up to 90 percent of value, the banks rode the wave–by buying shares in each other they inflated share prices and enticed depositors to shift their savings to shares. In less than 10 years after the privatization of banks, Iceland had the fifth highest GDP in the world, 60 percent higher than that of the United States, and the assets of their banks was valued at 800 percent of Iceland’s GDP. As land prices soared, Icelanders loaded up on lower-interest yen- or Swiss-franc debt.

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By 2006, Iceland’s current account deficit had soared to 20 percent of its GDP. Late in that year, Landsbanki established an online bank, Icesave, to attract deposits from overseas clients and by offering highly attractive interest rates, it raked in millions of pounds from England, and later millions of euros especially from the Netherlands. This was soon copied by the two other banks. These were established as ‘branches’ rather than as ‘subsidiaries‘ which meant that they were to be supervised by the icelandic Central Bank rather than regulators in Britain or the Netherlands. Because of Iceland’s obligations as a member of the European Economic Area to insure bank deposits, no one thought to worry about whether the Icelandic Central Bank had the capacity to oversee the vastly extended operations of the island’s three major banks.

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This happy bubble burst in September 2008 when Lehman Brothers collapsed, within a fortnight of which the three big Icelandic banks collapsed and by November of that year the krona had fallen from its pre-crisis level of 70 to the euro to 190 to the euro, so sharply cutting the islanders’ purchasing power that the three McDonald’s franchises were forced to close as the cost of importing ingredients made the price of burgers prohibitive! The country’s stock market lost 98 percent of its value! If ever there was a definition of crisis, this was it. It was the first time in over 30 years that a ‘developed’ state had to seek assistance from the International Monetary Fund.

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In the light of all this, Iceland’s voters have had the courage to face up to the crisis. It was the first country to kick out the government which had failed so spectacularly. Unlike its neighbor in the North Atlantic–Ireland which underwrote its own banking collapse and loader every household with €80,000 in debt–Iceland let the three banks go under and they imposed capital controls to prevent the flight of capital. Though unemployment in Iceland today is 7.5 percent in Iceland–up from 2 percent in 2002–but just over half of Ireland’s 13.6 percent. Though the krona lost almost half its value, inflation is down sharply and without having to pay back foreign creditors, its government finances are in much better shape than those of Greece, Ireland, or Portugal.

Oil, Civil War, and the Politics of Intervention

March 6, 2011 at 1:34 pm | Posted in democracy, Human Rights, International Relations, Political Economy, World Politics | 2 Comments
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Reports of four British Special Air Service (SAS) troops being captured 30 kilometers from Benghazi is ominous especially since the rebels they were ostensibly sent to help had no inkling that these troops were being parachuted into the areas they control. The refusal of the Gaddafi regime to crumble in the face of widespread protests–unlike the regimes in Tunisia to its west and Egypt to its east–has meant that the struggle for power in that oil-rich desert state had flared into a full-blown civil war.

While it is much too early to predict how the civil war will pan out, it has provided a wedge for US and European leaders to speculate openly about intervening in Libya. That Senators John McCain and Joseph Lieberman called to arm the rebels comes as no surprise, it is troubling that President Barack Obama has refused to take the options of imposing a ‘no-fly zone’ and military intervention off the table, especially after his Defense Secretary, Robert Gates, injected a rare bit of sanity when he told cadets at West Point:

“In my opinion, any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should ‘have his head examined,’ as General MacArthur so delicately put it.”


Ostensibly, the case for intervention is couched in humanitarian terms and cloaked under the UN doctrine of the “responsibility to protect.” It is easy to dismiss the humanitarian justifications as Seumas Milne has shown:

“When more than 300 people were killed by Hosni Mubarak’s security forces in a couple of weeks, Washington initially called for “restraint on both sides”. In Iraq, 50,000 US occupation troops protect a government which last Friday [25 Feb 2011] killed 29 peaceful demonstrators demanding reform. In Bahrain, home of the US fifth fleet, the regime has been shooting and gassing protesters with British-supplied equipment for weeks.”

The ‘prime directive’ if you will of the UN doctrine of “responsibility to protect” is that intervention does no harm–and on these grounds, any intervention in Libya would fail spectacularly! Even some opponents of the Libyan regime have warned against foreign intervention. Certain Russian and Chinese vetoes ensure that there will be no UN Security Council sanction for intervention and that any intervention will be under NATO auspices–or by the US, the UK and some of their allies acting on their own initiative.

If there is intervention, it is almost certain that it will have to be followed by an occupation–the opposition is disparate and only united against the regime; it is clear that the regime has some significant support–otherwise it would not have been able to mount an offensive. Since both factions will have access to weapons, an occupation to pacify the country would have to follow.

Moreover, for all the talk of Libyan government forces launching murderous assaults against its citizens, the Libyan military has been largely ineffective. Opposition forces already are reported to control some 80 percent of Libya’s oil supplies. Government planes have been unable to bomb targets–leading to speculation that the sympathies of pilots are with the rebels though it is at least equally plausible that it is because they are poorly trained.

Aljazeera English that the strength of the Libyan military is overly exaggerated. Years of sanctions and poor maintenance has meant that much of its military hardware are obsolescent or unusable and it estimates that the regime has only about 10-12 thousand well-trained and well-armed troops.

The very weakness of the Libyan forces makes threats of foreign intervention ominous. If US, British or NATO forces can intervene on a pretext, they can establish bases in Libya as they can install another kleptocratic regime–once such bases are established, they take a life of their own and are rarely dismantled as shown by the history of post-Second World War US bases.

Libya has the largest oil reserves in Africa and that as world demand for petroleum surges insatiably, there is a greater urgency to control sources of supply. However, Michael Klare has documented that every effort by the UK and the US to control supplies has led to disaster–stretching from the coup d’etat that London and Washington engineered to depose the democratically elected government of Mohammed Mossadeq in Iran in 1953, to the fall of the Shah in 1979, and to the two invasions of Iraq in 1991 and 2003. To site bases that could be used for war against another Arab country would be anathema to the protestors.

Advocates of foreign intervention, as Milne also notes,

“seem brazenly untroubled by the fact that throughout the Arab world, foreign intervention, occupation and support for dictatorship is regarded as central to the problems of the region. Inextricably tied up with the demand for democratic freedoms is a profound desire for independence and self-determination.”

Riots across North Africa and the Persian Gulf for once is not about imperialism or Israel–but about food and employment, for democracy and dignity, and against corruption and nepotism. Here too Libya is noteworthy in that it has the best Human Development Index among all African states. Here it is a case of the young and the middle class demanding an end to autocracy more than the bread-and-butter struggles that animated the Egyptian revolts and these rebels are not going to tolerate the establishment of another pro-Western kleptocracy.

Capitalism as Anti-Market

December 16, 2010 at 10:39 pm | Posted in Capitalism, Free Trade, Political Economy, World Politics | 2 Comments
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Nothing shatters the myth of free market capitalism than reports that an anonymous group of bankers from the largest Wall Street giants meet privately on the third Wednesday of every month to overseas trading in derivatives. Though the big banks claim that this secretive committee–“even their identities have been strictly confidential” says a New York Times report–exists to safeguard the integrity of the markets, they also have fought bitterly to prevent other banks from entering the market and obstructed all attempts to make full information on prices and fees freely available.

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In the most profitable sector of the economy–where derivatives traders are routinely paid tens and hundreds of millions of dollars as compensation and bonuses–markets do not function the way the politicians, economists, commentators, and bureaucrats tell us they do: the forces of supply and demand do not operate without distortions; there is no free flow of information or transparency and customers are price-takers rather than price-makers.

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This, of course, has always been true of capitalism. Fernand Braudel had argued that contrary to prevailing myths, capitalism is anti-market. The market economy, the world of transparent visible realities on which ‘economic science’ was founded, he contended was ‘the not unacceptable face of ‘micro-capitalism,’ barely distinguishable fro ordinary work,” it was very different from the rarefied heights from where exceptional profits–as cornered by the derivatives traders and financiers–are reaped.

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It is precisely because derivatives are ‘exotic’ instruments and not understood by the public, that the virtual identity between free markets and capitalism incessantly proclaimed by policymakers, economists, and journalists live on in the public domain. In many transactions at the corner grocery store or a farmers’ market, there is an appearance of free markets–of small producers and shop keepers selling goods to the public, “barely distinguishable from ordinary work.” But even here, the principles of the market do not operate. No seller in a farmer’s market can know the costs of production of their competitors and nor could consumers go to every seller even in a nearby area to compare prices–in most cases, sellers quote prices they think they can get away with and consumers pay what they think they can afford.

Derivatives trade, of course, is very different. They are designed to shift risks. Typically, if the price of a gallon of oil is $2.50, large consumers may choose to lock in future supplies at $2,80 a gallon so that if prices soar to $3.00 or $3.50 a gallon, they will be insulated from the rise. Their suppliers have no idea how much lower they could charge their customers because the banks dont disclose the process by which prices are set. This is where the collusion takes place–and where the big profits are reaped.

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If this is not enough, we also learn that as the financial crisis set in 2008, the US Federal Reserve opened its vaults a staggering 174 times within a 13-month period to the Citigroup, that Barclays, the British Bank owed the Fed some $48 billion at one time and on and on the list goes of the US Central Bank massively shoring up domestic and foreign banks and even to corporations such as Harley Davidson and McDonalds without public scrutiny. Needless to say, no such facility was ever considered for smaller operators. So much for free markets without the distorting influence of the state!

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