The End of Prosperity

The End of Prosperity - by Stephen Lendman

From too much of a good thing. From the 1980s and 1990s excesses. From the longest ever US bull market. Heavily manipulated to keep it levitating. From August 1982 to January 2000. An illusory reprieve from October 2002 to October 2007. Fluctuations aside, all lost in the past 12 months. The wages of sin are now due, and payment is being painfully extracted. From all nations globally. Affecting ordinary people the most who had nothing to do with creating booms and busts. They got little on the upside but are paying dearly for the down.

Even "free-market" champions are unnerved. Arthur Laffer for one in his October 27 Wall Street Journal op-ed headlined: "The Age of Prosperity Is Over." He states that "This administration and Congress will be remembered like Herbert Hoover," but not for the right reasons. He continued: "what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932. Whenever people make decisions when they are panicked, the consequences are rarely pretty. We are now witnessing the end of prosperity."

Readers will remember Laffer from the Reagan era. The "supply side trickle down" guru. More popularly called "Reaganomics." GHW Bush's "voodoo economics." The faux theory that tax cuts for the rich grow the economy and benefit everyone. By encouraging well-off recipients to earn more money. For more tax revenue. For the greater good of everyone.

What Reagan's budget director, David Stockman, called a "Trojan Horse." To con Congress into accepting "Republican orthodoxy (and pave the way for) the greed level, the level of opportunism, (to get) out of control." From tax cuts for the rich. Loopholes for special interests. Tax increases on low and middle-income households. Taking from the many for the few. What Laffer and others championed and still do. Along with believing markets work best so let them. Government is the problem, not the solution.

The results weren't encouraging. Macroeconomic growth for sure until it ended. The rich got much richer. The top 1%. Another 9% to some extent. Not the rest, however. Their well-being either stagnated or declined and now are in free-fall. Their savings and futures erased by rampant deleveraging. Market manipulation. Massive fraud. Leaving millions of households in trouble. With the worst likely yet to come. All Laffer can do is resurrect Hoover. The real villains are present and among us. Some active. Others not. Their venom corrosive and harmful. Hurting economies and people everywhere.

From boom now bust. Rampant speculation and fraud. In most asset classes. Especially equities, housing, commercial real estate, commodities, currencies, and huge leveraged debt for levitation.

As a consequence, world economies are reeling and leaders scrambling to contain them. With the most ambitious/outrageous rescue plans ever. Likely mindful, or they should be, that all their grand schemes can't undue nearly three decades of excess. The most extreme financial sins. The age of levitation is over. As financial expert and investor safety advocate Martin Weiss puts it:

Here's the "inescapable reality - Now that the global debt bubble has burst, all the world's leaders and all their radical new measures can't" contain, let alone undue, all the damage. They can't "turn back the clock or reverse decades" of excess and greed. "They cannot repeal the law of gravity or prevent investors from selling. Even as they sweep piles of bad debts under the carpet with bailouts and buyouts, mountains of new debts will go bad - another flood of mortgages that can't be paid, a new raft of credit cards falling behind, an avalanche of companies defaulting on their bonds."

No matter how many billions they throw at the problem, "trillions more in wealth will be wiped out in market declines. For a while longer, our leaders may try to play their last cards in a herculean effort to stop the fall." They may commit good money to save bad. "Inject more money into bankrupt banks, broken brokerage firms, endangered insurers and any company they deem essential to the economy."

It won't work. "It will be a blood transfusion with a failing heartbeat." Soon enough they'd better learn that "it's impossible to save the entire world." The right choice is to "accept the (inevitable) decline, manage it proactively," and avoid the perilous alternative. An "open floodgate (of) climatic selling. A crash producing "the final phase of the decline." Erasing "anywhere from 50% to 90% of (stocks, corporate bonds, real estate, foreign currencies and commodities valuations) in a matter of months or even weeks."

"As many as one-fourth (of S & P 500 companies) could go bankrupt." The entire index "flip(ing) from the black to the red." Around 20% of US workers could lose their jobs. The standard of living of American households seriously harmed. The potential for big trouble ahead is real and growing. The effect on world economies serious and spreading.

Weiss called the Fed's latest rate cut a "DUD," and said the big news was "the Fed's latest cockamamie effort to save the world." With $120 billion to Brazil, South Korea, Singapore and Mexico ($30 billion each). Besides committed IMF funds for Hungary ($25.5 billion), Ukraine ($16.5 billion), and Iceland ($2.5 billion) and a new $100 billion Short-Term Liquidity Facility offering short-term loans.

It's an illusion to think Bernanke can play "Santa Claus, the Pied Piper and the Fairy Godmother all in one act." In fact, he's "desperate" and resorting to "the most radical measures of all time. Playing his last cards." Knowing that if he fails, "it's game over. Taking huge risks - that his rescue-the-whole-world schemes will backfire in the form of falling confidence in the US government as a whole." Besides there's no way make banks lend. Consumers borrow. Continue to spend. Have the means to do it. Reverse decades of excess or repeal the law of gravity to keep markets levitating.

On October 28, more evidence of what he's up against from the Washington Post. In an article headlined: "Downturn Clobbers Public Pension Funds." According to staff writer Peter Whoriskey, they're being ravaged across the country, "with many state and local governments (losing) more than 20% of their retirements pools." Even worse because they were inadequately funded before the crisis, according to the Government Accountability Office. And the 20% figure is conservative given the severity of the October selloff.

According to Chicago-based Northern Trust Investment Risk and Analytical Services' William Frieske, "We expect this (will) be the worst year we've seen since we've been tracking the funds." They service 27 million people. Supported by taxpayer money, investment returns and employee contributions. The bear market "played havoc on" actuarial calculations to ensure enough is available for future retirees. Because about 60% of fund assets are in common stocks, according to the National Association of State Retirement Administrators.

What's ahead depends on economic prospects. Whether markets will continue to contract. How deep and for how long. When recovery will occur. Will it be sustainable, and is there enough time to make up the shortfall for retirees expecting their pensions. After the Dow bottomed in 1932, it took a generation to recoup losses. What investors hope won't repeat today.

Much will given the raft of bad news:

-- spreading layoffs across the country; on October 29, The New York Times reporting their painful impact in New York; spreading "well beyond Wall Street;" expected to "drive up the city's unemployment rate and strain the state's unemployment insurance fund;" hitting everywhere, including service firms; professional ones - law firms, banks, other financial services, publishers, tourism, besides tens of thousands on Wall Street;

-- official unemployment heading for the high single digits; the true number far higher and growing; real pain is being felt as a result;

-- the worst housing crisis since the 1930s; continued record home price declines, according to the S&P Case-Shiller Index; 16.6% in its latest (20 major metropolitan areas) reading; compounded by a glut of unsold homes;

-- in an October 28 news release, the Center for Economic and Policy Research (CEPR) reported grim findings; a comparison of ownership vs. rental costs "points to negative equity accruals in many markets over the next 4 years" even as prices keep falling; many homeowners won't ever accrue equity with many going under water; in the most inflated markets, homeownership costs outpace rents by as much as 300% placing enormous stress on household income, especially for middle and lower-income families;

-- declining production; autos especially hard hit; Chrysler sacking 25% of its salaried force; GM suspending employee benefits; all three auto makers closing or idling plants; steel affected as a result; 17 of the nation's 29 blast furnaces shut down; other industries also under stress;

-- economists lowering their GDP forecasts; many saying we're well into recession; fourth quarter results will be the worst since the severe 1981 - 82 one, and 2009 also looks even bleaker; third quarter ones out show an annualized .3% decline; most disturbing a minus 3.1% PCE (personal consumption expenditure) reading, the first drop since 1991; private investment also shrunk 1.9%;

-- against this backdrop, little relief is being proposed; where it's most needed; so beleaguered homeowners can keep their properties; to struggling households to stimulate demand; not for toxic assets or to fund giant bank acquisitions; what Alan Nasser reported in his article titled "The Bailout Lie Exposed;" that big banks won't lend out their windfall; that New York Times economics reporter Joe Nocera confirmed from an employee-only recording of a JP Morgan Chase conference he secured; that the bank will use bailout funds for acquisitions; leveraged buyouts; with public money; for assets at fire sale prices; courtesy of US taxpayers; for further consolidation; a multi-generational tradition; to crush competition and grow monopolies; with both presidential candidates on board; assuring reduced social spending and no return to enlightened New Deal policies when they're most needed.

In Times of Crisis, Bring Out the Heavy Artillery

It's a common tactic and the one used in 1929. Following Black Thursday (October 24), Black Monday (October 28) and Black Tuesday (October 29). Popularly called the Great Crash of 1929. After which the publication Variety headlined: "Wall Street Lays an Egg." A much larger one than at first realized but serious enough for the establishment to get John D. Rockefeller to state (on Black Tuesday):

"Believing that fundamental conditions of the country are sound and that there is nothing in the business situation to warrant the destruction of values that has taken place on the exchanges during the past week, my son and I have for some days been purchasing sound common stocks." Fast forward to the present. History is again repeating. At another crisis time. No garden variety one. The most serious since the 1930s. With investor and public confidence severely shaken. Enough for a repeat of Rockefeller's bravado.

Dire enough to get Warren Buffett to do what he rarely if ever does. Pen an op-ed. On October 16 in The New York Times. To sound like John D. and say in spite of gloom and doom, he's "buying American stocks." To affirm his faith in "the long-term prosperity of the nation's many sound companies." To predict "most major companies will be setting new profit records 5, 10 and 20 years from now." At age 78, he may not be around to confront critics if he's wrong.

On October 27, the Wall Street Journal took aim at him. A very uncharacteristic gesture toward a large (and successful) investor. Let alone the most famous individual one and one of the richest. "Even the Oracle Didn't Time It Perfectly" headlined the Journal. His class A Berkshire Hathaway shares have taken a hit like most others year to date, but that's a side issue for the Journal.

It's troubled because "the Oracle of Omaha failed to see how bad the market was going to get." And he's even exposed to credit default swaps (CDSs). Increased his position to $8.8 billion from mid-2006 - mid-2008. Already took a $490 million loss in the first quarter. Another $136 million in the second, and likely much more unreported so far for the third and beyond.

These positions show he "was relatively comfortable about the prospects for US corporations and global stocks at a time when (other observers) were predicting a bust." Maybe it's "time for the Oracle to get a new crystal ball."

Warnings from Abroad

Overseas comments differ greatly from more optimistic ones here. Germany's finance minister, Peer Steinbruck, for example. On October 26, the Financial Times reported his fears about global financial markets collapsing. At least through 2009. He said: "The danger of a collapse is far from over. Any attempt to give the all clear would be wrong."

His government committed $635 billion to rescue troubled banks. A "financial market stabilization fund." With most of it in credit guarantees and a smaller portion to recapitalize banks and buy toxic assets. But unlike the Paulson plan, Germany won't compel banks to take it and many so far haven't. For fear investors will punish them for admitting they're in trouble and also over concerns that conditions imposed are too stringent. Steinbruck is working through this and said banks eschewing state aid are "irresponsible."

Leaders in Europe fear the financial crisis will tip the continent into serious recession. And cause a currency meltdown in the East. Across former Soviet bloc nations. Testing currency pegs "on the fringes of Europe's monetary union in a traumatic upheaval" reminiscent of the 1992 Exchange Rate Mechanism collapse. Bank of New York strategist Neil Mellor called it "the biggest currency crisis the world has ever seen."

On October 26, Ambrose Evans-Pritchard wrote about it in the UK Telegraph. He cites what experts fear. A "chain reaction within the eurozone itself." A surge in capital flight from Austria. The latest Bank of International Settlements data aren't encouraging. They show Western European banks in trouble. With the most exposure "to the emerging market bubble, now bursting with spectacular effect."

The amount involved is huge. Around three-fourths of "the total $4.7 trillion in cross-border bank loans to Eastern Europe, Latin America and emerging Asia." Much greater than America's subprime lending. Iceland was at the leading edge of the problem. Hungary and other states may follow. In a Paul Krugman New York Times op-ed, he discussed currency crises and said he "never anticipated anything like what's happening now."

He cited Morgan Stanley's chief currency strategist Stephen Jen (his former student) saying since Lehman's demise, we've seen world emerging market currency crises. "So far, the US financial sector has been (at) the epicentre of the global crisis. I fear that a hard landing in EM assets and economies (unfolding in Europe) will become the second epicentre in the coming months, with very damaging feedback effects on the developed world."

Already Austria, Hungary, Ukraine, Serbia, Belarus "queuing up for" IMF rescue packages. Jumping from the frying pan into the fire unless they can arrange no-strings loans. Given the gravity of the crisis and danger of its contagion, maybe so or at least escape the worst type IMF demands. They've swallowed enough neoliberalism already. It exacerbates their dire condition.

Europe is now reeling under stress. Heavily pressured by emerging market debt. The Eastern bloc borrowed heavily in dollars, euros and Swiss francs. Some in Hungary and Latvia in Yen. An unpublished 2006 IMF report warned about their most dangerous excesses in the world. Nothing was done to curb them, and finally its authors "had their moment of vindication as Eastern Europe went haywire." It hit Hungary, Romania and put Russia "in the eye of the storm, despite its energy wealth. The cost of insuring Russian sovereign debt (through CDSs) surged to 1200 basis points last week." More than Iceland "before Gotterdammerung struck Reykjavik."

With oil prices plunging, markets no longer believe that Russian state spending is viable, and the fear is that peripheral contagion will invade the eurozone's core. Yield spreads between German and Italian 10-year bonds are being watched. "They reached a post-EMU (European Economic and Monetary Union)" high of 93 in late October. No one knows the "snapping point" but it's feared that anything above 100 is cause for alarm.

BNP Paribas' chief currency strategist Hans Redeker cites "an imminent danger that East Europe's currency pegs will be smashed unless EU authorities wake up to the full gravity of the threat, and that in turn will trigger a dangerous crisis for EMU itself."

"The system is paralyzed," he said, "and starting to look like Black Wednesday 1992." He fears a very deflationary effect across Western Europe. One "almost guaranteed" to implode the euroland money supply. As for UK banks, they're lightly exposed to the former Soviet bloc. But not to emerging Asia. In the amount of $329 billion. Almost as much and America and Japan combined. Evan-Pritchard concludes with a sobering note for his UK readers. "Whether you realise it or not, your pension fund is sunk in Vietnamese bonds and loans to Indian steel magnates." Like for many other investments, that money's safety is far from secure.

Neither is Britain according to a Mail online October 27 article headlined: The country "may need 0% interest rate to avoid a depression, leading economist warns." He's Charles Goodhart. A founding member of the Bank of England's Monetary Policy Committee (MPC). Now a professor emeritus of banking and finance at the London School of Economics.

He told Channel 4's Dispatches program: "Interest rates will go down from now, by how far and how fast nobody knows. They could go to zero" like in Japan. And may have to. Yet other experts warn that at this stage big cuts are "too little, too late" because the country already faces a long severe recession.

On October 29, more confirmation from a UK Independent article headlined: "Repossessions soar by 70 per cent as joblessness rises." From new Financial Services Authority figures. Some 11,054 second quarter foreclosures. Up from under 6500 last year. Numbers expected to keep rising, and new Land Registry data revealed continuing house price declines. Around 8% in the past 12 months.

A gloomy picture, according to Howard Archer. Global Insight's chief UK economist. In his view, "The fundamentals continue to be largely stacked against the housing market, and it seems odds-on that prices will fall considerably further." Especially given "accelerating unemployment set to pick up significantly....recession (and) wages (held) down." Add to this a 167% rise in calls to the housing charity Shelter helpline. Its chief executive, Adam Sampson, said: "These figures are not only shocking and worse than expected, they highlight the crippling severity of the credit crunch on ordinary homeowners." It's hit Britain especially hard, but economic woes are little different throughout the continent.

In Japan as well after the benchmark Nikkei index hit a 26 year low and a scant 18% of its 1989 high. Despite a few days of rebound, it made front page (October 28) Wall Street Journal news in an article headlined: "Crisis Deals New Blow to Japan" in a feature story about the nation's largest bank. Mitsubishi UFJ Financial Group. On October 27, it said it would raise $10.7 billion in new capital. The result of its own vulnerabilities and Japan's economic turmoil. According to Kristine Li of Tokyo's KBC Securities: Mitsubishi's announcement was a "big blow" to investors' confidence. Its share price reflected it. Plunging 15% on October 27. Other banks hit as well. Major ones. They, too, need more capital and will have to raise it from investors.

Some in Tokyo believe the country can do little to reverse the downward trend. According to Credit Suisse's Toyko-based chief equity strategist, Shinichi Ichikawa, "The Japanese government alone can't fix" the nation's export woes or the deepening global crisis. "The factors hurting the market are beyond Japan's control."

The Financial Times paints a similar picture. The Nikkei down 53% through late October and has "the dubious honour of having been the worst performing leading developed country market last year." The current crisis hit Japan in several ways. Its banking and financial sectors "in spite of having relatively less exposure to toxic assets." Nonetheless, investors worry about their underlying strength or lack of it.

Japan is heavily export dependent. For most of its economic growth and health. It's hurt by a surging Yen. At a 13 year high against the dollar. In addition, hedge funds and foreign investors are bailing out. The way they're doing everywhere, but it's hurting Japan more than most because it relies so heavily on outside capital.

So does China in the form of foreign investment that doesn't affect how it manages its banks. At least in what they can invest in non-Chinese securities. Very little and why the government is spending nothing to bail them out. There's no need because they own scant amounts of toxic assets and use their own to fuel internal growth. What China needs badly for its large and growing population.

It's not insulated from the global crisis and will feel it in slower growth. Still expected to be impressively high although certain to drop from its 9.9% in the first nine months of 2008. Down from 12% last year. Amidst a deepening global slump. It's helped by strong domestic demand and its exports. Up an impressive 21.5% over last year. Heavily to Asia to make up for slumping Western demand.

It's affected China's toy manufacturers. China's customs agency reported that 52.7% of them shut down in the first seven months of 2008. Mass layoffs resulted. Other industries are also affected. Textiles, shoes, clothing, home appliances and electronics because of slumping Western markets. Millions of workers are at risk and why China announced an economic stimulus plan to keep growth as high as possible. A targeted minimum 8%. If achieved will be impressive by any standard.

A potential glimmer of light amidst a dismal global outlook with China determined to keep it that way although there's no assurance it can. The reason its stock market slumped like most others. However, it may rebound sooner given the government's commitment to big infrastructure spending increases. With its "embarrassment of riches" according to The Economist. Growing "at a staggering rate" says its Intelligence Unit. Its huge $1.75 trillion in foreign currency reserves. Likely to top $2 trillion by yearend. That can be used for roads, airports, nuclear power plants, hydro power stations, and more. To create new jobs for laid off workers. As many as possible. What America should do to stimulate growth. Not commit billions for corporate acquisitions. Bailouts that won't work. That will harm the economy, not heal it. The reason even in today's climate China's star is rising. In the US, it's growing dim.

The Worst Is Yet to Come

According to economist Nouriel Roubini. Called Dr. Doom for his gloomy views that today command worldwide respect. Opinions once dismissed now widely sought. He believes recession began in early 2008. Will last throughout 2009. Will be severe and painful with GDP contracting 4 - 5%. On October 29, he told Bloomberg: "We're entering a vicious circle where economies are spinning down, financial markets are spinning lower, and policy makers in my view - and that's my biggest fear - have lost control of what's going on in the financial markets."

In London in late October he predicted that hundreds of hedge funds will close down and given the extent of panic selling markets may have to suspend trading. Perhaps for a week or more before resuming. In September, Russia's stock exchanges shut down after their steepest ever one day fall. They did again in late October after falling nearly as much. Perhaps Wall Street is next. Maybe Europe.

If the latest (October 28 reported) consumer confidence report is an indication, it may happen sooner, not later. It was dismal by any standard. From the Conference Board. An all-time low and far below expectations. Surveyed economists forecast a reading of 52. It came in woefully short at 38 from an upwardly revised 61.4 September figure. Results were "significantly more pessimistic" on future business prospects and jobs. It signals trouble if translated into spending that, in turn, means lower profits and share prices already crushed over the past 12 months. With no end of pain in sight.

Yet markets remain volatile because of heavy insider manipulation for big profits up or down. The "not-so-invisible hand" working its magic. Killing the "free-market" according to author Ellen Brown. Making it hazardous for ordinary investors to risk anything in this climate. Casino capitalism with the odds heavily favoring the house. Getting Brown to quote a talk show commentator saying: "I'm fully diversified; some under the mattress; some under the floor boards; and some in the backyard." Better that than lose everything.

Because world economies are "at a breaking point" according to Roubini. "Essentially in free fall (and near) sheer panic." Played out in markets that reflect future expectations. Despite relief rallies, very much pointing down and signaling no end of crisis in sight. It got Roubini to state:

"Every time there has been a severe crisis in the last six months, people have said this is the catastrophic event that signals the bottom." Every time so far they were wrong. "They said it after Bear Stearns, after Fannie and Freddie, after AIG, and after" the $700 billion bailout plan. "Each time they have called the bottom, and the bottom has not been reached."

Despite everything world governments throw at their problems, Roubini thinks investors no longer trust them or believe they'll do the right things. For good reason. Because so far they haven't and what they're now doing is mostly woefully misdirected and inadequate. "Even using the nuclear option of guaranteeing everything, providing unlimited liquidity, nationalising the banks, making clear that nobody of importance is going to fail, even that has not helped." Economic fundamentals no longer apply. "We are reaching a breaking point frankly."

From his Hong Kong base, long-time investment advisor and fund manager Marc Faber publishes the "Gloom Boom and Doom" report. On how he views economic and financial prospects and investment opportunities worldwide. Given today's climate, he's more than ever in demand and shows up often in the financial press and on business channels like Bloomberg and CNBC. But not with good cheer.

He thinks that government interventions may be partially responsible for world market selloffs. Not least because in the current climate guaranteeing bank deposits leaves investors with no incentive to take risks. And other measures have been counterproductive as well. "They have increased volatility. It's impossible to forecast market movements when you have interventions."

Downward readjustments of company book values may be next in his view as happened in previous bear markets. That revealed overstated estimates. "If the global economy slows down as much as I think," he said, "then a lot of book values will have to be adjusted downward quite substantially." And rate cuts will create their own headache. "I think first we'll have a bout of deflation that will actually be quite substantial, but then the budget deficits will go through the roof and the Fed will print even more money (so that) later on we'll have very high inflation."

Morgan Stanley ("perennial bear") economist and chairman of the company's Asia operations Stephen Roach was extremely critical of Fed policy in an October 27 Financial Times op-ed titled: "Add 'financial stability' to the Fed's mandate." He called "the era of excess as much about policy blunders and regulatory negligence as about mistakes by financial institutions." We need a new system and new role for the Fed in his judgment. Explicitly to reference "financial stability."

Something critically needed for a "post-bubble, crisis-torn US economy." To make the Fed "tougher in its neglected regulatory oversight capacity." To counter "bubble denialists (like) Alan Greenspan." To mandate Fed policy "err on the side of caution." To expose the "fatal mistake" in trusting "ideology" over "objective metrics. Like all crises, this one is a wake-up call. The Fed made policy blunders of historic proportions that must be avoided in the future."

However, dealing with today's crisis requires an even bigger international rescue according to Roubini. And whatever's done, America faces "year(s) of economic stagnation." After a deep protracted downturn. If as true as he forecasts, it signals the end of prosperity. A new age of austerity and world economies in extreme disrepair and needing an alternative model in lieu of a clearly failed one. Hugely corrupted as well.

Will world leaders seize the challenge and act? Only if mass outrage demands it and even then change at best may be minimalist and short-lived. If history is a guide. What better time to prove history wrong. If not now, when? If not by us, who? If not soon, maybe never. If that's not incentive enough, what is?

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on Republic Broadcasting.org Mondays from 11AM - 1PM for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10685

Targeting Dissent - The San Francisco Eight

Targeting Dissent: The San Francisco Eight - by Stephen Lendman

Throughout much of American history, dissent was never tolerated if thought to threaten entrenched interests. Especially in times of war, economic crisis, or social stress. During the great Red Scare from 1917 - 1920. Under the 1917 Espionage Act that barred mailing materials advocating insurrectionist or forcible resistance, and the 1918 Sedition Act that banned criticism of the government and ongoing war effort. Later targeting those on the left by the House Un-American Activities Committee (HUAC), the Smith Act, and during the age of Joe McCarthy. Post-9/11, anti-war activists, Latino immigrants, and Muslim Americans viciously targeted. The San Francisco Eight as well.

Former Black Panthers. On January 23, 2007, arrested in early morning raids in California, New York and Florida. Charged with the 1971 killing of a San Francisco police officer and various conspiracy acts from 1968 - 1973. A racist frame following decades of harassment and a ruthless vendetta against the Black Panther Party.

Targeted for destruction under COINTELPRO. The FBI's war against dissent. From 1956 - 1971 officially but it never ended and now is worse than ever. To disrupt, sabotage, and neutralize it. Against the Panthers from 1967 through the early 1970s. The party apparatus and its members. A "Black Nationalist Hate Group," according to the FBI. For J. Edgar Hoover, "the greatest threat to the internal security of the country." Along with the American Indian Movement, its primary target. The toll was devastating. Dozens incarcerated and killed. Including Fred Hampton and Mark Clark (in 1969) murdered in their sleep by Chicago police. George Jackson (in 1971) assassinated in San Quentin prison.

In 1968, eight Panthers (including Eldridge Cleaver, Bobby Hutton and David Hilliard) nearly killed when ambushed by Oakland police. They took cover in a basement that police quickly surrounded. Fired on it for over an hour. Then tear-gassed it. Cleaver was wounded. He and Hutton offered to surrender. Hutton first with his hands in the air and was shot 12 times and killed instantly. Murdered in cold blood.

A Brief History of the Panthers

In October 1966, Huey Newton and Bobby Seale founded the Black Panther Party for Self-Defense. Progressive, activist, militantly for ethnic justice, racial emancipation, and real economic, social, and political equality across gender and color lines. Radical ideas then and now. The party's ten-point program expressed them:

(1) freedom and "power to determine the destiny of our black community;"

(2) full employment for black people; for everyone;

(3) "an end to the robbery by the capitalists of our black community;"

(4) decent housing;

(5) education to expose "the true nature of this decadent American society (and teach) us our true history and our role in the present-day society;"

(6) for "all black men to be exempt from military service" at a time they were drafted for foreign wars;

(7) "an immediate end to police brutality and murder of black people;"

(8) "freedom for all black men held in federal, state, county and city prisons and jails;"

(9) for black people in court "to be tried....by a jury of their peer group or people from their black communities;" and

(10) "land, bread, housing, education, clothing, justice and peace."

It added words from the Declaration of Independence at the end:

-- "that all men are created equal";

-- "to secure (their) rights, governments are instituted among men, deriving their just powers from the consent of the governed;"

-- "that, whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and institute a new government;"

-- "to throw off (despotism), and to provide new guards for (peoples') future security."

They believed in the rule of law. Published a newspaper with 250,000 readers. Articulated fundamental wants and needs. Practiced what they preached with nutritious breakfasts for poor children. Groceries for needy families. Free clinics for medical care. A free ambulance service. Help for the homeless. Free legal aids and bussing to prisons. After-school and summer classes teaching black history. Voter registration drives for blacks. It helped elect Oakland's first black mayor, Lionel Wilson, in the city where the Panthers were founded.

They were young and idealistic. Willing to put their lives on the line for their beliefs and activism. Their goal - to make the world a better place. For black people and everyone. They were revolutionaries. Hostile to repression. In Huey Newton's words: "never a group of angry young militants full of fury toward the 'white establishment.' The Party operated on love for black people, not hatred of white people." They demanded change and fought for it. From over 30 branches throughout the country. By its over 2000 members.

They wanted redress of longstanding grievances - slavery, Jim Crow, segregation; neglect and abuse. The right to self-defense against them. A revolutionary agenda, and for practicing what Jefferson preached, the US government targeted them for destruction and largely succeeded. The 1960s civil rights gains as well so that today blacks are repressed, impoverished, and segregated. Stripped of their voting rights, and consigned to second class status by a society disdaining them. Targeted like the San Francisco Eight for crimes they didn't commit:

-- Ray Boudreaux, Richard Brown, Hank Jones, Richard O'Neal, Harold Taylor, and Francisco Torres;

-- Herman Bell and Jalil Muntaqim already imprisoned for 30 years; as political prisoners on trumped-up charges; and

-- a ninth man Ronald Stanley Bridgeforth still being sought.

No new evidence was found against any of them for decades. On February 7, 2008, the conspiracy charge against Boudreaux, Brown, Jones, Taylor, and O'Neal was dropped. The result of defense motions correctly challenging it on grounds that the three-year California statute of limitations expired. Similar motions for Bell, Muntaqim and Torres were heard by the California Appeals Court. O'Neal is now cleared of all charges.

Evidence in this case was obtained through torture. In 1973, on Taylor, John Bowman (recently deceased) and Ruben Scott. They were arrested and brutalized by New Orleans police. Assisted by two San Francisco detectives. Abuse continued for several days. Stripped naked for maximum effect and humiliation. Applied were electric shocks, cattle prods, beatings, sensory deprivation, plastic bags, and hot wet blankets for asphyxiation. Confessions finally extracted to end the pain. A federal court at the time ruled that torture was used and dismissed the case.

Ruben Scott is now believed to be the government's chief witness. To be used against the others. On the basis of torture-induced confessions. To get convictions and life sentences or perhaps the death penalty for innocent men. The result of continued COINTELPRO viciousness.Today as part of the "war on terror." Dissent and be targeted.

In 2003, the San Francisco police reopened the 1971 case. Along with FBI agents, visited dozens of people around the country. Pressured them to cooperate. When that failed, grand juries were convened (state and federal in 2003, 2004 and 2005) to subpoena people to testify. In 2005, Brown, Boudreaux, Taylor, Jones and Bowman were jailed for refusing to cooperate. Later released when the grand jury didn't indict them.

They responded by forming the Committee for Defense of Human Rights:

"to draw attention to human rights abuses perpetrated by the government of the United States and law enforcement authorities which were carried out in an effort to destroy progressive organizations and individuals. By building coalitions with organizations and groups that advocate for human and civil rights." Against extracting evidence through torture. Trying to make what was inadmissible 35 years ago acceptable today in a court of law. Legitimizing the "war on terror" on US soil. To be used against anyone the state targets. Their innocence irrelevant. Their guilt pre-ordained, case closed.

Activist blacks are again targets. The San Francisco Eight to send a message to others who resist. Six were released on bail. Thanks to heroic work by their families, supporters and lawyers. Two others, Muntaqim and Bell, are ineligible. They would be in New York where each served 30 years in prison. Their cases up for parole. Their transfer to San Francisco disqualifies them.

Bell was framed for the murders of two New York policemen. He's been a political prisoner since 1973. Muntaqim was arrested in 1971 on weapons charges. Later falsely implicated in the police officer killings. He's a founder of the Jericho Amnesty Movement for Political Prisoners and Prisoners of War. From organizations like the Panthers, American Indian Movement, MOVE, the Republic of New Afrika, and the Puerto Rican independence movement. Also North American anti-imperialist prisoners. Jailed for their solidarity with these movements and fighting for change in the current economic and political system. They're in prison for their activism. For being against racism, imperialism and injustice. For participating in the Black Liberation Struggle.

For the San Francisco Eight, delay is the prosecution's strategy. A preliminary hearing date approaches to decide if enough evidence exists to proceed. Thousands of document pages were delivered to the defense and a list of 180 potential witnesses. Enough time to review them and interview witnesses is needed. It was requested and granted. A new trial date has yet to be scheduled.

Meanwhile, Judge Philip Moscone refused to return Bell and Muntaqim to New York temporarily for their parole hearings. Both men may now lose any chance for release for years. It's to keep them and other activist blacks targeted and imprisoned. Victims of the "war on terrorism." For their efforts against it. Supporting the Black Liberation Struggle. Being the wrong color for the wrong cause at the wrong time and having only their raw grit in its behalf. United in solidarity as well. Along with others, committed against the power of the state. For the privileged, not the people. Determined to persist no matter how this case turns out. To prevail no matter how long it takes.

Support the San Francisco Eight. Demand their exoneration and release. Their struggle is ours.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM for cutting-edge discussions with distinguished guests on world and national topics. All programs are archives for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10685

Public Enemy Number One

Public Enemy Number One - by Stephen Lendman

A note before beginning. This article focuses on today's financial and economic crisis. Not affairs of state, war and peace or geopolitics. No guessing who's number one under those headings. That said:

With so many good choices, it's hard just picking one. But given the gravity of today's financial crisis, one name stands out above others. The "maestro," as Bob Woodward called him in his book by that title. The "Temple of Boom" chairman, according to a New York Times book review. Standing "bestride the Fed like a colossus." Now defrocked as the "maestro" of misery. Alan Greenspan. From August 11, 1987 to January 31, 2006, as head of the private banking cartel euphemistically called the Federal Reserve. That Ron Paul explains isn't Federal and has no reserves.

It represents bankers who own it. Big and powerful ones. Not the state or public interest. It prints money. Controls its supply and price. Loans it out for profit and charges the government interest it wouldn't have to pay if Treasury instead of Federal Reserve notes were issued. People, as a result, pay more in taxes for debt service. The nation is more crisis-prone. Over time they increase in severity. The current one the most serious since the Great Depression. Potentially the greatest ever. The result of Greenspan's 18 year irresponsible legacy.

He championed deregulation and presided over an earlier version of today's crisis. The Reagan-era savings and loan fraud. It bankrupted 2200 banks. Cost taxpayers around $200 billion and for many people their savings in S & Ls they thought safe.

In the 1990s, he engineered the largest ever stock market bubble and bust in history through incompetence, subservience to Wall Street, and dereliction of duty. In January 2000, weeks short of the market peak, he claimed that "the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits, and stock prices at a pace not seen in generations, if ever....Lofty stock prices have reduced the cost of capital. The result has been a veritable explosion of spending on high-tech equipment....And I see nothing to suggest that these opportunities will peter out anytime soon....Indeed many argue that the pace of innovation will continue to quicken....to exploit the still largely untapped potential for e-commerce, especially the business-to-business arena."

A week later, the Nasdaq peaked at 5048. Lost 78% of its value by October 2002. The S&P 500 49% from its March 2000 high to its October 2002 bottom. Individual investors were left high and dry as a result. For Mr. Greenspan, it was back to engineering multiple bubbles with 1% interest rates and a tsunami of easy money.

He advocated less regulation, not more. Voluntary oversight. The idea that markets work best so let them. Government intervention as the problem, not the solution. In the mid-1990s, he told a congressional committee:

"Risks in financial markets, including derivative markets, are being regulated by private parties. There is nothing involved in federal regulation per se which makes it superior to market regulation."

On October 23 before the House Government Oversight and Reform committee, he refused to accept blame for the current crisis, but softened his tone and admitted a "flaw" in his ideology. Confessed his faith in deregulation was shaken. Said he was in a "state of shocked disbelief." Unclear on what went wrong. Not sure "how significant or permanent it is," and added:

-- "We are in the midst of a once-in-a century credit tsunami (requiring) unprecedented measures;"

-- "This crisis has turned out to be much broader than anything I could have imagined;"

-- "fears of insolvency are now paramount;"

-- significant layoffs and unemployment are ahead;

-- a "marked retrenchment of consumer spending" as well;

-- containing the crisis is conditional on stabilizing home prices;

-- at best, it's "still many months in the future;"

What went wrong with policies that "worked so effectively for nearly four decades," he asked? Securitizing home mortgages. "Excess demand" for them, and failure to properly price them he answered. Unmentioned was unbridled greed. The greatest ever fraud. No oversight, and a predictable crisis only surprising in its magnitude and how it grew to unmanageable severity.

Greenspan is now softening on regulation but barely enough to matter. Too little, too late by any standard, and only to restore stability after which chastened investors "will be exceptionally cautious." In the end, in his view, "This crisis will pass, and America will reemerge with a far sounder financial system." Until another Fed chairman repeats his mistakes. Creates a crisis too big to contain. Destroys unfettered capitalism as we know it. Changes the world irrevocably as a consequence. Unless this time is the big one and does it sooner.

In March 1999, Greenspan was optimistic at the end of a robust decade (that James Petras calls "the golden age of pillage") with no worries about new millennium meltdowns. He addressed the Futures Industry Association and said it would be "a major mistake" to increase rules on how banks assess risks when they use derivatives. He added: "By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives." By a compounded 20% rate throughout the decade. Around 30% alone by banks in 1998. And, according to Greenspan, "The reason that (derivatives) growth has continued despite adversity, or perhaps because of it, is that these new financial instruments are an increasingly important vehicle for unbundling risk....the value added of derivatives themselves derives from their ability to enhance the process of wealth creation (and) one counterparty's market loss is the (other's) gain."

Overall, they've increased the standard of living of people globally, he claimed. In fact, they contributed to global crises in the 1990s. Hot money in, and meltdowns when it exited. The problem is derivatives work well in bull markets, but are disastrous when they're down. Going up they do nothing for ordinary people, but during downturns receding tides sink all boats and all in them and aren't the zero sum game Greenspan suggested.

Worst of all are so-called credit default swaps (CDSs). The most widely traded credit derivative. In the tens of trillions of dollars. A $43 trillion market, according to PIMCO's Bill Gross. The International Swaps and Derivatives Association (ISDA) estimates it at $54.6 trillion. Down from $62 trillion at yearend 2007. Others place it higher, but key is what they are and how they're used. They resemble insurance (on risky mortgages), but, in fact, are for little more than casino-type gambling. Unregulated with no transparency in the shadow banking system that dwarfs the traditional one in size and risk.

Gross describes it this way. It "craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever." CDSs are at the center of shadow banking, and Gross and others warn about possible financial Armageddon if things begin collapsing.

A "Cheerleader for Imprudence"

That, according to James Grant, editor of Grant's Interest Rate Observer. Greenspan's "biggest mistake was inciting people to do imprudent things." He called him "marble-mouthed" for his "Greenspeak" and not simply admitting he "was as blind as those (he) pretended to lead. This sense of security that people invested in the idea of perfect control by an all-knowing brain at the top, that idea's been shattered."

In July, Grant was outspoken in a Wall Street Journal op-ed titled "Why No Outrage?" He quoted Mary Elizabeth Lease from the Populist era haranguing farmers to "raise less corn and more hell." He asked why today's financial victims aren't protesting Fed policy "of showering dollars on the (monied) people who would seem to (least) need them." Where are the "uncounted improvident?" Have they "not suffered (enough) at the hands of what used to be called The Interests? Have the stewards of other people's money not made a hash of high finance? Where is the people's wrath?" In the wake of the "greatest (ever) failure of ratings and risk management."

Greenspan's Fed cut interest rates to 1%. "House prices levitated as mortgage underwriting standards collapsed." He claimed earlier that property appreciation was a sign of prosperity and a strong economy and "while home prices do on occasion decline, large declines are rare." Most homeowners experience "a modest but persistent rise in home values that is perceived to be largely permanent."

Especially, according to Grant, at a time that "credit markets went into speculative orbit, and an idea took hold. Risk....was yesterday's problem." It led to "one of the wildest chapters in the history of lending and borrowing." As a consequence, an $8 trillion home valuation wealth bubble and an unprecedented oversupply of unsold properties. Now in even more oversupply as owners default. Are foreclosed on or simply walk away from unaffordable underwater assets. They sit empty with no one to buy them except for those able in distressed sales.

The whole episode criminal and avoidable had the Fed used its authority under the 1994 Home Ownership and Equity Protection Act. It authorized the central bank to monitor abuses and intervene, if necessary, to prevent abusive lender practices. It failed to do it.

The result was predictable. People and the economy in crisis. Greenspan orchestrated it. His successor Bernanke did nothing to curb it. Wall Street was on a roll until it crashed. Huey Long once compared JD Rockefeller to "the fat guy who ruins a good barbecue by taking too much." Wall Street thrives on it. Fed largesse enables it. The problem is their indigestion affects everyone. A stomachache spreading round the world. How bad it'll get and where it stops nobody knows. Blame it on Greenspan. Our "former clairvoyant," according to Grant.

The New York Times - Uncharacteristically Critical

Usually a "free-market" cheerleader, even The New York Times voiced criticism. In an October 8 Peter Goodman article titled "Taking Hard New Look at a Greenspan Legacy." It quoted him in 2004 saying: "Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient."

As already explained, he abhorred regulation and championed derivatives. The latter what investor George Soros won't touch "because we don't really understand how they work." What long-time investment banker Felix Rohatyn calls potential "hydrogen bombs." What Warren Buffett describes as financial "weapons of mass destruction." What Alan Greenspan thought regulating would be a huge mistake and even today his faith in these instruments remains unshaken.

Others see things differently "and the role that Mr. Greenspan played in setting up (the current) unrest." Law professor Frank Partnoy says "derivatives are a centerpiece of the crisis." Given their purchased market value in the hundreds of trillions of dollars. Up from a fraction of that years back. The fact that much of it is toxic junk, and the fear that writing enough off will bankrupt their holders and send shock waves through world economies. They're already being felt. Especially in emerging markets.

None of this should have happened. "If Mr. Greenspan had acted differently during his tenure as Federal Reserve chairman, many economists say, the current crisis might have been averted or muted. Over the years, Mr. Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences."

It was argued throughout the 1990s "that derivatives had become so vast, intertwined and inscrutable that they required federal oversight to protect the financial system." Even so, "Mr. Greenspan banked on the good will of Wall Street to self-regulate as he fended off (suggestions of) restrictions."

As the housing bubble burst and prices began collapsing, "Mr. Greenspan's record has been up for revision. Economists from across the ideological spectrum have criticized his decision to let the nation's real estate market continue to boom with cheap credit, courtesy of low interest rates, rather than snuffing out price increases with higher rates."

He championed adjustable rate mortgages and ignored the clear fraud from subprime ones. In a 2004 speech, he said that "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage." He, in fact, endorsed the type abuses and the housing bubble they produced that Fed action should have prevented.

It will be a chapter in his legacy. Along with "the spectacular boom and calamitous bust in derivatives trading." He declined a Times interview request and referred instead to his record in his memoir, "The Age of Turbulence." In it, he stated that it's "superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade." Instead he "preached the transcendent, wealth-creating powers of the market." Not for Main Street. For Wall Street. What a friend of this writer calls "laissez-unfair."

Despite convincing evidence to the contrary, he claimed markets are best able to handle risks. Former Fed vice-chairman Alan Blinder said "Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury. I think of him as consistently cheerleading on derivatives." In congressional testimony, he claimed the potential for serious crisis "extremely remote" and dismissively suggested that "risk is part of life." He also warned that too many rules would damage Wall Street and prompt traders to do business overseas.

Until the present, every debacle under him was resolved (enough at least) and markets stabilized and advanced. He got credit for his "steady hand at the Fed," and former Senator Phil Gramm said "You will go down down as the greatest chairman in the history of the Federal Reserve Bank." That comment may go down as the greatest misstatement in the history of the Senate.

This is the same Phil Gramm behind the 1999 Gramm-Leach-Bliley Act that repealed (1933 enacted) Glass-Steagall. It let commercial and investment banks and insurance companies combine and opened the door to rampant speculation, fraud and abuse.

In addition, the 2000 Commodity Futures Modernization Act (CFMA). At Gramm's behest, it was tucked undebated into an appropriations bill near the end of Clinton's tenure. It legitimized "swap agreements" and other "hybrid instruments" at the core of today's problems. It prevented regulatory oversight of derivatives and leveraging and turned Wall Street sharks loose on unsuspecting investors. Including world sovereign ones.

It also contained the "Enron Loophole." So the company could exploit its "Enron On-Line." The first internet-based commodities transaction system. Freeing electronic energy trading from regulation by rescinding supervisory restrictions in place since 1922. It empowered Enron to do as it pleased. Ended up fleecing investors. Bankrupting the company, and costing its employees their jobs and savings in worthless Enron stock. All because CFMA sailed through the House and Senate (below the radar), and Clinton signed it into law a month before he left office.

Much to Greenspan's approval. He sweet-talked Congress and said "There is a very fundamental trade-off of what type of economy you wish to have. You can have huge amounts of regulation and I will guarantee nothing will go wrong, but nothing will go right either." He added that Wall Street had tamed risk and "many of the larger (ones) are dramatically hedged." Legislators bought it or at least didn't object. The New York Times is less convinced. Better late than never but don't expect it to become a trend.

As Greenspan championed derivatives as a way of sharing risks, The Times said: "Shared risk has evolved from a source of comfort into a virus. As the housing crisis grew and mortgages went bad, derivatives actually magnified the downturn. In recent months, the financial crisis gathered momentum." Mr. Greenspan stayed conspicuously out of sight. Until October 23.

With the crisis unfolding, he wrote an epilogue to the paperback version of his memoir. Said "Risk management can never achieve perfection. Governments and central banks could not have altered the course of the boom." He has no regrets.

His critics do, and they're coming out of the woodwork, if slowly. Economist Jeff Sachs said "To a large extent, the US crisis was actually made by the Fed, helped by the wishful thinking of the Bush administration. One main culprit was none other than Alan Greenspan."

On October 24, the Seattle Times ran a piece on "Former hero Greenspan blamed for the credit crisis." He "found himself likened to one of the great goats of baseball." Called one of "three Bill Buckners." Referring to the 1986 Red Sox first baseman who let an easy ground ball through his legs that cost Boston the World Series as it turned out.

The Financial Times ran critical responses to a Greenspan article titled "We will never have a perfect model of risk" in which he argued for the inability to anticipate "all discontinuities in financial markets." Economics professor Paul de Grauwe called it "a smokescreen to hide his own responsibility in making the financial crisis possible."

Economist Michael Hudson challenged Greenspan's logic and misuse of empirical real estate data. Specifically land values. By spring 2006, "bankers knew there was a bubble." He wrote a Harpers cover story on it. But Fed officials compounded bad policy with more of it. Hudson added that "The financial system is now at a turning point. Bankers have shown that they can't regulate themselves when they're making so much money by feeding (off Fed created) bubble(s)."

Marx Was Right

According to David Cox before today's crisis emerged. In the London Guardian on January 29, 2007. He referred to globalization "laying bare the contradictions of capitalism" but extended the argument to "unbridled economic activity." Destroying "the world's climate, water supplies, farmland, forests and fish stocks." Additionally, "mountainous trading, governmental, corporate and personal debt threaten to precipitate world-wide economic collapse....Nothing but the re-engineering of global capitalism can head off the crisis that is beginning to confront it."

Fast-forward to now and the Guardian's "Maelstrom in the markets" article (September 16). Marx again featured. "It is a moment Karl Marx would have relished. From every angle financial capitalism is taking a battering....Two pillars of the modern economic system - greed and prosperity - are trembling in a manner unseen for a very long time."

On October 15, the Guardian headlined "Booklovers turn to Karl Marx as financial crisis bites in Germany. Karl Marx is back." According to German "publishers and bookshops who say that his works are flying off the shelves." Because people "recognise that the neoliberal promises of happiness have not proved to be true," according to publisher Karl-Dietz's Jorn Schutrumpf. Even Germany's finance minister, Peer Steinbruck, was chagrined enough to admit that "certain parts of Marx's theory are really not so bad."

He's on a "winning streak" others admitted, so it's worth noting what he wrote to Friedrich Engels: "The American Crash is a delight to behold and it's far from over." He referred to the Panic of 1857. An earlier banking crisis and recession that spread to Europe, South America and Asia.

Marx condemned "free-market" capitalism as "anarchic" and ungovernable. Because it alienates the masses. Prevents the creation of a humane society. Produces class struggle between the "haves" and "have-nots." The bourgeoisie (capitalists) and proletariat (workers). The destructive contradictions of the system. Exploited masses so a few can profit.

He predicted what's clear today. Competition over time produces a handful of winners. Powerful monopolies controlling nearly all production and commerce. Finance capitalism as well. Exploitation increases. Successive crises erupt, and ultimately fed up workers react. Recognizing their collective power and bringing down the system. Replacing it with a self-managed one. Ending exploitation and alienation. In his view, an inevitable socialist revolution.

His letter to Engels wasn't wrong. Just early, and perhaps by how change will evolve. Not the outcome. Just the method. With a whimper, not a bang. Not by workers. From the system's own corrosiveness. Internal contradictions. So unworkable. Crisis-prone. Fractured by inequities. So self-destructive it can't endure. So it won't. It will crumble on its own.

A Brief Update on Spreading Indigestion

Compared to other bouts, this one is scary and hitting everywhere. In his latest update, Nouriel Roubini states that:

"markets (are) in sheer panic and becoming literally dysfunctional and unhinged." So much so that "policy makers may soon (have to) close financial markets as the panic selling accelerates. Indeed, we have now reached a point where fundamentals and long term valuation considerations do not matter any more for financial markets. (They're in) free fall as most investors are rapidly deleveraging and we are on the verge of a capitulation collapse." Flows are now everything and in one direction. For the exits in a very destabilizing game.

Just as bad, economic fundamentals "are awful as investors are finally realizing that a severe US and Eurozone and G7 and emerging markets and global recession is coming (not a full-blown depression he believes) and will be deep and protracted." Before this ends, "equity prices may have to fall another 30% based on fundamentals alone...." Add the element of panic selling that may erase even more.

After Wall Street crashed in October 1929, the Dow lost 89% of its value by its low point in July 1932. No one today is predicting that. But given the current climate. Three decades of reckless excess. The greatest ever financial fraud. Multi-trillions of bad debt. Only the brave or foolish should imagine conditions won't be painful and protracted before they stabilize and improve.

What's sure is they're already awful, worsening, spreading, affecting everyone, and when finally ended - the world no longer will be the same as when the crisis emerged. But what it will look like and where it will head is anyone's guess.

For now, emerging economies are endangered. Iceland collapsed, and others, like Hungary, may have to default on their debt. More stable countries like India and Japan are also in trouble. For the first time in 26 years, Japan recorded a trade deficit as exports to the US dropped 21.8% from a year earlier. The steepest ever monthly decline. Recall also that at yearend 1989, Japan's Nikkei peaked at 38,915. It then plunged to 7831 in April 2003. On October 27, 2008, it sunk to a shocking 7163. About 18% of its peak value nearly 19 years earlier and its lowest valuation since October 1982. In the world's second largest economy. A hint of what may await the largest.

One money manager was so shaken he said we're "going back to the stone age." Across Asia it was bloody Friday. The same again on Monday and throughout the world. The worst on Friday was avoided. Armageddon was postponed until further notice. Beyond the timeline of this article, it may arrive sooner, not later.

Because markets are crashing. Equities, commodities, currencies, bonds considered risky. Anything investors can sell to raise cash. All signs are negative. In America, a key indicator is the Mortgage Bankers Association (MBA) figures on home loan applications. Its index tracking purchasing demand and for refinancing loans plunged 17% in its latest reading. Their lowest levels since October 2001 showing housing demand remains stubbornly weak and not likely to stabilize soon.

Other signs are just as worrisome. Fitch Ratings suggest that high-yield corporate debt defaults may end up the highest number on record. Hedge funds are hemorrhaging from forced liquidations and huge losses. US automakers are on their knees and may face bankruptcy. European ones are also wobbly. Credit is still frozen as who'll lend to borrowers who can't repay. And households are so over-indebted, they can't borrow nor will lenders accommodate them.

Global deleveraging is in play as well. According to Fitch Ratings, world credit growth peaked at almost 16% in 2007. By yearend, it will be 7% and lower still at 5% in 2009. Hardest hit will be "emerging Europe but (it) will spread to all regions." World recession is setting in. Most likely to be deeper, longer and worse than most predict.

In America, credit market debt as a percent of GDP began rising in the early 1980s and peaked at 350% in 2008. Comparable to its 1930s level. Money manager Jeremy Grantham's research shows that all markets revert to their means and generally way overshoot in the process. We're currently well into a massive repricing of risk and asset values. It may take years to play out. It will affect all over-valued markets. Stocks, bonds, commodities and leveraged debt. The cost will be in the trillions. The wreckage unimaginable. The result of monetary and fiscal irresponsibility with Greenspan deserving more blame than anyone.

In 1987, he was chosen to serve financial community interests. Largely Wall and major banks. He bailed them out on October 1987's black Monday. Again in 1998 after Long Term Capital Management's collapse. He flooded the market with easy money. Kept interest rates low. He could do no wrong, and even now, says he has "no regrets on any of the Federal Reserve's policies that we initiated." An astonishing statement given the gravity of today's crisis. The result of rampant speculation and fraud made possible by easy money. With Greenspan supplying it to all takers.

The Fed's job (or what it should be) is to promote stability. Smooth out the business cycle. Maintain a steady, healthy sustainable growth rate. Create price stability. Control inflation, and grow opportunities for everyone. Instead Greenspan fueled bubbles, and all he could say was that "irrational exuberance" may have "unduly escalated asset values" in a December 1996 speech. He did nothing to curb it. Claimed bubbles are hard to identify in real time, and the Fed is unable to diffuse them. He infamously said that it's "easier to clean up the mess after an asset bubble pops than to try and deflate (one) on the way up."

In fact, the Fed's job is to spot and moderate them. Not let them get out of hand. By raising interest rates. Margin requirements. Jawboning. Reducing the money supply to cool speculation and enhance stability. "Taking away the punch bowl," as former Fed chairman William McChesney Martin put it. Available tools Greenspan eschewed that would have worked if used. They weren't, and he denied all responsibility. The result is where we are today. Greenspan still avoiding a mea culpa and only expressing "shock" and "disbelief." But no regrets, and why not. His job was to transfer wealth from the public to the rich. In that he succeeded mightily but look at the cost.

-- markets crashing;

-- the economy sinking; in secular decline;

-- record budget and current account deficits;

-- a soaring national debt and federal obligations; $5 trillion alone in one day for the Fannie and Freddie takeover; hundreds of billions more so far and trillions more to come; taxpayers on the hook for it all;

-- rising personal and corporate bankruptcies;

-- mortgage loan delinquencies and defaults in the millions before this ends; the latest Realty Trac foreclosure filings survey reported default notices up 71% from third quarter 2007 and said figures likely were underestimated;

-- an unprecedented wealth gap;

-- record household debt and debt service levels as a percent of disposable income; around 25% of annual income to credit card companies alone;

-- the greatest housing crisis since the Great Depression;

-- flat wages;

-- high prices on basic items like food, fuel and health care;

-- rising unemployment; a wave of corporate-announced layoffs; across the board in nearly all sectors; biotech as well as banking; aerospace as well as autos;

-- conditions overall the worst in decades; maybe ever as things get more dire; how economist Paul Krugman (on October 26) described them in the words of a "guy who was told, 'Cheer up - things could be worse!' So he cheered up, and sure enough, things got worse."

The result of reckless and irresponsible policy. With lots of blame to go around. But none more than to the "maestro" of misery. Now 82 and unapologetic to the end.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org on Mondays from 11AM - 1PM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10685

Seyed Mousavi - Guilty of Being Muslim in Police State America

Seyed Mousavi: Guilty of Being Muslim in Police State America - by Stephen Lendman

Seyed Mousavi is a US citizen of Iranian decent. A "family man, and a tireless servant" of the Southern California Muslim community where he lives and helped found the Islamic Shura Council of Southern California (ISCSC). It states its mission as follows: "to promote communications, understanding, cooperation, and coordination among the Muslim communities in Southern California at all levels (and) to help in the practice and propagation of Islam in the United States of America."

In 2000, Mousavi also founded the Hejrat Foundation. A Southern California religious, educational and charitable organization to do the following:

-- "educate Muslims and non-Muslims about Islam;"

-- teach them about issues affecting their lives;

-- work toward positive social progress;

-- build unity among people of all faiths; and

-- serve their needs "to improve their standard of living and assist in their economic advancement;" at first locally, then nationally and internationally.

Through Mousavi's direction and efforts, Hejrat became associated with the UN through its Department of Public Information (DPI)-NGO. Also under Hejrat, he administers the Al-Nabi Mosque and its broad range of activities. Including programs to educate people in religious, cultural, humanitarian, legal, national, and international issues of importance. It reflects his outreach and concern for others and why he's respected as a pillar of the community. Not a man supporting violence or terrorism.

Prior to founding Hejrat, Mousavi had broad and impressive goals. Well beyond religious ones. Encompassing a wide range of charitable initiatives. For schools, libraries, homeless shelters, free medical clinics, orphanages, domestic violence shelters, food banks, and various other community-related needs. More recently to raise funds for Midwest flood victims. Also focusing on youths to provide them the best possible guidance and support. They, in turn, express gratitude for how he changed their lives for the better.

Hejrat and the Islamic Shura Council promote peace and understanding. Not conflict and violence and do it through a broad outreach program. But it's not how the Bush administration sees them in its "war on terror" against anyone of Muslim faith. They treat them like enemies of the state. The way Nazis targeted Jews. Israelis Palestinians, and the strong do against the weak nearly everywhere. It's state-sponsored viciousness inflicting grave harm in defiance of the law or any sense of justice and fairness. It goes on because who'll stop it, and it means anyone may be as vulnerable as Mousavi. Especially prominent and activist Muslims at the wrong time in America.

Mousavi's Background

He was born in May 1948 in Abadan, Iran and until arrested had no criminal history. He's the youngest of six children and recalls his childhood as stable and secure. One of his teachers remembers him as one of his best students. A simple person. An honest one. Always helping classmates. Chosen to lead prayers because of his academic success.

He studied physics at Jonde Shapoor University. Graduated in the early 1980s. At age 18, he would normally have performed military service. He was exempted, however, because of poor vision and a bad back. In the 1980s, he never participated in the Iran - Iraq war that killed 53 members of his extended family.

On September 29, 1980, he was injured, however, when an incendiary exploded near him and caused severe injuries. Over the entire left side of his body. From his shoulder to his calf. He lost a finger on his left hand and sustained nerve damage. Underwent multiple surgeries. Electric stimulation with needles and extensive physical therapy. More surgery in Vienna to help restore mobility to his left arm. Nonetheless, he retained shrapnel in his body and one fragment close to his heart. Iran classified him as 40% disabled, and to this day he's lost partial use of his body's left side.

In 1986, he and his family emigrated to America and settled in Southern California. Because of his physical limitations and pain, he focused increasingly on spiritual activities. Became involved as a "lay minister" in the Muslim community. Active with youths and in allaying sectarian tensions.

An Islamic Society of Corona and Islamic Shura Council of Southern California board member wrote in his behalf:

he's a "hard-working, generous man. His dream was for a society of mutual understanding and respect. He encouraged interfaith dialogue and....pioneer(ed) in the 1980s (in) establish(ing) the Shura Council.... in 1995. It contributes....through joint research studies with many interfaith leadership organizations, collaborative social justice projects with non-governmental organizations and community based" ones.

The Islamic Society of Orange County's Vice-Chairman called him a "bridge builder" between Sunni and Shiite Muslims and among people of all faiths. A dedicated man promoting "peace, harmony and understanding between humanity."

To support his family, he held various jobs. Selling used cars. Driving a tow truck and as a clothing store sales manager. Later a Radio Shack sales associate and installing satellite dishes. All the while, he was active in the Muslim community. With the Shura Council and area mosques. Teaching classes for children. Engaging in a wide range of activities.

According to people who know him, he holds a more liberal Islamic vision than is typical in local mosques. His speaker program included children as well as scholars and Imams. He also provided a forum for youths to express concerns they're reluctant to tell their more traditional parents.

Among his many activities, he served as president of the San Bernardino United Islamic Youth Organization and its management of the only Southern California Muslim cemetery. A small mosque on its grounds as well.

In 2002, he attended a three-week Hajj pilgrimage to Mecca for the first time. It moved him so profoundly that he organized his own groups. Personally led them until he was incarcerated. Made it possible for many lower income people to go through discounts, special payment plans and loans.

His friends describe him as religious with a passion for performing tangible good works. Helping others. Building bridges, and improving the lives of people around him. After his arrest, over 100 individuals wrote letters on his behalf. About his character and respect for his work.

Arrest and Charges

On June 29, 2006, his ordeal began when the FBI and IRS raided his home and confronted him and his family at gunpoint. At 6AM, they heard loud banging on the front door and agents screaming "Emergency! Come out of the house NOW!" The family was terrified and responded. Agents swarmed in, and at the same time raided Mousavi's Al-Nabi Mosque. They were given keys but broke in. Damaged furnishings, and seized files, computers, recordings and other items still held as evidence even though nothing incriminating is on them. They followed the same procedure at Mousavi's home where he and his son were handcuffed. His family detained for hours. Supposedly on the pretext of not reporting income for tax purposes. It was bogus and just the beginning.

Muslims connected with the Hejrat Foundation were also questioned but not about taxes. About Mousavi's perceived political views. Alleged connections to the Iranian government, and beliefs of past religious scholars who spoke at a Hejrat-administered mosque. They were told it was "dangerous" and were asked to be informants, even though they assured agents that it's only for worship and cultural gatherings. Not a den for "terrorists" or secret dealings with foreign governments.

The FBI, nonetheless, hounded Mousavi. On August 22, 2007, things came to a head. After early morning prayer, he was arrested outside his mosque and charged with six felony counts under the catch-all International Emergency Economic Powers Act (IEEPA). It's used against innocent victims like Mousavi, other Muslims, or anyone the government wishes to entrap. Charges against him were bogus and included:

-- two counts of violating IEEPA for doing business with a Kuwaiti company linked to two Iranian ones; that he "entered into a contract with Al Mal Kuwait Co. to provide (consulting) services (for a mobile communication license) prohibited by the US trade embargo against Iran;" also that he established a bank and leasing company in Iran;

-- filing a false tax return that failed to report $45,000 from Al Mal Kuwait Co. and another $500,000 from his Hajj caravan travel "business;"

-- impeding the administration of tax collection;

-- illegally procuring citizenship by making false statements under oath; when asked, for not disclosing his (FBI-claimed) military service and affiliation with the following Iranian organizations:

(1) the Islamic Revolutionary Committee;

(2) the Islamic Revolutionary Court;

(3) the Office of the Governor General;

(4) the Housing Foundation in Khuzestan Province;

(5) the Committee of the Center for Industrial Expansion in Khuzestan Province;

(6) the Welcoming Committee of Imam Ummat (Ayatollah Ruhollah Khomeini);

(7) the Tribal Center of West Azerbaijan Province; and

(8) the Office of Public Security; as well as

-- making a false statement to federal investigators by not divulging the above information to FBI and IRS agents when questioned.

The charges against Mousavi are bogus. They have no basis in fact. Yet on April 24 he was convicted on all counts. He's been held without bail at the Los Angeles Federal Detention Center.

October 6 was to be a sentencing hearing. Instead Mousavi's lawyer, Ronald Kaye, submitted a motion for a new trial but was denied. He based it on substantial new evidence. Of Mousavi's innocence. Presented documents disproving the charges. Showed he never performed Iranian military service. That he was ordered to take government positions during the 1980s Iran - Iraq war. That the Welcoming Committee for Imam Ummat was a loose collection of "thousands/millions" of Iranians in 1979 welcoming Ayatollah Khomeini's return from exile. That money wired to him wasn't income. It was a loan. No contractual work was done. The Iranian embargo wasn't discussed nor did Mousavi do anything to violate it.

Kaye also asked that the Probation Officer's recommendation letter for Sentencing be revealed. This request was also denied.

October 14 might have been much grimmer for Mousavi. The prosecutor asked for a nine-year sentence. Instead he received 33 months imprisonment on three counts. All bogus and unjust. For:

-- filing false tax returns;

-- omitting group membership on naturalization forms; and

-- violating the US embargo against Iran.

His family will now ask the Ninth Circuit US Court of Appeals to review the lower court's ruling. Reverse the three charges and grant Mousavi justice. Otherwise, he'll remain confined despite his innocence.

Mousavi's Pre-Trial Ordeal

Since his August 22, 2007 arrest, Mousavi has been held in detention. At first, his $300,000 bail request was granted, but when prosecutors appealed it was denied. A $1,000,000 offer as well. In property offered by friends. The reason: that he was a flight risk to Iran in spite of going well out of his way to cooperate. Help authorities in their investigation and notify them (without being asked) of any planned foreign travel. He also offered but was denied the right to be under modified house arrest by wearing an electronic tracking device at all times.

At his bail hearing, prosecutors failed to substantiate their charges. They merely accused Mousavi of "high (Iranian) connections." Claimed he was a "terrorist," and went further at a second hearing. They never charged him with terrorism. Yet they presented classified "terrorist connections evidence" but denied his counsel's access to it so there's no way to rebut it.

Police state tactics denied Mousavi his rights. He remains unjustly detained, tried, convicted, and sentenced on bogus charges that will keep him imprisoned for another 33 months without an Appeals Court reversal. Like many others today, he's a political prisoner in Police State America. Victimized by the Bush administration's war on Islam and against anyone it calls a threat.

Mousavi's Ordeal in Detention

In detention, false rumors were spread to intimidate him. That he was a "terrorist" so his fellow inmates would shun and possibly harm him. Ever since, he's been endangered, and it was just the beginning of his long ordeal.

Food is another issue. Getting a proper amount. Sufficiently nutritious, and allowing for Mousavi's religious-based dietary restrictions. He requested what Islamic law allows, but instead got (prison-style) "kosher" that doesn't comply. He then suggested vegetarian choices but got vegetables alone that fall way short of a balanced diet. Things worsened on court days and during solitary confinement periods. The result - for a while his diet was inadequate. He lost considerable weight, and his health was affected.

Essential medical treatment is also crucial for a man in his condition. Being 40% disabled from previous severe injuries. He has constant knees and back pain and gets weaker every day. Yet he was malnourished. Denied care, and on court days kept chained and shackled for up to 12 hours ahead of proceedings. It constrains his movements. Causes severe pain, and requests for relief were ignored. For an entire court day, he got a cup of juice and a bologna sandwich that his diet forbids him from eating.

Yet for a time his ordeal worsened. On October 22, 2007, he was placed in solitary confinement. Told it was for "security reasons." Got no food or water the first day, and held there for a month. His Quran and prayer book were removed (later returned), and he got unheated vegetables plus some sparse purchased food that was cold and uncooked.

At night, he had one thin blanket that was inadequate. As a result, he was cold and shivered until morning. In addition, glaring cell lights stayed on 24 hours a day. He got one shower a week in scalding hot water. His toilet flushed once a day only. Noise on his floor was loud and nerve-racking. Sleep nearly impossible. Proper hygiene as well. Mousavi became severely ill. His knees and back pain increased, and remediating medical attention was denied.

He got one call a week for a limited few minutes plus two weekly one-hour family visits in shackles and double handcuffs. At first in a glass-separated room. Throughout his solitary confinement, he never knew why he was there. He broke no prison rules, yet was cruelly and inhumanely punished. To exert control. Crush his spirit. Dehumanize him, and inflict great pain and suffering for being Muslim at the wrong time in America.

Harsh treatment continued in the general prison population. He lost phone privileges for six months and got spurious reasons why. His appeal for reconsideration was denied and an extra year tacked on plus 30 days of no family visits. Other harassment as well that left him shaken and traumatized. Daily disruptive cell searches and efforts to convince other prisoners he's dangerous.

Plus unsettling floor changes. Regular prayer schedule disruptions. Lengthy delays getting mail, and having no access to books, computer literature print-outs, and other non-threatening material. It was a systematic scheme to destroy him. Emotionally and physically, and it affected him and his family who can do nothing to stop it.

His trial preparation was also impaired. Phone privileges were denied. During family visits, pens and paper weren't allowed, and he couldn't mail or receive legal documents to review in advance. He had limited face-to-face meetings with his lawyer and prevented from reaching him by phone. He was obstructed throughout his confinement, and it showed in court.

After conviction, Mousavi was returned to solitary confinement (on May 22), and it took its toll. He was isolated in a small room. Restricted to uncooked zucchini and cauliflower plus occasional uncooked rice that's inedible. After June 21, he was denied permission to buy food and water from the prison store. Previously, limited amounts of dates, oatmeal and chocolate were allowed. No longer for a time. In addition, all phone access was denied for another three years. These and other punitive measures were employed until finally they were relaxed later on.

Mousavi's Trial

It was classic police state justice. A common DOJ practice against "war on terror" targets. Figures like Sami Al-Arian, Rafil Dhafir, Sheik Mohammed Ali Hassan Al-Moayad, Mohammed Mohsen Yahya Zayed, and Lynne Stewart. Known for their prominence, leadership positions, charitable efforts, affiliations with Islamic organizations, or in the case of Lynne Stewart for being a notable civil rights lawyer. Devoting 30 years of her life championing the rights of the poor and underprivileged. Defending society's unwanted and controversial figures never afforded due process without an advocate like her.

On April 24, after three days of testimony, a jury convicted Mousavi on all counts. In spite of bogus evidence and the defense given no right to call witnesses or introduce refuting documents. A Kangaroo Court process that denies judicial fairness in most federal courts.

On each of six counts, here's what jurors never heard. Because defense counsel was late filing motions for experts to testify. The trial judge disallowed them and was within his right to do it. But it cost Mousavi dearly.

He lost money in the two years he was accused of paying no taxes. The alleged $500,000 from the Hajj Company (and Umrah Services) was from a non-profit Hejrat Foundation enterprise. It arranged Hajj pilgrimage trips to Mecca for religious purposes. It had nothing to do with "business" or an effort to yield "profits." There were none. It was solely to help fellow Muslims perform their religious duties and connect with their spiritual roots. In the two years in question (2003 and 2004), the enterprise lost money. Prosecutors claimed it wasn't reported, Yet Hejrat's accountant wasn't allowed to testify and explain. Nor could expenses be presented to prove the non-profit Hajj Company had losses and owed nothing.

Regarding a supposed violation of the International Emergency Economic Powers Act (IEEPA) and breaking (and "intending" to break) the embargo under the Iranian Transactions Regulations, here's what, in fact, happened. In 2002, a Kuwaiti company wanted Mousavi for a consulting job and invited him over to discuss it. It wished to sell Iran cell phones and buy sand and gravel in return. It prepared an "Incentive Plan." Not a contract. Listed the proposal in it, but ended up not pursuing it. Why? Because bureaucratic hurtles were too costly so the idea was scrapped.

Mousavi returned home and had no dealings with Iran or any of its companies. At trial, a government Office of Foreign Assets Control (OFAC) witness confirmed or at least implied that no contract existed, and no embargo violation occurred. Nonetheless, he was charged with one because the witness recalled another law. Believed it applied, and if so the embargo was broken.

Regarding illegally procuring citizenship, Mousavi was falsely charged with lying under oath about not being an "active and ranking member of the Iranian military." It was bogus like the other charges. As explained above, he was exempted from military service because of health and disability factors. His defense had Iranian government letters as proof but was prohibited from entering them as evidence. Because counsel hadn't presented them to the court.

The prosecution mistranslated documents to make its case. Another common anti-Muslim tactic. Misstate the language. Change its meaning. Present false evidence. Some that's irrelevant. Prevent defense from refuting it, and claim justice prevailed. In this case, the Farsi words for "police department" on Mousavi's (and all civilian licenses) were mistranslated to mean "military." In addition, the terms "janbaz" and "cart-e janbazan" were misused with the latter one called a "Devotee" or "suicide mission squad" card. It's actually a handicap one with an established international symbol stating degree of disability. Other documents were also mistranslated to "prove" bogus prosecution charges that unfortunately stuck.

A Final Comment

In a climate of fear, Muslims risk harassment, prosecution and incarceration. Especially prominent ones like Mousavi. His defense will appeal and seek exoneration at the appellate court level. For now, he's incarcerated and subjected to dehumanizing treatment. For being Muslim in America at the wrong time. Only his inner strength sustains him. And the love and admiration of his family, friends and supporters. In today's disturbing climate, we're all Seyed Mousavis.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting-edge discussions on world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10596

This Time Is Different

This Time Is Different - by Stephen Lendman

Whatever we know about today's financial crisis. Think we know. Eventually will know in the fullness of time. This time is really different. In 1922, Henry Ford put it this way in his book titled "My Life and Work:"

"The (economy's) primary functions are agriculture, manufacture, and transportation. Community life is impossible without them. They hold the world together....The great delusion is that one may change the foundation. The foundations of society are the men and means to grow things, to make things, and to carry things."

Real enterprise producing value. Tangible products. Not casino capitalism. Computerized gambling. The illusion of wealth. Disappearing once liquidity dries up. Or even now when it's abundant. With a keyboard click, or when investors fear an approaching economic storm.

Until recently, and even now, many observers pretend that the US and major world economies will avoid recession. Or at worst experience a mild one with healthy growth resuming in 2009. Slowly and grudgingly, opinions are changing. Output is falling. Unemployment rising. Wages stagnant. Personal consumption falling and so are equity, bond and commodity prices. At the same time, households are way over-indebted and so are businesses, states, cities and the federal government. At issue is how bad things will get. For how long, and what, if any, corrective measures at this stage can stabilize and reverse conditions.

It's effects are broad-reaching. Chicago mayor Richard Daley faces a $469 million budget gap. As a result, he'll shut down "non-safety related city services" for six days over the holidays to save millions of dollars. California "faces the potential of a perfect storm created by the financial crisis effect on liquidity, lower-than-anticipated revenues currently coming into the state, and our late budget," according to governor Schwarzenegger's communication director. Another administration official agreed and said "the (revenue) window is shut, and if it stays shut, we are in deep trouble." The state needs an emergency $7 billion loan. It wants Washington to buy that amount of state bonds that it can't sell in the marketplace due to current conditions.

Other cities like New York are also strapped. With a projected $2.3 billion revenue shortfall in 2009 and gaps of around $5.2 billion in 2010 and 2011. To combat it, Mayor Bloomberg ordered a $1.5 billion spending cut and may raise property taxes by 7%. Other measures will follow as needed.

The Center on Budget and Policy Priorities reported that 29 or more states (and the District of Columbia) face an estimated $48 billion in total budget shortfalls for FY 2009. Unlike the federal government, states and cities can't run deficits or borrow like Washington for operating expenditures. They can only use available reserves, cut spending or raise taxes. Choosing the latter two will contract their economies further and contribute to a national slowdown.

Mountains of debt and multiple imploding bubbles are the problems. The housing one especially crucial for millions and the states where they live. It hits property tax revenues. Sales taxes from furniture, appliances, construction materials and other housing related products. Incomes taxes also from employment cutbacks at the same time demand for city services is increasing. Instead they're being cut for public health, education, the indigent, the elderly and disabled, and public workforces. All of which makes a bad situation worse. And according to some astute observers, it's only the beginning. The worst is yet to come.

Are We In Recession?

On October 17, the latest housing numbers added extra confirmation. New home construction hit a 17-year low in September. Housing starts fell 6.3% to a seasonally adjusted 817,000 annual rate. The lowest figure since January 1991, and single-family starts dropped 12% to 544,000. The worst showing since February 1982 in the depths of that period's severe recession. Until today called the deepest since the 1930s.

Building permits also fell 8.3% to 786,000. A 27-year low, and for single-family homes they dropped 3.8% to 532,000. The lowest in 26 years. Along with the data, the National Association of Home Builders reported that builder sentiment hit a record low in October and shows no signs of improvement. According to the University of Michigan/Reuters index (on October 17), so did consumer sentiment. Their latest reading fell to 57.5. Its biggest every monthly drop and nearing its all-time low 51.7 figure in May 1980.

Blame it on the housing slump and assets related to it causing a severe economic contraction. According to Merrill Lynch economist David Rosenberg, it will surpass the worst of the 1973 - 1975 one. He also sees huge and growing financial damage. Credit losses already around $600 billion ballooning to two or three times that amount before things stabilize. Economist Martin Feldstein, former US National Bureau of Economic Research head, sees the deepest US recession since WW II. He told CNBC: "The fact is that lenders don't want to lend, (and) asset buyers don't want to buy assets because of this tremendous uncertainty on what mortgage-backed securities are actually worth."

Investor Warren Buffett thinks a sharp downturn is underway, but he showed up in an October 17 New York Times op-ed saying now is a good time to own stocks. So he's buying. Others disagree and say we're in much more than a cyclical slump. The result of an unsustainable house of cards. No one knowing the amount of economic damage. From rampant speculation. Mountains of debt. The housing bubble, and the entire financial unraveling affecting households, businesses, all parts of the economy, and sentiment.

Noted economist Joseph Stiglitz is grim in his outlook. He sees "the most serious problem since the Great Depression (that) in some ways (is) worse in terms of the financial institutions....The reason, in part, is that while some of the same problems that occurred (then and since), such as excessive leverage, pyramid schemes, bubbles, have happened before, the so-called innovation of Wall Street, the financial innovations, that were supposed to manage risk, created a kind of non-transparency that is now so great that no one knows exactly the magnitude of the risk they face. It is particularly bad because our financial institutions are based on trust" that you can get your money out of banks you put it into.

Because of the current unraveling, that trust is fractured. "We are in the midst of micro-economic failure on a grand scale....rather than managing risk, the financial markets created" more of it. "The failure of our financial system to do what it is supposed to do matches in destructive grandeur the macro-economic failures of the Great Depression." The "country as a whole" lost out. What happened to "the American economy was avoidable." Stiglitz sees a protracted downturn, L-shaped at best, and lasting up to 18 months before it ends.

The economy may or may not face another Great Depression, but for many it'll feel like one. According to Yale economist Robert Shiller, it's possible. He devotes an entire chapter of his new book, "EconoPower," to it. He claims that the US economy is no longer "depression proof," and lists three potential scenarios that could threaten the nation's monetary system. The third is most ominous: "a series of unexpected events that could trigger a major financial accident - a run on the dollar, a real estate crisis, a major terrorist attack, or a natural disaster, that could overwhelm the monetary authorities."

Shiller sees the current real estate crisis far from over and so severe that the Fed and Treasury will have to take emergency measures to avoid collapse. Effective tools are available. Interest rates will be cut to zero and much more. Well beyond what's already done. Great Depression-like measures will be crucial to keep the economy afloat. In his judgment, if the right ones are adopted they'll work, but not swiftly or easily.

Others aren't as sure. Last year, even the central bank for central bankers, the Bank for International Settlements (BIS), was worried. It warned that loose Fed monetary policy, speculative finance, and excess household debt, among other factors, could cause another Great Depression. It passed without notice, and here we are today. Easy credit and no oversight brought us to the edge of the abyss. The possibility of a systemic meltdown and economic calamity. The consequences are unimaginable. The human wreckage incalculable. The toll already severe and increasing.

Proposed Bailout "Too Little, Too Late," and Counterproductive

Leading financial expert and investor safety advocate Martin Weiss is very critical of the Paulson plan and gave Congress his views. He called it "too little, too late (and) too much, too soon for the US bond market." It's apparent in rising bond prices and 30-year mortgage rates. Around 6.50% compared to about 5.75% in mid-September.

He recommended reconsidering "a broad bailout for US debts given the wide diversity of mortgage holders" and total outstanding debt in the country. Besides mortgages, over $20 trillion in private-sector consumer and corporate debt and other $2.7 trillion in municipal securities.

Among banks and thrifts with over $5 billion in assets, he estimates 61 banks and 25 thrifts heavily exposed to non-performing mortgages. He urges a greater understanding of the derivatives build-up and the consequences if enough of them sour. He calls established safety nets inadequate. FDIC for depositors. Securities Investor Protection Corporation (SIPC) for brokerage customers, and state guarantee associations for insurance policy holders. If the entire $700 billion was used responsibly (and it won't be), it's "just a drop in the bucket" to address the debt crisis.

He says it's foolhardy to expect the bond market to handle the bailout burden without upward pressure on interest rates. The opposite of what's needed. He sees skyrocketing federal deficits exacerbating things further and "aggravating the very debt crisis that the bailout plan seeks to alleviate."

Instead of protecting "imprudent institutions and speculators," he recommends strengthening "existing safety nets" for individuals and savers. Informing the public about significant systemic risks, and explaining how limited government is to contain them. He says savers and investors should avoid risk for safety.

He estimates 1479 FDIC member banks with $2.4 trillion in total assets at risk of failure. Another 158 S&Ls with $756 billion. A total of $3.2 trillion or 41 times the assets of banks on the FDIC's watch list. He notes $51 trillion in interest-bearing debts. Over $12 trillion in residential mortgages on single and multi-family homes. "Fannie, Freddie and GSAs still at risk" after being taken over. They hold $5.4 trillion in residential mortgages, but a government guarantee doesn't prevent them from deteriorating and requiring much larger funding than contemplated.

Private sectors and local governments also own residential mortgages:

-- asset-backed securities issuers - $2.1 trillion;

-- non-bank finance companies - $426 billion;

-- credit unions - $332 billion;

-- state and local governments - $159 billion'

-- life insurance companies - $62 billion; and more in

-- private pension funds, government retirement funds and households.

Commercial mortgages are also at issue and are souring. A total of $2.6 trillion "dispersed widely beyond the banking sector." And mortgages are less than half the problem. Add to them credit cards, auto and student loans, and various other kinds of private-sector debt. Consumer and corporate. Around $20 trillion in total plus nearly $15 trillion in residential and commercial mortgages.

State and local governments are at risk with $2.7 trillion in outstanding municipal securities and huge growing budget shortfalls given the current crisis.

The derivatives problem is especially ominous. At extreme levels and very dangerous. An estimated $180 trillion held by commercial banks alone meaning those with most of it are technically insolvent. JP Morgan Chase holds half of it. An "unprecedented concentration of risk in modern US history." The large counterparty default risk in this market isn't understood. Currently the Office of the Comptroller of the Currency (OCC) reports credit derivatives exposure (or risk of trading partner default) at $465 billion. Up 159% from 2007. Failure to address the derivatives time bomb "leaves a gaping hole through which financial panic can spread."

In addition, beyond the above lowball figure, no estimates are available of derivatives default amounts or forecasts of more likely in a continuing downturn.

In sum, a monumental problem. Too big to ignore, but precisely what Congress is doing. At enormous risk to the economy, businesses, households, the American way of life, and the nation as the world's economic superpower. Plus the effect on world economies and people everywhere.

Politics, Finance and Consumer Sentiment

With the November 4 election approaching, pocket book issues show up in consumer sentiment polls and have incumbents worried. Especially Republicans seen as mostly to blame. The October 15 Reuters/Zogby Index on the mood of the country plunged from 96.3 in September to 89.7 currently. Approaching a record low 87.7 number. The poll also gave George Bush his lowest ever job approval rating at 21%. Congress scored just above its worst reading at 10%. Zogby called the results "a double-whammy" and compared the public mood to the Great Depression's early years.

An October 6 - 8 Gallup tracking poll showed much the same results. A similarly dramatic difference from the previous month:

-- in September, 38% of respondents rated current conditions poor; in October, the number jumped to 59%;

-- in September, 78% expected conditions to worsen; in October, 90% were negative.

Gallup commented that the polling data trend suggests that "consumer confidence is reaching historic lows." Further, "given the current financial crisis and associated recession, it is likely to take some dramatic efforts to turn consumer confidence around." Gallup numbers vary up and down weekly. However, given the state of things and strong likelihood they'll worsen before improving, expect the trend ahead to stay decidedly negative. Meaning bad news for incumbents being blamed.

Maybe not for the most important job according to investigative journalist Greg Palast. He uncovered convincing evidence that the 2000 and 2004 presidential elections were stolen and now has a new article titled "It's Already Stolen." It follows his joint year-long investigation with Robert F. Kennedy, Jr. revealing "a systematic program of 'GOP vote tampering' on a massive scale." They cite:

-- swing-state Colorado Republican Secretaries of State "have quietly purged one in six names from their voter rolls;" a shocking "ten times the average state's rate of removal;"

-- among newly registered voters, "more than 2.7 million have had their registrations REJECTED under new procedures signed into law by George Bush;" individuals affected are largely blacks and Latinos; likely to vote Democrat;

-- "a fired US prosecutor....accus(ed) leaders of his own party, Republicans, with criminal acts in an attempt to block legal voters...."

-- in 2004, a little known practice called "caging" purged 1.1 millions voters; it's used to suppress minority voters by delisting them for failing to answer "do not forward" registered mail sent to homes they're away from for various reasons; Palast predicts far greater "caging" this November; and

-- post-2004, "states used dubious 'list management' rules to scrub at least 10 million voters from their roles."

Palast and Kennedy believe Republicans intend to steal the 2008 presidential election. Much like they did in 2000 and 2004. They state: "Republican operatives - the party's elite commandos of bare-knuckle politics (are) systematically disenfranchis(ing) Democrats. If Democrats are to win (in November), they must not simply beat John McCain...they must beat him by a margin that exceeds the level of GOP vote tampering."

If the latest Pew Research poll numbers are accurate and hold, Obama appears headed to do precisely that, and on November 5 headlines will read: "President-elect Obama." On October 21 (based on October 16 - 19 polling), Pew noted that "Barak Obama's lead over John McCain has steadily increased since mid-September," and he now "enjoys his widest margin yet over McCain among registered voters, at 52% to 38%" with 10% undecided or for other candidates. "When the sample of voters is narrowed to those most likely to vote, Obama leads by 53% to 39%."

Palast and Kennedy are on top of vote tampering whoever wins in November. They released a 24-page full-color comic book called "Steal Back Your Vote." It's available in print or can be downloaded on "StealBackYourVote.org."

Dirty politics and fraudulent finance are close bedfellows. Together they explain much about the current economic crisis. Its effect on ordinary people, and what might be expected ahead. Given the current climate (vote tampering notwithstanding), it should be a slam dunk election for Obama. People in distress mostly blame incumbents. It showed in 1932 when Franklin Roosevelt trounced Herbert Hoover carrying 42 of the (then) 48 states. A majority 57.4% to Hoover's 39.7% and 472 Electoral College votes to 59.

Given it was three years after Wall Street crashed. In July that year the Dow average had lost 89% of its peak valuation, and in August unemployment reached 25%. Using realistic figures, it's half that number today. But increasing to where it may reach alarmingly high levels before the current downturn bottoms.

Few today expect the 1930s to repeat, but economic conditions are worsening. Housing, consumption affecting retail sales, and production dropping 2.6% in September. The largest monthly decline since May 1980. The Philadelphia Fed said its manufacturing index plunged at the fastest pace in its 40-year history to a minus 37.5 reading. The sector overall had job cuts every month since July 2006.

It may be 2010 at the earliest before conditions stabilize. Consumer sentiment is near record lows. Millions of homeowners face foreclosure. Loss of income. Jobs and inadequate social safety net protections are in place for backup. People are worried, angry and with good reason. Yet if Palast and Kennedy are right, Republicans may retain the White House given the level of fraud they uncovered. It says much about our faux democracy and offers faint hope for better times in 2009.

Future Prospects - Bleak and Growing Bleaker

Maybe not as bad as Ambrose Evans-Pritchard saw them last month in the UK Telegraph. But who knows. He may be right. His September 22 column was headlined: "Crisis may make 1929 look (like) a walk in the park." He cites meager and fleeting effects from "buckets of liquidity" and quotes economist (92-year old) Anna Schwartz saying "Liquidity doesn't do anything in this situation. It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue."

Schwartz also gave the Wall Street Journal an October 18 interview in which she said Treasury and Fed policies are wrong. She repeated that liquidity isn't the problem. At issue is uncertainty "that the balance sheets of financial firms are credible." As a result, credit spreads haven't budged because you don't know who's solvent and who isn't and too many are in the latter category.

Liquidity was the issue in the 1930s when the money supply contracted sharply. Not today with bank problems on the asset side of their ledgers. "All these exotic securities that the market does not know how to value. They're toxic because you cannot sell them. Your balance sheet is not credible, and the whole market freezes up. We don't know who to lend to because we don't know who is sound." Schwartz is worried that Paulson is trying to save banks, not the system. Insolvent ones and said we shouldn't "be recapitalizing firms that should be shut down." They should be allowed to fail. "Everything works much better when wrong decisions are punished and good (ones) make you rich."

She commented also on what caused the current crisis. Like in the 1920s, it started with a "mania." In every case, it was expansive monetary policy generating an asset boom. She's very critical of Alan Greenspan dropping interest rates to 1%. Seeing the negative effect and doing nothing about it. She's no gentler with Ben Bernanke and accused him of fighting the last war. The result so far is failure. "So my verdict on this present Fed leadership is that they have not really done their job."

As a result, lenders are hoarding cash and economist Peter Spencer said that global authorities have just weeks to make things right. Instead they're making them worse. Unless changed, things may start to implode.

Economists like Nouriel Roubini aren't as dire but nonetheless see grim times ahead. His October 17 commentary echoed them:

-- continued negative economic surprises;

-- "a major surge in corporate default rates;"

-- a weak recovery "as the recession becomes severe" and credit spreads widen;

-- "the risk of a CDS (credit default swap) market blowout as corporate defaults" spike;

-- hundreds of hedge funds collapsing; liquidation of their assets and the toll on financial markets as a result;

-- major insurance companies in trouble;

-- "a slow motion refinancing and insolvency crisis for many toxic LBOs;"

-- "the risk that other systemically important financial institutions are insolvent" and need expensive rescue packages;

-- the continuing vicious circle of falling asset prices; the result of ongoing deleveraging into illiquid financial markets;

-- growing numbers of margin calls as asset prices fall; cascading them lower as a result;

-- the continuing housing slide "pushing over 20 million households into negative equity by 2009;" and

-- the risk of an emerging or developed country experiencing a severe financial crisis; much like Iceland in recent days.

Roubini calls the last factor "crucially important" and cites about 12 or more emerging economies "in serious financial trouble." Especially in Eastern Europe, including Turkey, but also Korea, Indonesia and Pakistan. The risk of contagion is worrisome as even tiny Iceland (population 300,000) sent tremors globally.

Overall, risks and vulnerabilities remain. They're growing, not receding. Not a hint of resolution is in sight and observers expressing near-term optimism need a reality check. The best to hope for is a severe, protracted recession. Most likely globally. Further, inadequate measures are in place, and more corrective ones are needed to avoid an economic meltdown. The longer they're delayed, the worse conditions will get.

Globally we have a severe recession combined with a financial and banking crisis. The result of the largest ever leveraged asset and credit bubbles. Multiple ones in housing, mortgages, credit, equities, bonds, commodities, private equities and hedge funds all simultaneously imploding. There's no simple or easy way out of this and overwhelming risks of something much more serious loom. Unmentioned in daily business news reporting that instead touts a market bottom and a great time to buy stocks. Leaving unexplained the risk of doing it in a very hazardous climate.

People today should be cautious and demand far more from elected officials than they're getting. Critical times like these require radical measures. So far only handouts to Wall Street. To fraudsters through what economist Michael Hudson calls a "con game (and an) unprecedented giveaway of financial wealth." What financial affairs author Ellen Brown brilliantly explains this way:

We seeing "the collapse of a 300 year Ponzi scheme. All the king's men cannot put the private banking system together again, for the simple reason that (it's) reached its mathematical limits." It needs new borrowers but doesn't have them. This racket has gone on for 300 years "ever since the founding of the Bank of England in 1694." The whole world now is "mired in debt to the bankers' private money monopoly." The dirty game has reached its finite limits. "The parasite has finally run out of its food source."

World governments are scrambling frenetically as a result. Supplying mountains of credit (liquidity) to support troubled and over-indebted banks. Leaving distressed households high and dry and sticking them with the bill.

Eventually the game will end badly. In this case, a lengthy asset and debt deflation. Long after bankers took the money and ran. Wrecking economies and throwing ordinary people to the wolves. Michael Hudson puts it this way:

"Neither the Treasury nor Congress is helping to resolve this problem." Newly issued debt won't re-inflate markets or stabilize the economy. Just the opposite. "As debt deflation eats into the domestic market for goods and services, corporate sales and earnings will shrink," and so will market valuations. The end result will be "the very bankruptcy that the bailout was supposed to prevent."

That prospect is nightmarish so here we are. America's economy is eroding. Government and Wall Street are orchestrating it. Maybe even willfully, and here's the legacy they're leaving. The nation "passing from democracy to oligarchy (and steering it is) a bipartisan financial kleptocracy" chuckling all the way to their offshore tax havens.

Stephen Lendman is a Research Associate of the Center of Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting edge discussions with distinguished guests on vital world and national issues. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10596

Hard Times

Hard Times - by Stephen Lendman

Hard and troubled. Racked by fear and uncertainty. For many trauma. Experts predict, speculate and conjecture, but no one knows for sure what's ahead. Key questions are whether we're in a protracted and severe recession. Or at the onset of another Great Depression. So much is unresolved. The problems have built for years and are immense. Maybe nothing at this stage will work and the best hope is for light at the end of a very long, dark tunnel.

Again no one knows. The worst may or may not be too late to avoid. At best, stabilization and recovery will take time. Likely years. The degree of pain along the way will depend on future policy responses. Ones so far taken aren't encouraging. Their details aren't entirely clear. They're slowly emerging and from what's known since the original EESA/TARP announcement, the Treasury:

-- will invest $125 billion to recapitalize nine major banks, including Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America, Wells Fargo, Morgan Stanley, Bank of New York Mellon, Merrill Lynch and State Street; another $125 billion will go to smaller banks and thrifts;

-- according to Bloomberg.com, amounts range from $25 billion to JP Morgan Chase and Citigroup; another $25 billion to be divided between Bank of America and Merrill Lynch; $20 billion to Wells Fargo; $10 billion each to Goldman Sachs and Morgan Stanley; and $3 billion each to Bank of New York Mellon and State Street; the winners in the "bailout" sweepstakes;

-- investments will be in specially issued preferred (non-voting) shares; they'll pay 5% interest to be increased to 9% after five years;

-- the government will receive warrants worth 15% of the preferred shares' value;

-- FDIC insurance will cover all small business deposits so they won't be shifted from weak to more stable banks;

-- the government will guarantee banks' newly issued unsecured debt for three years to make refinancing liabilities easier; retail deposits up to $250,000 also guaranteed as previously announced;

-- toxic assets will be bought to restore liquidity in mortgage-backed securities market; also previously announced; banks' "toxicity" is in the multi-trillions of dollars; no amount of government largesse can change that;

-- all available tools will be used to avoid a systemic meltdown; the IMF and other international lending agencies will also be involved;

-- the Federal Reserve will serve as buyer of last resort for commercial paper; and

-- measures are intended to be temporary, but no time horizon was indicated.

Will these and other planned measures work? On October 14, Bloomberg interviewed numerous analysts. Some were reassuring. Others weren't. They noted heroic measures to unfreeze money markets and interbank lending. Suggested any improvement helps but expected too little, too late, to matter. They also cited little easing in stress measures in stark contrast to soaring world equity valuations. Early on, then plunging. Continuing the same volatile pattern indicating fear and uncertainty. Plus lots of manipulation so speculators can profit hugely on ups and downs.

Steps so far taken do nothing for distressed households. They're an aggressive attempt to save major banks that are effectively insolvent. Stabilize world economies if it works. Yet huge problems remain at the "end of an era as credit bubble bursts," according to Lloyds TSB economist Trevor Williams on October 13:

"Too much debt led to bubbles....no one really knows when or how this crisis is going to end....this is the latest of many bubbles to have plagued the world economy in the last 10 - 15 years....(it didn't) develop overnight and will therefore take time to resolve....one year (after it was clear that) asset markets, especially housing and credit, were grossly overvalued and so (were) the value of the securities written on them (on which so many financial firms borrowed heavily), the crisis is intensifying rather than abating...."

For Williams and others, the challenges are formidable. "Hence, this is a long-term problem that will not result in business as usual anytime soon as the changes required are far reaching and complex. The adjustment of the balance sheets of firms in developed economies caught up in this crisis will take many years....cutting interest rates alone will not work....it may be like pushing on a piece of string (because) developed country households are already hugely in debt." Low interest rates "reduces their income (further eroding) spending and weakening growth....Tax cuts and public spending increases would help....but with public finances strained by the bank rescue, this is unlikely." How long recovery "will take is anybody's guess."

Economist Nouriel Roubini approves of bank recapitalizations but cites "significant downside risks" in the coming weeks:

-- Treasury plans aren't entirely clear;

-- they're woefully inadequate;

-- world economies are weakening; fiscal stimulus is lacking, so "macro news will surprise on the downside;"

-- so will quarterly earnings;

-- confidence has been severely damaged;

-- "deleveraging of the shadow financial system" will continue;

-- major stresses remain, possibly including a credit default swap (CDS) market blowout; hundreds of hedge funds collapsing; noted money manager Jeremy Grantham believes 5000 ultimately will disappear; asset liquidations will follow pressuring market valuations lower;

-- insurance companies' troubles are increasing; more rescue packages needed for "other systemically important financial institutions;" crises emerging in developing and advanced countries; deleveraging causing a continued asset price deflation, margin calls, still lower asset prices and creating "further downside risks to housing and home prices."

In addition, G-7 and EU plans include no fiscal stimulus to boost aggregate demand. Personal income is falling. In a state of collapse are: personal consumption, residential and non-residential investment, and capital expenditures. Unless government fills the breach massively (at least $300 billion for starters), "an unavoidable two-year recession (may) become a decade long stagnation." Roubini cites the usual type stimuli:

-- for instructures;

-- green technologies;

-- increased unemployment benefits;

-- targeted tax rebates for lower income households;

-- aiding distressed homeowners to "avoid a tsunami of foreclosures;" potentially 10 million or more; rising rapidly to greater numbers in 2009; measures should include a plan to reduce mortgage face values; also let troubled homeowners retain their property and pay affordable rent;

-- further steps to relieve over-indebted households; the result of home equity loans, credit cards, auto and student loans; failure to reduce these stresses assures a more protracted and deeper economic crisis; how can banks lend to unwilling borrowers;

-- federal block grants to states and local governments among other measures.

Crucial for many experts is that without rapid implementation of these type measures, financial institution rescue plans will be undermined. Aggregate demand will decline further and prolong an already severe recession. "If Main Street goes bust in the next six months, (Wall Street will again) as the real economy implodes further."

In an October 14 Bloomberg Interview, Roubini predicted the worst US recession in 40 years. "We're going to be surprised by the severity of the recession and (resulting) financial losses." It will last 18 to 24 months. Push unemployment to 9% from its reported 6.1% level, and drive home prices down another 15%. He upped his bad mortgage credit loss estimate to $3 trillion from his previous $1 - 2 trillion amount. He also believes that $250 billion in bank recapitalizations is just the beginning. At least double that amount is needed to save banks from bankruptcy. Even that total may be too little, too late. And the soaring national debt presents its own unwelcome problems.

Another issue involves the source of bailout funding. It either has to be borrowed or created. Printing dilutes the currency. A prescription for future higher inflation although today's problem is deflation. Borrowing won't be simple either. EU and other foreign central banks have their own problems to resolve. China, Japan and wealthy petrodollar states will have to partner with the Treasury and Fed as lenders/bankers of last resort. In greater amounts than they may be willing to assume.

Other Problems - Too Great to Solve and/or Ignore

Earlier by others and on October 12, the London Independent cited the resident elephant few in the major media acknowledge. Especially in America. A "$516 trillion derivatives 'time-bomb,' " according to writers Margareta Pagano and Simon Evans. Roughly equal 10 times world output and "not for nothing (that) Warren Buffett call(s) them (financial) 'weapons of mass destruction.' "

These are financial instruments that derive their value from an underlying asset, reference rate or index. In exchange-traded and privately negotiated forms, all sorts of them exist - swaps, forwards, futures, puts, calls, swaptions, caps, floors, collars, captions. Combined they represent (by far) the world's largest financial market. They're complex, opaque and called "the world's biggest black hole because they" comprise the shadow financial system. Unregulated and allowed to explode to unmanageable size. Creating potentially overwhelming risks. If enough of them sour, world economies may crash in a cascading domino effect.

Long-time financial observer and analyst Bob Chapman is dire in his assessment. Using Bank for International Settlements (BIS) figures, he cites a "quadrillion dollar (1000 trillion) powder keg waiting to blow' and places this problem (led by credit default swaps - CDSs) at the heart of the financial crisis." He thinks "catastrophic losses are inevitable."

Subprime and mortgage debacles are a "side show" at around a few trillion in losses. Their real estate derivatives problems are another matter. He believes that the Treasury, Fed, and other smart Wall Street types know it. They're terrified about potential losses that "may (way) exceed the entire world's GDP (and) thus obliterat(e) the balance sheets of every major commercial bank and the Fed." Take down the entire world financial system and cause an unstoppable "juggernaut of loss, insolvency, failure and bankruptcy." Resulting in world governments having to nationalize their financial systems and become bankers of last resort.

Chapman thinks the train left the station, and nothing can stop it. Current policies can only delay the inevitable through a Ponzi scheme "final orgy of fraud and profligacy." The idea is to "take total control, make markets do whatever pleases them (and) thus create their own reality."

If this happens, nations will be bankrupt. So will people. Their savings erased. Their situation unpalatable. Intolerable. A "New World Disorder." Police state tactics will be needed to contain it. But there's more to this story as some observers recognize. Today's crisis was manufactured but not as it's turning out. Far worse than planned so the best laid schemes "are unraveling," according to Chapman. Too many trillions in losses to handle may result, and at this stage, who can say what's ahead. Not what the masters of the universe had in mind except to take the money and run.

Other Assessments of Conditions

Take your choice. Opinions are everywhere. Some credible. Many not. But one thing about most is consistent. These are perilous times. The most challenging in decades. Maybe ever. Prudence and caution are essential. Enormous unpredictable risks threaten. Massive economic damage has been done, and certain hard times are ahead across the board. For businesses and households. Many in both sectors won't make it. A dark prospect to consider. Unimaginable for most.

Financial expert Martin Weiss has been a leading investor safety advocate for decades. On October 14, he issued "an urgent update on these wild, wild markets" and explained what most observers ignored. As world markets soared on October 13, "bond markets suffer(ed) a dramatic decline." He concluded: "if you think (October 13's) euphoria means the government's newer and bigger bailout plan is going to be a success, think again."

Equities aren't at the epicenter of the crisis. Bonds and credit markets are:

-- "subprime mortgages first collapsed;"

-- mortgage-backed bonds imploded;

-- commercial paper also;

-- interbank lending froze; and

-- "the entire global financial system (approached) a systemic meltdown."

A future day of reckoning is ahead in global bond and credit markets. Washington's "master plan" may "temporarily stimulate" Wall Street rallies. Possibly "ease some panic in some debt sectors." That's worlds from ending a crisis of this magnitude, and Weiss' advice is to "move decisively from risk to safety." For protection and to profit from "the next phase of the crash."

Since summer 2007, all central bank plans "backfired," and the new US and EU ones "are no different." While authorities liquified markets, fires raged inside them. Instead of solving problems, they created greater ones. Instability, not calm. The "very panic they sought to avoid. The same thing is going to happen this time....The bigger it is, the more desperation it denotes." And more of it means it's likelier their plans will fail. Recovery will come eventually. First, however, "the economy will suffer a great fall," and America's contagion will spread everywhere.

Ismael Hossein-sadeh cites University of Maryland economist Herman Daly in his October 14 article titled: "Why the Bailout Scam Is More Likely to Fail than to Succeed." He lists five reasons:

-- a lack of "faith and trust," not liquidity; the world is awash in the latter and more is coming;

-- too little good money to redeem the bad kind; mountains of it in the multi-trillions, and no one knows how much;

-- no help provided for distressed homeowners; a key source of the crisis; preventing mortgage defaults is crucial; if they're serviced, mortgage-backed securities can be restored along with the solvency of their holders; absent that, greater insolvency;

-- no economic stimulus is included to inject purchasing power into the economy; it's vital to revive production, create jobs and reverse the economic slide; and

-- a "socially-responsible fiscal policy" is needed; mirror opposite the current one; anchored by ruinous military Keynsianism; wealth transfers to the rich; ending responsible social policies; and creating mountains of unrepayable debt.

Add to these a regulatory-free environment. Speculative finance crowding out productive investments. Massive fraud allowed to persist unchecked, and excesses creating even greater ones. Overall a broken, pernicious, unsustainable model corroding from within and taking America and world economies down with it. Remedies being implemented assure greater problems. At best only short-term relief, and in the end economic ruin. In all likelihood the republic with it.

The Housing Bubble - The Core Economic Problem

Many analysts cite the imploding housing bubble as the core US economic problem. The large and growing volume of bad mortgage loans. Heading up to 20 million under water in 2009. The implications of millions of foreclosures and their negative effect on the economy. Until home valuations stabilize, no recovery is possible. But according to experts like economist Robert Shiller, it's likely months off before it happens.

In the Great Depression, home prices plunged 30%. Today they're down around 20%, and Shiller believes they may match or exceed that era's levels. Even worse, when valuations stabilize in nominal terms, most homeowners will keep losing money. A very disquieting prospect to consider. It may force many households to walk away from their properties because retaining them is too costly.

Not helping are plunging housing data and the October National Association of Home Builders (NAHB) Housing Market Index (HMI) hitting a record low. According to NAHB's chief economist David Seiders, it's "clear evidence than an additional economic stimulus package is needed." Enough to spur home buying. All three HMI components fell. Current sales conditions and expectations hit record lows, and buyer traffic matched its July low. It affected all regions, and Seiders said builder sentiment was the worst he can remember.

Before his death in summer 2007 (at age 88), Kurt Richebacher was a well-respected economist and financial analyst. Also a fierce critic of speculative finance, particularly on Wall Street. In 2004, he reflected on the housing bubble (before most others) in a commentary titled "Property Bubbles: Beware of Property Bubbles."

He cited critical US "economic and financial imbalances." The nation's growth "depend(ent) entirely on the continuation of the frenetic housing bubble." The certainty that "all bubbles end painfully, housing (ones) in particular. They're an especially dangerous (type) asset bubble because of their extraordinary debt intensity." By extracting wealth (through refinancing) from rising valuations and by "heavily entangl(ing) banks and the whole financial system as lenders." Thus, property bubbles have historically been the main cause of major financial crises.

Japan in the late 1980s for example. Its stock and property bubbles burst, but the former got most of the attention. The "property deflation continued for 13 years" through the timeframe of his article. With "calamitous effects on the banking system through a horrendous legacy of bad loans." Japan's "building sector" also suffered and "never recovered from the depression following its (late 1980s) excesses."

Richebacher wondered if America's fate may be similar and asked "Is the US economy in better or worse shape today (in 2004) than in 2000 (as it faced recession)? Is it in a self-sustaining recovery?" Absolutely not...."it is in dramatically worse shape." The result of binge borrowing. Financing "leveraged asset purchases and soaring imports. The former involve no income creation; the latter involve income destruction. By implication, this borrowing represents entirely unproductive, or dead-weight, debt, yielding to debtors no future flow of income from which to pay their debt service." A bad ending is assured. In summer 2007 it arrived. Its effects are painful and worsening. No sign of a quick or easy resolution is evident nor will Wall Street's bailout produce one. According to University of Chicago economics professor Casey Mulligan, it represents a minute fraction of the problem. It may only buy a couple of months relief. Nothing more.

An "Oasis of Calm"

Along with Fidel Castro, Washington's favorite Latin American target is Hugo Chavez. The Wall Street Journal's Mary O'Grady attacks him relentlessly in her Americas column, and on October 6 (and earlier) said Venezuela's economy is deteriorating. In a shambles. At a time it's, in fact, experiencing robust growth.

Impressively with one of the highest world rates. It also tops most nations and the entire Hemisphere (including the US) with the largest international reserves per capita ($1300). Credit Bolivarianism. Abandoning neoliberalism. Maintaining sovereign independence. Raising taxes and royalties on foreign investors to make them pay their fair share. Imposing currency exchange controls to prevent capital flight. High oil prices. Keeping a majority of the profits at home. Using them to develop Venezuela's social state among other factors.

Amidst a world financial crisis. America, Europe and Asia on the ropes. Groping desperately for solutions. The Financial Times (on October 14) wrote: "While stock markets all over the world were ravaged in recent weeks, there was one oasis of calm: Venezuela's tiny exchange, cosseted by capital controls, actually rose slightly on days where historic losses were being reported elsewhere." Even though a "handful of local banks and brokers" face serious losses. The Wall Street Journal failed to notice.

Ideas from the October 8 - 11 Caracas International Conference of Political Economy

Attended by 40 world specialists from 20 countries to propose South-based solutions to the financial crisis. They fear Western plans will worsen poverty, unemployment, and exploit workers worldwide. They reject a massive public debt increase. The greater concentration of capital, and a perverse restructuring to suck wealth to the privileged.

They fear an authoritarian capitalism. Class warfare and increased racism. Enormous productive and social costs plus weakened environmental sustainability. They call for economic and financial architecture reconstructing. An alternative post-capitalist model. What Venezuela calls Socialism of the Twenty-First Century.

They want more social spending and natural resources protections prioritized. Urgent financial regulations to protect savings, stimulate production, control currency movements, and prevent capital flight. They think it's crucial to develop regional complementation. Balanced commercial integration. Industrial agricultural, energy and infrastructure improvement. Initiatives like cooperative trade and the Bank of the South.

Globally they want international monetary system reform. To defend savings and channel investments toward prioritized people needs. To curb speculation and lessen economic disparities. Overall they want new economic institutions in place of failed ones and said the crisis awakened the common interests of people everywhere. They made specific recommendations in areas of banking, finance, and the current social emergency.

They noted the complicity of the IMF, World Bank, Inter-American Development Bank, and transnational bankers in causing the current collapse and its consequences. They call them discredited and want a new financial architecture. They announced a second political economy conference for the first quarter of 2009 in Caracas.

The Crisis of World Capitalism - A Broken, Unworkable Economic Model

Over time, "free market" capitalism has grown larger, more powerful, more complex, more exploitive, and more crisis-prone. Currently notable because of massive Wall Street fraud. Financialization. Speculative finance. Computerized gambling instead of productive investment. Largely with no regulatory oversight.

When crises erupt like today's, fire-fighting is employed to contain them. Moral hazard bailouts for investors taking imprudent risks. Insurance called the "Greenspan put" during his tenure. Currently, the Bernanke/Paulson one. So far, it worked. Eventually it won't. Eventually may be now.

If so or later, the proof is in the pudding. Each crisis begets greater ones. Sooner or later, one too big to contain. It reveals the inherent flaw of an unworkable model. Broken and in disrepair. With even Washington Post writer Anthony Faiola wondering if it's "The End of American Capitalism?" Too far gone to fix, but it likely will be. Patched up and reinvented one more time.

It was wobbly during the 1970s. At the depths of the 1974 recession and again in 1979 heading into the 1980 - 1982 one, Newsweek magazine and later Business Week ran the same headline on their covers: "The Death of Equities." One day perhaps, but they were early.

On October 10, Faiola wrote: "The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism." He means the "hands-off" kind. Not the free-market model as such. And one with more government intervention at times like these. At least "temporarily for a more restrained model, particularly in financial markets." In other words, a strategic retreat. Not a fundamental overhaul or admission that something this broken can't be fixed. Just patched, but eventually it's own internal contradictions will destroy it.

Meanwhile, prepare for what economist Michael Hudson calls "the age of oligarchy." With the "wealthiest 1 per cent of the population com(ing) into possession of even more returns to wealth than the 57 per cent" they now get. "Robin Hood in Reverse." From the public to the rich. Hollowing out America. Making it look like Mexico. Locking in "our age of deception...even more tightly." It's a "self-defeating free-market strategy. Short-termism" that will prove to be the financial sector's undoing. Perhaps industrial capitalism and the republic with it. If not soon, eventually.

Replaced by what is most worrisome. Egalitarian reforms come rarely but are possible. Past protest movements achieved them. Ones based on what Frances Fox Piven calls a "distinctive kind of power. Disruptive power." Past conditions were right and it happened. Piven wonders if another "popular upheaval" is possible. It's "the big question of our time" and even bigger with reckless militarism. A permanent war economy. The erosion of democratic freedoms, and potentially the nation's worst ever financial crisis. Nothing is certain or easy, but historically "hardship propels people to collective defiance," especially at times of extreme inequalities of wealth. Given the current state, what more urgent time than now.

Stephen Lendman is a Research Associate for The Center for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting-edge discussions on key world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10596

Reviewing Zionism, Militarism, and the Decline of US Power

Reviewing James Petras' "Zionism, Militarism, and the Decline of US Power" - by Stephen Lendman

James Petras is Binghamton University Professor Emeritus of Sociology. His credentials and achievements are long and impressive as a noted academic figure on the left. A well-respected Latin American expert, and a longtime chronicler of the region's popular struggles.

He's also a prolific author of hundreds of articles and dozens of books, including his latest titled "Zionism, Militarism, and the Decline of US Power" and subject of this review. It follows from his earlier 2006 book: "The Power of Israel in the United States" that documented the Israeli Lobby's enormous influence over US Middle East policy and its destructive effects.

Petras continues the story in his latest book. Asks is Israel good for America, and responds by exposing and critiquing American Zionism. Its powerfully destructive influence. Its stranglehold on US politics, academia, the media, clergy, and over all segments of society voicing dissent. He debunks the notion that the Israeli Lobby is like all others and provides convincing evidence of its influence and veto power over war and peace, trade and investment, multi-billion dollar arms sales, and all Middle East policy issues under Democrat and Republican administrations alike.

Every Petras book is important. So is this one at a time the most powerful Washington Lobby is assured that a new administration will continue and expand the current "Global Wars on Terrorism." Petras explains the dangers. The current disastrous foreign adventurism. America's economic decline as a result, and the calamitous global fallout overall. High-level officials won't read this book, but they should. To realize the dangers of their destructive policies. How they threaten the republic's survival and are heading the nation for insolvency and ruin.

Part I - Zionism and US Militarism

How Zionist Power Promotes US Middle East Wars

Pretexts for invading and occupying Iraq went from:

-- WMDs;

-- to removing a dangerous dictator;

-- to establishing democracy in the Arab world;

-- to preventing a civil war;

-- to needing a colonial military victory to retain our global superpower status;

-- to reassuring regional regimes they can rely on us for protection; and

-- to proving America can fight and defeat "terrorism."

However, the longer the conflict continues (as well as the Afghan one), the less credibility any argument holds. The more likely an occupied people will grow more restive and reassertive. A similar likelihood that popular resistance will grow throughout the Middle East, Eurasia and elsewhere. The greater the economic and political cost. The less able a depleted military will be able to sustain foreign wars, and less willing the US public will put up with them. Yet they continue, and explanations why crop up as follows:

(A) A War for Oil with arguments ranging from:

(1) Big Oil wanted it;

(2) the White House acted reflexively on its behalf; to

(3) the urgency to secure the region's oil that Saddam Hussein threatened.

Petras responds that these explanations "fail several empirical tests:"

(1) Big Oil opposed the war and wants peace and stability instead;

(2) the oil giants tried to establish economic ties with Iraq before the invasion; they want and are denied the same arrangement with Iran and all other oil producing countries;

(3) they prefer gaining new markets and business economically and by building good relationships with host countries; not a single Big Oil CEO favored war and occupation; and

(4) "windfall profits" haven't materialized as benefits accruing from occupation; lucrative contracts to develop Iraqi oil aren't arranged; and the country is too violent to warrant serious investments to do it, except in the Kurdish north.

Still, war was declared. The occupation continues. The political and economic costs are enormous. Big Oil has been a loser, not a winner, and the evidence shows that the powerful Israeli Lobby trumped any opposition the oil giants could pose to match it.

Petras refers to the Zionist Power Configuration (ZPT). Its influence over the administration and Congress. Its tentacles spanning the country at the grassroots. Its control of the media, academia, the clergy, and important professional elements in the population. Its "slavish obedience to official Israeli policy" even when US interests are harmed. Its threat to US democratic freedoms, and the fact that anyone daring to confront Israeli policy becomes a target to be intimidated, blackmailed, smeared, pressured, and removed from positions of authority.

(B) the National Security Argument that breaks down as easily as a war for Big Oil. At its height, Iraq was a modestly strong regional power, but never a match for America or a nuclear-powered Israel. Following the 1980s war with Iran; the 1991 Gulf war; 12 years of punishing sanctions; repeated bombings in the 1990s; the patrolled no-fly zone and protected Kurdish north; and the depleted state of Iraq's military, the nation was in no position for conflict with any of its neighbors let alone with the world's only superpower. "Saddam Hussein was clearly not a threat."

Neither is Iran the way Israel, its Lobby, the administration, and most members of Congress portray it in an effort to push America into another disastrous war that will only benefit Israel in the short term. Its interests were key in influencing the Iraq war. Economic sanctions and the Gulf war preceding it. For the purpose of removing a regional rival. Eliminating the Palestinians' major source of support, and solidifying the Jewish state as the Middle East's leading power. Iran remains the main obstacle. Followed by Syria, Hezbollah in South Lebanon and the Hamas government in Gaza.

Israel and its Lobby want sequential wars to enhance its power by eliminating them all. Thus far, Congress and the administration have gone along. Saddam's Ba'athist regime is no longer a threat, but Iraq remains embroiled in turmoil with no end of conflict in sight. Many hundreds of billions have been spent containing it with little to show for the effort and expense, yet Israeli supporters want war with Iran and ignore the unimaginable fallout if it comes.

Nonetheless, most of official Washington and plenty of media disinformation back one. Starting off with tighter sanctions. A possible partial or full blockade. The idea being to harm the Islamic Republic. Then attack it in a weakened state. That's the plan. Will it happen? Perhaps if ZPC power prevails. But not if high-level Pentagon and others in Washington win out. They know the risks of inflaming the entire Muslim world. The unlikely possibility of regime change by war. The immense disruption to the region through retaliation, blocked oil shipments and skyrocketing prices, and how these factors will affect a world economy already reeling from the strains of a financial crisis.

Nonetheless, ZPC influence is considerable and can't be underestimated. It's "exercised directly on political, academic, and cultural decision makers to make sure their policies back pro-Israel, pro-Zionist interests." High-level administration officials represent it. People like Eliot Abrams, special National Security Council Middle East/North Africa "Global Democracy Strategy" advisor and DHS director Michael Chertoff.

Indirect ZPC power is exerted by:

-- "parlaying influence over a small group of Congressmen into a large majority;" also winning over the leadership of both parties and having them publicly pledge allegiance to Israel;

-- enhancing power by focusing on single issues - like denouncing prominent Israeli critics and assuring their views won't prevail or even be heard; removing them from Congress and other posts; figures like Cynthia McKinney twice from the House and Norman Finkelstein from the DePaul University faculty;

-- publicizing the successful punishing of critics to deter others;

-- employing mutually re-enforcing public and private sphere multiple resources like large-scale electoral financing and influencing donors not to contribute to Israeli critics; and

-- using powerful, effective, one-sided propaganda to demonize Arabs, especially Palestinians and critics; instead portray Israel as a "democratic fortress surrounded by hostile authoritarian governments;" also having the media on board reinforcing these views.

What precisely is the ZPC or Israeli Lobby? It's unlike any other in power. The breadth of its base, and the only one with no opposition. Representing less than 1% of the population (elites only), it consists of "a multiplicity of highly organized, well-financed and centrally-directed structures throughout the US." It includes scores of political action committees. A dozen or more think tanks, and the "52 major American Jewish organizations grouped under the umbrella listing 'Conference of Presidents of Major American Jewish Organizations (CPMAJO).' " AIPAC, the Anti-Defamation League (ADL), and the American Jewish Committee (AJC) are among them at the "national Executive-Congressional lobbying levels."

As or more important are local Jewish community federations and organizations throughout the country. In them are activist professionals - doctors, lawyers, accountants, small business leaders, academics, the clergy and many others who promote Israeli interests, denounce critics, and work to assure their voices aren't heard or are dimmed. On-campus pro-Israeli student organizations are also enlisted to spy on professors. Smear critical ones, and work to pressure universities to fire them.

The ZPC "octopus" reaches everywhere - "far beyond the traditional centers of big city power and national politics....into remote towns and cultural spheres" across the country. With powerful mass media backing, its influence is enormous, and only the brave dare opposes it. Yet they do, and their numbers are growing in spite of the risks.

The Israeli Lobby "is at or near the peak of its political power" - at all levels of government and through the mass media. Yet it's vulnerable nonetheless - because of the extent of its crimes. The defrauding of the American public. For forcing the country into two disastrous wars against Iraq and Afghanistan. Their enormous cost in dollars, lost lives, vast destruction, and mass human misery, and their showing US (and Israeli) democracy to be sheer fantasy.

High Pentagon officials are also angered for being led into "an unprecedented state of disgrace and demoralization, with thousands of officers tendering their early retirement, thousands of troops going AWOL, and an increasing number of retired senior officers expressing outrage" and wanting an end to clearly failed policies.

Nonetheless, the task facing critics is daunting, and consider the public record documentation of the relentless campaign for war against Iraq. In its run-up, "leading pro-Israel Jewish organizations produced approximately 8800 pieces of pro-Iraq war propaganda and circulated them to all its member organizations, every Congressperson, and every leading member of the executive branch, with follow-ups by local activists and an army of Washington lobbyists (150 from AIPAC alone) plus several hundred full-time activists from local and regional offices."

A 2002 - 2007 Financial Times survey (the leading Anglo-American business publication) of 1872 op-eds, editorials and letters contained "not a single (item) by any spokesperson or representative of a major (or minor) oil company calling for the invasion and occupation of Iraq or the bombing of Iran."

In contrast, the one-sided Daily Alert digest of pro-Israeli and Middle East propaganda (from 2004 through September 2007) published 960 issues with on average six daily articles calling for an immediate or near-term preemptive US and/or Israeli attack on Iran. Tightened economic sanctions also plus divestment and boycotts of Iranian products.

During the same period, the Financial Times (in 1053 issues) published no Big Oil op-eds, commentaries or letters advocating war or harsh measures against Iran. Quite the opposite. Large and smaller oil companies want peace and stability everywhere and the right to negotiate deals with all oil-producing states, including Iran. They also fear conflict will disrupt business. Damage or destroy their installations, and undermine transport routes and shipping lanes from wellheads to market destinations.

Yet conflict continues. More may be ahead under the current or next administration, and nothing is being done to address the core Middle East issue - resolving the Israeli-Palestinian conflict equitably. Short of that, no regional peace is possible nor can Israeli survive even nominally democratic. Yet Israeli Lobby influence thwarts every peace initiative, and consider three recent ones:

-- the bipartisan dismissal of a statement sent George Bush and Secretary Rice from former top political officials calling for Israel to abide by UN Resolutions 242, 338 and other conflict-resolving initiatives;

-- Tony Blair's "Quartet Peace-Making Mission" has been a total flop due to Israeli intransigence; and

-- the November Annapolis, MD peace conference proved just as fruitless because Israel wants conflict, not resolution.

Key for Israeli officials is total Palestinian subjugation. Weakening, isolating and destroying Iran. Emerging as the region's unchallengeable power, and tolerating no opposition to its aims. They represent "a clear and present danger to" America's freedoms, already seriously eroded and heading south unless reversed.

Yet there's hope in the form of "rising anger and hostility in America against the ZPC, against its arrogant authoritarian communal attacks on our democratic values, to say nothing about our national interests" - grievously harmed by supporting Israel's. An eventual backlash is coming because things that can't go on forever, won't.

The political and economic costs are enormous and ahead will come down to Chalmers Johnson's conclusion in his two most recent books. That America is plagued with the same dynamic that doomed past empires unwilling to change: "isolation, overstretch, the uniting of local and global forces opposed to imperialism, and in the end bankruptcy" combined with authoritarian rule and the loss of personal freedom. Supporting a tiny Middle East state with interests harming our own is hastening that outcome. It's high time this stops, but so far it's just wishful thinking.

War On Iran - The American Military v. the Israel Firsters

Israeli interests and its supportive Lobby have pitted Congress and administration officials against some top Pentagon commanders - irate over Iraq and opposed to more conflict against Iran. Which side will prevail isn't sure, but civilian militarists neutralized their critics. Marginalized, silenced or removed mid and high-ranking officers. Men like Joint Chiefs of Staff Chairman General Peter Pace. Army Chief of Staff General Eric Shinseki. CENTCOM commander Admiral William Fallon. General John Abizaid for opposing the Bush administration's "surge." General Ricardo Sanchez for calling Iraq "a nightmare with no end in sight," and many others throughout an officer corp racked by half their numbers not re-enlisting. Career officers fed up, wanting out and leaving. Further depleting an already weakened military.

Nonetheless, the Lobby remains dominant even after losing key pro-Israel administration officials through forced or voluntary departures. Like Donald Rumsfeld, Paul Wolfowitz, Douglas Feith, Larry Franklin, Lewis "Scooter" Libby, Abram Shulsky, David Wurmser, many lesser or unknown figures, and even Colin Powell who in February 2001 said: Saddam "has not developed any significant capability with respect to weapons of mass destruction. He is unable to project conventional power against his neighbors" and thus poses no threat.

On February 5, 2003, he then disgraced himself before the UN Security Council by lying about Iraqi WMDs and "involvement in terrorism" and having CIA chief George Tenet and UN Ambassador (at the time) John Negroponte as visible props behind him for credibility. An episode he'll never live down nor should anyone let him.

Setbacks notwithstanding and the Bush administration's tenure nearly over, the Lobby remains supremely confident and empowered. It steamrolls opposition and neutralized the peace movement as well. Now diffused, misdirected, and supporting pro-war Democrats instead of taking to the streets, demanding an end to the Iraq occupation, no confrontation with Iran, and a dramatic change in course in Washington they want but won't fight for.

Even connecting with anti-war Pentagon officials would help as well as key fundamental issues between them and the Lobby:

-- the extent of the Iranian threat: none according to the IAEA; and evidence shows Iran is complying with NPT provisions unlike Israel that's a nuclear outlaw;

-- Iran's uranium enrichment program: it's lawful and poses no "existential threat" as Israel claims; intelligence and US military estimates are that at the earliest Iran might be able to produce a low-yield weapon by 2010 - 2015 if it wishes to; hardly a threat to Israel's nuclear arsenal and sophisticated delivery systems able to devastate any country in the region; none pose a threat to Israel or will in the foreseeable future;

-- Iran supplying arms to the Iraqi resistance: the Pentagon and CENTCOM repeatedly deny it; nonetheless, Israel and its Lobby claim it and the dominant media go along; and

-- consequences of attacking Iran: retaliation is certain; Israel will be harmed; so will US Iraqi forces; the Strait of Hormuz may be blocked through which up to one-third of Middle East oil passes and 20% of world production of 88 million barrels; and Iranian "sleeper cells" may be activated around the world for "big impact" terror missions.

None of this deters Israel, its Lobby and their policy of "no dialog, no diplomacy, and a blockade, weakened economy, ripe for Anglo-French-American bombing." They ignore a frequent criticism about having no "exit strategy" because they want the US to invade, occupy, colonize, build permanent bases, and wage unending "Global Wars on Terrorism" for total victory and dominance - of the region and beyond. So far, the Pentagon is their only effective opposition along with scattered former Washington officials like Zbigniew Brzezinski, Jimmy Carter, Henry Kissinger, Jim Baker and the president's father. Figures rarely given air time or op-ed space to voice these views. Short of that and mass grassroots activism, the possibility of an unthinkable Iran attack can't be discounted.

Burying the National Intelligence Estimate

In December 2007, the US National Intelligence Estimate (NIE) reported that Iran halted its nuclear weapons program in 2003 (with no evidence one ever existed) and has none of these weapons in its arsenal. The Bush administration, Israel, and its Lobby dismissed the report calling it an Iranian ploy to buy time. The White House knew its findings months in advance. No doubt shared them with Israel, and effectively diffused them to remove an obstacle to new aggression. AIPAC, in fact, twisted NIE's findings by arguing they bolster the case for confrontation because the absence of a nuclearized Iran should support the case for greater pressure on the country.

With plenty of media support, the Lobby effectively buried the NIE report and refocused attention on "Iran's nuclear program still (being) a threat," and who can counteract it when no opposition voices get air time or op-ed space in key mainstream broadsheets. Nonetheless, the inteligence report has credibility and "made liars of the White House and Congressional Democrats and the Presidents of the Major American Jewish Organizations who 'knew' Iran had a nuclear weapons program" no one can find a trace of.

It shows that the nuclear issue is a ruse. Israel wants unchallengeable regional dominance, and Iran is its major rival. Remove it and lesser ones remain with no worry about the Islamic Republic intervening against further Palestinian oppression, displacement and isolation, and Israel's other imperial aims. With billions from Washington, worldwide backing or indifference, and the power of their Lobby to win support and intimidate opposition.

The drumbeat for war continues. Yet it's quieted somewhat following the August Caucasus crisis with Russia now a reinvented evil empire opponent in a new Cold War and Great Game confrontation for control of Eurasia's vast resources, including those in the Middle East.

Iran, however, hasn't gone away, and with General David Petraeus now CENTCOM chief, the Bush administration, Israel, and the Lobby have their man in charge of going in whatever direction they send him. Obediently and willingly to further his own political ambitions that got him this far despite his less than stellar record. More on the general below.

Provocations as Pretexts for Imperial Wars - From Pearl Harbor to 9/11

Despots need no pretexts for war. Imperialist democracies have to invent them to convince the public to go along. In 1916, Woodrow Wilson was reelected on a promise that "He Kept Us Out of War." WW I, that is, that began in 1914.

Unknown to the public, Wilson had imperialist designs. He needed the war to advance them, and established the Committee on Public Information under George Creel. A government propaganda initiative that in six months turned a pacifist nation into raving German haters and got Congress (overwhelmingly) to declare war on Germany on April 17.

The effort also showed corporations how effective propaganda can be. It launched the public relations industry. All the mind manipulating methods that followed, and it taught business how to market their products, denigrate unions, and today keep people glued to TV screens, influenced by hyper-commercialism and bread and circuses to want all the things they don't need and think less about essentials like clean air and water, safe food, and government providing everyone with vital services like health care and education.

Wilson's war led to America's unchallengeable ascendency after WW II. The war Roosevelt wanted and got as did his successors to the present time and to be continued under the next administration. Petras explains that "US presidents have routinely created circumstances, fabricated incidents and acted in complicity with their enemies" to convince the public to be "receptive to war."

WW I and the major imperial wars to the present needed "a provocation, a pretext, and systematic, high-intensity mass media propaganda to mobilize the masses for war." Manipulated to accept it by "an army of academics, journalists, mass media pundits and experts." Well rewarded for their complicity.

Japan's rulers didn't want war with America. FDR goaded them into attacking through multi-step harassment and embargo provocations. Acts of war leading up to December 7, 1941. An effort to foment an attack by selling arms to Tokyo's enemies. Denying Japan strategic resources and port access, and imposing a damaging embargo on the country.

It worked. Japan attacked Pearl Harbor. US cable documentation showed Washington knew it was coming. They tracked the fleet across the Pacific, but officials gave no warning to Admiral HE Kimmel in charge of Pearl Harbor's defense. Crucial intelligence reports were withheld to let the attack proceed unimpeded to mobilize public anger and give FDR his war. Think of the similarity between then and 2001.

At its conclusion, America was triumphant, but its conquest of Asia incomplete. Truman's dilemma - "how to consolidate US imperial supremacy in the Pacific at a time of growing nationalist and communist upheavals" in spite of a war-weary public wanting peace, demobilization, and normalcy.

Again, a provocation worked. Mass propaganda followed. The great "red" menace was fabricated. Hawkish collaborators took over unions and civic organizations. McCarthyism emerged. Peace and anti-war organizations were targeted. Many thousands lost jobs. Hundreds jailed, and hundreds more blacklisted. All under Harry Truman now reinvented as one of our great past presidents. Point of fact - he was a war criminal.

He chose the Korean peninsula. Lawlessly intervened in the country's civil war because the wrong side was winning, and that outcome couldn't be tolerated. The war destroyed the North. Killed millions of Koreans. Shattered millions of more lives on both sides. Left the country divided, and gave Washington a permanent foothold in the South with bases it retains to this day. The empire was on a roll. It was just the beginning.

Vietnam was next, and things began early in 1954. Bare months after the July 27, 1953 Korean armistice. Washington backed their corrupt puppet in the South. Ngo Dinh Diem, imported from New Jersey for the job. Most Vietnamese supported Ho Chi Minh in Hanoi and his national liberation and anti-imperialist government. An intolerable situation for Washington that had to be stopped.

War was for two strategic reasons:

-- to establish client regimes and military bases in East and South Asia to encircle China - in Japan, Korea, Indochina, the Philippines, and elsewhere; and

-- to destroy opposition Southeast Asian governments and movements - in N. Vietnam, all Indochina, Indonesia, and elsewhere if they arose.

In all, to solidify America's hold in East Asia. Install or consolidate client regimes. Build more military bases. Establish opportunities for US business. Privatize raw material sectors, and as much else as possible.

Doing it meant removing opposition regimes. Ho in Hanoi. Sukarno in Indonesia, and hundreds of thousands of anti-imperialist movements, trade unionists, communists, peasants and others seen as threats to US ambitions. Covert attacks against N. Vietnam began in 1961. Then the fabricated Gulf of Tonkin Incident led to full-scale war. The country decimated. Millions of deaths in the region for a war America lost, but Southeast Asians and 58,000 US service men and their families paid for.

Ronald Reagan pursued proxy wars in Central America and elsewhere until GHW Bush attacked Panama. Deposed Manuel Noriega. Tricked Saddam into invading Kuwait. Won a quick victory and declared: "By God, we've licked the Vietnam Syndrome" - meaning: restraints are removed and America is free to invent pretexts to attack anyone.

September 11, 2001 gave Bush administration militarists their opportunity to pursue new Middle East/Central Asian conquests. In spite of no credible threat in either region. Solution - invent one. "...some catastrophic and catalyzing event, like a new Pearl Harbor" the way Project for a New American Century planners envisioned it their 2000 Rebuilding America's Defenses document.

Afghanistan was first in October 2001. It was planned many months in advance. Long before 9/11. Iraq followed in March 2003. Also planned well in advance and awaiting a pretext to launch - 9/11, non-existant WMDs, and a made-to-order despot like Saddam made it easy. Especially because Israel wanted war. Pushed hard for it, and Bush administration hard-liners obliged.

When the opportunity arose, Israel and its Lobby mobilized a phalanx of ideologues, academics, Christian Right clergy and spokespeople, writers, journalists, pundits, and the entire mass media for one common purpose. Round-the-clock propaganda to convince the public about a dangerous enemy. Scare them enough to want him removed. Turn them into "irrational, chauvinist militarists," and get them to sacrifice their freedoms for a "Global War on Terrorism" that, according to Dick Cheney, "won't end in our lifetime." The nation has been at war ever since. No end is in sight. The next president promises no change. Perhaps new wars on new fronts. And the country and public continue to pay dearly for their leaders' crimes and deceit.

Israel's and its Lobby's as well. A small group of extremists. Behind closed doors. Deceiving the public. Creating a cauldron and scorched earth in Iraq and Afghanistan. Erasing two countries. Giving Israel free reign to attack South Lebanon. Syria on the pretext of a non-existant nuclear site. The endless oppression, occupation, displacement, and isolation of Palestinians while the world looks on dismissively. Plus the stoking of tensions for more wars so Israel and America can solidify their positions as unchallengeable imperial powers. Israel in the Middle East. America everywhere.

Part II - Embracing the Israeli Modus Operandi of Endless War

The Palestinian Sewage Disaster: The Political Ecology of the US/Israeli Responsibility in Microcosm

In the broader scheme of things, what happened on March 26, 2007 in Northern Gaza was one incident. Barely noticed outside the region, among so many others attracting more attention. It was when a river of raw sewage and debris escaped from a collapsed earthen embankment. Flooded a refugee camp. Drove 3000 Palestinians from their homes. Killed five, injured 25 and destroyed scores of houses.

Israeli propagandists blamed Palestinians for what Israel caused. Years of neglect. A policy of undermining public maintenance projects, including sewage treatment plants and cesspools. Massively bombing Gaza in summer 2006. Destroying roads, bridges, sewage treatment facilities, water purification ones, and the Territory's only electrical power plant.

Israel bombs, kills, marauds, invades, occupies, destroys, and Palestinians are blamed. Rogues are rewarded. Victims demonized. A raw sewage flood one day. Aerial bombardment the next. Mass arrests, incarcerations, torture as official policy, and an agenda of conflict over peace to assure Israel is the dominant regional state. No challengers exist, and world support lets this policy go on unimpeded.

General Petraeus - From Surge to Purge to Dirge

Last April, Defense Secretary Robert Gates nominated General David Petraeus to replace Admiral William Fallon as CENTCOM commander. The reason - Fallon disagreed sharply with the administration's Middle East policy. Why Petraeus? He's fully on board to further his own military and political ambitions. On September 16, he took over putting him in charge of US military operations in 27 Eurasian countries (up to Russian/Chinese borders), including the Middle East, Afghanistan, Pakistan, and vital waterways like the Persian Gulf and Indian Ocean.

Why Petraeus? A man Admiral Fallon openly criticized for shamelessly supporting Israel in northern Iraq and the Bush "Know Nothings" in charge of Iraq and engaging Iran. Fallon went further as well about a man he clearly dislikes whose main skill is "brown-nosing." As for his theory and strategy in defeating the Iraqi resistance, he was "a disastrous failure," but that was predictable given his "phony success in Northern (Kurdish) Iraq."

The region's relative stability "has nothing to do with (his) counterinsurgency theories" and more because of Kurdish "independence" and "separatism." He bought off local militias and accomplished there what can't be duplicated in the rest of the country. The "surge" was a ruse and achieved nothing but headlines about its effectiveness. Phony and untrue. The reduction in violence is mainly because some elements were bought off and that Muqtada al Sadr agreed to a ceasefire that may prove only temporary.

Then there's the matter of a competent Iraqi army in a country where most volunteers want a pay check but have little appetite to fight. With rampant unemployment, hunger, deprivation, and the country destroyed, what choice do they have. Nonetheless, many desert after enlisting. Refuse to attack fellow Iraqis, and in some cases join them against a brutal occupation promising no end.

The "Petraeus Manual" prioritizes "security and task sharing as a means of empowering civilians and prompting national reconciliation." Neither is achievable with thousands of Iraqis still dying. Attacks against US troops continuing, and all that can be said for Petraeus' Multi-National Force - Iraq tenure is that "empowered people (the locals) have protected and supported insurgents and oppose the US occupation and its puppet regime." His goal of "national reconciliation" was a total failure and won't change until the occupation ends.

He also followed the same failed Vietnamese strategy producing widespread civilian casualties. Bombing densely populated areas. Mass-arresting suspected local leaders. Targeted assassinations. Wncircling entire neighborhoods. Punishing suffering Iraqis and engendering deep hostility, and destroying the country to save it the way it was tried in Vietnam and failed.

Even Petraeus understands that and said "There is no military solution to a problem like that in Iraq, to the insurgency." So prioritizing military victory is only explainable by his desire to please the administration and further his own military and political ambitions.

He's a master of "double speak" and last April lied to Congress and the public in fabricating accounts of progress. He claimed the war was being won. Progress being made. Iraq being stabilized. Peace around the corner, and then on to more war against Iran. He was the first general to claim Iranian weapons were blowing up US armored carriers and Iranian agents training the Iraqi resistance.

He clearly played up to Bush administration neocons and the Israel Lobby in supporting an attack against Iran. They "found their stooge" in the general, and he took full advantage at the same time the puppet Iraqi government was praising Tehran for helping to stabilize the country and invited President Mahmoud Ahmadinejad to Baghdad to sign trade agreements. Petraeus now commands all of Eurasia at a time Russia may now be targeted, and if so, the stakes are far greater and so are the risks.

Part III - Militarism and the Decline of US Power

Military-Driven Over Market-Driven Empire Building (1950 - 2008)

From the middle of the 19th century to especially post-WW II, Petras distinguishes between two forms of empire building: by military conquests or through "large-scale, long-term economic penetration via a combination of investments, loans, credits and trade in which market power and superiority (greater productivity) in the means of production led to....a virtual empire."

European militarism declined after WW II. America's was just beginning as it followed a military-based empire building approach over the alternative. Based on foreign wars, proxy ones, encircling the world with bases, and establishing a military-industrial complex to advance it. Today exceeding $1 trillion annually with all spending categories included. Plus multi-billions more in secret off-the-books budgets. Overall, a reckless agenda for shorter term gains at the expense of long-term decline, bankruptcy, despotism and ruin.

As the US expanded its war-making capacity, Western Europe, Japan, and more recently China and Russia chose to develop their economic potential both at the public and private levels. The results were predictable. America prospered through the 1960s before competitors grew more formidable. Since then, "European and Japanese (and now Chinese and Russian) market-based empire building moved with greater dynamism from domestic to export-led growth and began to challenge US predominance in a multiplicity of productive sectors." The trend continues with EU and BRIC countries (Brazil, Russia, India and China) emerging as formidable competitors as US supremacy declines.

Why so? The off-shoring of US manufacturing. Growing a predominantly service economy. Substituting low wages for higher ones. Reducing social benefits. Becoming heavily dependent on speculative finance. Financialization or Frankenstein finance. Letting Wall Street and big banks decide what's best for the country and failing badly. Diverting wealth to the rich and super-rich at the expense of 80% or more of the public. Destroying unions and high-paying jobs. Running up massive trade and current account deficits. Unrepayable national debt as well, and now reeling under a financial crisis. Not getting a grasp on it, and not knowing when or how it will end or what condition the country will be in when it does. Or if it will.

Readying the nation for martial law if things get bad enough and a popular revolt erupts. Practicing for it in real time in Denver, St. Paul and New Orleans. Readying for more foreign wars under a new administration and even one or more before the current one ends. Trying to disprove the notion that things that can't go on forever, won't. Having to learn the hard way that they're dead wrong after eight failed years under George Bush taught both parties nothing. Hoping the public will decide that change must percolate up. Never does it flow the other way.

Petras reviews market v. military empire building approaches post-WW II. Its early years. Then in the 1980s under Reagan. The 1990s Clinton years, and after 2000 under George Bush. The 2002 - 2008 40% decline of the dollar alone provides strong evidence of America's competitive decline that may accelerate under the current economic crisis or in its wake. In contrast, China, India, Russia, European, Asian and Latin American states are developing their economies. Expanding business relationships around the world at the expense of America. Likely this trend will continue as the US grows more militaristic and declines under the weight of maintaining it.

Partnering with Israel makes it worse. Advancing the Jewish state's agenda at the expense of our own. Allowing pro-Israeli extremists to run foreign policy. Seeing no difference under Democrats or Republicans. Promising more of the same in 2009. Advancing or prolonging current conflicts in Iraq, Afghanistan, and Somalia. Planning new ones in Eurasia. Proxy ones in Latin America or wherever US and Israeli interests are at stake.

Ignoring the historical record that "imperial wars destroy the productive forces and social networks of targeted countries." Eat the homeland's seed corn as well. Let market-driven empires gain advantage through productive alliances. Advantage them to grow strategic industries. Arrange favorable trade and monetary agreements. Plus policies of building productive forces, not destroying them or their nations' social fabric. That lesson is lost on US militarists or the broader defense establishment that profits hugely at the expense of the remaining economy and the public.

Petras goes even further saying that "Militarist imperialism has weakened the entire economic fabric of the US empire without any compensatory gains on the military side." Since WW II, GHW Bush waged the only two successful conflicts. Both against weak opponents, and they were quick and cheap. In contrast, Korea and Vietnam were quagmires. So are Iraq and Afghanistan today. Hopeless and lost, yet doomed to continue for years with unconscionable further loss of lives. Continued destruction, and hundreds more wasted billions so badly needed at home for productive investment and desperately needed social services being cut not increased.

The result, especially under George Bush: Militarism writ large. Costly military adventurism. "Catastrophic economic costs." Pushing the nation toward insolvency. Declining economically as competitors advance. Having no one around with enough foresight so see the folly. So addicted to wars it doesn't matter if some do. Like a junkie too far gone to change. Knowing a bad ending awaits, yet heading full steam toward it. Leaving Petras to foresee two possible outcomes - "a new rabidly nationalist authoritarian regime, or the re-birth of a republic based on the reconstruction of a productive economy centered on the domestic market and social priorities...." Based on the current state and bipartisan campaign rhetoric, there's faint hope for the latter.

US Militarism and the Expanding Israeli Agenda

With key allies in high places in both parties, the Israeli Lobby consistently "steamroll(s) domestic opposition in securing unconditional US backing for Israel's position in the Middle East." Exhibit A - Iraq.

Nonetheless, some signs of critical public scrutiny have emerged, and one example is from the Council of Gulf Cooperation. It's conservative, pro-US and composed of Kuwait, Qatar, Oman, Saudi Arabia, Bahrain and the United Arab Emirates (UAE). Its members also produce 40% of world oil. Have strong business ties to the US (and elsewhere) and are large purchasers of American military hardware.

In late March 2007, the Council called for diplomatic dialogue with Iran, not confrontation or sanctions. Big Oil shares this view. So do many European states and Turkey. Others outside the region as well. Russia, China and Venezuela prominently. Israel is opposed and vetoed any chance for a changed policy. It highlights the divergent interests of Israel and America compared to moderate Arab states and most other countries. Stability over Washington and Tel Aviv's "radical militarist destabilizing policies." Both countries are structurally incapable of pursuing peace over conflict. It assures "disastrous military adventures" ahead and the terrible toll from their fallout.

Yet what harms America helps Israel, at least in the short run. Iraq has been a great success. Saddam was overthrown. A key Palestinian backer removed. Iraq destroyed. Israel's regional dominance increased. It's unimpeded in colonizing and devastating Palestine. It can now pursue its next key objective to eliminate Iran as a regional rival. Regime change if possible or at least a weakened state so it doesn't matter. Then on to Syria and consolidating control over Lebanon, especially in the water-rich South.

Petras states: "....Democratic and Republican candidates (and all key members of Congress have) pledged to unconditionally support Israeli interests, specific pledges to the ZPC-AIPAC included." Not a brave soul in sight to challenge their reckless agenda or acknowledge European polls that show large majorities call Israel the most threatening and negative country in the world. Over Iran, North Korea and Syria. All the more so because of its stranglehold over US foreign policy. And in the face of disastrous regional wars. Yet more may be planned and America may willingly go along. Against Iran, Syria, Hezbollah in Lebanon and/or Hamas in Gaza.

Outside the region as well, especially against opposition forces in Pakistan and an accelerated effort in Somalia. Perhaps in Latin America also against Venezuela and Bolivia even though countries that far removed are outside of Israel's sphere of influence. But it doesn't deter the Jewish state from aiding America as it did in arming and training Georgians to attack South Ossetia and using its agents around the world for similar nefarious activities. It's also the world's fourth largest arms supplier, ahead of the UK, and has the world's fourth most powerful military.

Petras sees a "Judeo-centric view of the world" as deadly. Believing "what's good for the Jews (means) providing unconditional support to an aggressive colonial state (Israel)...." Proving that to be "a formula for global disaster." Also what just a small minority of Jews believe in. Most of them have no ideological ties to Israel nor do they support its imperial wars or America funding them. No matter. They're marginalized and ignored. "Where will it take us? When will it end?"

Part IV - Challenging the Lobby

American Jews on War and Peace - What the Polls Do and Don't Tell Us

Independent polls and a recent American Jewish Committee (AJC) one show most Jewish Americans have different views on the Iraq war and attacking Iran than do leaders of major American Jewish organizations. Yet this has no impact on the administration, Congress or the dominant media. Why so?

One explanation is that most American Jews are pro-Israel and (mistakenly) "believe Democrats will make the right decisions on the war in Iraq" in spite of clear evidence they won't. Further, 82% of them think that "the goal of the Arabs is not the return of occupied territories but rather the destruction of Israel, (and a majority say) Israel and its Arab neighbors (won't) settle their differences and live in peace." Conclusion - right or wrong, most Jews identify with Israel, support the Jewish state, and retain ingrained anti-Arab prejudices.

Israeli public opinion also undermines progressive American Jewish anti-war views as evidenced in a recent Haaretz report. It cites a civil rights poll showing that "Israel has reached new heights of racism...." Findings in it cite:

-- a 26% rise in anti-Arab incidents;

-- double the number of Israeli Jews expressing hatred of Arabs;

-- half of them opposing equal rights for them; and

-- three-fourths of young Jews believing Arabs are "unclean," according to a Haifa University study.

These and other factors along with identifying with Israel help explain why Jewish Americans (in spite of their views) won't criticize leaders of reactionary Jewish organizations, making it all the easier for them to influence favorable congressional and administration policies toward Israel.

Why Condemning Israel and the Zionist Lobby is So Important

First some misguided beliefs:

-- that the ZPC is just another lobby;

-- that other nations and their leaders commit equally violent crimes and abuses;

-- that criticizing Israel is anti-Semitic;

-- that Israel is a democracy and the only one in the region;

-- the uniqueness of Jewish suffering and the Holocaust as exclusively affecting Jews; and

-- that Israel/Palestine discussion should be balanced - in complete denial of a powerful oppressive state v. a near-defenseless and persecuted people - on their own and with virtually no outside help.

Now some facts:

-- the Israeli Lobby is far and away the most powerful in America;

-- criticizing Israel more than other abusive states is important because of its inordinate ability to influence US policy;

-- accusation of anti-Semitism is a canard, a non-starter, a way to shift attention from real issues;

-- Israel defiles democracy by granting it only to Jews and not even all of them; it disdains the less privileged much the way they're treated in America;

-- exploiting the Holocaust as an exclusive Jewish issue defiles the outrage of so many others, including much greater ones; and

-- the imbalance between pro-Israeli representation v. hostile or indifferent views about Arabs is pronounced.

Confronting the Israeli Lobby is vital because it plays such "a decisive role (and) world-historic impact on the present and future of world peace and social justice." Ignore it and consider the peril of America hurtling from wars to greater ones with no end in sight and solidifying tyranny at home.

Consider also some "big questions facing Americans as a result of the power of Israel in the United States:"

-- the ZPC wants was; "has played a major role" in influencing them in the past eight years; and is very capable of pushing America into new conflicts regardless of which party in Washington is dominant;

-- the big issue is "World Peace or War" and the horror of the latter;

-- Israel and its Lobby harm US democracy by stifling "the right to debate, to elect (and) legislate free from coercion;" also to select political candidates strongly opposed to Israeli policies and against providing financial and military support;

-- Israeli interests harm our own; further, "never in the history of the US republic or empire has a powerful but tiny minority been able to wield so much influence" over our foreign policy for the benefit of another nation;

-- by doing it, the ramifications are staggering: permanent wars; massive deaths; unimaginable human misery and destruction; outrageous and ill-directed amounts of spending; a staggering amount of unrepayable debt; the alienation of the entire Muslim world; growing world indignation overall; and the demise of democracy in America - partly because of sacrificing homeland interests to serve those of a tiny foreign power.

Petras asks: "What happened to the peace movement? Mass indignation and outrage as well because of harmful policies to everyone and getting worse. America is the only nation where this movement isn't willing to condemn an agenda promoting Middle East wars and the fraudulent "Global War on Terrorism." Its leaders won't denounce the pro-Israeli Lobby's stranglehold over US policy and the overwhelming harm it causes.

It refuses to confront the Democrat party that's no less militant than Republicans. Both are totally subservient to Israeli interests. Their destructive imperial wars. The likelihood of more ahead for a state "whose Supreme Court legalizes political assassinations across national boundaries, torture (as official policy), systematic violations of international law including collective punishment, and a regime which repudiates United Nations resolutions and unilaterally invades and bombs its neighbors and practices military colonist expansionism." America is a "look-alike" state writ large that practices these and similar policies worldwide and justifies the most outrageous acts in the name of "national security."

"Where (and how) will it end," asks Petras. In the depths of tyranny unless good people confront oppressive power and put a stop to "uncontainable humanitarian calamities whose ramifications impact the entire world." Whose fallout may contaminate it beyond repair if we don't.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM to 1PM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10515

The October Surprise - Global Panic

The October Surprise: Global Panic - by Stephen Lendman

Since 9/11, the notion of an October surprise has been around. The idea going something like this. Another real or manufactured terror attack. The dominant media stokes fear. The public is again traumatized. The Bush administration pledges all effective measures to protect national security. Formerly seizes total power. Suspends the Constitution and declares martial law. Mass detentions follow. Beginning with dissenters and elements of the public considered "dangerous."

This may be coming with the 3rd Infantry's 1st Brigade Combat Team back in the US as of October 1. According to the Army Times, as "an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks." Augmented by USNORTHCOM.

According to Wayne Madsen's recent article titled "FEMA sources confirm coming martial law," it gets worse. He cites "knowledgeable" FEMA sources saying that "the Bush administration is putting the final touches on a plan (to declare) martial law in the US with various scenarios anticipated as triggers." Economic collapse. Massive social unrest. Bank closures. Street protests. Violence in response, and another stolen election.

Early in the month, a different October surprise arrived. Not the expected one. Not yet at least. The Wall Street Journal put it this way: "The Dow Jones Industrial Average (DJIA) capped the worst week in its 112-year history with its most volatile day ever, as hopes for a major international bank rescue plan were overwhelmed at day's end by another wave of selling."

The DJIA dropped 22% over the past eight trading sessions. Investors were "shell-shocked." Many spent Friday "trying to protect themselves from further declines. The past week's (October 6 - 10) 18% decline "and Friday's 1018.77 point swing from low to high were the biggest since the Dow was created in 1896." The VIX measure of market fear hit 69.95. By far its highest level ever, and some investors think it may touch 100 in the current climate. Until now, the Dow's worst week was in 1933. Trading volume also set a record at 11.16 billion shares.

"Market crash shakes world" headlined the Financial Times (FT). Mass trauma, fear and uncertainty sent tremors everywhere, and no one knows if Friday ended it. Maybe just began it. First markets crater. Then world economies, and finally the inevitable human fallout. Affecting many tens of millions everywhere. Innocent people paying dearly.

Morning headlines say it all. And they're getting grimmer. On October 10, the Wall Street Journal said the "Market's 7-Day Rout Leaves US Reeling. Stocks in a Slow-Motion Crash....After Year of Declines, Investors Lose $8.4 Trillion of Wealth." Most scary is what's ahead and how much more people can or will tolerate.

The Financial Times was just as grim headlining "Global equities plunge....Japan leads Asian market rout...Wall Street in biggest fall since 1987 crash." Once the nation's largest company, General Motors may now face bankruptcy. Its October 10 stock fell to its 1950 valuation and now has a market capitalization of just $2.6 billion. Shockingly expressed in one headline saying "Wheels falling off for General Motors." Add the engine and chassis, too.

Ford Motor's outlook is little better. Its stock price is the lowest in decades, and one analyst warned that "the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity (for both companies and Chrysler) during 2009." JD Power and Associates was even grimmer saying that the global auto market may experience an "outright collapse" in 2009. And we're only talking about autos.

Look at banks and world finance. The source of today's crisis and reason global economies are reeling. Economists like Nouriel Roubini were once scoffed at. No longer. He warned for months that "the risk of a total systemic meltdown is now as high as ever since the credit crunch is gripping European banks as well" and spreading globally. Affecting good ones as well as bad. Trashing the baby with the bath water. Erasing savings for tens of millions everywhere. And for seniors who may not have time to recoup.

The crisis didn't emerge like Topsy. It's been simmering for years, and in July 2006 historian Gabriel Kolko warned about it in an article titled "Bankers Fear World Economic Meltdown." He noted how:

the "whole nature of the global finance system has changed radically in ways that have nothing whatsoever to do with 'virtuous' national economic policies....The investment managers of private equity funds and major banks have displaced national banks....moving well beyond regulatory structures....Traders have taken over from traditional bankers because buying and selling shares, bonds, derivatives and the like now generate the greater profits, and taking more and higher risks is now the rule....They often bet with house money (and) low interest rates....let them do things....that were once deemed foolhardy."

Compounded by the irrational development of global finance, liberalization and loose regulations. Playing fast and loose and betting on the come. The potential gains are enormous and so are the risks of a major financial crisis. A meltdown. Now we've got one that global institutions are "utterly inadequate" to deal with.

Kolko warned then that "the entire global financial structure (was) becoming uncontrollable....financial liberalization produced a monster....contradictions wrack the world's financial system (that's) both crisis-prone (and) immoral. (We) may very well be on the verge of serious crises." Now we've got one and in dire straits.

Because "a kleptocratic class (took) over the economy," according to economist Michael Hudson. A criminal element betting on high returns through computerized gambling "and when bad bets are made, bailouts are the (payoff) for campaign contributions." For having friends in high places as well.

Today's crisis isn't an accident or from happenstance. It was planned, according to economist and critic F. William Engdahl in his recent article titled "Behind the Panic." To "shape the future of global banking" through creative destruction. Panic incited by a well-designed "long-term strategy." To change the "face of European banking." Weaken it with toxic junk. Asset Backed Securities. Force enough of it into liquidation or cheap enough to buy at fire sale valuations. The idea being to "create three colossal global financial giants - Citigroup, JP Morgan Chase, and Goldman Sachs." Add Bank of America and make it a foursome. Then use their "muscle to ravage European banks." Even if they wreck the US and world economies. Resuscitate them so they can "advance their global agenda over the coming years." To dominate world finance and increase US hegemony in the new century.

That's the scheme, and Engdahl calls it "a fight for the survival of the American Century." Built on "the twin pillars of American financial (and military) dominance," but the game is far from over. "Battle lines are drawn." EU nations have their own ideas. Stabilization and recovery plans as well that differ from Washington's and look much sounder. It remains to be seen where things are heading and whether competing nations can work together and do it effectively. They haven't much time.

Washington's Efforts to Shape the Last Century

Engdahl recounted some of them in his important book on war, geopolitics, oil and finance: "A Century of War." He explained how Washington designed "the greatest confidence game" ever. A "special hegemony" to:

-- print limitless amounts of dollars;

-- accumulate huge trade deficits;

-- "inflate (the) currency beyond imagination;"

-- have the government pay bankers interest on its own money; and

-- create an unprecedented public and private debt to enrich the few at the expense of the many.

Up to now it worked. Let America rule the world. Control its energy and finance. Avoid serious challengers and crush potential ones.

From the early years of the last century, US muscle flexing took many forms. From conflicts to geopolitics to controlling world resources to financial warfare. JP Morgan and other Wall Street notables were experts on the latter. Creating panics for greater power. Like today's with similar aims.

In 1969, Richard Nixon had his own scheme with the country in recession. Interest rates were cut. Dollars flowed abroad. The money supply was expanded, and in May 1971 America recorded its first monthly trade deficit. It triggered a panic US dollar sell-off. Gold backed the currency then. Reserves were one-quarter of official liabilities, and (on August 15) Nixon unilaterally imposed a 90-day wage and price freeze. A 10% import surcharge. An 8% currency devaluation, and he closed the gold window. Suspended dollar convertibility into the metal and ended compliance with Bretton Woods' core provision. He pulled the plug on world economies. Shook them and on February 12, 1973 did again. With a further 10% dollar devaluation that created the worst global instability since the 1930s. What lay behind his actions?

To buy time ahead of a bold new monetary "paradigm shift." To revive a strong dollar and US hegemony. By a "colossal assault" on world industrial growth. Through an engineered oil embargo. A 400% increase in oil prices. A flood of petrodollars to be recycled into US investments and purchases. Big Oil and major banks to profit hugely at the cost of economic crisis. The worst since the 1930s. Causing bankruptcies, unemployment and stagflation.

Under Jimmy Carter in 1979, Fed chairman Paul Volker advanced his own radical monetary policy on the pretext of fighting high inflation. It was another Washington scheme to preserve dollar hegemony. Keep it the world's reserve currency, and do it by crushing industrial growth to let political and financial power prop up dollar strength.

It worked by raising interest rates from 10% to 16% and then 20% in weeks. The US and world economies plunged into deep recessions, and the dollar began a strong five year ascent.

In the 1980s under Ronald Reagan, Mexican president Jose Lopez Portillo wanted to use his oil revenue to modernize and industrialize the country. To make it stronger and more independent. That prospect was anathema to Washington and it reacted. With a scheme to demand rigid repayment of Mexican debt at exorbitant rates.

In 1981, it began with an orchestrated run on the peso. Stories were circulated about an impending devaluation and capital flight. Portillo instituted an austerity plan, and his government cracked under pressure. The peso was devalued 30%. Mexican industry was devastated. Industrial production cut. Bankruptcies followed. Millions of Mexicans suffered grievously. The nation became effectively insolvent. It had to accept IMF help. Took on large amounts of debt, and major banks profited hugely by working with the government and IMF. Socializing the debt. Spinning it off to tax payers and privatizing gains through structural adjustment looting. Similarly in other countries. Causing mounting debt. Charging onerous interest rates, and earning greater profits from hundreds of billions of dollars in servicing costs.

Reagan-era deregulation caused the S & L crisis. A lesser version of today's. By letting banks invest in speculative real estate. Engage in massive fraud. And get the right wing Cato Institute to say: "If Congress had set out in 1980 to create an environment that would lure all the crooks and frauds in the country into one industry, few would have been more suitable than" this one. "It was easy (finding) disenchanged S & L owners who were willing to sell out for a reasonable price, and once one had an S & L charter, opportunities abounded."

It ended up bankrupting hundreds of banks. Shrunk the industry from 4500 in 1979 to about 2200 in 1991 and hundreds more afterward. It also cost taxpayers around $200 billion. Pocket change compared to the trillions needed for the current crisis.

In the 1980s, Japan was the country that could say "no." At decade's end, it was the world's economic and banking leader. Because reckless speculation left American banks in deep crisis. Japan operated more prudently. It prospered, and challenged American dominance. Washington feared former communist countries would adopt its model. This was anathema. It might shut out US companies. Show Japan's way was superior so it had to be stopped.

The 1985 Plaza accord was the scheme. To get Japan to exercise monetary and fiscal measures to expand domestic demand and reduce the country's external surplus. At the same time, the Bank of Japan held interest rates at 2.5% from 1987 - 1989. To stimulate US goods purchases. Instead cheap money went into Japanese stocks and real estate. It created two colossal bubbles. A lost decade followed, and the economy is still recovering and under new duress from the current panic.

The 1990s Asian crisis was also manufactured. In summer 1997, it hit. For no apparent reason beyond rumors that the Thai bhat was in trouble, and Thailand had too few dollars to back it. "Asian Contagion" was unleashed. Hot money came in earlier. Then exited electronically. From Thailand, Indonesia, South Korea, the Philippines, and other Asian Tiger countries. Through a Washington-engineered scheme because these nations' economic model bested America's and threatened it.

Tiger countries grew by protecting their markets and barring foreign companies from owning land and national firms. They also restricted Western and Japanese imports to grow their own economies and homegrown industries. Again anathema so it had to be stopped.

The countries were hammered. Forced to devalue their currencies and get IMF help. With strings. Accepting debt bondage. Opening their markets. Structural adjustments. Privatizations. Spending cuts. Mass layoffs and constrained wages and benefits. The whole toxic package in return for aid. The regional toll was devastating. An estimated 24 million lost jobs. Its growing middle class destroyed. A black hole of misery for around 20 million people. Forcing them to do anything to survive. Crushing the Asian miracle to let Western brands replace local ones. Bargain hunters get great deals at fire sale prices. The New York Times called it "the world's biggest going-out-of-business sale." The region now hammered again from the current crisis. No secret where it was manufactured. No telling how it will end up. No guessing many millions feel pain and are fearful.

No end to other notable examples. Two especially stand out. The 1990s ones affecting post-Soviet Russia and South Africa. In each case, neoliberal "shock therapy" was devastating. It empowered an oligarch class in Russia. Let them strip mine the nation's wealth and offshore it to tax havens. Impoverished tens of millions of people. Bankrupted 80% of farmers. Caused mass unemployment. Created a permanent underclass. An annual 700,000 a year population decline and much more.

South Africa fared no better. Despite Nelson Mandela's pledge to support black economic empowerment. As president he surrendered to capital. The consequences were horrific. Far worse than under apartheid. Double the unemployment rate and number of people in desperate poverty. Millions of poor blacks without homes. Another million evicted from farms. One-fourth of the population with no running water or electricity. Around 60% with inadequate sanitation. A 13 year life expectancy decline since 1990. Appalling human wreckage much like what happened in Russia and elsewhere. To empower capital at the expense of people. Heading for America and in one week took a quantum leap.

Spreading everywhere. On October 2, enough for The New York Times to say that Latin American leaders have gone from "schadenfreude to fear(ful)." Hugo Chavez skipped the UN General Assembly opening to visit China and said Beijing is more relevant than New York. Venezuela and Bolivia expelled their US ambassadors, and Brazil's Lula da Silva railed against an American regional naval presence and said his nation's warships must be on alert in response. He's also furious at Wall Street and Washington for the current crisis and said: "We did what we were supposed to do to get our house in order. They spent years telling us what to do and they themselves didn't do it."

Argentina's Christina Fernandez de Kirchner was also bitter in stating: "We are witnessing the First World, which at one point had been painted as a mecca we should strive to reach, popping like a bubble." And the Chicago Tribune quoted an Inter-American Dialogue expert saying that "whatever credibility the US had in the region, on economic management, that's clearly gone."

Forty world specialists from 20 countries attended the International Conference of Political Economy in Caracas, Venezuela from October 8 - 11. To analyze and propose South-based, alternative solutions to the financial crisis. Venezuela's Minister for Planning and Development, Haiman El Troudi, highlighted his country's relative strength. Its impressive economic growth (at 6% in first half 2008), and recommended that Venezuelans repatriate their US investments given the current climate. To protect them from unsafe American banks.

He and President Chavez also criticized the IMF and called for it to "dissolve....kill itself." They were harsh on the World Bank as well. Chavez added that "We are decoupling from the wagon of death." El Troudi said we are witnessing the end of neoliberal hegemony. Others agreed that a new model is needed. The old one clearly failed.

The Current Panic and Meltdown

Credit today is frozen. From a debt crisis, not a liquidity one. Markets are reeling as a result. Crashing in free fall from severe financial stress. From the largest ever leveraged asset and credit bubbles. Multiple ones. Imploding. Starting with housing. Causing widespread mortgage defaults and huge financial institution losses. Multi-trillions more asset dollars at risk. Compounded by banks reluctant to lend. Fearing they won't be repaid. Prices are falling. Trust is eroded. Losses mounting from destructive deleveraging. Mortgages, stocks, bonds, commodities, credit, private equity, hedge funds imploding more intensively than since the Great Depression.

Forcing troubled companies to the wall. Each one exposing others. Some too big to fail but they did. Getting investors to run for the exits. Selling good assets to cover bad ones. Freezing up money markets. Making short-term Treasuries the only safe bet. Getting world governments scrambling for solutions. Already in recession and getting worse. Fearing an intensified financial crisis. A systemic collapse.Turning a deepening recession into a global depression. A disaster only urgent, well-designed, and coordinated actions may prevent. But no assurance anything will work this late.

Here's what Nouriel Roubini and others recommend. Mirror opposite of EESA that will do more harm than good:

-- additional rapid rate cuts globally; at least to 1% in America; much lower in the EU, Asia and elsewhere;

-- guarantee all deposits until stability is restored at least;

-- partially nationalize troubled banks; recapitalize them with public funds; in some form that now seems the plan according to The New York Times in its October 11 article headlined: "White House Overhauling Rescue Plan;" capital to be injected into banks by buying non-voting shares; what's known is Henry Paulson's October 10 statement that "We can use the taxpayer's money more effectively....if we develop a standardized program to buy equity in financial institutions;" it remains to be seen what, in fact, happens; Paulson represents Wall Street; not the public, national or world interests;

-- he's not for reestablishing responsible regulation to curb market excesses; what economists like Roubini recommend;

-- freeze all home foreclosures; establish a 1930s type Home Owners' Loan Corporation (HOLC) to refinance homes and prevent foreclosures; let foreclosed homeowners retain their properties and pay affordable rent;

-- ease the debt burden of distressed households; cap credit card and other high consumer loan interest rates at much lower levels; put cash in peoples' hands; lots of it; at least several hundred billion dollars for starters; more if needed; as much as it takes;

-- provide solvent financial institutions with as much liquidity as they need; corporate sector companies as well, including small businesses;

-- save solvent companies; liquidate troubled ones too far gone;

-- fund massive stimulus to revive the economy; for public works, infrastructure, education, alternative energy, unemployment benefits, job training, tax rebates to the needy, and state and local governments strapped for cash; money for what's needed most and that can do the most good;

-- get stronger, more solvent countries to help weaker, more indebted ones; and

-- move on these policies fast; world governments have little time left to save themselves; there's no assurance they can; and these measure don't address our destructive military Keynsianism; permanent war economy and need to redirect those funds for constructive homeland needs; mirror opposite of a reported a new Pentagon document requesting an additional $450 billion over the next five years.

Reeling from One Policy Response to Another

First came EESA. The Emergency Economic Stabilization Act. To reward fraudsters and not address the root of the crisis. Nor help millions of troubled households. Homeowners in foreclosure. Others threatened. The public traumatized by the most calamitous economic events since the 1930s.

Europeans formed their own plans. Different from Washington's. On October 10, G-7 finance ministers met to discuss policy. In early evening, they presented an action plan. Long on promises. Short on specifics. The New York Times reported that: "Many investors had hoped the ministers would (propose) more concrete steps" and quoted Peterson Institute of International Economics deputy director, Adam Posen, saying: "This fell short." But he wasn't giving up entirely or saying what they have in mind or will later decide can't work.

They agreed to:

-- act decisively with all available tools to support financial institutions and prevent their failure;

-- unfreeze credit and money markets; assure banks and other financial institutions "have broad access to liquidity and funding;"

-- ensure banks and financial intermediaries "can raise (sufficient) capital from public (and) private sources;" to rebuild confidence and get them again lending to households and businesses;

-- ensure national deposit insurance protection is sound so people have confidence in the safety of their deposits; and

-- take appropriate action "to restart the secondary markets for mortgages and other securitized assets;" assure accurate valuations and transparency according to "high quality accounting standards."

Besides the US Treasury planning to "buy equity in financial institutions," AP reported on October 12 that the 15 euro-zone countries will "temporarily guarantee future bank debt to encourage lending....for an interim period and on appropriate terms" for up to five years. Recapitalizing banks is part of the plan. The hope is to unfreeze credit and get markets operating normally again.

According to The New York Times on October 12, "each country will announce concrete figures for the measures they expect to take individually." Belgian finance minister Didier Reynders said "There is no question of setting up a European fund." A final proposal will be presented to the full 27-member EU summit later in the week, and individual parliaments will have to vote on it.

Key to understand about whatever emerges in final details or any that follow - world governments will loot their treasuries to save powerful capital interests. Despite bold pronouncements we can expect more of ahead, practically nothing will be done for many tens of millions of people globally in greatest need. At best for them....crumbs.

In the coming days and weeks, we'll see statements become policies and how world markets react. Given the immensity of the crisis, no one's sure if anything can work. Nor is it reassuring to hear George Bush say remain calm. We've got things under control. On October 10, the Dow dropped 300 points while he spoke.

In an October 13 Barron's interview, noted money manager Jeremy Grantham (now age 70) was asked if he thought we'd learn anything from the current crisis. His response: "an enormous amount in a very short time, quite a bit in the medium-term, and absolutely nothing in the long-term."

He's been bearish since last year but added that "the fundamentals are turning out worse than" he expected. "The terrible thing - after all this pain - is that the US equity market is not even cheap." It was so high in 2000 that it hasn't come down to trend, but it's getting close. However, "the really bad news is that great bubbles in history always overcorrect." He believes S & P 500 fair value is around 1025 compared to its 899.22 October 10 close. But "typically bubbles overcorrect by quite a bit, possibly by 20%. This is very discouraging," so he's not rushing to buy but he fears he'll act too soon. He predicts a market low in 2010.

Where he sees things going from here was also posed. He's highly respected as an expert, and yet he emphasized "how little (he) understand(s about) all of the intricate workings of the global financial system. (He) hopes that someone else gets it, because (he) doesn't. And (he) has no idea, really, how this will work out....(It's) so intricate that all (he) can conclude, by instinct (and from history), is that it will be longer, harder and more complicated than we expect." Quite an assessment from a man called "the philosopher king of Wall Street."

The Human Cost of Manufactured Crisis

Ordinary people are hit hardest. Millions will suffer grievously for years as a result of this totally avoidable crisis. Fraudsters who caused it are rewarded. Innocent homeowners, households, and workers are punished. Mercilessly. The result:

-- trillions of dollars lost; likely trillions more ahead;

-- millions of lost homes, homeowners behind in their payments, or threatened with foreclosure in the worst housing crisis since the Great Depression; ultimately may exceed it given current estimates of up to 10 million foreclosures before stability and recovery;

-- likely well over a million 2008 personal bankruptcies and much higher numbers in 2009 compared to 800,000 in 2007 and 573,000 in 2006; figures below the 2000 - 2005 1.5 million average before passage of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act; according to Samuel Gerdano, American Bankruptcy Institute director, consumer over-indebtedness "made worse by the home mortgage crisis" is the problem; it won't likely recede in the near or intermediate-term;

-- rising unemployment; not the spurious 6.1%; including discouraged workers and people working part-time who want (but can't find) full-time jobs, economist John Williams puts the real figure above 12% and rising;

-- consumer over-indebtedness; maxed out on credit but needing more of it to survive; and charged usurious rates to get it;

-- declining wages and benefits in the face of soaring expenses; making it all the harder to cope;

-- food banks and homeless shelters facing increasing demands but forced to turn away people for lack of resources; and

-- things overall are worsening; to the edge of the abyss according to some; even the most optimistic fear what's coming; who can know; no one dares be complacent.

Whatever final policies emerge. In whatever form they take. Unless they address the human dimension, they'll do nothing for people in most need. Growing millions. Desperate and in trouble. Their issue is economic and ethical. The G-7 statement addressed neither. It dealt only with saving Wall Street. Industrial capitalism. A better idea is let them die and replace them with a new order. A workable one. Respecting people, not capital.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting edge discussions with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10515

Another Israeli West Bank Land Grab Scheme

Another Israeli West Bank Land Grab Scheme - by Stephen Lendman

Since 1967, Israel has systematically and relentlessly sought control of the entire "Holy Land" by seizing Gaza, the West Bank and all of Jerusalem. The entire area remains occupied and, according to Israeli professor and activist Jeff Halper, the aggressive "Nishul" agenda continues. It entraps and commits genocide against 1.5 million Gazans under siege in the world's largest open-air prison. It also displaces Israeli Arabs inside Israel and West Bank Palestinians for expanding Jewish settlements.

It depoliticizes the process to normalize it. Casts it as part of the "war on terrorism" and "class of civilizations." What Edward Said called the colonized and the colonizers. "The familiar (Europe, West, us, and of course Israel) and the strange (the Orient, East, them)." Halper refers to "adherents to 'evil' religions, ideologies or cultures." Needing to be dealt with. Not people with real grievances, needs and rights. Israel's solution: "warehousing a surplus (unwanted) population" in prisons, open-air ones, and by isolating and oppressing it relentlessly until all fight is beaten out of it. Others give up and leave.

Banishing Palestinians to around 15% of historic Palestine. Its least valuable parts. Denying them free movement. Keeping them out of Israel and Israeli-controlled West Bank areas. Preventing them from having real state autonomy or developing a viable economy. Relegating them to "surplus humanity" serfdom. Pioneering a "Matrix of Control" model to be used globally. Against billions of "surplus" people everywhere. Making every country look like Israel. Even the US where parts of this writer's Chicago already look like it. One area close enough to walk to, and controlled by what one observer calls the "police repression capital of America," referring to the city's "finest."

Halper worries why most countries, including Arab ones, grant Israel miles of latitude. Refuse to demand an end to its outrageous practices. It's to let it provide a "valued service." Develop a population control model to be exported everywhere. Assuring unwanted people have no political engagement, peace, chance for redress, or any rights. Making them "disappear" into black hole isolation.

Having one overwhelming obstacle in the way. Six decades of Palestinian resistance. Gaining millions of grassroots supporters worldwide. Hoping to prove determination and persistence will overcome repression, and sometimes it does.

Nonetheless, Israeli policies continue. All the while monitored by The Israeli Human Rights organization, B'Tselem. It just documented more evidence in its report titled "Access Denied: Israeli measures to deny Palestinians access to land around (West Bank) settlements." Its findings are discussed below. It details how authorities block Palestinians' access to areas adjacent to settlements through closure policies and de facto seizure. Land theft and displacement for greater settlement expansions.

Grave human rights violations, according to B'Tselem. Violations of international humanitarian law as well that apply during war and occupation. The prohibition of an occupying power from transferring people from their own territory to another. The Fourth Geneva Convention's Article 49 states:

"Individual or mass forcible transfers, as well as deportations of protected persons from occupied territory to the territory of the Occupying Power or to that of any other country, occupied or not, are prohibited, regardless of the motive."

In addition, the Hague Regulations prohibit occupying powers from permanently changing occupied areas, except for narrowly defined military purposes or to benefit the local population. Settlements by their nature are illegal. Expanding them compounds the crime. Israel does it through complex legal and bureaucratic measures. First by declaring "state land" based on an obscure 1858 Ottoman Lands Law. Also by creating "closed military zones" and "special security areas (SSAs)" for stated Israeli Defense Forces (IDF) needs.

Declaring areas "abandoned assets" as well. Seizing them for public needs, and helping Jewish citizens buy land on the open market. Stolen land they have no right to have. By displacing indigenous Palestinians for expanding Jewish-only settlements. Sanctioned and approved by Israel's High Court of Justice. Complicit in the land grab theft.

Mocking the rule of law. Establishing an official apartheid policy. Legalized separation and discrimination. Repugnant in all respects. Enforcing it through military occupation. Denying Palestinians all rights, including to their land. Having two sets of laws. One for Jews. The other for Arabs. Calling itself a democracy. Violating that standard by any measure.

Operating 23 local Jewish authorities in the West Bank: three munipalities; 14 local councils and six regional ones for 121 Jewish-only settlements and 106 outposts on stolen Palestinian land. For around 500,000 Jews in total, including in 12 East Jerusalem settlements. Providing incentives for Israeli Jews to move to the West Bank. Low-cost housing. Financial grants, and other inducements. Special ones for teachers, other needed professions and companies.

Defining most West Bank settlements as "national priority areas." Either A or B class. Having a planning system that favors Jews and severely restricts Palestinians. Refusing them construction permits on lands earmarked for Jews only. On their own land as well. Employing a home demolition policy. Roads for Jews only, oppressive harassment, and much more. To make life so intolerable, most Palestinians will leave.

Learning nothing from six decades that its scheme won't work. As Edward Said explained before his death. "There is no way for Israel to get rid of Palestinians." They "shar(e) the land that has thrust (them) together (and must do it) in a truly democratic way, with equal rights for each citizen," Jew and Arab.

Israel nonetheless, pursues a ruthless repressive policy. Advantaging its settlers and encouraging or forcing Palestinians to leave. Systematically seizing more land so they will. Leaving them only the least desirable areas. Isolated, occupied and surrounded by hostile Israelis. Denying them the right to their own land, housing, their livelihood, human rights and almost daily for some their lives. Getting away with it because no outside authority stops them or even complains. Seeing things worsen. Making it look legal through radical interpretations of law.

Israel wants the entire region to resemble Occupied Palestine. Israeli journalist and Foreign Ministry-connected Oded Yinon's 1980s vision to make the Jewish state an imperial power. Essential he believed to survive. Doing it by dividing the Middle East into small states. Dissolving existing ones. Making the Arab world one of Arab fragments. Occupied Palestine as well. Making it and regional mini-states Israeli satellites. Seizing more land for greater dominance. Displacing indigenous Arabs to achieve it. Calling Jordan a Palestinian state and forcing Palestinians to resettle there. Ariel Sharon favored the idea. Very likely other Israeli extremists today so anything is possible going forward.

Which brings things to the present and B'Tselem's latest report.

Denying Palestinians Access to Their Own Land

B'Tselem documents how Israel does it. Blocking Palestinians' access to areas adjacent to settlements in two ways:

-- with security forces and settler violence and harassment; expelling Palestinians close to settlements and preventing others from approaching; and

-- building a secondary security fence around settlements far removed from settler homes; in addition to a close-in barrier already in place as another land grab method; much like the Separation Barrier that the World Court ruled illegal and must come down; Israel disdains international law and refuses.

Further, West Bank Palestinians are prohibited or restricted from entering settlements. Military "special security areas (SSAs)." Roads for Jews only. Military areas of any kind. Annexed land in and around East Jerusalem, and other large areas like the Jordan Valley. B'Tselem reports on one part among many other prohibitions, restrictions, and other harassing measures to seize Palestinian land, including valuable farmland that many families rely on for their livelihood. The practice has been ongoing for decades. Tens of thousands of dunams of land (four dunams to the acre) are affected. New areas continuously added. Once belonging to Palestinians. Now seized under an illegal occupation.

Done in the name of security by lawlessly manipulating a threat to justify a land grab policy. Creating an "absurd situation," according to B'Tselem. Forcing Palestinians to deal with a bureaucratic authority to reach their own property. Enduring great hardships and often being refused. Allowing settlers, in contrast, easy access to Palestinian-owned land to do as they wish. Their presence violates the logic of a "warning area," besides encroaching on property not their own.

Palestinians are obstructed in various ways:

-- closing a ring of land around settlements by military orders;

-- allowing settlers to harass and expel them from land outside the ring;

-- some of it farmland Palestinians have a permit to be on; but, why should they need one at all; it's their land;

-- denying them anyway by classifying their property as SSAs;

-- requiring Palestinians to obtain bureaucratic permission to enter non-SSA areas; and

-- erecting physical barriers around some of them to keep them out.

In all, a convoluted bureaucratic nightmare to deny Palestinians access to their land and seize it for settlement expansions. For years, B'Tselem documented how Israel's "actions relating to land in the Occupied Territories have been carried out in bad faith."
As in America, justifying policy on national security grounds. To protect settlers from those "bad" Palestinians with their small arms and rocks against the world's fourth most powerful (nuclear-armed) military and never reluctant to unleash it.

All Occupied Palestine belongs to its people. Israel has no right to expropriate or occupy it. Its West Bank "settlement enterprise breaches international humanitarian law and is the basis for most human rights violations there. Israel is obligated to evacuate the settlers and resettle them in Israel." Instead displacement and land seizures continue, and B'Tselem's report documents it through dozens of testimonies, interviews, and investigations. Information from state authorities. Background discussions with defense officials, and from a computerized analysis of the closed land borders - as land appears on maps attached to military orders and from aerial photos.

B'Tselem provides a history of Israel's land closure policy. Its harmful aspects and components. The use of physical obstructions to block access. Settlers along with security forces for enforcement. Making land closure around settlements official state policy. Giving Jews unrestricted access and free movement, and creating a bureaucratic and security nightmare for Palestinians. Breaking international law and getting away with it.

Israel now controls over 40% of the West Bank for settlements, its Separation Wall, nature reserves, where its military is based or trains, and the percentage is growing. Its settlements are connected to Israel and each other by a network of for-Jews only roads. Ones for Palestinians are obstructed by hundreds of physical barriers and checkpoints. Palestinian communities are isolated, surrounded and shrinking.

B'Tselem calls "the cumulative effect of the prohibitions and restrictions....grave." Restrictions on free movement. State-sanctioned land seizures. A policy of isolation and separation. The daily threat of settler or security force violence. The impossibility of expanding Palestinian communities. Building homes on their own land. Having industrial development and a normal agriculture. Living in peace and co-existing with their Jewish neighbors. Being free in their own unoccupied land. Getting world support for their rights. Instead losing more of them and their land that's already inadequate for their growing population.

Compelling On-the-Ground Testimonies

In July 2008, Israel expelled Fahmeyeh Fakheideh from her farmland for settlement construction. After her husband died, she had 12 dunams (around three acres) of land and some olive trees. About six years ago, Israelis built a new settlement nearby. A new bypass road as well. Six dunams of her land were enclosed by a new fence and the rest remained outside. The land is her primary income source, and she "didn't know what to do (because she) was afraid of the settlers (and) didn't try to go to (her) land inside the settlement."

Nonetheless, she was harassed on the outside land. Chased away. Had her ladders burned and olives destroyed. Another time confronted with rifles and forced to flee. "Every time we see a settler, we hide." Also "security people....every time they approach us (and treat us) as if we are robbers on our land. We live in fear....Our greater fear is that the settlers will harm the children."

In the past three years, she's had to take great care entering her land. To plow in planting season. Harvest in the fall. Arrive in early morning. Unable to enter until after police and the army show up and settlers open the gate to their settlement. At times, it's not until 9:00 or 10:00AM. Then soldiers escort them from in front and behind and stay with them until 4:00PM when they're removed. They're frightening and force them to work and take meal and bathroom breaks hurriedly. They live constantly under the threat of settler and even military attack.

As a result, they're denied free access to their land. Restricted from half of it. Production has fallen to less than half of its pre-settlement volume. And in poor harvest years even less.

The family "used to love the harvest season. (They) would stay until evening and not want to go home. (They) would drink tea and coffee and eat and listen to music in (their) orchard and be happy....even cook there and prepare maklubeh, which really tasted good because (they) cooked it on the open fire. Now (they) don't dare talk while (they're) in the orchard, because (they) are afraid the settlers will hear (them)." Even the children must be quiet.

When Fahmeyeh goes on the roof of her house and looks at her land and olive trees, she feels "as if (she) were going to die from the sadness. The olive trees are dear to (her), but there is nothing (she) can do to improve the situation." She struggles to cover her household expenses. Can only gets by because her children are grown, have jobs, and help her. It never used to be this way before the settlement.

Saleh Daraghmeh's story is also very disturbing. He's a shepherd in the Jordan Valley. When grazing his flock in the Ein al-Beida area, Shademot Mehola settlers chased him away. Assaulted his 11-year old son. Put a knife to his throat and terrified him.

On September 24, 2007, he was grazing his flock with his sister's sons and their cows. He saw a car heading toward the nearby settlement. It stopped and two men approached. They ran toward the cows and stoned them. His nephew went over and asked why. The settlers chased him and fired shots at his legs. Saleh came over to calm the situation. Spoke to the intruders in Hebrew and asked why they opened fire. Instead of answering, a settler shot his nephew. Hurt him badly. Saleh tried to give him first aid. Had his other nephew run for help. Get an ambulance. In a Hummer jeep and then an ambulance managed to get him to Rambam Hospital in Haifa. No simple task but he did it.

Police and soldiers came to the scene to investigate. Saleh was summoned to the Efraim police station to give testimony. He saw who shot his nephew. Didn't remember well enough what he looked like but knew the other settler's name who was with him. He was only about 14 or 15 years old. Most likely the shooter was also about the same age. Like in most other instances, nothing was expected to result from a very inadequate investigate. Little more than whitewash nearly always. Even when an innocent Palestinian is shot.

B'Tselem collected similar stories to the two above. Palestinians accosted and assaulted in their fields. Their groves. Near or in their homes because they're close to settlements. Communities as well that are far removed. They're intimidated. Attacked. Shot at. Their property is destroyed, and authorities do little to stop it. B'Tselem states firmly that they can do plenty and should:

-- order the army, police and Civil Administration to rigidly enforce the law; ensure settlers obey it; prosecute those who don't; provide equal justice to Jews and Arabs equally;

-- have security forces dismantle fences and other physical barriers that have no business being there;

-- fulfill their obligations as an occupying power by providing security for the occupied people to keep them safe from settler violence;

-- have IDF commanders order their subordinates to assure Palestinians rights are observed and enforced;

-- prosecute soldiers who violate the orders;

-- "cancel the engineering components of the SSA plan and remove secondary fences;" and

-- ensure Palestinians have free access to their land; no need for advance coordination, and no concerns about facing settler or security force violence.

B'Tselem goes further as well and calls on "the government of Israel (to) evacuate all the settlements and return the settlers to Israeli territory" in accordance with international humanitarian law. Instead, Israel continues its expansion projects. Oppresses and displaces indigenous Palestinians. Seizes all parts of Occupied Palestine it wants for itself, and mocks the rule of law by disobeying it. B'Tselem and all people of conscience are outraged. An Israeli government spokesperson wasn't available for comment.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting-edge discussions on world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10442

Justice for Yemeni Sheik

Justice for Yemini Sheik - by Stephen Lendman

This time is different for Yemini Sheik Mohammed Ali Hassan Al-Moayad and his assistant Mohammed Mohsen Yahya Zayed. On October 2, the 2nd US Circuit Court of Appeals unanimously reversed their unjustifiable convictions. More on that below.

On March 10, 2005, both men were convicted on multiple charges of conspiring to and providing "material support" for Al Queda and Hamas and became victims of the Bush administration's "war on terrorism" and Jihad against Islam. On August 2 and September 1, they received 75 and 45 year sentences respectively.

The charges were outrageous on their face and followed similar type persecutions of other Muslim figures like Sami Al-Arian, Rafil Dhafir, Yassin Aref, Seyed Mousavi, and many more. Innocent men unjustly convicted in kangaroo court proceedings. Often because of their prominence, leadership positions, and affiliations with Islamic organizations. Charity initiatives to others less fortunate. Efforts to promote unity among all faiths. Teach others about Islam, and work for social progress, peace and against war. As a result, be charged with "terrorism," tried, and become victims of police state justice in a climate of fear.

Both Yemeni clerics were targeted for their faith, ethnicity, activism, prominence and notable charitable efforts. Germany unjustifiably extradited them to the US to be prosecuted for their entirely legal activities. With testimony from a notoriously unreliable informant. Paid $100,000 by the FBI for his services. Then pressuring the agency for more.

At trial, the prosecution repeatedly attempted to prejudice the jury. Scare them with allegations about a Koranic verse being a "terrorist" one. A Palestinian-born attorney posing an "increased risk" because her "foreign born" status. Using this accusation to keep her off the case at first. Doing everything possible to convict two innocent men and claim a victory in "the war on terrorism."

Arrest and Charges

On January 10, 2003, both clerics were arrested In Germany with the help of FBI informant Mohamed Al- Anssi. A man with a dubious history of theft, burglary and defrauding Islamic organizations and charities. Stealing their property. Running up phone bills. Using public, private individual, and mosque services for his own benefit. Then in November 2004, pressuring the FBI for more money by setting himself ablaze in front of the White House.

Al-Anssi was an out-of-status immigrant fearing deportation. To avoid it, he contacted an FBI Terrorism Task Force agent. One eager to produce results by reeling in suspects. Islamic ones in a climate of fear. That juries would convict. Al-Anssi offered to help. With no substantiating evidence, he claimed that Sheik Al-Moayad supported Al Queda, mujahideen Islamic fighters, and even North Korea.

A month later, the FBI sent him to Yemen to target Al-Moayad even though his own government knew and approved of his activities. Their legitimacy having nothing to do with "terrorism." Over the next year, Al-Anssi and Yemeni-based FBI agents produced scant "evidence," none of which was incriminating:

-- three Palestinian charity donation receipts; ones not to designated Foreign Terrorist Organizations (FTOs); and

-- a 30-minute video of a five-day Yemeni group wedding at which a Hamas representative to Yemen spoke.

Based on this alone, Al-Moayad and Zayad were to be charged with conspiring to and providing material support for Al Queda and Hamas. An entrapment scheme then followed in Germany. An Agent "Sharif" became involved, posing as a former Black Panther supportive of "Jihadist causes." The "civil rights movement" among them, according to an FBI agent BM.

A sting was arranged as follows. Agent "Sharif" instructed Al-Anssi to tell Al-Moayad and Zayad that he wished to donate $2 million for their work, and conversations were secretly videotaped. When the clerics learned it was for another purpose, they disapproved. "Sharif" then said: "I know what you're here for and I will give you what you want if you give me what I want." Both clerics still objected and wished only for funding help to build their charitable center. "Sharif" claimed conversations with him were about funneling it to Hamas. Based only on his word. Masked officers arrested both clerics three days after they arrived in Germany.

They were held for six months. Indicted on March 4, 2003. Extradited to the US in November. At a Senate hearing, Attorney General John Ashcroft called them "big fish." Claimed that they funneled millions of dollars to Al Queda and Hamas, and that Al-Moayad boasted of personally delivering $29 million to bin Laden.

The charges were concocted and false. Evidence showed both clerics supported Palestinians in the Occupied Territories. Others in refugee camps in other Arab countries. Also that they knew Hamas members throughout the Arab world, in Africa, and in some European states. Entirely legitimate activities in Yemen and Germany unrelated to "terrorism." Not according to the FBI and John Ashcroft even though both men never raised funds in America or broke US laws.

Sheikh al-Moayad's Background

Early in life, he came to love the oppressed and indigent. He was born in May 1948 to a peasant family in Safya. A Sanaa, Yemen suburb. His father was a village teacher who earned only what local parents paid him in food and personal effects. He developed a desire to do community service like his father, and in the 1970s built a dam in Sanaa to distribute water more effectively.

In the early 1980s, he moved to Asbahi, Yemen. A town with no mosque, so he opened his home for worship. He convinced the government to provide land for a mosque and built one. Then expanded it to include religious services for women and a small basement elementary school.

By the early 1990s, Al-Moayad was well-respected for his honesty, charity and grassroots activism. His Al Ihsan Charitable Organization provided aid and got government support. He opened a bakery that fed hundreds of families daily. A market that charged wholesale prices and had fresh water for those without it.

He expanded his school to accommodate students from kindergarten through high school. One for girls as well and personally encouraged reluctant families to enroll their daughters. More efforts to teach trade skills.

In all, a near-endless number of charitable initiatives addressing all aspects of daily life for around 9000 needy families. Individual, communal and religious. An orphan fund project, blanket distribution, and full meal provisions during Ramadan. Group wedding coordination for poor groomsmen. Holistic healing. Computer training and a free medical clinic.

Al-Moayad is also a father of seven. However, he became known as the "Father of Orphans" throughout Sanaa and was appointed honorary supervisor of the Al Aqsa Foundation.

All along, he supported the Palestinian struggle for liberation. Their right of return, justice, and self-determination. He raised money and other essentials for Palestinians in refugee camps. Others in greatest need in Occupied Palestine. Efforts that Washington calls supporting "terrorism."

Al-Moayad is so well respected that Yemenis were outraged. Especially in Sanaa. Thousands protested publicly for over two years demanding his release. His assistant, Mohamad Zayad as well. Yemeni president, Ali Abdallah Saleh, said neither man had links to Al Queda, and they have every right to support Hamas and the Palestinian people. In vain, he urged Washington to release them.

The Indictment - United States of America v. Mohammed Ali Hassan Al-Moayad and Mohammed Mohsen Yahya Zayed

Count One: defendants "knowingly and intentionally conspired to provide material support and resources to a foreign terrorist organization, to wit, al Qaeda."

Count Two: defendant Al-Moayad "knowingly and intentionally provided material support and resources to a foreign terrorist organization, to wit, al Qaeda."

Count Three: defendants conspired to provide material support to Hamas.

Count Four: defendant Al-Moayad provided material support to Hamas.

Trial and Convictions

For five weeks in early 2005, the proceedings took place in a Brooklyn courtroom. Unfairly described by New York Times writer William Glaberson (on February 6 in his opening paragraph) as the same one where "thousands of past cases (of) mobsters, drug dealers and con artists" were tried. Now the "sheik, in his silk hat and flowing robes....heard in hours of secretly recorded videotapes talking in a convoluted style....his meanings elusive....his style indirect. (Recounting) tales from the Koran or sayings of the Prophet Muhammad....In a conversation about a man who seemed to be offering a big donation to Muslim causes, the sheik started a discourse on a battle from the time of the prophet."

Both men "remain enigmas....mysterious figures, charged with funneling money to Al Queda and Hamas. Much of it raised in Brooklyn." In fact, none of it was or was it used for "terrorism." Nor did Al-Moayad issue a "public call for revenge against Americans for his arrest" as Glaberson wrote earlier (again in his opening paragraph) on September 22, 2004.

The trial was a travesty of justice in which Al-Anssi's unsubstantiated testimony, written notes and videotapes were the key "evidence". Plus US Attorney Mauskopf demonizing Palestinian resistance and saying that supporting their right of return is "extremism." Terrorism.

Unrelated testimony from a Scottish law student, Gideon Black, was also introduced. About a Tel Aviv suicide bombing that killed his cousin. Over defense objections, the judge allowed it and biased the jury. A bin Laden "terror camp" video as well. DOJ's customary strategy to portray Muslims as terrorists to instill enough fear to convict. Give jurors no other choice.

In the end, Al-Moayad and Zayad were acquitted of supporting Al Queda. Al-Moayad was convicted of conspiring to and providing support for Palestinian resistance fighters, Hamas, and bin Laden. Zayed was convicted of the Hamas conspiracy and support charges as well as conspiring to support Al Queda. Some of the many "material support" charges that DOJ cites in its worldwide war on Islam. Portraying Muslims as dangerous. Terrorists. Others who supports Arab rights. Palestinian self-determination. Equal justice the way US and international laws demand. What targeted Muslims almost never get in US courtrooms.

Nor did they on March 10, 2005 when both men were convicted. Or again on August 2 when Al-Moayad was sentenced to the maximum 75 years and fined $1.2 million. A beloved Yemeni cleric US Attorney Roslynn Mauskopf called a "master terrorist financier." On September 1, Zayad received a 45 year sentence and was fined $750,000. Both men were sent to the US federal Florence, Colorado Supermax prison.

Conditions In and Effects of Supermax Confinement

These prisons are intended for "the worst of the worst." Society's most dangerous, violent and incorrigible on the notion that behavior modification will result from solitary confinement, sensory deprivation and punitive treatment.

These facilities are known for their harshness. They crush the human spirit, mind and body through isolation and cruelty. Physical abuse is common and inflicted as punishment. Deprivation extreme. Inmates have little contact with staff. None with other inmates. They're confined alone in small windowless cells for 23 hours a day. Have no work, social contact, education, recreation, rehabilitation or personal privacy. Nearly everything is delivered there - food, medical supplies, other materials. Outside their cells, they're escorted everywhere by 4-man teams, painfully handcuffed and shackled. Over time, the effects are devastating:

-- severe anxiety;

-- panic attacks;

-- lethargy;

-- insomnia;

-- nightmares;

-- dizziness;

-- irrational anger; at times uncontrollable;

-- confusion;

-- social withdrawal;

-- loss of memory;

-- loss of appetite;

-- delusions and hallucinations;

-- self-mutilations;

-- profound despair and hopelessness;

-- suicidal thoughts;

-- paranoia; and

-- for many a totally dysfunctional state and inability ever to live normally outside of confinement.

Prisoner anecdotes describe the experience:

-- "People come in here with a few problems and will leave sociopaths."

-- You're like a "caged animal. I've seen people just crack and either scream for hours on end or cry."

-- Isolation "creates monsters (who) want revenge on society."

-- We "have a sense of hopelessless. Plus my anger (is) a silent rage....I am beginning to really hate people."

-- "They....try to break a person down mentally (and) mental abuse leaves no evidence behind (like) physical abuse."

-- others describe isolation as like being buried alive; living in a tomb; and in a March 2006 US Gulag Prison System article this writer tried to give readers a sense of what it's like by saying: "Try locking yourself in your bathroom with a little food and water for 24 hours and see how you (react). Then (do it for) 20....years" or the rest of your life.

Overall for many, prolonged isolation results in irreversible psychological trauma and harm. A condition no society should inflict on any human being. Nor should any law allow it.

Justice for Both Clerics

On November 26, 2007, attorneys for both men appealed their convictions. On October 2, AP reported that the 2nd US Circuit Court of Appeals "overturned the convictions of a Yemeni cleric and his deputy, finding they were prejudiced by inflammatory testimony about unrelated terrorism links." The decision means both men can have new trials under a new judge if DOJ orders them.

In its 68-page opinion, the three-judge panel was unanimous and referred to an FBI "sting operation." Video tapes of "FBI-orchestrated meetings between the defendants and government informants." The FBI paying Al-Anssi $100,000 for his role. Over defense's objections, allowing unrelated testimony to be introduced that was "enormously prejudicial (and) is a central issue in this appeal."

Noting that Al-Anssi's "evidence" can't be substantiated. That he couldn't "specify when Al-Moayad allegedly provided money to either Al-Queda or Hamas." Nor did Al-Moayad ever say he sent any. That "any support Al-Moayad may have provided to Al-Queda lasted only through the Afghan conflict in the 1980s" when the Reagan administration called the Mujahideen "freedom fighters" and provided billions in aid against the Soviet occupation.

The Appeals Court mentioned other reasons for their reversal as well. Relating to a second FBI informant named Saeed. When he "asked what he could do for Al-Moayad, Al Moayad described five goals: (1) teaching people their religion; (2) uniting Muslims; (3) raising young men in a manner of which God approves; (4) helping young people in need; and (5) doing everything for God's sake. Al-Moayad also discussed more specific projects, including the charitable bakery, educating Muslim women, and aiding the families of people who have been jailed or martyred."

Saeed expressed willingness to support these efforts, "but that he primarily wanted to fund mujahidin. Al-Moayad replied, '(l)et me tell you that I want to be honest with you....We can't say yes, yes to what you're asking then lie to you...." Discussions about money involved using it for charitable efforts. "Al-Moayad also explained....that although he had delivered money to Bin Laden during the (1980s) 'Afghani Jihad,' he distanced himself from al-Queda once that conflict was over."

The justices agreed that district court errors "when considered collectively denied (the defendants) due process of law and fundamental fairness." Enough "to warrant reversal of (their) convictions" and for the 2nd US Circuit Court of Appeals to "VACATE the judgments of conviction and REMAND to the district court for further proceedings consistent with this opinion before a different district court judge." A harsh and rare rebuke of trial judge Sterling Johnson Jr. showing no confidence in him, according to legal ethics professor Stephen Gillers.

Al-Moayad's lawyer, Robert Boyle, said he was "extremely gratified" by the decision, "particularly its emphasis on the cumulative effect of the trial errors. I hope this means that Sheik Moayad, who's elderly and not in good health, will be able to go back to his country in the very near future." Zayed's attorney, Steven Feldman, said "Even in the war on terror, justice knows no country. Justice was served." Robert Nardoza, the US Attorney's spokesperson, said "We are reviewing the decision and will consider the options available to the government before deciding our next course of action."

This decision is extremely important and follows US District Court Judge Brinkema's granting Sami Al-Arian bail on July 10. Then his release on September 2. After five and a half years of unjustifiable and extremely harsh confinement. Both cases offer hope, if just a glimmer. For these men. All Muslim defendants. Those imprisoned on false charges and unfair convictions, and others yet to be targeted. In a climate of fear and the wrong time to be Muslim in America.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM o 1PM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs archived for easy listening.

ttp://www.globalresearch.ca/index.php?context=va&aid=10442

The Fleecing of America

The Fleecing of America - by Stephen Lendman

Over 200 years ago, Thomas Paine wrote a treatise on government in which he said "a republic is supposed to be directed by certain fundamental principles of right and justice, from which there cannot, because there ought not to, be any deviation. (It) is executed by a select number of persons, who act as representatives, and in behalf of the whole, and who are supposed to (govern) as the people would do were they all assembled together....

When a people agree to form themselves into a republic (they) mutually resolve and pledge themselves to each other, rich and poor alike, to support this rule of equal justice among them....A republic, properly understood, is a sovereignty of justice, in contradistinction to a sovereignty of will."

Since its founding, America was never governed by Paine's principles. Never less so or more disgracefully than under George Bush.

This article follows from an earlier one titled Grand Theft America. On the crime of the century. The greatest one ever. Unbridled excess gone awry. An economic system built on a foundation of greed and fraud. Threatening the country with insolvency and ruin. World economies with it. Plundering the national treasury to save it. Bailing out criminal bankers. Rewarding fraudsters with public funds. Making the world safe again for capital (or trying to) and heading it for an even greater calamity ahead. Maybe next time (or this one) one no financial engineering can fix.

An Update on the "Bailout": The Emergency Economic Stabilization Act (EESA)

EESA defrauds the public. Fleeces the treasury to reward criminal bankers. Arranged secretly behind closed doors. The $700 billion is just for starters. Another $150 billion was just added to it (discussed below). Trillions will be pilfered for this scheme. Millions of innocent people will suffer grievously. Crumbs at best are in it for them.

This goes way beyond a subprime crisis as author Ellen Brown explains. The real problem is a "black hole of ($180 trillion in bank-held) derivatives." If enough of them implode, so will world economies. The "bailout" and various other schemes hope to prevent it, but there's no guarantee anything will work. That's the real dilemma.

Public pronouncements about EESA were deceitful on their face. George Bush calling it a plan for Main Street, not Wall Street. Nancy Pelosi saying that "All of this was done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street," and added: "The party is over. No longer will taxpayers be forced to bail out reckless investors." That's precisely what they're being forced to do.

Both presidential candidates endorse the plan and voted for it. Most party leaders as well. A bipartisan conspiracy to compound the fraud. Reward criminals with public money. Empower the Treasury secretary as a financial czar. With unlimited authority to dispense public money. Direct it as he wishes. Stipulate the terms. Conceal the plan's true purpose from the public. To save Wall Street and big banks. The entire financial system. Industrial capitalism in trouble. And make ordinary people pay for it.

The Senate passed EESA on October 1 - by a 74 - 25 vote. The same body that (on September 26) rejected a $56 billion stimulus plan that would have extended unemployment benefits, increased food aid, and funded new construction projects to create jobs at a time the economy is in a deepening recession.

After first rejecting EESA, the House reversed itself (263 - 171) on October 3. Global markets reacted convulsively. Plunging on September 29. Soaring the next day. Plunging again. Continuing the same volatile pattern begun last fall. From the crisis-level weakness of major banks worldwide and the effect on global economies. The possibility that nothing proposed will work. The likelihood that only mass worldwide infusions of public funds and recapitalizations have a chance.

Ignoring the core reason for the crisis. The extraordinary amount of criminal fraud. Rewarding and not prosecuting the fraudsters. Compounding the enormity of their crime. Looting the national treasury for it. Rejecting emergency measures with proven past success. Recapitalizing banks through government interest-bearing loans with guaranteed repayment provisions out of future profits. Temporarily nationalizing troubled banks. Letting governments take over weak ones until things stabilize. Restarting credit flows now frozen. Then designing a whole new system to replace the current failed one.

The present crisis shows industrial capitalism's failure. Financialization-based. Speculative finance. Frankenstein finance. Unfettered. Unregulated. Greed-based. Rewarding fraud and harming people. The government - business partnership behind it. The inevitability that nothing this pernicious is sustainable. The naked truth about an ugly system.

EESA's hidden details make the prima facie case. Besides add-ons, it's little different from its initial version. It:

-- directs the original $700 billion to Wall Street and big banks;

-- lets the Treasury buy unlimited amounts of junk assets (some worthless or close to it) but hold no more than $700 billion at one time; pay whatever prices it chooses; hold-to-maturity prices if it wishes for toxic waste;

-- includes whole mortgages in the program, not just securitized asset pools;

-- compounds fraud by rewarding it;

-- beyond tokenism and disingenuous rhetoric, provides no relief for beleaguered homeowners;

-- excludes a measure to allow bankruptcy judges to amend mortgage terms to help homeowners avoid foreclosure;

-- another one that would have allotted 20% of any government bank assets resale profit to a housing fund; set aside for the public;

-- also a bank-imposed fee to compensate the government for buying junk assets at inflated prices;

-- leaves executive compensation, golden parachutes, and lavish benefits unrestricted by inserting toothless provisions against them;

-- establishes a fake independent oversight panel consisting of the Treasury secretary, Fed chairman, SEC chairman, Federal Home Finance Agency director, and Housing and Urban Development (HUD) secretary;

-- an equally fraudulent Congressional Oversight Board composed of House and Senate leadership-chosen bankers and big investors - called "financial experts;" fraudsters to manage the "bailout;" business and government foxes in charge of the looting the national treasury;

-- includes a provision authorizing the SEC to suspend GAAP (Generally Accepted Accounting Principles) standards requiring mark-to-market valuations to let banks (on their balance sheets) carry toxic assets at purchased prices, not fair market value, and be able to conceal their losses; and

-- another providing tax breaks for companies holding Fannie Mae and Freddie Mac preferred shares.

The White House, Paulson and House and Senate leadership scrambled after EESA's defeat. Cobbled together a revised plan. Kept the original's core provisions unchanged, and added new ones:

-- temporarily (maybe permanently) increases FDIC insurance per account to $250,000;

-- lets FDIC borrow unlimited amounts from the Fed to protect against bank runs; thus exempts banks from paying premiums for additional deposit insurance;

-- another provision to exempt the bill from constitutional challenge;

-- includes about $150 billion in tax cuts and so-called "extenders"; provisions to renew or extend expiring tax breaks;

-- $78 billion for business as well as extending current business tax breaks for renewable energy efforts;

-- $8 billion for hurricane and other natural disaster relief; and

-- another $65 billion extension for Alternative Minimum Tax relief; mostly to high-income earners.

The plan ballooned from its original 3-page version to the House's 106 pages. Then to the final 451 pages (not likely written in 48 hours) with various additional earmarks for:

-- film and television productions;

-- wooden arrows for children;

-- Exxon Valdez oil spill litigants;

-- Virgin Island and Puerto Rican rum;

-- railroads;

-- auto racing tracks;

-- wool research and more.

In addition, Section 128's Acceleration of Effective Date refers to Section 203 of the Financial Services Regulatory Relief Act of 2006. EESA moved up its original effective date from October 1, 2011 to October 1, 2008, and thereby changed the United States Code Title 12 - Banks and Banking, Chapter 3 - Federal Reserve System, Subchapter XIV - Bank Reserves. The measure is solely to help banks. Foreign ones included. The changes:

-- no longer require banks to maintain cash reserves to cover deposits;

-- abolished the Fed's Earnings Participation Account for the supplemental reserve fees it charges banks; meaning the Fed can retain them; and

-- lets the Fed create its own rules for distributing earnings as well as payments to foreign banks.

EESA greatly expands Treasury and Federal Reserve powers. Rewards fraudsters and does nothing for beleaguered homeowners. Both presidential candidates voted for the bill. Obama hypocritically saying that the plan is "our best and only way to prevent an economic catastrophe (and be able to help families) on Main Street." McCain pretty much agreed in a bipartisan show of homage to their big Wall Street backers.

Ignored is their criminal fraud. The harmful fallout to many millions, and the fact that $700 billion (now $850 billion) is a down payment with trillions more to come. A systematic looting of public funds. Nearly all of it to fraudsters.

Ahead of EESA's initial defeat, the American Bankers Association (ABA) was pleased with the plan. Its chief executive, Ed Yingling, called the financial crisis "like a big Category 4 hurricane." Unleashed an army of lobbyists on Congress. To assure final legislation contained wanted measures and excluded ones bankers opposed.

In the end, the ABA prevailed. It got nearly everything it asked for. So did Wall Street, but they're far from out of the woods. Nonetheless, big banks are taking advantage by devouring smaller and some big ones. Weaker ones on the cheap. Merrill Lynch to Bank of America. Bear Stearns and Washington Mutual to JP Morgan Chase, and Wachovia's retail banking operations (including $400 billion in deposits) to Citigroup for $1 a share. Then Wells Fargo trumped Citi for most of Wachovia for $7 a share. A deal now held up after New York Supreme Court Justice Charles Ramos blocked it temporarily.

The above acquisitions were giveaways under planned creative destruction. Enabling greater consolidation in the hands of fewer giant players. The result is less competition and a fundamentally unfair system less fair.

The announced deals are for starters. Many more will follow as a powerful industry concentrates into few, larger hands. But providing no help for distressed households. Nor relief for over-indebted homeowners facing foreclosure. Rejecting better, fairer ways to recapitalize banks in crisis. Measures proved effective in the past yet unconsidered.

Also unaddressed are severe money market stresses and unwillingness of banks to lend to each other. Resume a free flow of credit. It shows in unprecedented spreads on unsecured inter-bank lending. Only confidence can change that. Something no government can legislate. It can make good policy as a way to start building it.

On September 30, the Financial Times columnist Martin Wolf headlined his commentary: "Congress decides it is worth risking depression" and said "We are watching the disintegration of the financial system." Such a "dire outcome is no longer impossible." The free flow of credit is frozen and unless thawed "no modern economy can survive. Yet that is now threatened."

We're experiencing a "downward spiral of panic." What economist Hyman Minsky called "revulsion." A "Minisky Moment." The final stage of bubble deflation when cheap credit ends or is frozen like now. Investors dump assets. Any bad news roils markets, and it's infectious. Quickly turning euphoria into "revulsion" and creating downward momentum much greater and faster than the upside.

Wolf has mixed feeling about EESA. Calls it flawed and directed by the wrong man. A "titan of high finance charged with bailing out Wall Street," but worrying mostly about Congress doing nothing and causing "ruin." He wants something passed and much more. Ensuring "liquidity needs are fully met during this period." Europeans addressing the same issue. Worrying about a greater crisis ahead, yet ending with a hopeful thought. Winston Churchill's words that "The United States invariably does the right thing, after having exhausted every other alternative." The greater issue now is a deepening crisis so great that no constructive intervention can work.

Events are fast-moving and changing almost daily. So far in an intensifying contracting cycle. A perfect storm of:

-- recession;

-- rising unemployment;

-- public trauma;

-- failing banks;

-- frozen credit;

-- multi-trillions in toxic debt;

-- the worst housing slump since the Great Depression; spilling over into commercial real estate as well;

-- millions of homeowners threatened with foreclosure;

-- trillions of eroded household wealth;

-- hugely over-indebted consumers; and

-- contagion spreading everywhere and the danger that it may be uncontainable.

Fleecing the American Dream

This article explores other ways a government - business partnership gains power and wealth. Harms the public. Heads the nation toward insolvency, tyranny and in the end ruin. Political theorist Sheldon Wolin refers to our "managed democracy (and) inverted totalitarianism." Our "wielding total power without appearing to." With no jack boots in the streets or concentration camps. Nor "enforcing ideological uniformity, or forcibly suppressing" dissent. America's genius is that it appears to be a democratic showcase. Fooling most of the people most of the time to believe it. So far.

In charge - powerful corporate giants and the rich. Feeding at the public trough. Protected by the military-industrial complex. Single-mindedly pursuing profits. Dismissive of public welfare. Socially democratic institutions. Elements of social progressivism. New Deal political and other gains. Purposely aiming to dismantle them. Everything benefitting people to further corporate power and privilege.

Partnered with government to do it. One of its choosing. Pursuing a policy of empire. Doling out largesse. Transferring wealth to the privileged. Exploiting people without their even noticing. Waging wars for profit. Privatizing everything. Getting around democracy through subterfuge. Making believe it's real when it's fantasy. Heading toward when all pretense will be gone. Remaining public revenue as well unless boundless profligacy can be curbed. So far it's growing. Unsustainably toward a very unpleasant future. Because people empowered are fleecing America. Strip-mining it toward demise. Hollowing it out. Mindless to the lessons of history showing empires, militarism, and extremism can't endure. Eventually will understand when it's too late to matter.

Corporate Dominance in America

Corporate giants rule America and the world as the dominant institution of our time. Their influence is pervasive and profound. Over every facet of our lives. What we eat and drink. What we wear. Where we live. What we're taught. How we get our essential services. Where our main sources of information come from. How we think. Who'll govern and for whose benefit.

With no constitutional empowerment. Self-empowered collaboratively with Congress and the courts. To "invest, speculate, trade, and accumulate wealth," according to Michael Parenti. To maximize shareholder equity by increasing sales and profits. Gaining new markets, resources, and growing in size or risk being left behind. Benefitting hugely at the public's expense.

They're run by wealthy and powerful figures. The elitist top 1%. Owning over one-third of the nation's wealth. Stocks, bonds, land, natural resources, business assets and other investments. In the most unequal of world developed countries. Rigidly class structured. Plagued by racism and inequality. Mocking the notion of a land of opportunity for everyone.

Squandering our national resources. Exploiting and underpaying labor. Dismantling the social safety net. Impoverishing millions of people. Revealing America's dark side. The failure of our "democracy." Government's unaccountability to the public. To provide essential services. Consumer safety. Social justice. Concern for the environment. Closing the gap between haves and have-nots. Having enough compassion to care.

Instead, defending the rich against the poor. Siding one-sidedly with business. Through tax breaks. Huge subsidies. Export ones. Price supports. Loan guarantees. R & D grants. Free use of the public broadcasting spectrum. Bailouts. All sorts of other measures to redistribute wealth upward to the top. Providing legal protections and empowerment. Depriving the many for the few. Socialism for the rich. Free-market capitalism for most others. Sink or swim, on our own, with a disappearing social safety net for those who can't. Redefining "justice" to mean "just us."

Militarism and Wars for Profit - Spending Ourselves Toward Insolvency and Ruin

Since WW II, America was unchallengeable. With no external enemies or threats, the Soviet Union notwithstanding. Yet according to the Center for Defense Information, 60 years of military expenditures (in constant dollars) since 1945 totaled an astonishing $21 trillion. And since 2001, annual defense spending more than doubled under George Bush.

Christopher Hellman, Military Budget Analyst for the Center for Arms Control and Nonproliferation, refers to a "runaway military budget" with core allocations and add-ons. Including all defense categories, FY 2008 exceeds $1 trillion for the first time. More than the rest of the world combined. Including war supplementals, budgets expanded dramatically since the mid-1990s and are at the highest level since WW II.

Here's analyst Robert Higgs' breakdown for FY 2006 in billions, and FY 2009 proposed numbers are several hundred billions higher:

-- Department of Defense: $499.4; for FY 2008, it's $623 billion with supplemental add-ons for Iraq and Afghanistan; proposed for FY 2009, it's $711 billion by the same calculation; other estimates place it over $760 billion;

-- Department of Energy: $16.6

-- Department of State: $25.3

-- Department of Veterans Affairs: $69.8

-- Department of Homeland Security: $69.1

-- Department of Justice (including FBI, DEA and other federal law enforcement agencies): $1.9

-- Department of the Treasury (for Military Retirement Fund): $38.5

-- NASA: $7.6, and

-- Net interest attributable to past debt-financed defense outlays: $206.7.

A total of $934.9 billion. Higgs estimated FY 2007 at $1.028 trillion, and each year the numbers grow to more out-of-control levels. Unsustainable, and those reported exclude black budgets for CIA, NSA and other off-the-books operations amounting to tens of billions more. In nominal totals and as a percent of GDP, he calls it nonsensical. Insanity for others. A death wish for the economy at this unsustainable level.

Higgs and others also cite the unreliability of official numbers. He believes it's more accurate to take the Pentagon's basic budget and double it because as much as 40% of it is black or hidden. Concealing secret projects. Now under the most secretive administration in our history. Also, the more powerful the Pentagon becomes, the more spending benefits accrue to congressional districts, and less willing Congress is to hold it accountable.

The Department of Defense's 2007 Base Structure Report shows how large the Pentagon has become. Even with important information left out:

-- DOD is the world's largest landlord with over 577,500 (reported) facilities (buildings, structures and linear structures) on more than 5300 sites covering 32 million acres and 2.4 billion square feet of space in the US, its territories and overseas; these numbers are way understated and are, in fact, much higher.

-- including undisclosed ones, over 1000 overseas bases in over 150 countries; additional secret ones shared with or leased from host countries; of varying sizes and importance, including the largest Main Operating Bases (MOBs) for permanent combat troops; extensive infrastructure; command and control headquarters; and extensive accommodations in many places for families, including hospitals, schools and recreational facilities;

-- about 6000 homeland bases and military warehouses, and

-- from a DOD March 31, 2008 active duty personnel strength report, a total worldwide force of 1,373,000. Of that, 1,083,000 are US-based and in its territories; another 290,000 are abroad, and 195,000 are "in and around Iraq as of March 31, 2008, includ(ing) deployed Reserve/National Guard" forces; another 31,000 are in Afghanistan, including Reserves and National Guard; the US National Guard is a joint US Army - Air Force reserve component that numbered 460,000 as of December 31, 2007, according to the Congressional Research Service.

In his 1961 farewell address, Eisenhower warned about the "military-industrial complex." Its "grave implications" evident nearly 50 years ago. A "coalition of the military and industrialists who profit by manufacturing arms and selling them to government." The need to "guard against the acquisition of unwarranted influence....by the military industrial complex....The potential for the disastrous rise of (its) misplaced power...."

After the Vietnam War, its resurgence under Ronald Reagan. A prelude to George Bush's aggressive militarism. Ideologically driven. Waging "Global Wars on Terrorism." Exploiting 9/11 fears to pursue them. Disregarding budgeting constraints. Spending on all sorts of new weapons systems. The way Ian Mount, Matthew Maier and David Freedom described it on March 1, 2003 in Business 2.0 magazine. They called it "The New Military Industrial Complex To arm for the digital-age war, the Pentagon has turned to a new generation of defense contractors. The hardware is impressive. It's also deadly." The Pentagon refers to a "revolution in military affairs (RMA)." Building an unchallengeable high-tech arsenal. A new military-industrial complex.

The old one remains and gets huge contracts for new and more traditional weapons. The result of an influential "iron triangle" of Congress, the Pentagon and defense industry. Conservative think tanks also like:

-- the Project for a New American Century (PNAC); its "Rebuilding America's Defenses" scheme for US global hegemony;

-- the Center for Security Policy (CSP) headed by super-hawk Frank Gaffney; promoting a policy of "Peace through Strength" and perpetual wars for perpetual peace;

-- the Committee on the Present Danger (CPD); its hard right leadership and members; "fighting terrorism and the ideologies that drive it;"

-- the National Institute for Public Policy (NIPP); its focus on defense issues; ties to the nuclear weapons industry; and

-- the Center for Strategic and International Studies (CSIS); emphasizing national security and "advancing (US) global interests;" specializing in crisis management and connected to the highest levels in government and the Pentagon.

Another element is hugely important and destructive to a free society. The nation's 16 intelligence agencies, including CIA, NSA, DIA (Defense Intelligence Agency), FBI, Army, Navy and Air Force Intelligence, DHS (Department of Homeland Security), and Department of State. A multi-billion dollar funded, largely off-the-books, clandestine anti-democratic network. Interconnected with thousands of private contractors. Tied to world governments and their intelligence services. Hugely expensive. Powerful. A force unto themselves. Secretive by the nature of their work, and gaining strength from their own momentum.

Together they comprise a government-military-industrial-intelligence service-think tank colossus. Heading the nation toward insolvency, tyranny and ruin. Wrecking the remnants of a free society. Looting the public treasury. Pursuing a single-minded drive for empire. Mindless to its harmful effects. Masking it behind a democratic facade. Plagued by the same dynamic that doomed past empires unwilling to change.

For Chalmers Johnson: "perpetual war, the collapse of constitutional government, endemic official lying and disinformation, isolation, overstretch, the uniting of local and global forces opposed to imperialism, and in the end bankruptcy." Tyranny and ruin as well. The loss of personal freedom, and vital social safety net essentials. An ugly America few today can imagine. Arriving at flank speed after eight disastrous years under George Bush with scant hope for change under a new administration, Republican or Democrat.

Ruinous militarization is wrecking the nation. The insane amounts of spending on it. Military Keynesianism. A permanent war economy. Institutionalized after WW II. The current "Global Wars on Terrorism." The misguided notion that they promote sustainable economic growth. Mindless to their destructive effects. Eroding our social fabric. The national and human infrastructure. Looting the national treasury. Diverting productive economic efforts to war making. Ignoring vital re-industrialization needs. Instead doing the opposite. Losing our competitiveness. Eroding our political credibility, and leading the world solely in military might and the recklessness to use it.

It shows in waging perpetual wars. Allowing the destruction of our manufacturing base. Letting malls replace factories as the nation's engine. Amassing unsustainable current account and budget deficits. The former approaching $900 billion. The latter to exceed $400 billion, according to a September CBO Congressional Budget Office estimate. It excludes around $300 billion from the Social Security "Trust Fund." Without it, the deficit is $700 billion. Then add expected hundreds of billions of "bailout" dollars, and the total for FY 2009 skyrockets. Will way exceed $1 trillion.

Economist John Williams says the above numbers are grossly understated. Based on Generally Accepted Accounting Practices (GAAP), he calculates the FY 2007 budget deficit at $1.2 trillion. Down from $4.6 trillion in 2006 because of one-time actuarial assumption changes. It includes the year-to-year changes in the net present value of unfunded liabilities in programs like Social Security, Medicare and Medicaid. Washington calculations are by "cash accounting" with no provisions for future payouts in years when they accrue.

By GAAP estimates, Williams also says that total federal debt obligations rose to $59.8 trillion in 2007 from $58.6 trillion the previous year and that FY 2008 numbers will be higher. He reverse engineers data. Reveals administration and congressional bookkeeping gimmicks, and gives what he believes is a more accurate picture of the nation's financial health. In deep trouble by all his measures, and reckless military Keynesianism is why. It's heading the nation toward insolvency and getting progressively closer each year.

According to Williams, America is already bankrupt, and Bush administration policies get much of the blame. The official national debt was under $1 trillion in 1981. In January 2001, it was $5.7 trillion. It jumped to $9 trillion for 2007. Williams, however, puts it at $14.7 trillion, up from $14.1 trillion in 2006. It'll easily top $15 trillion (by his calculation) for 2008 and go far higher in future years.

The culprit - unsustainable military spending. All the worse because of the productive investment lost. Sacrificed for unneeded weaponry and militarism. To pursue an imperial agenda and enrich war profiteers. At the expense of advancing the greater good. The public interest long ago abandoned. Any pretext that "we the people" matter. The ones who do are them, not us.

Transferring Wealth to the Rich

It's been long-standing but became policy under Ronald Reagan. Shifting wealth upward. Mainly to the top 1% and major corporations. Less substantially to another 10% from over 90 million middle-class, lower-earning and poor households. By what anthropologist David Harvey calls "accumulation by dispossession." It shows in the decline of organized labor from a 1950s 34.7% high to around 12% overall today and only 7% in the private sector. The lowest percentage since the mass unionization struggles of the 1930s and in the private sector in over 100 years.

The result of a bipartisan antipathy to workers. A one-sided pro-corporate agenda. Allowing the dismantling of the nation's manufacturing base. Along with it the outsourcing of high-paying jobs. Professional ones also. Wage and benefit losses as a result. Allowing essential government services to erode. Replacing permanent jobs with lower-cost part-time and temporary ones. Creating a reserve army of labor to hold down wages and benefits. An unfair tax code restructured for the wealthy and large companies. Forcing workers to bear a greater burden. Using devious ways to do it. One discussed below by the 1980s Greenspan Commission.

Establishing globalized market-based rules. Embodying them in repressive trade agreements like NAFTA, DR-CAFTA, and an alphabet soup from the WTO. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The General Agreement on Trade Services (GATS). The Agreement on Agriculture (AoA) and others for one purpose. To establish uniform global trade rules favoring capital over people. To privatize and commoditize everything and strip-mine the planet for profit.

America's 130 million working class families have suffered. Militarism and financialization replaced productive investments. Lower-paying service jobs in place of higher-paying ones. People now work longer for less pay, adjusted for inflation, and are increasingly denied benefits. Peoples' overall standard of living declined. Two household earners are commonplace. Struggling to get by. College degrees are more expensive. For many unaffordable and are no longer an assurance of good jobs and a bright future.

Wealth today is more unequally distributed than ever. Poverty levels are rising. Millions of households are affected. The 37 million US Census Bureau figure masks the real problem. Now exacerbated by today's financial crisis touching many millions more. The near-certainty that conditions will worsen before stabilizing and improving. In the meantime, a permanent underclass is growing. In the richest country in the world. Heartless and mindless to the problem. One-sidely supporting capital. Rewarding criminals for their crimes. Allowing the middle class to erode. The poor to suffer grievously, and millions of homeowners to lose everything and maybe hope.

For a generation or more, an astonishing wealth transfer up occurred and is ongoing. Income and benefit reductions. Payroll tax increases. Loss of pensions and now savings. Well over $1 trillion annually accruing to the rich. And without most people even noticing. The result is an unprecedented and growing wealth disparity. An engineered enrichment of society's richest minority.

Tax cuts for the rich. In Bush's first term, over $4 trillion. Ballooning to $11 trillion if his cuts become permanent. Well over another $1 trillion to corporations. For working Americans - eroding welfare, lost opportunity, and for many any hope for a better future. Compounded by letting trillions in wealth be stashed in offshore tax havens from the Caribbean to Cyprus to South Asia to the Pacific.

Neither party objects. Nor to letting corporations pay less than their fair share. From 28% of federal revenues in the 1950s. To 21% in the 1960s. About 10% and falling since the 1980s, and according to the Government Accountability Office (GAO) 94% of major corporations now pay less than 5% of their income in taxes. In addition, payments are the lowest in 60 years. Many pay nothing at all. Some, including profitable ones, get large rebates on top of huge annual subsidies. Ones working people pay for under socialism for business and free-market, on-your-own capitalism, for most others.

For them, welfare as we know it is disappearing. Public education eroding. College for many unaffordable. Health care as well for nearly 50 million uninsured and many millions more underinsured. New Deal and Great Society programs are eroding at a time they're most needed. To enrich the privileged and for unsustainable militarism. Destroying the American dream and national solvency. A free society with it. One for "them," not "us."

Lavish (Taxpayer-Funded) Corporate Subsidies

Corporations get tens of billions annually in taxpayer-funded subsidies. Giveaways. From looting the national treasury and returning nothing to the public.

The Cato Institute is no bastion of egalitarianism. It's for limited government and unfettered "free market" capitalism. Here's what its May 2007 Policy Analysis Number 592 had to say on subsidies. It's titled: "The Corporate Welfare State - How the Federal Government Subsidies US Business." Cato's budget studies director Stephen Slivinski prepared it.

He calls subsidies "corporate welfare" and defines them as "any federal spending program that provides payments or unique benefits and advantages to specific companies or industries." In FY 2006, he calculates it totaled $92 billion "in direct and indirect subsidies to businesses and private-sector corporate entities." Handouts he opposes. Examples are cash payments to farmers, primarily to agribusiness. Others to defense contractors. Research grants to high-tech companies, and indirect funds such as for promoting US products and industries overseas. Outside his definition are preferential tax treatment and advantageous trade benefits. Combined they add tens of billions more.

"What's wrong with federal business subsidies," Slivinski asks? Its supporters say they're in the national interest. They promote business, enhance US competitiveness, and remedy market failures. Misguided reasoning for him (and Cato) as follows:

-- business, not government, is best-suited to finding the "Next Big Thing;"

-- subsidies "create an incestuous relationship between business and government;" and

-- they're unconstitutional as opposed to infrastructure spending that benefits everyone; business and the public.

A case study example: Agribusiness subsidies. In FY 2006, the largest of all direct ones totaling $21 billion. In the mid-1990s, Congress (in the 1996 Freedom to Farm Act) voted to scale down and eliminate the program, but instead increased it to record levels.

Another example: the 1988 Advanced Technology Program (ATP) and Small Business Innovative Research (SBIR) one to grow the high-tech economy. Since inception, it funded 768 ATP projects costing $2.3 billion through 2006. Another $1 billion to SBIR. Cato calls it ill-directed. To already generously-supported private sector research ventures in some cases. In others, by crowding out private research spending. The net result is that government subsidies produce no overall increase in R & D. Instead, they underwrite it and increase business profits - at the taxpayers' expense.

An example Cato omitted. A likely greater subsidy than to agribusiness. One media scholar and critic Robert McChesney has studied and states: "The (US) media and communications systems have been the recipients of enormous direct and indirect subsidies, arguably as great as or greater than any other industry in our economy." He lists:

-- free monopoly licenses to commercial radio and TV stations; spectrum for satellite television; and monopoly cable TV and telephone franchises; valued at about $500 billion;

-- since the advent of radio in the 1920s, this amounts to hundreds of billions of dollars;

-- many billions more in postal subsidies for magazines, periodicals and other publications;

-- hundreds of millions for film and television production;

-- indirect subsidies through government advertising;

-- another one by letting businesses write off advertising expenditures as an expense;

-- additional many billions in political advertising during every election cycle amounting to over 10% of commercial TV revenue;

-- what McChesney calls perhaps the largest subsidy of all - copyrights; "a government-created (and enforced) monopoly right to eliminate the possibility of competitive markets;" and

-- an indirect subsidy in the form of government serving as a "powerful lobbying force for commercial media oversea to see that foreign governments change regulations and divert subsidies to the benefit of US communications firms."

Though no precise calculations have been made on these benefits, McChesney believes combined they're worth up to hundreds of billions annually. Without people even noticing or that commercial broadcasters exploit the public airwaves solely for their own benefit. They and other industries feed at the public trough. The amount of free money they get is enormous. Taxpayer dollars fund it with no reciprocal benefit. Another component of the fleecing of America.

More largesse to the nuclear industry. In the mid-1990s, it was on its knees. Strapped by unmanageable debt from billions in cost overruns and plant shutdowns. Plagued by aging reactors. Expensive and shoddy maintenance. Haunted by Chernobyl and Three Mile Island. No nuclear power plant has been built in America since the 1970s. The last one to start up was the Tennessee Valley Authority's Watts Bar reactor in 1996 after 23 years of construction delays.

Today a revival is underway because of unprecedented subsidies from the 2005 Energy Policy Act along with generous state incentives. Without them, no new plants would be proposed. Nuclear power is unsafe, uneconomic, uncompetitive, and unneeded, despite what its advocate say. Its costs are also rising, and the industry is plagued with huge cost-overruns. Building a new plant runs somewhere between $5 - $12 billion dollars depending on its capacity and problems related to bringing it online.

Nonetheless, 30 new reactors are proposed for the US alone. Some in the planning stages. Others close to groundbreaking. Because of more than $13 billion in industry subsidies and tax breaks. Unlimited taxpayer-backed loan guarantees. Limited liability in case of accidents under the Price-Anderson Act. Absolving companies of most costs if they happen. Various other incentives as well to revive a moribund industry. For construction, R & D, operations, nuclear waste disposal, and eventual shutdowns. More coming if the administration's requested 37% FY 2009 nuclear program appropriation increase is approved. At the same time, a 27% energy efficiency and renewable energy budget reduction was proposed.

The Great Social Security Heist

Until the present fraud-based financial crisis, it was the largest modern era wealth transfer from the public to the rich. Engineered by Alan Greenspan in 1981 as head of the National Commission on Social Security Reform. Called the Greenspan Commission to address "the short-term financing crisis that Social Security faced." Based on the fraudulent claim that the Old-Age and Survivors Insurance Trust Fund "would run out of money as early as August 1983." It wouldn't then nor will it now.

In January 1983, the Commission issued its report. Congress, in turn, used it to enact Social Security Amendments to "resolve short-term financing problems and (make) many other significant changes in Social Security law" harmful to the public interest.

A menu of changes were enacted, including a "consensus package" to fix the problem by raising payroll taxes on incomes but exempting the rich beyond a maximum level. It also raised the retirement age in incremental steps. The result:

-- working Americans bare the brunt of this unfair regressive tax;

-- the rich barely feel it;

-- low income earners pay more payroll than income tax; and

-- the working poor have an enormous unaffordable burden; many earn too little to pay income taxes; yet they're not exempt from paying 6.2% of their wages for Social Security and another 1.45% for Medicare; employers match them with equal amounts, but it's not surprising that they pass on these costs through lower pay and benefits; an effective and unfair 15.3% of income burden for wage earners.

The public was told that the changes would make Social Security solvent for the next 75 years. They weren't told that the program was sound and needed no restructuring. That doing it was to transfer massive wealth amounts from working Americans and the poor to the rich. One part of a greater Reagan administration scheme to shift more of it upward. In addition to restructuring individual and corporate income taxes between 1981 to 1986.

The rich benefitted most with top rates dropping from 70% in 1981 to 50% over three years and then to 28% in 1986. At the same time, the lowest rate actually rose from 11 to 15%. It was the first time that US income tax rates were simultaneously reduced at the top and raised at the bottom. Even worse was that Reagan and Greenspan collaboratively defrauded the public.

By engineering the largest ever income tax cut for the rich combined with the greatest one ever affecting working Americans earning $30,000 or less. The payroll tax was doubled, and "Trust Fund" revenues were then used to reduce budget deficits. The tax code became hugely regressive, and for the first time a pay-as-you-go retirement and disability program became one where wage earner contributions subsidize the rich as well as support current beneficiaries.

The wealth gap began widening. Today it's unprecedented with the top 1% owning 40% of global assets. The top 10% around 85% of them. The top 1% over one-third of the nation's wealth. The bottom 80% just 15.3%. The top 20% nearly 85%, and in contrast, the poorest 20% in debt owing more than they own. The result of a generational wealth transfer as well as the added effects of globalization, automation, outsourcing, the shift from manufacturing to services, deregulation, weak unions and declining membership, and government indifference to human needs. More than ever under George Bush.

Now compounded by a deepening financial crisis of unknown magnitude. The potentially catastrophic fallout from it. Rescue packages for business alone, and millions of working Americans left to fend for themselves in a very uncertain environment. The result of fleecing America. Letting greedy bankers profit from it. Commit massive fraud and get away with it. Reward them for their crimes. Looting the national treasury to pay for them. Is public anger so surprising? Only that it hasn't boiled over on the streets of the nation's Capitol. Maybe in time as things keep worsening and Washington only worries about Wall Street.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting-edge discussions on world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10442

Project Censored's Media Democracy Advocacy

Project Censored's Media Democracy Advocacy - by Stephen Lendman

For 32 years, Sonoma State University's (SSU) Project Censored has pioneered US media democracy, research, and First Amendment issues. Founded by Carl Jensen in 1976, it's now headed by Professor Peter Phillips, currently on sabbatical leave, with Professor Mickey Huff in charge as Interim Associate Director of the program until his return.

PC works cooperatively with numerous independent media groups, primarily to train SSU students "in media research, First Amendment issues and the advocacy for, and protection of, free press rights in the United States." Since its founding, it's trained over 1500 students in investigative research and the importance of our most fundamental right without which all others are at risk and now currently hang by a thread.

PC is a "partnership of faculty, students, and the community" to conduct research "on important national news stories that are underreported, ignored, misrepresented, or censored by the US corporate media." Each year, it ranks the top 25 and publishes them in its yearbook, "Censored: Media Democracy in Action." The latest "Censored 2009: The Top 25 Censored Stories of 2007 - 2008" may now be purchased at bookstores or online at http://www.projectcensored.org/store/.

The current edition is larger than ever. It includes the year's honorable mention choices and additional chapters covering these topics:

-- Updates on previous PC stories;

-- Junk Food News and News Abuse;

-- The News is Good!: Stories of Hope and Change from 2007 and 2008;

-- Oiling the Dangerous Engine of Arbitrary Government: Newspaper Coverage of the Military Commissions Act (aka the torture authorization and habeas rights revocation act);

-- Universal Healthcare, Media, and the 2008 Presidential Campaign;

-- US Media Bias, Human Rights, and the Hamas Government in Gaza;

-- The Gardasil Sell Job - on the controversial human papillomavirus (HPV) vaccine thought to be unsafe for adolescent girls, yet Merck dishonestly markets it in collusion with the FDA;

-- Fear & Favor 2007: How Power Still Shapes the News;

-- Index on Censorship 2007 - 2008;

-- Truth Emergency Meets Media Reform;

-- Winter Soldier: Iraq & Afghanistan -- Eyewitness Accounts of the Occupations;

-- The Pentagon's Child Recruiting Strategy;

-- Deconstructing Deceit: 9/11, the Media, and Myth Information; and

-- Thirty-Three Years of US Military Domination and Economic Deception.

In all, over 400 power-packed pages of vital information in the current PC Censored 2009 edition. Must reading for everyone. Even those familiar with the issues for more information than they now know.

Project Censored's Definition of "Modern Censorship"

It's the dominant media's "subtle yet constant and sophisticated manipulation of reality" in their role as "guardians of power" and to serve their single-minded pursuit of profit. It includes ignoring vital news stories. Parts of them. The whys that explain them, and systematically withholding vital truths from the public. It's done through and because of political, economic and legal pressures in fundamental violation of a free and open press. Run by CEOs, not journalists. Serving their interests and advertisers, not ours.

PC believes in a "healthy and functioning democracy." Supports independent media and the right of free people to be informed. It also holds the dominant media accountable and serves as an antidote to their practices.

Why Project Censored and Why Now?

Democracy requires a free, open, vibrant and diverse media. Elements very much absent under our corporate-dominated system. As a result, the media system today is in crisis. Fiction substitutes for fact. News is carefully filtered. Dissent marginalized, and supporting the powerful substitutes for full and accurate reporting. Aggressive wars are thus called liberating ones. Civil liberties are suppressed for our own good. Anything government does, we're told, business does better, so let it, and patriotism means supporting lawless imperial regimes.

Media scholar and activist Robert McChesney asks whether "the media system....promote(s) or undermine(s) democratic institutions and practices. Are media a force for social justice or oligarchy?" Given their concentrated state, profits as a be all and end all, and partnership with an imperial state, their current condition is corrupted, broken, and in violation of the public trust they disdain. "Rich media, poor democracy" for McChesney. A powerful antidemocratic force. More dominant than ever. Hyper-commercially driven. Unresponsive to public needs, and serving only the interests of wealth and power the way Alex Carey brilliantly explained in his classic work, "Taking the Risk Out of Democracy:"

He wrote: "The twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy." Journalist Walter Lippmann called it the "manufacture of consent" in a democratic society where it can't be done by force, and Noam Chomsky and Edward Herman titled their landmark 1988 book "Manufacturing Consent" to describe the dominant media's "propaganda model" to program the public mind.

It "filter(s) out the news to print, marginalize(s) dissent, (and assures) government and dominant private interests" control all information dissemination. It's done through a set of "filters" to remove what's unacceptable and "leav(es) only the cleansed residue fit to print" or broadcast.

It raises the dilemma James Madison posed that "A popular government, without popular information or the means of acquiring it, is but a prologue to a farce or a tragedy; or perhaps both. Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power knowledge gives."

Today it's from the media, and therein lies the problem. An opportunity as well from alternative sources and organizations like Project Censored promoting the best they have to offer. Publishing it in annual volumes. Spreading it by word of mouth through lectures, on-air discussions, and in classroom instruction on journalism as it was meant to be in a free and open society. Understanding Thomas Jefferson's warning that emerging "banking institutions and moneyed incorporations" would destroy our democratic freedoms and replace them with a "single and splendid government of an aristocracy" if given a free hand.

What Lincoln also feared by "see(ing) in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country....corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed." Made easier today given the dominant media's power and ability to use it against the public interest the way Alex Carey explained:

Through a "propaganda-managed democracy....to identify the free-enterprise system in popular consciousness with every cherished value, and to identify interventionist governments and strong unions with tyranny, oppression and even subversion." Carey called propaganda "communications where the form and content is selected with the single-minded purpose of bringing some target audience (the public or a company's employees, etc.) to adopt attitudes and beliefs chosen in advance by the sponsors." It's as important in democratic societies as in authoritarian ones. In addition, "the success of business (or government) propaganda persuading us that we are free from (this type influence) is one of the most significant propaganda achievements of the twentieth century."

Even truer today with round-the-clock news. Hundreds of cable channels, and a more dominant media than in Carey's day. All the greater need for organizations like Project Censored to dispel official propaganda with real news and information that refutes it. All the more reason also to support its vital work. Countering the giants with what a free society needs to survive.

Stories the Dominant Media Censor

Hundreds of them have been covered since 1976 when PC's top story was "Jimmy Carter and the Trilateral Commission." Carter was a charter member of David Rockefeller's organization to counter the threat of democracy - too much of it. To assure that political power rests with the few. That public interests go unaddressed. That governments serve multinational banks and giant corporations. That people and resources are exploited for their benefit, and that popular democratic movements are suppressed. David Rockefeller chose Jimmy Carter to be president for that agenda. To be an interregnum executive after the turbulent Nixon years, then hand back the office to Republicans in 1980.

The same year, PC covered:

-- the "Corporate Control of DNA;"

-- selling banned pesticides and drugs to third world countries;

-- unsafe workplaces causing "untold numbers of injuries, disease and deaths....;" and

-- the sale of worthless and harmful non-prescription drugs to the public along with 20 other censored stories.

The top two 1977 stories covered the myth of black progress and "Cancer, Inc." About billions spent for cures, yet the US rate was 50% above the world average. It's still epidemic. Kills millions. Is a huge health care industry money-maker and too profitable for providers to want a cure.

In 1978, nuclear power plant dangers won top honors, and long before the proliferation of GMO foods and their hazards, the feasibility of organic farming ranked second.

Dumping illegal/dangerous production on third world countries was called "The Corporate Crime of the Century" and PC's top 1979 story. Number two was that "The (Iranian embassy) Seizure Should Not Have Been A Surprise" even though as late as summer 1978 the US media portrayed the Shah "as a modernizing, reform-oriented leader (with) a broad base of popular support."

In 1980, the distorted coverage of El Salvador's civil war won top honors followed by "Big Brother Is Listening to You" - the National Security Agency (NSA) that can do it today with much improved technology and legally with institutionalized spying legislation in place. Most recently The Protect America Act of 2007 and FISA Amendments Act of 2008. They assail civil liberties. Legalize warrantless wiretapping. Remove judicial oversight, and grant telecom companies retroactive immunity post-9/11 to violate our privacy.

"The Real Story Behind Our Economic Crisis" and the flagrant miscarriage of justice in Greensboro, NC ranked one and two in 1981.

Back then, a lack of "a competitive economy, monopoly, militarism, and multi-nationalization" (were) at the root of our economic crisis." Those factors still apply but much more as well. The current situation far exceeds any crisis since the 1930s. Is in most respects unparalled. No one fully understands it. How much harm if may cause. Its effect on world economies. How bad things may get or what alleviating measures may work best, if any.

Industrial capitalism is eroding. Replaced by a kleptocracy. Grand theft America. Rewarding criminals for their crimes. Backed by the full faith and credit of the government with taxpayer money. An unimaginable wealth transfer to the rich. When this ends, things won't ever be the same again in our lifetimes. The old system didn't work. The new one will be worse, and along the way the human fallout will be catastrophic. Talk about a big story. Short of armageddon or world war, it doesn't get any bigger than this. Factors responsible include:

-- the ruinous effects of militarization; a permanent war economy for profit and dominance; unsustainable spending for it; the accumulation of mountains of unrepayable debt; the drain on a weakened economy; the implications are chilling - a future default, hyperinflation, potential bankruptcy, and demise of the republic;

-- a speculative finance-created crisis; called financialization or Frankenstein finance;

-- a totally deregulated, anything goes, environment permitting the most extreme, outrageous practices; free from government oversight that created the real under and unreported dilemma of: multiple imploding bubbles affecting housing, mortgage finance, and an alphabet soup menu of levered-up, high-risk securitized assets amounting to financial alchemy and largely outright fraud; the most dangerous being a "quadrillion dollar derivatives bubble" (a thousand trillion) crucial to contain to avoid the implosion of the entire global banking system and world economies with it; in a word, potential financial armageddon touching everyone; in 2003, Warren Buffett called derivatives a "time bomb" that pose a "mega-catastrophic risk;" said they're "financial weapons of mass destruction" capable of wrecking the whole economic system;

-- at the root of today's crisis is a corrupted, broken system; Chicago School fundamentalism; unfettered capitalism; unbridled greed, and the human wreckage it causes; driving it is a government-business partnership for global dominance and the single-minded pursuit of profit;

-- no freedom in our "free markets;" they're manipulated (up and down) for profit in either direction; in a crisis like today, small, expendable, and less favored enterprises are destroyed to benefit powerful ones like Bank of America, Goldman Sachs, and the Rockefeller family JP Morgan Chase Bank; the scheme is for greater consolidation among fewer giant players; the losers - the vast majority of people unaware that what's going on was planned; although this time the best and brightest were too smart by half; they may have set off a chain reaction global financial market meltdown; world governments are frantically scrambling to contain it with no idea if they can because the current crisis is unprecedented; no one's sure what can work, and the sums needed are unimaginable; in the trillions, with a fraction of it proposed for starters; a down payment; perhaps international help to raise more; and

-- fraud on a massive scale involving many trillions of dollars; placing world economies at risk; a Ponzi scheme writ large; a calculated crime; the greatest one ever with media complicity through silence as things progressively worsened and now approach the abyss; the story is still unfolding; it won't be easily or soon resolved; and its outcome is far from clear; one thing that is: this affects the entire world community of nations and everyone in them; there's no place to hide anywhere.

In 1982, fraudulent toxicity and cancer testing was PC's top story followed by "Americans 'Bugged' by Super-Secret (Foreign Intelligence Surveillance) Court." Institutionalized, illegal spying goes way back.

In 1983, "Israel: Merchant of Death in Central America" as the region's largest arms supplier and Ronald Reagan's massive peacetime military buildup ranked one and two.

In 1984, the myth of the "well-publicized Soviet military buildup" (to incite fear), and the Reagan administration's use of "international terrorism" as a pretext to assail civil liberties were the year's top two stories.

In 1985, intense saturation El Salvador bombing and unregulated military toxic waste were PC's picks for numbers one and two.

In 1986, spying on US Central American policy critics took top honors, followed by the Reagan administration's official policy of suppressing information from the public - with near-silence from the dominant media.

In 1987, PC's top story was on "The Information Monopoly" - what journalist/author Ben Bagdikian wrote about in his book, "The Media Monopoly," now titled "The New Media Monopoly" in its seventh edition. Ranked second was the "Contra-drug connection in America."

In 1988, George HW Bush's 25 years of "Dirty Big Secrets" was PC's top story followed by "How the EPA Pollutes the News and the Dioxin Cover-Up."

In 1989, media dominance again took top honors in an story titled "Global Media Lords Threaten Open Marketplace of Ideas." Second ranked was "Africa Turning into the World's Garbage Can."

In 1990, PC's top story was on the Cheerleader Press' Gulf War coverage. Second ranked was "The S & L Crisis: The Solution Is Worse Than the Crime" - about Reagan era criminal bankers and the $500 billion taxpayer bailout it cost. Appropriate to look back on given today's financial crisis. The unease about how bad it may get, and the realization that this time things are far more potentially disastrous than anything experienced in the past. See above comments under 1981's top story.

In 1991, "CBS and NBC Spiking Iraq Bombing Carnage Footage" ranked first. Number two was "Operation Censored War" about the secretive GHW Bush administration and an obliging cheerleading media.

In 1993 (the next PC-listed year), "The Great Media Sell-Out to Reaganism" won top honors followed by corporate crime dwarfing what occurs on streets. The US prison gulag system (by far the world's largest and adding 1000 new inmates weekly, mostly poor blacks and Latinos) holds 2.3 million inmates. People not rich enough to buy justice. Seldom are corporate criminals prosecuted, and when they are, punishment is inconsequential by comparison.

In 1994, the US killing its young (through violence, poverty and indifference to human needs) ranked first. Second was "Why Are We Really in Somalia?" Humanitarian intervention is never the reason. Strategic resources (especially oil and gas) always are primary along with advancing our imperial agenda and making the world safe for capital.

In 1995, PC's top story was "The Deadly Secrets of the (US) Occupational Safety Agency" - keeping 170,000 toxically-exposed workers uninformed about the risks. Second-ranked was about a "Powerful Group of Ultra-Conservatives (including influential Christian fascists) Secret Plans for Your Future." They haven't changed and are now more dangerous than ever.

In 1996, "Telecommunications Deregulation: Closing Up America's Marketplace of Ideas" ranked first after passage of the (grand theft media) Telecommunications Act of 1996 allowing greater than ever consolidation. Number two was a story on cutting social services by balancing the budget on the backs of the poor. Now affecting everyone to advance a global militarist agenda.

In 1997, PC's top story was "Risking the World: Nuclear Proliferation in Space." One part of an agenda for "full spectrum dominance" over all land, surface and sub-surface sea, air, space, electromagnetic spectrum and information systems with enough overwhelming power to fight and win global wars against any potential challengers using all weapons in our arsenal. "Shell's Oil, Africa's Blood" was number two for the year.

In 1998, the Clinton administration's aggressive global arms sales ranked first followed by personal care and cosmetic products being potentially carcinogenic.

In 1999, PC's top story was on the secret Multilateral Agreement on Investment (MAI). Designed to undermine national sovereignty by creating an open field for capital. Next was the story of chemical corporations profiting from breast cancer.

In 2000, multinational corporations profiting from international brutality ranked first followed by Big Pharma putting profits ahead of human need. By developing products like Viagra instead of cures for diseases killing millions in developing countries.

In 2001, World Bank and multinational corporate collusion to privatize water took top honors followed by OSHA failing to protect US workers.

In 2003 (the next listed year), PC's top story was on FCC efforts to privatize the airwaves followed by a story on the General Agreement on Trade in Services (GATS) to privatize social services and make them available only to those who can pay.

In 2004, top ranked was "The Neoconservative Plan for Global Dominance" followed by how "Homeland Security Threatens Civil Liberty" with plenty of ammunition from pre-and-mostly-post-9/11 repressive laws.

In 2005, PC's top story was on the unprecedented 21st century wealth inequality threatening the economy and democracy followed by a story about Attorney General John Ashcroft's attempt to strike down Alien Torts Claim Act (ATCA) protections against corporate human rights abuses in foreign countries.

In 2006, the Bush administration's obsession with secrecy ranked first followed by the media's failure to cover the Fallujah and overall Iraqi civilian death toll.

In 2007, PC's top story was on the "Future of Internet Debate Ignored by Media" followed by "Halliburton Charged with Selling Nuclear Technologies to Iran."

In 2008, the Military Commissions Act (MCA) denial of habeas rights for everyone (including US citizens designated "unlawful enemy combatants") won top honors followed by the Bush administration moving toward martial law by inserting an obscure provision in the John Warner Defense Authorization Act of 2007 annulling the 1807 Insurrection Act and 1878 Posse Comitatus Act.

Project Censored's current top 25 2009 stories are just out and available for purchase as explained above. Top ranked was about "Over One Million Iraqi Deaths Caused by US Occupation" as documented by Johns Hopkins researchers earlier and British polling group, Opinion Research Business (ORB). Other selected stories included:

-- the North American Union (NAU) Security and Prosperity Partnership (SPP) or militarized NAFTA;

-- InfraGard on the FBI deputizing business;

-- the US International Law Enforcement Academy (ILEA) training Latin American security forces in counterterrorism techniques; a possible scheme to restart the region's dirty wars;

-- two George Bush executive orders (EOs) criminalizing the anti-war movement and allowing the Treasury Department to seize property from anyone opposing the administration's Middle East wars;

-- The Violent Radicalization and Homegrown Terrorism Prevention Act (HR 1955) - called "the thought crime prevention bill;" passed by the House and introduced in the Senate in August 2007 (S. 1959) but not acted on;

-- Guest Workers Inc.: Fraud and Human Trafficking - or near-slavery in America;

-- executive orders (EOs) can be changed secretly even though the Constitution has no provision giving presidents the right to make new law through one-man decrees;

-- Iraq and Afghanistan Vets Testify;

-- the American Psychological Association's (APA) complicity in CIA torture;

-- El Salvador's Water Privatization and the Global War on Terror;

-- Bush profiteers collecting billions from the No Child Left Behind Act scheme to destroy public education in America by privatizing it;

-- Tracking Billions of Dollars Lost in Iraq through fraud, waste and other war profiteering schemes;

-- Mainstreaming Nuclear Waste;

-- Worldwide Slavery at a time most people don't know it exists, let alone in America;

-- the Annual Survey on Trade Union Rights;

-- the UN's Empty Declaration of Indigenous Rights;

-- Cruelty and Death in Juvenile Detention Centers;

-- Indigenous Herders and Small Farmers Fight Livestock Extinction;

-- Marijuana Arrests Set New Record;

-- NATO Considers "First Strike" Option while the US 2001 Nuclear Policy Review, 2002 and updated 2006 National Security Strategy, and other US documents assert the right to wage preventive or proactive wars with "first strike" nuclear or any other weapons of mass destruction;

-- CARE Rejects US Food Aid - because it causes more hunger than it prevents;

-- FDA Complicit in Pushing Pharmaceutical Drugs;

-- Japan Questions 9/11 and the Global War on Terror; and

-- Bush's Real Problem with Eliot Spitzer - to stop his exposure of subprime predatory lending fraud responsible for much of the current world financial crisis.

Project Censored annually present awards for the corporate media's most important suppressed stories. For its work, its Director, dedicated staff, and student interns deserve our award for being one of our national treasures. Holding the dominant media accountable.

Follow their work. Support their activities. Know what's at stake. A free and open society. The type media vital in it. The risk of losing it, and need for assertive, decisive action to assure that won't happen. Nor will it if Project Censored can help it.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM - 1PM US Central time for cutting-edge discussions on world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10360