Media Response to Venezuelan Elections

The Media Response to Venezuelan Elections - by Stephen Lendman

On November 23, Venezuela held regional and local elections for governors, mayors and other municipal offices. Over 5000 candidates contested in 603 races for 22 state governors, 328 mayors, 233 state legislative council members, 13 Caracas Metropolitan area council members, and seven others for the Alto Apure District Council.

As mandated under Article 56 of the Bolivarian Constitution: "All persons have the right to be registered (to vote) free of charge with the Civil Registry Office after birth, and to obtain public documents constituting evidence of the biological identity, in accordance with the law."

It's a constitutional mandate to let all Venezuelans vote. Once registered, none are purged from the rolls, obstructed, or prevented from having their vote count like so often happens in America. In Venezuela, democracy works.

In 2003, Hugo Chavez undertook a major successful initiative called Mision Itentidad (Mission Identity) to implement the law. Prior to it in 2000, 11 million Venezuelans were registered to vote. By September 2006, it was 16 million, and now it's 16.8 million in a country of 27 million people.

How the Process Works

The electoral process is administered by the National Electoral Council (CNE). Unlike America's privatized system, it's an independent body, separate from the Executive, Legislative and Judicial branches of government or any private corporate interests. It's comprised of 11 members of the National Assembly and 10 representatives of civil society, none of whom are appointed by the President.
Elections are conducted using Smartmatic touchscreen electronic voting machines with verifiable paper ballot receipts. Voters can thus check to confirm their votes and their accuracy. The CNE then saves them as a permanent record to be used in case a recount is needed. It also requires voters to leave an electronic thumbprint to assure no one votes more than once.
The machines work as intended, and, after the 2006 election, the Carter Center said: based on its observations, Venezuela's "automated machines worked well and the voting results do reflect the will of the people." Further earlier independent studies verified the same thing, including ones carried out by vote-process experts at the University of California Berkeley, Johns Hopkins, Stanford and elsewhere.
In design, great care was taken to eliminate the possibility of tampering. It required a special technology that split the security codes into four parts. As a result, numerous voting security reports endorse the process they say makes Venezuelan machines the most advanced and accurate in the world.
On November 23, CNE president Tibisay Lucena said voters turned out in unprecedented numbers at 65.45%, the largest ever total for a regional election. The people spoke and registered a resounding, but not one-sided, victory for Hugo Chavez's United Socialist Party of Venezuela (PSUV) candidates - and sent a message. They affirmed the success of Bolivarianism and want it continued.

As the Venezuela Information Office reported, PSUV candidates won 77% of governorships (17 of 22), 81% of mayoral offices, 77% of all contests, and 58% of the popular vote - an impressive result by any standard anywhere in an election that 134 independent observers from 54 countries (from America, Europe, Asia, Africa and the 34-member country Organization of American States - OAS) judged open, free, fair, and efficient like all others under Chavez. OAS secretary general Jose Miguel Insulza called this one "peaceful and exemplary" and described it as a powerful expression of democratic maturity and the trust Venezuelans have in it under Chavez.

Other observer comments were as follows:

-- Colombia's CNE representative, Joaquin Vives, called Venezuela's electoral process "a pioneer in the world (and added) Many things dazzled us" about it, such as voters "great desire to construct democracy in Venezuela;"

-- Greek legislator Sofia Sakorafa called the process "one that expresses the will of the people and is characterized by a commitment to social and political inclusion;"

-- Costa Rica's Maria Elena Salazar said the election was "beautiful, participative, of which all Latin Americans should be proud;" and

-- Anthony Gonzales from America admired well-equipped and secured voting centers and that the election was held on a weekend to make it easier for working people.

Long-time Latin American expert James Petras commented on the significance of the victory:

-- few European, North or South American parties have as high a level of support as the PSUV; certainly none in the United States in particular where growing numbers of voters have little faith in a deeply corrupted process;

-- the PSUV is popular "in the context of several radical economic measures, including the nationalization of major cement, steel, financial and other private capitalist monopolies;" even so, business in Venezuela remains strong (though slowing) at a time of a global economic crisis;

-- the PSUV won in spite of declining oil prices; fluctuating around $50 a barrel, they're down about two-thirds from their peak price; even so, "the government maintained most of its funding for its social programs" and intends to continue doing it - in contrast to America where social programs have eroded for years and show no signs of revitalization under either party;

-- the electorate was selective in its voting choices - "rewarding candidates who performed adequately in providing government services and punishing those who ignored or were unresponsive to popular demands;"

-- most important: "the decisive (PSUV) victory provides the basis for confronting the deepening collapse of world capitalism with (impressive and workable) socialist measures;" compare them to the looting of the US Treasury to reward criminal bankers for their malfeasance and failures; the differences between both countries are dramatic and breathtaking - democratically impressive (though not perfect) in Venezuela compared to criminally corrupted under either party in America; no one dares mention this in the corporate media.

In the election's aftermath, Petras explained that "most Venezuelan firms are heavily indebted to the state and local banks." Chavez can ask them "to repay their debts or hand over the keys (and be able to bring) about a painless and eminently legal transition to socialism." It remains to be seen if he'll do it to advance his socialism of the 21st century - or perhaps remain defensive, proceed cautiously, and fail to take advantage of an important opportunity.

Responses from the Dominant Media

With some exceptions, it's been pretty much as expected - one-sided, distorted, inaccurate, and not at all reflecting the will of Venezuelans and their impressive support for Chavez and Bolivarianism.

For example, The New York Times in a November 25 editorial headlined: "Hugo Chavez's Choice." After he took office in February 1999, The Times kept up a steady attack against him in editorials and commentaries. Here it states: Hugo Chavez "is not feeling the love. Collapsing oil prices have sharply curtailed his ability to 'buy' public sympathies," and after Barack Obama's election he no longer has "a convenient foe."

Sunday's elections "showed just how fed up (Venezuelans) are with his government's 'authoritarianism and incompetence' by rejecting the president's allies in significant races." Even by Times standards, these comments are way over the top and mirror opposite of the facts.

The Times continues: "Mr. Chavez did pretty much everything he could to skew the elections. His government increased public spending by 60 percent in the last year." Of course, he's always used the nation's wealth for his people and not as handouts to the rich like in America.

"A government watchdog (also) disqualified many opposition candidates," but The Times omitted saying that the Venezuelan Supreme Court (YSJ) barred them because of corruption, misuse of public funds, and convictions of these offenses. The Times called them "bogus."

It then exaggerated Sunday's results, suggested Chavez's popular support is waning, referred to his "rejected (December) power-grabbing constitutional reform," and stated "Venezuelans don't want to give Mr. Chavez even more power. He should heed the message (and) accept democratic limits to his rule." Unstated was:

-- Chavez's popular support at over 60% compared to George Bush scoring lowest ever for a US president at around 20%;

-- the nation's impressive social democracy;

-- the kind few other nations have;

-- the type absent in America;

-- the kind Venezuelans never before had and cherish; and

-- are committed never to give up.

Simon Romero is The Times man in Caracas where his reporting is mediocre and inaccurate. His November 24 article was typical. It's headlined: "Chavez Supporters Suffer Defeat in State and Municipal Races" in which he refers to their "stinging defeat in several state and municipal races." Unnoticed were all the victories and how impressively they were won.

Instead Romero noted "festering discontent" and how "celebratory fireworks went off over parts of (Caracas) after the results were announced." Perhaps so but mostly for Chavez and his PSUV.

Romero preferred to quote Caracas opposition mayoral winner, Antonio Ledezma, saying "Those who should feel defeated are the criminals." An urban Caracas Petare carpenter as well being "tired of Chavez treating the entire country as if it were his military barracks."

Well into his article, Romero had to say that "Voting unfolded without reports of major irregularities" but ignored the fact that few at all occurred and they were minor. He also admitted that pro-Chavez candidates won 17 of 22 states but added sour grapes about some being small "in terms of population."

On the same day, Romero wrote another commentary headlined: "Once Considered Invincible, Chavez Takes a Blow" with as many inaccuracies as the above one. He referred to "many of (Chavez's) supporters desert(ing) him....in areas where he was once thought invincible," but had to admit the results might not "slow his Socialist-inspired revolution or check his power." Why should it when most Venezuelans want it.

He repeated much from his other article, added a few inaccurate quotes (like it's a "myth" to believe "only Chavez can be a champion of the poor"), omitted the most important facts, but again admitted the obvious - that "Mr. Chavez remains by far the dominant and most popular figure in Venezuelan politics," and the election results showed it.

Even so, Romero downplayed his victory and said Chavez candidates won mostly in largely rural states. He quoted economist Luis Pedro Espana, director of the Economic and Social Research Institute at Venezuela's Andres Bello Catholic University, stating: "The more modern part of the country wants political change." What he means, but didn't say, is the more affluent part, now forced to share some of the nation's wealth with its least advantaged and most in need people - the great majority who support Chavez overwhelmingly.

On November 25, the Wall Street Journal was extremely hostile in two post-election articles - one on the results and another feature story headlined: "Chavez Lets Colombian Rebels Wield Power Inside Venezuela." It reeks of inaccuracies, uses Washington and the Colombian military as its sources, and claims that Chavez is providing a growing "safe haven" for FARC-EP and ELN "guerrillas."

Unreported was anything about Chavez's Colombian peace intervention and his successful efforts to arrange FARC-EP held hostage releases - in spite of Washington and Colombia's president Uribe conspiring to prevent it.

Journal writer Jose de Cordoba accused the Venezuelan military and police of "turning a blind eye to guerrilla activity, and at times cooperating in areas including the trafficking of arms and cocaine." This and other anti-Chavez agitprop show up often in Journal commentaries, but this time in far more detail compared to much less said about the election results.

That was in a page six article headlined: "Chavez Base Rebukes Him at Polls." Writer John Lyon referred to Chavez's "dual ambitions - to stay in power for life and wield outsize influence on the global stage." He added how "the very people that brought him to power" rebuked him: "the urban poor."

Like The Times, the article reeked with inaccuracies that are increasingly common on both the Journal's op-ed and news pages. Lyon suggests trouble for Chavez with his electoral "setbacks add(ing) to a list of growing problems that are likely to slow his swagger." For example, falling oil prices that may crimp his "checkbook diplomacy that has won him allies outside his borders...."

He also compared him to Fidel Castro, referred to his "foreign adventures....backfir(ing) amid the global financial crisis," and said his base is "dwindling" at a time it's impressively strong. He quoted opposition candidate Antonio Ledezma (as did Romero) saying "Now is the time for true change" by which he means ending Bolivarianism, its social democracy, returning power to the privileged oligarchs, and throwing most Venezuelans back into deep poverty. Lyon apparently approves and quotes a leading opposition newspaper, Tal Cual, headlining: "We hit him where it hurts." For the past 10 years, the Venezuelan people have had the last word.

The Washington Post was just as hostile in a November 25 editorial headlined "How to Beat Mr. Chavez" and his "Cuban-style socialist regime." It called him "Venezuela's strongman (and) caudillo" and over-hyped Sunday's results much the way the Journal and Times did it. It added that Chavez "shows no sign that he is listening to the country," and post-election said the voters' message was to "continue down the same road." Indeed it was and will be.

According to the Post, "the opposition now has an opportunity to show that it can offer a workable alternative to Mr. Chavez's policies." Unmentioned was that they had generations to "show" it, failed dismally, Venezuelans overwhelmingly reject them, and want no part of their kind of "change."

With its large anti-Castro population, Miami is a hotbed of anti-Chavismo, and the Miami Herald reflects it. Post-election, it headlined "Despite foes' gains, Hugo Chavez will try to get another term in Venezuela." It referred to state and local elections "slow(ing) his grand ambitions to yank Venezuela and Latin America to the left" but not enough to stop him according to unnamed analysts.

It suggested an upcoming "titanic battle" as Chavez is expected to hold a national plebiscite next year "that would allow him to campaign for an additional six-year presidential term in 2012." It quoted pollster Luis Vincente Leon of Datanalisis, who publicly called for Chavez's assassination, saying: "He wants to change the constitution to run again. There's no doubt about that," but again unsaid is what the people want. Chavez wants them to choose and like always will honor their will.

On November 23, the far right Washington Times headlined a John Thomson commentary on "Chavez's fraud game" and referred to "The kinds and extent of fraud already being applied by the Venezuelan government to crucial elections today." He called them "unprecedented (and) unmitigated electoral larceny (and) Venezuela's pilfer process starts well before the day the votes are cast and counted."

In an age of breathtaking anti-Chavez agitprop, this comment takes the cake or at least matches the worst of it. Thomson called the "fraud potential" on election day "staggering" and listed a menu of absurdities and rubbish ranging from "jumbled" voting lists to "rigged" voting machines, and "manipulation" of results.

It's much like Journal writer Mary O'Grady's agitprop - her latest on November 17 in a commentary headlined: "Dodd's Democrat Tightens His Grip." Dodd, of course, is Senator Chris Dodd, and her article is about Venezuela's election, the country's "numerous setbacks for democracy," and the chance Venezuelans have to "rid themselves of Mr. Chavez."

She refers to his "authoritarian powers....deteriorating living standards (and) the widespread assumption that the government will use tricks to win" on November 23. "Venezuelans saw this coming. From his earliest days as president in 1999, Mr. Chavez began working to destroy any checks on his power."

She attacked Chris Dodd for "throw(ing) a fit over Mr. Chavez's (48-hour) removal" in April 2002. "This self-styled Latin American expert (referred to) a US-backed coup and insisted that since Mr. Chavez (was) democratically elected in a fair vote" no one should question his legitimacy.

"Of course it wasn't a coup," according to O'Grady, as she questions the "circumstances (of his) political resurrection," again called him a "strongman," warned earlier about his budding "dictatorship," and now says her view about him is accurate.

"Political prisoners are rotting in Venezuelan jails without trials. Being identified as a political opponent of the revolution is a ticket to the end of the unemployment line. Private property has zero protection under the law and the economy's private sector has been all but destroyed....(and Chavez) has made it clear he will not accept defeat at the polls."

Breathtaking hardly describes this rant. It's mirror opposite the truth. Venezuela's social democracy is unimaginable in America, and one reason why O'Grady and others vilify it. It's also why they reported inaccurately on Sunday's election.

A Sane Voice in the Wilderness

On November 22, the London Independent published "Letters: In praise of Hugo Chavez." One confronted Latin American writer Phil Gunson's "bleak picture" of Venezuela in his article titled: "Tough-talking Chavez faces rising dissent." It was grossly inaccurate, mentioned the usual kinds of criticisms, and pretty much read like the US and Venezuelan corporate media agitprop.

The writer asked: If Gunson is right, "why are President Chavez's approval ratings at 58%, as he reports." He doesn't mention "how (his) government has delivered free healthcare to millions of people for the first time, eradicated illiteracy and used the country's best economic performance for decades to halve the poverty levels."

Suggesting that poll results may trigger a "violent reaction....turn(s) reality on its head. It was the Chavez government itself that was briefly the victim of an opposition-led military coup in 2002. In contrast, (his) government has showed a consistent commitment to democracy....Moreover, last week the respected Latinbarametro survey showed that Venezuela is now the country with the greatest support for democracy in Latin America and the region's second-most satisfied with the functioning of its democracy. Venezuela's combination of democracy and social progress under Chavez has inspired widespread support."

It's signed by Colin Burgon, MP, Chair, Labour Friends of Venezuela group of MPs, House of Commons. He adds more as well, and the Independent published it. It's unlike major US broadsheets that cover Chavez one way - with venomous inaccuracy and very rare exceptions that hardly draw notice.

The Venezuela Information Office reviewed the election in detail, and it's summarized below as follows:

-- for a regional election, voter turnout was unprecedented at over 65%;

-- independent observers judged the process open, free, fair and efficient and according to OAS secretary general Insulza "peaceful and exemplary;"

-- PSUV candidates won impressive victories, far exceeding the opposition;

-- pro-government candidates gained a large majority of offices throughout the country - for governors, mayors and other posts;

-- like for the past decade, most Venezuelans will continue to live under pro-Chavez regional and local leaders because they want them;

-- the PSUV scored important victories in strategic areas of the country, but not all of them;

-- pro-government candidates won by wide margins affirming Venezuelans faith in Bolivarianism;

-- although the metropolitan Caracas mayoralty went to the opposition, residents of the largest city municipality voted for the PSUV;

-- even in states won by the opposition, key municipalities went to the PSUV; and

-- Venezuela's Electoral Authority (CNE) handled the record voter turnout impressively.

The Wall Street Journal, New York Times and other publications falsely reported that a majority of the population is under opposition control. Official statistics show otherwise but were ignored.

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 on world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=11087

Israel's Slow-Motion Genocide in Occupied Palestine

Israel's Slow-Motion Genocide in Occupied Palestine - by Stephen Lendman

Imagine life under these conditions:

Living in limbo under a foreign occupier. Having no self-determination, no right of return, and no power over your daily life. Being in constant fear, economically strangled, and collectively punished.

Having your free movement denied by enclosed population centers, closed borders, regular curfews, roadblocks, checkpoints, electric fences, and separation walls. Having your homes regularly demolished and land systematically stolen to build settlements for encroachers in violation of international law prohibiting an occupier from settling its population on conquered land.

Having your right to essential services denied - to emergency health care, education, employment, and enough food and clean water. Being forced into extreme poverty, having your crops destroyed, and being victimized by punitive taxes. Having no right for redress in the occupier's courts under laws only protecting the occupier.

Being regularly targeted by incursions and attacks on the ground and from the air. Being willfully harassed, ethnically cleansed, arrested, incarcerated, tortured, and slaughtered on any pretext, including for your right of self-defense. Having no rights on your own land in your own country for over six decades and counting. Vilified for being Muslims and called terrorists, Jihadists, crazed Arabs, and fundamentalist extremists. Victimized by a slow-motion genocide to destroy you.

According to Israeli historian Ilan Pappe, Israel has conducted state-sponsored genocide against the Palestinians for decades and intensively in Gaza. In a September 2006 Electronic Intifada article titled "Genocide in Gaza" he wrote:

"A genocide is taking place in Gaza....An average of eight Palestinians die daily in the Israeli attacks on the Strip. Most of them are children. Hundreds are maimed, wounded and paralyzed. (It's become) a daily business, now reported (only) in the internal pages of the local press, quite often in microscopic fonts. The chief culprits are the Israeli pilots who have a field day," like shooting fish in a barrel. Why not, they're only Muslims, so who'll notice or care.

International law expert Francis Boyle does and in March 1998 proposed that "the Provisional Government of (Palestine) and its President institute legal proceedings against Israel before the International Court of Justice (ICJ) in the Hague for violating the" Genocide Convention. He stated that "Israel has indeed perpetrated the international crime of genocide against the Palestinian people (and the) lawsuit would....demonstrate that undeniable fact to the entire world."

Israel is a serial human rights international law abuser. The UN Human Rights Commission affirms that it violates nearly all 149 articles of the Fourth Geneva Convention that governs the treatment of civilians in war and under occupation and is guilty of grievous war crimes. The Commission also determined that as an occupying power Israel has committed crimes against humanity as defined under the 1945 Nuremberg Charter.

Geneva, Nuremberg and other international human rights laws guarantee what Article 3 of the Universal Declaration of Human Rights states: that everyone "has the right to life, liberty and security of person." Article 6 (1) of the International Covenant on Civil and Political Rights also affirms it in saying that every "human being has the inherent right to life." Official Israeli policy is to deny it to Palestinians under occupation, especially Gazans under siege.

On November 5, it was egregiously tightened after Israel closed all commercial crossings and banned virtually all permissible items - previously severely restricted and in limited amounts.

On November 21, Haaretz reported that Karen AbuZayd, United Nations Relief and Works Agency (UNRWA) commissioner-general said Gaza faces a humanitarian "catastrophe" if Israel maintains its blockade. She called the current closure the gravest since the early days of the Second Intifada eight years ago. "It's been closed for so much longer than ever before....and we have nothing in our warehouses....It will be a catastrophe if this persists, a disaster."

Out of Gaza's 1.5 million population, UNRWA provides vitally needed rations for 820,000 of its refugees, and the UN World Food Program aids another 200,000 people. They supply about 60% of daily needs, now effectively shut off and nearly exhausted - including food, medicines, fuel, and other basic essentials.

On November 17, 31 containers of foods and medicines were allowed in through Karm Abu Salem (Kerem Shalom) crossing, southeast of Rafah. It was closed, along with other border crossings, for the previous two weeks. These amounts are hugely deficient and amount to less than 10% of what entered Gaza before Israel's June 2007 imposed siege.

Also allowed in was 427,000 liters of fuel or barely enough to operate Gaza's power plant for a day. It's effectively shut down, and at least 30% of the population is without electricity and around 70% experiences lengthy power outages for days or weeks.

On November 20, AP reported that Israeli officials "stood by (their) decision to shut cargo crossings into the Gaza Strip, brushing off pleas to ease the blockade from United Nations chief Ban Ki-moon." Of course, the Strip has been mostly isolated since Israel's imposed siege 18 months ago that created a humanitarian crisis now intensified.

Why so was stated to the Jerusalem Post by senior IDF General Amos Gilad: Because "Hamas is committed to the destruction of the state....It (also) wants to take over the PLO." Unmentioned are the facts that refute this assertion. After Ismail Haniyeh became Hamas prime minister in 2006, he offered the Bush administration peace and a long-term truce in return for an end to Israel's (illegal) occupation. He was rebuffed the way he is from Israel for the same offer.

Again why so? Israel and Washington are allied in a joint enterprise and need enemies, aka "terrorists." While maintaining an illusory "peace process," none whatever exists nor is any effort made to address equity for the Palestinians. What matters is joint-control of the region. Israel as the local hegemon. America as part of its world empire and all vital resources in it, especially oil, of course.

In the 1980s, former prime minister Yitzhak Shamir admitted that Israel waged war against Lebanon in 1982 because there was "a terrible danger....not so much a military one as a political one." So a pretext was arranged the way it always is to invent threats and avoid resolution.

In January 2006, it was policy again after Hamas won a resounding democratic majority in the Palestinian Legislative Council (PLC). As a result, they and the Palestinians paid dearly. Israel, America and the West ended all outside aid, imposed a crippling economic embargo and sanctions, and politically isolated the ruling Hamas government. An intensive crackdown followed that continues to this day - regular interventions, attacks, ruthless repression, and the imposition of a medieval siege on Gaza, now intensified.

On November 19, the Territory's largest flour mill shut down for a lack of wheat, and the UN suspended cash grants to 98,000 poor Gazans because of a shortage of Israeli currency.

The world community has been silent. Conditions continue to deteriorate, and Christian Aid is speaking out. It accused Israel of collective punishment in violation of international law. Under Fourth Geneva's Article 33:

"No protected person (under occupation) may be punished for an offense he or she has not personally committed. Collective penalties and likewise all measure of intimidation or of terrorism are prohibited (as well as) Reprisals against protected persons and their property."

Costa Dabbagh from the Near East Council of Churches (a Christian Aid partner) says "Simply letting food into Gaza is not enough," and precious little is arriving. Its people "are fed and kept alive without dignity and the international community should be blamed for it." It's "not acceptable to be waiting for food to come. (Gazans) want to live freely with Israel and other countries in peace. (They're) not against any individual or government (but) are against imprisonment."

They're also against starving, extreme deprivation, no effective outside aid, and no support from world or other Arab leaders in their behalf. At the moment, three of five mills have stopped operating, and the two others are about to for lack of wheat. Several bakeries are closed for lack of flour, fuel, cooking gas and electricity.

Of Gaza's 72 bakeries, 47 produce Syrian bread (the most popular kind); 29 of them stopped operating; eight others are at partial capacity; 10 bake Iraqi bread, and 15 others different varieties and pastries. None are in full operation, and all may have to close for lack of supplies and power. Gazans are being strangled and starved.

Health facilities are also in crisis and their patients endangered because of their limited ability to provide services. In addition, 45 vital medicines are embargoed and unavailable. Another unconscionable act.

Shifa Hospital is Gaza's largest and seriously hampered. Besides a lack of power, medicines and other supplies, its equipment needs repair and has no readily available spare parts. Its main generator is in disrepair. Its MRI machine can't operate without electricity. It's short on gas for disinfection and to prepare food for patients. Concern is growing that much other essential equipment may also stop working or have to shut down for lack of power.

Shifa's director, Hassan Khalaf, and the Red Cross describe the situation as critical. Lives are at risk. The intensive care unit can't operate. Electronic equipment in the newborn baby unit doesn't function, and the staff has to manually pump oxygen to all infants. In addition, stocks of about 160 essential medicines have run out and another 120 are running low. Shifa can't run very long under these conditions.

Nor can Gaza's other hospitals and all other operations in the Territory - an intolerable situation barely reported on in the dominant US media. Inverting the truth, they portray Israel heroically as a democratic island in a hostile Arab sea.

They won't explain that Israel is obligated to provide essentials under Fourth Geneva's Article 55. It states:

"To the fullest extent of the means available to it, the Occupying Power has the duty of ensuring the food and medical supplies of the population; it should, in particular, bring in the necessary foodstuffs, medical stores and other (essential) articles if the resources of the occupied territory are inadequate." Israel continues to violate this law and all others.

As Andrea Becker of the UK-based Medical Aid for Palestinians states: For Israelis, "international law was tossed aside long ago." The result for Gazans is "exhaustion gripping hold of (them) all. Survival leaves (them) little if no room for political engagement - and beyond exhaustion, anger and frustration are all that is left."

A Partial Border Reopening

On November 24, Haaretz reported that "Israel partially (opened) its border crossings with the Gaza Strip (today) to allow the transfer of humanitarian aid (after) all but completely (keeping them) shut for (the past) 19 days." Defense officials let in "44 trucks with basic goods....through Kerem Shalom crossings" in the South.

According to the Ma'an News Agency, another 200 truckloads of UN humanitarian aid and 25 more containing food will also be allowed through Kerem Shalom. This is helpful but woefully short of what the Strip needs regularly to care for its 1.5 million people, most of whom rely solely or mainly on outside aid.

Whether this additional aid will even arrive is now open to question, according to Haaretz (on November 25). It reported that Israel "closed its crossings with Gaza again," supposedly after two Qassam rockets were fired on Sunday, one on Monday, and another on Tuesday. Unmentioned are the regular and devastating IDF attacks against Palestinian civilians who have little more than crude weapons for self-defense and are no match against Israel's overpowering force.

According to Haaretz on November 26, some aid may be forthcoming and surprisingly from Libya. It "sent a ship carrying 3000 tons of humanitarian aid to Gaza" to break Israel's blockade. The International Middle East Media Center called on other Arab states to do the same - flout the blockade and send aid even with no assurance Israel will allow it in. It's been very effective preventing most everything so far and shows no signs of relenting.

A Shocking Red Cross Report

On November 15, the London Independent headlined an article titled; "Chronic malnutrition in Gaza blamed on Israel." Writer Donald Macintyre referred to a leaked Red Cross report he called "explosive."

It chronicled "the devastating effect of the siege that Israel imposed after Hamas (took control of Gaza) in June 2007 and notes that the dramatic fall in living standards triggered a shift in diet that will damage the long-term health of (Gaza's population). Alarming deficiencies (showed up) in iron, vitamin A and vitamin D."

The report goes on to say that "heavy restrictions on all major sectors of Gaza's economy, compounded by a cost of living increase of at least 40%, is causing progressive deterioration in food security for up to 70 per cent of (the) population. That in turn is forcing people to cut household expenditures down to survival levels."

Chronic malnutrition is rising steadily, and "micronutrient deficiencies are of great concern." Since 2007, the reported cited a switch to "low cost/high energy" cereals, sugar and oil and away from higher-cost animal products, fresh fruits and vegetables. This type diet assures long-term harmful consequences for people on it.

The Red Cross said that "the (18 month) embargo has had a devastating effect for a large proportion of households who have had to make major changes on the composition of their food basket." They now rely 80% on cereals, sugar and oil. In addition, people are selling assets, cutting back on clothing and children's education, scavenging for discarded items, and doing virtually anything to survive.

The report refers to economic disintegration and that prolonging the current situation risks permanently damaging households and their capacity to recover. The study was conducted from May to July 2008.

Mark Regev, spokesman for Israeli prime minister Ehud Olmert, had little response except to say that the people of Gaza were being "held hostage" to Hamas' "extremist and nihilist" ideology. In fact, Hamas wants peace, has repeatedly been conciliatory, and its founder, Sheikh Ahmed Yassin, said earlier that armed struggle would cease "if the Zionists ended (their) occupation of Palestinian territories and stopped killing Palestinian women, children and innocent civilians."

That offer is repeatedly rejected. More recently, Hamas offered to maintain peace and recognize Israel in return for a Palestinian state inside pre-1967 borders, its Occupied Territories. That, as well, is a non-starter for Israel. It conflicts with its West Bank plan to colonize the Territory and ethnically cleanse its rightful inhabitants in violation of international law.

Israeli Clampdown on Human Rights Organizations and the Media

Over 20 human rights organizations sought entry to Gaza but were denied to prevent them from seeing and reporting on conditions on the ground. A delegation representing the Coordination Forum of The Association of International Development Agencies (AIDA) arrived at Erez Crossing with the required permit and were still prevented from entering.

International journalists are also banned. The AP head and Israeli Foreign Press Association chairman, Steven Gutkin, said journalists called and complained. In response, the association appealed to the government without success. "We consider it a serious problem for freedom of the press. We think that journalists have to be placed in a special category. A blanket ban on people going into Gaza should not apply to journalists," Gutkin explained.

"We are hoping that this is not the start of a policy of banning journalists from Gaza. We would like to point out that when times are tough, and when things heat up, it is important for journalists to be able to enter" and report on it.

A BBC media crew was also refused entry along with Conny Mus from Dutch television station RTL after being told he and his crew had permission.

Even Haaretz objected in a recent editorial titled: "Open Gaza to media coverage." It stated: "To serve their function sufficiently, representatives of the Israeli and international press must be in Gaza, just like in any other conflict region around the world. There is no way to cover (events there) without free access...."

Haaretz called on the Israel Press Council, journalist associations, editors, writers, and the public to "raise their voices in protest." It also asked the defense establishment "to immediately lift the media closure."

The Israeli press has been banned from entering Gaza for the past two years. Only Haaretz correspondent Amira Hass has been there. She then left and could only get back in by sea, and not easily or safely.

Orwell would appreciate how Coordinator of Government Activities in the Territories Peter Lerner responded: "There is no decision not to allow journalists in." The Israeli foreign ministry said no restrictive order was issued in spite of clear evidence it's being enforced.

Hostilities in Gazan Waters

The Israeli navy is also in action. It arrested three human rights activists: Darlene Wallach from America, Andrew Muncie from Britain, and Vittorio Arrigoni from Italy as they accompanied Gaza fishermen in waters nowhere near ones under Israeli control. The three were imprisoned, are on hunger strike in protest, and may face deportation or worse as Israeli justice is harsh and not forthcoming against opponents of its policies.

Under the Oslo Accords, Palestinians can fish as far out as 30 kilometers. Forty thousand fishermen and their dependents rely on their catch for their livelihoods and sustenance. Israel egregiously impedes them, and after Hamas took control of Gaza, it restricted fishing to within six kilometers of shore (in less productive shallow waters) and rigorously enforces it. Those exceeding the limit risk being shot or arrested and their boats confiscated or destroyed - another serious international law violation.

Saber Al-Hissie is one of them. He's been fishing in Gazan waters for 15 years, his father and grandfather before him. He spent half his life at sea, "but every day we face problems from Israeli gunboats," he explained. "They follow us, and then they start shooting at us because they want to force us to stop working."

Thousands of fishermen live in Gaza, mostly in and around Gaza City where the main harbor is located. Al-Hissie is one of them and describes the restrictions Israel imposes on him and others trying to earn a living from the sea.

"If we sail six miles out to sea, then maybe we will be safe. But if we go any further, the Israelis always harass us. They circle the boats, they shoot towards us, and recently they started using water cannon to attack us." He won't exceed the limit to protect his boat, but it's scared with bullet holes anyway.

He and others aren't safe wherever they fish. They're harassed and attacked daily. "Unless you see it for yourself, you cannot believe the situation we are facing," he explains. It decimated local fishing. Ten years ago, Gazan fishermen caught about 3000 tons a year. It's now less than 500 and another part of the Gaza siege, Israel's war on its people, and its ongoing slow-motion genocide. "We just want to fish and support our families," says Saber. "We are not committing any crimes, but they are."

End the Israeli Blockade and Stop the Genocide

On November 24, UN General Assembly president Miguel D'Escoto Brockmann said Israel's treatment of the Palestinians was like "the apartheid of an earlier era." His remarks were at an annual debate marking the International Day of Solidarity with the Palestinian People. He added: "We must not be afraid to call something what it is" since the UN passed the International Convention against the crime of apartheid.

Israel's response was familiar. Its UN ambassador, Gabriela Shalev, called Brockmann an "Israel hater." He's a 75-year old Catholic priest. If he were Jewish, she'd have accused him of being "self-hating."

On November 20, the UN High Commissioner for Human Rights, Navanethem Pillay, called for an immediate end to Israel's blockade. In response, the Ministry of Foreign Affairs (MFA) audaciously expressed shock at what it called a one-sided statement.

The High Commissioner's call came after mounting reports of human rights and humanitarian concerns. For its part, Israel claims its siege is a necessary response to mortar and rocket attacks on Israeli towns and military posts. They're little more than pin pricks and only occur in response to sustained and brutal Israeli attacks against Gazan civilians, including men, women and children - a long-standing practice for decades with overwhelming force against light arms and homemade weapons as well as children throwing rocks. It hardly justifies a medieval siege against 1.5 million people and the horrific fallout it causes. And for what?

For five months through November 3, Hamas and Israel were at peace as a result of an agreed on Egyptian-brockered hudna (or truce). On November 4 it ended when the Israeli Defense Forces (IDF) entered Gaza (without cause) and killed six Hamas officers supposedly because of tunnels close to the Kisufim roadblock. Thereafter, and in spite of both sides calling for peace, IDF hostilities continued.

Israel is a serial aggressor. Hamas responds in self-defense (as do West Bank Palestinians). Reality is turned on its head. Lightly-armed Gazans are called terrorists, and the world's fourth most powerful military its victims.

In fact, Gazans are grievously harmed, impoverished, slaughtered and now starved. Israel claims it as a right. International law is a non-starter, and a state of war exists against innocent men, women and children with no world efforts made to stop it.

The Washington - Israeli axis believes strife, instability, and a "war on terror" can remake the Middle East and place it firmly under their control. No matter that it failed hugely in Iraq, the same in Afghanistan, and for over six decades in Occupied Palestine.

Today starving Gazans won't be silenced. They keep protesting, and according to Hamazah Mansur, head of the Jordanian-based Islamic Action Front's six-member parliamentary bloc: If conditions in the Territory worsens, "Arab rulers should expect an earthquake that would shake their countries and regimes." It's high time something shook them out of their silent complicity with decades of slow-motion genocide, now worse than ever in Gaza under siege.

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 of world and national issues with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=11087

Lurching Toward Gomorrah: More Signs of An Unstoppable Economic Meltdown

Lurching Toward Gomorrah: More Signs of An Unstoppable Economic Meltdown - by Stephen Lendman

Crisis denialists are still around but are slowly and grudgingly giving way to the reality that global capitalism is in serious crisis as recession lurches toward depression in a continuing downward spiral.

Nearly every new data release confirm it. On November 19, housing starts and permits hit record lows, according to the Commerce Department. At an annual 791,000 rate last month, they were the lowest they've been since number tracking began in 1959 and are down 4.5% from a revised 828,000 September reading.

Building permits were also worrisome at an annual 708,000 rate (down from 805,000 in September), breaking the previous 709,000 March 1975 low figure.

With supply way exceeding demand and prices in near free fall, no end of this is in sight for an industry perhaps facing its most challenging environment ever. The National Association of Home Builders (NAHB)/Wells Fargo November housing market index shows why. It fell to a seasonally adjusted 9 reading - its lowest recorded level since the index first began in 1985 and below its October reading of 14. Any number below 50 indicates contraction.

In addition, the Mortgage Bankers Association's (MBA) weekly purchase loan index fell 12.6% in the week ending November 14. At 248.50, it's at its lowest loan applications level since December 2000. This signals weak future home demand at a time when it's woefully weak and declining.

There was more bad news on November 20 as well as weekly initial jobless claims keep rising. This time by a higher than expected 27,000 to 542,000 in the week ending November 15 - the highest level since July 1992. The four-week average is its highest since January 1983 as employment keeps deteriorating at an increasing pace.

It's no surprise that the October 28 and 29 Fed Open Market Committee minutes showed the sharpest meeting-to-meeting sentiment drop in memory, according to one of its former governors, Lyle Gramley. It now predicts that the economy will contract for a year or longer and "agreed that the downside risks to growth had increased." Back in August, the Fed left interest rates unchanged at 2%, foresaw continued but lower growth, and said: "Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the Committee."

Currently, the Philadelphia Fed's survey predicts that GDP will shrink by 2.9% in Q 4, a sharp downgrade from its last 0.7% growth prediction. It added that the economy entered recession in April. It will last at least 14 months and will be one of the longest ones since the 1930s. Its latest survey of manufacturing conditions decreased from -37.5 in October to -39.3 currently. It's now at its lowest point since October 1990 and falling. Its employment index also fell to -25.2.

Another distressing sign is the growing number of unsold goods in Long Beach, one of the nation's most active commercial ports. On November 18, The New York Times called them "A Sea of Unwanted Imports" and a reflection of growing inventory levels - up 5.5% in September from a year earlier and rising.

Long Beach accounts for about 20% of the country's container imports. It's second only to Los Angeles, and its volume is down 10% from last year. It's "where imported products arrive and filter through the tributary of trucks, trains and retailers into the hands of consumers. But now, products are just sitting" and turning the port into a parking lot. Nearly all other major ports are in similar decline as the current crisis worsens.

Veteran Long Beach port workers say the slowdown is like nothing they've ever seen. It's affecting other businesses and workers, and it's got them all worried. US consumers, too, and in the words of one reflecting the many: "I'm saving money, paying bills (and) hunkering down." It shows in declining retail sales.

The Architecture Billings Index (ABI) indicates future construction activity. In October, it hit an all-time low since the survey began in 1995. It's at 36.2, down significantly from 41.4 in September. Any number below 50 indicates contraction. In addition, new project inquiries were at 39.9, another record low.

Many other indicators are as bleak and show the economy in free fall, taking most others down with it. Clearly the verdict is in. At the least, it's the worst economic crisis since the 1930s. At worst, it may be far greater that only the fullness of time will reveal.

Bellweather Canaries in the Coal Mine

Once a bellweather corporate icon and virtual proxy for the S & P 500, General Electric has fallen on hard times. In September 2000, its stock price traded at around $60 a share. On November 20, it fell to $12.84 for a net eight year loss of nearly 79%. Back in April, when the company badly missed its earnings target, the stock lost $47 billion in market value that day, and The Economist remarked that "This is not what investors expect from one of the few remaining triple-A rated companies, famed for hitting its targets." Analyst Bob Chapman believes only gold deserves that rating at a time when no asset class is safe.

CreditGuru.com defines a AAA credit rating as follows:

"Bonds rated AAA are of the highest credit quality, with exceptionally strong protection for the timely repayment of principal and interest. Earnings are considered stable, the structure of (its) industry is strong, and the outlook for future profitability is favorable. There are few qualifying factors present which would detract from the performance of the entity, the strength of liquidity and coverage ratios (are) unquestioned and the entity has established a creditable track record of superior performance. Few entities (warrant) a AAA rating."

Why? Because of practices like these:

-- living excessively off credit;

-- an uncertainty of future earnings;

-- playing fast and loose with accounting policies;

-- lying to investors;

-- diluting the market with recapitalizations; and

-- having a history of these practices.

Government fiscal irresponsibility is no different than for businesses. As a result, America's credit worthiness is at risk.

In the late 1970s, 58 companies were rated AAA. In the 1990s, it was 22, and in 2001 nine.

Today, according to 247wallst.com, GE is one of only six corporations rated AAA by S & P (along with ExxonMobil, J & J, Toyota, Berkshire Hathaway, and ADP) but it's status is clearly jeopardized in the view of some analysts. One puts it this way:

"The legendary American institution is in deep trouble. Its PR machine has been in constant spin mode as the company sinks deeper into despair." Its "AAA rating is not worth the paper it is written on. One look at GE's balance sheet will convince you....AAA companies do not need to take the desperate actions that GE has taken in the last few months."

The first signs of real trouble appeared in April when the company missed its target. "It is widely known that they are masters of 'legal' earnings manipulation," so it came as a shock. "Accounting rules allow for wide discretion in reserves and estimates. GE Capital has always been a black box within the larger company," and the management used this division "as its backstop for meeting earnings estimates." It failed, and it's slide has been precipitous enough for the company to need Warren Buffett to invest $3 billion as a psychological boost and have to pay him a 10% dividend and other incentives to get it.

"Credit default swaps (CDSs) protecting against GE Capital default now trade as if GE is a junk bond credit." And issuing $12 billion in new common stock (at $22.25 a share) was "an act of extreme desperation and brings into question whether GE has a lucid strategy."

Its divisions face problems across the board but especially GE Capital, its largest with three subdivisions - GE Commercial Finance, GE Money, and GE Consumer Finance. The company "is a bank disguised as an industrial conglomerate." In boom times, it did wonders for its profits. Today it's "a rocky path to destruction," and as GE goes, so goes the S & P 500 perhaps and the economy along with it.

Market analyst Robert Prechter calls GE a "bellweather for a global bear market," and when the August 1982 - January 2000 longest ever bull market ended, he said "GE is going to go way down (and it) probably heralds stormy weather ahead for the market as a whole; or should we say 'hole?' " Prechter maintains that view today as GE's valuation keeps falling at a time when it just secured government insurance for $139 billion of GE Capital debt. If the company was strong, it wouldn't need it. Getting it is a sign of real weakness.

A condition also affecting Citigroup that's teetering on the brink of failing. No longer the nation's largest bank, it, too, has fallen on hard times and its stock price reflects it. At $3.77 a share on November 20, it's down around 94% from its closing high and now trades at 15-year lows. Clearly the company is in very big trouble. So are other major banks. They're all effectively insolvent and are only kept operating with billions in government aid and plenty more if needed under Paulson's no banker left behind scheme. At least none anointed too big to fail.

Perhaps in Citi's case, it's too big to save. It has $2 trillion in assets, a $37 trillion (notional value) derivatives portfolio (including $3.6 trillion in credit default swaps), $202 billion in troubled residential mortgages, huge numbers of shaky auto loans, and unknown amounts of other dead weight that may in the end sink the company. One analyst calls Citi insolvent and says its problems are double those of AIG. It plans 52,000 job cuts (14% of its workforce) on top of 25,000 previously announced and more to come as the company furiously restructures to survive.

On November 21, the Wall Street Journal highlighted the company's plight in a feature article titled: "Citi Weighs Its Options, Including Firm's Sale." It cites company executives considering the possibility of auctioning off pieces of the bank or selling it entirely after its worst ever percentage one-day drop in valuation. The board of directors will meet to decide what's next and may do what was "unthinkable only weeks ago." They must also deal with growing rumors that Citi is on the verge of bankruptcy and that Washington plans a takeover, AIG-style.

For now at least, a stopgap plan was announced on Sunday (November 23) for Washington to provide Citi with another $20 billion infusion and will guarantee as much as $306 billion of its troubled assets. The bank must absorb its first $29 billion in losses and 10% of others beyond that. The Treasury will assume the next $5 billion, the FDIC the next $10 billion, and the Fed will take the rest up to the agreed on amount. This may provide some temporary relief, but given the extent of Citi's problems, it may in the end be short-lived.

Growing numbers of other companies face similar problems or may in the months ahead. The auto giants are already insolvent and a hair's breath from bankruptcy or even oblivion. Other companies fear a similar fate. It's reflected in their sinking stock prices and bond yields, especially the junk variety. As reported in the Financial Times:

"Average yields on US junk bonds have topped 20 per cent for the first time (over 50% for GM debt) amid rising concerns about a protracted recession and a wave of corporate defaults." It could have a "dramatic impact on economic activity" by making debt prohibitively expensive. These issuers comprise nearly half the corporate bond market, according to S & P. "The yield on the benchmark Merrill Lynch US High-Yield index hit 20.81" topping its previous 18.66 January 1991 reading.

Even worse, the risk premium spread over Treasuries is nearly double what it was then when the benchmark 10-year bond yielded over 8%. Today, it's ranging between around 3.0 - 4.0%. Moody's sees 14% of corporate bonds defaulting - an all-time high figure since it began keeping records, and it's likely the number will rise as the global crisis deepens and companies start falling like tenpins.

Maybe US Treasuries also according to analyst Martin Hennecke of Bridgewater Ltd, Hong Kong. He told clients that "The US might really have to look at a default on the bankruptcy reorganization of the present financial system," and a corresponding government one is very possible.

"In the United States, there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off." He added that to solve or stem the current crisis, America will have to radically reduce spending across the board and recall all its troops from around the world. As for a stimulus package, "there is not much of an industry left to stimulate back to life," he believes. Others agree and see depression ahead - not whether but when it will arrive.

Then there's Asia with Bloomberg reporting (on November 19) that: "Asian stocks fell, extending a global rout, as Japan's exports declined the most in almost seven years (7.7% from a year earlier) and US consumer prices sank by a record" raising the specter of deflation. One analyst described it as "the end of the world as we know it" in the worst ever global slump he's seen and "no region (able) to help (others)."

AFP in Tokyo said "Japan (officially in recession) reported a rare trade deficit in October." Exclusive of the slow holiday-affected January period, "it was the first red figure in 26 years" and a sign of more trouble ahead. In America also with JP Morgan Chase predicting that the Fed will cut interest rates to zero by January, hold them there throughout 2009, and other central banks will cut as well. But hold the cheers.

So far, monetary policy has been ineffective and little more than pushing on a string in a liquidity trap climate. Further, perception is everything at a time confidence is at record lows and shows no signs of stabilizing.

Once nominal rates hit zero, "the Fed has run out of ammo" except for what innovative tools it may use - such as buying toxic debt more aggressively and transferring it to its balance sheet in unheard of and reckless new ways.

One analyst weighs in on this possibility as follows: It's a desperation-driven "course of action that is not working (and) not a sign of intelligence....If Fed funds at 1% (and huge liquidity injections aren't) inducing banks to extend credit, a further reduction....won't have any impact" either, so why do it and maybe makes things worse.

It's why analyst Tim Duy calls Fed policy "adrift" in a November 20 commentary. He cites "a distinct lack of leadership and believes Bernanke "has used up his bag of tricks" and doesn't know what to do next. He calls recent Fedspeak "littered with confusing statements that leave the true policy of the Federal Reserve in question." For example, on interest rates, whether to lower them further or stand pat, and more debate on the target rate is "nothing more than academic masturbation."

That rate is a non-issue, and "policy needs to take a different direction....One can only conclude that Fed officials do not understand their own policies. Policy is adrift. Be afraid; be very afraid....Bernanke cannot elucidate a coherent policy strategy to his organization because no such strategy exists. What does exist is a potpourri of policy responses that amounts to providing liquidity at all costs....Beyond this, the Fed is stuck in a netherworld of dual policy targets - not ready to admit the loss of the interest rate target, not ready to adopt a formal policy of quantitative easing."

"I think it is high time some real critical attention was placed on Bernanke. How complicit was (he) with designing and implementing a clearly failed policy?" And while "Fed officials publicly debate the intent of their own policies, investor confidence is collapsing. Bernanke needs to step forward and define policy. We need to pressure him into providing that leadership - or (have him) step aside for someone else to do it."

It's a sign of the times that another analyst describes this way: America's problems "are trickling down from the top and devastating (people) at every level. A vicious cancer has materialized and every segment of the economy is suffering. Americans increasingly have nowhere to turn as funds dry up and unemployment skyrockets."

According to The New York Times (on November 20), even New York's shoeshine business is suffering. In Grand Central Terminal alone, one operator of five stands now gets 100 customers a day compared to 700 in good times. It's a "s(h)ign" of the times.

The World According to Paul Volcker

At a November Lombard Street Research conference in London he said: "What this crisis reveals is a broken financial system like no other in my life. (He's 81.) Normal monetary policy is not able to get money flowing. The trouble is that, even with all this (intervention and) protection, the market is not moving again....I don't think anybody thinks we're going to get through this recession in a hurry." Leading up to this has been "leveraging in the economy beyond imagination, and nobody was saying we need to do something....Alan (Greenspan) was not a big regulator."

It's now payback time, and according to economist Paul Ashworth, business spending is in "meltdown." And the same is true for maxed out consumers.

Market Watch columnist Paul Farrell sees depression ahead in 2011 and lists 30 reasons why. Here's a sampling:

-- America may lose its AAA credit rating; it already exists in name only;

-- growing numbers of companies need bailouts;

-- "Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states;"

-- sinking state revenues and rising debts signal trouble;

-- "state, municipal, corporate pensions lost hundreds of billions on derivative swaps;"

-- "consumer debt way up, now at $2.5 trillion; next area for credit meltdowns;"

-- Fannie Mae, Freddie Mac, AIG, the big banks and other companies are bleeding cash and want more taxpayer dollars;

-- bailout costs will be in the many trillions;

-- all asset classes are sinking and signal a global meltdown;

-- retailers are failing; "mall sales (are) in free fall;"

-- unemployment (is) skyrocketing; and

-- "government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists" - exceeded only by Wall Street's level of greed and corruption.

Two Additional Shoes to Drop

The auto industry for one. They're so close to the edge that no amount of bailout may help, but consider the consequences of bankruptcy. The big three employ around 250,000 US workers and affect nearly three million others at suppliers, dealerships and other companies. Without this industry, unemployment will skyrocket to unimagined levels, and the economic fallout will be catastrophic - both at home and globally because these companies have foreign operations and America's problems resonate everywhere.

Alt.A loans are another issue, called by some "liar loans." Moody's recently warned about this less publicized part of the mortgage market, and they should. They've grown faster than subprime ones to borrowers with less than top credit.

Alt.A refers to people with A-rated credit who borrow with little or no verification of income, or so-called alternative documentation. They cut across all socio-economic lines, exist everywhere in the country, are in danger of imploding, and if it happens, they'll dwarf the subprime meltdown. Why so? Because they're higher-priced, higher-leveraged, and there are more of them.

In combination with so-called Jumbo Prime mortgages, over $1 trillion in residential mortgages are at risk - much of it on balance sheets of the nation's largest banks (including Citigroup, JP Morgan Chase and Bank of America) and another reason why their stock prices are plunging.

As of October, Alt.A delinquencies of at least 90 days averaged 20.3% for those originated in 2006. For 2007 ones, it's 17.5%. According to Moody's, prepayment rates are at historical lows (in the mid to high single digits) and are expected to remain depressed in light of credit tightness and declining home equity. Moody's stated:

"Given the lack of pool seasoning, cumulative losses have not yet risen as steeply as delinquencies. However, many pools are starting to show a sharp increase in the rate of loss realization. As the pace of liquidations has picked up, the performance data suggests worsening loss severities."

Moody's added that when Alt.A loans include an option adjustable-rate mortgage, delinquencies outpace pools without option-ARMS. The reason is because negative amortization results in weaker loan-to-values, and downgrades are certain to follow.

Corporate Director Resignations Increasing

It's another sign of the times and highlighted in the Wall Street Journal (November 21). The Journal states: "Departing board members cite too-frequent meetings and conference calls. (Thus) a small but growing number....are quitting or planning to quit corporate boards just when companies need them most."

They give the usual reasons, but not the more likely ones. Corporate directorships pay well for a limited amount of work - six-figure compensation, stock options, and various other benefits as well as gaining valuable interlocking relationships with other corporate officials.

So why give them up? Along with benefits comes liability at a time many companies are floundering. Growing numbers face potential insolvency, shareholder law suits, and other increasing downside uncertainties. Citing too little time is a smoke screen. Busy people are rarely too busy for things they feel are important. Avoiding unnecessary risk is one of them.

Gold - The Traditional Safe Haven in Troubled Times

On November 19, Market Watch.com reported that "Retail investors sharply increased their demand for gold bars and coins in the past few months as they struggled to find a safe place for their money amid the financial crisis...."

On the same date, a World Gold Council press release stated:

"Dollar demand for gold reached an all-time quarterly record of US $32 billion in the third quarter of 2008 as investors around the world sought refuge from the global financial meltdown, and jewelry buyers returned to the market in droves on a lower gold price. This figure was 45% higher than the previous record in Q 2 2008. Tonnage demand was also 18% higher than a year earlier."

Record demand is showing up at retail and in exchange traded fund (ETF) inflows. They were also offset by "inferred investment" outflows by hedge fund liquidations to raise cash for redemptions.

James Burton, World Gold Council's chief executive officer stated:

"Gold's universal role as a store of value has shone through during this quarter helping (to) attract investors and consumers to all forms of gold ownership. Looking forward, given the uncertainty that surrounds the global economy, gold's safe haven appeal should continue," but so will the speculative side of the gold market.

Earlier in the year, spot gold reached $1000 an ounce. The price then briefly fell below $700, remained in the low to mid-$700 range (until on November 21 it spiked to $800), and reasons cited are that institutional investors are selling desired assets to meet margin calls on weaker ones. Perhaps so, but much more is going on as well.

Markets are heavily manipulated, and gold among others are targeted. For the precious metal, it's to hold down its price to make dollars more attractive at a time it should be soaring and likely will looking ahead with some forecasts of it reaching extremely high valuations.

Noted analyst Richard Russell of Dow Theory Letters has his view on gold and its price action. He believes "one way or another, gold is being manipulated by certain sources. What group would least want to see (it) heading higher? My answer is the Fed. (It's) exploding the money supply. This would ordinarily foment inflation. Surging gold is a red flag that the public understands. The Fed is doing everything it can to hide the fact that it is devaluing the dollar via its" explosion of the money supply.

Russell believes that gold is in a primary bull market. The longer its price is artificially depressed, the "greater the bull forces within gold will struggle to express themselves."

Even now, the New York Post reported (on November 18) that "Governments Can't Handle (the) Global Run on Gold Coins....as people around the world are demanding so many of the valuable coins that government mints are having difficulty filling orders."

The US mint is allocating them to restrict supply. It increased its dealer price for a 10-ounce coin by 10% and one-ounce coins by 3%, and one dealer says that customers wanting 200 gold coins have to wait up to two weeks to get them. Six months ago they were available immediately. In addition, some dealers turn customers away, and those selling them demand a 10 - 15% premium over the Comex quoted price.

It hasn't curtailed demand and why not. Gold is a global thermometer that reflects monetary, political and economic stability as well as marketplace demand - for investment, jewelry, or as the ultimate hedge against uncertainty. When prices rise, it usually warns of trouble - geopolitical, inflation, deflation, the loss of confidence in fiat currency, or a possible looming depression so far not reflected in the metal's price, but watch out.

Gold's price may be resting for a time and is being artificially held down, but for how long. If conditions keep deteriorating and money creation remains too expansive, sooner or later gold may explode on the upside.

Petrodollar states may think so and are making large gold purchases. In November, Saudi investors bought $3.5 billion worth, reportedly as a safe haven at a time of crisis and falling oil prices. Reuters said that Iran is converting some of its $120 billion in foreign currency reserves to gold. Dubai dealers are running low on the metal as demand is high.

In China it hit 38.4 metric tons through September compared to 24 tons for all of 2007. Gold jewelry demand in China reached 241.6 tons through September compared to 302 tons in 2007 when jewelry demand grew by 26%. China is the world's second largest gold consumer.

On November 14, The Standard (based in Hong Kong) reported that "The mainland is seriously considering a plan to diversify more of its massive foreign-exchange reserves into gold (because of) fears about the long-term viability of parking most of (them) in US government bonds" at a time America's budget deficit and national debt are soaring.

Demand in India (the largest gold consuming market) is also growing (up 31% from Q 3 2007) at a time global gold mining production was 1133 tons in the first half of 2008 or 6% below the same 2007 period. Gold supply was down 9.7% over year-earlier levels due largely to significantly lower central bank sales. Those made under the Central Bank Gold Agreement (CBGA) totaled 357 tons in the year ending September 26 - the lowest annual figure since the first 1999 Agreement. Prices are falling, but Saudis and other Middle East investors are buying and for good reason.

World economic viability is sinking, and it's affecting oil prices. They've fallen around two-thirds from their all-time high, and producer states are worried. The Energy Information Agency projects that OPEC may earn $595 billion in 2009 - way down from its earlier $979 billion net 2008 revenues and lower that $671 in 2007.

So today's gold weakness and dollar strength may turn out to be a shorter-term phenomenon than many observers believe. The 10-year credit default swap (CDS) spread on US Treasuries provides a clue. The cost of insuring against a US government default is soaring, and it's happening to Britain and Germany as well. It's now many fold higher than in late summer, a cause for worry, and likely because markets are pricing in massive bailouts that may far exceed the current levels. In the US, it already hit $4.2 trillion, it's rising, and hinting at a possible future default or huge devaluation that's the same thing.

In this environment, gold may be the safest of all asset classes at a time none are safe, and no one can predict how bad things may get before they improve. What's likely, however, is that the road ahead will be painful, protracted, and unlike anything experienced before so all the old rules don't apply, and no one knows what, if anything, may work. This saga has a long way to run, and the path ahead is down.

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 on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=11087

Fate of Lakotahs Highlights America's Failed Native American Policies

Fate of Lakotahs Highlights America's Failed Native American Policies - by Stephen Lendman

On November 6, South Dakota's governor Michael Rounds declared a state of emergency as heavy snow blanketed the state and threatened all parts of it - including Native American reservations.

They, however, were excluded from his declaration. They'll get no badly needed help, and it's an all too familiar story for our nation's original inhabitants. They've been abused and slaughtered for over 500 years. At Mabila, Acoma Mesa, Conestoga, the Trail of Tears, Pamunkey, Mystic River, Yellow Creek, Sand Creek, Gnadenhutten, and Wooded Knee. At far too many other places as well at a cost of many millions of lives, now forgotten and erased from memory.

Worst still, our Native people continue to be systematically repressed and mistreated. They live in poverty and despair. They're mocked and demonized in films and society as drunks, beasts, primitives, savages, and people to be Americanized or warehoused on reservations and forgotten.

Their cultures are willfully denegrated. Their legacy is one of millions slaughtered, betrayal, treaties made and broken, stolen lands, rights denied, and welfare criminally ignored to this day.

The Lakotahs are one of many examples, and the Republic of Lakotah web site highlights their plight. It welcomes "all self-sufficient People who come with an open Heart, a Passion for Freedom and a Love for Grand Mother Earth."

In a commentary titled "Broken Promises & Laws," it describes a Broken People whose lands were stolen, buffalo massacred, people slaughtered, and who were herded onto reservations in violation of Treaties successive US governments signed and then abrogated.

The Treaty of 1851, for example, in which the government requested a right-of-way for a road through Lakotah lands to the newly-discovered Montana gold fields. It became known as the Bozeman Trail to be used only until all gold was removed. By the Civil War it was gone and the government reneged. Forts were erected on its right of way. Lakotahs demanded they be removed. The US refused, war ensued, and it ended with the Treaty of 1868.

It stated that "The government of the United States desires peace, and its honor is hereby pledged to keep it." It also re-affirmed all rights the Indians were granted under the 1851 Treaty. Those rights and all others were abrogated and denied.

Western North and South Dakota Lakotahs are one of seven Sioux tribes comprising the Great Sioux Nation and are best known by their redoubtable leaders - Sitting Bull, Crazy Horse, Red Cloud and Black Elk, among others. Names even young school children know but not their heroic feats and the great price they and their people paid.

Before the 1770s, Sioux held territories from Minnesota to the Rocky Mountains and from the Yellowstone to the Platte Rivers. Until the Treaty of 1868, they were the richest Native American nation of the northwestern plains, but years earlier their lives were irrevocably changed. Treaties were made and broken. Settlers, railroads, and mining interests took their lands and resources.

In 1874, General George Custer invaded the most sacred Lakotah territory, the Black Hills (Paha Sapa), and with him came gold seekers. An illegal occupation followed along with billions of dollars of stolen resources and great numbers of lives lost. All in the name of progress to colonize the continent's West. All at the expense of our Native peoples who lost everything as a result.

The earlier 1787 Northwest Ordinance was deceptive on its face. Supposedly to afford Indians "justice (and) humanity," it, in fact, expanded the nation to admit new states on stolen Native American lands. Wars followed. Broken promises and treaties as well in violation of Article 6 of the Constitution that states:

"This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land" - binding without qualification on the executive, legislature and judiciary.

The Sioux acted in good faith to avoid confrontation, but in vain. The executive, Congress, and judiciary denied them their lands, vital resources, and basic rights through a succession of repressive laws:

-- Homestead Acts - for settlers only that gave them title to 160 acres of "underdeveloped" land outside the original 13 colonies; 1.6 million in all got around 270 million acres, or 10% of all US land between 1862 - 1886;

-- Allotment Acts - various "act(s) to provide for the allotment of land in severalty to Indians on the various reservations and to extend the protection of the laws of the United States over the Indians, and for other purposes;" for example, the 1887 Dawes Act that distributed mostly unwanted and unviable land in Oklahoma; it was done by dividing reservations into privately-owned parcels to destroy Native cultures, impose western values, and achieve forced assimilation;

-- the Indian Citizenship Act of 1924 to force citizenship on all Native Americans; the words of one spoke for many: "United States citizenship was just another way of absorbing us and destroying our customs and government; how could these Europeans come over and tell us we were citizens in our country; we had our citizenship;" it's "in our nations;" forcing their citizenship on us "was a violation of our sovereignty;"

-- the 1934 Indian Reorganization Act (aka the Wheeler-Howard Act or the Indian New Deal); it reversed Dawes provisions and created what Native Americans call the first Apartheid Act that still applies; the 1964 Bantu Development Act copied this law and institutionalized black and white separation in South Africa; the same practice exists now in Occupied Palestine, in US inner cities, and wherever else white supremicists want unwanted people kept out of their restricted spaces;

-- forced relocations continued during the 1950s and 1960s;

-- Supreme Court rulings against Native American religious practices; in City of Boerne v. Flores (June 1997), the Court ruled against the 1993 Religious Freedom Restoration Act that prohibited the government from "substantially burdening" a believer's religious practices; the Court held that this act attempted to overturn its own First Amendment interpretation; in Employment Division v. Smith (April 1990), the Court ruled that Oregon could deny unemployment benefits to a person fired for violating a state prohibition on the use of peyote, even for a religious ritual; in other words, this and similar practices aren't protected under the First Amendment freedom of religion provision; and

-- Native Americans on reservations aren't entitled to the same constitutional rights (like free speech, religion, assembly, and due process, etc.) as other Americans even though they're legal citizens; non-Indian people when on reservations (so-called "tribal trust status lands") also relinquish these rights while there; in addition, "tribal sovereignty" benefits leaders alone, not their people, and tribal chiefs get their authority from the Interior Secretary and US-run Bureau of Indian Affairs (BIA).

"Tribal sovereignty" is a profound misnomer. It belies any sense that Indians on reservations are self-governing. They are not. There are no checks and balances, no separation of powers, no constitutional protections, and the US government owns the lands as federal territories - under "plenary power" in trust status. In 1978, the Supreme Court ruled that Indian tribal chiefs and councils (not US law) have full authority over their people, and these "governments" are empowered by Washington.

Indian tribes are beholden to the government for help and need permission for most everything they do. Their people on reservations remain warehoused, abused and forgotten. The notion of "sovereignty" is another indignity, a charade, and silent outrage against our proud original inhabitants. Out of sight and mind in tribal "homelands," no different than South Africa's former bantustans and equally oppressive.

The Republic of Lakotah Today - A Broken People the Result of Broken Promises and Broken Laws

To this day, Native Americans and the Lakotah people are victims of what Ward Churchill calls "A Little Matter of Genocide" that he explained in his book by that title. It's from American Indian Movement founder, Russell Means, who spoke of "a little matter of genocide right here at home" by which he meant a process still ongoing.

In 1944, jurist Raphael Lemkin first defined the term to mean:

"the destruction of a nation or of an ethnic group" that corresponds to other terms like "tyrannicide, homocide, infanticide, etc." Genocide "does not necessarily mean the....destruction of a nation, except when accomplished by mass killings....It is intended....to signify a coordinated plan (to destroy) the essential foundations of the life of national groups" with intent to eradicate or substantially weaken or harm them. "Genocidal plans involve the disintegration....of political and social institutions, culture, language, national feelings, religion....economic existence, personal security, liberty, health, dignity, and" human lives.

The Convention on the Prevention and Punishment of the Crime of Genocide (adopted December 1948 and took effect in January 1951) defines genocide in legal terms as follows:

"any (acts like those Lemkin cited) committed with intent to destroy, in whole or in part, the national, ethnical, racial or religious group (by) killing (its) members; causing (them) serious bodily or mental harm; (or) deliberately inflicting (on them) conditions" that may destroy them in whole or in part.

Destroying peoples' cultures, preventing them from practicing their religion, speaking their language, and/or passing on their traditions to new generations are acts of genocide.

Nowhere does the Constitution let government abuse its people or deny them their rights. Nowhere does it authorize genocide, either in or outside the country, or permit the theft and occupation of their lands or any others.

Nowhere does it say "We the People" are the chosen few or that the minimum function of government is less than to insure the "general welfare" as stated in the Preamble and Article I, Section 8 as follows:

"The Congress shall have power to....provide for....(the) general welfare of the United States" - the so-called welfare clause for all its citizens.

Nowhere does it sanction rampant crime, unequal justice, political or corporate corruption, dishonest officials, raging social problems, the right to ignore the law, or to be able to slaughter and abuse its Native people. Nonetheless, it happens. Most egregiously to native Indians for over 500 years and counting.

Before early Europeans arrived, the Americas (North and South by expert estimates) were home to over 100 million indigenous peoples. From 1492 to 1892, US Census Bureau figures showed less than 250,000 survived. Or put another way - white Europeans committed the greatest ever genocide that was rivaled only, but not equaled, by the one against black Africans who were stolen into slavery for the "new world." Millions of them died during capture and the Middle Passage.

Our Native peoples in even greater numbers - victimized by ritual slaughter. By being hacked apart, buried alive, trampled under horses, hunted as game and fed to dogs, shot, beaten, stabbed, and even scalped for bounty or as trophies. They were also hung on meathooks like beef, thrown into the sea from ships (the way blacks were), worked to death as slaves, starved, frozen to death during forced marches and internments, and infected with deadly diseases. Our disturbing "civilization" that's untaught in American schools, and when it is Indians are the villains and the settlers their victims. History on its head the way Hollywood portrays it and still does.

Ward Churchill recounts otherwise about what he calls "the American holocaust" and compares it to the Jewish one under the Nazis. He explains that:

"Distinctions....between right, center, left and extreme left in the US are quite literally nonexistent on the question of genocide of indigenous peoples. From all four vantage points, the historical reality is simultaneously denied, justified, and in most cases celebrated (or just forgotten. But preposterous as these arguments are, all of them are) outstripped by a substantial component of zionism which contends not only that the American holocaust never happened, but that no 'true' genocide has ever occurred, other than the Holocaust suffered by the Jews" in Nazi Germany.

It's an all too familiar pattern of historical revisionism or denial to view one people's ordeal as important, preeminent or unique and another's as non-existent - depending, of course, on who suffered and who caused it. After WW II, Zionist Jews copyrighted Hitler's genocide, rebranded it "The Holocaust," framed it as a one-off event, and created the myth of unique Jewish suffering.

The Plight of the Lakotah People

The Republic of Lakotah web site recounts it from the first official political and diplomatic contacts "between Lakotah and the (US) government began in earnest after the United States (completed) the (so-called) Louisiana Purchase in 1803."

It refers to "fantasy" US history about the purported French sale of 530 million acres for a mere $15 million - part of which belonged to Lakotahs who weren't consulted or consented to the transaction. The first "peace and friendship" treaty followed in 1805. Like others later on, it was systematically ignored and violated as settlers invaded, encroached, and occupied Lakotah lands.

Throughout the 19th century, the US government "engaged in multiple military, legal and political strategies....to deny Lakotah our right to freedom and self-determination." Even after the Supreme Court's 1883 Ex Parte Crow Dog decision, it persisted. The Court recognized Lakotah freedom and independence in ruling that tribes held exclusive jurisdiction over their internal affairs. It didn't matter as in 1885 Congress passed the Major Crimes Act to extend US jurisdiction into Lakotah territory, and more egregious actions followed.

One was the 1903 Supreme Court Lone Wolf v. Hitchcock decision that recognized near absolute plenary congressional power over Indian affairs, virtually exempt from judicial oversight. It was an outrageous ruling to let the government freely expropriate tribal lands and resources on the pretext of fulfilling its federal trust responsibilities. Quite simply, it empowered Washington and rendered Indians impotent over their own internal affairs, with no rights of any kind without Washington's permission.

This ruling was then used to violate hundreds of treaties between the government and indigenous peoples, including Lakotahs. As a result, the sacred Black Hills were stolen along with billions of dollars of resources from them. America was on the move. Lakotahs were in the way, so they were shoved aside through all the various ways described above.

Today, the Republic of Lakotah explains the "Genocidal Results of the Failed American Indian Policies of the United States" under the following headings:

Mortality

-- Lahotah men have the world's lowest life expectancy at 44 years;

-- the Lakotah death rate is the highest in America;

-- the Lakotah infant mortality rate is three time the US average;

-- one-fourth of Lakotah children are fostered or adopted by non-Indian households - a willful Americanization policy to destroy their culture and existence;

-- Lakotahs have epidemic levels of disease and illness; and

-- teenage Lakotah suicide is 150% higher than the US national average.

Poverty

-- median income is a shocking $2600 - $3500 a year;

-- 97% of Lakotahs live below the poverty line - unmatched anywhere in the world except by other indigenous peoples; and

-- most families can't afford heating oil, wood, propane or any way to heat homes.

Unemployment

-- it's at 80% or higher; and

-- government funding for job creation is lost through cronyism and corruption.

Housing

-- it's so inadequate that many elderly die each winter from hypothemia (freezing to death);

-- one-third of homes lack clean water and sewage;

-- 40% have no electricity;

-- 60% no telephone;

-- 60% are infected with potentially fatal black molds; and

-- an estimated 17 people on average live in each family home - many with only two or three rooms; some homes built for six to eight people have up to 30 living in them.

Drugs and Alcohol

-- drug addiction afflicts over half of Lakotah adults; two known meth-amphetamine labs are allowed to operate; and

-- alcoholism affects 90% of families.

Disease

-- the tuberculosis rate for Lakotahs is about 800% higher than the US national average;

-- cervical cancer is 500% higher;

-- diabetes 800% higher; and

-- the Federal Commodity Food Program provides sugar-rich foods that cause high rates of diabetes, heart disease, and other preventable illnesses and diseases.

Incarceration

-- the rate for Indian children is 40% higher than for whites;

-- 21% of South Dakotan prisoners are Indians yet they comprise 2% of the population;

-- Indians have the second largest state prison incarceration rate in the nation after blacks; and

-- most Indians live on reservations that are supposed to be self-governing - in principle, that is; around 2% of Indians live under state jurisdiction.

Threatened Culture

-- only 14% of Lakotahs speak their native language;

-- it's not being taught inter-generationally; the average age of fluent Lakotah speakers is 65; thus the language is endangered and on the verge of extinction; and

-- the Lakotah language is forbidden to be taught in US government schools - a further indignity inflicted on the people.

A Final Comment

In September 2007, the UN General Assembly adopted the United Nations Declaration on the Rights of Indigenous Peoples. It passed 143 - 4 with only Australia, New Zealand, Canada and the US voting "no." Eleven nations abstained.

This document enumerates the "collective rights of the world's 370 million native peoples, calls for the maintenance and strengthening of their cultural identities, and emphasizes their right to pursue development in keeping with their own needs and aspirations."

The Declaration affirms the right of native peoples "to the recognition, observance and enforcement of treaties concluded with States or their successors. It also prohibits discrimination against indigenous peoples and promotes their full and effective participation in all matters that concern them."

This document concluded 25 years of "contentious negotiations over the rights of native people to protect their lands and resources, and to maintain their unique cultures and traditions." In that and the above stated respects, it's historic and important.

Nonetheless, America has its own "traditions" over and above those of others it disdains and abuses - the poor, non-whites, the disadvantaged, labor, non-Jews and Christians, virtually everyone outside its white supremacists elites, and clearly its Native peoples from the earliest settlers to the present day.

Nothing's changed from then to now - Broken Promises, Broken Laws, Broken Treaties, and Broken Hope for a Broken People suffering hugely in the United States of America - out of sight and mind and not an issue for the dominant news media. Very much one for people who care.

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=10946

Extrajudicial Assassinations As Official Israeli Policy

Extrajudicial Assassinations As Official Israeli Policy - by Stephen Lendman

Extra-judicial killings are indefensible, morally abhorrent, and illegal under international laws and norms. Article 23b of the 1907 Hague Regulations prohibits "assassination, proscription, or outlawry of an enemy, or putting a price upon an enemy's head, as well as offering a reward for any enemy 'dead or alive.' "

Article 3 of the Universal Declaration of Human Rights (UDHR) states that "Everyone has the right to life, liberty and security of person." UDHR also recognizes the "inherent dignity (and the) equal and inalienable rights of all members of the human family."

So do "just war" principles that rule out gratuitous violence, assassinations, especially if premeditated, war against civilians, and so on, despite the difficulties of distinguishing between combatants, those who've laid down their arms, and the innocent in times of war - let alone dealing with "terrorism" or what one analyst calls the "twilight zone between war and peace." Others say it's justifiable resistance or "blowback" in response to state-sponsored violence and other crimes of war and against humanity.

In 1980, the Sixth United Nations Congress on the Prevention of Crime and the Treatment of Offenders condemned "the practice of killing and executing political opponents or suspected offenders carried out by armed forces, law enforcement or other governmental agencies or by paramilitary or political groups" acting with the support of official forces or agencies.

The General Assembly also acted in response to arbitrary executions and politically motivated killings. On December 15, 1980, it adopted resolution 35/172 in which it urged member states to abide by the provisions of Articles 6, 14 and 15 of the International Covenant on Civil and Political rights that cover the right to life and various safeguards guaranteeing fair and impartial judicial proceedings.

The first principle of the 1989 UN Principles on the Effective Prevention and Investigation of Extra-legal, Arbitrary and Summary Executions states:

"Governments shall prohibit by law all extra-legal, arbitrary and summary executions and shall ensure that any such executions are recognized as offences under their criminal laws, and are punishable by appropriate penalties which take into account the seriousness of such offenses. Exceptional circumstances, including a state of war or threat of war, internal political instability or any other public emergency may not be invoked as a justification of such executions. (They) shall not be carried out under any circumstances including, but not limited to, situations of internal armed conflict, excessive or illegal use of force by a public official or other person acting in an official capacity or by a person acting at the instigation, or with the consent or acquiescence of such person, and situations in which deaths occur in custody. This prohibition shall prevail over decrees issued by governmental authority."

These articles and provisions apply to occupied civilian populations, and the Fourth Geneva Convention and its Article 3 affords ones (like the Palestinians) under foreign occupation special protection. It covers all actions related to "Violence to life and person, Murder of all kinds, mutilation, cruel treatment and torture." In addition, "The passing of sentences and the carrying out of executions without previous judgment pronounced by a regularly constituted court, affording all the judicial guarantees....recognized as indispensable by civilized peoples."

Its Article 32 states: "the High Contracting Parties specifically agree that each of them is prohibited from taking any measure of such a character as to cause the physical suffering or extermination of protected persons in their hands. This prohibition applies not only to murder, torture, corporal punishment, mutilation and medical or scientific experiments not necessitated by the medical treatment of a protected person, but also to any other measures of brutality whether applied by civilian or military agents."

Its Article 85 refers to "Grave Breaches" and defines them as "Acts committed willfully and causing death or serious injury to body or health....making the civilian population or individual civilians the object of attack (or)launching an indiscriminate attack affecting the civilian population or civilian objects...."

The 2002 International Criminal Court's Rome Statute also defines these grave violations as war crimes that include (in its Article 8):

-- "Grave" Geneva Convention breaches;

-- "Willing killing...."

-- "Intentionally launching an attack" knowing it will "cause incidental loss of life...."

-- "Killing or wounding" combatants who've laid down their arms;

-- extrajudicial killings; and

-- "Killing or wounding treacherously a combatant adversary...."

In 1982, the UN established the Special Rapporteur on extrajudicial, summary or arbitrary executions. It was one of several mandates to address disappearances, torture, assassinations and many other human rights abuses and violations of international law.

Philip Alston currently holds the post to investigate extrajudicial killings, hold governments responsible for committing them, failing to prevent them, or for not responding when they're carried out by others. In May 2008, he issued the latest report of his "principle activities" in 2007 through the first three months of 2008. As of March 2008, he requested permission from 32 countries and Occupied Palestine to visit. In spite of "proceed(ing) with plans for a visit," Israel "so far failed to respond affirmatively." The Palestinian Authority (PA) "issued an invitation."

The US Position On Extrajudicial Killings

In 1976, President Gerald Ford signed Executive Order (EO) 11905 banning the practice against foreign leaders in peacetime and by implication against others. Yet Reagan's Defense Secretary, Caspar Weinberger, argued that only "murder by treacherous means" is forbidden so assassinations are acceptable as long as they're unrelated to "treachery."

George Bush then swept aside subtleties, reversed Ford's EO, and authorized the CIA to assassinate Osama bin Laden, his supporters, and publicly stated that bin Laden "was wanted, dead or alive." His Defense Secretary, Donald Rumsfeld, concurred and called killing "terrorists" an act of "self-defense."

In June 2008, Philip Alston visited the US. He met with federal and state officials, judges and civil society groups in New York, Washington, Alabama and Texas. He also conducted a fact-finding tour of US prison and detention facilities and presented his findings at a June 30 press conference. He sharply criticized the Bush administration, the country's flawed judicial system, and continued rule of law violations. He cited:

-- racism in the application of the death penalty;

-- the lack of transparency in Guantanamo prisoner deaths;

-- a lack of information about Iraq and Afghanistan civilian deaths; the unwillingness of Department of Defense officials and others to cooperate; his concern about serious human rights violations as well; and

-- the refusal of the US Justice Department to prosecute mercenary contractors (like Blackwater Worldwide) who commit unlawful killings. Or the US military.

Israeli Extrajudicial Killings

Throughout its history, Israel willfully and systematically committed premeditated extrajudicial killings of Palestinians and other Arabs as official state policy - carried out with explicit high-level political, judicial and military authorization and allegedly in "self-defense" against individuals threatening Israeli security. Government officials even admit that certain persons are targeted, and Dan Haluts, former Israeli Army Chief of Staff, once told the Washington Post (in August 2006) that "Targeted killing is the most important method in the fight against 'terrorism.' " In other words, premeditated murder is acceptable as long as it's properly classified.

In May 2007 on Israeli Army Radio, Binyamin Ben-Eliezer, former Infrastructure Minister, defended the practice and said: "We decided to carry out more physical liquidation operations against (Palestinian) 'terrorists"....I think this will eliminate the damage caused to Israeli territory due to the launching of Palestinian rockets."

Almost never do Israeli government or military officials show evidence that targeted individuals acted violently or threatened Jewish citizens. Simply calling them "terrorists" is justification enough - to kill them extrajudicially, with no recourse to due process or respect for international law that bans the practice for any reason.

"My crime was to protest Israeli assassinations"

On January 5, 2007, the London Guardian headlined that comment in reporting on Jewish activist Tali Fahima's first interview following her release from Israeli incarceration. Sitting with her arms handcuffed to a chair's legs 16 hours a day, her captors said they wanted to teach her to be a "good Jew." She was imprisoned for 30 months for traveling to the West Bank, "meeting an enemy agent and translating a simple army document."

She explained and said her crimes were for refusing to work with Shin Bet (Israel's secret service), going to see the Palestinians, then protesting the Israeli assassinations policy. She was kept in isolation for nine months. Finally, at the urging of her lawyer, she struck a plea bargain for a shorter sentence, and ended up being "unbowed" by her experience. She learned how Sin Bet "terroriz(es)" people, both Palestinians and Jews. "About the nature of the government, how they do not want us to see what is going on in our name."

On August 8, 2004, she was arrested and placed under administrative detention in September. In December, she was charged with "assistance to the enemy at time of war." It was trumped up and false. In January 2005, the Tel Aviv district court ruled that she should be placed under house arrest during her trial. Jerusalem's high court overruled it on the grounds that she "identifie(d) with an ideological goal." In December 2005, she pled guilty under her plea bargain to meeting and aiding an enemy agent and entering Palestinian territory. In January 2006, she was released.

She felt compelled to make regular Jenin visits. Talk to hundreds of people, including Palestinian resisters, and for the first time heard their point of view and how hard things are under occupation. For showing compassion and disagreeing with Israeli policies, she was imprisoned for nearly 30 months on false charges. Not even Jews are safe from harsh state retribution against anyone showing defiance or daring to resist injustice.

The Palestinian Centre for Human Rights Documentation of Israeli Targeted Assassinations

The (1995 established) Palestinian Centre for Human Rights (PCHR) functions independently in Gaza and enjoys "Consultative Status" with the UN's Economic and Social Council (ECOSOC). It's also an affiliate of the International Commission of Jurists-Geneva, the International Federation for Human Rights (FIDH) in Paris, the Euro-Mediterranean Human Rights Network in Copenhagen, the Arab Organization for Human Rights in Cairo, and the International Legal Assistance Corsortium (ILAC) in Stockholm.

Palestinian lawyers and human rights activists established it to:

-- "protect human rights and promote the rule of law;"

-- create, develop and promote a democratic culture in Palestinian society; and

-- work for Palestinian self-determination and independence "in accordance with international law and UN resolutions."

PCHR issues documents, fact sheets, and reports like its quarterly accounts of Israeli extrajudicial executions in the Occupied Palestinian Territories (OPT). Its latest one is from April through June, and a more comprehensive one covered August 2006 through its latest June 2008 data.

PCHR states: It's "investigated and documented these (killings) in depth (and) concluded that the IOF (Israeli Occupation Forces) have consistently acted with utter disregard for the lives of (mostly innocent) Palestinian civilians in the OPT, and that IOF have continued to carry out state sanctioned extra-judicial executions, (in violation of) international human rights law....in the overwhelming majority of cases....suspects could have been arrested, but no efforts were made....and they were instead extra-judicially executed" - according to official state policy.

The Human Toll

Since the second Intifada's September 2000 inception through June 30, 2008, and excluding all other Palestinian killings, the IOF carried out 755 OPT executions. Victims included 521 extrajudicially targeted and 233 bystanders, including 71 children and 20 women. In Gaza, 405 were killed. Another 350 in the West Bank. The methods used included:

-- F-16, unmanned drone, and attack helicopter-launched air-to-surface missiles; tank shelling; missile launchers and gunboats;

-- Israeli military undercover units disguised as Palestinians; first established during the first (1987 - 1993) Intifada; they became more active during the second one; could easily have arrested suspects but instead killed them at short range; and

-- IOF targeted house ambushes in the West Bank.

Most often, civilians are attacked in their homes, vehicles, on streets and at workplaces. Sometimes entire families are killed, including children, women, the elderly, and infirm, and a July 2002 incident was typical. It targeted Salah Shehada, an Ezzedeen Al-Qassam Brigades (the Hamas armed wing) leader.

The IOF knew he was with his wife and children. That they lived in a densely populated residential area, and former Israeli Army Chief of Staff, Moshe Ya'alon, admitted that he knew Shehada's wife and daughter "were close to him during the implementation of the assassination....and there was no way out of conducting the operation despite their presence." An Israeli F-16 bombed his home, and completely destroyed it. Two neighboring ones also and damaged 32 others.

The toll was horrific - 77 injured civilians; 16 others killed, including Shehada, his wife, daughter, assistant, eight children, (one a two-month old baby), and two elderly men and two women. It was an indefensible criminal act of wanton murder.

In May 2007, an air-to-surface missile targeted the Al-Hayia family at his eastern Gaza meeting hall. It scored a direct hit. Killed were seven members of his family, another Palestinian and the object of the attack - Sameh Saleh Farawana, a Hamas activist. In addition, three others were wounded.

In July 2006, air-to-surface missiles destroyed Dr. Nabil Abdol Latif Abu Selmeya's home in Gaza City's Al-Sheikh Radwan district. He, his wife, and seven children were killed. In addition, 34 bystanders were injured, including 5 children and six women. At least 15 neighboring homes were also damaged in an operation Israelis said targeted Mohammed Al-Deif, Hamas' armed wing leader and apparently Israel's most wanted man.

In January 2008, an air-to-surface missile struck a civilian vehicle carrying three members of the Al-Yazji family killing Mohammed Al-Yazji, his five-year old son, and his 40-year old brother. Three bystanders were also injured. IOF sources later admitted the attack was in error and was meant for another vehicle carrying Palestinian resistance activists.

In August 2007, a Gaza operation near the Rafah International Crossing Point killed two civilians, injured 12 others and slightly wounded three targeted activists who escaped. Moments later, another vehicle was struck nearby killing the driver, a civilian bystander, and wounding 12 others, including a child.

In November 2006 in eastern Gaza, a vehicle was struck carrying Bassel Sha'aban Ubeid, an Ezzedeen Al-Qassam Brigades member. He and a colleague were killed. In addition, five Amen family members were injured, including two children.

Throughout the reporting period, there were many more killings in Gaza and the West Bank. In November 2006, four Jenin civilians. In February 2007, three others in Jenin. In March 2008, four Bethlehem civilians. Many others throughout the Territories in Ramallah, Nablus, Rafah, Khan Younis, Tul Karim, north, central and southern Gaza, and elsewhere - against activists, resisters, civilians, women and children for the crime of being Palestinians wanting self-determination, freedom, and respect for their rights under international law. For their part, Israelis, with world support and complicity, continue denying it to them repressively and illegally.

Extrajudicial Executions in the Latest Reporting Period - April - June 2008

During the period, the IOF conducted eight OPT assassinations killing a total of 16 people, including two civilian bystanders. Two operations were carried out in the West Bank. Six others in Gaza.

On April 14, an air-to-surface missile killed Ibrahim Mohanned Abu 'Olba, the National Resistance Brigades' (the Democratic Front for the Liberation of Palestine's armed wing) leader in northern Gaza. Two civilians were also injured, including a 15-year old boy. In addition, a number of nearby houses were damaged.

On April 15, an air-to-surface missile killed Abdullah Mohammed al-Ghassain, an al-Quds Brigades' (the Islamic Jihad's armed wing) activist in northern Gaza. Three others were also injured.

On April 17, the IOF besieged a building in Qabatya village, southeast of Jenin in the northern West Bank. They opened fire at a civilian car, ordered people out of the building, and fired shells and demolished it with a bulldozer. Two dead Palestinians were found inside.

On April 20, an air-to-surface missile killed Nour al-Dibari in Gaza. A second missile targeted a number of Palestinians who just left a grocery shop. Its owner was seriously injured as well as his son. At least one other Palestinian was hurt as well.

On June 29, the IOF entered Tubas in the northern West Bank and set a cemetery ambush for a group of Palestinian children there throwing stones and Molotov cocktails at military vehicles. They opened fire and killed one 16-year old from multiple gunshots to the chest and abdomen.

PCHR "asserts that the Government of Israel continues to act recklessly, and with utter disregard for the human rights of the Palestinian people, including (their) right to life" and safety. Israel also fails "to meet its obligations under human rights law, including the Fourth Geneva Convention." An Israeli government representative 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=10946

Worse Than the Great Depression?

Worse Than the Great Depression? - by Stephen Lendman

It's a minority but growing view, including from 86-year old former Goldman Sachs chairman, John Whitehead, at the November 12 Reuters Global Finance Summit in New York. As disturbing evidence mounts, he said: "I think it would be worse than the depression. We're talking about reducing the credit of the United States of America, which is the backbone of the economic system. I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America.

Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S & P will announce a downgrade of US government bonds. Eventually (they'll) no longer be the triple-A credit that they've always been. I've always been a positive person and optimistic, but I don't see a solution here." Powerful words from a man who "want(s) to get people thinking about this, and realize (we're on) a road to disaster."

A subject writer, precious metals analyst, and Safe Money Report editor Larry Edelson also comments on. Most recently on November 13 in an article titled: "The G-20's Secret Debt Solution." He's quite dire in saying short-term fixes won't be discussed at its November 15 summit. A "far more fundamental fix is being (secretly) discussed - the possible revaluation of gold and the birth of an entirely new monetary system." It's a topic Edelson has spent much time on previously.

Given the speed and severity of the current crisis, he believes something big is planned and puts it this way: "If we can't print money fast enough to fend off another deflationary Great Depression, then let's change the value of the money." In other words, devalue it, but do it globally. "It would be a strategy designed to ease the burden of ALL debts - by simultaneously devaluing ALL currencies (or at least all that matter) and re-inflating ALL asset prices."

Edelson thinks G-20 officials will discuss this seriously. Essentially, the idea of "a new financial order that includes new monetary units that (will help) wipe clean the world's debt ledgers." At best, it will be a tough sell given that the US, by far, is the world's largest debtor and the one most in need of help. The urgency for all others is that if America sinks, it'll drag down all world economies with it, so it's possible some kind of solution will be arranged. But it's not assured, nor can it be ruled out that the summit will be stalemated as every nation has its own concerns and its own constituency to serve.

Edelson believes that key US officials, including Fed chairman Bernanke, Treasury secretary Paulson, and president-elect Obama back the idea, and (most but not all) key world central bankers and politicians agree that a new monetary system is needed.

Consider a historical precedent at a previous dire time - the Great Depression. In April 1933, Roosevelt issued Executive Order (EO) 6102 that stated:

....a "national emergency still continues to exist (and) by virtue of the authority vested in me....(I) do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations...."

The EO required the delivery on or before May 1, 1933 "to a Federal Reserve Bank or a branch or agency thereof" all such holdings other than amounts used in industry, profession or art and other listed exceptions. Failure to comply carried a fine up to $10,000 (adjusted for inflation today would be 16 times or more that amount), up to 10 years in prison or both. This EO is called the Gold Confiscation (act) of 1933. It's price at the time was $20.67 an ounce. Shortly thereafter, it was raised to $35 an ounce for an effective US dollar 41% devaluation.

What Edelson is suggesting is that world economies together will do the same thing - "a simultaneous and universal currency devaluation" without confiscating gold. They don't have to and instead can "raise the current official central bank price from its booked ($42.22) value an ounce - to a price that monitizes a large enough portion of the world's outstanding debts."

If this happens, debts will be reduced to a fraction of re-inflated asset prices "led higher by the gold price." Further, Edelson believes, in place of the dollar as a reserve currency, "three new monetary units of exchange (will emerge) with equal reserve status" - a new dollar, euro and "a new pan-Asian currency" with the Chinese yuan likely surviving and linked to a basket of the other three.

With devaluation, new currencies will be worth less than the old ones by a considerable amount. For example, "10 new units of money (may then equal) one old dollar or euro." They'll have new names as well, and new "regulations and programs would be designed and implemented to ease the transition to a new monetary system" - if it happens and it's by no means assured.

But if it does, central banks and governments would run things along with the IMF that's had contingency plans for such an eventuality since it was established in 1944. According to Edelson, a new monetary system will include the following:

(1) A new fixed-rate currency regime

Once the price of gold is increased and new currencies introduced, "a new fixed exchange rate system" will be introduced. The floating one and old currencies will be eliminated to reduce market volatility.

(2) New compensatory measures for savers

They'll be introduced as an inducement and to protect against further devaluation. For example, a possible "one-time windfall tax-free deposit could be issued directly to individual accounts or to employer-sponsored pensions, to IRAs, or Social Security accounts." Something like a tax rebate. At the same time, income taxes may be raised to cover the cost or perhaps some kind of global sales tax instead.

(3) Additional programs to protect lenders and creditors

They'll get top priority over individuals but with a currency worth far less than before. So programs will be needed (like tax help) to help them offset the losses that will be considerable.

Can this work? Edelson thinks so as hard as the medicine would be to swallow. Also, it's not a recipe for high growth rates or improved returns on investments the way it was in the great bull market now ended.

Another issue is what gold price would be legislated to reflate world economies. Who can say, but here are some possibilities Edelson sees, and note the dramatic effect on the precious metal if he's right:

-- if 100% of public and private sector debt is monetized, "the official government price of gold would have to be raised to about $53,000 per ounce;"

-- at 50% monitization, gold would be $26,500 an ounce;

-- at 20%, it would be $10,600 an ounce; and

-- at 10%, it would be $5300 an ounce.

The lowest figure isn't outlandish in light of historical precedent. Gold hit $850 an ounce in 1980. In CPI inflation-adjusted terms, around $2300 an ounce would equal it today. But if the government hadn't cooked the CPI calculation to keep it low, the number would be about $6250 an ounce. So if a devaluation occurs, perhaps even $10,600 might not seem unusual.

Edelson bases his numbers on US debt only because this country is the world's largest debtor and at "the epicenter of the crisis." He won't be surprised if "the G-20 monetize(s) at least 20% of the US debt markets." If so, he sees gold at over $10,000 an ounce along with currency devaluations "by a factor of at least 12 to 1, meaning it would take 12 new dollars or euros to equal 1 old dollar or euro."

A gold standard isn't needed because central banks need only monitize and reduce their debt burdens "via inflating asset prices in fiat money terms." The obvious question is what to do if he's right. Think gold, and in his judgment, make it "as much as 25% of your investable funds." He's not alone recommending this, including others who believe America is insolvent, will simply default on its debt, perhaps create a new currency as Edelson believes, and do it sooner than most people imagine. Next year perhaps because conditions are so dire and deteriorating fast.

Macro data keep confirmng it. The latest on November 13 with initial unemployment claims at 516,000 or the highest since September 2001. Continuing claims are at the highest level since 1983. For the week ending November 1, the seasonally adjusted insured unemployment advance number was 3,897,000 or an increase of 65,000 from the preceding week.

Crucial to understand is that these figures are grossly understated given the numbers of discouraged workers, part-time and occasional ones, and other ways the government cooks the books to soften or otherwise alter all types of "official" data. None of it, including GDP, inflation, and the rest is reliable. For unemployment, a good rule of thumb is to double the announced figures, so the Labor Department's reported 6.5% is, in fact, around 13% and rising.

In addition, housing continues to deteriorate. Large builder Toll Brothers president, Bob Toll, says "These are bad times if there ever were" any. Along with declining prices and rising foreclosures, it shows in new mortgage application figures - down 40% from a year earlier and no evident leveling off signs.

Still more bad news on November 14 with the Commerce Department reporting October retail sales plunging a record 2.8% after falling the previous three months. Even excluding a 5.5% drop in auto purchases, they fell a record 2.2% with lower gasoline prices accounting for much of the drop. Nonetheless, numbers were down across the board, and August and September figures were revised lower signaling a poor holiday shopping season and very bleak Q 4 that's certain to continue into the new year.

Some observers believe that these and other data lie behind Paulson abandoning his toxic asset purchase plan to give more to "nonbank financial institutions, like insurers and speciality-finance companies" as well as to "Shift Focus in (the) Credit Bailout to the Consumer," according to The New York Times. Others see the Treasury in disarray and still others think the original plan was a head fake, and all along Paulson had other things in mind and will gradually unveil them. They'll offer little for beleaguered households if anything at all.

Details on his newest plan are vague, but apparently consumers won't directly benefit. Around $50 billion will be for a new loan facility to help companies issuing credit cards, making student loans and financing car purchases. It means maxed out households won't be able to borrow because they're already overextended, and lenders will only do business with good credit risks.

Nonetheless, this is the latest twist in what some critics call making Treasury policy on the fly. First toxic asset purchases, then bank recapitalizations and various other handouts, and now the vague outlines of a new plan just announced. Tomorrow something else in the wake of the G-20 November 15 summit.

Its official 47-action items statement (drafted well in advance of the meeting) was in the usual type political-speak. According to The New York Times, "leaders of 20 countries agreed Saturday to work together to revive their economies, but they put off thornier decisions about how to overhaul financial regulations until next year (when it plans) its next meeting for April 30, 101 days after (Obama) is sworn into office." Whatever is finally agreed on, this much for certain is clear. Unchanged Washington/Wall Street dominance is planned along with putting the IMF in charge of global "neoliberalizing" with all its destructive fallout.

A Long-Term View on the Depression

It's from noted sociologist, social scientist and world-systems analyst Immanuel Wallerstein, now a Senior Research Scholar at Yale where he covers world-systems in three ways:

-- the historical development of the modern world-system;

-- the contemporary crisis of modern world-economy capitalism; and

-- structures and knowledge.

He's authored numerous books and writes regular commentaries on major world and national topics. A recent October 15 one is titled "The Depression: A Long-Term View."

It's started in his view. We're "at the beginning of a full-blown worldwide depression with extensive unemployment almost everywhere. It may take the form of a classic nominal deflation (or less likely) a runaway inflation, which is simply another way in which values deflate." What caused it, he asks? Derivatives? Subprime mortgages? Oil speculators? It's a "blame game of no real importance."

Understanding it calls for far more revealing factors, such as "medium-term cyclical swings (and) long-term structural trends." Over several hundred years at least, he describes two major ones. "One is the so-called Kondratieff cycles that historically" lasted 50 - 60 years. The other is called "hegemonic cycles" that are much fewer in number but last far longer.

America contended for hegemony as early as 1873, achieved it fully in 1945, and has been declining since the 1970s. "George W. Bush's follies have transformed a slow decline into a precipitate one. And as of now, we are past any semblance of US hegemony. We have entered, as normally happens, a multipolar world. The United States remains a strong power, perhaps still the strongest, but it will continue to decline relative to other powers in the decades to come." Nothing can change this.

Kondratieff cycles are timed differently. Its last B-phase ended in 1945, followed by "the strongest A-phase upturn in the history of the modern world-system." It peaked around 1967 - 73, and headed down. "This B-phase has gone on much longer than previous (ones) and we are still in it."

Its characteristics are as follows:

-- "profit rates from productive activities go down, especially in those types of production that have been most profitable;"

-- it directs capitalists to financialization and speculation for higher returns; and

-- "productive activities, in order not to become too unprofitable, tend to move from core zones (like America) to (lower cost) parts of the world-system."

Speculative bubbles are profitable while inflating, but they always burst. "If one asks why this Kondratieff B-phase has lasted so long, it is because the powers that be (the Treasury, Fed, IMF, and western European and Japanese collaborators) have intervened in the market regularly and importantly" to shore it up at times of economic disruptions - 1987, the 1989 S & L crisis, 1997 Asian contagion, 1998 Long Term Capital Management debacle, the 2001 - 2002 corporate scandal period, and more than ever today with big unanswered questions whether this time it will work.

It doesn't matter because we've reached the limits of what can be done - "as Henry Paulson and Ben Bernanke are learning to their chagrin and probably amazement. This time, it will not be so easy, probably impossible, to avert the worst."

In earlier depressions, innovations and quasi-monopolies helped world economies recover. In the late 1930s, WW II played the major role. Today things are different and "may interfere with this nice cyclical pattern that has sustained the capitalist system for some 500 years." They're new structural trends, according to Wallerstein. "The problem with all structural equilibria of all systems, is that over time the curves tend to move far from equilibrium (and it's) impossible to bring them back."

What happened this time? It's "because over 500 years the three basic costs of capitalist production - personnel, inputs, and taxation - have steadily risen as a percentage of possible sales price (so) today (it's) impossible to obtain the large profits" that previously were the "basis of significant capital accumulation." It's the result of capitalism working so well that it finally "undermined the basis of future accumulation."

At this point, the system "bifurcates." The immediate consequence is high chaotic turbulence (now ongoing) and will continue....for perhaps another 20 - 50 years. From the chaos "one of two alternate and very different paths" will emerge.

The present system won't survive. A new one will replace it. It will not be capitalism as we know it, but may be far worse or far better (more democratic and egalitarian). Determining the outcome is "the major worldwide political struggle of our times."

In the short-term, we're moving into a "protectionist world (forget about so-called globalization)." Governments are getting more into production - even in America and Britain. We're also moving more into "populist government-led redistribution," either in a left-of-center social democratic form or a far right authoritarian one. "And we are moving into acute social conflict within states, as everyone competes over the smaller pie. In the short-run, it is not, by and large, a pretty picture."

A Brief Summary of Nouriel Roubini's Latest Views

As of November 11, he says "the US will experience its most severe recession since WW II, much worse and longer and deeper than even (in) 1974 - 75 and 1980 - 82." It'll last through 2009 and cause a "cumulative GDP drop of over 4%." Unemployment will likely reach 9%. The US consumer is debt burdened, saving less and faltering: "this will be the worst consumer recession in decades."

A V-shaped recovery "is out the window." In prospect is either a U-shaped 18 - 24 months recession or a worse multi-year L-shaped one similar to what Japan experienced in the 1990s. Economist Michael Hudson sees an L-shaped depression ahead, more severe than what Roubini forecasts who doesn't rule out something worse than he imagines.

As a result, president-elect Obama "will inherit an economic and financial mess worse than anything the US has faced in decades:" the worst recession in 50 years;" the worst financial and banking crisis since the 1930s; a massive fiscal deficit; a huge current account one; "a financial system that is in a severe crisis and where deleveraging is still occurring at a very rapid pace," thus making the credit crunch worse; a household sector in disarray with millions insolvent and forclosures rising; the risk of serious deflation; a liquidity trap for the Fed as well; and "the risk of a severe debt deflation as the real value of nominal liabilities will rise given price deflation while the value of financial assets is still plunging."

Worse still, this is happening globally, even in mighty China that could see its market peak 12% growth rate plunge to 6% for a "hard landing." Emerging economies will be very hard hit, and advanced ones "will face stag-deflation (stagnation/recession and deflation)."

In countries like the US, Japan and possibly others, interest rates may reach zero with serious potential consequences if it happens. "Zero-bound on interest rates implies the risk of a liquidity trap where money and bonds become perfectly substitutable, where real interest rates become high and rising thus further pushing down aggregate demand, and where money fund returns cannot even cover their management costs."

Deflation also affects debt. At nominal values it will rise and thus increase its real burden. As for monetary policy, no matter how aggressive it gets, it will be "pushing on a string given the glut of global aggregate supply relative to demand (plus) a very severe credit crunch."

With this in mind, projected 2009 earnings are "delusional" and will have to be lowered sharply. As a result, view equity rallies as sucker rally bear traps, and Roubini has a cartoon to explain them:

-- top graphic: broker saying "I've got a stock here that could really EXCEL"....really excel someone asks?..another asks "EXCEL?"...still another thinks "SELL," then everyone yells "SELL;"

-- bottom graphic: everyone yelling "SELL"....one voice saying "This is madness! I can't take anymore, goodbye!" Good bye, someone asks? Buy? - asks another, and then everyone yells BUY!!

Michel Chossudovsky, Ellen Brown and others explain what's really going on. It's not pretty or what Wall Street wants investors to know. That markets are heavily manipulated. Speculation drives them up and down, and very visible (insider) hands profit hugely in either direction.

Chossodovsky: "With foreknowledge and inside information, a collapse in market values constitutes a lucrative and money-spinning opportunity, for a select category of powerful speculators who have the ability to manipulate the market in the appropriate direction at the appropriate price" - and he explains the various ways how.

Brown on the "Plunge Protection Team (PPT): it's "the group set up under President Reagan to maintain market 'stability (profitable instability also) by manipulating markets behind the scenes."

In other words, financial markets are rigged. "Free" ones don't exist except in the mind's eye of the innocent. They represent no collective wisdom other than the speculators who manipulate it for profit.

Brown: "In a rigged pseudo-capitalist economy, investors are easily separated from their money because they expect the market to follow 'free market principles' based on 'supply and demand.' They are seduced into 'pump and dump schemes" and fleeced.

In today's market climate, trusting in Adam Smith's "invisible hand" is a very hazardous exercise. Brown again: "The market today is indeed controlled by an invisible hand, but it is not necessarily serving the interests of small investors."

Paul Krugman on A Possible Depression

He doesn't expect one, but he's worried at a time when we're "well into the realm of what (he calls) depression economics." He means "a state of affairs like that of the 1930s in which the usual tools of economic policy - above all, the Federal Reserve's ability to pump up the economy by cutting interest rates - have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly."

He cites one piece of macro data, among many others, as an example - new unemployment insurance claims (mentioned above) that are high, rising, but not unusual in recessionary times. Standard policy is to cut the fed funds rate, but today doing it is "meaningless." It's officially at 1%, but it's "averaged less than 0.3 percent in recent days," so there's nothing left to cut.

Krugman suggests a huge $600 billion stimulus package, but even that could fall far short, especially if it causes as much destabilization as the Paulson bailout schemes - designed to wreck the economy, not heal it, so powerful interests can grow more powerful and do it with taxpayer dollars.

New Programs for Old Add Up to Same Old, Same Old

Shifting focus to bailing out consumers was covered above and explained as a way to help companies, not households. It's more Bush administration deception that will continue seamlessly under Obama, and just look at his major Wall Street contributors for proof. He fully supports aiding them at a time one observer calls the Treasury "privatized," and it's no secret that it's being looted.

Then there's (supposed) mortgage aid for beleaguered homeowners that falls way short of helping them. Quite the opposite in fact. The newly announced plan is more old than new and only to keep under water owners from deserting their properties and renting. The idea is for lower rates, extended loan terms, lower payments, and adding unpaid balances to principal. It's called negative amortization - when monthly payments are less than the full interest amount due. The interest accrues and principal balances increase, only putting off an eventual day of reckoning for a later time when prices of homes will be lower and owners even less able to afford them.

In others words, the solution is worse than the problem. It will sink owners more under water than at present, delay their defaulting for a later time, turn owners into levered renters, drive them deeper into debt, ensure continued foreclosures for many years to come, and end the dream of home ownership for millions. It will also discourage millions more from wanting one.

And there's more to this ugly plan. There's a catch. It focuses on loans Fannie and Freddie own or guarantee. They dominate half the mortgage market and have about 20% of delinquent loans, so far. Even FDIC chairman, Sheila Bair, is critical saying the plan "falls short of what is needed to achieve wide-scale modifications of distressed mortgages." She wants some TARP money for "fixing the front-end problem: too many unaffordable home loans," but what's needed is an entirely new plan.

One designed to work. With affordable monthly payments, principal balances reduced, and lenders required to eat losses on deceptive loans they never should have made in the first place. The proposed plan is designed to fail, and it's typical of how Washington operates. It was announced by the Federal Housing Finance Agency (FHFA), the same one that seized Fannie and Freddie in September.

On November 13, FDIC officials unveiled their own plan that improves on FHFA's but not enough. It's only for 1.5 million homeowners facing foreclosure in 2009. Its cost is an estimated $24.4 billion, and even so Henry Paulson opposes it because it taps a small portion of his TARP money.

Borrowers who've missed at least two monthly payments will be eligible for a reduced amount - at no more than 31% of their monthly income compared to the 28% of the pre-tax amount lenders once deemed affordable.

In exchange, mortgage companies will be guaranteed that if borrowers fall behind on their payments and they lose money, Washington will cover half of their loss in most cases. The plan's estimated cost is based on the assumption that only one in three borrowers with modified payments will be unable to make them. Currently, nearly half of borrowers under such plans default, so it's doubtful FDIC's plan will work, especially with home prices still falling and likely to bottom well below current values.

Nonetheless, leading congressional Democrats are supportive, and Senate Banking Committee chairman, Chris Dodd, said he'll introduce legislation to let bankruptcy courts modify mortgage loans. It's something consumer advocates want badly and the banking industry strongly opposes. It remains to be seen what kind of new law passes (if any), and despite expressing support for one during his campaign, rest assured that Obama will do nothing to harm his core constituency - his powerful Wall Street backers.

He'll likely let banks set their own terms for their own benefit to the detriment of homeowners. The way it usually works in the end. Further, arrangements announced, in place or planned can't stop foreclosures from rising. Increasing unemployment will intensify the problem. Many borrowers overstated their incomes and can't even handle reduced payments. Others were speculators on second homes and don't qualify.

In addition, home prices keep falling with no end of it in sight. Growing millions of owners are under water owing far more than their properties are worth and assuring many will default and simply rent - for less than they're now paying.

Further, securitizing mortgages complicates who owns them. Except for Fannie and Freddie, they're not your local bank or S & L in most cases, but foreign investors, hedge funds, and all sorts of other non-traditional mortgage paper holders. Usually ones homeowners can't meet with face-to-face, and if they could would be rebuffed. "Servicers" won't modify loan terms because doing so lowers their value for investors and likely would invite lawsuits.

It's another wrinkle in a complicated situation with homeowners at the bottom of the food chain being squeezed, short of major government help not forthcoming or likely in the new year. For them and most others, trouble is baked in their cake that they're now being force-fed to eat.

In greater portions after the Office of the Comptroller of the Currency refused to let lenders forgive large amounts of credit card debt. As much as 40% for consumers who don't qualify for existing repayment plans.

A rare financial industry and Consumer Federation of America alliance asked the Treasury Department for help on October 29 for very logical reasons. Consumers need it as well as credit card lenders for a way to mitigate growing losses - by assuming small in lieu of total ones and getting extended write-off periods.

But consider how over-indebted individuals may react if they're smart. Why pay anything when it's simpler to default and walk away. For those strapped enough, it's what growing numbers are choosing and the reason lenders like JP Morgan Chase, Citigroup, and Bank of America (already reeling from bad mortgage debt) are concerned enough to seek relief.

Instead, they should be held accountable for their fraud. For destroying savings, pensions, and for growing millions their homes and futures. For charging usurious interest and late charges on credit card balances. For gaming the system for decades but now out of their food source. Instead of help, have them give back and make it on their own, or step aside, be nationalized, and turn them into a public utility, on a level playing field, to serve the greater good for everyone.

Their due reward for what Paul Craig Roberts calls "unregulated banksters and Wall Street criminals, greedy CEOs, and a no-think economics profession (for having) destroyed America's economy," and now wanting to be saved from their own transgressions. Rebalance the tax code instead, make it progressive, and soak the rich, not the poor. It was the original idea in the first place at a time low income earners paid nothing. Today they're overburdened, overtaxed, out of work, and out of hope during the most serious disruption in our history.

They're not offered part of the latest bank handout that's little more than naked theft on top of all of it earlier. This time with another $140 billion windfall that was in a September 30 Treasury Department memo. According to tax experts, it overstepped its authority by overturning section 382 of a 1986 law curtailing the outlandish corporate gaming of the tax system. It nets Wells Fargo $25 billion for its Wachovia takeover and PNC bank $5.1 billion in acquiring National City. Future acquisitions will enjoy similar benefits with taxpayers getting the bill.

This also helps big banks acquire smaller ones, concentrate more power in their hands, and head them closer to near-monopoly control over the entire financial system. A privatized Treasury indeed - with bipartisan support and by the new president-elect.

His new Treasury secretary will maintain the status quo or even sweeten it at a time when ordinary households are in deep distress with little help in prospect beyond measures too inadequate to matter.

According to the New York and London-based CreditSights research firm, it's $5 trillion and counting for fraudsters and bare crumbs for the public. At a time economies are sinking into recession, unemployment and poverty rising, and mayor Richard Daley of this writer's Chicago warning of "huge" layoffs to come.

He compared now to the 1930s and said: "We never experienced anything like this except (for those) people who came from the Depression. When you have that many layoffs early (referring to the city's and what corporate heads tell him) - and they're telling me this is only the beginning of their layoffs - that is very frightening."

Daley warned that local governments could face bankruptcy at a time Chicago-based Challenger, Grey & Christmas outplacement consultant reported that US job cuts reached a five-year high in their latest numbers and are rising across the board.

It's just as bad for Illinois (and other states) according to Bloomberg. The state "is $4 billion behind in paying bills to its suppliers of goods and services," Comptroller Dan Hynes said. "Vendors face a 12 week delay in getting paid, and the wait may extend to 20 weeks" as conditions deteriorate further. "The unprecedented backlog of bills might grow to $5 billion by March. To call this an imminent crisis is an understatement," and it's affecting all state services. In other states as well across the country.

Even the mighty New York Times is hurting. It's fallen on hard times and may be a metaphor for the country. In 2002, its stock price hit nearly $53 a share and is now below $7.50 (as of November 14), down about 86%. It also owes lenders around $400 million by next May, has a mere $46 million on hand, and it needs all of it and more for operating expenses at a time one observer suggests that the Grey Lady may need to change its slogan to "Less News and Less Money To Print It."

Maybe none according to its publisher Arthur Sulzberger Jr. months back at the Davos, Switzerland World Economic Forum. He said "I really don't know whether we'll be printing The Times in five years, and you know what? I don't care either" because the paper is emphasizing internet news and doubled its online readership to 1.5 million.

Well and good but it hasn't enough online advertising to make up for what it's losing in print, and given today's climate, it may run out of time to make up the shortfall and stay viable. That may prove the epitaph for growing numbers of venerable (and now vulnerable) American and global companies at perhaps the most challenging time in their histories.

A Final Comment

How did it come to this in the first place? In a word: out-of-control excess yields even greater payback, and the only cure for bubbles (according to noted economist Kurt Richebacher) is to prevent them from developing.

The ones now deflating are unprecedented in their size and severity. No amount of policy making magic will easily fix them. America and world economies face a long, painful period ahead, likely more than at any other time in history with no clear idea what will emerge in the end. As one observer puts it: "All we know is that nobody knows."

What's known in the shorter term is what Michel Chossudovsky observes: "The financial crisis is deepening, with the risk of seriously disrupting the system of international payments. (This time) is far more serious than the Great Depression. All major sectors of the global economy are affected (and TARP and related schemes are) not a 'solution' to the crisis but the 'cause' of further collapse" - by design.

So what long-term lessons will be learned when the dust finally settles? According to money manager and market strategist Jeremy Grantham: "absolutely nothing" or put another way - those who don't heed the lessons of the past are condemned to repeat them.

Policy makers won't change. "Free-market" fundamentalism won't be tamed, and nothing in sight promises deliverance to a caring, progressive new world. Before whatever comes out of this in the end, plenty of pain will precede it, then past sins will repeat, and we'll go through the whole cycle again - if we make it through this one.

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 issues with distinguished guests. All programs are archives for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10946

Targeting Hugo Chavez

Targeting Hugo Chavez - by Stephen Lendman

Since taking office in February 1999, America's dominant media have relentlessly attacked Chavez because of the good example he represents and threat it might spread in spite of scant chance it will in today's climate.

Yet some of his fiercest critics maintain pressure and show up often on the Wall Street Journal's op-ed page. Most recently on November 10 by its America's columnist, Mary O'Grady. Her style is agitprop. Her space a truth-free zone. Her latest in an article headlined "Hugo Chavez Spreads the Loot" referring to what The New York Times calls "Suitcasegate."

It played out in a Miami show trial that concluded on November 3 with Franklin Duran found guilty of acting as an unregistered agent of the Venezuelan government in the US. He's co-owner of the private Venezuelan motor oil company, Venoco. It's unconnected to the government, but that's not what prosecutors charged, what jurors were pressured to conclude after initially being deadlocked, and what O'Grady picked up on and claims.

She calls Hugo Chavez "the intellectual author of his crime," whatever that means, but O'Grady doesn't explain. "The problem for Mr. Chavez is that, for almost a decade, Latin American 'democrats' (i.e. Colombia's fascist and US vassal leader Alvaro Uribe) have been accusing Venezuela of violating the sovereignty of its neighbors by supporting the radical left with money and weapons."

With no proof whatever, she means the FARC-EP (the Revolutionary Armed Forces of Colombia) and wrote about it in her March 10 column titled "The FARC Files." In it, she accused Chavez, Ecuador's Correa, Bolivia's Morales, and Nicaragua's Ortega of being "four best friends of terrorists." Citing bogus laptop documents "show(ing) that Mr. Chavez (& Co.) and (the FARC-EP are) not only ideological comrades, but also business partners and political allies in the effort to wrest power from Mr. Uribe." She listed a menu of charges that were bogus on their face, then later exposed and dropped for lack of evidence.

Of course, they were preposterous in the first place, but were resurrected in September by the US Treasury Department's Office of Foreign Control (OFAC) in designating one former and two current high-ranking Venezuelan officials as FARC-EP collaborators. Accused are Hugo Carvajal, head of the Military Intelligence Directorate and Henry de Jesus Rangel Silva in charge of the Directorate of Intelligence and Prevention Services (DISIP).

These charges came after Chavez expelled the US ambassador in solidarity with Bolivia's Evo Morales. A day earlier, he dispatched the US envoy for instigating violent anti-government protests.

What's happening relates to Colombia's early 2008 Ecuadorean incursion. An illegal cross-border raid with the help of US Special Forces. They attacked and slaughtered 20 or more people while they slept, including 16 FARC-EP members. One being its second in command, Raul Reyes. Its public voice, key peace negotiator since the 1990s, and lead figure in the Chavez-arranged releases of hostages they held. A humanitarian effort he was vilified for with the usual kinds of political charges often made against him.

Noted Latin American expert James Petras calls the FARC-EP the "longest standing, largest peasant-based guerrilla movement in the world (that was) founded in 1964 by two dozen peasant activists (to defend) autonomous rural communities from" Colombian military and paramilitary violence. It's a "highly organized 20,000 member guerrilla army with several hundred thousand local militia and supporters...." It now numbers about 10,000 - 15,000 "distributed throughout the country" and still a force to be reckoned with.

When its leader, Manuel Marulanda, died in March, Petras paid homage to him in a powerfully moving article. He explained that for over "60 years he organized peasant movements, rural communities and, when all legal democratic channels were effectively (and brutally) closed, he built the most powerful sustained guerrilla army and supporting underground militias in Latin America." Besides its fighters, it included (and still largely does) "several hundred thousand peasant-activists, (and) hundreds of village and urban militia units" united against the most brutally repressive Latin American government (regardless of who leads it) and his vast supportive entourage.

Marulanda "defied them all - those in their mansions, presidential palaces, military bases, torture chambers, and bourgeois editorial offices." These brave fighters nonetheless persist. The same ones O'Grady attacks and the Venezuelan leader as equally committed to justice and freedom as they are.

She takes full advantage of Duran's conviction for supposedly conspiring to conceal the "origin and destination" of a suitcase filled with $800,000 and for acting as an "unregistered agent" for his country on US soil. Prosecutors claimed it was for Argentina President, Christina Kirchner. For her successful campaign last year. A charge both presidents deny. Venezuela's foreign minister, Nicolas Maduro, as well (earlier in the year) calling the case "absolutely rigged (and that) the person who said he is an agent of our government lied."

As a Miami trial approached, Maduro questioned the impartiality of the venue, saying: "Those who appoint the public prosecutors and judges in Florida are those who run the mafia, linked to people of Cuban origin who are totally opposed to the sovereign process in our country" and, of course, are committed to removing Castro and his brother.

Today, "Suitcasegate" is front-page news in Venezuela and Argentina. In America as well at times and in O'Grady's November 10 commentary.

In December 2007, Duran and three businessmen came to Miami. Their purpose - to advise their business partner, Guido Antonini, a Venezuelan-American businessman who was caught with the money months earlier in a Buenos Aires airport. At the time, Argentine judge Marta Novatti ordered his arrest, but he evaded authorities and returned to Miami where he lives in its wealthy Key Biscayne suburb. Argentina twice requested his extradition on charges of money laundering, but US authorities refused and instead used him to advantage.

Antonini wasn't charged. In return, he allowed the FBI to wire him to record conversations with Duran and the others. At trial, he was the star witness after proceedings were at first delayed. All four defendants originally pleaded not guilty. Then, after threats and bribes, three agreed to plea bargains, including Venoco's co-owner, Carlos Kauffman, who testified against Duran at trial.

Edward Shohat represented him. He denounced it as a "political circus" and said he plans to appeal because the FBI entrapped Duran, the charges are false, and the whole scheme is an attack against America's ideological Latin American enemies, especially Chavez.

Early in the trial, Shohat filed a motion to dismiss and was rejected. He argued that the law Duran supposedly broke is unconstitutional because it's vague as to what type behavior is illegal so its use is solely for political purposes.

He referred to 18 USC, 951 - "Agents of foreign governments." It states:

"the term 'agent of a foreign government' means an individual who agrees to operate within the United States subject to the direction or control of a foreign government or official, except that such term does not include -

(1) a duly accredited diplomatic or consular officer....;

(2) any officially and publicly acknowledged and sponsored official or representative of a foreign government;

(3) any officially and publicly acknowledged and sponsored member of the staff (thereof - from paragraphs 1 and 2); or

(4) any person engaged in a legal commercial transaction" - except if "such person agrees to operate within the United States subject to the direction or control of a foreign government or official."

Most often, this law only applies to enemy spies in wartime or against agents committing espionage. In other words, individuals engaged in activities violating the nation's security. Against Duran, it involved a mysterious cash-filled suitcase having nothing to do with security or any connection to Chavez and his government. Antonini and Kauffman testified otherwise. That Venezuela's state oil company, PDVSA, supplied it, and Chavez directed the operation and cover-up from his office. Of course, it's their word with no proof.

On tape, Duran and his co-defendants said Chavez and Kirchner promised Antonini protection if he was charged in an Argentine court. At trial, Duran said that he lied to convince Antonini to be tried in Argentina if it came to that. For its part, Argentina accused Antonini of working for the CIA. It's quite possible given his known links to Chavez opposition groups. He worked for Venoco from 2000 - 2002 when its then owner, Isaac Perez Recao, was involved in the April 2002 (two-day aborted) coup. Venezuela's 48-hour president, Pedro Carmona, also headed Venoco at the time. The connection between him, Recao, and Antonini seems more than coincidental.

Duran's defense learned more about Antonini as well. That the FBI paid him $30,000 and, through a letter, that he asked Chavez for $2 million to stay silent about the affair. It also came out that the FBI tried to bribe an Argentine customs officer to testify falsely for the prosecution. The usual type FBI shenanigans seen often in other show trials. Against innocent targets of political persecution. Most often Muslim victims of the "war on terrorism." A topic this writer frequently revisits and discusses on-air.

In her commentary, O'Grady continued her attack and accused Chavez of directing his "intelligence chief to find a way to shut up (his) bagman (Antonini)." She claims Duran and Kauffman "were sent to Florida to warn Mr. Antonini to remain silent....The exposure of this thuggish behavior of the Venezuelan government is embarrassing enough." What's worse, she claims, is that there was another $4.2 million with Antonini on the same plane "and that there had been other operations to smuggle cash into Argentina for political purposes. Another "$100 million to spend on Bolivia" as well.

Not a shred of evidence for proof, and she forgets about the open-ended millions Washington directs to CIA, the National Endowment for Democracy, International Republican Institute, USAID and other US agencies for political mischief, including coups against democratically elected leaders. Funds also to opposition groups and candidates in Venezuela, Bolivia, and wherever else less than fully US-supportive governments exist, either democratic or despotic.

In contrast, Chavez supplies low-cost oil to his neighbors and to US cities that accept it. He also engages other nations cooperatively as opposed to Washington's global predation. He seeks unity, promotes world solidarity, and practices the kind of democracy Americans can't even imagine.

He champions human rights. Has no secret prisons. Doesn't invade his neighbors or practice torture. He's a true social democrat and the reason Venezuelans overwhelmingly support him in elections independent monitors judge free, open and fair.

But O'Grady keeps hammering with accusations that "the Venezuelan ambassador (to Bolivia) travels the country handing out checks to mayors who support President Evo Morales." In Colombia also for "pro-Chavez Senator Piedad Cordoba recently (with) a PDVSA subsidiary (donation of) $135,000." Nicaragua as well "where the old Sandinista Daniel Ortega is now president (and Chavez) is supplying 60 - 70% (of his crude) through a program that allows Mr. Ortega to pay only half the bill....Nicaragua's state oil company Petro-Nic sells the oil to private companies and collects the full value."

O'Grady's says one-fourth of this revenue goes for "giving away goodies like kitchens and houses ahead of yesterday's municipal elections (to buy votes she implies)," and much of the rest is for an Orgega "slush fund government critics say." Something similar is going on in El Salvador, she claims and continues:

"The Duran case has blown the lid off Mr. Chavez's covert Argentine activities. But his imperialist ambitions go far beyond that country (and) he may get away with it." If she means spreading Bolivarianism, let's hope so and that its spirit takes root in America. What country is more in need at a time its leaders plan even greater world domination with hardened repression for enforcement.

Through a secret new scheme now revealed. To unleash IMF orthodoxy globally - "austerity, sacrifice, deregulation, privatization, union busting, wage reductions, free trade, the race to the bottom, prohibitions on advanced technologies," and to crush the human spirit along with it.

To make Venezuela and all countries banana republics. Its workers serfs. Its industry destroyed to empower corporate giants. Mostly American ones. To suck global wealth to the top. To render freedom, democracy and Bolivarianism dead letters. To use agents like O'Grady to support this "best of all possible worlds."

Those in the know must expose her. Back leaders like Chavez for the type world all humanity wants. It's there for the taking but won't ever come down from the top. A message all readers should consider. At a perilous time in our history staring down the likelihood of the greatest ever world economic crisis with imperialists in Washington planning to milk it to maximum advantage. It's for freedom loving people everywhere to stop them.

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 archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10861

Global Economic Tremors

Global Economic Tremors - by Stephen Lendman

On October 28, the Financial Times' columnist Martin Wolf wrote: "Preventing a global slump must be the priority." He cited Nouriel Roubini back in February listing "twelve steps to financial disaster," all of which the US took and dragged the whole world down with it.

Priority one is to rescue it and avoid a possible depression. "Given the near-disintegration of the western world's banking system, the flight to safe assets, the tightening of credit to the real economy, collapsing equity prices, turmoil on currency markets, continued steep declines in house prices, rapid withdrawal of funds from hedge funds and ongoing collapse of the so-called "shadow banking system." More worrisome is that "next year could be far worse" so what does Wolf think should be done?

Nothing to purge past excesses or everything possible to prevent the worst of all possible outcomes. Wolf calls the former path "a recipe for xenophobia, nationalism and revolution" and in combination like "let(ting) a city burn in order to punish someone who smoked in bed." In short, madness at a time world economies need huge amounts of proactive remedies:

-- to prevent deflation;

-- help the private sector delever with liberal amounts of government debt;

-- sustain lending inside and among economies; if banks won't do it, central banks must;

-- aid hard-hit emerging economies and keep them afloat; and

-- rebuild domestic demand with substantial fiscal measures.

At risk is the "legitimacy of the open market economy itself." It's wobbly and on life support because of what Roubini spotted early on. All having occurred or now happening. His 12-stage "systemic financial meltdown" scenario:

(1) the worst ever US housing recession with prices falling up to 30% from their peak and matching their Great Depression decline; most recently Roubini thinks a 40% drop is likely with a market bottom still way off;

(2) the subprime disaster causing hundreds of billions in losses and throwing millions of homeowners into foreclosure;

(3) a sharp increase in other defaults - credit cards, auto and student loans, and other borrowing; add bank losses to the mix (including from their securitized assets), and we've got a severe credit crunch;

(4) monoline losses will mount more severely than expected and other writedowns will follow;

(5) commercial real estate will be impacted; the housing crisis will cause a bust in non-residential construction;

(6) large regional or national banks may go bankrupt and worsen the already severe credit crunch;

(7) losses from large leveraged loans will impair banks' ability to syndicate and securitize them; today the market is dead; earlier losses froze it up; these assets were then stuck on bank balance sheets at well below par values and are headed lower; they're still there at undisclosed valuations most likely scraping bottom because no buyer will touch them above fire sale prices and most often not even those;

(8) a massive wave of corporate defaults will accompany a severe recession;

(9) the shadow banking system (hedge funds and the like) is heading for serious trouble;

(10) world stock markets will price in a severe recession; at the time, Roubini saw the S & P 500 falling about 28% or around the average decline for US recessions; it fared much worse, and he now sees a far lower valuation ahead;

(11) the worsening credit crunch will cause liquidity to dry up; it will require massive central bank intervention; and

(12) "a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading cycle of losses and further credit contraction." The massive credit crunch will spread around the world. Monetary and fiscal measures won't prevent a systemic financial meltdown "as credit and insolvency problems trump illiquidity" ones. As a result, US and global financials will experience their most severe crisis in the last quarter of a century."

Roubini now sees the greatest one since the 1930s. Grudgingly, only small numbers of economists agree with him, and the majority think the worst is past and 2009 will bring recovery. Barrons economics editor, Gene Epstein, for one. He asks: "How long will the slump linger? (It's) already under way. But hopefully, it won't extend into 2009." An astonishing assessment at a time virtually all macro data point to hard times in the new year, and the big unknown is how hard and protracted.

It's the reason for unprecedented global amounts of monetary stimulus with limited effect so far. It's also why Congress may add hundreds of billions more in fiscal medicine on top of an orgy of past and upcoming government borrowing.

The Treasury already announced $550 billion more in Q 4. An amount greater than the announced FY 2008 $455 billion fiscal deficit. In addition, Goldman Sachs now believes Washington will have to borrow $2 trillion to finance an $850 billion federal deficit, buy $500 billion in toxic assets, and roll over $561 billion in maturing Treasury securities. Add to it unknown factors and another trillion may be needed.

For loans, investments and commitments, Washington already earmarked:

-- $700 billion for TARP;

-- another $150 billion tacked on to EESA funding for pork barrel spending;

-- $200 billion in the Fannie and Freddie takeover, and Fannie now says the amount is inadequate after reporting a record $29 billion loss and its difficulty in issuing and refinancing debt; in a November 10 SEC filing it stated: "This commitment may not be sufficient to keep us in solvent condition or from being placed into (effective bankruptcy) receivership" if further "substantial" losses occur or if the company can't sell unsecured debt;

-- $25 billion to the auto companies and another $50 billion more they may get; the industry is effectively insolvent; on November 11, General Motors stock hit a 65 year low and is down over 90% this year; the nation's once largest company is a mere shadow of its former self and won't survive without a bailout; the same holds for Ford and Chrysler;

-- $29 billion for Bear Stearns;

-- $85 billion to AIG; upped to $129 billion and again to $150 billion after the company reported a $25 billion Q 3 loss; add $15 billion more for its commercial paper with no end of this looting in sight - to a single company, albeit a big one;

-- $144 billion to buy mortgage-backed securities, in part included above;

-- $300 billion for the Federal Housing Administration Rescue Bill for FHA to insure up to that amount in new 30-year fixed-rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down loan balances to 90% of the homes' current appraised values;

-- $87 billion to JP Morgan Chase for financing bad Lehman Brothers' trades;

-- $200 billion in loans to banks under the Fed's Term Auction Facility (TAF);

-- $50 billion to support commercial paper held in money market funds; $1.3 trillion worth qualifies so a far greater liability may be incurred;

-- $620 billion in currency swaps with developed nations - central banks in Western Europe (the ECB, UK, Denmark, and Switzerland), Japan, Canada, and Australia;

-- another $120 billion for emerging markets - to Brazil, Mexico, South Korea and Singapore; and

-- potential great liabilities to cover the FDIC's expanded bank deposit insurance up to $250,000 per account.

These numbers are staggering in size and may go much higher. A trillion here, a trillion there, and pretty soon we're talking about real money, but if enough of it swirls around, today's deflation may one day become severe inflation.

Two Views on Potential Depression

The dreaded "D" word. Unmentioned and unconsidered in the mainstream but not off the table given the severity of today's crisis. What Michel Chossudovsky isn't alone calling "the most serious (one) in World history." He says the Treasury "bailout" isn't a solution. Just the opposite - "it is the cause of further collapse. It triggers an unprecedented concentration of wealth, which in turn contributes to widening economic and social inequities both within and between nations" - on top of how inequitable they are already.

President of the London-based Independent Strategy consultancy group, David Roche, disagrees in a November 8 Wall Street Journal article headlined "How Far Will Deleveraging Go?" He acknowledges the severity of the crisis and asks: "Will this lead to depression? And, if not, how long and deep will the recession be?" He examines the extent of deleveraging for the answer in the following analysis.

He says the amount of a bank's "risk-free" or "tier-one" capital is a "good reverse indicator of how leveraged it is." Financial institutions globally had about $5 trillion of it at the credit crisis' onset. For America and the EU, it was $3.3 trillion "supporting a loan book of some $43 trillion. Then came the crisis."

He gives three answers to the amount they lost:

-- using mark-to-market rules (what an asset would bring if sold today), an estimated 85% of their tier-one capital was lost; but this assumes selling today at fire-sale prices which largely isn't happening;

-- using "economic value," or the present value of future cash flows (assuming there are any), current losses are about half their mark-to-market valuations; and

-- if only so far recognized losses are considered, the amount taken is around $700 billion.

Despite these losses, loan portfolios have grown during the crisis. Shrinkage has only occurred for investment banks, prime brokers and hedge funds, Roche believes. All bank losses have been offset by "$420 billion from private sources" and another "$250 billion from governments."

At the onset of the crisis, US and EU leverage was about 13 times tier-one capital. Under mark-to-market rules, it's now more than double that. "But using economic value or declared losses reveals that leverage is now back to what it was before the crisis began" because of capital injections. Nonetheless, conditions remain dire, and growth isn't ready to resume. For three reasons, according to Roche:

-- financial sector leverage was too high in the first place, which is why the credit bubble collapsed;

-- the world economy uses $4 to $5 of credit for every $1 of GDP growth; a profligate amount; even at half that amount, between a 10 - 15% rate of credit expansion is needed to achieve real GDP growth of 2 - 3%; recapitalization amounts so far are only enough to maintain existing credit assets, not expand them; so the crisis continues; and

-- current bank-asset losses don't include allowances for future ones - from recession and its fallout; Roche estimates they'll be another $900 billion for a total $1.7 trillion during the whole crisis period; others estimate a much higher figure; if Roche is right, these losses will deplete new capital infusions and reduce US and EU tier-one capital back to $2.3 trillion at a leverage ratio of over 18 times.

Roche believes leverage and credit will shrink even with further capital injections. They're "temporary, expensive, and impose constraints on shareholders and management." It makes them unattractive.

In addition, banks need to reduce their "customer funding gap" and focus on "deposit rather than loan growth." It's a slow process during recession and can only be achieved "by reducing assets and liabilities" which means "cutting credit on the asset side of the balance sheet." And do it during a risk aversion period in wholesale and longer-term debt markets. It makes the task a lot harder at a time regulation is coming that "will reduce bank leverage to well below what it was before the crisis began."

Bottom line: if further credit losses reduce US and EU tier-one bank capital to where it was before crisis-induced infusions, financial sector credit "would have to shrink 37% just to keep leverage constant at pre-crisis levels," and it it happens we're talking about global depression.

But governments are now "part of bank management so may limit credit losses to less than 10%, Roche believes, but a a cost - more capital injections, further longer-term liability guarantees, tolerating higher leverage in "socialized banks," plus more than a little "dirigisme," or directing banks to lend. Under this scenario, Roche thinks global depression will be avoided - but "at the high long-term cost of a socialized financial system. And it still heralds a very long, gray, global recession as the world learns to use less capital to meet its needs."

Financial expert and investor safety advocate Martin Weiss disagrees with Roche and sees depression coming. He's not alone, and he's said it repeatedly, including in his latest commentary titled "Why Washington Cannot Prevent Depression." He cites what he calls "dire reality. Washington is not God. It cannot save the world. It cannot prevent the next depression," and he gives five reasons why:

(1) The Debt Crisis

It's far too big to control. Based on Fed Flow of Funds figures, "there are now $52 trillion in interest-bearing debts in the US." According to US Government Accountability Office estimates, add another $60 trillion in contingency debts and obligations - for Social Security, Medicare, Medicaid, and other pensions. In addition, the Bank of International Settlements (BIS) earlier cited a staggering global debt total, including derivatives, of $1 quadrillion, or 1000 trillion. In a separate report, it says $596 trillion, but even this number is unimaginable and unmanageable.

So far, reckless government outlays amount only to a fraction of this amount - around $2.7 trillion. Weiss says the numbers aren't directly comparable, but "to get a sense of the magnitude of the problem, compare the size of the debts and (derivatives) bets outstanding" to the tiny amount injected to combat it. It's miniscule and may fall way short of being effective. Weiss is blunt in calling "the debt build-up in the US today far greater than it was on the eve of Great Depression I." Pre-1930, it was between 150 - 160% of GDP. Today, excluding derivatives, it's nearly 350% or more than double the earlier. Include them, and debt levels go off the charts. Weiss concludes: "government bailouts are too little, too late to end this crisis."

(2) Bailout Costs Are Too Great to Be Financed

Given the dire economy, higher taxes and expenditure cuts are off the table. Going forward, "the government will try to finance its folly largely by borrowing the money." The next tranche - $550 billion in Q 4 and $2 trillion in total, or four times the size of the entire official FY 2008 deficit. As a result, a tsunami of new Treasury supply is coming. It will crowd out private borrowers and pressure interest rates higher when lower ones are desperately needed.

(3) Supply Can't Stimulate Lending and/or Borrowing

Washington wants households to borrow and spend more, but they're doing the opposite. Banks are also urged to lend, dispense more access to credit cards, and provide capital for troubled businesses. They refuse and are using their handouts for acquisitions, bonuses and dividends. "No matter what the government says, it is the natural survival instinct of billions of people and businesses around the world that will determine the outcome" of today's crisis: "Depression and deflation."

(4) Powerful Debt and Deflation Cycles

Debt can continue accumulating for years as long as borrowers have enough income to repay it. Deflation (or disinflation) can increase the affordability of homes and other major purchases. But when debt and deflation converge, depression is inevitable. It happened in the 1930s, and (in different form) it's happening today. "We are witnessing powerful vicious cycles in which deflation brings down debts and debts help accelerate the deflation."

For example:

-- widespread mortgage delinquencies and foreclosures trigger massive real estate liquidations followed by severe price declines, and more delinquencies and defaults;

-- fear of bankruptcies causes equities, bonds, commodities and virtually every type asset to fall; more bankruptcies result the way today they threaten US auto makers; and

-- the same downward spiral affects households, small and mid-sized businesses, city and state governments, and entire countries; spending is slashed; workers laid off; assets sold, and revenues lost precipitating more of the same.

"In every sector of the economy and every corner of the globe, debt defaults are causing deflation; and deflation is causing debt defaults. No government can stop this powerful vicious cycle. It has to play itself out."

(5) The Ultimate Power of Markets

Why can't governments simply print enough money to buy up excess debt and inflate? Because governments need buyers for their bonds and to finance all new planned spending and deficits. "The power of the market is stronger than any politician or government bureaucrat. It is more powerful than any law. It is even more powerful than the gold standard."

Trust is needed to raise money. It's not built by "run(ning) the printing presses or destroy(ing) your money." Instead, deflation and depression must run its course. "It's preposterous to believe that Washington can save every failing individual, company, country and government on this planet."

It can't stop investors from dumping their assets or reverse decades of financial excesses. "It cannot win the battle against depression. It cannot stop the Dow or S & P from losing half their value from current levels, if not more. It cannot stop the collapse in real estate, commodities, and corporate bonds." It can't convince people to use their cash to invest or do anything they wish not to do. It can only reap the whirlwind.

Two Other Views on the Dire State of Things

One from Russian economist Mikhail Khazin in a recent (Russian web site) kp.ru/daily interview. He predicted the current crisis early on, but his views were largely dismissed. No longer, and today they're more dire than before.

In 2000, he wrote an Ekspert magazine article titled: "Is the US Digging for an Apocalypse?" At the time, he saw declining demand destroying 25% of the US economy. Today it's maybe one-third, he believes. Why? Because of an early 1980s policy "to stimulate demand through state support....(by) switch(ing) on the printing press" and building debt at a rate way above GDP growth. He mentioned 8 - 10% in an economy growing at around 2 - 3% or a maximum 4%.

It let America "create a very high standard of living by stimulating consumer demand....But it's impossible to live forever in debt. Household debt has now surpassed the national economy - more than $14 trillion. Now it's time to pay up. Of course, Wall Street tried to postpone this collapse....but this was just a gasp for air before an inevitable death....Whatever decision Wall Street takes right now, the demand is going to fall."

It points to "an uncontrollable increase in unemployment, a horrible depression, a sharp increase in the effect of social services on the budget....Now, the US is jumping all over the place doing everything it can to rescue this fraction of the economy (the portion Khazin thinks will evaporate). The government is stimulating banks and manufacturing....But regardless, in 2 - 3 years, the US will face a crisis similar to the Great Depression."

Harvard president Drew Faust is also alarmed in a recent letter to alumni and friends. She cites the "current global financial situation and its effect on the University." She mentions "extraordinary turbulence, the most serious (uncertainty and financial distress) in decades (as part of) our new economic reality."

Despite over three and a half centuries of surviving challenges, "Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered. We will need to plan and act" accordingly.

Her focus, of course, is on revenue and the school's endowment. It provides income for over one-third of its operating budget, now severely impacted by today's crisis. Despite past outperformance in turbulent times, Harvard fared poorly in its current fiscal year ending June 2008 (before the worst of today's crisis struck). In FY 2007, an impressive 23% return was registered, and it lifted the total endowment to $34.9 billion. In FY 2008, it fell an estimated 30% or a $10.5 billion hit. Even mighty Harvard is impacted enough to "need to be prepared to absorb unprecedented endowment losses" in the current environment. Drew Faust wants help, of course, but clearly she's worried to the point of alarm at the gravest financial time in our lives.

Credit Normalization Is Stuck in a Debt Trap

It affects Harvard and world economies everywhere. Even mighty America isn't immune from its impact. From having lived way beyond our means for years. The chickens are now home to roost - big time.

In spite of extraordinary liquidity injections globally, risk markets remain paralyzed. Frozen. Uncertainty and turbulence continue, and economies are reeling in distress. They're like buckets leaking more out their bottoms than whatever flows in at their tops. Fed credit creation is counterbalanced by deleveraging and collapsing balance sheets, and there's no end to this in sight.

True enough, unclogging has occurred in inter-bank and money markets, but it hasn't freed up credit or its price for the vast majority of borrowers. In addition, junk and investment grade bond spreads have widened. Municipal bond yields have soared as their prices fell. Some offer tax-free returns topping 6% compared to taxable 10-year Treasuries under 4%. According to some analysts, they're screaming buys, and so are high-grade corporate bonds that are much more attractive (and safer at a time no financial asset is safe) than equities in the same companies, and a big reason why stock prices are falling. But by no means the only one.

The world pre-mid-2007, no longer exists. Risk is a dirty word. Leverage is out the window, and asset-backed securities (ABSs), collateralized debt obligations (ABSs), and securitization markets are closed and padlocked. All the king's horses and all the king's men can't reconstitute them. No amount of liquidity injections, rate-cutting, or high-minded rhetoric will reinflate that air that's now leaving the bubble.

Today's debt overhang is unmatched by a factor of more than three to one over any previous period without including derivatives. Add them, and it's unquantifiable in unchartered waters. Issue one for policy makers is how to keep economies from crashing. How to create enough new credit and get it flowing at a time lenders won't lend and borrowers are so indebted they can't assume more if they could get it.

Viable or not, the Fed will keep expanding its balance sheet to never before imagined amounts, and the government will run even greater multi-trillion dollar deficits. Amounts impossible to repay so they never will be with dark forebodings of how that problem will be resolved. It portends a very unpleasant future far worse than most now imagine. It also suggests another vicious downward spiral as recession deepens, and potential depression looms. The likes of which no one has experienced in our lifetimes or wishes to. Today's bubble economy is unlike anything ever in the past. Worse than all post-war excesses and what led to the Great Depression.

Can the worst of all possible outcomes be avoided? It's beyond this writer's ability to imagine. It's for the Fed, Treasury, GSEs (government sponsored enterprises like Fannie, Freddie, Sallie, Ginnie, etc.) and banks, if they're able and willing, to try. To create money, get it flowing, inflate or die, but it already may be too late. Things that can't go on forever, won't, and as writer Ellen Brown observes: "The parasite has run out of its food source." The engine is now out of fuel.

A Secret Revival Plan for the November 15 G-20 Summit

According to Webster Tarpley (on Rense.com, 11/10/08), a "British (and, of course, Washington) steered....confidential strategy paper (aims) to impose (an IMF) dictatorship on the entire planet, wiping out all hope of economic recovery, the modernization of the developing countries, and national sovereignty" as well.

It proposes the usual form of IMF orthodoxy - "austerity, sacrifice, deregulation, privatization, union busting, wage reductions, free trade, the race to the bottom, and prohibitions on advanced technologies." Quite literally an agenda from hell. So outlandish that BRIC countries are reportedly objecting - Brazil, Russia, India and China. China wants policies of the type it may pursue in its just announced $586 fiscal stimulus plan - for various internal needs like infrastructure. The IMF plan is mirror opposite in its five points. To:

(1) "require the credit rating agencies to be registered and monitored and submit to rules of governance;

(2) halt the principle of a convergence of accounting standards and re-examine the application of the fair market value rule in the financial field, so as to improve its coherence with the rules of prudence and conservatism;

(3) resolve that no market segment, territory, or financial institution shall escape from a proportionate and adequate regulation, or at the least, surveillance;

(4) set up a code of conduct to avoid excessive risk-taking in the financial industry, including in the area of compensation. Supervisors will have to follow this code in evaluating the risk profiles of financial institutions; (and)

(5) entrust to the IMF the primary responsibility, along with the FSF (Financial Stability Forum - Basel), to recommend the necessary measures to restore confidence and stability.

The IMF must be equipped with the essential resources and suitable instruments to support countries in difficulty, and to exert its role of macroeconomic surveillance to the fullest."

Translation: This is a Washington-UK-IMF scheme to increase their collective power at the expense of and to the detriment of the civilized world. An attempt to suck more of its wealth to the top by extracting it from all others.

Economist Michael Hudson reports that 1% of the US population owns 70% of its wealth, a huge increase over earlier periods. This plan aims to increase it. To turn the US and world economies into banana republics. To make its workers de facto serfs. To crush competition and empower corporate giants. Mostly ones in America.

To end any hope for progressive change at a time all humanity craves it. To revive Chicago School fundamentalism when it's totally discredited. To step back from a new direction that appears little more than a pipe dream. To harden the old failed one and suck us deeper into its quicksand.

It's hoped enough nations will balk, render this scheme dead on arrival, and consign it back to its hellish origins. The alternative is a view of our future. One too disturbing to imagine. That no one should tolerate and be willing to be disruptingly defiant enough to prevent.

Stephen Lendman is a Research Associate of 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 with distinguished guests on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10861

Obama Mania

Obama Mania - by Stephen Lendman

On November 4, the world exhaled. The age of George Bush ended, and a new one under Barak Obama began. With high hopes he'll reverse the toxic legacy of the past eight years. Adopt socially progressive policies. End foreign wars. Govern the nation responsibly, democratically for all its people. Show his supporters that their faith in him was justified.

"Let us congratulate ourselves on being alive at such a promising moment," wrote The Nation magazine's William Greider. His victory is "a monumental rebuke to tragic history -- the ultimate defeat of 'while supremacy.' Barak Obama has already changed this nation profoundly. Like King before him, the man is a great and brave teacher. (He) redefined the country for us."

The Nation endorsed Obama early on and called his candidacy "historic (for) a new generation (with) new possibilities....a sea-change of course (for) progressive-driven reform....(the) end of the Reagan era....an end of the occupation of Iraq....empowering labor (and) challenging our trade policies." A socially liberal new beginning.

A "transformational presidency," according to its editor Katrina Vanden Heuvel. A "new era of possibility opened up by Barak Obama's victory. (His) team's respect for the core decency, dignity and intelligence of the American people was reflected in the campaign's" rhetoric. He represents "a historic opportunity for a progressive governing agenda and a mandate for bold action....Tonight we celebrate."

Early on, The Nation shamelessly endorsed Obama with over-hyped expectations for him. They're unfounded, and based on early indications, hold the cheers. Obama's transition team is the first sign of the type people he'll choose for cabinet and other top posts. Insiders all, including former Clinton administration figures. The usual cast of characters in Democrat or Republican administrations. The parts nearly interchangeable for their common agenda. Progressive? A new beginning? A "mandate for bold action?" A reason to "celebrate?" Indeed so for insiders, who engineered what's now apparent.

Earlier this writer imagined it, but who then could have known. In a July article titled A Possible September Surprise," it was suggested that "Republicans may stick with a likely loser, someone many insiders dislike, go for a 1976 repeat, turn things over to a Democrat, let him deal with their mess, then retake the presidency next time around."

In the 1970s, the Rockefellers (America's most powerful family) chose Jimmy Carter for president after the turbulent Nixon years. Gerald Ford went along as window dressing. The same process repeated in 2008 to decompress after eight toxic Bush years. A needed respite for the country, the world, and humanity. A new party and face to appear different from the old one. Who better chosen than the first black president (a stroke of genius some believe) to deflect attention from the past and focus it all on him and the task he faces.

McCain-Palin was the vehicle. A perfect foil. A caricature-like ticket. An embarrassment. Supremely unqualified on both ends. By a man with a distinct "passion gap" for conservatives. Known mostly for his unpredictable temperament, unimpressive intellect, instability, and genius for making enemies in his own party. And a woman more knowledgeable about fishing than affairs of state. Pulled from obscurity. Noted only for having been chosen. Now consigned to a footnote in history. One conservatives plan to forget, then erase.

Now a new beginning under Obama. With hoped for change that he promised. A "bold mandate (for) progressive governing." A "transformational presidency." The end of neoliberalism and new era for his faithful. With legions lining up to cheer. Unmindful of how American politics works. The way it is most everywhere. The same old, same old that The New York Times ignored in saying that "Obama began moving (swiftly) to build his administration and make good on his ambitious promises to point the US in a different direction...."

Without a whiff of progressivism in any high-level appointees so far named, suggested, or in his transition team co-chairmen:

John Podesta

From 1998 - 2001, he was Clinton's chief of staff, and in the 1980s, served as legal counsel for various congressional committees. He's the founder and current president of the Center for American Progress, a Democrat party front group claiming progressive credentials that got seed money from investor and Obama advisor Warren Buffett. He's also a visiting law professor at Georgetown University Law Center, and since 1988 the head of the Podesta Group, a Washington-based lobbying firm representing corporations like Lockheed Martin, BP, and Walmart as well as trade associations among its other clients. The Washingtonian magazine ranked him the third most powerful city lobbyist.

Valerie Jarrett

A Chicagoan who worked for Mayor Harold Washington in the 1980s as Deputy Corporation Counsel for Finance and Development. She then moved on to the Daley administration in the 1990s as deputy chief of staff and in other positions. She's currently CEO of the Habitat Company, a real estate development and management firm with a dubious record. She works closely with city officials on public housing and helped the Chicago Housing Authority get public subsidies for its notoriously substandard work.

Habitat managed Grove Parc Plaza from 2001 - 2008 and an even larger complex that the federal government seized in 2006 because of its dilapidated and uninhabitable state. Nonetheless, she's rumored to become the new housing secretary where she may do for the country what she did to Chicago.

Jarrett is also a Board member of the Chicago Stock Exchange where she served as chairman from 2004 - 2007. She's one of Obama's most trusted and longest serving advisors and campaign aides.

Pete Rouse

He's a long-time Capitol Hill insider for over 30 years. Once served as Senate majority leader Tom Daschle's chief of staff and was known as "the 101st senator" because of his knowledge, skill and contacts. He's been allied to Obama since 2004. Wrote his "Strategic Plan" for his first year in the Senate and also served as his chief of staff.

All three individuals are expected to have key roles in the new administration once it takes over in January as well as others on the Transition Project. It's been around for months as a fund-raising front. The Chicago Sun Times said it was to raise money from individual donors up to a maximum $5000 and do no internet or direct mail solicitations. It helped Obama raise $600 million for his campaign, and though he claimed transparency as one of his principles, he made no "voluntary early disclosures." Money raised is also being used for his transition period with no mention of how he'll use any residual amounts.

Other Transition Project Members

Carol Browner

She served as Administrator of the Environmental Protection Agency for eight years under Bill Clinton. The longest of anyone in that position. Earlier she worked for Citizen Action in Washington. As general counsel for the Florida House of Representatives Government Operations Committee and for Senator Lawton Chiles. In addition, as Senator Al Gore's Legislative Director. In 2001, she joined the Albright Group, a global strategy firm headed by former secretary of state Madeleine Albright.

William Daley

Brother of Chicago mayor Richard M. Daley. He's a lawyer and was Clinton's secretary of commerce from 1997 - 2000. He's a well-connected insider and member of numerous high-powered organizations like the Council on Foreign Relations, Friends of Hillary, Friends of Joe Lieberman, Obama for America, and a number of corporate boards. Companies like Boeing, Abbott Labs, Merck and Boston Properties. He's also vice-chairman of Evercore Partners, a 1996-founded investment banking "boutique providing advisory services to prominent multinational corporations on significant mergers, acquisitions, divestitures, restructuring, and other strategic corporate transactions."

In the Clinton administration, Daley was instrumental in getting NAFTA passed. He's also a past president of SBC Communications and was later Midwest chairman of JP Morgan Bank among other positions, including the practice of law.

Michael Froman

He's president and CEO of CitiInsurance, a branch of banking giant Citigroup. Also a senior fellow at the Council on Foreign Relations and a Resident Fellow at the German Marshall Fund of the United States. Earlier and in the Clinton administration, he served as treasury department chief of staff from 1977 to 1999. From 1993 - 1995, he was director for International Affairs on the National Economic Council and the National Security Council at the White House.

Federico Pena

He held two cabinet posts under Bill Clinton - from 1993 - 1997 as transportation secretary and from 1997 - 1998 as energy secretary. In 1992, he advised then governor Clinton on transportation issues. Since 1998, he's been affiliated with the investment firm, Vestar Capital Partners, as senior advisor and is now one of its managing directors.

Suggested Obama Administration Members

The first already chosen as Obama's chief of staff - Rahm Emanuel, but hold the cheers. He's an influential insider and Democrat member of the House since 2003. In 1991, he joined the Clinton campaign as a fundraiser. Then later was political director and senior advisor.

From 1999 - 2002, he was a managing director for investment bank Dresdner, Kleinwort, Wasserstein in Chicago and also served as mayor Richard Daley's chief fundraiser.

In 2006, he chaired the Democratic Congressional Campaign Committee for the midterm elections. He's the fourth ranking House Democrat. A hawk, neoliberal and pro-Israeli hardliner. Now deceased long-time Chicago activist, investigative reporter, and founder and chairman of the Citizens Committee to Clean up the Courts, Sherman Skolnick, called him the "acting deputy chief for North America of the (Israeli intelligence) Mossad."

He's the son of Benjamin Emanuel (changed from Auerbach in 1936 by his grandfather Ezekiel), a Chicago pediatrician involved pre-1948 with smuggling weapons to the Irgun. The Israeli group former prime minister Menachem Begin headed that in 1946 bombed the King David Hotel and conducted numerous other terrorist attacks.

Emanuel is hard line like his father in his one-sided support for Israel. He's dismissive of pro-Palestinian sympathies, and supports a failed peace process that guarantees no chance for one. In 1991, he served as a civilian volunteer in the Israeli Defense Forces (IDF) during the Gulf war and is believed to hold dual citizenships.

The Nation magazine's David Corn praised his appointment and called Emanuel "an intelligent, fierce, competent, and sharp Washington partisan....an agent of change....and guy who gets things done." Corn also hailed Obama's victory and called him "one of the most progressive (or liberal) nominees in the Democratic Party's recent history." Looking ahead to his presidency, he represents "hope and change. He opposed the Iraq war....Bush's tax cuts for the rich. He was no advocate of let-'er-rip, free market capitalism or American unilateralism. In policy terms, Obama represents a serious course correction....And more."

In fact, Obama is mostly opposite of what Corn suggests. On financial and economic matters alone, his Transitional Economic Advisory Board reveals it. All its 17 members are high-level corporate and financial types plus Democrat party insiders. CEOs like Warren Buffet, Robert Rubin and head of four major corporations Penny Pritzker with more about her below regarding her dubious business dealings and influential role in an Obama administration. His other Brain Trust members (as the Wall Street Journal calls them) are:

-- Roel Campos - former SEC commissioner;

-- Daniel Tarullo - Georgetown University professor and former deputy director for international affairs of the National Economic Council (NEC) from 1993 - 1998;

-- Eric Schmidt - CEO of Google;

-- Antonio Villaraigosa - mayor of Los Angeles;

-- William Donaldson - former SEC chairman, under secretary of state, chairman and CEO of the New York Stock Exchange, CEO of Aetna, and founder and head of the investment firm Donaldson, Lufkin & Jenrette;

-- Laura Tyson - former chairman of the National Economic Council (NEC);

-- David Bonier - former congressman;

-- vice president-elect Joe Biden;

-- Jennifer Granholm - governor of Michigan;

-- Paul Volker - former Fed chairman with more on him below;

-- Rahm Emanuel - congressman and incoming White House chief of staff; it's the most important administration post after the president and a Dick Cheney type vice-presidency;

-- Richard Parsons - chairman of Time Warner;

-- Anne Mulcahy - CEO of Xerox;

-- Lawrence Summers - former Treasury secretary with more on him below;

-- Roger Ferguson - CEO of TIAA-CREF financial services;

--John Podesta - transition team head;

-- Robert Reich - former labor secretary; and

-- William Daley - former commerce secretary.

Noticeably absent - anyone representing ordinary people. Workers, homeowners, the unemployed, the disadvantaged, the poor who've been hurt the most by Wall Street's-caused financial crisis now morphed into the worst economic downturn since the Great Depression. Their omission is clear evidence where Obama's administration is headed, where his allegiance lies, and what his policy directives will look like. A rigid class society, white supremacism, and neoliberalism are safe in his hands.

-- he's for permanent occupation of Iraq;

-- America's imperial agenda;

-- militarism and foreign wars;

-- new ones against Pakistan; possibly Iran as well;

-- an enlarged military;

-- more troops to Afghanistan;

-- a new Cold War with Russia;

-- in 2006, campaigned for Joe Lieberman against anti-war candidate Ned Lemont;

-- opposes impeaching Bush and Cheney;

-- in July 2005, backed reauthorizing the Patriot Act with its police state provisions;

-- supports Homeland Security funding to enforce them;

-- supports the death penalty;

-- privatized in lieu of public education;

-- is one-sidedly pro-Israel;

-- opposes universal single-payer national health care;

-- supports medical providers in wrongful injury cases;

-- backs "free trade" and initiatives like NAFTA;

-- the right of mining companies to strip mine everything;

-- is unresponsive to labor;

-- supports biofuels production, big agribusiness subsidies, and the industry's rage to make all foods GMO;

-- supports the Bush administration's energy policy; its huge subsidies and other generous handouts;

-- backs nuclear power, loose industry regulation, and multi-billions in subsidies;

-- supports the Paulson bailout plan and the fraudsters that get it;

-- backs repressive immigration legislation affecting people of color;

-- is beholden to his corporate backers; and

-- is committed to a pro-business agenda overall.

He steered clear of criticizing Wall Street, and appears ready to back down on his campaign pledge to cut taxes for earners under $200,000 and raise them on incomes over $250,000. When asked point blank, he waffled and said this policy may be reconsidered, which is clear evidence it's been scrubbed.

He's reputed not to be a member of the far-to-the-right-of-center Democratic Leadership Council (DLC), but according to its founder, Al From, he's on board for "a good part of the strategy we have articulated over the years." He added that Obama has an "intellectual" and "tactical" connection to the DLC. It was clear in his first appointment - Rahm Emanuel.

He's a key DLC member in good standing. The organization Ralph Nader calls "corporatist (and) soulless." Governing from the far right no different than Republicans. Founded in 1985, it grew dominant in the party under then governor Clinton and Senators Gore, Lieberman and John Breaux.

Its ideology is anti-labor, anti-populist, anti-welfare, pro-business, and very amenable to imperialism, militarism, and foreign wars. Again Ralph Nader: "To the DLC mind, Democrats are catering to 'special interests' when they stand up for trade unions, regulatory consumer-investor protections, a pre-emptive peace policy overseas, pruning the bloated military budget now devouring (the federal budget), defending Social Security from Wall Street schemes, and pressing for universal health care coverage. So right-wing is the DLC....that even opposing Bush's tax cuts for the wealthy....is considered ultra-liberal and contrary to winning campaigns."

DLC "special interests" include the rights of blacks, Hispanics, Latino immigrants, Muslims, labor, the poor, consumer justice groups, populism, progressivism, environmental protection, anti-war activists, peace supporters, groups demanding corporate and war criminals be prosecuted, and anyone believing that America should have honest elections and be governed democratically.

Based on early indications, these "interests" appear sidelined in a new Obama administration. But not according to New York Times columnist Bob Herbert in his "Take a Bow, America" article. "The nation deserves to take (one). This is not the same place it used to be."

In his latest Times commentary, our newest economics Nobel laureate, Paul Krugman, agreed in calling November 4 "a date that will live in fame. If the election of our first African-American president didn't stir you, if it didn't leave you teary-eyed and proud of your country, there's something wrong with you. But will the election also mark a turning point in the actual substance of policy? Can Barak Obama really usher in a new era of progressive policies? Yes he can."

Times writer Frank Rich agreed as well in his article titled "It Still Felt Good the Morning After (as) America's tears of catharsis gave way to unadulterated joy....millions of....Americans were....waiting for a leader. This was the week that they reclaimed their country."

It will await a future one before they realize they were fooled again. The nation will remain in safe elitist hands. It won't get "a new New Deal" Krugman advocates given the names being floated to serve in it who seem to have passed under the radar screens of the above commentators.

Tom Daschle

The former Senate majority leader. Now a special policy advisor at the Alston & Bird law firm and visiting professor at Georgetown University's Public Policy Institute. He's also a senior fellow at John Podesta's Center for American Progress. Possible posts mentioned include secretary of state, health and human resources for his work on health care, and agriculture for the same reason.

Richard Holbrooke

Another long-time insider. He twice served as assistant secretary of state. From 1977 - 1981 under Jimmy Carter for Asia and from 1994 - 1996 for Europe under Bill Clinton. From 1993 - 1994, he was ambassador to Germany, and from 1999 - 2001 served as UN ambassador. It's rumored he's being considered for secretary of state, a position he failed to get to replace Warren Christopher when Madeleine Albright got the job as the first ever woman in it.

Richard Lugar

A senior Republican senator and man, who as mayor of Indianapolis in 1975, gave an impressive welcoming address to a group assembled by this writer for an event unrelated to world or national affairs. He's now served 30 years in the Senate where he's been chairman of the Senate Committee on Foreign Relations from 1987 - 1995 and again from 2003 - 2007. He's been mentioned as a possible secretary of state.

Lawrence Summers

From 1982 - 1983, he served on the Reagan administration's Council of Economic Advisors. Then in 1993 in the Clinton administration as under-Treasury secretary for international affairs and as Treasury secretary from 1999 - 2001. Earlier from 1991 - 1993, he was chief economist for the World Bank where he authored a controversial memo stating that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that."

Summers was later president of Harvard University from 2001 - 2006 where controversy again dogged him. For his contentious relations with faculty members and for suggesting that the presence of few women in upper-level science and math positions was because of innate differences between men and women. The combination led to his 2006 resignation.

He now teaches at Harvard's Kennedy School of Government, is a consultant to Goldman Sachs, and is a managing director of the DE Shaw & Company hedge fund. His name is being floated as the leading candidate for Treasury secretary, and as Michel Chossudovsky states: "Putting a Hedge Fund manager (with links to the Wall Street financial establishment) in charge of the Treasury is tantamount to putting the fox in charge of the chicken coup," and more evidence that Obama plans the kind of business as usual that he pledged to get rid of.

Jon Corzine

Former CEO of Goldman Sachs who was forced out by the current Treasury secretary, Henry Paulson, in a palace coup. He's now New Jersey governor and according to the New Jersey Star-Ledger "is being actively vetted by the Obama transition team as a possible candidate for Treasury secretary in the new administration, two New Jersey Democrats familiar with the process said (on November 5)....Neither Corzine nor his aides would respond to a request for comment."

Paul Volker

The former Fed chairman from 1979 under Jimmy Carter and under Ronald Reagan until Alan Greenspan replaced him in 1987. He's a key Obama economic advisor and another possible Treasury secretary. Timothy Geithner, the New York Fed chairman, is also being mentioned. He's allied with Henry Paulson and worked closely with him on his bailout plan.

James Steinberg

An academic and political advisor, he served as deputy National Security Advisor to Bill Clinton in his second term. He's currently dean of the Lyndon Johnson School of Public Affairs at the University of Texas. He's reported most likely to become National Security Advisor.

Senators John Kerry and Republican Chuck Hagel are mentioned as possible secretary of state choices, and the AP reports that Kerry wants the job. New Mexico governor Bill Richardson also who under Clinton was energy secretary and UN ambassador but then broke with the Clintons to support Obama.

Dennis Ross

The former State department director for policy planning and special Middle East coordinator under Clinton. Under Republicans and Democrats he's been instrumental in shaping Middle East policy with an extreme pro-Israeli bias. He may do it again under Obama or serve in another key role.

Susan Rice

A National Security Council member and assistant secretary of State under Clinton. Rumored to become UN ambassador.

Some observers think the current defense secretary Robert Gates may stay on, but an anonymous source close to Obama discounts it. Others mentioned include John Hamre, a former deputy defense secretary from 1997 - 2000 and current president of the far right Center for Strategic and International Studies (CSIS) that specializes in crisis management and "advancing (US) global interests." Senator Jack Reed's name is also mentioned as well as Marine general and former NATO commander Jim Jones and general Anthony Zinni when he's available in 2010.

Penny Pritzker

According to some, she's the most powerful woman in America. At the least one of them and one of the richest as heiress to a portion of the Pritzker family fortune (believed in excess of $40 billion) and its grandfathered in (free from taxation) offshore trusts. Hundreds of them for secrecy that were set up in the Caribbean by her grandfather Abram.

Forbes magazine did a feature 2005 story on her saying she "was chosen by her late uncle (and family patriarch) Jay (Pritzker) to help oversee the family's vast portfolio of investments" that includes Hyatt hotels, other real estate investments, and 40% of the Marmon Group after 60% was sold to Warren Buffett for $4.5 billion.

In its "Power of Penny Pritzker" article, Bloomberg called her the "billionaire head of Barack Obama's fundraising machine (and) the person to call when you want to 'get the job done,' says Warren Buffett," who's had a long-standing business relationship with the family going back decades. Today, it's with Penny, the multi-billion dollar fortune she controls, and the enormous influence she wields in Washington as a Democrat party insider and fund-raiser extraordinaire.

According to Bloomberg, Penny gets much of the credit for getting Obama elected. For "organizing the best-financed campaign in US history." For tapping wealthy and first-time contributors through her influence, contacts, and "no-nonsense" style.

Her controversial one also, according to Fran Sweet, a retired Ameritech manager, who lost $100,000 in the failed (suburban Chicago) Hinsdale-based Superior Bank that collapsed in 2001 with some $2.3 billion in assets. The result of poor lending practices, sloppy bookkeeping, and likely fraud at a time Pritzker was on its Board and in charge.

Superior was a predatory lender very heavily into subprime mortgages in the late 1990s. Pritzker was one of its originators, and some call her the "subprime queen." The doyenne of predatory lending that cost the FDIC $700 million and depositors $65 million.

Fran Sweet for one. She calls the Pritzkers "crooks. They don't care anything about people who spent their whole lives trying to save." Many lost everything in Superior accounts in amounts over the FDIC $100,000 limit.

Bloomberg reported controversy about another Pritzker company - the credit reporting firm TransUnion. "It controls the $3.3 billion market in equal shares with Atlanta-based Equifax and Dublin-based Experian Group Ltd. After widespread consumer complaints about shoddy service in the credit checking industry, the US Congress passed legislation in 2003 that allowed people to get free copies of credit reports so they could check for mistakes and block information obtained from identity theft."

"That same year, a jury awarded Judy Thomas of Klamath Falls, Oregon, $5.3 million after she claimed TransUnion took six years to correct a mistake in her credit report." On appeal, it was reduced to $1.3 million.

Pritzker will have a seat at the table in the new Obama administration. Not an appointed one but powerfully behind the scenes. The accustomed role she prefers in business and politics.

More on the Obama Administration Taking Shape

Many other prominent current or former Democrats will be chosen for the new administration. Possibly some Republicans as well. In the coming days, names will be announced and things will begin taking shape. But hold the cheers. They'll all be insiders on the same page, committed to the same agenda. Tackling the current financial/economic crisis as top priority plus continued imperialism, militarism, corporatism, neoliberalism, and no more for the public than urgencies and expediency dictate.

The same failed fundamentalism that's been around for decades with maybe some (temporary) softening around the edges given the severity of the current crisis. So dire it's impossible to avoid providing something in the form of aid. Enough to constrain growing anger and maintain the fiction of a progressive new era. Its arrival has been postponed for a date to be named later under a leader who's yet to be chosen.

Obama's First Order of Business

The "urgent priority" of the severe financial crisis. What economist Nouriel Roubini calls "The Economic Mess and Financial Disaster that Obama Will Inherit." A sign progressivism will have to wait until it's arrested and cleared up. But no short-term fix will do it. Perhaps not even a longer-term one given the extent of the damage and no assurance new policy choices will improve on current dubious ones.

Roubini believes that the nation is in more dire straits than anything seen in decades. He calls it:

"the most severe recession in 50 years; the worst financial and banking crisis since the Great Depression; a ballooning fiscal deficit that may be as high as a trillion dollars in 2009 and 2010."

Given $2 trillion in announced borrowing; around another $1.8 trillion in loans, investments and commitments; and whatever fiscal stimulus is added this year and next, the total looks to be much higher.

On top of a "huge current account deficit; a financial system that is in a severe crisis and where deleveraging is still occurring at a very rapid pace, thus causing a worsening of the credit crunch; a household sector where millions of (them) are insolvent, into negative equity territory and on the verge of losing their homes; a serious risk of deflation as the slack in goods, labor and commodity markets becomes deeper; the risk that we will end in a deflationary liquidity trap as the Fed is fast approaching the zero-bound constraint for the Fed Funds rate; the risk of a severe debt deflation as the real value of nominal liabilities will rise given price deflation while the value of financial assets is still plunging. This is the bitter gift that the Bush administration has bequeathed to Obama and the Democrats."

New macro data supports the dire state of things. It's been "worse than awful: collapsing retain sales and consumption, free fall in capex spending, sharply falling production," employment as well, "housing still in free fall and home prices bound to fall 40% from the peak, collapsing auto sales, forward looking business and consumer confidence indicators dropping to multi-decade lows, sharp surge in corporate defaults, a wrecked banking and financial system that will have to be partially nationalized."

Overall the most daunting economic and financial challenges since FDR in the Great Depression, and adding to it, the rest of the world as bad off. Severe recession is hitting Europe, Japan and other advanced countries. China risks a hard landing. So do many emerging economies. A severe global recession and financial crisis are certain. We're already in it despite some observers still in denial. Especially on its severity and likely duration.

According to Roubini, "the US and global recession train has left the station." The financial and banking one as well. It will be long and severe for at least two years regardless of the best of policy actions going forward. Stock market rallies are deceptive. They're classic bear market ones. At a time when 2009 earnings projections are "delusional." Projected to rise 15% from 2008 when, if fact, they'll fall off sharply. Roubini thinks the S & P 500 could drop as low as 600 or over one-third lower than its 931 valuation on November 7. And if things are worse than expected, 500 may be a bottoming low. It's no exaggeration to say the downside risks are significant at a time of severe economic contraction.

"The worst is ahead of us rather than behind us." Beware of excessive optimism that each time has been wrong. A severe meltdown possibility may have passed but it's not out of the question if poor future policy choices are made. That's for the new Obama team to avoid plus having to deal with whatever else the Bush administration does in its final weeks. It's botched things so badly up to now so there's no telling how much more piling on they'll do into January. Whatever happens until then, they'll be no joy in 2009, and no simple task for the ablest of appointees or assurance that their best efforts will work.

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

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

http://www.globalresearch.ca/index.php?context=va&aid=10861

The Wages of Sin

The Wages of Sin - by Stephen Lendman

"Reaping the whirlwind" for money manager and market strategist Jeremy Grantham in his latest no-nonsense commentary. Worlds different from most in the mainstream. Cheerleaders in upturns. Downplaying risks. Soft-pedaling reversals and still many in denial about the severity of today's crisis. The virtual certainty of a deep and protracted recession. The likely emergence of a changed world order at its end - for better or worse. The result of what Grantham calls "the poisonous wind we all sowed," and went on to explain it with his customary thoughtful analysis. Calling it like he sees it as one of the earliest to spot the current storm. Even though it arrived sooner and with more severity than he imagined. In that respect, it fooled some of the best and brightest but no longer the ones most credible.

Grantham enumerated 10 "poisonous" elements:

(1) an extended period of excess in: "money supply, loan growth, leverage, and below normal interest rates;"

(2) at a time of a "remarkably lucky global economic" climate he called "near perfect;" in January 2007, he observed that "Against all odds, Goldilocks tiptoed through the perils of the first (2005) and second (2006) year of the Presidential Cycle (and) 2006 was the rarest of rare birds - a perfect year;" it was "the best year in the entire history of finance for the selling of high credit risks at low premiums" and sowed many seeds for the current debacle; it produced what Grantham called "the first truly global bubble in all asset classes everywhere with only a few modest exceptions;"

(3) as asset bubbles inflated, the Fed, SEC, Treasury, and (both parties in) Congress dismantled regulations instead of tightening them; they sanctified leverage and rejected efforts to curtail risks; worse still, they "encouraged (extreme) excesses by admiring the ingenuity of new financial instruments and repeated their belief that no bubbles existed and that housing at the peak 'merely reflected a strong US economy;' " when conditions headed south, a "strong economy" was still the near-universal mantra;

(4) the combination of a favorable climate and cheerleading by authorities "produced an even more poisonous bubble - that in risk-taking itself;" the idea was that in the event of trouble, moral hazard would ride to the rescue, so go as far out on limbs as you like;

(5) the "concept of rational expectations, or market efficiency," laid deadly groundwork; the idea that we're "far too sensible" to let major bubbles appear let alone get out of control; the notion is nonsensical on its face; in the "real world of greed and fear, it dangerously encourages the belief that if you take more risk you will automatically receive more reward;" true enough in calm markets, but in turbulent ones it's disastrous; astonishingly, investors were lulled to think that until mid-2007, market conditions "were actually paying to take risks for the first time in history;"

(6) these bubbles burst like all previous ones; unsurprisingly, they were "absolutely not outlier events;"

(7) built up stresses were so extreme that unwinding them was certain to be painful; in early 2007, Grantham noted that "it is increasingly impressive and surprising how much we have done wrong this time;"

(8) "by far, the biggest failing of our system has been its unwillingness to deal with important asset bubbles as they form;" as the dot.com one grew, Grantham explained it in 1998, 1999 and in a 2002 "Feet of Clay" commentary that "aimed at (his) arch villain, Alan Greenspan;" because of a more dangerous housing bubble, "Bernanke joined (his) rogues' gallery;"

-- added icing on the cake came from Warren Buffett on derivatives; "financial weapons of mass destruction" he called them; so complex few understand them, and many of them are for gambling, not protection or investing; a sure recipe for trouble; the destruction of the very keys to our financial structure; as a result, trust and confidence have been hugely impaired; "a potentially lethal blow to the system and must be addressed at any cost as fast as possible;" and a final observation:

(10) foresight, imagination and competence are essential to avoid crises; when they occur, these elements in abundance are needed to deal with it; "the bitterest disappointment" this time is how authorities "rationalized and ignored" asset bubble buildups and risk-taking; especially their cheerleader in-chief, "the formerly esteemed chairman of the Fed."

Grantham then asked: "Why did our leaders encourage the deregulation, encourage the leveraging and risk-taking, and completely miss or dismiss the growing signs of trouble and what we described as the 'near certainties' of bubbles breaking?" He suggested two "theories." The first based on "career risk" or what he calls "the Goldman Sachs Effect: Goldman increased its leverage and its profit margins shot into the stratosphere." Eager and needing to keep up, other less talented banks copied them "with ultimately disastrous consequences." They had to because "woe betide the CEO who missed the game....The Board would simply kick him out" and replace him with a "gunslinger."

Theory two is harder to prove: "that CEOs are picked for their left-brain skills - focus, hard work, decisiveness, persuasiveness, political skills (and with luck) analytical (ones) and charisma. The Great American Executives are not picked for their patience." For wasting time "thinking about history and the long-term future. They are paid to be decisive and to act now." Today's CEOs, "to the man, missed everything that was new and different," and these elements "happened to be vital."

In mid-2007, Grantham noted three "near certainties:"

-- that US and UK house prices would decline;

-- profit margins globally would fall; and

-- risk premiums everywhere would rise with the result that "markets and the financial and economic systems" would experience "severe consequences."

The US housing market is down but "probably has quite a way to go" to reach bottom. The UK slump has just begun. It will hit with a thud and cause "another wave of write-downs and stress." Global profits are falling "rapidly, but have a long way to go." Most dramatically has been the rise of risk premiums. From record narrow spreads 18 months ago in developed country fixed income markets to far above normal. In emerging countries, the worst is likely ahead and in places may be "very severe." As for equities, global markets "moved in three weeks from quite expensive to moderately cheap for the first time in at least 20 years."

But hold the cheers. We're not out of the woods. Not even close perhaps given the history of bubbles that are punctuated by strong bear market rallies like the one in the run-up to November's election. Grantham's research shows that all markets revert to their mean values from their highs and lows. No exceptions, and getting there is very bumpy. Nearly always by way overshooting. Further, the larger the bubble, the greater the overshoot.

In addition, US markets haven't been cheap since 1982 - 1983 and have been "permanently overpriced since 1994." Hence a "terrible caveat." Until the greatest ever 2000 equity bubble, the three most important 20th century ones were in 1929, 1965 and Japan at end of 1989. All three overcorrected by more than 50%. Today, we have "a more global, interlocking, and complicated system, including non-bank players like hedge funds." We've also got destabilizing derivatives in a totally unregulated market. Is a 50% overrun likely? Grantham thinks governments will do anything to prevent it and with luck they will, but not entirely.

He estimates S & P 500 fair value at around 975 and believes that it will likely "overrun on the downside by 20 - 40%, giving a range of 585 to 780 as a probable low." Its closing October 9, 2007 high was 1565. The lower figure, if reached, will be 63% below the high. In the event of a 50% overshoot, the low will be 487, or a 69% drop. In sum, "the world faces unavoidable declines in economic activity and profit margins, so this overrun is unlikely to be much less painful than average" and may be worse.

Another disturbing sign was in the November 3 closely-watched Institute for Supply Management (ISM) report. The index fell to 38.9% in October from 43.5% in September. Its lowest level since September 1982. Readings below 50 signal contraction. This one is big and maybe worsening. Both new orders and production were their lowest since the early 1980s. A clear sign of a deepening recession with the worst still yet to come.

More evidence as well from an October 30 Bloomberg report headlined: "The Shipping News Suggests World Economy is Toast." Writer Mark Gilbert cites the Baltic Dry Index that tracks the cost of shipping goods and commodities. It fell below 1000 for the first time in six years with a thud. It's now nearly 90% cheaper to ship goods over water than early in the year. Air freight is also affected and dropped 7.7% in September, according to the International Air Transport Association, or the steepest decline since the trade group began compiling the data in January 2003.

Given the current economic crisis and some of the worst economic conditions in years, Societe Generale's Guy Stear and Claudia Panseri said "Earnings expectations still look optimistic, with analysts projecting 2009 earnings for the S & P 500 rising by 19 per cent." It's astonishing that some people buy it or that analysts are allowed to get away with such deception. Slowly and grudgingly, they'll lower their figures as unfolding evidence forces them.

More from Martin Weiss on "The Great American Housing Nightmare: Next Phase"

His latest analysis as of November 3, and it's pretty grim. He explains that it's foolish to assume home prices "are so low that they (can't) go any lower. They don't stop declining because they appear cheap or match a historical low. They keep dropping until "no new economic forces drive them down. Despite sharp declines already recorded, a steeper plunge is dead ahead." Because "most of the (housing market) troubles (so far) have been caused by bad mortgages going sour. Meanwhile, the more common causes of housing slumps - high interest rates, rising unemployment, and recession - are just starting to kick in, and the most powerful causes - depression and deflation - are still on the horizon."

In addition, massive over-indebtedness will pressure greater numbers of homeowners to abandon or sell properties for whatever amounts they'll bring. Already in 2008, 10% of them are in foreclosure. Nearly 40% owe more than their homes are worth, and all this kicked in before recession deepens and the "next phase of the Great American Housing Nightmare" begins.

Weiss calls it "one of the biggest speculative manias of all time." With no precedent, so no historical roadmap is available for guidance. "No one can (say) with precision how far US home prices will decline, when they will hit bottom, how many homeowners will lose their homes, or how soon a real recovery will begin." It may take many years, and the most comparable precedents for today's crisis had nothing to do with homes.

"They are the Dutch speculative mania of the 1630s, the South Sea Bubble of the 1700s, and the stock market panics of the early 1900s." The 1929 one as well. Their critical boom-bust elements were quite similar:

(1) Debt: the fuel of speculation; with enough, prices can be wildly inflated; "in many respects, the borrowing mania makes all previous debt manias pale by comparison;" by mid-2008, the Fed reported $14.8 trillion in outstanding US mortgages or 40% more than the official national debt and triple the total of all mortgages a dozen years earlier. Even worse, was the quality of debt. Dangerous and substandard because all types of speculative lending proliferated. Requiring no proof of an ability to repay. No down payment so even low income households could buy unaffordable properties or even more than one. And even pay interest only or less than the full amount.

It's no surprise that a majority made the smallest required payments and accrued unpaid amounts to their loan balances. The more payments they made, the deeper in debt they fell.

It gets worse. Unlike past speculative periods, non-lenders this time hold most of the mortgages - "institutions and investors far removed from borrowers." And the $14.8 trillion in residential and commercial mortgages is compounded by another $20.4 trillion in consumer and corporate debt. As a result, Americans are pressured on multiple fronts - unaffordable mortgages, credit card and other loan balances, combined with mounting layoffs and unemployment. A potentially lethal combination.

(2) Investor Frenzy: history shows that the wilder it gets on the upside, the greater the selling panic heading down; at the housing bubble's peak, the average existing home price was nearly five times the yearly incomes of owners - the highest ever ratio in history; at the same time, home affordability plunged to its lowest ever level; in addition, speculation was rampant as the market peaked; "an astounding 40% of houses and condos were bought as second homes or investments."

Further, the annual appreciation rate for existing homes jumped from 3.6% in January 2001 to 16.6% in November 2005. For new homes, it surged from 4.8% to 18.1% over the same period. Securitized mortgages (sold globally) added more bubble fuel to the mix - $4.8 trillion worth or 60% more than the total value of all Dow Jones Industrial Average stocks.

(3) Government-Created Monopolies, Corruption, Fraud and Cover-Ups: some of the greatest bubbles in history were created, fueled and extended this way.

For example, failing to create a massive railroad monopoly caused the Panic of 1901. The Panic of 1907 followed the inability to corner the copper market, and the 1929 crash, in large measure, resulted from collusion among brokers, bankers and tycoons. Nearly always, the government fostered a deregulatory climate. Gave selected companies and individuals special privileges. Encouraged concentrated power, and desperately tried to reconstitute the boom after the bust occurred. It proved fruitless, collapse followed, and it portends what may happen today with a potentially similar or even worse outcome than in the past.

Take the two government-created housing monopolies for example - Fannie Mae and Freddie Mac. They got dominant control over the nation's largest debt market - mortgages, and were encouraged to compete aggressively with private subprime lenders. It proved disastrous, showed up early, but was ignored.

In September 2004, Fannie and Freddie's primary regulator, the Office of Federal Housing Enterprise (OFHE), revealed massive accounting irregularities on both companies' books. Four years later, they were still unaddressed. As a result, the SEC began investigating their accounting practices. In addition, their official filings and public pronouncements "consistently and wildly overstated their capital, while understating their risk. Fannie and Freddie were actually houses of cards in disguise," but their executives repeatedly lied about their companies' health in testimony before Congress. That both were undercapitalized and, in fact, involvent.

It's no surprise given their speculative practices. Between 2005 and 2008, Fannie alone purchased or guaranteed at least $270 billion in subprime mortgages - more than three times the amount it bought in all previous years combined. It went unnoticed, and Wall Street and Washington encouraged even greater risk-taking. In September 2008, it ended with a crash. Both companies were bankrupt, and it no longer could be hidden. They needed "an unprecedented $100 billion" each from the government to keep them operating.

But that amount way understates the problem. It "assumes an end to the credit crunch, no more debt collapses, no recession, and certainly no depression." It thus completely ignores reality. What may be needed for what's "fast becoming history's largest (ever) cesspool of sinking debts and commitments - $5.2 trillion in mortgages guaranteed or owned by the two companies, their $1.5 trillion in debts, and their $2 trillion in derivatives."

(4) Collapse: How far home prices will decline can't be predicted with certainty. However, history once again is a guide:

-- in the Dutch Tulip Mania, investors lost nearly everything if they paid cash; even more if they bought on a slim 2.5% margin.

-- in the South Sea Bubble, share prices declined about 90%;

-- in the 1929 crash, they dropped 89%;

-- In the 2000 - 2002 tech bubble, they sunk 78%;

-- in the 1990 to the present Japanese bear market, they lost 82% in the leading Nikkei average; and

-- in today's financial crisis, losses of up to 99% have occurred in some of America's most noted companies.

Right or wrong, Weiss believes that today's US housing bubble "is as extreme as (the above-listed) examples." He sees it progressing in three phases:

-- the subprime mortgage bust already experienced;

-- a severe US recession "just beginning;" and

-- "depression and deflation" to come.

Home prices will continue falling precipitously with the most over-valued areas and blightest regions with high unemployment hardest hit. "Never before in history have we witnessed home price declines of this magnitude." The result of unprecedented levels of debt, speculation, government manipulation, fraud, corruption and consumer abuse. If history teaches anything, "it's that unprecedented causes (produce) unprecedented consequences." It's now playing out in America and globally with the worst of it to come.

Another Potential Shoe to Drop

According to Nouriel Roubini in his November 4 commentary titled: "The Rising Risk of a Hard Landing in China: The Two Engines of Global Growth - the US and China - are Now Stalling."

In recent years, "the global economy has been running on two engines, the US on the consumption side and China on the production side, both lifting the global economy." As the world's "consumer of first and last resort," the latest macro data show this engine has effectively shut down. "More worrisome," increasing signs show China is also stalling.

Their latest macro data are mixed but all point to "a sharp deceleration of economic growth." Now at 9% compared to past 12% years. At risk is a potential "hard landing" that for China would mean around 5 - 6% growth and not the 9 - 10% it needs to absorb its 24 million new workers annually. Various "macro indicators suggest that China is indeed headed towards a hard landing." It's not good news for America, and in combination, aren't good news for world economies.

One year ago, Chinese exports to the US grew at an annualized 20% rate. The most recent trade data show zero growth, but "the worst is still to come in the next few quarters" as US consumption is falling and is expected to continue declining. In addition, nearly all advanced economies face severe recession that will slow China's growth further.

Monetary policy may prove ineffective, and analysts disagree about fiscal measures. As export demand falls, the country is committed to more infrastructure and other spending and has a huge (near-$2 trillion) foreign currency war chest to do it. But Roubini believes fiscal stimulus will be limited at best. Because of the combined effects of Olympics spending, natural disasters, and social strife in the West, a large budget hole was created. Other factors are in play as well such as a turnover decline in local property markets. Lower fees and taxes have resulted that, in turn, have delayed some industrial development plans.

A "hard landing" may also increase the amount of non-performing loans from "the still mostly public state banks....Once net exports go bust and real investment sharply falls we will see a massive surge in non-performing loans that financed low return and marginal investment projects. The ensuing fiscal costs of cleaning up the banking system could be really high."

An additional factor comes from Michael Pettis - a leading Chinese economy expert. That a tax revenue surge "in the last 4 years has been more than matched by (a) surge in spending so that if revenue growth diminishes (or reverses) it might not be easy to slow spending growth proportionately. Contingent liabilities from non-performing loans could also reduce resources available for a fiscal stimulus."

Nonetheless, fiscal measures are being implemented but so far just modestly, and the "big question is (can China) increase (the amount enough) if a quick order hard landing were to occur." Roubini believes likely not because "moving a massive amount of economic resources from the tradeable (to the non-tradeable infrastructure) sector will take time...." He sees China decelerating to a 2009 7% growth rate - "just a notch above a 6% hard landing (and) an even worse outcome cannot be ruled out...."

In addition, "a hard landing in China will have severe effects on growth in emerging market economies in Asia, Africa and Latin America as Chinese demand for raw materials and intermediate inputs has been a major source of economic growth for emerging markets and commodity exporters....Thus, global growth - at market prices - will be close to zero in Q 3 of 2008, likely negative in Q 4 and well into negative territory in 2009. So brace yourself for an ugly and protracted global economic contraction" next year.

On November 4, the US Commerce Department added fuel to that argument as factory orders slumped sharply as US and foreign businesses curtailed their capital equipment demand for the second straight month. It fell 2.5% in September, much weaker than the .2% expected. In August, it declined 4.3%, the biggest drop in almost two years, and more erosion is expected in the coming months as the US recession deepens.

Exacerbated by plunging US auto sales according to the latest reported figures. They dropped 31% in October to around 850,000 vehicles with GM reporting its worst month since 1945 - down 45% along with Chrysler's 35% and Ford's 30%. According to one analyst, adjusted for population increases, it was the worst monthly performance "in the post-WW II era. This is clearly a severe, severe recession," and auto executives warned that the worst still may lie ahead.

Very likely according to the Fed's Opinion Survey on Bank Lending Practices. It shows tighter standards along with weaker loan demand. It stated: "In the current survey, large net fractions of domestic institutions reported having continued to tighten their lending standards and terms on all major loan categories over the previous three months." Both to businesses and households. In addition, "Demand for loans from both businesses and households at domestic institutions continued to weaken, on net, over the past three months."

At the same time, there are huge federal funding demands that will cause an even greater debt crisis. The Treasury just announced a need to borrow $550 billion in the current quarter. Near-term needs may add $2 - $3 trillion more to that total - to finance the federal deficit, buy $500 billion in toxic assets, roll over $561 billion in maturing Treasuries, and add the unknown factor of what other needs may arise.

On November 5, another worrisome one came from the latest ISM non-manufacturing (or service) sector. It dropped from a neutral 50.2 September reading to 44.4 in October. Another clear sign of contraction. In addition, the non-manufacturing business activity index fell 7.9 points to 44.2, and the new orders one declined 6.8 points to 44. The employment index stands at 41.5, and the price index dropped 16.6 points to 53.4. Any number below 50 signals contraction.

On November 6, two more weak reports came out:

-- One from retailers showing their sales plummeted to their lowest level in about 40 years. AP retail reporter Anne D'Innocenzio called it "stunning and rare" and said it augurs a bleak outlook for holiday shopping. Michael Niemira, the International Council of Shopping Centers' chief economist, described October sales as "awful. This reflects the severity of the current financial crisis." The ICSC-Goldman Sachs Index registered a 1% decline to its lowest level since at least 1969 when the index was established.

-- The Labor Department reported that longer-term jobless benefits hit a 25-year high with the number of people drawing unemployment benefits jumping by 122,000 to 3.84 million in late October. It was the highest reading since 1983 at a time of deepening recession. In addition, another report showed productivity declined to 1.1% in Q 3 compared to 3.6% in Q 2. Unit labor costs increased at a 3.6% rate compared to .1% in the earlier period.

The View According to Krassimir Petrov

He's an economist and assistant professor at the American University in Bulgaria teaching macroeconomics, money and banking, and international finance, and his world view signals trouble of the most serious kind. "Worse than the Great Depression" he explains in a recent article. Gives reasons he feels are compelling, and lists the "very same mistakes that led to the" earlier one only this time they're even worse:

-- asset bubbles in stocks, real estate and more;

-- securitization and the immense amount of toxic debt it created;

-- excessive leverage compounded by a world of hedge funds;

-- corrupt gatekeepers that allowed an Enron and Worldcom scandal and today's far worse problems;

-- lagging regulations or a complete lack of them where they're most needed;

-- market ideology; laissez unfair fundamentalism; and

-- non-transparency to the degree that financial executives even fool themselves.

Combined he sees the current debacle much "worse than the Great Depression" because of six "baked in the cake" fundamental factors:

-- overvalued real estate to a far greater degree than in the 1920s when most people paid cash for their homes;

-- total US highly-levered credit; again more extreme than in the earlier era; to unprecedented levels;

-- the explosion of derivatives; a thousand trillion dollar "sword of Damocles over the financial system;" an estimated $180 trillion held by banks alone;

-- the Dow-gold ratio; the "most important ratio between the relative prices of financial" and real assets; leverage creates an imbalance and implies gross overvaluation; it reached its highest ever level in 2000 and needs painfully more downside to unwind;

-- global bubbles not easily comparable to the less globalized 1920s; today, however, US stock market and real estate excesses exceed what occurred back then; and

-- the collapsing Bretton Woods II as distinguished from Bretton Woods I tied to gold and its ability to restrain credit and financial excesses.

Today's cumulative imbalances far exceed those of the earlier era and suggest a very grim outlook - if Petrov is right. His advice, and he's not alone - think gold.

A Morning-After Reality Check

November 4 election night. It was a happening at Chicago's Grant Park. Like New Year's eve in Times Square. Expectant many tens of thousands assembled for a huge victory rally. Office buildings were emptied to let them come. They arrived early. Awaiting official word that their man won. Eager to greet him. The new president-elect. A change of the guard. A new day. At around 10PM, the crowd erupted when on giant TV screens CNN called it for Obama. "Yes we can" people chanted.

It was mass euphoria. At a time of deepening financial duress. The worst in many decades. Hitting Chicagoans hard like many others. The nation at war on two fronts as well. A possible new one with Iran, and a new Cold War with Russia in the wings. Out of sight and mind as Chicago threw a party and brought the whole city to a halt. Until after midnight when crowds began dispersing.

All night electricity filled the air. "Finally we have someone who will change the world," said a woman. "He'll put the right people in the right jobs," said another. "He wants to make a difference in our country," one more. Not a hint of negativity in sight. Not tonight at least. Tomorrow will be soon enough. Mark January 20 as the day it arrives. Inauguration day. In the meantime, party on.

In less than three months, the age of George Bush will end and a new Obama one will begin. Will it be different or more of the same? Will the new president be less hawkish? Less supportive of massive Wall Street bailouts? Socialism for the rich and the hindmost for the rest? Less controlled by monied interests? More committed to public need? Main Street over Wall Street? More eager to end foreign wars? More dedicated to a new course? Reversing his predecessor's toxic legacy? Governing responsibly for the first time in decades? Maybe ever, but at least since the New Deal? Is anything close to that possible? Think so? Think again.

Comparing Obama to FDR and expecting another New Deal is ludicrous. Yet with every new president hope springs eternal. Candidates promise change (or at least suggest it) and people buy it. A new course. Racial harmony. Peace and prosperity. Populist reform and a radical shift away from the Bush administration's toxic extremism. A deep breath please for a reality check. A wake-up call. A cold shower.

Obama is a creation of Wall Street and America's boardroom rulers. Its dominant corporate power. His administration:

-- will continue an imperial agenda;

-- won't end foreign wars;

-- won't repeal repressive police state laws;

-- will let corruption go unpunished;

-- will continue to serve monied interests;

-- send hundreds of billions more to bankers;

-- loot the federal treasury to do it;

-- let taxpayers fund it;

-- let Wall Street run the Treasury with either Goldman Sachs executives or others just like them;

-- increase the size of the military;

-- send more troops to Afghanistan;

-- continue occupying Iraq;

-- begin a new Cold War with Russia;

-- continue attacking Pakistan;

-- possibly Iran as well;

-- will keep waging the "war on terrorism;"

-- will continue one-sided support for Israel's repressive occupation of Palestine and proved it by choosing pro-Israeli hardliner and neoliberal Rahm Emanuel as his White House chief of staff; it's considered the most powerful executive branch position after the president and a Dick Cheney type vice-presidency; Emanuel rammed through NAFTA for Clinton and is a Democratic Leadership Council (DLC) insider;

-- will send Israel billions of dollars, the latest weapons and technology, and much more annually;

-- will maintain the Cuban embargo;

-- hostility toward Hugo Chavez and all other independent leaders, democrats or despots;

-- will support neoliberal "free trade;"

-- keep undermining labor;

-- do nothing to foster racial harmony;

-- or defend the rights of immigrant workers;

-- or reform the US gulag prison system; the largest in the world by far; affecting mostly poor people of color; his own people;

-- won't end the barbaric death penalty;

-- won't release political prisoners or end the war on Islam;

-- will support privatizing public education;

-- will ignore the plight of tens of millions with no health insurance and many millions more with too little;

-- will back a business as usual agenda because "the business of America is business," and Obama won't ever forget it. Or the foreign wars he'll support in its behalf, and

-- will protect the two-party duopoly and do nothing to make an anti-democratic America more democratic.

Think a new progressive age is dawning? Think again. An Obama presidency will go Lincoln one better. It'll prove that the electorate can be fooled "all of the time" - or enough of them long enough before eventually they'll know they were had - fooled again. One commentator put it up this way: "Forget the honeymoon - I want a divorce," and Ralph Nader asked: Will Barak Obama be an "Uncle Sam for the people of this country, or Uncle Tom for the giant corporations?"

That said, consider two positive things. Thankfully, Obama isn't John McCain, and given the dire state of things, he and Congress may have to help people in need. It will be woefully inadequate, packaged to look otherwise, but may be enough to contain public anger. Unless things get so dire, nothing less than massive stimulus will help, and then political exigencies may force a more progressive agenda than party leaders now have in mind. It's how the New Deal came about. Enlightened politicians and some business leaders were scared enough to give a little to save capitalism. In the months ahead, that choice may again arise.

A View from the UK

It comes from Ambrose Evans-Pritchard in his November 4 commentary headlined: "Revenge of the Left across the world." He suggests the possibility that America's election will produce a hostile laissez-faire climate given that "capitalism has run amok" and caused damage so great that Obama "may have to pursue unthinkable policies." Just as Franklin Roosevelt did once in office.

True or not, some observers believe it or at least are hopeful. Ninety-one year old Eric Hobsbawm for one. The famed British Marxist historian and author in a BBC interview. He calls today's events "the dramatic equivalent of the collapse of the Soviet Union: we now know that an era has ended. It is certainly the greatest crisis of capitalism since the 1930s. As Marx and Schumpeter foresaw, globalization not only destroys heritage, but is incredibly unstable. It operates through a series of crises."

This one will result in "a much greater role for the state, one way or another. We've already got the state as lender of last resort. We might well return to the idea of the state as employer of last resort" the way it was under FDR.

Evans-Pritchard is sympathetic and disagrees with those who think business can go on as usual given that governments have stepped in with massive rescue packages. He quotes Germany's foreign minister, Frank-Walter Steinmeier, saying: "The rule of the radical market ideology that began with Margaret Thatcher and Ronald Reagan has ended with a loud bang. We need a comprehensive new start, so we can reestablish our society on fresh foundations. People create value, not locusts." Thatcher's TINA (there is no alternative) has come full circle. It was fraudulent on its face and is now turned on it head.

So says Nicolas Sarkozy in his "Laissez-faire, c'est fini" comment that needs no translation. "We will intervene massively whenever a strategic enterprise needs our money," he said. It's pouring out of Washington, the UK, and most Western European capitals in a frantic effort to staunch the bleeding that keeps gushing no matter what they do. Because of what Evans-Pritchard calls the "awful truth." Gross excesses producing awesome credit bubbles now imploding and landing with a thud. Their "shock will move by degrees from revulsion to political rage." It produced Hitler in 1930s Germany. Hobsbawm hopes America will be wiser and choose socialism over "the Hegelian broth nearing the boil in Europe."

Given current conditions near certain to worsen and a new US administration in power, it's anyone's guess how a crisis this grave will be resolved or how things will look when it ends. One thing, however, is sure. The age of George Bush is over, and not a moment too soon. But unduing his damage may be too great a task for any head of state - even for all of them combined. The wages of sin are now due.

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 of world and national topics with distinguished guests. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10773

Targeting Aristide in Exile

Targeting Aristide in Exile - by Stephen Lendman

Elected Haiti's president in 1990. Its first ever democratically chosen one. By a sweeping two-thirds majority. Took office in February 1991. Deposed by an army-led coup in September with all the earmarks of being made-in-Washington. Returned to office in October 1994. Served until February 1996. According to Haitian law, he couldn't succeed himself. Reelect in November 2000 with 90% of the vote. Took office in February 2001. Served until February 29, 2004 when, in the middle of the night, US marines deposed him and forced him into exile.

He's now in South Africa where he remains larger than life. Haiti's symbolic leader. A man of the people. Dedicated to their welfare. Steadfast in his principles. Beloved and wanted back. Yet he's vilified in the press because of the good example he represents. Accused while in office and still now of all sorts of things. The way developing country democrats are always treated. Human rights abuses. Using armed gangs to crush dissent. Retain power. Political killings. Tolerating corruption. Connections to drugs trafficking. Profiting from it. Not a shred of it true. Not a word in the mainstream to expose it, denounce it, and set the record straight.

Now four years later a resurrected charge. As unfounded as the others. On the Wall Street Journal's op-ed page by Americas writer, Mary O'Grady. Known for attacking democrats. Supporting repression. Right wing extremism. American imperialism and corporate power. She's excels in journalistic venom mirror opposite of the truth.

Her latest on October 27, in an article titled: "Democrats for Despotism." About publicly-owned Haiti Telecommunications International called Teleco. The once state monopoly now compromised by de facto privatization. What's plagued Haiti before and since Aristide by opening its markets to private investors. Predators. Profiting at the expense of the people. Buying assets at well below fair value. Part of Washington's imposed neoliberalism in telecommunications and other areas. So that companies like Rectel, Haitel, Digicel and Comtel combined exceed Teleco in size and can take full advantage at the expense of poor Haitians.

Even so, it hasn't contained O'Grady's brand of diatribe. Again targeting Aristide, but not for the first time. She called him a "dictator." Accused him while in office of "inciting violence against his political opponents." Being "renown for eliminating his enemies," she blamed Democrats for returning him to office. Claimed on return he "resumed his despotic ways." Enough so that "Haitians begged for US help" to remove him. Up to February 2004 when he "was finally run out of the country." Indeed so courtesy of dispatched US marines. And now a resurrected old canard.

That "Aristide installed his accomplices in (Teleco) management positions and those accomplices then caused Teleco to enter into agreements with certain US and Canadian telecommunications carriers, granting them significantly reduced rates for services provided by Teleco in exchange for kickbacks, which further reduced those rates." That the post-Aristide US-installed Latortue "government opened (Teleco's) books and claimed the company had been looted." By "Aristide....stealing millions of dollars in telephone revenues." Not a shred of it true. Not a bit of evidence to support it, but they tried anyway. By filing suit that was later withdrawn.

Some Background

In July, the FCC fined IDT $1.3 million - the New Jersey telecom company run by one of John McCain's top fund raisers, Jim Courter. It was for failing (in 2003 and 2004) to file a contract for telephone service to Haiti. According to the FCC, IDT paid Teleco an illegally low rate for calls it handled between Haiti and the US.

Courter was a New Jersey Republican congressman from 1979 - 1991. A former gubanatorial candidate as well, and one of McCain's 20 national finance co-chairmen until he resigned because the fine generated negative publicity.

Portfolio magazine published two articles on the incident by freelance journalist Lucy Komisar. Hired by the Haiti Democracy Project (HDP) to write them. An organization infamous for vilifying Aristide and his government. Founded in November 2002, it's based in Washington. Staffed by former US government officials. Bankrolled by Haiti's right-wing Boulos family. Rudolph Boulos a prominent Haitian businessman. He and HDP have close ties to the Bush administration.

This was an encore for Komisar who misreported earlier about Aristide. Unproved charges of corruption and other accusations. Typical corporate-sponsored agitprop. Directed at leaders who dare oppose Washington, neoliberalism, and instead pursue socially enlightened policies. In the case of Haiti, in the poorest country in the hemisphere. With its unimaginable level of poverty that Aristide was dedicated to alleviate. The human need his agenda addressed. His impressive successes in spite of overwhelming obstacles. Mostly from Washington under Democrats and Republicans.

The reason why twice coups removed him and why Haitians want him back. In any capacity. Just his presence. To be home with his people. What America won't allow. Nonetheless, one day he will be. Why writers like O'Grady and Komisar keep resurrecting old canards. For figures like Aristide, they never die. They don't even fade away.

The Teleco issue is about Aristide's supposed "corrupt" IDT dealings. The company paid Teleco 8.75 cents per minute for long-distance calls and not the FCC-established 23 cent rate (at the time) for other carriers. Komisar claimed IDT paid its fees to a Turks & Caicos company she identified as "Mount Salem." She then alleged that 5.75 cents went to Teleco and 3 cents to Aristide. That Turks & Caicos lawyer Adrian Corr was Aristide's legal counsel. That he ran "Mount Salem," and that he confirmed that "Aristide owned the shell."

Her whole story was invented and bogus. By his own admission, Corr never represented Aristide. Never set up a shell company, and never kicked back funds to anyone as Komisar and O'Grady claim.

O'Grady's article is about Fusion Telecommunications. Its 1999 contract with Teleco. That it violated FCC rules by granting the company a preferential rate. Access to Haiti's network "at a rate of 12 cents a minute, dropping to 11 cents after the first three million minutes each month" as opposed to "the FCC's official rate (of) 50 cents a minute, dropping to 46 cents in 2000."

She also claimed an IDT "whisleblower alleged he was fired in 2003 for objecting to a deal in which IDT would get a low termination rate in exchange for depositing payments in an account for Aristide." Fusion denies it made any improper payments, and the FCC has no evidence it did. Not good enough for O'Grady who said "Haitians can be forgiven for not putting much stock in those words." Readers can be forgiven for questioning O'Grady's credibility. Komisar as well.

For his part, Aristide was a parish priest before being elected president. He never had and today has no ownership stake in any company, including the so-called "Mount Salem." Ira Kurzban represents him as legal counsel. He refuted Komisar's accusations and stated: "Mr. Corr did not and does not represent President Aristide and President Aristide had no interest in or knowledge of any company - 'shell' or otherwise - set up in the Turks & Caicos for any purpose. Mr. Corr never set up 'Mount Salem,' any 'shell' company, or any other company for President Aristide."

He added that: "these repeated false stories of corruption against President Aristide are part of a continuing disinformation campaign against (him) that began when he first took office in 1991." The same type charges levied against democrats like Hugo Chavez. The latest example in a trial just concluded in a Miami courtroom. About a suitcase filled with $800,000 for Argentina's President, Christina Kirchner. For her successful campaign last year. Both presidents denounced the accusation, but it's still front-page news in each country and currently in America. "Suitcasegate" The New York Times called it after a "wealthy Venezuelan businessman (was convicted of) acting as an 'unregistered agent' (for his country) on American soil."

Unwarranted according to his lawyer who plans to appeal, and said the trial was a "political circus in which (his client) is a pawn of the US government." He earlier called the case politically motivated to embarrass the Chavez government. Venezuela's Foreign Minister, Nicolas Maduro, said the charges were "absolutely rigged" and that the defendant wasn't an "unregistered (Venezuelan) foreign agent."

Contrast this case and accusations against Aristide to Wall Street's massive fraud. At the heart of the world's financial crisis. That goes unmentioned in mainstream reports. Lets criminals loot the federal treasury and puts taxpayers on the hook for the tab. The same ones defrauded by the scheme. Now left high and dry on their own while world-class democrats like Aristide and Chavez are pilloried. Accused of all kinds of bogus things. Even though Aristide is no longer Haiti's president.

No matter because it's how Washington operates. With full support from its echo chamber in the press. From writers like Komisar and O'Grady well paid to comply. It's up to readers to reject their accounts. Not become hostage to their message, and rely on alternative news for the truth. There's plenty around and places to find it as readers of this web site know.

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 on major world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10773

More from the Front Lines of the Financial Crisis

More from the Front Lines of the Financial Crisis - by Stephen Lendman

In its latest economic outlook, Merrill Lynch economists "worry about inflation, or more precisely," a lack of it. From crashing global equity markets, falling commodity prices, rising unemployment, stagnant wages, over-indebted households, declining production, the continuing housing crisis, and more. All pointing to several future quarters of negative growth. Showing that Fed chairman Bernanke will face "his greatest fear: deflation." An analysis of the coincident to lagging indicators signals "deep recession."

In his October 24, commentary, Merrill's North American economist David Rosenberg sees "economic data deteriorating in a very serious way (and says) we are witnessing unprecedented stuff happen:"

-- the two-year housing recession "is still far from over" with new lows in a number of key readings;

-- it's "morphed into a capex recession, industrial production" had its worst decline in 34 years;

-- consumer confidence showed record declines;

-- retail sales keep falling; evidence is that auto and chain store sales will show four straight down months; it's happened only four other times since 1947, so "we're living through a 1-in-200 event;"

-- based on CPI data, prices are falling; at a rapid pace also seen only four other times since 1947;

-- GDP will decline at 2% annual rate in Q 4; 4% in Q 1 2009 and 3.3% in Q 2.

Conclusion: "This recession is unlike any seen in the last five decades." Typically caused by inflation, inventory cycles or aggressive Fed tightening. "This is a balance sheet recession deeply rooted in asset liquidation and debt repayment, and would seem to have more in common with pre-WW I cycles."

Going back to 1855, "a typical recession lasts 18 months." It's no assurance this one won't be longer. Rosenberg thinks it started in January and believes will end "within a month of the National Bureau of Economic Research (NBER) making the call." It defines recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Some say that occurs when economic growth is negative for two or more consecutive quarters.

The signs are evident and growing, yet NBER is usually late making its call. It may hold off until housing shows signs of stabilizing. For some analysts, it's the core economic problem, and as long as it keeps eroding no end of recession is in sight. The latest data aren't encouraging:

-- Case-Shiller's 10 and 20-city composite indexes set new record declines of 17.7% and 16.6% respectively; year-over-year dropping for 20 consecutive months; Case-Shiller predicts a peak to trough 28.6% drop in its 10-city composite index; it also sees up to 50% declines in some areas;

-- nominal house prices down 20% from their 2006 peak; according to the Center for Economic Policy Research (CEPR), this implies a 27% real decline; a loss of $5 trillion in housing wealth, and 60% of the bubble deflated so more is yet to come; at least another 10 - 15% to return to trend levels; another question is "whether markets will overshoot on the downside;" a very distinct possibility;

-- on October 29, CEPR reported record high ownership vacancies according to Census Bureau data at 2.8%; for rental units at 9.9%, slightly below the peak first quarter 10.1% level; CEPR predicts a fully deflated housing bubble by mid-2009 but added a caveat; "With the employment picture turning bleaker and the plunge in the stock market," housing is certain to be even more negative in coming months; "the tens of millions of workers....fearful about their future job prospects will be very reluctant to buy a new home;" compounded by trillions of lost personal wealth (from home and stock market losses) will make households "much more cautious in all their expenditures;"

-- the Office of Federal Housing Enterprise Oversight (OFHEO) index fell .6% in its latest July reading and is down 5.3% on a year-over-year basis; its sharpest decline ever;

-- Fitch expects home prices to fall another 10% in the next 18 months and will decline by an average 25% in real terms over the next five years; beginning from the second quarter 2008; they're now back to early 2004 levels and heading lower;

-- the PMI Group predicts home price declines will double to a national average of 20% by next year with lower values in areas experiencing the sharpest increases;

-- economist Paul Krugman cites his "preferred metric;" the ratio of housing prices to rental rates; it shows the former got way overvalued; will retrace and result in about a 25% home valuation decline;

-- Goldman Sachs forecasts a 15% home price decline with no recession and 30% with one; and

-- The Economist sees "no end in sight....to America's housing bust as prices continue to fall fast."

On October 28, economist Nouriel Roubini was even more alarming on housing citing "The recessionary macro effect of the worst US housing bust ever." He reported the view of a "senior professional in one of the (world's) largest financial institutions" who emailed him "privately and confidentially." As early as a year ago, he predicted "the worst housing recession in US history" and described "a bust process" in four phases:

(1) "rising mortgage defaults, home prices start falling, sale volumes fall, housing starts and permits decline;" it's been happening and we're beginning phase two;

(2) "home-builders' bankruptcies, housing starts and permits crash, substantial layoffs in construction and real estate-related fields (mortgage brokers, mortgage lenders, etc.);"

(3) "substantial price declines in major metro areas, large rise in defaults of prime but low-equity mortgages;"

(4) "large-scale government intervention to help households going bankrupt;" a political phenomenon so its timing and nature can't be reliably forecast.

He cites clear phase two evidence already:

-- countless smaller builder and subcontractor bankruptcies;

-- Levitt Corp. home-building unit getting loan default notices;

-- national home builder Tousa with $1 billion in senior notes and subordinated debt hired law firm Akin Gump Strauss Hauer Feld as a precaution in case of bankruptcy; and

-- Neumann Homes and Enterprise Construction file for bankruptcy.

Roubini agrees with his emailer "with one caveat." He believes we're past the beginning of phase two; most of its aspects have occurred, and we're heading into phase three or close to it; he cites sharply falling home prices; rising defaults in prime and near prime mortgages; also some prime and near prime lenders in trouble; we're also getting close to phase four as "over a dozen proposals to rescue 2 million plus households on the way to default and foreclosure are now being debated in Washington." Debate is one thing. Meaningful action another and likely a ways off at best. Possibly once a new president is in office for something substantial if it comes at all.

Rubini's emailer followed up with another. That consensus now "admits" what it denied last year. The reality of a severe housing downturn. In price action and foreclosures. The worst since the 1930s. But they're still behind the curve by acknowledging "only minor macro effects." He called it extraordinary that a decline this severe is being taken dismissively. "Perhaps the most astonishing aspect of this event is the refusal to recognize the possible dimensions, the impact of what is coming." It's "delusional" to believe that the "biggest housing recession in US history will not have severe macro effect. Most of the consensus (according to Bloomberg earlier)" was for 1.8% fourth quarter growth. It then predicted a Q 4 slow growth bottom with "economic growth recover(ing) in soft landing territory (2.5%)."

On what basis, he asks? "Mostly wishful thinking (because of) the economic and financial shocks leading to falling demand (and a worsening housing bust); anemic capex spending; slowdown in commercial real estate demand; sharp private consumption slowdown and weak supply (from weakening ISM - Institute of Supply Management;" falling employment; a glut of new and existing homes; weak auto sales; consumer durables; "a capacity overhang;" and excess inventory); these factors will persist well into the new year.

The latest Q 3 GDP report hints at what's coming. A minus .3% with personal consumption (PCE) dropping 3.1%. The first decline since 1991 and largest drop since falling 8.6% in 1980. Residential construction also fell at a 19.1% annual rate. Its 11th straight quarter drop. It now represents 3.3% of GDP. Its lowest level since 1982. Non-residential investment fell 1% and will likely fall further in Q 4. A quarter likely to be much weaker than Q 3 as most private activity is slowing. Only government spending remains strong.

On October 31, still another disturbing report. Bloomberg reported that the "US Chicago Purchasers Index (the Institute for Supply Management-Chicago, ISM) Falls by Most on Record." To 37.8 down from 56.7 in September, and its lowest reading since the 2001 recession. A clear indication of a deepening downturn. Readings below 50 signal contraction.

Another Shoe to Drop: Credit Cards

Even The New York Times published a rare ahead-of-the-curve October 28 admission. In an Eric Dash article headlined: "Consumers Feel the Next Crisis: Credit Cards." As they're squeezed by an "eroding economy." An "already beleaguered banking industry" is threatened as lenders are sharply curtailing credit card offers and "sky-high credit lines." Even creditworthy consumers are affected because of growing amounts of bad loan losses. An estimated $21 billion in the first half of 2008.

With layoffs increasing, analysts forecast at least another $55 billion in the next 18 months. Around 5.5% of outstanding debt now and may "surpass the 7.9% level reached after the technology bubble burst in 2001." As a result, lenders like American Express, Bank of America, MasterCard and Visa are "tightening standards (and) culling their portfolios of the riskiest customers." Credit lines are being reduced as well, and lenders are avoiding over-indebted consumers. Treading carefully in housing ravaged areas and with customers employed by troubled industries.

It's impacting already strapped households. With lower credit scores. Higher rates for those rated creditworthy. Less willingness to allow high balances. Less availability of loans with many needing them shut out. "The depth of the financial crisis has shocked a credit-hooked nation into rethinking its habits. Many families once content to buy now and pay later are eager to trim their reliance on credit cards....At the same time," lenders are retrenching with one CEO saying "If you're not fearful, you're crazy."

It's seen in mail solicitations slowing to a trickle. "Credit card issuers have realized their market is shrinking and that there is no room for extra credit cards, so they have to scale back," according to Mintel analyst Lisa Hronek. "People are completely maxed out with mortgages, home equity lines and credit card debt."

It's hitting hard on both ends. Rising losses and shrinking profits for issuers. Less credit availability for consumers already strapped and cutting back of necessity. At a time the only bull market is in bailouts. Amidst towering debt levels. Soaring defaults. Wobbly global economies. Some cratering. America teetering. Confidence shattered, and everyone wondering what's next.

First the Banks. Next "the Coming Insurance Meltdown"

According to analyst Mike Larson of Weiss Research. AIG was just the beginning. Falsely called an "anomaly (and that) the rest of the insurance industry is doing just fine." Larson and Weiss disagree and identified "46 insurers with $500 million or more in assets that are at an elevated risk of failure." It's seen in their share prices. Down 80 - 90% for some because the largest US and Bermuda-based insurers have lost $98 billion year-to-date, and they have more in unrealized losses.

A Possible Gotterdammerung?

On October 28, from the Financial Times forum in a Peterson Institute for International Economics Anders Aslund article titled: "It can be worse than the Great Depression." A possibility, not a prediction. Because of "the worst global asset bubble and financial panic" since that time. Because lessons learned then haven't prevented new mistakes, and unlike in the 1920s, "CNBC and Bloomberg can spread worldwide panic instantly." Old blunders may not be repeated, but "new policies (may be) even worse."

Anders laid out a "then" and "now" comparison:

-- Then: exchange rates over-zealously defended; Now: floating exchange rates could cause a trade panic;

-- Then: the money supply shrank dramatically; Now: monetary expansion and budget deficits are dangerously excessive; currency collapses may result; the fundamentals don't justify the current dollar surge;

-- Then: nations didn't go bankrupt; some may today; some major ones; Italy, for example, had over 100% of GDP in public debt before the crisis; it risks major state bankruptcies; America was unmentioned, but the rapidly mounting public debt and money supply growth alone pose immense risks, including default and future hyperinflation;

-- Then: subprime loans existed at modest levels, but that era didn't have "non-transparent collateralized debt obligations;" Now: derivatives "created the mother of all bubbles; the deeper the financial system, the harder we may fall;"

-- Then: the Great Depression "largely emanated from two countries, the US and Germany; Now: "never before has the world seen such a monstrous and truly global bubble;"

-- Then: financial institutions engaged in minimal overleveraging; Now: it's mirror opposite; "never have big financial institutions been as overleveraged as Fannie Mae and Freddie Mac or the former US investment banks, not to mention the hedge funds;"

-- Then: protectionism froze global trade; Now: frozen finances in countries like Iceland, Ukraine and possibly others have temporarily left them outside the world financial system;"

-- Then: the dollar and gold "were unchallenged sources of value;" Now: the dollar is neither stable nor the uncontested world currency;

-- Then: policymakers made mistakes but "stood for principles;" Now: "George Bush is assembling (Group 20 leaders) for a photo opportunity in Washington on November 15;" failure to come up with meaningful corrective policies "could unleash untold (global) financial panic;" and

-- Then: the 1920s lacked television and the internet for fast information dissemination; Now: information and decisions move instantly; often with no transparency; the combination is potentially harmful.

The Global Europe Anticipation Bulletin (GEAB), LEAP/E2020's Disturbing Prediction

In its October 15 28th edition. About a "global systemic crisis." An alert because its researchers believe that before summer 2009 "the US government will be insolvent (and will) default and be prevented to pay its creditors (holders of US Treasury Bonds, of Fannie May and Freddy Mac shares, etc.)." It envisions "the setting up of a new Dollar to remedy the problem of default and of induced massive drain from the US." It gives five reasons for its prediction:

-- the current US dollar surge is temporary; the result of world stock market collapses;

-- the Euro has become "a credible 'safe haven;' " an alternative to the dollar;

-- the out-of-control US public debt;

-- the collapsing US economy; and

-- future "strong inflation or hyper-inflation;" by 2009.

GEAB states: "the whole planet has become aware that a global systemic crisis is unfolding, characterised by the collapse of the US financial system and its contagion to the rest of the world." As a result, "a growing number of global players are beginning to act on their own." In their own self-interest. Because US policies are ineffective. The crisis is very serious and "far more important, in terms of impact and outcome, than" in 1929. With the US economy weaker now than then. Because of unmanageable public debt. Reckless consumer borrowing and spending. Enormous current account and budget deficits. A hollowed out industrial base, and a highly inflated dollar.

With that in mind, it's up to "vigilant" citizens and "clear-sighted" leaders to assure that America won't "drive the planet into a disaster." It will take divergent policies. What's "good for the rest of the world will not be good for the US." America defaulting will be partly from "this decoupling of decision-making...." A new dollar will be "imposed." And "one morning (in) summer 2009....after a long week-end or bank holiday," Americans will discover that their "US T-Bonds and Dollars are only worth 10 per cent of their value...."

A Jesse's Cafe Americain commentary suggests something similar. That in 2009, "the US will be forced to selectively default and devalue its debt." Because of its extraordinary financial needs. A $2 trillion annual deficit. It will take a terrible toll on Treasuries. Forcing a significant drop by 2011. We're approaching "the apogee of the Treasury bubble, with the credit bubble" already broken.

Once market deleveraging subsides, "the dollar and Treasuries will drop, perhaps with momentum, as the rest of the world realizes that the US has no choice but to default." Unless foreign sources (for a while at least) keep buying American debt despite the risk. Offer debt forgiveness. The dollar is devalued short of default. Taxes raised substantially, and debt instruments pay higher interest rates. Even then, these measures may fall short and prove ineffective.

America way exceeded its debt service ability from real cash flows. A turnaround will require a "severe devaluation and selective default." For GEAB down to 10 cents on the dollar. Following on its March 2008 prediction that by yearend "a formidable debacle will affect pension funds (worldwide) endangering the entire system of capital-based pensions." Their revenues collapsing "at the very moment when they should be making their first large series of payments to pensioners." A disturbing picture in the current climate that may reveal other unexpected hazards in the coming months.

On October 28, Bloomberg reported on the Treasury's "unprecedented" 2009 financing needs. To fund a growing budget deficit and raise hundreds of extra billions to contain the current financial crisis. To assure guarantees the government committed for. Almost $6 trillion alone for Fannie and Freddie debt and mortgage securities. With continued growing demands as other obligations arise. Plus over $1 trillion annually for national defense with all expenditure categories included. An impossible burden Bloomberg didn't mention. A deepening dilemma as the financial crisis grinds toward more unsettling realities.

What Euro Pacific Capital's Peter Schiff writes about in his 2007 book "Crash Proof: How to Profit from the Coming Economic Collapse." What he adds to in commentaries on his web site: europac.net. His latest on October 31 titled "The Tales Get Taller." Debunking mainstream explanations for recent dollar strength. A currency he's very bearish on. Because of our extreme profligacy. Decades of borrowing trillions we can't repay. How we blew it on consumption and by letting our industrial base erode.

Our problems are now too big to contain. A possible bankruptcy is ahead. "The main lesson our creditors will learn from this crisis is not to lend American consumers any more money. Once the lending stops, our 'cart before the horse' borrow to spend economy will crumble. While the rest of the world absorbs their losses and moves on, we will be digging our way out of the rubble for years to come. Earthquakes are caused by the fundamental shifts of tectonic plates beneath the Earth's surface. A similar move is underway in the global economy."

America's salad days are over, he believes. We've gone from a nation of savers, investors and producers to one of borrowers, consumers and gamblers. Official government statistics lie. They conceal hidden truths. America's house of cards is crumbling. It won't be pretty when it collapses. His advice is get out of the dollar. Get your money out of the country while you can, and gold is one of his recommendations.

Gold is on Paul Amery's mind as well in his Prudent Bear.com October 31 commentary titled "The Credit Crisis Endgame." He sees it likely becoming "a bloody standoff between investors and governments (on a) market for government bonds" battlefield.

He reviewed the unfolding credit crunch stages:

-- its beginning with liquidity drying up in "esoteric, structured-finance securities, linked to riskier types of mortgages;"

-- it then spread "to more mainstream mortgage bonds, structured finance in general, and other types of debt;"

-- by early summer 2008, it hit many non-financial companies having trouble refinancing loans;

-- by late summer, it affected sovereign states; mostly ones with high current account deficits like Iceland, Hungary and Ukraine;

-- it points globally to a spreading ailment affecting major economies and their bond markets.

The US for example. While nominal Treasury bond yields declined (10 year T-bonds at 4% October 31), their credit risk component has been increasing since last year. Credit specialists CMA DataVision shows the 10 year credit default swap (CDS) spread rose steadily. From 1.6 basis points in July 2007; to 16 basis points in March 2008; to 30 basis points in September; and to over 40 basis points on October 27. In other words, insuring against a US government bond default rose 25-fold in the past 15 months. The same is true for Britain and Germany.

Some observers find this astonishing. How could America or other major states default on their debt? It would be "the equivalent of a (financial market) nuclear explosion" smashing global economies with it.

Further, the dollar is the world's reserve currency. The Fed can create unlimited amounts of them, so any default would likely be through inflation and devaluation, some argue.

Maybe not, according to University of Maryland's Carmen Reinhart and Harvard's Kenneth Rogoff in their April 2008 paper: "The Forgotten History of Domestic Debt." They explained that throughout history debt defaults have been more common than realized. They're the rule, not the exception, in times of severe economic stress.

Again America for example. Budget and national debt levels have exploded. Bailout amounts will increase them and cause enormous strains. Morgan Stanley forecasts a sharply rising 2009 fiscal deficit. Besides the escalating national debt, to more than double the previous 1983 record. As a percent of GDP, it's expected to be around 70% in 2009. The tip of the iceberg, some say, compared to the private debt to GDP ratio. At an unprecedented 300%, according to University of Western Sydney economist Steve Keen.

He saw the storm coming before most others. He's also very skeptical about the rescue plan and compares it to King Canute's effort against the tide. Given the enormity of the problem, he sees the possibility of the debt pyramid crashing from a violent and uncontrollable chain of defaults, taking the government bond market down with it.

Strains in the US Treasury market are already evident in spite of their historically low yields. Recent auctions have had poor bid-to-cover ratios and long "tails" indicate weak demand. Secondary market delivery failures are also at record levels. Another sign of poor liquidity. If the worst of all possible worlds happens - a US debt default - the consequences will be "cataclysmic for the financial economy." The entire system will be bankrupt.

Where to hide if it happens? Amery suggests a few safe havens. The "ultimate" one being in precious metals. Think gold. Understand also that the $725/ounce October 31 spot price reflects market manipulation (over the short term) to drive it down from its March 2008 high above $1000. As one analyst puts it: I'll "give you three good reasons why gold is (underperforming). First: manipulation. Second: rampant manipulation. Third: incessant, nonstop, unabated, fiendish manipulation."

He also believes the process is only temporary and won't stop the metal's eventual rise. Given the current crisis and its likely duration, it won't surprise experts to see its price above $1000 again before it ends.

A Final Comment

In spite of trillions of asset losses. American and global households hardest hit. Wobbly world economies getting weaker. The virtual certainty of a deep and protracted recession, and the likelihood of no robust recovery when it ends.

Despite all this and Wall Street's worst year in decades, it's celebrating like it always does. With big bonuses. In the many billions of dollars. According to Bloomberg, Merrill Lynch plans $6.7 billion. Goldman Sachs about $6.85 billion and Morgan Stanley about $6.44 billion.

Bloomberg noted that Goldman, Morgan Stanley, Merrill, Lehman Bros. and Bear Stearns paid their employees "a cumulative $145 billion in bonuses from 2003 through 2007," or more than the Philippines' GDP. In 2007, the firms paid out a record $39 billion. In a year when three of them posted their worst quarterly losses ever and their shareholders lost over $80 billion. Two of them no longer exist. Another went into forced liquidation. Their combined 2008 losses should way exceed last year when they're reported.

Yet there's plenty of money for bonuses. Courtesy of ESSA/TARP. For executive pay and dividends as well. At a time all these companies are insolvent. Their survival dependent on federal handouts. US taxpayers are on the hook for them as their consumption declines. According to the Commerce Department at the fastest rate in 28 years. Because they don't get big bonuses. Are maxed out on credit and haven't the money to spend.

But the Fed and US Treasury do and plan to dispense more of it. To other takers lining up. Sovereign nations. Insurance companies. GM and Chrysler perhaps for their reported merger. Dependent on government cash to complete it. Any other company as well deemed worth saving. Big campaign contributors with friends in high places. What beleaguered homeowners don't have.

Floated proposals to help them appear meager at best. For a fraction of the millions in trouble with inadequate suggested funding amounts. A suggested $40 billion for 20 million or more homeowners facing foreclosure. With more at issue as well, according to The New York Times. Giving qualified borrowers a few grace years. Perhaps three. For lower mortgage payments that won't reduce their principal balance. It would only provide temporary relief and delay today's problem for a later time. When households may be no better off than now, yet face higher ARM reset obligations.

What's needed, but not proposed, is a 1930s type Home Owners' Loan Corporation (HOLC) plan that refinanced homes at affordable rates and prevented foreclosures. One on a grand scale as part of an enlightened New Deal agenda.

In lieu of "trickle down" to fraudsters, "trickle up" for beleaguered households. An idea so far with no traction for a new administration to consider. The one now in charge has no "imminent" plan, according to White House spokesperson, Dana Perino. On October 30, she added only that "If we find one that we think strikes the right notes....then we would move forward and announce it." Ones so far advanced are for Wall Street. Main street apparently can wait.

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 on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10773

Studs Terkel: The Passing of An Icon

Studs Terkel: The Passing of An Icon - by Stephen Lendman

Despite his advanced age, the news came as a shock. An era had passed. On October 31, author, activist, actor, broadcaster, and mensch for all seasons Louis "Studs" Terkel died peacefully at his Chicago North Side home at age 96. Already weakened by other ailments, his health declined further from a fall in his home two weeks earlier.

His son Dan paid tribute to his father. He "led a long, full, eventful, sometimes tempestuous, but very satisfying life." He was the master of oral history. Calvin Trillin called him "America's pre-eminent listener" that was "all the more remarkable when you consider that he (was) a prodigious talker." On jazz to world affairs. His soap-opera days to the state of the nation. Interviews with entertainers, artists, politicians, philosophers and social critics. Figures like Bertrand Russell, John Kenneth Galbraith, Aaron Copland, Leonard Bernstein, Zero Mostel, and Margaret Mead. Others he knew like Mahalia Jackson, David Dellinger, Nelson Algren, and Eugene Debs. The greats and near-greats but mostly ordinary people.

Whose lives and experiences he documented in his oral histories. Guerrilla journalism he called them. What he's best remembered for. In books like Hard Times: An Oral History of the Great Depression. Working: People Talk About What They Do All Day and How They Feel About What They Do. The Good War. The Great Divide: Second Thoughts on the American Dream, and his 2007 book, Touch and Go. His memoir. Of a professional listener, talker, author, actor, and "conscience of long memory" as The New York Times described him. Beloved by many and by his friends. A final book coming out in November. PS: Further Thoughts From a Lifetime of Listening. It includes a collection of radio show transcripts, short essays and other writing.

Studs was for the little guy. Our voice of America. Against war and "in-bed-with" journalists. For a New Deal kind of country. More "reg-u-la-tion" as he said. To reign in the kind of abuses now rampant. Hold the powerful accountable. Support the public interest. Do it as our "quintessential American writer" as Congressman Dennis Kucinich called him. Our "Boswell, our Whitman, our Sandburg." Our one and irreplaceable Studs.

His Background

Born in New York in 1912, and as Studs put it: "As the Titanic went down, I came up." In 1922, his family moved to Chicago. From 1926 - 1936, they ran a rooming house at which he credits his worldly knowledge. From its tenants and people who gathered in nearby Bughouse Square. A meeting place for workers, labor organizers, dissidents, the unemployed, and all sorts of others of many persuasions. A place to speak publicly. They did and still do today. A few blocks from this writer's home.

In 1934, Studs got philosophy and law degrees at the University of Chicago but chose other endeavors. He worked briefly in the civil service in Washington. Then back to Chicago in a WPA Writers Project's radio division. It got him into soap operas, stage performances, and a radio news show.

After one year in the Air Force he was discharged with perforated eardrums. A condition resulting from childhood surgeries. Back home, he wrote radio scripts. Then did news and sports commentary. A show of his own followed, and a television program called Stud's Place. Another radio show called The Wax Museum primarily for jazz, but it also included opera, gospel, country and folk music. He promoted artists like Mahalia Jackson, Pete Seeger, Woody Guthrie and Burl Ives. Interviewed jazz greats like Duke Ellington, Louis Armstrong and Billie Holiday. Wrote about them in his Giants of Jazz book.

Interviewing came accidently on his award-winning Studs Terkel Program. It led to his "transforming oral history into a popular literary form....a serious genre" as New York Times writer William Grimes put it. He had a remarkable ability to get others to talk about themselves, their lives and work. That combined with his diverse knowledge of many topics gained his program widespread popularity.

In the late 1930s as an actor, he dropped the name Louis and decided on Studs. From another Chicagoan. Noted author James Farrell from his fictional Studs Lonigan character.

In the 1950s during the McCarthy era, he was blackballed from commercial radio but found work in the theater. In 1952, he joined Chicago's WFMT. The city's preeminent, and today only, fine arts and classical music station. Its "radio legend" in its words as it devoted all weekend to his memory. To "remember(ing) Studs Terkel in words and music....talking with those who knew and loved him, and (to) listen to some of the vast body of work from (his) many years at WFMT" - 45 in all.

He was honored with many awards. A Peabody Award for excellence in journalism. The National Book Foundation Medal for contributions to American letters. The Pulitzer Prize for The Good War. The Presidential National Humanities Medal. The National Medal of Humanities. The Illinois Governor's Award for the Arts, and the Clarence Darrow Commemorative Award among others. Until his death, he was the Distinguished Scholar in Residence at the Chicago Historical Society.

Tributes and Eulogies

After his death, praise followed. The London Guardian called him a "master chronicler of American life in the 20th century, veteran radical and vibrant soul of the midwestern capital of Chicago." Calling him a "writer and broadcaster" would be like calling Louis Armstrong a "trumpeter" or the Empire State Building an "office block."

Chicago mayor Richard Daley said he "was part of a great Chicago literary tradition that stretched from Theodore Dreiser to Richard Wright to Nelson Algren to Mike Royko. In his many books, he captured the eloquence of the comment men and women whose hard work and strong values built" the nation.

Chicago Tribune writer Patrick Reardon called him a "voice (for) the voiceless" and said he was the only white writer to be inducted into the International Literary Hall of Fame for Writers of African Descent at Chicago State University. By unanimous approval after being nominated. The man who did it called "America a better place as a result of Studs Terkel being here."

He "was Chicago and everything good about the literary world...make that the world in general, said Chicago Tribune's literary editor, Elizabeth Taylor, one of Stud's good friends. Toward the end, he was aware "the shadows were closing in" but rarely used the word "dying." He preferred the euphemism "checking out" and said he wanted to be cremated and have his ashes mixed with his wife's (in an urn in his living room). Then have them scattered in the Bughouse Square he loved. "Scatter us there," he said. "It's against the law (so) let 'em sue us." It was pure Studs to the end. We'll miss him so. An era has passed.

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 on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10773