Sep 302011
 
Information Clearing House
Glenn Greenwald

September 29, 2011 “Salon” — The FBI has received substantial criticism over the past decade — much of it valid — but nobody can deny its record of excellence in thwarting its own Terrorist plots. Time and again, the FBI concocts a Terrorist attack, infiltrates Muslim communities in order to find recruits, persuades them to perpetrate the attack, supplies them with the money, weapons and know-how they need to carry it out — only to heroically jump in at the last moment, arrest the would-be perpetrators whom the FBI converted, and save a grateful nation from the plot manufactured by the FBI.

Last year, the FBI subjected 19-year-old Somali-American Mohamed Osman Mohamud to months of encouragement, support and money and convinced him to detonate a bomb at a crowded Christmas event in Portland, Oregon, only to arrest him at the last moment and then issue a Press Release boasting of its success. In late 2009, the FBI persuaded and enabled Hosam Maher Husein Smadi, a 19-year old Jordanian citizen, to place a fake bomb at a Dallas skyscraper and separately convinced Farooque Ahmed, a 34-year-old naturalized American citizen born in Pakistan, to bomb the Washington Metro. And now, the FBI has yet again saved us all from its own Terrorist plot by arresting 26-year-old American citizen Rezwan Ferdaus after having spent months providing him with the plans and materials to attack the Pentagon, American troops in Iraq, and possibly the Capitol Building using “remote-controlled” model airplanes carrying explosives.

None of these cases entail the FBI’s learning of an actual plot and then infiltrating it to stop it. They all involve the FBI’s purposely seeking out Muslims (typically young and impressionable ones) whom they think harbor animosity toward the U.S. and who therefore can be induced to launch an attack despite having never taken even a single step toward doing so before the FBI targeted them. Each time the FBI announces it has disrupted its own plot, press coverage is predictably hysterical (new Homegrown Terrorist caught!), fear levels predictably rise, and new security measures are often implemented in response (the FBI’s Terror plot aimed at the D.C. Metro, for instance, led to the Metro Police announcing a new policy of random searches of passengers’ bags). I have several observations and questions about these matters:

(1) The bulk of this latest FBI plot entailed attacks on military targets: the Pentagon, U.S. troops in Iraq, and possibly military bases. The U.S. is — as it has continuously announced to the world — a Nation at War. The Pentagon is the military headquarters for this war, and its troops abroad are the soldiers fighting it. In what conceivable sense can attacks on those purely military and war targets be labeled “Terrorism” or even illegitimate? The U.S. has continuously attacked exactly those kinds of targets in multiple nations around the world; it expressly tried to kill Saddam and Gadaffi in the wars against their countries (it even knowingly blew up an entire suburban apartment building to get Saddam, who wasn’t actually there). What possible definition of “Terrorism” excludes those attacks by the U.S. while including this proposed one on the Pentagon and other military targets (or, for that matter, Nidal Hasan’s attack on Fort Hood where soldiers deploy to war zones)?

(2) With regard to the targeted building that is not purely a military target — the Capitol Building — is that a legitimate war target under the radically broad standards the U.S. and its allies have promulgated for themselves? The American “shock and awe” assault on Baghdad destroyed “several government buildings and palaces built by Saddam Hussein”; on just the third day of that war, “U.S. bombs turn[ed] key government buildings in Baghdad into rubble.” In Libya, NATO repeatedly bombed non-military government buildings. In Gaza, Israeli war planes targeted a police station filled with police recruits on the stated theory that a valid target “ranges from the strictly military institutions and includes the political institutions that provide the logistical funding and human resources” to Hamas.

Obviously, there is a wide range of views regarding the justifiability of each war, but isn’t the U.S. Congress — which funds, oversees, and regulates America’s wars — a legitimate war target under the (inadvisedly) broad definitions the U.S. and its allies have imposed when attacking others? If the political leaders and even functionaries of other countries with which the U.S. is at war are legitimate targets, then doesn’t that necessarily mean that Pentagon officials and, arguably, those in the Congress are as well?

(3) The irony that this plot featured “remote-controlled aircraft filled with plastic explosives” is too glaring to merit comment; the only question worth asking is whether the U.S. Government can sue Ferdaus for infringing its drone patents. Glaring though that irony is, there is no shortage of expressions of disgust today, pondering what kind of dasterdly Terrorist monster does it take to want to attack buildings with remote-controlled mini-aircraft.

(4) Wouldn’t the FBI’s resources be better spent on detecting and breaking up actual Terrorist plots — if there are any — rather than manufacturing ones so that they can stop those? Harboring hatred for the U.S. and wanting to harm it (or any country) is not actually a crime; at most, it’s a Thought Crime. It doesn’t become a crime until steps are taken to attempt to transform that desire into reality. There are millions and millions of people who at some point harbor a desire to impose violent harm on others who never do so: perhaps that’s true of a majority of human beings. Many of them will never act in the absence of the type of highly sophisticated, expert push of which the FBI is uniquely capable. Is manufacturing criminals — as opposed to finding and stopping actual criminals — really a prudent law enforcement activity?

(5) Does the FBI devote any comparable resources to infiltrating non-Muslim communities in order to persuade and induce those extremists to become Terrorists so that they can arrest them? Are they out in the anti-abortion world, or the world of radical Christianity, or right-wing anti-government radicals, trying to recruit them into manufactured Terrorist plots?

(6) As usual, most media coverage of the FBI’s plots is as uncritical as it is sensationalistic. The first paragraph of The New York Times article on this story described the plot as one “to blow up the Pentagon and the United States Capitol.” But the FBI’s charging Affidavit (reproduced below) makes clear that Ferdaus’ plan was to send a single model airplane (at most 1/10 the size of an actual U.S. jet) to the Capitol and two of them to the Pentagon, each packed with “5 pounds” of explosives (para. 70); the Capitol was to be attacked at its dome for “psychological effect” (para 34). The U.S. routinely drops 500-pound or 1,000-pound bombs from actual fighter jets; this plot — even if it were carried out by someone other than a hapless loner with no experience and it worked perfectly — could not remotely “blow up” the Pentagon or the Capitol.

(7) As is now found in almost every case of would-be Terrorist plots against the U.S. — especially “homegrown Terrorists” — the motive is unbridled fury over (and a desire to avenge) contintuous U.S violence against Muslim civilians. Infused throughout the charging Affidavit here are such references to Ferdaus’ motives, including his happiness over the prospect of killing U.S. troops in Iraq; his proclamation that he’s “interested in traveling to Afghanistan” to aid insurgents; his statement that “he wanted to ‘decapitate’ the U.S. government’s ‘military center’ and to severely disrupt . . . the head and heart of the snake” (para 12) and to “essentially decapitate the entire empire” (para 34) (compare that language to how the U.S. described what it tried to do in Baghdad). Using drones to decapitate the leadership and government infrastructure of a nation at war; I wonder where he got that idea.

At least according to the FBI, this is how Feradus replied when expressly asked why he wanted to attack the U.S.:

Cause that would be a huge scare . . . the point is you want to scare them so they know not to mess with you . . . They have . . . . have killed from us, our innocents, our men, women and children, they are all enemies (para 19).

If the FBI’s allegations are accurate, then it’s clear Ferdaus has become hardened in his hatred; he talks about a willingness to kill American civilians because they have become part of the enemy, and claims that he fantasized about such attacks before the FBI informant spoke to him.

But whatever else is true, it’s simply unrealistic in the extreme to expect to run around for a full decade screaming WE ARE AT WAR!! — and dropping bombs and attacking with drones and shooting up families in multiple Muslim countries (and occupying, interfering in and killing large numbers before that) — and not produce many Rezwan Ferdauses. In fact, the only surprising thing is that these seem to be so few of them actually willing and able to attack back that — in order to justify this Endless War on civil liberties (and Terror) — the FBI has to search for ones they can recruit, convert, convince, fund, and direct to carry out plots.

Complaint Affidavit


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Sep 302011
 

Today we learned that our democracy could be hacked by an eighth grader with 26 bucks. That’s what a security assessment team with the US Department of Energy discovered when they successfully hacked into a Diebold electronic voting machine – and were able to change voting results without leaving a trace behind. These are the same guys that make sure the facilities that manufacture nuclear bombs are secure – and the security assessment team leader said about the voting machine hack, “this is a national security issue.” Despite all this – in next year’s election – 30% of voters are expected to use these very same “hack-easy” voting machines – that the rest of the world have shelved citing security concerns. And today – with the rise of hack-activist groups like Anonymous – this glaring hole in the security of our elections – could be exploited for absurd purposes…and, the nominee is…Scooby Doo?


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Sep 302011
 

Steve Peoples
MANCHESTER, N.H. (AP) — Republican presidential candidate Ron Paul is condemning the Obama administration for killing an American born al-Qaida operative without a trial.
Paul, a Texas congressman known for libertarian views, says the killing of Anwar al-Awlaki on Yemeni soil amounts to an “assassination.” Paul warned the American people not to casually accept such violence against U.S. citizens, even those with strong ties to terrorism.
Anwar al-Awlaki was considered one of the most influential al-Qaida operatives wanted by the United States. U.S. and Yemen officials say he was killed in a U.S. air strike targeting his convoy Friday morning.
Paul made the comments to reporters after a campaign stop Friday at Saint Anselm College in New Hampshire. He said America’s leaders must think hard about “assassinating American citizens without charges.”


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Sep 302011
 
Russia Today

Egyptians are getting ready to mount further mass protests on Friday. Millions are expected to come onto the streets to express their dissatisfaction at the way their country is being run post-Mubarak.
Public anger is accompanied by threats from dozens of political parties to boycott the upcoming parliamentary elections.

Do not judge a book by its cover, Egyptians urge overseas observers. When reading “Post-Mubarak Egypt,” look between the lines and you will find that the country’s “new chapter” has not been rewritten, edited, or even slightly revised.

“We still have the Supreme Council of the Armed Forces as the ruling body in this country, and it is constituted of Mubarak’s army generals,” Cairo-based activist and blogger Hossam Hamalawy told RT. “I cannot say that those rulers, in any sense, have been gearing this country towards democracy.”

Mubarak may be gone but his policies are not. And while his case is ongoing at tribunal, new figures from Human Rights Watch claim more civilians – some 12,000 – have been forced to face military trials over the last six months than during the entire 30-year rule of Mubarak.

“On average, civilians are given five to seven years in prison… a lot of torture has occurred since SCAF has come into power,” journalist and activist Gigi Ibrahim explains.

Actor Aly Sobhy does not clown around when it comes to the Supreme Council or SCARF. He has taken part in protests since day one and still has scars from being detained.

“The marks were much worse. I used to have very long hair. They tied me by my hair to a stick and hung me from it. After that I was shocked with a stun gun and beaten with a bat on the head,” he reveals. “I was released only because I’m well-known. Now I’m not allowed to leave the country for 30 years according to law… If I have to, I will seek asylum, but I want to stay and fight for freedom.”
Like Mubarak, SCAF gets the support it needs to rule Egypt from abroad.

“The aid that we get – the US $1.5 billion a year that Egypt receives from the USA – most of it goes to the Supreme Council, to the army, to SCAF,” Gigi Ibrahim says.

And progress on human rights has come to a stop or even gone into reverse since the “new” regime took over.

“In many human rights areas, it is the same as before January 25, and in others it’s getting worse,” a Cairo-based human rights activist Ramy Raoof told RT.

According to the UK Prime Minister David Cameron, “the Arab Spring is a massive opportunity to spread peace, prosperity, democracy.” But, while the West boasts that the history books will record a change for the better, Egyptians are left reading the writing on the wall.


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Sep 302011
 
Occupied Palestine

The European Parliament voted to support the UN recognition of a Palestinian state. According to a statement issued today, the Parliament assures the legitimacy of the Palestinian bid to the UN and asks all EU countries to adopt the same position.

The Parliament endorses the UN recognition of Palestine as a state and recognizes the Palestinians’ right of self determination and sovereignty while stressing the importance of finding a solution for the Palestinian-Israeli conflict during the Arab Spring.

The Parliament said it is important to support the two-state solution based on 1967 borders with Jerusalem as the capital of both states. The statement calls for complete freezing of settlement construction in the West Bank and Jerusalem.

The statement assures the solution will only come through non-violent means and asks both sides to go back to negotiations while avoiding any steps that may affect the peace-making process from taking place.

Israel approved to build 1,100 new settlement units in the East Jerusalem settlement of Gilo on Tuesday, just days after Palestinian President Mahmoud Abbas submit the bid to the UN. The West condemned this move and pushed for negotiations between Israel and Palestine.

The Parliament stressed the importance of guaranteeing Israel security while granting Palestinians their rights as a result of the 66th meeting of the General Assembly.

Palestinian Ambassador to the EU, Laila Shahid, praised the European Parliament’s position, who assured the legitimacy of the Palestinian request at the UN.

“The European Palrliament [endorsed the UN recognition of a Palestinian State]. That is the voice of the European people,” she said.

The Parliament  expressed their support by signing a statement by Avaaz, an organization that campaigned nationally on behalf of Palestinians.

Veronique de Keyster, Vice President of the Middle East Committee and member of the Socialist group, praises the political courage of MPs and assured her groups support of the Palestinian request. Keyster said she and her party recognized the Palestinians’ right of becoming a member state, especially because it has been 63 years since Israel’s recognition by the UN and 12 years since Europeans promised to recognize a Palestinian state.

“Europe can’t tell the Palestinian people, ‘This Arab Spring is not yours,’” she said.

In a discussion with the EU high representative for foreign affairs, Catherine Ashton, the president of the Green group expressed his group’s support to the Palestinian request and criticized the weakness of the European position until now.


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Sep 302011
 
IMEU/Mondoweiss
Henry Norr

If I were one of the Zionist operatives who pressured the Museum of Children’s Art in Oakland to cancel the exhibit of Gaza children’s drawings, I’d be kicking myself right now.

If they’d simply ignored the whole thing and let its scheduled two-month run proceed, probably no more than a few hundred people, most of them school children, would have seen the show. It’s not as if MOCHA is a major attraction.

But thanks to the ham-handed censorship engineered by the Jewish establishment – and the determined fight-back of the Middle East Children’s Alliance and others opposed to such bullying – thousands of people around the world have seen the kids’ pictures.

Last Saturday 500 or so crowded into a makeshift storefront gallery and spilled over into the street outside at an upbeat grand opening of the show around the corner from MOCHA – see Annie’s description here, video here (including the music of the Brass Liberation Orchestra, featuring my daughter Sarah on snare drum), more video and photos here and here, and a frustrated Zionist take on the event here. Thousands more have seen at least some of the images online – here at Mondoweiss, on Facebook, on YouTube, even in a slideshow posted on the online editorial pages of the two largest newspapers in the East Bay.

Lots more Bay Area residents and visitors will get a chance to see the pictures in person this fall, as they will remain on display at MECA’s new gallery for the next two months at 917 Washington Street in Oakland, a block from Broadway between 9th St. and 10th St. (MECA is still trying to work out hours and staffing, so before you head for the show, check at www.mecaforpeace.org, email meca@mecaforpeace.org, or call (510) 548-0542.)

And after the Oakland run is over, the show will very likely continue elsewhere – MECA’s been swamped with requests from groups all over the world who want to show it next.

Powerful as the pictures are, another aspect of this episode may prove even more important in the long run: it has brought the power of the local Israel lobby, and their determination to use it to suppress Palestinian perspectives, out into the open, for all to see. That’s partly because the Anti-Defamation League and its allies can’t resist boasting about their “victory,” Pyrrhic as it may be. But it’s also because MECA and friends have worked hard to spell out what we all know really went down here, despite the MOCHA board’s attempt at apologetic obfuscation. Outraged activists spread the story far and wide via listservs, Twitter, Facebook, etc., and MOCHA’s e-mail account and Facebook page (apparently now closed down) were barraged with indignant messages. A protest rally outside MOCHA last Friday afternoon (video and photos here and here), in the run-up to Saturday’s opening, wasn’t huge, but it attracted representatives from some important constituencies beyond the usual Palestine-solidarity activists. Much of the organizing energy behind the event came from San Francisco’s Arab Resource & Organizing Center, and dozens of Muslim Americans (including a slew of young women in hijab) turned out.

In addition, Betty Olson-Jones, president of the Oakland Education Association (the local teachers’ union), read a powerful letter, approved unanimously by the OEA executive boad, condemning the museum board’s decision to cancel the show. (Despite its name, MOCHA is mainly an art-in-the-schools program, so the teachers’ statement carries particular weight.) And Cecilie Surasky of Jewish Voice for Peace delivered a forceful and well-received speech condemning the censorship from a Jewish perspective.

Clearly the museum board has felt the heat. One piece of evidence: During the Friday rally MECA associate director Ziad Abbas reported that a representative of the board had called just a half hour earlier and offered to have “A Child’s View from Gaza” shown at MOCHA after all – provided MECA would agree to some unspecified “modifications” to the show. Appropriately, MECA director Barbara Lubin apparently told MOCHA where to stick that idea – in addition to a principled refusal to allow the childrens’ expression to be censored, MECA had already that morning signed a two-month lease on the storefront around the corner, which is actually a much more visible location than the museum itself.

Even the mainstream corporate media has covered the controversy, on the whole much more fairly than they usually do when the topic involves Palestine. The San Francisco Chronicle pointedly listed several past MOCHA exhibits that included images of violence, belying the museum board’s sudden reluctance to expose children to such sights. The two main East Bay papers (now owned, like nearly all newspapers in the Bay Area except the Chronicle, by one company) have been even better: In addition to the editorial Adam excerpted here, both the Oakland Tribune and the Contra Costa Times, which claims a circulation of about 168,00 in other sections of the East Bay, have carried two excellent columns by staff columnists shredding MOCHA’s decision to cancel the exhibit – here and here.

I’m not sure about TV – I hardly ever watch it – but the story has also been all over the radio, and not just on Pacifica’s KPFA. Predictably, National Public Radio’s story on Weekend Edition Saturday gave a lot of time to Rabbi Douglas Kahn, executive director of the Jewish Community Relations Council of the East Bay, apparently one of the principal perps in this case. So did Michael Krasny during a half-hour segment on Forum, a popular interview show aired on KQED, the Bay Area’s largest public radio outlet, yesterday. But both shows also gave the outspoken Barbara Lubin considerable time to lay out her perspective.

On KALW, San Francisco’s alternative public radio station, Dore Stein, DJ of a wonderful Saturday evening music show called Tangents, devoted the segment he calls Gaza Corner, a weekly feature on the show since the 2010 flotilla attack, to the MOCHA case last weekend. And yesterday (as Annie noted in comments at the time) host Rose Aguilar, host of KALW’s popular Your Call interview show, devoted her whole hour to discussion and call-ins with MECA associate director Abbas and Susan Greene, a clinical psychologist and artist who has worked on Palestine-themed murals in Gaza, the West Bank, Olympia, WA, and San Francisco as part of the Break the Silence Mural Project.

Obviously, none of this debate changes the facts on the ground in Palestine, and the power of the Israel lobby in national politics seems to go stronger by the week. But even though the lobby likes to show off its power on ceremonial occasions, it prefers to do its dirty work in the dark, and forcing its machinations out into the open, as I think we’ve done to a significant degree in this case, can only lead more Americans to question and eventually challenge it. Alice Walker, in her inspiring blog post on MOCHA’s cancellation of the Gaza exhibit, compared it to the Daughters of the American Revolution’s infamous 1939 refusal to allow Marian Anderson, the celebrated black contralto, to perform at Constitution Hall in Washington, D.C. That decision provoked widespread outrage, and Anderson eventually sang instead on the steps of the Lincoln Memorial before an integrated crowd of 75,000 and a national radio audience. The incident is now remembered as a milestone in the demise of overt racial segregation in this country.

Of course, Anderson had Franklin and Eleanor Roosevelt on her side, at least in that dispute. Today, unfortunately, Barack Obama has unabashedly lined up on the side of the racists when it comes to Israel/Palestine (as has Michelle, if only by her silence). Still, the resistance that’s greeted the cancellation of “A Child’s View From Gaza” over the last few weeks leaves me thinking that this incident might yet go down as something of a turning point, at least in the Bay Area and perhaps beyond, in the battle against Zionist thought control.


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Sep 302011
 
Guardian

Justices urged by 26 states to strike down requirement that all Americans have health insurance, with decision likely in midst of 2012 election campaign

The Obama administration has asked the US supreme court to back the centrepiece of the president’s sweeping healthcare overhaul – the requirement that all Americans have health insurance.

The appeal was largely expected, as a high court ruling against the law could be a fatal blow to Obama’s signature domestic policy achievement, and could have major implications for his re-election bid.

The same day the administration filed its appeal, 26 states and a major business group urged the justices to strike down the entire law, which would have a far-reaching impact on future healthcare coverage for Americans and company costs.

The case is likely to be heard and decided in the supreme court’s upcoming term, which begins next week and lasts through June 2012. A ruling is likely in the midst of the campaign for the November 2012 elections.

The administration and the opponents of the law called for a quick ruling by the high court to resolve uncertainty affecting the federal government, states and companies about the law’s key provisions that are taking effect.

The 26 states and the National Federation of Independent Business argued in their appeals the entire law should be invalidated because Congress exceeded its powers requiring that Americans buy health insurance or face a penalty.

The Obama administration filed its own appeal in which the Justice Department argued the so-called individual mandate, due to take effect in 2014, was constitutional and said the issue was appropriate for supreme court review.

“Throughout history, there have been similar challenges to other landmark legislation such as the Social Security Act, the Civil Rights Act and the Voting Rights Act, and all of those challenges failed,” the Justice Department said.

“We believe the challenges to Affordable Care Act … will also ultimately fail and that the supreme court will uphold the law,” the department said in a statement.

White House adviser Stephanie Cutter said the administration asked the supreme court to hear the case “so that we can put these challenges to rest and continue implementing the law to lower the cost of health care and make it more secure for all Americans.”

At issue was a ruling by a US appeals court in Atlanta in August that declared unconstitutional the individual insurance requirement but refused to strike down the entire law.

That decision conflicted with rulings by other appeals courts that have upheld the law or have rejected legal challenges, including a lawsuit by the state of Virginia that was dismissed earlier this month on procedural grounds.

The law, passed by Congress and signed by Obama in 2010 after a bruising political battle, is expected to be a major issue in the 2012 elections as Obama seeks another four-year term. Republican presidential candidates oppose it and Republicans in Congress have pushed to repeal the law.
Obama has championed the law as a major accomplishment of his presidency and as a way to try to slow soaring healthcare costs while expanding health insurance coverage to the more than 30m Americans without it.

The supreme court has long been expected to have the final word on the law’s constitutionality. The dispute has important legal, political and financial implications for companies in the healthcare field.
Florida attorney general Pam Bondi said the states sought supreme court review of their lawsuit.
“This healthcare law is an affront on Americans’ individual liberty and we will not allow the federal government to violate our constitutional rights,” she said.

Legal experts have said the nine-member supreme court, with a conservative majority and four liberals, most likely will be closely divided on whether the individual mandate requiring insurance purchases exceeded the power of Congress.

The Obama administration earlier this week said it decided against asking the full US appeals court for the 11th circuit to review the August ruling by a three-judge panel of the court that found the insurance requirement unconstitutional.

That decision cleared the way for the administration to go to the supreme court.

The states in their appeal also argued the law’s expansion of Medicaid, a federal-state partnership that provides health care to low-income Americans, was unconstitutionally coercive, forced upon the states.
A senior Justice Department official told reporters that political considerations played no role in moving for supreme court review. The official said it was important to get a ruling soon so planning for the far-reaching law can proceed.

 


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Sep 302011
 
Global Research
Devon DB

In 2007, the world became engulfed in the largest economic slump since the Great Depression. The crisis was so damaging it was coined “the Great Recession” and there was much comparison of the recession to the Great Depression of the 1930s in the mainstream media. However, what many failed to do was an in-depth analysis of both the Great Depression and the Great Recession, to compare and contrast to two. Thus, this article will be a comparison of both economic downfalls, ending in an analysis of the current economic situation America finds itself in and asking the question if another Great Depression is possible.

The decade prior to the 1930s, the US was in a time of great economic boom known as “The Roaring Twenties.” Yet while the nation’s income rose about 20% (from $74.3 billion in 1923 to $89 billion in 1929), the majority of this wealth went to the richest as can be seen by the fact that “in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%” [1] and that the disposable income per capita rose 9% from 1920 to 1929, while the top 1% enjoyed a massive 75% increase in per capita disposable income. This greatly increased wealth disparity and led to a imbalance in the US economy where demand wasn’t equal to supply and thus there was an oversupply of goods as “those [the poor and the middle class] whose needs were not satiated could not afford more, whereas the wealthy were satiated by spending only a small portion of their income,” [2] which caused the US to become reliant on three things to keep the economy afloat: credit sales, luxury spending, and investment by the rich. However, the major flaw of an economy based on credit sales, luxury spending, and investments was that all three of those activities depended upon people’s confidence in the economy. If confidence were to lower, then those activities would come to a halt and with it the US economy.

The massive inequality in wealth was not solely in terms of socioeconomic status, but also extended to corporations as well. During the first World War, the federal government subsidized farms in earnest as they wanted to feed not only Americans, but also Europeans. However, once the war ended, so did subsidies for farms. The government began to support the automobile and radio industries, with help from then-President Calvin Coolidge in the form of pressuring the Federal Reserve to keep easy credit, as to allow for both industries to easily be heavily invested in.

In the 1920s, the profits of the automobile and its connected industries such as lead, nickel, and steel skyrocketed, so much so, that by 1929 “a mere 200 corporations controlled approximately half of all corporate wealth.” [3] The automobile boom also led to the creation of hotels and motels which in turn led “Americans spent more than a $1 billion each year on the construction and maintenance of highways, and at least another $400 million annually for city streets” [4] in the 1920s. In addition to the massive success of the automobile industry, the radio industry also preformed exceptionally well as “Radio stations, electronic stores, and electricity companies all needed the radio to survive, and relied upon the constant growth of the radio market to expand and grow themselves.” [5]

This dependence on two main industries to support the entire US economy led to quite serious problems as in the case of depending on the spending habits of the upperclass to support the economy, if the expansion of either the radio or automobile industries slowed down or halted, the US economy would meet the same fate.

Still further, there was wealth inequality on the international banking scene. After World War 1, the Americans lent their “European allies $7 billion, and then another $3.3 billion by 1920” and by 1924 “the U.S. started lending to Axis Germany,” eventually “climbing to $900 million in 1924, and $1.25 billion in 1927 and 1928” [6] The Europeans then used the loans to buy US goods and thus were in no shape to pay back the loans. One must realize that after World War 1, virtually all of Europe was hit hard economically by the war and thus unable to make any goods with which to sell, yet the US played a role as well due to its high tariffs on imports, thus increasing the difficulty in which Europe could sell goods and pay off its debt.

Yet, the massive wealth inequalities domestically were not the only problems that led to the stock market crash, financial speculation was rampant also, which allowed corporations to make huge amounts of money. As long as stock prices continued to rise, the corporation itself became near-meaningless. “One such example is RCA corporation, whose stock price leapt from 85 to 420 during 1928, even though it had not yet paid a single dividend.” [7] This was a serious fundamental problem in the stock market as many forgot that if stock prices increase extremely quickly, a bubble is being created and sooner or later it will burst. This speculation greatly distorted the values of corporations. Usually, the stock price somewhat correlates with the performance of the company, but due to the rampant speculation, companies that were doing horribly could now seem as if they were great investments, all based on the increase in their stock price.

A factor that led to rampant speculation was the ability to buy stocks on margin, which allowed for one to buy stocks without actually having the money. Due to this, investors could potentially get extremely high returns on their investments. Buying stocks on margin was quite easy as the process

functioned much the same way as buying a car on credit. Using the example of [the RCA corporation], a Mr. John Doe could buy 1 share of the company by putting up $10 of his own, and borrowing $75 from his broker. If he sold the stock at $420 a year later he would have turned his original investment of just $10 into $341.25 ($420 minus the $75 and 5% interest owed to the broker). That makes a return of over 3400%! [8] (emphasis added)

This massive speculation led stock prices to incredibly high levels, with “the total of outstanding brokers’ loans [being] over $7 billion” [9] by mid-1929.

The stock market bubble soon burst as on October 21, 1929, prices began to fall so rapidly that the ticker fell behind. Prices fell even further due to investors fears which led them to sell their shares. The speculation and wealth inequality caused a major undermining of the entire market which led to the wealthy ending their spending on luxury items and investing, as well as “[the] middle-class and poor stopped buying things with installment credit for fear of loosing their jobs, and not being able to pay the interest,” [10] and with it the US economy came to a griding halt. The lack of spending led to a nine percent decrease in industrial production from October to December 1929. This led to job losses, defaults on interest payments, and the destruction of the radio and automobile industries as inventory grew due to no one having the ability to purchase anything.

Internationally, loaning had already come to an abrupt halt earlier in the decade because “With such tremendous profits to be made in the stock market nobody wanted to make low interest loans” [11] and trade quickly ended as the US increased already high tariffs and foreigners quit purchasing US goods.

A topic that is rarely mentioned in regards to the Great Depression is the role of the Federal Reserve. The Fed played a major role in why investment purchases collapsed dramatically. The main problem was that in the onset of the Great Depression, there was rampant deflation. This was caused by the fact that the M1 money supply had reached a peak in 1929 and went downhill from there, yet the Fed didn’t see this. Instead, they saw “only the statistics on the monetary base, the currency in circulation plus the funds held as reserves by the banks with the twelve Federal Reserve Banks,” [12] which showed that the monetary base had been steadily increasing since about 1929. Thus, since the Fed saw that the money supply was increasing, they found no reason to act, when in reality, the M2 money supply was decreasing rapidly. However, in the late 1920s, the Fed acted to end speculative banking and wound up applying more restrictive monetary policies than thought. This resulted in banks closing en masse, which the Fed initially welcomed, yet this caused

the banks and the banking public [to become] alarmed. Some people withdrew their funds from the banks. The banks became worried about withdrawal of deposits and even runs on banks. The banks reacted by holding reserves in excess of what the Fed required. [13]

This massive withdrawal of funds emptied the coffers of banks, thus causing the aforementioned deflation. The Fed’s actions, along with the stock market crash, led to a 90% decrease in investment purchases, cutbacks in the labor force due to business not being able to sell anything, and a downturn in consumer spending.

Thus, due to a mixture of socio-economic and industrial wealth inequality, high tariffs on foreign imports, a stock market bubble, and poor economic management by the Federal Reserve, the United States descended into the Great Depression.

Initially, in the onset of the Depression, then-President Hoover decided against the government taking action to help individuals on the grounds that “if left alone the economy would right itself and argued that direct government assistance to individuals would weaken the moral fiber of the American people.” [14] However, when he was forced by Congress to intervene in the economy, Hoover focused his “spending [on stabilizing] the business community, believing that returning prosperity would eventually ‘trickle down’ to the poor majority,” [15] and thus began the first implementation of what would later be called in the ‘70s, “trickle-down economics.”

The public, being appalled by the lack of empathy from Hoover, voted Franklin D. Roosevelt (FDR) into office. Once in office, he began embarking on programs that would come to be known as “The New Deal.” However, this was not a deal concerned with easing the pain of the Depression on ordinary people, rather FDR “sought to save capitalism and the fundamental institutions of American society from the disaster of the Great Depression.” [16] While the popular view is that the New Deal was radically different from Hoover’s plan, in reality the two plans didn’t truly differ to much as while some social programs were implemented, overall FDR’s plan “tended toward a continuation of ‘trickle down’ policies, albeit better-funded and executed more creatively.” [17]

He never truly adopted Keynesian economics, which argued that the “government should use its massive financial power (taxing and spending) as a sort of ballast to stabilize the economy.” [18] This can be seen in the Agricultural Adjustment Act which paid farmers to produce less, however, this “did little for smaller farmers and led to the eviction and homelessness of tenants and sharecroppers whose landlords hardly needed their services under a system that paid them to grow less” [19], while also not addressing the main problem of the Depression: weak consumer spending. Overall, the Act benefited mainly moderate and large agriculture operations. Another example is the National Industrial Recovery Act. The National Industrial Recovery Act encouraged industries to avoid selling below cost to attract more customers, and while this was good for businesses in the short run, it “resulted in increased unemployment and an even smaller customer pool in the long-run.” [20] FDR’s overall goal, while he did aid in the creation of social programs such as Social Security and enacted many jobs programs, was to protect capitalism and the very institutions that led to the Great Depression.

Another topic that isn’t even mentioned in examinations of the Great Depression is the Depression’s effect on home mortgages. During the 1920s and early 1930s, the US experienced a housing boom, whose peak was around 1924 for single-family houses and 1927 for multi-family houses.[21] In 1928, when the Fed began cracking down on speculation, housing investments began to fall due to the sharp increase in interest rates. Housing debt had “increased rapidly during the 1920s and continued to grow even after housing starts had begun to decline and house prices had leveled off” [22] and due to deflation, housing debt continued to increase until 1932. While rising debt usually doesn’t pose a problem for households as long as they could make their loans payments, yet household incomes and wealth decreased greatly during the Depression, thus leading “loan delinquencies and foreclosures [to soar], fueled by falling household incomes and property values.” [23] It was extremely difficult for homeowners to keep their property as “Falling incomes made it increasingly difficult for borrowers to make loan payments or to refinance outstanding loans as they came due.” [24] However, the situation would improve as unlike the experience with the financial industry, the government stepped in to remedy the situation with the creation of agencies such as the Federal National Mortgage Association and the Federal Home Loan Bank System which aided homeowners in financing their mortgages.

Unlike the Depression, where falling mortgages were a side effect of the overall economic crash, in this current recession, mortgages played a major role in facilitating a near collapse of the global economy. Ordinary Americans found themselves able to purchase homes as credit was easily available. Yet due to predatory lending on the part of banks, the majority of these houses were being bought by people who couldn’t afford them and many homeowners would soon find themselves having underwater mortgages due to “one-year adjustable –rate mortgages (ARMs) with teaser rates for first 2-3 years of a mortgage” which “were set artificially low and then reset much higher.” [25] Due to credit rating agencies lowering the requirements for having mortgages rated AAA, the majority of these mortgages “were packaged into opaque securities and sold to public” and this “Subprime loans increased from 9% of new mortgage originations in 2001 to 40% in 2006.” [26] Yet at the end of 2006, events took a turn for the worse as mortgage payments decreased and with it the value of mortgage-backed securities.

The mortgage bubble burst left in its wake “destroyed household savings in the ensuring financial meltdown, forcing individuals to slash their spending,” [27] which led to a massive decrease in consumer spending and a long, painful recession. The housing bubble burst also had larger consequences as “The disappearance of cushion against future losses virtually froze the credit market.” [28] In addition to this, several large financial institutions such as Lehman Brothers and Bear Stearns collapsed, thus prompting the government to intervene, though not on the behalf of the American people.

Just as in the Great Depression, the US government’s main goal was to protect the very institutions that caused the financial crisis instead of dealing with them. There were cries from leaders of the financial and political elite that massive companies such as AIG were “too big too fail,” thus the US government embarked upon a $700 billion bailout. However, the true cost of the bail out is more like $839 billion as

the $700 billion [was] in addition to an $85 billion agreement on a bailout of the insurance giant American International Group, plus $29 billion [was] support that the government pledged in the marriage of Bear Stearns and JPMorgan Chase. On top of all that, the Congressional Budget Office [said] the federal bailout of the mortgage finance companies Fannie Mae and Freddie Mac could cost $25 billion. [29]

This money was paid to the corporations by the US taxpayer. While the financial institutions stated that they needed to money to survive, once gotten, corporations used to bailout money to stabilize their corporations, but also to hand out massive bonuses to corporate executives. [30] This bailout did not address the root causes of the financial meltdown: incompetence of the US government in regulating the financial industry, massive financial speculation, and predatory lending.

As they had during the Depression, the Federal Reserve played a role in bringing about the recession. Their main goal was to try “to artificially prop up those markets [of bad debt and worthless assets] and keep those assets trading at prices far in excess of their actual market value.” [31] To this end, the Fed provided $16 trillion to domestic and foreign banks in the form of secret loans and bought mortgage-backed securities that were in reality, completely and totally worthless. [32] In addition to this, many of the people on the board of directors at the Federal Reserve also had connections to corporations that received bailout money.

For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest. [33] (emphasis added)

Thus, there was a very cozy relationship between the Federal Reserve and the banks that received bailout funds. This only serves to show the revolving door relationship between the two groups and how the Fed’s actions were subject to the interests of the large banks.

However, these are not the only actions the Fed took that helped to create the financial crisis. Their role goes back even further, almost a decade. In the early 1990s, Congress played a large role in trying to increase the amount of homeowners by passing the Home Ownership & Equity Protection Act of 1994 (HOEPA), which planned to address concerns of “reverse redlining” which was“the practice of targeting residents of specific disadvantaged communities for credit on unfair terms, and in particular by second mortgage lenders, home improvement contractors, and finance companies.” [34] To achieve these ends, the Act called for the establishment of residential mortgage loans which were fixed so that it would be easier for low-income home owners to repay their loans. The Act also gave the Fed the ability, not only to ensure that HOEPA was carried out, but also to

exempt specific mortgages or categories of mortgages from any or all of the HOEPA requirements, or prohibit additional acts or practices in connection with any mortgage (not just “high cost mortgages”) that the Board determines are unfair, deceptive, or designed to evade HOEPA, or that are made in connection with a refinancing of a mortgage loan that the Board finds to be associated with abusive lending practices, or that are otherwise not in the interest of the borrower. [35]

However, then-Fed Chairman Alan Greenspan refused to curb predatory lending as he touted a kind of laissez-faire economics and argued that the market would take care of itself. This refusal to attack predatory lenders would come back in later years in the form of the current financial crisis.

Many thought that with the election of Barack Obama, he would fulfill his much touted goals of “hope and change” to restore the US, yet this did not occur with America’s foreign policy, nor did it occur with America’s economic policy. Obama’s economic team consisted of former Treasury Secretary Robert Rubin who was the “chairman of Citigroup Inc.’s executive committee when the bank pushed bogus analyst research, helped Enron Corp. cook its books, and got caught baking its own” and also “was a director from 2000 to 2006 at Ford Motor Co., which also committed accounting fouls and now is begging Uncle Sam for Citigroup- style bailout cash.” [36] Two former Citigroup directors, Xerox Corp. Chief Executive Officer Anne Mulcahy and Time Warner Inc. Chairman Richard Parsons, were appointed to his economic team. Both Mulcahy and Parsons have shady pasts as not only were “Xerox and Time Warner got pinched years ago by the Securities and Exchange Commission for accounting frauds that occurred while Mulcahy and Parsons held lesser executive posts at their respective companies,” [37] but both were directors at Fannie Mae when that company was breaking accounting rules. To round out the group, former Commerce Secretary William Daley was appointed and at the time of his appointment, Daley was “a member of the executive committee at JPMorgan Chase & Co., which, like Citigroup, is among the nine large banks that just got $125 billion of Treasury’s bailout budget.” [38] Thus, it was no surprise to anyone who was paying close attention to the financial crisis and Obama’s economic team that instead of attacking the root causes of the crisis, instead these advisors opted for a massive stimulus package of almost $800 billion. The situation had long been one where the patients were running the asylum.

While the stimulus undoubtedly saved millions of jobs, it didn’t fulfill its main objective: stimulate the economy. The debt ceiling debacle would serve to only make the situation worse as the Republicans wanted solely austerity measures implemented and the Democrats capitulated, almost without a fight. Both parties began to create in the public’s mind the idea that the only way to rein in the deficit was for austerity measures to be implemented. However, these austerity measures will only serve to exacerbate the situation as the IMF stated that implementing austerity measures “will hurt income in the short term and worsen unemployment in the long term.” [39] Thus, the $2 trillion that the government plans to cut in social programs will only serve to make an already horrid situation even worse.

Currently, America’s fiscal situation is in tatters. While the stock market is doing well, the real problem is unemployment, which is on a level that hasn’t been seen since the Great Depression [40] and things are not going to get better soon. This becomes a serious problem as without employment, people don’t have money to spend and America’s economy “is predominantly driven by consumer spending, which accounts for approximately 70 percent of all economic growth.” [41] (emphasis added)

Another Depression is possible due to the fact that while things may seem to have calmed down for now, the deep, structural problems within America’s economy still exist, are still active and therefore still have the potential to do major damage in the future. Economist Nouriel Roubini stated that another crisis is already manifesting itself in developed nations. [42] The only thing that the bailouts served to do was delay the inevitable: the bailed out corporations will fail due to their own risky practices and they will bring the US and world economies down with them.

Notes

1: http://www.gusmorino.com/pag3/greatdepression/index.html
2: Ibid
3: Ibid
4: Ibid
5: Ibid
6: Ibid
7: Ibid
8: Ibid
9: Ibid
10: Ibid
11: Ibid
12: http://www.sjsu.edu/faculty/watkins/dep1929.htm
13: Ibid
14: http://iws.collin.edu/kwilkison/Online1302home/20th%20Century/DepressionNewDeal.html
15: Ibid
16: Ibid
17: Ibid
18: Ibid
19: Ibid
20: Ibid
21: http://research.stlouisfed.org/publications/review/08/05/Wheelock.pdf
22: Ibid
23: Ibid
24: Ibid
25: http://www.ijeronline.com/documents/volumes/vol1issue1/ijer2010010107.pdf
26: Ibid
27: Ibid
28: Ibid
29: http://www.nytimes.com/2008/09/21/business/21qanda.html
30: http://www.cbsnews.com/stories/2008/11/12/earlyshow/main4595179.shtml
31: http://newsblaze.com/story/20080927140845tsop.nb/topstory.html
32: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
33: Ibid
34: http://apps.americanbar.org/buslaw/committees/CL130000pub/newsletter/200708/natter.pdf
35: Ibid
36: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNCFKvAMUQ6w
37: Ibid
38: Ibid
39: http://www.huffingtonpost.com/2011/09/13/imf-austerity_n_960199.html
40: http://www.globalresearch.ca/index.php?context=va&aid=25098
41: http://fivethirtyeight.blogs.nytimes.com/2010/09/19/consumer-spending-and-the-economy/
42: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20110911/REG/309119958

Sep 302011
 

TimesLive
MCKEED KOTLOLO

Though fewer suspects died in police custody this year than last, the number of reported incidents of torture is on the increase, according to police watchdog figures released.

During the 2010-2011 financial year, 797 suspects lost their lives in police custody – 63 fewer than in the previous year.
 
But the number of reports of torture rose from five to 41 cases.

The Independent Complaints Directorate released its report yesterday in Pretoria.

Deputy Police Minister Maggie Sotyu revealed that deaths in custody were among 5869 complaints received nationally by the directorate .
The report also revealed that:

  • KwaZulu-Natal and Gauteng led deaths in custody with 248 and 182 respectively. Northern Cape had 20 such complaints;
  • The ICD received 2493 complaints from the public about police and others from police officers. The ICD said the “statistics are by no means a true reflection of the extent of police criminality” because the police were under no obligation to report such offences;
  • Serious assault topped the list of crimes alleged against police officers, with 966 incidents reported. There were 354 attempted murder cases in which policemen were the accused; and
  • Gauteng was the source of the highest number of misconduct complaints against officers at 546, followed by Western Cape and Eastern Cape, at 485 and 448, respectively.

Sotyu welcomed the 7% reduction in deaths in police custody or as a result of police action. She also lauded a 15% drop in the number of misconduct cases.

ICD executive director Francois Beukman said that, of the 797 deaths in police custody, 540 were as a result of “police action”.

Eighty percent of the suspects died during the commission of a crime, during escapes or attempted escapes, or during arrests or investigations. Of those, 87 were killed by police in KwaZulu-Natal and 48 in Gauteng.

Most of the suspects killed by the police were shot with service pistols – 443 cases – followed by deaths by natural causes (113) and assault (104).

Of those who died in police custody, 92% were men. Suspects in the 26-to-35 age group accounted for 47% of the total and children 5%.


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Sep 302011
 
Alexander Higgins

The plot thickens as more unions pledge support to the Occupy Wall Street movement and a collective group with 1 million members expected to march against the machine.

As I previously reported unions are coming out in full force to support the Occupy Wall Street protests. We received news that the 200,000 member strong Transportation Workers Union would be joining the protests. The Teamster’s union endorsed the protests. Rumors of Verizon workers joining the protests. A scathing endorsement was issued by the Industrial Workers Union has also endorsed the Occupy Wall Street protests. Then news that several more unions had committed to or were contemplating joining the protests, while two the unions scheduled solidarity marches.

Now TPM reports even more unions are joining up to protest against Wall Street and the movement is set to grow rapidly.

The article also comes along with the news that a collective of 8 groups, with over 1 million members. will be joining the Occupy Wall Street movement to show solidarity and march against the machine.

Occupy Wall Street Protests Poised to Grow Rapidly With Union Support
[…]

The Union on Thursday used Twitter to urge members to take part in a massive march and rally on Wednesday, Oct. 5. That effort is being co-sponsored by another eight labor and community outreach organizations.

The Village Voice spoke with TWU Local 100’s spokesman Jim Gannon on Wednesday, who explained the group’s reasons for joining the protests:

“Well, actually, the protesters, it’s pretty courageous what they’re doing,” he said, “and it’s brought a new public focus in a different way to what we’ve been saying along. While Wall Street and the banks and the corporations are the ones that caused the mess that’s flowed down into the states and cities, it seems there’s no shared sacrifice. It’s the workers having to sacrifice while the wealthy get away scot-free. It’s kind of a natural alliance with the young people and the students — they’re voicing our message, why not join them? On many levels, our workers feel an affinity with the kids. They just seem to be hanging out there getting the crap beaten out of them, and maybe union support will help them out a little bit.”

The other eight organizations expected to join in the October 5 rally, based on its Facebook page, are United NY, Strong Economy for All Coalition, Working Families Party, VOCAL-NY, Community Voices Heard, Alliance for Quality Education, New York Communities for Change, Coalition for the Homeless, which have a collective membership of over 1 million.

As Jon Kest, the executive director of New York Communities for Change, told Crain’s New York Business: “It’s a responsibility for the progressive organizations in town to show their support and connect Occupy Wall Street to some of the struggles that are real in the city today. They’re speaking about issues we’re trying to speak about.”

Crain’s also quoted a political consultant who said of the demonstration: “”It’s become too big to ignore.”

Meanwhile, the New York Metro 32BJ SEIU, which represents maintenance workers and security officers and counts some 70,000 members, is also re-purposing a previously planned rally on Oct. 12 to express solidarity with the Occupy Wall Street protesters, the Huffington Post reports.

“The call went out over a month ago, before actually the occupancy of Wall Street took place,” said 32BJ spokesman Kwame Patterson. Now, he added, “we’re all coming under one cause, even though we have our different initiatives.”

TPM Announces Collective With 1 Million Members To March On Wall Street


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