Wednesday, March 5, 2008

NAFTA Has Had Its Trade-Offs for the US

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By Marla Dickerson

Consumers and global companies benefited, but critics see pitfalls.

Mexico City - Four campaign seasons have come and gone since presidential hopeful H. Ross Perot warned that NAFTA would create a "giant sucking sound" of jobs going to Mexico, and the trade pact is still generating plenty of noise. Calls to renegotiate the 14-year-old deal are rising from both sides of the border.

Thousands of protesters paralyzed traffic in Mexico's capital in January to demand a redo of the pact, which they said had hurt Mexican farmers. In the U.S., the North American Free Trade Agreement looms large in states such as Ohio, which hosts a crucial presidential primary Tuesday.

The Rust Belt has shed hundreds of thousands of factory jobs since 1994, when the U.S.-Canada-Mexico trade bloc was implemented. Ohio alone had lost a net 50,000 jobs as a result of NAFTA, according to a 2006 analysis by the Economic Policy Institute in Washington. Sens. Barack Obama and Hillary Rodham Clinton, who are campaigning for the Democratic nomination, say the deal needs to be retooled to protect American workers.

"Let's get real about NAFTA. It simply isn't working for all Americans," Clinton said at a recent rally in Youngstown, Ohio. If elected, she said, she would call for a temporary freeze on new trade pacts and a thorough review of existing ones. Obama wants stronger labor and environmental provisions put into NAFTA and other accords.

Whether talk of revamping NAFTA amounts to more than election-year stumping remains to be seen. Three-way trade has soared and unemployment in the U.S. is substantially lower now than it was 14 years ago - 4.9% in January 2008 compared with 6.6% in January 1994. American shoppers have benefited from lower prices on imported goods, and U.S.-based multinational companies have boosted their competitiveness by whittling production costs.

Yet there is growing wariness among the public that the U.S. is giving away more than it's getting. After all, the nation has lost 3.1 million manufacturing jobs since 1994, and its trade deficit with Mexico and Canada has risen to $138.5 billion last year from $9.1 billion in 1993.

Lawmakers who are critical of the Bush administration's trade policies picked up 37 congressional seats in the 2006 election, according to Global Trade Watch, a Washington-based advocacy group. Although Congress approved a free trade pact with Peru in December, pending deals with Colombia, Panama and South Korea are stalled.

It's not just Democrats who want a time out. Six in 10 Republican voters said that free trade had hurt the U.S. and that they would support tougher import restrictions, according to a Wall Street Journal-NBC News poll in October.

"We're seeing the strongest opposition to free trade expansion in recent memory," said Eric Farnsworth, vice president of the Council of the Americas, a Washington-based business group that promotes open markets in the Western Hemisphere. "NAFTA has become symbolic of the fears and apprehensions of globalization in general."

Despite promises that NAFTA would help keep Mexicans at home, illegal immigration to the U.S. has accelerated. About two-thirds of the estimated 12 million illegal immigrants in the United States have arrived since 1995, according to the Pew Hispanic Center. Many hail from rural Mexico - casualties, critics say, of a trade deal that pitted highly subsidized U.S. and Canadian agribusiness against Mexican producers working tiny plots.

"The dimensions of the problem are finally becoming obvious," said Raul Fernandez, a professor of Chicano and Latino studies at UC Irvine. "Policymakers in the United States realize they have created a monster, and that monster is devouring them."

Free trade agreements have been the centerpiece of the Bush administration's relations with Latin America, where the U.S. has long promoted democracy, privatization and open markets as the prescription for the region's woes. Free market advocates are concerned that rising U.S. protectionism will signal a retreat from these principles just as Washington is losing influence to populists such as Venezuelan President Hugo Chavez.

Despite strong economic growth in much of Latin America in recent years, trust in market economics is declining, according to a poll released in November by Latinobarametro, a Chilean opinion research firm. Millions are frustrated that privatization and falling trade barriers have done little to mitigate income inequality.

Survey respondents in Central America were particularly downbeat, despite that region's recent embrace of the Central American Free Trade Agreement, which includes the U.S., the Dominican Republic, Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua.

In a separate 2007 opinion poll, Mexicans said they disapproved of NAFTA by 2 to 1, according to the Mexico City-based polling firm Mund Americas. That's an about-face from 10 years ago, when Mexicans favored the deal by a similar ratio.

The shift reflects disappointment that NAFTA hasn't done more to transform Mexico's economy, said Dan Lund, president of Mund Americas. Although the nation's exports have soared and Mexico has attracted record levels of foreign investment, more than 40% of its citizens still live in poverty. The nation still isn't creating enough jobs to keep up with population growth.

Mexico's government oversold NAFTA to get it approved, Lund said. "It was as if everything, including adolescent acne, would be resolved."

Free trade boosters say unrealistic expectations have soured ordinary people in both countries on NAFTA. The pact, they believe, is a scapegoat for failed government policies and larger economic trends.

Although NAFTA clearly has put some American factory hands out of work, manufacturing employment has been declining since the 1970s, largely as a result of automation.

NAFTA may have pushed some Mexican farmers off the land. But experts say most illegal immigrants were pulled north by back-to-back economic booms in the United States, where they found companies eager to hire them regardless of their legal status.

Mexico's economy lags in part because it's dominated by monopolies that its government has been unwilling or unable to dismantle. Its farm sector was struggling long before NAFTA, said David Lewis, vice president of Manchester Trade Ltd., a Washington-based consulting firm specializing in international trade.

Under the agreement, the last tariffs on agricultural products were lifted Dec. 31. Although Mexico had 14 years to prepare its farmers with subsidies, technical assistance, land reform and other help, many small growers say it failed to do so. They want President Felipe Calderon to renegotiate NAFTA's agricultural chapter to restore tariffs on commodities such as corn and beans.

But his administration has opposed any such move. NAFTA backers note that some Mexican farmers have prospered under the deal: Although only about 5% do any exporting, they've been so successful at sending avocados, tomatoes and other fruit north that Mexico now runs a trade surplus in agricultural products with the United States.

Even U.S. critics of NAFTA agree that there's no turning back globalization, but they say the U.S. must get tougher in demanding equitable exchanges.

Sens. Byron L. Dorgan (D-N.D) and Sherrod Brown (D-Ohio) recently introduced legislation to make it harder to pass trade agreements unless they include a detailed analysis of what's in it for the U.S., such as how many jobs are expected to be lost or gained.

Rep. Duncan Hunter (R-Alpine) is co-sponsoring the NAFTA Accountability Act, which would require America to quit the pact unless changes are made to gird U.S. manufacturing and cut the trade deficits with Mexico and Canada.

Others want strict enforcement of labor and environmental laws in developing countries and more retraining and financial aid for workers who lose their livelihoods.

Jeff Faux, founding president of the Economic Policy Institute, thinks NAFTA requires a bigger fix. He advocates a $100-billion, U.S.-backed development fund to stimulate job growth in Mexico, similar to what the European Union did to prevent its rich nations from being flooded with workers from poorer countries such as Portugal and Greece.

He said pulling out of the deal was impossible, given the links forged by the U.S., Canada and Mexico over the last 14 years. But he added that the talk of renegotiation among U.S. presidential candidates showed how attitudes had changed since President Clinton signed NAFTA into law.

Clinton "used to say, 'If it doesn't work, let's redo it,' " Faux said. "Well, it's not working. . . . It's time to rethink the whole strategy."

Big Oil Should Pay Its Share of Taxes

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By James K. Boyce

On Feb. 28, the Gazette ran an AP story headlined "House OKs $18B in new taxes on big oil companies." Buried in paragraph 10, the careful reader learned that a bill passed the previous day by the U.S. House of Representatives seeks to "roll back two lucrative tax breaks for the five largest U.S. oil companies."

Excuse me? Since when is rolling back tax breaks the same thing as "new taxes"?

One of these tax breaks "helps manufacturers compete against foreign companies." Huh? Since when do oil companies "manufacture" anything besides super-profits?

The other "gives a tax credit related to oil and gas extraction outside the country." Outside the country? Whose brilliant idea was this?

It's time for some common sense on Big Oil. Here is the story in plain English: While American families pay their taxes, Big Oil pays lobbyists and lawmakers to give them tax breaks. These not only deprive our government of money to pay for everything from education and bridges to health care and veterans' benefits. They also deepen a root cause of our country's economic and foreign-policy woes: our abject dependence on oil, most of which doesn't happen to be buried under our soil.

Revoking the two tax breaks is projected to cost the five largest U.S. oil companies $1.8 billion per year over the next 10 years. To put this number in perspective, these companies hauled in $123 billion in profits last year. Common sense includes simple arithmetic: ending the tax breaks will trim Big Oil's profits by a mere 1.5 percent.

Even this is too much for Rep. Jim McCrery (R-La.). He fumes that the rollback would "punish" the oil industry, a move he decries as "wrongheaded" and "spiteful." Who is this guy? The ranking Republican on the House Ways and Means Committee, the committee that makes our tax laws.

The White House agrees with McCrery, saying the bill "unfairly takes aim at the oil industry." President Bush is expected to veto it - if the bill makes it through the Senate. Similar bills failed to clear the Senate twice last year.

It is time - past time - to talk common sense. The House bill does not levy "new taxes": it revokes two fat tax breaks. It's not "spiteful" for the American people to demand that Big Oil pays the going rate on its profits: we pay Big Oil's going rates every time we fill up at the pump.

The problem is not only that we are being ripped off at the pump, and then ripped off again when Big Oil recycles a fraction of its profits into buying tax breaks in Washington. These travesties are dwarfed by the biggest ripoff of all: the damage to our planet caused by burning oil and other fossil fuels. We pay the price of Big Oil's profiteering today, but our children and grandchildren will pay an even heavier price tomorrow.

Over the next decade, the House bill would redirect the $18 billion into support for wind power, solar energy, and energy conservation. Common sense tells us this would be one small but welcome step in the direction of fiscal and environmental sanity.

Fed Says Economy Has Weakened This Year

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By Jeannine Aversa

Washington - The economy has weakened since the start of this year as shoppers turned even more cautious given the severe housing slump and painful credit crunch.

Manufacturers and other businesses, meanwhile, had to cope with skyrocketing prices for energy and other raw materials. The businesses' ability to pass along higher prices to their customers was mixed, according to the Federal Reserve's new snapshot of nationwide economic conditions released Wednesday.

Many economists fear that the country is teetering on the edge of a recession or is in one already.

"Economic growth has slowed since the beginning of the year," the Fed reported. Two-thirds of the Fed's 12 regions "cited softening or weakening in the pace of business activity, while the others referred to subdued, slow or modest growth," the Fed said.

The report suggested that persisting problems in the housing market and harder-to-get credit are affecting the behavior of individuals and businesses alike - making them think twice about spending and investing.

The nation's retail sector is feeling the strain.

"Reports on retail spending were generally downbeat," the Fed said.

The Fed said that retailers in a majority of regions described sales as "below plan, downbeat, weak or having softened." Clothing sales, for instance, were reported as soft in the regions of New York and Philadelphia and Richmond, Va. Several regions noted declines in sales of "big ticket" goods and home-related items, the Fed said. Auto sales nationwide were characterized as slow or sluggish, the Fed said.

Spending by consumers accounts for a big chunk of overall economic activity and thus plays a major role in determining whether the economy will survive the housing and credit crises or fall victim to those problems.

Economic growth slowed to a near halt in the final three months of this year, advancing at a pace of just 0.6 percent. Many economists believe growth in the current January-to-March quarter will be worse - a pace of around 0.4 percent. Some analysts, however, believe the economy is actually shrinking now.

To help shore up things, the Federal Reserve has been cutting a key interest rate since September. As the economic situation continued to falter, the Fed turned much more aggressive. It slashed rates by 1.25 percentage points in the span of just eight days in January - the biggest one-month rate reduction in a quarter century.

Fed Chairman Ben Bernanke signaled last week that the central bank stands ready to lower rates again at its next meeting, March 18.

Some worry that the country could be headed for a bout of stagflation - a dangerous mix of stagnant economic activity and stubborn inflation. But Bernanke, in his congressional appearance last week, said he didn't believe that was the case.

The Fed's report said that companies had to deal with rising energy prices, which translated into increased transportation and shipping costs. Companies also reported price increases for metals, petrochemicals and food.

However, "firms ability to pass along cost increases by raising selling prices varied," the Fed said.

The Boston region, for instance, noted that retailers were passing "some price increases on to customers and some manufacturers were raising selling prices to partially offset rising costs." Half the manufacturers in the Cleveland region had raised prices or added surcharges since the Fed's last report in mid-January. The Dallas and Atlanta regions reported some companies raised their prices but others were constrained by competitive pressures. The Kansas City region said retail prices were "mostly stable." The Chicago region said businesses - other than construction and retail - were passing along cost increases to their customers.

On the manufacturing front, activity was reported to be sluggish or to have slowed in about half of the Fed's regions, the survey said. Some areas continued to cite weak demand for products and equipment used for building and furnishing homes. All Fed regions, however, expressed "caution or concern" about their near-term business prospects, the Fed said.

A separate report from the Commerce Department on Wednesday showed that factories saw demand for their products drop sharply in January. New orders for manufactured goods fell 2.5 percent, the biggest decline in five months. Another report from the Institute for Supply Management showed that activity in the nation's service sector shrank in February for the second straight month.

The Fed's report, meanwhile, continued to paint a bleak picture of housing.

Most areas continued to suffer sagging home sales and home prices.

The one exception: the Manhattan co-op and condo market, where prices were up 5 percent compared with a year ago, the Fed said.

For commercial real estate, there were signs of slowing in the markets for office and retail space in some regions.

On the labor market front, there was some "loosening" or slowing in hiring, the Fed said. The regions of New York, Philadelphia, St. Louis and Atlanta reported an increased prevalence of layoffs, reduction in workers' hours or hiring freezes, the Fed said.

The government on Friday releases the employment report for February. Many economists are predicting the unemployment rate climbed to 5 percent from 4.9 percent.

The Fed's survey is based on information supplied by the Fed's 12 regional banks. The information was collected before Feb. 25.

New FBI Privacy Violations Confirmed

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By Lara Jakes Jordan

Washington - FBI Director Robert Mueller says an upcoming Justice Department report will show the bureau improperly used national security letters to obtain personal data on Americans during terror and spy investigations.

Mueller says the report focuses on national security letters issued only in 2006 - a year before the FBI enacted sweeping new reforms to prevent future lapses.

Mueller's comments Wednesday morning in front of the Senate Judiciary Committee came just days before the Justice Department's inspector general is scheduled to release the follow-up to a similar audit in 2007.

Last year's report found that over a three-year period, the FBI had demanded personal data on people from banks, telephone and Internet providers and credit bureaus without official authorization and in non-emergency circumstances.

US Officials Defend Drug Spraying in Colombia

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By Thomas D. Williams

"The consequences of the fumigation are catastrophic. They do it (spraying from planes) in a hurry. They don't care that they also fumigate corn plantations, prairies, lakes, fish, animals," said a middle-aged, lightly bearded Colombian man wearing a blue baseball hat, designed with a green marijuana leaf. He spoke to an interviewer for the filmmaker of the 2001 documentary film, "Coco Mama - The War on Drugs," produced by Jan Thielen.

The viewpoints are literally the powerful corporate north country versus the vulnerable, impoverished agricultural south country. It's US politicians and a huge herbicide corporation ignoring the painful cries and complaints of human and animal sickness and environmental as well as massive crop and food destruction from Colombian and Ecuadorian indigenous peoples.

Monsanto Company, the US herbicide manufacturer, says it sells over $1 billion annually in tested, harmless and effective garden and farm weed killers. Monsanto officials say scientific tests show Roundup is not a threat to humans, animals or the environment. One such study, completed in December 1999, appears in Science Direct. Another study says any possible pollutant impacts are minimal and not acutely harmful.

Meanwhile, the US contractor, DynCorp International, is aerial spraying Roundup Ultra and other chemical additives on poppy and coca crops producing, respectively, heroin and cocaine. Those operations are aimed at eliminating billions of dollars in illegal drug sales in the US and other countries. But, DynCorp says it is complying with all the rules set by the US and Colombian governments. "We spray as directed by the governments," said Gregory Lagana, DynCorp's senior vice president of communications. "We don't manufacture the spray or mix it. It is the only place we use the spray. We have no control over what is in the spray."

Nevertheless, thousands of health complaints from herbicide spray victims have streamed into a Washington, DC, US District Court, the Colombian government and now potentially the International Court of Justice in The Hague, Netherlands. Other scientific tests reveal Roundup to be cancer-causing. Still other studies show the herbicide to be toxic. (See this link and this link for further documentation.)

Despite these conflicting scientific tests and thousands of complaints of Colombian and Ecuadorian herbicide-related illnesses, not one of the US presidential candidates had anything to say, nor did any acknowledge knowing what is happening. Democrats Barack Obama and Hillary Clinton, as well as Republicans John McCain and Michael Huckabee, were telephoned and emailed with written questions for two weeks without any giving a single substantive specific answer. Clint Coppernoll, a spokesman for Independent Ralph Nader, promised comments that never arrived.

A spokesman for Obama, Michael Ortiz, did supply his general environmental policy sheet which supports organically grown food sources and generally is wary of pesticides.

McCain is quoted in summaries of the presidential campaign issues as saying: "Clinton administration was 'AWOL on the war on drugs'" and that he "would push for more money and military assistance to drug- supplying nations such as Colombia." But one of his campaign spokespersons, Melissa Shuffield, after receiving close to a dozen detailed combined emails or telephone messages, would only say: "To my knowledge Senator McCain has no public record on these issues below." Asked to clarify this statement, she refused to do so. In scores of Internet searches, including campaign platforms, none of the other candidates could be discovered with concerns about herbicides and Colombian illicit drug issues.

The candidates' Monsanto-related campaign contribution totals are: Mrs. Clinton $5,150; Huckabee $3,400, Obama $339 and McCain $250, the federal campaign finance records show.

Meanwhile the administration of George W. Bush and the Congress continue steadily along with a Colombia Drug War plan started in the administration of former President Bill Clinton. Congress changed the governing law once three years ago to require an herbicide mixture used in the US and approved by the US Environmental Protection Agency, but the EPA has no powers to enforce that in a foreign land. That's up to Colombian and Ecuadorian environmental agencies, with Ecuador becoming involved as a result of herbicide mist blown over from Colombia.

In 2000, Congress tried to encourage Colombian officials to instead use mycoherbicides, pathogenic strains of fungi herbicide. However, fears by Clinton's advisers that it might do even more environmental damage ended in quashing its sanctioned use.

In the interim, the US and Colombian officials relied on scientific studies of the herbicide, Roundup Ultra, supplied by the Monsanto Corporation and analyzed by the US Environmental Protection Agency. An agency spokesman explained: "For an agricultural use pesticide such as glyphosate, EPA has requirements for about 120 different studies ranging from basic chemistry, toxicology, residues on crops, exposures to applicators and others, environmental fate and ecotoxicology. These study and test method requirements are vetted with external expert scientists to ensure our scientific requirements are sound, high quality, and will provide the (required) data and information about a pesticide and its potential uses...."

But even those studies and tests have been questioned by environmentalists and others because of enhancer chemicals, later added into the herbicide to make it stick to plants sprayed from above. The EPA says, however, that it is given the spray's components and tests them to show they comply with US standards. Notwithstanding the controversial additives to Roundup Ultra sprayed in Colombia, there are other independent scientific tests mentioned above which insist that Roundup alone can cause harm to living beings, including humans, animals and especially fish.

As well, Monsanto's Roundup products carry required warning labels that are obviously only useful for those who read them, or those doing the spraying. When, as is true in Colombia, a US contractor is spraying a large area by plane, how can the natives below know what precautions to take for themselves, wildlife and drinking water? For instance, the Roundup label warns, "Have the product container or label with you when calling a poison control center or doctor or going for treatment."

What are other warnings? "If inhaled, move person to fresh air.... If person is not breathing, call 911 or an ambulance, then give artificial respiration, preferably by mouth to mouth, if possible.... If swallowed, have a person sip a glass of water if able to swallow.... Do not induce vomiting unless told to do so by the poison control center or doctor." In fact, in 1996 during an out-of-court settlement with the New York State attorney general, Monsanto agreed to stop advertising the product as "safe, non-toxic, harmless or free from risk."

A telling You Tube video is displayed on the Daily Kos of indigenous Colombians bemoaning their sometimes intense health consequences from the aerial herbicide spraying and nine Colombian children's color drawings of planes and helicopters spraying the streams and countryside, birds, animals and people.... The video, part of Jan Thielen's documentary, shows swooping planes spraying whole green valleys including crops. It depicts rain forests burned to relocate crop sites. It shows peasant farmers carrying large sacks of harvest, still others being searched by soldiers for drugs and a man who said accidental spraying hit his pond and "killed a thousand fishes."

Unfortunately, attempts for over a decade to eliminate the coca and poppy crops one way or another have not made much progress, despite President Bush's statements a year ago: "But we've also stopped a lot of drugs from coming. And therefore, I can argue to the Congress and the people that there has been a lot of notable successes. And the truth of the matter is Colombia has changed to the better as a result of the Plan Colombia. There's still bad activities going on, but it's a lot less than it was before," Bush said in an RCN TV Colombia interview a year ago.

Indeed, it is a "Drug War" against the drug-hungry FARC guerrillas and their right-wing paramilitary opponents of the United Self- Defence Forces of Colombia terrorizing the law-abiding peasants, the police and those US forces assisting the government. But mysteriously, the spraying, say world wide drug analysts, is not that effective in stopping cocaine and heroin production.

Colombia continues to be one of the world's largest suppliers of cocaine, says the World Drug Report. "Most of the world's coca is grown in the Andean countries - Peru, Colombia and Bolivia, which together account for more than 98 percent of world cocaine supplies," says the report. "Half the global cultivation of approximately 220,000 hectares takes place in Peru, while Bolivia and Colombia each account for nearly one-quarter of the total. Estimates of global illicit production of coca leaves suggest a doubling of production over the 1985 to 1994 period, although production seems to be down from the 1991/1992 peak level."

One of the depressing environmental reasons for the continued and expanded production of coca crops arises from the coca growers moving into Colombian national parks and burning the natural resources there to create new coca fields. Chris Kraul, a Los Angeles Times staff writer, reported in February: "Leftist rebels, right-wing paramilitaries, and narcos that control the billion-dollar cocaine trade have invaded the 2.5-million-acre Macarena, laying waste to much of it to plant coca. Most of Colombia's 48 other national parks and nature reserves are suffering similar fates. Chased from more accessible sites by U.S.-sponsored aerial fumigation, coca growers relentlessly clear forests, knowing that they are beyond the reach of the US-Colombian fleet of planes because spraying of the parks is prohibited by law."

Not only does Monsanto make big profits on its herbicide, but it sells a genetically modified seed, called Roundup Ready, that is immune to its own Roundup herbicide. This means agribusinesses, farmers and gardeners can spray weeds surrounding such Monsanto seeded crops as soybeans, beets and wheat, as the cliche says, to 'your heart's content,' and the crops will grow on while the weeds die. But, questions surrounding the safety of such operations for humans, animals and crops have been repeatedly raised by environmentalists and food safety organizations. None of their concerns, however, have put much of a dent in Monsanto's annual billions of dollars in worldwide sales. And Monsanto, in a myriad of documents on its Internet site, insists Roundup Ready seeds are safe.

However, last year, San Francisco's and Washington, DC's, Center For Food Safety successfully challenged the US Department of Agriculture's unrestricted classification for Monsanto's genetically modified alfalfa seeds. The center said: the genetically modified crop could harm the environment and contaminate naturally harvested alfalfa. In May, "a San Francisco federal judge ruled that the USDA's 2005 approval of Monsanto's genetically engineered Roundup Ready alfalfa was illegal. The judge called on the USDA to ban any further planting of the GE seed until it conducts a complete Environmental Impact Statement on the GE crop."

More recently, the center filed a similar lawsuit challenging the USDA's approval of genetically engineered (GE) beets. The suit said: "The cultivation of Roundup Ready sugar beets will also greatly increase the use of Roundup on sugar beets ... and therefore increase Roundup residues in foods made with sugar from such sugar beets. USDA's actions in allowing the introduction of GE sugar beets into the environment will make it more difficult for (The Center for Food Safety's) members to produce, sell, and eat foods not contaminated by GE material."

Roundup Ready seeds' environmental viability is inseparably linked to Roundup, the herbicide, because the seeds' use allows growing plants to be sprayed with the herbicide with harm only to the weeds, says Monsanto.

The US Department of State's Bureau of International Narcotics and Law Enforcement Affairs, assisting worldwide herbicide programs, says it relies upon "an objective, independent scientific study that evaluated the Colombian illicit-crop eradication program. The study was authored by five Canadian doctors for the American Drug Abuse Control Commission. But that study, dated in March 2005, comes a dozen or more years after the herbicide spraying began.

And, the study says: "It is recommended that the current application practices for eradication spraying be retained but that additional data be gathered over a longer period of time to better characterize the impacts of coca and poppy productions in the Andean Biodiversity Hotspot; and the possibility of non-target effects in the surface waters close to fields.

"If shallow waters are routinely found close to fields, it is recommended that other formulants be tested for the purposes of selecting products that present a lower risk to aquatic organisms. Although no association was observed between eradication spraying and reproductive outcomes in humans, additional studies to identify possible risk factors associated with other human activities or environmental factors should be considered."

Susan Pittman, a State Department spokeswoman, did not explain why it took so long for the department to justify its herbicide spraying program on a 2005 study like this one. The full-fledged spraying started in the late 1990's. And Pittman did not directly answer a question about the study's insistence that additional data needed to be gathered over a longer period of time to determine more definitively that Roundup spraying is safe for humans, animals and fish. She replied: "CICAD did the study, and thus you should ask them the methods used in preparing their report. As I indicated to you earlier, the US Embassy investigates all claims of human health consequences that have been alleged as a result of the spray program."

A search for such complaints on the State Department site indeed showed some serious complaints that were not resolved for several years. Here is one EPA recommendation to investigate those complaints, but not until three or more years after the program started. "The Department of State followed EPA's 2002 recommendation by beginning use of a lower toxicity glyphosate product in its coca and poppy eradication programs and implementing a program to investigate health complaints. As with coca eradication, the use of glyphosate for opium poppy eradication is done aerially."

Iraq: At least 13 killed as US occupation grinds on

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Following are security developments in Iraq at 10 a.m. EST on Wednesday.

* denotes new or updated items.

* MAHMUDIYA - A roadside bomb killed one person and wounded three others near Mahmudiya, 30 km (20 miles) south of Baghdad, police said.

* BAGHDAD - Iraqi soldiers killed two suspected militants and arrested 38 others during operations across Iraq in the past 24 hours, the Defence Ministry said.

* KIRKUK - A roadside bomb wounded one civilian in an attack against the convoy of Major-General Hazim al-Khazraji, a senior police officer in Kirkuk, 250 km (155 miles) north of Baghdad, police said.

* UDHAIM - A roadside bomb killed one person and wounded two others near Udhaim, north of Baghdad, police said.

* TUZ KHURMATO - Four truck drivers were kidnapped in Tuz Kurmato, 220 km (135 miles) north of Baghdad, police said. Syrian identity documents were found inside the trucks.

* KIRKUK - Gunmen killed Abdul-Sattar Tahira, a professor at Kirkuk University, police said. Tahira held New Zealand citizenship, they said.

* BAGHDAD - U.S. forces detained 22 suspected insurgents during raids against al Qaeda in northern and central Iraq, the U.S. military said.

TUZ KHURMATO - Gunmen killed two people and wounded three other family members in an attack on a house in Tuz Khurmato, police said.

SAMARRA - A bomb in a parked car killed two people and wounded six others, including four members of a U.S.-backed neighborhood security unit, near a checkpoint in Samarra, 100 km (60 miles) north of Baghdad, police said. Another police source put the death toll at one and said the attack was by a suicide car bomber.

BAGHDAD - Two bodies were found in different areas of Baghdad on Tuesday, police said.

Underestimating Rafael Correa

The attack on Ecuador

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By Fidel Castro Ruz

I remember when he visited us, months before the electoral campaign when he was thinking of running as a candidate for the Presidency of Ecuador. He had been the Minister of the Economy in the government of Alfredo Palacio, a surgeon with professional prestige who had also visited us as Vice President, before becoming the President in an unexpected situation that took place in Ecuador. He had been receptive to a program of ophthalmologic operations that we offered him as a form of cooperation. There were good relations between our two governments.

A while earlier Correa had resigned from the Ministry of the Economy. He was unhappy with what he called administrative corruption instigated by Oxy, a foreign company that explored and invested important sums of money, but was holding on to four out of every five barrels of oil that it extracted. He didn´t talk about nationalization, but about taxing them heavily; these taxes would be assigned in advance to specific social investments. He had already approved the measures and a judge had declared them to be valid.

Since the word "nationalize" had not been mentioned, I thought he felt apprehensive about the concept. It didn´t surprise me because he had graduated as an economist with much acclaim from a well-known U.S. university. I didn´t bother getting into much depth; I bombarded him with questions from the arsenal accumulated in the struggle against the Latin American foreign debt in 1985 and of Cuba´s own experience.

There are high-risk investments that use sophisticated technology and that no small nation like Cuba or Ecuador could take on.

Since this was already in 2006 and we were determined to promote the energy revolution, --ours was the first country on the planet to proclaim this as a vital issue for humankind-- I had dealt with the subject particularly emphatically. But I halted, as I understood one of his reasons.

I related to him the conversation I had had a while ago with the president of REPSOL, a Spanish company. This company, associated with other international companies, would undertake an expensive operation to drill the ocean floor, more than 2000 meters down, using sophisticated technology, in Cuba´s jurisdictional waters. I asked the head of the Spanish company: How much is an exploratory well worth? I ask you this because we would like to participate, even if it is for one percent of the total cost and we would like to know what you want to do with our oil.

Correa, for his part, had told me that for every one hundred dollars taken out by the companies, only twenty remained in the country; it didn´t even get into the budget, he said; it was left in a separate fund for just about anything other than improving the living conditions of the people.

I abolished the fund, he told me, and directed 40 percent towards education and health, technological and highway development, and the rest towards buying back the debt if the price was favorable, and if not, investing it in something more useful. Before, every year we had to buy a portion of that debt which was becoming more expensive.

In the case of Ecuador, he added, oil policies verged on treason against the country. Why do they do it? I asked him. Is it because they are afraid of the Yankees or due to unbearable pressure? He answered: If they have a Minister of the Economy who tells them privatization would improve efficiency, you can just imagine. I didn´t do that.

I encourage him to go on and he calmly explains. The foreign company Oxy is one that has broken its contract and according to Ecuadorian law it requires an expiration date. It means that the oil field operated by this company must go over to the State, but because of Yankee pressure the government does not dare to occupy it; a situation is created which is not contemplated by the legislation. The law just states that an expiration date must be set, and nothing more. The judge at the court of first instance at that moment was the president of PETROECUADOR and he made it happen. I was a member of PETROECUADOR and they called an emergency meeting to expel him from his position. I didn´t attend and they couldn´t fire him. The judge declared the expiration date.

What did the Yankees want? I asked him. They wanted a fine, he quickly replied. Listening to him I realized that I had underestimated him.

I was in a hurry because of a great number of commitments. I invited him to sit in on a meeting with a large group of highly qualified Cuban professionals who were leaving for Bolivia to be part of the Medical Brigade; it had staff for more than 30 hospitals including 19 surgical positions that could do more than 130 thousand ophthalmologic operations per year; all in the manner of free cooperation. Ecuador possesses three similar centers with six ophthalmologic positions.

Dinner with the Ecuadorian economist took place into the morning hours of February 9, 2006. There were scarcely any view points that I didn´t cover. I even spoke to him about the very harmful mercury that modern industry scatters throughout the planet´s oceans. Consumerism was of course a subject that I emphasized; the high cost of the kilowatt/hour in the thermoelectric plants; the differences between socialist and communist forms of distribution, the role of money, the trillions spent on advertising which people had no choice but to pay for in the prices of goods, and the studies made by university social brigades who discovered, among the 500 thousand families in the capital, the number of elderly folk lived alone. I explained the stage of university courses for all that we were involved in.

We became friends even though he perhaps received the impression that I was self-sufficient. If that happened, it was truly not my intention.

Since that time I have observed his every step: the electoral process, focusing on the concrete problems of Ecuadorians and the people´s victory over the oligarchy.

In the history of our peoples there are many things that bring us together. Sucre was always a highly admired figure, along with The Liberator Bolivar; as Marti said, what he hasn´t done in America remains to be done, and as Neruda exclaimed, Bolivar awakens every hundred years.

Imperialism has just committed a monstrous crime in Ecuador. Deadly bombs were dropped in the early morning hours on a group of men and women who, almost without exception, were asleep. That has been deduced by all the official reports right from the beginning. Any concrete accusations against that group of human beings do not justify that action. They were Yankee bombs, guided by Yankee satellites.

Absolutely no one has the right to kill in cold blood. If we accept that imperial method of warfare and barbarism, Yankee bombs directed by satellites could fall on any group of Latin American men and women, in the territory of any country, war or no war. The fact that this happened on undisputed Ecuadorian territory is an aggravating circumstance.

We are not an enemy of Colombia. Previous reflections and exchanges demonstrate how much of an effort we have made, both the current President of the Council of State of Cuba and I, to abide by a declared policy of principles and peace, proclaimed years ago in our relations with the rest of the Latin American states.

Today, with everything at risk, we have not been transformed into belligerent people. We are determined supporters of that unity among peoples which Marti named Our America.

If we keep quiet we shall become accomplices. Today they would like to have our friend, the economist and President of Ecuador Rafael Correa, seated in the dock; this is something we couldn´t even conceive that morning of February 9, 2006. At that time it seemed that my imagination was capable of embracing all kinds of dreams and risks, but never anything like what has occurred in the early morning of Saturday March 1, 2008.

Correa has in his hands the few survivors and the rest of the bodies. The two which are missing prove that Ecuadorian territory was occupied by troops that crossed the border. Now he can cry out like Emile Zola: J´accuse!

Fidel Castro Ruz, March 3, 2008, 8:36 p.m.

Democracy is ill served by its self-appointed guardians

Our sonorous moralising lies behind so much bloodshed in the past 50 years. A sense of history surely counsels humility

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By Simon Jenkins

This week's Russian elections were "limited" and "less than free and fair", according to western monitors. The last elections in Iraq, by contrast, were "a triumph for democracy". The forthcoming elections in Zimbabwe and Iran have been pre-emptively dismissed as a travesty. Those in Pakistan were, by general consent, an affirmation of freedom.

Democracies are like two-year-olds: adorable when they belong to you, but you never see them as others do. Downing Street had a problem with the new Russian president, Dmitry Medvedev, since the procedure by which he was chosen was little short of feudal. Yet Gordon Brown could hardly slap him on the back as the victor in some great electoral tourney. Medvedev might hit back with a joke about western leaders also being slid into office by friends and predecessors - and at least he had an election of sorts. The British prime minister wisely muttered something noncommittal and put down the phone.

We are in the midst of an astonishing festival of elections in countries as diverse as Russia, Pakistan, Iran, Taiwan, Kenya, Georgia, Armenia, Cyprus, Thailand, Serbia, Zimbabwe, Spain and Italy. And then there is the daddy of them all, America's primaries. Only one generalisation can be made of them, that no generalisation applies.

Democracy is the new Christianity. It is the chosen faith of western civilisation, and carrying it abroad is the acceptable face of the Crusader spirit. In reinterpreting Tony Blair's interventionism, the foreign secretary, David Miliband, spoke recently of the west's "mission" to promote democracy, even by economic and military warfare. With his eyes fixed on Iraq and Afghanistan, Miliband contrived both to assert that "we cannot impose democratic norms" and then demand that we do just that.

The truth is that neither Blair nor Miliband, nor the rest of us, has any idea of what we are about. We expect far too much of democracy, and of others who claim to espouse it. We treat it as a rigid set of rules from which no wavering is tolerable. The ballot is a sacred rite and any contamination is blasphemy. We incant the Nicene creed when we should stick to the Sermon on the Mount.

Let us upend the customary analysis. At one extreme stands an ideal: democracy as the full table d'hôte of secret ballots, civil rights, a free press, freedom of assembly, balance of power and discretionary local government. It applies in pathetically few states, even in the supposedly democratic west. Menken reasonably dismissed it as "a dream, to be put in the same category as Arcadia, Santa Claus and Heaven".

At the other, more crowded extreme is a rough and ready electoral process exerting some form of restraint on a ruling elite. One of Africa's nastiest dictators, Zimbabwe's Robert Mugabe, regards as a genuine threat the electoral challenge of his former finance minister, Simba Makoni, in an election Mugabe feels he cannot avoid. In Kenya what is significant is not that the leadership rigged an election but that the outcome was denied popular consent, and order collapsed as a result. The same happened in Serbia in 2000. Even Hugo Chávez, hero of Venezuela, had to concede defeat last autumn after a referendum denied his bid to rule for life.

Likewise Pakistan's military dictator, Pervez Musharraf, felt obliged to hold reasonably open elections, despite the likelihood that they would lead to his downfall. In Iran, thoroughly polluted elections still threaten to undermine the president, Mahmoud Ahmadinejad, who is milking the popularity bonanza America has handed him in Iraq.

In all these cases some ideal of democracy is exerting its mystic force. Even where consent is presumed, as in Russia, the ballot is the ghost in the machine. It is the ultimate legitimiser, the point to which all power aspires and from which it measures its own backsliding.

Russia's elections were imperfect, their casual and crude corruption by Vladimir Putin yet another way of displaying his autocratic machismo. He may have failed to live up to the standards the west "expects". But he appears to have correctly read the mood of his people, who simply want a strong hand on the wheel for as long as possible.

I cannot see what purpose is therefore served by hurling abuse at these states. Russia's path to political emancipation is tentative, if not in reverse. That country has never ticked more than a handful of democracy's boxes, yet is still incomparably freer than under communism. Its pastiche of monopoly capitalism - Putin's "managed democracy" - so contrasts with the chaos of the 1990s that even sophisticated Russians tell western interviewers that they would happily buy stability and discipline at the expense of another such gamble. We can tell them they are wrong until the cows come home. But we did not live in Russia in the 1990s.

Western leaders, as they beat a cringing path to the door of China's dictators, buy this argument from Beijing. Why do they expect Moscow to behave differently? The famous "raising of human rights issues" by western visitors to China, before talking hard cash, now has the familiarity of a tea ceremony. It is these same leaders who, having destroyed order in Iraq and Afghanistan, hail them as democracies when in reality they are anarchies, failed states. To vote for a ruler in a fortress is not to participate in a democracy.

There is just no point in the sonorous moralising of western NGOs characterised by the (normally admirable) Human Rights Watch. It complains that "by allowing autocrats to pose as democrats, without demanding they uphold the civil and political rights that make democracy meaningful, influential democrats risk undermining human rights".

What are these words "allowing ... demanding ... undermining"? Their major premise is not just western superiority, to which I might subscribe, but western potency and, most extraordinary (and illegal), a western right to global sovereignty. The assumption behind "demand" has lain at the root of so much useless bloodshed over the past half century that a sense of history might surely counsel humility. And this from a Europe whose rulers in Brussels propose using opinion polls as the basis for their legislative legitimacy, without a peep of complaint from democracy's self-appointed guardians.

Patience Is the Best Iran Policy

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By Scott Ritter

The United Nations Security Council has agreed to tighten economic sanctions against Iran following Iran's continued refusal to suspend its ongoing program of uranium enrichment. This decision follows the release of a report by the International Atomic Energy Agency (IAEA) that also documents the expansion of Iran's enrichment activities. While the administration of President Bush has strongly pushed for the imposition of these new sanctions, there is good reason to question whether or not the Security Council action represents the best policy to deal with Iran's nuclear program.

With the IAEA now able to ascertain that the Iranian explanations about both the origin and use of its enrichment program are consistent with the information available to the IAEA, there no longer remains a technical justification for demanding the suspension of Iran's ongoing uranium enrichment activities. The IAEA has declared that it can account for all declared nuclear material in Iran and that it has adequate inspection and verification controls in place for the totality of Iran's declared enrichment program. The IAEA notes that it does not have conclusive evidence of any proscribed activities taking place inside Iran (documents made available to the IAEA by the United States, derived from sources of questionable origin, have been rejected by the Iranians as fabrications.)

The best mechanism for achieving a level of verifiable confidence concerning Iranian nuclear activities would be the implementation of additional inspection protocols which the IAEA states are necessary for its work in Iran. Iran would likely agree to the additional protocol if the Security Council reversed its demand for the unconditional suspension of uranium enrichment. A previous offer made by Iran to the international community in March 2005 reinforces this point. The original reasoning behind the suspension of uranium enrichment was based on the IAEA's inability to establish the scope and purpose of Iran's uranium enrichment programs. The IAEA is now in a position to do so. There is no longer any viable technical excuse for suspension, and any continued requirements for such must be judged to be political in nature.

The current U.S. policy on Iran, as articulated by the Bush administration, centers its goals on the issue of regime change in Tehran; the nuclear dispute is simply used as a facilitator for isolating Iran economically and politically. This approach pollutes the credibility of any multilateral solution to the problem of Iran's nuclear enrichment program endorsed by the United States, such as the current suspension demands of the Security Council, while making it virtually impossible for Iran to embrace any meaningful path toward moderation. This policy suppresses the forces of moderation and reform within the civil and theocratic branches of the Iranian government and can only lead Iran and the U.S. down a path of increased friction and probable conflict.

The next presidential administration should seek to divorce the United States from any policy seen as supporting regime change inside Iran. This could be accomplished simply by endorsing the commitment made by the U.S. in the 1980 Algiers Accord (which ended the hostage crisis) not to interfere, directly or indirectly, militarily or politically, in the internal affairs of Iran. Such a statement, backed by a decision to suspend all economic sanctions pending the implementation by Iran and the IAEA of an additional protocol of inspections (at which time the sanctions would be lifted), would help build a foundation of trust upon which further dialogue between the U.S. and Iran could be conducted. The U.S. could reiterate a zero-tolerance policy regarding the militarization of nuclear activity in Iran while allowing further policy direction to be dictated by a more natural course of events.

The lifting of economic sanctions against Iran would unshackle the forces of moderation inside that nation. Given the technical and economic shortfalls inherent in the Iranian nuclear program, there is every reason to believe that Iran would gravitate toward policies that make sense economically, such as the current offers of co-enrichment and international support put forward by both Russia and the European Union. Time, in this case, is an asset, not an enemy. Even Israel, a staunch opponent of Iran's nuclear program, concurs that Iran is years away from having a nuclear weapon. The next president of the United States must have both the courage and the leadership to forge a new policy direction with Iran, and the patience and fortitude to allow such a policy to bear fruit.

Vermont Towns Approve Bush "Indictment"

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Brattleboro, Vt. - Voters in two Vermont towns approved measures Tuesday calling for the indictment of President Bush and Vice President Dick Cheney for what they consider violations of the Constitution.

More symbolic than anything, the items sought to have police arrest Bush and Cheney if they ever visit Brattleboro or nearby Marlboro or to extradite them for prosecution elsewhere - if they're not impeached first.

In Brattleboro, the vote was 2,012-1,795. In Marlboro, which held a town meeting on the issue, it was 43-25 with three abstentions.

"I hope the one thing that people take from this is, 'Hey, it can be done,"' said Kurt Daims, 54, who organized the petition drive that led to the Brattleboro vote.

The measure in Marlboro isn't binding because it didn't appear on the warning for the meeting, according to Nora Wilson.

"It was emotional. There were heartfelt speeches on both sides," Wilson said.

The question put to voters in Brattleboro referred to "crimes against our Constitution" but did not specify the allegations.

In Brattleboro, a steady stream of voters paraded into the Union High School gym to cast their ballots on a day when school board elections and Vermont's presidential primary were also on the slate.

Voters interviewed after casting ballots said they saw the article as an opportunity to express their frustration over the war in Iraq and Bush's tenure in general.

"I realize it's an extreme thing to do, and really silly in a way," said Robert George, 74, a retired photographer. "But I'm really angry about us getting involved in the war in Iraq and him (Bush) disrespecting the will of the people."

Ian Kelley, 41, a radio DJ, said he didn't vote on the article.

"It's not a good reflection on the town," he said. "Do I like either of them and would I vote for them? No. But I don't think it's cause to arrest them."

Barbara Southworth, a 66-year-old nurse, said she would have voted against it.

"I forgot to vote because it was on the flip side," she said.

The White House press office didn't immediately respond to a request for comment, but a spokeswoman for the Republican National Committee denounced the indictment effort.

"It appears that the left wing knows no bounds in their willingness to waste taxpayer dollars to make a futile counterproductive partisan political point," said Blair Latoff. "Town people would be much better served by elected officials who sought to solve problems rather than create them."

Sue Israel for Genocide before the International Court of Justice

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By Prof. Francis A. Boyle

The following article was written more than ten years ago In Honor of the Tenth Anniversary of the Intifadah Gaza City, Palestine - 13 December 1997

I would like to propose publicly here in Gaza, Palestine--where the Intifadah began ten years ago at this time--that the Provisional Government of the State of Palestine and its President institute legal proceedings against Israel before the International Court of Justice (ICJ) in The Hague (the so-called World Court) for violating the 1948 Convention on the Prevention and Punishment of the Crime of Genocide. I am sure we can all agree that Israel has indeed perpetrated the international crime of genocide against the Palestinian People. The purpose of this lawsuit would be to demonstrate that undeniable fact to the entire world. These World Court legal proceedings will prove to the entire world and to all of history that what the Nazis did to the Jews a generation ago is legally similar to what the Israelis are currently doing to the Palestinian People today: genocide.

There are three steps that should be taken for Palestine to sue Israel before the International Court of Justice for genocide. First, the President of the State of Palestine must deposit an Instrument of Accession to the 1948 Genocide Convention with the U.N. Secretary General, the depositary for the Convention. This Accession would become effective in ninety days.

Second, the President of the State of Palestine should deposit a Declaration with the International Court of Justice accepting the jurisdiction of the Court in accordance with the Charter of the United Nations and with the terms and subject to the conditions of the Statute and Rules of the Court, and undertaking to comply in good faith with the decisions of the Court and to accept all the obligations of a Member State of the United Nations under Article 94 of the United Nations Charter. Article 35(2) of the Statute of the International Court of Justice gives the Security Council the power to determine the conditions under which the World Court shall be open to states such as Palestine that are not yet Parties to the ICJ Statute. These conditions have been set forth by the Security Council in a Resolution of 15 October 1946. I would recommend that the State of Palestine consider making a "general declaration" accepting the jurisdiction of the World Court generally in respect of all disputes which have already arisen, or which may arise in the future, as permitted by paragraph 2 of this 15 October 1946 Security Council Resolution.

Pursuant to the terms of paragraph 5 of that Resolution, "All questions as to the validity or the effect of a declaration made under the terms of this resolution shall be decided by the Court." Therefore, it would be for the World Court itself to decide whether Palestine is a State entitled to exercise the powers conferred by the Security Council in its Resolution of 15 October 1946. For reasons explained in more detail below and elsewhere,1 I believe the World Court will decide in favor of Palestine on this matter of its Statehood.

To the same effect is Article 41 of the Rules of Procedure of the International Court of Justice:

Article 41

The institution of proceedings by a State which is not a party to the Statute but which, under Article 35, paragraph 2, thereof, has accepted the jurisdiction of the Court by a declaration made in accordance with any resolution adopted by the Security Council under that Article, shall be accompanied by a deposit of the declaration in question, unless the latter has previously been deposited with the Registrar. If any question of the validity or effect of such declaration arises, the Court shall decide.

The Security Council Resolution referred to in Article 41 that is now in force is the Resolution of 15 October 1946 mentioned above.

In addition, that same Article 35 of the Statute of the International Court of Justice also permits a State such as Palestine that is not a Party to the ICJ Statute to file a lawsuit against another State without making the above-mentioned Declaration provided that both States are parties to a treaty that contains a compromissory clause submitting disputes arising thereunder for adjudication by the World Court:

Article 35

1. The Court shall be open to the states parties to the present Statute.

2. The conditions under which the Court shall be open to other states shall, subject to the special provisions contained in treaties in force, be laid down by the Security Council, but in no case shall such conditions place the parties in a position of inequality before the Court. .... [Emphasis added.]

Article IX of the Genocide Convention, to be quoted in full below, contains such a "special provision" or compromissory clause.

Indeed, the World Court clearly envisioned and expressly approved such a lawsuit by a State Party to the Genocide Convention, which is not a Party to the Statute of the International Court of Justice and has not even made the aforementioned Declaration accepting the jurisdiction of the Court, by means of Paragraph 19 of its 8 April 1993 Order in Case Concerning Application of the Convention on the Prevention and Punishment of the Crime of Genocide, (Bosnia and Herzegovina vs. Yugoslavia (Serbia and Montenegro)), Request for the Indication of Provisional Measures, which I personally filed, argued, and won for the Republic of Bosnia and Herzegovina and its President Alija Izetbegovic:

19. Whereas Article 35 of the Statute, after providing that the Court shall be open to the parties to the Statute, continues:

"2. The conditions under which the Court shall be open to other States shall, subject to the special provisions contained in treaties in force, be laid down by the Security Council, but in no case shall such conditions place the parties in a position of inequality before the Court";

whereas the Court therefore considers that proceedings may validly be instituted by a State against a State which is a party to such a special provision in a treaty in force, but is not party to the Statute, and independently of the conditions laid down by the Security Council in its resolution 9 of 1946 (cf. S.S. "Wimbledon", P.C.I.J. 1923, Series A, No. 1, p. 6); whereas a compromissory clause in a multilateral convention, such as Article IX of the Genocide Convention, relied on by Bosnia-Herzegovina in the present case could, in the view of the Court, be regarded prima facie as a special provision contained in a treaty in force; whereas accordingly if Bosnia-Herzegovina and Yugoslavia are both parties to the Genocide Convention, disputes to which Article IX applies are in any event prima facie within the jurisdiction ratione personae of the Court;

[Emphasis added.]

Notice that in the language emphasized above, the World Court ruled that a State Party to the Genocide Convention could file a lawsuit against another State Party even "independently of the conditions of the Security Council in its resolution 9 of 1946." In other words, Palestine can sue Israel for violating the 1948 Genocide Convention so long as Palestine becomes a Contracting Party to the Genocide Convention. For reasons explained in more detail below and elsewhere,2 I believe the World Court will find that Palestine is a State entitled to become a Contracting Party to the Genocide Convention. Out of an abundance of caution, however, I still recommend that Palestine file the above-mentioned Declaration generally accepting the jurisdiction of the International Court of Justice.

Third, and finally, the Provisional Government of the State of Palestine and its President must file an Application against Israel instituting legal proceedings for violating the Genocide Convention on the jurisdictional basis of Article IX thereof, which provides as follows:

Disputes between the Contracting Parties relating to the interpretation, application or fulfillment of the present Convention, including those relating to the responsibility of a State for genocide or any of the other acts enumerated in article III, shall be submitted to the International Court of Justice at the request of any of the parties to the dispute.

In accordance with Article 36(6) of the ICJ Statute, in the event of a dispute as to whether the World Court has jurisdiction over a lawsuit between Palestine and Israel on the basis of Article IX of the Genocide Convention, "the matter shall be settled by the decision of the Court."

Therefore, the filing of this genocide Application should be enough to get Palestine into the World Court against Israel for quite some time. And once Palestine is in the World Court, we can then consider requesting from the Court at any time an Indication of Provisional Measures of Protection against Israel to cease and desist from committing all acts of genocide against the Palestinian People. This international equivalent to a temporary restraining order would be similar to the two cease-and-desist Orders that I won from the World Court against the rump Yugoslavia on behalf of the Republic of Bosnia and Herzegovina on 8 April 1993 and 13 September 1993.3

Furthermore, in its Judgment of 11 July 1996 in the Bosnia case, the World Court ruled in Paragraph 34 that there is no reservation ratione temporis to be implied into the Genocide Convention and in particular Article IX thereof, in the following language:

34. Having reached the conclusion that it has jurisdiction in the present case, both ratione personae and ratione materiae on the basis of Article IX of the Genocide Convention, it remains for the Court to specify the scope of that jurisdiction ratione temporis. In its sixth and seventh preliminary objections, Yugoslavia, basing its contention on the principle of the non-retroactivity of legal acts, has indeed asserted as a subsidiary argument that, even though the Court might have jurisdiction on the basis of the Convention, it could only deal with events subsequent to the different dates on which the Convention might have become applicable as between the Parties. In this regard, the Court will confine itself to the observation that the Genocide Convention -- and in particular Article IX -- does not contain any clause the object or effect of which is to limit in such manner the scope of its jurisdiction ratione temporis, and nor did the Parties themselves make any reservation to that end, either to the Convention or on the occasion of the signature of the Dayton-Paris Agreement. The Court thus finds that it has jurisdiction in this case to give effect to the Genocide Convention with regard to the relevant facts which have occurred since the beginning of the conflict which took place in Bosnia-Herzegovina. This finding is, moreover, in accordance with the object and purpose of the Convention as defined by the Court in 1951 and referred to above (see paragraph 31 above). As a result, the Court considers that it must reject Yugoslavia's sixth and seventh preliminary objections. [Emphasis added.]

In other words, Palestine would be able to claim in its World Court Application against Israel that the Israeli genocide against the Palestinian People commenced with the Zionist war, conquest, ethnic cleansing, and occupation of 1948--"the beginning of the conflict," to use the precise words of the World Court itself. Indeed, in the Bosnia case I already successfully argued to the World Court that ethnic cleansing is a form of genocide.

Article II of the 1948 Genocide Convention defines the international crime of genocide as follows:

In the present Convention, genocide means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group as such:

(a) Killing members of the group; (b) Causing serious bodily or mental harm to members of the group; (c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part; (d) Imposing measures intended to prevent births within a group; (e) Forcibly transferring children of the group to another group.

[Emphasis added.]

Certainly, Palestine has a valid claim that Israel and its predecessors-in-law--the Zionist Agencies and Forces--have committed genocide against the Palestinian People that actually started in 1948 and has continued apace until today in violation of Genocide Convention Article II(a), (b), and (c), inter alia.

For at least the past fifty years, the Israeli government and its predecessors-in-law--the Zionist Agencies and Forces--have ruthlessly implemented a systematic and comprehensive military, political, and economic campaign with the intent to destroy in substantial part the national, ethnical and racial group known as the Palestinian People. This Zionist/Israeli campaign has consisted of killing members of the Palestinian People in violation of Genocide Convention Article II(a). This Zionist/Israeli campaign has also caused serious bodily and mental harm to the Palestinian People in violation of Genocide Convention Article II(b). This Zionist/Israeli campaign has also deliberately inflicted on the Palestinian People conditions of life calculated to bring about their physical destruction in substantial part in violation of Article II(c) of the Genocide Convention.

Of course, the downside of bringing this lawsuit is that at some point in the future the World Court could rule that the State of Palestine does not exist as a "State" entitled to accede to the Genocide Convention. But I think that there is a high probability that this World Court, as currently constituted, would rule in favor of the existence of the State of Palestine.

Today the State of Palestine is recognized de jure by about 125 states or so around the world, the only significant geographical exception being Europe. Even then, most of the states of Europe accord Palestine de facto recognition as an Independent State. The only reason why these European states have not accorded Palestine de jure recognition as an Independent State is massive political pressure that has been applied upon them by the United States Government.

Palestine is also a Member State of the League of Arab States, which is the appropriate "Regional Arrangement" organized under Chapter VIII of the United Nations Charter. In addition, Palestine has Observer State Status at the United Nations Organization. Indeed, today Palestine would be a Member State of the United Nations Organization if not for illegal threats made by the United States Government to keep Palestine out of the United Nations.

Nevertheless undaunted, on 15 December 1988 the United Nations General Assembly adopted Resolution 43/177, essentially recognizing the then month-old State of Palestine. That Resolution was adopted by a vote of 104 in favor, the United States and Israel opposed, and 44 states abstaining. For reasons fully explained elsewhere,4 such General Assembly recognition of the State of Palestine is constitutive, definitive, and universally determinative.

I believe the World Court will rule in favor of the de jure existence of the State of Palestine for the purpose of mounting this lawsuit against Israel for genocide. We might not get the vote of the Judge from the United States who was a State Department Lawyer during the Reagan administration. But I believe that a majority of the fifteen Judges on the International Court of Justice will rule in favor of the de jure existence of the State of Palestine.

To be sure, we can expect that the United States Government will do everything possible to line up the votes of certain Judges against Palestine. But it is no longer the case that the United States Government controls the World Court. In this regard, recall the high degree of independence the World Court demonstrated by condemning the United States Government throughout the proceedings of Nicaragua v. the United States of America over a decade ago.5

Of course, if necessary, I could also sue the United States before the International Court of Justice for aiding and abetting Israeli genocide against the Palestinian People in violation of Article III(e) of the 1948 Genocide Convention that expressly criminalizes "complicity" in genocide. This separate lawsuit against the United States would be similar to the proceedings that President Izetbegovic of the Republic of Bosnia and Herzegovina authorized me to institute against the United Kingdom on 15 November 1993 for aiding and abetting Serbian genocide against the Bosnian People. In this regard, you should consult the Statement of Intention by the Republic of Bosnia and Herzegovina to Institute Legal Proceedings Against the United Kingdom Before the International Court of Justice of 15 November 1993, which I drafted for the Republic of Bosnia and Herzegovina and filed with the International Court of Justice on that same day.

The Bosnian U.N. Ambassador Muhamed Sacirbey also circulated this Statement to the Member States of both the General Assembly and the Security Council as an official document of the United Nations Organization.6 This document should give the reader a fairly good idea of the legal basis for Palestine to sue the United States at the World Court for aiding and abetting Israeli genocide against the Palestinian People.7 In regard to this proposed lawsuit, the U.S. government's reservation to Article IX of the Genocide Convention is invalid and severable.

Quite obviously, I cannot promise the Palestinian People a clear-cut victory in these two lawsuits. But the mere filing of this genocide lawsuit against Israel at the World Court would constitute a severe defeat for Israel in the Court of World Public Opinion. The Palestinian filing of this genocide lawsuit in 1998 would deliver yet another body-blow to Israel along the same lines of the major body-blow already inflicted on Israel by the creation of the State of Palestine in 1988. Israel has never recovered from the creation of the Palestinian State. So too, Israel will never recover from this genocide lawsuit brought against it by Palestine before the International Court of Justice. Likewise, the United States government will never recover from a World Court lawsuit brought against it by Palestine for aiding and abetting Israeli genocide against the Palestinian People.

For these reasons, then, I would ask all the Palestinian People around the world to give the most serious consideration to backing my proposals: Tell the Provisional Government of the State of Palestine and its President to sue Israel for genocide before the International Court of Justice! Tell the Provisional Government of the State of Palestine and its President to sue the United States before the International Court of Justice for aiding and abetting Israeli genocide against the Palestinian People! May God be with the Palestinian People at this difficult time in your Nation's history.


1. See Francis A. Boyle, The International Legal Right of the Palestinian People to Self-determination and an Independent State of Their Own, 12 Scandinavian J. Development Alternatives, No. 2 & 3, at 29-46 (June-Sept. 1993); The Future of International Law and American Foreign Policy 135-96, 268-73 (1989) (Creating the State of Palestine).

2. Id.

3. See Francis A. Boyle, The Bosnian People Charge Genocide (1996).

4. See note 1 supra.

5. See, e.g., Francis A. Boyle, Determining U.S. Responsibility for Contra Operations Under International Law, 81 Am. J. Int'l L. 86-93 (1987); Defending Civil Resistance Under International Law 155-210 (1987).

6. See U.N. Doc. A/48/659-S/26806, 47 U.N.Y.B. 465 (1993).

7. See also John Quigley, Complicity in International Law: A New Direction in the Law of State Responsibility, 57 Brit. Y.B. Int'l L. 77-131 (1986).

America Behind Bars: Why Attempts at Prison Reform Keep Failing

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By Liliana Segura

When Gov. Arnold Schwarzenegger declared plans in January 2005 to reform California's prisons, starting with a rebranding campaign (it's the California Department of Corrections and Rehabilitation now), his announcement signaled much-needed relief for California taxpayers, whose overstretched, scandal-prone prison system was screaming for an overhaul.

But three years later, California maintains the second-highest prison population in the country (171,444 in January 2008) and the highest recidivism rate (a staggering 70 percent).
From the start, people familiar with the embattled prison system were skeptical. "Everybody's going to get new business cards and letterheads," said Lance Corcoran, vice president of the powerful California Correctional Peace Officers Association, "but we haven't changed with respect to providing inmates anything different."

Gov. Schwarzenegger's largely failed attempts at prison reform -- e.g. reducing the overall prison population and releasing low-risk, nonviolent offenders early -- is a reflection of a larger economic and political dynamic playing out across the country. On one hand, people are starting to realize that bloated prison systems are a resource suck on an already troubled economy. On the other hand, many people -- even in that liberal bastion, California -- cling to the misguided idea that locking up large numbers of lawbreakers will keep the public safer. That leaves politicians like Schwarzenegger trying to straddle a line between appearing "tough on crime" and pushing for meaningful reform. So far, the former has won out. In many ways, California is a microcosm of the American prison crisis -- one that has reached alarming proportions.

The most recent proof is summarized in the title of a report released last week by the Pew Center on the States: "One in 100: Americans Behind Bars 2008." The study examines the state of adult America (no juveniles were included) to deliver a sobering new measure of our incarceration nation. The title statistic alone is jaw-dropping, representing a historic high (or new low, depending on how you look at it) when it comes to American justice. With more than 2.3 million people behind bars, the United States leads the world in its prison population, well ahead of China (1.5 million) and leaving Russia in the dust (890,000). "Beyond the sheer number of inmates, America is also the global leader in the rate at which it incarcerates its citizenry," the study reports, "outpacing nations like South Africa and Iran."

[As always, it turns out the "citizenry" disproportionately consists of black men over 18 (one in 15 are imprisoned) -- and particularly those between the age of 20 and 34 (1 in 9). Recidivism rates are also sky-high. According to the Federal Bureau of Justice Statistics, more than a third of the people admitted to prison in 2005 were arrested on parole violations. "Nationally, more than half of released offenders are back in prison within three years," the Pew study reports, "either for a new crime or for violating the terms of their release." In 1998, thanks in large part to the War on Drugs, the number of nonviolent prisoners hit 1 million -- and has risen since then. The number of women prisoners is also rising, and black women are a microcosm of the national prison epidemic: One in 100 black women in their mid- to late 30s is behind bars.

It's a clarion call for reform, no doubt, but beyond its record-breaking numbers, the Pew study breaks no news -- at least not in the larger scheme of the American criminal justice system. It's a crisis decades in the making, and a 50-state Pew analysis released at the same time last year provided similarly startling projections of where our prisons and jails are headed, to far less fanfare. But one in 100 is a stark figure (and, in fact, the exact number is worse: 1 in 99.1). Thus, both the New York Times and the Washington Post ran stories -- with the Post holding an online Q&A with one of the study's authors the day after it was released. The report even nudged its way into the presidential race: Hillary Clinton issued a press release on her campaign website that day bemoaning the "heartbreaking statistic" and invoking the need for "a president who will be tough on crime, but smart about it too." (As a senator representing a state whose rural regions are littered with the architecture of a prison explosion fanned during her husband's administration, it's an important statement -- if only a statement).

While public shock and dismay over the criminal justice system is a good thing, policy reform usually only comes once those in power recognize public support for measures otherwise considered too politically risky. (Iraq war notwithstanding.) Indeed, a significant part of the Pew study (which was written mainly with politicians in mind) is devoted to showing that policy makers are starting to come around on the prison issue, increasingly talking about being "smart" rather than "tough" on crime. The hope is that others will take their lead. "There's a shift away from the mindset of lock them up and throw away the key," one Ohio Republican legislator is quoted as saying. Alternatives include investing in drug treatment for prisoners -- as well as "drug courts" -- relaxing stringent parole rules and curbing mandatory minimums.

Ironically (if necessarily) the states that appear to be paving the way on prison reform are the ones who lock up the most people. Take Texas: Between 1985 and 2005, its prison population rose by 300 percent, a growth rate even the state's death row machinery couldn't offset. Now, with an estimated prison population of 171,790, according to the Pew study, the Lone Star State is forging "a new path," with a bipartisan decision last year to authorize a "virtual makeover" of the prison system. The overhaul will include more drug treatment for prisoners and "broad changes in parole practices" aimed to curb recidivism rates. If all goes according to plan, the state may be able to shelve emergency blueprints for three new prisons. "It's always been safer politically to build the next prison, rather than stop and see whether that's really the smartest thing to do," the Houston-based chair of the Texas senate's criminal justice committee said. "But we're at the point where I don't think we can afford to do that anymore."

Financially, this is certainly true. Politically, Texas lawmakers will likely face serious challenges when it comes to implementing these reforms. In California, months after tacking the word "rehabilitation" to its Department of Corrections, an organization called Crime Victims United of California created TV ads accusing the governor of abandoning crime victims and endangering Californians by easing up the punishments for people on parole. In concert with the CCPOA, the effort successfully derailed one of the central components of Schwarzenegger's plan. Rather than receive drug counseling or anything comparable, parole violators would be shuttled back to prison.

The move was a big step backward. "Eliminating alternative sanctions as an option for parole violators will undoubtedly drive up the inmate population and exacerbate overcrowding in the California prison system, already jam-packed to nearly twice its design capacity," reported the Los Angeles Times in April 2005. "Experts say such conditions -- with inmates stacked in triple-decker bunks and wedged into gyms, hallways and other spaces not intended as housing -- are a recipe for riots."

In fairness, regardless of what happens in Texas, it's hard to begrudge honest-sounding and measured rhetoric about an issue that historically has attracted so much belligerent posturing. But at the same time, for those who have watched the American criminal justice system consume not just state budgets but whole city blocks, it's also somewhat infuriating.

Warehousing massive populations of men and women is, on its face, bad public policy. For politicians to be just waking up to this maddening reality seems dubious. What's more, the dollars and sense tone so many strike when espousing the benefits of prison reform leaves out a major factor -- a veritable elephant in the room when it comes to the prison boom: the powerful incentives that continue to keep the prison population high. From construction to prison security to healthcare, prisons are an industry -- and a highly lucrative one at that. "Profits oil the machinery, keep it humming and speed its growth," wrote criminal justice expert Judith Greene in an essay recently published in Prison Profiteers: Who Makes Money From Mass Incarceration (New Press). With states spending $44 billion in tax dollars on corrections, prisons are an enormous cash cow for private companies.

In its 2005 annual report, the Corrections Corporation of America laid out what's at stake for a prison industry facing reform:

Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities ... The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws.

... Legislation has been proposed in numerous jurisdictions that could lower minimum sentences for some nonviolent crimes and make more inmates eligible for early release ... Also, sentencing alternatives under consideration could put some offenders on probation with electronic monitors who would otherwise be incarcerated. Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities.
The reforms described by the rather alarmed-sounding CCA mirror those that Pew and other advocates herald as a way to curb the growing prison crisis -- and it appears that lawmakers are finally willing to hear them. "What we're seeing is state leaders around the country starting to call time out," said Pew researcher Susan K. Urahn during the Post's online chat. "We are seeing activity in several states where legislators from both parties are saying, 'We aren't getting our money's worth out of prisons.'" So, for example, "for the same amount of money, you could keep one inmate behind bars for an additional year, or you could provide treatment and intensive supervision for several others -- and cut the recidivism rate considerably." But who will provide treatment -- and how about those electric monitors? Like prison construction itself, prison "reform" will largely amount to trading in one set of services for another.

Reform as it stands mostly means managing a massive pre-existing population that is already mired in the prison-to-parole-to-prison pipeline. With the numbers so high, any small adjustments in the system will yield results. In Texas' case, "even a small tweak -- such as the 5 percent increase in grants by the Texas Board of Pardons and Parole between 2006 and 2007 -- can have an appreciable thinning affect on the prison population." It is too soon to tell how effective such reforms will be in the long term.

Going beyond managing the prison population from state to state to effectively reduce it nationwide will take much more than implementing piecemeal alternatives. The fact that we're no longer seeing an all-out race to the bottom in prison expansion is a good thing, but deeper change will require dismantling the pervasive attachment to conventional wisdom that, despite being erroneous and counterproductive, is still used to justify the record-breaking rise in the American prison population. "One out of every 100 adults is behind bars because one out of every 100 adults has committed a serious criminal offense," a Utah-based law professor and former federal judge told the New York Times last week, directly contradicting the conclusions of the Pew study, which focused much attention on the pitfalls of locking up nonviolent and drug offenders.

Others continue to defend the sweeping policies that got us here in the first place. "The fact that we have a large prison population by itself is not a central problem because it has contributed to the extraordinary increase in public safety we have had in this country," conservative sociologist James Q. Wilson told the Washington Post. Hardly unbiased criticism, given that Wilson was one of the intellectual engines behind the "broken windows" theory that helped get us into this mess. (And tell that to black or Latino families who experience the criminal justice system's harshest excesses -- from children growing up without their parents to parents paying crippling phone fees to reach their children. Or tell that to now-elderly prisoners living out their final days behind bars, whose threat to society is negligible and whose failing health makes them highly vulnerable -- and hugely expensive to care for.)

Besides, connecting the prison boom to an increase in public safety is a classic canard. Studies by organizations such as the Vera Institute of Justice have found only a small correlation between prisons and reduced crime. As Urahn puts it, "incarceration is not the dominant force in crime control that many people assume ... despite having quadrupled the prison population over the past 25 years, we have not quadrupled public safety."

What has soared is the cost for taxpayers -- $50 billion per year at the state level and an additional $5 billion at the federal level, according to the Pew study. Perhaps more than even the stunning one in 100 figure, these are the numbers that should shake people awake. But regardless of all proof to the contrary, many Americans remain attached to the idea that prisons keep them safe. "We are jammed up in this situation right now because we have fallen in love with one of the most undocumented beliefs," California Sen. Don Perata said in 2007. "That somehow you get safer if you put more people in jail."

Bernanke urges banks to forgive portions of mortgages

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By Peter G. Gosselin and Marc Lifsher

WASHINGTON — Saying banks must do more to stem rising foreclosures, Federal Reserve Chairman Ben S. Bernanke called on lenders Tuesday to go beyond trimming interest rates on some troubled mortgages by cutting the size of the loans as well.

Unless bankers act quickly, Bernanke warned, a large number of homeowners could walk away from their mortgage debt, reversing the historical pattern of people hanging onto their homes at almost all costs.

The Fed chief's comments were bolstered by a report by Moody's that said nearly 9 million homeowners -- or about one in every 10 -- will either have no equity in their homes by the end of this month, or will have mortgage balances that exceed what their homes are worth.

Separately, a study by California regulators found that foreclosures continue to rise while efforts by homeowners to "work out" their troubled loans with their lenders appear to be declining.

"Increasing numbers of borrowers, especially those who paid very little or nothing down or who refinanced out all their equity, and who live in areas of steep home price decline . . . are walking away from their homes," said the report issued by California Corporations Commissioner Preston DuFauchard.

Bernanke's call for outright mortgage cuts is more sweeping than anything he has previously advocated and appears to put him at odds with the Bush administration. Treasury Secretary Henry M. Paulson Jr. contends that homeowners are obligated to keep paying on their home loans.

"Being underwater does not affect your ability to pay your mortgage," Paulson said in a speech Monday. "Any homeowner who can afford his mortgage payments, but chooses to walk away from an underwater property is simply a speculator -- and one who is not honoring his obligations."

But Bernanke argued that lenders might be better off forgiving some of the debt and keeping borrowers in their homes than going through the expense of foreclosure.

"Housing prices are falling in many parts of the country," the Fed chairman told the Independent Community Bankers of America. "The resulting decline in equity reduces both the ability and the financial incentive of stressed borrowers to remain in their homes."

"In this environment," he said later, "principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure."

The back-and-forth between the nation's top two economic policymakers came as new estimates suggested just how extensive the loss of home equity has been during the current slump., a West Chester, Pa.-based forecasting firm, predicted that by the time the housing slump is over nearly 14 million homeowners, or 16%, will have zero or negative equity.

"This highlights the extreme level of stress that American homeowners are under as house values plunge," said Mark Zandi,'s chief economist. "The government is going to need to become bolder and put taxpayer money on the line to keep some of these homeowners in their homes.

"Otherwise," he said, "the housing and mortgage market, and the broader economy will continue to slide away."

In California, there were 10,202 foreclosures in January, the state reported, up from 6,736 in December.

At the same time, the number of troubled adjustable-rate mortgages whose payment terms were modified to make them easier to afford dropped from 8,061 in December to 5,630 in January.

"We would be hoping that they would be moving in the opposite direction," said Paul Leonard, executive director of the Center for Responsible Lending in Oakland.

Corporations Commissioner DuFauchard said the data suggested "a troubling new phenomenon is currently at work," in which people abandon their homes rather than make payments on a property that is worth less than they paid for it

He added that although there was "no precise data" to quantify the number of walk-aways, "lenders have expressed sufficient concern to conclude it is real, and not necessarily marginal."

Bernanke's suggestion that bankers start cutting mortgage principal received a tepid reception from key banking groups.

"It is not a casual thing to disrupt an existing legal contract, as those contracts are the basis on which our market system is based," Mortgage Bankers Assn. President Jonathan Kempner said in a statement. "That said, there is an incentive for lenders, borrowers and investors to work together to maximize the value of the relationship."

By contrast, Bernanke's comments were warmly received by congressional Democrats, who have argued for months that lenders must absorb greater losses and that Washington needs to step in with a program to guarantee a large number of troubled loans to break the downward cycle in housing.

"He recognizes that there's a structural problem that doesn't lend itself to the usual solutions," said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. "What Bernanke is saying to the banks is 'Take your losses, rewrite your loans realistically and then the government can help.' "

The federal government has generally relied on voluntary efforts by mortgage lenders and servicers to work out arrangements with troubled borrowers, especially those with sub-prime loans made to people with spotty credit histories.

Bernanke said that these efforts had borne some fruit. He said the Hope Now Alliance, a group that includes such lending giants as Countrywide Financial Corp. and Citigroup Inc., reported the number of sub-prime loans adjusted to help people stay in their homes rose from 250,000 in the third quarter of last year to 300,000 during the final quarter of the year.

But critics charge that most of the changes lenders have agreed to thus far have been comparatively minor -- for example, granting delinquent borrowers extra time to catch up on back payments -- and are inadequate considering the scale of the problem.

The Fed chief predicted that the housing crisis would deepen, saying that "delinquencies and foreclosures likely will continue to rise for a while longer" and that "further declines in prices are likely."

"This situation calls for a vigorous response," Bernanke said.