Monday, April 14, 2008

Copayments Soar for Drugs With High Prices

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By Gina Kolata

Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.

With the new pricing system, insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug's actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.

The system means that the burden of expensive health care can now affect insured people, too.

No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

Insurers say the new system keeps everyone's premiums down at a time when some of the most innovative and promising new treatments for conditions like cancer and rheumatoid arthritis and multiple sclerosis can cost $100,000 and more a year.

But the result is that patients may have to spend more for a drug than they pay for their mortgages, more, in some cases, than their monthly incomes.

The system, often called Tier 4, began in earnest with Medicare drug plans and spread rapidly. It is now incorporated into 86 percent of those plans. Some have even higher co-payments for certain drugs, a Tier 5.

Now Tier 4 is also showing up in insurance that people buy on their own or acquire through employers, said Dan Mendelson of Avalere Health, a research organization in Washington. It is the fastest-growing segment in private insurance, Mr. Mendelson said. Five years ago it was virtually nonexistent in private plans, he said. Now 10 percent of them have Tier 4 drug categories.

Private insurers began offering Tier 4 plans in response to employers who were looking for ways to keep costs down, said Karen Ignagni, president of America's Health Insurance Plans, which represents most of the nation's health insurers. When people who need Tier 4 drugs pay more for them, other subscribers in the plan pay less for their coverage.

But the new system sticks seriously ill people with huge bills, said James Robinson, a health economist at the University of California, Berkeley. "It is very unfortunate social policy," Dr. Robinson said. "The more the sick person pays, the less the healthy person pays."

Traditionally, the idea of insurance was to spread the costs of paying for the sick.

"This is an erosion of the traditional concept of insurance," Mr. Mendelson said. "Those beneficiaries who bear the burden of illness are also bearing the burden of cost."

And often, patients say, they had no idea that they would be faced with such a situation.

It happened to Robin Steinwand, 53, who has multiple sclerosis.

In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone. She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.

She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying 30 days' worth of the pills at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment.

Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325.

There must be a mistake, Ms. Steinwand said. So the pharmacist checked with her supervisor. The new price was correct. Kaiser's policy had changed. Now Kaiser was charging 25 percent of the cost of the drug up to a maximum of $325 per prescription. Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life.

"I charged it, then got into my car and burst into tears," Ms. Steinwand said.

She needed the drug, she said, because it can slow the course of her disease. And she knew she would just have to pay for it, but it would not be easy.

"It's a tough economic time for everyone," she said. "My son will start college in a year and a half. We are asking ourselves, can we afford a vacation? Can we continue to save for retirement and college?"

Although Kaiser advised patients of the new plan in its brochure that it sent out in the open enrollment period late last year, Ms. Steinwand did not notice it. And private insurers, Mr. Mendelson said, can legally change their coverage to one in which some drugs are Tier 4 with no advance notice.

Medicare drug plans have to notify patients but, Mr. Mendelson said, "that doesn't mean the person will hear about it." He added, "You don't read all your mail."

Some patients said they had no idea whether their plan changed or whether it always had a Tier 4. The new system came as a surprise when they found out that they needed an expensive drug.

That's what happened to Robert W. Banning of Arlington, Va., when his doctor prescribed Sprycel for his chronic myelogenous leukemia. The drug can block the growth of cancer cells, extending lives. It is a tablet to be taken twice a day - no need for chemotherapy infusions.

Mr. Banning, 81, a retired owner of car dealerships, thought he had good insurance through AARP. But Sprycel, which he will have to take for the rest of his life, costs more than $13,500 for a 90-day supply, and Mr. Banning soon discovered that the AARP plan required him to pay more than $4,000.

Mr. Banning and his son, Robert Banning Jr., have accepted the situation. "We're not trying to make anybody the heavy," the father said.

So far, they have not purchased the drug. But if they do, they know that the expense would go on and on, his son said. "Somehow or other, myself and my family will do whatever it takes. You don't put your parent on a scale."

But Ms. Steinwand was not so sanguine. She immediately asked Kaiser why it had changed its plan.

The answer came in a letter from the federal Office of Personnel Management, which negotiates with health insurers in the plan her husband has as a federal employee. Kaiser classifies drugs like Copaxone as specialty drugs. They, the letter said, "are high-cost drugs used to treat relatively few people suffering from complex conditions like anemia, cancer, hemophilia, multiple sclerosis, rheumatoid arthritis and human growth hormone deficiency."

And Kaiser, the agency added, had made a convincing argument that charging a percentage of the cost of these drugs "helped lower the rates for federal employees."

Ms. Steinwand can change plans at the end of the year, choosing one that allows her to pay $20 for the Copaxone, but she worries about whether that will help. "I am a little nervous," she said. "Will the next company follow suit next year?"

But it turns out that she won't have to worry, at least for the rest of this year.

A Kaiser spokeswoman, Sandra R. Gregg, said on Friday that Kaiser had decided to suspend the change for the program involving federal employees in the mid-Atlantic region while it reviewed the new policy. The suspension will last for the rest of the year, she said. Ms. Steinwand and others who paid the new price for their drugs will be repaid the difference between the new price and the old co-payment.

Ms. Gregg explained that Kaiser had been discussing the new pricing plan with the Office of Personnel Management over the previous few days because patients had been raising questions about it. That led to the decision to suspend the changed pricing system.

"Letters will go out next week," Ms. Gregg said.

But some with the new plans say they have no way out.

Julie Bass, who lives near Orlando, Fla., has metastatic breast cancer, lives on Social Security disability payments, and because she is disabled, is covered by insurance through a Medicare H.M.O. Ms. Bass, 52, said she had no alternatives to her H.M.O. She said she could not afford a regular Medicare plan, which has co-payments of 20 percent for such things as emergency care, outpatient surgery and scans. That left her with a choice of two Medicare H.M.O's that operate in her region. But of the two H.M.O's, her doctors accept only Wellcare.

Now, she said, one drug her doctor may prescribe to control her cancer is Tykerb. But her insurer, Wellcare, classifies it as Tier 4, and she knows she cannot afford it.

Wellcare declined to say what Tykerb might cost, but its list price according to a standard source, Red Book, is $3,480 for 150 tablets, which may last a patient 21 days. Wellcare requires patients to pay a third of the cost of its Tier 4 drugs.

"For everybody in my position with metastatic breast cancer, there are times when you are stable and can go off treatment," Ms. Bass said. "But if we are progressing, we have to be on treatment, or we will die."

"People's eyes need to be opened," she said. "They need to understand that these drugs are very costly, and there are a lot of people out there who are struggling with these costs."

Mosaic News - 4/11/08: World News from the Middle East

The World According to Monsanto

On March 11 a new documentary was aired on French television (ARTE – French-German cultural tv channel) by French journalist and film maker Marie-Monique Robin, The World According to Monsanto - A documentary that Americans won't ever see. The gigantic biotech corporation Monsanto is threatening to destroy the agricultural biodiversity which has served mankind for thousands of years

Cheney, Torture and the Chance to Restore the Rule of Law

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By John Nichols

The Constitution of the United States is absolutely clear when it comes to matters of torture.

Amendment 8 specifically states that,"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."

Acts of torture are by definition and common understanding -- certainly at the time of the drafting of the nation’s essential document and arguably even in this less-enlightened era -- cruel and unusual punishments

Vice President Dick Cheney, when he assumed the second most powerful office in the land after the disputed election of 2000, swore an oath to "support and defend the Constitution of the United States against all enemies, foreign and domestic" and to "bear true faith and allegiance to the same."

Any reasonable reader of that oath would conclude that Cheney bound himself to abide by the Constitution -- and thus to avoid any involvement with the promotion of acts of torture upon detainees of the United States government.

Yet we now know from revelations made by former senior intelligence officials to ABC News and the Associated Press that Cheney and other members of the administration -- who apparently took care to insulate President Bush from a series of meetings where CIA interrogation methods were discussed -- authorized the use of waterboarding and other generally recognized torture techniques.

There is no question that Cheney violated his oath of office, which bound him to support and defend a Constitution that he disregarded.

The question is: How will responsible Americans respond?

The power to hold Cheney to account rests with Congress.

The power to get Congress to act rests with the American people.

Former Salt Lake City Mayor Rocky Anderson, a respected lawyer who has been working with a number of other Constitutional experts and activists, has responded -- not just to Cheney’s trashing of the Constitution but to the long list of Bush administration wrongs.

Anderson is circulating a letter that reads:

As patriotic Americans, we believe in knowing the truth about our government. Regardless of political affiliation, we believe in our constitutional democracy. We believe in the rule of law – that no person, regardless of position, is above the law.

We believe in respecting basic human rights – and have been proud to distinguish our nation from those countries where people are kidnapped, disappeared, and tortured.

We believe that in a democracy likes ours, citizens are entitled to know whether government officials are living up to their oaths to defend and preserve the Constitution, and whether they are abusing the human rights of people here or elsewhere in the world.

This is not a partisan matter. It is a matter of responsible citizenship.

Recently, several conscientious members of the House Judiciary Committee, including the Chair, Congressman John Conyers, have indicated support for public hearings to investigate and disclose the facts concerning claims of illegal conduct and other abuses of power by members of the Executive Branch. If misconduct has occurred, the American people are entitled to know. If misconduct has not occurred, hearings will determine and disclose that as well.

By showing that the American people – without political partisanship – support the disclosure of the truth through public hearings, we can make a difference, together standing up for the truth, the rule of law, and our Constitution.

• We are entitled to know whether members of the Executive Branch misrepresented the facts and withheld crucial information, thereby deceiving our nation and the international community before the invasion of Iraq.

• As American citizens who value the system of checks and balances among the three branches of government, we are entitled to know whether that system has been seriously undermined. We are entitled to know whether the courts and Congress have fulfilled their important constitutional roles in investigating and disclosing the misuse of Executive power.

• Our nation has engaged in the unprecedented, illegal, and immoral kidnapping, disappearance, and torture of human beings around the world (some of whom have been proven to be innocent of any wrongdoing), with no due process, in complete secrecy, and with no accountability. Even US citizens have been held in prisons indefinitely, with no legal counsel, no trial, and no charges filed against them. As Americans, we are entitled to know what has occurred in connection with these human rights abuses. In our democratic system of government, there must be full accountability.

Speaking out together, as concerned, patriotic Americans, we can send a clear message to Congress: In the United States, the rule of law must prevail, our Constitution cannot be disregarded, and the fundamental morality to which our nation has always laid claim will be restored.

Anderson asks that Americans who support the principles outlined in this letter -- as I do -- go to his Restore the Rule of Law website and sign on.

Signing this letter, says Anderson, who has opened an important dialogue about the Constitution and White House accountability with Conyers and other key players on the Judiciary Committee, "indicates to Congressman Conyers, other members of the House Judiciary Committee, and Congress as a whole that you support efforts to investigate and disclose any illegal acts and abuses of power by the President and others in his administration. Declare to the world, and to our posterity, that, as a US citizen:

• You proudly support our long-held constitutional principles.

• You are speaking out to reaffirm our democracy.

• You demand accountability for those in our government who have disregarded our Constitution, violated statutory law, or engaged in immoral human-rights abuses."

Anderson’s is an authentic patriotic response to the latest revelations about Dick Cheney’s disregard for the Constitution.

Go to the Restore the Rule of Law website and sign on and do what Cheney did not: support and defend the Constitution of the United States against all enemies, foreign and domestic.

Financial Collapse will End the Occupation: And it won't be "A time of our choosing"

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By Mike Whitney

“Come and see our overflowing morgues and find our little ones for us...
You may find them in this corner or the other, a little hand poking out, pointing out at you...
Come and search for them in the rubble of your "surgical" air raids, you may find a little leg or a little head...pleading for your attention.
Come and see them amassed in the garbage dumps, scavenging morsels of food...
Come and see, come... "
"Flying Kites” Layla Anwar

The US Military has won every battle it has fought in Iraq, but it has lost the war. Wars are won politically, not militarily. Bush doesn't understand this. He still clings to the belief that a political settlement can be imposed through force. But he is mistaken. The use of overwhelming force has only spread the violence and added to the political instability. Now Iraq is ungovernable. Was that the objective? Miles of concrete blast-walls snake through Baghdad to separate the warring parties; the country is fragmented into a hundred smaller pieces each ruled by local militia commanders. These are the signs of failure not success. That's why the American people no longer support the occupation. They're just being practical; they know Bush's plan won't work. As Nir Rosen says, “Iraq has become Somalia”.

The administration still supports Iraqi President Nouri al Maliki, but al-Maliki is a meaningless figurehead who will have no effect on the country's future. He has no popular base of support and controls nothing beyond the walls of the Green Zone. The al-Maliki government is merely an Arab facade designed to convince the American people that political progress is being made, but there is no progress. Its a sham. The future is in the hands of the men with guns; they're the ones who have divided Iraq into locally-controlled fiefdoms and they are the one's who will ultimately decide who will rule the state. At present, the fighting between the factions is being described as “sectarian warfare”, but the term is intentionally misleading. The fighting is political in nature; the various militias are competing with each other to see who will fill the vacuum left by the removal of Saddam. It's a power struggle. The media likes to portray the conflict as a clash between half-crazed Arabs--"dead-enders and terrorists"---who relish the idea killing their countrymen, but that's just a way of demonizing the enemy. In truth, the violence is entirely rational; it is the inevitable reaction to the dissolution of the state and the occupation by foreign troops. Many military experts predicted that there would be outbreaks of fighting after the initial invasion, but their warnings were shrugged off by clueless politicians and the cheerleading media. Now the violence has flared up again in Basra and Baghdad, and there is no end in sight. Only one thing seems certain, Iraq's future will not be decided at the ballot box. Bush has made sure of that.

The US military does not rule Iraq nor does it have the power to control events on the ground. It's just one of many militias vieing for power in a state that is ruled by warlords. After the army conducts combat operations, it is forced to retreat to its camps and bases. This point needs to be emphasized in order to understand that there is no real future for the occupation. The US simply does not have the manpower to hold territory or to establish security. In fact, the presence of American troops incites violence because they are seen as forces of occupation, not liberators. Survey's show that the vast majority of the Iraqi people want US troops to leave. The military has destroyed too much of the country and slaughtered too many people to expect that these attitudes will change anytime soon. Iraqi poet and blogger Layla Anwar sums up the feelings of many of the war's victims in a recent post on her web site "An Arab Women's Blues":

"At the gates of Babylon the Great, you are still struggling, fighting away, chasing this or the other, detaining, bombing from above, filling up morgues, hospitals, graveyards and embassies and borders with quesesfor exit-visas.

Not one Iraqi wishes your presence. Not one Iraqi accepts your occupation.

Got news for you Motherfuckers, you will never control Iraq, not in six years, not in ten years, not in 20 years....You have brought upon yourself the hate and the curse of all Iraqis, Arabs and the rest of the face your agony." (Layla Anwar; "An Arab Women's Blues: Reflections in a sealed bottle"

Is Bush hoping to change the mind of Layla or the millions of other Iraqis who have lost loved ones or been forced into exile or seen their country and culture crushed beneath the bootheel of foreign occupation? The hearts and minds campaign is lost. The US will never be welcome in Iraq.

According to a survey in the British Medical Journal "Lancet" more than a million Iraqis have been killed in the war. Another four million have been either internally-displaced or have fled the country. But the figures tell us nothing about the magnitude of the disaster that Bush has caused by attacking Iraq. The invasion is the greatest human catastrophe in the Middle East since the Nakba in 1948. Living standards have declined precipitously in every area---infant mortality, clean water, food-security, medical supplies, education, electrical power, employment etc. Even oil production is still below pre-war levels. The invasion is the most comprehensive policy failure since Vietnam; everything has gone wrong. The heart of the Arab world has descended into chaos. The suffering is incalculable.

The main problem is the occupation; it is the primary catalyst for violence and an obstacle to political settlement. As long as the occupation persists, so will the fighting. The claims that the so-called surge has changed the political landscape are greatly exaggerated. Retired Lt. General William Odom commented on this point in an interview on the Jim Lerher News Hour:

"The surge has sustained military instability and achieved nothing in political consolidation....Things are much worse now. And I don't see them getting any better. This was foreseeable a year and a half ago. And to continue to put the cozy veneer of comfortable half-truths on this is to deceive the American public and to make them think it is not the charade it is.....When you say that the Lebanization of Iraq is taking place, yes, but not because of Iran, but because the U.S. went in and made this kind of fragmentation possible. And it has occurred over the last five years....The al-Maliki government is worse off now...The notion that there;'s some kind of progress is absurd. The al-Maliki government uses its Ministry of Interior like a death squad militia. So to call Sadr an extremist and Maliki a good guy just overlooks the reality that there are no good guys." (Jim Lerher News Hour)

The war in Iraq was lost before the first shot was fired. The conflict never had the support of the American people and Iraq never posed a threat to US national security. The whole pretext for the war was based on lies; it was a coup orchestrated by elites and the media to carry out a far-right agenda. Now the mission has failed, but no one wants to admit their mistakes by withdrawing; so the butchery continues without pause.

How Will It End?

The Bush administration has decided to pursue a strategy that is unprecedented in US history. It has decided to continue to prosecute a war that has already been lost morally, strategically, and militarily. But fighting a losing war has its costs. America is much weaker now than it was when Bush first took office in 2000; politically, economically and militarily. US power and prestige around the world will continue to deteriorate until the troops are withdrawn from Iraq. But that's unlikely to happen until all other options have been exhausted. Deteriorating economic conditions in the financial markets are putting enormous downward pressure on the dollar. The corporate bond and equities markets are in disarray; the banking system is collapsing, consumer spending is down, tax revenues are falling, and the country is headed into a painful and protracted recession. The US will leave Iraq sooner than many pundits believe, but it will not be at a time of our choosing. Rather, the conflict will end when the United States no longer has the capacity to wage war. That time is not far off.

The Iraq War signals the end of US interventionism for at least a generation; maybe longer. The ideological foundation for the war (preemption/regime change) has been exposed as a baseless justification for unprovoked aggression. Someone will have to be held accountable. There will have to be international tribunals to determine who is responsible in the deaths of over one million Iraqis.

American Hegemony Is Not Guaranteed

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By Paul Craig Roberts

Exactly as the British press predicted, last week’s congressional testimony by Gen. David Petraeus and Green Zone administrator Ryan Crocker set the propaganda stage for a Bush regime attack on Iran. On April 10 Robert H. Reid of AP News reported: “The top US commander has shifted the focus from al-Qaida to Iranian-backed ‘special groups’ as the main threat . . . The shift was articulated by Gen. Petraeus who told Congress that ‘unchecked, the special groups pose the greatest long-term threat to the viability of a democratic Iraq.’”

According to the neocon propaganda, the “special groups” (have you ever heard of them before?) are breakaway elements of al Sadr’s militia.

Nonsensical on its face, the Petraeus/Crocker testimony is just another mask in the macabre theatre of lies that the Bush regime has told in order to justify its wars of naked aggression against Muslims.

Fact 1: Al Sadr is not allied with Iran. He speaks with an Iraqi voice and has his militia under orders to stand down from conflict. The Badr militia is the Shi’ite militia that is allied with Iran. Why did the US and its Iraqi puppet Maliki attack al Sadr’s militia and not the Badr militia or the breakaway elements of Sadr’s militia that allegedly now operate as gangs?

Fact 2: The Shi’ite militias and the Sunni insurgents are armed with weapons available from the unsecured weapon stockpiles of Saddam Hussein’s army. If Iran were arming Iraqis, the Iraqi insurgents and militias would have armor-piercing rocket-propelled grenades and surface-to-air missiles. These two weapons would neutralize the US advantage by enabling Iraqis to destroy US helicopter gunships, aircraft and tanks. The Iraqis cannot mass their forces as they have no weapons against US air power. To destroy US tanks, Iraqis have to guess the roads US vehicles will travel and bury bombs constructed from artillery shells. The inability to directly attack armor and to defend against air attack denies offensive capability to Iraqis.

If the Iranians desired to arm Iraqis, they obviously would provide these two weapons that would change the course of the war.

Just as the Bush regime lied to Americans and the UN about why Iraq was attacked, hiding the real agenda behind false claims that Saddam Hussein had weapons of mass destruction and connections to al Qaeda, the Bush regime is now lying about why it needs to attack Iran. Could anyone possibly believe that Iran is so desirous of having its beautiful country bombed and its nuclear energy program destroyed that Iran would invite an attack by fighting a “proxy war” against the US in Iraq?
That the Bush regime would tell such a blatant lie shows that the regime has no respect for the intelligence of the American public and no respect for the integrity of the US media.

And why should it? The public and media have fallen for every lie the Bush regime has told.

The moral hypocrisy of US politicians is unrivaled. McCain says that if he were president he would not attend the opening ceremony of the Beijing Olympics because China has killed and injured 100 Tibetans who protested Tibet’s occupation by China. Meanwhile the Iraqi toll of the American occupation is one million dead and four million displaced. That comes to 20% of the Iraqi population. At what point does the US occupation of Iraq graduate from a war crime to genocide?

Not to be outdone by McCain’s hypocrisy, Bush declared: “The message to the Iranians is: we will bring you to justice if you continue to try to infiltrate, send your agents or send surrogates to bring harm to our troops and/or the Iraqi citizens.”

Consider our “Christian” president’s position: It is perfectly appropriate for the US to bomb and to invade countries and to send its agents and surrogates to harm Iraqis, Afghans, Somalians, Serbians and whomever, but resistance to American aggression is the mark of terrorism, and any country that aids America’s victims is at war with America.

The three-week “cakewalk” war that would be paid for by Iraqi oil revenues is now into its sixth year. According to Nobel economist Joseph Stiglitz, the cost of the war to Americans is between three and five trillion dollars. Five trillion dollars equals the entire US personal and corporate income tax revenues for two years.

Of what benefit is this enormous expenditure to America? The price of oil and gasoline in US dollars has tripled, the price of gold has quadrupled, and the dollar has declined sharply against other currencies. The national debt has rapidly mounted. America’s reputation is in tatters.

The Bush regime’s coming attack on Iran will widen the war dramatically and escalate the costs.

Not content with war with Iran, Republican presidential candidate John McCain in a speech written for him by neocon warmonger Robert Kagan promises to confront both Russia and China.

Three questions present themselves:

(1) Will our foreign creditors--principally China, Japan and Saudi Arabia--finance a third monstrous Bush regime war crime?

(2) Will Iran sit on its hands and wait on the American bombs to fall?

(3) Will Russia and China passively wait to be confronted by the warmonger McCain?

Should a country that is over-extended in Iraq and Afghanistan be preparing to attack yet a third country, while threatening to interfere in the affairs of two large nuclear powers? What sort of political leadership seeks to initiate conflict in so many unpromising directions?

With Iran, Russia, China, and North Korea threatened by American hegemonic belligerence, it is not difficult to imagine a scenario that would terminate all pretense of American power: For example, instead of waiting to be attacked, Iran uses its Chinese and Russian anti-ship missiles, against which the US reportedly has poor means of defense, and sinks every ship in the American carrier strike forces that have been foolishly massed in the Persian Gulf, simultaneously taking out the Saudi oil fields and the Green Zone in Baghdad, the headquarters of the US occupation. Shi’ite militias break the US supply lines from Kuwait, and Iranian troops destroy the dispersed US forces in Iraq before they can be concentrated to battle strength.

Simultaneously, North Korea crosses the demilitarized zone and takes South Korea, China seizes Taiwan and dumps a trillion dollars of US Treasury bonds on the market. Russia goes on full nuclear alert and cuts off all natural gas to Europe.

What would the Bush regime do? Wet its pants? Push the button and end the world?

If America really had dangerous enemies, surely the enemies would collude to take advantage of a dramatically over-extended delusional regime that, blinded by its own arrogance and hubris, issues gratuitous threats and lives by Mao’s doctrine that power comes out of the barrel of a gun.

There are other less dramatic scenarios. Why does the US assume that only it can initiate aggression, boycotts, freezes on financial assets of other countries and bans on foreign banks from participation in the international banking system? If the rest of the world were to tire of American aggression or to develop a moral conscience, it would be easy to organize a boycott of America and to ban US banks from participating in the international banking system. Such a boycott would be especially effective at the present time with the balance sheets of US banks impaired by subprime derivatives and the US government dependent on foreign loans in order to finance its day-to-day activities.

Sooner or later it will occur to other countries that putting up with America is a habit that they don’t need to continue.

Does America really need more political leadership that leads in such unpromising directions?

Sanctity of Contracts: Mortgages and Credit Cards

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By Dean Baker

Momentum is building in Washington for a large-scale housing bailout. It is virtually certain something will happen. The big questions are how large will the package be and will it be designed to help homeowners or to bailout out the banks?

The latter question will be determined primarily by whether the government steps in to try to prop up bubble-inflated housing markets in places like California, Florida and the East Coast cities. While the government may be able to play a useful role in stabilizing house prices in depressed markets like Detroit, Cleveland and Atlanta, the main effect of bailouts in the bubble markets will be to reduce the banks' losses on their mortgages.

In these markets, prices must still fall 20 percent to 40 percent to get back in line with fundamentals. If the government were to guarantee new mortgages at near the current market prices, it will just be allowing the lenders to cut their losses.

Since prices will continue to fall, homeowners will not accumulate any equity and the taxpayers are likely to have to make good on the mortgage guarantees. Furthermore, homeowners will be paying far more than necessary for housing costs each year that they live in their house, draining money away from health care, child care and other necessary expenses.

There is a simple and costless alternative policy that could be applied to these bubble areas. We can temporarily change the foreclosure laws to allow moderate-income homeowners facing foreclosure the option to stay in their homes as renters paying the fair market rent.

This would guarantee homeowners some security, since they could not just be thrown out on the street. If they like the house, the neighborhood, the school for their kids, they would have the option to stay. More importantly, since the banks will not want to become landlords, this policy will give banks a real incentive to negotiate terms that allow homeowners to stay in their house as owners. It is likely this would be the more common outcome from this policy.

I have been pushing this "own to rent" plan for more than half a year. Many people from across the political spectrum have embraced the proposal as the most realistic way to help homeowners facing the loss of their home. However, there has been one widely voiced objection that seems to carry considerable weight in policy circles. This plan would interfere with the sanctity of contract since it would be changing the rules for enforcing payment on mortgages and could cause lenders to involuntarily end up as landlords.

This objection is interesting because there seemed no concern whatsoever for the sanctity of contract when Congress went in the opposite direction with the bankruptcy law reform passed in 2005. In that case, Congress established much stricter rules for bankruptcy, which made it far more difficult to use bankruptcy to discharge debt.

What makes the bankruptcy reform analogous to the own to rent proposal is Congress applied the new bankruptcy rules retroactively. In other words, people who had accumulated credit card or other debt under the old set of bankruptcy rules were suddenly subject to a new set of bankruptcy rules.

Presumably, both the banks and credit cardholders understood the bankruptcy rules that were in place when loans were issued prior to the bankruptcy reform. Banks would have charged an additional premium because debt was harder to collect under the old bankruptcy laws.

However, Congress had no qualms whatsoever about just ignoring these contracts when it decided to tighten the rules to make it easier for the banks to collect. Congress could have written the law to just apply to debts incurred after the passage of the new bankruptcy bill, but apparently this route was never even considered.

Given this recent history, it seems strange there is such great concern now about the sanctity of contract. The only obvious difference is this legislative change would benefit borrowers, while bankruptcy reform benefited lenders. Does anyone smell a double standard?

Finance Ministers Emphasize Food Crisis Over Credit Crisis

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By Steven R. Weisman

Washington - The world's economic ministers declared on Sunday that shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets.

The ministers, conferring in the shadow of a slumping American economy that threatens to pull down the economies of other countries, turned their attention to the food crisis and called on the wealthiest countries to fulfill pledges to help prevent starvation and disorder in Asia, Africa and Latin America.

"Throughout the weekend we have heard again and again from ministers in developing countries and emerging economies that this is a priority issue," said Robert B. Zoellick, president of the World Bank. "We have to put our money where our mouth is now, so that we can put food into hungry mouths. It is as stark as that."

Mr. Zoellick said that almost half of the $500 million that the World Food Program recently requested in additional pledges for food aid this year had been committed, but that the program would not meet a deadline of raising the money by May 1.

The World Food Program seeks the aid, on top of nearly $3 billion already committed, because of shortfalls in food distribution resulting from higher prices.

Dominique Strauss-Kahn, the managing director of the International Monetary Fund, said the food crisis posed questions about the survivability of democracy and political regimes.

"As we know in the past, sometimes those questions lead to war," he said. "We now need to devote 100 percent of our time to these questions."

World Bank and I.M.F. officials noted that political instability had already hit countries as disparate as Haiti, Egypt, the Philippines and Indonesia because of food shortages, forcing some countries to limit food exports.

Mr. Zoellick had earlier highlighted the food issue in speeches and presentations this weekend, saying the World Bank intended not only to help with the emergency situation but also to upgrade programs to help countries produce more food on their own. He cited Malawi, in southern Africa, as a country that has started going in that direction.

But food has also become a symbol of the conflicting pressures that frequently emerge at the semiannual gatherings of finance and development officials and central bankers that take place in Washington every spring.

Some ministers from poor countries, for example, are growing impatient with the way the West is addressing global warming by subsidizing and encouraging conversion of corn, sugar cane and other food products into substitutes for oil. The shift is helping to drive up prices, they say.

Mr. Strauss-Kahn said he had heard from many financial officials this weekend that the West's focus on fuel, at the expense of food, was a "crime against humanity." Though he noted that the I.M.F. is primarily a monetary and financial agency, he said it would try to "review its tools" to help countries pay for food imports.

In addition, many ministers meeting here appeared to be self-conscious about how much of the attention at the meeting has focused on the global credit crisis, which has caused hundreds of billions of dollars in losses for banks and investment banks, while there was less focus on the problem of feeding the world's poor.

Treasury Secretary Henry M. Paulson Jr. said on Friday that the subject of food shortages had come up at the meeting of finance ministers of the United States, Canada, Europe and Japan under the heading of the Group of Seven.

"Every country sitting around the table was focused on it," Mr. Paulson said of the Group of Seven's concern about food, adding that Mr. Zoellick "made an impassioned plea." But Treasury officials said they had no details of what aid the United States was prepared to commit.

Fewer Large Corporations Audited by IRS

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Washington - The tax audit rates of the largest companies are less than half what they were 20 years ago while more small and mid-size businesses are coming under scrutiny, according to an organization that monitors the Internal Revenue Service.

The Syracuse University-based Transactional Records Access Clearinghouse described what it said was a "historic collapse" in audits for corporations holding assets of $250 million or more. About 26 percent of them were audited in the 2007 budget year compared with 34 percent in 2006 and 43 percent in 2005.

The IRS did not dispute the numbers, based on agency data. But it strongly disagreed with suggestions it was easing oversight of the biggest corporations.

Enforcement revenues from large companies rose by one-third in 2007 from the previous year, from $10.6 billion to $14.2 billion, said IRS Deputy Commissi

oner Barry Shott, who heads the Large and Mid-Size Business Division.

While the number of examinations has declined, "what we are doing is focusing our resources better on where the noncompliance is," Shott said in an interview with The Associated Press.

Shott said the focus in recent years has been on tax shelters and `extraordinarily complicated" partnerships and S corporations where shareholders, rather than the company, must report income or losses. Last year the IRS examined 17,700 S corporations, compared with 14,000 the previous year, and 12,200 partnerships, compared with 9,800.

But the TRAC report concluded that the IRS also was concentrating on regular small and mid-sized companies to boost audit numbers.

"Moving the focus of the corporate auditors away from the large corporations and toward the smaller ones has been quite effective when it came to increasing the overall number of these kinds of audits but actually was counterproductive in financial terms," the researchers said.

The new IRS commissioner, Douglas Shulman, said in a response that he intends to make "targeting noncompliance with our tax laws ... a high priority."

According to IRS statistics, 15 percent, or 4,473, of companies with $10 million to $50 million in assets were examined in 2007. That compares with 12.3 percent, or 3,535 companies, that were audited in 2005.

In the same two years, the percentage of audits of corporations in the $50 million to $100 million range fell from 16.4 percent to 11.4 percent. For corporations in the $100 million to $250 million range, the percentage dropped from 17.5 percent to 12.1 percent .

Among the largest corporations above $250 million in assets, 3,424 were audited in 2007, down from a peak of 4,859 in 2005.

TRAC also questioned the financial benefits of the shift. The group said that last year the government uncovered $682 in additional recommended taxes for every revenue agent hour spent auditing the smallest corporations, compared with $7,498 in additional taxes for audits of the largest corporations.

Dean Zerbe, national managing director for Houston-based alliantgroup, which provides tax services for medium-sized companies, said his fear was that "in the IRS' zeal to show Congress improved numbers in corporate audit, it is America's small and medium businesses that are taking it on the chin."

Shulman told the Senate Finance Committee last week that audits of businesses in general rose from 52,000 in 2006 to 59,500 in 2007.

He acknowledged that audits of the largest corporations were down. But he said that "in times of flat budgets, the agency cannot increase activity across the board, but must address the areas where there is growth and potential risk."

Shott also cited a new program where larger companies work with the IRS during the year so there will not be disputes at tax-filing season. Participants in this program rose from 17 in 2005 to 73 this budget year, he said.

The returns of these companies do not show up in enforcement statistics, he said, but the collaboration can avoid controversies that can go on for years.

Having more money was not necessarily an advantage for individual taxpayers. The IRS said that last year it audited 9.25 percent of those with incomes of more than $1 million, compared with 6.3 percent in 2006. For those earning less than $100,000, the chances of getting audited were less than 1 percent.

The tax agency said total enforcement revenues in the 2007 budget year, from collections and appeals activities, were $59.2 billion, up from $48.7 billion the previous year.

Big Oil to Big Wind: Texas Veteran Sets Up $10 Billion Clean Energy Project

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By Ed Pilkington

Dallas - T Boone Pickens is famous for thinking big. He founded his Texan oil company, Mesa Petroleum, in 1956 with just $2,500 (£1,200) in the bank. After a string of audacious takeovers he turned it into an independent empire that challenged the big oil companies, and today he is worth $3bn.

Now this straight-talking Southerner is launching the biggest and most audacious project of his career. This month he will make the first down payment on 500 wind turbines at a cost of $2m each. The order is the first material step towards his goal of building the world's largest wind farm.

Over the next four years he intends to erect 2,700 turbines across 200,000 acres of the Texan panhandle. The scheme is five times bigger than the world's current record-holding wind farm and when finished will supply 4,000 megawatts of electricity - enough to power about one million homes.

It's not just the breathtaking scale of the scheme that is striking, though at a total cost of $10bn it impresses even Pickens himself: "It's pretty mind boggling," he says. The fact that Pickens, a tycoon who made his fortune in oil, has turned his attention to wind power is an indication of how the tectonic plates are moving. Until recently wind was seen as marginal and alternative; now it is being eyed by Wall Street.

"Don't get the idea that I've turned green," Pickens tells the Guardian in the Dallas offices of his new venture Mesa Power. "My business is making money, and I think this is going to make a lot of money."

His fascination with wind developed as Pickens engaged in his favourite leisure pursuit - quail hunting. For years he has been shooting Bobwhite quail on his 68,000-acre ranch in the panhandle. "I've been hunting quail for 50 years, I know where the wind is," Pickens says.

The idea formed that this area of Texas, with its wide-open space, low population and steady south-westerlies would make a perfect location for wind-generated energy. Studies proved him right - there was more wind than even he had imagined, much of it at peak times in the middle of the day when power sells at a premium.

So he set about convincing neighbouring ranchers to join his scheme, promising them between $10,000 and $20,000 in annual royalties for every turbine they allowed on their land. They have all signed up, eager to cash in on this literal windfall. (Pickens, by contrast, refuses to have any of the turbines placed on his own ranch. "They are ugly!" he says, unashamedly.)

To see exactly what the promise is to ranchers and rural communities of the new dash for wind, you have to drive four hours west of Dallas into the Texan prairies. Until a couple of years ago Sweetwater was a gently declining railroad town, its population falling year on year and its infrastructure quietly rotting. Now it is a boom town, a 21st-century equivalent of the Wild West. German wind technicians who have poured into the area have coined a name for it - the Wind West.

The three largest wind farms in America are all situated in the surrounding area, Nolan county, which, with a population of just 18,000, now produces more wind power than the UK, France and California.

While other towns in the region are struggling with plummeting house prices and job losses, Sweetwater is in the midst of a construction explosion. Two new companies opened this week, one servicing the blades of the county's 2,000 turbines, another renting out cranes used in erecting new turbines. The turbines, state of the art models 400 feet to the tip of their blades, span out for 150 miles in any direction.

New roads and houses are going up, and local schools and medical centres have been renovated using the influx of tax revenues from the energy companies. Greg Wortham, Sweetwater's mayor, says he has watched over the past two years as wind power was transformed "from a hobby - a green thing - into an industry. Suddenly it was all about welders and engineers and truckers. We have companies here begging for new workers and paying them more than the thousands being laid off by the car companies."

Back in Dallas, Pickens believes there are several reasons to invest in this new energy source. Beyond the mere profit motive, which clearly excites him, there is the fact that Texan oil has been on the wane since it peaked at 10m barrels a day in 1973, and is already down to half that amount. "Oil fields have a declining curve - you find one, it peaks and starts downhill, you've got to find another one to replace it. It drives you crazy! With wind, there's no decline."

There is also a political edge to his obsession. Politics and Pickens go together, as is obvious from the walls of his offices, lined with photographs of him with world leaders. One shows him with the Queen, Prince Philip and George HW Bush; another is with Margaret Thatcher and Ronald Reagan; a third shows him on board Air Force One with the current President Bush. There is a signed calendar from Arnold Schwarzenegger on the table.

As the pictures suggest, Pickens has for many years been a major financial backer of both George Bushes, but he professes to be frustrated by the lack of action on energy by this administration and all its predecessors. "George Bush has done nothing. Nothing. Every guy that ran for president clear back to Nixon said he would make us energy independent, but not one goddamned thing has been done. Zero. The biggest problem facing the United States in the next 50 years is energy and nobody has come up with a solution."

Pickens, being Pickens, has come up with a solution - and it makes his own gargantuan plans for a wind farm in the panhandle look tiny. For the benefit of the Guardian, he draws on a white board his master scheme. He carves out an enormous corridor of land running north to south through the middle of the US - along the great plains - where he would build an army of wind farms. Then he draws an equally enormous corridor running east to west from Texas to southern California which he would similarly dedicate to solar energy.

"You need a giant plan for America. Not the pissant 83 megawatt [windfarm] deals being stamped all over the country. There needs to be a huge plan from someone with leadership. It's going to take years to do, but it has to start now." Only then, he explains, can the US stop what he regards as the madness of a flood of money flowing out of America to the oil producers of the Middle East. "That money is going God knows where - a few friends, a lot of enemies. We've got to stop it."

T Boone Pickens certainly is thinking big. And all this as he prepares to celebrate his 80th birthday next month. How is it that he appears to be expanding his ambitions at a stage in life when most people are retrenching theirs? "You're getting older so you are running out of time," he says. "So let's go! We haven't got long, and we've got to get this job finished."

China and America: The Tibet Human Rights PsyOp

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By Michel Chossudovsky

The human rights issue has become the centerfold of media disinformation.

China is no model of human rights but neither are the US and its indefectible British ally, responsible for extensive war crimes and human rights violations in Iraq and around the World. The US and its allies, which uphold the practice of torture, political assassinations and the establishment of secret detention camps, continue to be presented to public opinion as a model of Western democracy to be emulated by developing countries, in contrast to Russia, Iran, North Korea and the People’s Republic of China.

Human Rights "Double Standards"

While China’s alleged human rights violations in relation to Tibet are highlighted, the recent wave of killings in Iraq and Palestine are not mentioned. The Western media has barely acknowledged the Fifth "anniversary" of Iraq’s "Liberation" and the balance sheet of the US sponsored killings and atrocities perpetrated against an entire population, in the name of a "global war on terrorism".

There are more than 1.2 million Iraqi civilian deaths, 3 million wounded. The United Nations High Commission for Refugees (UNHCR) indicates a figure of 2.2 million Iraqi refugees who have fled their country and 2.4 million "internally displaced persons":

"Iraq’s population at the time of the US invasion in March 2003 was roughly 27 million, and today it is approximately 23 million. Elementary arithmetic indicates that currently over half the population of Iraq are either refugees, in need of emergency aid, wounded, or dead." (Dahr Jamail, Global Research, December 2007)

The Geopolitical Chessboard

There are deep-seated geopolitical objectives behind the campaign against the Chinese leadership.

US-NATO-Israeli war plans in relation to Iran are at an advanced state of readiness. China has economic ties as well as a far-reaching bilateral military cooperation agreement with Iran. Moreover, China is also an ally of Russia, Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan in the context of the Shanghai Cooperation Organization (SCO). Since 2005, Iran has an observer member status within the SCO.

In turn, the SCO has ties to the Collective Security Treaty Organization (CSTO), an overlapping military cooperation agreement between Russia, Armenia, Belarus, Uzbekistan, Kazakhstan, the Kyrgyz Republic, Tajikistan.

In October of last year the Collective Security Treaty Organization (CSTO) and the Shanghai Cooperation Organization (SCO) signed a Memorandum of Understanding, laying the foundations for military cooperation between the two organizations. This SCO-CSTO agreement, barely mentioned by the Western media, involves the creation of a full-fledged military alliance between China, Russia and the member states of SCO/CSTO. It is worth noting that the SCTO and the SCO held joint military exercises in 2006, which coincided with those conducted by Iran. (For further details see Michel Chossudovsky, Russia and Central Asian Allies Conduct War Games in Response to US Threats, Global Research, August 2006)

In the context of US war plans directed against Iran, the US is also intent upon weakening Iran’s allies, namely Russia and China. In the case of China, Washington is seaking to disrupt Beijing’s bilateral ties with Tehran as well as Iran’s rapprochement with the SCO, which has its headquarters in Beijing.

China is an ally of Iran. Washington’s intention is to use Beijing’s alleged human rights violations as a pretext to target China, an ally of Iran.

In this regard, a military operation directed against Iran can only succeed if the structure of military alliances which link Iran to China and Russia is disrupted. This is something which German Chancellor Otto von Bismarck understood in relation to the structure of competing military alliances prevalent prior to World War I. The Triple Alliance was an agreement between Germany, the Austro-Hungarian Empire and Italy formed in 1882. The Triple Alliance ultimately came to an end in 1914, when Italy withdrew from the Triple Alliance and declared its neutrality, leading to the outbreak of World War I.

Encircling China

With the exception of its Northern frontier which borders on the Russian Federation, Mongolia and Kazakhstan, China is surrounded by US military bases.

The Eurasian Corridor

Since the 2001 invasion and occupation of Afghanistan, the US has a military presence on China’s Western frontier, in Afghanistan and Pakistan. The U.S. is intent upon establishing permanent military bases in Afghanistan, which occupies a strategic position bordering on the former Soviet republics, China and Iran.

Moreover, the US and NATO have also established since 1996, military ties with several former Soviet republics under GUUAM (Georgia, Ukraine, Uzbekistan and Moldava). In the post 9/11 era, Washington has used the pretext of the "global war against terrorism" to further develop a U.S. military presence in GUUAM countries. Uzbekistan withdrew from GUUAM in 2002.(The organization is now referred to as GUAM).

China has oil interests in Eurasia as well as in sub-Saharan Africa, which encroach upon Anglo-American oil interests.

What is at stake is the geopolitical control over the Eurasian corridor.

In March 1999, the U.S. Congress adopted the Silk Road Strategy Act, which defined America’s broad economic and strategic interests in a region extending from the Eastern Mediterranean to Central Asia. The Silk Road Strategy (SRS) outlines a framework for the development of America’s business empire along an extensive geographical corridor.

The successful implementation of the SRS requires the concurrent "militarization" of the entire Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as "protecting" pipeline routes and trading corridors. This militarization is largely directed against China, Russia and Iran.

The militarization of the South China Sea and of the Taiwan Straits is also an integral part of this strategy which, in the post 9/11 era, consists in deploying "on several fronts".

Moreover, China remains in the post-Cold War era a target for a first strike nuclear attack by the US.

In the 2002 Nuclear Posture Review (NPR), China and Russia are identified along with a list of "rogue States" as potential targets for a pre-emptive nuclear attack by the US. China is listed in the NPR as "a country that could be involved in an immediate or potential contingency". Specifically, the Nuclear Posture Review lists a military confrontation over the status of Taiwan as one of the scenarios that could lead Washington to use nuclear weapons against China.

China has been encircled: The U.S. military is present in the South China Sea and the Taiwan Straights, in the Korean Peninsula and the Sea of Japan, as well as in the heartland of Central Asia and on the Western border of China’s Xinjiang-Uigur autonomous region. Moreover, as part of the encirclement of China, "Japan has gradually been amalgamating and harmonizing its military policies with those of the U.S. and NATO." (See Mahdi Darius Nazemroaya, Global Military Alliance: Encircling Russia and China, Global Research, 10 May 2007)

Weakening China from within: Covert Support to Secessionist Movements

Consistent with its policy of weakening and ultimately fracturing the People’s Republic of China, Washington supports secessionist movements both in Tibet as wall as in the Xinjiang-Uigur autonomous region which borders onto North Eastern Pakistan and Afghanistan.

In Xinjiang-Uigur, Pakistani intelligence (ISI), acting in liaison with the CIA, supports several Islamist organizations. The latter include the Islamic Reformist Party, the East Turkestan National Unity Alliance, the Uigur Liberation Organization and the Central Asian Uigur Jihad Party. Several of these Islamic organizations have received support and training from Al Qaeda, which is a US sponsored intelligence asset. The declared objective of these Chinese-based Islamic organizations is the "establishment of an Islamic caliphate in the region" (For further details see Michel Chossudovsky, America’s War on Terrorism, Global Research, Montreal, 2005, Chapter 2).

The caliphate would integrate Uzbekistan, Tajikistan, Kyrgyzstan (West Turkestan) and the Uigur autonomous region of China (East Turkestan) into a single political entity.

The "caliphate project" encroaches upon Chinese territorial sovereignty. Supported by various Wahabi "foundations" from the Gulf States, secessionism on China’s Western frontier is, once again, consistent with U.S. strategic interests in Central Asia. Meanwhile, a powerful U.S.-based lobby is channeling support to separatist forces in Tibet.

By tacitly promoting the secession of the Xinjiang-Uigur region (using Pakistan’s ISI as a "go-between"), Washington is attempting to trigger a broader process of political destabilization and fracturing of the People’s Republic of China. In addition to these various covert operations, the U.S. has established military bases in Afghanistan and in several of the former Soviet republics, directly on China’s Western border.

The militarization of the South China Sea and of the Taiwan Straits is also an integral part of this strategy.(Ibid)

The Lhasa Riots

The violent riots in Tibet’s capital in mid-March were a carefully staged event. In their immediate aftermath, a media disinformation campaign supported by political by Western leaders directed against China was launched.

There are indications that US intelligence played a behind the scenes role in what several observers have described as a carefully premeditated operation.(See our analysis below).

The Lhasa event in mid-March was not a spontaneous "peaceful" protest movement as described by the Western media The riots involving a gang of mobsters were premeditated. They had been carefully planned. Tibetan activists in India associated with the Dalai Lama’s government in exile "hinted they were indeed expecting the disturbances. But they refuse to elaborate how they knew or who their collaborators were" (Guerilla News)

The images do not suggest a mass protest rally but rather a rampage led by a few hundred individuals. Buddhist monks were involved in the rampage. According to China Daily (March 31, 2008), the Tibetan Youth Congress (TYC) based in India, considered by China as a "hard-line organization" affiliated to the Dalai Lama, was also behind the violence. The TYC’s training camps are funded by the National Endowment for Democracy (NED). (See the text of the Congressional Hearings regarding NED support to the TYC)


Video footage confirms that civilians were stoned, beaten and in some cases killed. Most of the victims were Han Chinese. At least ten people were burned to death as a result of acts of arson, according to statements of the Tibet government. These statements were confirmed by several eyewitness reports. According to a China Daily report:

"five shop assistants at a clothing store were burnt to death before they had any chance to escape. A 1.7-meter-tall man named Zuo Yuancun was torched down to chunks of horrid flesh and skeletons. A migrant worker had his liver stabbed and bled by mobsters. A woman was beaten hard by the attackers and had her ear sliced off." (People’s Daily, March 22, 2008)

Meanwhile, the Western media casually described the looting and arson as a "peaceful demonstration" which the Chinese authorities suppressed with the use of force. There are no accurate reports (from Chinese and Western news sources) on the nature of the Chinese police operation launched to repress the riots. Western press reports point to the deployment of more than 1000 soldiers and police in the Tibetan capital.

Businesses, schools were attacked, cars were set on fire. According to Chinese reports, there are 22 dead and 623 injured. "Rioters set fire at more than 300 locations, mostly private houses, stores and schools, and smashed vehicles and damaged public facilities."

The planning of the riots was coordinated with the media disinformation campaign, which accused the Chinese authorities of having instigated the looting and arson. The Dalai Lama accused Beijing of "disguising its troops as monks" to give the impression that Buddhist monks were behind the riots. The claims were based on a four year old photograph of soldiers dressing up as monks in a theatrical stage performance (See South China Morning Post, 4 April 2008).

The mainland newspaper {People’s Daily] said the security forces quelling riots in Lhasa could not possibly have been wearing the uniforms shown in the photograph because they were summer uniforms, unsuitable for the cold March weather.

It also said the PAP had changed to new uniforms in 2005, which feature shoulder emblems. The armed officers shown in the photograph were in old-style uniforms which had been phased out after 2005. ... Xinhua said the photograph was taken during a performance years ago, when soldiers borrowed robes from monks before performing on stage. (Ibid)

The Dalai Lama’s claim that the Chinese authorities had instigated the riots, quoted in the Western media, is supported by a statement of a former Communist Party official Mr. Ruan Ming who "claims the CCP carefully staged the incidents in Tibet in order to force the Dalai Lama to resign and to justify future repression of the Tibetans. Mr. Ruan Ming was a speechwriter for former CCP General Secretary Hu Yaobang." (quoted in The Epoch Times)

2003 photograph used by the media to accuse China of having deliberately instigated the riots.
This [2003] photo was apparently made when soldiers were ordered to put on
robes to play as actors in a movie."

The Role of US Intelligence

The organization of the Lhasa riots are part of a consistent pattern. They constitute an attempt to trigger ethnic conflict in China. They serve US foreign policy interests.

To what extent has US intelligence played an undercover role in the current wave of protests regarding Tibet?

Given the covert nature of intelligence operations, there is no tangible evidence of direct CIA involvement. However, there are various Tibetan organizations linked to the Tibet "government in exile" which are known to be supported by the CIA and/or by the CIA’s civilian front organization, the National Endowment for Democracy (NED).

The CIA’s involvement in channeling covert support to the Tibetan secessionist movement goes back to the mid-1950s. The Dalai Lama was on the CIA’s payroll from the late 1950s until 1974:

The CIA conducted a large scale covert action campaign against the communist Chinese in Tibet starting in 1956. This led to a disastrous bloody uprising in 1959, leaving tens of thousands of Tibetans dead, while the Dalai Lama and about 100,000 followers were forced to flee across the treacherous Himalayan passes to India and Nepal.

The CIA established a secret military training camp for the Dalai Lama’s resistance fighters at Camp Hale near Leadville, Colorado, in the US. The Tibetan guerrillas were trained and equipped by the CIA for guerrilla warfare and sabotage operations against the communist Chinese.

The US-trained guerrillas regularly carried out raids into Tibet, on occasions led by CIA-contract mercenaries and supported by CIA planes. The initial training program ended in December 1961, though the camp in Colorado appears to have remained open until at least 1966.

The CIA Tibetan Task Force created by Roger E McCarthy, alongside the Tibetan guerrilla army, continued the operation codenamed "ST CIRCUS" to harass the Chinese occupation forces for another 15 years until 1974, when officially sanctioned involvement ceased.

McCarthy, who also served as head of the Tibet Task Force at the height of its activities from 1959 until 1961, later went on to run similar operations in Vietnam and Laos.

By the mid-1960s, the CIA had switched its strategy from parachuting guerrilla fighters and intelligence agents into Tibet to establishing the Chusi Gangdruk, a guerrilla army of some 2,000 ethnic Khamba fighters at bases such as Mustang in Nepal.

This base was only closed down in 1974 by the Nepalese government after being put under tremendous pressure by Beijing.

After the Indo-China War of 1962, the CIA developed a close relationship with the Indian intelligence services in both training and supplying agents in Tibet." (Richard Bennett, Tibet, the ’great game’ and the CIA, Global Research, March 2008)

The National Endowment for Democracy (NED)

The National Endowment for Democracy (NED), which channels financial support to pro-US opposition groups around the World has played a significant role in triggering "velvet revolutions" which serve Washington’s geopolitical and economic interests.

The NED, although not formally part of the CIA, performs an important intelligence function within the arena of civilian political parties and NGOs. It was created in 1983, when the CIA was being accused of covertly bribing politicians and setting up phony civil society front organizations. According to Allen Weinstein, who was responsible for setting up the NED during the Reagan Administration: "A lot of what we do today was done covertly 25 years ago by the CIA." (’Washington Post’, Sept. 21, 1991).

The NED provided funds to the "civil society" organizations in Venezuela, which initiated an attempted coup against President Hugo Chavez. In Haiti, the NED supported the opposition groups behind the armed insurrection which contributed to unseating President Bertrand Aristide in February 2004. The coup d’ Etat in Haiti was the result of a carefully staged military-intelligence operation. (See Michel Chossudovsky, The Destabilization of Haiti, Global Research, February 2004)

The NED funds a number of Tibet organizations both within China and abroad. The most prominent pro-Dalai Lama Tibet independence organization funded by the NED is the International Campaign for Tibet (ICT), founded in Washington in 1988. The ICT has offices in Washington, Amsterdam, Berlin and Brussels. Distinct from other NED funded Tibet organizations, the ICT has a close cozy and " overlapping" relationship with the NED and the US State Department::

Some of ICT’s directors are also integral members of the ‘democracy promoting’ establishment, and include Bette Bao Lord (who is the chair of Freedom House, and a director of Freedom Forum), Gare A. Smith (who has previously served as principal deputy assistant secretary in the U.S. Department of State’s Bureau of Democracy, Human Rights and Labor), Julia Taft (who is a former director of the NED, the former U.S. Assistant Secretary of State and Special Coordinator for Tibetan Issues, has worked for USAID, and has also served as the President and CEO of InterAction), and finally, Mark Handelman (who is also a director of the National Coalition for Haitian Rights, an organization whose work is ideologically linked to the NED’s longstanding interventions in Haiti).

The ICT’s board of advisors also presents two individuals who are closely linked to the NED, Harry Wu, and Qiang Xiao (who is the former executive director of the NED-funded Human Rights in China).

Like their board of directors, ICT’s international council of advisors includes many ‘democratic’ notables like Vaclav Havel, Fang Lizhi (who in 1995 – at least – was a board member of Human Rights in China), Jose Ramos-Horta (who serves on the international advisory board for the Democracy Coalition Project), Kerry Kennedy (who is a director of the NED-funded China Information Center), Vytautas Landsbergis (who is an international patron of the British-based neoconservative Henry Jackson Society – see Clark, 2005), and until her recent death, the “mid-wife of the neocons” Jeane J. Kirkpatrick (who was also linked to ‘democratic’ groups like Freedom House and the Foundation for the Defense of Democracies). (Michael Barker, "Democratic Imperialism": Tibet, China, and the National Endowment for Democracy Global Research, August 13, 2007)

Other NED funded Tibet organizations include the Students for a Free Tibet (SFT) referred to earlier. The SFT was founded in 1994 in New York City "as a project of US Tibet Committee and the NED-financed International Campaign for Tibet (ICT). The SFT is most known for unfurling a 450 foot banner atop the Great Wall in China; calling for a free Tibet." (F. William Engdahl, Risky Geopolitical Game: Washington Plays ‘Tibet Roulette’ with China, Global Research, April 2008).

The SFT together with five other Tibet organizations proclaimed last January "the start of a ’Tibetan people’s uprising" ... and co-founded a temporary office in charge of coordination and financing." ( Ibid)

"The NED also funds the Tibet Multimedia Center for “information dissemination that addresses the struggle for human rights and democracy in Tibet,” also based in Dharamsala. And the NED finances the Tibetan Center for Human Rights and Democracy.(Ibid)

There is a division of tasks between the CIA and the NED. While the CIA provides covert support to armed paramilitary rebel groups and terrorist organizations, the NED finances "civilian" political parties and non governmental organizations with a view to instating American "democracy" around the World.

The NED constitutes, so to speak, the CIA’s "civilian arm". CIA-NED interventions in different part of the World are characterized by a consistent pattern, which is applied in numerous countries.

PsyOp: Discrediting the Chinese Leadership

The short-term objective is to discredit the Chinese leadership in the months leading up to the Beijing Olympic games, while also using the Tibet campaign to divert public opinion from Middle East war and the war crimes committed by the US, NATO and Israel.

China’s alleged human rights violations are highlighted as a distraction, to provide a human face to the US led war in the Middle East. Moreover, US sponsored war plans directed against Iran are barely acknowledged by the Western media. Moreover, with Tibet making the headlines, the real humanitarian crisis in the Middle East is not front page news.

More generally, the issue of human rights is distorted: realities are turned upside down, the extensive crimes committed by the US and its coalition partners are either concealed or justified as a means to protecting society against terrorists.

A "double standards" in the assessment of human rights violations has been instated. In the Middle East, the killing of civilians is categorized as collateral damage. It is justified as part of the "global war on terrorism". The victims are said to be responsible for their own deaths.

The Olympic Torch

Carefully timed demonstrations on China’s human rights violations in Western capitals have been set in motion.

A partial boycott of the Olympic games seems to be underway. French Foreign Minister Bernard Kouchner (a strong protagonist of US interests who has a relationship to the Bilderbergs), has called for a boycott of the opening ceremonies of the Olympics. Kouchner said the idea should be discussed at a meeting of EU foreign ministers

The Olympic torch was lit at a ceremony in Greece, which was disrupted by "pro-Tibet activists". The event was sponsored by "Reporters Without Borders", an organization known to have links to US intelligence. (See, Diana Barahona, Reporters Without Borders Unmasked, May 2005). "Reporters Without Borders" also receives support for the National Endowment for Democracy (NED).

The Olympic Torch is symbolic. The Psychological operation (PsyOp) consists in targeting the Olympic torch in the months leading up the Beijing Olympic games.

At each phase of this process, the Chinese leadership is denigrated by the Western media.

Global Economic Implications

The Tibet campaign directed against the Chinese leadership could backlash.

We are at the crossroads of the most serious economic and financial crisis of modern history. The unfolding economic crisis bears a direct relationship to the US sponsored military adventure in the Middle East and Central Asia.

China play a strategic role with regard to US military expansionism. So far it has not exercised it Veto power in the United Nations Security Council in relation to the several US sponsored UNSC resolutions directed Iran.

China also plays a central role in the global economy and financial system.

Resulting from an accumulated trade surplus with the US, China’s now holds 1.5 trillion dollars worth of US debt instruments (including US Treasury bills). It has the ability to significantly disrupt international currency markets. The US dollar would plunge to even lower levels, were China to sell off its dollar denominated debt holdings.(For further details see: F. William Engdahl, op cit)

Moreover, China is the largest producer of a wide range of manufactured goods which constitute, for the West, a significant share of monthly household consumption. Western retail giants rely on the continued and uninterrupted flow of cheap labor industrial commodities from China.

For the Western countries, China’s insertion into the structures of global trade, investment, finance and intellectual property rights under the World Trade Organization (WTO) is absolutely crucial. Were Beijing to decide to curtail its "Made in China" manufacturing exports to the US, America’s fragile and declining manufacturing base would not be able to fill the gap, at least in the short run.

Moreover, the US and its coalition partners including the UK, Germany, France and Japan have important investment interests in China. In 2001, the US and China signed a bilateral trading agreement prior to the accession of China to the WTO. This agreement allows US investors, including the major Wall Street financial institutions, to position themselves in Shanghai’s financial and trading system as well as in China’s domestic banking market.

While China is, in some regards, the West’s "cheap labor industrial colony", China’s relationship to the global trading system is by no means cast in steel.

China’s relationship to global capitalism has its roots in the "Open Door Policy" initially formulated in 1979. (Michel Chossudovsky, Towards Capitalist Restoration. Chinese Socialism after Mao, Macmillian, London, 1986, chapters 7 and 8)

Since the 1980s, China has become the main supplier of industrial goods to Western markets. Any threat against China and/or military venture directed against China’s Eurasian allies including Iran could potentially disrupt China’s extensive trade in manufactured goods. China’s export oriented industrial base is the source of tremendous wealth formation in the advanced capitalist economies. Where does the wealth of the Walton family, owners of WalMart, originate? WalMart does produce anything. It imports cheap labor commodities "Made in China" and resells them in the US retail market at up to ten times their factory price.

This process of "import led development" has allowed the Western "industrialised" countries to close down a large part of their manufacturing outlets. In turn, China’s industrial sweat shops serve to generate multibillion dollar profits for Western corporations, including the retail giants, which purchase and/or outsource their production to China.

Any threat of a military nature directed against China could have devastating economic consequences, far beyond the familiar upward spiral in the price of crude oil.

America’s War on Terrorism, Global Research, Montreal 2005

Click to order

In this new and expanded edition of Michel Chossudovsky’s 2002 best seller, the author blows away the smokescreen put up by the mainstream media, that 9/11 was an attack on America by "Islamic terrorists". Through meticulous research, the author uncovers a military-intelligence ploy behind the September 11 attacks, and the cover-up and complicity of key members of the Bush Administration.

The expanded edition, which includes twelve new chapters focuses on the use of 9/11 as a pretext for the invasion and illegal occupation of Iraq, the militarisation of justice and law enforcement and the repeal of democracy.

According to Chossudovsky, the "war on terrorism" is a complete fabrication based on the illusion that one man, Osama bin Laden, outwitted the $40 billion-a-year American intelligence apparatus. The "war on terrorism" is a war of conquest. Globalisation is the final march to the "New World Order", dominated by Wall Street, the Anglo-American oil giants and the U.S. military-industrial complex.

September 11, 2001 provides a justification for waging a war without borders. Washington’s agenda consists in extending the frontiers of the American Empire to facilitate complete U.S. corporate control, while installing within America the institutions of the Homeland Security State.

Chossudovsky peels back layers of rhetoric to reveal a complex web of deceit aimed at luring the American people and the rest of the world into accepting a military solution which threatens the future of humanity.

The last chapter includes an analysis of the London 7/7 Bomb Attacks.

Why blame Iran

Global food prices crisis

Ex-CIA analyst on Petraeus and Cheney

Cynthia McKinney 4 President - Explosivo Verde, Los Angeles

Cynthia McKinney's Green presidential campaign stops at the Zero Point Art Space in South Los Angeles at the Explosivo Verde Green Party party. Organized by the Los Angeles Greens ( Saturday, April 12th.

Inside Story - Syria's economic reforms

It has been 8 years since Bashar al-Assad, Syria's president, promised economic reforms. In this special episode of Inside Story from Damascus, we ask what impact the reforms have had and if they have created more opportunities for young Syrians.

US Lenders Freeze Home Equity Credit Lines

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By Gretchen Morgenson

New York - It was the lending institutions and mortgage originators that got the United States into this credit mess, but it is the American consumers, taxpayers and those companies' shareholders who will end up shouldering most of the costs.

The latest example of this is in the mass freezing of home equity lines of credit going on across the United States. Reeling from losses on their wretched loan decisions of recent years, lenders are preventing borrowers with pristine credit and significant equity in their homes from tapping into credit lines that they paid dearly to secure.

In the past 30 days, lenders have sent several hundred thousand letters advising borrowers that their home equity lines of credit are frozen, estimated Michael Kratzer, president of, a Web site intended to help consumers reduce fees on home loans.

Major lenders - including Washington Mutual, IndyMac Bank and the Greenpoint Mortgage Unit of Capital One - say that declining property values are prompting the decisions to cut off credit.

Banks have the right, of course, to rescind these credit lines at any time under the terms of the contracts they struck with borrowers. And as home prices have tumbled in many parts of the United States, banks are undoubtedly trying to protect themselves from exposure to additional losses.

But these actions are being taken even in areas where property prices are rising, Kratzer said. What's worse, the letters provide no explanation for how the lenders determined that the property values underlying the equity lines had fallen.

Frozen home equity lines will surely intensify the consumer spending downturn and put added pressure on an already weak economy.

On Friday, U.S. consumer confidence, as measured by the University of Michigan, plummeted to its lowest level since 1982. The drop was attributed mostly to higher fuel and food costs, but consumers' views on their current and expected personal financial situations dropped to the lowest readings since November 1982 and April 1980, respectively.

One especially exasperating aspect of now-you-see-them, now-you-don't equity lines is that borrowers are not receiving refunds for fees they paid to secure the credit in the first place.

These fees can be significant, Kratzer said: On a $50,000 line, for example, fees of $1,500 are common. If the line is being frozen at, say, $25,000, why shouldn't the borrower be entitled to receive a refund of $750?

Borrowers who have excellent credit scores may also find that status hurt when a home equity line is frozen. That is because when a lender suddenly caps a $50,000 line at $25,000, the borrower will appear to have tapped the entire amount of the loan, a factor that can reduce a person's credit score. Never mind that, based on the original amount of the credit line, the borrower is using only half of it.

Ronald Martin, 31, a U.S. naval aviator deployed in Iraq, received one of these letters recently from IndyMac Bank. "We regret to inform you that your IndyMac Bank Home Equity account has been temporarily frozen," the letter began.

Martin's wife, Leigh Anne, a substitute teacher who lives in their home in Camarillo, California, said the notice had surprised her because she and her husband had excellent credit scores and had not even tapped the IndyMac line. While home values in the Martins' neighborhood had fallen, the Martins were not under water on their mortgage, which had been taken out in spring 2005.

"You paid to use that equity line and now they are saying you can't use it," Leigh Anne Martin said. "We've never been late on our mortgage. We have a good savings account. We pay every bill we ever had on time - what did we do wrong?"

The IndyMac letter said the Martins' credit was being suspended because "the value of the dwelling has declined significantly below its appraised value used at origination." IndyMac said it would re-evaluate the property value each quarter and, if it improved, the freeze would be lifted.

Officials representing IndyMac declined to comment.

Sara Gaugl, a Washington Mutual spokeswoman, said the bank actively manages the amount of credit it extends to customers. "We have a process in place for customers who wish to appeal a credit line decrease decision," she said. "We also will continue to assist homeowners who may have unique or special situations."

Kratzer, who has recently fielded calls and e-mail messages from more than 500 borrowers in straits similar to the Martins', said lenders who were reining in credit should provide an explanation of how they determined that property values associated with the lines had declined sharply.

"How are lenders arriving at the new loan-to-value ratios?" Kratzer asked. "When you secure a loan or home equity line, a full appraisal is generally required. But these processes aren't being used when the lender calculates a new value to reduce an existing credit line."

Kratzer said he had heard from frozen-out borrowers in 11 areas where the median home price actually increased in the last quarter of 2007, the most recent figures available from the National Association of Realtors. These areas include Yakima, Washington; Appleton, Wisconsin; Raleigh-Cary, North Carolina; and Champaign-Urbana, Illinois.

Borrowers in areas where prices remained flat have also contacted him.

"Are they applying blanket values to ZIP codes, neighborhoods or entire regions?" Kratzer asked. "We're all left to wonder about the process."

Luckily for the Martins, they are not in need of additional credit on their IndyMac line. But other borrowers who have contacted Kratzer say they are in the middle of home improvement projects that they can no longer finance, or have college tuition bills that they were going to pay using the credit lines. Now they can't.

Medical expenses, another reason that borrowers tap their equity lines, are also posing problems for some homeowners.

And small-business owners who use home equity lines to bridge cash-flow gaps throughout the year are also being stricken by these curbs, Kratzer said. He has also heard from people who paid down some of their home equity lines, expecting to be able to draw on them again. Now, they are out of luck.

"In a perfect world, lenders would fully disclose the process and criteria used to make these valuations and decisions," Kratzer said. "These borrowers have a solid payment history, good credit scores and plenty of equity to satisfy most of the lenders' loan-to-value formulas. Instead, the banks are just shutting them off."