Friday, July 4, 2008

Google Told to Turn Over User Data of YouTube

Go to Original

SAN FRANCISCO — A federal judge has ordered Google to turn over to Viacom its records of which users watched which videos on YouTube, the Web’s largest video site by far.

The order raised concerns among YouTube users and privacy advocates that the video viewing habits of tens of millions of people could be exposed. But Google and Viacom said they were hoping to come up with a way to protect the anonymity of the site’s visitors.

Viacom also said that the information would be safeguarded by a protective order restricting access to the data to outside lawyers, who will use it solely to press Viacom’s $1 billion copyright suit against Google.

Still, the judge’s order, which was made public late Wednesday, renewed concerns among privacy advocates that Internet companies like Google are collecting unprecedented amounts of private information that could be misused or fall unexpectedly into the hands of third parties.

“These very large databases of transactional information become honey pots for law enforcement or for litigants,” said Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology.

For every video on YouTube, the judge required Google to turn over to Viacom the login name of every user who had watched it, and the address of their computer, known as an I.P. or Internet protocol address.

Both companies have argued that I.P. addresses alone cannot be used to unmask the identities of individuals with certainty. But in many cases, technology experts and others have been able to link I.P. addresses to individuals using other records of their online activities.

The amount of data covered by the order is staggering, as it includes every video watched on YouTube since its founding in 2005. In April alone, 82 million people in the United States watched 4.1 billion clips there, according to comScore. Some experts say virtually every Internet user has visited YouTube.

Google and Viacom said they had had discussions about ways to further protect users’ anonymity, but as of Thursday evening the two companies had yet to agree on how to do that.

“We are investigating techniques, including anonymization, to enhance the security of information that will be produced,” said Michael D. Fricklas, Viacom’s general counsel.

Mr. Fricklas said Viacom would not have direct access to the data, and that its use would be strictly limited by the court order. Viacom would not, for example, chase down users who had illegally posted clips from “The Colbert Report.”

“The information that is produced by Google is going to be limited to outside advisers who can use it solely for the purpose of enforcing our rights against YouTube and Google,” Mr. Fricklas said.

In a letter sent Thursday, Google’s lawyers pressed their counterparts at Viacom to accept a more limited set of data. “We request that plaintiffs agree that YouTube may redact user names and I.P. addresses from the viewing data in the interests of protecting user privacy,” wrote David H. Kramer, a partner at Wilson Sonsini Goodrich & Rosati.

In a response, a Viacom lawyer wrote that Viacom was “committed to working with Google” on the privacy issue.

Interestingly, Google has rejected demands by privacy groups for more stringent protections for I.P. address records, saying that in most cases the addresses cannot be used to identify users. Yet Google argued that YouTube viewing data should be kept from Viacom, in part, to protect the privacy of its users.

Judge Louis L. Stanton of the Southern District of New York, who is presiding over Viacom’s lawsuit against Google and YouTube, referenced Google’s past statements on I.P. addresses to conclude that its “privacy concerns are speculative.”

“It is an ‘I told you so’ moment,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington.

Other privacy advocates said they welcomed Viacom’s commitment to limit its use of the information, but they remained concerned about user rights.

“Users should have the right to challenge and contest the production of this deeply private information,” said Kurt Opsahl, senior staff lawyer at the Electronic Frontier Foundation, an online civil liberties group.

That right is protected by the federal Video Privacy Protection Act, Mr. Opsahl added. Congress passed that law in 1988 to protect video rental records, after a newspaper disclosed the rental habits of Robert H. Bork, then a Supreme Court nominee.

Mr. Opsahl also said that even records that did not include a user’s login name and I.P. address might be able to be associated with specific people.

In 2006, after AOL released for research purposes the search records of thousands of anonymous users, reporters from The New York Times were able to track down one person by analyzing her search queries. Mr. Opsahl said anonymous viewing habits may similarly yield clues about the identity of viewers.

Viacom wants the viewing data in part to help it determine the extent to which YouTube’s success was built on the popularity of copyrighted clips that were illegally posted to the site. Outside experts say that without the data it would be virtually impossible to pin that down.

Judge Stanton agreed that the information could help Viacom make its case. “A markedly higher proportion of infringing-video watching may bear on plaintiff’s vicarious liability claim, and defendants’ substantial noninfringing use defense,” he wrote.

US: The Federal Reserve’s dilemma

Go to Original
By Andre Damon

Earlier this month, Federal Reserve Board Chairman Ben Bernanke hinted that the US central bank would shift to a tighter monetary policy, leading analysts to expect multiple interest rate hikes this year. In a speech given June 3, Bernanke stressed the need to ensure that record oil prices do not feed into wage inflation, and all but announced a plan to boost the US exchange rate by raising interest rates. Now, a month later, the Fed has proven unable to act on either of these goals, having kept the Target Federal Funds Rate at a steady 2 percent at its Federal Open Market Committee (FOMC) meeting last week.

In our analysis of Bernanke’s speech, we stressed that the shift in policy emphasis represented an attempt to orchestrate a controlled recession, leading to a moderate rise in unemployment and a steady lowering of real wages. This process would in turn boost the profits of US corporations, guaranteeing a certain baseline level of returns to carry through the de-leveraging of financial firms and the write-downs of hundreds of billions of dollars in financial assets. The Fed aimed to oversee a controlled purge of infected assets, financed by a recessionary assault on the working class.

But the best-laid plans often go awry, and in the weeks that passed from Bernanke’s speech to the June 25 policy decision the conditions facing US finance capital have taken a tremendous turn for the worse. From late March through May, there was a certain recovery in the financial markets. Stock prices started to creep back up, banks succeeded in reducing the ratio of borrowings to assets by receiving significant infusions of capital, in many cases from abroad. The recovery reached its peak around mid-May, after which stocks began to slump rapidly. Last month ended with stock indexes registering their worst June since the Great Depression.

The institutions that recapitalized banks suffered significant losses on their investments, and—after some had their fingers burned—other institutions are far less willing to invest in bank stocks. The inability to raise capital—together with the precipitous decline of already existing share values—has left many banks, even very large ones, hurtling towards insolvency. As the Fed’s March 14 and March 16 minutes make clear, the Federal Reserve board firmly believed that the collapse of Bear Stearns would have resulted in an uncontrolled destabilization of the financial system leading to further bank failures. The conditions for such a crisis have fully reemerged in recent weeks, only perhaps in more pervasive and systematic form.

Far from being merely a technical operation, monetary policy is among the main regulators of aggregate relations between the working class and the owners of the productive forces—the bourgeoisie. In the US economic system, wages are set by the labor market—that is, by the interaction of labor supply and labor demand. But monetary policy, by spurring or constricting business activity, increases or reduces the demand for labor. Wage levels—if accompanied by aggressive action by one or the other class—tend to move accordingly.

The theory goes as follows: in the event of an unwanted economic slowdown, the Fed will stimulate demand by lowering interest rates—making credit easier to obtain and thus furthering business and consumer consumption. In case of an upturn in the class struggle, the Fed will raise rates, rein in demand, and suppress the wage struggles of the working class.

The Fed—under the leadership of Paul Volker—successfully implemented such a policy in the 1980s, when the breaking of the PATCO strike was accompanied by a manufactured recession—the sharpest since the 1930s—opening up a still-ongoing assault on the US working class.

The Federal Reserve is mandated by the US government to pursue a monetary policy that minimizes both inflation and unemployment. Aside from these policies, it acts as the guarantor of depository institutions; a “lender of last resort” with whom banks are required to keep a certain minimum amount of reserves. But with the latest crisis, the Federal Reserve has taken on the task of preserving the “shadow banking system” of hedge funds, loan distributors, and other unregulated entities, significantly complicating its operations. In so doing, it has granted itself quasi-legal authority to lend to investment banks and to take the assets of distressed institutions onto its own balance sheet.

These latest developments have complicated the Fed’s role. Aside from the “discount window,” through which the Fed lends to banks that are otherwise unable to borrow, the US central bank must operate with the blunt instrument of the Federal Funds rate, which impacts not only wages—the intended target—but also financial performance and exchange rates. In setting interest rate policy, the Federal Reserve now confronts problems on both sides. On one hand, rising commodities prices are fueling inflationary expectations and are likely to lead to a wages counteroffensive by the working class; to guard against this the Fed would need to raise interest rates and tighten the labor market. On the other hand, there is a very real threat of more crises like that of Bear Stearns.

Recent discussions in the business press have made clear that the US financial system faces a long-term solvency crisis that, if stock prices continue to fall, could well result in the failure of multiple “systemically important” institutions, prompting their rescue by the Federal Reserve or the broader US government. Such an event—referred to as the omnipresent “tail risk” in Bernanke’s parlance—could entail the government’s appropriation of hundreds of billions of dollars in toxic assets, putting into question the creditworthiness of US Treasury securities. This could, in turn, precipitate a dollar collapse and a catastrophic reordering of the international economic system.

To guard against this possibility, the Fed would seek to lower interest rates, making cheaper financing available to stimulate business activity and consumer spending, resulting in lower default rates on debt and safer conditions for finance. But to the Fed’s chagrin, its two most pressing goals—anti-inflation and the prevention of a financial meltdown—necessitate opposite policy responses. As the credit crisis reared up again this month, the Fed was forced to back down from its emphasis on raising interest rates.

Meanwhile, the European Central Bank faces the same dilemma. In line with previous announcements by ECB President Jean-Claude Trichet, the bank raised its benchmark rate from 4 to 4.25 percent on Thursday, hoping to stave off a wages offensive in response to rising commodity prices. But the dismal performance of financial stocks has made the likelihood of bank failures even more significant and, according to most financial analysts, further rate hikes unlikely.

Thomas Mayer, chief European economist at Deutsche Bank, observed, “The ECB is hiking at a time when confidence is plummeting.” He continued, “The question is, ‘What do you do when asset prices fall at the same time that consumer prices rise?’ The central bankers seem to have reached the end of the line.”

Bush administration encouraged oil deal in Kurdistan, undermining Iraqi “national unity”

Go to Original
By David Walsh

The Bush administration publicly criticized a deal made between Hunt Oil of Dallas, Texas and the Kurdistan Regional Government in Iraq last September for supposedly undermining Iraqi “national unity,” while privately officials were facilitating the oil firm’s activities, documents released this week by the US House Committee on Oversight and Government Reform reveal.

Hunt Oil, whose chief executive Ray Hunt has been a major backer of George W. Bush, signed the agreement with the Kurdish government on September 8, 2007 to explore and develop oilfields in the region.

No national law on the division of oil revenues had been passed at the time (and still has not been), and the agreement outraged Iraqi government officials fearful that Baghdad would be cut out of its share of lucrative oil profits by such arrangements and that the country might well break up under centrifugal pressures. At the time Iraq’s oil minister, Hussein al-Shahristani, called the deal “illegal.”

The Bush administration echoed these remarks. The president stated on September 20, 2007: “I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I’m concerned.”

A State Department official told the press: “It’s counterproductive. Our view is the contract process should be controlled by the central government and that these regional deals could become illegal if an oil law is passed.”

The Assistant Secretary of State for Legislative Affairs, Jeffrey T. Bergner, wrote to a Congressional committee in October 2007 that, in his department’s view, “the signature of such contracts would needlessly elevate tensions between the KRG [Kurdish Regional Government] and the Government of Iraq.” Bergner went on to say, “We believe it is in the best interest of Iraq for all interested parties to agree to a single central approver of contracts so that Iraq’s oil and gas resources can be developed in accordance with a rational plan.”

This was all for public consumption. Behind the scenes, US government officials were assisting Hunt, a former member of the board at Halliburton (1998-2007), who has contributed $35 million toward the building of a Bush library, to land the deal with the Kurds.

The documents released by California Democratic Congressman Henry Waxman’s Oversight and Government Reform committee include an email from David McDonald, Hunt Oil’s General Manager for Europe, Africa and the Middle East, reporting on conversations with US government officials held June 12 and 15, 2007 in Erbil, the capital of the Kurdish autonomous region. McDonald sent the message in late September 2007, after the Hunt deal had been publicly censured by Bush and other administration officials.

In the email, addressed to Hunt Vice President Ken Topolinsky, McDonald writes about the initial discussion with US officials on June 12: “I described our visit as a security and business opportunity assessment, we discussed their views about security, power supply.” The officials, including members of the State Department’s Regional Reconstruction Team for the Kurdish region, suggested that McDonald return for another discussion three days later “when the expert concerned with the petroleum industry would be present.”

McDonald did so, and on June 15 another conversation took place between the Hunt oilman and US government representatives, among them, the “Senior Economic Adviser, Regional Reconstruction Team, USAID Northern Region.” In response to a question about production sharing contracts, McDonald explained that “I answered with a demonstration on a whiteboard of the terms of the agreement how royalties, cost oil, and profit oil are calculated and noted that the KRG contract [model production sharing agreement on the KRG web site] is consistent with agreements in use around the world and in fact is a sophisticated agreement. I specifically asked if the USG [US government] had a policy toward companies entering contracts with the KRG and [blacked out name] replied that there was no policy, neither for nor against.”

McDonald notes other contacts with American government officials in August and early September 2007, and concludes: “There was no communication to me or in my presence made by the 9 state department officials with whom I met prior to 8 September that Hunt should not pursue our course of action leading to a contract. In fact there was ample opportunity to do so, but it did not happen.”

The Commerce Department official who participated in the June 12 meeting, wrote Hunt Oil executives that same day: “It was a real pleasure meeting with you today, hope you [have] a fruitful visit to Kurdistan ... Please feel free to contact in case you need any support from our office here in Erbil.”

Casting further doubt on State Department claims that it was discouraging deals similar to the one Hunt was making with the Kurdish government, a few days after the agreement was announced in September, the Deputy Director of the US Regional Embassy in Basra wrote to a Hunt official, “I read and heard about with interest your deal with the regional Kurdish government,” and went on to tip her off about “another opportunity,” a liquefied natural gas refinery in southern Iraq. He added, “This seems like it would be a good opportunity for Hunt.”

As to the White House claim that it knew nothing about the deal, Ray Hunt’s own political relationship with the administration puts the lie to that. Aside from being a billionaire oilman, Hunt is a member of the President’s Foreign Intelligence Advisory Board (PFIAB), along with 15 other business, military and intelligence types. Hunt dispatched two letters informing the PFIAB of his Kurdistan venture, presumably because the latter would involve contact with representatives of a foreign government.

On July 12, he wrote: “We were approached a month or so ago by representatives of a private group in Kurdistan as to the possibility of our becoming interested in that region. We had one team of geoscientists travel to Kurdistan several weeks ago and were encouraged by what we saw. We have a larger team going back to Kurdistan this week but who they will actually meet with while they are there and what the relationships of those people might be with the Government of Kurdistan are both unclear at this time.”

Some six weeks later, Hunt wrote again to the PFIAB, informing board members of his upcoming visit to the region: “While my schedule is still fluid, there is a high likelihood that I will meet with President Masoud Barzani, the Prime Minister, the Oil Minister and various other individuals associated with the government of Kurdistan.” The visit bore fruit.

Barzani said recently, in response to criticism from Baghdad, that the more than 20 production-sharing contracts his government has signed with foreign oil companies since passing its own gas and oil law in August 2007 are “irreversible.” He added, “Anyone who wants to put off these deals is a dreamer.” The Iraqi oil ministry has threatened to blacklist any oil firms making deals with the KRG, but that has not stopped the flow of such agreements. In late June, the Kurdish regime announced a new package of oil deals with South Korea’s state oil company.

The revelations about the US government and its dealings with Hunt come in the context of the recent announcement that American and European oil giants Exxon, Shell, BP and Total are receiving no-bid service contracts from the Iraqi government, deals that are simply the foot in the door for the massive companies.

The Bush administration claimed in this case too that it had nothing to do with the negotiations. Secretary of State Condoleezza Rice stated, “The United States Government has stayed absolutely out of the matter of the awarding of Iraq oil contracts.” A State Department spokesman declared, “These are Iraqi contracts. They were made by Iraqis, for Iraqis.”

Everyone over the age of 10 knows that these claims are boldfaced lies. The US intervened in Iraq to seize control of the country’s oil reserves and assert its hegemony throughout the petroleum-rich Middle East. All the stated reasons—weapons of mass destruction, the Hussein regime’s ties with Al Qaeda, the establishment of democracy—have been exposed as falsehoods, and now, some five-and-a-half years later, the truth is emerging for all to see.

This is a potential embarrassment to the American ruling elite. Rep. Waxman makes clear that the brazenness of the Bush administration’s actions is a political problem: “The documents the Committee has received about Hunt Oil show that in matters involving Iraqi oil, official denials of knowledge and involvement can be misleading. This is a serious matter because of the widespread suspicion in Iraq and other nations that the United States went to war to gain access to Iraqi oil.”

As to why the State Department aided Hunt in Kurdistan, effectively undermining official policy in support of Iraqi “national unity,” the Bush administration is no doubt keeping all its options “on the table.” Washington is duplicitous in its dealings with the puppet regime in Baghdad, which it mistrusts and believes is too close to the Iranians, as it is with everyone else.

Voices have loudly been raised in favor of partition of the country, legal or de facto, and this policy has its backers in the administration. At the time of the Hunt deal signing last year, New York Times columnist Paul Krugman noted that Ray Hunt, “thanks to his policy position, is presumably as well-informed about the actual state of affairs in Iraq as anyone in the business world can be. By putting his money into a deal with the Kurds, despite Baghdad’s disapproval, he’s essentially betting that the Iraqi government ... won’t get its act together. Indeed, he’s effectively betting against the survival of Iraq as a nation in any meaningful sense of the term.

“The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia. And I suspect that most people in the Bush administration—maybe even Mr. Bush himself—know this, too.”

Bush officials no doubt believe that there are various routes to the exploitation of Iraqi oil reserves. They are pressing for a national oil law, but see no difficulty in helping open up the Kurdish region to foreign predators in the meantime. Their policy is shortsighted and reckless, but this has been the character of the administration’s actions all along. The criminal plundering of Iraq’s natural resources, in the interest of the American corporate oligarchy, does not lend itself to rational, long-term planning.

Billions of dollars are at stake, and no doubt the administration did what it could to pass along some business to Hunt, a close political ally, whatever the ultimate consequences. A State Department official’s September 2007 email notes that when asked about “concerns over potential conflicts between the recently passed KRG hydrocarbon law and an [sic] national law,” Hunt’s McDonald said “the ‘significant opportunity’ outweighs the legal ambiguity.” Indeed.

It is worth noting that the Hunt name has a special political connotation.

The founder of the company, H.L. Hunt (1889-1974), Ray Hunt’s father, made a fortune in the oil industry in Texas. In 1957 Fortune magazine estimated that Hunt was worth $400-700 million, making him one of the eight richest individuals in the US.

Hunt was a fanatical right-winger and anticommunist. In 1951, he launched the Gen. Douglas MacArthur for president campaign with a chunk of his own money. Later, with two of his sons, he set up a right-wing “intelligence network,” the International Committee for the Defense of Christian Culture.

Hunt was involved in various ultra-right activities, including anti-Castro operations, and was a member of the John Birch Society. He also apparently helped bankroll the career of Democratic President Lyndon B. Johnson.

Ray Hunt was appointed the finance chairman of the Republican National Committee’s Victory 2000 Committee. During that campaign he was designated one of the 241 Bush “Pioneers,” thanks to his raising more than $100,000 in donations from his family. In 2004, Hunt and his wife donated $190,000 to the Republican cause.

In addition to his seat on the Foreign Intelligence Advisory Board, Hunt serves as chairman of the Federal Reserve Bank of Dallas and is a member of the National Petroleum Council, which advises the president on energy policy. As noted above, Hunt also served on the board of Halliburton, the firm once headed by Vice President Dick Cheney.

Inflation worsens as China lifts petrol prices

Go to Original
By John Chan

In a major shift, the Chinese government raised retail fuel prices by 16-18 percent on June 19. The move will inevitably stoke further inflation and follows similar measures by other Asian countries in recent months. Most analysts were surprised by the move, as they had expected Beijing to lift the oil prices—a politically sensitive decision—only after the Olympic Games in August.

Rising petrol prices have fuelled a wave of protests and riots across the globe. Beijing also is well aware that inflation and deteriorating living standards were a significant factor in large numbers of workers joining protesting students in the demonstrations that were finally crushed by the military in Tiananmen Square in June 1989.

The National Development and Reform Commission (NDRC) announced the decision, declaring: “Due to the sharp spike in international oil prices, some refineries had to be shut down, with queues at petrol stations and rationing re-emerging in some regions. Appropriate increases in fuel prices will help raise supply and promote energy conservation.”

Beijing lifted the retail price of petrol by 16.7 percent to 6,980 yuan ($US1,015) a tonne and diesel by 18.1 percent to 6,520 yuan a tonne. The retail price for electricity was raised by an average of 4.7 percent, except in areas hit by the May 12 earthquake and in the impoverished Central Asian province of Xinjiang.

Like most developing Asian countries, China maintains domestic caps on energy prices that are substantially lower than international benchmarks. As a result, the state-owned petroleum corporations and refiners such as PetroChina and Sinopec have incurred huge financial losses, forcing them to scale back or even halt production and imports. Some smaller refiners have gone bankrupt. China had to increase fuel prices by 9-10 percent in November for the same reason.

Jun Ma, a Deutsche Bank economist, commented that “energy shortages had become a bigger threat to stability ahead of the Olympics” than inflation. Shortages of fuel have caused long queues at petrol stations in many cities throughout China in recent weeks, causing concern that the transport sector would be badly disrupted, affecting the whole economy.

The state-controlled petrol price in China is about $0.85 a litre—still well below $1.08 in the US and $2.33 in the UK. Low prices have been an important stimulant for the rapidly expanding auto industry. China is now the world’s second largest market of automobiles after the US.

Beijing has come under growing international pressure, especially from Washington, to raise fuel prices. American politicians have blamed the Chinese demand for oil for causing price rises. Last week, 16 Democratic senators, including former presidential candidate Hillary Clinton, sent a letter to the Bush administration demanding action to force Beijing to end its controls on fuel prices. “What Americans see happening at the pump is driven, in part, by what is happening in China,” they wrote.

The Wall Street Journal warned: “With inflation a growing worry world-wide, the political furore over China’s price controls has threatened to supplant the long-standing tussle over its exchange-rate policies as the nation’s most contentious international economic issue.”

The crude oil futures in New York did fall by 2 percent following China’s announced fuel rises. In the long term, however, China’s demand for oil is unlikely to slow amid a rapid growth of privately-owned vehicles. China is already the world’s second largest consumer and the International Energy Agency estimates it will account one third of the global oil demand growth from 2007 to 2030.

Worsening inflation

Analysts warn that the increased energy prices will only worsen inflation, which eased to 7.7 percent in May—a slight fall from 8.5 percent in April and a 12-year-high of 8.7 percent in February.

Immediately after the fuel price hikes, the finance ministry announced subsidies of 19.8 billion yuan or $2.9 billion for farmers, taxi drivers and low-income families. Although car ownership is still relatively low, the numbers are growing. Liu Honghui, one driver who had queued in Beijing to fill up petrol, told the Financial Times on June 20: “The price increase is high. It doesn’t matter for official cars and the rich, but for ordinary people the burden will be much heavier.”

Kong Fanshan, a taxi driver in Beijing, told Agence France Press (AFP) that he could not stop driving, even though the hikes would cut a quarter of his monthly income of 2,000 yuan ($290). He would lose a deposit of 20,000 yuan if he terminated his contract with the taxi company. “Besides, I only know driving. People my age can’t get another job. That’s the case for most taxi drivers,” he said.

Simon Yang, a cosmetic shop owner, said his small business would be affected as he made deliveries to clients. “It’s certainly not reasonable, especially when other prices are so high. Everything will rise following the gas price hike,” he said.

For the majority of the population, the increased petrol prices will translate into higher public transport fares. Credit Suisse First Boston (CSFB) estimated that an increase of 8 percent in public transport costs would add 2.3 percent to the inflation rate in China.

The World Bank sharply revised its inflation forecast for China in 2008 from 4.8 to 7 percent in a recent quarterly assessment. While the “worst of the food price hikes” was over, it stated, China was facing a second wave of inflationary pressures from rising prices for industrial commodities. On June 23, for instance, Anglo-Australian mining giants BHP-Billiton and Rio Tinto forced Chinese steel companies to pay up to 100 percent more for iron ore—a new record high.

The World Bank report rather optimistically predicted a growth rate of 9.8 percent this year, despite the economic slow down in the US and Europe and the closure of many low-end factories in China. It urged the government to increase interest rates and speed up the appreciation of yuan to combat inflation. Although China’s foreign currency reserves have reached $1.76 trillion, the bank dismissed fears that inflation was being fuelled by an oversupply of liquidity.

The Chinese government’s analysis differs. Under the pressure from the Bush administration and the US Congress to reduce China’s huge trade deficit ($256 billion in 2007), Beijing ended the yuan’s peg to the US dollar in 2005 and linked it to a basket of currencies instead. The yuan has gradually appreciated by less than 10 percent against the greenback. Speculative capital has flooded into China in the expectation that the yuan will be further revalued and that interest rates will rise.

In April, Zhu Baoling, the deputy chief of the State Information Centre’s economic forecasting department, estimated that the amount of speculative capital reached $80 billion in the first quarter—compared to $120 billion for the whole of 2007. A new estimate by Zhang Ming, a researcher at the Chinese Academy of Social Sciences, put the cumulative total of “hot money” at a staggering $1.75 trillion for the period from 2003 to March this year—far higher than the previous estimate of $500-$600 billion.

Zhang warned of the dangers of a sudden withdrawal by speculators. “The possibility of a large-scale evacuation like in the Asian financial crisis [in 1997-98] is not very big. But if they think the economic fundamentals will change significantly, the outflow can be huge,” he stated.

The South China Morning Post commented on June 16 that it was not just foreign investors who were speculating but state firms and private companies, which “falsify export receipts to move hard currency into the mainland and take advantage of the rising yuan”. At the same time, the rising yuan has hurt export processing industries in the Pearl River and Yangtze River deltas that play a central role in creating the 10-20 million new jobs needed each year.

Tensions between the US and China are rising. During the US-China “Strategic Economic Dialogue” last month, US Treasury Secretary Henry Paulson urged Beijing to abandon its oil price control and further revalue the yuan. Chinese officials fired back that Washington was in no position to demand that China act because of the subprime mortgage mess in the US.

China’s central bank chief Zhou Xiaochuang pointedly told reporters: “China is of course interested in learning from the experience of the United States in macroeconomic regulation and using a market economy, and now we also want to see what lessons we can draw from the experience of the US after the turbulence [of the subprime crisis].” The New York Times commented: “Chinese officials seem to be galled by the apparent hypocrisy of Americans telling them what to do while the American economy is at best stagnant.”

While they have been blaming the falling US dollar and subprime crisis for rising commodity prices and other global economic problems, Chinese officials are deeply concerned that economic troubles in the US and Europe—their largest export markets—can quickly impact on the Chinese economy and lead to social and political unrest.

Obama continues lurch to the right on Iraq war and militarism

Go to Original
By Bill Van Auken

The embrace of key elements of the Republican agenda and jettisoning of positions that he advanced during his “Change you can believe in” primary campaign have become a daily routine, as the Democratic Party’s presumptive presidential candidate Barack Obama carries out a dizzying turn to the right.

In speeches and press appearances on Wednesday and Thursday, Obama continued to identify his campaign with support for American militarism, while backing away from his primary-campaign pledge to withdraw US combat forces from Iraq based on a definite timetable.

Appearing Wednesday in Colorado Springs, Obama delivered a speech on national service, which hailed the US military and vowed to swell its ranks.

While proposing the expansion of Americorps, the Peace Corps and other civilian entities, Obama made it clear that the main service to which he intended to call young Americans was the military.

He began by invoking the September 11, 2001 terrorist attacks on New York City and Washington and lamenting the failure of the Bush administration to issue “a call to service” and “a call for shared sacrifice.”

“There is no challenge greater than the defense of our nation and our values,” he continued, praising the actions of US troops “fighting a resurgent Taliban” and “persevering in the deserts and cities of Iraq.”

What “values” are embodied in the systematic destruction of the Afghan and Iraqi societies and the killing and maiming of millions of civilians in the attempt to impose US hegemony over oil-rich regions of the planet, the Democratic candidate did not spell out.

Instead, he insisted on the “need to ease the burden on our troops, while meeting the challenges of the 21st century.” That these “challenges” entail the continuation of these wars and the launching of new ones is clear. As president, he said, he would “call on a new generation of Americans to join our military,” while vowing to increase US ground forces by 65,000 soldiers and 27,000 Marines.

With the military struggling to meet current recruitment quotas, this proposal raises the real question of whether the national service envisioned by Obama will involve the reactivation of the military draft.

Speaking at a press conference in Fargo, North Dakota Thursday before addressing a group of veterans, Obama allowed that he expected to “refine” his positions on Iraq during an upcoming trip to the US occupied country this summer.

Backing away from his earlier pledge to carry out a 16-month withdrawal of combat troops from Iraq, the candidate said, “I have always said I would listen to the commanders on the ground. I have always said that the pace of withdrawal would be dictated by the safety and security of our troops and the need to maintain stability.” Meanwhile, he couched his opposition to the continued occupation of Iraq at current levels in terms of what he posed as the more urgent necessity for sending troops to Afghanistan.

Obama’s advisors have been more explicit. His top foreign policy advisor, Anthony Lake, a former Clinton administration national security advisor, told the press that an incoming Democratic administration was committed to maintaining “a residual force for clearly defined missions” in Iraq, as well as “preparedness to go back in,” if needed. “That is not a ‘cut and run’ and let’s just see what happens,’” said Lake, one of the architects of the Clinton administration’s “humanitarian” interventions in Somalia, Haiti and the Balkans.

Meanwhile, there is growing speculation that Obama is prepared to keep current US Defense Secretary Robert Gates at his post and the campaign has agreed to participate in a series of transition teams being set up in military, intelligence and police agencies to assure the seamless continuation of the “global war on terrorism.”

Having won the Democratic primaries in no small part by posturing as an opponent of the Iraq war and indicting his opponent, Hillary Clinton, for voting to authorize it, Obama is now presenting himself as another “wartime president.”

The lurch to the right by the Obama campaign is so blatant that it has aroused substantial commentary in the bourgeois press, some of it gloating and some of it reflecting concerns that this maneuver is so naked that it may alienate substantial layers of the population from the electoral process and expose the fraud of the entire two-party system.

The Christian Science Monitor, for example, cited concerns Thursday that Obama’s lurch to the right posed “a particular risk among young voters, who have turned out and volunteered in droves for Obama and may be disillusioned by his display of old-style politics.”

In the gloating category was an editorial published Wednesday in the Wall Street Journal entitled “Bush’s Third Term.” The Journal, whose editorial board has generally reflected the views within the right-wing sections of the Republican Party that dominate the Bush administration, pointed to Obama’s continuous warnings against McCain’s victory resulting in “George Bush’s third term.”

“Maybe he’s worried that someone will notice that he’s the candidate running for it,” the editorial affirmed.

It went on to note Obama’s announcement two weeks ago that he will vote for legislation legalizing the Bush administration’s sweeping domestic wiretapping program, while granting retroactive immunity to the telecom companies that helped it carry out this unlawful spying operation. It pointed to the pullback from campaign promises of a timetable for withdrawing US combat troops from Iraq. And it cited his embrace of government funding for “faith-based” social programs, as well as a series of calculated statements on so-called hot button issues of the political right, ranging from guns to the death penalty.

Another demagogic appeal that the Obama campaign has jettisoned is the previous pretense that he opposed NAFTA and sympathized with the protectionist outlook of the trade union bureaucracy. In a recent interview with Fortune magazine, the candidate declared, “I’ve always been a proponent of free trade,” and allowed that some of the primary rhetoric on the subject had been “overheated.”

“Now that he is in a general election,” the Journal commented, “he can’t scare the business community too much.” It would appear that the stock exchange is not at all frightened. According to figures compiled by the Center for Responsive Politics, Obama has netted nearly $8 million in contributions from the securities and investment houses, almost double the amount received by his Republican rival, McCain.

The Journal editorial concludes cynically, though justifiably, that “the next President, whether Democrat or Republican, is going to embrace much of Mr. Bush’s foreign and antiterror policy whether he admits it or not.”

In the end, this right-wing voice of Wall Street criticizes Obama not for his policies, but rather for what it terms his questionable “political character,” meaning doubts about whether he can be trusted to carry through the wars abroad and attacks on the working class at home that the ruling elite requires.

Obama’s turn to the right is the manifestation of a system in which the policies of both major parties are determined by a small wealthy layer of the population, which holds the will and sentiments of the American population in contempt.

The right-wing agenda being spelled out by the Obama campaign sets the stage for yet another election in which the masses of working people in the US will find themselves politically disenfranchised, with no viable means to express their immense hostility to the policies of war, destruction of living standards, and political reaction identified with the Bush administration.

Obama’s rapid evolution in the wake of the primaries demonstrates the politics of deception and manipulation of public opinion that his campaign has embodied from the outset. It has never represented an insurgency from below, but rather a bid by elements of the ruling elite to effect certain definite but limited changes in policy, while using Obama to supply a fresh face for American imperialism under conditions in which it is discredited at home and abroad.

The attempt to use the Obama campaign to delude broad layers of the population seeking change enjoys the active and crucial support of most of what passes for the American “left.” They seek to cover up or apologize for the right-wing trajectory of the Democrats. Some put forward the cynical argument that Obama is merely doing what it takes to get elected—the American people, they would argue, are backward and right-wing. Others maintain that he is reacting to pressure from the establishment and must be pushed back on course through pressure from the left.

Typical of this second school is the left liberal journalist Arianna Huffington, who posted on her web site advice to Obama, warning him that “tacking to the center is a losing strategy.”

Instead, she called upon him to “appeal to the 82 million people who did not vote in 2004.” She continued, “Isn’t galvanizing the electorate to demand fundamental change the raison d’être of the Obama campaign in the first place?”

In reality, Obama is now running on his real program, that of a corrupt and reactionary big business politician. He will leave it to figures like Huffington, the Nation, and others on the so-called left to continue promoting illusions in his candidacy, while he makes his pitch to his key constituencies, the financial aristocracy and the forces of the state.

The Democrats have no interest in coming into office with a mandate for “fundamental change,” because they have no desire or intention of carrying out such transformations. In fact, Obama’s latest campaign swing is aimed in no small part at creating a new and decidedly conservative base for politics that will in key respects represent continuity with those of the Bush administration.

In the end, the promotion of illusions in Obama and the Democrats serves only to block the emergence of a genuine alternative based upon the independent political mobilization of the broad mass of working people.

One thing is certain. The policies of an incoming Obama administration will not be determined by the erstwhile populist posturing of the candidate or by the pressure exerted by the left liberals. Rather, they will be dictated by the enormity of the economic and political crisis confronting American capitalism and what is required under these conditions to defend the class interests of the ruling elite. The turn to the right on the campaign trail is preparation for this essential task.

The Ashes Have Been Passed To A New Generation

Go to Original
By David Michael Green

We live in the most astonishing of times, politically speaking.

And I don’t mean that as a compliment.

There is so much I would hate to try to have explain to an alien about our politics. Same with a human five centuries from now - it’s just that I’m not so sure there’ll be any.

In America, a regressive majority of one on the Supreme Court disappears a whole clause from the Second Amendment in order to interpret it favorably for an industry merchandizing mass quantities of small death machines. Thirty or forty thousand of us are swept away every year by these killers, but few find the coincidence of that fact with their ubiquitous presence - by some estimates, there is nearly one gun for every American nowadays - somehow noteworthy.

One president has oral sex in a private consensual relationship and lies about it, so right-wing freaks spend $40 million to investigate this most heinous of crimes and bring impeachment charges against a president for only the second time in American history. Meanwhile, one of their own admits to trashing the Constitution at every turn and isn’t even investigated, let alone impeached, let alone removed from office.

This same president plunges the world into war on the basis of non-existent weapons of mass destruction in Iraq, but couldn’t be less concerned when North Korea actually goes nuclear on his watch. This president goes to war to bring democracy to the Arab world, but can’t even be bothered to pressure Egypt or Saudi Arabia to move a tad in that direction. This president uses an attack on the US to justify international belligerence and mass human rights violations, but doesn’t seem very interested in even attacking, let alone vanquishing, the supposed perpetrator.

The list of these political out-of-body experiences is as endless as it is absurd. I may not speak Martian very well, but even I can tell you what the look on the face of that little green feller with the antennae means. He’s thinking, “Wow, you humans are the strangest freaks in the galaxy, man!”

Well, actually, it’s not so much the entire species, but mostly just us especially twisted sisters manning the bridge over here in the, uh, world’s only superpower. Bad coincidence, eh? Even we wacky Gringos know that weapons and criminals make a bad combination, as do weapons and lunatics. So, what fool handed us the keys to this planetary oil tanker? Shouldn’t, like, um, the Swedes or the Norwegians be the world’s superpower? They seem harmless enough.

Yep, we could go on and on detailing the ludicrous inanities of American politics in the age of Bush (himself Exhibit A), but really my favorite has to be the case of global warming. In a society devoted like no other to the politics of fear, we have somehow managed to forget the one thing we should probably fear most.

Imagine if there was a meteor headed toward our one and only planet, with the potential to do devastating and possibly lethal damage to the planet. Imagine that we had the technological capability to divert the course of this weapon of the massiest mass destruction, and all we needed was the will to do so. And imagine that we chose to focus our society’s energies instead on … gay marriage. Or illegal immigration. Or premarital sex.

Not only would we screw up all of those policy areas, but we be toast anyhow, along with all our unmarried gays, undocumented workers and ‘virgin’ teenagers (who, have you seen, just become experts at anal and oral sex in order to avoid the forbidden standard kind?). Good lord, this is a society which desperately needs medication! Or maybe that’s the problem, and we desperately need to ditch all the brain-benders of every sort that we imbibe like candy.

Remember Dick Cheney’s ‘one percent doctrine’? He argued that if there’s even a one percent chance of a terrorist attack, you have to go on the offensive. Of course, reality external to the Vice President’s secret location tends to be a bit more nuanced than that, but that’s why everyone calls him Dick, I guess. Anyhow, there’s this little thing called cost-benefit analysis that seems to have gone sorely missing over the last, er, eight years or so. It was last seen flowing down the sewers of Baghdad. It would argue, for example, that yes, you should take threats seriously, but that if the solution to a one percent probability of danger that could threaten the lives of a thousand people is to adopt a policy which definitely kills 100 million of your own citizens, that’s probably a bad plan. Costs and benefits, you see. I mean, people can differ on this, of course, but I’d vote to take the one percent risk in such a case. At a minimum I’d certainly argue that we ought to weight the costs along with the benefits every once in a while. Admittedly, though, that’s not so helpful when you’re in the middle of trying to scare the hell out of people so they’ll vote for you, or acquiesce to your destructive policies.

But I digress. There is a monstrous catastrophe not only headed our way, but actually already here. I’m not a climatologist, but my sense from paying attention to media reporting on this issue over the last two decades is that there is not only a one percent chance that global warming is both real and anthropogenic, but rather a ninety-five percent chance. Perhaps ninety-nine. Yep, sure, there are a few scientists out there still making the opposite argument. Probably some of them even aren’t on oil company payrolls! But the vast majority of reputable climate scientists now agree that this is happening, that we are making it happen, and that the results will be catastrophic. This, after ten and twenty years of a (somewhat) healthy scientific skepticism about those claims, which only further underscores the validity of the findings.

So what will they say about us five centuries from now - those very few, very toasty, remaining humans, living on mountain tops, the only dry land to be found? What they’ll say is probably unprintable in any family newspaper, that’s for sure. But in-between the expletives I think you’d be likely to find words like … “unconscionable” … “breathtakingly stupid” … “astonishingly selfish” … and, “If you weren’t already dead I’d kill you!”

Last week we had James Hansen reminding Congress, twenty years after originally doing so, of the gravity of this situation. One of the top scientists from one of America’s premier science agencies - who was told, by the way, to shut the hell up by the Bush administration - was reminding us yet again that we are facing mass species extinctions and ecosystem collapse among the lovely perils awaiting us if we continue in the current direction. Assuming, that is, that it isn’t already far too late to turn it around now.

Think about that for a second: Mass extinction. Ecosystem collapse. Meteor. Ninety-five or better percent chance.

Gay marriage.

Takes your breath right away, doesn’t it? There are certainly few better ways to underscore the full scope of the regressive nightmare haunting a country that likes to think of itself as the last, best hope of humanity. Fat chance of that. Indeed, we - or at least some of us - half-deserve this fate for choosing the likes of Nixon, Reagan, Bush, DeLay, Scalia and the rest these last decades. It’s the rest of the world I feel especially sorry for. Last, best hope? Jeez, the mercury had already burst out squirting from the top of my irony thermometer seven years ago. Somehow I don’t think so. Well, maybe the ‘last’ part…

And what’s especially killer about this particular issue is the degree to which the multiple maladies and solutions all line up so neatly. Sometimes the cosmos sends you a message in very subtle ways. Other times it beats you over the head with a two-by-four. Occasionally, it detonates a small nuclear device in your backyard swimming pool to get your attention.

We’re very much in the latter category right now. You don’t exactly have to do a full and complete inventory to figure this one out. Here, just take this pop quiz. Quick, now: What factor do all of the following items have in common: massive environmental devastation, skyrocketing transportation and food prices, a declining middle-class with disappearing jobs, and a war-prone and constant calamity-threatening Middle East continually sucking in American military involvement and nightmarishly distorting our foreign policy? (If you’re somehow still struggling with this, you may want to consider spending a little more time catching up with current events. Meanwhile, though, here’s a bonus hint for you: Alan Greenspan described this as the real reason America went to war in Iraq.)

Did you get it?!?! Okay! A+ for you! Now flip it on it’s head. What would be a way in which our society could address the massive threats of global warming, a sinking middle class with lousy jobs, poverty-inducing energy costs and military nightmares in the Middle East, all at once? How about if we made it a giant national priority to wean ourselves off carbon-based energy sources through a variety of policies mixing incentives and regulations, and a huge national effort to develop alternative fuel sources, with all the industrial development and good-paying jobs associated with launching such industries? You know. What did Jimmy Carter call it, thirty freakin’ years ago? “The moral equivalent of war”, wasn’t it? Too bad he was a failed president, though. Hardly invaded any other countries. What could he possibly have known?

Seriously, though, here’s a chance to go from the all-wrong scenario of environmental destruction / energy dependence / Middle East war / horrific gas prices / recession / middle class decline, over to the all-right scenario of sustainability / energy independence / peace / reasonable energy costs / economic development / prosperity - all in one fell swoop. I mean, I know that regressives have a problem with any policies that actually make sense, and I know that Americans are just about the dumbest branch of the homo politicus family tree, but isn’t this a no-brainer so obvious that even people who actually have no brains could figure it out?

So, last week James Hansen reminded us that we are headed for such joyous ‘lifestyle changes’ as mass extinction and ecosystem collapse. Of course, most regressives continued to pooh-pooh such warnings as some sort of liberal conspiracy to undermine capitalism. I must say, these people blow me away with their unflinching and robotic dogmatism. I mean, I get why they insist on the Earth being only 6,000 years old and anything having to do with sex being a major sin. They’re incredibly frightened, and these beliefs bring the existential comfort of order to an otherwise messy and capricious universe. But what’s up with middle class fools ardently supporting tax cuts for the wealthy? Or any human being in the whole world denying the near unanimous testimony of scientific experts regarding a planetary threat, because oil companies told them to do so? Do climatologists seriously strike anybody as crypto-anarchists masquerading as scientists in order to destroy capitalism? (Listen to some regressive kooks talk about global warming and you could easily think so.) And, if that was really their goal, wouldn’t there be a lot easier ways to crash the system than to go spend years getting a PhD, do a bunch of boring research for low pay, and grade a million mind-numbing term papers written by a million grammatically-challenged college sophomores?

Then there’s that pesky little problem of evidence. Every week there’s more, though hardly any quite as egregious as what you could have seen on just a few days ago: “North Pole Could Be Ice-Free This Summer, Scientists Say”. Woo-hoo. No worries there, eh? Now if Adam and Steve get married in California or Massachusetts, that’s something to get worked up about. But the destruction of the Arctic ice cap? We’ve already got polar bears in zoos, so what’s the big damn deal? Prolly it’ll be easier to get to the oil up there without all that ice in the way, anyhow.

What will they say - assuming there are any they left to be saying - in five centuries about us nice folks who managed to bequeath the solar system a second Mercury where a green and fertile planet once stood, just so we could party a little longer? I’m not sure, but I don’t think it will be pretty. And I don’t think it will be, “Well, sure, they weren’t perfect. And, true, they wrecked the whole planet. But at least they kept boys from marrying other boys.”

These regressive fools and their pre-/anti-scientific religious superstitions just kill me.

And that’s just the problem. They’re killing all of us.

Praise the lord.

Echoes of Vietnam: VA Stalls, Dissembles While Vets Suffer and Die

Go to Original
By Penny Coleman

On June 10, U.S. District Judge Samuel Conti ordered the Department of Veterans Affairs back into court. Conti is presiding over a lawsuit brought by veterans against the VA, charging the agency with systematically denying veterans the services and support they so desperately need. Conti demanded that the VA explain why it had failed to produce certain critical (and incriminating) documents.

Among those documents was an e-mail written by the now-infamous Norma Perez. It read: "Given that we have more and more compensation-seeking veterans, I’d like to suggest that you refrain from giving a diagnosis of PTSD straight out. Consider a diagnosis of adjustment disorder, R/O [ruling out] PTSD."

Bob Filner, chairman of the House Veterans Affairs Committee, said it was inconceivable that a low-level staffer like Perez could have written such an e-mail on her own authority. Barack Obama called it "unacceptable" and "tantamount to fraud." John McCain called it "not too important."

Lost somehow in the high-decibel rhetoric of the moment is a historical dimension of this story that I think deserves some attention. This is not the first time the VA has acted as adversary rather than advocate. Thirty years ago, almost to the day, Max Cleland, then head of the VA, circulated an equally directive memo to his staff that read:

In view of the remaining uncertainties on the long-term effects of the defoliants, all VA personnel should avoid premature commitment to any diagnosis of defoliant poisoning. Similarly, entries in medical records should not contain statements about the relationship between a veteran’s illnesses and defoliant exposure unless unequivocal confirmation of such a connection has been established.

(The defoliants Cleland refers to were Agent Orange and other dioxin-based chemicals the United States sprayed over Vietnam.)

In the meantime, Cleland instructed VA staff to deny all Agent Orange claims. He also refused to undertake any kind of epidemiological study because, he claimed, the necessary outreach to veterans would only cause them "needless anxiety."

Then, as now, veterans’ "anxiety" was a hot topic at the VA. In testimony before the Senate Veterans Affairs Committee in February 1980, Cleland justified the agency’s practice of first, and often exclusively, giving veterans with dioxin-related symptoms psychiatric exams. Obviously, he explained to the committee, if "in FY 1979, 46 percent (of veterans) had received care for psychiatric disorders," that proved, ipso facto, that psychiatric care was what they needed. They were suffering from "post-Vietnam syndrome." All their symptoms were in their heads. Veterans tried to sue the VA over its "no health effects" policy, but the agency took the rather astonishing position that veterans had "no standing" to challenge the policies. They were allowed to sue the chemical manufacturers, but not the U.S. government, the entity that bought the poison and ordered it spread -- in concentrations four times that recommended for civilian use and with total disregard for the health and safety of its own soldiers and Vietnamese citizens. Veterans’ lawyers suggested that the VA’s position would lead "to a government of men, not law."

A prescient observation.

In a manner usually associated with totalitarian regimes, veterans were called "crazy" and thus dismissed, stigmatized and silenced. Paul Reutershan, who courageously initiated the class-action lawsuit against the chemical companies in 1978, told a television audience at the time, "My government killed me in Vietnam, and I didn’t even know it." Five months later, Reutershan was permanently silenced when he died of his illnesses. The longer the VA stalled, the more veterans died.

Reutershan was not, however, the original whistleblower. In 1977, Maude DeVictor, a VA caseworker in Chicago, began to notice a pattern of unusual birth defects in Vietnam veterans’ children. She began to keep a log of these cases, at least initially with her supervisors’ permission, accumulating a devastating, if circumstantial, body of evidence suggesting a strong link to dioxin poisoning. Suddenly, without explanation, her boss ordered her to stop. DeVictor decided to go to the media. On March 23, 1978, WBBM, the CBS television affiliate in Chicago, aired an hourlong documentary on the health effects of Agent Orange, including interviews with veterans and scientists. DeVictor was fired from her job and banned from full-time government work.

Which brings us back to today.

Veterans for Common Sense, one of the plaintiffs in the latest lawsuit, called Judge Conti’s recent ruling "an important victory for veterans." And I suppose that it might be, if the VA can be forced to start doing its job. After seven years of preposterous, viciously cruel and far-too-often lethal gamesmanship, it would feel good to see the bad guys slapped around -- even just a little bit. And the fallout from such a court order, if one could be made binding, would certainly ease the betrayal and perhaps even the suffering of veterans. It might also help convince Americans that our big-stick militarism is a far more expensive solution to our international problems than they have been led to believe.

But what has really changed?

I find it deeply ironic that the very physical effects of dioxin were once dismissed as merely psychological, not compensable service-connected injuries. With the inclusion of posttraumatic stress disorder in the Diagnostic and Statistical Manual of Mental Disorders, such psychic injuries are acknowledged, yet the VA is still using the same tools of denial and obfuscation to refuse treatment to injured vets. The agency has proven itself over time to be far more committed to protecting the bottom line for "a government of men" than to protecting its rightful charges. Perhaps if the agency were no longer the fiefdom of political appointees, its policies would not be so predictably callous and politically expedient.

And where are the Maude DeVictors in this generation’s VA? How is it that policies are set and directives come down from above, stinking of injustice, and yet a staff that, at least in my experience, is largely made up of honorable, compassionate professionals carries them out without protest? Since this generation of soldiers began coming home, psychically injured in numbers never seen (or acknowledged?) before, a steadily increasing number of reports accuses the agency of everything from indifference to gross medical malfeasance. That’s corporate for "murder." The VA may be tantamount to a corporation, but those who individually carry out those policies and directives have also chosen. Like Maude DeVictor, they could have said no.

On the entrance to the Washington, D.C., headquarters of the Department of Veterans Affairs is a metal plaque that bears these words, taken from Abraham Lincoln’s second inaugural address: "To care for him who shall have borne the battle and for his widow, and his orphan."

That plaque is an affront and an offense to those who have been so heartlessly treated, and someone should order it taken down. Or, maybe it’s time to take matters into our own hands. Maybe, to paraphrase Abbie Hoffman, it’s time to steal this plaque.

Penny Coleman is the widow of a Vietnam veteran who took his own life after coming home. Her latest book, Flashback: Posttraumatic Stress Disorder, Suicide, and the Lessons of War, was released on Memorial Day 2006. Her website is Flashback.

Bush-Led 'Disaster Capitalism' Exploits Worldwide Misery to Make a Buck

Go to Original
By Naomi Klein

Once oil passed $140 a barrel, even the most rabidly right-wing media hosts had to prove their populist cred by devoting a portion of every show to bashing Big Oil. Some have gone so far as to invite me on for a friendly chat about an insidious new phenomenon: "disaster capitalism." It usually goes well -- until it doesn’t.

For instance, "independent conservative" radio host Jerry Doyle and I were having a perfectly amiable conversation about sleazy insurance companies and inept politicians when this happened: "I think I have a quick way to bring the prices down," Doyle announced. "We’ve invested $650 billion to liberate a nation of 25 million people. Shouldn’t we just demand that they give us oil? There should be tankers after tankers backed up like a traffic jam getting into the Lincoln Tunnel, the Stinkin’ Lincoln, at rush hour with thank-you notes from the Iraqi government ... . Why don’t we just take the oil? We’ve invested it liberating a country. I can have the problem solved of gas prices coming down in ten days, not ten years."

There were a couple of problems with Doyle’s plan, of course. The first was that he was describing the biggest stickup in world history. The second, that he was too late: "We" are already heisting Iraq’s oil, or at least are on the cusp of doing so.

It’s been ten months since the publication of my book The Shock Doctrine: The Rise of Disaster Capitalism, in which I argue that today’s preferred method of reshaping the world in the interest of multinational corporations is to systematically exploit the state of fear and disorientation that accompanies moments of great shock and crisis. With the globe being rocked by multiple shocks, this seems like a good time to see how and where the strategy is being applied.

And the disaster capitalists have been busy -- from private firefighters already on the scene in Northern California’s wildfires, to land grabs in cyclone-hit Burma, to the housing bill making its way through Congress. The bill contains little in the way of affordable housing, shifts the burden of mortgage default to taxpayers and makes sure that the banks that made bad loans get some payouts. No wonder it is known in the hallways of Congress as "The Credit Suisse Plan," after one of the banks that generously proposed it.

Iraq Disaster: We Broke It, We (Just) Bought It

But these cases of disaster capitalism are amateurish compared with what is unfolding at Iraq’s oil ministry. It started with no-bid service contracts announced for ExxonMobil, Chevron, Shell, BP and Total (they have yet to be signed but are still on course). Paying multinationals for their technical expertise is not unusual. What is odd is that such contracts almost invariably go to oil service companies -- not to the oil majors, whose work is exploring, producing and owning carbon wealth. As London-based oil expert Greg Muttitt points out, the contracts make sense only in the context of reports that the oil majors have insisted on the right of first refusal on subsequent contracts handed out to manage and produce Iraq’s oil fields. In other words, other companies will be free to bid on those future contracts, but these companies will win.

One week after the no-bid service deals were announced, the world caught its first glimpse of the real prize. After years of back-room arm-twisting, Iraq is officially flinging open six of its major oil fields, accounting for around half of its known reserves, to foreign investors. According to Iraq’s oil minister, the long-term contracts will be signed within a year. While ostensibly under control of the Iraq National Oil Company, foreign firms will keep 75 percent of the value of the contracts, leaving just 25 percent for their Iraqi partners.

That kind of ratio is unheard of in oil-rich Arab and Persian states, where achieving majority national control over oil was the defining victory of anticolonial struggles. According to Muttitt, the assumption until now was that foreign multinationals would be brought in to develop brand-new fields in Iraq -- not to take over ones that are already in production and therefore require minimal technical support. "The policy was always to allocate these fields to the Iraq National Oil Company," he told me. This is a total reversal of that policy, giving INOC a mere 25 percent instead of the planned 100 percent.

So what makes such lousy deals possible in Iraq, which has already suffered so much? Ironically, it is Iraq’s suffering -- its never-ending crisis -- that is the rationale for an arrangement that threatens to drain its treasury of its main source of revenue. The logic goes like this: Iraq’s oil industry needs foreign expertise because years of punishing sanctions starved it of new technology and the invasion and continuing violence degraded it further. And Iraq urgently needs to start producing more oil. Why? Again because of the war. The country is shattered, and the billions handed out in no-bid contracts to Western firms have failed to rebuild the country. And that’s where the new no-bid contracts come in: they will raise more money, but Iraq has become such a treacherous place that the oil majors must be induced to take the risk of investing. Thus the invasion of Iraq neatly creates the argument for its subsequent pillage.

Several of the architects of the Iraq War no longer even bother to deny that oil was a major motivator. On National Public Radio’s To the Point, Fadhil Chalabi, one of the primary Iraqi advisers to the Bush Administration in the lead-up to the invasion, recently described the war as "a strategic move on the part of the United States of America and the UK to have a military presence in the Gulf in order to secure [oil] supplies in the future." Chalabi, who served as Iraq’s oil under secretary and met with the oil majors before the invasion, described this as "a primary objective."

Invading countries to seize their natural resources is illegal under the Geneva Conventions. That means that the huge task of rebuilding Iraq’s infrastructure -- including its oil infrastructure -- is the financial responsibility of Iraq’s invaders. They should be forced to pay reparations. (Recall that Saddam Hussein’s regime paid $9 billion to Kuwait in reparations for its 1990 invasion.) Instead, Iraq is being forced to sell 75 percent of its national patrimony to pay the bills for its own illegal invasion and occupation.

Oil Price Shock: Give Us the Arctic or Never Drive Again

Iraq isn’t the only country in the midst of an oil-related stickup. The Bush Administration is busily using a related crisis -- the soaring price of fuel -- to revive its dream of drilling in the Arctic National Wildlife Refuge (ANWR). And of drilling offshore. And in the rock-solid shale of the Green River Basin. "Congress must face a hard reality," said George W. Bush on June 18. "Unless members are willing to accept gas prices at today’s painful levels -- or even higher -- our nation must produce more oil."

This is the President as Extortionist in Chief, with gas nozzle pointed to the head of his hostage -- which happens to be the entire country. Give me ANWR, or everyone has to spend their summer vacations in the backyard. A final stickup from the cowboy President.

Despite the Drill Here. Drill Now. Pay Less bumper stickers, drilling in ANWR would have little discernible impact on actual global oil supplies, as its advocates well know. The argument that it could nonetheless bring down oil prices is based not on hard economics but on market psychoanalysis: drilling would "send a message" to the oil traders that more oil is on the way, which would cause them to start betting down the price.

Two points follow from this approach. First, trying to psych out hyperactive commodity traders is what passes for governing in the Bush era, even in the midst of a national emergency. Second, it will never work. If there is one thing we can predict from the oil market’s recent behavior, it is that the price is going to keep going up regardless of what new supplies are announced.

Take the massive oil boom under way in Alberta’s notorious tar sands. The tar sands (sometimes called the oil sands) have the same things going for them as Bush’s proposed drill sites: they are nearby and perfectly secure, since the North American Free Trade Agreement contains a provision barring Canada from cutting off supply to the United States. And with little fanfare, oil from this largely untapped source has been pouring into the market, so much so that Canada is now the largest supplier of oil to the United States, surpassing Saudi Arabia. Between 2005 and 2007, Canada increased its exports to the States by almost 100 million barrels. Yet despite this significant increase in secure supplies, oil prices have been going up the entire time.

What is driving the ANWR push is not facts but pure shock doctrine strategy -- the oil crisis has created the conditions in which it is possible to sell a previously unsellable (but highly profitable) policy.

Food Price Shock: Genetic Modification or Starvation

Intimately connected to the price of oil is the global food crisis. Not only do high gas prices drive up food costs but the boom in agrofuels has blurred the line between food and fuel, pushing food growers off their land and encouraging rampant speculation. Several Latin American countries have been pushing to re-examine the push for agrofuels and to have food recognized as a human right, not a mere commodity. United States Deputy Secretary of State John Negroponte has other ideas. In the same speech touting the US commitment to emergency food aid, he called on countries to lower their "export restrictions and high tariffs" and eliminate "barriers to use of innovative plant and animal production technologies, including biotechnology." This was an admittedly more subtle stickup, but the message was clear: impoverished countries had better crack open their agricultural markets to American products and genetically modified seeds, or they could risk having their aid cut off.

Genetically modified crops have emerged as the cureall for the food crisis, at least according to the World Bank, the European Commission president (time to "bite the bullet") and Prime Minister of Britain Gordon Brown. And, of course, the agribusiness companies. "You cannot today feed the world without genetically modified organisms," Peter Brabeck, chairman of Nestlé, told the Financial Times recently. The problem with this argument, at least for now, is that there is no evidence that GMOs increase crop yields, and they often decrease them.

But even if there was a simple key to solving the global food crisis, would we really want it in the hands of the Nestlés and Monsantos? What would it cost us to use it? In recent months Monsanto, Syngenta and BASF have been frenetically buying up patents on so-called "climate ready" seeds -- plants that can grow in earth parched from drought and salinated from flooding.

In other words, plants built to survive a future of climate chaos. We already know the lengths Monsanto will go to protect its intellectual property, spying on and suing farmers who dare to save their seeds from one year to the next. We have seen patented AIDS medications fail to treat millions in sub-Saharan Africa. Why would patented "climate ready" crops be any different?

Meanwhile, amid all the talk of exciting new genetic and drilling technologies, the Bush Administration announced a moratorium of up to two years on new solar energy projects on federal lands -- due, apparently, to environmental concerns. This is the final frontier for disaster capitalism. Our leaders are failing to invest in technology that will actually prevent a future of climate chaos, choosing instead to work hand in hand with those plotting innovative schemes to profit from the mayhem.

Privatizing Iraq’s oil, ensuring global dominance for genetically modified crops, lowering the last of the trade barriers and opening the last of the wildlife refuges ... Not so long ago, those goals were pursued through polite trade agreements, under the benign pseudonym "globalization." Now this discredited agenda is forced to ride on the backs of serial crises, selling itself as lifesaving medicine for a world in pain.