Friday, December 19, 2008

Blackwater Might Lose License to Work in Iraq

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The State Department faces serious challenges protecting U.S. diplomats in Iraq and may no longer be able to rely on Blackwater Worldwide to do the job, according to an internal report.

A report from the department's inspector general says the agency must deal with the prospect that Blackwater -- its main private security contractor in Iraq -- could lose its license to work in Iraq. Officials say that means preparing alternative arrangements.

''The department faces the real possibility that one of its primary worldwide personal protective services contractors in Iraq -- Blackwater (Worldwide) -- will not receive a license to continue operating in Iraq,'' the recently completely report says.

A copy of the 42-page report, labeled ''sensitive but unclassified,'' was obtained by The Associated Press on Wednesday.

Officials said the report is a prelude to a decision on whether to renew Blackwater's Iraq contract, which expires next year. A recommendation on that is expected after an investigation is completed into last September's incident in Baghdad's Nisoor Square in which Blackwater guards killed 17 Iraqis, they said, requesting anonymity because the report is not public.

Five Blackwater guards have been indicted by a U.S. federal grand jury on manslaughter and other charges stemming from that incident. The company was not charged.

The State Department had no immediate comment on the report itself, but deputy spokesman Robert Wood said that after the Nisoor Square probe is finished, officials would look at ''whether the continued use of Blackwater in Iraq is consistent with the U.S. government's goals and objectives.''

A decision on how U.S. diplomats in Iraq are to be protected will be left to the Obama administration, which will be in place when Blackwater's contract comes up for renewal in spring.

Sen. John Kerry, D-Mass., the incoming chairman of the Senate Foreign Relations Committee and a longtime critic of Blackwater and the use of private security companies, welcomed the report and said, ''The era of Blackwater must finally end.''

''It will benefit the incoming administration to have reassurance from the State Department that Blackwater's contract should be seriously questioned, but it's disheartening that it took 15 months from a tragedy in Baghdad for the Bush administration to reach an overdue conclusion,'' Kerry said.

Sen. Bob Casey, D-Pa., a member of the Foreign Relations committee, said that without preparing for the possibility of Blackwater losing its license, ''our overreliance on this one company for protective services in Iraq will place our diplomats in a difficult position.''

It is not clear how the State Department would replace Blackwater. The department relies heavily on contractors to protect its diplomats in Iraq, as it does not have the manpower or equipment to do so. No other private security contractor has the North Carolina-based firm's range of resources, particularly its fleet of helicopters and planes.

The report suggests that one way to fill the void would be for the State Department's Diplomatic Security Service to beef up its presence in Iraq.

Secretary of State Condoleezza Rice ordered a review of the department's use of private security firms after the Nisoor Square incident. The inspector general's report is an analysis of how recommendations in that review have been implemented.

Blackwater spokeswoman Anne Tyrrell declined to comment, saying the company has not yet seen the report. The company has said in the past, though, that it plans to largely get out of the security contracting business to concentrate on training and other projects.

Blackwater has won more than $1 billion in government contracts under the Bush administration, a large portion of which has been for work in Iraq, where its duties include guarding diplomats based at the U.S. Embassy in Baghdad.

Separately, the State Department on Wednesday issued new regulations to boost its monitoring of how Blackwater exports sensitive equipment, such as guns and ammunition. The new rules force Blackwater and its affiliates to file extra paperwork and progress reports.

The department said the oversight, which took effect earlier this month, is necessary to ensure that Blackwater ''is both capable and willing'' to comply with U.S. export laws. Blackwater has acknowledged that it made numerous mistakes with exports over the years and has established a panel of experts to ensure it follows the law.

Federal prosecutors have probed how Blackwater handled its arms shipments to Iraq. The company has denied accusations it is smuggling guns and argues that most of its violations have been failures of paperwork and timeliness.

Will War Crimes Be Outed?

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By Jeremy Brecher & Brendan Smith

As the officials of the Bush administration pack up in Washington and move into their posh suburban homes around the country, will they be able to rest easy, or will they be haunted by the fear that they will be held accountable for war crimes?

There are many reasons to anticipate that the incoming Obama administration and the new Congress will let sleeping dogs lie. Attention to criminal acts by the former administration would probably anger Republicans, whose support Obama is hoping to win for his first priority, his economic program. Democratic Congressional leaders have known a great deal about Bush administration lawlessness, and in some cases have even given it their approval--making an unfettered review seem unlikely.

Some of Obama's own top appointees would undoubtedly receive scrutiny in an unconstrained investigation--Obama's reappointed defense secretary Robert Gates, for example, has had responsibility not only for Guantánamo but also for the incarceration of tens of thousands of Iraqis in prisons in Iraq like Camp Bucca, which the Washington Post described in a headline as "a Prison Full of Innocent Men," without even a procedure for determining their guilt or innocence--unquestionably a violation of the Geneva Conventions in and of itself.

But the repose of the Cheneys, Bushes, Gonzaleses and Rumsfelds may not turn out to be so undisturbed. In his notorious torture memo, Alberto Gonzales warned about "prosecutors and independent counsels" who may in the future decide to pursue "unwarranted charges" based on the US War Crimes Act's prohibition on violations of the Geneva Conventions. While no such charges are likely to be brought anytime soon, neither are they likely to vanish. In the short run, Obama and his team face inescapable questions about the legal culpability of the Bush administration. And in the long run, such charges are likely to grow only more unavoidable once the former officials of that administration have lost the authority to quash them.

In April Obama said that if elected, he would have his attorney general initiate a prompt review of Bush-era action to distinguish between possible "genuine crimes" and "really bad policies."

"If crimes have been committed, they should be investigated," Obama told the Philadelphia Daily News. He added, however, that "I would not want my first term consumed by what was perceived on the part of Republicans as a partisan witch hunt, because I think we've got too many problems we've got to solve."

Obama's nominee for attorney general, Eric Holder, speaking to the American Constitution Society in June, described Bush administration actions in terms that sound a whole lot more like "genuine crimes" than like "really bad policies":

Our government authorized the use of torture, approved of secret electronic surveillance against American citizens, secretly detained American citizens without due process of law, denied the writ of habeas corpus to hundreds of accused enemy combatants and authorized the use of procedures that violate both international law and the United States Constitution.... We owe the American people a reckoning."

A Reckoning?

While attention has focused on whether, once president, Obama will move quickly to close Guantánamo, shut down secret prisons, halt rendition and ban torture, there's a less visible struggle over whether and how to provide a reckoning for war crimes past.

A growing body of legal opinion holds that Obama will have a duty to investigate war crimes allegations and, if they are found to have merit, to prosecute the perpetrators.

In a December 3 Chicago Sun-Times op-ed, law professors Anthony D'Amato (the Leighton Professor at Northwestern University School of Law) and Jordan J. Paust (the Mike & Thersa Baker Professor at the Law Center of the University of Houston) ask whether president-elect Barack Obama will have "the duty to prosecute or extradite persons who are reasonably accused of having committed and abetted war crimes or crimes against humanity during the Bush administration's admitted 'program' of 'coercive interrogation' and secret detention that was part of a 'common, unifying' plan to deny protections under the Geneva Conventions."

They answer, "Yes."

"Under the US Constitution, the president is expressly and unavoidably bound to faithfully execute the laws." The 1949 Geneva Conventions "expressly and unavoidably requires that all parties search for perpetrators of grave breaches of the treaty" and bring them before their own courts for "effective penal sanctions" or, if they prefer, "hand such persons over for trial to another High Contracting Party."

The statement is particularly authoritative--and particularly striking--because Paust is also a former captain in the United States Army JAG Corps and member of the faculty at the Judge Advocate General's School.

Michael Ratner of the Center for Constitutional Rights says that one of Barack Obama's first acts as president should be to "instruct his attorney general to appoint an independent prosecutor to initiate a criminal investigation of former Bush Administration officials who gave the green light to torture."

Parallel to the legal community, members of Congress and president-elect Obama are trying to chart a strategy that avoids the appearance of seeking to punish Bush administration officials without appearing blatantly oblivious to their apparent war crimes. According to the AP's Lara Jakes Jordan, "Two Obama advisors say there's little--if any--chance that the incoming president's Justice Department will go after anyone involved in authorizing or carrying out interrogations that provoked worldwide outrage." Instead, "Obama is expected to create a panel modeled after the 9/11 Commission to study interrogations, including those using waterboarding and other tactics that critics call torture."

Asked if Bush administration officials would face prosecution for war crimes, Senate Judiciary Chairman Patrick Leahy flatly said, "In the United States, no," but he does intend to continue to investigate Bush administration officials and their interrogation policies. "Personally, I would like to know exactly what happened. Torture is going to be a major issue."

Continue the Cover-Up?

President-elect Obama may well seek to delay taking a stand for or against such accountability actions. But he is likely to be confronted early in his administration by choices about whether to continue or terminate legal cover-up operations the Bush administration currently has under way.

For example, the Bush administration has blocked the civil suit against US officials by Canadian Maher Arar for his "rendition" to Syria and his torture there by invoking the "state secrets" privilege. According to Christopher Anders, senior legislative counsel for the ACLU, they have appointed a prosecutor to investigate the destruction of videotapes of CIA interrogations, but the investigation is limited only to whether crimes were committed in relation to the destruction of the tapes--not whether what was being videotaped is a crime. The administration has refused to cooperate with the trial of twenty-six Americans, mostly CIA agents, who kidnapped a terrorism suspect in Milan and flew him to Egypt where, he says, he was tortured. And they have refused to provide secret documents to the British High Court in the case of Guantánamo detainee Binyam Mohamed that may demonstrate that US officials were complicit in his torture in Morocco.

If the Obama administration continues the Bush administration's efforts to prevent investigators from investigating and courts from hearing such cases, it will rapidly become part of the cover-up. If it begins to, at a minimum, stop obstructing such proceedings, the result could be a rapid crumbling of the wall of silence the Bush administration has tried so assiduously to build around its "war on terror."

A bipartisan report issued by the Senate Armed Services Committee on December 11 will make it far more difficult to evade the responsibility of holding Bush administration officials legally accountable for war crimes. Released by Senators Carl Levin and John McCain after two years of investigation, the report concluded:

The abuse of detainees in US custody cannot simply be attributed to the actions of 'a few bad apples' acting on their own.... The fact is that senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality, and authorized their use against detainees.... Secretary of Defense Donald Rumsfeld's authorization of aggressive interrogation techniques for use at Guantánamo Bay was a direct cause of detainee abuse there.

In an interview published in the Detroit News, Senator Levin said he was not responsible for deciding whether officials should be prosecuted for authorizing torture, but he admitted that there is enough evidence that victims of abuse could file civil lawsuits against their assailants. Levin also suggested that the Obama administration "needs to look for ways in which people can be held accountable for their actions."

An Accountability Movement

Outside the Beltway, a movement to hold Bush administration officials accountable for torture and other war crimes after they leave office is gradually emerging. It received a boost when over a hundred lawyers and activists met in Andover, Massachusetts on September 20 at a conference entitled "Planning for the Prosecution of High Level American War Criminals." The conference created an ongoing committee to coordinate accountability efforts. At the close, conference convener Dean Lawrence Velvel of the Massachusetts School of Law noted more than twenty strategies and specific actions that had been proposed, ranging from the state felony prosecutions proposed by former district attroney Vincent Bugliosi to the international prosecutions pioneered by the Center for Constitutional Rights' Rumsfeld cases; and from impeaching Bush appointees like Federal Judge Jay Bybee to public shaming of torture-tainted former officials like ohn Yew, now a professor at the University of California Law School.

One of proposals discussed at the Andover conference was the creation of a citizens' War Crimes Documentation Center, modeled on the special office set up by the Allied governments before the end of World War II to investigate and document Nazi war crimes. Such a center could be the nexus for research, education and coordination of a wide range of civil society forces in the US and abroad that are demanding accountability. It could bring together the extensive but scattered evidence already available, to compile a narrative of what actually happened in the Bush administration. It could help or pressure Congress to conduct investigations to fill in the blanks. It could pull together high-profile coalitions to campaign around the issue of accountability for specific crimes like torture. If Obama does initiate some kind of investigating commission, such a center could provide it with information and help hold it accountable.

A Moral Education

There are a myriad of reasons for urgently holding the Bush regime to account, ranging from preventing unchallenged executive action from setting new legal precedent to providing a compelling rationale for the immediate cessation of bombing civilians in the escalating Afghan war.

But the issue raised by Bush administration war crimes is even larger than any person's individual crimes. As Thomas Paine wrote in Common Sense, "A long habit of not thinking a thing wrong gives it a superficial appearance of being right." The long history of aggressive war, illegal occupation, and torture, from the Philippines to Iraq, have given the American people a moral education that encourages us to countenance war crimes. If we allow those who initiated and justified the illegal conquest and occupation of Iraq and the use of torture at Abu Ghraib and Guantánamo to go unsanctioned, we teach the world--and ourselves--a lesson about what's OK and legal.

As countries like Chile, Turkey and Argentina can attest, restoration of democracy, civic morality and the rule of law is often a slow but necessary process, requiring far more than simply voting a new party into office. It requires a wholesale rejection of impunity for the criminal acts of government officials. As Rep. Robert Wexler (D-FL) put it, "We owe it to the American people and history to pursue the wrongdoing of this administration whether or not it helps us politically.... Our actions will properly define the Bush Administration in the eyes of history."

Bush throws lifeline to U.S. auto industry

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By Jeremy Pelofsky and John Crawley

President George W. Bush announced $17.4 billion (11.6 billion pounds) in emergency loans to faltering U.S. carmakers on Friday in a dramatic step to stave off collapse of the industry and save hundreds of thousands of jobs from falling victim to a deep recession.

Bush, seeking to bolster his legacy and bucking some fellow Republicans who would prefer the car industry to deal with its problems without government aid, said it would be irresponsible in a time of economic crisis to let carmakers die.

The government will offer up to $17.4 billion in loans to the U.S. carmakers, reeling from a slump in consumer demand, and expects General Motors and Chrysler LLC to access the money immediately. The White House said the loan agreements had been signed.

Ford Motor Co, the other firm in Detroit's storied Big Three, said its liquidity is adequate for now and it did not need a loan at this point.

"If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers," Bush said, warning that to do nothing would deepen and prolong the U.S. recession.

U.S. stocks rose on the news of the lifeline to the sector, with GM shares jumping 10.9 percent.

Some $13.4 billion of the total package will be made available in December and January from a $700 billion Wall Street bailout fund that was originally designed to rescue struggling financial institutions.

Bush attached a string of conditions to the three-year loans and set a deadline of March 31 for the companies to prove they can restructure enough to ensure their survival or have the loans called back.

Democratic President-elect Barack Obama, who takes over from Bush on January 20 and so will inherit the handling of the deal, welcomed the loan move as a necessary step. But he said he wanted to make sure workers do not bear the brunt of the restructuring.

"My top priority in this administration is to create 2.5 million new jobs and I want some of those jobs to be in the auto industry," Obama said at a news conference.

Obama has been calling for short-term loans to the sector based on steps towards long-term viability.

Labour TERMS

Other Democrats and the main auto labour union assailed the deal as unfair, saying workers were going to have to concede too much.

One provision in the loan terms on worker pay brought protests from the United Auto Workers union, and then a change in wording by the U.S. Treasury. The Treasury altered the wording of the terms for automakers to seek reductions in wages and benefits to levels "competitive with" Japanese rivals.

Under wording released earlier in the day, the Treasury said it would require reductions to levels "equal to" average compensation paid per hour and employee by Toyota Motor Corp, Nissan Motor Co and Honda Motor Corp in the United States.

The change was described as a correction of a grammatical error by a Treasury spokeswoman.

GM's CEO, Rick Wagoner, said the company would now focus on fully implementing its restructuring plan and was confident of meeting the government's requirements.

Chrysler, widely seen as the weakest of the Big Three, said concessions would happen quickly and it would continue to undertake "significant cost reductions."

Private equity firm Cerberus said in a statement it would use the first $2 billion of proceeds from Chrysler's auto financing arm Chrysler Financial to backstop the government loan allocated to its struggling Chrysler car making unit.

Ford, while not seeking an immediate loan under the program, has said it would like a line of credit from the government only to be used if its finances worsen significantly in 2009.

Analysts noted the automakers' woes were far from over.

"It's a lifeline, but it doesn't get them completely out of the woods. It takes them (GM and Chrysler) forward until March. Basically the next administration has to deal with it." said Erich Merkle, an analyst with Crowe Horwath in Michigan, of the loan package news.


Some Republicans opposed to bailing out Detroit were dismayed at the loan package.

"I find it unacceptable that we would leave the American taxpayer with a tab of tens of billions of dollars while failing to receive any serious concessions from the industry," said Arizona Repubican Sen. John McCain, who lost the presidential election to Obama on November 4.

The White House presented a dire picture if it did not act, saying that if the auto industry were to collapse, it could reduce U.S. economic growth by more than 1 percent, put about 1.1 million workers out of jobs and cost some $13 billion in new unemployment claims.

The White House moved on its own after Republicans in the Democratic-controlled U.S. Congress stalled a deal last week. That plan followed weeks of negotiations that included desperate pleas on Capitol Hill from the auto chiefs.

The loan conditions included limits on executive compensation. Auto companies must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. The automakers would also have to provide warrants for non-voting stocks.


Both GM and Chrysler have said a bankruptcy filing is not an option they would chose because of the risk that it would drive more consumers away from their brands. Both have idled plants and laid off thousands of workers across North America.

A bankruptcy filing by one company could topple suppliers and endanger the remaining two companies because of the overlap in their key parts suppliers.

The Treasury said the move to help the automakers had effectively exhausted the initial $350 billion of the Wall Street bailout funds approved by Congress and that it now needs to access the rest of the $700 billion.

The remaining $4 billion in autos aid is contingent on the administration seeking the second half of the Troubled Asset Relief Program, an administration official said.

The loans would have an interest rate of at least 5 pct but could rise to 10 pct if the carmakers default, officials said.

In a ripple from the U.S. autos slump, Mexican conglomerate Alfa said on Friday it was temporarily halting production at its nine auto parts plants in Mexico that supply U.S. carmakers.

No automakers have been spared in the global sales slump.

Japan's Toyota Motor Corp could report its first annual parent-only operating loss in 71 years in the year to end-March, and may issue a profit warning at a scheduled year-end news conference on Monday, Japanese media reported.

Toyota, which declined to comment on the reports, last saw an operating loss in its first year of operation in 1937/38.

Japan's carmakers are also feeling the pinch from a strong yen.

In perhaps the strongest protest since the dollar soared to a 13-year high recently, Honda Motor Co CEO Takeo Fukui warned a strong yen would cripple Japanese industry and trigger mass layoffs, forcing the automaker to shift production offshore if it persisted.

Canadian Prime Minister Stephen Harper was set to announce an aid package for his country's auto industry on Saturday. That aid could amount to several billion dollars.

U.S. Military Defiant on Key Terms of Iraqi Pact

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By Gareth Porter

U.S. military leaders and Pentagon officials have made it clear through public statements and deliberately leaked stories in recent weeks that they plan to violate a central provision of the U.S.-Iraq withdrawal agreement requiring the complete withdrawal of all U.S. combat troops from Iraqi cities by mid-2009 by reclassifying combat troops as support troops.

The scheme to engage in chicanery in labeling U.S. troops represents both open defiance of an agreement which the U.S. military has never accepted and a way of blocking President-elect Barack Obama's proposed plan for withdrawal of all U.S. combat troops from Iraq within 16 months of his taking office.

By redesignating tens of thousands of combat troops as support troops, those officials apparently hope to make it difficult, if not impossible, for Obama to insist on getting all combat troops of the country by mid-2010.

Gen. David Petraeus, now commander of CENTCOM, and Gen. Ray Odierno, the top U.S. commander in Iraq, who opposed Obama's 16-month withdrawal plan during the election campaign, have drawn up their own alternative withdrawal plan rejecting that timeline, as the New York Times reported Thursday. That plan was communicated to Obama in general terms by Secretary of Defence Robert M.Gates and Chairman of the Joint Chiefs of Staff Admiral Mike Mullen when he met with his national security team in Chicago on Dec. 15, according to the Times.

The determination of the military leadership to ignore the U.S.-Iraq agreement and to pressure Obama on his withdrawal policy was clear from remarks made by Mullen in a news conference on Nov. 17 -- after U.S. Ambassador Ryan Crocker had signed the agreement in Baghdad.

Mullen declared that he considered it "important" that withdrawal of U.S. forces from Iraq "be conditions-based". That position directly contradicted the terms of the agreement, and Mullen was asked whether the agreement required all U.S. troops to leave Iraq by the end of 2011, regardless of the security conditions. He answered "Yes," but then added, "Three years is a long time. Conditions could change in that period of time..."

Mullen said U.S. officials would "continue to have discussions with them over time, as conditions continue to evolve", and said that reversing the outcome of the negotiations was "theoretically possible".

Obama's decision to keep Gates, who was known to be opposed to Obama's withdrawal timetable, as defence secretary confirmed the belief of the Pentagon leadership that Obama would not resist the military effort to push back against his Iraq withdrawal plan. A source close to the Obama transition team has told IPS that Obama had made the decision for a frankly political reason. Obama and his advisers believed the administration would be politically vulnerable on national security and viewed the Gates nomination as a way of blunting political criticism of its policies.

The Gates decision was followed immediately by the leak of a major element in the military plan to push back against a 16-month withdrawal plan -- a scheme to keep U.S. combat troops in Iraqi cities after mid-2009, in defiance of the terms of the withdrawal agreement.

The New York Times first revealed that "Pentagon planners" were proposing the "relabeling" of U.S. combat units as "training and support" units in a Dec. 4 story. The Times story also revealed that Pentagon planners were projecting that as many as 70,000 U.S. troops would be maintained in Iraq "for a substantial time even beyond 2011", despite the agreement's explicit requirement that all U.S. troops would have to be withdrawn by then.

Odierno provided a further hint Dec. 13 that the U.S. military intends to ignore the provision of the agreement requiring withdrawal of all U.S. combat troops from cities and towns by the end of May 2009. Odierno told reporters flatly that U.S. troops would not move from numerous security posts in cities beyond next summer's deadline for their removal, saying "We believe that's part of our transition teams."

His spokesman, Lt. Col. James Hutton, explained that these "transition teams" would consist of "enablers" rather than "combat forces", and that this would be consistent with the withdrawal agreement.

But both Odierno's and Hutton's remarks were clearly based on the Pentagon plan for the "relabeling" of U.S. combat forces as support forces in order to evade a key constraint in the pact that the Times had reported earlier. In an article in The New Republic dated Dec. 24, Eli Lake writes that three military sources told him that the U.S. "Military Transition Teams", which who have been fighting alongside Iraqi units, as well as force-protection units and "quick-reaction forces", are all being redesignated as "support units", despite their obvious combat functions, "in order to skirt the language of the SOFA [status of forces agreement]".

U.S. commanders have not bothered to claim that this is anything but a semantic trick, since the redesignated units would continue to participate in combat patrols, as confirmed by New York Times reporters Elisabeth Bumiller and Thom Shanker Thursday.

The question of whether Iraqis would permit such "relabeled" combat forces to remain after next June was discussed with Obama on Monday, according to the Times report. One participant reportedly said Gates and Mullen "did not rule out the idea that Iraqis might permit such troops..."

Despite Odierno's assertion of the U.S. military's prerogative to unilaterally determine what U.S. troops may remain Iraqi cities, the Iraqi government has already made it clear that the U.S. military has no such right. Defence Ministry spokesman Maj. Gen. Mohammed al Askari, responded to Odierno's and Hutton's statements by saying that U.S. commanders would have to get permission from the Iraqi government to station any non-combat troops in cities beyond the deadline.

The signals from Odierno of U.S. military defiance of the withdrawal agreement suggest that the Pentagon and military leadership still do not take seriously the views of the Iraqi public as having any role in determining the matter of foreign troops in their country. Nevertheless, the withdrawal agreement is still subject to a popular referendum next July, and Iraqi politicians have already warned that evidence of U.S. refusal to abide by its terms will affect the outcome of that vote.

Washington Post reporters quoted Sunni legislator Shata al-Obusi as saying that Iraqis "will see this procrastination and they will vote no against the agreement, and after that the government should cancel it according to its provision".

Beyond the aim of getting Obama to abandon his 16-month plan, the military and Pentagon group still hopes to pressure Obama to agree to a long-term U.S. military presence in Iraq.

Further evidence emerged last week that Gates is a central figure in that effort. In a Washington Post column Dec. 11, George Will quoted Gates as saying that there is bipartisan congressional support for "a long-term residual presence" of as many as 40,000 U.S. troops in Iraq, and such a presence for "decades" has been the standard practice following "major U.S. military operations" since the beginning of the Cold War.

Those statements evidently represent part of the case Gates, Mullen and the military commanders are already making behind the scenes to get Obama to acquiesce in the subversion of the intent of the U.S.-Iraq agreement.

*Gareth Porter is an investigative historian and journalist specialising in U.S. national security policy. The paperback edition of his latest book, "Perils of Dominance: Imbalance of Power and the Road to War in Vietnam", was published in 2006.

New rules will ease farm hiring, affect wages

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By Tyche Hendricks

The U.S. Department of Labor announced new rules Thursday that would make it easier for farming companies to hire foreign guest workers and would change the way their wages are set, potentially lowering farmworker pay.

The regulations were condemned by labor, farmworker and immigrant advocates, who said they would worsen wages and working conditions for both U.S. agricultural workers and temporary guest workers.

Representatives of the farming industry, which had worked with the Bush administration to change the rules, voiced optimism that the program would be less burdensome and more attractive to use. Fewer than 10 percent of U.S. farmworkers are believed to be employed under the H-2A program.

A Department of Labor statement issued Thursday describing the changes said the new rule "addresses a number of criticisms about the current program, including that it is so cumbersome and prone to delays that many agriculture employers refuse to use it." The statement noted that the changes are the first in 20 years.

Paul Schlegel, a policy director specializing in immigration at the American Farm Bureau, praised two changes to the guest worker program:

-- First, the new rules allow growers to "attest" that they have tried to recruit U.S. workers, rather than undergoing a more rigorous "certification" process.

-- Second, they change the method of setting wage rates from an average of wages in the industry to a database of actual existing wages.

"It looks like they are going to a market-based wage, and to us that would be a very significant improvement," said Schlegel. "It's not going to be the inflated wage we have now."

But labor advocates complained that the new system would hurt workers.

"It will result in a loss of wages for H-2A workers and for U.S. workers because they're placed in competition with the foreign workers," said Sonia Ramirez, legislative representative for the AFL-CIO. "We should be doing more in honoring the letter of law and enforcing the law, as opposed to reducing the law."

Bruce Goldstein, director of Farmworker Justice, a group that advocates for agricultural workers, added that the new rules do not address the larger problem - that a substantial majority of farmworkers are illegal immigrants.

"We don't understand why the Department of Labor would invest millions of dollars in these new regulations when there is a bipartisan proposal in Congress that was negotiated between farmworker unions and agricultural growers to address these issues in a reasonable way," said Goldstein.

That proposal, known as the AgJOBS bill, has broad support but nevertheless stalled in Congress during the past five years. It would include some similar changes to the H-2A program but would link them to a program to legalize undocumented farmworkers who pledge to continue working in agriculture for a period.

The Bush administration's new rules take into account some egregious abuses of the past and increase penalties for willful violations of workers' contracts or the program rules, said Cindy Hahamovitch, a professor of history specializing in immigration and labor at the College of William and Mary in Williamsburg, Va. But she questioned whether the rules would be enforced, saying there have been few sanctions in the program's 60-year history.

"The idea behind these rule changes is to wean farm employers off undocumented workers," added Hahamovitch. "The plan is to make guest workers cheaper and easier to get than 'illegal' workers. This has been tried many times before. The result was an expanded guest worker program but degraded living and working conditions for all farmworkers."

The new regulations are to be published in the Federal Register on Thursday and will go into effect 30 days later. They have been in the works for most of the past year, but are part of a series of rule changes being rushed into effect by the Bush administration before President-elect Barack Obama takes office Jan. 20. Reversing the new H-2A rules would require going through the lengthy formal "notice and comment" rule-changing process again.

Goldstein said his group is considering legal options, but he also encouraged Congress to exercise its prerogative to step in and prevent the new regulations from taking effect. Such a move could face a Bush veto, however.

California Sen. Dianne Feinstein opposed the new rules, saying they ignored the AgJOBS agreement: "This revision breaks apart a carefully crafted agreement between the growers and the farm labor community. I believe it will be undone."

Dick Cheney's fantasy world

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By Scott Ritter

Despite the facts, the vice-president still insists that Saddam Hussein could have produced weapons of mass destruction

In yet another attempt at revisionist history by the outgoing Bush administration, vice-president Dick Cheney, in an exclusive interview with ABC News, took exception to former presidential adviser Karl Rove's contention that the US would not have gone to war if available intelligence before the invasion had shown Iraq not to possess weapons of mass destruction. Cheney noted that the only thing the US got wrong on Iraq was that there were no stockpiles of WMD at the time of the 2003 invasion. "What they found was that Saddam Hussein still had the capability to produce weapons of mass destruction. He had the technology, he had the people, he had the basic feed stock."

The vice-president should re-check both his history and his facts. Just prior to President Bush's decision to invade Iraq, the UN had teams of weapons inspectors operating inside Iraq, blanketing the totality of Iraq's industrial infrastructure. They found no evidence of either retained WMD, or efforts undertaken by Iraq to reconstitute a WMD manufacturing capability. Whatever dual-use industrial capability that did exist (so-called because the industrial processes involved to produce legitimate civilian or military items could, if modified, be used to produce materials associated with WMD) had been so degraded as a result of economic sanctions and war that any meaningful WMD production was almost moot. To say that Saddam had the capability or the technology to produce WMD at the time of the US invasion is a gross misrepresentation of the facts.

While one can make the argument that Saddam had the people, insofar as the scientists who had participated in the WMD programmes of the 1980s were still in Iraq and, in many cases, still employed by the government, these human resources were irrelevant without either the industrial infrastructure, the economic base or the political direction needed to produce WMD. None of these existed. The argument Cheney makes on feed stock is even more ludicrous. Precursor chemicals used in the lawful manufacture of chemical pesticides were present in Iraq at the time of the invasion, but these were unable to be used in manufacturing the sarin, tabun or VX chemical nerve agents the Bush administration claimed existed inside Iraq in stockpile quantities prior to the invasion.

The same can be said about Iraqi biological capability. The discovery after the invasion of a few vials of botulinum toxin suitable for botox treatments, but unusable for any weapons purposes, does not constitute a feed stock. And as for the smoking gun that the Bush administration did not want to come in the form of a mushroom cloud, there was no nuclear weapons programme in Iraq in any way shape or form, nor had there been since it was dismantled in 1991. Cheney's dissimilation of the facts surrounding Iraqi WMD serves as a distraction from the reality of the situation. Not only did the entire Bush administration know that the intelligence data about Iraqi WMD was fundamentally flawed prior to the invasion, but they also knew that it did not matter in the end. Bush was going to invade Iraq no matter what the facts proved.

Cheney defended the invasion and subsequent removal of Saddam from power by noting that "this was a bad actor and the country's better off, the world's better off with Saddam gone". This is the argument of the intellectually feeble. It would be very difficult for anyone to articulate that life today is better in Baghdad, Mosul, Basra or any non-Kurdish city than it was under Saddam. Ask the average Iraqi adult female if she is better off today than she was under Saddam, and outside of a few select areas in Kurdistan, the answer will be a resounding "no".

The occupation of Iraq by the United States is far more brutal, bloody and destructive than anything Saddam ever did during his reign. When one examines the record of the US military in Iraq in terms of private homes brutally invaded, families torn apart and civilians falsely imprisoned (the prison population in Iraq during the US occupation dwarfs that of Saddam's regime), what is clear is that the only difference between the reign of terror inflicted on the Iraqi people today and under Saddam is that the US has been far less selective in applying terror than Saddam ever was.

At a time when the US and the world struggle with a resurgent Iran, the Iranian-dominated Dawa party of Prime Minister Nuri al-Maliki governs Iraq today in name only. The stability enjoyed by Iraq today has been bought with the presence of 150,000 US troops who have overseen the ethnic cleansing of entire neighbourhoods in cities around Iraq, and who have struck temporary alliances with Shia and Sunni alike which cannot be sustained once these forces leave (as they are scheduled to do by 2011).

Invading Iraq and removing Saddam, the glue that held that nation together as a secular entity, was the worst action the US could have undertaken for the people of Iraq, the Middle East as a whole and indeed the entire world. For Cheney to articulate otherwise, regardless of his fundamentally flawed argument on WMD, only demonstrates the level to which fantasy has intruded into the mind of the vice-president.

Kids Learn That Killing Is Fun at the Army's Lethal New Theme Park

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By Penny Coleman

The Army Experience Center, located in the Franklin Mills Mall just north of Philadelphia, bills itself as a "state-of-the-art educational facility that uses interactive simulations and online learning programs to educate visitors about the many careers, training and educational opportunities available in the Army."

Nonsense. The only thing they're teaching here is how to blow shit up. If it's state-of-the-art anything, it's state-of-the-art adolescent boys’ wet dreams.

"Too slow! Do it again!" yells the voice in my earphones as a new sequence of armed figures in camouflage pop up in front of me. I -- the player -- am attached to the foreshortened barrel of an M-16 -- and a little embarrassed by that. It's not my thing, really. And I wasn't expecting the game to involve having to tolerate some dickhead's personal opinion about my marksmanship.

But I didn't come here to get yelled at or to play games. I came because I was curious about the Army's latest marketing strategy. For $12 million, this place has been dressed to kill: 15,000 square feet (about three basketball courts) done up in brushed steel, glass and low-light glam. But what this place is really about is the bling: strings of networked Xbox 360 pods and individual gaming stations. And the crown jewels: a UH-60 Black Hawk, an AH-64 Apache and a Humvee. Simulators. And it's all entirely free.

"Potential recruits are afforded a unique opportunity to learn what it means to be the best-led, best-trained and best-equipped Army in the world by allowing them to virtually experience multiple aspects of the Army," says Pete Geren, Secretary of the Army.

Sir, give me a break, sir! You mean the "Career Navigators," those fancy touch-screen installations where you can see all the different jobs the Army can train you for? No one went near them all day. Most of these kids can't reach them, anyway. It's the shiny toys and virtual adrenaline rush that brings them in.

Behind a glass wall, there are 40 more terminals facing a wall of plasma screens: the Tactical Operations Center, where local educators (principals, superintendents, school counselors and teachers) are given an earful about how misunderstood the military is.

"Accurate information about the military experience is often drowned out, or the information that does get through projects mixed messages or inaccuracies," Lt. Gen. Benjamin C. Freakly recently complained to the Northeast Times. "The Army Experience Center provides hands-on, virtual-reality experiences and simulations for young men and women, their parents and others to see, touch and learn firsthand what it means to be in the Army."

There are no mixed messages at the AEC: being in the Army is about getting to play with boy toys, 24/7. Freakly's tidy version of "what it means to be in the Army" fails to mention what can happen if your Humvee hits an IED, or how it might feel to be splattered with your best friend's insides. Or your own.

As I considered that grim thought, there’s a tap on my shoulder. It's my turn -- my Black Hawk awaits.

Our orders are to protect a convoy as it moves through enemy territory. The video kicks in with a roar of rotors; the chopper lurches and bucks as it turns to follow the trucks on the ground -- the wind, the vibrations, the report of my M-4 and the staccato of incoming rounds make it hard to hear the screamed alerts coming over the intercom: "Enemy on the right!" "Look out, RPGs straight ahead!"

Bad guys are shooting at me from the alleys, the shadows, the rooftops, but I am wasting them. One after another, they get caught in my crosshairs and -- bam! -- their bodies lift and sprawl in haphazard death. We're slammed by an IED and momentarily engulfed in flame. My hand is getting numb from the rifle recoil, but my lizard brain has taken over.

Too soon, we emerge from the bedlam and an inspirationally oversized American flag indicates that we have successfully achieved our destination -- a field hospital where rows of medics attend to ghastly luminous, very slightly breathing shapes, the bloodless bodies of the cyber-wounded.

It's a bizarre curtsy to realism, and almost is lost in the orgy of virtual pyrotechnics as American rockets vaporize a bridge in the background.

I rode the Black Hawk three times and the Humvee twice. My best score: I totally "engaged" 47 percent of the man-shapes that came into my crosshairs. I'm told that 27 percent is average.

And only a few Rules of Engagement infractions -- civilians, the ones without guns who were running away. Didn't notice. Too bad. Mission accomplished.

Paul Boyce, an Army spokesman, "strongly refutes" the notion that any of the Army's initiatives glamorize war, adding that "great care" is taken to avoid portraying violence.

Again, nonsense. The drill instructor who was yelling at me earlier is a character in the Army's official game, "America's Army," available at all of the AEC’s game stations. "America's Army" is unapologetically about realistic, deadly combat -- minus the blood. A hit registers as a puff of red smoke. Four puffs and you are "engaged." Concerned parents can further sanitize the violence with controls that cause dead soldiers to simply sit down.

"We have a 'Teen' rating that allows 13-year-olds to play, and in order to maintain that rating we have to adhere to certain standards," Chris Chambers, a retired Army major who is now the project's deputy director, told the New York Times. "We don't use blood and gore and violence to entertain."

So, in the absence of blood and gore, there is no violence. And kids get that? They get the distinction between fantasy and reality? I found the blurring completely disorienting, and I have consumed decades of both real and virtual violence.

Lt. Col. Dave Grossman has written extensively on the psychology of killing, and he argues that it's not that people can't tell the difference between fantasy and reality, but that these games use virtual experience to systematically desensitize and condition.

Grossman cites hundreds of studies that reveal a direct correlation between exposure to media violence -- especially interactive video games -- and increased childhood aggression. A Stanford University study is particularly compelling: Over a 20-week period, third- and fourth-graders who limited or eliminated TV and video games demonstrated a 50 percent decrease in verbal aggression and a 40 percent decrease in physical aggression.

Grossman warns that Americans ''are reaching that stage of desensitization at which the inflicting of pain and suffering has become a source of entertainment; vicarious pleasure rather than revulsion. We are learning to kill, and we are learning to like it.''

Whose agenda does that serve?

Brian Mackey, a slight kid from Levittown, Pa., is working the front desk. He's wearing a white T-shirt sporting a U.S. Army logo, and although he doesn't have the bulk that comes with basic training (and age), I ask if he is active duty anyway. Brian says no, he plans to go straight from graduation in June into the Army. In the meantime, he has the ideal job for pre-induction skills training.

Brian has a 3.95 grade-point average in high school, but he isn't interested in the differences between policies or politicians or wars. And he isn't interested in any of the Army's fancy careers either. He wants to be in the infantry. When he says, "Sure I might die, but infantry is what I've always wanted," I can't help but wonder how much of his bravado comes from exactly that systematic desensitization and conditioning Grossman talks about.

His T-shirt, by the way, is part of the First Infantry Division apparel collection, the Army's first officially licensed line of clothing, on sale in the AEC and at Sears. Made in China. Available in boys sizes.

Despite the AEC's 13-year-old age limit, underage exiles are welcome to come for the free movies. Or to "Dining Army Style," featuring MRE (Meal, Ready to Eat) smorgasbords. Otherwise, they can watch -- through the center's glass front from the video arcade or the skateboard palace, both directly opposite the AEC -- while their older brothers compete in the Xbox tournaments.

A provision of No Child Left Behind, one of the first pieces of legislation proposed by the Bush administration, forced schools to open their doors to recruiters and provide contact information for students as young as 11.

J.E. McNeil, executive director of the Center on Conscience & War, calls such marketing tactics "an illegal tool in the recruiting arsenal" and a "violation of international law."

The Optional Protocol on the Involvement of Children in Armed Conflict, ratified and signed by the U.S. Senate in 2002, categorically forbids the Pentagon, or the militaries of any of the other 124 signatory nations, to attempt to recruit children 13 to 16 years old. The Pentagon simply chooses to ignore it, and Congress has neglected to enforce the treaty. (A meticulous documentation of the Pentagon's recruiting tactics explicitly directed at children can be found in a recent report by the American Civil Liberties Union, Soldiers of Misfortune.)

Staff Sgt. Kevin Haver is a recruiter, a 25-year-old native Philadelphian, pumped up, tightly wrapped in his uniform, and one of a score of active-duty soldiers currently assigned to the AEC. He's taciturn at first. Having ascended to the warrior class, he has learned to despise and distrust all that is not military. Or at least, to act that way.

Haver has completed five deployments (including two to Iraq and one to Afghanistan), and he describes them defiantly as "the most fun I've ever had." My question about stress gets a dismissive snort. He's a "flexible kind of guy." Being home is nice enough, but it's too laid-back. He misses the high energy, the focused activity, and especially, the comradeship.

In fact, here at the center, it is laid-back -- nothing like the heavy-handed recruiting tactics that have caused so much public outrage over the past few years. Soldiers are standing around talking, watching TV. Some of Haver's buddies even jumped on the sims with me, inflating my scores. The place is filled with kids, but they are all playing games, ignoring the soldiers, who ignore them in turn.

"It's not a recruiting center," insists Ed Walters, the Army's first official chief marketing officer.

It is so, Ed.

For the past two years, the Army has proudly claimed to have met its recruitment goals. The economic crisis, unemployment, expanded educational benefits, grossly inflated enlistment bonuses, an array of medical, moral and criminal waivers, and relaxed weight, height, age and education requirements all make that achievement look considerably less impressive. The Army’s efforts have cost more than $4 billion a year, but a recent rash of recruiter suicides in Texas suggests that the ongoing stress of meeting quotas is becoming intolerable for some.

It seems the Army has come up with a unique strategy for the future: automation. For $4 billion, they could build half a dozen experience centers in every state and let the machines desensitize, condition, train and even enlist America's youth.

The Pentagon has been enjoined by both by national lawmakers and international institutions to stop pandering to children. When children's bodies are invaded, we call it statutory rape. Do we have a tidier phrase for the invasion of their minds?

Obama picks Wall Street insider to head main regulatory agency

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By Patrick Martin

In a further demonstration of his subservience to Wall Street interests, President-elect Barack Obama announced the appointment of a longtime representative of the investment banks and brokerage houses as chairwoman of the Securities and Exchange Commission.

At the press conference Thursday, Obama declared that his selection of Mary Schapiro to head the main regulatory agency for the US financial securities industry was an appropriate response to the deepening Wall Street collapse and such scandals as the $50 billion fraud perpetrated by money manager Bernard Madoff.

Obama also appointed a former Clinton administration official, Gary Gensler, to head the Commodity Futures Trading Commission (CFTC), which oversees trading in one of the main arenas of financial speculation, including oil, gold and other precious metals, copper and agricultural products. Gensler is yet another of the former executives at Goldman Sachs investment bank who monopolize most top financial and regulatory positions in Washington.

Obama presented the appointment of Schapiro as a demonstration that his administration would “crack down on the culture of greed and scheming” that led to the current financial collapse and a $700 billion bailout of the banking system.

The Madoff scandal “has reminded us yet again of how badly reform is needed,” he said. “There needs to be a shift in ethics on Wall Street.” Regulators and congressional committees “have been asleep at the switch,” Obama added. He did not explain how appointing a highly paid dispenser of sedatives about the value of self-regulation would solve this problem.

Mary Schapiro has spent the last 12 years as an advocate of Wall Street policing itself, most recently as head of the Financial Industry Regulatory Authority (FINRA), which is not a federal agency but a private entity created by the financial industry to forestall actual government regulation.

Schapiro was first appointed as a member of the SEC by Republican Ronald Reagan in 1988, continuing in that position throughout the first Bush administration and for two years under Democrat Bill Clinton. In 1994, Clinton promoted her, naming her as the chairwoman of the CFTC.

In 1996, Schapiro left the government to work for the National Association of Securities Dealers. After the NASD merged with the internal regulatory authority of the New York Stock Exchange, creating FINRA, she headed the combined organization. She is a trusted figure in corporate America, serving on the board of directors of Duke Energy and Kraft Foods.

Media coverage of the appointment included obligatory quotes and sound-bites from leading Democrats and stock exchange figures hailing Schapiro as an advocate of tough regulation and as someone who would “reinvigorate the SEC.”

New York Senator Charles Schumer, a frequent point man for Wall Street interests, described her as “the kind of strong and experienced regulator that we very much need in these times. I believe her nomination could be approved quickly and without controversy in the Senate.”

But according to one press account, the number of cases handled by FINRA actually declined after Schapiro took charge in 2006. And in 2001, Schapiro appointed Mark Madoff, son of Bernard Madoff and a top officer in his firm, to the board of the National Adjudicatory Council, an internal appeal committee for FINRA.

There is little doubt where Schapiro’s interests lie. She made $2.1 million in 2007, and her total income from the securities industry over the past 12 years has likely topped $20 million. That sum is more than 100 times the $158,500 yearly salary she will draw as head of the SEC.

But Schapiro can look forward to recouping the lost income from her hardship duty at the SEC when she returns to Wall Street a few years hence.

Dollar plunges after record rate cut by US Federal Reserve

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By Barry Grey

In the two days since the Federal Reserve Board cut its benchmark interest rate to a record low range of 0 to 0.25 percent and announced that it will supply an unlimited amount of liquidity to near-frozen credit markets, the US dollar has fallen sharply on world currency markets. The panic sell-off of dollars is an expression of falling confidence in the solvency of US financial institutions and the credit-worthiness of the American currency, and mounting fears that the recession that began with the collapse of the US housing and credit markets could develop into a full-blown depression.

The Fed’s unprecedented move, widely described by commentators as a “shock and awe” action, has evoked both relief in financial circles that the US government is prepared to take extraordinary measures and fears that it represents a desperate and reckless move with potentially disastrous implications for the US and world economy.

In essence, the Fed tacitly acknowledged Tuesday that the US economy is breaking down under the weight of trillions of dollars of bad debt and could enter into a deflationary spiral similar to that which took place in the Great Depression of the 1930s. It made clear that it will print an unlimited volume of dollars to buy mortgage-backed securities, credit card debt, car loans and even long-term bonds issued by the US Treasury in an attempt to get banks to begin lending once again to businesses and consumers.

This is the financial equivalent of emergency triage on an expiring patient. It means a massive increase in US indebtedness and a further dilution in the value of the US dollar, a recipe down the road for an explosive growth of inflation, a further decline in the world economic position of American capitalism, and the further impoverishment of large sections of the US population. It takes place under conditions where US private sector gross debt has already soared from 118 percent of gross domestic product in 1978 to 290 percent this year.

The fact that the Fed, whose core legal mandate is to maintain the stability and value of the dollar, is nevertheless prepared to take such action is an indication of growing alarm over the depth of the economic crisis and the rapidity with which it is developing.

On Wednesday, the euro jumped as much as 4 cents against the dollar, the biggest single-day move since the euro was launched in 1999. The dollar plunged against the yen to its lowest level in 13 years. The dollar also fell in relation to the British pound and the Swiss franc.

In the space of two hours Wednesday, the euro soared from $1.4058 to an 11-week high of $1.4440. The dollar gained back some ground against the euro on Thursday, closing at $1.4180, after the European Central Bank moved to stem the rush from dollars into euros by cutting its interest rate on deposits from 2.0 percent to 1.5 percent. However, the dollar continued to fall against the yen. Gold futures surged.

Only a month ago the euro was at $1.24. In just the two days since the Fed’s announcement, it has jumped nearly 7.5 percent.

US stock markets, which had a sharp rally Tuesday after the Fed announcement, fell back on Wednesday and Thursday. The Dow Jones Industrial Average fell 99 points Wednesday and 219 points Thursday, giving up most of its gains from Tuesday. The retreat reflected mounting concerns over the implications of the Fed’s actions as well as new economic data indicating a continuing surge in joblessness and a further contraction in the economy in the coming months.

Financial commentators in both the US and abroad expressed concern over the deeper significance of the Fed’s moves. The Financial Times published a lead editorial Thursday entitled “The Fed Rips Up the Rule Book,” which began, “We are flying blind.”

It continued, “The Federal Reserve’s announcement this week that it was abandoning conventional rate measures in favour of directly propping up lending represents a bold experiment in policy. Ben Bernanke, Fed chairman, is taking a gamble, but he had little choice…

“The US real economy is crumbling and continues to deteriorate, the global downturn has been exacerbated by a crippled domestic financial system. Credit is not flowing to consumers and businesses because risk spreads are too high…. Restoring credit may be the Fed’s primary aim, but its measures are also an insurance policy against falling into a deflationary spiral… As growth returns, inflation might come back with a vengeance.”

A report by Credit Suisse Group said the Fed’s “easing and very low US rates will ultimately undermine the dollar across the board.”

C. Fred Bergsten, director of the Peterson Institute for International Economics, wrote, “The risk is that the deceleration of the dollar could cascade and push interest rates up as the rest of the world demands a higher return on US investments.”

Nouriel Roubini of the Stern School of Business at New York University summed up the Fed’s actions as follows: “Traditionally, central banks have been the lenders of last resort, but now they are becoming the lenders of first and only resort. As banks curtail lending to each other, to other financial institutions and to the corporate sector, central banks are becoming the only lenders around.

“Likewise, with household consumption and business investment collapsing, governments will soon become the spenders of first and only resort, stimulating demand and rescuing banks, firms and households. The long-term consequences of the resulting surge in fiscal deficits are serious.”

The backdrop to the Fed’s action is a raft of economic data showing an accelerating economic decline. Earlier this week there were reports showing a continuing fall in industrial production, a record drop in homebuilding and a record decline in consumer prices. These deflationary indicators were supplemented by a fall in crude oil prices below $36, despite a record production cutback announced Wednesday by OPEC, another massive increase, 554,000, in first-time jobless benefit applications for the week ended December 13, and the Conference Board’s report that its leading economic indicators gauge of future economic performance posted its biggest annual fall since 1991 in November, dropping 3.7 percent from the year before.

JPMorgan Chase analysts now estimate that the global economy will contract at a 3.7 percent annual rate this quarter and a 2.3 percent pace in the first quarter of 2009, marking the worst six-month period for the world economy since World War II.

Every day brings multiple announcements of job cuts across all branches of the private sector US economy. Such announcements over the past few days include 1,000 jobs at the insurance company Aetna, 2,500 jobs at hard-drive manufacturer Western Digital, 800 jobs at Caterpillar’s Mossville, Illinois engine plant, and hundreds of layoffs at Ford’s Flat Rock, Michigan plant, American Apparel in Los Angeles, Cooper Tire and Newell Rubbermaid.

The Fed’s massive injection of liquidity into the financial markets does not address the underlying causes of this downward spiral. The crisis is not one of liquidity, but of solvency. Decades of rampant speculation and outright fraud based on cheap credit and an expansion of debt, facilitated by government deregulation of the banks and financial markets, have produced a vast edifice of paper values that is now collapsing.

There is a general erosion of confidence in the credit markets. The basic problem is not the cost of credit, but the fact that banks and other financial institutions refuse to lend to one another, to other businesses and to consumers because they have no confidence in the financial viability of prospective clients.

At the heart of this crisis is the internal decay of American capitalism, marked above all by the dismantling of large sections of its manufacturing base, and the decline in its global economic position. A longstanding crisis of profitability in industry has led to a separation of wealth accumulation by the financial elite from the productive process and a massive growth of financial parasitism. There is no genuine solution to this crisis within the framework of the capitalist market system—only ever more brutal attacks on the jobs and living standards of the working class, combined with a growth of militarism and war.

Cheney Throws Down Gauntlet, Defies Prosecution for War Crimes

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By Marjorie Cohn

Dick Cheney has publicly confessed to ordering war crimes. Asked about waterboarding in an ABC News interview, Cheney replied, "I was aware of the program, certainly, and involved in helping get the process cleared." He also said he still believes waterboarding was an appropriate method to use on terrorism suspects. CIA Director Michael Hayden confirmed that the agency waterboarded three al-Qaeda suspects in 2002 and 2003.

US courts have long held that waterboarding, where water is poured into someone's nose and mouth until he nearly drowns, constitutes torture. Our federal War Crimes Act defines torture as a war crime punishable by life imprisonment or even the death penalty if the victim dies.

Under the doctrine of command responsibility, enshrined in US law, commanders all the way up the chain of command to the commander in chief can be held liable for war crimes if they knew or should have known their subordinates would commit them and they did nothing to stop or prevent it.

Why is Cheney so sanguine about admitting he is a war criminal? Because he's confident that either President Bush will preemptively pardon him or President-elect Obama won't prosecute him.

Both of those courses of action would be illegal.

First, a president cannot immunize himself or his subordinates for committing crimes that he himself authorized. On February 7, 2002, Bush signed a memo erroneously stating that the Geneva Conventions, which require humane treatment, did not apply to al-Qaeda and the Taliban. But the Supreme Court made clear that Geneva protects all prisoners. Bush also admitted that he approved of high-level meetings where waterboarding was authorized by Cheney, Condoleezza Rice, John Ashcroft, Colin Powell, Donald Rumsfeld and George Tenet.

Attorney General Michael Mukasey says there's no need for Bush to issue blanket pardons since there is no evidence that anyone developed the policies for any reason other than to protect the security in the country and in the belief that he or she was doing something lawful. But noble motives are not defenses to the commission of crimes.

Lt. Gen. Antonio Taguba, who investigated the Abu Ghraib scandal, said, "There is no longer any doubt as to whether the current administration has committed war crimes. The only question that remains to be answered is whether those who ordered the use of torture will be held to account."

Second, the Constitution will require President Obama to faithfully execute the laws. That means prosecuting lawbreakers. When the United States ratified the Geneva Conventions and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, thereby making them part of US law, we agreed to prosecute those who violate their prohibitions.

The bipartisan December 11 report of the Senate Armed Services Committee concluded that "senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality, and authorized their use against detainees."

Lawyers who wrote the memos that purported to immunize government officials from war crimes liability include John Yoo, Jay Bybee, William Haynes, David Addington and Alberto Gonzales. There is precedent in our law for holding lawyers criminally liable for participating in a common plan to violate the law.

Committee Chairman Senator Carl Levin told Rachel Maddow that you couldn't legalize what's illegal by having a lawyer write an opinion.

The committee's report also found that Rumsfeld's authorization of aggressive interrogation techniques for use at Guantanamo Bay was a direct cause of detainee abuse there. Those techniques migrated to Iraq and Afghanistan, where prisoners in US custody were also tortured.

Pardons or failures to prosecute the officials who planned and authorized torture would also be immoral. Former Navy General Counsel Alberto Mora testified to the Senate Armed Services Committee in June 2008 that "there are serving US flag-rank officers who maintain that the first and second identifiable causes of US combat deaths in Iraq - as judged by their effectiveness in recruiting insurgent fighters into combat - are, respectively the symbols of Abu Ghraib and Guantanamo."

During the campaign, Obama promised to promptly review actions by Bush officials to determine whether "genuine crimes" were committed. He said, "If crimes have been committed, they should be investigated," but "I would not want my first term consumed by what was perceived on the part of the Republicans as a partisan witch hunt, because I think we've got too many problems we've got to solve."

Two Obama advisers told the Associated Press that "there's little - if any - chance that the incoming president's Justice Department will go after anyone involved in authorizing or carrying out interrogations that provoked worldwide outrage."

When he takes office, Obama should order his new attorney general to appoint an independent prosecutor to investigate and prosecute those who ordered and authorized the commission of war crimes.

Obama has promised to bring real change. This must be legal and moral change, where those at the highest levels of government are held accountable for their heinous crimes. The new president should move swiftly to set an important precedent that you can't authorize war crimes and get away with it.

Falling oil prices shatter Iraqi budget forecasts

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By James Cogan

The fall in world oil prices is slashing the revenues of the US-backed regime in Iraq, forcing it to drastically reduce its projected budget for 2009. Deputy Prime Minister Barham Saleh told a recent conference in London: "The decline in oil prices has serious implications on the Iraqi economy."

As much as 90 percent of the Iraqi government budget is derived from oil revenues—despite more than five years of so-called "reconstruction" and the expenditure of tens of billions of dollars in US and Iraqi funds. Outside of employment in the military, the police and other security-related occupations and the salaries paid in the nepotistic and corrupt state apparatus, little in the way of economic activity has developed under US military occupation.

Dependence on oil sales has made Iraq extremely vulnerable to the rapid shift in global demand that has followed the worst economic contraction since the 1930s Depression. Not only has the price of oil collapsed from $US140 a barrel to a range between $40 and $50, but overall Iraqi oil exports have fallen by 25 percent from a post-invasion peak of some 2 million barrels a day to just 1.65 million barrels.

Former oil minister Baham al-Uloom told the Iraqi news agency Azzaman: "This represents a big challenge to the government. The 2009 budget has been based on the assumption of exporting 2 million barrels a day and an estimated price of not less than $80 for a barrel."

The exponential rise in oil prices from 2006 to the first half of 2008 delivered unexpected revenues. Iraq registered a budget surplus of some $29 billion between 2005 and 2007 and, as recently as August, the US Government Accountability Office (GAO) was issuing excited memorandums that the 2008 surplus could be as high as $50 billion.

Such projections were decidedly premature.

Most of this year's surplus of some $22 billion was spent in a June supplementary budget that handed over $14.3 billion in "operational expenses" to various federal departments, provincial governments and city councils, in payment for services rendered to the US occupation. The forecasts for the 2009 budget are now being drastically reduced. On estimates of an oil price of about $70 a barrel, the surplus had already been slashed in November from $80 billion to $67 billion. If current prices persist, the actual figure will be less than $50 billion.

Finance minister Baqir Jabr al-Zubeidi has already raised the prospect of Iraq having to seek international loans to finance government spending. At the same time, public sector wage rises have been put on hold and government departments have been instructed to slash expenditure.

The implications of the budget crisis for the mass of the Iraqi people are immense. It virtually guarantees that resources will not be made available to improve the nightmarish conditions of life that they endure.

It is estimated that returning Iraq to the relatively developed state it had reached before being virtually destroyed by two US wars and punitive sanctions would require at least $400 billion to repair, replace or modernise destroyed or damaged infrastructure.

The "reconstruction" undertaken under the US occupation has utterly failed to address the situation. A draft congressional report alleges that a considerable proportion of the $117 billion spent by the US military and Iraqi government since 2003 was squandered on ill-conceived projects or disappeared due to waste and corruption. Most of the spending was directed toward the Iraqi military and police or other security related projects, not improving the lot of the population.

No area of the country—including the autonomous Kurdish region in the north—provides continuous electricity to the population. The average power supply ranges from 14 hours per day to less than 8 hours in working class districts of Baghdad and several southern provinces.

The sewerage system in most cities is dysfunctional. Baghdad's was built to cater for a population of just 750,000, not the five million inhabitants now crowded into the city. Raw effluent flows in the streets. A councillor in the suburb of Sadr City told Bloomberg last month: "Getting rid of this waste has become a dream. I fear that when I die, I will be buried in it." Garbage collection is also substandard, with piles of rubbish left uncollected for days or weeks.

The water system is a disaster. The Iraqi health ministry estimates that a third of the water used by the population of Baghdad is unfit for human consumption. Nationally, 17 percent of the water supply is contaminated. A spokesman for the Baghdad water directorate told the United Nations IRIN agency: "Our water pipes are over 30 years old and that is the main reason for contamination as the water gets mixed with either sewage or underground water."

The health system is dysfunctional due to lack of investment and chronic staff shortages. Mental health services barely exist—in a war-ravaged country where a survey last year found that 70 percent of primary school age children showed signs of psychological trauma, such as bed-wetting, stuttering, voluntary muteness, poor academic performance or aggressive behaviour.

The staggering infrastructure problems that the Iraqi people face in their day-to-day lives aggravate the misery produced by the lack of jobs and grinding poverty.

Close to six years after the invasion, official unemployment is estimated to be at least 17.6 percent and underemployment as high as 38.1 percent. Some 70 percent of families subsist on less than $210 a month. With the average family consisting of 6 to 10 people, that breaks down to an average income of less than $1 per day for close to 17 million Iraqis.

At least 6.2 million people depend upon the state-funded Public Distribution System (PDS) to avoid starvation. Radically cut back earlier this year, the scheme only supplies eligible families with 9 kilograms of flour, 3 kg of rice, 2 kg of sugar, 1 litre of cooking oil and 250 grams of milk powder, per family member, per month.

The most destitute Iraqis have been reduced to scavenging through garbage dumps, particularly those used by nearby US military bases, in search of discarded food or items that can be sold. Saad, a 14-year-old boy rummaging through waste on the outskirts of Najaf, told Asharq Alawsat last month: "My friends here cannot read or write and their sole concern is how they will get hold of some food for the day. Our work begins at dawn and ends at sunset. At lunchtime we always think about the way we are living our lives and why we cannot be like other young people..."

The combined effect of war, malnutrition, preventable disease and lack of medical care has caused Iraqi life expectancy to slide from 66.5 years in 1990 to 59 for women and 57 for men. Infant mortality has soared from less than 50 per 1,000 births to 120. A quarter of all children have suffered stunted growth due to malnutrition.

These grim statistics will only worsen as the cash-strapped Iraqi government cuts into social programs like the PDS and turns a blind eye to the infrastructure crisis.

Watergate 'Deep Throat' Mark Felt Dies at 95

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Mark Felt, the mysterious "Deep Throat" source who helped Washington Post reporters Bob Woodward and Carl Bernstein crack the Watergate scandal that brought down President Richard Nixon, has died at age 95.

In this Aug. 30, 1976, file photo Mark Felt appears on CBS' 'Face The Nation' in Washington. (AP Photo/File)Felt suffered from congestive heart failure but the exact cause of his death at home on Thursday was not immediately known, said the Press Democrat newspaper in Santa Rosa, California, 55 miles north of San Francisco.

In its report on Felt's death, the New York Times called him "the most famous anonymous source in American history."

Felt, the No. 2 official at the FBI when the Watergate case broke, kept his role in the story a secret for 30 years. Only in 2005, at age 91, was his part made public in an article in Vanity Fair magazine written by Felt's family lawyer.

"I'm the guy they used to call Deep Throat," Felt told attorney John O'Connor.

For years, people had speculated and argued about the identity of "Deep Throat," whose name was derived from the title of a popular pornographic movie.

Vanity Fair scooped Woodward and Bernstein, who had promised not to reveal the name of the star source of their 1974 stories until after his death. But within a day of Felt's unveiling, Woodward wrote of his relationship with Felt.

Woodward said he turned to Felt after he and Bernstein wrote about the break-in at the offices of the Democratic National Committee at the Watergate complex in Washington.

"This was the moment when a source or friend in the investigative agencies of government is invaluable," Woodward wrote in the Post. "I called Felt at the FBI ... It would be our first talk about Watergate."

Woodward said Felt told him the Watergate case was going to "heat up." He abruptly hung up but then started to provide guidance on the story, Woodward said.

Following a complicated routine, Felt and Woodward would arrange to meet in an underground garage, with "Deep Throat" corroborating information the Post reporters had gleaned from other sources and outlining a government conspiracy.

"Felt believed he was protecting the bureau by finding a way, clandestine as it was, to push some of the information from the FBI interviews and files out to the public, to help build public and political pressure to make Nixon and his people answerable," Woodward wrote.

"He had nothing but contempt for the Nixon White House and their efforts to manipulate the bureau for political reasons."


Reporting by the Post and other news organizations on the White House's involvement in the Watergate break-in and other political "dirty tricks" forced Nixon's resignation in 1974.

More than 30 officials would ultimately plead guilty or be convicted, including Attorney General John Mitchell, who served 19 months for conspiracy, obstruction of justice and perjury.

Felt repeatedly denied he was "Deep Throat," even though his position at the FBI made him an obvious candidate, and Nixon himself suspected Felt of leaking to the media.

A character patterned on Felt showed up in the book and movie "All The President's Men," an account by Bernstein and Woodward of their Watergate reporting. Played by Hal Holbrooke, the "Deep Throat" character was seen in the shadows.

This portrayal was true to life, Woodward wrote, because Felt insisted on anonymity and was concerned that phone calls might be tapped.

Last month, Woodward and Bernstein visited Felt in Santa Rosa. It was Bernstein's first meeting with the famous source, who dealt only with Woodward during the Watergate days.

Born on August 17, 1913 in Twin Falls, Idaho, Felt came to Washington as a Capitol Hill staff member and later worked at the Federal Trade Commission before joining the FBI in 1942.

He served in the bureau's espionage section during World War Two and later worked in various field offices and oversaw some of the FBI's early investigations into organized crime.

Felt was appointed deputy associate director, the No. 3 job at the FBI, in 1971, and was disappointed when Nixon named L. Patrick Gray to head the agency after the death of its longtime chief, J. Edgar Hoover, in 1972.

Felt was convicted in 1980 of authorizing illegal break-ins at five homes in New York and New Jersey as part of the FBI's pursuit of the radical Weather Underground group. He was fined $5,000 and then pardoned by President Ronald Reagan in 1981.

Felt and his wife Audrey, who died in 1984, had two children.