Friday, January 2, 2009

A Trillion Dollar Recovery

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By Katrina vanden Heuvel

Poverty is on the rise, record numbers of people are relying on food stamps and we’ve seen no relief for the foreclosure crisis. There are increasing rates of child abuse and domestic violence linked to this recession. State governments don’t have financial resources to cope at the exact moment when those resources are most needed. Nineteen states and the District of Columbia have lowered Medicaid payments or eliminated people from eligibility. The senior economist of the International Monetary Fund recently warned of another Great Depression

We don’t need a stimulus, we need a recovery. And that means investing $1 trillion over the next two years.

The Congressional Progressive Caucus (CPC) has proposed a plan to do just that--a detailed $1 trillion recovery plan to kick start the economy, invest in sustainable, long term growth and target individuals and communities that are most desperate for resources.

Obama political adviser David Axelrod said this weekend that the new Administration is looking at a stimulus bill in the range of $675 to $775 billion over two years. But is that enough at this moment of metastasizing economic pain and deepening recession? Not according to CPC Co-Chair, Representative Lynn Woolsey of California, who said, "...anything much less than $1 trillion would be like trying to put out a forest fire with a squirt gun."

In addition to much needed investments which have already been laid out--like the extension of unemployment insurance while joblessness soars, increasing food stamps, and assisting cash-strapped states with Medicaid--the CPC plan goes a step further. It takes a holistic approach to economic recovery and the needs of ordinary Americans by addressing infrastructure, human capital, keeping people in their homes, job creation, fiscal relief for state, local and tribal governments, education and job training and tax relief for lower-income families.

There are smart commitments in the CPC plan that deserve real attention, such as:

• A percentage of the infrastructure work would be performed by veterans, low-income and homeless individuals, out-of-school youth, and others facing multiple barriers to employment.
• Green technologies to weatherize the nation’s homes and small businesses.
• Grants to neediest schools for modernization, renovation, energy efficiency, and investing in educational technology.
• Construction of libraries in rural communities in order to expand broadband access
• Capital improvements and short-term operating funds for federally-qualified health centers.
• Boost funding for National Health Service Corps to produce more doctors, dentists and nurses to provide health care in underserved area.
• Expand sustainable food systems at local community level.
• A moratorium on home foreclosures.
• At least $100 billion allocated to "green jobs creation", including at community level and in Indian Country.
• Creation of a new energy block grant to transition to green energy sources
• Re-establish Youth Conservation Corps to eliminate backlog of work projects in national, state, and local parks.
• Federal Arts and Writers Project to create jobs for American artists, writers, editors, researchers, photographers, and others.
• Triple funding for Community Development Block Grant Program
• Make the child tax credit fully refundable, lifting 2.7 million people--including 1.7 million children--above the poverty line.
• Expand the earned income tax creditfor families with three or more children.

"The Progressive Caucus is determined to bring justice and prosperity to the American economy, and this proposal does both," CPC Co-Chair, Representative Raul Grijalva of Arizona, said in a released statement.

"The American people’s urgent needs in health care, employment, education and infrastructure have been neglected for so very long that the basic structure of our economic system has been undermined. Now that the American people have the attention of Wall Street and Washington, we intend to lift their voice and demand the profound change the people voted for."

There is a groundswell of support for massive action along these lines. More than twenty progressive groups and unions are spearheading the Jobs and Economic Recovery Now campaign, building grassroots support for a bold recovery program of $850 billion or more. At events across the nation, supporters urged quick passage of the legislation so that it is waiting on President Obama’s desk the day he takes office.

The campaign is also targeting moderate Republicans in the Senate in order to avoid a filibuster. It was just three months ago, after all, that Republicans successfully filibustered a stimulus that targeted unemployment insurance, food stamps and "shovel-ready" infrastructure projects--and that was only $56 billion.

At this moment, a massive recovery along the lines of what the country needs is far from a done deal. The Congressional Progressive Caucus has done a great service with its plan, showing us what a comprehensive approach to economic recovery looks like--addressing the needs of ordinary Americans who have been left behind by the Wall Street Bailout Bonanza and eight years of greed and deregulation. Contact your elected officials--make sure they read the plan and support a $1 trillion recovery. We can’t afford anything less.

Treasury Has Pledged More Rescue Funds Than Authorized

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The Treasury Department has committed nearly $10 billion more than the $350 billion Congress has authorized to date for the financial-sector rescue package, which could constrain how the incoming Obama administration deploys the rest of the fund.

Treasury's announcement Monday that it is directing $6 billion to auto-finance company GMAC LLC brought to $358.4 billion the total funds from the Troubled Asset Relief Program that have been pledged to a variety of programs and guarantees. That suggests Treasury is tapping into the second half of the $700 billion set aside in October before it has been released by Congress.

"They are pushing the envelope here," said Sen. Bernie Sanders (I., Vt.), a critic of the bailout. "What they are trying to do is create a situation to put pressure on [President-elect Barack] Obama and the Congress to provide the next $350 billion."

Under the legislation that approved the bailout funds, Treasury received $350 billion and was required to request access to the rest by providing a detailed plan of how the money would be spent. The goal was to provide a check for lawmakers wary about Treasury's broad authority under the legislation.

Treasury says the agency has complied with the rescue legislation. A Treasury official briefing reporters Monday said that "from a short-term cash-flow basis," the department hasn't come close to the $350 billion limit because not all its commitments have been fulfilled. As of Tuesday, roughly $207 billion had been disbursed.

Treasury's actual commitments include $250 billion for capital injections into banks, $40 billion for insurer American International Group Inc., $20 billion for a Federal Reserve consumer-finance program, $25 billion for Citigroup Inc. and $23.4 billion in aid to the auto industry.

A Treasury spokeswoman declined to comment Tuesday on whether the newest commitments were based on the assumption that Congress would release the second installment, or would require reallocating money that had been promised to others.

A spokeswoman for Mr. Obama's transition team declined to comment.

Treasury Secretary Henry Paulson, in announcing the auto-rescue plan Dec. 19, said "it is clear" that Congress will have to release the second $350 billion tranche to maintain financial-market stability.

Obama Faces Legacy of Lawlessness at Justice

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By Daphne Eviatar

After 29 years enforcing the civil rights laws at the Department of Justice, in 2002 Richard Ugelow was abruptly transferred from his position as deputy chief of employment litigation to an administrative job in the civil division, which defends the government against, among other things, claims of civil rights violations. Ugelow was just one of many highly experienced justice department lawyers who, beginning in the early years of the Bush administration, were transferred, demoted or otherwise pushed out of their positions at Justice because their aggressive enforcement of federal laws didn’t match the new administration’s conservative ideology.

That’s just one of the many serious problems at the Department of Justice that the incoming Obama administration will have to rectify, say former Justice Department employees, law professors and civil rights advocates. As internal government reports and congressional hearings have documented, the Bush Justice Department over the last eight years expelled or ignored attorneys that it didn’t agree with and replaced them with inexperienced lawyers hired more for their ideology than their qualifications. Many of those promoted and implemented conservative agendas that in some cases turned out to be illegal. Those lawyers who were given career positions can’t simply be pushed out by a new administration, however – and they could make it difficult for Obama to implement a new agenda.

Under President Bush, “there was a total disregard for the career attorneys,” said Ugelow, who now teaches at American University’s Washington College of Law. “When they initially came in they stopped all enforcement activities. The administration came in with the attitude that we’re not going to use the courts to enforce the law.”

The result, says Jon Greenbaum, a former senior attorney in the Voting Section of the Civil Rights Division at the Justice Department, was “you had people in charge who didn’t know what the heck they were doing. At the civil rights division, you had some of the people who were most hostile to civil rights running things.”

In fact, as an inspector general’s report revealed, potential new hires during the Bush administration were disqualified for jobs if in the past they’d worked for Democrats or organizations with “liberal affiliations” – such as civil rights groups. The inspector general concluded that “political or ideological affiliations were used to deselect candidates” applying for entry-level attorney positions and internships.

The Inspector General is still investigating a separate set of allegations that DOJ lawyers hired attorneys for the civil rights division based on ideology in violation of the civil service laws.

Not surprisingly, during the Bush years, civil rights enforcement on behalf of minorities dropped dramatically. From 2000 to 2006, for example, the Equal Employment Opportunity Commission referred more than 3200 individual charges of discrimination to the civil rights division, yet the division filed only seven cases (pdf) on behalf of African-Americans or Latinos. And of only seven cases (pdf) alleging systemic racial discrimination brought by September of 2007, two were reverse discrimination cases — alleging systemic discrimination against whites.

The department’s enforcement of the Voting Rights Act, meanwhile, essentially came to a halt, says Greenbaum, as political appointees refused to bring new voting rights cases recommended by longtime career attorneys and at times ignored their legal judgments.

In 2003, for example, voting division lawyers and analysts unanimously warned that a Texas redistricting plan spearheaded by Republican Rep. Tom Delay would violate the voting rights act by by diluting black and latino voting power. They were overruled by political appointees. In 2006, the US Supreme Court held that the redistricting plan was unconstitutional.

Similarly, when Georgia sought to pass a voter ID law, career staff objected that the law would effectively discriminate against minority voters, many of whom would not have the kinds of identification cards required. “Again, the front office just didn’t care. They pretty much ignored it,” says Greenbaum, now director of the Voting Rights Project at the Lawyers’ Committee for Civil Rights Under Law. Although Justice Department senior officials signed off on the Georgia law, it was eventually ruled unconstitutional by a federal judge, who likened the ID requirement to a poll tax from the Jim Crow era.

Obama will soon have the opportunity to hire his own political appointee to lead the Civil Rights Division. Still, “[t]he overall damage caused by losing a large body of the committed career staff and replacing it with persons with little or no interest or experience in civil rights enforcement has been severe and will be difficult to overcome,” Joseph Rich, the former chief of the voting section at Justice from 1999 to 2005, told a congressional committee in 2007.

And it’s not just the civil rights division that’s been damaged, lawyers warn. Attorney General Alberto Gonzales’s dismissal of seven US Attorneys in 2006 allegedly based on ideology is now under investigation by a special prosecutor. And at the Office of Legal counsel, Assistant Attorney General Jay Bybee and his deputy John Yoo advised the president in 2002 that he had unprecedented executive authority to ignore federal and international law. Those opinions – later sharply criticized and partly withdrawn by Jack Goldsmith, Bybee’s successor — led President Bush and his senior officials to authorize the torture, abuse and humiliation of detainees in violation of the Geneva Conventions and US anti-torture law, and to permit warrantless wiretapping of US citizens. Civil rights advocates are now calling for criminal investigations into those who authorized those acts – including the lawyers.

Looking forward, advocates and former career lawyers hope the new Obama administration will change that. But it won’t be easy. Although Obama will make new political appointments, such as the heads of the Office of Legal Counsel and of the civil rights division, he’s stuck with many of the career attorneys that some say are unqualified.

“You can’t get rid of the career people,” says Michael Ratner, president of the Center for Constitutional Rights and professor at Columbia Law School. “They have civil service protections. To fire them for political reasons would be the equivalent of hiring them for political reasons. On the other hand you don’t have to let them run their politics on the case.”

In fact, say legal scholars and advocates, the most important change Obama can make at Justice is to eliminate ideology from decision-making and return the department to its tradition of fairly enforcing the law.

“For me, the structural issue is the independence of the office of legal counsel,” says Ratner. “OLC got utterly maligned and controlled by [Dick] Cheney and [David] Addington. So restoring the office of legal counsel to an independent voice is absolutely crucial.”

Advocates such as Ratner are pushing for prosecutions of Cheney, Addington, Rumsfeld and others, insisting that only by prosecuting such abuses can the new justice department prevent their recurrence. Obama has not said whether he will initiate a criminal investigation, although he hasn’t ruled it out.

But there are also actions a new administration can take short of prosecution that could go a long way toward restoring respect for the rule of law, say legal scholars.

Making all the legal memos public is an important first step, said Sharon Kelly, a campaign manager at Human Rights First. The new administration should also review all of those memos and refute those that promote an unlawful view of unbridled executive power, says Ratner, who notes that although Goldsmith refuted the infamous “torture memo” written by John Yoo, he’s “never refuted the broad views of Yoo that the executive can do whatever is necessary to protect the country in war. I would want to see the justice department pull in the broad statements by affirmatively saying the president cannot violate the law in the name of national security.”

As for the civil rights division, it will have to get the lawyers hired under the Bush administration to begin vigorously enforcing the civil rights laws. In the area of voting rights, for example, the 2010 Census data is expected to lead to a flood of proposals for redistricting in 2011 and 2012, many of which will require review under the Voting Rights Act.

Ugelow is optimistic: “I’m hoping they’ll put somebody in charge who will have some gravitas and be well respected and appoint subordinates around him or her who will set a tone where enforcement is the order of the day.”

Other than Eric Holder, Obama’s pick for the next attorney general, the president-elect hasn’t yet announced his choices for who will lead key divisions at Justice. But David Ogden, former assistant attorney general for the Civil Division under President Clinton and now a partner at the law firm Wilmer Hale, is considered a likely pick for Deputy Attorney General. Ugelow said he thinks Holder will be “terrific” and that Ogden “has a wonderful reputation as a straight shooter.”

Washington lawyers say that Tom Perez, a former Justice Department lawyer, now secretary of labor in Maryland and serving on Obama’s transition team, is a possible pick for the Civil Rights division.

Potential leaders for Office of Legal Counsel include Martin Lederman, a former OLC attorney now teaching at Georgetown University Law School, and Dawn Johnsen, a law professor at Indiana University and former acting assistant attorney general of the office. Both are on Obama’s transition team.

“The next AG is going to have his work cut out for him,” warns Kelly of Human Rights First. “The Department of Justice needs strong leadership to put things back on track. Hopefully, it will go back to being a place more interested in upholding the law than in finding ways to skirt it.”

The Big Bailout Lessons

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By Harold Meyerson

Two things we learned about our politics and our economy in 2008:

Lesson One: If it's big and you don't regulate it, you end up nationalizing it.

One of the major lessons of the year is that unregulated and underregulated capitalism ends up confronting democratic governments with a subprime choice: Either let a major institution go down and watch as chaos follows (the Lehman option) or funnel gobs of the public's money into such institutions to avoid such Lehman-like chaos.

It was the Bush administration, more than the government of any other nation, that demonstrated this iron law of economics, for it was the Bush administration that was most committed to laissez-faire economics. The White House and the Treasury, under George W. Bush and Bill Clinton, let an entire unregulated financial world rise alongside the more regulated consumer banks and brokerages. Uniquely under Bush, however, the regulation of regulated banks and brokerages broke down as well. In 2000, the Justice Department filed 69 cases of securities fraud based on Securities and Exchange Commission investigations. In 2007, it filed nine. And this year, Bush's Office of Thrift Supervision allowed IndyMac Bank to doctor its books so it wouldn't appear to be as insolvent as, in fact, it was.

When the American financial industry came tumbling down this year, the laissez-faire ideologues of this most ideological administration indulged their ideology just once, allowing Lehman to go under. Thereafter, as one giant institution after another tottered under the weight of dubious deals, the administration tossed ideology out the window and funneled money to the banks.

Laissez faire be damned, the ideologues concluded: When handed a Lehman, make Lehman aid.

The lesson for 2009 couldn't be clearer: To avoid nationalization, you need regulation. Or, the lesson's ideological corollary: To avoid socialism (to whatever extent throwing public money at banks is socialism), you need liberalism (that is, the willingness to restrain capitalism from its periodic self-destruction).

Presumably, these lessons haven't been lost on Barack Obama, who has pledged to re-regulate Wall Street. Whether he's selected the right people for this task remains to be seen. To head the SEC, he chose Mary Schapiro, who led the financial industry's own regulatory authority, over such proven investor advocates as former SEC commissioner Harvey Goldschmid. The issue isn't Schapiro's competence or probity, which are well established, but whether she shares the "deep suspicion of bankers, of Wall Street lawyers, and of corporation lawyers in general" that characterized (in the words of FDR consigliere Raymond Moley) Tommy Corcoran and Ben Cohen, the New Deal attorneys who drafted the original and highly successful Securities and Exchange Act. If she doesn't, considering that Wall Street and its apologists are already warning about the dire effect of new regulations on the economy -- and, one presumes, their annual bonuses -- we'll be bound for a new cycle of light regulation and heavy public bailouts.

Lesson Two: In matters economic, the Civil War isn't really over.

If Abraham Lincoln were still among the living as he prepared to turn 200 six weeks from now, he might detect in the congressional war over the automaker bailouts a strong echo of the war that defined his presidency. Now as then, the conflict centered on the rival labor systems of North and South. Now as then, the Southerners championed a low-wage, low-benefits system while the North favored a more generous one. And now as then, what sparked the conflict was the North's fear of the Southern system becoming the national norm. Or, as Lincoln put it, a house divided against itself cannot stand.

Over the past century, of course, the conflict between North and South has been between union and non-union labor. The states of the industrial Midwest and the South had common demographics (Appalachian whites and African Americans, though the Northern states also were home to Catholics of Eastern European origin) but developed two distinct economies.

Residents of the unionized north enjoyed higher living standards, both from their paychecks and the higher public outlays on health and education, than did their counterparts in the union-resistant South.

But, just as Lincoln predicted, the United States was bound to have one labor system prevail, and the debate over the General Motors and Chrysler bailout was really a debate over which system -- the United Auto Workers' or the foreign transplant factories' -- that would be. Where the parallel between periods breaks down, of course, is in partisan alignment. Today's congressional Republicans are hardly Lincoln's heirs. If anything, they are descendants of Jefferson Davis's Confederates.

The Republicans in the White House, however, couldn't afford to be so sectional, since they were still subject to Lesson One: Even if the cars were lemons, they had to make -- okay, once per column.

Happy regulated new year.

US manufacturing slumps to 1980 low: ISM

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US manufacturing contracted for the fifth consecutive month in December to a 1980 low amid a sharp Asian slowdown and deepening recession in the world's biggest economy, a survey showed Friday.

The Institute of Supply Management (ISM) said its key manufacturing index dropped 3.8 percentage points from November to 32.4 percent, far below the 50 percent level that separates expansion and contraction.

It was below the economists' consensus estimate of 35.4 percent and, according to the institute, the lowest reading since June 1980, when the index hit 30.3 percent.

The machinery market in Asia had virtually shut down, respondents told a survey by the institute, which is a top supply management group based in Tempe, Arizona.

A reading above 50 percent indicates that the manufacturing economy is generally expanding while that below 50 percent signals it is generally contracting.

"Manufacturing activity continued to decline at a rapid rate during the month of December," ISM said in a statement.

"The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time."

New manufacturing orders, captured by another ISM index, have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948, the institute said.

Manufacturers, it said, were reducing inventories and shutting down capacity to offset the slower rate of activity caused by a prolonged recession.

In the machinery sector, respondents to an ISM survey said Europe "has slowed down dramatically, while Asia -- particularly China -- has virtually shut down."

Analysts pointed out that there was no sign that the US industrial activity decline was easing, citing the new numbers.

"Notably, there is no sign in the December report that the pace of manufacturing decline is yet bottoming," said Peter Kretzmer, senior economist with Bank of America.

Eurozone manufacturing activity fell to a record low in December while China's manufacturing sector is close to a technical recession after output contracted at a record pace in the last month of 2008, according to figures released Friday.

Three million customers and still counting: the bank getting rich by helping the poor

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By Xan Rice

Homegrown lender draws in customers shunned for decades by multinationals

In his 14th floor corner office overlooking the city, James Mwangi sits at the very top of Kenyan society. He got there by understanding the needs of those at the bottom.

Mwangi is the CEO of Equity Bank, a homegrown company that has turned the financial services industry on its head. For decades multinationals such as Barclays and Standard Chartered dominated Kenya’s banking sector by focusing almost solely on the middle and upper classes. Equity went the opposite way. It targeted the unbanked poor - "the watchmen, tomato sellers and small-scale farmers" whom Mwangi lists as typical customers - with cheap savings accounts and microloans backed by unusual guarantees.

The strategy has proved remarkably successful. In just a few years Equity has gone from being a quirky, fringe player to the third most profitable bank in the country and one of leading companies on the Nairobi Stock Exchange. It claims to have signed up its three millionth customer last month, giving it a 50% share of the Kenyan market for the first time, and is opening 4,000 new accounts a day.

"By focusing on the previously excluded Equity has revolutionised the banking sector," said James Shikwati, director of the Inter Region Economic Network, a thinktank in Nairobi. "It has forced the multinational banks to change their business strategies."

Equity’s improbable story has attracted international attention. Teams from Stanford and Harvard universities have travelled to Nairobi to study its business model, while Mwangi has advised the UN and the Bill and Melinda Gates Foundation on banking in the low-income sector. Last year he even shared a international microfinance award from the Berlin-based Global Economic Network with Muhammad Yunus, the Bangladeshi "banker to the poor" who won the Nobel peace prize in 2006.

But while Yunus’s Grameen Bank has relied on donor funding and state subsidies, Equity is a purely commercial venture.

It rose from difficult beginnings. Established as a building society in 1984, it was technically insolvent when Mwangi, an accountant, joined a decade later. Kenya’s economy was sliding, and the likes of Barclays were closing branches outside main towns, shrinking an already exclusive banking market.

Mwangi and his fellow managers realised that there were millions of low-wage earners in Kenya - a demographic economists call "the bottom of the pyramid" - who wanted to save and especially to borrow but were locked out of the financial system. As individuals the customers were not worth pursuing, but as a block they represented a huge, and potentially very profitable, market.

"Banking was the only industry in Kenya led by supply rather than demand," said Mwangi. "There was no ’bottom of the pyramid bank’."

That’s what a refocused Equity became. By 2003, when the economy began to pick up and bank launched an aggressive expansion drive, it had 256,000 account holders. While building up its network - there are now more than 100 outlets nationwide and 500 ATMs - Equity sent out armoured trucks into rural areas to serve as mobile branches. Traditional banks required payslips and utility bills as proof of address before opening an account with high minimum balances and monthly fees. Equity only asked for an ID card.

Within a year Equity had 600,000 account holders, and the growth trend has since continued. Most had never held a savings account - Equity’s competition is the mattress, Mwangi said. The typical savings account balance is about £100.

Even more important for profits - and to potential clients - was the microcredit operation. Loans can be for less than £5, repayable in just a few months. Since many of individual customers work in the informal sector and have few assets of value, the loans are often backed by what the bank calls "social collateral".

This can include account holders grouping together to guarantee an individual’s debt. Women can offer up their matrimonial beds as security; the theory being that no wife is going to want to tell her husband that their bed is gone.

"For us it’s psychological security. Nobody wants to be excommunicated and lose their inheritance to the Kingdom," Mwangi said. The bank claims that its unconventional credit risk strategy is proven, with a default of less than 3% on 600,000 outstanding loans, compared with an industry average of 15%. As with mobile phone service providers across the continent, Equity has proved the viability of the low-margin, high-volume business model.

With a cutting-edge IT infrastructure keeping transaction costs down, the bank earned £21m before tax in 2007, a return that encouraged the British private equity firm Helios Investment Partners to buy a 25% stake. This year earnings are expected to have more than doubled for the fourth successive year.

Though it was voted Kenya’s third most respected company in November, the bank does have its critics. Some people in the industry have questioned whether the Equity’s extraordinary performance statistics can be believed; Mwangi dismisses this as "competitors in self-denial". Still, experts say a slowdown in growth is inevitable. Mbithe Muema, an equity analyst with Renaissance Capital, said that other banks, including Barclays, were moving into the low-income sector, and would also try to make it hard for Equity to attract more affluent customers. A continued drive to expand its loan book might also increase Equity’s credit risk, she said.

But Mwangi seems unconcerned. He says that Kenya’s unbanked population remains large. And besides, the base of the pyramid is expanding: Equity has started operations in Uganda, and has plans to target Rwanda and South Sudan.

Cash transfers by text

Before the banking boom in Kenya came the mobile phone revolution. Now they are converging. Equity Bank recently launched a mobile banking service. But it is the move into banking by Kenyan mobile phone companies, which have signed up more than 15 million subscribers in under a decade, that has caught the public’s imagination. Safaricom, the biggest mobile service provider, launched a money transfer system in 2007 with Vodafone, its British partner. Known as M-PESA, it allows customers to deposit, transfer and withdraw money using their phones. Already 4 million people have registered for the service, which is cheaper and faster than more traditional cash transfer offerings. In December Vodafone began a pilot project enabling people to transfer money between Britain and Kenya.

The Crisis of Common Sense: Is It So Difficult To Understand The Financial Crisis?

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By Matthias Chang

Thinking & Common Sense

God gave us a brain to think, to think naturally and in simple terms, and not in a complicated way.

When we think naturally and use common sense to address problems we will be able to arrive at simple solutions.

But our education system tortures us mentally and forces us to think in complicated ways. Our teachers, economists, politicians and so-called experts in God and religion make mountains out of mole-hills, turning simple truths to complex arguments and “scientific theories and equations”.

These experts need to make things look difficult to survive and to make sure that we have to rely upon them for solutions. It is often said that, “in the land of the blind, the man with one eye is the King”.

Thinking used to be a pleasure and so very invigorating. But now experts have ensured that thinking is difficult and tiring, so burdensome, that we don’t think at all.

The result is that common sense is thrown out of the window, and we have been conditioned to rely on our mental crutch, the so-called experts to think for us.

How sad.

It Is So Difficult To Understand The Financial Crisis

Many have expressed to me that they are overwhelmed by the complexity of the global financial tsunami and are absolutely confused as to how to prepare and survive the crisis.

When I explained in simple terms, they refused to accept the explanations as to them “it was too simple. It must be more complicated as otherwise how can the crisis become a global fiasco?

Consider the following and my simple explanation:

1. financial engineering: new ways of gambling

2. Investors: gamblers

3. Stock & Futures Markets: casinos

4. Financial Analysts: casinos’ salesmen / women

5. Bonds: I.O.Us.

6. Banks: Dishonest Money-lenders (actual money-lenders licensed not as banks, but as money-lenders, cannot create “money out of thin air”. They have to use their own capital – 100% to lend)

7. Currencies / fiat money toilet papers

8. Derivative markets: ponzi scheme

So many people have difficulty accepting my explanations as the simple reality. This is even after the recent exposé of the US$50 Billion fraud by Bernard Madoff, the former chairman of NASDAQ. He declared to the FBI, that his scheme was essentially a Ponzi scheme (i.e. using one set of “investors’ money” to pay off an earlier set of “investors”).

Banks worldwide have collapsed!


Two reasons – (i) they gambled at the casino and lost trillions and (ii) almost all their borrowers that borrowed huge sums (leveraging 30 times or more i.e. if a borrower has $1 million capital, he can borrower $30 million) have defaulted.

Common sense tells us that if our income is only $X and we borrow 30 times in excess of $X, there is no way that we can repay the debt, unless our gambling bets pay out in excess of 30 times the original amount of $X.

Common sense tells us that if our total family monthly income is e.g. RM3,500, we cannot afford a lifestyle that requires a monthly expenditure of RM10,000 financed by credit-cards with only 5% monthly payment on the outstanding. When interests start piling up on the accumulated monthly outstanding, a point will be reached whereby the cardholder cannot even keep up with the payment of the interests. The cardholder defaults and he gets sued by the lawyers acting for the credit-card companies and or banks.

Common sense tells us that if you are conned into buying something allegedly worth US$500,000 when its actual value is US$5,000 and you borrowed to buy the inflated “asset”, there is no way that you will continue paying the installments and the interests on such an acquisition. The bank on the other hand is stuck with an “asset” supposedly worth US$500,000 but its actual worth is only US$5,000 or less.

Common sense tells us that the banks and the governments (fearing a systemic banking collapse) will lie and cover up the con-game until it cannot cover up anymore as too many banks are having the same problems and more importantly, the con-game cannot be covered-up anymore because borrowers are walking away and saying to the banks and governments – “You conned us, you take the blame.”

Common sense tells us that these so-called assets which “investors” have invested cannot be real assets, but mere papers masquerading as assets (such as CDOs, synthetic CDOs and CDO Squared – toilet papers). Therefore, so-called sophisticated “investors” were borrowing toilet papers to “invest” in toilet paper assets!

Common sense tells us, and thinking naturally and in simple terms will enable us to conclude, that only greedy people can be lured by such con-games and that when gambling at such casinos, these so-called sophisticated investors were not using common sense.

Common sense tells us that we, the remaining hardworking people should not allow any government to use our tax revenue to bailout such reckless and greedy b@st@ds.

Common sense tells us that when gamblers lose millions at the Las Vegas, Macau or Genting Highlands casinos, no government can justify and or dare to bailout such stupid and greedy gamblers. We would vote them out of office.

Common sense tells us that since all these “clever people” by their reckless, irresponsible and fraudulent conduct have destroyed the economy, they should be prosecuted and sent to jail and the keys thrown away!

Common sense tells us that a system that allows such frauds and gambling should be banned and made illegal.

Common sense tells us that when common thieves rob a jewelry shop or a bank, they are sentenced to long terms of imprisonment and whipped as well, these sophisticated thieves should be likewise be whipped and sent to prison for life imprisonment, as their destruction is a million times more devastating than the common thieves!

Common sense tells us that when times are hard, we should be prudent and thrifty to overcome and survive the hardships, so why are we encouraged to borrow more and more and to spend, spend and spend?

Common sense tells us that when a shop is offering a discount, a reduction in the price of a product, the shop-keeper is encouraging us to spend and buy the goods.

Common sense tells us therefore, interest charges and penalty interests are the cost of a debt / borrowings from the perspective of the borrower and revenues and profits, when the debt is fully paid, from the point of view of the lender.

Common sense tells us that it is not out of kindness that banks lower interest charges. Like the shop-keeper, it is to encourage more borrowings. More borrowings mean more debts and ultimately more profits for the bankers.

Common sense tells us that we should not get into debts unnecessarily and not to borrow to purchase things that are not within our income and our ability to repay.

Common sense tells us that we should not commit fraud and or be a party to a fraud.

Common sense tells us more importantly, not to be greedy and lust for material wealth.

Common sense tells us that we should be angry, very angry with the so-called “sophisticated and up-right people” who commit fraud and the regulatory authorities and political leaders who cover-up their crimes.

Finally, common sense tells us that we should take action to put a stop to these crimes and scandals.

Please use common sense and do something before it is too late!

Israel Has No Intention of Granting a Palestinian State

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If Hamas Did Not Exist

Let us get one thing perfectly straight. If the wholesale mutilation and degradation of the Gaza Strip is going to continue; if Israel’s will is at one with that of the United States; if the European Union, Russia, the United Nations and all the international legal agencies and organizations spread across the globe are going to continue to sit by like hollow mannequins doing nothing but making repeated “calls” for a “ceasefire” on “both sides”; if the cowardly, obsequious and supine Arab States are going to stand by watching their brethren get slaughtered by the hour while the world’s bullying Superpower eyes them threateningly from Washington lest they say something a little to their disliking; then let us at least tell the truth why this hell on earth is taking place.

The state terror unleashed from the skies and on the ground against the Gaza Strip as we speak has nothing to do with Hamas. It has nothing to do with “Terror”. It has nothing to do with the long-term “security” of the Jewish State or with Hizbullah or Syria or Iran except insofar as it is aggravating the conditions that have led up to this crisis today. It has nothing to do with some conjured-up “war” – a cynical and overused euphemism that amounts to little more the wholesale enslavement of any nation that dares claim its sovereign rights; that dares assert that its resources are its own; that doesn’t want one of the Empire’s obscene military bases sitting on its cherished land.

This crisis has nothing to do with freedom, democracy, justice or peace. It is not about Mahmoud Zahhar or Khalid Mash’al or Ismail Haniyeh. It is not about Hassan Nasrallah or Mahmoud Ahmadinejad. These are all circumstantial players who have gained a role in the current tempest only now that the situation has been allowed for 61 years to develop into the catastrophe that it is today. The Islamist factor has colored and will continue to color the atmosphere of the crisis; it has enlisted the current leaders and mobilized wide sectors of the world’s population. The primary symbols today are Islamic – the mosques, the Qur’an, the references to the Prophet Muhammad and to Jihad. But these symbols could disappear and the impasse would continue.

There was a time when Fatah and the PFLP held the day; when few Palestinians wanted anything to do with Islamist policies and politics. Such politics have nothing to do with primitive rockets being fired over the border, or smuggling tunnels and black-market weapons; just as Arafat’s Fatah had little to do with stones and suicide bombings. The associations are coincidental; the creations of a given political environment. They are the result of something entirely different than what the lying politicians and their analysts are telling you. They have become part of the landscape of human events in the modern Middle East today; but incidentals wholly as lethal, or as recalcitrant, deadly, angry or incorrigible could just as soon have been in their places.

Strip away the clichés and the vacuous newspeak blaring out across the servile media and its pathetic corps of voluntary state servants in the Western world and what you will find is the naked desire for hegemony; for power over the weak and dominion over the world’s wealth. Worse yet you will find that the selfishness, the hatred and indifference, the racism and bigotry, the egotism and hedonism that we try so hard to cover up with our sophisticated jargon, our refined academic theories and models actually help to guide our basest and ugliest desires. The callousness with which we in indulge in them all are endemic to our very culture; thriving here like flies on a corpse.

Strip away the current symbols and language of the victims of our selfish and devastating whims and you will find the simple, impassioned and unaffected cries of the downtrodden; of the ‘wretched of the earth’ begging you to cease your cold aggression against their children and their homes; their families and their villages; begging you to leave them alone to have their fish and their bread, their oranges, their olives and their thyme; asking you first politely and then with increasing disbelief why you cannot let them live undisturbed on the land of their ancestors; unexploited, free of the fear of expulsion; of ravishment and devastation; free of permits and roadblocks and checkpoints and crossings; of monstrous concrete walls, guard towers, concrete bunkers, and barbed wire; of tanks and prisons and torture and death. Why is life without these policies and instruments of hell impossible?

The answer is because Israel has no intention of allowing a viable, sovereign Palestinian state on its borders. It had no intention of allowing it in 1948 when it grabbed 24 per cent more land than what it was allotted legally, if unfairly, by UN Resolution 181. It had no intention of allowing it throughout the massacres and ploys of the 1950s. It had no intention of allowing two states when it conquered the remaining 22 per cent of historic Palestine in 1967 and reinterpreted UN Security Council Resolution 248 to its own liking despite the overwhelming international consensus stating that Israel would receive full international recognition within secure and recognized borders if it withdrew from the lands it had only recently occupied.

It had no intention of acknowledging Palestinian national rights at the United Nations in 1974, when –alone with the United States—it voted against a two-state solution. It had no intention of allowing a comprehensive peace settlement when Egypt stood ready to deliver but received, and obediently accepted, a separate peace exclusive of the rights of Palestinians and the remaining peoples of the region. It had no intention of working toward a just two-state solution in 1978 or 1982 when it invaded, fire-bombed, blasted and bulldozed Beirut so that it might annex the West Bank without hassle. It had no intention of granting a Palestinian state in 1987 when the first Intifada spread across occupied Palestine, into the Diaspora and the into the spirits of the global dispossessed, or when Israel deliberately aided the newly formed Hamas movement so that it might undermine the strength of the more secular-nationalist factions.

Israel had no intention of granting a Palestinian state at Madrid or at Oslo where the PLO was superseded by the quivering, quisling Palestinian Authority, too many of whose cronies grasped at the wealth and prestige it gave them at the expense of their own kin. As Israel beamed into the world’s satellites and microphones its desire for peace and a two-state solution, it more than doubled the number of illegal Jewish settlements on the ground in the West Bank and around East Jerusalem, annexing them as it built and continues to build a superstructure of bypass roads and highways over the remaining, severed cities and villages of earthly Palestine. It has annexed the Jordan valley, the international border of Jordan, expelling any ‘locals’ inhabiting that land. It speaks with a viper’s tongue over the multiple amputee of Palestine whose head shall soon be severed from its body in the name of justice, peace and security.

Through the home demolitions, the assaults on civil society that attempted to cast Palestinian history and culture into a chasm of oblivion; through the unspeakable destruction of the refugee camp sieges and infrastructure bombardments of the second Intifada, through assassinations and summary executions, past the grandiose farce of disengagement and up to the nullification of free, fair and democratic Palestinian elections Israel has made its view known again and again in the strongest possible language, the language of military might, of threats, intimidation, harassment, defamation and degradation.

Israel, with the unconditional and approving support of the United States, has made it dramatically clear to the entire world over and over and over again, repeating in action after action that it will accept no viable Palestinian state next to its borders. What will it take for the rest of us to hear? What will it take to end the criminal silence of the ‘international community’? What will it take to see past the lies and indoctrination to what is taking place before us day after day in full view of the eyes of the world? The more horrific the actions on the ground, the more insistent are the words of peace. To listen and watch without hearing or seeing allows the indifference, the ignorance and complicity to continue and deepens with each grave our collective shame.

The destruction of Gaza has nothing to do with Hamas. Israel will accept no authority in the Palestinian territories that it does not ultimately control. Any individual, leader, faction or movement that fails to accede to Israel’s demands or that seeks genuine sovereignty and the equality of all nations in the region; any government or popular movement that demands the applicability of international humanitarian law and of the universal declaration of human rights for its own people will be unacceptable for the Jewish State. Those dreaming of one state must be forced to ask themselves what Israel would do to a population of 4 million Palestinians within its borders when it commits on a daily, if not hourly basis, crimes against their collective humanity while they live alongside its borders? What will suddenly make the raison d’etre, the self-proclaimed purpose of Israel’s reason for being change if the Palestinian territories are annexed to it outright?

The lifeblood of the Palestinian National Movement flows through the streets of Gaza today. Every drop that falls waters the soil of vengeance, bitterness and hatred not only in Palestine but across the Middle East and much of the world. We do have a choice over whether or not this should continue. Now is the time to make it.

Hamas orders 'day of wrath' over Israel blitz

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Israeli warplanes pounded militant targets including a mosque in Gaza on Friday as Hamas ordered a "day of wrath" against Israel over the killing of a senior commander.

Thousands of Israeli security personnel were on alert after Hamas called for "massive marches" following the main weekly Muslim prayers, starting off from the Al-Aqsa mosque compound in Jerusalem and from all mosques in the West Bank.

"Police has been placed on a heightened state of alert throughout the country, just under the maximum level that is in effect in war time," police spokesman Micky Rosenfeld told AFP.

Thousands of officers were deployed around annexed Arab east Jerusalem alone, he said.

The army also locked down the West Bank for 48 hours, with movement in and out of the territory prohibited except for emergencies and special cases.

Hamas called a "day of wrath" after an Israeli air strike killed Nizar Rayan , a firebrand hardliner, and several of his wives and children. At least 422 Palestinians have now been killed in Israel's seven-day-old blitz.

Rayan is the most senior Islamist figure killed by Israel since Abdel Aziz al-Rantissi in 2004 and Hamas again warned that it could resume suicide operations against Israel for the first time since January 2005 to avenge his death.

"After the last crime, all options are open to counter this aggression, including martyr operations against Zionist targets everywhere," Hamas official Ismail Radwan vowed after the attack.

With tanks and troops massed for a threatened ground offensive around Gaza and no ceasefire in sight, the army allowed foreigners to leave the battered enclave.

"The (border) crossing was specially reopened to allow foreign nationals to leave the Gaza Strip," an army spokesman told AFP, adding that more than 400 people, mostly dual nationals, were expected to cross.

The Israeli military pounded the densely populated territory for a seventh day, carrying out some 20 strikes overnight, bombing rocket launching sites and Hamas buildings, the army said.

Among the targets was a mosque in the northern town of Jabaliya that the military said was a "terror hub," used to stockpile weapons and as a Hamas operations centre.

At least two people were killed in the latest raids, which targeted a house in Jabaliya, medics said.

The Islamist movement kept firing back, sending a handful of rockets slamming into Israeli territory overnight without causing casualties.

Israel unleashed its "Operation Cast Lead" on Hamas in Gaza on Saturday in response to persistent rocket fire from the territory, which has been under a crippling Israeli blockade since the Islamists seized control in June 2007.

At least 422 Palestinians have now been killed in the offensive and a further 2,180 wounded, according to medics. At least 25 percent of those killed are civilians, according to a UN count.

Gaza militants have fired more than 360 rockets into Israel, killing four people and wounding dozens more. Some of the rockets have reached deeper than ever inside Israeli territory, penetrating some 40 kilometres (24 miles) from the Gaza border.

The Israeli offensive -- one of its deadliest-ever on Gaza -- has sparked angry protests in the Muslim world and defied diplomatic efforts to broker a truce.

In the latest protests, more than 4,000 Muslims demonstrated in Sydney and hundreds of Muslims burnt Israeli flags in Indian-administered Kashmir.

UN Foreign Minister Tzipi Livni reiterated that Israel does not think the time is yet ripe for a truce after talks in Paris on Thursday with President Nicolas Sarkozy and other French leaders.

"The question of whether it's enough or not will be the result of our assessment on a daily basis," she said.

Peace moves were also stalled at the UN Security Council even though UN Secretary General Ban Ki-moon said the conflict had become "a dramatic crisis."

The civilian population in Gaza and stability throughout the Middle East "are trapped between the irresponsibility displayed in the indiscriminate rocket attacks by Hamas militants and the disproportionality of the continuing Israeli military operation," Ban said.

The majority of the Israeli public is supporting the Gaza offensive, with some 95 percent of Jewish residents backing the strikes according to a survey published on Friday in the Maariv daily.

McKinney to Obama: “Say Something” About Gaza Humanitarian Crisis

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Asks Congress to Stop Sending "Weapons of Mass Destruction"

Former Georgia Congresswoman Cynthia McKinney has called upon President-Elect Barack Obama to "please, say something about the humanitarian crisis that is being experienced by the Palestinian people, by the people of Gaza." McKinney spoke to CNN news from the Lebanese city of Tyre, where she had debarked from the relief vessel Dignity after it was rammed on the high seas by an Israeli patrol boat, early Tuesday morning. Passengers also report the Israelis fired machine guns into the water near their ship.

McKinney was among the passengers on an attempted voyage from the island of Cyprus to Gaza, where Israeli bombs and missiles have killed hundreds of Palestinians, including many civilians, since Saturday. The Dignity carried three tons of medical supplies and a number of doctors prepared to treat the more than 1,000 Gazans wounded in the Israeli attacks. The 66-foot craft had made two previous humanitarian relief trips to Gaza since the summer. Israel has blocked food, medicines and other essentials from entering Gaza in a campaign of collective punishment against the 1.5 million Palestinians that live there under a Hamas Party administration.

President-Elect Obama has been silent on the Israeli attacks, while President George Bush has supported Israel’s actions.

"I would like to ask my former colleagues in the United States Congress to stop sending weapons of mass destruction around the world," said McKinney, who was the Green Party’s presidential candidate in November. "As we are about to celebrate Dr. Martin Luther King Jr’s birthday, let us remember what he said. He said that the United States is the greatest purveyor of violence on the planet. And guess what: we experienced a little bit of that violence, because the weapons that are being used by Israel are weapons that were supplied by the United States government."

A CNN reporter who accompanied the passengers and crew of the Dignity confirmed that the boat "was sailing with full lights" when "one of the Israeli patrol boats, with no lights on, rammed the Dignity, hard."

Israel blames the collision on the relief vessel.

Said McKinney: "Our boat was rammed three times, twice in the front, once on the side.... What the Israelis are saying is outright disinformation."

McKinney compared the Israeli action against the Dignity to the attack on a U.S. naval vessel during the 1967 Arab-Israeli War. "I recall that there was another boat that was attacked by Israelis, and it was the U.S.S Liberty." Thirty-four crewmen died and 170 were wounded by fire from Israeli planes and torpedo boats. The Israelis claim it was a case of mistaken identity. "People would like to forget about the U.S.S. Liberty," said McKinney, "but I haven’t forgotten about it and the people who were on that ship have not forgotten what happened to them."

Gazans fight cold and hunger as supplies run dry

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By Azmi Keshawi

Their windows smashed in the dead of winter by bomb blasts, Jihad Hamed, his wife and seven children huddle together every night in one bedroom of their freezing house, trying to keep warm and as far away as possible from the next explosion, wherever it might come from.

Aside from the terror of the Israeli bombs, Gazans also have to contend with more insidious enemies: cold, hunger, and the risk of falling ill when almost all medical supplies have run out.

There has been no electricity for days, causing pumps to fail and water supplies to run dry. Toilets and showers are a forgotten luxury for a population merely trying to stay alive in a withering aerial blitz that has shocked even war-hardened Gazans.

“Now the situation is tragic for me and the kids,” said Mr Hatem, a 45-year-old caretaker, whose family survives on his meager salary of 900 shekels (£164) a month. “I’m sure my kids will get sick from the cold and I don’t have the money to buy any medicine, and the hospitals can only take seriously wounded people.” Even before the onslaught started, Mr Hamed struggled to get by, often having to rely on the charity of richer neighbours. “Now the rich and poor are the same, you can’t buy electricity,” because for those lucky enough to have generators, almost no fuel can get into the blockaded territory. “Rich and poor are in the same boat,” he said.

Hatem Baana, the manager of a medical supply store, said many of his medical products spoiled because without electricity his storage fridges no longer work. Desperate aid groups supporting Gaza’s overwhelmed hospitals have contacted him to buy whatever he might have, but he cannot help them.

And Hatem al-Shurab, an aid worker for the British charity Islamic Relief, said that some people had been reduced to foraging for wild mallow plants as their emergency food stocks dwindled to nothing. “People are finding it hard to feed their families,” he said.

Even in her cold homes, Gazans do not feel safe, since they do not know what constitutes a target for the Israeli bombers which have broadened their mission to include mosques, sport centres, and even money changers transferring funds for Hamas.

Recorded phone messages warn people their buildings will be blown up if there are Hamas members there: the problem is that nobody really knows if their neighbour might be a member of Hamas’s shadowy military wing.

“Nobody knows what the next target will be,” said Mr al-Shurab.

Police are still patrolling important areas such as markets and hospitals to prevent looting or robberies, but to avoid being hit they wear civilian clothes and keep their pistols tucked down the back of the trousers. They have vowed to track down anyone daring to exploit the chaos to loot or rob.

Cold, hungry and afraid, Gazans are directing their anger at their neighbours. “I blame the Arab countries first and foremost,” said Mr Hamed. “They are the once who have left us to our fate without any support. We are civilians, we have no hand in political disputes. We are the victims of both the siege and of politics.”

2009 - Time to wake up

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By Omran Al Sharhan

While 100 of millions are happily celebrating the New Years Eve with their loved ones, 100s of innocent Palestinian civilians & Hamas Freedom Fighters have been bombed by F-16s indiscriminately. 1000s of seriously injured Palestinians are desperately waiting for blood, medicine & doctors. 100,000s are trying to find a shelter to hide and protect their loved ones, food to eat and water to drink. More than 2,000,000 are hoping for an end to all misery inflicted on them during the past 60 years. Yet with all those numbers, the headlines of CNN as well as other major media corporations focus on the less than 10 injured Israelis and 2 dead Israelis.

Watching Al-Jazeera and reading online news that you won't find on CNN and Fox News, one will witness a historic moment in which millions of protestors worldwide have decided to speak against the atrocities occurring in the lands of Palestine. Many holding shoes (symbolizes the shoe-thrower Hero of Iraq), many holding signs of "Stop Zionism", "End the HoloCaust", "9/11 - Inside Job", "Support Gaza - Break the Seige" and much more. Whether it is in London, or Belgium or even New York, the brave protestors filled the streets fearing no authority, no government and no voilent police response. Christians, Muslims, Buddhas and even Jews, all sharing one goal, one voice, one conscience, one hope for "real" change and not the "change" advertized throughout 2008 American Elections.

As conscious human-beings who care about humanity and still maintain hope for a better world, the recent global protests for Gaza should strengthen our faith in creating that better world we all dreamed of. A world in which no country is above International Law, a world with no occupied territories, a world where justice prevails, a world that does not remain quiet when a whole nation is being horrifically imprisoned for decades.

This new level of awareness filling the streets of the world is growing with every injust bombing or bullet that penetrates through the flesh of the Heroic Stone Throwers & Resistance Fighters. Gaza has become a symbol of resistance to injustice, Gaza has become a symbol of freedom, Gaza has become the symbol of unity for all those who seek justice in our world.

The time has arrived in which the world is finally waking up from the illusions of the world. Young & Old people of all faiths are waking up to the injustice that has been hidden from them by the very same tools that aim to brainwash and manipulate the masses. It is time for real change, not the change promised to us by the manipulative soon to be President of USA, but by change that will be brought by the brave people of the world who seek justice and truth. The new Holocaust will end, the New World Order will fail, and Good will win over Evil. This is not utopian, reality has shown us that this can be accomplished.

Happy New Year.

"We are not Human-beings on a Spiritual Journey, We are Spiritual-beings on a Human Journey"

Everything You Needed Know about Iran but the Mass Media, the Republicans and Hillary Clinton Wouldn't Tell You

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By Col. Ann Wright

Just a month ago, while Israeli Prime Minister Ehud Olmert and President George W. Bush met in Washington for the last time as heads of state and continued their relentless bellicose rhetoric toward Iran, I and three activists from the United States were in Iran as citizen diplomats talking with Iranians on their views of a new American presidential administration and their hopes for their country.

We went to Iran with no illusions. We knew well the history of United States involvement in Iran. We knew of Iranian support for organizations U.S. administrations have labeled terrorist groups. And we were very familiar with international concerns about Iran’s nuclear-enrichment program and human-rights record.

We wanted to talk with members of the Iranian government as well as with ordinary Iranians. We ended up meeting with officials in the Iranian president’s office and the Ministry of Foreign Affairs and with two female members of the Iranian Parliament (Majles). We also spoke with businesspersons, members of nongovernmental organizations, writers, filmmakers and university students and faculty.

Writing about the concerns of the Iranians we met leaves one open to comments of being one-sided, not speaking with enough Iranians to provide the "real" voices and of picking and choosing voices to record. I acknowledge the possible criticism in advance but believe our discussions are worthy of presentation to those who have not been so fortunate to have traveled to Iran to see and hear for themselves. So here goes.

Iranians Want Peace, Not War

Codepink Women for Peace co-founders Jodie Evans and Medea Benjamin, Fellowship of Reconciliation Iran Program Director Laila Zand and I were reminded in virtually every conversation that Iranians want peace with the United States. Not one person in Iran told us that, first, she believed her country would begin a war with the United States or any other country, including Israel, and second, that if the United States initiated military actions against Iran, that those actions would resolve problems in Iran or with the United States.

They reminded us that, unlike the United States, which has invaded and occupied Iran’s neighbors Iraq and Afghanistan, Iran has not attacked any country in the last 200 years. They reminded us that Iran was the victim of an eight-year war in the 1980s, when Iraq invaded Iran and the United States and European countries provided Iraq with military equipment, intelligence and chemical weapons that were used at least 50 times against Iranian civilians and military forces. We learned that during that war, the Revolution’s Supreme Leader Ayatollah Khomeini had mandated that it would be against Islamic precepts to bomb Iraqi cities or use chemical or unconventional weapons on Iraq -- and Iranian military forces complied.

Most Iranians Have Issues With Their Government, as Most Americans Have Issues With Theirs

Iran is a country with a population of about 70 million (two-and-one-half times as many people as Iraq) and a geographic area about the size of Alaska (four times as large as Iraq). Tehran, the nation’s capital, has 7.5 million people in the urban area and 15 million in surrounding areas. It is a modern city with a beautiful subway and cosmopolitan shops, as well as a huge traditional bazaar and an incredible number of cars, trucks and motorcycles. Tehran and Iran have recovered from the Iraq war that ended 20 years ago and are holding up remarkably well to U.S. and international sanctions.

Most Iranians with whom we talked openly said they have issues with many aspects of their government. Many said the Iranian people share a common dislike with Americans -- dislike of their respective governments -- noting that Bush’s and the U.S. Congress’ approval ratings with the American people are extremely low, as is Iranian President Mahmoud Ahmadinejad’s ratings, particularly in urban areas. But, they strongly said they do not want outside interference in the internal political events of their country and definitely do not want a political system and government installed by invasion and occupation. Their democracy, even with its flaws, is better than a U.S.-enforced democracy, they said.

America’s best policy would be to treat Iran with respect and not with threats of military action. Any attempt to overthrow the Iranian government would be met with stiff opposition, even from those who don’t like the government, they repeated. "Regime change" will come in due time and in an Iranian manner.

U.S. Interference in Iran’s Internal Affairs

Several reminded us that in January 1981, the United States and Iran signed the Algiers Accord, in which the United States agreed "not to intervene, directly or indirectly, politically or militarily, in Iran’s internal affairs." The Algiers Accord was the agreement to end the 444-day U.S. Embassy hostage crisis.

However, this accord has been violated numerous times by the United States. Investigative journalist Seymour Hersh wrote in the New Yorker that in late 2007, Bush requested and received from Democratic congressional leadership $400 million reprogrammed from previous authorizations to fund a presidential finding that substantially increased covert activities designed to destabilize Iran’s religious leadership. These covert actions involved support for the Ahwazi Arab and Baluchi groups and other dissident organizations. Hersh wrote that since 2007 United States special operations forces had been conducting cross-border operations from southern Iraq, with presidential authorization, including seizing members of Al Quds, the commando arm of the Iranian Revolutionary Guard and taking them to Iraq for interrogation, and pursuing "high-value targets" who could be captured or killed. Hersh said operations by the Central Intelligence Agency and the Joint Special Operations Command were significantly expanded in 2007 by this authorization.

Iran’s Nuclear Program

Iran has had a nuclear program for almost 50 years, having purchased a research reactor from the United States in 1959 during the reign of the Shah Mohammad Reza Shah Pahlavi. The Iranian government states that its nuclear energy program will allow increased electricity generation to reduce consumption of gas and oil to allow export of more of its fossil fuels. The U.S. National Intelligence Estimate made public on Dec. 3, 2007, concluded with "high confidence" that the military-run Iranian nuclear weapons program had been shut down in 2003 but that Iran’s enrichment program could still provide enough enriched uranium to produce a nuclear weapon by the middle of the next decade, a time frame unchanged from previous estimates.

Virtually everyone with whom we spoke said they believe their country has a right to have a nuclear-enrichment program and to produce nuclear energy. Many questioned why Iran would ever need a nuclear weapons program, unless as leverage against the United States’ 30-year antagonism toward their country. They reminded us that Iran is a signatory of the Nuclear Non-Proliferation Treaty (unlike Israel, North Korea, India and Pakistan, which refused to join the NNPT and developed nuclear weapons purposefully outside the treaty). Additionally, they insist that Iran is in compliance with the International Atomic Energy Agency standards, according to the November 2008 IAEA report, despite interpretations of the report by the United States and Israel.

Some reminded us that on Aug. 9, 2005, at the IAEA meeting in Vienna, 60 years after the U.S. atomic bombing of Japan, Iran’s Supreme Leader Ayatollah Khamenei announced that he had issued a fatwa, or religious mandate, forbidding the production, stockpiling and use of nuclear weapons. Importantly, the supreme leader controls the Iranian military and the nuclear program of Iran, not the president, Ahmadinejad.

Iran, Israel and the United States

Iran, Israel and United States have had a disturbing, but fascinating, history over the past 30 years. Iran’s current relationship with Israel and Western countries seems to be defined by Ahmadinejad’s October 2005 statement -- widely reported, but tragically and dangerously mistranslated and misinterpreted -- that "Israel should be wiped off the face of the earth." According to highly respected Middle Eastern scholar Juan Coles, Ahmadinejad was "not making a threat, but was quoting a saying of Khomeini’s that urged pro-Palestinian activists in Iran not give up hope -- that the occupation of Jerusalem was no more a continued inevitability than had been the hegemony of the shah’s government." Whatever this quotation from a decades-old speech of Khomeini may have meant, Ahmadinejad did not say that "Israel must be wiped off the map" with the implication that phrase has of Nazi-style extermination of a people.

But the history of Iranian-Israeli relationships is more than just Ahmadinejad’s misinterpreted statement. Israel, like the United States, had a long history of selling arms to the shah, which Iran’s revolutionary government was willing to exploit secretly, despite its public animosity toward the state of Israel. In the early years (1980-82) of the Iranian Revolution and during the war with Iraq, Khomeini’s government sold oil to Israel in exchange for weapons and spare parts. Even during the American hostage crisis (1979-1981) in which 52 U.S. diplomats were held for 444 days, Israel made weapons deals with Iran. President Ronald Reagan’s Secretary of State Alexander Haig gave permission to Israel to sell U.S.-made military parts for fighter planes to Iran in early 1981.

In another remarkable relationship known as the Iran-Contra affair, funds from Israel’s sale to Iran of U.S. weapons in 1985-1986 were used by U.S. Defense Secretary Caspar Weinberger, National Security Adviser Adm. John Poindexter, National Security Adviser Robert McFarlane (Reagan’s first national security adviser) and National Security Council staffer Marine Lt. Col. Oliver North to fund the Contras’ war against the revolutionary government in Nicaragua. This was in violation of a congressional ban on funding the Contras and took place during the Iraq-Iran war when the United States was also providing military equipment to Iraq. Iranians remember that those convicted for their actions, including Weinberger, Poindexter, McFarlane and North were pardoned by President George H.W. Bush, who was vice president during this period of criminal actions.

Iranian Support for Hamas and Hezbollah

When asked about one of the most contentious points in U.S.-Israeli-Iranian relationships -- the Iranian government’s support for Hamas in Palestine and Hezbollah in southern Lebanon -- Iranians pointed out that the United States has consistently and heavily funded Israel during its 62-year existence (the United States provides about $4 billion per year to the Israeli government and the Israeli Defense Forces). Many Iranians suggested that Palestinians who have lived in refugee camps during those 62 years must be provided assistance. Hezbollah began in 1982 as a small militia fighting the Israeli invasion of Lebanon and is now not only a military group but a political organization that won seats in the Lebanese government, has a radio and satellite television station and provides social development and humanitarian assistance for much of southern Lebanon. Iranians strongly felt that Hamas, the elected (and they emphasize elected) government of Gaza, needs financial support, particularly now in current extraordinary humanitarian crisis due to the lengthy Israeli blockade of foods and services into Gaza.


On the question of Iraq, many Iranians who lived in the border regions with Iraq during the eight-year war said they personally knew the agony of deaths, injuries, destruction and other costs of war and do not wish that on their former enemies. They talked of the irony of the political outcome of the U.S. invasion and occupation of Iraq, in which many Shiite Iraqis, who lived in exile in Iran during President Saddam Hussein’s regime and have longstanding ties to the Iranian government, are now in leadership positions in the new U.S.-backed Iraqi government.


Other Iranians reminded us of Iran’s help to the United States in 2001 and 2002 in the early days of the U.S. military action in Afghanistan. When we asked about recent U.S. intelligence analysis that indicated Iranian support for the Taliban, we were met with laughs. The Taliban are Sunni Muslims, while Iranians are Shiites. They reminded us that in 1998, the Taliban killed 11 Iranian diplomats and one Iranian journalist at the Iranian consulate in Afghan northern city of Mazar-i-Sharif, an incident Iranians have not forgotten. The Iranians consider the Taliban their adversaries and feel that a Taliban government in Afghanistan would make the region more unstable.

Sanctions Are Drying Up Lines of Credit for Businesses

We found that Iranians are proud of their creativity to outwit the 29 years of various sanctions the United States has placed on their country. They say the United States has only isolated itself commercially by its sanctions, as Iran trades with many other nations. Europeans, Chinese, Russians and Indians have had flourishing businesses with Iran. However, the recent international sanctions’ clampdown on lines of credit for Iranian banks has had a rippling effect into the business community, where money for loans to Iranian businesses for purchase of materials is drying up. Oil dollars that paid for an incredible amount of imports are drying up with the downturn in oil prices, and the government is beginning to re-evaluate the large subsidies given to the population for food, gasoline and services.

We spoke with four businesswomen (an architect, a chemist, a business consultant and an agricultural professional), who each said of their businesses had been affected negatively with the shrinking of money available for purchase of materials from outside the country and for continuation of current levels of operation or expansion of their businesses.

One of the most incredible stories we heard about the effect of the sanctions was on the alternative-energy sector. Since there is so much rhetoric in the United States about the dangers of the Iranian nuclear program, we decided to see if there were alternative-energy companies in the country. On the aircraft flying into Iran, we met a European businessman who said he would put us in touch with the director of a wind-energy company. He introduced us by telephone to the director of Saba Niroo Co., an Iranian company that makes wind turbines and is the largest regional wind power manufacturer. We met with the director and staff at the state-of-the-art factory in south Tehran. Saba Niroo has installed some of the 143 wind turbines planned for the wind farm in Manjil, Guillan Province, and the 43 wind turbines planned for the Binalood wind farm in Khorasan Razavi Province. They have installed four wind turbines in the Pushkin Pass wind farm in Armenia.

However, the director told us that because of U.S. sanctions, Vestas, a Danish wind energy company with whom the Iranian company has had a contractual relationship, has now refused to honor its 15-year contract to furnish critical parts for the wind turbines.

As a result, Saba Niroo has 50 huge 70-foot-long blades and corresponding chassis and installation towers lying useless in its warehouse and warehouse yard. Saba Niroo may go bankrupt in six months if it is unable to complete and sell the wind turbines -- all because of U.S. sanctions and pressure.

As a part of citizen diplomacy, we decided to defy sanctions and show our support of alternative-energy programs, by purchasing shares in Saba Niroo. We have also decided to purchase shares in Vestas, which has a big U.S. headquarters in Portland, Ore. As shareholders, we could put pressure on Vestas to honor its contract with the Iranian company.

Human Rights in Iran

On the question of human rights in Iran, executions, political prisoners and rights of gays and lesbians, many Iranians strongly want changes in their government’s policies. In response to a question on Sept. 24, 2007, from an audience at Columbia University in New York, Ahmadinejad drew widespread criticism when his answer was translated as, "In Iran, we don’t have homosexuals in our country, we do not have this phenomenon. I don’t know who told you that we have it." In October 2007, one of Ahmadinejad’s media advisers said that the president had meant that "compared to American society, we don’t have as many homosexuals -- in Iran, we don’t have homosexuals like in your country."

Homosexual acts are punishable by law: Sodomy (defined as "sexual intercourse with a male") is punishable by execution, and punishment for "lesbian acts" is 100 lashes. However, conviction takes the testimony of four witnesses, and if the accused recants before witnesses testify, the accused will not be punished. The discussion of human rights of youth and gay youth combined in the much-publicized 2005 execution by hanging of two young men in Iran. Some say they were executed solely because they were gay, and others say the two were convicted and hanged because they sexually assaulted another boy.

Interestingly, sex-change surgery is legal in Iran and there are more sex-change operations in Iran than any other country except Thailand. The Iranian government provides grants up to $4,500 for the operation and further funding for hormone therapy on the theory that persons wanting a sex change have a "treatable disorder."

Iranians want change to come from within their society, not imposed by another government, especially one, as we were reminded, that has its own human rights issues, including incarceration of the highest percentage of its citizenry of any country in the world, high rates of execution (Texas in particular), state-sponsored kidnapping from other countries (known in the Bush administration as extraordinary rendition), imprisonment without due process, extrajudicial courts and a military and an intelligence agency that are notorious for torture.

Women’s Issues

When thinking of women in Iran, many in the West immediately respond with comments about the clothing women must wear. Few realize that 70 percent of all university students are women, 30 percent of doctors in Iran are women, 80 percent of women are literate (88 percent of men can read), women receive 90 days of maternity leave at two-thirds pay and right to return to their jobs, and the number of children per woman has declined from seven in 1979 to 1.7 now. Abortions are illegal in Iran, but it’s the only country I know of where couples must take a class on modern contraception before being issued a marriage license. It has the only state-supported condom factory in the Middle East, and it produces 45 million condoms a year in 30 colors, shapes and flavors.

In one of the most successful instances of women’s grassroots organizational pressure on the government, in September 2008, more than 100 advocates for women’s rights successfully lobbied against proposed changes to marriage laws that were detrimental to women and forced the Iranian Parliament to drop the regressive amendments.

Clothing Restrictions

Yes, there are mandatory clothing rules for women, including wearing a scarf and clothing that covers the arms to the wrists and legs to the ankles, and they are cited by Western women as a human rights concern. In fact, as our aircraft arrived at the Tehran International Airport terminal, the aircraft crew announced, "By the law of the country of Iran, women cannot leave the aircraft without a scarf on their heads -- and there will be an Iranian official outside the aircraft to return women who are not properly covered." While some Iranian women say wearing the scarf is burdensome, others are comfortable with the dress code. In any case, clothing restrictions are not the main focus of women’s rights advocates. Rights to custody of children and property after divorce, right to education and health care are more important than mandatory wearing of a scarf.

In the Month Since Our Visit

Sparks fly over Iranian president’s BBC Christmas message -- "Jesus Christ Would Stand Up to Bullying, Ill-Tempered and Expansionist Powers."

In what they surely knew would be a very controversial request, the British Broadcasting Company asked Ahmadinejad to deliver Channel 4’s traditional "alternative Christmas message" to the Queen’s Christmas address.

The head of BBC News and Current Affairs said the decision to ask Ahmadinejad was because "As the leader of one of the most powerful states in the Middle East, President Ahmadinejad’s views are enormously influential. As we approach a critical time in international relations, we are offering our viewers an insight into an alternative worldview. Channel 4’s role is to allow viewers to hear directly from people of world importance with sufficient context to enable them to make up their own minds."

It turned out that Ahmadinejad’s 36-second message in Farsi, with English subtitles, broadcast on Christmas Day probably resonated with much of the world, but predictably provoked a British government hornet’s nest with his comment that if Jesus Christ lived today he would stand up against bullying powers.

"If Christ were on earth today, undoubtedly he would stand with the people in opposition to bullying, ill-tempered and expansionist powers." Ahmadinejad, a devout Muslim, criticized the "indifference of some governments and powers" toward the teachings of the "divine prophets, including Jesus Christ" and said that "the general will of nations" was for a return to human values. He declared, "The crises in society, the family, morality, politics, security and the economy … have come about because the prophets have been forgotten, the Almighty has been forgotten and some leaders are estranged from God."

Ahmadinejad’s remarks received very little media coverage in the United States, minuscule when compared to the news story of the month -- Bush’s encounter with the Iraqi shoe thrower. However, a spokeswoman for the U.K.’s Foreign and Commonwealth Office, in predicting anticipated Bush administration displeasure, said: "President Ahmadinejad has during his time in office made a series of appalling anti-Semitic statements. The British media are rightly free to make their own editorial choices, but this invitation will cause offense and bemusement not just at home but amongst friendly countries abroad."

Labor Member of Parliament Louise Ellman, chairwoman of the Labor Jewish Movement, said: "I condemn Channel 4’s decision to give an unchallenged platform to a dangerous fanatic who denies the Holocaust while preparing for another and claims homosexuality does not exist while his regime hangs gay young men from cranes in the street." Conservative MP Mark Pritchard, a member of the Commons all-party media group, said: "Channel 4 has given a platform to a man who wants to annihilate Israel and continues to persecute Christians at Christmastime."

Media Relations Not a Strong Suit of the Iranian Government

It’s almost as if Ahmadinejad, who is up for re-election in summer 2009, has hired lame ducks Vice President Dick Cheney and Israel’s Olmert as his foreign policy, national security and media consultants. How else could the Iranian government have come up with so many incidents in recent weeks that give ammunition to those in the United States and Israel who do not want dialogue with Iran on nuclear and regional security issues, who want human rights issues to publicize and who wish ill to the Iranian government and people?

For example, on Dec. 22, the Iranian government closed down two human-rights organizations headed by 2005 Nobel Peace Prize-winner Shirin Ebadi. The government accused the organization of carrying out illegal activities, such as publishing statements, writing letters to international organizations and holding news conferences. The Center for Participation in Clearing Mine Areas helps victims of land mines in Iran, and Defenders of Human Rights Center reports human rights violations in Iran, defends political prisoners and supports families of those prisoners. Ebadi was taken into police custody briefly following the raids.

The first week in December 2008, in a campaign against Western cultural influence in Iran, Qaemshahr city police arrested 49 people during a crackdown on "satanic" fashions and unsuitable clothing and closed five barbershops for "promoting Western hairstyles."

And now, there is the predictable increased international criticism about the Russian government providing the Iranian government with anti-aircraft and anti-missile defense systems, triggered by the Bush administration’s decision to put a "missile shield" in Poland and the Czech Republic. On Dec. 23, United Press International reported that the Russian government had begun delivery to the Iranian government of some of its most modern anti-aircraft and anti-missile defense systems, the S-300s. These missile systems can shoot down ballistic missiles and aircraft at low and high altitudes as far away as 100 miles. Iran conducted well-publicized air force and ballistic missile defense exercises in September.

The Bush administration’s poke in the eye of Russia and Iran by the deployment of ballistic missiles in Poland and a radar in the Czech Republic "to protect against attacks from rogue states" is perceived by many Iranians as a strategy to ensure that tensions in the region continue to escalate. The United States is planning to deploy 10 Ground-Based Interceptors in Poland and batteries of shorter-range Patriot PAC-3 anti-ballistic missiles to protect the GBIs.

Iranians Not Optimistic About Future Relations with the United States Under an Obama Administration

Despite President-elect Barack Obama’s comments during the presidential campaign that he would have dialogue with the Iranian government without preconditions, many Iranians with whom we spoke are not optimistic that there will be meaningful change in U.S. policy during an Obama administration. Citing appointments of former Israeli Defense Force member and U.S. Congressman Rahm Emanuel as chief of staff; Sen. Hillary Clinton, D-N.Y., who during the summer campaign said she would "obliterate" Iran if Iran used nuclear weapons against Israel (a statement that Iranians find incomprehensible since it is Israel that has nuclear weapons, not Iran, and Israel continues to threaten Iran), and Dennis Ross, the Middle East negotiator during the Clinton and Bush administrations, Iranians said they hoped the American Israel Public Affairs Committee lobby had not already determined Obama’s agenda toward Iran.

Iranians Want Peace

To emphasize again, the overwhelming comment from Iranians during our visit was that they want peace with the United States. They hope that the new president of the United States will talk with their government to resolve issues instead of resorting to the threat, much less the use, of military action.

Our Future With Iran -- a Hope for Diplomacy, Not Military Action

As we have seen from the American invasion and occupation of Afghanistan and Iraq, the use of our military to resolve security issues kills and injures civilians, destroys cities and villages, creates more people who dislike/hate our country and who may be willing to use violence against us, and jeopardizes, not enhances, the security of the United States.

As a retired U.S. Army colonel and a former U.S. diplomat, I hope that the Obama administration will throw away the old template of 30 years of crisis, threats of military action, vindictiveness and retaliation and look to diplomacy to develop a peaceful future with Iran!