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By Jean Shaoul
Last week, the Guardian newspaper confirmed that Israel was actively considering a military strike against Iran’s nuclear facilities last spring. It reported that when Israel’s then prime minister, Ehud Olmert, raised this during US President George W. Bush’s visit to Israel last May, Bush vetoed it.
The Guardian’s veteran Middle East commentator, Jonathan Steele, cited senior diplomatic personnel working for a European head of government who met Olmert some time after Bush’s visit.
According to the Guardian’s sources, the talks were so sensitive that they were held in private, with no note-takers in attendance. They said that Olmert “took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office.”
Bush’s refusal to sanction an attack was apparently based on several factors. Firstly, the US was concerned that such an attack would provoke Iran to retaliate, which would probably include a wave of attacks on US military and contract personnel in Iraq, and Afghanistan and US shipping in the Gulf. Iraq’s Shiite-dominated government, installed by the US, retains close ties with and is dependent upon Tehran.
Secondly, it was unlikely that an Israeli air raid—even with dozens of aircraft—would succeed in knocking out Iran’s nuclear facilities, which are widely dispersed in fortified underground locations throughout the country.
Furthermore, the shortest route to Natanz, Iran’s uranium enrichment plant, is more than 700 miles from Israel and would entail flying over Iraq’s airspace, which is controlled by the US. So it would be impossible for Israel to launch such an attack without explicit US approval.
This would have left the US unable to officially deny knowledge of the attack. Iran would have every reason to assume that Bush had concurred with such an act of war, and to retaliate.
Iran has repeatedly said it would defend itself against any attacks on its nuclear facilities, which it maintains are for civilian purposes only. An air strike would precipitate a full-scale war, going far beyond Iran, underlining Washington’s increasing isolation in the region. It would precipitate attacks by Hezbollah on Israel and even terrorist attacks within the US itself.
One official said, “It is over 10 years since Hezbollah’s last terror attack outside Israel, when it hit an Argentine-Israel association building in Buenos Aires [killing 85 people].” “There is a large Lebanese diaspora in Canada which must include some Hezbollah supporters. They could slip in the US and take action,” he continued.
Olmert’s press spokesman, by denying that Bush had refused Israel a green light to attack Iran in “any working meeting,” only served to confirm the Guardian’s story.
US National Security Council spokesman Gordon Johndroe refused to comment on the content of a private conversation between Bush and Olmert, saying, “The president’s position is that all options are on the table but diplomacy remains our first course of action.”
While it appears that Bush vetoed Israel’s plans to attack Iran in private, publicly he continued his bellicose attitude towards Iran and gave no hint that he had, for the time being at least, excluded the military option.
In his speech to the Knesset the following day, Bush told legislators, “America stands with you in firmly opposing Iran’s nuclear weapons ambitions. Permitting the world’s leading sponsor of terror to possess the world’s deadliest weapon would be an unforgivable betrayal of future generations. For the sake of peace, the world must not allow Iran to have a nuclear weapon.”
Israel’s plans to attack Iran’s nuclear facilities in fact continued, despite the fact that 16 US intelligence agencies had issued a long delayed National Intelligence Estimate (NIE) last December concluding that Tehran had ended any nuclear weapons program in 2003.
The Israeli political and military establishment, which regards Iran as its main rival in the region, rejected the NIE’s assessment and has repeatedly sought assurances that the Bush administration would “deal with” Tehran before leaving office.
It is determined to maintain its military supremacy in the Middle East and to prevent the possibility that Iran or any of its neighbours will master nuclear technology that could assist in the building of weapons. It is an open secret that Israel itself has an arsenal of more than 200 nuclear missiles. In order to retain its nuclear monopoly, the Israeli ruling elite is fully prepared to plunge the entire region into war through an unprovoked and criminal attack on Iran.
Senior ministers, including Olmert himself last November, have warned that Israel would take military action of its own to disable the “threat” posed by Iran’s nuclear facilities. In September last year, Israel destroyed a deserted Syrian target that Washington and Tel Aviv claimed was a North Korean-built nuclear installation. This attack evoked no serious international condemnation and is viewed as a precursor to a future attack on Iran.
Last April, National Infrastructure Minister Benjamin Ben-Eliezer threatened Iran with complete destruction should it attack in Israel. This threat was made amid a massive five-day civil defence drill and continuing hints of a pre-emptive Israeli strike against Iranian nuclear facilities.
Even after Bush’s apparent veto, verbal threats and speculation of imminent air strikes against Iran have continued. In June, Israel carried out a long-range exercise over the eastern Mediterranean involving more than 100 F-15 and F-16 fighter jets, refuelling planes and rescue helicopters. Citing unnamed sources, the New York Times reported that the operation was a dry run for an attack on Iran.
Shaul Mofaz, deputy prime minister and a former defence minister, warned a few weeks later that a unilateral attack against Iran was “unavoidable” as international sanctions had been ineffective.
The official position in Washington and Tel Aviv is that diplomacy is the preferred way of dealing with Iran. And these bellicose threats and war games are widely seen as part of an orchestrated pressure campaign against Iran to submit to US demands for the suspension of its nuclear enrichment programme. But since Israel does not have the capacity to carry out a successful attack on Iran’s nuclear facilities on its own, the ultimate purpose of such threats as far as influential figures in both Tel Aviv and Washington are concerned is to draw the US into such an attack.
There are without doubt elements within the Israeli and American ruling elite that are pressing for an escalation of militarism in the region, with the question of Iran one of the most divisive issues in the US presidential election.
Israel recently signed a deal with Washington for the purchase of F-22 stealth bombers, which are ideally suited to the type of targeted bombing raids planned by an Israeli air force command. Israel’s existing fleet of F15 fighter jets could also be used to launch an attack on Iran.
The Israeli military has bought 90 F-161 fighter bombers that can reach Iran and will receive 11 more by the end of next year. It has also bought two new Dolphin-class submarines from Germany, in addition to the three it already has, that are reported to be capable of firing nuclear missiles.
Earlier this month, the US Defense Department told Congress it intended to sell Israel 1,000 smart bombs capable of penetrating 90cm of steel-reinforced concrete.
On Sunday, it was announced that the US had supplied Israel with an advanced radar system that will provide an early warning in the event of an Iranian missile attack. Known as FBX-T, it will be linked to the US military’s Joint Tactical Ground Station and will be run by 120 US military personnel. Israel’s Arrow II ballistic missile shield currently works with less advanced radar.
While Bush refused to give Israel the nod to attack Iran last May, judging that it would be too precipitous a step, the military build-up in the region makes clear that such an attack is far from being off the agenda permanently. Indeed, elements within the Bush administration might still contemplate an unprovoked attack on Iran before the presidential election in November.
Tuesday, September 30, 2008
US government brokers Citigroup takeover of Wachovia Bank
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By Barry Grey
The restructuring of the US financial system, concentrating financial resources and power in the hands of a few banking behemoths, took a further step Monday with the sale of the banking operations of Wachovia to Citigroup, the nation’s largest bank.
The demise of Charlotte, North Carolina-based Wachovia, the fourth largest US bank, came only four days after the biggest bank failure in American history, the collapse of Washington Mutual. The banking operations and deposits of Seattle-based WaMu, the largest savings and loan and sixth biggest bank in the US, were immediately sold off to JPMorgan Chase, in a deal brokered by the Federal Deposit Insurance Corporation (FDIC), the federal agency that insures deposits at commercial banks.
Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke were both involved in an intensive effort over the weekend to find a buyer for Wachovia. President Bush was also consulted, according to press reports.
Wachovia is the first major US commercial bank to fall in the widening credit and banking crisis.
The FDIC announced early Monday that Citigroup would acquire Wachovia, which was teetering on the edge of collapse, at the fire-sale price of $1 a share, or about $2.2 billion. Citigroup demanded that the government assume some of Wachovia’s losses as a condition for its purchase of the firm’s banking operations, assets and liabilities.
Citigroup will absorb more than $42 billion of losses on Wachovia’s $312 billion pool of loans, the FDIC said in a statement. The regulator said it would take on losses beyond that amount in exchange for $12 billion in preferred stock and warrants.
This obligation could further erode the FDIC’s deposit insurance fund, which is used to guarantee customers’ deposits in commercial banks up to $100,000. The collapse of IndyMac last July drained $8.9 billion from the $45.2 billion fund, leaving it dangerously depleted under conditions of a growing banking crisis that threatens to claims dozens more institutions, big and small.
Citigroup will acquire Wachovia’s $400 billion in deposits as well as its network of some 3,300 branches and offices in 21 states.
Wachovia had invested heavily in high-risk adjustable rate mortgages, which have defaulted at an ever-rising rate since the implosion of the housing and credit bubbles last year. The bank holds about $122 billion of adjustable-rate home loans, making it the largest holder of such assets, ahead of the now-bankrupt Washington Mutual. Analysts at Fitch Ratings predict default rates on such loans packaged as securities may reach 45 percent.
The bank also faced losses on loans made to homebuilders and commercial real estate developers. Wachovia reported $9.7 billion of losses in the first half of 2008.
In June, the board ousted G. Kennedy Thompson, the bank’s longtime chief executive. He was succeeded in July by Robert K. Steel, a former top lieutenant of Treasury Secretary Henry Paulson at Goldman Sachs and then the Treasury Department.
Following the failure of Lehman Brothers two weeks ago, Wachovia customers began withdrawing their deposits in large numbers and the bank’s stock plummeted. It shares, which finished last week at $10 on the New York Stock Exchange, traded for 95 cents at 9 a.m. in early transactions on Monday. It sold for more than $48 in February 2007.
Following the purchase of Merrill Lynch two weeks ago by Bank of America, the rash of failures and buyouts of major US institutions has left fully one-third of all US bank deposits in the hands of three monoliths—Citigroup, Bank of America and JPMorgan Chase. These financial companies now control a vast network of branches and trillions of dollars in assets, putting them in a position to set fees and interest payments on everything from commercial loans to credit cards and home mortgages.
The further monopolization of the financial system will increase pressure on small and midsize banks, undermining their competitive position and forcing many of them to close or sell out to bigger rivals.
Since last March, the investment bank Bear Stearns has been sold off to JPMorgan Chase, in a rescue operation that included a $29 billion subsidy to JPMorgan by the Federal Reserve; IndyMac Bankcorp., a large California savings and loan, has failed; Lehman Brothers, another Wall Street titan, has filed for bankruptcy; and the government has taken over the mortgage giants Fannie Mae and Freddie Mac and the insurance conglomerate American International Group (AIG).
Even without the Bush administration’s proposed $700 billion-plus bailout of Wall Street, the US Treasury and the Federal Reserve have pumped hundreds of billions of dollars into the financial industry, in low-cost loans and taxpayer-financed subsidies, in an attempt to contain the greatest financial crisis since the Great Depression. At the same time, the government has used the crisis to engineer a vast consolidation of the banking system.
The takeover of Wachovia by Citigroup will likely result in major job cuts, adding to the more than 150,000 jobs that have already been slashed at US banks and financial institutions since the onset of the credit crisis in August of 2007.
G. Kennedy Thompson, the CEO who was ousted last June, received a severance package of $1.45 million and accelerated vesting of $7.25 million in restricted stock.
By Barry Grey
The restructuring of the US financial system, concentrating financial resources and power in the hands of a few banking behemoths, took a further step Monday with the sale of the banking operations of Wachovia to Citigroup, the nation’s largest bank.
The demise of Charlotte, North Carolina-based Wachovia, the fourth largest US bank, came only four days after the biggest bank failure in American history, the collapse of Washington Mutual. The banking operations and deposits of Seattle-based WaMu, the largest savings and loan and sixth biggest bank in the US, were immediately sold off to JPMorgan Chase, in a deal brokered by the Federal Deposit Insurance Corporation (FDIC), the federal agency that insures deposits at commercial banks.
Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke were both involved in an intensive effort over the weekend to find a buyer for Wachovia. President Bush was also consulted, according to press reports.
Wachovia is the first major US commercial bank to fall in the widening credit and banking crisis.
The FDIC announced early Monday that Citigroup would acquire Wachovia, which was teetering on the edge of collapse, at the fire-sale price of $1 a share, or about $2.2 billion. Citigroup demanded that the government assume some of Wachovia’s losses as a condition for its purchase of the firm’s banking operations, assets and liabilities.
Citigroup will absorb more than $42 billion of losses on Wachovia’s $312 billion pool of loans, the FDIC said in a statement. The regulator said it would take on losses beyond that amount in exchange for $12 billion in preferred stock and warrants.
This obligation could further erode the FDIC’s deposit insurance fund, which is used to guarantee customers’ deposits in commercial banks up to $100,000. The collapse of IndyMac last July drained $8.9 billion from the $45.2 billion fund, leaving it dangerously depleted under conditions of a growing banking crisis that threatens to claims dozens more institutions, big and small.
Citigroup will acquire Wachovia’s $400 billion in deposits as well as its network of some 3,300 branches and offices in 21 states.
Wachovia had invested heavily in high-risk adjustable rate mortgages, which have defaulted at an ever-rising rate since the implosion of the housing and credit bubbles last year. The bank holds about $122 billion of adjustable-rate home loans, making it the largest holder of such assets, ahead of the now-bankrupt Washington Mutual. Analysts at Fitch Ratings predict default rates on such loans packaged as securities may reach 45 percent.
The bank also faced losses on loans made to homebuilders and commercial real estate developers. Wachovia reported $9.7 billion of losses in the first half of 2008.
In June, the board ousted G. Kennedy Thompson, the bank’s longtime chief executive. He was succeeded in July by Robert K. Steel, a former top lieutenant of Treasury Secretary Henry Paulson at Goldman Sachs and then the Treasury Department.
Following the failure of Lehman Brothers two weeks ago, Wachovia customers began withdrawing their deposits in large numbers and the bank’s stock plummeted. It shares, which finished last week at $10 on the New York Stock Exchange, traded for 95 cents at 9 a.m. in early transactions on Monday. It sold for more than $48 in February 2007.
Following the purchase of Merrill Lynch two weeks ago by Bank of America, the rash of failures and buyouts of major US institutions has left fully one-third of all US bank deposits in the hands of three monoliths—Citigroup, Bank of America and JPMorgan Chase. These financial companies now control a vast network of branches and trillions of dollars in assets, putting them in a position to set fees and interest payments on everything from commercial loans to credit cards and home mortgages.
The further monopolization of the financial system will increase pressure on small and midsize banks, undermining their competitive position and forcing many of them to close or sell out to bigger rivals.
Since last March, the investment bank Bear Stearns has been sold off to JPMorgan Chase, in a rescue operation that included a $29 billion subsidy to JPMorgan by the Federal Reserve; IndyMac Bankcorp., a large California savings and loan, has failed; Lehman Brothers, another Wall Street titan, has filed for bankruptcy; and the government has taken over the mortgage giants Fannie Mae and Freddie Mac and the insurance conglomerate American International Group (AIG).
Even without the Bush administration’s proposed $700 billion-plus bailout of Wall Street, the US Treasury and the Federal Reserve have pumped hundreds of billions of dollars into the financial industry, in low-cost loans and taxpayer-financed subsidies, in an attempt to contain the greatest financial crisis since the Great Depression. At the same time, the government has used the crisis to engineer a vast consolidation of the banking system.
The takeover of Wachovia by Citigroup will likely result in major job cuts, adding to the more than 150,000 jobs that have already been slashed at US banks and financial institutions since the onset of the credit crisis in August of 2007.
G. Kennedy Thompson, the CEO who was ousted last June, received a severance package of $1.45 million and accelerated vesting of $7.25 million in restricted stock.
Bush Wants To Bankrupt America: There is Method To His Madness
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By Sam Hamod
Some have wondered if GW Bush knows what he's doing with his tax cut that benefits the corporations and the very rich, and cuts away the remaining money of the poor and the middle class. I say yes, he does know what he'd up to, as do his corporate advisors and his neo-con economist friends and theorists, chief among them Grover Norquist. Norquist has been the chief architect behind the dismantling of the American federal financial structure in terms of benefits for the common citizen, but has helped to create the superstructure of tax breaks for the very rich and the corporatocracy that now has a choke-hold on America.
The plan is very simple, but not obvious on first blush. Make sure that all the money is gone from the U.S. treasury, make sure the deficits are so great that all social and educational programs are cut, increase the military and security budgets to "protect our nation" with all these monies going to corporations and security firms who are extra-national (not tied to any country, but actually more than multi-national in that they are outside the purview of any nation at any single moment) and stave in the social security fund by allowing it to go to private corporations for "investment"-and you have the perfect scenario for saying, "only the private sector can save us-we're broke and they have the money to run every program, fund every program, but of course, at huge costs and profits for the private corporations." Our only resource will be the corporate lenders, especially the large extra-national corporations who will have loyalty to no one except their corporate coffers and large share owners throughout the world.
This plan is so obvious at this point that it is hard to believe because it is happening so fast and the Democrats and even conservative non- neo-con Republicans don't realize what Bush and his neo-con buddies are up to.
Of course, this is easier to accomplish with all of our attention being focused on 9/11 matters, Bin Laden, Saddam Hussein, the WMDs, threats to our nation, threats to our troops in Iraq and Afghanistan (where we lose troops everyday to Iraqis and Afghans fighting against our occupation), but we keep sending in more troops to basically protect Bechtel and Halliburton. Soon, we'll also hire private contractor troops, some from other countries and others from selected American security firms. All the time we are occupied with this, just as Orwell predicted in his novel, 1984, the Bush team will be destroying our civil liberties and taking away our social and educational programs in order to fund "security measures" and will keep blinking yellow, orange, and red codes at us.
I want to make this article short so that you have time to think about this and alert your congressperson and senator as to what's really going on. Bush has already started pushing for privatization in Iraq and Afghanistan and in America-it's only a short step from this huge debt he has created from the great surplus he inherited. *God only knows what kind of deficit he's going to create as he lets the dollar drop freely, so that consumers have to pay more for goods and our balance of trade goes to hell, the national debt at its current rate will take over 100 years to pay off-if we can even then get a hold on it according to some economists who are upset (see articles by Paul Krugman and others)sat the Bush team's actions. But they fail to see the real motive behind all this seeming disaster. Yes, it's a disaster for us, but it's a windfall for Bush and his corporate friends who will soon be running everything. *Actually, through their lobbying, they are running most things at this point-simply see the astounding inflation in drug prices compared to the low national inflation rate, the false "shortage of natural gas"-a commodity that is endless in the world and in its supply in America-the artificial shortage of electricity (as done by Enron and others to jack up prices and now FERC saying that though California did sign contracts with utilities under duress, they are still bound by the contracts even though they were lied to when signing the contracts-which is fraud in any honest person's mind, but not in the mind of FERC) and now our need for added security that is endless because it will not be long before Bush brings terrorists to our shores by either his behavior, or allows some actors within the Republican camp to fake terrorist raids so that possibly martial law will follow.
Friends, we are in a mess of catastrophic proportions on so many fronts that it will be difficult to unravel all the various strains of this explosive Bushian virus. I use the term virus, because Bush is trying to pack the courts with his appointees from the neo-con right, placing government officials in corporations and in some cases, in law schools so that the neo-con approach to the destruction of the federal government may have academic credentials and blessings. Yes, this is an artificially created virus intended to kill the patient-namely, our democracy and our formerly free and decent lives.
By Sam Hamod
Some have wondered if GW Bush knows what he's doing with his tax cut that benefits the corporations and the very rich, and cuts away the remaining money of the poor and the middle class. I say yes, he does know what he'd up to, as do his corporate advisors and his neo-con economist friends and theorists, chief among them Grover Norquist. Norquist has been the chief architect behind the dismantling of the American federal financial structure in terms of benefits for the common citizen, but has helped to create the superstructure of tax breaks for the very rich and the corporatocracy that now has a choke-hold on America.
The plan is very simple, but not obvious on first blush. Make sure that all the money is gone from the U.S. treasury, make sure the deficits are so great that all social and educational programs are cut, increase the military and security budgets to "protect our nation" with all these monies going to corporations and security firms who are extra-national (not tied to any country, but actually more than multi-national in that they are outside the purview of any nation at any single moment) and stave in the social security fund by allowing it to go to private corporations for "investment"-and you have the perfect scenario for saying, "only the private sector can save us-we're broke and they have the money to run every program, fund every program, but of course, at huge costs and profits for the private corporations." Our only resource will be the corporate lenders, especially the large extra-national corporations who will have loyalty to no one except their corporate coffers and large share owners throughout the world.
This plan is so obvious at this point that it is hard to believe because it is happening so fast and the Democrats and even conservative non- neo-con Republicans don't realize what Bush and his neo-con buddies are up to.
Of course, this is easier to accomplish with all of our attention being focused on 9/11 matters, Bin Laden, Saddam Hussein, the WMDs, threats to our nation, threats to our troops in Iraq and Afghanistan (where we lose troops everyday to Iraqis and Afghans fighting against our occupation), but we keep sending in more troops to basically protect Bechtel and Halliburton. Soon, we'll also hire private contractor troops, some from other countries and others from selected American security firms. All the time we are occupied with this, just as Orwell predicted in his novel, 1984, the Bush team will be destroying our civil liberties and taking away our social and educational programs in order to fund "security measures" and will keep blinking yellow, orange, and red codes at us.
I want to make this article short so that you have time to think about this and alert your congressperson and senator as to what's really going on. Bush has already started pushing for privatization in Iraq and Afghanistan and in America-it's only a short step from this huge debt he has created from the great surplus he inherited. *God only knows what kind of deficit he's going to create as he lets the dollar drop freely, so that consumers have to pay more for goods and our balance of trade goes to hell, the national debt at its current rate will take over 100 years to pay off-if we can even then get a hold on it according to some economists who are upset (see articles by Paul Krugman and others)sat the Bush team's actions. But they fail to see the real motive behind all this seeming disaster. Yes, it's a disaster for us, but it's a windfall for Bush and his corporate friends who will soon be running everything. *Actually, through their lobbying, they are running most things at this point-simply see the astounding inflation in drug prices compared to the low national inflation rate, the false "shortage of natural gas"-a commodity that is endless in the world and in its supply in America-the artificial shortage of electricity (as done by Enron and others to jack up prices and now FERC saying that though California did sign contracts with utilities under duress, they are still bound by the contracts even though they were lied to when signing the contracts-which is fraud in any honest person's mind, but not in the mind of FERC) and now our need for added security that is endless because it will not be long before Bush brings terrorists to our shores by either his behavior, or allows some actors within the Republican camp to fake terrorist raids so that possibly martial law will follow.
Friends, we are in a mess of catastrophic proportions on so many fronts that it will be difficult to unravel all the various strains of this explosive Bushian virus. I use the term virus, because Bush is trying to pack the courts with his appointees from the neo-con right, placing government officials in corporations and in some cases, in law schools so that the neo-con approach to the destruction of the federal government may have academic credentials and blessings. Yes, this is an artificially created virus intended to kill the patient-namely, our democracy and our formerly free and decent lives.
Friday, September 26, 2008
Sarah Palin's Very Bad Interview
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The first half of the Katie Couric interview with Sarah Palin did not start off well. It was a complete disaster in fact.
It’s like watching a train wreck, she seems to have no idea what she is talking about.
But hey, people sometimes get off on the wrong foot. It couldn’t get any worse right? She just probably needed to find her rhythm, right?
Well, no. If the first half of the interview was bad, well then the second half of the interview was much, much worse.
From Ryan Powers over at Think Progress:
During the interview, Couric asked Palin why she believes the Wall Street bailout is needed. Palin responded incoherently by claiming that the bailout would "help those who are concerned about health care reform." Palin then appeared to look down at her notes and said, "Oh, it’s got to be all about job creation":
COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families struggling with health care, housing, gas and groceries? ... Instead of helping these big financial institutions that played a role in creating this mess?
PALIN: Ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up the economy- Oh, it’s got to be about job creation too. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions
"She’s not always responsive when she’s asked questions," Couric said of Palin. "It was a really interesting experience for me to interview her yesterday," she added.
Well, people make mistakes. But that has to be the worst of it right? Nope, as Steve Benen over at the Washington Monthly reported:
Earlier, I suggested Sarah Palin’s response to Katie Couric’s question on the bailout was a low point in Palin’s brief career as a candidate for national office. I spoke too soon.
As regular readers know, almost immediately after Palin was added to the Republican ticket, a number of conservatives, including McCain himself, argued Alaska’s proximity to Russia necessarily amounts to foreign policy experience. I’ve been having some fun with this, because, well, it’s the dumbest argument I’ve ever heard.
In the second part of the CBS interview with Palin Couric, to her enormous credit, asks Palin to explain what this talking point means:
COURIC: You’ve cited Alaska’s proximity to Russia as part of your foreign policy experience. What did you mean by that?
PALIN: That Alaska has a very narrow maritime border between a foreign country, Russia, and on our other side, the land -- boundary that we have with -- Canada. [...]
COURIC: Explain to me why that enhances your foreign policy credentials.
PALIN: Well, it certainly does because our -- our next door neighbors are foreign countries. They’re in the state that I am the executive of. And there in Russia --
COURIC: Have you ever been involved with any negotiations, for example, with the Russians?
PALIN: We have trade missions back and forth. We -- we do -- it’s very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where -- where do they go? It’s Alaska. It’s just right over the border. It is -- from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to -- to our state.
Usually, candidates for national office get better as time goes on. Palin is clearly getting worse.
I mean, really, think about Palin’s argument here. She has foreign policy experience because Russian leaders flies over Alaskan air space on their way to the U.S.? Seriously, that’s what Palin told a national television audience.
First, it’s probably not true. Moscow is in Western Russia, and if a Russian leader were flying to the U.S., he or she would probably fly over the Atlantic. But geography aside, what does this have to do with foreign policy experience? If a head of state flies over you, you necessarily gain a background in international affairs?
I’m afraid Sarah Palin is not only embarrassing herself, she’s quickly become a national joke.
It’d be funny, if it wasn’t so painful to watch.
Bailout Backlash: Five Surprising Things That Happened on Thursday
Even news junkies had a hard time keeping up with a flurry of events on September 25 on Wall Street, Washington and the presidential campaigns. Here’s a round-up of what happened:
1. Outrage over the bailout spreads across the Internet and to Wall Street
The Internet is flooded with angst about Treasury Secretary Paulson’s proposed $700 billion bailout:
A lot of the online rage is channeled in the form of signatures on petitions and electronic letters to members of Congress. Senator Bernie Sanders (Independent-Vt.) is circulating a popular one on the left-wing blog Huffington Post. The 1.9-million member Service Employees International Union is also circulating a sign-on letter to Congress that reads in part: "No deal. No blank check." StopTheHousingBailout.com reasons: "A bailout tells responsible Americans that they are suckers."
The anger is coming from right-leaning groups as well. The National Taxpayers Union’s "No More Bailouts!" petition reads: "Bailouts that keep mismanaged organizations afloat delay natural corrections to unsound business practices . Enough is enough. No more bailouts. Not with my tax dollars."
The conservative site townhall.com features a similar petition. Right-wing blogger Patrick Ruffini, meanwhile, urges Republicans to vote against the bailout, since "God Himself couldn’t have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration."
And as Steven Wishnia reports for AlterNet, protesters took to New York’s financial district:
Enraged by the prospect of $700 billion of their taxes going to reimburse Wall Street speculators for their dubious investments, about 500 protesters paraded through Lower Manhattan’s financial district Thursday afternoon, their chants of "You broke it, you bought it" reverberating through the narrow office building canyons and off the flag-draped wall of the New York Stock Exchange.
2. White House pow-wow flops
The White House summit originally billed as a bipartisan, non-partisan effort to come to a deal on Treasury Secretary Hank Paulson’s proposed $700 billion bailout plan ended bitterly. With the entire Senate and House leadership along with Barack Obama and John McCain in attendance, Paulson apparently got down on one knee at the end of the meeting and begged the Democratic congressional leaders not to publicly disclose how poorly the session had gone:
"If money isn’t loosened up, this sucker could go down," Bush apparently warned as the meeting broke up. Republican Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee summed up the White House meeting, saying there was "obviously no agreement." 3. The entire bailout discussion implodes entirely As the Washington Post reports, "A renegade bloc of Republicans moved to reshape a massive bailout of the U.S. financial system yesterday, surprising and angering Bush administration and congressional leaders who hours earlier announced agreement on the ’fundamentals’ of a deal": Marc Ambinder of the Atlantic Monthly reports that there are less than 100 of the 202 GOP house members who would support the Paulson plan. 4. Obama says he’ll host a townhall meeting if McCain doesn’t show up Sam Stein of the Huffington Post reported on Thursday, "Barack Obama is committed to hosting a public, televised event Friday night in Mississippi even if John McCain does not show up," according to an Obama official. "In McCain’s absence, the Senator is willing to make the scheduled debate a townhall meeting, a one-on-one interview with NewsHour’s Jim Lehrer, or the combination of the two, the official said." Interestingly, Mississippi governor and former chair of the Republican Party Haley Barbour also said Thursday that he believed the debate would continue as planned. And later in the day, McCain spokesman Tucker Bounds implied that the McCain campaign was going into the debate. 5. John McCain’s fake campaign suspension On Wednesday, McCain said he would "suspend" his campaign and return to Washington to work on the bailout proposal. But it was soon clear that this was a gigantic political stunt. As Think Progress reports, "Five hours after McCain said he would suspend his campaign, aides Nancy Pfotenhauer, Tucker Bounds, and Mike Duhaime appeared on Fox News and MSNBC five times, frequently criticizing Obama and Democrats." The Huffington Post also reported that:Financial Services Chairman Barney Frank, the feisty Democrat who has been leading negotiations with Paulson, reacted angrily, saying Republicans had waited until the last moment to present their proposal.
McCain, who dramatically announced Wednesday that he was suspending his campaign to deal with the economic crisis, stayed silent for most of the session and spoke only briefly to voice general principles for a rescue plan.
Democrats accused Boehner of acting on behalf of GOP presidential candidate Sen. John McCain (Ariz.) in trying to disrupt a developing consensus
Democrats say they would not approve the legislation without a significant number of Republican votes to share in any political fallout from the controversial proposal, which comes just weeks before the November election. "We are working to try to get this bill ready, but if House Republicans continue to reject the president’s approach, then there’s no bill," said Rep. Barney Frank (D-Mass.), an architect of the bailout legislation. "We told Paulson the whole thing is at risk if the president can’t get his own party to participate."
Across the country, McCain campaign offices are up and running, accepting volunteers, conducting phone banking, literature dropping and other GOTV activities. This held true on a local, state, and even regional level. The Huffington Post called up 15 McCain-Palin and McCain Victory Committee headquarters in various battleground states. Not one said that it was temporarily halting operations because of the supposed "suspension" in the campaign. Several, in fact, enthusiastically declared the continuation of their work. Others hadn’t even heard that the candidate for whom they were devoting their time had officially stopped campaigning.
Broken US promises undermine North Korean nuclear agreement
Go to Original
By Peter Symonds
The six-party agreement on the denuclearisation of North Korea is threatened with breakdown after Pyongyang took a series of steps this week to restart the plutonium reprocessing plant adjoining its nuclear reactor at Yongbyon. While the US and international media have focussed attention on North Korea, its actions clearly have been taken in response to the US administration’s refusal to meet Washington’s commitments under the deal.
According to the International Atomic Energy Agency (IAEA), North Korea is planning to introduce nuclear material into the plant next week. IAEA inspectors completed the removal of seals and surveillance cameras from the facility on Wednesday, as instructed by North Korean authorities, and will be barred from the plant, but not at this stage from the reactor and other facilities at the site.
US officials immediately criticised North Korea’s decision. Secretary of State Condoleezza Rice warned on Wednesday that the step would only heighten Pyongyang’s international isolation. At the same time, she dismissed the suggestion that six-party talks, involving China, Russia, South Korea and Japan, as well as the US and North Korea, were dead, declaring: “By no means. We’ve been through ups and downs in this process before.”
The deal has been fraught with difficulties since it was initially reached in February 2007. In the first phase, North Korea agreed shut down its reactor and reprocessing plant at Yongbyon, allow IAEA inspectors and provide details of its nuclear programs, in return for 50,000 tonnes of desperately needed heavy fuel oil. In the second stage, finalised in October 2007, Pyongyang agreed to disable its nuclear facilities under the supervision of US experts and provide a full list of its nuclear programs, in return for a schedule for providing another 900,000 tonnes of fuel.
Apart from vague commitments to ending economic sanctions and establishing normal diplomatic relations, the only US pledge was to remove North Korea from its list of state sponsors of terrorism and end the application of the Trading with the Enemy Act. The US has maintained punitive economic sanctions against North Korea since the end of the Korean War in 1953 and has no diplomatic relations with Pyongyang.
North Korea carried out the process of disablement but only handed over a 60-page report on its nuclear programs in June, nearly six months after the December deadline, due to disagreements with Washington about its contents. As a demonstration of good will, Pyongyang demolished the cooling tower of its nuclear reactor in front of TV cameras, even though it was not immediately required by the agreement.
President Bush initially welcomed the steps and announced that the US would end North Korea’s listing under the Trading with the Enemy Act and commence the 45-day process for removing North Korea from the list of state sponsors of terrorism. He made clear, however, that the two actions would be little more than symbolic, as “North Korea will remain one of the most heavily sanctioned nations in the world”. Even so, the Bush administration was denounced by right-wing extremists such as former ambassador to the UN, John Bolton, who proclaimed the “final collapse of Bush’s foreign policy”.
By August, the Bush administration had reneged on its agreement to remove North Korea from the terrorist list and raised new demands for “a protocol of verification” of the contents of Pyongyang’s report. Quite legitimately, the North Korean regime interpreted the decision as a sign of bad faith—the agreement had all along been premised on an “action for action” approach. In return for shutting its nuclear facilities and disabling its reactor under international supervision, North Korea had received nothing but relatively small amounts of fuel oil. The ending of the country’s status as a sponsor of terrorism, while symbolic, was nevertheless a first step toward easing the economic blockade that has crippled its economy.
In mid-August, the North Korean regime called a halt to work on disabling its nuclear plant and warned that it would “consider a step to restore the nuclear facilities in Yongbyon to their original state,” adding: “The United States is gravely mistaken if it thinks it can make a house search in North Korea as it pleases, as it did in Iraq.” Last Friday, Pyongyang declared that it no longer expected or wished to be removed from the US terrorist list and announced its intention to restart its nuclear facilities.
There is undoubtedly a certain amount of bluster in North Korea’s statements, as it has nothing else to bargain with, except its potential nuclear weapons capacity. But as Joseph Cirincione, president of the Ploughshares Fund, told Australian Broadcasting Corporation (ABC) radio on Thursday, North Korea was not “rushing pell mell” into restarting its facilities. Instead, it was “practically begging us to come back to the negotiating table”. He estimated that it would take Pyongyang at least a year to restart its reactor. Starting the reprocessing plant will only enable the extraction of about 6 kilograms of plutonium from existing spent reactor fuel rods.
North Korea’s announcement has, however, prompted a flood of speculation in the US and international media about the reasons behind its “provocative” act. Attention has been focussed on rumours about the ill-health of North Korean leader Kim Jong-il who failed to appear at a military parade held earlier this month to commemorate the regime’s 60th anniversary. Various analysts have speculated, with little in the way of facts, that Pyongyang’s “hard-line” stance may reflect a decision-making logjam while Kim recovers from a stroke.
A deliberate US provocation
It may be that the North Korean leader is sick. It is also possible that there is a sharp political crisis in the Stalinist regime, which confronts major economic problems. But as far as the uncertainty surrounding the six-party nuclear agreement is concerned, it would be far more legitimate to ask why the White House has provocatively refused to take a very limited step in keeping its side of the bargain. Divisions within the Bush administration, rather than a crisis in Pyongyang, are likely to be the real reason behind the stalling of the nuclear agreement.
Earlier this month, Secretary of State Rice, who pressed for the six-party talks and a deal with North Korea, rather absurdly declared that the administration’s diplomacy on Iran and North Korea was evidence that it would leave the non-proliferation issue “in far better shape than we found it”. In fact, under the influence of Vice President Dick Cheney and US Secretary of State for Non-Proliferation John Bolton, the Bush administration immediately ended Clinton administration’s rather tentative diplomatic opening toward Pyongyang and rapidly undermined the previous Agreed Framework under which North Korea’s nuclear facilities were frozen.
Tensions rapidly escalated as the US accused North Korea of maintaining a secret uranium enrichment program then effectively pulled out of the Agreed Framework by halting promised supplies of fuel oil. Pyongyang responded in late 2002 by expelling IAEA inspectors, restarting its nuclear reactor and reprocessing plant, and withdrawing from the Nuclear Non-Proliferation Treaty. The attitude of the Bush administration was summed up by Bush’s inclusion of North Korea in a so-called “axis of evil” with Iran and Iraq. The White House made clear its strategy was one of “regime change” not negotiations.
However, as the occupation of Iraq turned into a quagmire in 2003, the Bush administration tentatively accepted the start of six-party talks brokered by China. The move was always bitterly opposed by the most militarist elements of the White House, who sought on a number of occasions to obstruct negotiations. An initial deal in 2005 effectively collapsed after US Treasury officials secured the freezing of $25 million of North Korean funds in the Macau-based Banco Delta Asia (BDA) bank and abruptly pulled out of talks. The negotiations were only resumed after Pyongyang exploded a small nuclear device in October 2006.
In his comments to ABC radio, analyst Cirincione pointed to the divisions in the Bush administration between “pragmatists” such as Rice and “hardliners” led by Cheney, saying that he suspected the latter were “behind the decision not to take North Korea off the [terrorist] list”. After noting the earlier steps to freeze North Korea’s bank assets, he added that he saw the refusal to end North Korea’s terrorist status “as the hardliners intervening again to put a stick in the spokes of these negotiations”.
The fact that the Bush administration as a whole is now undercutting the North Korean agreement underscores the tactical character of the differences between the contending factions. One can only speculate as to the motives of the Bush administration as it reaches the end of its second term of office. But it does again raise the possibility that the embattled White House is preparing further provocations in the lead-up to the US presidential elections in a desperate bid to deflect attention from the worst financial crisis since 1929 and to bolster the fortunes of the Republican campaign.
By Peter Symonds
The six-party agreement on the denuclearisation of North Korea is threatened with breakdown after Pyongyang took a series of steps this week to restart the plutonium reprocessing plant adjoining its nuclear reactor at Yongbyon. While the US and international media have focussed attention on North Korea, its actions clearly have been taken in response to the US administration’s refusal to meet Washington’s commitments under the deal.
According to the International Atomic Energy Agency (IAEA), North Korea is planning to introduce nuclear material into the plant next week. IAEA inspectors completed the removal of seals and surveillance cameras from the facility on Wednesday, as instructed by North Korean authorities, and will be barred from the plant, but not at this stage from the reactor and other facilities at the site.
US officials immediately criticised North Korea’s decision. Secretary of State Condoleezza Rice warned on Wednesday that the step would only heighten Pyongyang’s international isolation. At the same time, she dismissed the suggestion that six-party talks, involving China, Russia, South Korea and Japan, as well as the US and North Korea, were dead, declaring: “By no means. We’ve been through ups and downs in this process before.”
The deal has been fraught with difficulties since it was initially reached in February 2007. In the first phase, North Korea agreed shut down its reactor and reprocessing plant at Yongbyon, allow IAEA inspectors and provide details of its nuclear programs, in return for 50,000 tonnes of desperately needed heavy fuel oil. In the second stage, finalised in October 2007, Pyongyang agreed to disable its nuclear facilities under the supervision of US experts and provide a full list of its nuclear programs, in return for a schedule for providing another 900,000 tonnes of fuel.
Apart from vague commitments to ending economic sanctions and establishing normal diplomatic relations, the only US pledge was to remove North Korea from its list of state sponsors of terrorism and end the application of the Trading with the Enemy Act. The US has maintained punitive economic sanctions against North Korea since the end of the Korean War in 1953 and has no diplomatic relations with Pyongyang.
North Korea carried out the process of disablement but only handed over a 60-page report on its nuclear programs in June, nearly six months after the December deadline, due to disagreements with Washington about its contents. As a demonstration of good will, Pyongyang demolished the cooling tower of its nuclear reactor in front of TV cameras, even though it was not immediately required by the agreement.
President Bush initially welcomed the steps and announced that the US would end North Korea’s listing under the Trading with the Enemy Act and commence the 45-day process for removing North Korea from the list of state sponsors of terrorism. He made clear, however, that the two actions would be little more than symbolic, as “North Korea will remain one of the most heavily sanctioned nations in the world”. Even so, the Bush administration was denounced by right-wing extremists such as former ambassador to the UN, John Bolton, who proclaimed the “final collapse of Bush’s foreign policy”.
By August, the Bush administration had reneged on its agreement to remove North Korea from the terrorist list and raised new demands for “a protocol of verification” of the contents of Pyongyang’s report. Quite legitimately, the North Korean regime interpreted the decision as a sign of bad faith—the agreement had all along been premised on an “action for action” approach. In return for shutting its nuclear facilities and disabling its reactor under international supervision, North Korea had received nothing but relatively small amounts of fuel oil. The ending of the country’s status as a sponsor of terrorism, while symbolic, was nevertheless a first step toward easing the economic blockade that has crippled its economy.
In mid-August, the North Korean regime called a halt to work on disabling its nuclear plant and warned that it would “consider a step to restore the nuclear facilities in Yongbyon to their original state,” adding: “The United States is gravely mistaken if it thinks it can make a house search in North Korea as it pleases, as it did in Iraq.” Last Friday, Pyongyang declared that it no longer expected or wished to be removed from the US terrorist list and announced its intention to restart its nuclear facilities.
There is undoubtedly a certain amount of bluster in North Korea’s statements, as it has nothing else to bargain with, except its potential nuclear weapons capacity. But as Joseph Cirincione, president of the Ploughshares Fund, told Australian Broadcasting Corporation (ABC) radio on Thursday, North Korea was not “rushing pell mell” into restarting its facilities. Instead, it was “practically begging us to come back to the negotiating table”. He estimated that it would take Pyongyang at least a year to restart its reactor. Starting the reprocessing plant will only enable the extraction of about 6 kilograms of plutonium from existing spent reactor fuel rods.
North Korea’s announcement has, however, prompted a flood of speculation in the US and international media about the reasons behind its “provocative” act. Attention has been focussed on rumours about the ill-health of North Korean leader Kim Jong-il who failed to appear at a military parade held earlier this month to commemorate the regime’s 60th anniversary. Various analysts have speculated, with little in the way of facts, that Pyongyang’s “hard-line” stance may reflect a decision-making logjam while Kim recovers from a stroke.
A deliberate US provocation
It may be that the North Korean leader is sick. It is also possible that there is a sharp political crisis in the Stalinist regime, which confronts major economic problems. But as far as the uncertainty surrounding the six-party nuclear agreement is concerned, it would be far more legitimate to ask why the White House has provocatively refused to take a very limited step in keeping its side of the bargain. Divisions within the Bush administration, rather than a crisis in Pyongyang, are likely to be the real reason behind the stalling of the nuclear agreement.
Earlier this month, Secretary of State Rice, who pressed for the six-party talks and a deal with North Korea, rather absurdly declared that the administration’s diplomacy on Iran and North Korea was evidence that it would leave the non-proliferation issue “in far better shape than we found it”. In fact, under the influence of Vice President Dick Cheney and US Secretary of State for Non-Proliferation John Bolton, the Bush administration immediately ended Clinton administration’s rather tentative diplomatic opening toward Pyongyang and rapidly undermined the previous Agreed Framework under which North Korea’s nuclear facilities were frozen.
Tensions rapidly escalated as the US accused North Korea of maintaining a secret uranium enrichment program then effectively pulled out of the Agreed Framework by halting promised supplies of fuel oil. Pyongyang responded in late 2002 by expelling IAEA inspectors, restarting its nuclear reactor and reprocessing plant, and withdrawing from the Nuclear Non-Proliferation Treaty. The attitude of the Bush administration was summed up by Bush’s inclusion of North Korea in a so-called “axis of evil” with Iran and Iraq. The White House made clear its strategy was one of “regime change” not negotiations.
However, as the occupation of Iraq turned into a quagmire in 2003, the Bush administration tentatively accepted the start of six-party talks brokered by China. The move was always bitterly opposed by the most militarist elements of the White House, who sought on a number of occasions to obstruct negotiations. An initial deal in 2005 effectively collapsed after US Treasury officials secured the freezing of $25 million of North Korean funds in the Macau-based Banco Delta Asia (BDA) bank and abruptly pulled out of talks. The negotiations were only resumed after Pyongyang exploded a small nuclear device in October 2006.
In his comments to ABC radio, analyst Cirincione pointed to the divisions in the Bush administration between “pragmatists” such as Rice and “hardliners” led by Cheney, saying that he suspected the latter were “behind the decision not to take North Korea off the [terrorist] list”. After noting the earlier steps to freeze North Korea’s bank assets, he added that he saw the refusal to end North Korea’s terrorist status “as the hardliners intervening again to put a stick in the spokes of these negotiations”.
The fact that the Bush administration as a whole is now undercutting the North Korean agreement underscores the tactical character of the differences between the contending factions. One can only speculate as to the motives of the Bush administration as it reaches the end of its second term of office. But it does again raise the possibility that the embattled White House is preparing further provocations in the lead-up to the US presidential elections in a desperate bid to deflect attention from the worst financial crisis since 1929 and to bolster the fortunes of the Republican campaign.
Chrysler 1979: Lessons from an early corporate “bailout”
Go to Original
By Tom Eley
In 1979, Chrysler Corporation, the third largest US automaker, hovered on the verge of collapse, a victim of sharply declining revenue and cash-on-hand that had reached the level of threatening daily operations. In August 1979, President Jimmy Carter’s Treasury Secretary, G. William Miller, proposed a government intervention in the form of $1.5 billion in guaranteed loans. The sum was considered an astonishing total. It was by far the largest government bailout in US history. On September 7, 1979 Chrysler formally petitioned the US government for the loans, and on December 20, 1979 Congress ratified the appropriation in the “Chrysler Corporation Loan Guarantee Act,” which Carter subsequently signed into law.
The loans stipulated major concessions from Chrysler’s workers, represented by the United Autoworkers Union (UAW). The political and media elite had successfully shifted blame for the corporation’s collapse—and by extension the overall decline of US capitalism—onto the working class. The UAW and the AFL-CIO buckled to the concession demands, a capitulation that cleared the path for an onslaught on working class living standards that has continued to this day.
There were profound pressures at play in the near-bankruptcy of Chrysler. The reemergence of the US’s capitalist rivals, especially Japan and Germany, was felt keenly in the auto industry through declining market share. Even the more immediate cause of Chrysler’s demise—the oil shocks of the 1970s that reduced demand for the large and inefficient vehicles that had been Chrysler’s stock-in-trade—testified to the declining influence of the US, which was reflected in its inability to dictate production quotas to the oil states.
Now, in the midst of the proposed bailout of the entire US financial industry, the experience of Chrysler in 1979 holds critical lessons for the working class.
The Chrysler bailout set in motion processes that have only intensified to this day. First, the working class would henceforth have to foot the bill for the decline of US capitalism through its own impoverishment, carried out in the name of “competitiveness.” Second, the corporate and financial elite, who bore primary responsibility for this decline, would henceforth reap windfall profits not only in spite of this decline, but precisely because of it.
These processes found embodiment in Chrysler CEO Lee Iacocca, who soon after the bailout was making millions of dollars, even as he ruthlessly axed tens of thousands of jobs.
A special place of shame must be given to the national media and political elite. In 1979 they raised a hue and cry about the need for Chrysler’s workers to “sacrifice” and extolled the virtues of the free market. Today they offer few such sermons to the financial elite responsible for the current crisis. But they continue to insist, as they did in the days of the Chrysler bailout, that the working class must pay the bills for the failures of American capitalism. The working class is being asked to fork over trillions of dollars—the sum would have been unfathomable in 1979—to bail out a criminal financial aristocracy that has bankrupted American capitalism, and very nearly the state itself.
The Chrysler bailout
When the bankruptcy of Chrysler appeared imminent, an intense debate developed within the ruling elite over how to approach what was viewed as the most disastrous sign to date of the decline of US capitalism. Should the nation’s third largest automaker and tenth largest industrial employer be allowed to fail? Or should there be a bailout? And, if so, under what conditions should Chrysler be “rescued”?
Ultimately a bailout prevailed over what had been quite intense Congressional opposition. The new consensus in favor of federal intervention was based on pressing wage and benefit concessions on Chrysler workers.
By late October 1979, UAW President Douglas Fraser had already agreed to substantial concessions. The UAW would allow Chrysler to defer $200 million in payments to the union’s pension fund, and it would hand over nearly all of the UAW’s $850 million pension fund to Chrysler as a loan. He also indicated that the UAW might accept a pay cut.
But in November, as the bill to bail out Chrysler hung in the balance, Alfred E. Kahn, chairman of the Carter Administration’s Council on Wage and Price Stability, testified before the Senate Banking Committee that the proposed $1.5 billion loan would be almost totally consumed by the UAW’s three-year contract with Chrysler. Kahn’s testimony was considered quite surprising, inasmuch as it appeared to undermine his own administration’s proposed bailout.
In fact Kahn was supplying the Senate with a new rationale for supporting the bill. In his testimony, he took the position—shared by the Carter Administration—that Chrysler workers had to sacrifice still more in the way of wages, benefits and conditions in order to rescue the corporation’s profit margins. The leading Democrat and Republican on the Senate Banking Committee, William Proxmire of Wisconsin and Jake Garn of Utah, who had previously opposed the bailout, then fell in line. Soon the Banking Committee was proposing stipulations to the package that included a renegotiation of the UAW contract, $525 million in concessions from workers, and a three-year wage freeze.
As New York Times correspondent Judith Miller put it in 1979, “there was widespread agreement ... that workers must make sufficient ‘sacrifices’ to help their employer recover.” The senators bullied, cajoled, and blackmailed the UAW, Garn threatening the union—in words eerily similar to current Treasury Secretary Henry Paulson—that “if they’re not willing to act in response to an extreme situation quickly, then let Chrysler go.”
In the weeks that followed, the national media and leading politicians launched a propaganda campaign demanding that Chrysler workers “sacrifice” in order to “save” Chrysler. The Times editorial page weighed in on December 10 (“What Price Chrysler Jobs?”), sanctimoniously declaring that “Chrysler workers should contribute significantly to their own rescue.” “The possibility of corporate failure,” the Times lectured, “is crucial to the health of a free economy. Without the market’s discipline, incentives for efficiency and innovation disappear.”
If Chrysler were to collapse, the editorial continued, “some workers would lose their jobs; most would be forced to renegotiate their wages downward. But the economy as a whole would benefit: Chrysler’s inefficiency would be removed as a drag on productivity... [i]t makes no sense to put the taxpayers at greater risk than Chrysler’s workers. If saving jobs is the most important rationale for a bailout, surely the public should expect major sacrifice from those with the most to gain.” The editorial then went on to denounce the UAW concessions already on the table as insufficient, warning that if the union “really prefers bankruptcy to a wage freeze, the public would have no reason to decide otherwise.”
(The Times’s idolatry of the free market, as expressed in 1979 when Chrysler workers’ jobs were at stake, is in noticeably short supply in 2008 as the government intervenes to bail out wealthy financiers—albeit once again at the expense of the working class!)
Out of this increasingly belligerent environment, a “compromise plan” was ultimately worked out that required, in exchange for the $1.5 billion guaranteed loan to Chrysler, $462.5 million in wage cuts and benefit concessions from workers.
Lessons from history
The 1979 Chrysler bailout was a significant turning point in US history.
Chrysler had been a major and iconic presence of US industry for decades. Its collapse was a milepost in the long-term decline of US capitalism, which had resulted from the reemergence of major capitalist rivals and the enormous quantities the US spent on its military and related industries. The reemergence of Europe and Japan was the outcome of long processes that had been set in motion much earlier, when in the wake of World War II US capitalism—as a means of forestalling world revolution—rebuilt its major rivals.
At the helm of Chrysler stood Lee Iacocca, the human embodiment of another new historical process: the celebrity CEO whose personal wealth and prestige grows in inverse proportion to the decline of the corporation that he nominally represents.
At the helm of the country was the Democratic Party, which controlled the presidency and Congress. In the bailout, the Democrats joined with the Republicans in isolating the UAW. In so doing, they distanced themselves from the limited reformist agenda that the party had championed between the 1930s and 1960s. Since the 1970s the Democratic Party has been an equal partner with the Republicans in the steady rollback of the social gains and democratic rights won by the working class in the preceding decades.
Finally, the capitulation of the UAW and the AFL-CIO without a fight in order to “save jobs” gave the green light to what has been a three-decades-long assault on the living standards of the working class. The UAW’s plan to “save jobs” has failed miserably—hundreds of thousands of auto jobs have been wiped out since 1979—but much like Iacocca and the managerial elite, the bureaucracy has prospered in spite of its pitiful track record. The Chrysler concessions were a major step toward the open conversion of the bureaucracy into a profit-making enterprise, a process that has come to full fruition in the UAW’s recent ascension to the management of the auto industry’s enormous health care liabilities.
The Bulletin, the forerunner to the World Socialist Web Site, warned in 1979 that “there is one essential question that arises out of the Chrysler bankruptcy: Who is to pay for the breakdown of the capitalist profit system, the working class or big business? The answer of big business, the banks, the Democrats, the Carter administration and the UAW bureaucracy is, of course, the working class.”
By Tom Eley
In 1979, Chrysler Corporation, the third largest US automaker, hovered on the verge of collapse, a victim of sharply declining revenue and cash-on-hand that had reached the level of threatening daily operations. In August 1979, President Jimmy Carter’s Treasury Secretary, G. William Miller, proposed a government intervention in the form of $1.5 billion in guaranteed loans. The sum was considered an astonishing total. It was by far the largest government bailout in US history. On September 7, 1979 Chrysler formally petitioned the US government for the loans, and on December 20, 1979 Congress ratified the appropriation in the “Chrysler Corporation Loan Guarantee Act,” which Carter subsequently signed into law.
The loans stipulated major concessions from Chrysler’s workers, represented by the United Autoworkers Union (UAW). The political and media elite had successfully shifted blame for the corporation’s collapse—and by extension the overall decline of US capitalism—onto the working class. The UAW and the AFL-CIO buckled to the concession demands, a capitulation that cleared the path for an onslaught on working class living standards that has continued to this day.
There were profound pressures at play in the near-bankruptcy of Chrysler. The reemergence of the US’s capitalist rivals, especially Japan and Germany, was felt keenly in the auto industry through declining market share. Even the more immediate cause of Chrysler’s demise—the oil shocks of the 1970s that reduced demand for the large and inefficient vehicles that had been Chrysler’s stock-in-trade—testified to the declining influence of the US, which was reflected in its inability to dictate production quotas to the oil states.
Now, in the midst of the proposed bailout of the entire US financial industry, the experience of Chrysler in 1979 holds critical lessons for the working class.
The Chrysler bailout set in motion processes that have only intensified to this day. First, the working class would henceforth have to foot the bill for the decline of US capitalism through its own impoverishment, carried out in the name of “competitiveness.” Second, the corporate and financial elite, who bore primary responsibility for this decline, would henceforth reap windfall profits not only in spite of this decline, but precisely because of it.
These processes found embodiment in Chrysler CEO Lee Iacocca, who soon after the bailout was making millions of dollars, even as he ruthlessly axed tens of thousands of jobs.
A special place of shame must be given to the national media and political elite. In 1979 they raised a hue and cry about the need for Chrysler’s workers to “sacrifice” and extolled the virtues of the free market. Today they offer few such sermons to the financial elite responsible for the current crisis. But they continue to insist, as they did in the days of the Chrysler bailout, that the working class must pay the bills for the failures of American capitalism. The working class is being asked to fork over trillions of dollars—the sum would have been unfathomable in 1979—to bail out a criminal financial aristocracy that has bankrupted American capitalism, and very nearly the state itself.
The Chrysler bailout
When the bankruptcy of Chrysler appeared imminent, an intense debate developed within the ruling elite over how to approach what was viewed as the most disastrous sign to date of the decline of US capitalism. Should the nation’s third largest automaker and tenth largest industrial employer be allowed to fail? Or should there be a bailout? And, if so, under what conditions should Chrysler be “rescued”?
Ultimately a bailout prevailed over what had been quite intense Congressional opposition. The new consensus in favor of federal intervention was based on pressing wage and benefit concessions on Chrysler workers.
By late October 1979, UAW President Douglas Fraser had already agreed to substantial concessions. The UAW would allow Chrysler to defer $200 million in payments to the union’s pension fund, and it would hand over nearly all of the UAW’s $850 million pension fund to Chrysler as a loan. He also indicated that the UAW might accept a pay cut.
But in November, as the bill to bail out Chrysler hung in the balance, Alfred E. Kahn, chairman of the Carter Administration’s Council on Wage and Price Stability, testified before the Senate Banking Committee that the proposed $1.5 billion loan would be almost totally consumed by the UAW’s three-year contract with Chrysler. Kahn’s testimony was considered quite surprising, inasmuch as it appeared to undermine his own administration’s proposed bailout.
In fact Kahn was supplying the Senate with a new rationale for supporting the bill. In his testimony, he took the position—shared by the Carter Administration—that Chrysler workers had to sacrifice still more in the way of wages, benefits and conditions in order to rescue the corporation’s profit margins. The leading Democrat and Republican on the Senate Banking Committee, William Proxmire of Wisconsin and Jake Garn of Utah, who had previously opposed the bailout, then fell in line. Soon the Banking Committee was proposing stipulations to the package that included a renegotiation of the UAW contract, $525 million in concessions from workers, and a three-year wage freeze.
As New York Times correspondent Judith Miller put it in 1979, “there was widespread agreement ... that workers must make sufficient ‘sacrifices’ to help their employer recover.” The senators bullied, cajoled, and blackmailed the UAW, Garn threatening the union—in words eerily similar to current Treasury Secretary Henry Paulson—that “if they’re not willing to act in response to an extreme situation quickly, then let Chrysler go.”
In the weeks that followed, the national media and leading politicians launched a propaganda campaign demanding that Chrysler workers “sacrifice” in order to “save” Chrysler. The Times editorial page weighed in on December 10 (“What Price Chrysler Jobs?”), sanctimoniously declaring that “Chrysler workers should contribute significantly to their own rescue.” “The possibility of corporate failure,” the Times lectured, “is crucial to the health of a free economy. Without the market’s discipline, incentives for efficiency and innovation disappear.”
If Chrysler were to collapse, the editorial continued, “some workers would lose their jobs; most would be forced to renegotiate their wages downward. But the economy as a whole would benefit: Chrysler’s inefficiency would be removed as a drag on productivity... [i]t makes no sense to put the taxpayers at greater risk than Chrysler’s workers. If saving jobs is the most important rationale for a bailout, surely the public should expect major sacrifice from those with the most to gain.” The editorial then went on to denounce the UAW concessions already on the table as insufficient, warning that if the union “really prefers bankruptcy to a wage freeze, the public would have no reason to decide otherwise.”
(The Times’s idolatry of the free market, as expressed in 1979 when Chrysler workers’ jobs were at stake, is in noticeably short supply in 2008 as the government intervenes to bail out wealthy financiers—albeit once again at the expense of the working class!)
Out of this increasingly belligerent environment, a “compromise plan” was ultimately worked out that required, in exchange for the $1.5 billion guaranteed loan to Chrysler, $462.5 million in wage cuts and benefit concessions from workers.
Lessons from history
The 1979 Chrysler bailout was a significant turning point in US history.
Chrysler had been a major and iconic presence of US industry for decades. Its collapse was a milepost in the long-term decline of US capitalism, which had resulted from the reemergence of major capitalist rivals and the enormous quantities the US spent on its military and related industries. The reemergence of Europe and Japan was the outcome of long processes that had been set in motion much earlier, when in the wake of World War II US capitalism—as a means of forestalling world revolution—rebuilt its major rivals.
At the helm of Chrysler stood Lee Iacocca, the human embodiment of another new historical process: the celebrity CEO whose personal wealth and prestige grows in inverse proportion to the decline of the corporation that he nominally represents.
At the helm of the country was the Democratic Party, which controlled the presidency and Congress. In the bailout, the Democrats joined with the Republicans in isolating the UAW. In so doing, they distanced themselves from the limited reformist agenda that the party had championed between the 1930s and 1960s. Since the 1970s the Democratic Party has been an equal partner with the Republicans in the steady rollback of the social gains and democratic rights won by the working class in the preceding decades.
Finally, the capitulation of the UAW and the AFL-CIO without a fight in order to “save jobs” gave the green light to what has been a three-decades-long assault on the living standards of the working class. The UAW’s plan to “save jobs” has failed miserably—hundreds of thousands of auto jobs have been wiped out since 1979—but much like Iacocca and the managerial elite, the bureaucracy has prospered in spite of its pitiful track record. The Chrysler concessions were a major step toward the open conversion of the bureaucracy into a profit-making enterprise, a process that has come to full fruition in the UAW’s recent ascension to the management of the auto industry’s enormous health care liabilities.
The Bulletin, the forerunner to the World Socialist Web Site, warned in 1979 that “there is one essential question that arises out of the Chrysler bankruptcy: Who is to pay for the breakdown of the capitalist profit system, the working class or big business? The answer of big business, the banks, the Democrats, the Carter administration and the UAW bureaucracy is, of course, the working class.”
Democrats push for quick adoption of Bush plan to bail out Wall Street
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By Barry Grey
By Barry Grey
The turn of events at the White House summit announced Wednesday night by President Bush and held Thursday to press for bipartisan agreement on his plan for a bailout of Wall Street has underscored the cynical and reactionary role being played by the Democratic Party and its presidential candidate, Barack Obama.
Bush called the meeting, bringing together Obama, Republican presidential candidate John McCain and the congressional leadership of both parties, to signal rapid passage of legislation authorizing Treasury Secretary Henry Paulson to spend at least $700 billion in taxpayer money to purchase virtually worthless financial assets from banks and other financial institutions, enabling them to offload their bad debts and losses at the expense of the American people.
The meeting was called for Thursday afternoon, in the expectation that by that time the Democratic Party would have already signed off on the deal, along with the Republicans in the Senate. As for the House of Representatives, the Republican minority leader, Rep. John Boehner, had joined with the Democratic speaker of the house, Nancy Pelosi, to issue a statement pledging support for a bipartisan bill that would conform to the basic provisions of the proposal first broached by Paulson the previous Friday.
Early Thursday afternoon, prior to the White House summit, the heads of the banking and finance committees of the House and Senate emerged from talks to announce that they had arrived at an agreed framework for a bailout plan which, with minor amendments, accepted the principles of the scheme proposed by Paulson.
Christopher Dodd, the Democratic chairman of the Senate Banking Committee, spoke for the group, saying, “We’re giving [Paulson] authority that he will need in order to act and the funding that he will need.” He predicted that a final bill would pass both houses of Congress within a few days.
But the White House meeting turned into a contentious affair and ended in disarray. Boehner, with the tacit support of McCain, raised objections to the deal that have been voiced by a large number of right-wing House Republicans, and announced that he had a counterproposal. His intervention blindsided the Democrats, who emerged from the meeting denouncing Boehner and McCain and pledging to continue the push for rapid passage of the Paulson plan.
Ever since Paulson presented his bailout plan last week, the Democrats have taken the lead in the drive to pass the necessary legislation. They have lavished praised on Paulson and Federal Reserve Board Chairman Ben Bernanke, who testified before the House and Senate banking committees on Tuesday and Wednesday to promote the deal.
After Bush spoke Wednesday night, the Democratic chairmen of the banking committees went out of their way to praise him, presenting the spectacle of leaders of the nominal opposition party hailing the most hated president in modern American history for his efforts to carry out one of the most antidemocratic and reactionary measures in the history of the country.
Christopher Dodd, the chairman of the Senate Banking Committee, welcomed Bush’s speech as a “quantum leap forward” in gaining passage of the bailout.
Obama, for his part, has made the principal task of his campaign assuring Wall Street of his support for the bailout and his overall reliability as a defender of the interests of the financial elite.
This has opened the door for McCain and right-wing House Republicans to posture as opponents of Wall Street and identify themselves with massive popular opposition to the bailout. The faction of House Republicans who have denounced the measure represents right-wing libertarian elements within the party who identify social spending and government intervention in the capitalist “free market” with what they consider the ultimate evil—socialism. They base themselves on appeals primarily to middle class layers, utilizing anti-tax and nationalist demagogy as their stock in trade.
In opposing the bailout, they are, moreover, responding to bitter opposition to the windfall for Wall Street among their constituents. The media and politicians of both parties have acknowledged that there is massive popular opposition to the bailout scheme.
The Los Angeles Times on Thursday called the proposal “wildly unpopular.” The New York Times reported that the “delicate” negotiations between Paulson and congressional leaders were “complicated” by pressure on rank-and-file legislators “who were fielding torrents of complaints from constituents furious that their own money was going to be spent to clear up a mess created by high-paid financial executives.”
The newspaper gave several examples of lawmakers who have been inundated with hostile emails and phone calls over the past week. “Senator Barbara Boxer, Democrat of California,” it noted, “has received nearly 17,000 email messages, nearly all opposed to the bailout, her office said. More than 2,000 constituents called Ms. Boxer’s California office on Tuesday alone; just 40 favored the bailout. Her Washington office received 918 calls. Just one supported the rescue plan.
“Senator Sherrod Brown, Democrat of Ohio, said he had been getting 2,000 email messages and telephone calls a day, roughly 85 percent opposed.”
What neither the media nor the politicians have pointed out is the brazen violation of any conception of democracy, even by the eviscerated and restricted standards of the American two-party system, represented by the enactment of such a momentous measure, which will impose massive burdens on the American people for decades to come, on the eve of a national election by a lame duck president and a Congress nearing the end of its tenure.
The Democrats’ rush to pass the bailout is driven by the most cynical calculations. They want the decision to be taken before the November elections, so that in the event they win, an Obama administration, with an increased Democratic majority in both houses of Congress, can claim that its hands are tied and it has no alternative but to pursue a right-wing policy of austerity, including savage cuts in social spending.
The Socialist Equality Party completely rejects the bailout of Wall Street and the entire framework within which the Bush administration and the Democratic Party seek to deal with the financial crisis. Our opposition has nothing in common with that of some of the most right-wing sections of the Republican Party.
The responsibility for the economic crisis rests with the capitalist system. The near-collapse of the American banking system has exposed not only the economic bankruptcy of the profit system, but also the fundamentally unrepresentative character of its political system.
This crisis is the product of the unbridled greed and criminality of the financial elite. More fundamentally, it is the outcome of the long-term decline and decay of American capitalism.
There is no progressive or democratic solution within the framework of this system. If the resources of the country must be mobilized to resolve the economic crisis and prevent a catastrophe, then they must be taken out of the hands of the financial parasites and placed under the democratic control of the working people.
The working class must be mobilized as an independent political force, in opposition to both parties of Wall Street, to establish a workers’ government and carry out the socialist nationalization, without compensation, of the banks and finance industry, so that the financial resources of the country can be allocated to meet to social needs of the people, rather than the money-mad strivings of a financial aristocracy.
Only on this basis can the urgent need be met for decent-paying jobs, retirement security, education, health care and high-quality housing for all.
This is the program of the SEP and our candidates for president and vice president, Jerry White and Bill Van Auken. We call on all those who agree on the need for a socialist alternative to support our election campaign and join the SEP.
To find out more about the SEP campaign, visit www.socialequality.com or contact us.
Thursday, September 25, 2008
Drinking at the Public Fountain
Go to Original
By Alan Snitow and Deborah Kaufman
The New Corporate Threat to Our Water Supplies
By Alan Snitow and Deborah Kaufman
The New Corporate Threat to Our Water Supplies
In the last few years, the world’s largest financial institutions and pension funds, from Goldman Sachs to Australia’s Macquarie Bank, have figured out that old, trustworthy utilities and infrastructure could become reliable cash cows -- supporting the financial system’s speculative junk derivatives with the real concrete of highways, water utilities, airports, harbors, and transit systems.
The spiraling collapse of the financial system may only intensify the quest for private investments in what is now the public sector. This flipping of public assets could be the next big phase of privatization, and it could happen even under an Obama administration, as local and state governments, starved during Bush’s two terms in office, look to bail out on public assets, employees, and responsibilities. The Republican record of neglect of basic infrastructure reads like a police blotter: levees in New Orleans, a major bridge in Minneapolis, a collapsing power grid, bursting water mains, and outdated sewage treatment plants.
Billions in private assets are now parked in "infrastructure funds" waiting for the crisis to mature and the right public assets to buy on the cheap. The first harbingers of a potential fire sale are already on the horizon. The City of Chicago has leased its major highway and Indiana its toll road. Private companies are managing major ports and bidding for control of local water systems across the country. Government jobs are also up for sale. For the first time in American history, the federal government employs more contract workers than regular employees.
This radical shift to the private sector could become one of history’s largest transfers of ownership, control, and wealth from the public trust to the private till. But more is at stake. The concept of democracy itself is being challenged by multinational corporations that see Americans not as citizens, but as customers, and government not as something of, by, and for the people, but as a market to be entered for profit.
How the Water Revolt Began
As a result, local and state governments are desperately trying to figure out how to make up the difference without politically unpopular rate increases. A growing number of mayors and governors, Republicans and Democrats, are turning to the industry’s designated solution: privatization.
Providing clean, accessible, affordable water is not only the most basic of all government services, but throughout history, control of water has defined the power structure of societies. If we lose control of our water, what do we, as citizens, really control?
The danger is that most citizens don’t even know there’s a problem. Water systems are generally underground and out of sight. Most of us don’t think about our water until the tap runs dry or we flush and it doesn’t go away. That indifference could cost us dearly, but privatization is not yet destiny.
A citizens’ water revolt has been slowly spreading across the United States. The revolt is not made up of "the usual suspects," has no focused ideology, and isn’t the stuff of headlines. It often starts as a "not-in-my-backyard" movement but quickly expands to encompass issues of global economic justice.
In Lee, Massachusetts, the revolt began against potential water-plant layoffs. In Felton, California, it was initially about rate increases and local control; in Atlanta, broken pipes and sewage lines. In other communities, it focused on corruption, cover-ups, and complicity between politicians and giant corporations.
One of the epicenters of this nascent movement has been Stockton, California, in the heart of the state’s agricultural San Joaquin Valley. A citizens’ group there took on not only the mayor and city council, but also some of the world’s largest private water corporations in a preview of the corporate water wars to come.
When private water companies case a city as a potential privatization target, they look for a "champion" in city government, someone who will take the lead in selling off the city’s water services. In Stockton, they found their champion in Mayor Gary Podesto, a former "big box" grocery store owner. In his view, it was "time that Stockton city government treat its citizens as customers."
But Mayor Podesto had other reasons to privatize. Stockton was already under pressure from state and federal environmental agencies to modernize its sewage plant to reduce San Joaquin River pollution. This was an expensive project, and the mayor thought that a private company could do it cheaper, if not better.
In 2002, Podesto sought bids from private water companies to take over the city’s water department. The winner of the bidding war was a consortium of two multinational giants: OMI, the water division of Colorado-based CH2M-Hill, one of the largest engineering firms in the United States, and London’s water company, Thames Water, which was itself a subsidiary of German energy powerhouse RWE. For OMI and RWE/Thames, Stockton was an opportunity to show California, and the country, what a private utility could do. It would be the largest water privatization deal in the western United States--a 20-year, $600 million contract.
But Mayor Podesto and the water giants were in for a surprise.
Water’s Dirty History
Although hidden from sight (and scent), even pipes have a history. In the nineteenth century, water ownership and management in the United States was largely in private hands.
But as populations grew, private water companies did not have the resources or expertise to meet the need. Citizens demanded, and eventually won, modern public water systems, financed through bonds, operated by reliable engineers and experts, and accountable to local governments. The nation built a dazzling system of community waterworks that provided clean, reasonably priced water and sewer systems that still rank among the best in the world.
But in recent years, federal disinvestment in water services has sparked a new era of privatization with contemporary players repeating promises made by nineteenth century entrepreneurs. The world’s largest private water companies have quickly entered the American market: Suez and Veolia from France and Germany’s RWE/Thames. Few Americans have heard of them, but the Big Three have dominated the global water business and are among the world’s largest corporations. Together they control subsidiaries in more than 100 countries.
Relying on free market ideology rather than research, neither government officials nor the media have generally bothered to check the shaky record of these multinationals in cities around the world. Suez and Veolia have had a reputation for influence peddling in France that has reached right into the presidential palace. Suez’s first foray in the United States was in Atlanta, which threw the company out after four years of brown water, low water pressure, and general incompetence.
The companies directly involved in the Stockton deal have also had their share of controversy. OMI was charged with falsifying water quality reports in several small American cities. RWE/Thames had been named "worst polluter" in Britain several years running.
How to Privatize an American City
If Stockton Mayor Podesto had doubts about OMI and RWE/Thames, he didn’t let on, saying only that Suez’s failures in Atlanta would come back to haunt them in the American market. In his view, privatization promised efficiencies of scale, as well as competitive cost cutting, lower water rates, and a business culture that would favor real-estate development.
The argument for marketplace competition should lose all traction with a monopoly service like water, but water companies still contend that the profit motive gives them an incentive to cut costs. However, such efficiencies usually turn out to come from somewhere else -- usually from service cutbacks, staff layoffs, and failures to invest in preventive maintenance.
As for rates, studies from across the country reveal that private water systems charge more -- often much more -- than public systems right next door. But private water operations make their biggest profits by expanding their service areas as cities grow. The industry’s business culture makes it a natural ally of developers and an opponent of citizens’ groups trying to limit growth, preserve agricultural land, or establish greenbelts.
All these political and business considerations make it easy to forget that even when water is public, it is not really our water at all. It is the planet’s circulation and life force. Climate change expresses itself through water or the lack of it. Droughts are a spreading problem across the United States, making conservation of water a high priority. However, private water companies want customers to use more water, not less, in order to maximize profit for their shareholders.
It’s not always easy to define the spark that ignites local rebellion. In Stockton, it was a growing distrust of local government. The Concerned Citizens Coalition of Stockton ("the coalition") had formed in 2001 to monitor and challenge what its members called they mayor’s "political-control machine." For the next six years, fighting water privatization would become its defining cause.
The coalition was unified by the conviction that Mayor Podesto was out to railroad the water privatization plan through the city council without a thorough public hearing and a citywide vote. Coalition members tenaciously confronted the mayor and his allies every step of the way. When it appeared that he still wouldn’t listen, they gathered 18,000 signatures to put an initiative on the ballot to require a citywide vote before privatization could take place.
Increasingly embattled, Podesto recognized that the coalition’s initiative was a poison pill for privatization. He wasn’t about to be outmaneuvered. In early 2003, less than two weeks before the initiative was to go to the voters, he put the proposed OMI/Thames contract on the city council. A vote by the seven-member council could preempt the 18,000 signers. Hundreds of people came out to protest. The details of the privatization deal itself had become secondary. At the electrifying two-hour meeting, the debate was over the rights of citizens, the value of the ballot, the meaning of representative democracy, and the human right to water.
In the end, Podesto himself cast the deciding vote in a 4 to 3 decision to approve the contract. Days later, Stocktonians voted overwhelmingly to approve the coalition’s initiative, but their votes had been made moot by the council’s action.
The coalition fought back in court. In its rush to approve the privatization, the city had failed to do an environmental impact study. The coalition’s lawyers claimed that was illegal and filed suit to stop privatization.
Podesto and OMI/Thames moved quickly to implement the contract. On July 31, 2003, water department employees turned in their city badges for ones with the OMI/Thames logo. Meanwhile, the coalition’s legal challenge went before superior court judge Robert McNatt, whose record indicated that it would be a hard sell. In October 2003, the judge shocked observers by throwing out privatization and giving the city 180 days to unravel the deal. McNatt wrote that the city’s self-exemption from environmental law was "an abuse of discretion." But the city appealed, setting in motion a multi-year legal battle.
The coalition didn’t leave the battle solely up to its lawyers as appeals continued. Each year of private control, the group issued damning report cards on OMI/Thames’ performance. Mayor Podesto had, for instance, claimed that water rates would rise only 7% over the 20-year life of the contract, but the coalition analysis showed an 8.5% increase in just the first three years. In addition, leakage doubled, maintenance backlogs skyrocketed, and staff turnover was constant.
Some residents of Stockton also noticed a difference when they sniffed the air. Workers at the plant said that OMI/Thames had cut back on odor-control chemicals to save approximately $40,000 a month.
As if that weren’t enough, on the Friday before a hot summer weekend in 2006, the wastewater-treatment plant spilled eight million gallons of sewage into the San Joaquin River, contaminating a mile-long stretch where people normally went swimming. It took 10 hours for managers to notice the problem and another three days to notify the public about the health danger.
In late 2006, the courts finally reaffirmed the coalition’s position that the city had violated California environmental law and, in the spring of 2007, after Mayor Podesto had left office, Stockton’s new city council -- dissatisfied with OMI/Thames’ performance -- voted not to appeal and set March 1, 2008, for Stockton to resume full control of its water system.
Nevertheless, the city faced all kinds of problems taking its water system back from the private consortium. The water department remained understaffed with a huge backlog of maintenance, and it was estimated that it would now take millions of dollars to fix the system.
Reverberations
The events in Stockton were followed by activists around the country and reverberated through the private water industry as well. In September 2005, RWE/Thames cited growing "public resistance to privatization schemes" in its decision to get out of the water business. In leaked minutes from an executive board meeting in Essen, Germany, then CEO Henry Roels complained that the water business required too much long-term investment in plant and equipment and offered little hope for once anticipated quick profits. But there was an ominous note in the RWE minutes. An unidentified board member cited a Goldman Sachs prediction that the "water business would become the oil business of the decade from 2020 to 2030."
And so a new stage in the water privatization wars beckons as Goldman Sachs, Macquarie bank, huge pension funds, and billionaire investors hop on the infrastructure bandwagon.
Will the Democrats -- if elected -- resist the trend? Past history suggests that the Party is deeply split on the issue of privatization and that only public resistance has slowed the fire sale. No matter who is president, the fate of public services and assets is likely to be left to local citizens groups that have cut their teeth on water battles like the one in Stockton.
Those local groups have already coalesced into a national movement for a democratic and sustainable water future. The unanswered question is whether these twenty-first century water wars are merely a last stand against an inevitable corporatized future, or the beginning of a far-reaching revolt to reclaim citizenship, reassert democratic values, and redefine how we interact with our environment.
Bush Withholds Salmon Disaster Money as He Pushes for Corporate Bailouts
Go to Original
By Dan Bacher
As George Bush pushes Congress to bail out Wall Street corporations, he refuses to immediately release $70 million out of the $170 million appropriated by Congress for disaster relief to salmon fishermen and businesses impacted by this year's salmon closures.
While George W. Bush wants taxpayers to give Treasury Secretary Henry Paulson a $700 billion blank check to bail out Wall Street for its reckless speculation and greed, the administration announced last week that it would release only $100 million of the $170 million appropriated to salmon fishermen and businesses impacted by this year’s salmon fishing closure off the California and Oregon coasts and in Central Valley rivers.
* * *
By Dan Bacher
As George Bush pushes Congress to bail out Wall Street corporations, he refuses to immediately release $70 million out of the $170 million appropriated by Congress for disaster relief to salmon fishermen and businesses impacted by this year's salmon closures.
While George W. Bush wants taxpayers to give Treasury Secretary Henry Paulson a $700 billion blank check to bail out Wall Street for its reckless speculation and greed, the administration announced last week that it would release only $100 million of the $170 million appropriated to salmon fishermen and businesses impacted by this year’s salmon fishing closure off the California and Oregon coasts and in Central Valley rivers.
Representatives Peter DeFazio (D-Oregon) and Mike Thompson (D-California), along with ten other members of Congress, wrote to President Bush on September 19 urging him to distribute the full $170 million in disaster aid to fishermen and businesses suffering from the closure of the salmon fishing season on the West Coast caused by the collapse of the Sacramento River fall run Chinook salmon population.
"Playing games with the livelihood of fishers across the Pacific Northwest is yet another sign that the Bush administration has no commitment to protect our valuable river systems, and no interest in helping the fishing communities and economies that rely on them," the letter stated. "It is also completely unacceptable. We insist that you comply with congressional intent and immediately release the full $170 million in federal disaster aid for Pacific Northwest fishers."
The other representatives who signed the letter were Brian Baird (D-Washington), Earl Blumenauer (D-Oregon), Lois Capps (D-California), Anna Eshoo (D-California), Sam Farr (D-California), Darlene Hooley (D-Oregon), Doris Matsui (D-California), Lynn Woolsey (D-California), David Wu (D-Oregon) and George Miller (D-California).
"The Bush administration has once again put politics ahead of people," said North Coast Congressman Thompson. "Because of the administration’s disastrous policies, Pacific Coast fishing families have been devastated. Congress appropriated $170 million in federal disaster relief, but this latest proposal by the Bush administration to withhold a large portion of these funds shows no regard for hardworking fishing families nor their livelihood."
"I am absolutely astounded that the administration is not distributing the full $170 million Congress allocated in the Farm Bill to deal with the salmon disaster," DeFazio said. "Instead, they are trying to steal $70 million from salmon fishermen and give it to an incompetent defense contractor. The fishing community of Oregon is already suffering because of the flawed Bush policies in the Sacramento River basin. They should not have to suffer again because the president has hired people in Florida who can’t count. We’ve been there before."
In a news release, US Commerce Secretary Carlos M. Gutierrez offered no reason the other $70 million owed to the fishermen and businesses wasn’t being released immediately.
"The salmon fishery has been a mainstay of the West Coast’s ocean fishing revenues for many years," said Gutierrez. "This year’s closure left thousands of fishermen and dependent businesses struggling to make ends meet. This disaster aid package of $100 million will help them get back on their feet."
Brian Gorman, spokesman for NOAA Fisheries, said the remaining $70 million of Congressionally appropriated disaster relief money "is expected to become available later in the year as the $100 million is spent.
"The administration requested to transfer $70 million for the Census, but I have no idea if there is support for this in Congress," Gorman added. "If there is no vote to do otherwise, the funds will remain as originally designated and the disaster relief aid will become available after October 1. I expect all of the money to be distributed."
He noted that the agency would provide the money in the form of a grant to the Pacific States Marine Fisheries Commission. The commission will distribute the money, based on the agreements reached with the states, to fishermen and related businesses affected by this year’s closure of the ocean salmon fishing season off California, Oregon and Washington.
The governors of all three West Coast states requested a federal disaster declaration as a result of the closures. The declaration, issued by Gutierrez in May, paved the way for Congress to appropriate the $170 million disaster relief package in July.
The states of Washington, Oregon and California estimated damages to the fishing industry to total $290 million. Of the $100 million released, approximately $63 million will go to California, $25 million to Oregon and $12 million to Washington State. The full disaster aid is needed immediately in order that fishermen can make boat payments, insurance payments, mortgage payments and keep food on the table.
In June, the Office of Management and Budget that puts together the president’s annual budget sent Congress a revised budget request for more funding to carry out the 2010 Census. "The White House is requesting $546 million more for the Census and has proposed using $70 million of the $170 million in salmon disaster money allocated in the Farm Bill to pay for the cost over-runs," according to DeFazio and Thompson.
The administration entered into a contract with the Harris Corporation, a Florida defense contractor, to conduct the Census, but the contractor has run into serious cost over-runs amounting to hundreds of millions of dollars. Congressmen DeFazio and Thompson and 13 other members of Congress sent President Bush a letter at that time they say was "largely ignored" by the administration.
The refusal to disburse the $70 million in salmon aid relief now is particularly outrageous because the Bush and Schwarzenegger administrations are largely responsible for the unprecedented fishery collapse. The Sacramento fall run Chinook salmon population has declined from over 800,000 in 2002 to fewer than 60,000 fish this year.
The Bush and Schwarzenegger administrations claim "ocean conditions" are responsible for the collapse, but all of the available evidence demonstrates that it is water policies that favor agribusiness and corporate water developers over fish, the environment and local communities that caused the dramatic decline. The collapse undoubtedly occurred because of record water exports from the California Delta by the state and federal projects to drainage-impaired land in the San Joaquin Valley during the years returning salmon were supposed to go to sea. For example, 2005 was a record export year with 6.4 million acre-feet of water diverted from the estuary.
It is believed many salmon never made it out of the Bay-Delta estuary, but were instead chopped up in the Delta pumps, disoriented and stranded in dead end sloughs because of reverse flows caused by pumping, and deprived of forage. At the same time, the state of California failed to put its hatchery salmon into salt water acclimation pens, as they had done previously, during 2005 and 2006. This resulted in increasing loss of salmon to predators when the stunned salmon were released into San Pablo Bay.
I believe that you can’t fully understand the Central Valley Chinook salmon collapse without understanding the dramatic decline of four California Delta pelagic species-delta smelt, longfin smelt, juvenile striped bass and threadfin shad. A team of federal and state scientists has pinpointed water exports as the number one cause of the "Pelagic Organism Decline," followed by toxic chemicals and invasive species.
As Peter Moyle, prominent U.C. Davis fishery scientist, recently stated, "Overall, blaming ’ocean conditions’ for salmon declines is a lot like blaming Hurricane Katrina for flooding New Orleans, while ignoring the many human errors that made the disaster inevitable, such as poor construction of levees or destruction of protective salt marshes. The listings of the winter and spring runs of Central Valley Chinook as endangered species were warnings of likely declines on an even larger scale. Continuing on our present course will result in the permanent loss of a valuable and iconic fishery unless we start taking corrective action soon."
Meanwhile, the Bush administration, while trying to steal money allocated to the victims of a fishery collapse engineered by the Bush and Schwarzenegger administrations, wants to soak the taxpayers for another $700 billion for corporate criminals who should be in jail, not receiving another handout. That’s on top of $1.1 trillion for other recent bailouts, including A.I.G., Fannie Mae, Freddie Mac and Bear Stearns. Just when you think the Bush regime has sunk to a new low, it will always find a way to reach a lower level of criminality in its policy of "socialism for the rich."
Note: The House Committee on Oversight and Government Reform held a hearing on the Harris Corporation and the problems with the Census on June 11, 2008.
The text of the letter sent to President Bush is below:
September 18, 2008
The Honorable Jim Nussle, Director
Office of Management and Budget
Washington, DC 20503
Dear Director Nussle:
We write with increasing concern regarding full disbursement of the $170 million appropriated by Congress to compensate fishers for the unprecedented closure of the West Coast salmon fishery.
Earlier this week, NOAA Fisheries (NOAA) indicated that it would be dispersing $100 million of the $170 million appropriated by Congress to provide aid to affected fishers. NOAA further indicated that the remaining $70 million may be disbursed if further need was demonstrated, and "if Congress did not act to rescind the funds.’ We have been informed that NOAA is not dispersing the full amount now because OMB has not yet released the funds. We find this unconscionable.
First, as we expressed to you in June, it is unacceptable that the Administration has proposed-and now seems to be trying to implement-a plan to take disaster aid from the fishing communities of California, Oregon and Washington to pay for cost overruns associated with this Administration’s questionable contract with the Harris Corporation to complete the 2010 census. Indeed, the reason why Congress had to step up to provide this emergency aid to fishers in our states is because of this Administration’s unlawful and shortsighted policies regarding the Pacific Northwest’s rivers.
Second, we have received no satisfactory explanation for why OMB can legally withhold funds that Congress has appropriated for a specific purpose such as this. The states of Oregon, Washington, and California have followed the process set out in the Magnuson-Stevens Act, which provides for emergency assistance. Now that NOAA has accepted the application from Pacific Fishery Management Council, and has approved the $170 million grant to the states, OMB is legally obligated to release the funds so that affected fishers may receive the aid they desperately need. The law provides for no further "assessment of need,’ and we are aware of no precedent for OMB’s alleged "phased’ disbursement of these funds.
To us, the fact that OMB is withholding $70 million, when it proposed in June to reprogram this exact same amount to pay for the Administration’s mistakes with its census contract, smacks of political gamesmanship. Playing games with the livelihood of fishers across the Pacific Northwest is yet another sign that the Bush Administration has no commitment to protect our valuable river systems, and no interest in helping the fishing communities and economies that rely on them. It is also completely unacceptable. We insist that you comply with congressional intent and immediately release the full $170 million in federal disaster aid for Pacific Northwest fishers.
Sincerely,
Brian Baird (D-Washington), Earl Blumenauer (D-Oregon), Lois Capps (D-California), Peter DeFazio (D-Oregon), Anna Eshoo (D-California), Sam Farr (D-California), Darlene Hooley (D-Oregon), Doris Matsui (D-California), Mike Thompson (D-California), Lynn Woolsey (D-California), David Wu (D-Oregon), George Miller (D-California)
Israel Asked US for Green Light to Bomb Nuclear Sites in Iran
Go to Original
By Jonathan Steele
US president told Israeli prime minister he would not back attack on Iran, senior European diplomatic sources tell Guardian
Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.
Map showing nuclear activity in Iran
By Jonathan Steele
US president told Israeli prime minister he would not back attack on Iran, senior European diplomatic sources tell Guardian
Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.
The then prime minister, Ehud Olmert, used the occasion of Bush’s trip to Israel for the 60th anniversary of the state’s founding to raise the issue in a one-on-one meeting on May 14, the sources said. "He took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office", they added.
The sources work for a European head of government who met the Israeli leader some time after the Bush visit. Their talks were so sensitive that no note-takers attended, but the European leader subsequently divulged to his officials the highly sensitive contents of what Olmert had told him of Bush’s position.
Bush’s decision to refuse to offer any support for a strike on Iran appeared to be based on two factors, the sources said. One was US concern over Iran’s likely retaliation, which would probably include a wave of attacks on US military and other personnel in Iraq and Afghanistan, as well as on shipping in the Persian Gulf.
The other was US anxiety that Israel would not succeed in disabling Iran’s nuclear facilities in a single assault even with the use of dozens of aircraft. It could not mount a series of attacks over several days without risking full-scale war. So the benefits would not outweigh the costs.
Iran has repeatedly said it would react with force to any attack. Some western government analysts believe this could include asking Lebanon’s Shia movement Hizbollah to strike at the US.
"It’s over ten years since Hizbollah’s last terror strike outside Israel, when it hit an Argentine-Israel association building in Buenos Aires [killing 85 people]", said one official. "There is a large Lebanese diaspora in Canada which must include some Hizbollah supporters. They could slip into the United States and take action".
Even if Israel were to launch an attack on Iran without US approval its planes could not reach their targets without the US becoming aware of their flightpath and having time to ask them to abandon their mission.
"The shortest route to Natanz lies across Iraq and the US has total control of Iraqi airspace", the official said. Natanz, about 100 miles north of Isfahan, is the site of an uranium enrichment plant.
In this context Iran would be bound to assume Bush had approved it, even if the White House denied fore-knowledge, raising the prospect of an attack against the US.
Several high-level Israeli officials have hinted over the last two years that Israel might strike Iran’s nuclear facilities to prevent them being developed to provide sufficient weapons-grade uranium to make a nuclear bomb. Iran has always denied having such plans.
Olmert himself raised the possibility of an attack at a press conference during a visit to London last November, when he said sanctions were not enough to block Iran’s nuclear programme.
"Economic sanctions are effective. They have an important impact already, but they are not sufficient. So there should be more. Up to where? Up until Iran will stop its nuclear programme," he said.
The revelation that Olmert was not merely sabre-rattling to try to frighten Iran but considered the option seriously enough to discuss it with Bush shows how concerned Israeli officials had become.
Bush’s refusal to support an attack, and the strong suggestion he would not change his mind, is likely to end speculation that Washington might be preparing an "October surprise" before the US presidential election. Some analysts have argued that Bush would back an Israeli attack in an effort to help John McCain’s campaign by creating an eve-of-poll security crisis.
Others have said that in the case of an Obama victory, the vice-president, Dick Cheney, the main White House hawk, would want to cripple Iran’s nuclear programme in the dying weeks of Bush’s term.
During Saddam Hussein’s rule in 1981, Israeli aircraft successfully destroyed Iraq’s nuclear reactor at Osirak shortly before it was due to start operating.
Last September they knocked out a buildings complex in northern Syria, which US officials later said had been a partly constructed nuclear reactor based on a North Korean design. Syria said the building was a military complex but had no links to a nuclear programme.
In contrast, Iran’s nuclear facilities, which are officially described as intended only for civilian purposes, are dispersed around the country and some are in fortified bunkers underground.
In public, Bush gave no hint of his view that the military option had to be excluded. In a speech to the Knesset the following day he confined himself to telling Israel’s parliament: "America stands with you in firmly opposing Iran’s nuclear weapons ambitions. Permitting the world’s leading sponsor of terror to possess the world’s deadliest weapon would be an unforgivable betrayal of future generations. For the sake of peace, the world must not allow Iran to have a nuclear weapon.’’
Mark Regev, Olmert’s spokesman, tonight reacted to the Guardian’s story saying: "The need to prevent Iran from obtaining nuclear weapons is raised at every meeting between the prime minister and foreign leaders. Israel prefers a diplomatic solution to this issue but all options must remain on the table. Your unnamed European source attributed words to the prime minister that were not spoken in any working meeting with foreign guests".
Three weeks after Bush’s red light, on June 2, Israel mounted a massive air exercise covering several hundred miles in the eastern Mediterranean. It involved dozens of warplanes, including F-15s, F-16s and aerial refueling tankers.
The size and scope of the exercise ensured that the US and other nations in the region saw it, said a US official, who estimated the distance was about the same as from Israel to Natanz.
A few days later, Israel’s deputy prime minister, Shaul Mofaz, told the paper Yediot Ahronot: "If Iran continues its programme to develop nuclear weapons, we will attack it. The window of opportunity has closed. The sanctions are not effective. There will be no alternative but to attack Iran in order to stop the Iranian nuclear programme."
The exercise and Mofaz’s comments may have been designed to boost the Israeli government and military’s own morale as well, perhaps, to persuade Bush to reconsider his veto. Last week Mofaz narrowly lost a primary within the ruling Kadima party to become Israel’s next prime minister. Tzipi Livni, who won the contest, takes a less hawkish position.
The US announced two weeks ago that it would sell Israel 1,000 bunker-busting bombs. The move was interpreted by some analysts as a consolation prize for Israel after Bush told Olmert of his opposition to an attack on Iran. But it could also enhance Israel’s attack options in case the next US president revives the military option.
The guided bomb unit-39 (GBU-39) has a penetration capacity equivalent to a one-tonne bomb. Israel already has some bunker-busters.
Map showing nuclear activity in Iran
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