The largest transformation of America's Financial System since the Great Depression
Global Research, September 20, 2008
By Michael Hudson
[Michael Hudosn is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of Super-Imperialism: The Economic Strategy of American Empire (1972 and 2003) and of The Myth of Aid (1971).]
Nobody expected industrial capitalism to end up like this. Nobody even saw it evolving in this direction. I'm afraid this failing is not unusual among futurists: The natural tendency is to think about how economies can best grow and evolve, not how it can be untracked. But an unforeseen road always seems to appear, and there goes society goes off on a tangent.
What a two weeks!
On Sunday, September 7, the Treasury took on the $5.3 trillion mortgage exposure of Fannie Mae and Freddie Mac, whose heads already had been removed for accounting fraud.
On Monday, September 15, Lehman Brothers went bankrupt, when prospective Wall Street buyers couldn't gain any sense of reality from its financial books. On Wednesday the Federal Reserve agreed to make good for at least $85 billion in the just-pretend "insured" winnings owed to financial gamblers who bet on computer-driven trades in junk mortgages and bought counter-party coverage from the A.I.G. (the American International Group, whose head Maurice Greenberg already had been removed a few years back for accounting fraud).
But it is Friday, September 19, that will go down as a turning point in American history. The White House committed at least half a trillion dollars more to re-inflate real estate prices in an attempt to support the market value junk mortgages - mortgages issued far beyond the ability of debtors to pay and far above the going market price of the collateral being pledged.
These billions of dollars were devoted to keeping a dream alive - the accounting fictions written down by companies that had entered an unreal world based on false accounting that nearly everyone in the financial sector knew to be fake. But they played along with buying and selling packaged mortgage junk because that was where the money was. As Charles Prince of Citibank put it, "As long as they're playing music, you have to get up and dance." Even after markets collapsed, fund managers who steered clear were blamed for not playing the game while it was going. I have friends on Wall Street who were fired for not matching the returns that their compatriots were making. And the biggest returns were to be made in trading in the economy's largest financial asset - mortgage debt. The mortgages packaged, owned or guaranteed by Fannie and Freddie alone exceeded the entire U.S. national debt - the cumulative deficits run up by the American Government since the nation won the Revolutionary War!
This gives an idea of just how large the bailout has been - and where the government's (or at least the Republicans') priorities lie! Instead of waking up the economy to reality, the government has thrown all its resources to promote the unreal dream that debts can be paid - if not by the debtors themselves, then by the government - "taxpayers," as the euphemism goes.
Overnight, the U.S. Treasury and Federal Reserve have radically changed the character of American capitalism. It is nothing less than a coup d'Etat for the class that FDR called "banksters." What has happened in the past two weeks threatens to change the coming century - irreversibly, if they can get away with it. This is the largest and most inequitable transfer of wealth since the land giveaways to the railroad barons during the Civil War era.
Even so, there seems little sign that it even may end the free-market patter talk by financial insiders who have managed to avert public oversight by appointing non-regulators to the major regulatory agencies - and thus created the mess that Treasury Secretary Henry Paulson now says threatens the bank deposits and jobs of all Americans. What he really means, of course, are simply the largest Republican campaign contributors (and to be fair, also the largest contributors to Democratic candidates on key financial committees).
A kleptocratic class has taken over the economy to replace industrial capitalism. Franklin Roosevelt's term "banksters" says it all in a nutshell. The economy has been captured - by an alien power, but not the usual suspects. Not socialism, workers or "big government," nor by industrial monopolists or even by the great banking families. Certainly not by Freemasons and Illuminati. (It would be wonderful if there were indeed some group operating with centuries of wisdom behind them, so at least someone at least had a plan.) Rather, the banksters have made a compact with an alien power -not Communists, Russians, Asians or Arabs. Not humans at all. The group's cadre is a new breed of machine. It may sound like the Terminator movies, but computerized Machines have indeed taken over the world - at least, the White House's world.
Here is how they did it. A.I.G. wrote insurance policies of all sorts of that people and businesses need: home and property insurance, livestock insurance, even aircraft leasing. These highly profitable businesses were not the problem. (They therefore will probably be sold off to pay the company's bad gambles.) A.I.G.'s downfall came from the $450 billion - almost half a trillion - dollars it was on the hook for as a result of guaranteeing hedge-fund counterparty insurance. In other words, if two parties played the zero-sum game of betting against each other as to whether the dollar would rise or fall against sterling or the euro, or if they insured a mortgage portfolio of junk mortgages to make sure that they would get paid, they would pay a teeny tiny commission to A.I.G. for a policy promising to pay if, say, the $11 trillion U.S. mortgage market should "stumble" or if losers placing trillions of dollars in bets on foreign exchange derivatives, stock or bond derivatives should somehow find themselves in a position that so many Las Vegas patrons are in, and be unable to come up with the cash to cover their losses.
A.I.G. collected billions of dollars on such policies. And thanks to the fact that insurance companies are a Milton Friedman paradise - not regulated by the Federal Reserve or any other nation-wide agency, and hence able to get the proverbial free lunch without government oversight - writing such policies was done by computer printouts, and the company collected massive fees and commissions without putting in much capital of its own. This is what is called "self-regulation." It is how the Invisible Hand is supposed to work.
It turned out, inevitably, that some of the financial institutions that made billion-dollar gambles - usually in the form of a thousand million-dollar gambles in the course of a few minutes or so, to be precise - couldn't pay up. These gambles all occur in microseconds, at strokes of a keyboard almost without human interference. In that sense it is not unlike alien pod people taking over. But in this case they are robot-like machines, hence the analogy I drew above with the Terminators.
Their sudden rise to dominance is as unforeseen as an invasion from Mars. The nearest analogy is the invasion of the Harvard Boys, World Bank and U.S.A.I.D. to Russia and other post-Soviet economies after the Soviet Union was dissolved, pressing free-market giveaways to create national kleptocracies. It should be a worrying sign to Americans that these kleptocrats have become the Founding Fortunes of their respective countries. We should bear in mind Aristotle's observation that democracy is the political stage immediately preceding oligarchy.
The financial machines that placed the trades that bankrupted A.I.G. were programmed by financial managers to act with the speed of light in conducting electronic trades often lasting only a few seconds each, millions of times a day. Only a machine could calculate mathematical probabilities factored in regarding the squiggles up and down of interest rates, exchange rates and stock and bonds prices - and prices for packaged mortgages. And the latter packages increasingly took the form of junk mortgages, pretending to be payable debts but in reality empty flak.
The machines employed by hedge funds in particular have given a new meaning to Casino Capitalism. That was long applied to speculators playing the stock market. It meant making cross bets, lose some and win some - and getting the government to bail out the non-payers. The twist in the past two weeks' turmoil is that the winners cannot collect on their bets unless the government pays the debts that the losers are unable to cover with their own money.
One would have thought that this requires some degree of control over the government. The activity probably never should have been licensed. In fact, it never was licensed, and hence nor regulated. But there seemed to be a good reason: Investors in hedge funds had to sign a paper saying that they were rich enough to afford to lose their money on this financial gambling. Your average mom and pop investors were not permitted to participate. Despite the high rewards that millions of tiny trades generated, they were deemed too risky for the uninitiated lacking trust funds to play with.
A hedge fund does not make money by producing goods and services. It does not advance funds to buy real assets or even lend money. It borrows huge sums to leverage its bet with nearly free credit. Its managers are not industrial engineers but mathematicians who program computers to make cross-bets or "straddles" on which way interest rates, currency exchange rates, stock or bond prices may move - or the prices for packaged bank mortgages. The packaged loans may be sound or they may be junk. It doesn't matter. All that matters is making money in a marketplace where most trades last only a few seconds. What creates the gains is the price fibrillation - volatility.
This kind of transaction may make fortunes, but it is not "wealth creation" in the form that most people recognize. Before the Black-Scholes mathematical formula for calculating the value of hedge bets, this kind of put and call option was too costly to provide much profit to anyone except the brokerage houses. But the combination of powerful computers and the "innovation" of almost free credit and free access to the financial gambling tables has made possible a frenetic back-and-forth maneuvering.
So why has the Treasury found it necessary to enter this picture at all? Why should these gamblers be bailed out, if they had enough to lose without having to become public wards by going on welfare? Hedge fund trading was limited to the very rich, for investment banks and other institutional investors. But it became one of the easiest ways to make money, loaning funds at interest for people to pay out of their computer-driven cross-trades. And almost as fast as it was made, this revenue was paid out in commissions, salaries and annual bonuses reminiscent of America's Gilded Age in the years prior to World War I - years before the income tax was introduced in 1913. The remarkable thing about all this money was that its recipients didn't even have to pay normal income tax on it. The government let them call it "capital gains," which meant that the money was taxed at only a fraction of the rate that incomes were taxed.
The pretense, of course, is that all this frenetic trading creates real "capital." It certainly does not do so in the classical 19th-century concept of capital. The term has been decoupled from producing goods and services, hiring wage labor or from financing innovation. It is as much "capital" as the right to conduct a lottery and collect the winnings from the hopes of the losers. But then, casinos from Las Vegas to riverboats have become a major "growth industry," muddying the language of capital, growth and wealth itself.
For the gaming tables to be closed and the money paid out, the losers must be bailed out - Fannie Mae, Freddie Mac, A.I.G. and who knows what to come? This is the only way to solve the problem of how companies that already have paid out their revenue to their managers and stockholders instead of putting it in reserves are to collect their winnings from insolvent debtors and insurance companies. These losers also have paid out their income to their financial managers and insiders (along with the usual patriotic contributions to the political candidates on the key committees in charge of deciding the nation's financial structuring).
This has to be orchestrated well in advance. It is necessary to buy politicians and give them a plausible cover story (or at least a well-crafted set of poll-tested euphemisms) to explain to voters just why it was in the public interest to bail out gamblers. Good rhetoric is needed to explain why the government should let them go into a casino and let them keep all their winnings while using public funds to make good on the losses of their counterparties.
What happened on September 18-19 took years of preparation, capped by a faux ideology crafted by public-relations think tanks to be broadcast under emergency conditions to panic Congress - and voters - right before the presidential election. This seems to be our September election surprise. Under staged crisis conditions, Pres. Bush and Treasury Secretary Paulson are now calling for the country to come together in a War on Defaulting Homeowners. This is said to be the only hope to "save the system." (What system is this? Not industrial capitalism, or even banking as we know it.) The largest transformation of America's financial system since the Great Depression has been compressed into just two weeks, starting with the doubling of America's national debt on September 7 with the nationalization of Fannie Mae and Freddie Mac. (My computer's spellchecker will not permit me to use the euphemism "conservatorship" that Mr. Paulson applied to bailing out the Fannie Mae and Freddie Mac fraudsters.)
Economic theory used to explain that profits and interest were a return for calculated risk. But today, the name of the game is capital gains and computerized gambling on the direction of interest rates, foreign currencies and stock prices - and when bad bets are made, bailouts are the calculated economic return for campaign contributions. But this is not supposed to be the time to talk of such things. "We must act now to protect our nation's economic health from serious risk," intoned Pres. Bush on September 19. What he meant was that the White House must make the Republican Party's largest group of campaign contributors whole - Wall Street, that is - by bailing out their bad gambles. "There will be ample opportunity to debate the origins of this problem. Now is the time to solve it." In other words, don't make this an election issue. "In our nation's history there have been moments that require us to come together across party lines to address major challenges. This is such a moment." Right before the presidential election! The same guff was heard earlier on Friday morning from Sec. Paulson: "Our economic health requires that we work together for prompt, bipartisan action." The broadcasters said that half a trillion dollars was discussed for this day's maneuverings.
Much of the blame should go to the Clinton Administration for leading the call to repeal Glass-Steagall in 1999, letting the banks merge with casinos. Or rather, the casinos have absorbed the banks. That is what has put the savings of Americans at risk.
But does this really mean that the only solution is to re-inflate the real estate market? The Paulson-Bernanke plan is to enable the banks to sell off the homes of five million home mortgage debtors faced with default or foreclosure this year! Homeowners with "exploding adjustable-rate mortgages" will lose their homes, but the Fed will pump enough credit into the mortgage-lending agencies to enable new buyers to go deeply enough into debt to take the junk mortgages off the hands of the gamblers who presently own them. Time for another financial and real estate bubble to bail out the junk mortgage lenders and packagers.
America has entered into a new war - a War to Save Computerized Derivative Traders. Like the Iraq war, it is based largely on fictions and entered into under seeming emergency conditions - to which the solution has little relation to the underlying cause of the problems. On financial security grounds the government is to make good on the collateralized debt obligations packaged (CDOs) that Warren Buffett has called "weapons of mass financial destruction."
Hardly by surprise, this giveaway of public money is being handled by the same group that warned the country so piously about weapons of mass destruction in Iraq. Pres. Bush and Treasury Secretary Paulson have piously announced that this is no time for partisan disagreements over this shift of public policy to favor creditors rather than debtors. There is no time to make the biggest bailout in election history an election issue. Not an appropriate time to debate whether it is a good thing to re-inflate housing prices to a level that will continue to oblige new home buyers to go so deeply into debt that they must pay some 40 percent of their take-home pay on housing.
Remember when President Bush and Alan Greenspan informed the American people that there was no money left to pay Social Security (not to mention Medicare) because at some future date (a decade from now? 20 years? 40 years?) the system might run a deficit of what now seems to be merely a trivial trillion dollars spread over many, many years. The moral was that if we can't figure out how to pay, let's plow the program under right now.
Mr. Bush and Greenspan did have a helpful solution, of course. The Treasury could turn Social Security and medical insurance money over to Bear Stearns, Lehman Brothers and their brethren to invest at the "magic of compound interest."
What would have happened to U.S. Social Security had this been done? Perhaps we should view the past two weeks' events as having assigned to Wall Street gamblers all the money that has been set aside since the Greenspan Commission in 1983 shifted the tax burden onto FICA wage withholding. It is not retirees who are being rescued, but the Wall Street investors who signed papers saying that they could afford to lose their money. The Republican slogan this November should be "Gambling insurance, not health insurance."
This is not how the much-vaunted Road to Serfdom was mapped out to be. Frederick Hayek and his Chicago Boys insisted that serfdom would come from government planning and regulation. This view turned upside down the classical and Progressive Era reformers who depicted government as acting as society's brain, its steering mechanism to shape markets - and free them from income without playing a necessary role in production.
The theory of democracy rested on the assumption that voters would act in their self-interest. Market reformers made a kindred happy assumption that consumers, savers and investors would promote economic growth by acting with full knowledge and understanding of the dynamics at work. But the Invisible Hand turned out to be accounting fraud, junk mortgage lending, insider dealing and a failure to relate the soaring debt overhead to the ability of debtors to pay - all of this mess seemingly legitimized by computerized trading models, and now blessed by the Treasury.
lørdag den 4. oktober 2008
The Financial Crisis: An Interview with George Soros
Judy Woodruff: You write in your new book, The New Paradigm for Financial Markets,[1] that "we are in the midst of a financial crisis the likes of which we haven't seen since the Great Depression." Was this crisis avoidable?
George Soros: I think it was, but it would have required recognition that the system, as it currently operates, is built on false premises. Unfortunately, we have an idea of market fundamentalism, which is now the dominant ideology, holding that markets are self-correcting; and this is false because it's generally the intervention of the authorities that saves the markets when they get into trouble. Since 1980, we have had about five or six crises: the international banking crisis in 1982, the bankruptcy of Continental Illinois in 1984, and the failure of Long-Term Capital Management in 1998, to name only three.
Each time, it's the authorities that bail out the market, or organize companies to do so. So the regulators have precedents they should be aware of. But somehow this idea that markets tend to equilibrium and that deviations are random has gained acceptance and all of these fancy instruments for investment have been built on them.
There are now, for example, complex forms of investment such as credit-default swaps that make it possible for investors to bet on the possibility that companies will default on repaying loans. Such bets on credit defaults now make up a $45 trillion market that is entirely unregulated. It amounts to more than five times the total of the US government bond market. The large potential risks of such investments are not being acknowledged.
Woodruff: How can so many smart people not realize this?
Soros: In my new book I put forward a general theory of reflexivity, emphasizing how important misconceptions are in shaping history. So it's not really unusual; it's just that we don't recognize the misconceptions.
Woodruff: Who could have? You said it would have been avoidable if people had understood what's wrong with the current system. Who should have recognized that?
Soros: The authorities, the regulators—the Federal Reserve and the Treasury—really failed to see what was happening. One Fed governor, Edward Gramlich, warned of a coming crisis in subprime mortgages in a speech published in 2004 and a book published in 2007, among other statements. So a number of people could see it coming. And somehow, the authorities didn't want to see it coming. So it came as a surprise.
Woodruff: The chairman of the Fed, Mr. Bernanke? His predecessor, Mr. Greenspan?
Soros: All of the above. But I don't hold them personally responsible because you have a whole establishment involved. The economics profession has developed theories of "random walks" and "rational expectations" that are supposed to account for market movements. That's what you learn in college. Now, when you come into the market, you tend to forget it because you realize that that's not how the markets work. But nevertheless, it's in some way the basis of your thinking.
Woodruff: How much worse do you anticipate things will get?
Soros: Well, you see, as my theory argues, you can't make any unconditional predictions because it very much depends on how the authorities are going to respond now to the situation. But the situation is definitely much worse than is currently recognized. You have had a general disruption of the financial markets, much more pervasive than any we have had so far. And on top of it, you have the housing crisis, which is likely to get a lot worse than currently anticipated because markets do overshoot. They overshot on the upside and now they are going to overshoot on the downside.
Woodruff: You say the housing crisis is going to get much worse. Do you anticipate something like the government setting up an agency or a trust corporation to buy these mortgages?
Soros: I'm sure that it will be necessary to arrest the decline because the decline, I think, will be much faster and much deeper than currently anticipated. In February, the rate of decline in housing prices was 25 percent per annum, so it's accelerating. Now, foreclosures are going to add to the supply of housing a very large number of properties because the annual rate of new houses built is about 600,000. There are about six million subprime mortgages outstanding, 40 percent of which will likely go into default in the next two years. And then you have the adjustable-rate mortgages and other flexible loans.
Problems with such adjustable-rate mortgages are going to be of about the same magnitude as with subprime mortgages. So you'll have maybe five million more defaults facing you over the next several years. Now, it takes time before a foreclosure actually is completed. So right now you have perhaps no more than 10,000 to 20,000 houses coming into the supply on the market. But that's going to build up. So the idea that somehow in the second half of this year the economy is going to improve I find totally unbelievable.
Woodruff: So how long will this last?
Soros: Well, it depends on when the authorities wake up, because you need to reduce the number of foreclosures. You need to keep as many people as possible in their houses so that they don't come onto the market. You need to arrest the decline in house prices, but you also need to prevent human suffering and social disruption because it's going to be very, very severe. Certain communities are already hurting and it's going to get a lot worse. So action will have to be taken, but I don't think it's going to happen during this administration.
Woodruff: You said the Federal Reserve had to step in to engineer the buyout by J.P. Morgan of Bear Stearns to prevent a much bigger catastrophe. You've also said that to do this, the Fed had to take on considerable risk. Is this an unhealthy amount of risk that the Fed has taken on?
Soros: This is their job, whether unhealthy or not; I don't think it's actually so severe. But that is their job, to save the system when it is in danger. However, because that is their job, it ought to be their job also to prevent asset bubbles from developing. And that task has not been recognized. Greenspan once spoke about the "irrational exuberance" of the market. It had a bad echo and he stopped talking about it. And it's generally accepted that the Fed tries to control core inflation, but not asset prices. I think that control of asset prices has to be an objective in order to prevent asset bubbles because they are so frequent.
Woodruff: And that's more than what the Fed is doing.
Soros: It's more than what it's doing now. You have to recognize that just controlling money doesn't control credit. You see, money and credit don't go hand in hand. The monetarist doctrine doesn't stand up. So you have to take into account the willingness to lend. And if it's too great—if borrowers can obtain large loans on the basis of inadequate security—you really have to introduce margin requirements for such borrowing and try to discourage it.
Woodruff: When you talk about currency you have more than a little expertise. You were described as the man who broke the Bank of England back in the 1990s. But what is your sense of where the dollar is going? We've seen it declining. Do you think the central banks are going to have to step in?
Soros: Well, we are close to a tipping point where, in my view, the willingness of banks and countries to hold dollars is definitely impaired. But there is no suitable alternative so central banks are diversifying into other currencies; but there is a general flight from these currencies. So the countries with big surpluses—Abu Dhabi, China, Norway, and Saudi Arabia, for example—have all set up sovereign wealth funds, state-owned investment funds held by central banks that aim to diversify their assets from monetary assets to real assets. That's one of the major developments currently and those sovereign wealth funds are growing. They're already equal in size to all of the hedge funds in the world combined. Of course, they don't use their capital as intensively as hedge funds, but they are going to grow to about five times the size of hedge funds in the next twenty years.
Woodruff: How low do you think the dollar will go?
Soros: Well, that I don't know. I can see the trend, but I don't know its extent, and I don't know when something might happen to turn it around. Once the economy stabilizes, probably the overshoot on the currencies would also be corrected.
Woodruff: Few people know more about hedge funds than you do. You've been enormously successful with your own hedge fund. Should hedge funds be more regulated by Washington?
Soros: I think hedge funds should be regulated like everything else. In other words, you have to control leverage—credit obtained for investment purposes—somewhere. Excessive use of leverage is at the bottom of this problem. And there have been hedge funds that have been using leverage excessively and some of those have gone broke. The amount of leverage that people are allowed to use has to be regulated. I think it's best done through the banks. In other words, the banks' reserve requirements—the amounts of money they are obliged to hold—should be tailored to the riskiness of their customers. So investment funds that use a lot of leverage ought to be seen as very risky; and therefore they would not get the amount of leverage they seek because the banks wouldn't give it to them.
Woodruff: New regulation, though: Could that impede the ability of hedge funds to be the big players that they have been in these markets?
Soros: Yes, I think that there has been excessive use of credit and it does have to be limited. So we are now in a period of very rapid deleveraging and I think that in the future we ought not to allow leverage to be used to the extent that it has been in the past.
Woodruff: You write, "We are at the end of an era." When this current credit crisis ends, will the US still be, no doubt about it, the world superpower when it comes to the economy?
Soros: Not at all. This is now in question. And you now have entered a period of really considerable uncertainty and turmoil because of the general flight from currencies, which manifests itself in the commodities bubble that has developed. The price of gold hasn't yet gone as high as it might. So what comes out of this turmoil is very open to question. I think that you will have to somehow reconstruct the global financial architecture because you have recognized that, in effect, the economic weight has changed considerably among the different countries. China has become much more important and also India, and so on. What kind of system will evolve from this is, I think, a very open question.
Woodruff: What about China? How much of an economic competitor could it end up being?
Soros: Well, China is rising. It's been the main beneficiary of globalization. Their currency is significantly undervalued and for various reasons they have to allow it to appreciate, recently at a rate of 10 percent. And it's been accelerating now to 15, 20 percent, which makes the situation more difficult for the Fed because you now have the prospect of core inflation in the US accelerating because if our imports coming from China go up in price by 15 percent, it will come through in core inflation. The price of goods at Wal-Mart is rising and will probably continue to rise and then accelerate.
Woodruff: So while people are thinking that goods are cheaper from China, you're saying the prices go up. It affects so many things that we buy in this country. What of Russia and how its economy is doing?
Soros: Basically, the country is benefiting from the high price of oil, but, at the same time, it is reestablishing a very authoritarian regime where the rights of investors are not respected. Now it is British Petroleum that is being chased out. So you invest at your own risk. I've done it and I'm not going to do it again.
Woodruff: So what you see in Russia tells us that political freedom and economic freedom are separable after all?
Soros: Well, the lack of political freedom also impinges on the rights of shareholders. So it's not a suitable area for investing exactly because you don't have the rule of law. China is improving a great deal. The rule of law is getting stronger in China, even though you don't have democracy.
Woodruff: The most attractive emerging market?
Soros: At this time, the outlook for India is also very good.
Woodruff: Let me mention two other points because they are so much on the minds of our leaders today. One is fighting the war on terror. Should the next president be prepared to sit down with the leaders of organizations like Hamas, like Hezbollah, countries like Iran?
Soros: Absolutely. I wrote another book arguing that the entire idea of a "war on terror" is a misleading concept that has got this country off on the wrong track.[2] It is responsible for our invading Iraq under the wrong pretenses and for a decline of our political influence and military power that has no precedent.
Woodruff: Where do you see the "war on terror" ten years down the road?
Soros: I hope that we will put it behind us. If you think in terms of human security and you say that the role of governments is to make the people secure, then it leads you to a completely different line of action. And even in Iraq, the surge, which was quite successful militarily, tried to provide protection for civilians, instead of just chasing terrorists whom we couldn't find after breaking into houses and terrifying the people. Concern for human security, making us feel safe and making the people in other countries feel safe: I think that would get you to a totally different line of action.
Woodruff: Bringing us back to this country in the midst of this economic credit crisis that you write about and that you've been describing, we are also in the middle of a presidential election. You endorsed Barack Obama the day he announced. Why him rather than your home state senator, Senator Clinton?
Soros: Well, I have very high regard for Hillary Clinton, but I think Obama has the charisma and the vision to radically reorient America in the world. And that is what we need because I'm afraid we have gotten off the right track and we need to have a greater discontinuity than Hillary Clinton would bring.
Woodruff: You have no concern that he lacks the experience to lead in this dangerous time that we live in?
Soros: I think that he has shown himself to be a really unusual person. And I think this emphasis on experience is way overdone because he will have exactly the same advisers available as Hillary Clinton, and it will be a matter of judgment whom he chooses. And actually, he is more likely to bring in new blood, which is what we need.
Woodruff: Recently, Senator Obama has endorsed some of the things we've been talking about: greater financial regulation, having for example the Federal Housing Administration insure unaffordable mortgages against default. Do you think this goes far enough, what he's talking about? Did he talk with you at all?
Soros: No, I've had absolutely no contact with him or any of the Democratic leadership on this issue. Now that my book is out, maybe I will in the future. But these are my ideas and they are not responsible for them.
Woodruff: From what you know about what he's saying about the housing crisis, do you think he goes far enough?
Soros: No, nothing right now goes far enough and Representative Barney Frank, who really understands the issues, is not pushing that far because, in order to get bipartisan support, you can't. So if you want something done, you have to set your sights lower. And that is what he has done and I think he is getting a few things through. But they are not enough.
Woodruff: A larger question on the campaign—you gave, I believe, something like $23 million in 2004 to various Democratic efforts: MoveOn.org and candidates. Far less than that so far this year—why the change?
Soros: Well, because I think that was a unique time when not having President Bush reelected would have made the situation of this country and of the world much better. I think now it's less important. And, in any case, I don't feel terribly comfortable being a partisan person because I look forward to being critical of the next Democratic administration.
Woodruff: What of your book and the philosophy that comes of it?
Soros: In human affairs, as distinguished from natural science, I argue that our understanding is imperfect. And our imperfect understanding introduces an element of uncertainty that's not there in natural phenomena. So therefore you can't predict human affairs in the same way as you can natural phenomena. And we have to come to terms with the implication of our own misunderstandings, that it's very hard to make decisions when you know you may be wrong. You have to learn to recognize that we in fact may be wrong. And, even worse than that, it's almost inevitable that all of our constructs will have some kind of a flaw in them. So when it comes to currencies, no currency system is perfect.
So you have to recognize that all of our constructions are imperfect. We have to improve them. But just because something is imperfect, the opposite is not perfect. So because of the failures of socialism, communism, we have come to believe in market fundamentalism, that markets are perfect; everything will be taken care of by markets. And markets are not perfect. And this time we have to recognize that, because we are facing a very serious economic disruption.
Now, we should not go back to a very highly regulated economy because the regulators are imperfect. They're only human and what is worse, they are bureaucratic. So you have to find the right kind of balance between allowing the markets to do their work, while recognizing that they are imperfect. You need authorities that keep the market under scrutiny and some degree of control. That's the message that I'm trying to get across.
George Soros: I think it was, but it would have required recognition that the system, as it currently operates, is built on false premises. Unfortunately, we have an idea of market fundamentalism, which is now the dominant ideology, holding that markets are self-correcting; and this is false because it's generally the intervention of the authorities that saves the markets when they get into trouble. Since 1980, we have had about five or six crises: the international banking crisis in 1982, the bankruptcy of Continental Illinois in 1984, and the failure of Long-Term Capital Management in 1998, to name only three.
Each time, it's the authorities that bail out the market, or organize companies to do so. So the regulators have precedents they should be aware of. But somehow this idea that markets tend to equilibrium and that deviations are random has gained acceptance and all of these fancy instruments for investment have been built on them.
There are now, for example, complex forms of investment such as credit-default swaps that make it possible for investors to bet on the possibility that companies will default on repaying loans. Such bets on credit defaults now make up a $45 trillion market that is entirely unregulated. It amounts to more than five times the total of the US government bond market. The large potential risks of such investments are not being acknowledged.
Woodruff: How can so many smart people not realize this?
Soros: In my new book I put forward a general theory of reflexivity, emphasizing how important misconceptions are in shaping history. So it's not really unusual; it's just that we don't recognize the misconceptions.
Woodruff: Who could have? You said it would have been avoidable if people had understood what's wrong with the current system. Who should have recognized that?
Soros: The authorities, the regulators—the Federal Reserve and the Treasury—really failed to see what was happening. One Fed governor, Edward Gramlich, warned of a coming crisis in subprime mortgages in a speech published in 2004 and a book published in 2007, among other statements. So a number of people could see it coming. And somehow, the authorities didn't want to see it coming. So it came as a surprise.
Woodruff: The chairman of the Fed, Mr. Bernanke? His predecessor, Mr. Greenspan?
Soros: All of the above. But I don't hold them personally responsible because you have a whole establishment involved. The economics profession has developed theories of "random walks" and "rational expectations" that are supposed to account for market movements. That's what you learn in college. Now, when you come into the market, you tend to forget it because you realize that that's not how the markets work. But nevertheless, it's in some way the basis of your thinking.
Woodruff: How much worse do you anticipate things will get?
Soros: Well, you see, as my theory argues, you can't make any unconditional predictions because it very much depends on how the authorities are going to respond now to the situation. But the situation is definitely much worse than is currently recognized. You have had a general disruption of the financial markets, much more pervasive than any we have had so far. And on top of it, you have the housing crisis, which is likely to get a lot worse than currently anticipated because markets do overshoot. They overshot on the upside and now they are going to overshoot on the downside.
Woodruff: You say the housing crisis is going to get much worse. Do you anticipate something like the government setting up an agency or a trust corporation to buy these mortgages?
Soros: I'm sure that it will be necessary to arrest the decline because the decline, I think, will be much faster and much deeper than currently anticipated. In February, the rate of decline in housing prices was 25 percent per annum, so it's accelerating. Now, foreclosures are going to add to the supply of housing a very large number of properties because the annual rate of new houses built is about 600,000. There are about six million subprime mortgages outstanding, 40 percent of which will likely go into default in the next two years. And then you have the adjustable-rate mortgages and other flexible loans.
Problems with such adjustable-rate mortgages are going to be of about the same magnitude as with subprime mortgages. So you'll have maybe five million more defaults facing you over the next several years. Now, it takes time before a foreclosure actually is completed. So right now you have perhaps no more than 10,000 to 20,000 houses coming into the supply on the market. But that's going to build up. So the idea that somehow in the second half of this year the economy is going to improve I find totally unbelievable.
Woodruff: So how long will this last?
Soros: Well, it depends on when the authorities wake up, because you need to reduce the number of foreclosures. You need to keep as many people as possible in their houses so that they don't come onto the market. You need to arrest the decline in house prices, but you also need to prevent human suffering and social disruption because it's going to be very, very severe. Certain communities are already hurting and it's going to get a lot worse. So action will have to be taken, but I don't think it's going to happen during this administration.
Woodruff: You said the Federal Reserve had to step in to engineer the buyout by J.P. Morgan of Bear Stearns to prevent a much bigger catastrophe. You've also said that to do this, the Fed had to take on considerable risk. Is this an unhealthy amount of risk that the Fed has taken on?
Soros: This is their job, whether unhealthy or not; I don't think it's actually so severe. But that is their job, to save the system when it is in danger. However, because that is their job, it ought to be their job also to prevent asset bubbles from developing. And that task has not been recognized. Greenspan once spoke about the "irrational exuberance" of the market. It had a bad echo and he stopped talking about it. And it's generally accepted that the Fed tries to control core inflation, but not asset prices. I think that control of asset prices has to be an objective in order to prevent asset bubbles because they are so frequent.
Woodruff: And that's more than what the Fed is doing.
Soros: It's more than what it's doing now. You have to recognize that just controlling money doesn't control credit. You see, money and credit don't go hand in hand. The monetarist doctrine doesn't stand up. So you have to take into account the willingness to lend. And if it's too great—if borrowers can obtain large loans on the basis of inadequate security—you really have to introduce margin requirements for such borrowing and try to discourage it.
Woodruff: When you talk about currency you have more than a little expertise. You were described as the man who broke the Bank of England back in the 1990s. But what is your sense of where the dollar is going? We've seen it declining. Do you think the central banks are going to have to step in?
Soros: Well, we are close to a tipping point where, in my view, the willingness of banks and countries to hold dollars is definitely impaired. But there is no suitable alternative so central banks are diversifying into other currencies; but there is a general flight from these currencies. So the countries with big surpluses—Abu Dhabi, China, Norway, and Saudi Arabia, for example—have all set up sovereign wealth funds, state-owned investment funds held by central banks that aim to diversify their assets from monetary assets to real assets. That's one of the major developments currently and those sovereign wealth funds are growing. They're already equal in size to all of the hedge funds in the world combined. Of course, they don't use their capital as intensively as hedge funds, but they are going to grow to about five times the size of hedge funds in the next twenty years.
Woodruff: How low do you think the dollar will go?
Soros: Well, that I don't know. I can see the trend, but I don't know its extent, and I don't know when something might happen to turn it around. Once the economy stabilizes, probably the overshoot on the currencies would also be corrected.
Woodruff: Few people know more about hedge funds than you do. You've been enormously successful with your own hedge fund. Should hedge funds be more regulated by Washington?
Soros: I think hedge funds should be regulated like everything else. In other words, you have to control leverage—credit obtained for investment purposes—somewhere. Excessive use of leverage is at the bottom of this problem. And there have been hedge funds that have been using leverage excessively and some of those have gone broke. The amount of leverage that people are allowed to use has to be regulated. I think it's best done through the banks. In other words, the banks' reserve requirements—the amounts of money they are obliged to hold—should be tailored to the riskiness of their customers. So investment funds that use a lot of leverage ought to be seen as very risky; and therefore they would not get the amount of leverage they seek because the banks wouldn't give it to them.
Woodruff: New regulation, though: Could that impede the ability of hedge funds to be the big players that they have been in these markets?
Soros: Yes, I think that there has been excessive use of credit and it does have to be limited. So we are now in a period of very rapid deleveraging and I think that in the future we ought not to allow leverage to be used to the extent that it has been in the past.
Woodruff: You write, "We are at the end of an era." When this current credit crisis ends, will the US still be, no doubt about it, the world superpower when it comes to the economy?
Soros: Not at all. This is now in question. And you now have entered a period of really considerable uncertainty and turmoil because of the general flight from currencies, which manifests itself in the commodities bubble that has developed. The price of gold hasn't yet gone as high as it might. So what comes out of this turmoil is very open to question. I think that you will have to somehow reconstruct the global financial architecture because you have recognized that, in effect, the economic weight has changed considerably among the different countries. China has become much more important and also India, and so on. What kind of system will evolve from this is, I think, a very open question.
Woodruff: What about China? How much of an economic competitor could it end up being?
Soros: Well, China is rising. It's been the main beneficiary of globalization. Their currency is significantly undervalued and for various reasons they have to allow it to appreciate, recently at a rate of 10 percent. And it's been accelerating now to 15, 20 percent, which makes the situation more difficult for the Fed because you now have the prospect of core inflation in the US accelerating because if our imports coming from China go up in price by 15 percent, it will come through in core inflation. The price of goods at Wal-Mart is rising and will probably continue to rise and then accelerate.
Woodruff: So while people are thinking that goods are cheaper from China, you're saying the prices go up. It affects so many things that we buy in this country. What of Russia and how its economy is doing?
Soros: Basically, the country is benefiting from the high price of oil, but, at the same time, it is reestablishing a very authoritarian regime where the rights of investors are not respected. Now it is British Petroleum that is being chased out. So you invest at your own risk. I've done it and I'm not going to do it again.
Woodruff: So what you see in Russia tells us that political freedom and economic freedom are separable after all?
Soros: Well, the lack of political freedom also impinges on the rights of shareholders. So it's not a suitable area for investing exactly because you don't have the rule of law. China is improving a great deal. The rule of law is getting stronger in China, even though you don't have democracy.
Woodruff: The most attractive emerging market?
Soros: At this time, the outlook for India is also very good.
Woodruff: Let me mention two other points because they are so much on the minds of our leaders today. One is fighting the war on terror. Should the next president be prepared to sit down with the leaders of organizations like Hamas, like Hezbollah, countries like Iran?
Soros: Absolutely. I wrote another book arguing that the entire idea of a "war on terror" is a misleading concept that has got this country off on the wrong track.[2] It is responsible for our invading Iraq under the wrong pretenses and for a decline of our political influence and military power that has no precedent.
Woodruff: Where do you see the "war on terror" ten years down the road?
Soros: I hope that we will put it behind us. If you think in terms of human security and you say that the role of governments is to make the people secure, then it leads you to a completely different line of action. And even in Iraq, the surge, which was quite successful militarily, tried to provide protection for civilians, instead of just chasing terrorists whom we couldn't find after breaking into houses and terrifying the people. Concern for human security, making us feel safe and making the people in other countries feel safe: I think that would get you to a totally different line of action.
Woodruff: Bringing us back to this country in the midst of this economic credit crisis that you write about and that you've been describing, we are also in the middle of a presidential election. You endorsed Barack Obama the day he announced. Why him rather than your home state senator, Senator Clinton?
Soros: Well, I have very high regard for Hillary Clinton, but I think Obama has the charisma and the vision to radically reorient America in the world. And that is what we need because I'm afraid we have gotten off the right track and we need to have a greater discontinuity than Hillary Clinton would bring.
Woodruff: You have no concern that he lacks the experience to lead in this dangerous time that we live in?
Soros: I think that he has shown himself to be a really unusual person. And I think this emphasis on experience is way overdone because he will have exactly the same advisers available as Hillary Clinton, and it will be a matter of judgment whom he chooses. And actually, he is more likely to bring in new blood, which is what we need.
Woodruff: Recently, Senator Obama has endorsed some of the things we've been talking about: greater financial regulation, having for example the Federal Housing Administration insure unaffordable mortgages against default. Do you think this goes far enough, what he's talking about? Did he talk with you at all?
Soros: No, I've had absolutely no contact with him or any of the Democratic leadership on this issue. Now that my book is out, maybe I will in the future. But these are my ideas and they are not responsible for them.
Woodruff: From what you know about what he's saying about the housing crisis, do you think he goes far enough?
Soros: No, nothing right now goes far enough and Representative Barney Frank, who really understands the issues, is not pushing that far because, in order to get bipartisan support, you can't. So if you want something done, you have to set your sights lower. And that is what he has done and I think he is getting a few things through. But they are not enough.
Woodruff: A larger question on the campaign—you gave, I believe, something like $23 million in 2004 to various Democratic efforts: MoveOn.org and candidates. Far less than that so far this year—why the change?
Soros: Well, because I think that was a unique time when not having President Bush reelected would have made the situation of this country and of the world much better. I think now it's less important. And, in any case, I don't feel terribly comfortable being a partisan person because I look forward to being critical of the next Democratic administration.
Woodruff: What of your book and the philosophy that comes of it?
Soros: In human affairs, as distinguished from natural science, I argue that our understanding is imperfect. And our imperfect understanding introduces an element of uncertainty that's not there in natural phenomena. So therefore you can't predict human affairs in the same way as you can natural phenomena. And we have to come to terms with the implication of our own misunderstandings, that it's very hard to make decisions when you know you may be wrong. You have to learn to recognize that we in fact may be wrong. And, even worse than that, it's almost inevitable that all of our constructs will have some kind of a flaw in them. So when it comes to currencies, no currency system is perfect.
So you have to recognize that all of our constructions are imperfect. We have to improve them. But just because something is imperfect, the opposite is not perfect. So because of the failures of socialism, communism, we have come to believe in market fundamentalism, that markets are perfect; everything will be taken care of by markets. And markets are not perfect. And this time we have to recognize that, because we are facing a very serious economic disruption.
Now, we should not go back to a very highly regulated economy because the regulators are imperfect. They're only human and what is worse, they are bureaucratic. So you have to find the right kind of balance between allowing the markets to do their work, while recognizing that they are imperfect. You need authorities that keep the market under scrutiny and some degree of control. That's the message that I'm trying to get across.
Massetab af Arbejdspladser.
NY TIMES: 159,000 Jobs Lost in September, the Worst Month in Five Years.
Report blames U.S. trade gap for 5.6 million lost jobs
WASHINGTON (Reuters) Thu Oct 2, 2008 7:03am EDT
The U.S. trade deficit in goods other than oil cost American workers 5.6 million jobs last year, with Michigan and South Carolina leading the list of hardest-hit states, a report issued on Thursday said.
"Elimination of the non-oil trade deficit could support millions of new jobs in export industries and contribute to the revitalization of U.S. manufacturing," Robert Scott, director of international programs for the partially labor-funded Economic Policy Institute, said in the report.
"Despite strong export growth over the past few years, that (non-oil) deficit still totaled $473 billion in 2007, only $48 billion less than its record peak in 2006," Scott said.
The report estimated Michigan lost 319,200 jobs in 2007 due to the non-oil trade gap, or 7.5 percent of its total employment. South Carolina was second with 121,000 job losses, or 6.2 percent of its work force, Scott said.
California, Texas and New York had bigger job losses, but with less impact on their total employment because of their larger populations, Scott said.
All 50 states and the District of Colombia had some jobs "lost or displaced" because of the trade deficit, he said.
The most important causes of the non-oil trade deficit are "currency manipulation and other unfair trade practices" by China and other countries, Scott said.
In an interview, Scott said the United States should impose a tariff on Chinese goods to level the playing field.
His findings contrast with those of the business-friendly Peterson Institute for International Economics, which has estimated the overall U.S. economy is approximately $1 trillion richer each year because of globalization.
The report also comes at a time when the Bush administration and many economists are crediting growing U.S. exports with keeping the U.S. economy afloat.
In the first seven months of 2008, exports increased by 18.3 percent to $1.1 trillion compared to the same period last year while imports rose 12.9 percent to $1.5 billion.
Trade has been an issue in the U.S. presidential campaign, with Democrat Barack Obama vowing to end tax breaks that encourage corporations to ship jobs overseas and promising to crack down on China's currency practices.
Republican John McCain has criticized Obama for opposing free trade pacts with South Korea and Colombia that the Bush administration wants Congress to pass.
The American economy lost 159,000 jobs in September, the worst month of retrenchment in five years, the government reported on Friday, amplifying fears that an already painful downturn had entered a more severe stage that could persist well into next year.
Employment has diminished for nine consecutive months, eliminating 760,000 jobs, according to the Labor Department’s report. And that does not count the traumatic events of recent weeks, as a string of Wall Street institutions collapsed, prompting the $700 billion emergency rescue package approved by Congress on Friday.
“It’s a dismal report, and the worst thing about it is that it does not reflect the recent seizure that we’ve seen in the credit markets,” said Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. “There’s really nothing good about this report at all. We’ve lost jobs in nearly every area of the economy, and this is going to get worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks.”
Report blames U.S. trade gap for 5.6 million lost jobs
WASHINGTON (Reuters) Thu Oct 2, 2008 7:03am EDT
The U.S. trade deficit in goods other than oil cost American workers 5.6 million jobs last year, with Michigan and South Carolina leading the list of hardest-hit states, a report issued on Thursday said.
"Elimination of the non-oil trade deficit could support millions of new jobs in export industries and contribute to the revitalization of U.S. manufacturing," Robert Scott, director of international programs for the partially labor-funded Economic Policy Institute, said in the report.
"Despite strong export growth over the past few years, that (non-oil) deficit still totaled $473 billion in 2007, only $48 billion less than its record peak in 2006," Scott said.
The report estimated Michigan lost 319,200 jobs in 2007 due to the non-oil trade gap, or 7.5 percent of its total employment. South Carolina was second with 121,000 job losses, or 6.2 percent of its work force, Scott said.
California, Texas and New York had bigger job losses, but with less impact on their total employment because of their larger populations, Scott said.
All 50 states and the District of Colombia had some jobs "lost or displaced" because of the trade deficit, he said.
The most important causes of the non-oil trade deficit are "currency manipulation and other unfair trade practices" by China and other countries, Scott said.
In an interview, Scott said the United States should impose a tariff on Chinese goods to level the playing field.
His findings contrast with those of the business-friendly Peterson Institute for International Economics, which has estimated the overall U.S. economy is approximately $1 trillion richer each year because of globalization.
The report also comes at a time when the Bush administration and many economists are crediting growing U.S. exports with keeping the U.S. economy afloat.
In the first seven months of 2008, exports increased by 18.3 percent to $1.1 trillion compared to the same period last year while imports rose 12.9 percent to $1.5 billion.
Trade has been an issue in the U.S. presidential campaign, with Democrat Barack Obama vowing to end tax breaks that encourage corporations to ship jobs overseas and promising to crack down on China's currency practices.
Republican John McCain has criticized Obama for opposing free trade pacts with South Korea and Colombia that the Bush administration wants Congress to pass.
Bil-Industrien får $25 milliarder bailout-lån af staten.
US bailout, plug-in credit a boost for automakers
Fri Oct 3, 2008 6:41pm EDT
By John Crawley
WASHINGTON, Oct 3 (Reuters) - Automakers received another boost from Congress with passage on Friday of the $700 billion financial rescue bill that the industry hopes will revive car loans and help create a mass market for electric vehicles.
The legislation signed into law by President George W. Bush aims to buy bad debts from financial institutions to address a a credit crisis which has hit the slumping U.S. auto industry particularly hard.
"Congressional action couldn't come at a more critical time," General Motors Corp spokesman Greg Martin said. "We believe this bill will restore confidence in our financial markets and restore the flow of credit that in our business dealerships so heavily depend on."
A 26 percent drop in industrywide sales reported earlier this week was partly blamed on the inability of buyers to finance purchases. And GM's GMAC financing affiliate scrapped the sale of $2.7 billion in corporate loan commitments on Thursday in another sign that tight credit markets are hitting automakers.
Consumers use credit for more than 90 percent of all new vehicle purchases, according to industry figures, and the scarcity of auto loans was used repeatedly by congressional leaders in recent days to help sell the financial rescue package to reluctant lawmakers and skeptical constituents.
The financial bailout comes just days after the government made $25 billion in federal loans available to mainly struggling Detroit manufacturers to help them develop fuel saving technologies needed to meet sharply higher federal efficiency standards next decade.
The money is for retooling outdated plants and accelerating research and development. Better engine and transmission designs are quickly factoring into Detroit's plan, but GM, Ford Motor Co and Chrysler LLC are also racing foreign rivals to develop electric cars.
The financial bailout legislation included a consumer tax credit of between $2,500 and $7,500 for plug-in vehicles.
Industry experts say tax incentives have been an effective means to accelerate early consumer interest in new technologies. Tax breaks helped propel sales of the hybrid Prius made by Toyota Motor Corp.
Dave Cole, director of the Center for Automotive Research, said the plug-in technology is real and the innovation, in place. "But this stuff is expensive," he said.
Cole called the tax break a bridge to enable the vehicles to get started in the market without "horrifying costs to the consumer or the company."
GM hopes to roll out the Chevrolet Volt in 2010. The automaker has not announced a sticker price, but its chief executive has said it could top $30,000.
Toyota hopes to introduce a plug-in version of its Prius hybrid in late 2009 for fleet operators. There is no timetable for bringing it to the mass-market.
Ford is testing plug-in versions of its Escape SUV as part of an alliance with Edison International utility Southern California Edison. The test is expected to run for about three years.
Chrysler plans to launch an electric vehicle for North American customers in 2010.
Nissan Motor Co plans to start testing an all-new electric car being developed in Japan and aims for global sales of the still-unnamed battery-powered car by 2010.
Mitsubishi Motors Corp said this week it would begin testing an electric car in Europe next month, the i-MiEV hatchback.
Felix Kramer, founder of the California Cars Initiative, said the tax breaks are higher than either U.S. presidential candidate has proposed and could spur follow-on incentives for fuel-saving technologies.
The legislation also extended through 2010 the 30 percent tax credit for service stations to install natural gas and E85 ethanol blend pumps and extends the credit to electric vehicle recharging equipment.
Fri Oct 3, 2008 6:41pm EDT
By John Crawley
WASHINGTON, Oct 3 (Reuters) - Automakers received another boost from Congress with passage on Friday of the $700 billion financial rescue bill that the industry hopes will revive car loans and help create a mass market for electric vehicles.
The legislation signed into law by President George W. Bush aims to buy bad debts from financial institutions to address a a credit crisis which has hit the slumping U.S. auto industry particularly hard.
"Congressional action couldn't come at a more critical time," General Motors Corp spokesman Greg Martin said. "We believe this bill will restore confidence in our financial markets and restore the flow of credit that in our business dealerships so heavily depend on."
A 26 percent drop in industrywide sales reported earlier this week was partly blamed on the inability of buyers to finance purchases. And GM's GMAC financing affiliate scrapped the sale of $2.7 billion in corporate loan commitments on Thursday in another sign that tight credit markets are hitting automakers.
Consumers use credit for more than 90 percent of all new vehicle purchases, according to industry figures, and the scarcity of auto loans was used repeatedly by congressional leaders in recent days to help sell the financial rescue package to reluctant lawmakers and skeptical constituents.
The financial bailout comes just days after the government made $25 billion in federal loans available to mainly struggling Detroit manufacturers to help them develop fuel saving technologies needed to meet sharply higher federal efficiency standards next decade.
The money is for retooling outdated plants and accelerating research and development. Better engine and transmission designs are quickly factoring into Detroit's plan, but GM, Ford Motor Co and Chrysler LLC are also racing foreign rivals to develop electric cars.
The financial bailout legislation included a consumer tax credit of between $2,500 and $7,500 for plug-in vehicles.
Industry experts say tax incentives have been an effective means to accelerate early consumer interest in new technologies. Tax breaks helped propel sales of the hybrid Prius made by Toyota Motor Corp.
Dave Cole, director of the Center for Automotive Research, said the plug-in technology is real and the innovation, in place. "But this stuff is expensive," he said.
Cole called the tax break a bridge to enable the vehicles to get started in the market without "horrifying costs to the consumer or the company."
GM hopes to roll out the Chevrolet Volt in 2010. The automaker has not announced a sticker price, but its chief executive has said it could top $30,000.
Toyota hopes to introduce a plug-in version of its Prius hybrid in late 2009 for fleet operators. There is no timetable for bringing it to the mass-market.
Ford is testing plug-in versions of its Escape SUV as part of an alliance with Edison International utility Southern California Edison. The test is expected to run for about three years.
Chrysler plans to launch an electric vehicle for North American customers in 2010.
Nissan Motor Co plans to start testing an all-new electric car being developed in Japan and aims for global sales of the still-unnamed battery-powered car by 2010.
Mitsubishi Motors Corp said this week it would begin testing an electric car in Europe next month, the i-MiEV hatchback.
Felix Kramer, founder of the California Cars Initiative, said the tax breaks are higher than either U.S. presidential candidate has proposed and could spur follow-on incentives for fuel-saving technologies.
The legislation also extended through 2010 the 30 percent tax credit for service stations to install natural gas and E85 ethanol blend pumps and extends the credit to electric vehicle recharging equipment.
Irak-krigen -> Dollarens hegemoni på olie-markedet.
Følgende er et uddrag fra min artikel 'Fogh & Bush - Venner i Ilden.' som jeg finder interessant at perspektivere til, i lyset af kapiliberalismens $millard-bailout af Wall Street spekulanter for skattemidler, da denne krise også bør ses i lyset af den ekstremt omkostningstunge Irak-krig, og dennes årsag.
Uddrag:
Uddrag:
Olien og dollaren…
Efter Anden Verdenskrig lå store dele af den europæiske og japanske industri hen i ruiner, og produktionen befandt sig generelt på et lavt niveau. USA var den eneste af de store magter, som undslap krigens ødelæggelser, og den amerikanske industri var efter krigen højproduktiv, således at man under krigen tredoblede produktionen indenrigs.
Derudover flyttedes store mængder guld fra Europa til USA før og under anden verdenskrig grundet det økonomiske og politiske postyr på det europæiske kontinent. Efter Anden Verdenskrig var USA således indehaver af 80 pct. af verdens guld og man rådede samtidig over 40 pct. af verdens samlede produktionsapparat. En fast valutakurs etableredes kaldet gulddollar standarden, hvor guldet blev prissat til $35 pr. ounce.
Guld blev altså ækvivalent med dollaren, og den amerikanske valuta blev efterfølgende den internationale valutareservestandard. Derudover bør det nævnes, at præsident Franklin Delano Roosevelt i 1945 lavede en aftale med den saudi-arabiske Ibn Saud gående ud på, at man ville beskytte landet, mod at regimet kun handlede dets olie i dollars [15]. Disse to historiske forhold er meget væsentlige at have med, hvis man vil forstå, hvorfor den internationale oliehandel har været domineret af dollaren i adskillelige årtier, hvilket ses manifesteret i det faktum, at olie kun kan købes hos OPEC i dollars.
Denne dollar-dominans blev af Saddam Hussein truet, da han i september 2000 valgte at veksle sin dollarreserve til euros [16] med henblik på at handle den irakiske olie i denne valuta, og det blev efterfølgende af flere olie-producerende lande hævdet, at man havde lignende intentioner, hvilket for Irans vedkommende i dag ses manifesteret i landets for nyligt lancerede eurobaserede oliebørs.
Det amerikanske olieforbrug forventes fra officiel side, at stige med en tredjedel over de næste to årtier, mens produktionen indenrigs forventes at falde med 12 pct. i samme periode, hvorfor den amerikanske afhængighed af importeret olie er steget fra at udgøre en tredjedel af forsyningen i 1985 til i dag at udgøre mere end halvdelen, og det forventes ydermere at importeret olie vil udgøre to tredjedele af forsyningen i 2020. Selvom man har gjort, hvad man kan for at sikre forsyningsstabiliteten, blandt andet ved at handle olie med lande uden for OPEC, var OPEC (primært Saudi-Arabien) fortsat den største eksportør af olie til USA i 2002-2003 [17].
Præsident Bush og vicepræsident Dick Cheney var blot de første eksempler på administrations dybe forbindelser til energisektoren. Otte ministre samt den nationale sikkerhedsrådgiver blev senere hentet direkte i oliebranchen. Præsidenten udpegede to uger inde i hans embede vice-præsident Dick Cheney som overhoved for task forcet National Energy Policy Group, hvis formål var en vurdering af karakteren af den amerikanske forsyningssikkerhed.
Et faktum som næppe kan have undgået Cheney’s Task Force’s opmærksomhed er, at der i Det Kaspiske Hav og under den irakiske ørken potentielt er 433 milliarder tønder olie eller mere, og kontrol over denne olie er selvsagt ensbetydende med øget økonomisk og geopolitisk magt. Bemærkelsesværdigt er det derfor også, at dette Task Force allerede mange måneder inden den 11. september, undersøgte kort over irakiske oliefelter, tankerterminaler og olieudvinding. Disse kort er først langt senere blevet offentliggjort grundet at sagsanlæg mod regeringen vedrørende aktindsigt som borgerretsgruppen Judicial Watch måtte hele vejen til Højesteret for at vinde [18].
Cheney’s taskforce konkluderede, at efter »enhver vurdering vil mellemøstlige olieproducenter forblive centrale for sikkerheden i verden. Golfområdet vil være et primært fokus for USA’s internationale energipolitik«. [19]
Samtidig med dette blev Condeoleeza Rice’s National Security Council beordret, at det skulle støtte »gennemgangen af operationelle politikker rettet mod slyngelstater såsom Irak, samt handlinger vedrørende pågribelsen af nye og eksisterende olie og gasfelter«.
I statsministeriet etableredes et såkaldt policy-development initiativ, der blev døbt »The Future of Iraq«. I initiativets sidste rapport gjordes det klart at Irak »burde åbnes for internationale olieselskaber så hurtigt som muligt efter krigen ... landet bør etablere et forretningsklima som kan bidrage med at tiltrække investeringer i olie- og gasressourcer«. [20]
Disse forhold peger alle sammen hen imod, at Bush-administration var overordentlig interesseret i den irakiske olie lang tid før proklameringen og markedsføringen af den Globale Krig mod Terror, og selvom det fra officiel side gentagne gange er blevet hævdet, at angrebskrigen intet havde at gøre med olie, er der et interessant forhold, som indikerer det modsatte. I en artikel i Financial Times den 5. juni 2003 - altså allerede mindre end tre måneder efter krigens begyndelse – kunne man læse, at den irakiske olie igen handledes i dollars [21], til trods for at euroen i midten af 2003 havde en 13 pct. højere værdi end dollaren.
Krigens omfattende økonomiske omkostninger.
Ifølge det officielle organ US Census Bureau havnede yderligere 3,5 millioner amerikanere i fattigdom i perioden 2002-2006, hvilket i dag betyder, at rundt regnet 13 pct. af den amerikanske befolkning er fattige. Denne foruroligende stigning i fattigdom er specielt bemærkelsesværdig, når den ses i sammenhæng med de enorme omkostninger, som Irak-krigen har kostet de amerikanske skatteydere.
Fra officiel side vurderede man før Irak-krigen påbegyndtes, at krigen ville koste omtrent 60 milliarder dollars, men dette må i lyset af krigsomkostningerne på nuværende tidspunkt betegnes som en meget optimistisk vurdering. Joseph Stieglitz, en af USA’s ledende økonomer, som i 2000 modtog Nobelprisen i økonomi og som tidligere har været cheføkonom i Verdensbanken, har netop i en ny bog vurderet, at den egentlige pris for Irak-krigen oprinder i tre billioner (på amerikansk kaldet trillion) dollars, hvilket Stieglitz i et interview sendt på Democracy Now den 29. februar i år, selv kalder en forholdsvis konservativ vurdering.
Ifølge Stieglitz er der nemlig udover forsvarsministeriets budgetterede krigsomkostninger, endvidere en lang række omkostninger skjult i andre offentlige budgetter og hinsides disse. For eksempel vil udgifter til de økonomiske kompensationer til tilskadekomne krigsveteraner, samt udgifter til medicinsk behandling af disse, løbe op i mange hundrede milliarder dollars over de kommende årtier. Hinsides disse budgetmæssige omkostninger findes der derudover andre skjulte omkostninger for økonomien.
Således udgør invaliderede soldaters økonomiske godtgørelser kun en brøkdel af de invalideredes familier økonomiske tab i form af tabte indkomster, som soldaterne ellers kunnet have tjent. Derudover er der ifølge Stieglitz en lang række makroøkonomiske omkostninger, som har forvoldt en deprimering af økonomien, såsom det faktum at krigen har bidraget til stigningen i prisen på olie, hvilket betyder ekstraomkostninger til køb af importeret olie, og følgelig at disse penge ikke kan bruges andetsteds i økonomien. Derudover nævner Stieglitz det forhold, at krigen var fuldstændig finansieret for lånte penge, altså med andre ord, af det enorme amerikanske underskud [22].
Amerikansk Militærbase-imperialisme.
737 U.S. Military Bases = Global Empire
By Chalmers Johnson
The following is excerpted from Chalmers Johnson's new book, "NEMESIS: The Last Days of the American Republic " (Metropolitan Books).
Once upon a time, you could trace the spread of imperialism by counting up colonies. America's version of the colony is the military base; and by following the changing politics of global basing, one can learn much about our ever more all-encompassing imperial "footprint" and the militarism that grows with it.
It is not easy, however, to assess the size or exact value of our empire of bases. Official records available to the public on these subjects are misleading, although instructive. According to the Defense Department's annual inventories from 2002 to 2005 of real property it owns around the world, the Base Structure Report, there has been an immense churning in the numbers of installations.
The total of America's military bases in other people's countries in 2005, according to official sources, was 737. Reflecting massive deployments to Iraq and the pursuit of President Bush's strategy of preemptive war, the trend line for numbers of overseas bases continues to go up.
Interestingly enough, the thirty-eight large and medium-sized American facilities spread around the globe in 2005 -- mostly air and naval bases for our bombers and fleets -- almost exactly equals Britain's thirty-six naval bases and army garrisons at its imperial zenith in 1898. The Roman Empire at its height in 117 AD required thirty-seven major bases to police its realm from Britannia to Egypt, from Hispania to Armenia. Perhaps the optimum number of major citadels and fortresses for an imperialist aspiring to dominate the world is somewhere between thirty-five and forty.
Using data from fiscal year 2005, the Pentagon bureaucrats calculated that its overseas bases were worth at least $127 billion -- surely far too low a figure but still larger than the gross domestic products of most countries -- and an estimated $658.1 billion for all of them, foreign and domestic (a base's "worth" is based on a Department of Defense estimate of what it would cost to replace it). During fiscal 2005, the military high command deployed to our overseas bases some 196,975 uniformed personnel as well as an equal number of dependents and Department of Defense civilian officials, and employed an additional 81,425 locally hired foreigners.
The worldwide total of U.S. military personnel in 2005, including those based domestically, was 1,840,062 supported by an additional 473,306 Defense Department civil service employees and 203,328 local hires. Its overseas bases, according to the Pentagon, contained 32,327 barracks, hangars, hospitals, and other buildings, which it owns, and 16,527 more that it leased. The size of these holdings was recorded in the inventory as covering 687,347 acres overseas and 29,819,492 acres worldwide, making the Pentagon easily one of the world's largest landlords.
These numbers, although staggeringly big, do not begin to cover all the actual bases we occupy globally. The 2005 Base Structure Report fails, for instance, to mention any garrisons in Kosovo (or Serbia, of which Kosovo is still officially a province) -- even though it is the site of the huge Camp Bondsteel built in 1999 and maintained ever since by the KBR corporation (formerly known as Kellogg Brown & Root), a subsidiary of the Halliburton Corporation of Houston.
The report similarly omits bases in Afghanistan, Iraq (106 garrisons as of May 2005), Israel, Kyrgyzstan, Qatar, and Uzbekistan, even though the U.S. military has established colossal base structures in the Persian Gulf and Central Asian areas since 9/11. By way of excuse, a note in the preface says that "facilities provided by other nations at foreign locations" are not included, although this is not strictly true. The report does include twenty sites in Turkey, all owned by the Turkish government and used jointly with the Americans. The Pentagon continues to omit from its accounts most of the $5 billion worth of military and espionage installations in Britain, which have long been conveniently disguised as Royal Air Force bases. If there were an honest count, the actual size of our military empire would probably top 1,000 different bases overseas, but no one -- possibly not even the Pentagon -- knows the exact number for sure.
In some cases, foreign countries themselves have tried to keep their U.S. bases secret, fearing embarrassment if their collusion with American imperialism were revealed. In other instances, the Pentagon seems to want to play down the building of facilities aimed at dominating energy sources, or, in a related situation, retaining a network of bases that would keep Iraq under our hegemony regardless of the wishes of any future Iraqi government. The U.S. government tries not to divulge any information about the bases we use to eavesdrop on global communications, or our nuclear deployments, which, as William Arkin, an authority on the subject, writes, "[have] violated its treaty obligations. The U.S. was lying to many of its closest allies, even in NATO, about its nuclear designs. Tens of thousands of nuclear weapons, hundreds of bases, and dozens of ships and submarines existed in a special secret world of their own with no rational military or even 'deterrence' justification."
In Jordan, to take but one example, we have secretly deployed up to five thousand troops in bases on the Iraqi and Syrian borders. (Jordan has also cooperated with the CIA in torturing prisoners we deliver to them for "interrogation.") Nonetheless, Jordan continues to stress that it has no special arrangements with the United States, no bases, and no American military presence.
The country is formally sovereign but actually a satellite of the United States and has been so for at least the past ten years. Similarly, before our withdrawal from Saudi Arabia in 2003, we habitually denied that we maintained a fleet of enormous and easily observed B-52 bombers in Jeddah because that was what the Saudi government demanded. So long as military bureaucrats can continue to enforce a culture of secrecy to protect themselves, no one will know the true size of our baseworld, least of all the elected representatives of the American people.
In 2005, deployments at home and abroad were in a state of considerable flux. This was said to be caused both by a long overdue change in the strategy for maintaining our global dominance and by the closing of surplus bases at home. In reality, many of the changes seemed to be determined largely by the Bush administration's urge to punish nations and domestic states that had not supported its efforts in Iraq and to reward those that had. Thus, within the United States, bases were being relocated to the South, to states with cultures, as the Christian Science Monitor put it, "more tied to martial traditions" than the Northeast, the northern Middle West, or the Pacific Coast. According to a North Carolina businessman gloating over his new customers, "The military is going where it is wanted and valued most."
In part, the realignment revolved around the Pentagon's decision to bring home by 2007 or 2008 two army divisions from Germany -- the First Armored Division and the First Infantry Division -- and one brigade (3,500 men) of the Second Infantry Division from South Korea (which, in 2005, was officially rehoused at Fort Carson, Colorado). So long as the Iraq insurgency continues, the forces involved are mostly overseas and the facilities at home are not ready for them (nor is there enough money budgeted to get them ready).
Nonetheless, sooner or later, up to 70,000 troops and 100,000 family members will have to be accommodated within the United States. The attendant 2005 "base closings" in the United States are actually a base consolidation and enlargement program with tremendous infusions of money and customers going to a few selected hub areas. At the same time, what sounds like a retrenchment in the empire abroad is really proving to be an exponential growth in new types of bases -- without dependents and the amenities they would require -- in very remote areas where the U.S. military has never been before.
After the collapse of the Soviet Union in 1991, it was obvious to anyone who thought about it that the huge concentrations of American military might in Germany, Italy, Japan, and South Korea were no longer needed to meet possible military threats. There were not going to be future wars with the Soviet Union or any country connected to any of those places.
In 1991, the first Bush administration should have begun decommissioning or redeploying redundant forces; and, in fact, the Clinton administration did close some bases in Germany, such as those protecting the Fulda Gap, once envisioned as the likeliest route for a Soviet invasion of Western Europe. But nothing was really done in those years to plan for the strategic repositioning of the American military outside the United States.
By the end of the 1990s, the neoconservatives were developing their grandiose theories to promote overt imperialism by the "lone superpower" -- including preventive and preemptive unilateral military action, spreading democracy abroad at the point of a gun, obstructing the rise of any "near-peer" country or bloc of countries that might challenge U.S. military supremacy, and a vision of a "democratic" Middle East that would supply us with all the oil we wanted. A component of their grand design was a redeployment and streamlining of the military. The initial rationale was for a program of transformation that would turn the armed forces into a lighter, more agile, more high-tech military, which, it was imagined, would free up funds that could be invested in imperial policing.
What came to be known as "defense transformation" first began to be publicly bandied about during the 2000 presidential election campaign. Then 9/11 and the wars in Afghanistan and Iraq intervened. In August 2002, when the whole neocon program began to be put into action, it centered above all on a quick, easy war to incorporate Iraq into the empire. By this time, civilian leaders in the Pentagon had become dangerously overconfident because of what they perceived as America's military brilliance and invincibility as demonstrated in its 2001 campaign against the Taliban and al-Qaeda -- a strategy that involved reigniting the Afghan civil war through huge payoffs to Afghanistan's Northern Alliance warlords and the massive use of American airpower to support their advance on Kabul.
In August 2002, Secretary of Defense Donald Rumsfeld unveiled his "1-4-2-1 defense strategy" to replace the Clinton era's plan for having a military capable of fighting two wars -- in the Middle East and Northeast Asia -- simultaneously. Now, war planners were to prepare to defend the United States while building and assembling forces capable of "deterring aggression and coercion" in four "critical regions": Europe, Northeast Asia (South Korea and Japan), East Asia (the Taiwan Strait), and the Middle East, be able to defeat aggression in two of these regions simultaneously, and "win decisively" (in the sense of "regime change" and occupation) in one of those conflicts "at a time and place of our choosing."As the military analyst William M. Arkin commented, "[With] American military forces ... already stretched to the limit, the new strategy goes far beyond preparing for reactive contingencies and reads more like a plan for picking fights in new parts of the world."
A seemingly easy three-week victory over Saddam Hussein's forces in the spring of 2003 only reconfirmed these plans. The U.S. military was now thought to be so magnificent that it could accomplish any task assigned to it. The collapse of the Baathist regime in Baghdad also emboldened Secretary of Defense Rumsfeld to use "transformation" to penalize nations that had been, at best, lukewarm about America's unilateralism -- Germany, Saudi Arabia, South Korea, and Turkey -- and to reward those whose leaders had welcomed Operation Iraqi Freedom, including such old allies as Japan and Italy but also former communist countries such as Poland, Romania, and Bulgaria. The result was the Department of Defense's Integrated Global Presence and Basing Strategy, known informally as the "Global Posture Review."
President Bush first mentioned it in a statement on November 21, 2003, in which he pledged to "realign the global posture" of the United States. He reiterated the phrase and elaborated on it on August 16, 2004, in a speech to the annual convention of the Veterans of Foreign Wars in Cincinnati. Because Bush's Cincinnati address was part of the 2004 presidential election campaign, his comments were not taken very seriously at the time. While he did say that the United States would reduce its troop strength in Europe and Asia by 60,000 to 70,000, he assured his listeners that this would take a decade to accomplish -- well beyond his term in office -- and made a series of promises that sounded more like a reenlistment pitch than a statement of strategy.
"Over the coming decade, we'll deploy a more agile and more flexible force, which means that more of our troops will be stationed and deployed from here at home. We'll move some of our troops and capabilities to new locations, so they can surge quickly to deal with unexpected threats. ... It will reduce the stress on our troops and our military families. ... See, our service members will have more time on the home front, and more predictability and fewer moves over a career. Our military spouses will have fewer job changes, greater stability, more time for their kids and to spend with their families at home."
On September 23, 2004, however, Secretary Rumsfeld disclosed the first concrete details of the plan to the Senate Armed Services Committee. With characteristic grandiosity, he described it as "the biggest re-structuring of America's global forces since 1945." Quoting then undersecretary Douglas Feith, he added, "During the Cold War we had a strong sense that we knew where the major risks and fights were going to be, so we could deploy people right there. We're operating now [with] an entirely different concept. We need to be able to do [the] whole range of military operations, from combat to peacekeeping, anywhere in the world pretty quickly."
Though this may sound plausible enough, in basing terms it opens up a vast landscape of diplomatic and bureaucratic minefields that Rumsfeld's militarists surely underestimated. In order to expand into new areas, the Departments of State and Defense must negotiate with the host countries such things as Status of Forces Agreements, or SOFAs, which are discussed in detail in the next chapter. In addition, they must conclude many other required protocols, such as access rights for our aircraft and ships into foreign territory and airspace, and Article 98 Agreements. The latter refer to article 98 of the International Criminal Court's Rome Statute, which allows countries to exempt U.S. citizens on their territory from the ICC's jurisdiction.
Such immunity agreements were congressionally mandated by the American Service-Members' Protection Act of 2002, even though the European Union holds that they are illegal. Still other necessary accords are acquisitions and cross-servicing agreements or ACSAs, which concern the supply and storage of jet fuel, ammunition, and so forth; terms of leases on real property; levels of bilateral political and economic aid to the United States (so-called host-nation support); training and exercise arrangements (Are night landings allowed? Live firing drills?); and environmental pollution liabilities.
When the United States is not present in a country as its conqueror or military savior, as it was in Germany, Japan, and Italy after World War II and in South Korea after the 1953 Korean War armistice, it is much more difficult to secure the kinds of agreements that allow the Pentagon to do anything it wants and that cause a host nation to pick up a large part of the costs of doing so. When not based on conquest, the structure of the American empire of bases comes to look exceedingly fragile.
An Internet Guide to United States Military Bases Around the World
Challenges to the Empire.
By Chalmers Johnson
The following is excerpted from Chalmers Johnson's new book, "NEMESIS: The Last Days of the American Republic " (Metropolitan Books).
Once upon a time, you could trace the spread of imperialism by counting up colonies. America's version of the colony is the military base; and by following the changing politics of global basing, one can learn much about our ever more all-encompassing imperial "footprint" and the militarism that grows with it.
It is not easy, however, to assess the size or exact value of our empire of bases. Official records available to the public on these subjects are misleading, although instructive. According to the Defense Department's annual inventories from 2002 to 2005 of real property it owns around the world, the Base Structure Report, there has been an immense churning in the numbers of installations.
The total of America's military bases in other people's countries in 2005, according to official sources, was 737. Reflecting massive deployments to Iraq and the pursuit of President Bush's strategy of preemptive war, the trend line for numbers of overseas bases continues to go up.
Interestingly enough, the thirty-eight large and medium-sized American facilities spread around the globe in 2005 -- mostly air and naval bases for our bombers and fleets -- almost exactly equals Britain's thirty-six naval bases and army garrisons at its imperial zenith in 1898. The Roman Empire at its height in 117 AD required thirty-seven major bases to police its realm from Britannia to Egypt, from Hispania to Armenia. Perhaps the optimum number of major citadels and fortresses for an imperialist aspiring to dominate the world is somewhere between thirty-five and forty.
Using data from fiscal year 2005, the Pentagon bureaucrats calculated that its overseas bases were worth at least $127 billion -- surely far too low a figure but still larger than the gross domestic products of most countries -- and an estimated $658.1 billion for all of them, foreign and domestic (a base's "worth" is based on a Department of Defense estimate of what it would cost to replace it). During fiscal 2005, the military high command deployed to our overseas bases some 196,975 uniformed personnel as well as an equal number of dependents and Department of Defense civilian officials, and employed an additional 81,425 locally hired foreigners.
The worldwide total of U.S. military personnel in 2005, including those based domestically, was 1,840,062 supported by an additional 473,306 Defense Department civil service employees and 203,328 local hires. Its overseas bases, according to the Pentagon, contained 32,327 barracks, hangars, hospitals, and other buildings, which it owns, and 16,527 more that it leased. The size of these holdings was recorded in the inventory as covering 687,347 acres overseas and 29,819,492 acres worldwide, making the Pentagon easily one of the world's largest landlords.
These numbers, although staggeringly big, do not begin to cover all the actual bases we occupy globally. The 2005 Base Structure Report fails, for instance, to mention any garrisons in Kosovo (or Serbia, of which Kosovo is still officially a province) -- even though it is the site of the huge Camp Bondsteel built in 1999 and maintained ever since by the KBR corporation (formerly known as Kellogg Brown & Root), a subsidiary of the Halliburton Corporation of Houston.
The report similarly omits bases in Afghanistan, Iraq (106 garrisons as of May 2005), Israel, Kyrgyzstan, Qatar, and Uzbekistan, even though the U.S. military has established colossal base structures in the Persian Gulf and Central Asian areas since 9/11. By way of excuse, a note in the preface says that "facilities provided by other nations at foreign locations" are not included, although this is not strictly true. The report does include twenty sites in Turkey, all owned by the Turkish government and used jointly with the Americans. The Pentagon continues to omit from its accounts most of the $5 billion worth of military and espionage installations in Britain, which have long been conveniently disguised as Royal Air Force bases. If there were an honest count, the actual size of our military empire would probably top 1,000 different bases overseas, but no one -- possibly not even the Pentagon -- knows the exact number for sure.
In some cases, foreign countries themselves have tried to keep their U.S. bases secret, fearing embarrassment if their collusion with American imperialism were revealed. In other instances, the Pentagon seems to want to play down the building of facilities aimed at dominating energy sources, or, in a related situation, retaining a network of bases that would keep Iraq under our hegemony regardless of the wishes of any future Iraqi government. The U.S. government tries not to divulge any information about the bases we use to eavesdrop on global communications, or our nuclear deployments, which, as William Arkin, an authority on the subject, writes, "[have] violated its treaty obligations. The U.S. was lying to many of its closest allies, even in NATO, about its nuclear designs. Tens of thousands of nuclear weapons, hundreds of bases, and dozens of ships and submarines existed in a special secret world of their own with no rational military or even 'deterrence' justification."
In Jordan, to take but one example, we have secretly deployed up to five thousand troops in bases on the Iraqi and Syrian borders. (Jordan has also cooperated with the CIA in torturing prisoners we deliver to them for "interrogation.") Nonetheless, Jordan continues to stress that it has no special arrangements with the United States, no bases, and no American military presence.
The country is formally sovereign but actually a satellite of the United States and has been so for at least the past ten years. Similarly, before our withdrawal from Saudi Arabia in 2003, we habitually denied that we maintained a fleet of enormous and easily observed B-52 bombers in Jeddah because that was what the Saudi government demanded. So long as military bureaucrats can continue to enforce a culture of secrecy to protect themselves, no one will know the true size of our baseworld, least of all the elected representatives of the American people.
In 2005, deployments at home and abroad were in a state of considerable flux. This was said to be caused both by a long overdue change in the strategy for maintaining our global dominance and by the closing of surplus bases at home. In reality, many of the changes seemed to be determined largely by the Bush administration's urge to punish nations and domestic states that had not supported its efforts in Iraq and to reward those that had. Thus, within the United States, bases were being relocated to the South, to states with cultures, as the Christian Science Monitor put it, "more tied to martial traditions" than the Northeast, the northern Middle West, or the Pacific Coast. According to a North Carolina businessman gloating over his new customers, "The military is going where it is wanted and valued most."
In part, the realignment revolved around the Pentagon's decision to bring home by 2007 or 2008 two army divisions from Germany -- the First Armored Division and the First Infantry Division -- and one brigade (3,500 men) of the Second Infantry Division from South Korea (which, in 2005, was officially rehoused at Fort Carson, Colorado). So long as the Iraq insurgency continues, the forces involved are mostly overseas and the facilities at home are not ready for them (nor is there enough money budgeted to get them ready).
Nonetheless, sooner or later, up to 70,000 troops and 100,000 family members will have to be accommodated within the United States. The attendant 2005 "base closings" in the United States are actually a base consolidation and enlargement program with tremendous infusions of money and customers going to a few selected hub areas. At the same time, what sounds like a retrenchment in the empire abroad is really proving to be an exponential growth in new types of bases -- without dependents and the amenities they would require -- in very remote areas where the U.S. military has never been before.
After the collapse of the Soviet Union in 1991, it was obvious to anyone who thought about it that the huge concentrations of American military might in Germany, Italy, Japan, and South Korea were no longer needed to meet possible military threats. There were not going to be future wars with the Soviet Union or any country connected to any of those places.
In 1991, the first Bush administration should have begun decommissioning or redeploying redundant forces; and, in fact, the Clinton administration did close some bases in Germany, such as those protecting the Fulda Gap, once envisioned as the likeliest route for a Soviet invasion of Western Europe. But nothing was really done in those years to plan for the strategic repositioning of the American military outside the United States.
By the end of the 1990s, the neoconservatives were developing their grandiose theories to promote overt imperialism by the "lone superpower" -- including preventive and preemptive unilateral military action, spreading democracy abroad at the point of a gun, obstructing the rise of any "near-peer" country or bloc of countries that might challenge U.S. military supremacy, and a vision of a "democratic" Middle East that would supply us with all the oil we wanted. A component of their grand design was a redeployment and streamlining of the military. The initial rationale was for a program of transformation that would turn the armed forces into a lighter, more agile, more high-tech military, which, it was imagined, would free up funds that could be invested in imperial policing.
What came to be known as "defense transformation" first began to be publicly bandied about during the 2000 presidential election campaign. Then 9/11 and the wars in Afghanistan and Iraq intervened. In August 2002, when the whole neocon program began to be put into action, it centered above all on a quick, easy war to incorporate Iraq into the empire. By this time, civilian leaders in the Pentagon had become dangerously overconfident because of what they perceived as America's military brilliance and invincibility as demonstrated in its 2001 campaign against the Taliban and al-Qaeda -- a strategy that involved reigniting the Afghan civil war through huge payoffs to Afghanistan's Northern Alliance warlords and the massive use of American airpower to support their advance on Kabul.
In August 2002, Secretary of Defense Donald Rumsfeld unveiled his "1-4-2-1 defense strategy" to replace the Clinton era's plan for having a military capable of fighting two wars -- in the Middle East and Northeast Asia -- simultaneously. Now, war planners were to prepare to defend the United States while building and assembling forces capable of "deterring aggression and coercion" in four "critical regions": Europe, Northeast Asia (South Korea and Japan), East Asia (the Taiwan Strait), and the Middle East, be able to defeat aggression in two of these regions simultaneously, and "win decisively" (in the sense of "regime change" and occupation) in one of those conflicts "at a time and place of our choosing."As the military analyst William M. Arkin commented, "[With] American military forces ... already stretched to the limit, the new strategy goes far beyond preparing for reactive contingencies and reads more like a plan for picking fights in new parts of the world."
A seemingly easy three-week victory over Saddam Hussein's forces in the spring of 2003 only reconfirmed these plans. The U.S. military was now thought to be so magnificent that it could accomplish any task assigned to it. The collapse of the Baathist regime in Baghdad also emboldened Secretary of Defense Rumsfeld to use "transformation" to penalize nations that had been, at best, lukewarm about America's unilateralism -- Germany, Saudi Arabia, South Korea, and Turkey -- and to reward those whose leaders had welcomed Operation Iraqi Freedom, including such old allies as Japan and Italy but also former communist countries such as Poland, Romania, and Bulgaria. The result was the Department of Defense's Integrated Global Presence and Basing Strategy, known informally as the "Global Posture Review."
President Bush first mentioned it in a statement on November 21, 2003, in which he pledged to "realign the global posture" of the United States. He reiterated the phrase and elaborated on it on August 16, 2004, in a speech to the annual convention of the Veterans of Foreign Wars in Cincinnati. Because Bush's Cincinnati address was part of the 2004 presidential election campaign, his comments were not taken very seriously at the time. While he did say that the United States would reduce its troop strength in Europe and Asia by 60,000 to 70,000, he assured his listeners that this would take a decade to accomplish -- well beyond his term in office -- and made a series of promises that sounded more like a reenlistment pitch than a statement of strategy.
"Over the coming decade, we'll deploy a more agile and more flexible force, which means that more of our troops will be stationed and deployed from here at home. We'll move some of our troops and capabilities to new locations, so they can surge quickly to deal with unexpected threats. ... It will reduce the stress on our troops and our military families. ... See, our service members will have more time on the home front, and more predictability and fewer moves over a career. Our military spouses will have fewer job changes, greater stability, more time for their kids and to spend with their families at home."
On September 23, 2004, however, Secretary Rumsfeld disclosed the first concrete details of the plan to the Senate Armed Services Committee. With characteristic grandiosity, he described it as "the biggest re-structuring of America's global forces since 1945." Quoting then undersecretary Douglas Feith, he added, "During the Cold War we had a strong sense that we knew where the major risks and fights were going to be, so we could deploy people right there. We're operating now [with] an entirely different concept. We need to be able to do [the] whole range of military operations, from combat to peacekeeping, anywhere in the world pretty quickly."
Though this may sound plausible enough, in basing terms it opens up a vast landscape of diplomatic and bureaucratic minefields that Rumsfeld's militarists surely underestimated. In order to expand into new areas, the Departments of State and Defense must negotiate with the host countries such things as Status of Forces Agreements, or SOFAs, which are discussed in detail in the next chapter. In addition, they must conclude many other required protocols, such as access rights for our aircraft and ships into foreign territory and airspace, and Article 98 Agreements. The latter refer to article 98 of the International Criminal Court's Rome Statute, which allows countries to exempt U.S. citizens on their territory from the ICC's jurisdiction.
Such immunity agreements were congressionally mandated by the American Service-Members' Protection Act of 2002, even though the European Union holds that they are illegal. Still other necessary accords are acquisitions and cross-servicing agreements or ACSAs, which concern the supply and storage of jet fuel, ammunition, and so forth; terms of leases on real property; levels of bilateral political and economic aid to the United States (so-called host-nation support); training and exercise arrangements (Are night landings allowed? Live firing drills?); and environmental pollution liabilities.
When the United States is not present in a country as its conqueror or military savior, as it was in Germany, Japan, and Italy after World War II and in South Korea after the 1953 Korean War armistice, it is much more difficult to secure the kinds of agreements that allow the Pentagon to do anything it wants and that cause a host nation to pick up a large part of the costs of doing so. When not based on conquest, the structure of the American empire of bases comes to look exceedingly fragile.
An Internet Guide to United States Military Bases Around the World
Challenges to the Empire.
fredag den 3. oktober 2008
torsdag den 2. oktober 2008
Mere om indkomstfordelingen i USA.
Rige Amerikaneres indkomster er steget.
I en op-ed for N.Y. Times i 2006 skriver økonomiprofessor ved Princeton University, Paul Krugman følgende:
http://select.nytimes.com/2006/09/15/opinion/15krugman.html?
I en op-ed for N.Y. Times i 2006 skriver økonomiprofessor ved Princeton University, Paul Krugman følgende:
Consider this: The United States economy is far richer and more productive than it was a generation ago. Statistics on economic growth aside, think of all the technological advances that have made workers more productive over the past generation. In 1973, there were no personal computers, let alone the Internet. Even fax machines were rare, expensive items, and there were no bar-code scanners at checkout counters. Freight containerization was still uncommon. The list goes on and on.
Yet in spite of all this technological progress, which has allowed the average American worker to produce much more, we’re not sure whether there was any rise in the typical worker’s pay. Only those at the upper end of the income distribution saw clear gains — gains that were enormous for the lucky few at the very top.
That’s why the debate over whether the middle class is a bit better off or a bit worse off now than a generation ago misses the point. What we should be debating is why technological and economic progress has done so little for most Americans, and what changes in government policies would spread the benefits of progress more widely. An effort to shore up middle-class health insurance, paid for by a rollback of recent tax cuts for the wealthiest Americans — something like the plan proposed by John Kerry two years ago, but more ambitious — would be a good place to start.
Instead, the people running our government are fixated on cutting tax rates for the wealthy even further. And their solution to Americans’ justified economic anxiety is a public relations campaign, an effort to convince middle-class families that their problems are a figment of their imagination.
http://select.nytimes.com/2006/09/15/opinion/15krugman.html?
onsdag den 1. oktober 2008
Fra Folket til Firmaerne.
Man kunne igår læse en artikel i den engelske avis The Guardian, hvori den engelske journalist George Monbiot fremhæver følgende:
Kilde: http://www.guardian.co.uk/commentisfree/2008/sep/30/marketturmoil.subprimecrisis
Endvidere kan man læse denne artikel [kilde angivet nedenfor]med titlen Bailing out the market hvori William Pentland skriver:
http://www.forbes.com/home/2008/09/23/energy-oil-washington-biz-cx_wp_0923energy.html
Any subsidies eventually given to the monster banks of Wall Street will be as American as apple pie and obesity. The sums demanded may be unprecedented, but there is nothing new about the principle: corporate welfare is a consistent feature of advanced capitalism. Only one thing has changed: Congress has been forced to confront its contradictions.
One of the best studies of corporate welfare in the US is published by my old enemies at the Cato Institute. Its report, by Stephen Slivinski, estimates that in 2006 the federal government spent $92bn subsidising business. Much of it went to major corporations such as Boeing, IBM and General Electric.
The biggest money crop - $21bn - is harvested by Big Farmer. Slivinski shows that the richest 10% of subsidised farmers took 66% of the payouts. Every few years, Congress or the administration promises to stop this swindle, then hands even more state money to agribusiness. The farm bill passed by Congress in May guarantees farmers a minimum of 90% of the income they've received over the past two years, which happen to be among the most profitable they've ever had. The middlemen do even better, especially the companies spreading starvation by turning maize into ethanol, which are guzzling billions of dollars' worth of tax credits.
Slivinski shows how the federal government's Advanced Technology Program, which was supposed to support the development of technologies that are "pre-competitive" or "high risk", has instead been captured by big businesses flogging proven products. Since 1991, companies such as IBM, General Electric, Dow Chemical, Caterpillar, Ford, DuPont, General Motors, Chevron and Monsanto have extracted hundreds of millions from this programme. Big business is also underwritten by the Export-Import Bank: in 2006, for example, Boeing alone received $4.5bn in loan guarantees.
The government runs something called the Foreign Military Financing programme, which gives money to other countries to purchase weaponry from US corporations. It doles out grants to airports for building runways and to fishing companies to help them wipe out endangered stocks.
But the Cato Institute's report has exposed only part of the corporate welfare scandal. A new paper by the US Institute for Policy Studies shows that, through a series of cunning tax and accounting loopholes, the US spends $20bn a year subsidising executive pay. By disguising their professional fees as capital gains rather than income, for example, the managers of hedge funds and private equity companies pay lower rates of tax than the people who clean their offices. A year ago, the House of Representatives tried to close this loophole, but the bill was blocked in the Senate after a lobbying campaign by some of the richest men in America.
Another report, by a group called Good Jobs First, reveals that Wal-Mart has received at least $1bn of public money. Over 90% of its distribution centres and many of its retail outlets have been subsidised by county and local governments. They give the chain free land, they pay for the roads, water and sewerage required to make that land usable, and they grant it property tax breaks and subsidies (called tax increment financing) originally intended to regenerate depressed communities. Sometimes state governments give the firm straight cash as well: in Virginia, for example, Wal-Mart's distribution centres receive handouts from the Governor's Opportunity Fund.
Corporate welfare is arguably the core business of some government departments. Many of the Pentagon's programmes deliver benefits only to its contractors. Ballistic missile defence, for example, which has no obvious strategic purpose and is unlikely ever to work, has already cost the US between $120bn and $150bn. The US is unique among major donors in insisting that the food it offers in aid is produced on its own soil, rather than in the regions it is meant to be helping. USAid used to boast on its website that "the principal beneficiary of America's foreign assistance programs has always been the United States. Close to 80% of the USAid's contracts and grants go directly to American firms." There is not and has never been a free market in the US.
Why not? Because the congressmen and women now railing against financial socialism depend for their re-election on the companies they subsidise. The legal bribes paid by these businesses deliver two short-term benefits for them. The first is that they prevent proper regulation, allowing them to make spectacular profits and to generate disasters of the kind Congress is now confronting. The second is that public money that should be used to help the poorest is instead diverted into the pockets of the rich.
A report published last week by the advocacy group Common Cause shows how bankers and brokers stopped legislators banning unsustainable lending. Over the past financial year, the big banks spent $49m on lobbying and $7m in direct campaign contributions. Fannie Mae and Freddie Mac spent $180m in lobbying and campaign finance over the past eight years. Much of this was thrown at members of the House financial services committee and the Senate banking committee.
Whenever congressmen tried to rein in the banks and mortgage lenders they were blocked by the banks' money. Dick Durbin's 2005 amendment seeking to stop predatory mortgage lending, for example, was defeated in the Senate by 58 to 40. The former representative Jim Leach proposed re-regulating Fannie Mae and Freddie Mac. Their lobbyists, he recalls, managed in "less than 48 hours to orchestrate both parties' leadership" to crush his amendments.
The money these firms spend buys the socialisation of financial risk. The $700bn the government was looking for was just one of the public costs of its repeated failure to regulate. Even now the lobbying power of the banks has been making itself felt: on Saturday the Democrats watered down their demand that the money earned by executives of companies rescued by the government be capped. Campaign finance is the best investment a corporation can make. You give a million dollars to the right man and reap a billion dollars' worth of state protection, tax breaks and subsidies. When the same thing happens in Africa we call it corruption.
European governments are no better. The free market economics they proclaim are a con: they intervene repeatedly on behalf of the rich, while leaving everyone else to fend for themselves. Just as in the US, the bosses of farm companies, oil drillers, supermarkets and banks capture the funds extracted by government from the pockets of people much poorer than themselves. Taxpayers everywhere should be asking the same question: why the hell should we be supporting them?
Kilde: http://www.guardian.co.uk/commentisfree/2008/sep/30/marketturmoil.subprimecrisis
Endvidere kan man læse denne artikel [kilde angivet nedenfor]med titlen Bailing out the market hvori William Pentland skriver:
While everyone knows the U.S. government is looking to bail Wall Street banks, few people realize that it's also bailing out speculative oil and commodities traders in the process, fueling a sharp rise in energy prices. Lehman Brothers (nyse: LEH - news - people ) and AIG (nyse: AIG - news - people ) held enormous trading positions in commodities markets. If those positions had been liquidated suddenly, the price of everything from wheat to oil would have collapsed. The Commodity Futures Trading Commission, the main regulator of U.S. commodity markets, allowed Wall Street's investment banks and trading companies to take control of massive positions in commodities markets called swaps held by Lehman Brothers and AIG.
The result: Oil prices spiked by a whopping $16 per barrel on Monday, the largest single-day rise in oil prices ever.
"If speculators were forced to liquidate their positions, oil would easily be $65 to $75 per barrel by the time the liquidation was complete," said Michael Masters, the founder of Atlanta-based hedge fund Masters Capital Management. Tuesday, oil was trading at $108.74 in midday trading in New York.
For all the talk of OPEC, the biggest threat to high oil prices in the short term might be the implosion of Morgan Stanley (nyse: MS - news - people ) or Goldman Sachs (nyse: GS - news - people ), which would trigger a massive number of low-priced oil-futures contracts to flood the market all at once in search of buyers to liquidate those contracts.
"If either of these entities were to collapse, we believe the downside for commodities would be tremendous as these companies unwind positions," Valerie Wood, president and owner of Energy Solutions, told Platts on Monday. "In particular, we know Goldman Sachs has large investments in crude oil and natural gas commodities because its own Goldman Sachs Commodity Index fund [comprises] about 39% crude oil commodities and about 6% natural gas commodities. A liquidation of GSCI shares would directly result in the selling of these commodities, and selling pushes prices lower."
Ironically, the biggest losers turned out to be the traders who bet that at least one of the victims from this month's financial chaos would be forced to liquidate a major long position in oil prices. When they avoided that fate, the race to unwind those bets that oil prices would fall before the end of the trading month caused a massive rally in oil prices.
The market meltdown has revealed the full extent of Wall Street's influence on commodities prices and, especially, their role in energy markets. More than $40 billion in cash has poured into commodity markets since the start of 2008, according to a report by Standard & Poor's. The total amount of investments in commodity indexes is estimated at between $150 billion and $270 billion. In other words, new investments in the market have climbed by 15% to 25% in less than a year.
In 2006, the U.S. Senate's Subcommittee for Permanent Investigations had already reported "there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices." The trouble is that so much of the trading happens in so-called "dark markets," unregulated over-the-counter electronic exchanges where trading companies buy and sell energy derivatives, that this role is hard to document.
Investment banks make money off commodities speculation, but are just conduits for hedge funds and institutional investors that have taken large positions in commodities markets as a long-term investment.
"The market dynamics induced more and more financial players to move into commodities markets," said Fadel Gheit, a senior oil analyst at Oppenheimer & Co. "It was a perfect storm. The Federal Reserve was cutting interest rates and people were running away from the dollar as it lost value. Hedge funds, pension funds and mutual funds started pumping money into commodities because they were the safest place and the safest of them all was crude oil. There were too many dollars chasing too few physical assets. That's the bottom line."
http://www.forbes.com/home/2008/09/23/energy-oil-washington-biz-cx_wp_0923energy.html
Pentagon og det militær-industrielle kompleks opædelse af skattemidler
We Have the Money
If Only We Didn't Waste It on the Defense Budget
by Chalmers Johnson
There has been much moaning, air-sucking, and outrage about the $700 billion that the U.S. government is thinking of throwing away on rich New York bankers who have been ripping us off for the past few years and then letting greed drive their businesses into a variety of ditches. In fact, we dole out similar amounts of money every year in the form of payoffs to the armed services, the military-industrial complex, and powerful senators and representatives allied with the Pentagon.
On Wednesday, September 24th, right in the middle of the fight over billions of taxpayer dollars slated to bail out Wall Street, the House of Representatives passed a $612 billion defense authorization bill for 2009 without a murmur of public protest or any meaningful press comment at all. (The New York Times gave the matter only three short paragraphs buried in a story about another appropriations measure.)
The defense bill includes $68.6 billion to pursue the wars in Iraq and Afghanistan, which is only a down-payment on the full yearly cost of these wars. (The rest will be raised through future supplementary bills.) It also included a 3.9% pay raise for military personnel, and $5 billion in pork-barrel projects not even requested by the administration or the secretary of defense. It also fully funds the Pentagon's request for a radar site in the Czech Republic, a hare-brained scheme sure to infuriate the Russians just as much as a Russian missile base in Cuba once infuriated us. The whole bill passed by a vote of 392-39 and will fly through the Senate, where a similar bill has already been approved. And no one will even think to mention it in the same breath with the discussion of bailout funds for dying investment banks and the like.
This is pure waste. Our annual spending on "national security" -- meaning the defense budget plus all military expenditures hidden in the budgets for the departments of Energy, State, Treasury, Veterans Affairs, the CIA, and numerous other places in the executive branch -- already exceeds a trillion dollars, an amount larger than that of all other national defense budgets combined. Not only was there no significant media coverage of this latest appropriation, there have been no signs of even the slightest urge to inquire into the relationship between our bloated military, our staggering weapons expenditures, our extravagantly expensive failed wars abroad, and the financial catastrophe on Wall Street.
The only Congressional "commentary" on the size of our military outlay was the usual pompous drivel about how a failure to vote for the defense authorization bill would betray our troops. The aged Senator John Warner (R-Va), former chairman of the Senate Armed Services Committee, implored his Republican colleagues to vote for the bill "out of respect for military personnel." He seems to be unaware that these troops are actually volunteers, not draftees, and that they joined the armed forces as a matter of career choice, rather than because the nation demanded such a sacrifice from them.
We would better respect our armed forces by bringing the futile and misbegotten wars in Iraq and Afghanistan to an end. A relative degree of peace and order has returned to Iraq not because of President Bush's belated reinforcement of our expeditionary army there (the so-called surge), but thanks to shifting internal dynamics within Iraq and in the Middle East region generally. Such shifts include a growing awareness among Iraq's Sunni population of the need to restore law and order, a growing confidence among Iraqi Shiites of their nearly unassailable position of political influence in the country, and a growing awareness among Sunni nations that the ill-informed war of aggression the Bush administration waged against Iraq has vastly increased the influence of Shiism and Iran in the region.
The continued presence of American troops and their heavily reinforced bases in Iraq threaten this return to relative stability. The refusal of the Shia government of Iraq to agree to an American Status of Forces Agreement -- much desired by the Bush administration -- that would exempt off-duty American troops from Iraqi law is actually a good sign for the future of Iraq.
In Afghanistan, our historically deaf generals and civilian strategists do not seem to understand that our defeat by the Afghan insurgents is inevitable. Since the time of Alexander the Great, no foreign intruder has ever prevailed over Afghan guerrillas defending their home turf. The first Anglo-Afghan War (1838-1842) marked a particularly humiliating defeat of British imperialism at the very height of English military power in the Victorian era. The Soviet-Afghan War (1979-1989) resulted in a Russian defeat so demoralizing that it contributed significantly to the disintegration of the former Soviet Union in 1991. We are now on track to repeat virtually all the errors committed by previous invaders of Afghanistan over the centuries.
In the past year, perhaps most disastrously, we have carried our Afghan war into Pakistan, a relatively wealthy and sophisticated nuclear power that has long cooperated with us militarily. Our recent bungling brutality along the Afghan-Pakistan border threatens to radicalize the Pashtuns in both countries and advance the interests of radical Islam throughout the region. The United States is now identified in each country mainly with Hellfire missiles, unmanned drones, special operations raids, and repeated incidents of the killing of innocent bystanders.
The brutal bombing of the Marriott Hotel in Pakistan's capital, Islamabad, on September 20, 2008, was a powerful indicator of the spreading strength of virulent anti-American sentiment in the area. The hotel was a well-known watering hole for American Marines, Special Forces troops, and CIA agents. Our military activities in Pakistan have been as misguided as the Nixon-Kissinger invasion of Cambodia in 1970. The end result will almost surely be the same.
We should begin our disengagement from Afghanistan at once. We dislike the Taliban's fundamentalist religious values, but the Afghan public, with its desperate desire for a return of law and order and the curbing of corruption, knows that the Taliban is the only political force in the country that has ever brought the opium trade under control. The Pakistanis and their effective army can defend their country from Taliban domination so long as we abandon the activities that are causing both Afghans and Pakistanis to see the Taliban as a lesser evil.
One of America's greatest authorities on the defense budget, Winslow Wheeler, worked for 31 years for Republican members of the Senate and for the General Accounting Office on military expenditures. His conclusion, when it comes to the fiscal sanity of our military spending, is devastating:
"America's defense budget is now larger in inflation-adjusted dollars than at any point since the end of World War II, and yet our Army has fewer combat brigades than at any point in that period; our Navy has fewer combat ships; and the Air Force has fewer combat aircraft. Our major equipment inventories for these major forces are older on average than any point since 1946 -- or in some cases, in our entire history."
This in itself is a national disgrace. Spending hundreds of billions of dollars on present and future wars that have nothing to do with our national security is simply obscene. And yet Congress has been corrupted by the military-industrial complex into believing that, by voting for more defense spending, they are supplying "jobs" for the economy. In fact, they are only diverting scarce resources from the desperately needed rebuilding of the American infrastructure and other crucial spending necessities into utterly wasteful munitions. If we cannot cut back our longstanding, ever increasing military spending in a major way, then the bankruptcy of the United States is inevitable. As the current Wall Street meltdown has demonstrated, that is no longer an abstract possibility but a growing likelihood. We do not have much time left.
Chalmers Johnson is the author of three linked books on the crises of American imperialism and militarism. They are Blowback (2000), The Sorrows of Empire (2004), and Nemesis: The Last Days of the American Republic (2006). All are available in paperback from Metropolitan Books.
Thank God for Capitalism
De 2000 største virksomheder havde iflg. en beregning publiceret af Forbes Magazine i Februar, samlet set, $30 billioner i indtægter, $2,4 billioner i profitter, $119 billioner i aktiver og $39 billioner i markedsværdi. På verdensplan har disse 2000 firmaer 72 millioner ansatte hvilket udgør 1,07 % af jordens samlede befolkning.
En anden beregning ligeledes foretaget af Forbes Magazine i år estimerer, at der nu er 1,125 milliardærer på verdensplan. De 42% af disse bor i USA og ejer tilsammen 37% af den totale rigdom. Verdens milliardærer ejer tilsammen $4.4 billioner dollars, hvilket er 900 milliarder mere end sidste år. Disse 1,125 milliardærer udgør oprundet 0.000017 % af jordens samlede befolkning.
Mindst halvdelen af verdens befolkning lever for under $2.5 om dagen,
Mindst 80% af verdens befolkning lever af mindre end $10 om dagen.
Mindst 80% af verdens befolkning lever i lande hvor indkomstforskellene er stigende.
Antallet af børn i verden: 2,2 milliard.
Antallat af børn der lever i fattigdom: 1 milliard.
Kilde: http://www.globalissues.org/article/26/poverty-facts-and-stats
http://www.workinglife.org/blogs/view_post.php?content_id=9646
The New York Times February 2, 2005
Study Ties Bankruptcy to Medical Bills
By REED ABELSON
Sometimes, all it takes is one bad fall for a working person with health insurance to be pushed into bankruptcy.
Hundreds of thousands of Americans file for personal bankruptcy each year because of medical bills - even though they have health insurance, according to a new study by Harvard University legal and medical researchers.
"It doesn't take a medical catastrophe to create a financial catastrophe," said Elizabeth Warren, a Harvard law professor who studies bankruptcy and is one of the authors of the study.
The study, which is scheduled to appear today on the Web site of Health Affairs, an academic journal, provides a glimpse into a little-researched area connecting bankruptcy and medical costs. About 30 percent of people said they filed for bankruptcy because of an illness or injury, even though most of them had health insurance when they first got sick.
Many lost their jobs - and their insurance - because they got sick, while others faced thousands of dollars in co-payments and deductibles and for services not covered by their insurance.
One person cited in the bankruptcy study, for example, broke a leg, missed a couple of months of work and then had $13,000 in unpaid medical bills, though his employer-based health plan had already paid for much of his care, Ms. Warren said.
Another respondent to the survey was able to pay for hospital stays for lung surgery and a heart attack but could not return to his old job. When he found a new job, he was denied coverage because of his pre-existing conditions, which continued to require costly medical care and contributed to his bankruptcy.
Policy analysts say these findings underscore the limitations of the nation's current system of providing health insurance largely through employers. Some argue that even for those with insurance, benefits can be ephemeral.
"You can lose it because it's tied to employment," said Joseph Antos, a health policy researcher with the American Enterprise Institute, who said people were also at risk if their employers went out of business.
To understand the effect of illness or injury on bankruptcy, the researchers surveyed 1,771 people who filed for bankruptcy in 2001 and interviewed 931 of them. They discovered a complex web of factors leading to bankruptcy, particularly as illness caused people to lose their jobs or cut back the hours they worked just as they were facing high medical bills.
Many of those families, Ms. Warren said, then "endured a one-two punch."
The researchers examined those who specifically reported that their bankruptcies were precipitated by financial burdens caused by medical illness. They also included in a broader category of medical-related bankruptcy people who had more than $1,000 in unpaid medical bills at the time of the bankruptcy filing or had mortgaged their home to pay those bills.
The researchers acknowledged that often there was no single reason why someone went bankrupt. "There's definitely overlapping reasons," said Steffie Woolhandler, an associate professor of medicine at Harvard and one of the authors of the report.
They also pointed to gaps in coverage that left people vulnerable to financial crisis - particularly when workers switched jobs or were temporarily unable to afford contributions to a health plan. The high cost of continuing coverage under Cobra, the federal rule that allows former employees to stay on health plans for a time if they pay the entire cost, "is a cruel joke to these people," Ms. Warren said.
Even when people remain insured, the study also notes that many health plans have limits on certain kinds of coverage, like physical therapy or prescription drugs.
"If you're sick enough long enough, you're in deep trouble in our society," said David Himmelstein, an associate professor of medicine at Harvard Medical School, another of the study's authors.
While some policies do offer catastrophic coverage, which pays for care after costs reach a certain threshold, Dr. Himmelstein said that coverage "often kicks in after people are bankrupted" because they must incur high medical bills to qualify.
And employees, who often have little choice of plans and frequently do not understand the differences among plans, are increasingly offered policies with less and less coverage, some policy analysts say.
"There's a race to the bottom in terms of what health insurance means today," said Ron Pollack, the executive director of Families USA, a consumer advocacy group in Washington.
This area is ripe for additional research, said Uwe E. Reinhardt, a professor at Princeton University, who said that there had not been enough hard evidence about working Americans who became ill and then went broke. "We put together vignettes, but they are not powerful enough," he said.
The findings also raise questions about the effect of asking employees to bear a greater share of health cost through higher co-payments and the like. Many employers are shifting the increasing cost of care onto their employees, arguing that that trend gives workers an incentive to make judicious use of health care. But the researchers say higher co-payments and deductibles may well exacerbate the problem of medical bankruptcies.
The 50 Richest Members of Congress
By Paul Singer, Jennifer Yachnin and Casey Hynes
Roll Call Staff
22/09/08 "Roll Call" -- - Everything that you are about to read might be wrong.
Roll Call’s annual attempt to rank the riches of Members of Congress is hampered by one fundamental flaw: It is based on the lawmakers’ financial disclosure forms, which are extraordinarily unreliable sources of information.
The disclosure rules allow Members to report assets in broad categories, so there is no way to tell the difference between a $20 million investment and a $5 million investment. The top category on the Members’ forms is “over $50 million,” so it is impossible to accurately account for anything worth more than that — like a professional sports team, for example. There is also a gaping loophole for assets owned by the Members’ spouse or dependent children; anything worth more than $1 million in value can be reported as “over $1 million.” There is no way to tell whether that is $1.2 million or $1.2 billion.
The rules also don’t require reporting things of value that are not used to produce income — most notably any primary residence or other home that is not used for rentals. That loophole removes from most Members’ portfolios hundreds of thousands of dollars and in come cases millions of dollars worth of assets. Airplanes, fancy cars, antiques or other valuable items are not reported.
In filing a detailed disclosure form on behalf of Sen. Bob Corker (R-Tenn.), his accountants added this editorial note, which sums up the problem: The form is meant to comply with Senate disclosure rules but “is not intended to be a complete presentation of Senator Corker’s financial position.”
Beyond all of these flaws, there remains the fact that many, many financial disclosure forms filed by Members of Congress are simply inaccurate. A check mark placed in the wrong box can inflate or deflate a Member’s apparent net worth by millions of dollars, and misunderstandings of the rules have led Members to understate some assets, overstate others and claim additional assets they no longer own.
Where the errors are obvious or have created noticeable discrepancies from prior-year filings, Roll Call has attempted to contact the offices to get a proper understanding of the actual value of the asset or assets in question.
What remains below is a ranking of the 50 wealthiest Members of Congress based on the minimum net worth reported on their financial disclosure forms. To achieve these numbers, Roll Call totaled the assets listed on financial disclosure forms filed in 2008 (covering calendar year 2007) using the lowest number in the ranges in which Members are required to report. An asset from $500,000 to $1 million is counted as being worth $500,000, unless the Member has provided a brokerage statement or other documentation that offers more specific detail.
Liabilities, which are also reported in ranges, are calculated based on the minimum value, and are subtracted from total minimum assets to establish total net worth.
Assets that are not included on the forms but have values that have been established by Roll Call or other publications are not included for the purposes of assembling this ranking, because the Members are not required to report these numbers. This ranking is based only on what is reported on the annual disclosure forms.
Se listen over de 50 rigeste ved at klikke på nedenstående link, jeg har valgt ikke at publicere den på bloggen, da den er for lang.
kilde: http://www.rollcall.com/features/Guide-to-Congress_2008/guide/28506-1.html?type=printer_friendly
En anden beregning ligeledes foretaget af Forbes Magazine i år estimerer, at der nu er 1,125 milliardærer på verdensplan. De 42% af disse bor i USA og ejer tilsammen 37% af den totale rigdom. Verdens milliardærer ejer tilsammen $4.4 billioner dollars, hvilket er 900 milliarder mere end sidste år. Disse 1,125 milliardærer udgør oprundet 0.000017 % af jordens samlede befolkning.
Mindst halvdelen af verdens befolkning lever for under $2.5 om dagen,
Mindst 80% af verdens befolkning lever af mindre end $10 om dagen.
Mindst 80% af verdens befolkning lever i lande hvor indkomstforskellene er stigende.
Antallet af børn i verden: 2,2 milliard.
Antallat af børn der lever i fattigdom: 1 milliard.
Kilde: http://www.globalissues.org/article/26/poverty-facts-and-stats
24.5 percent of all Americans earn poverty wages ($9.60 or less)
10 percent of all Americans—15 million Americans—earn $6.79 or less
33.3 percent of African American works and 39.3 of Hispanic workers earn poverty wages.
The share of our entire national income hoarded by the top one percent is, as of 2005, 21.8 percent. The last time it was that high was in 1928 (23.9)—just as the Great Depression was about to hit with its full fury.
We accept poverty as a fact of life in this country—partly because workers have not gotten the fair share of their hard work over the past three decades (in Republican and Democratic Administrations). If productivity and wages had kept their historic link (meaning, as workers were more productive, that translated into higher paychecks), the MINIMUM WAGE in the country would be $19.12. Yes, $19.12.
At the recent new minimum wage of $6.55 an hour, if you worked every single day, 40 hours a week, with no vacations, no holidays, no health care and no pension, you would earn the grand sum of $13.624. The POVERTY LEVEL for a family of three is $17,600.
47 million Americans have no health care and tens of millions more have inadequate or costly health care that can bankrupt them.
Since 1978, the number of defined-benefit plans—that means, pensions that give retirees a promised monthly amount—plummeted from 128,041 plans covering some 41 percent of private-sector workers to only 26,000 today. It’s a Dog Food Retirement future for millions of people.
All those numbers above do relate to the more narrow crisis in a very specific way: without being able to rely on their paychecks to survive, a lot of people got sucked into the housing bubble mania as an economic coping mechanism. Home equity credit lines substituted for decent pay, retirement and affordable, quality health care. And we know the rest.
http://www.workinglife.org/blogs/view_post.php?content_id=9646
The New York Times February 2, 2005
Study Ties Bankruptcy to Medical Bills
By REED ABELSON
Sometimes, all it takes is one bad fall for a working person with health insurance to be pushed into bankruptcy.
Hundreds of thousands of Americans file for personal bankruptcy each year because of medical bills - even though they have health insurance, according to a new study by Harvard University legal and medical researchers.
"It doesn't take a medical catastrophe to create a financial catastrophe," said Elizabeth Warren, a Harvard law professor who studies bankruptcy and is one of the authors of the study.
The study, which is scheduled to appear today on the Web site of Health Affairs, an academic journal, provides a glimpse into a little-researched area connecting bankruptcy and medical costs. About 30 percent of people said they filed for bankruptcy because of an illness or injury, even though most of them had health insurance when they first got sick.
Many lost their jobs - and their insurance - because they got sick, while others faced thousands of dollars in co-payments and deductibles and for services not covered by their insurance.
One person cited in the bankruptcy study, for example, broke a leg, missed a couple of months of work and then had $13,000 in unpaid medical bills, though his employer-based health plan had already paid for much of his care, Ms. Warren said.
Another respondent to the survey was able to pay for hospital stays for lung surgery and a heart attack but could not return to his old job. When he found a new job, he was denied coverage because of his pre-existing conditions, which continued to require costly medical care and contributed to his bankruptcy.
Policy analysts say these findings underscore the limitations of the nation's current system of providing health insurance largely through employers. Some argue that even for those with insurance, benefits can be ephemeral.
"You can lose it because it's tied to employment," said Joseph Antos, a health policy researcher with the American Enterprise Institute, who said people were also at risk if their employers went out of business.
To understand the effect of illness or injury on bankruptcy, the researchers surveyed 1,771 people who filed for bankruptcy in 2001 and interviewed 931 of them. They discovered a complex web of factors leading to bankruptcy, particularly as illness caused people to lose their jobs or cut back the hours they worked just as they were facing high medical bills.
Many of those families, Ms. Warren said, then "endured a one-two punch."
The researchers examined those who specifically reported that their bankruptcies were precipitated by financial burdens caused by medical illness. They also included in a broader category of medical-related bankruptcy people who had more than $1,000 in unpaid medical bills at the time of the bankruptcy filing or had mortgaged their home to pay those bills.
The researchers acknowledged that often there was no single reason why someone went bankrupt. "There's definitely overlapping reasons," said Steffie Woolhandler, an associate professor of medicine at Harvard and one of the authors of the report.
They also pointed to gaps in coverage that left people vulnerable to financial crisis - particularly when workers switched jobs or were temporarily unable to afford contributions to a health plan. The high cost of continuing coverage under Cobra, the federal rule that allows former employees to stay on health plans for a time if they pay the entire cost, "is a cruel joke to these people," Ms. Warren said.
Even when people remain insured, the study also notes that many health plans have limits on certain kinds of coverage, like physical therapy or prescription drugs.
"If you're sick enough long enough, you're in deep trouble in our society," said David Himmelstein, an associate professor of medicine at Harvard Medical School, another of the study's authors.
While some policies do offer catastrophic coverage, which pays for care after costs reach a certain threshold, Dr. Himmelstein said that coverage "often kicks in after people are bankrupted" because they must incur high medical bills to qualify.
And employees, who often have little choice of plans and frequently do not understand the differences among plans, are increasingly offered policies with less and less coverage, some policy analysts say.
"There's a race to the bottom in terms of what health insurance means today," said Ron Pollack, the executive director of Families USA, a consumer advocacy group in Washington.
This area is ripe for additional research, said Uwe E. Reinhardt, a professor at Princeton University, who said that there had not been enough hard evidence about working Americans who became ill and then went broke. "We put together vignettes, but they are not powerful enough," he said.
The findings also raise questions about the effect of asking employees to bear a greater share of health cost through higher co-payments and the like. Many employers are shifting the increasing cost of care onto their employees, arguing that that trend gives workers an incentive to make judicious use of health care. But the researchers say higher co-payments and deductibles may well exacerbate the problem of medical bankruptcies.
The 50 Richest Members of Congress
By Paul Singer, Jennifer Yachnin and Casey Hynes
Roll Call Staff
22/09/08 "Roll Call" -- - Everything that you are about to read might be wrong.
Roll Call’s annual attempt to rank the riches of Members of Congress is hampered by one fundamental flaw: It is based on the lawmakers’ financial disclosure forms, which are extraordinarily unreliable sources of information.
The disclosure rules allow Members to report assets in broad categories, so there is no way to tell the difference between a $20 million investment and a $5 million investment. The top category on the Members’ forms is “over $50 million,” so it is impossible to accurately account for anything worth more than that — like a professional sports team, for example. There is also a gaping loophole for assets owned by the Members’ spouse or dependent children; anything worth more than $1 million in value can be reported as “over $1 million.” There is no way to tell whether that is $1.2 million or $1.2 billion.
The rules also don’t require reporting things of value that are not used to produce income — most notably any primary residence or other home that is not used for rentals. That loophole removes from most Members’ portfolios hundreds of thousands of dollars and in come cases millions of dollars worth of assets. Airplanes, fancy cars, antiques or other valuable items are not reported.
In filing a detailed disclosure form on behalf of Sen. Bob Corker (R-Tenn.), his accountants added this editorial note, which sums up the problem: The form is meant to comply with Senate disclosure rules but “is not intended to be a complete presentation of Senator Corker’s financial position.”
Beyond all of these flaws, there remains the fact that many, many financial disclosure forms filed by Members of Congress are simply inaccurate. A check mark placed in the wrong box can inflate or deflate a Member’s apparent net worth by millions of dollars, and misunderstandings of the rules have led Members to understate some assets, overstate others and claim additional assets they no longer own.
Where the errors are obvious or have created noticeable discrepancies from prior-year filings, Roll Call has attempted to contact the offices to get a proper understanding of the actual value of the asset or assets in question.
What remains below is a ranking of the 50 wealthiest Members of Congress based on the minimum net worth reported on their financial disclosure forms. To achieve these numbers, Roll Call totaled the assets listed on financial disclosure forms filed in 2008 (covering calendar year 2007) using the lowest number in the ranges in which Members are required to report. An asset from $500,000 to $1 million is counted as being worth $500,000, unless the Member has provided a brokerage statement or other documentation that offers more specific detail.
Liabilities, which are also reported in ranges, are calculated based on the minimum value, and are subtracted from total minimum assets to establish total net worth.
Assets that are not included on the forms but have values that have been established by Roll Call or other publications are not included for the purposes of assembling this ranking, because the Members are not required to report these numbers. This ranking is based only on what is reported on the annual disclosure forms.
Se listen over de 50 rigeste ved at klikke på nedenstående link, jeg har valgt ikke at publicere den på bloggen, da den er for lang.
kilde: http://www.rollcall.com/features/Guide-to-Congress_2008/guide/28506-1.html?type=printer_friendly
Statsministeren vs. økonomerne.
Statsminister AFR siger ifl. Ritzau: "Finanskrisen afbødes på kort sigt bedst, hvis USA's Kongres vedtager krisepakken for amerikanske banker med dårlige lån. ..."
Her er han i uoverenstemmelse med en lang række prominente økonomer ved de amerikanske universiteter, der forleden i en fælles udtalelse ytrede:
Den østrigske økonom Robert P. Murphy tilknyttet Von Mises Instituttet er heller ikke begejstret for nu at sige det mildt, han skriver:
Her er han i uoverenstemmelse med en lang række prominente økonomer ved de amerikanske universiteter, der forleden i en fælles udtalelse ytrede:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
Den østrigske økonom Robert P. Murphy tilknyttet Von Mises Instituttet er heller ikke begejstret for nu at sige det mildt, han skriver:
The Paulson bailout failed in the House. If it isn't a death blow to the plan, it should be. This is not an economic plan: it is a heist.
It will go down as The Great Bank Robbery of 2008.
The economics behind it are nonsense, but we are naïve if we spend much time even considering the "arguments" for it. This is a money and power grab, pure and simple.
Lidt om Christiania
I forlængelse af at Regeringen via Slots og Ejendomsstyrelsen, har nægtet at give Christianitternes bud på en løsning en chance, er her en lille almen kommentar, som i et større perspektiv også er en kommentar på den drejning samfundet har taget under den DF-opbakkede borgerlige regering....
Det er meget bedrøveligt og ærgerligt at 40-50 pushere kan stjæle så meget opmærksomhed fra en fristad med mellem 2500-3000 indbyggere. Pusherne udgør maksimalt 2 procent af beboerne, men det er altid dem vi hører om når der rapporteres om Christiania i den borgerlige presse og det meste af den øvrige mediedækning. Det er aldrig det faktum at Fristaden i snart 40 år har været vækstcenter for kreativitet og alternativer til mainstream, eller det forhold at Christiania har Danmarks eneste økologisk-vegetariske restaurant udelukkende drevet af frivillige, samt et kunstgalleri, en biograf, fem spillesteder (Rockmaskinen, Grå Hal, Loppen, Operaen og jazzspillestedet Børneteatret) samt adskillige midlertidige udendørsscener som stilles op og pilles ned henover året, plus den faste scene ved Nemoland. På disse har gud og hver mand spillet gennem tiderne, lige fra internationale topnavne til bands der spillede deres første og sidste koncert på Staden, og det alt sammen indenfor en radius af femhundrede meter, hvilket gør Staden til det mest koncentrerede musikkulturelle center i København. Der er udover det nævnte vegetariske spisested Morgenstedet – et multikulturelt mekka i sig selv, både hvad personale og kunder angår – også Spiseloppen, som er bredt kendt for deres kvalitet samt flere take-away boder og steder, som i ånden også er ganske intermistiske, men...
Det Christiania der tidligere var et åndehul for kreative og anderledestænkende sjæle, og for folk der gerne ville kunne befinde sig i byen uden konstant at blive filmet af overvågningskameraer, eller holdt øje med af forbikørende transitter fyldt med betjente, er der desværre kun resterne tilbage af. Regeringen har sammen med politimesteren forvandlet stedet til det mest overvågede sted i byen via den voldsommeste magtdemonstration målt over tid og i resourcer, jeg kan huske at have oplevet i mit liv i hovedstaden. Tolv-femten mand stærke processioner af svært bevæbnede, kampuniformerede betjente, kan flere gange ugentligt ses gå rundt og intimidere de besøgende og beboende med deres tilstedeværelse. Vilkårlige visitationer, præventive midlertidige anholdelser og udspørgelser af ikke-pushende besøgende og beboere er bedrøveligvis hverdagskost, alt sammen pga. af mennesker der i fred og fordragelighed begår offerløs ”kriminalitet”.
Det er meget vanskeligt IKKE at se denne ekstremt disproportionelle magtudøvelse - som de facto udgør en politistat i staten - som en politisk hetz-kampagne fuldstændig bevidst bedrevet af en regering bestående af et hold borgerlige politikere, som over årene har haft ekstremt ondt i røven over fristaden. Den nye “vi kan på ingen måder forhandle med jer”-udmelding hælder blot benzin på denne mistankes bål. Interessant og ganske paradoksalt er det da også i denne sammenhæng at flokkens leder, Anders Fogh Rasmussen, i forordet til demokratikanonen skriver, at friheden skal udvikles og vindes i hver ny generation. Det gælder åbenbart ikke Christiania.
Det er meget bedrøveligt og ærgerligt at 40-50 pushere kan stjæle så meget opmærksomhed fra en fristad med mellem 2500-3000 indbyggere. Pusherne udgør maksimalt 2 procent af beboerne, men det er altid dem vi hører om når der rapporteres om Christiania i den borgerlige presse og det meste af den øvrige mediedækning. Det er aldrig det faktum at Fristaden i snart 40 år har været vækstcenter for kreativitet og alternativer til mainstream, eller det forhold at Christiania har Danmarks eneste økologisk-vegetariske restaurant udelukkende drevet af frivillige, samt et kunstgalleri, en biograf, fem spillesteder (Rockmaskinen, Grå Hal, Loppen, Operaen og jazzspillestedet Børneteatret) samt adskillige midlertidige udendørsscener som stilles op og pilles ned henover året, plus den faste scene ved Nemoland. På disse har gud og hver mand spillet gennem tiderne, lige fra internationale topnavne til bands der spillede deres første og sidste koncert på Staden, og det alt sammen indenfor en radius af femhundrede meter, hvilket gør Staden til det mest koncentrerede musikkulturelle center i København. Der er udover det nævnte vegetariske spisested Morgenstedet – et multikulturelt mekka i sig selv, både hvad personale og kunder angår – også Spiseloppen, som er bredt kendt for deres kvalitet samt flere take-away boder og steder, som i ånden også er ganske intermistiske, men...
Det Christiania der tidligere var et åndehul for kreative og anderledestænkende sjæle, og for folk der gerne ville kunne befinde sig i byen uden konstant at blive filmet af overvågningskameraer, eller holdt øje med af forbikørende transitter fyldt med betjente, er der desværre kun resterne tilbage af. Regeringen har sammen med politimesteren forvandlet stedet til det mest overvågede sted i byen via den voldsommeste magtdemonstration målt over tid og i resourcer, jeg kan huske at have oplevet i mit liv i hovedstaden. Tolv-femten mand stærke processioner af svært bevæbnede, kampuniformerede betjente, kan flere gange ugentligt ses gå rundt og intimidere de besøgende og beboende med deres tilstedeværelse. Vilkårlige visitationer, præventive midlertidige anholdelser og udspørgelser af ikke-pushende besøgende og beboere er bedrøveligvis hverdagskost, alt sammen pga. af mennesker der i fred og fordragelighed begår offerløs ”kriminalitet”.
Det er meget vanskeligt IKKE at se denne ekstremt disproportionelle magtudøvelse - som de facto udgør en politistat i staten - som en politisk hetz-kampagne fuldstændig bevidst bedrevet af en regering bestående af et hold borgerlige politikere, som over årene har haft ekstremt ondt i røven over fristaden. Den nye “vi kan på ingen måder forhandle med jer”-udmelding hælder blot benzin på denne mistankes bål. Interessant og ganske paradoksalt er det da også i denne sammenhæng at flokkens leder, Anders Fogh Rasmussen, i forordet til demokratikanonen skriver, at friheden skal udvikles og vindes i hver ny generation. Det gælder åbenbart ikke Christiania.
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