Archive for the ‘Uncategorized’ Category


No “Western” Interest In Investigating MH17

Moon of Alabama (July 25 2014)

After all the propaganda about the downed MH17 flight, screams about alleged looting and demands of access to the site, one would have expected some serious attempts to immediately investigate the case.

But hardly any are made {1}:


At the field in Ukraine where the exploded remnants landed, there are no guards and no recovery workers, no police officers and no investigators. Early Thursday evening, there were almost no people  –  just two curious twelve-year-old girls looking at part of the tail of the Boeing 777.

“There’s no one out here”, said Michael Bociurkiw, a spokesman for the Organization for Security and Cooperation in Europe, whose monitoring mission has been on the site every day since Friday. As for the arrival of international experts, “it’s not like our door is being broken down”.


After the US blustering “we have evidence” that Russia did it and then showing nothing of it – “just trust us” – the US seems have lost all interests to really find out who’s ammunition downed the plane. Russia had early on called for an international investigation and it was Russia alone so far which presented real evidence {2} on the case. US ships with very capable missile defense radars were in the Black Sea over the last weeks and likely have very detailed track records of every flight and missile launch up to several hundred of miles away. None of those have been made public. We can guess why.

And those “looting” claims?


There were a few new faces at the site on Thursday. Three Australian investigators worked in the field, joining three Malaysians. Before departing Thursday, the Malaysians said that they were surprised at the amount of access they had to the site and that they felt safe, Mr Bociurkiw said.

There have been widespread reports of looting, but Mr Bociurkiw said his monitoring group, which has now spent more time at the site than any other, had not seen any. The Malaysians said they had seen valuables in the fields untouched, he noted, including a bottle of duty-free perfume, auto parts, backpacks full of belongings, a watch and some jewelry.


Those claims of looting were false just as the claims of mishandling the remains of the victims were false.

But the White House will not take back one any of those false claims. It continues its anti-Russia campaign is coming up with new claims {3} for which again no facts are presented to back them up:


American officials, citing military intelligence, including satellite images, warned that Russia appeared to be preparing to arm the rebels with more high-powered weaponry  –  including tanks and armored vehicles  –  than it had previously supplied. In Kiev, a military spokesman said that Ukrainian troops were coming under increased fire from the Russian side of the border and that the Ukrainian military had recently shot down three Russian surveillance drones. One was used to target a Ukrainian base near the town of Amvrosiivka, which then quickly came under heavy rocket attack, the spokesman said.


Again these are just claims. Not one of the “satellite images” cited was presented.

But the main stream media fall for such nonsense and market it without inserting even the least bit of doubt.

Clearly the powers who be do want a war with Russia. A cold one for now but a hot one, destroying Europe’s production capacities, would even be better for rather tepid US economy.





Categories: Uncategorized

Blaming Russia as ‘Flat Fact’

Exclusive: The American rush to judgment blaming ethnic Russian rebels and Russian President Putin for the crash of Malaysia Airlines Flight 17 continues unabated despite other possible explanations.

by Robert Parry

Consortium News (July 27 2014)

As nuclear-armed America hurtles into a completely avoidable crash with nuclear-armed Russia over Ukraine, you can now see the dangers of “information warfare” when facts give way to propaganda and the press fails to act as an impartial arbiter.

In this sorry affair, one of the worst offenders of journalistic principles has been the New York Times, generally regarded as America’s premier newspaper. During the Ukraine crisis, the Times has been little more than a propaganda conveyor belt delivering what the US government wants out via shoddy and biased reporting from the likes of Michael R Gordon and David Herszenhorn.

The Times reached what was arguably a new low on Sunday when it accepted as flat fact the still unproven point of how Malaysia Airlines Flight 17 was shot down. The Times dropped all attribution despite what appear to be growing – rather than diminishing – doubts about Official Washington’s narrative that Ukrainian rebels shot down the plane by using a powerful Russian-supplied Buk missile battery.

US and Ukrainian government officials began pushing this narrative immediately after the plane went down on July 17 killing 298 people onboard. But the only evidence has been citations of “social media” and the snippet of an intercepted phone call containing possibly confused comments by Ukrainian rebels after the crash, suggesting that some rebels initially believed they had shot the plane down but later reversed that judgement.

A major problem with this evidence is that it assumes the rebels – or for that matter the Ukrainian armed forces – operate with precise command and control when the reality is that the soldiers on both sides are not very professional and function in even a deeper fog of war than might exist in other circumstances.

Missing Images

But an even bigger core problem for the US narrative is that it is virtually inconceivable that American intelligence did not have satellite and other surveillance on eastern Ukraine at the time of the shoot-down. Yet the US government has been unable (or unwilling) to supply a single piece of imagery showing the Russians supplying a Buk anti-aircraft missile battery to the rebels; the rebels transporting the missiles around eastern Ukraine; the rebels firing the fateful missile that allegedly brought down the Malaysian airliner; or the rebels then returning the missiles to Russia.

To accept Official Washington’s certainty about what it “knows” happened, you would have to believe that American spy satellites – considered the best in the world – could not detect sixteen-feet-tall missiles during their odyssey around Russia and eastern Ukraine. If that is indeed the case, the US taxpayers should demand their billions upon billions of dollars back.

However, the failure of US intelligence to release its satellite images of Buk missile batteries in eastern Ukraine is the “dog-not-barking” evidence that this crucial evidence to support the US government’s allegations doesn’t exist. Can anyone believe that if US satellite images showed the missiles crossing the border, being deployed by the rebels and then returning to Russia, that those images would not have been immediately declassified and shown to the world? In this case, the absence of evidence is evidence of absence – absence of US evidence.

The US government’s case also must overcome public remarks by senior US military personnel at variance with the Obama administration’s claims of certainty. For instance, the Washington Post’s Craig Whitlock reported last Saturday {1} that Air Force General Philip M Breedlove, US commander of NATO forces in Europe, said last month that “We have not seen any of the [Russian] air-defense vehicles across the border yet”.

Whitlock also reported that “Rear Admiral John Kirby, the Pentagon press secretary, said defense officials could not point to specific evidence that an SA-11 [Buk] surface-to-air missile system had been transported from Russia into eastern Ukraine”.

There’s also the possibility that a Ukrainian government missile – either from its own Buk missile batteries fired from the ground or from a warplane in the sky – brought down the Malaysian plane. I was told by one source who had been briefed by US intelligence analysts that some satellite images suggest that the missile battery was under the control of Ukrainian government troops but that the conclusion was not definitive.

Plus, there were reports from eyewitnesses in the area of the crash that at least one Ukrainian jet fighter closed on the civilian plane shortly before it went down. The Russian government also has cited radar data supposedly showing Ukrainian fighters in the vicinity.

Need for a Real Inquiry

What all this means is that a serious and impartial investigation is needed to determine who was at fault and to apportion accountability. But that inquiry is still underway with no formal conclusions.

So, in terms of journalistic professionalism, a news organization should treat the mystery of who shot down Flight 17 with doubt. Surely, no serious journalist would jump to the conclusion based on the dubious claims made by one side in a dispute while the other side is adamant in its denials, especially with the stakes so high in a tense confrontation between two nuclear powers.

But that is exactly what the Times did in describing new US plans to escalate the confrontation by possibly supplying tactical intelligence to the Ukrainian army so it can more effectively wage war against eastern Ukrainian rebels.

On Sunday, the Times wrote {2}:

At the core of the debate, said several [US] officials – who, like others interviewed, spoke on the condition of anonymity because the policy deliberations are still in progress – is whether the American goal should be simply to shore up a Ukrainian government reeling from the separatist attacks, or to send a stern message to [Russian President Vladimir] Putin by aggressively helping Ukraine target the missiles Russia has provided. Those missiles have taken down at least five aircraft in the past ten days, including Malaysia Airlines Flight 17. {3} [Emphasis added.]


The link provided by the Times’ online version of the story connects to an earlier Times’ story that attributed the accusations blaming Russia to US “officials”. But this new story drops that attribution and simply accepts the claims as flat fact.

The danger of American “information warfare” that treats every development in the Ukraine crisis as an opportunity to blame Putin and ratchet up tensions with Russia has been apparent since the beginning of the Ukraine crisis – as has been the clear anti-Russian bias of the Times and virtually every other outlet of the mainstream US news media. {4}

Since the start of the crisis last year, US officials and American-funded non-governmental organizations have not only pushed a one-sided story but have been pushing a dangerous agenda, seeking to create a collision between the United States and Russia and, more personally, between President Barack Obama and President Putin.

The vehicle for this head-on collision between Russia and the United States was the internal political disagreement in Ukraine over whether elected President Viktor Yanukovych should have accepted harsh International Monetary Fund austerity demands as the price for associating with the European Union or agree to a more generous offer from Russia.

Angered last September when Putin helped Obama avert a planned US bombing campaign against Syria, American neocons were at the forefront of this strategy. Their principal need was to destroy the Putin-Obama collaboration, which also was instrumental in achieving a breakthrough on the Iran nuclear dispute (while the neocons were hoping that the US military might bomb Iran, too).

So, on September 26 2013, Carl Gershman, a leading neocon and longtime president of the US-funded National Endowment for Democracy, took to the op-ed page of the neocon-flagship Washington Post to urge the US government to push European “free trade” agreements on Ukraine and other former Soviet states and thus counter Moscow’s efforts to maintain close relations with those countries.

The ultimate goal, according to Gershman, was isolating and possibly toppling Putin in Russia with Ukraine the key piece on this global chessboard. “Ukraine is the biggest prize”, Gershman wrote. “Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself”.

To give the United States more leverage inside Ukraine, Gershman’s NED paid for scores of projects, including training “activists” and supporting “journalists”. Rather than let the Ukrainian political process sort out this disagreement, US officials, such as neocon Assistant Secretary of State Victoria Nuland and neocon Senator John McCain, also intervened to encourage increasingly disruptive demonstrations seeking to overthrow Yanukovych when he opted for the Russian deal over the EU-IMF offer.

Though much of the ensuing violence was instigated by neo-Nazi militias that had moved to the front of the anti-Yanukovych protests, the US government and its complicit news media blamed every act of violence on Yanukovych and the police, including a still mysterious sniper attack that left both protesters and police dead.

On February 21, Yanukovych denied ordering any shootings and tried to stem the violence by signing an agreement brokered by three European nations to reduce his powers and hold early elections so he could be voted out of office. He also complied with a demand from Vice President Joe Biden to pull back Ukrainian police. Then, the trap sprang shut.

Neo-Nazi militias overran government buildings and forced Yanukovych and his officials to flee for their lives. The State Department quickly endorsed the coup regime – hastily formed by the remnants of the parliament – as “legitimate”. Besides passing bills offensive to ethnic Russians in the east, one of the parliament’s top priorities was to enact the IMF austerity plan.

White Hats/Black Hats

Though the major US news media was aware of these facts – and indeed you could sometimes detect the reality by reading between the lines of dispatches from the field – the overriding US narrative was that the coup-makers were the “white hats” and Yanukovych along with Putin were the “black hats”. Across the US media, Putin was mocked for riding on a horse shirtless and other indiscretions. For the US media, it was all lots of fun, as was the idea of reprising the Cold War with Moscow.

When the people of Crimea – many of whom were ethnic Russians – voted overwhelmingly to secede from Ukraine and rejoin Russia, the US media declared the move a Russian “invasion” although the Russian troops were already in Ukraine as part of an agreement with previous Ukrainian governments.

Every development that could be hyped was hyped. There was virtually no nuance in the news reporting, a lack of professionalism led by the New York Times. Yet, the solution to the crisis was always relatively obvious: a federalized system that would allow the ethnic Russians in the east a measure of self-governance and permit Ukraine to have cordial economic relations with both the EU and Russia.

But replacement President Petro Poroshenko – elected when a secession fight was already underway in the east – refused to negotiate with the ethnic Russian rebels who had rejected the ouster of Yanukovych. Sensing enough political support inside the US government, Poroshenko opted for a military solution.

It was in that context of a massive Ukrainian government assault on the east that Russia stepped up its military assistance to the beleaguered rebels, including the apparent provision of shoulder-fired anti-aircraft missiles to fend off Kiev’s air superiority. The rebels did succeed in shooting down some Ukrainian warplanes flying at altitudes far below the 33,000 feet of the Malaysia Airlines plane.

For a plane at that height to be shot down required a more powerful system, like the Buk anti-aircraft batteries or an air-to-air missile fired by a fighter jet. Which brings us to the mystery of what happened on the afternoon of July 17 and why it is so important to let a serious investigation evaluate all the available evidence and not to have a rush to judgment.

But the idea of doing an investigation first and drawing conclusions second is a concept that, apparently, neither the US government nor the New York Times accepts. They would prefer to start with the conclusion and then make a serious investigation irrelevant, one more casualty of information warfare.







Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative (2012), either in print or as an e-book. For a limited time, you also can order Robert Parry’s trilogy on the Bush Family and its connections to various right-wing operatives for only $34. The trilogy includes America’s Stolen Narrative. For details on this offer, click {5}.

Categories: Uncategorized

Behind the Curtains

2014/07/28 1 comment

How the Corporatocracy is Driving the US-EU Trade Agenda

by Don Quijones

Wolf Street (July 22 2014)

Last week the United States and the European Union completed their sixth round of talks on a transatlantic trade deal, with both sides saying that they are on track for the “ambitious and comprehensive” trade pact that they have been seeking in the shadows for the last two years. Unlike the Trans Pacific Partnership whose progress has been temporarily stalled in the US Congress and which apparently faces stiff resistance from a handful of Asian nations, the Transatlantic Trade and Investment Treaty appears to be set on a smooth course toward consummation.

But who’s actually driving the agenda of this highly secretive trade treaty that threatens to remake the market rules and regulations governing the world’s two biggest markets? According to a report by Corporate Europe Observatory (CEO), the answer is as predictable as it is depressing –  corporate lobbyists:


Of the 560 lobby encounters that DG Trade [The European Commission's Trade Department] held to prepare the negotiations, 520 (92%) were with business lobbyists, while only 26 (4%) were with public interest groups. So, for every encounter with a trade union or consumer group, there were twenty with companies and industry federations.


No sector has lobbied the European Commission more aggressively than the agribusiness sector. Food multinationals, agri-traders and seed producers have had more contacts with the Commission’s trade department (DG Trade) than lobbyists from the pharmaceutical, chemical, financial and car industry combined.

As with any bilateral trade deal, agribusiness behemoths such as Monsanto, Nestle, Kraft Foods, and Syngenta, who already control a significant chunk of the global food chain, have a great deal to gain (or lose) from the eventual outcome of the negotiations. Here’s a little taster of what’s potentially up for grabs if they get their way:

* Watered down European food safety standards. Both the pesticide and GMO industry have strongly pushed their agenda via the TTIP negotiations, with the aim of undermining current EU food regulations. Trade tools such as “mutual recognition” and “regulatory co-operation” are likely to lead to an erosion of food safety standards in the long run.

* An end to the “precautionary principle”. US negotiators on behalf of industry are doing all in their power to undermine the precautionary principle, a cornerstone of EU policymaking, calling it “unscientific”. The precautionary principle is based on the idea that manufacturers need to be able to demonstrate that there is no risk before they can put something on the market. In the US, the opposite is true –  you need to be able to prove that something is hazardous before it is taken off the shelf.

* The end of “buy local” initiatives in the US. According to the European Commission, local preference legislation is discriminatory and acts as “localisation barriers to trade”. As such, it should be minimised, if not banned outright.

* “Harmonised” regulatory standards. Harmonised is a nice-sounding word. After all, it’s the adjectival derivative of the word “harmony” and what could be nicer than a bit of harmony? Well, actually, quite a lot, at least when it comes to regulatory standards set in the exclusive interest of the world’s largest transnational corporations. As CEO warns, harmonisation is just the beginning; regulatory cooperation is the end goal –  meaning the ongoing joint review of existing rules or standards that are seen as barriers to trade, and preventing any new ones in the future.

A Who’s Who of Corporate Europe

Taken together, the groups that have seemed to have enjoyed the most influence over EU trade negotiations reads like a who’s who of the Transatlantic Corporatocracy. They include:

* Telecommunications and IT, including giant corporations such as Nokia and Ericsson as well as industry lobby groups like Digital Europe (whose members include all the big IT names, like Apple, Blackberry, IBM, and Microsoft).

* Automotive lobbies, representing some of the most powerful car brands (Ford, Daimler, BMW … ) and automotive suppliers.

* Engineering and machinery, including manufacturing behemoths such as Siemens and Alstom as well as industry federations such as Orgalime (lobbying for the mechanical, electrical and metalworking sectors) and the German Engineering Federation VDMA.

* Chemicals, including CEFIC, the EU’s biggest chemical industry lobby group (representing BASF, Bayer, Dow & Company), its US counterpart ACC (also lobbying for BASF, Bayer, Dow, and others) and the Germany industry federation (VCI).

* Finance, with lobbying by some of the world’s largest banks and insurers (Morgan Stanley, Allianz, Citigroup … ) and powerful financial sector lobby groups such as the Association of German Banks (BDB) and Insurance Europe (Europe’s main insurance lobby).

The list goes on and on, and includes lobbies for audiovisuals, media, healthcare and pharmaceuticals. Conspicuously absent from the meetings were groups representing the economies of Europe’s Southern and Eastern periphery. Indeed, CEO could not find a single lobby encounter between DG Trade and businesses from Greece and large parts of Eastern Europe (Poland, Bulgaria, Hungary, Czech Republic, Slovenia, Estonia, Lithuania, Latvia).

This revelation merely compounds fears that peripheral economies –  especially those in the East –  will bear the brunt of the social costs of TTIP. With US export interests targeting mainly those sectors where the European periphery has defensive interests –  such as agriculture –  the opening up of the EU to more transatlantic competition seems destined to exacerbate the divide between the EU’s economic core and its periphery.

A Lobbyist’s Paradise

That lobbies representing the world’s biggest businesses and finance institutions wield such influence over the trade agenda of the US and EU should hardly come as a surprise. Brussels is now home to roughly 3,000 powerful industry lobby structures (and 30,000 individual lobbyists), making the city the second biggest lobby industry in the world, just behind Washington.

And unlike Washington, which strengthened its lobbying laws after the Jack Abramoff scandal of 2005 & 2006, Brussels does not even have a mandatory lobby register. Instead, it has a voluntary one whose members supposedly benefit from greater ease of access to Parliament –  but apparently not to the EU’s executive branch, the Commission. To gain access to the Commission all you need is the right business card, as illustrated by the fact that more than thirty percent (94 out of 269) of the private sector interest groups that have lobbied DG Trade on TTIP are absent from the EU’s Transparency Register. They include companies such as Walmart, Walt Disney, General Motors, France Telecom and Maersk.

Given the acute lack of meaningful accountability, transparency or democratic legitimacy at the heart of its governance institutions, the EU makes the perfect paradise for lobbyists. Granted, in the US lobbies have deeper roots and arguably a more pervasive influence, thanks largely to the fact that virtually all forms of political bribery are now effectively legal. But at least most of the racket is out in the open these days. What’s more, the government still has a few semi-functional democratic checks and balances in place –  hence Obama’s difficulty (for now!) in fast-tracking the TPP through congress.

In contrast, the EU remains a democratic work in progress, and judging by recent revelations, rather than progressing, it’s regressing. The European Commission, wholly unelected and wholly unaccountable, is not so much in bed with the lobbyists; it’s making them breakfast too, croissants included. And that’s just how the Corporatocracy likes it!  By Don Quijones, a Wolf Street exclusive.

European bankers have begun sweating, not because of the harsh heat, but fear –  fear of what could happen as battalions of bank auditors take up temporary residence at the headquarters of the biggest banks. Read European Banks Begin to Sweat As ECB Promises Scalps:


Don Quijones is freelance writer and translator in Barcelona, Spain. is his modest attempt to challenge the wishful thinking and scrub away the lathers of soft soap peddled by political and business leaders and their loyal mainstream media. This article is a Wolf Street exclusive.

Categories: Uncategorized

​With ISDS it’s bedtime for democracy

by Mark Bergfeld (July 22 2014)

The Transatlantic Trade and Investment Partnership (TTIP) has multinational companies and transnational law firms on both sides of the Atlantic foaming at their mouths.

If the TTIP and its Investor-State Dispute Settlement (ISDS) clause go ahead, it would give more than 75,000 multinational corporations unprecedented powers to shape national legislation, override domestic courts and steal billions of dollars from peoples’ pockets.

ISDS promotes destructive rent-seeking

The TTIP seeks to dismantle any barriers to ‘free trade’ between the EU and the US. The fact is trade barriers between the two blocs are virtually non-existent. ISDS regulation will ensure a new type of free trade regime, which encourages destructive rent-seeking above all.

ISDS regulation would allow US investors to sue national governments of EU member states (or, vice versa) if they see their future potential earnings at risk. The words ‘future’ and ‘potential’ should ring alarm bells. ISDS regulation will be used to seek compensation when national governments seek to implement progressive policies such as higher corporate taxes, more environmental regulation, minimum wage agreements or new public services.

Since the 1990s, we have seen a significant rise of investor state attacks on domestic regulatory policy with more than 95 countries having to respond to one or more investment arbitration cases. Self-evidently, countries like Argentina, Bolivia and Ecuador who turned their backs on neoliberalism bore the brunt of this clause. With the on-going economic crisis and shifts in the political landscape, there were 58 new cases in 2012 alone according to UNCTAD. The TTIP’s implementation would drive that figure up exponentially.

The ISDS clause would facilitate destructive rent-seeking rather than productive entrepreneurship, which promotes jobs, growth and the environment. With arbitration costs of at least USD 8 million, concentrating on investor-state disputes has become a lucrative business for transnational law firms and the clients they represent. After all, 27 percent of all cases are settled outside of court with settlements paid to investors. With only nine out of 28 EU member states having ISDS regulation with the US, it is certain that the TTIP’s success hinges on the ISDS regulation.

Democracy under threat

The European Commission’s consultation paper on ISDS shows that investors’ demands for compensation would not be heard in a national or European court but a secret tribunal consisting of a representative of the investor, a representative of the defendant state, and a mediator which both parties agree to.

Surely no one would agree to such a kangaroo court which undermines national sovereignty, domestic courts and laws. However, all countries who have signed bilateral trade agreements with the USA have agreed to this provision with the exception of Australia.

Some of the US’s closest allies have learnt the hard way. The Canadian government, for example, has been sued under article 1110 of the NAFTA for CDN$250 million after Quebec introduced an anti-fracking law in 2011. Lone Pine, a Canadian energy company, is using its incorporated status in Delaware, USA to do so. This highlights the perverse nature of how this clause is being applied amongst so-called allies and friends.

In the wake of the Fukushima nuclear catastrophe, Germany’s government voted to phase out its nuclear power plants and shut others down immediately. In retaliation, the Swedish energy giant Vattenfall who operates two plants near Hamburg sued for 3.5 billion euros under the Energy Charter Treaty (ECT). This was the second time that Vattenfall filed for arbitration at the International Centre for Settlement of Investment Disputes (ICSID) in Washington. Previously, it had sought 1.4 billion euros in compensation after tighter environmental regulations had been passed in parliament.

Merkel’s decision to phase out nuclear energy followed a process initiated by previous governments, and was supported by all major political parties and opinion polls. It was anything but a communist plot of expropriation, yet Vattenfall claimed that its previous 700 million euros investment was worthless now, and that it was being expropriated. In fact it still owned its assets and was basing its claim for compensation on future projected earnings.

Vattenfall and Germany settled outside of court. The sum remains confidential but taxpayers will foot the bill in years to come. Ecuador has experienced this first-hand. Investor-state disputes have driven the country to the brink of bankruptcy. So far, there have been 39 arbitration cases against Ecuador. Ecuador was forced to pay $1.77 billion to Occidental Petroleum Corporation the fourth largest US oil company for renationalizing its oil operations in 2006. Subsidiaries of ConocoPhillips and Perenco have filed multi-million dollar cases as well.

Is there no alternative?

Unsurprisingly, broad-based opposition to the TTIP and its ISDS clause is emerging. The last day of action on July 12 saw more than a thousand people march in London. Following the European Commission’s public consultation, more than 120 legal scholars signed a statement criticizing the ISDS provision in the TTIP. The majority of European trade unions all have a policy against the TTIP now, while civil society organizations, NGOs and churches plan to hold a second day of action on October 11.

Once envisaged to protect foreign investors in countries where legal frameworks were absent, ISDS clauses have become tools for the powerful to target progressive policies and strip countries of their national sovereignty. It renders the renationalization of public services such as water, energy and transport networks impossible, and paves the way for national bargaining agreements to be destroyed once and for all. The threat of arbitration is enough for most countries to conform to the neoliberal paradigm out of fear of losing billions of dollars.

If the TTIP negotiations were to derail and the ISDS provision not granted to foreign investors, it would open up the possibility of dealing a serious blow to the edifice of neoliberalism on both sides of the Atlantic. The odds are good.


Mark Bergfeld is a writer and activist based in Cologne, Germany and London, UK. He tweets @mdbergfeld

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

Categories: Uncategorized

The Flame-Out Of Abenomics …

… in One Crucial Chart

by Wolf Richter

Wolf Street (July 24 2014)

Abenomics, the new economic religion of Japan, has kept some of its promises: It created inflation while wages stagnated, thus whittling down real incomes, further squeezed by the broad consumption tax hike. It devalued the yen by 25%, thus vaporizing a quarter of the wealth of the Japanese without having to tell them directly. And to make up for the tax increase on consumers, Abenomics elegantly cut taxes for Japan Inc. Grudging respect is due Prime Minister Shinzo Abe for these noble accomplishments.

In other areas, his record is spotty. One of the goals of his policies was to fire up exports by making them cheaper overseas and reduce imports by making them more expensive to consumers and businesses at home. It would crank up Japan’s manufacturing sector and lead to a trade surplus that would inflate GDP, make Abe a hero, and save Japan.

Exports and trade surpluses have been vital to the Japanese economy. And reconstituting them has been a cornerstone of Abenomics. But that plan has gone to heck.

Not step by step, gradually over time, but in monthly leaps, whose size surprised even Abenomics-cynics like me. And the Ministry of Finance rubbed it in today when it published the trade statistics for June {1}.

Exports, instead of soaring due to the watered-down yen, dropped two percent from a year ago to 5.94 trillion yen. Imports, instead of dropping due to consumers being squeezed by higher prices and stagnating incomes, soared 8.4% to 6.76 trillion yen. The resulting goods trade deficit jumped to 822.2 billion yen.

It was the worst trade deficit for any June ever. It was over four times as bad as last year’s “worst June deficit ever”. In June 2012, Japan still had a surplus. Historically, June is one of the better months for Japanese trade. But that surplus in June 2012 was Japan’s last. What followed were 24 months of relentlessly deteriorating trade deficits. The worst series in Japan’s recorded history (far ahead of the second-worst, the fourteen-month period in 1979 and 1980).

For the first six months this year, compared to the same period last year, the trade deficit soared 57%!

Here is what the flaming success of Abenomics looks like, boiled down to one chart:

The debacle was spread across the board, starting with its largest trading partner, both in terms of exports and imports, China. Since about one-third of Japan’s exports to China get transshipped through Hong Kong, I combine them. So exports to China and Hong Kong edged up 1.6%. But imports from them jumped 10.6%. And the trade surplus in 2013 of 57 billion yen turned into a trade deficit of 63 billion yen. That’s a deterioration of 120 billion yen. Even exports to the US, its second largest trade partner, declined 2.7%, while imports from the US rose 6.8%.

The export declines were spread across the largest categories: transportation equipment (cars, trucks, et cetera, which account for nearly a quarter of all exports) dropped 0.6%; machinery (about a fifth of all exports) down 0.4%; electrical machinery (semiconductors, audio-video equipment, batteries, et cetera) down 5.1%; manufactured goods (steel products, et cetera) down 0.2%.

And imports rose across the largest categories. Mineral fuels (petroleum, LNG, coal, et cetera), which make up nearly one-third of all imports, rose 8.3%.

I can already hear the voices that blame the imports of LNG and coal required to feed the fossil-fuel power plants that have replaced the capacity of the shut-down nuclear reactors. But wait. Imports of LNG and coal combined totaled 749 billion yen. If Japan hadn’t imported any LNG or coal –  which is impossible even with all nuclear power plants running at full tilt –  it would still have had a trade deficit of 73 billion yen.

The problem lies in a strategic shift undertaken by Japan Inc –  offshoring –  to take advantage of cheap labor in China and elsewhere, though it lagged behind the US in that respect. Japan Inc accelerated that shift after the 3/11 earthquake and tsunami, when supply chains in Japan collapsed. And when Abenomics came along, they redoubled their efforts at offshoring: the devaluation of the yen allows them to translate revenues and profits from foreign operations into weaker yen, thereby performing paper miracles on their financial statements. And promises of additional devaluations make that incentive to offshore even juicier.

Some of the offshore production is then imported. So imports of the largest categories all rose: electrical machinery up 7.7%, machinery up 14.2%, and manufactured goods up 14.0%. Japanese companies used to excel in these categories. While some have gotten clobbered by international competitors, others still excel at designing and making these products. They just don’t manufacture them in Japan anymore.

Given the incentives that Abenomics gives Japan Inc to invest and produce overseas, rather than in Japan, these dynamics are unlikely to change direction. And the ballooning trade deficits will become an albatross around the economy’s neck. But don’t expect consumers to jump in enthusiastically and help out. They’re squeezed by stagnating incomes accompanied by inflation and a consumption tax hike –  what I call “inflation without compensation”. It knocked their purchasing power overall down by 3.6% for all items, including services, year over year, and by 5.6% for goods. {2} And they’re unlikely to pull Japan out of its post-tax-hike funk anytime soon.




Companies are now grappling with it, after the surge of consumer and corporate spending before the tax hike. And a terrible corporate hangover has set in. Read Japan Inc’s Worst Quarterly Outlook Since The 2011 Earthquake:

Categories: Uncategorized

Germany Bucking Toxic, Nation-State Eroding …

… Transatlantic Trade and Investment Partnership

by Yves Smith

Naked Capitalism (July 17 2014)

We’ve inveighed against the dangers of two Orwellianlly-branded “trade” deals, the TransPacific Partnership and its ugly twin, the Transatlantic Trade and Investment Partnership. Both negotiations have been shrouded in a deeply troubling level of secrecy, with their draft terms being given classified status and Congressmen kept largely in the dark as to their content (summaries provided by the US Trade Representative aren’t remotely adequate, since as in all contracts, much hinges on exact language).

The business press in the US has tended to amplify Administration messaging, that both deals are moving forward. In fact, as we’ve covered in some detail, the TransPacific Partnership is in quite a lot of trouble, and as we’ll discuss below, the Transatlantic Trade and Investment Partnership is also going pear shaped.

So far, it’s the TransPacific Partnership that has gotten the press in the US, due in part to its strategic role (it’s meant to isolate China) as well as the heated opposition of some of the intended partners to key terms (such as Chile and Malaysia to provision that would prevent them from having the sort of capital controls that reduced the damage that they suffered during the financial crisis).

Congress, in a remarkable show of spine, has gone into opposition over the TPP due to the Administration’s refusal to provide remotely adequate information about the negotiations, as well as concern over what they can see of the provisions.

The controversy over the TPP increased when Wikileaks exposed some draft chapters, one on intellectual property and the other on the environment, which show how bad the deals were as well as how the “partners” oppose many of the sections of the drafts.

But heretofore, the assumption has been that the Transatlantic Trade and Investment Partnership is moving towards completion, and the only risk is whether Congress will dig in its heels as it has with the TPP. That assumption now looks questionable, since Germans are wildly opposed to the deal, and the souring of US/German relations over US wiretapping and spying (and its refusal to commit to a big change in conduct) means the German government is much more likely to stand up to the US and refuse to go along with provisions that are destructive to national interests, namely, secret “investor” panels that supercede national laws and regulations.

By way of background, we described how these panels work in a 2013 post:


Even though no one has seen the exact language of the text, since it is being kept under wraps, both deals are believed to strengthen and extend investor rights, which means give them easier access to the courts. Consider this description from a July presentation by Public Citizen:

What is different with TAFTA [pending Trans Atlantic Free Trade Agreement] (and TPP) is the extent of “behind the border” agenda

* Typical boilerplate: “Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements” …

* These rules are enforced by binding dispute resolution via foreign tribunals with ruling enforced by trade indefinite sanctions; No due process; No outside appeal. Countries must gut laws ruled against. Trade sanctions imposed … US taxpayers must compensate foreign corporations.

* Permanence –  no changes without consensus of all signatory countries. So, no room for progress, responses to emerging problems

* Starkly different from past of international trade between countries. This is diplomatic legislating of behind the border policies –  but with trade negotiators not legislators or those who will live with results making the decisions.

* Three private sector attorneys, unaccountable to any electorate, many of whom rotate between being “judges” & bringing cases for corporations against governments … Creates inherent conflicts of interest …

* Tribunals operate behind closed doors –  lack basic due process

* Absolute tribunal discretion to set damages, compound interest, allocate costs

* No limit to amount of money tribunals can order governments to pay corporations or investors

* Compound interest starting date if violation new norm (compound interest ordered by tribunal doubles Occidental versus Ecuador $1.7 billon award to $3 billlion plus

* Rulings not bound by precedent. No outside appeal. Annulment for limited errors.

And that’s alarming in light of some of the cases already brought before these panels in existing trade agreements like NAFTA. For instance:

* Eli Lilly is suing the Canadian government for not having the same extremely pro-drug-company patent rules. It is seeking $500 million in damages for two drugs that Canada approved to be sold as generics. If Eli Lilly prevails, other drug companies are sure to follow suit.

* Vattenfal, a Swedish company, is a serial trade pact litigant against Germany. In 2011, Der Spiegel reported on how it was suing for expected one billion euros plus losses due to Germany’s program to phase out nuclear power:

According to Handelsblatt, Vattenfall has an advantage in seeking compensation because the company has its headquarters abroad. As a Swedish company, Vattenfall can invoke investment rules under the Energy Charter Treaty (ECT), which protects foreign investors in signatory nations from interference in property rights. That includes, according to the treaty’s text, a “fair and equitable treatment” of investors.

The Swedish company has already filed suit once against the German government at the ICSID. In 2009, Vattenfall sued the federal government over stricter environmental regulations on its coal-fired power plant in Hamburg-Moorburg, seeking 1.4 billion euros plus interest in damages. The parties settled out of court in August 2010.

* Phillip Morris threatened suit against Australia for its plain cigarette packing rules and is suing Uraguay for anti-smoking regulations.

Now consider what this means. These companies are not suing for actual expenses or loss of assets; they are suing for loss of potential future profits. They are basically acting as if their profit in a particular market was guaranteed absent government action. And no one else enjoys these rights. Consider highly paid workers in nuclear plants. Will they get payments commensurate with the premium they’ve lost over the balance of their working lives from the phaseout of nuclear power? Will cigarette vendors in Australia get compensated for the decline in their sales? Commerce involves risk, which means exposure to loss, yet foreign investors want, and seem able to get, “heads I win, tails you lose” deals via these trade agreements.

And it’s even worse than you imagine once you understand how these panels work. Recall how Public Citizen mentioned the role of the panelists who go between working for the companies and serving on the panels? A small and tight-knit group has disproportionate influence (click to enlarge):

Consider the implications of the fact that the fifteen, and the larger community of panel “regulars”, work both sides of the street. They draw cases that go before the trade panel, as well as hear them. Thus it’s in their interest to issue aggressive rulings in order to facilitate more cases being filed.

Not surprisingly, this self-reinforcing system is, as expected, producing more claims even before its gets its hoped-for turbo-charging through the pending trade deals:




Back to the current post. You may have noticed the suit against Germany for phasing out nuclear power. That has brought the issue of the investor panels to the attention of the press and public. In the Huffington Post, Larry Cohen describes the widespread opposition to the Transatlantic Trade and Investment Partnership in Germany:



As negotiations move forward on the Transatlantic Trade and Investment Partnership (TTIP), a wide range of German elected and civic leaders are in disbelief that the US remains serious about including Investor-State Dispute Settlement (ISDS). From the German perspective, that’s a failed twentieth century approach …

By most benchmarks, Germany is the most successful large economy in the world, with a rising standard of living, an educational system that creates real opportunity to move from school to work, a deep economic safety net, and worker participation in economic decision making …

Much more could be said about the divergent paths of our two nations in the past sixty years. But thanks to a suit brought by the Swedish energy firm Vattenfall against the German government, opposition to ISDS is nearly universal …

Ironically back in the US, proponents of TTIP and the more imminent Trans Pacific Partnership (TPP) criticize those of us who oppose ISDS as anti-trade Neanderthals. But in my discussions with German leaders last week, it is clear that the US looks like the Neanderthal by supporting ISDS, coupled with dramatic increases here in economic inequality and nearly unlimited influence by corporate America in all aspects of our lives. If [US Trade Representative Michael] Froman proceeds with ISDS in the final version of the TPP, Germans and most other Europeans will never trust a future TTIP, even if there are ISDS carve outs for certain national legislation. They can read the handwriting on the TPP wall very clearly.




Yves here. This is priceless. Even though Japan and other prospective TPP partners have serious reservations about the investor panels, along with numerous other provisions, Froman appears to be operating as if he can bulldoze them, when the Japanese media indicates that this is a non-starter (and if Japan is not in the deal, there is no deal). But the US messaging (and the US media readings are likely to get more play in Europe than the Asian accounts) are that the talks are on track. So the overhyping of the state of play with the TPP may backfire with the TTIP talks. It would be delicious to see the Obama Administration hoist on its propaganda petard.

Links: The original version of this article, at the URL below, contains links to further information not included here.

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​Refusing to share

How the West created BRICS New Development Bank (July 21 2014)

One of my high school history teacher’s favorite topics was the European revolutionary movement of 1848, or as he would put it, time and again, ‘the turning point where Europe failed to turn’.

“What do you think the test will be on?” the students would ask each other sarcastically, after another lengthy rumination, “The turning point where Europe failed to turn?”

But I never forgot the phrase or the events it denoted, and I think that current economic crisis could well go down in history as the turning point where the entire Western world failed to turn. The recent creation of the New Development Bank by the BRICS nations (Brazil, Russia, India, China and South Africa), which will compete with the IMF and World Bank, is yet another example of how international control is skittering away from those nations that are failing to adapt to a changing world.

In a certain sense, falling behind like this is actually quite an achievement, given that Western countries not only invented the IMF and World Bank –  up until now, the pre-eminent international lenders of last resort –  but also gave themselves a controlling stake within both institutions. They set the rules of the game. Therefore, all they had to do to stay on top of that game was throw the other players a crumb once in a while.

It’s not exactly rocket science.

When people or countries feel they have a chance to succeed, they are motivated to participate in international institutions. Generating this mindset doesn’t even demand that the rules of the game be completely fair or that the rewards for success be particularly large. Most people are willing to settle for a reasonable chance of success and modest rewards when it occurs. Provide these things and you can spin out any advantage you may have for a startlingly long time.

One of the modest rewards implicitly offered by the IMF and World Bank was the chance to someday participate within these institutions as an important partner, that is, to have a real say in the projects these institutions undertake.

For nations are not accorded equal voting power at the IMF and World Bank. Instead, voting power is allocated based on the economic strength of a country. Decisions are not made based on what most people want, but on what the richest people want. This means that the top five shareholders (the US, Japan, Germany, the UK and France) hold nearly forty percent of total voting power at these institutions, but only about ten percent of the world’s population, while countries like China and India, each with approximately twenty percent of the world’s population, enjoy only about two to three percent of total voting power.

For a long time, this voting system was justified with the argument that those nations that were habitually lenders and not borrowers should have the final say in IMF and World Bank decisions. Implicit in this was the idea that any nation that managed to transform itself into a major world economic power with an economy stable enough to make it a habitual lender instead of a habitual borrower could expect to have its shares reallocated and thereby acquire a meaningful stake in global economic decision-making.

That was hard, some would even say it was grossly unfair, but it was within the realm of the possible. All those populous nations that were allotted miniscule fractions of voting power at the IMF and World Bank would have to do was to put their noses to the grindstone and work their way to success.

As they say in German “hope dies last”.

The Germans don’t offer any further advice about what happens when it does die, but I think we’re about to find out.

People in BRICS countries did put their noses to the grindstone and work themselves silly. And in the end, they made it. BRICS countries now make substantial contributions to the international system, from international lending programs to United Nations peacekeeping missions, and they do so at a time when many Western nations have scaled back their own contributions.

But the promised reward failed to materialize.

As of 2010, despite having the world’s second-largest economy, China is still locked out of the IMF’s top five shareholders, with only 3.81 percent of total voting power, while Brazil, with an economy comparable to France and the UK, is only permitted to wield 1.72 percent of votes at the institution (France and the UK hold 4.29 percent each).

The top five IMF shareholding nations (as well as other Western countries which are also over-represented at the institution) have literally refused to make room at the table for these other powerful states, which could, with a little compromise, quite easily have become their natural allies. BRICS countries had played, and succeeded at, the global economic game in order to have a chance of attaining a meaningful and respected position within the international community. They had not done all that work just so that traditional power-brokers like the IMF and World Bank could continue to ignore them. It’s not too surprising that under those circumstances anyone would look for alternatives.

Here, the inadvertent generosity of Western nations truly becomes apparent, because not only did they provide the BRICS with a reason to look for alternatives ways of acting on the world stage, they also considerately gave most of the rest of the world a reason to join them.

For a very long time, the US and other Western States, which together control most aspects of IMF and World Bank lending, abused their position at those institutions in the service of their own national interests.

For example, the IMF and World Bank repeatedly loaned to Mobutu Sese Seko, dictator of the Democratic Republic of Congo (then Zaire) in order to keep him –  and the enormous natural resources within his country –  out of the communist camp during the Cold War. Mobutu blew the cash on whatever struck his fancy and the people of the Congo spent decades trying to pay back the money –  in fact, by the late 1980s they had paid billions of dollars just in fees related to the nation’s debt, never mind the debt itself. Such irresponsible and short-sighted lending trapped the citizens of the DRC, and many others like them, in a perpetual debt cycle.

When powerful Western states working in tandem with corporate banks, began to set down increasingly harsh loan conditions through the IMF and World Bank, there was little these nations could do about it. The practice of setting conditions on loans is often dressed up with various justifications in official rhetoric, but at bottom, the IMF, the World Bank and the countries and companies behind them, operate in a way that many petty drug dealers would recognize. They hook a victim with cheap goods and a lot of talk and later they up their demands. It’s not an endearing modus operandi.

And some of these IMF and World Bank conditions were not a great deal more pleasant than having one’s fingers cut off. One core demand over the past twenty years has been privatization. This meant that nations who received loans from the IMF and World Bank were forced to privatize public services, even when doing so made no economic sense. For example, it was not uncommon for the World Bank to demand that a developing country entice private companies to bid for infrastructure contracts. These incentives usually included allowing the company to work in a completely tax-free environment and promising a certain level of profitability for the enterprise. In the case of a power plant, a country might literally oblige itself to pay for a minimum amount of power produced regardless of how much energy was actually used by its population.

That meant that private companies, usually based in Western countries, landed fat contracts to build and run something that there was literally no demand for, but for which the people of a nation ultimately had to foot the bill.

People in these nations could, of course, always hope that schemes like the privatization one were somehow magically inspired and that the combination of non-tax-paying, overproducing private ownership would, for inscrutable reasons, prove the unerring fertilizer of economic growth. They could hope this, in much the same way that you could hope to throw a few beans out the window and end up with a magic beanstalk.

But eventually hope dies, even if it does die last, and these heavily indebted peoples quite naturally begin to ask themselves what could possibly be worse than another World Bank or IMF loan. When people start thinking like that they will only continue with what they are doing if there is really, truly no other choice. In other words, if you are going to ignore the winners of the global economic game (that is, the BRICS) and subject the losers (developing nations like the Democratic Republic of Congo) to an impossible web of harsh conditions and crony capitalism, it shouldn’t be too surprising that these two camps might someday get together.

Looked at this way, the New Development Bank isn’t even a bold step –  it’s a no-brainer. Like 19th-century monarchs, Western nations have managed to give nearly everyone a reason to want rid of them, and like an absolute monarch, the IMF and World Bank’s twisted voting structures are looking increasingly anachronistic. The world is turning, but Western leaders are only trying to hit the brakes, remaining in a comfort zone that does not require them to face a new reality that requires higher levels of compromise and cooperation.

The New Development Bank doesn’t need to be fair, it doesn’t need to be perfect, it doesn’t even need to have that much cash to succeed. All it needs to do is be better than the IMF and World Bank, and that isn’t going to be a particularly challenging task.


Currently a Research Associate at the INSYTE Group, Dr Roslyn Fuller has previously lectured at Trinity College and the National University of Ireland. She tweets at @roslynfuller

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

Categories: Uncategorized

The TPP and Civil War

2014/07/26 1 comment

Global Trickle Down

by Elliot Sperber

CounterPunch (July 16 2014)

For those who haven’t heard, a major offensive is being planned in the ongoing war between the classes. While the poor, and what remains of the middle and the working classes, suffer defeat after defeat, the wealthy are hammering out yet another “free trade agreement”. Memorably described by Global Trade Watch Director Lori Wallach as “NAFTA on steroids”, the Trans-Pacific Partnership – or TPP – is the largest such agreement to come along since the creation of the WTO in 1995.

Negotiated in secret between the US and eleven other Pacific nation-states (including Chile, Peru, Vietnam, Australia, Singapore, Malaysia, and Japan), the deal is regarded as central to Obama’s economic agenda (as well as ancillary to his “pivot to Asia”). And yet, despite its list of horrors (which include the predictable assaults on labor, and the further desecration of the global environment, along with the virtual enclosure and privatization of the public domain via patent and copyright protections), the further aggrandizement of corporate power, and the further privatization of the commons, doesn’t seem too novel; perhaps because corporations already pretty much run the political-economic show.

After all, though those objecting to the TPP warn that its passage will weaken governments’ ability to regulate corporations and constrain corporate abuses, as it presently stands the corporate interests behind the TPP are already powerful enough to keep the agreement’s contents (aside from a few leaks) virtually secret. The few politicians privy to the deal’s contents are effectively banned from discussing its substance with their constituencies. And, as we’ve time and again witnessed, widespread public dissent is simply ignored. In other words, so-called “national sovereignty” (which many TPP protesters fear is being undermined) in many respects does not risk taking a backseat to corporate interests – for the very reason that they aren’t indistinct to begin with.

Let’s not forget, although many of us have had it hammered into our heads that we live in a democracy, the fact of the matter is that we live in a “representative democracy” – one that represents the wealthy – in which money is equated with political speech – that is, a plutocracy.

In addition to the fact that the Democratic and Republican parties are corporate parties through and through (who represent the interests of the rich nearly exclusively), those decrying the loss of national sovereignty sound particularly absurd considering the fact that they echo throughout a political context characterized by extreme abuses of sovereign power – abuses such as Obama’s “disposition matrix” (which, for those who haven’t been paying attention, allows the Executive to assassinate anyone s/he likes, without any meaningful due process of law). In light of this, perhaps, we should take a moment to briefly examine the concept of sovereignty.

As Carl Schmitt, the notorious Nazi jurist – whose thoughts on sovereignty are among the most influential of the past century – pithily put it: “Sovereign is he who decides on the exception”. That is, the sovereign is the person able to decide what the law is by deciding what and where the law’s exceptions reside, and has the capacity to declare a “state of exception”, suspending the law entirely.

The sovereign is s/he “who decides on the exception”. Given this, it is highly revealing that, in discussing his official function, George W Bush described himself as “the decider” – the one who decides. And when Obama assumed Bush’s office, this baton of sovereignty – this power to decide – passed on to him. Now Obama decides. He decides, for instance, that certain practices (targeting people for assassination without due process of law, or indefinitely detaining people without charging them with a crime, or killing people with drones throughout the world) are exceptions to the law. As such, demands for the protection of sovereignty (of “the ultimate power to command”) sound confused at best.

Rather than lamenting the loss or diminution of national sovereignty to corporate hegemony, then, we should instead consider the thoughts of the late Zapatista Comandante Ramona who maintained that, instead of seizing power, emancipatory political movements ought to break power into little pieces so that all can exercise some degree of (noncoercive) power – and that none will be subject to (coercive) power. That is, corporate sovereignty ought to be rejected, but not in favor of national sovereignty. National sovereignty ought to be rejected too.

In light of the above, some of those protesting the TPP to some degree (to me, at least) resemble the subculture of people obsessed with so-called “chemtrails”. This, of course, should not be construed to mean that TPP protesters are conspiracy theorists. What’s commensurable is just the utter superfluousness of their respective concerns.

Chemtrail enthusiasts, let us recall, who are disturbed by lingering condensation trails left in the sky by passing jets, believe that a government plot to control the weather is poisoning the world with various pollutants. Yet, while chemtrail theorists excite themselves over what may not even exist, mountains of firmly established factual reports point to the prevalence of actual pollutants in the environment causing epidemic rates of cancer, not to mention global warming, and the acidification and death of the ocean, among other actual, factual problems. Why don’t chemtrail obsessives concern themselves with these firmly documented harms?

Likewise, TPP protesters (like Ralph Nader, and other liberals) ought to recognize that though the harms expected to accompany the TPP are projected to exceed those that accompanied NAFTA, the TPP is itself just a symptom, a product, of the capitalist system subtending it. For even if the TPP is defeated, capitalism will just produce more trade agreements like it. That’s just what capitalism does. In addition to producing high-tech gadgetry – not to mention wars, ecocide, and widespread poverty, along with extreme concentrations of wealth – capitalism produces these inequitable trade agreements. So why not just go to the root of the problem – the radix (from which the word radical – as well as the word rational – derives)?

Some, of course, may object to this characterization of capitalism as an economic system that (re)produces poverty. But capitalism is hardly the efficient system its profiteers, and their minions, insist that it is. Just consider the relation capitalism has to the most basic economic product there is: food.

Most would probably agree that an economy’s purpose is the production of basic services and goods. Within capitalism, however, this is not exactly the case. The primary purpose within capitalism is the extraction of profits. Goods, or commodities, are produced for exchange (exchange-value) rather than for use (use-value). And since goods are produced not for their own sake, but as a means to acquire money, one encounters a fundamental conflict of interest in the capitalist production process. For instance, farmers who produce enough crops to feed their communities ultimately find themselves forced out of business in a capitalist system. Though successful in the sense that they produce a large amount of food, and provide sustenance, in a capitalist system this very productiveness renders them failures. For, within the upside-down logic of capitalism, a too-productive farmer, by lowering demand (by satisfying a need) leads the price of his or her product to drop. And the more the farmer produces, the less valuable the food becomes. This valuation/devaluation ultimately renders the farmer both unable to pay her debts and forced out of business. This is why millions of tons of perfectly good food are intentionally destroyed each year – not only is food sacrificed to profit, in a commodity economy food items become instruments of a low-burning civil war. (Of course, by decommodifying food – by treating it as a commons – this problem could be corrected. Yet, decommodification is anathema to capitalism. Capitalism runs in the opposite direction, attempting to privatize and commodify – and thereby profit from – everything).

Rather than meeting human needs directly, then, capitalism meets (some of) these needs incidentally – actively undermining human well being in the process, by artificially maintaining scarcity. This is why Henry Ford, faced with the problem of having new models of cars to sell to a public unwilling to trade in their perfectly functioning Model-Ts, contributed to the development of what has come to be known as planned obsolescence. That is, he developed cars that would break down and need to be replaced after awhile. Commodities (like computers) that aren’t rendered obsolete by technological advances are designed to break in a capitalist society. To be sure, manufactured scarcity, as well as planned obsolescence, and other strategies designed to create demand and profit, are integral to capitalism; these do little, however, to provide goods and services.

Capitalism’s general tendency to deprive (some degree) of goods and services from all but the wealthy is illustrated by another example. Due to the rising price of real property, the owner of a senior residence home in Brooklyn – which provides housing for vulnerable members of the community – is evicting this population, rendering them homeless. Why? In order to transform this necessary housing into luxury condominiums, of course. In other words, necessary housing for a vulnerable population of elderly people is valued less than, and subordinated to, luxury housing (which by definition is unnecessary). It is this upside-down system of values (which is anti-democratic – subordinating basic housing for the many to luxury housing for the few, for instance) that needs to be corrected.

While it may be counter to the reigning ideology, it is nevertheless the case that, rather than being a democratic political-economy (animated by a concern for the well being of all) capitalism is actually a highly aristocratic economic form, concerned with what is best for those it considers the aristos, the best (which, within a system that values things according to their monetary worth, turns out to be the rich). This is precisely the aristocratic logic undergirding “trickle down” theories. What is in the interest of the best, the theory holds, is in the interest of the many as well – as it will “trickle down” to the rest.

Unlike (aristocratic) capitalism, however, a society aspiring to actually democratic social relations ought to concern itself not with what is in the interest of the “best”, or even with the “majority”, but with the flourishing of all people. As long as an economy functions according to the demands of exchange-value, instead of use-value, though, we will wind up not only subordinating the well-being of all to the luxury of some, we will continue to produce avoidable harms such as global warming, famine, and poverty, along with trade agreements like the TPP. Rather than narrowly focusing on the TPP, then, we ought to direct our attention to developing an actually egalitarian, critical democracy. Unlike the capitalistic system, which regards everything as alienable (that is, for sale), such a project would not only recognize, for instance, that political rights must be inalienable (not for sale); it would recognize that the preconditions for these rights (such as food, and housing, among other conditions necessary for human flourishing) must be decommodified and inalienable as well. Humankind may yet have time to recognize this.


Elliot Sperber is a writer, attorney, and teacher. He lives in New York City, and can be reached at

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2014/07/25 1 comment

The Untold Story in the NSA Spying Scandal

High-Level NSA Whistleblower Says Blackmail is a Huge –  Unreported –  Part of Mass Surveillance

by WashingtonsBlog (July 21 2014)

It is well-documented that governments use information to blackmail and control people.

The Express reported last month:



British security services infiltrated and funded the notorious Paedophile Information Exchange in a covert operation to identify and possibly blackmail establishment figures, a Home Office whistleblower alleges.

Whistleblower Mr X, whose identity we have agreed to protect, became a very senior figure in local government before retiring a few years ago.

He has given a formal statement to that effect to detectives from Operation Fernbridge …

“And he said [the pedophile group] was being funded at the request of Special Branch which found it politically useful to identify people who were paedophiles …”



Section 11 of the Criminal Law Amendment Act 1885 made gross indecency a crime in the United Kingdom, which included male gay sex.  The Amendment was so frequently used to blackmail gay Brits that it was dubbed the “Blackmailer’s Charter”.

There is widespread speculation that Pope Benedict resigned because of sexual blackmail.

And the American government has a long history of blackmailing people –  including high-level officials – with knowledge of their sexual peccadilloes.

Wikipedia notes:



The Lavender Scare refers to the fear and persecution of homosexuals in the 1950s in the United States, which paralleled the anti-communist campaign known as McCarthyism.

Because the psychiatric community regarded homosexuality as a mental illness, gay men and lesbians were considered susceptible to blackmail …

Former US Senator Alan K Simpson has written: “The so-called ‘Red Scare’ has been the main focus of most historians of that period of time. A lesser-known element … and one that harmed far more people was the witch-hunt McCarthy and others conducted against homosexuals”.



FBI head Hoover was famous for blackmailing everyone …  including politicians.  The New York Times reports:



J Edgar Hoover compiled secret dossiers on the sexual peccadillos and private misbehavior of those he labeled as enemies –  really dangerous people like …  President John F Kennedy, for example.



Alfred McCoy –  Professor of history at the University of Wisconsin-Madison –  provides details:



Upon taking office on Roosevelt’s death in early 1945, Harry Truman soon learned the extraordinary extent of FBI surveillance. “We want no Gestapo or Secret Police”, Truman wrote in his diary that May. “FBI is tending in that direction. They are dabbling in sex-life scandals and plain blackmail.”

After a quarter of a century of warrantless wiretaps, Hoover built up a veritable archive of sexual preferences among America’s powerful and used it to shape the direction of US politics.  He distributed a dossier on Democratic presidential candidate Adlai Stevenson’s alleged homosexuality to assure his defeat in the 1952 presidential elections, circulated audio tapes of Martin Luther King, Junior’s philandering, and monitored President Kennedy’s affair with mafia mistress Judith Exner. And these are just a small sampling of Hoover’s uses of scandal to keep the Washington power elite under his influence.

“The moment [Hoover] would get something on a senator”, recalled William Sullivan, the FBI’s chief of domestic intelligence during the 1960s, “he’d send one of the errand boys up and advise the senator that ‘we’re in the course of an investigation, and we by chance happened to come up with this data on your daughter …’ From that time on, the senator’s right in his pocket”. After his death, an official tally found Hoover had 883 such files on senators and 722 more on congressmen.

With a few hundred cable probes and computerized decryption, the NSA can now capture the kind of gritty details of private life that J Edgar Hoover so treasured and provide the sort of comprehensive coverage of populations once epitomized by secret police like East Germany’s Stasi. And yet, such comparisons only go so far.

After all, once FBI agents had tapped thousands of phones, stenographers had typed up countless transcripts, and clerks had stored this salacious paper harvest in floor-to-ceiling filing cabinets, J Edgar Hoover still only knew about the inner-workings of the elite in one city: Washington, DC.  To gain the same intimate detail for an entire country, the Stasi had to employ one police informer for every six East Germans – an unsustainable allocation of human resources. By contrast, the marriage of the NSA’s technology to the Internet’s data hubs now allows the agency’s 37,000 employees a similarly close coverage of the entire globe with just one operative for every 200,000 people on the planet.

In the Obama years, the first signs have appeared that NSA surveillance will use the information gathered to traffic in scandal, much as Hoover’s FBI once did. In September 2013, the New York Times reported that the NSA has, since 2010, applied sophisticated software to create “social network diagrams … unlock as many secrets about individuals as possible … and pick up sensitive information like regular calls to a psychiatrist’s office, late-night messages to an extramarital partner”.

By collecting knowledge – routine, intimate, or scandalous – about foreign leaders, imperial proconsuls from ancient Rome to modern America have gained both the intelligence and aura of authority necessary for dominion over alien societies. The importance, and challenge, of controlling these local elites cannot be overstated. During its pacification of the Philippines after 1898, for instance, the US colonial regime subdued contentious Filipino leaders via pervasive policing that swept up both political intelligence and personal scandal. And that, of course, was just what J Edgar Hoover was doing in Washington during the 1950s and 1960s.

According to James Bamford, author of two authoritative books on the agency, “The NSA’s operation is eerily similar to the FBI’s operations under J Edgar Hoover in the 1960s where the bureau used wiretapping to discover vulnerabilities, such as sexual activity, to ‘neutralize’ their targets”.

The ACLU’s Jameel Jaffer has warned that a president might “ask the NSA to use the fruits of surveillance to discredit a political opponent, journalist, or human rights activist. The NSA has used its power that way in the past and it would be naive to think it couldn’t use its power that way in the future”. Even President Obama’s recently convened executive review of the NSA admitted: “In light of the lessons of our own history … at some point in the future, high-level government officials will decide that this massive database of extraordinarily sensitive private information is there for the plucking”.

Indeed, whistleblower Edward Snowden has accused the NSA of actually conducting such surveillance. In a December 2013 letter to the Brazilian people, he wrote, “They even keep track of who is having an affair or looking at pornography, in case they need to damage their target’s reputation”. If Snowden is right, then one key goal of NSA surveillance of world leaders is not US national security but political blackmail –  as it has been since 1898.


Today, the NSA tracks people’s porn-viewing habits in order to discredit activists.  The NSA also gathers and keeps nude and suggestive photos of people in order to blackmail them.

The Associated Press notes:



The stockpiling of sexually explicit images of ordinary people had uncomfortable echoes of George Orwell’s Nineteen Eighty-Four (1949), where the authorities –  operating under the aegis of “Big Brother” –  fit homes with cameras to monitor the intimate details of people’s home lives.

The collection of nude photographs also raise questions about potential for blackmail. America’s National Security Agency has already acknowledged that half a dozen analysts have been caught trawling databases for inappropriate material on partners or love interests. Other leaked documents have revealed how US and British intelligence discussed leaking embarrassing material online to blacken the reputations of their targets.



FBI whistleblower Sibel Edmonds alleged under oath that a recently-serving Democratic Congresswoman was secretly videotaped – for blackmail purposes –  during a lesbian affair. There have been allegations of blackmail of gay activities within the US armed forces for years.

And even the raw data on American citizens collected by the NSA is shared with Israel.  This likely includes Congress members and other politicians, as well.

Bill Binney –  the NSA’s senior technical director and head of the agency’s global digital information gathering program –  told Washington’s Blog:



Bulk collection of everything gives law enforcement all the data they need on every citizen in the country. And, it gives NSA all that information on everyone too.  Makes them akin to a J Edgar Hoover on super steroids.



Binney explained to us the importance of this story:



Being able to blackmail people is one major aspect of bulk/mass collection that has not been talked about. For example, they could use this data to blackmail members of governments around the world. But, surely just to get them to do what they wanted them to do. Just like J Edgar Hoover did.

This is on top of the ability to do world-wide industrial espionage.



Indeed, Binney tells us that the NSA’s blackmail tactics are the same as those used by the KGB and Stasi:



This is just one of the ways to make controlling people possible.  Standard KGB/Stasi tactics.



Binney told the Guardian recently: “The ultimate goal of the NSA is total population control”.

And Binney tells Washington’s Blog that NSA surveillance allows the government to target:

* “[CIA head] General Petraeus and General Allen and others like [New York State Attorney General] Elliot Spitzer”

* “Supreme Court Judges, other judges, Senators, Representatives, law firms and lawyers, and just anybody you don’t like … reporters included”

NSA whistleblower Russell Tice (a key source in the 2005 New York Times report that blew the lid off the Bush administration’s use of warrantless wiretapping), also says:

* The NSA is spying on and blackmailing its overseers in Washington, as well as Supreme Court judges, generals and others

* The agency started spying on Barack Obama when he was just a candidate for the Senate

And senior NSA executive Thomas Drake explains to Washington’s Blog that the NSA can use information gathered from mass surveillance to frame anyone it doesn’t like.

Links: The original version of this article, at the URL below, contains many links to further information not included here.

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What Putin Knows

2014/07/25 1 comment

Putin Knows What Happened to MH17, But He’s Not Saying … Yet

by Mike Whitney

CounterPunch (July 22 2014)



We have repeatedly called on all parties to immediately stop the bloodshed and sit down at the negotiating table. We strongly believe that if military action in the East of Ukraine had not been renewed on the 28th of June, this tragedy wouldn’t have happened. However, no one has the right to use this tragedy to pursue their own political aims. Such events should unite and not divide people.

- Russian President Vladimir Putin, Official statement on the downing of Malaysia Airlines flight 17




Lets be clear, both Russia and the US know what happened. They’d have to. Their intelligence and orbital systems saw it all … They’d have to know.

- Omen 4, Zero Hedge comments line



Washington’s plan to “pivot” to Asia by establishing a beachhead in Ukraine and sabotaging trade relations between Europe and Russia, entered a new phase last Thursday when Malaysia Airlines Flight 17 was shot down by a surface-to-air missile launched from east Ukraine. Since then, the western media and prominent members of the US political establishment have used the incident to attack Russia mercilessly and to hold Russian President Vladimir Putin personally responsible for the deaths of the 295 passengers.

On Sunday, the Obama administration launched its most impressive propaganda blitz to date, scheduling appearances for US Secretary of State John Kerry  on all five Sunday morning talk shows where he made unsubstantiated claims that MH17 was shot down by Russia-backed rebels in east Ukraine.  According to Kerry, Russia has not only “supported, armed and trained” the separatists, but also provided them with the missile system (BUK) which was used to bring down the jetliner.

On CBS’s  “Face the Nation”, Kerry said:



We know for certain that the separatists have a proficiency that they’ve gained by training from Russians as to how to use these sophisticated SA-11 systems … there’s enormous amount of evidence, even more evidence than I just documented, that points to the involvement of Russia in providing these system, training the people on them. {1}



Amazingly, Kerry’s claims don’t square with those of his boss, President Barack Obama who admitted on Friday that he didn’t know who shot down MH17 or why. He said, “I think it’s too early for us to be able to guess what intentions those who might have launched the surface-to-air missile might have had … In terms of identifying specifically what individual or group of individuals, you know, personnel ordered the strike, how it came about – those are things that I think are going to be subject to additional information that we’re going to be gathering”.

The fact that neither the contents of the black boxes or the cockpit recordings have yet been revealed didn’t deter Kerry from making accusations and possibly tainting the investigation. Nor did Kerry mention the fact that the Ukrainian military – who also had BUK missile systems in the area – may have mistakenly taken down the airliner. None of the five hosts challenged Kerry on any of his claims. He was able to provide the state’s view of the incident without challenge or debate, just as one would expect in a dictatorship where information is carefully monitored.

And Kerry didn’t stop there either. He went on to claim that Moscow had sent “a convoy several weeks ago of about 150 vehicles with armored personnel carriers, multiple rocket launchers, tanks, artillery, all of which crossed over from Russia into the eastern part of Ukraine and was turned over to the separatists”.

Needless to say, none of the major media or respective Intel agencies (who closely follow activities on the border) have uttered a word about Kerry’s phantom convoy. Without satellite imagery or some other proof, we must assume that Kerry’s claim is about as reliable as his bogus four-page “White Paper” that pinned the use of sarin gas on the Syrian government, a charge that was designed to escalate US involvement in the Syrian war and – as journalist Robert Parry says, “spur President Obama into a quick decision to bomb Syrian government targets”.

It’s also worth noting that the journalist who co-authored Sunday’s piece on Kerry in the New York Times was none other than Michael R Gordon. In 2002 Gordon co-wrote a piece about aluminum tubes with Judith Miller which was intended to scare readers “with images of mushroom clouds” into supporting the war in Iraq.   The story turned out to be complete baloney, but it helped to pave the way for the US invasion as it was intended to do.  Gordon escaped blame for the article, while the discredited  Miller was released.

Now the politicians and the media are at it again; trying to whip up war fever to get the public on board for another bloody intervention. Only this time, the target audience is not really the American people as much as it is Europeans. The real objective here, is to build support for additional economic sanctions as well as a deployment of NATO troops to Russia’s western border. Washington wants to sabotage further economic integration between the EU and Russia so that it can control  the flow of vital resources to the EU, crash the Russian economy, and establish a tollbooth between the continents. It’s all part of Washington’s “pivot” strategy that is critical to maintaining global hegemony throughout the 21st century. This is from the New York Times:



If investigators are able to confirm suspicions that the Malaysia Airlines jet was brought down by a surface-to-air missile fired by pro-Russian rebels who mistook it for a military aircraft, American officials expressed hope that the tragedy will underscore their case that Moscow has been violating Ukrainian sovereignty. While Mr Obama imposed new sanctions on Russia just a day before, Europeans refused to adopt measures as stringent out of fear of jeopardizing their own economic ties …

The Obama administration already has additional sanctions prepared that could be put into effect quickly if Mr Obama so chooses. “The question is does this finally move the Europeans across that threshold”, said a senior administration official, who insisted on anonymity to speak more candidly. “I don’t know, but how could it not?”

European officials were cautious in their initial reactions, seeking time and information before jumping to possible consequences, and were reluctant to assign blame. But most of the passengers were Europeans. The majority of them, 154 in all, were from the Netherlands, where the flight originated, which could increase pressure on European governments to respond … Some analysts said the disaster would invariably lead to a re-evaluation of Europe’s approach to Russia.

“Ultimately this is going to ratchet up pressure within Europe to do what they should have done a long time ago”, said John E Herbst, a former American ambassador to Ukraine now at the Atlantic Council in Washington. “The strength of the opposition to firm steps remains strong, and so it’s not going to go away. It’s just that their position just took a serious hit and it should lead to a stronger set of European sanctions” …

While Mr Obama did not articulate such a position, his former secretary of state, Hillary Rodham Clinton, gave voice publicly to what administration officials were saying privately … “Europeans have to be the ones to take the lead on this. It was a flight from Amsterdam to Kuala Lumpur over European territory. There should be outrage in European capitals.” {2}



Can you see what’s going on? Washington doesn’t care about the facts. What matters to Obama and Company is getting the Europeans on board (“ratcheting up pressure within Europe”) so they can gin up the sanctions, shut off  Russian gas, deprive Putin of a vital source of revenue, and set up shop (NATO bases) in Eurasia. Whether US Intel agencies were involved in the missile attack or not doesn’t change the fact that Washington clearly benefits from the tragedy.

Keep in mind, that the reason Putin hasn’t deployed Russian troops to stop the violence in east Ukraine is because the EU is his biggest trading partner and he doesn’t want to do anything that will put the kibosh on their business dealings.  Russia needs Europe just like Europe needs Russia. They’re a perfect fit, which is why Washington has concocted this goofy plan to throw a wrench in the works. It’s because Washington wants to be the Kingfish in Eurasia and control the continent’s resources as well as the growth of regional economies. To achieve that objective, they need to convince EU leaders and people that Putin is a reckless aggressor who can’t be trusted. That’s why Kiev has launched one provocation after another since the legitimate Ukrainian government (Viktor Yanukovych) was ousted in late February and replaced with by a US-backed junta government. Most of the provocations have gone unreported in the western media, although they have regularly involved violations of international law and crimes against humanity, like the use of incendiary “phosphorous” ordnance on June 12 in Slavyansk {3}, or the bombing of a kindergarten in Slavyansk {4}, or the deliberate bombing of hospitals in east Ukraine {5}, or the killing of journalists {6}, or the firing of mortar rounds across the border into Russia {7}, or the massacre at Odessa where 42 people were burned to death in a fire at the Trade Unions Building that was started by pro-junta hooligans and neo Nazis. None of these were reported in the western media where the coverage is tailored to advance the corporate-state agenda.

All of these incidents were concocted with one goal in mind; to provoke Putin into sending in the tanks thus providing the media with the opportunity to demonize him as the new Hitler. Putin has wisely avoided that trap deciding instead to work collaboratively with EU leaders Merkel and Hollande to try to persuade Ukrainian president Petro Poroshenko to stop the bombardment in the east and agree to an immediate ceasefire.

Poroshenko, however, who takes his orders from Washington, has refused to end the violence. In fact, on Monday the “chocolate king” launched a massive attack on the city of Donetsk, home to nearly one million civilians. Here’s a clip from a report from RT on Monday July 21:



A heavy firefight is underway in a section of the city of Donetsk, with cannonade heard downtown. Self-defense reports of pro-Kiev armored vehicles and infantry trying to cut through defenses next to the central railway terminal.

Ukrainian troops equipped with tanks and armored vehicles are making an attempt to break into Donetsk, a city of approximately 950,000 people, an official of the rebels’ self-proclaimed Donetsk People’s Republic, Sergey Kavtaradze, informed Reuters. {8}



Poroshenko has no intention of complying with a ceasefire, because a ceasefire does not achieve the Obama administration’s objective, which is to lure Putin into a bloody and protracted guerilla war. This is what makes the downing of MH17 so suspicious, because it could very well be a false flag operation intended to hurl more mud on Putin.

In any event, the fate of MH17 isn’t going to be a secret for long. As journalist Pepe Escobar points out in a recent piece in the Asia Times,  Russian intelligence has collected tons of data that will help connect the dots. Here’s a clip from Escobar’s latest titled “It was Putin’s missile?”:



Russian intelligence (has) been surveilling/tracking everything that happens in Ukraine 24/7. In the next 72 hours, after poring over a lot of tracking data, using telemetry, radar and satellite tracking, they will know which type of missile was launched, from where, and even produce communications from the battery that launched it. And they will have access to forensic evidence. {9}



So, one way or another, we’re going to know what happened.  The US and Russia have the data they need to figure out where the missile was launched and who launched it. They probably even have recordings of  communications between Air Traffic Tower and the airliner. They know it all, but they’ll probably be cautious about what they reveal and when they reveal it.

My guess, is that Putin will drag his feet to see whether the investigation is thorough, transparent and even-handed or an elaborate hoax used to discredit him in the eyes of his trading partners.

Clearly, the Obama team see this as an opportunity to do a number on Putin, so they could be tempted to use fake evidence like the grainy photos that popped up in the New York Times some months ago that were supposed to prove that Russian military experts were secretly directing the rebellion in east Ukraine. (The photos were fake.) If they try a stunt like that this time around, Putin will be ready for them. And, of course, if he has solid proof that the plane was blown up by Poroshenko’s henchmen, then there could be hell to pay. In fact, it might just bring Obama’s proxy war to a screeching halt.

One can only hope.












Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press, 2012). Hopeless is also available in a Kindle edition. He can be reached at

Categories: Uncategorized

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