Crony Capitalism Out of Control

Big Pharma

by Ralph Nader

The Nader Page (November 21 2014)

Two recent news items about the voracious drug industry should call for a supine Congress to arouse itself and initiate investigations about the pay-or-die drug prices that are far too common.

The first item – a page one story in the New York Times – was about the Cystic Fibrosis (CF) Foundation, which fifteen years ago invested $150 million in the biotechnology company Vertex Pharmaceuticals to develop a drug for this serious lung disease.

On November 19, the Foundation reported a return of $3.3 billion from that investment. Kalydeco, the drug developed with that investment, is taken daily by CF patients (who can afford it) and is priced at $300,000 a year per patient. Who can pay that price?

The second news release came from the drug industry funded Tufts Center for the Study of Drug Development. The Center’s Joseph DiMasi asserts that the cost of developing a new prescription medicine is about $2.558 billion, significantly higher than the previous estimate of $802 million that the Center claimed in 2003.

The drug industry promoters use this ludicrous figure to justify sky-high drug prices for consumers. Unfortunately, the criticism of this inflated number does not receive adequate media attention.

Half of the DiMasi assertion is opportunity costs foregone if the drug company invested its money elsewhere. That cuts his estimate by almost half to $1.395 billion. This maneuver gives “inflation” a new meaning. According to economist James P Love, founder of Knowledge Ecology International, DiMasi also conveniently ignores government subsidies such as so-called orphan drug tax credits, research grants from the National Institutes of Health and government support of the cost of clinical trials that qualify (see

Mr Love adds that the drug companies spend “much more on marketing than they do on research and development”.

Rohit Malpani, Director of Policy and Analysis of Doctors Without Borders (which received the Nobel Prize in 1999), says that if you believe Tufts’ figures, whose alleged data analysis is largely secret, “you probably also believe the Earth is flat”.

Mr Malpani cites GlaxoSmithKline’s CEO Andrew Witty himself who says that the figure of a billion dollars to develop a drug is a myth.

Malpani adds that

… we know from past studies and the experience of non-profit drug developers that a new drug can be developed for just a fraction of the cost the Tufts report suggests. The cost of developing products is variable, but experience shows that new drugs can be developed for as little as $50 million, or up to $186 million if you take failure into account … not only do taxpayers pay for a very large percentage of industry R&D, but are in fact paying twice because they then get hit with high prices for the drugs themselves.

Mr Malpani was referring primarily to the  US, where the drug companies show no gratitude for generous tax credits and taxpayer funded R&D (that they get mostly free). Add the absence of price controls and you the consumer/patient pay the highest drug prices in the world.

Another largely ignored aspect of the industry’s R&D is how much of it is directed to products that match, rather than improve, health outcomes – so-called “me too” drugs that are profitable, but don’t benefit patients’ health.

Also, the consistently profitable drug industry has been continually unable to restrain its deceptive promotion of drugs and inadequate disclosure of side-effects. About 100,000 Americans die every year from adverse effects of pharmaceuticals. Tens of billions of consumer dollars are wasted on drugs that have side effects instead of drugs for the same ailments with lesser side-effects (see

During a visit in 2000 with military physicians and scientists at the Walter Reed Army Hospital, I asked how much they spent on R&D to develop their antimalarial drugs and other medicine. The answer: five to ten million dollars per drug, which included clinical testing plus the salaries of the researchers.

This “drug development entity” inside the Department of Defense arose because drug companies refused to invest in vaccine or therapeutic drugs for malaria, then the second leading cause for hospitalizing soldiers in Vietnam (the first being battlefield injuries). So the military brass decided to fill this void in-house, and with considerable success.

The problem with the stinginess of the coddled private pharmaceutical industry regarding vaccine development continues. Drug resistant tuberculosis and other infectious diseases rampant in developing countries continue to take millions of lives each year. The Ebola epidemic is a current lethal illustration of such neglect.

The survival of many millions of people is too important to be left to the drug companies. For a fraction of what the federal government is wasting on spreading and failing lawless wars abroad, it can expand from the Walter Reed Army Hospital example to become a humanitarian superpower that produces life-saving vaccines and medicines as if the plight of sick people mattered more than windfall profits for Big Pharma.

Japanese Investors Are Hoarding Physical Gold

While The Bank of Japan Goes ‘Full-QE-Retard’

by Sprout Money

Zero Hedge (November 28 2014)

Japan’s Prime Minister Shinzo Abe has had an extremely busy past few weeks. After increasing the sales tax rate earlier this year which caused the GDP to contract by more than 7%, the Bank of Japan announced earlier this month it would step up its game and print money like never before. In a previous column we explained that Japan would print new money at twice the rate the USA was printing cash at the height of its quantitative easing program.

Even though Abe’s economic policy (called Abenomics) seemed to be working in the first phase of the implementation, the progress has stalled and Japan is now back in a recession again. This could be a huge indication that Abenomics is quite dead. In an attempt to resuscitate the policy, the huge money printing program has started and Abe has announced he would postpone a planned increase in the sales tax to ten percent by eighteen months years as the effect of another increase might have been devastating for the country’s economy. It was already quite weird for someone who wanted to increase the consumption pattern of the Japanese population to increase a sales tax (which obviously reduces the demand for goods) to get the country’s financial situation back in order.

Surprisingly enough, even though Japan’s economy is now officially in recession again Abe has called for new elections within the month. With Abenomics failing and the domestic economy tumbling back into recession, the central bank printing money like crazy leading to a severe depreciation of the Japanese Yen and an unpopular move to increase the sales tax from five percent to eight percent, one would definitely not expect a democratic leader to ask the citizens of Japan to vote for him once again.

Japan Abenomics

But Abe has effectively called for elections which will be held on December 14th which is in less than four weeks from now, now that’s an electoral ‘Blitzkrieg’! It’s also quite easy to understand why the sales tax hike has been postponed as the prime minister needs to make himself popular with his citizens. But more than anything else, the elections were called to take the left side of the political landscape by surprise. As elections are a complete surprise for everyone, the left-wing parties haven’t organized and harmonized their opposition against Abe yet. On top of that, with such a short time frame before the elections it’s extremely unlikely the left side will actually be able to organize themselves and take up the glove Abe has dropped.

By adding this element of surprise, Abe just wants to secure another term in office despite his failing economic policy. As he’s a real politician, Shinzo Abe is still upbeat about Abenomics stating ‘it’s working’ but he seems to forget that even though the unemployment rate decreased and the company’s revenues increased, there still isn’t a noticeable increase in consumption and salaries. Realizing one out of three promises isn’t really what you’d call ‘passing’ the test. It’s also a very wise decision to ask the Japanese population for a vote of confidence before the newly-printed money will be felt by the man in the street through an increasing inflation rate.

The ‘Abenomics balloon’ is slowly deflating and Abe seems to want to secure his personal future before Japan’s economic situation deteriorates even further. The Japanese Yen has already lost fifteen percent of its value in the past six months and with a failing economy and huge quantitative easing program we are expecting a further depreciation of the Yen. Meanwhile, the gold price in JPY has increased by almost ten percent in the same six months, despite a 7.5% drop in the price of gold (expressed in USD). This once again emphasizes every decent investment portfolio should contain some gold and silver to protect yourself against sudden changes in the economic policy.

Our thesis seems to be confirmed as our research has indicated the total amount held in a physical gold ETF issued by Mitsubishi UFJ – “Fruit of Gold” – has increased exponentially since Abenomics went in full force, as can be seen on the following chart.

The amount of gold is expressed in grams. So whereas this ETF had roughly one million grams of gold in 2010 (32,150 ounces), this increased exponentially and almost eightfolded in just a few years time. The vertical red line is the moment the Bank of Japan started behaving irrational and you can clearly see the interest to hold physical gold has increased since then. The smart Japanese have mobilized their money and invested it in physical gold to safeguard and protect their purchasing power. And they are right to do so!

“Godfather” of Abenomics Admits …

… Japanese Policy “Is A Ponzi Game … Taxpayers May Revolt”

by Tyler Durden

Zero Hedge (November 17 2014)

Koichi Hamada is a special adviser to prime minister Shinzo Abe and one of his closest confidants. That makes his comments, as The Telegraph reports, even more stunningly concerning. Focusing his attention on the fact that Japan must delay the second stage of its planned consumption tax hike – for fear of derailing the ‘recovery’ – Hamada unwittingly, it seems, explains the terrible reality behind the so-called “godfather” of Abenomics’ perspective on the extreme monetary policy he has unleashed …

Select stunning quotes that everyone should ignore and just BTFPonziD in Japan …

* “The consumption tax hike is a great big turbulence to the Japanese economy. It may have erased almost two thirds of the benefits of Abenomics”, he told the Telegraph. “At the very least, a third of this great experiment is gone”.

*  “I used to say that we should wait until the third quarter figures are out. However, by various economic indicators, the GDP figures cannot be very optimistic”, he added.

* “We should increase the consumption tax in the intermediate future”, he said. “This first shock starting in April has been countered by a monetary counter-move. But can we risk another shock in this way?”

*  He also said that while he fully supported the Bank of Japan’s bond buying spree, he said there would be diminishing returns from quantitative easing the longer it went on.

* “I completely agree with Kuroda’s direction of policy, as well as his strategy of keeping quiet and surprising the market. Of course, if you repeat the same kind of action then the impact will be weaker”, he said.

* Marc Faber, the famous Swiss investor, has accused Japan of “engaging in a Ponzi scheme” because the BoJ is hoovering up most of the debt that has been issued by the government. While Mr Hamada agreed that Japan had created a “mild ponzi game”, he also said it was a “feasible” one because of Japan’s huge foreign reserves.

* “In a Ponzi game you exhaust the lenders eventually, and of course Japanese taxpayers may revolt. But otherwise there are always new taxpayers, so this is a feasible Ponzi game, though I’m not saying it’s good.”

* Mr Hamada said it was important that Japanese policymakers sent a clear signal that the government was willing to do whatever it takes to smash deflation and pave the way for wage increases for millions of workers.

* “I’m optimistic about wages, but the uncertainty is how long it takes”, he said. Business is still in doubt about whether Abenomics will continue. If they know it will continue and the profits of export firms are really soaring, they will start to share that with their employees.”

Read more here at The Telegraph:

So to sum up … as long as the BoJ keeps buying stocks and bonds in ever-greater amounts (and Japan has more taxpayers to foot the bill) then the ponzi scheme can survive in its fiscally unsustainable way … what a total farce.

The next time someone comes on business media and says Buy Japan (for whetever reason), maybe a reminder that the architect of Abenomics has said that the policy is nothing short of an attempt to keep the Ponzo scheme of Japan alive.

The Passing of an Era

Sam Noumoff Dies at 79. Outstanding Scholar and Political Analyst of US Imperialism

by James Putzel

Global Research (November 28 2014)

For many generations of students who studied politics at McGill University, Sam Noumoff was an iconic figure. He taught courses in political theory and comparative politics that you would be hard pressed to find on the curricula of universities in the developed or, indeed the developing, world today. Aside from offering a radical perspective on the comparative politics of East Asia, over the years Sam introduced thousands of students to Marxist political theory and even offered a course, on which I was briefly his teaching assistant, called Comparative Revolution.

Sam, with his radical ideas, was often a thorn in the side of the University administrators who more than once tried to get rid of him. He was part of the failed effort, back in the 1970s, to unionise the faculty at McGill. However, over the years I think there developed a begrudging respect for Sam among the high mighty at McGill, as he actively engaged in University governance and tirelessly pursued fights, not only for academic freedom, but also against unjust treatment, whether of faculty, students, administrative staff or the many workers who kept the university’s physical plant running.

Sam came to McGill from the United States in 1967 as a young firebrand deeply involved in the movement against the Vietnam War. He fought a life-time battle against what he was not afraid to label as US imperialism, or what he said was the “US determination to control the world’s destiny on its own terms through military power”. Over the years he gained the respect of leaders of revolutionary movements and national liberation struggles as he tirelessly, and often quietly, intervened where he could to advance their cause. In one reminiscence he told of the time when on an academic visit to North Korea in the 1970s the foreign minister had asked him to carry a note to Cyrus Vance, Secretary of State under President Jimmy Carter, which was a back door effort to get peace negotiations going with the US. Of course, Richard Holbrooke, the Undersecretary who eventually agreed to meet him, made it clear the US was not interested in such overtures. Many found Sam’s sympathy for North Korea difficult to understand, but it was simple for him: he saw North Korea as a victim and a product of decades of US efforts to isolate, contain and destroy the regime by any means possible. Sam had many stories about the harassment he and his wife suffered by US and South Korea intelligence, at the height of what was not a very “cold” war, for what was always his effort to oppose the imposition of US power in Asia.

For many of us who studied at McGill in the 1970s Sam, along with his life-time colleague and friend Paul Lin, introduced us to the history of the Chinese revolution. Sam had a profound understanding of modern Chinese politics and the social and economic transformation unleashed by the Chinese Communist Party that has proven to be one of the most extraordinary experiences of late development the world has ever seen. He was deeply philosophical but by no means naive about the Party’s efforts to lead the country forward into the 21st Century. Sam saw the incremental moves towards developing a more democratic China on its own terms over the past couple of decades as part of a long historical process, which would be driven by the Chinese people’s own efforts to build their future. He observed the way people were carving out their own spaces for local elections and the impact of internet and electronic technology on giving them access to new forms of expression and communication. He commented on the emerging practice of law and people’s own claims being pursued through the legal system in fights against abuses of power or in defence of local communities.

While Sam became an authority on politics in China, Japan and the Koreas, he maintained relationships with organisations and movements all over the South and often with individuals caught in the grip of asymmetric power. Over the years he assisted countless people in their small and big struggles in life, never asking for anything in exchange, always concerned about their well-being. Countless individuals from across Latin America, the Philippines, India, Palestine and so many other places will have very personal memories of correspondence, advice and unselfish assistance that Sam provided.

But I will always remember Sam foremost as a teacher. In those early days when I was a young rebel opposing the Vietnam War and smitten by the counter-culture of the early 1970s, I can remember Sam drawing spirals on the blackboard in an attempt to get us to understand dialectics and how processes of incremental change can lead to qualitative leaps. He introduced me to the works of scientific socialism and he was aghast when, inspired by the Chinese revolution, I told him I was leaving university without finishing my degree to go out and live what we were studying. He pleaded with me to stay and finish my studies first, but I was a hot-headed idealist. In the ensuing almost decade of working in factories, engaging in street politics and international solidarity activities, I kept some contact with Sam who never condemned our naive politics but often shook his head at the mistakes we made. When I humbly went back and knocked on Sam’s door almost a decade later, he generously welcomed me back and was a constant source of encouragement as I got serious about critically studying the history of socialism, the economics and politics of development and launched myself on a long process of finishing my BA, getting a scholarship to do a Masters and then one to go on to undertake doctoral research at the University of Oxford.

During my doctoral research in the Philippines, I helped Sam arrange to visit and to travel to the zones where the New People’s Army had their strongholds. He wanted to meet party leaders and activists first hand and to talk with them about their struggle in the post-Marcos era. It was a hard journey for him, as I remember, but he came back fascinated and for long thereafter followed what was happening and offered modest comment and the occasional critical reflection over what they were doing. That was the way Sam lived –  a man of staunch principle, sympathetic to those who were fighting injustices of all kinds, but hesitant to pass judgment and ready to offer quiet advice.

I was able to reconnect with Sam a few years ago when he was living in Spain with his most beloved wife Francesca who also sadly died just weeks before Sam. It was to be a rushed time at the tail end of a short vacation on the Costa Blanco, but as I was stranded by the Icelandic volcano, we were able to enjoy much more time together than originally planned. One day, we drove Sam and Francesca up into the mountains to a tiny village that had been a stronghold of resistance against Franco’s fascists during the Spanish Civil War. There we met the old one-armed proprietor who, against all the odds, had kept the village in Republican hands during the entire war and who was still running the village restaurant serving big plates of paella with the single arm left to him by the fascists. Sam was fascinated looking at the memorabilia in that place and it launched us into discussions about the civil war, the anti-fascist war and what emerged in its aftermath. He was as fascinated a few days later when we met up to go and see and hear the flamenco dancers. Sam was a man of many passions.

I probably became much more circumspect about socialism than Sam in the years after I returned to my studies and perhaps Iearned more about political science and development economics from other professors. But Sam and I always connected over a deep critique of the polity in which we were born and a life-long commitment to opposing the imposition of its power on people around the world. I learned that Sam had once met Pete Seeger, who had so influenced me long before I went to Canada. I learned that Sam was involved in the defence of Daniel Elsberg and Anthony Russo when they were charged for releasing the Pentagon Papers, the expose of US aggression in Indochina that had such an impact on me in my formative years. I saw in Sam a man of principle, who even when I disagreed with his position on this or that point, I always admired. When I last spoke to Sam a couple of weeks ago in hospital I told him how important he was in my formation. He said, well that is the way of this world, that he had learned from Chomsky, I learned from him and my students would carry it on. Sam was one of the people who taught me to be a teacher. He valued deeply his students and saw his responsibility to help them develop a critical mind and that, perhaps more than anything else, has influenced my own vocation as a teacher. Sam will be, and already is, deeply missed by all those fortunate enough to have crossed his path in our lives.


James Putzel is Professor of Development Studies, London School of Economics

Copyright (c) 2014 Global Research

Trotsky at the IMF

Does the Name “Strauss-Kahn” Ring a Bell?

by Mike Whitney

CounterPunch (November 25 2014)

The International Monetary Fund has finally admitted that it was wrong to recommend austerity as early as it did in 2010 and 2011. The IMF now agrees that it should have waited until the US and EU economies were on a sustainable growth-path before advising them to trim their budget deficits and reduce public spending.  According to a report issued by the IMF’s research division, the Independent Evaluation Office (IEO):

IMF advocacy of fiscal consolidation proved to be premature for major advanced economies, as growth projections turned out to be optimistic … This policy mix was less than fully effective in promoting recovery and exacerbated adverse spillovers.

Now there’s an understatement.

What’s so disingenuous about the IMF’s apology,  is that the bank knew exactly what the effects of its policy would be, but stuck with its recommendations to reward its constituents.  That’s what really happened. The only reason it’s trying to distance itself from those decisions now, is to make the public think it was all  just a big mistake.

But it wasn’t a mistake. It was deliberate and here’s the chart that proves it:

(Democrats Reap What They Sowed, Rob Urie, CounterPunch)

There it is, six years of policy in one lousy picture. And don’t kid yourself, the IMF played a critical role in this wealth-shifting fiasco. It’s job was to push for less public spending and deeper fiscal cuts while the Central Banks flooded the financial markets with liquidity (QE). The results are obvious, in fact, one of the Fed’s own officials, Andrew Huszar,  admitted that QE was a massive bailout for the rich.  “I’ve come to recognize the program for what it really is”, said Huszar who actually worked on the program, “the greatest backdoor Wall Street bailout of all time”.  There it is, straight from the horse’s mouth.

So now the IMF wants to throw a little dust in everyone’s eyes by making it look like it was a big goof-up by well-meaning but misguided bankers. And the media is helping them by its omissions.

Let me explain: Of the more than 455 articles on Google News covering the IMF’s mea culpa, not one piece refers to the man who was the IMF’s Managing Director at the time in question. Doesn’t that strike you as a bit odd?

Why would the media scrub any mention of Dominique Strauss-Kahn from its coverage? Could it be that (according to NPR):

The IMF’s managing director wanted to give Greece, Portugal and Ireland the time needed to put their accounts in order, and he also argued for softening the austerity measures associated with the bailouts for those countries.

Greek economists say that under Strauss-Kahn’s leadership, the IMF was a counterbalance to the strict austerity policies favored by northern European leaders. In fact, according to the daily Le Monde, Strauss-Kahn is fond of calling those who argue for tighter austerity “fous furieux“, which roughly translates as “mad men”.

Strauss-Kahn’s view is that shock-therapy measures imposed on Greece and other European countries with sovereign debt crises will lead only to economic recession and severe social unrest.

Several commentators pointed out Monday that at a time of turmoil in the eurozone and division among European leaders, it was the IMF, under Strauss-Kahn’s leadership, that kept the eurozone’s rescue strategy on track.

The Financial Times said that the IMF’s single most important influence in the resolution of the eurozone crisis was political –  amid a lack of political leadership, the paper said, the IMF filled a vacuum. {1}

Ah-ha! So Strauss-Kahn wasn’t on board with the IMF’s shock doctrine prescription. In fact, he was opposed to it.  So there were voices for sanity within the IMF, they just didn’t prevail in the policy debate.

But why would that be, after all, Strauss-Kahn was the IMF’s Managing Director, his views should have carried greater weight than anyone else’s, right?

Right. Except DSK got the ax for a sexual encounter at New York’s ritzy Sofitel Hotel. So the changes he had in mind never took place, which means that the distribution of wealth continued to flow upwards just like the moneybags constituents of the IMF had hoped for.

Funny how that works, isn’t it? Funny how it’s always the Elliot Spitzers, and the Scott Ritters, and the Dominique Strauss-Kahn’s who get nailed for their dalliances, but the big Wall Street guys never get caught.

Why is that?

The fact is, Strauss-Kahn was off the reservation and no longer supported the policies that the establishment elites who run the IMF wanted to see implemented.  They felt threatened by DSK’s Keynesian approach and wanted to get rid of him. That’s it in a nutshell.

Do you know why the bigwig plutocrats hated DSK?

It had nothing to do with his sexual acrobatics at the Sofitel Hotel. Nobody cares about that shite.   What they were worried about were his plans for the IMF which he laid out in a speech he gave at the Brookings Institution in April 2011, one month before he got the boot. The speech got very little attention at the time, but – for all practical purposes – it was DSK’s swan song.  And, I think you’ll see why.

The experience must have been a real shocker for the gaggle of tycoons and hangers-on who attend these typically-tedious gatherings. Instead of praise for “market discipline”, “labor flexibility” and “fiscal consolidation”, Strauss-Kahn delivered a rousing thirty minute tribute to leftist ideals and wealth-sharing sounding more like a young Leon Trotsky addressing the Forth International than a cold-hearted bureaucrat heading the world’s most notorious loan sharking operation. By the time the speech ended, I’m sure the knives were already being sharped for the wayward Managing Director. To put it bluntly, DSK’s goose was cooked. Here’s a clip from the speech that will help to explain why:

… The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes …

Not everyone will agree with the entirety of this statement. But what we have learnt over time is that unemployment and inequality can undermine the very achievements of the market economy, by sowing the seeds of instability …

… the IMF cannot be indifferent to distribution issues …

Today, we need a similar full force forward response in ensuring that we get the recovery we need. And that means not only a recovery that is sustainable and balanced among countries, but also one that brings employment and fair distribution …

But growth alone is not enough. We need direct labor market policies …

Let me talk briefly about the second lung of the social crisis – inequality … IMF research also shows that sustainable growth over time is associated with a more equal income distribution …

We need policies to reduce inequality, and to ensure a fairer distribution of opportunities and resources. Strong social safety nets combined with progressive taxation can dampen market-driven inequality. Investment in health and education is critical. Collective bargaining rights are important, especially in an environment of stagnating real wages. Social partnership is a useful framework, as it allows both the growth gains and adjustment pains to be shared fairly …

We have also supported a tax on financial activities (and) organized jointly with the ILO  …  to better understand the policies behind job-creating growth …

Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF’s mandate. It must be placed at the heart of the policy agenda. Thank you very much. {2}

Can you imagine the chorus of groans that must have emerged from the crowd when Strauss-Kahn made his pitch for “progressive taxation”, “collective bargaining rights”, “protecting social safety nets”, “direct labor market policies” and  “taxes on financial activities”? And how do you think the crowd reacted when he told them he’d settled on a more enlightened way to distribute the wealth they’d accumulated over a lifetime of insider trading, crooked backroom deals and shady business transactions?

Do you think they liked that idea or do you suppose they lunged for their blood pressure medication before scuttling pell-mell towards the exits?

Let’s face it; Strauss-Kahn was headed in a direction that wasn’t compatible with the interests of the cutthroats who run the IMF. That much is clear. Now whether these same guys concocted the goofy “honey trap” at the Sofitel Hotel, we may never know.  But what we do know is this: If you’re Managing Director of the IMF, you’d better not use your power to champion “distribution” or collective bargaining rights or you’re wind up like Strauss-Kahn, dragged off to the hoosegow in manacles wondering where the hell you went wrong.

DSK was probably done-in by the people who hated his guts. Now they want to polish-up their image by rewriting history.

And, you know, they’re rich enough to pull it off, too.





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

Western News-Suppression …

… about the Downing of MH-17 Malaysian Jet

by Eric Zuesse

RINF Alternative News (November 05 2014)

The cause of the shooting-down of the Malaysian passenger plane MH-17 on July 17th (while that plane was flying over the conflict-zone during Ukraine’s civil war) is becoming clearer and clearer, despite the rigorous continuing attempts by Western ‘news’ media to cover it up and to hide from the public the evidence that clearly shows what brought down this airliner.

In the months since I headlined on August 24th the news, “MH-17 ‘Investigation’: Secret August 8th Agreement Seeps Out: Perpetrator of the Downing in Ukraine, of the Malaysian Airliner, Will Stay Hidden” {1}, explaining why the leaders of Western nations want these black-box and other basic data to remain hidden, additional evidence has nonetheless become public, and all of it confirms and adds yet further details to the explanation that was first put forth by the retired German Lufthansa pilot Peter Haisenko, whose independent investigation had concluded that Ukrainian Government fighter-jets intentionally shot down this civilian plane.

Precisely how they did it is gradually becoming clearer, despite this continuation of Western secrecy regarding the contents of the black boxes, and of the  –  satellite images, and of the Ukrainian air-traffic-control radar recordings, and of other evidence – sources that are held by the West and not made available to their ‘news’ media nor to anyone outside a tight official circle of those Western nations’ intelligence agencies.

Russia has thus been releasing its own investigations regarding MH-17; and, in the process, Russia is not only providing further details as to how the downing actually happened (it wasn’t by mistake, as the West contends it was), but they are also exposing the absurd impossibility of the Ukrainian Government’s ‘explanation’ of this event, which is the ‘explanation’ that is still being parroted unquestioningly and unflinchingly by officials in Washington, Europe, and NATO, and also by Western ‘news’ media. (As my news-report explained, that secret August 8th agreement was signed by the four governments that were handed the black boxes to study –  Ukraine, Belgium, Australia, and Netherlands –  and it granted to the Ukrainian Government a veto over anything that the team’s official report would say, which is probably the reason why the subsequent officially released report on those black boxes {2} said essentially nothing. It was a brazen insult to the 298 victims’ families.)

Though Russia doesn’t possess those black boxes, they do possess, and they publicly reveal, evidence that’s conclusive on its own; and it is 100% consistent with Haisenko’s reconstruction of the event. Russian Television issued a 25-minute documentary recently on the event, and it starts with people whom they interviewed in that region, who were describing their having seen at least one and perhaps two planes rising toward the airliner, and then the airliner coming down from the sky. Other witnesses told them that they saw an SU-25 fighter plane take off in that general area just minutes before the airliner came down.

The BBC had previously posted to their website on 23 July 2014, just six days after the event itself, a news report in Russian via their Russian service {3}, about the downing, but they quickly removed it without explanation. Fortunately, however, some Russian-speakers had managed to download it before it was yanked; and one of those downloads is still up at YouTube, having been posted there on July 28th, with English subscripts, and with the headline, “Ukraine Eyewitness Confirm Military Jet Flew Besides MH17 Airliner: BBC Censors Video 25Jul2014″ {4}. (Actually, there were several witnesses interviewed there, not just one “Eyewitness”.) Furthermore, Global Research posted on September 10th a transcript of it, headlining, “Deleted BBC Report. ‘Ukrainian Fighter Jet Shot Down MHI7’, Donetsk Eyewitnesses” {5}. So, this valuable eyewitness-testimony to the event is available despite Western ‘news’ media (or propaganda-media), and the reason for the news-suppression is clear from anyone who views that BBC report, which presents several eyewitnesses, all of whom were interviewed separately as individuals, not as a group, and yet all of whose testimonies report having observed the very same basic narrative, of at least one military jet rising toward the airliner just before it came down. In other words: BBC had yanked this piece because it didn’t confirm the West’s story-line, which says that Ukrainian pro-Russian separatists fired a “Buk” ground-based missile at the airliner, thinking that the civilian plane was a Ukrainian Government war-plane about to bomb them and their families. But, first of all, the Ukrainian Government was virtually admitting there that they were bombing these villagers, which means that they were perpetrating an ethnic cleansing there, which indeed that Government was doing {6}; but, secondly, the Ukrainian Government’s statement also acknowledged that if the event had happened in that way, it would have been unintentional, a tragic accident on the part of the rebels there. So, then, why did “the international community” respond with massive economic sanctions against Russia on account of this downing? The whole Western propaganda position was designed for a public of sheer fools, if not of outright psychopathic ones, who cared not a bit about the plights of the victims of an ethnic-cleansing campaign. The West’s basic storyline doesn’t make sense without recognizing that we are financing ethnic cleansing to clear the land in southeastern Ukraine, and that any support that Russia would be providing to those separatists would be defensive in nature, not offensive. Yet Russia gets the blame when this passenger jet goes down? In any case, that storyline is false, from start to finish.

Here is how outright ludicrous it actually is, and sound reason in itself that anyone in the military had to have known, from the very get-go, that the “Buk” ‘explanation’ was a line of pure malarkey:

The Russian documentary was titled, “MH-17: The Untold Story” {7}, and it presents videos of several “Buk” missiles being fired. Here’s one:

That passage shows the missile, a 9K37 Buk SA-11 Gadfly, which is a bit longer than ten yards (30 feet) {8}  –  this large (and certainly not inconspicuous) missile –  being launched from its standard launch-base.

The documentary then notes:

And then this:

And then this:

And then this:

So, when even the BBC‘s reporter wasn’t able to find anyone in that entire region who recounts having seen anything of the sort, just how likely would the Ukrainian Government’s line on that matter actually be? Obviously, any person with any military knowledge whatsoever had to have recognized virtually immediately that the Ukrainian Government’s story-line on the MH-17 downing was a pile of sheer malarkey, but did anyone in the Western ‘news’ media report that it was –  that the Western line there was not just a lie, but an absurd one, one that requires an ignorant public in order for it to be able to be taken seriously at all by the public? One that requires an ignorant public, to remain  ignorant? This is supposed to be the Western ‘news’ media, with a free press, and a democracy, a truthfully informed citizenry, who can vote based upon truths, not on mere lies?

Here is the way that the Russian TV documentary opens:

Several of the locals there told Russian TV‘s reporter that they had seen a military jet rise toward the airliner; and not a one of these individuals were any of the same ones who had testified the exact same thing to the BBC‘s reporter, whose news-piece had been squelched by her managers.

Now, to the substance of the explanation of how this plane was actually brought down:

Earlier, I summarized the evidence for Peter Haisenko’s reconstruction of the event, but I questioned his having accepted the eyewitness testimony to the effect that the planes that shot down the airliner were SU-25s. In Haisenko’s Russian TV interview, he sticks by his belief that it was probably SU-25s instead of SU-27s or Mig 29s, both of which are also in the Ukrainian Air Force, and all three of which use 30-millimeter machine-guns or “cannons”. But since the fact is that all three of those attack-plane models use machine-guns (“cannons”) with 30-caliber bullets (which is the size that clearly was used, especially on the cockpit), the effect would be identically-sized round 30-caliber entry-holes, no matter what. My last major report on that evidence was “Systematically Reconstructing the Shoot-Down of the Malaysian Airliner: The Guilt Is Clear and Damning” {9}.  That basically fills in (and the links in that report document with pictures and videos) the actual way that this plane was downed and why it was downed. Obama (via the regime that he had installed in a February 2014 coup in Kiev {10}) succeeded there in getting the international sanctions against Russia that he had been wanting. Obama, not Putin, was behind this.

International actions are based upon such fabrications, and ‘evidence’ taken out of its full context, as this from the far-right Forbes commentator Paul Roderick Gregory {11}, but there are no such fakes {12}, nor out-of-context items of evidence, in the case that has been presented here. That’s the difference between news-reporting and propaganda; but, in the United States today, propaganda passes as if it were ‘news’, and authentic news that doesn’t fit the regime’s cooked-up narrative is suppressed entirely.

Western governments, and their ‘news’ media, are treating their citizens, their own publics, not really as citizens, but as suckers. They are treating them as subjects, instead of as citizens. This is not authentic democracy. It is neo-feudal; it is, in fact, a sophisticated form of fascism.

The entire “Buk” ‘explanation’ of the downing of the Malaysian airliner is for suckers only; and everyone in official circles, and in the press, who peddles it, is just as fake as the ridiculous story-line that he or she is peddling. To fall for it, after being provided all of the authentic evidence, which has been linked to here, is to be a willing slave {13} to psychopaths {14}.

So, now we know why Western governments have hidden, instead of making available to the public, the black-box data and the other evidence that they still refuse to provide to the public. They are aiming to scam the public, not to inform it. Lying is their game. And they call it ‘patriotism’. But, of course, they would! Traitors would do that. Traitors to any  country would do it. And, so, they do.

Unfortunately, the people they fool become their tools, and everyone else are purely their victims –  helpless to oust the tyrants who make things bad for everyone but themselves and their colleagues.

















Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs Republican Economic Records, 1910-2010 (2012),  and of  Christ’s Ventriloquists: The Event that Created Christianity (2012).

Russia Turns East …

… at Shocking Speed with China Mega Energy Deals

by William Engdahl

New Eastern Outlook (November 24 2014)

While Western mainstream media concentrates attention on the emissions agreement signed by US President Barack Obama and Chinese President Xi at the recent APEC Beijing Summit, Russia’s Putin and China’s Xi quietly signed major new energy agreements that will have enormous geopolitical significance in bringing about the very nightmare that US strategists such as Zbigniew Brzezinski warned about way back in 1997 when America seemed indomitable as sole Superpower.

The impetus, ironically, to the array of strategic Russia-China deals are the very economic and financial sanctions the rather stupid strategists at the US Treasury and National Security Council devised to “punish” Putin beginning last May for allegedly “invading” Crimea.

China to be Russia’s Major Gas Customer

On November 9 in meetings on the periphery of the Beijing APEC summit, Putin and Xi signed ten agreements. Far the most significant is the one for the so-called West Route gas pipeline that will connect gas fields in western Siberia with northwest China through the Altai area of Xinjiang Autonomous Region. They also agreed on provisions for possible second and third sections to be added later that would bring capacity to a staggering 100 billion cubic meters a year. West Route is designated a priority and to be finished in six years. Initially it will give China another thirty billion cubic meters of gas annually over thirty years.

The West Route is in addition to the so-called Russian East Route pipeline deal signed between Putin and Xi in May. That deal, a $400 billion agreement over thirty years will begin sending gas in 2018 for another 38 billion cubic meters annually from Russia to China. When both East and West Route pipelines are operational, Russia will supply some forty percent of the current Chinese annual natural gas consumption, replacing the EU as Russia’s largest gas export market. Today China consumes 169 billion cubic meters annually.

The first pipeline laying in Russia for the East Route began already in September. When it was signed in May, many Western sources were shocked, as negotiations had been ongoing for almost a decade. It was called the “Holy Grail” and the “Gas Deal of the Century”. With the signing now only six months later of a second almost equally large West Route gas deal, Russia and China have just agreed to “Holy Grail Two”.

At the same Beijing meeting the two presidents and their respective state oil companies Rosneft and CNPC signed a deal whereby CNPC buys a ten percent stake in Rosneft subsidiary Vankorneft which operates the huge Russian Vankor oil field. China will receive some $7 billion worth of Russian oil from Vankor in the deal.

Notably, largely unnoticed by western media, China’s state Xinhua news agency reported that a day before opening of the Beijing APEC forum, the Chinese and Russian military leadership reached wide-ranging cooperation agreements as well. Valery Gerasimov, Chief of the Russian General Staff and Wang Guanzhong, Deputy Chief of the General Staff of the Chinese People’s Liberation Army (PLA), reached agreements on a number of important military cooperation projects during the seventeenth round of strategic consultation. Xinhua quoted Gerasimov, “Many cooperation projects in critical areas were agreed upon during the current round of consultation”.

They reportedly discussed “the current international and regional security situations, regional issues as well as the relationship between the two militaries”, said Xinhua. One can wonder just what those “situations” might be, perhaps the brazen US and EU intervention into Ukraine to give the excuse for financial warfare and a proxy war against Russia, and perhaps the US National Endowment for Democracy’s “Umbrella Revolution” in Hong Kong, designed to rattle Beijing as well as the Obama “Asia Pivot” military focus on China? The Washington neo-conservative hawks and their backers in the CIA, State Department and NSC are managing to accelerate the very Eurasian alliance that is they are trying to destroy.

The United States, during my own childhood growing up in Texas in the 1950s, was the unchallenged industrial leader in the world economy. Americans were rightly proud of their industrial excellence. Tragically, today the United States has managed to transform itself into the world’s largest virtual economy. The main item produced today is virtual money by the Federal Reserve to give paper steroids to the mega banks of Wall Street so they can continue their criminal enterprises with increasingly worthless paper dollars.

America’s industrial excellence is mostly a relic of the past. Factory work has been outsourced to … the Peoples’ Republic of China. Domestically, American democracy, or at least its earlier traces, has given way to a rule by power-addicted loveless American Oligarchs. Now those loveless oligarchs see their world, their power, threatened by a growing cooperation between the great nations of Eurasia, led by China and Russia with Iran also playing a significant role.

Ironically their very stupid attempts to initiate global dis-order and a new world war, in order to retain their failing grip on power, is having the opposite effect. It is driving China, Russia, the entire BRICS countries and other nations into closer ties on all levels to build a defense against that attempt. The oligarchs and their war machine are stupid precisely because they seem incapable of thinking in comprehensive terms of how interconnected everything in our universe is. They seem blinded by their addiction.


F William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine New Eastern Outlook.