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US to set fire to oil rig leak


The US coast guard has said it will set fire to an oil spill in the Gulf of Mexico on Wednesday as efforts to stem a leak after a rig blast are failing.

Officials are concerned that, unless controlled, the leak could cause one of the worst spills in US history.

Coast Guard Rear Adm Mary Landry has said work on sealing leaks using robotic submersibles could take months.

Around 1,000 barrels are leaking every day after the Deepwater Horizon rig exploded and sank last week.

Eleven of the rig’s workers are still missing and presumed dead in the disaster off the Louisiana coast.

Controlled burn

A “controlled burn” would involve setting fire to an area of oil trapped by special containment booms on the water’s surface.

Environmental experts say birds and animals are more likely to escape a burning patch of water than an oil slick, although toxic fumes could endanger wildlife.

“We fully understand there are benefits and trade-offs,” said Adm Landry.

But she noted that with the spill moving toward land, the impact on Louisiana’s coastline, which contains some 40% of the nation’s wetlands and spawning grounds for countless fish and birds, had to be considered.

Controlled burns had been tried and tested before, and had been shown to be “effective in burning 50 to 95% of oil collected in a fire boom”, she said.

She warned that if the well was not secured soon, “this could be one of the most significant oil spills in US history”.

The leaks – about 5,000ft (1,525m) under the surface – were found on Saturday, four days after the Deepwater Horizon platform, to which the pipe was attached, exploded and sank.

About 1,000 barrels (42,000 US gallons; 35,000 imperial gallons) of oil a day have been gushing into the sea since the blast.

The resulting oil slick now has a circumference of about 600 miles (970km) and covers about 28,600 sq miles (74,100 sq km).

The slick is now about 20 miles (32km) off the coast of Louisiana, but wind projections indicate it will not reach land before Saturday.

It would have to continue for more than eight months to match the 11m-gallon spill from the oil tanker Exxon Valdez off Alaska in 1989.

Possible solutions

Workers on a nearby oil platform were evacuated by the US authorities on Monday after the oil slick came dangerously close.

British oil company BP, one of the firms operating the rig, has not been able to activate a device known as a blow-out preventer, designed to stop oil flow in an emergency.

OIL SPILL DISASTERS

  • 1991: 520m gallons were deliberately released from Iraqi oil tankers during the first Gulf War to impede the US invasion
  • 1979: 140m gallons were spilt over nine months after a well blow-out in the Bay of Campeche off Mexico’s coast
  • 1979: 90m gallons leaked from a Greek oil tanker after it collided with another ship off the coast of Trinidad
  • 1983: 80m gallons leaked into the Gulf over several months after a tanker collided with a drilling platform
  • 1989: 11m gallons were spilt into Alaska’s Prince William Sound in the Exxon Valdez disaster
  • Doug Suttles, the chief operating officer for exploration and production at BP, said it had not yet given up on engaging the valve, but was considering other possible solutions.

    These include placing a dome directly over the leaks to catch the oil and send it up to the surface, where it could be collected by ships. This has only been done in shallow water before and is still two to four weeks from being operational.

    BP will also begin drilling a “relief well” intersecting the original well, but it is also experimental and could take two to three months to stop the flow.

    Forty-nine vessels – oil skimmers, tugboats barges and special recovery boats that separate oil from water – were working to round up oil, BP said.

    An investigation has been ordered into the cause of the leak by the interior and homeland security departments.

    It will have the power to compel witnesses to testify, and will look into possible violations by the operators of the rig, Transocean.

    Story from BBC NEWS:
    http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/8649862.stm

    Published: 2010/04/28 15:41:56 GMT

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    Spain downgraded, Europe debt crisis widens


    Germany says aid for Greece could be passed by May 7

    A protester holds handcuffs during an anti-government  demonstration staged by civil servants outside the Greek Parliament in  Athens, Tuesday, April 27, 2010. Greece's debt crisis intensified  Tuesday as its credit rating cut to junk status. (AP Photo/Marita  Pappa)A protester holds handcuffs during an anti-government demonstration staged by civil servants outside the Greek Parliament in Athens, Tuesday, April 27, 2010. Greece’s debt crisis intensified Tuesday as its credit rating cut to junk status. (AP Photo/Marita Pappa)

    Juergen Baetz and Pan Pylas, Associated Press Writers, On Wednesday April 28, 2010, 2:25 pm EDT

    BERLIN — Europe’s debt crisis spread its contagion to another country Wednesday when a major credit agency downgraded Spain’s credit rating, even as Germany grudgingly moved closer to bailing out Greece from imminent collapse.

    Chancellor Angela Merkel said Germany would speed up the approval process and could have its share of a euro45 billion joint bailout from other euro countries and the International Monetary fund for Greece rushed through parliament by next week.

    That would beat a May 19 deadline when Greece has debt coming due — debt it can’t pay without the money promised.

    “It’s absolutely clear that the negotiations between the Greek government and the European Commission and the IMF have to be accelerated now,” Merkel said ahead of a meeting with IMF head Dominique Strauss-Kahn. “We hope that they will be completed in the next days.”

    Merkel’s remarks and a promise from Finance Minister Wolfgang Schaeuble that the package could be signed, sealed and delivered — provided Greece promised to tough austerity measures — helped shore up confidence in the markets that the country would not suffer a disastrous default that would make borrowing more expensive for governments across Europe.

    But the downgrade for Spain and a lack of clarity about how much money Greece will really need unsettled investors again — the IMF’s managing director Dominique Strauss-Kahn would not confirm reports he had told German parliamentary deputies that Greece would need euro120 billion over several years.

    A lot is at stake — some say that the very future of the euro project hangs in the balance. At the very least, a Greek debt default that could also tear holes in the balance sheets of European banks holding Greek bonds.

    More broadly, growing worries about shaky government finances in Europe could force indebted governments to pay more and more of their budgets to cover interest costs, crimping spending and stimulus for the economy and pushing them to increase taxes. That could make it harder for Europe to maintain its shaky economic recovery.

    Once again though, the main actors in the Greek debt drama failed to provide complete clarity — until that emerges the markets could well suffer further turmoil.

    Royal Bank of Scotland analyst Jacques Cailloux said the statements by Merkel, Strauss-Kahn and European Central Bank president Jean-Claude Trichet “failed to provide groundbreaking information” and warned that Europe risked the “biggest coordination failure in modern history.”

    Until the German parliament backs the release of the funds, the markets will remain “very sceptical” that the powers that be have got a handle on the crisis, said Cailloux.

    Merkel’s government has balked at handing over the Germans’ taxpayers money to a country that has admitted has massaged its debt figures for years — and key regional elections in Germany on May 9 have not helped a swift resolution.

    Merkel stressed that Germany was still insisting Greece commit to cutbacks.

    “Germany will make its contribution but Greece has to make its contribution,” she said.

    Merkel would not comment on how much money Greece would need in the long run. “What is known … is that it will be a three year program…” she said. “Let us talk about numbers when the program is finalized.”

    The clock is ticking — Greece has to pay off some euro8.5 billion worth of debts by May 19, but cannot raise the money in the markets given current sky-high borrowing costs — at one stage earlier, the yield on the two-year Greek bond spiked up to a massive 23 percent.

    That means it needs its 15 partners in the eurozone and the International Monetary Fund to cough up the money promised earlier this month, including euro8.4 billion from Germany.

    The downgrade for Spain was an ominous new blow, coming just as markets were recovering their poise after the double shock Tuesday of a Standard & Poor’s downgrade for Greece — to junk status — and Portugal.

    Greece and Portugal, up to now the focus of alarm, are relative economic minnows; Spain’s economy is four times the size of Greece and is considered by some to be too big to rescue.

    Though its overall debt burden is fairly modest at around 53 percent of national income compared to 115 percent for Greece, the country is running a high budget deficit and has done less than others to get a handle on its public finances.

    The agency said it was cutting Spain’s rating to AA from AA+ amid concerns about the country’s growth prospects following the collapse of a construction bubble.

    “We now believe that the Spanish economy’s shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed,” Standard & Poor’s credit analyst Marko Mrsnik said.

    Spain still has an investment grade rating but could wind up paying more to borrow and may find itself under pressure to take tougher steps to cut spending.

    “Given its lack of competitiveness and the grim outlook for domestic demand the government will need to announce further fiscal measures if it is to make serious inroads into the deficit,” said Ben May, European economist at Capital Economics. “Today’s announcement may increase the pressure on it to do this sooner rather than later.”

    Speaking during a cabinet meeting Wednesday, Greek Prime Minister George Papandreou said that every EU member must “prevent the fire that intensified through the international crisis from spreading to the entire European and global economy.”

    Papandreou insisted Greece was determined to bring its economy into order. “We will show that we do not run away. In difficult times we can perform — and we are performing — miracles,” he said, adding that “our government is determined to correct a course that has been followed for decades in a very short time.”

    Investors appeared to anticipate Athens would eventually have to default or restructure its debt payments at some point even if the bailout gets it past May 19, when it has debt coming due.

    Authorities in Athens halted short-selling of stocks for two months, helping the exchange finally climb after a five-day losing streak. The ban will remain in force until June 28. It closed up 0.63 percent at 1,707.35.

    Associated Press Writers Verena Schmitt-Roschmann, Melissa Eddy and David Rising in Berlin, Barry Hatton in Lisbon, Nicholas Paphitis and AP Television Producer Nathalie Rendevski Savaricas in Athens contributed to this report. Business Writer Pan Pylas contribued from London.

    ap

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    Berating the Raters


    Let’s hear it for the Senate’s Permanent Subcommittee on Investigations. Its work on the financial crisis is increasingly looking like the 21st-century version of the Pecora hearings, which helped usher in New Deal-era financial regulation. In the past few days scandalous Wall Street e-mail messages released by the subcommittee have made headlines.

    That’s the good news. The bad news is that most of the headlines were about the wrong e-mails. When Goldman Sachs employees bragged about the money they had made by shorting the housing market, it was ugly, but that didn’t amount to wrongdoing.

    No, the e-mail messages you should be focusing on are the ones from employees at the credit rating agencies, which bestowed AAA ratings on hundreds of billions of dollars’ worth of dubious assets, nearly all of which have since turned out to be toxic waste. And no, that’s not hyperbole: of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent — 93 percent! — have now been downgraded to junk status.

    What those e-mails reveal is a deeply corrupt system. And it’s a system that financial reform, as currently proposed, wouldn’t fix.

    The rating agencies began as market researchers, selling assessments of corporate debt to people considering whether to buy that debt. Eventually, however, they morphed into something quite different: companies that were hired by the people selling debt to give that debt a seal of approval.

    Those seals of approval came to play a central role in our whole financial system, especially for institutional investors like pension funds, which would buy your bonds if and only if they received that coveted AAA rating.

    It was a system that looked dignified and respectable on the surface. Yet it produced huge conflicts of interest. Issuers of debt — which increasingly meant Wall Street firms selling securities they created by slicing and dicing claims on things like subprime mortgages — could choose among several rating agencies. So they could direct their business to whichever agency was most likely to give a favorable verdict, and threaten to pull business from an agency that tried too hard to do its job. It’s all too obvious, in retrospect, how this could have corrupted the process.

    And it did. The Senate subcommittee has focused its investigations on the two biggest credit rating agencies, Moody’s and Standard & Poor’s; what it has found confirms our worst suspicions. In one e-mail message, an S.& P. employee explains that a meeting is necessary to “discuss adjusting criteria” for assessing housing-backed securities “because of the ongoing threat of losing deals.” Another message complains of having to use resources “to massage the sub-prime and alt-A numbers to preserve market share.” Clearly, the rating agencies skewed their assessments to please their clients.

    These skewed assessments, in turn, helped the financial system take on far more risk than it could safely handle. Paul McCulley of Pimco, the bond investor (who coined the term “shadow banks” for the unregulated institutions at the heart of the crisis), recently described it this way: “explosive growth of shadow banking was about the invisible hand having a party, a non-regulated drinking party, with rating agencies handing out fake IDs.”

    So what can be done to keep it from happening again?

    The bill now before the Senate tries to do something about the rating agencies, but all in all it’s pretty weak on the subject. The only provision that might have teeth is one that would make it easier to sue rating agencies if they engaged in “knowing or reckless failure” to do the right thing. But that surely isn’t enough, given the money at stake — and the fact that Wall Street can afford to hire very, very good lawyers.

    What we really need is a fundamental change in the raters’ incentives. We can’t go back to the days when rating agencies made their money by selling big books of statistics; information flows too freely in the Internet age, so nobody would buy the books. Yet something must be done to end the fundamentally corrupt nature of the the issuer-pays system.

    An example of what might work is a proposal by Matthew Richardson and Lawrence White of New York University. They suggest a system in which firms issuing bonds continue paying rating agencies to assess those bonds — but in which the Securities and Exchange Commission, not the issuing firm, determines which rating agency gets the business.

    I’m not wedded to that particular proposal. But doing nothing isn’t an option. It’s comforting to pretend that the financial crisis was caused by nothing more than honest errors. But it wasn’t; it was, in large part, the result of a corrupt system. And the rating agencies were a big part of that corruption.

    by Paul Krugman

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    Greece’s Debt Downgraded To Junk Status By S&P


    Greek officials

    Enlarge Dimitri Messinis/APGreek Deputy Prime Minister Theodoros Pangalalos, left, talks to Labor Minister Andreas Loverdos at a meeting of governing Socialist party deputies Tuesday at the Greek Parliament. Two financially troubled countries — Greece and Portugal — saw their credit ratings downgraded Tuesday as markets sold off their debt.

    Europe’s government debt crisis worsened ominously Tuesday when Greek bonds were downgraded to junk status and Portugal’s debt was lowered on fears the trouble could spread. Stocks slid on the news.

    German reluctance to fund most of a euro45 billion bailout of Greece by European government and the International Monetary Fund is sending shudders through markets that the money may not reach Greece by May 19, when euro8.5 billion in bond payments come due.

    Germany wants to see a commitment to deep, long-term cutbacks in Greek government services and benefits before it agrees to provide its euro8.4 billion euro of the bailout cash. But investors remain highly skeptical that Greek voters used to generous benefits and worker protections will accept a drop in living standards. They also worry that the proposed bailout will not cure Greece’s long-term imbalance between its soaring debt and tepid prospects of economic growth.

    “The downgrade results from our updated assessment of the political, economic, and budgetary challenges that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory,” said Standard & Poor’s credit analyst Marko Mrsnik.

    The move deprives Greece of an investment-grade rating on its bonds, meaning it would pay higher costs to borrow if it taps debt markets again. The agency said Greece’s weak long-term growth prospects made it less credit-worthy.

    The downgrade results from our updated assessment of the political, economic, and budgetary challenges that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory.

    – Standard & Poor’s credit analyst Marko Mrsnik

    “The Greek bond market is now in full scale meltdown,” said Jeremy Batstone-Carr, head of private client research at stockbrokers Charles Stanley. “The nightmare scenario from an investor stand point is that either Greece defaults, forcing investors to take a severe ‘haircut’ on their investments-loans, or the Greek authorities could honor the country’s debts and simply shut down all nonessential operations, markedly escalating the strife for the nation’s people.”

    Default would hurt the shared euro currency and could lead to the debt crisis spreading to other countries with shaky finances such as Portugal and Spain, threatening them with the same vicious spiral of default fears leading to higher rates.

    A debt downgrade immediately preceded Greece’s call for the bailout last week. While Portugal has less debt, economists have focused on it as the next possible victim if concerns over high levels of government debt in Europe spread. Standard & Poor’s downgraded its credit rating on Portugal amid mounting concerns about the country’s ability to get a handle on its debt load, saying that the two-notch downgrade to A- reflects its view of “the amplified risks Portugal faces.”

    Greek company shares plunged for a fifth straight session Tuesday, with the benchmark Athens stock index shedding 6.75 percent to reach 1,683.08 points in late afternoon trading. The message from the markets is clear – there are real doubts that Athens will be able to service its debts.

    “The market is pricing in the realistic prospect that Greece may not be in a position to meet all its debt obligations,” said Jane Foley, research director at Forex.com.

    Athens now faces a long, nail-biting wait with far from guaranteed results before its mid-May payment date.

    “Until that day, everything must be concluded,” Finance Minister George Papaconstantinou said. “I have absolutely no doubt that we will get there.”

    Prime Minister George Papandreou said his country stood “naked before international market storms.”

    “We are going through Greece’s hardest time in recent decades,” Papandreou told his Socialist party lawmakers. “The challenges our country faces are unprecedented, not only for Greece, but also for Europe and even the world economy. … And what I say is no exaggeration.”

    by The Associated Press

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    We’re Living in a Kleptocracy: Fears of Socialism and Fascism Are a Distraction from the Naked Theft of Trillions


    Kleptocracy — now, there’s a word I was taught to associate with corrupt and exploitative governments that steal ruthlessly and relentlessly from the people.  It’s a word, in fact, that’s usually applied to flawed or failed governments in Africa, Latin America, or the nether regions of Asia.  Such governments are typically led by autocratic strong men who shower themselves and their cronies with all the fruits of extracted wealth, whether stolen from the people or squeezed from their country’s natural resources.  It’s not a word you’re likely to see associated with a mature republic like the United States led by disinterested public servants and regulated by more-or-less transparent principles and processes.

    In fact, when Americans today wish to critique or condemn their government, the typical epithets used are “socialism” or “fascism.”  When my conservative friends are upset, they send me emails with links to material about “ObamaCare” and the like.  These generally warn of a future socialist takeover of the private realm by an intrusive, power-hungry government.  When my progressive friends are upset, they send me emails with links pointing to an incipient fascist takeover of our public and private realms, led by that same intrusive, power-hungry government (and, I admit it, I’m hardly innocent when it comes to such “what if” scenarios).

    What if, however, instead of looking at where our government might be headed, we took a closer look at where we are — at the power-brokers who run or influence our government, at those who are profiting and prospering from it?  These are, after all, the “winners” in our American world in terms of the power they wield and the wealth they acquire.  And shouldn’t we be looking as well at those Americans who are losing — their jobs, their money, their homes, their healthcare, their access to a better way of life — and asking why?

    If we were to take an honest look at America’s blasted landscape of “losers” and the far shinier, spiffier world of “winners,” we’d have to admit that it wasn’t signs of onrushing socialism or fascism that stood out, but of staggeringly self-aggrandizing greed and theft right in the here and now.  We’d notice our public coffers being emptied to benefit major corporations and financial institutions working in close alliance with, and passing on remarkable sums of money to, the representatives of “the people.”  We’d see, in a word, kleptocracy on a scale to dazzle.  We would suddenly see an almost magical disappearing act being performed, largely without comment, right before our eyes.

    Of Red Herrings and Missing Pallets of Money

    Think of socialism and fascism as the red herrings of this moment or, if you’re an old time movie fan, as Hitchcockian MacGuffins — in other words, riveting distractions.  Conservatives and tea partiers fear invasive government regulation and excessive taxation, while railing against government takeovers — even as corporate lobbyists write our public healthcare bills to favor private interests.  Similarly, progressives rail against an emergent proto-fascist corps of private guns-for-hire, warrantless wiretapping, and the potential government-approved assassination of U.S. citizens, all sanctioned by a perpetual, and apparently open-ended, state of war.

    Yet, if this is socialism, why are private health insurers the government’s go-to guys for healthcare coverage?  If this is fascism, why haven’t the secret police rounded up tea partiers and progressive critics as well and sent them to the lager or the gulag?

    Consider this: America is not now, nor has it often been, a hotbed of political radicalism.  We have no substantial socialist or workers’ party.  (Unless you’re deluded, please don’t count the corporate-friendly “Democrat” party here.)  We have no substantial fascist party.  (Unless you’re deluded, please don’t count the cartoonish “tea partiers” here; these predominantly white, graying, and fairly affluent Americans seem most worried that the jackbooted thugs will be coming for them.)

    What drives America today is, in fact, business — just as was true in the days of Calvin Coolidge.  But it’s not the fair-minded “free enterprise” system touted in those freshly revised Texas guidelines for American history textbooks; rather, it’s a rigged system of crony capitalism that increasingly ends in what, if we were looking at some other country, we would recognize as an unabashed kleptocracy.

    Recall, if you care to, those pallets stacked with hundreds of millions of dollars that the Bush administration sent to Iraq and which, Houdini-like, simply disappeared.  Think of the ever-rising cost of our wars in Iraq and Afghanistan, now in excess of a trillion dollars, and just whose pockets are full, thanks to them.

    If you want to know the true state of our government and where it’s heading, follow the money (if you can) and remain vigilant: our kleptocratic Houdinis are hard at work, seeking to make yet more money vanish from your pockets — and reappear in theirs.

    From Each According to His Gullibility — To Each According to His Greed

    Never has the old adage my father used to repeat to me — “the rich get richer and the poor poorer” — seemed fresher or truer.  If you want confirmation of just where we are today, for instance, consider this passage from a recent piece by Tony Judt:

    In 2005, 21.2 percent of U.S. national income accrued to just 1 percent of earners.  Contrast 1968, when the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker.  Today the CEO of Wal-Mart earns nine hundred times the wages of his average employee.  Indeed, the wealth of the Wal-Mart founder’s family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40 percent of the U.S. population: 120 million people.

    Wealth concentration is only one aspect of our increasingly kleptocratic system.  War profiteering by corporations (however well disguised as heartfelt support for our heroic warfighters) is another.  Meanwhile, retired senior military officers typically line up to cash in on the kleptocratic equivalent of welfare, peddling their “expertise” in return for impressive corporate and Pentagon payouts that supplement their six-figure pensions.  Even that putative champion of the Carhartt-wearing common folk, Sarah Palin, pocketed a cool $12 million last year without putting the slightest dent in her populist bona fides.

    Based on such stories, now legion, perhaps we should rewrite George Orwell’s famous tagline from Animal Farm as: All animals are equal, but a few are so much more equal than others.

    And who are those “more equal” citizens?  Certainly, major corporations, which now enjoy a kind of political citizenship and the largesse of a federal government eager to rescue them from their financial mistakes, especially when they’re judged “too big to fail.”  In raiding the U.S. Treasury, big banks and investment firms, shamelessly ready to jack up executive pay and bonuses even after accepting billions in taxpayer-funded bailouts, arguably outgun militarized multinationals in the conquest of the public realm and the extraction of our wealth for their benefit.

    Such kleptocratic outfits are, of course, abetted by thousands of lobbyists and by politicians who thrive off corporate campaign contributions.  Indeed, many of our more prominent public servants have proved expert at spinning through the revolving door into the private sector.  Even ex-politicians who prefer to be seen as sympathetic to the little guy like former House Majority Leader Dick Gephardt eagerly cash in.

    I’m Shocked, Shocked, to Find Profiteering Going on Here

    An old Roman maxim enjoins us to “let justice be done, though the heavens fall.”  Within our kleptocracy, the prevailing attitude is an insouciant “We’ll get ours, though the heavens fall.”  This mindset marks the decline of our polity.  A spirit of shared sacrifice, dismissed as hopelessly naïve, has been replaced by a form of tribalized privatization in which insiders find ways to profit no matter what.

    Is it any surprise then that, in seeking to export our form of government to Iraq and Afghanistan, we’ve produced not two model democracies, but two emerging kleptocracies, fueled respectively by oil and opium?

    When we confront corruption in Iraq or Afghanistan, are we not like the police chief in the classic movie Casablanca who is shocked, shocked to find gambling going on at Rick’s Café, even as he accepts his winnings?

    Why then do we bother to feign shock when Iraqi and Afghan elites, a tiny minority, seek to enrich themselves at the expense of the majority?

    Shouldn’t we be flattered?  Imitation, after all, is the sincerest form of flattery.  Isn’t it?

    William J. Astore, a retired lieutenant colonel (USAF), now teaches at the Pennsylvania College of Technology. His books and articles focus primarily on military history and include Hindenburg: Icon of German Militarism (Potomac Press, 2005). He may be reached at wastore@pct.edu.

    To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com here.

    By William Astore, Tomdispatch.com
    Posted on April 20, 2010, Printed on April 22, 2010
    http://www.alternet.org/story/146553/

    To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com here.]

    © 2010 Tomdispatch.com All rights reserved.
    View this story online at: http://www.alternet.org/story/146553/

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    Tomgram: William Astore, The Business of America Is Kleptocracy


    It’s hard to miss these days.  The headlines tell the story — repetitively.  Everyone, it seems, is on the take.  The Securities and Exchange Commission has charged Goldman Sachs with securities fraud for creating and selling “a mortgage investment that was secretly intended to fail” — and then betting against its own customers. JPMorgan Chase which, in a pinch in 2008, happily took taxpayer dough, just reported $3.3 billion in profits for the first quarter of 2010, a jump of 55% over the previous quarter.  The bank set aside $9.3 billion in what’s called “compensation and benefits” for its employees in 2009.

    Even when they lose, they win.  According to James Kwak of the Baseline Scenario website, on a deal in which JPMorgan swallowed $880 million in losses, its bankers still managed to walk away with up to $10 million in compensation.  As he wrote, “JPMorgan’s bankers did just fine, despite having placed a ticking time bomb on their own bank’s balance sheet.” Meanwhile, Robert Rubin, who helped create the world that led to the 2008 financial meltdown as Treasury Secretary under Bill Clinton, then took a top position at Citibank and made more than $100 million before it tanked on his watch.  As economist Dean Baker puts it, “In the fall of 2008, when Citigroup was saved from bankruptcy with a taxpayer bailout, Rubin quietly slipped out the back door (with his money), resigning from his position at Citigroup.” Only recently Rubin made the headlines for offering the least apologetic (non-)apology imaginable for taking the American people to the cleaners.

    And when it comes to taking, according to Eric Lichtblau of the New York Times, “more than 125 former Congressional aides and lawmakers are now working for financial firms as part of a multibillion-dollar effort to shape, and often scale back, federal regulatory power.”  In other words, the regulators and their aides legislate the rules and then simply step through that infamous revolving door and pick up a handsome check on the other side.  There are, in fact, at least 11,000 well-employed registered lobbyists in Washington today.  A $3.4 billion “industry” in 2009, lobbying is definitely a field to get into, even in bad times, and according to the Christian Science Monitor, “when the cost of grass-roots efforts and of strategic advisers are all counted, total spending on influencing policy in Washington approaches $9.6 billion a year.”

    As for the money flowing into politics from corporate deep pockets, 2008 not only saw the first billion-dollar presidential campaign, but at $1.7 billion, more than doubled the 2004 campaign’s costs, and no one expects 2012 to be anything but more expensive.  All this is, of course, known to anyone who glances at the front page of a daily newspaper, but what exactly do we make of it all?  What does it add up to?  William Astore, historian and TomDispatch regular, has a suggestion, but before you start his piece, you might want to close your purse or button that back pocket with your wallet in it.  Otherwise, they could be picked bare by the time you’re done.  Tom

    American Kleptocracy
    How Fears of Socialism and Fascism Hide Naked Theft

    By William J. Astore

    Kleptocracy — now, there’s a word I was taught to associate with corrupt and exploitative governments that steal ruthlessly and relentlessly from the people.  It’s a word, in fact, that’s usually applied to flawed or failed governments in Africa, Latin America, or the nether regions of Asia.  Such governments are typically led by autocratic strong men who shower themselves and their cronies with all the fruits of extracted wealth, whether stolen from the people or squeezed from their country’s natural resources.  It’s not a word you’re likely to see associated with a mature republic like the United States led by disinterested public servants and regulated by more-or-less transparent principles and processes.

    In fact, when Americans today wish to critique or condemn their government, the typical epithets used are “socialism” or “fascism.”  When my conservative friends are upset, they send me emails with links to material about “ObamaCare” and the like.  These generally warn of a future socialist takeover of the private realm by an intrusive, power-hungry government.  When my progressive friends are upset, they send me emails with links pointing to an incipient fascist takeover of our public and private realms, led by that same intrusive, power-hungry government (and, I admit it, I’m hardly innocent when it comes to such “what if” scenarios).

    What if, however, instead of looking at where our government might be headed, we took a closer look at where we are — at the power-brokers who run or influence our government, at those who are profiting and prospering from it?  These are, after all, the “winners” in our American world in terms of the power they wield and the wealth they acquire.  And shouldn’t we be looking as well at those Americans who are losing — their jobs, their money, their homes, their healthcare, their access to a better way of life — and asking why?

    If we were to take an honest look at America’s blasted landscape of “losers” and the far shinier, spiffier world of “winners,” we’d have to admit that it wasn’t signs of onrushing socialism or fascism that stood out, but of staggeringly self-aggrandizing greed and theft right in the here and now.  We’d notice our public coffers being emptied to benefit major corporations and financial institutions working in close alliance with, and passing on remarkable sums of money to, the representatives of “the people.”  We’d see, in a word, kleptocracy on a scale to dazzle.  We would suddenly see an almost magical disappearing act being performed, largely without comment, right before our eyes.

    Of Red Herrings and Missing Pallets of Money

    Think of socialism and fascism as the red herrings of this moment or, if you’re an old time movie fan, as Hitchcockian MacGuffins — in other words, riveting distractions.  Conservatives and tea partiers fear invasive government regulation and excessive taxation, while railing against government takeovers — even as corporate lobbyists write our public healthcare bills to favor private interests.  Similarly, progressives rail against an emergent proto-fascist corps of private guns-for-hire, warrantless wiretapping, and the potential government-approved assassination of U.S. citizens, all sanctioned by a perpetual, and apparently open-ended, state of war.

    Yet, if this is socialism, why are private health insurers the government’s go-to guys for healthcare coverage?  If this is fascism, why haven’t the secret police rounded up tea partiers and progressive critics as well and sent them to the lager or the gulag?

    Consider this: America is not now, nor has it often been, a hotbed of political radicalism.  We have no substantial socialist or workers’ party.  (Unless you’re deluded, please don’t count the corporate-friendly “Democrat” party here.)  We have no substantial fascist party.  (Unless you’re deluded, please don’t count the cartoonish “tea partiers” here; these predominantly white, graying, and fairly affluent Americans seem most worried that the jackbooted thugs will be coming for them.)

    What drives America today is, in fact, business — just as was true in the days of Calvin Coolidge.  But it’s not the fair-minded “free enterprise” system touted in those freshly revised Texas guidelines for American history textbooks; rather, it’s a rigged system of crony capitalism that increasingly ends in what, if we were looking at some other country, we would recognize as an unabashed kleptocracy.

    Recall, if you care to, those pallets stacked with hundreds of millions of dollars that the Bush administration sent to Iraq and which, Houdini-like, simply disappeared.  Think of the ever-rising cost of our wars in Iraq and Afghanistan, now in excess of a trillion dollars, and just whose pockets are full, thanks to them.

    If you want to know the true state of our government and where it’s heading, follow the money (if you can) and remain vigilant: our kleptocratic Houdinis are hard at work, seeking to make yet more money vanish from your pockets — and reappear in theirs.

    From Each According to His Gullibility — To Each According to His Greed

    Never has the old adage my father used to repeat to me — “the rich get richer and the poor poorer” — seemed fresher or truer.  If you want confirmation of just where we are today, for instance, consider this passage from a recent piece by Tony Judt:

    In 2005, 21.2 percent of U.S. national income accrued to just 1 percent of earners.  Contrast 1968, when the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker.  Today the CEO of Wal-Mart earns nine hundred times the wages of his average employee.  Indeed, the wealth of the Wal-Mart founder’s family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40 percent of the U.S. population: 120 million people.

    Wealth concentration is only one aspect of our increasingly kleptocratic system.  War profiteering by corporations (however well disguised as heartfelt support for our heroic warfighters) is another.  Meanwhile, retired senior military officers typically line up to cash in on the kleptocratic equivalent of welfare, peddling their “expertise” in return for impressive corporate and Pentagon payouts that supplement their six-figure pensions.  Even that putative champion of the Carhartt-wearing common folk, Sarah Palin, pocketed a cool $12 million last year without putting the slightest dent in her populist bona fides.

    Based on such stories, now legion, perhaps we should rewrite George Orwell’s famous tagline from Animal Farm as: All animals are equal, but a few are so much more equal than others.

    And who are those “more equal” citizens?  Certainly, major corporations, which now enjoy a kind of political citizenship and the largesse of a federal government eager to rescue them from their financial mistakes, especially when they’re judged “too big to fail.”  In raiding the U.S. Treasury, big banks and investment firms, shamelessly ready to jack up executive pay and bonuses even after accepting billions in taxpayer-funded bailouts, arguably outgun militarized multinationals in the conquest of the public realm and the extraction of our wealth for their benefit.

    Such kleptocratic outfits are, of course, abetted by thousands of lobbyists and by politicians who thrive off corporate campaign contributions.  Indeed, many of our more prominent public servants have proved expert at spinning through the revolving door into the private sector.  Even ex-politicians who prefer to be seen as sympathetic to the little guy like former House Majority Leader Dick Gephardt eagerly cash in.

    I’m Shocked, Shocked, to Find Profiteering Going on Here

    An old Roman maxim enjoins us to “let justice be done, though the heavens fall.”  Within our kleptocracy, the prevailing attitude is an insouciant “We’ll get ours, though the heavens fall.”  This mindset marks the decline of our polity.  A spirit of shared sacrifice, dismissed as hopelessly naïve, has been replaced by a form of tribalized privatization in which insiders find ways to profit no matter what.

    Is it any surprise then that, in seeking to export our form of government to Iraq and Afghanistan, we’ve produced not two model democracies, but two emerging kleptocracies, fueled respectively by oil and opium?

    When we confront corruption in Iraq or Afghanistan, are we not like the police chief in the classic movie Casablanca who is shocked, shocked to find gambling going on at Rick’s Café, even as he accepts his winnings?

    Why then do we bother to feign shock when Iraqi and Afghan elites, a tiny minority, seek to enrich themselves at the expense of the majority?

    Shouldn’t we be flattered?  Imitation, after all, is the sincerest form of flattery.  Isn’t it?

    William J. Astore is a TomDispatch regular; he teaches History at the Pennsylvania College of Technology and served in the Air Force for 20 years, retiring as a lieutenant colonel.  He may be reached at wjastore@gmail.com.

    Copyright 2010 William J. Astore

    © 2010 TomDispatch. All rights reserved.
    View this story online at: http://www.tomdispatch.com/blog/175235/
    By William Astore
    Posted on April 20, 2010, Printed on April 21, 2010
    http://www.tomdispatch.com/blog/175235/

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    “Imposed” Mideast Solution Would Stoke Violence – Israel FM


    Wednesday, April 21, 2010

    JERUSALEM (Reuters) – In a veiled warning to U.S. President Barack Obama, Israel’s foreign minister said on Tuesday that any move to impose a peace settlement between Israel and the Palestinians would lead to greater conflict.

    “Any attempt to force a solution on the parties without establishing the foundation of mutual trust will only deepen the conflict,” Avigdor Lieberman told the assembled diplomatic corps at an event marking Israel’s Independence Day.

    Though he made no reference to the United States, the remark appeared to be a response to recent speculation in Washington that Obama may consider proposing a peace settlement in the absence of a negotiated deal between the Palestinians and Israel.

    Lieberman, who leads a far-right, pro-settler party in the coalition of Prime Minister Benjamin Netanyahu, said that before negotiating a final settlement of the 62-year-old conflict, it would be necessary first to establish “a new reality” in which Israel enjoys security, the Palestinians greater prosperity and both sides more stability.

    He also told the assembled ambassadors in the grounds of the presidential residence in Jerusalem that Israel would never give up its control of all of Jerusalem, a city at the heart of the conflict.

    Many foreign powers support a negotiated settlement of the dispute over Jerusalem that would satisfy Palestinian aspirations to have the capital of their future state in East Jerusalem, which Israel seized in a war in 1967.

    (Reporting by Alastair Macdonald; editing by Andrew Roche)

    By REUTERS

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