Wednesday, February 29, 2012


In a Comic Book, Health Care Reform Explained

by JAY LONDON on February 28, 2012
Original here

At about 1,900 pages and 400,000 words, the Patient Protection and Affordable Care Act is a heavy read. Trying to deduce all of the bill’s information can be, at best, time-consuming and, at worst, undecipherable.

Professor Jonathan Gruber ’87 sought to interpret this information for the general public in a straightforward way: through pictures. Using a comic book format, Gruber’s graphic novel, “Health Care Reform: What It Is, Why It’s Necessary, How It Works,” explains and combats some common misconceptions about the new federal health reform law.

A longtime health economist, Gruber has worked with both political parties on health care reform. He worked alongside then-Governor Mitt Romney on the 2006 Massachusetts health care insurance reform law and advised President Barack Obama during the writing of the Affordable Care Act. He told New York’s Inside City Hall he was initially skeptical about doing the book, but quickly realized the comic-style medium was an effective way to translate information.
From Inside City Hall:
“…When you’re on airplane, and you want to know what to do in case of an accident, they hand you a comic. It’s a great way to teach people.
When we polled people and asked them whether they liked the bill, they were sort of skeptical. But when you explained what was in it, they liked it. We realized we needed to explain a very complicated concept clearly.”
In the 152-page book, an illustrated version of Gruber attempts to clarify information and combat misconceptions about the new federal health reform law. The book aims to answer bill-specific issues such as why health-care reform is important, what the individual insurance mandate is, and whether or not people will be required to buy health insurance that they cannot afford.

In the video below, Gruber uses animated illustrations to provide a short summary of points made in Health Care Reform: What It Is, Why It’s Necessary, How It Works.

Tuesday, February 28, 2012


FEBRUARY 28, 2012                                                                                                  Permalink 

Report from Kabul: Deadly Protests over U.S. Koran Burning May Be Turning Point for U.S. Occupation

The U.S.-led NATO occupation in Afghanistan is facing a storm of violence and outrage over the burning of copies of the Koran by U.S. troops at the Bagram Air Base last week. Retaliatory attacks and public protests have swept Afghanistan, leaving more than 40 Afghans dead. On Sunday, six U.S. soldiers were injured in northern Afghanistan when a demonstrator threw a grenade at a U.S. base. Two senior U.S. Army officers were shot dead on Friday inside the Afghan Interior Ministry. In private, U.S. officials are expressing worry about the situation in Afghanistan. We go to Kabul to speak with John Wendle, a reporter for TIME and photographer for Polaris Images. "I think we’re going to continue to see attacks," Wendle says. "[This] makes it difficult for the United States to pull out and achieve the one goal that it’s kind of set for itself, which is training the Afghan security forces so they can stand on their own two feet and provide security in this country." [Original includes rush transcript]


Tomgram: Engelhardt and Turse, The End in Afghanistan?

Blown Away
How the U.S. Fanned the Flames in Afghanistan

By Tom Engelhardt and Nick Turse

Is it all over but the (anti-American) shouting -- and the killing?  Are the exits finally coming into view?
Sometimes, in a moment, the fog lifts, the clouds shift, and you can finally see the landscape ahead with startling clarity.  In Afghanistan, Washington may be reaching that moment in a state of panic, horror, and confusion.  Even as an anxious U.S. commander withdrew American and NATO advisors from Afghan ministries around Kabul last weekend -- approximately 300, military spokesman James Williams tells TomDispatch -- the ability of American soldiers to remain on giant fortified bases eating pizza and fried chicken into the distant future is not in doubt.

No set of Taliban guerrillas, suicide bombers, or armed Afghan “allies” turning their guns on their American “brothers” can alter that -- not as long as Washington is ready to bring the necessary supplies into semi-blockaded Afghanistan at staggering cost.  But sometimes that’s the least of the matter, not the essence of it.  So if you’re in a mood to mark your calendars, late February 2012 may be the moment when the end game for America’s second Afghan War, launched in October 2001, was initially glimpsed.

Amid the reportage about the recent explosion of Afghan anger over the torching of Korans in a burn pit at Bagram Air Base, there was a tiny news item that caught the spirit of the moment.  As anti-American protests (and the deaths of protestors) mounted across Afghanistan, the German military made a sudden decision to immediately abandon a 50-man outpost in the north of the country.

True, they had planned to leave it a few weeks later, but consider the move a tiny sign of the increasing itchiness of Washington’s NATO allies.  The French have shown a similar inclination to leave town since, earlier this year, four of their troops were blown away (and 16 wounded) by an Afghan army soldier, as three others had been shot down several weeks before by another Afghan in uniform.  Both the French and the Germans have also withdrawn their civilian advisors from Afghan government institutions in the wake of the latest unrest.

Now, it's clear enough: the Europeans are ready to go.  And that shouldn’t be surprising.  After all, we’re talking about NATO -- the North Atlantic Treaty Organization -- whose soldiers found themselves in distant Afghanistan in the first place only because, since World War II, with the singular exception of French President Charles de Gaulle in the 1960s, European leaders have had a terrible time saying “no” to Washington.  They still can’t quite do so, but in these last months it’s clear which way their feet are pointed.

Which makes sense.  You would have to be blind not to notice that the American effort in Afghanistan is heading into the tank.

The surprising thing is only that the Obama administration, which recently began to show a certain itchiness of its own -- speeding up withdrawal dates and lowering the number of forces left behind -- remains remarkably mired in its growing Afghan disaster.  Besieged by demonstrators there, and at home by Republican presidential hopefuls making hay out of a situation from hell, its room to maneuver in an unraveling, increasingly chaotic situation seems to grow more limited by the day.

Sensitivity Training

The Afghan War shouldn’t be the world’s most complicated subject to deal with.  After all, the message is clear enough.  Eleven years in, if your forces are still burning Korans in a deeply religious Muslim country, it’s way too late and you should go.

Instead, the U.S. command in Kabul and the administration back home have proceeded to tie themselves in a series of bizarre knots, issuing apologies, orders, and threats to no particular purpose as events escalated.  Soon after the news of the Koran burning broke, for instance, General John R. Allen, the U.S. war commander in Afghanistan, issued orders that couldn’t have been grimmer (or more feeble) under the circumstances.  Only a decade late, he directed that all U.S. military personnel in the country undergo 10 days of sensitivity “training in the proper handling of religious materials.”

Sensitivity, in case you hadn’t noticed at this late date, has not been an American strong suit there. In the headlines in the last year, for instance, were revelations about the 12-soldier “kill team” that “hunted” Afghan civilians “for sport,” murdered them, and posed for demeaning photos with their corpses.  There were the four wisecracking U.S. Marines who videotaped themselves urinating on the bodies of dead Afghans -- whether civilians or Taliban guerrillas is unknown -- with commentary (“Have a good day, buddy… Golden -- like a shower”).  There was also that sniper unit proudly sporting a Nazi SS banner in another photographed incident and the U.S. combat outpost named “Aryan.”  And not to leave out the allies, there were the British soldiers who were filmed “abusing” children.

And that’s just the tip of the iceberg when it comes to how Afghans have often experienced the American and NATO occupation of these last years.  To take but one example that recently caused outrage, there were the eight shepherd boys, aged six to 18, slaughtered in a NATO air strike in Kapisa Province in northern Afghanistan (with the usual apology and forthcoming “investigation,” as well as claims, denied by Afghans who also investigated, that the boys were armed).

More generally, there are the hated night raids launched by special operations forces that break into Afghan homes, cross cultural boundaries of every sort, and sometimes leave death in their wake.  Like errant American and NATO air operations, which have been commonplace in these war years, they are reportedly deeply despised by most Afghans.

All of these, in turn, have been protested again and again by Afghan President Hamid Karzai.  He has regularly demanded that the U.S. military cease them (or bring them under Afghan control).  Being the president of Afghanistan, however, he has limited leverage and so American officials have paid little attention to his complaints or his sense of what Afghans were willing to take.

The results are now available for all to see in an explosion of anger spreading across the country.  How far this can escalate and how long it can last no one knows.  But recent experience indicates that, once a population heads for the streets, anything can happen.  All of this could, of course, peter out, but with more than 30 protesters already dead, it could also take on a look reminiscent of the escalating civil war in Syria -- including, as has already happened on a small scale in the past, whole units of Afghan security forces defecting to the Taliban.

Unfolding events have visibly overwhelmed and even intimidated the Americans in charge.  However, as religious as the country may be and holy as the Koran may be considered, what's happened cannot be fully explained by the book burning.  It is, in truth, an explosion a decade in coming.

Precursors and Omens

After the grim years of Taliban rule, when the Americans arrived in Kabul in November 2001, liberation was in the air.  More than 10 years later, the mood is clearly utterly transformed and, for the first time, there are reports of “Taliban songs” being sung at demonstrations in the streets of the capital.  Afghanistan is, as the New York Times reported last weekend (using language seldom seen in American newspapers) “a religious country fed up with foreigners”; or as Laura King of the Los Angeles Times put it, there is now “a visceral distaste for Western behavior and values” among significant numbers of Afghans.

Years of pent up frustration, despair, loathing, and desperation are erupting in the present protests.  That this was long on its way can’t be doubted.

Buy the Book
Among the more shocking events in the wake of the Koran burnings was the discovery in a room in the heavily guarded Afghan Interior Ministry in Kabul of the bodies of an American lieutenant colonel and major, each evidently executed with a shot in the back of the head while at work.  The killer, who worked in the ministry, was evidently angered by the Koran burnings and possibly by the way the two Americans mocked Afghan protesters and the Koran itself.  He escaped.  The Taliban (as in all such incidents) quickly took responsibility, though it may not have been involved at all.

What clearly rattled the American command, however, and led them to withdraw hundreds of advisors from Afghan ministries around Kabul was that the two dead officers were “inside a secure room" that bars most Afghans.  It was in the ministry's command and control complex.  (By the way, if you want to grasp some of the problems of the last decade just consider that the Afghan Interior Ministry includes an area open to foreigners, but not to most Afghans who work there.)

As the New York Times put it, the withdrawal of the advisors was “a clear sign of concern that the fury had reached deeply into even the Afghan security forces and ministries working most closely with the coalition.” Those two dead Americans were among four killed in these last days of chaos by Afghan “allies.”  Meanwhile, the Taliban urged Afghan police and army troops, some of whom evidently need no urging, to attack U.S. military bases and American or NATO forces.

Two other U.S. troops died outside a small American base in Nangarhar Province near the Pakistani border in the midst of an Afghan demonstration in which two protestors were also killed.  An Afghan soldier gunned the Americans down and then evidently escaped into the crowd of demonstrators. Such deaths, in a recent Washington Post piece, were termed “fratricide,” though that perhaps misconstrues the feelings of many Afghans, who over these last years have come to see the Americans as occupiers and possibly despoilers, but not as brothers.

Historically unprecedented in the modern era is the way, in the years leading up to this moment, Afghans in police and army uniforms have repeatedly turned their weapons on American or NATO troops training, working with, or patrolling with them.  Barely more than a week ago, for instance, an Afghan policeman killed the first Albanian soldier to die in the war.  Earlier in the year, there were those seven dead French troops.  At least 36 U.S. and NATO troops have died in this fashion in the past year.  Since 2007, there have been at least 47 such attacks.  These have been regularly dismissed as “isolated incidents” of minimal significance by U.S. and NATO officials and, unbelievably enough, are still being publicly treated that way.

Yet not in Iraq, nor during the Vietnam War, nor the Korean conflict, nor even during the Philippine Insurrection at the turn of the twentieth century were there similar examples of what once would have been called “native troops” turning on those training, paying for, and employing them.  You would perhaps have to go back to the Sepoy Rebellion, a revolt by Indian troops against their British officers in 1857, for anything comparable.

In April 2011, in the most devastating of these incidents, an Afghan air force colonel murdered nine U.S. trainers in a heavily guarded area of Kabul International Airport.  He was reportedly angry at Americans generally and evidently not connected to the Taliban.  And consider this an omen of things to come: his funeral in Kabul was openly attended by 1,500 mourners.

Put in the most practical terms, the Bush and now Obama administrations have been paying for and training an Afghan security force numbering in the hundreds of thousands -- to the tune of billions dollars annually ($11 billion last year alone).  They are the ones to whom the American war is to be “handed over” as U.S. forces are drawn down.  Now, thanks either to Taliban infiltration, rising anger, or some combination of the two, it’s clear that any American soldier who approaches a member of the Afghan security forces to “hand over” anything takes his life in his hands.  No war can be fought under such circumstances for very long.

Apologies, Pleas, and Threats

So don’t say there was no warning, or that Obama’s top officials shouldn’t have been prepared for the present unraveling.  But when it came, the administration and the military were caught desperately off guard and painfully flatfooted.

In fact, through repeated missteps and an inability to effectively deal with the fallout from the Koran-burning incident, Washington now finds itself trapped in a labyrinth of investigations, apologies, pleas, and threats.  Events have all but overwhelmed the administration’s ability to conduct an effective foreign policy.  Think of it instead as a form of diplomatic pinball in which U.S. officials and commanders bounce from crisis to crisis with a limited arsenal of options and a toxic brew of foreign and domestic political pressures at play.

How did the pace get quite so dizzying?  Let’s start with those dead Afghan shepherd boys.  On February 15th, the U.S.-led International Security Force (ISAF) “extended its deep regret to the families and loved ones of several Afghan youths who died during an air engagement in Kapisa province Feb 8.”  According to an official press release, ISAF insisted, as in so many previous incidents, that it was “taking appropriate action to ascertain the facts, and prevent similar occurrences in the future.”

The results of the investigation were still pending five days later when Americans in uniform were spotted by Afghan workers tossing those Korans into that burn pit at Bagram Air Base.  The Afghans rescued several and smuggled them -- burnt pages and all -- off base, sparking national outrage.  Almost immediately, the next act of contrition came forth.  “On behalf of the entire International Security Assistance Force, I extend my sincerest apologies to the people of Afghanistan,” General Allen announced the following day.  At the same time, in a classic case of too-little, too-late, he issued that directive for training in “the proper handling of religious materials.”

Buy the Book
That day, White House Press Secretary Jay Carney was on the same page, telling reporters that the burning of the Muslim holy books was “deeply unfortunate,” but not indicative of the Americans’ feelings toward the religious beliefs of the Afghan people.  “Our military leaders have apologized... for these unintentional actions, and ISAF is undertaking an investigation to understand what happened and to ensure that steps are taken so that incidents like this do not happen again.”

On February 22nd, an investigation of the Koran burnings by a joint ISAF-Afghan government team commenced.  "The purpose of the investigation is to discover the truth surrounding the events which resulted in this incident," Allen said. "We are determined to ascertain the facts, and take all actions necessary to ensure this never happens again."

The next day, as Afghan streets exploded in anger, Allen called on “everyone throughout the country -- ISAF members and Afghans -- to exercise patience and restraint as we continue to gather the facts surrounding Monday night’s incident.”

That very same day, Allen’s commander-in-chief sent a letter to Afghan President Hamid Karzai that included an apology, expressing “deep regret for the reported incident.”  “The error was inadvertent,’’ President Obama wrote. “I assure you that we will take the appropriate steps to avoid any recurrence, to include holding accountable those responsible.’’

Obama’s letter drew instant fire from Republican presidential candidates, most forcefully former House speaker Newt Gingrich, who called it an “outrage” and demanded instead that President Karzai issue an apology for the two Americans shot down by an Afghan soldier.  (Otherwise, he added, “we should say goodbye and good luck.”)

Translated into Washingtonese, the situation now looked like this: a Democratic president on the campaign trail in an election year who apologizes to a foreign country has a distinct problem. Two foreign countries?  Forget it.

As a result, efforts to mend crucial, if rocky, relations with Pakistan were thrown into chaos.  Because of cross-border U.S. air strikes in November which killed 24 Pakistani soldiers, ties between the two countries were already deeply frayed and Pakistan was still blocking critical resupply routes for the war in Afghanistan.  With American war efforts suffering for it and resupply costs sky-high, the U.S. government had put together a well-choreographed plan to smooth the waters.

General Martin Dempsey, Chairman of the Joint Chiefs of Staff, was to issue a formal apology to Pakistan’s army chief.  Secretary of State Hillary Clinton would then follow up with a similar apology to her Pakistani counterpart.

Fearing further Republican backlash, however, the Obama administration quickly altered its timetable, putting off the apology for at least several more weeks, effectively telling the Pakistanis that any regrets over the killing of their troops would have to wait for a time more convenient to the U.S. election cycle. 

Trading apologies to Afghans for those to Pakistanis, however, turned out to mean little on the streets of Afghanistan, where even in non-Taliban areas of the country, chants of “Death to America!” were becoming commonplace.  “Just by saying ‘I am sorry,’ nothing can be solved,” protester Wali Mohammed told the New York Times. “We want an open trial for those infidels who have burned our Holy Koran.”

And his response was subdued compared to that of Mohammed Anwar, an officer with the U.S.-allied Afghan police.  “I will take revenge from the infidels for what they did to our Holy Koran, and I will kill them whenever I get the chance,” he said. “I don’t care about the job I have.”

A day later, when Anwar’s words were put into action by someone who undoubtedly had similar feelings, General Allen announced yet another investigation, this time with tough talk, not apologies, following.  "I condemn today's attack at the Afghan Ministry of Interior that killed two of our coalition officers, and my thoughts and prayers are with the families and loved ones of the brave individuals lost today," he said in a statement provided to TomDispatch by ISAF. "We are investigating the crime and will pursue all leads to find the person responsible for this attack. The perpetrator of this attack is a coward whose actions will not go unanswered."

Allen also took the unprecedented step of severing key points of contact with America’s Afghan allies.  "For obvious force protection reasons, I have also taken immediate measures to recall all other ISAF personnel working in ministries in and around Kabul."

Unable to reboot relations with allies in Islamabad due to the unrest in Afghanistan (which was, in fact, already migrating across the border), the U.S. now found itself partially severing ties with its “partners” in Kabul as well.  Meanwhile, back home, Gingrich and others raised the possibility of severing ties with President Karzai himself.  In other words, the heat was rising in both the White House and the Afghan presidential palace, while any hope of controlling events elsewhere in either country was threatening to disappear.

As yet, the U.S. military has not taken the next logical step: barring whole categories of Afghans from American bases.  “There are currently no discussions ongoing about limiting access to ISAF bases to our Afghan partners,” an ISAF spokesperson assured TomDispatch, but if the situation worsens, expect such discussions to commence.

The Beginning of the End?

As the Koran burning scandal unfolded, TomDispatch spoke to Raymond F. Chandler III, the Sergeant Major of the U.S. Army, the most senior enlisted member of that service.  “Are there times that things happen that don’t go exactly the way we want or that people act in an unprofessional manner?  Absolutely.  It’s unfortunate,” he said.  “We have a process in place to ensure that when those things don’t happen we conduct an investigation and hold people accountable.”

In Afghan eyes over the last decade, however, it’s accountability that has been sorely lacking, which is why many now in the streets are demanding not just apologies, but a local trial and the death penalty for the Koran burners.  Although ISAF’s investigation is ongoing, its statements already indicate that it has concluded the book burnings were accidental and unintentional.  This ensures one thing: those at fault, whom no American administration could ever afford to turn over to Afghans for trial anyway, will receive, at best, a slap on the wrist -- and many Afghans will be further outraged.

In other words, twist and turn as they might, issue what statements they will, the Americans are now remarkably powerless in the Afghan context to stop the unraveling.  Quite the opposite: their actions are guaranteed to ensure further anger among their Afghan “allies.”

Chandler, who was in Afghanistan last year and is slated to return in the coming months, said that he believed the United States was winning there, albeit with caveats.  “Again, there are areas in Afghanistan where we have been less successful than others, but each one of those provinces, each one of those districts has their own set of conditions tied with the Afghan people, the Afghan government’s criteria for transition to the Afghan army and the Afghan national police, the Afghan defense forces, and we’re committed to that.”  He added that the Americans serving there were “doing absolutely the best possible under the conditions and the environment.”

It turns out, however, that in Afghanistan today the “best” has not been sufficient.  With even some members of the Afghan parliament now calling for jihad against Washington and its coalition allies, radical change is in the air. The American position is visibly crumbling.  “Winning” is a distant, long-faded fantasy, defeat a rising reality.

Despite its massive firepower and staggering base structure in Afghanistan, actual power is visibly slipping away from the United States.  American officials are already talking about not panicking (which indicates that panic is indeed in the air).  And in an election year, with the Obama administration’s options desperately limited and what goals it had fast disappearing, it can only brace itself and hope to limp through until November 2012.

The end game in Afghanistan has, it seems, come into view, and after all these fruitless, bloody years, it couldn’t be sadder.  Saddest of all, so much of the blood spilled has been for purposes, if they ever made any sense, that have long since disappeared into the fog of history.

Tom Engelhardt, co-founder of the American Empire Project and the author of The American Way of War: How Bush’s Wars Became Obama’s as well as The End of Victory Culture, runs the Nation Institute's His latest book, The United States of Fear (Haymarket Books), has just been published.

Nick Turse is associate editor of  An award-winning journalist, his work has appeared in the Los Angeles Times, the Nation, and regularly at TomDispatch. His new TomDispatch series on the changing face of American empire is being underwritten by Lannan Foundation.  You can follow him on Twitter @NickTurse, on Tumblr, and on Facebook.
Follow TomDispatch on Twitter @TomDispatch and join us on Facebook.
Copyright 2012 Tom Engelhardt and Nick Turse

Sunday, February 26, 2012


Blogger's Note: Bernie Ellis organized the National Election Reform Conference held at the Jefferson Street Missionary Baptist Church in Nashville, TN, April 8-10, 2005. It was attended by individuals from all across the United States who perceived -- and more commonly PROVED -- massive fraud in the 2004 Presidential Election, flipping millions of votes from Kerry to Bush. Forty of these individuals (including me) were allotted speaking spots. On the last day a number of topical discussion groups were held; the picture at the left shows Bernie (in white shirt, left) paying a visit to the group that I had joined. Ironically (given that the venue was a black church) most speakers were white. What may seen to be an even greater irony, Bernie was tapped to be the keynote speaker at Oak Ridge National Laboratory on Martin Luther King Day last month. But if you watch the video below, and I hope you all will, you will see that it was no irony at all... It literally had me in tears.

Martin Luther King Day Keynote Address at US Dept of Energy - Oak Ridge, TN

Uploaded by BernieEllis1 on Feb 23, 2012

Protecting the Promise of America

This presentation was the keynote address at the 2012 Martin Luther King Day celebration held at the US Department of Energy/Y-12 facility in Oak Ridge, TN, one of the most secure facilities in this country. At the recommendation of the TN chapter of the NAACP, Bernie Ellis, the organizer of the Tennessee-based grassroots election integrity organization, Gathering To Save Our Democracy, was asked to address the large USDOE audience on past and present efforts to protect, defend and extend voting rights in Tennessee and the nation; and on the serious threats to our franchise that are underway today.

Bernie Ellis, MA, MPH
Organizer, Gathering To Save Our Democracy
Contact at tracevu at gmaildotcom

Saturday, February 25, 2012


036, de Juan Fernando Andrés Parrilla y Esteban Roel García Vázquez

Uploaded by notodofilmfest on Jan 31, 2011

Finalista de la Novena Edición de Jameson Notodofilmfest

Blogger's Note: Although dubbed in Spanish, it is suspected that this may be of Eastern Europe or Russian origin. In any event, let me assure you that our long-time experiences with Mexican bureaucrats have been nothing like this.


FEBRUARY 24, 2012                                                                                                                 .

Occupy the SEC: Former Wall Street Workers Defend Volcker Rule Against Banks’ Anti-Regulatory Push

The latest offshoot of the Occupy Wall Street movement, Occupy the SEC, has submitted a 325-page comment to the Securities and Exchange Commission that calls on regulators to resist the financial industry’s lobbying efforts to water down the Volcker Rule, a section in the Dodd–Frank Wall Street Reform and Consumer Protection Act, that aims to prevent large banks from making certain kinds of risky, speculative investments. The group is made up of former Wall Street professionals who once worked at many of the largest financial firms in the industry. We’re joined by Alexis Goldstein, who worked as a computer programmer for seven years at Morgan Stanley, Merrill Lynch and Deutsche Bank. She left Wall Street in 2010 and joined the Occupy Wall Street movement soon after the encampment began. "Banks shouldn’t behave like a hedge fund," Goldstein says. "Hedge funds are there to make money and take risky bets, and their clients tend to be these really wealthy clients. And the Volcker Rule sort of says, 'Well, wait a minute. These big banks that enjoy all this government support shouldn't be in that business." [Original includes rush transcript]


February 24, 2012

Gerald Celente, the Kleptocrat's Carry-Trade and the Revolution against Financial Occupation

Uploaded to YouTube by CapitalAccount on Feb 24, 2012

Thursday, February 23, 2012


How Greece Could Take Down Wall Street

In an article titled “Still No End to ‘Too Big to Fail,’” William Greider wrote in The Nation on February 15th:
Financial market cynics have assumed all along that Dodd-Frank did not end “too big to fail” but instead created a charmed circle of protected banks labeled “systemically important” that will not be allowed to fail, no matter how badly they behave.
That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS).  Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt. 

CDS are a form of derivative taken out by investors as insurance against default.  According to the Comptroller of the Currency, nearly 95% of the banking industry’s total exposure to derivatives contracts is held by the nation’s five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs.  The CDS market is unregulated, and there is no requirement that the “insurer” actually have the funds to pay up.  CDS are more like bets, and a massive loss at the casino could bring the house down.

It could, at least, unless the casino is rigged.  Whether a “credit event” is a “default” triggering a payout is determined by the International Swaps and Derivatives Association (ISDA), and it seems that the ISDA is owned by the world’s largest banks and hedge funds.  That means the house determines whether the house has to pay. 

The Houses of Morgan, Goldman and the other Big Five are justifiably worried right now, because an “event of default” declared on European sovereign debt could jeopardize their $32 trillion derivatives scheme.  According to Rudy Avizius in an article on The Market Oracle (UK) on February 15th, that explains what happened at MF Global, and why the 50% Greek bond write-down was not declared an event of default. 

If you paid only 50% of your mortgage every month, these same banks would quickly declare you in default.  But the rules are quite different when the banks are the insurers underwriting the deal. 

MF Global: Canary in the Coal Mine?

MF Global was a major global financial derivatives broker until it met its unseemly demise on October 30, 2011, when it filed the eighth-largest U.S. bankruptcy after reporting a “material shortfall” of hundreds of millions of dollars in segregated customer funds.  The brokerage used a large number of complex and controversial repurchase agreements, or “repos,” for funding and for leveraging profit.  Among its losing bets was something described as a wrong-way $6.3 billion trade the brokerage made on its own behalf on bonds of some of Europe’s most indebted nations.
Avizius writes:
[A]n agreement was reached in Europe that investors would have to take a write-down of 50% on Greek Bond debt. Now MF Global was leveraged anywhere from 40 to 1, to 80 to 1 depending on whose figures you believe. Let’s assume that MF Global was leveraged 40 to 1, this means that they could not even absorb a small 3% loss, so when the “haircut” of 50% was agreed to, MF Global was finished. It tried to stem its losses by criminally dipping into segregated client accounts, and we all know how that ended with clients losing their money. . . .
However, MF Global thought that they had risk-free speculation because they had bought these CDS from these big banks to protect themselves in case their bets on European Debt went bad. MF Global should have been protected by its CDS, but since the ISDA would not declare the Greek “credit event” to be a default, MF Global could not cover its losses, causing its collapse.
The house won because it was able to define what “ winning” was.  But what happens when Greece or another country simply walks away and refuses to pay?  That is hardly a “haircut.”  It is a decapitation.  The asset is in rigor mortis.  By no dictionary definition could it not qualify as a “default.”

That sort of definitive Greek default is thought by some analysts to be quite likely, and to be coming soon.  Dr. Irwin Stelzer, a senior fellow and director of Hudson Institute’s economic policy studies group, was quoted in Saturday’s Yorkshire Post (UK) as saying:
It’s only a matter of time before they go bankrupt. They are bankrupt now, it’s only a question of how you recognise it and what you call it.
Certainly they will default . . . maybe as early as March. If I were them I’d get out [of the euro].
The Midas Touch Gone Bad

In an article in The Observer (UK) on February 11th  titled “The Mathematical Equation That Caused the Banks to Crash,” Ian Stewart wrote of the Black-Scholes equation that opened up the world of derivatives:

The financial sector called it the Midas Formula and saw it as a recipe for making everything turn to gold.  But the markets forgot how the story of King Midas ended.
As Aristotle told this ancient Greek tale, Midas died of hunger as a result of his vain prayer for the golden touch.  Today, the Greek people are going hungry to protect a rigged $32 trillion Wall Street casino.  Avizius writes:

The money made by selling these derivatives is directly responsible for the huge profits and bonuses we now see on Wall Street. The money masters have reaped obscene profits from this scheme, but now they live in fear that it will all unravel and the gravy train will end. What these banks have done is to leverage the system to such an extreme, that the entire house of cards is threatened by a small country of only 11 million people. Greece could bring the entire world economy down. If a default was declared, the resulting payouts would start a chain reaction that would cause widespread worldwide bank failures, making the Lehman collapse look small by comparison.

Some observers question whether a Greek default would be that bad.  According to a comment on Forbes on October 10, 2011:
[T]he gross notional value of Greek CDS contracts as of last week was €54.34 billion, according to the latest report from data repository Depository Trust & Clearing Corporation (DTCC). DTCC is able to undertake internal netting analysis due to having data on essentially all of the CDS market. And it reported that the net losses would be an order of magnitude lower, with the maximum amount of funds that would move from one bank to another in connection with the settlement of CDS claims in a default being just €2.68 billion, total.  If DTCC’s analysis is correct, the CDS market for Greek debt would not much magnify the consequences of a Greek default—unless it stimulated contagion that affected other European countries. 
It is the “contagion,” however, that seems to be the concern.  Players who have hedged their bets by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets.  The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme.  The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives “weapons of financial mass destruction.”  It is also why the banking system cannot let a major derivatives player—such as Bear Stearns or Lehman Brothers—go down.  What is in jeopardy is the derivatives scheme itself.  According to an article in The Wall Street Journal on January 20th:

Hanging in the balance is the reputation of CDS as an instrument for hedgers and speculators—a $32.4 trillion market as of June last year; the value that may be assigned to sovereign debt, and $2.9 trillion of sovereign CDS, if the protection isn’t seen as reliable in eliciting payouts; as well as the impact a messy Greek default could have on the global banking system.

Players in the future may simply refuse to play.  When the house is so obviously rigged, the legitimacy of the whole CDS scheme is called into question.  As MF Global found out the hard way, there is no such thing as “risk-free speculation” protected with derivatives.    
Ellen Brown is an attorney and president of the Public Banking Institute,  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.  Her websites are and


  theREALnews                                                                               Permalink

February 21, 2012
Greece Has a Choice - Get Out the Euro

Costas Lapavitsas: Breaking with neo-liberal economics imposed by German and European elite is the only real choice 

More at The Real News


Costas Lapavitsas is a professor in economics at the University of London School of Oriental and African Studies. He teaches the political economy of finance, and he's a regular columnist for The Guardian.

Wednesday, February 22, 2012


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February 20, 2012

Is Obama Getting Serious About Bank Fraud?

Bill Black: Are Pres. Obama's new measures effective or window dressing?

More at The Real News


William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri--Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" -- frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

Tuesday, February 21, 2012


Blogger's Note: China's most egregious exploitation of workers in high-tech factories like Foxconn Technologies is due to their being cheated by the company's management. Although expressly forbidden by Chinese law and perfectly transparent to regulators (if there are any), no company CEO or manager has ever been prosecuted.

Foxconn, which recruited workers at a 2010 job fair in Shenzhen, China, said Saturday it would sharply raise its wages.

Published: February 19, 2012

BEIJING — The announcement Saturday that Foxconn Technology — one of the world’s largest electronics manufacturers — will sharply raise salaries and reduce overtime at its Chinese factories signals that pressure from workers, international markets and concerns among Western consumers about working conditions is driving a fundamental shift that could accelerate an already rapidly changing Chinese economy.

Trainees at a Foxconn industrial park in Shenzhen,
China, walked beneath a poster of Terry Gou,
chairman of Foxconn's parent, Hon Hai Precision
But the true meaning of Foxconn’s reforms, analysts say, will depend in part on how effectively the company can remake an economic system that has relied for much of the last decade on luring migrants to work cheaply for long hours in mammoth factories building smartphones, computers and other electronics.

Plants depend on workers’ being at assembly lines six or seven days a week, often for as long as 14 hours a day. Such facilities have made it possible for devices to be turned out almost as quickly as they are dreamed up. 

For that system to genuinely change, Foxconn, its competitors and their clients — which include Apple, Hewlett-Packard, Dell and the world’s other large electronics firms — must convince consumers in America and elsewhere that improving factories to benefit workers is worth the higher prices of goods.

Foxconn employees in Shenzhen. The company has
announced plans to invest in automation.
“This is the way capitalism is supposed to work,” said David Autor, an economist at the Massachusetts Institute of Technology. “As nations develop, wages rise and life theoretically gets better for everyone.

“But in China, for that change to be permanent, consumers have to be willing to bear the consequences. When people read about bad Chinese factories in the paper, they might have a moment of outrage. But then they go to Amazon and are as ruthless as ever about paying the lowest prices.”

Foxconn, with 1.2 million Chinese employees, is one of China’s largest employers. It assembles an estimated 40 percent of the smartphones, computers and other electronic gadgets sold around the world. Foxconn’s decisions set standards other manufacturers must compete with.

The announcement by Foxconn, which said that it would raise salaries as much as 25 percent, to about $400 a month, came after an outcry over working conditions at its factories. In recent weeks, labor rights groups have staged coordinated protests in various countries after reports that some of Apple’s Chinese suppliers operate harsh, abusive and dangerous facilities. To stem criticism, Apple hired a nonprofit labor group to inspect the plants it uses.

Workers welcomed the announced raises and overtime limits, though some were skeptical they would cause much real change. “When I was in Foxconn, there were rumors about pay raises every now and then, but I’ve never seen that day happen until I left,” said Gan Lunqun, 23, a former Foxconn worker. “This time it sounds more credible.”

By bowing to such demands, Foxconn has conceded that employees and consumers have gained a sway once possessed only by Chinese bureaucrats and executives at the global electronics firms that hire Foxconn to build their products.

Foxconn’s announcement also reflects how quickly China’s economy is shifting. Many of the country’s employers are facing labor shortages, which also puts upward pressure on wages, as do inflation and government demands to raise minimum wages.

Over 100 million migrant workers returned to their village homes this month to celebrate China’s Spring Festival, otherwise known as the New Year. Traditionally, factories have had no problem luring those workers back. But many Chinese cities are still confronting serious labor shortages, even though the holiday ended weeks ago. A recent Chinese government report said this year’s labor shortage was more pronounced than those in previous years.

And just as China’s exporters are struggling to cope with labor shortages in coastal regions, they are also confronting higher raw material costs and a strengthening Chinese currency, which makes Chinese goods more expensive in other nations.

“China can’t guarantee the low wages and costs they once did,” said Ron Turi of Element 3 Battery Venture, a consulting firm in the battery industry. “And companies like Foxconn have developed international profiles, and so they have to worry about how they’re seen by people living in places with very different standards.”

No other company in the world has quite the manufacturing scale of Foxconn. Nearly every global electronics company has some tie to the manufacturing giant, and while much of its work can be done cheaply, with low-skilled workers, the sheer volume of goods and scale of its operations make it China’s single biggest exporter.

Some of its campuses are considered small cities, with as many as 200,000 workers. Many are housed in dormitories near the assembly lines and are expected to be ready to rush into work should new orders flow in.

The Foxconn model, though, is under pressure. While most companies operate with similar dormitories, wage structures and work schedules, staffing Foxconn’s large sites has grown increasingly difficult. A new generation of young people in China are more reluctant to migrate to coastal cities, live in factory dorms and toil long hours. Many are staying closer to home, because of new opportunities in inland provinces. That has created labor shortages on the coast.

Social scientists say young people here are also less willing to accept factory jobs for long periods. Meanwhile, demographic changes have meant China has fewer young people to join the work force.

If the workers will not move to the coast, the logic is that the coastal factories ought to move to where the workers are living. Big manufacturers like Foxconn have responded to such challenges by moving factories inland.

And worried that the old model is dying, Foxconn has announced plans to invest in millions of robots and automate aspects of production.

David Barboza reported from Beijing, and Charles Duhigg from New York.


Find Original Here

Acts of Love

Posted on Feb 19, 2012

Love, the deepest human commitment, the force that defies empirical examination and yet is the defining and most glorious element in human life, the love between two people, between children and parents, between friends, between partners, reminds us of why we have been created for our brief sojourns on the planet. Those who cannot love—and I have seen these deformed human beings in the wars and conflicts I covered—are spiritually and emotionally dead. They affirm themselves through destruction, first of others and then, finally, of themselves. Those incapable of love never live.

“Hell,” Dostoevsky wrote, “is the inability to love.”

And yet, so much is written and said about love that at once diminishes its grandeur and trivializes its meaning. Dr. James Luther Adams, my ethics professor at Harvard Divinity School, cautioned all of us about preaching on love, reminding us that any examination of love had to include, as Erich Fromm pointed out in “Selfishness and Self-Love,” the unmasking of pseudo-love.

God is a verb rather than a noun. God is a process rather than an entity. There is some biblical justification for this. God, after all, answered Moses’ request for revelation with the words, “I AM WHO I AM.” This phrase is probably more accurately translated “I WILL BE WHAT I WILL BE.” God seems to be saying to Moses that the reality of the divine is an experience. God comes to us in the profound flashes of insight that cut through the darkness, in the hope that permits human beings to cope with inevitable despair and suffering, in the healing solidarity of kindness, compassion and self-sacrifice, especially when this compassion allows us to reach out to others, and not only others like us, but those defined by our communities as strangers, as outcasts. “I WILL BE WHAT I WILL BE.” This reality, the reality of the eternal, must be grounded in that which we cannot touch, see or define, in mystery, in a kind of faith in the ultimate worth of compassion, even when the reality of the world around us seems to belittle compassion as futile.

“The courage to be is rooted in the God who appears when God has disappeared in the anxiety of doubt,” wrote Paul Tillich.

Aristotle said that only two living entities are capable of solitude and complete separateness: God and beast. The most acute form of human suffering is loneliness. The isolated human individual can never be fully human. And for those cut off from others, for those alienated from the world around them, the false covenants of race, nationalism, the glorious cause, class and gender compete, with great seduction, against the covenant of love. These sham covenants—and we see them dangled before us daily—are based on exclusion and hatred rather than universality. These sham covenants do not call us to humility and compassion, to an acknowledgement of our own imperfections, but to a form of self-exaltation disguised as love. Those most able to defy these sham covenants are those who are grounded in love, those who find their meaning and worth in intimate relationships that cut through the loneliness and isolation of the human condition.

There are few sanctuaries in war. Couples in love provide one. And it was to such couples that I consistently retreated. These couples repeatedly acted to save those branded as the enemy—Muslims trapped in Serb enclaves in Bosnia or dissidents hunted by the death squads in El Salvador. These rescuers did not act as individuals. Nechama Tec documented this peculiar reality when she studied Polish rescuers of Jews during World War II. Tec did not find any particular character traits or histories that led people to risk their lives for others, often for people they did not know, but she did find they almost always acted because their relationship explained to them the world around them. Love kept them grounded. These couples were not able to halt the destruction and violence around them. They were powerless. They could and often did themselves become victims. But it was with them, seated in a concrete hovel in a refugee camp in Gaza or around a wood stove on a winter night in the hills outside Sarajevo, that I found sanity and peace, that I was reminded of what it means to be human. It seemed it was only in such homes that I ever truly slept during war.

Love, when it is deep and sustained by two individuals, includes self-giving—often tremendous self-sacrifice—as well as desire. For the covenant of love recognizes both the fragility and sanctity of all human beings. It recognizes itself in the other. And it alone can save us, especially from ourselves.

Sigmund Freud divided the forces in human nature between the Eros instinct, the impulse within us that propels us to become close to others, to preserve and conserve, and the Thanatos, or death instinct, the impulse that works toward the annihilation of all living things, including ourselves. For Freud these forces were in eternal conflict. All human history, he argued, is a tug of war between these two instincts.

“The meaning of the evolution of civilization is no longer obscure to us,” Freud wrote in “Civilization and Its Discontents.” “It must present the struggle between Eros and Death, between the instinct of life and instinct of destruction, as it works itself out in the human species. This struggle is what all life essentially consists of.”

We are tempted, indeed in a consumer culture encouraged, to reduce life to a simple search for happiness. Happiness, however, withers if there is no meaning. The other temptation is to disavow the search for happiness in order to be faithful to that which provides meaning. But to live only for meaning—indifferent to all happiness—makes us fanatic, self-righteous and cold. It leaves us cut off from our own humanity and the humanity of others. We must hope for grace, for our lives to be sustained by moments of meaning and happiness, both equally worthy of human communion. And it is this grace, this love, which in our darkest moments allows us to endure.

Viktor Frankl in “Man’s Search for Meaning” grappled with Eros and Thanatos in the Auschwitz death camp. He recalled being on a work detail, freezing in the blast of the Polish winter, when he began to think about his wife, who had already been gassed by the Nazis although he did not know it at the time.

“A thought transfixed me,” he wrote, “for the first time in my life I saw the truth as it is set down by so many poets, proclaimed as the final wisdom by so many thinkers. The truth—that love is the ultimate and the highest goal to which man can aspire. Then I grasped the meaning of the greatest secret that human poetry and human thought and belief have to impart. The salvation of man is through love and in love.”

Love is an action, a difference we try to make in the world.

“We love our enemy when we love his or her ultimate meaning,” professor Adams told us. “We may have to struggle against what the enemy stands for; we may not feel a personal affinity or passion for him. Yet we are commanded for this person’s sake and for our own and for the sake of the destiny of creation, to love that which should unite us.”

To love that which should unite us requires us to believe there is something that connects us all, to know that at some level all of us love and want to be loved, to base all our actions on the sacred covenant of love, to know that love is an act of will, to refuse to exclude others because of personal difference or race or language or ethnicity or religion. It is easier to be indifferent. It is tempting to hate. Hate propels us to the lust for power, for control, to the Hobbesian nightmare of an eye for an eye and a tooth for a tooth. Hate is what people do when they are distressed, as many Americans are now, by uncertainty and fear. If you hate others they will soon hate or fear you. They will reject you. Your behavior assures it. And through hate you become sucked into the sham covenants of the nation, the tribe, and you begin to speak in the language of violence, the language of death.

Love is not selflessness. It is the giving of one’s best self, giving one’s highest self unto the world. It is finding true selfhood. Selflessness is martyrdom, dying for a cause. Selfhood is living for a cause. It is choosing to create good in the world. To love another as one loves oneself is to love the universal self that unites us all. If our body dies, it is the love that we have lived that will remain—what the religious understand as the soul—as the irreducible essence of life. It is the small, inconspicuous things we do that reveal the pity and beauty and ultimate power and mystery of human existence.

Vasily Grossman wrote in his masterpiece “Life and Fate”:
My faith has been tempered in Hell. My faith has emerged from the flames of the crematoria, from the concrete of the gas chamber. I have seen that it is not man who is impotent in the struggle against evil, but the power of evil that is impotent in the struggle against man. The powerlessness of kindness, of senseless kindness, is the secret of its immortality. It can never be conquered. The more stupid, the more senseless, the more helpless it may seem, the vaster it is. Evil is impotent before it. The prophets, religious leaders, reformers, social and political leaders are impotent before it. This dumb, blind love is man’s meaning. Human history is not the battle of good struggling to overcome evil. It is a battle fought by a great evil struggling to crush a small kernel of human kindness. But if what is human in human beings has not been destroyed even now, then evil will never conquer.
To survive as a human being is possible only through love. And, when Thanatos is ascendant, the instinct must be to reach out to those we love, to see in them all the divinity, pity and pathos of the human. And to recognize love in the lives of others, even those with whom we are in conflict—love that is like our own. It does not mean we will avoid suffering or death. It does not mean that we as distinct individuals will survive. But love, in its mystery, has its own power. It alone gives us meaning that endures. It alone allows us to embrace and cherish life. Love has the power both to resist in our nature what we know we must resist and to affirm what we know we must affirm.