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Readers ask if the financial crisis is over, if the recovery is for real and, if not, what are Americans’ prospects. The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it:

The global crisis is understood as a banking crisis brought on by the mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets.

The crisis was initiated when the U.S. allowed Lehman Brothers to fail, thus threatening money market funds everywhere. The crisis was used by the investment banks, which controlled U.S. economic policy, to secure massive subsidies to their profits from a taxpayer bailout and from the Federal Reserve. How much of the crisis was real and how much was hype is not known at this time.

As most of the derivative instruments had never been priced in the market, and as their exact composition between good and bad loans was unknown (the instruments are based on packages of securitized loans), the mark-to-market rule drove the values very low, thus threatening the solvency of many financial institutions. Also, the rule prohibiting continuous shorting had been removed, making it possible for hedge funds and speculators to destroy the market capitalization of targeted firms by driving down their share prices.

The obvious solution was to suspend the mark-to-market rule until some better idea of the values of the derivative instruments could be established and to prevent the abuse of shorting that was destroying market capitalization. Instead, the Goldman Sachs people in charge of the U.S. Treasury and, perhaps, the Federal Reserve as well, used the crisis to secure subsidies for the banks from U.S. taxpayers and from the Federal Reserve. It looks like a manipulated crisis as well as a real one due to greed unleashed by financial deregulation.

The crisis will not be over until financial regulation is restored, but Wall Street has been able to block re-regulation. Moreover, the response to the crisis has planted seeds for new crises. Government budget deficits have exploded. In the U.S. the fiscal year 2009 federal budget deficit was $1.4 trillion, three times higher than the 2008 deficit. President Obama’s budget deficits for 2010 and 2011, according to the latest report, will total $2.9 trillion, and this estimate is based on the assumption that the Great Recession is over. Where is the U.S. Treasury to borrow $4.3 trillion in three years?

This sum greatly exceeds the combined trade surpluses of America’s trading partners, the recycling of which has financed past U.S. budget deficits, and perhaps exceeds total world savings.

It is unclear how the 2009 budget deficit was financed. A likely source was the bank reserves created for financial institutions by the Federal Reserve when it purchased their toxic financial instruments. These reserves were then used to purchase the new Treasury debt. In other words, the budget deficit was financed by deterioration in the balance sheet of the Federal Reserve. How long can such an exchange of assets continue before the Federal Reserve has to finance the government’s deficit by creating new money?

Similar deficits and financing problems have affected the EU, particularly its financially weaker members. To conclude: the initial crisis has planted seeds for two new crises: rising government debt and inflation.

A third crisis is also in place. This crisis will occur when confidence is lost in the U.S. dollar as world reserve currency. This crisis will disrupt the international payments mechanism. It will be especially difficult for the U.S. as the country will lose the ability to pay for its imports with its own currency. U.S. living standards will decline as the ability to import declines.

The financial crisis is essentially a U.S. crisis, spread abroad by the sale of toxic financial instruments. The rest of the world got into trouble by trusting Wall Street. The real American crisis is much worse than the financial crisis. The real American crisis is the offshoring of U.S. manufacturing, industrial, and professional service jobs such as software engineering and information technology.

Jobs offshoring was initiated by Wall Street pressures on corporations for higher earnings and by performance-related bonuses becoming the main form of managerial compensation. Corporate executives increased profits and obtained bonuses by substituting cheaper foreign labor for U.S. labor in the production of goods and services marketed in the U.S.

Jobs offshoring is destroying the ladders of upward mobility that made the U.S. an opportunity society and eroding the value of a university education. For the first decade of the 21st century, the U.S. economy has been able to create net new jobs only in domestic nontradable services, such as waitresses, bartenders, sales, health and social assistance and, prior to the real estate collapse, construction. These jobs are lower paid than the jobs were that have been offshored, and these jobs do not produce goods and services for export.

Jobs offshoring has increased the U.S. trade deficit, putting more pressure on the dollar’s role as reserve currency. When offshored goods and services return to the U.S., they add to imports, thus worsening the trade imbalance.

The policy of jobs offshoring is insane. It is shifting U.S. GDP growth to the offshored locations, such as China, thus halting growth in U.S. consumer incomes. For the past decade, U.S. households substituted an increase in indebtedness for the lack of growth in income in order to continue increasing their consumption. With their home equity refinanced and spent, real estate values down, and credit card debt at unsustainable levels, it is no longer possible for the U.S. economy to base its growth on a rise in consumer debt. This fact is a brake on U.S. economic recovery.

Stimulus packages cannot substitute for the growth in real income. As so many high value-added, high productivity U.S. jobs have been offshored, there is no way to achieve real growth in U.S. personal incomes. Stimulus spending simply adds to government debt and pressure on the dollar, and sows seeds for high inflation.

The U.S. dollar survives as reserve currency because there is no apparent substitute. The euro has its own problems. Moreover, the euro is the currency of a non-existent political entity. National sovereignty continues despite the existence of a common currency on the continent (but not in Great Britain). If the dollar is abandoned, then the result is likely to be bilateral settlements in countries’ own currencies, as Brazil and China now are doing. Alternatively, John Maynard Keynes’ bancor scheme could be implemented, as it does not require a reserve currency country. Keynes’ plan is designed to maintain a country’s trade balance. Only a reserve currency country can get its trade and budget deficits so out of balance as the U.S. has done. The prospect of U.S. default and/or inflation and decline in the dollar’s exchange value is a threat to the reserve system.

The threats to the U.S. economy are extreme. Yet, neither the Obama administration, the Republican opposition, economists, Wall Street, nor the media show any awareness. Instead, the public is provided with spin about recovery and with higher spending on pointless wars that are hastening America’s economic and financial ruin.

 

By Paul Craig Roberts

23 January, 2010

 

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He can be reached at paulcraigroberts@yahoo.com

Source: http://vdare.com/roberts/100202_crisis.htm

 

 

09 December 2008Beirut – Having discovered the wonders of Google Earth, it didn’t take me long to type in the name of what many Lebanese consider the “Forbidden City” – Tel Aviv: a city that we as Lebanese are not able to travel to, or even phone, though many of us will point out that we have no desire to.

The web page zoomed out, then back in very quickly; I was breathing just as quickly. Not only did I get an adrenaline rush just from seeing Tel Aviv’s buildings, roads and parks, but I felt uncomfortable with the realisation that no matter how “close” Tel Aviv was to me through the web, it was still not as “close” as Beirut is to Israelis.

I was 18 years old when I first saw Tel Aviv virtually, but Israelis, on the other hand, have had regular access to Beirut through their television sets, and read about it in their newspapers as part of their daily lives.

They would know what the Lebanese first lady was wearing for the welcoming dinner of French President Nicolas Sarkozy in Beirut, and what our city centre looked like.

In fact, there may have been a small grain of truth to Hizbullah leader Hassan Nasrallah’s statement during the July 2006 war when he said “I have more credibility than Ehud Olmert in the Israeli mainstream.” Israelis can access Lebanese news programmes and sitcoms while we have no access to Israeli ones.

This one-way communication limits Lebanese understanding and awareness of how Israelis think and what drives them on a daily basis. Meanwhile, on the other side of the border, Israelis can see for themselves how the Lebanese live.

Are the Lebanese doomed to live in the dark when it comes to learning about Israeli lives and developments? Not necessarily. Slowly, we are beginning to access Israeli media through the internet, and two Lebanese daily newspapers, As-Safir and Al-Akhbar, have dedicated full sections to translating articles from Israeli newspapers. The editors responsible for these sections believe it is necessary for the Lebanese mainstream to understand what’s going on in Israel.

However, for those without regular access to the internet, this window provides only a glimpse of Israeli life, for the editors are selective about which articles they choose to translate, often selecting those that serve a particular political agenda. The section under which Israeli articles are published is called “The other side of the struggle”, and most of the articles portray Israel as a state that is falling apart, that has a weak government or that suffers serious threats from Arab resistance.

Over the course of the past half-century, generations of Lebanese have been taught that Israel is not an official country, and that its presence is temporary. Thus, with a virtual moratorium on news and entertainment from the country, it remains a mystery in the minds of many Lebanese in several aspects.

So strong is this mystique that in the spring of 2001, one Lebanese newspaper started a media campaign against a high school in South Lebanon that it claimed was making its students acknowledge the presence of Israel as an official country. The school was using American dictionaries that included maps identifying the landmass to the south of Lebanon as Israel, rather than the Palestinian Occupied Territories. Not only did this issue cause a considerable fuss, but the school ended up having to modify the students’ textbooks mid-year to respond to parents’ demands.

This response hurts students and broader Lebanese interests alike. Not recognising a country and not knowing it are two different things.

Coming from a media studies background, I am a great believer in the power of information and in the importance of equal access to information by all stakeholders on a given issue.

A better understanding of Israel does not make us traitors, does not betray our prisoners of war or our occupied land. A better understanding gives us power. It may not empower us politically, militarily or economically, but it will – at the very least – balance the scales when it comes to understanding a country and its people.

by Raissa Batakji

* Raissa Batakji is a journalism student at the Lebanese American University in Beirut. This article was written for the Common Ground News Service (CGNews) and can be accessed at www.commongroundnews.org.

Source: Common Ground News Service, 9 December 2008, www.commongroundnews.org
Copyright permission is granted for publication.

 

The media has headlined good economic news: fourth quarter GDP growth of 5.7 percent (“the recession is over”), Jan. retail sales up, productivity up in 4th quarter, the dollar is gaining strength. Is any of it true? What does it mean?

The 5.7 percent growth figure is a guesstimate made in advance of the release of the U.S. trade deficit statistic. It assumed that the U.S. trade deficit would show an improvement. When the trade deficit was released a few days later, it showed a deterioration, knocking the 5.7 percent growth figure down to 4.6 percent. Much of the remaining GDP growth consists of inventory accumulation.

More than a fourth of the reported gain in Jan. retail sales is due to higher gasoline and food prices. Questionable seasonal adjustments account for the rest.

Productivity was up, because labor costs fell 4.4 percent in the fourth quarter, the fourth successive decline. Initial claims for jobless benefits rose. Productivity increases that do not translate into wage gains cannot drive the consumer economy.

Housing is still under pressure, and commercial real estate is about to become a big problem.

The dollar’s gains are not due to inherent strengths. The dollar is gaining because government deficits in Greece and other EU countries are causing the dollar carry trade to unwind. America’s low interest rates made it profitable for investors and speculators to borrow dollars and use them to buy overseas bonds paying higher interest, such as Greek, Spanish and Portuguese bonds denominated in euros. The deficit troubles in these countries have caused investors and speculators to sell the bonds and convert the euros back into dollars in order to pay off their dollar loans. This unwinding temporarily raises the demand for dollars and boosts the dollar’s exchange value.

The problems of the American economy are too great to be reached by traditional policies. Large numbers of middle class American jobs have been moved offshore: manufacturing, industrial and professional service jobs. When the jobs are moved offshore, consumer incomes and U.S. GDP go with them. So many jobs have been moved abroad that there has been no growth in U.S. real incomes in the 21st century, except for the incomes of the super rich who collect multi-million dollar bonuses for moving U.S. jobs offshore.

Without growth in consumer incomes, the economy can go nowhere. Washington policymakers substituted debt growth for income growth. Instead of growing richer, consumers grew more indebted. Federal Reserve chairman Alan Greenspan accomplished this with his low interest rate policy, which drove up housing prices, producing home equity that consumers could tap and spend by refinancing their homes.

Unable to maintain their accustomed living standards with income alone, Americans spent their equity in their homes and ran up credit card debts, maxing out credit cards in anticipation that rising asset prices would cover the debts. When the bubble burst, the debts strangled consumer demand, and the economy died.

As I write about the economic hardships created for Americans by Wall Street and corporate greed and by indifferent and bribed political representatives, I get many letters from former middle class families who are being driven into penury. Here is one recently arrived:

“Thank you for your continued truthful commentary on the ‘New Economy.’ My husband and I could be its poster children. Nine years ago when we married, we were both working good paying, secure jobs in the semiconductor manufacturing sector. Our combined income topped $100,000 a year. We were living the dream. Then the nightmare began. I lost my job in the great tech bubble of 2003, and decided to leave the labor force to care for our infant son. Fine, we tightened the belt. Then we started getting squeezed. Expenses rose, we downsized, yet my husband’s job stagnated. After several years of no pay raises, he finally lost his job a year and a half ago. But he didn’t just lose a job, he lost a career. The semiconductor industry is virtually gone here in Arizona. Three months later, my husband, with a technical degree and 20-plus years of solid work experience, received one job offer for an entry level corrections officer. He had to take it, at an almost 40 percent reduction in pay. Bankruptcy followed when our savings were depleted. We lost our house, a car, and any assets we had left. His salary last year, less than $40,000, to support a family of four. A year and a half later, we are still struggling to get by. I can’t find a job that would cover the cost of daycare. We are stuck. Every jump in gas and food prices hits us hard. Without help from my family, we wouldn’t have made it. So, I could tell you just how that ‘New Economy’ has worked for us, but I’d really rather not use that kind of language.”

Policymakers who are banking on stimulus programs are thinking in terms of an economy that no longer exists. Post-war U.S. recessions and recoveries followed Federal Reserve policy. When the economy heated up and inflation became a problem, the Federal Reserve would raise interest rates and reduce the growth of money and credit. Sales would fall. Inventories would build up. Companies would lay off workers.

Inflation cooled, and unemployment became the problem. Then the Federal Reserve would reverse course. Interest rates would fall, and money and credit would expand. As the jobs were still there, the work force would be called back, and the process would continue.

It is a different situation today. Layoffs result from the jobs being moved offshore and from corporations replacing their domestic work forces with foreigners brought in on H-1B, L-1 and other work visas. The U.S. labor force is being separated from the incomes associated with the goods and services that it consumes. With the rise of offshoring, layoffs are not only due to restrictive monetary policy and inventory buildup. They are also the result of the substitution of cheaper foreign labor for U.S. labor by American corporations. Americans cannot be called back to work to jobs that have been moved abroad. In the New Economy, layoffs can continue despite low interest rates and government stimulus programs.

To the extent that monetary and fiscal policy can stimulate U.S. consumer demand, much of the demand flows to the goods and services that are produced offshore for U.S. markets. China, for example, benefits from the stimulation of U.S. consumer demand. The rise in China’s GDP is financed by a rise in the U.S. public debt burden.

Another barrier to the success of stimulus programs is the high debt levels of Americans. The banks are being criticized for a failure to lend, but much of the problem is that there are no consumers to whom to lend. Most Americans already have more debt than they can handle.

Hapless Americans, unrepresented and betrayed, are in store for a greater crisis to come. President Bush’s war deficits were financed by America’s trade deficit. China, Japan, and OPEC, with whom the U.S. runs trade deficits, used their trade surpluses to purchase U.S. Treasury debt, thus financing the U.S. government budget deficit.

The problem now is that the U.S. budget deficits have suddenly grown immensely from wars, bankster bailouts, jobs stimulus programs, and lower tax revenues as a result of the serious recession. Budget deficits are now three times the size of the trade deficit. Thus, the surpluses of China, Japan, and OPEC are insufficient to take the newly issued U.S. government debt off the market.

If the Treasury’s bonds can’t be sold to investors, pension funds, banks, and foreign governments, the Federal Reserve will have to purchase them by creating new money. When the rest of the world realizes the inflationary implications, the US dollar will lose its reserve currency role. When that happens Americans will experience a large economic shock as their living standards take another big hit.

America is on its way to becoming a country of serfs ruled by oligarchs.

By Paul Craig Roberts

17 February, 2010
@ Vdare.com

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. paulcraigroberts@yahoo.com

Source: http://countercurrents.org/roberts170210.htm

 

The way things were happening for last few weeks it was not surprising that violence on such scale took place. It was, as if, in store, large scale propaganda was going on that Muslims are being killed all over the world. There is conspiracy to kill Muslims everywhere and on Bodo-Muslim clashes and about Rohingiyah Muslims in Burma prayers were being organized in every mosque and SMSs were circulating about it. Urdu papers were carrying articles saying there is world-wide conspiracy to kill Muslims articles simply appealing to emotions, not to reason.

I have not seen any sober and analytical article in the Urdu press in Mumbai. The Muslim leadership was creating a psychology of victimhood in the minds of Muslims and pent up emotions were waiting to explode with some triggering event. The photographs about killing of Muslims in Burma had greatly disturbed the Muslim youth. All photographs, I must say, were not authentic but they circulated on large scale and ignited emotions.

Muslim leadership which hardly does anything for the real welfare of the community always has an eye on such sensitive situations and wants to grab the opportunity to enhance their own interests. Also, mosques were used to announce about rally giving it further religious colour. For those who go to mosques to pray, in large numbers, particularly in the holy month of Ramadan, are gullible and the moment religious colour is given to an issue they become extra-sensitive.

These religious leaders and also some non-religious leaders of Muslims neither fully understand the problem what is the conflict about nor they care to know the facts what is going on the ground. They simply make it a case of conspiracy against Muslims. In Azad Maidan too where rally was organized despite knowing that huge crowd is there with all sorts of people, including anti-social elements, the speakers made highly emotional speeches especially attacking media for not covering killing of Muslims in Burma. Then what more do you want to incite emotions for anything to happen.

It was not only question of managing the crowd; it was utterly irresponsible act on the part of leadership of the rally. If they had expected only 1500 persons to come and 50,000 turned up the leaders should have clearly understood that situation can get out of control any time as they were simply dealing with raw emotions. A wise leadership would not have allowed highly emotional speeches in the midst of such huge crowd and fuel emotions further.

It is also not correct to say that they expected only 1500 people to turn up as they were making announcements inside the mosque on Friday and also posters were put up. It means they aimed higher and made efforts to mobilize large number of people and succeeded in it. Ideal thing would have been to have a dharna by about 1000-1500 seriously interested people for a day long dharna and then they could have met Chief Minister or Home Minister. There was no need at all for such a huge rally.

And if at all such a huge rally was organized why such emotional speeches were made? They should have understood the sensitivity of the problem. But then if they did, how can they be Muslims leadership without arousing religious sentiments? In fact as far as Assam is concerned hardly any one of those who actively organized the rally knew anything about the nature of conflict except that Muslims were killed.

What was the history of Bodo-Muslim conflict in Assam? Bodos are not killing Muslims because of their Muslimness but the fundamental problem is of land. Bodos are in conflict with other communities also like Adibashis, Santhals and others and they have come in conflict with all these communities. Though it is not true that Bangla Deshis are migrating in large numbers (this is largely the Sangh Parivar propaganda) by unfortunately Bodos, in order to fulfill their ambition of Bodo-land and for evicting Bengali Muslims and other ethnic communities from the 4 districts of Bodo Territorial Council, are using this propaganda for their own purposes. One can of course blame the Congress Government for giving Bodos BTC to buy peace with militant Bodo outfits. They should not have without taking other ethnic communities in confidence and giving them proper representation. We have dealt with this issue on our last article on Bodo-Muslim riots in Kokrajhar and other districts.

As for Rohingiyah Muslims it is the Military Government of Myanmar which is to be blamed. I visited Rangoon after the recent riots and interviewed large number of Rohingya Muslims. No such problem existed until 1981. They were treated as regular citizens and had voting rights. It was the Military Government of Myanmar which suddenly and without any proper reason, took away their papers from them and tried to expel them from Rakhine district of Western Myanmar.

It treats these Muslims as foreigners and wants Bangla Desh to settle them in its territory which is totally unjust. Rohingya Muslims have been in that province for centuries and there is no case to describe them as outsiders. Most of them had settled there with Muslim rule. But the Military Government of Myanmar has been killing Burmese of other provinces too and killed several Buddhist monks also during pro-democracy demonstrations.

It is true that some Buddhist monks have issued pamphlets against Rakhine Muslims to show solidarity with their co-religionists which they should not have done. But then like others Buddhists monks also are getting politicized as their pro-democracy demonstration also shows. But in both cases (i.e. Assam and Rohingya Muslims) it is not part of any world wide conspiracy to kill Muslims as it is being propagated.

In Mumbai violence media came under attack for no reason except that provocative speeches were made against media. It was quite ill-advise. A wise leadership would rather try to win over media rather than antagonize it this way. Also, one cannot tar the media with the same brush. Both print and electronic media has different ideological and commercial approaches. A blatant attack is totally wrong and even if a section of media is ideologically against or indifferent to Muslim problems, solution does not lie in attacking its journalists, or IB vans. It is at best foolish.

Urdu papers often write that let Ulama-kiram (Honourable Ulama) guide the Muslim ummah and give it a lead. How can one expect Ulama who hardly have knowledge of the modern world and for whom provoking religious sentiments is part of their orientation, can provide leadership. It is not to say that all Ulama are like this but a large number of Ulama – and this has been proved repeatedly in political matters – behave either in opportunistic or emotional way.

And let us remember all this happened in the holy month of Ramadan. The ulama never tire of telling us that this month of fasting so that we become more patient and able to control our anger and we must devote us entirely to ‘ibadat i.e. acts of worship, compassion and charity. What was then hurry to take out this rally in this holy month when no fresh incidents were taking place. The Assam situation had come under control and what was urgently needed was to collect money, clothes, shoes and medicines for those in relief camps in those four districts.

In this holy month of charity they could have concentrated on collecting relief for those unfortunate 4 million people who are rotting in relief camps in most unspeakable conditions. Many Bodos also have been killed in retaliatory actions and quite a few Bodos are also living in these relief camps in as bad a condition as Bengali speaking Muslims. As a good and compassionate Muslims, in this month of charity they should adopt inclusive approach and collect relief for Bodos too. This is what the Holy Qur’an also requires of them.

If instead of making it a conspiracy against Muslims, if they had condemned killing of Bodos too and prayed for all it would not have acquired such emotional proportions. Also the rally also should not have been exclusively a Muslim rally but a rally with the support of all sections of Indian society i.e. Hindus, Christians, Buddhists and all others – besides Muslims – to strengthen our secular character. It was not only exclusively Muslim but organized by Raza Academy – representing Barelvi Muslims. What a sectarian approach. Deobandis were to organize separately a day after but was postponed because of violent turn which the rally on Saturday took.

If we have to be against violence and it should be our serious commitment – we have to be more and more inclusive. When ever sectarian approach is adopted, it becomes easier to resort to violence and if it is inclusive of all sections it is not only more democratic but also likely to be more non-violent. Sectarian approach also results in competitive approach and inclusive approach is also cooperative approach.

The police is now saying the violence was pre-planned which may result in harassment of many Muslim youth. It is shameful that some rallyists molested women constables and seized revolvers from them. The police may take revenge for this. Let us hope police does not. But one must say the police had shown lot of restraint and Police Commissioner Arup Patnaik himself had come and spoken from the platform appealing Muslims to show restraint in this holy month of Ramadan.

Let us hope wiser counsel will prevail and peace would not be disturbed.

Asghar Ali Engineer

(Secular Perspective August 16-31, 2012)

Centre for Study of Society and Secularism

Mumbai.

E-mail: csss@mtnl.net.in

 

Two Toyota Land Cruisers filled with about 15 well-built gunmen in ski masks and all-black outfits appear seemingly out of nowhere. Behind them is vast, open desert. They approach a group of soldiers huddled around a simple meal as they prepare to break their Ramadan fast. The gunmen open fire, leaving the soldiers with no chance of retrieving their weapons.

This is not an opening scene of a Hollywood action movie. The massacre actually took place at an Egyptian military post in northern Sinai on August 5. The description above was conveyed by a witness, Eissa Mohamed Salama, in a statement made to The Associated Press (AP; Aug 8). The gunmen were well trained. Their overt confidence can only be explained by the fact that “one militant got out a camera and filmed the bodies of the soldiers”.

One is immediately baffled by this. Why would the masked militants wish to document the killings if they were about to embark on what can be considered a suicide mission in Israel? “The gunmen then approached the Israeli border,” with two vehicles, one reportedly a stolen Egyptian armored personnel carrier. The British Broadcasting Corp, citing Israeli officials, reported that one of the vehicles “exploded on the frontier”, while the other broke through the Israeli border, “travelled about 2 kilometers into Israel before being disabled by the Israeli air force” (BBC News Online, Aug 7). According to the BBC report, citing Israeli sources, there were about 35 gunmen in total, all clad in traditional Bedouin attire.

Their mission into Israel was suicidal, since, unlike in Sinai, they had nowhere to escape. But who would embark on such a logistically complex mission, document it on camera, and then fail to take responsibility for it? The brazen attack seemed to have little military wisdom, but it did possess a sinister political logic.

Only 48 hours before the attack, the media were awash with reports about the return of electricity in the Gaza Strip. The impoverished Strip’s generators have not run at full capacity for about six years, since Hamas was elected. The Israeli siege and subsequent wars killed and wounded thousands, but they failed to bend Gaza’s political will. For Gazans, the keyword to their survival in the face of Israel’s blockade was “Egypt”.

The Egyptian revolution on January 25, 2011, carried a multitude of meanings for all sectors of Egyptian society, and the Middle East at large. For Palestinians in Gaza, it heralded the possibility of a lifeline. The nearly 1,000 tunnels dug to assist in Gaza’s survival would amount to nothing compared with a decisive Egyptian decision to end the siege by opening the Rafah border.

In fact, a decision was taking place in stages. Hamas, which governs Gaza, was a branch of Egypt’s Muslim Brotherhood. The latter is now the leading political force in the country and, despite the military’s obduracy, it has managed to claim the country’s presidency as well.

In late July, a high-level Hamas delegation met in Cairo. All the stress and trepidation of the last 16 months seemed to have come to an end, as Hamas chief Khaled Mashaal, his deputy Musa Abu Marzouq and other members of the group’s politburo met with President Mohammed Morsi. Egypt’s official news agency reported Morsi’s declarations of full support “for the Palestinian nation’s struggle to achieve its legitimate rights”. According to Reuters, Morsi’s top priority was achieving unity “between Hamas and Fatah, supplying Gaza with fuel and electricity and easing the restrictions on the border crossing between Gaza and Egypt”.

Juxtapose that scene – where a historical milestone has finally been reached – with an Agence France-Presse photo of Israeli Prime Minister Benjamin Netanyahu and his defense minister, Ehud Barak, standing triumphantly next to a burned Egyptian vehicle that was reportedly stolen by the Sinai gunmen. The message here is that only Israel is serious about fighting terror. Israeli newspaper Haaretz’ accompanying article started with this revelation: “Israel shared some of the intelligence it received with the Egyptian army prior to the incident, but there is no evidence Egypt acted on the information.” This was meant to humiliate Egypt’s military further.

Naturally, Israel blamed Gaza, even though there is no material evidence to back such accusations. Some in Egypt’s media jumped on the opportunity to blame Gaza for Egypt’s security problems in Sinai as well. The loudest among them were completely silent when, on August 18, 2011, Israel killed six Egyptian soldiers in Sinai.

Then, Israel carried out a series of strikes against Gaza, killing and wounding many, while claiming that Gaza was a source of attacks against Israeli civilians. Later the Israeli media dismissed the connection as flawed. No apologies for the Gaza deaths, of course, and AP, Reuters and others are still blaming Palestinians for the attack near Eilat last year. Then, Palestinian factions opted not to escalate to spare Egypt an unwanted conflict with Israel during a most sensitive transition.

None of that seems relevant now. Egypt is busy destroying the tunnels, continuing efforts that were funded by the US a few years ago. It also closed the Gaza-Egypt crossing, and is being “permitted” by Israel to use attack helicopters in Sinai to hunt for elusive terrorists. Within days, Gaza’s misfortunes were multiplied and once more Palestinians are pleading their case.

Israeli officials and analysts are, of course, beside themselves with anticipation. The opportunity is simply too great not to be utilized fully. Commenting in Egypt-based OnIslam, Abdelrahman Rashdan wrote that according to the Israeli intelligence scenario, “Iranians, Palestinians, Egyptians, and al-Qaeda operatives all moved from Lebanon to attack Egypt [and] Israel and defend Syria.”

In Western mainstream media, few asked who benefits from all of this – from once more isolating Gaza, shutting down the tunnels, severing Egyptian-Palestinian ties, embroiling the Egyptian military in a security nightmare in Sinai, and much more.

The Muslim Brotherhood website had an answer. It suggested that the incident “can be attributed to the Mossad”. True, some Western media reported the statement, but not with any degree of seriousness or due analysis. The BBC even offered its own context: “Conspiracy theories are popular across the Arab world,” ending the discussion with an Israeli dismissal of the accusation as “nonsense”. Case closed. But it shouldn’t be.

Before embarking on a wild goose chase in Sinai, urgent questions must be asked and answered. Haphazard action will only make things worse for Egypt, Palestine and Sinai’s long-neglected Bedouin population.

By Ramzy Baroud

15 August, 2012

Countercurrents.org

– Ramzy Baroud (www.ramzybaroud.net) is an internationally-syndicated columnist and the editor of PalestineChronicle.com. His latest book is My Father Was a Freedom Fighter: Gaza’s Untold Story (Pluto Press, London.)

Beirut: The Sinai Peninsula has rejoined the Arab and Islamic Resistance as this great awakening spreads inexorably across the region toppling Western imposed security states and replacing them with governments of greater popular legitimacy. Egypt and other countries in the region are contributing to righting the historic wrong done to the Palestinian people as millions around the World are employing an increasing variety of resistance strategies in solidarity with this regions central cause of liberating Palestine from the crumbling but ultra-violent Zionist colonial project.

Historically, the 23,000 sq. mile triangular Sinai Peninsula has been an area of Resistance against a series of occupiers and despots since it was joined to Egypt during in Mamluk Sultanate (1260-1517) when the Ottoman sultan, Selim the Grim, won the Battles of Marj Dabiq and al-Raydaniyya, and added Egypt to the Ottoman Empire.

Following the establishment of the Muhammad Ali Dynasty‘s rule over the rest of Egypt in 1805, the Ottoman Porte, faced with increasing resistance from Sinai, transferred administration of the restive Peninsula to the Egyptian government, by this time under the control of the colonial power, the United Kingdom. The British occupied Egypt since 1882 and imposed the border in an almost straight line from Rafah on the Mediterranean to Taba on the Gulf of Aqaba which has remained the eastern border of Egypt. At the beginning of the 1948 Arab-Israeli War, Egyptian forces invaded Palestine from Sinai to support the Palestinian Resistance in their struggle against the imposed State of Israel.

Last week’s Sinai operation by “terrorists in Bedouin clothing” against the occupiers of Palestine resulted in the deaths of 16 Egyptian guards protecting the Israeli border as well as several of the Fedayeen, signals again that the Sinai Peninsula has returned to its historic role in confronting colonialism on Egypt’s border. The Egyptian people, if not yet fully their leaders are returning to their historic struggle to liberate Palestine.

The regime of former Egyptian President Hosni Mubarak would purposefully undermine relationship between the Egyptian and Palestinian people. However, over the past 18 months, much of the Sinai has become more Resistance oriented, as police stations in the Sinai were dismantled, the gas line with Israel repeated severed, and Bedouin tribes and others began to stockpile weapons arriving from Libya and from Israel’s black market and elsewhere. The area is becoming a major Resistance base with fighters vowing to repel any attempt by the US and Israel to retain control.

No proof positive has been proffered to support a number of claims being made regarding those responsible for the Sinai attacks and other recent attacks against Israeli installations that number more than 30 just since last year’s Tahrir revolution.

A spokesman for the Hamas government has claimed that the Sinai attack was an Israeli “attempt to tamper with Egyptian security and drive a wedge between the Egyptians and the residents of the Gaza Strip.” Tarek Zumar, a spokesman for the group, claimed that Israel was behind all recent terror attacks against the Egyptians “because it wants to make changes along its border with Egypt.” The day after the attack, and relying on its own intelligent sources, Hamas announced that: ”This crime can be attributed to the Mossad, which has been seeking to abort the revolution since its inception and the proof of this is that it gave instructions to its Zionist citizens in Sinai to depart immediately a few days ago.”

An American critic of Israel’s influence over the U.S. Congress, who is an Assistant Staff Director on a Congressional Committee, emailed that “We are looking into what Israeli leaders knew about the Sinai attack and when they knew it, but no definite responsibility for this operation has been established.”

The Muslim Brotherhood has also blamed Mossad for the attack.

One of the reasons the Egyptian public is increasingly calling for abolishing or at least re- negotiating the “Treaty of Shame” as the Camp David agreement is commonly known, is that Egyptian security forces in Sinai are not enough to protect the borders. Under Camp David’s “Peace Agreement” it is Israel, and not the Egyptian government who determines how many Egyptians security personnel can stand guard at Egypt’s border.

On 8/4/12, Egypt’s new pro-Palestinian President, Mohammad Morsi, responded to the attack by sacking the pro-Israeli intelligence chief Murad Muwafi, as well as the governor of Northern Sinai Abdel Wahab Mabrouk. The same day Mursi ordered his defense minister to relieve the head of the country’s military police, as his spokesman said to “turn a page” in the Palestinian struggle and also as a confidence building move in the face of a predicted Zionist campaign to blame the Muslim Brotherhood for the attack. There has been a relentless campaign by Zionist leaders since Mubaraks ouster, to weaken the Egyptian public’s determination to isolate Israel and cancel their governments relations with the occupiers of Palestine.

Supporters of Morsi’s rival in the presidential election, Ahmed Shafik, a former air force commander, have called for Egyptians to rise up against the Brotherhood and President Morsi as a result of the Sinai operation. Such attacks underscore the divide between new pro-Palestinian government and the military, which continues to hold enormous political power and has limited the president’s authority.

The Resistance operation comes only a week after Palestinian Prime Minister Ismail Haniya made a rare visit to Egypt to meet with Egyptian President Mohammad Morsi to discuss easing travel restrictions on Gaza imposed by Israel’s siege, restrictions respected by Mubarak for years. That meeting, coupled with Morsi meeting both Hamas chief Khaled Meshaal and Palestinian President Abbas last month, resulted in the opening the Rafah border for 12 hrs a day and increasing the daily limit on passengers from Gaza to 1,500. By opening the border Morsi was following through on a campaign promise he made during the run up to Egypt’s hotly contested election. With the advent of the Arab Spring a number of Egyptian pro Resistance organizations demanded the complete opening of the Rafah crossing to all traffic, including commercial. During his campaign Morsi stated that “the time has come to open the Rafah crossing to traffic 24 hours a day and all year round.”

Unfortunately, following the most recent operation the Rafah crossing has been indefinitely closed just like it was under the deposed Egyptian president which will cause great hardship to Gazans and amounts to nothing less than Israeli style “collective punishment” as claimed by Musa Abu Marzouk, a senior Hamas official.

As one Gazan young woman, Rana Baker, a member of the Gaza-based BDS organizing committee recently observed, “It is worth recalling here the official Egyptian stance on the murder of two Egyptian security guards in an Israeli raid along the Israeli-Egyptian border last year. Not one Egyptian helicopter took off in search of the assailants and not one bullet was aimed at “suspects” from the Israeli side. Not only did the SCAF bury the incident as if it had never happened, but it went as far as to quell Egyptian protestors at the Israeli embassy in Cairo almost a year ago today. Days later the SCAF erected a high wall around the embassy to “protect” it against “extremists.”

The Gaza Strip has now been closed off, as it was during the time of deposed Egyptian president Hosni Mubarak. The siege is now expected to intensify following the indefinite closure of the Rafah and Karm Abu-Salem border crossings. The siege is now expected to intensify following the indefinite closure of the Rafah and Karm Abu-Salem border crossings.

Robert Satloff , Executive Director of the Washington Institute for Near East Policy (WINEP), founded by AIPAC, presented the Zionist lobby’s reaction to the Sinai operations and the expanding geography of Resistance. He offered the following suggestions presented on their website and in Lobby publications:

“The US must undertake firm communication to Egypt’s Morsi that if he wants international support to bolster his flagging economy, he cannot pander to the worst instincts of Egyptian public opinion. Indeed, any serious effort to prevent terrorist infiltration in Sinai requires coordination with Israel, and this will not proceed in an environment of public vilification.”

“Second, U.S. policymakers should reaffirm to the Egyptian military that Washington views securing Sinai as an essential aspect of Egyptian-Israeli peace, and that continued provision of substantial military aid, which has exceeded 35 billion over the past three decades, is absolutely contingent on the investment of adequate personnel and resources to do the security job. Failure to direct the right people and resources to the peninsula will trigger an overall reassessment of the U.S. military assistance package, with an eye to updating this 1980s-era relationship for the current environment.”

Satloft’s views are reflective of the vast disconnect between reality and expectations of Zionist officials and their shills, over what the past 18 months has birthed in the Middle East with respect to Resistance to the continuing colonization and ethnic cleansing of Palestine.

With the Sinai Peninsula returning to the era and culture of Resistance the liberation of Palestine draws every nearer and more certain, perhaps sooner than later.

By Franklin Lamb

15 August, 2012

Countercurrents.org

Franklin P. Lamb is Director, Americans Concerned for Middle East Peace, Wash.DC-Beirut and Board Member, The Sabra Shatila Foundation and the Palestine Civil Rights Campaign, Beirut-Washington DC Email: fplamb@gmail.com

 

Human security for global security: Demilitarization is not a dirty word, nonviolence is not inaction, and building sustainable peace is not for the faint of heart

The political, social and economic changes we all face are serious. Some might call the state of the world today chaos. The ongoing, dramatic changes in technology and communications are other elements adding to uncertainty and the feelings of insecurity that people around the globe are confronting. No one can predict the future but we can work hard to shape the outcomes.

Clearly there are huge obstacles to creating a world of sustainable peace with justice, equality and an end to impunity. A world free of militarism, armaments and the arms trade in which human and other resources are focused on meeting the needs of humanity rather than fueling conflicts and war. A world of sustainable development that nurtures our planet instead of continuing to devastate the environment and threaten life on earth. This will not happen over night. But worrying about the future is not a strategy for shaping it.

My own work, beginning with protests against the Vietnam War, has been against weapons, war and militarism. It is based on an understanding that sustainable peace is not simply the absence of armed conflict. The absence of armed conflict provides the bare minimum for the possibility of constructing sustainable peace based on socio-economic justice and equality. And to accomplish that we must change the understanding of security.

For centuries security has been defined as “national security” – which essentially has meant assuring the security of those in power and the apparatus of the state. Defending the state requires military power based on nationalism and patriotism. “Us” against “them.” How else could armies be formed that send other people’s children off to fight battles for resources, territory and to project the power of the state?

Now, with globalization where all aspects of life are increasingly and more rapidly interconnected around the world, it is time to move away from state-centric security to security based on the individual – “human security” not “national security.” The human security framework understands “security” as directing policies and resources toward meeting the basic needs of the majority of people on the planet: providing decent housing, education, access to medical care, employment with dignity, protection of civil and human rights and governments that respond to the needs of citizens. It means creating a world where people live with freedom from want and freedom from fear.

One part of being able to create that world is reclaiming and reasserting the meaning of “world peace.” It isn’t meditation, a rainbow with a dove flying over it, or singing peace songs. Nonviolence is not inaction and building sustainable peace must be understood as hard work every single day. We must all be active participants in change for the good. It doesn’t matter what issues people choose to work on – it could be global warming, an end to militarism, an end to poverty, or HIV/Aids for example.

What matters is that we all work on issues we feel passionate about and that our actions are for the benefit of everyone. By doing that our combined efforts enhance human security. We also must talk about our work in the context of human security so that people become familiar with the concept and understand the various elements that contribute to promoting and protecting human security.

Another aspect of creating a world based on human security not national security is to tackle demilitarization and the glorification of violence head on. It is an abomination that with the current global economic shake-down, countries still managed to find billions of dollars for weapons and the military while at the same time they are cutting funds for education, health care, job training, social services –the elements of daily life that are the basis of human security.

Demilitarization is not a dirty word. Civil society and national nongovernmental organization should confront demilitarization in our own countries. At the same time we must collectively press regional bodies such as the European Union, the African Union, the Organization of American States, and so on for global demilitarization. We also have another means of collective action, which is Article 26 of the UN Charter – not that we have illusions about the ability of the UN to seriously work for demilitarization. But every country that joins the UN commits to fulfilling the articles of the charter and Article 26 states:

In order to promote the establishment and maintenance of international peace and security with the least diversion for armaments of the world’s human and economic resources, the Security Council shall be responsible for formulating…plans to be submitted to the members of the United Nations for the establishment of a system for the regulation of armaments.

In the more than six decades since the establishment of the UN, the Security Council has done absolutely nothing to fulfill its Article 26 obligation. But the member states of the UN have not done a thing to pressure the Security Council on Article 26 either.

Collectively, global civil society should begin actions to force the Security Council to “formulate plans” under Article 26 as soon as possible. Knowing that they will do everything in their formidable power to continue to ignore those obligations, global civil society should draw up its own plans and recommendations for demilitarization and how to use the resources resulting from demilitarization to enhance global human security. We can develop strategies and tactics around our plans and recommendations to pressure governments nationally, regionally and internationally to begin the process of demilitarization.

With demilitarization, the possibilities of positive change and human security in our world would be limitless. Humanity has the right to the real security of sustainable peace not the false “security” of militarism, armaments and war.

 

By Jody Williams

15 August, 2012

@Warisacrime.org

 

Jody Williams is an American political activist known around the world for her work in banning antipersonnel landmines, her defense of human rights – and especially those of women, and her efforts to promote new understandings of security in today’s world. She was laureated with the Peace Nobel Prize in 1997 for her work for the banning and clearing of anti-personnel mines.