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Sometimes it explodes. But social explosions are rare events. Are the Wall Street protests and their nationwide copycats an explosion or just a flare up? For an explosion to happen there must be not only explosive material, but plenty of oxygen to feed the fire. For social movements this means that enough working people, students, and unemployed find the necessary unity and inspiration to push through obstacles and maintain enthusiasm. The Wall Street protests have ingredients that can create such unity but the threat of extinguishing it is real.

Although many of the Wall Street protesters are following the tactics of the Arab Revolutions, they’ve begun on a higher plane politically. The Arab dictatorships made for an easy target and helped unify working people against the regimes; the Wall Street protesters, however, have already identified the money interests behind the bad government in the U.S. — a very similar money interest that rules post-Mubarack Egypt that Egyptians are still mobilizing to dethrone.

But the political head start of Occupy Wall Street doesn’t mean they can skip over the need to unify working people in the Egyptian way. The need for concrete political demands becomes all the more important now that the financial elite is the target. And although the Occupy Wall Street movement has put forth some excellent demands, they have not elaborated specific policies that would achieve these demands. Some examples of their demands include: “Ending wealth inequality, ending homelessness, ending poverty, and ending political corruption.”

The protesters might think that making the demands broad enough will open the gates to a wider number of people. But these demands create two dangers: 1) working people may simply view the demands as unattainable, since all people would like to end poverty but see no way to achieve it. 2) vague demands invite political opportunists into the fold, who would like to join the movement in order to kill it.

For example, President of the group Rebuild the Dream, Van Jones, has recently pushed his Democratic Party-friendly organization into the Occupy Wall Street fold. And although Rebuild the Dream puts forth some progressive demands, its ultimate purpose is to mobilize people to re-elect President Obama, a puppet of Wall Street.

If Occupy Wall Street openly identifies both Democrats and Republicans as being in the pockets of Wall Street, opportunists like Jones would find no platform to push their nefarious ulterior motives. In the same way that many rich Egyptians exploited the anti-Mubarack protests for their own ends, the U.S. protests face a similar threat, though better disguised.

More specific demands would also help to accelerate the number of labor unions who join the movement. It must be noted that the union-inspired explosion in Wisconsin and smaller flare-ups around the country helped create the kindling for the sparks on Wall Street. The more unions that join the movement, the more logs go on the fire, and the more ability to reach out via labor’s resources to the wider oppressed community. It is no surprise that the labor unions in Egypt — after having helped activate the younger activists via strike waves — are now leading the charge, post-Mubarack, with a new, larger flurry of strike activity. If Occupy Wall Street made a special effort to attract union support, the movement as a whole would benefit greatly.

Some examples of labor-friendly demands that Occupy Wall Street might consider were recently endorsed by the Oregon AFL-CIO state convention, itself based on a resolution passed by the San Francisco Labor Council that calls for mass mobilizations to demand: “Make no cuts or concessions in wages, benefits, and social welfare programs; Tax Wall Street Banks, large and multi-national corporations, and the wealthiest Americans at both the federal and state level; make public investments in education, rebuilding of infrastructure, and public transit improvements.”

Although it is good to demand “end unemployment,” it’s better still to demand “tax the rich to create jobs and save social programs.” Not only would such demands attract more labor unions, it would keep union leaders honest; some union leaders have a bad habit of focusing on “foreign trade” and specifically China instead of the corporations and banks inside the U.S. The same labor leaders have an equally bad habit of supporting Wall Street-owned Democrats, making “political independence” an especially necessary position of the movement. Moreover, these demands give a people a sense of what immediate steps could be taken to move from the present to a better future, and they give a sense of where the obstacles lie to a better future: the wealthy elite who want to preserve their privileges.

Finally, union support is crucial because in order for working people to indefinitely occupy something — without fear of losing their jobs — a unified labor movement would need to be organized enough to go on strike and join the street protesters, something that can only happen now on the weekends.

Ultimately, the Occupy Wall Street protests have already succeeded. The movement has successfully re-focused the nation’s debate on who ruined the economy and who should be targeted, shifting blame away from immigrants, unions, and other groups of working people, like public employees. The protests have also re-fueled working people’s energy after the post-Wisconsin letdown, activating the energies of many who want to collectively organize for progressive change in the interests of working people.

But all movements either grow or shrink. A large Occupy Wall Street march across the Brooklyn Bridge on October 1st resulted in 700 arrests. Through such tactics the police intend to chip away at the movement until they feel strong enough to strangle it. The Occupy Wall Street movement must attract a growing number of allies or face an inevitable smothering.

By Shamus Cooke

Shamus Cooke is a social service worker, trade unionist and writer for Workers Action (www.workerscompass.org)

This is the revolution’s understanding of religions: love, fraternity, equality. With equality we can create a strong homeland that knows no sectarianism, only patriotism… We as a government, and I as president, carry responsibility for everyone in this country, whatever their religion, whatever their origins…

These were the words of President Gamal Abdel Nasser at the dedication ceremony of the St. Mark Cathedral at Abbasiya on 25 June 1968. Nasser personally supervised its construction, offering Pope Kyrillos VI access to state contractors, and funds from the public works budget to build it. It is a landmark in Coptic architecture, the largest cathedral in Africa and the Middle East. And it was beneath its high domed ceilings that cries of grief rang out at the funerals of Egypt’s latest martyrs earlier this month, their violent deaths the responsibility of a very different military leadership. At least 25 were killed after military police opened fire on a demonstration which had gathered at the Maspero state television building to protest the burning of a Coptic church in Aswan.

Nasser’s speech came almost two decades after Egypt’s Free Officers Movement staged a coup to overthrow a defunct monarchy, launching the July Revolution of 1952. Sixty years later, many have connected the July Revolution with this year’s popular uprising in Egypt, which brought down another failed regime, and launched the January Revolution of 2011. Some draw parallels between the emphases of both on ‘dignity, freedom, and social justice.’ Others vehemently blame the Free Officers for the legacy of military rule that empowered Mubarak and now the ruling military council. This has reinvigorated refrains of ‘60 years of oppression’, heard often in recent months.

Yet today’s generals are protecting an entirely different set of interests from those important to the Free Officers. They have presided over months of delay in the trials of Mubarak and his aides, and have stalled and bargained with the revolutionary forces over every aspect of constitutional and electoral reform. They have thrown over 8,000 people in military prisons, and have even turned their tanks and guns on peaceful demonstrators at Maspero. The generals’ statements in support of the January Revolution can no longer conceal their connections with the old regime and their return to the worst of its tactics.

Today’s generals are protecting an entirely different set of interests from those important to the Free Officers.Certainly, the Free Officers Movement brought the army to power and ruled a one-party state with its own share of political prisoners. But both partisans and detractors of the July Revolution also agree on its orientation towards Egypt’s millions of poor at home, and towards pan-Arabism and liberation movements abroad. Phasing in land reform, improved labor conditions, free education and healthcare, Nasser argued that the road to democracy had to begin with freedom from poverty and colonialism. Today, six decades on, Egypt’s ruling military council is part of a coalition with big business, Islamist organizations, and politicians from the Mubarak era, while abroad, it is only American interests that count. How did this change occur?

What is often forgotten in rooting all of Egypt’s contemporary ills to the July Revolution is the systematic undoing of most of its economic, social, and foreign policy programs soon after Nasser’s death.

Sadat’s Makeover: The ‘Open Door’ Policy

Egypt’s military elite today is the product of the infitah (openness) economic liberalization policies and the Israeli peace treaty of the 1970s. Both of these are the legacies of President Anwar Sadat, preserved and entrenched by Hosni Mubarak. As Camp David came into effect, Egypt was rewarded with massive financial assistance from Washington, surpassed only by Israel’s allowance over the years. The largest portion went straight into army coffers, whose budget was kept secret. The army grew into part of a formidable military-industrial complex, and later became fully complicit in the crony capitalism of Mubarak Inc.

Today’s military council criminalized the right to strike as early as March, and is openly disdainful of workers’ grievances, while the government continues to dodge demands to fix a reasonable minimum and maximum wage. Until a cabinet reshuffle in July, prompted by renewed popular protests, the council had even retained the last Minister of Finance appointed by Mubarak, Samir Radwan. The state media broadcast misinformation about ‘sectoral’ strikes and their purported harm to Egypt’s ‘production wheel,’ while faithfully replaying footage of General Tantawi mingling with employees at a chemicals factory. The military council propagates the myth that it guaranteed the success of the January Revolution. But it is increasingly clear that the generals helped maneuver Mubarak out in order to contain the competition coming from his son Gamal and his business associates in the ruling party, all with non-military backgrounds, all with similar ambitions.

The Internal Islamist Alliance

Alongside the economic turn-around of the 1970s, Sadat and his military elite forged a strong alliance with Islamist groups in Egypt, in stark contrast to the secular style of rule under Nasser. Sadat pumped funds into particular groups specifically to counter Nasser’s supporters, as well as the left, while repressing any which would not fall into line. One of these factions eventually killed Sadat, and Mubarak reigned in the rest, but superficial religious discourse continued to be fostered in state media, and Islamist groups kept their place in public debate. It is telling that while millions of Egyptians, Muslim, and Christian demonstrated and prayed together in January, most of the organized Islamist ‘opposition’ were absent. Matters are coming full circle today, as the military council appears to be encouraging the Muslim Brothers once more, in a bid to neutralize the liberal and left-leaning forces of the new revolution. And the Brothers’ leadership, despite imprisonment at the hands of successive military rulers, have rushed to prove their loyalty to the new authorities. Some analysts explain this in terms of caution and insecurity; others see a recurrent opportunism.

The military council’s own stances reveal an Egyptian chauvinism reminiscent of the Sadat and Mubarak eras.Several times since January, Islamist voices have criticized the democracy movement’s challenge to the military council. In the March referendum, they counselled a ‘yes’ vote that preserved the status quo. In July, just as the latest military communiqué targeted the April 6 Movement, members of al-Gama‘a al-Islamiyya vowed to ‘purge Tahrir’ of its ‘loose’ and ‘disrespectful’ youth. The Muslim Brothers, as well as al-Gama’a and the Salafis, have stayed away from Tahrir’s “million” marches – which have rallied around the revolution’s original, consensual demands – and instead organized their own emonstrations calling for religious rule. Any tussles between the Islamists and the generals have stayed within the realm of debates on the electoral law.

Egypt’s military rulers appear to be returning the blessing. Hours of state television airtime are today devoted to Islamist politicians of all stripes who seem immune from official criticism. After churches were attacked at Imbaba in May and Aswan in October, the iron hand of the military council – seen crushing multiple demonstrations since January – did not come down on the perpetrators. In September, when Christian schoolgirls in Minya were sent home from school for not covering their hair, this was not declared a matter of national concern. There has been an eerie silence from prominent Islamist quarters on these issues. With important exceptions such as Noha el-Zeiny, this silence was deafening after last week’s vicious attack on Christian and Muslim demonstrators at Maspero.

From Pan-Arabism to ‘Egypt First’

While making pious new friends at home, Nasser’s successors also radically overhauled Egypt’s foreign relations. In the early 1970s, Sadat sought refuge in total US allegiance, freezing ties with the Soviet Union and Egypt’s fellow non-aligned states, before negotiating a peace treaty with Israel. These moves overturned all the foreign policy tenets of the July Revolution, which had championed autonomy, Arab solidarity, and positive neutralism. Sadat’s policy isolated Egypt among the Arabs, and even when Mubarak rehabilitated these ties, Egypt never recovered its leading role. It was overtaken by regional rivals such as Saudi Arabia, while its role and influence in Africa also receded. The current January 25 Revolution reintroduced a strong Arab dimension. Its demonstrators invoked their inspiration from Tunisia, their determination to liberate Palestine, and expressed solidarity with all sister movements for democracy in the Arab world.

Yet the ruling generals seem aloof from this, and more inclined to reassure and take the lead from the conservative monarchies of Saudi Arabia, Qatar, and the Emirates, while receiving regular nods from Washington. For months this year, it was understood that the generals had succumbed to heavy pressure from Saudi not to try Mubarak. Many also believe that US pressure reigned in the regional activism of the new Foreign Minister Nabil el-Arabi. After his decision to permanently open the Rafah crossing in March, passage through it became heavily constrained yet again, and el-Arabi was re-posted to head the Arab League in May.

The military council’s own stances reveal an Egyptian chauvinism reminiscent of the Sadat and Mubarak eras. In July, General Hassan al-Ruwaini denounced well-known Egyptian-Palestinian poet Tamim al-Barghouti as a meddling foreigner, in a tone also reminiscent of former Foreign Minister Ahmed Aboul Gheit’s wanton dismissal of the Palestinians, Lebanese Shia, and Algerians on different occasions. These positions highlight a stark difference between the army that built a revolution in 1952 – albeit top-down – and earned respect across the Arab world, and the army that is trying to contain a revolution, or rather foil it, in 2011.

The ‘60 years of oppression’ mantra then, seems to reflect a rather selective reading. Indeed, the effaced priorities of July 1952 were among those upheld, alongside the call for democracy, in January 2011: rejection of foreign interference and dependency, and the promotion of social justice and equality. Further comparisons are also possible. Today both the army and the Muslim Brotherhood are run by an old guard who appear out of touch with younger generations. Both younger officers and the Muslim Brothers Youth famously broke ranks to participate in this year’s January Revolution. It was also disgruntled younger officers who plotted the coup of July 1952, six decades ago this summer. This is perhaps the aspect of the July Revolution that is most thought-provoking when considering the fortunes of the democracy movement today.

By Reem Abou-El-Fadl

24 October 2011

@ Al Akhbar English

Reem Abou-El-Fadl is a Junior Research Fellow in Middle East Politics at Oxford University, UK.

They were predicted to be a flash in the pan. So why are the anti-Wall Street occupations growing?

#OccupyWallStreet protests are now well into their second week, and they are increasingly capturing the public spotlight. This is because, whatever limitations their occupation has, the protesters have done many things right.

I will admit that I was skeptical about the #OccupyWallStreet effort when it was getting started. My main concerns were the limited number of participants and the lack of coalition building. One of the things that was most exciting about the protests in Madison—and the global justice protests of old such as Seattle and A16—was that they brought together a wide range of constituencies, suggesting what a broad, inclusive progressive movement might look like. You had student activists and unaffiliated anarchists, sure; but you also had major institutional constituencies including the labor movement, environmentalists, faith-based organizations, and community groups. The solidarity was powerful. And, in the context of a broader coalition, the militancy, creativity, and artistic contributions of the autonomist factions made up for their lack of an organized membership base.

With #OccupyWallStreet, the protest did not draw in any of the major institutional players on the left. Participants have come independently—mostly from anarchist and student activist circles—and turnout has been limited. Some of the higher estimates for the first day’s gathering suggest that a thousand people might have been there, and only a few hundred have been camping out.

That said, this relatively small group has been holding strong. As their message has gained traction—first in the alternative media, and then in mainstream news sources—they have drawn wider interest. On Tuesday night, Cornel West visited the occupied Zuccotti Park and spoke to an audience estimated at 2,000. Rallies planned for later in the week will likely attract larger crowds. People will come because the occupation is now a hot story.

#OccupyWallStreet has accomplished a great deal in the past week and a half, with virtually no resources. The following are some of the things the participants have done that allowed what might have been a negligible and insignificant protest to achieve a remarkable level of success:

1. They chose the right target.

The #OccupyWallStreet protesters have been often criticized for not having clear demands. They endured a particularly annoying cheap shot from New York Times writer Ginia Bellafante, who (quoting a stockbroker sympathetically) resurrected the old canard that no one who uses an Apple computer can possibly say anything critical about capitalism. Such charges are as predictable as the tides. Media commentators love to condescend to protesters, and they endlessly recycle criticism of protests being naïve and unfocused.

I am among those who believe that the occupation would have benefited from having clearer demands at the outset—and that these would have been helpful in shaping the endgame that is to come. But protesters have largely overcome the lack of a particularly well-defined messaging strategy by doing something very important: choosing the right target.

Few institutions in our society are more in need of condemnation than the big banks and stockbrokers based where the critics are now camped. “Why are people protesting Wall Street?” For anyone who has lived through the recent economic collapse and the ongoing crises of foreclosure and unemployment, this question almost answers itself.

The protest’s initial call to action repeatedly stressed the need to get Wall Street money out of politics, demanding “Democracy not Corporatocracy.” Since then, many protesters have been emphasizing the idea that “We Are the 99 Percent” being screwed by the country’s wealthiest 1 percent. At Salon, Glenn Greenwald writes:

Does anyone really not know what the basic message is of this protest: that Wall Street is oozing corruption and criminality and its unrestrained political power—in the form of crony capitalism and ownership of political institutions—is destroying financial security for everyone else?….

So, yes, the people willing to engage in protests like these at the start may lack (or reject the need for) media strategies, organizational hierarchies, and messaging theories. But they’re among the very few people trying to channel widespread anger into activism rather than resignation, and thus deserve support and encouragement—and help—from anyone claiming to be sympathetic to their underlying message.

Notably, young protesters have been able to convey the idea that their generation, in particular, has been betrayed by our economy. This idea was picked up in remarkably hard-hitting commentary at MarketWatch.com, which reads like more like something you’d expect to find in the socialist press than on a business website:

[A]sk yourself how you might act if you were in school or fresh out of it or young and unemployed. What future has Wall Street, the heart and brain of our capitalist country, promised you? How does it feel to be the sons, daughters and grand kids of a “me” generation that’s run up the debt and run down the economy?

Unemployment is between 13% and 25% for people under 25. Student loans are defaulting at about 15% at a time when more young people have no alternative but to borrow to pay for school.

Meanwhile, Wall Street bonuses continue to be paid at close to all-time highs. Lloyd Blankfein, the chief executive of Goldman Sachs Group Inc. (NYSE:GS), took home $13.2 million last year, including a $3.2 million raise.

Such a message resonates with many, and protesters did something important to attract them:

2. They made a great poster.

I write this partially in jest. There is a joke among labor organizers that if you are spending all your time obsessing over the quality of your posters or handouts, rather than going out to actually talk to people, you are in big trouble.

In this case, however, there’s some truth to the idea that posters matter. When you’re not mobilizing an established organizational membership, but rather trying to capture the imagination of unaffiliated activists, protest planning is more akin to promoting a concert than staging a workplace strike. And if you’re doing that kind of promotion, how cool your call to arms is makes a difference.

#OccupyWallStreet has benefited from a series of great posters and promotional materials. Foremost among them is a lovely depiction of a ballerina dancing on top of Wall Street’s famous bull statue, created by the veteran leftist image-makers at Adbusters. The text below the bull reads simply: “#OccupyWallStreet. September 17th. Bring tent.”

The poster hinted that the event would be exciting and creative and audacious. It suggested that culture jamming and dissident art would be part of the adventure. And it pointed to another thing the protesters did right:

3. They gave their action time to build.

Most protests take place for one afternoon and then are finished. Had #OccupyWallStreet done the same, it would already have been forgotten.

Instead, planners told participants to get ready to camp out. The event operated on the premise that challenging Wall Street would take a while, and that things would build with time. In fact, this is exactly what has happened. It took a few days for alternative press sources to catch on, but now the occupation is a leading story at outlets such as Democracy Now!.

The extended time frame for the protest has allowed for the drama of direct action to deepen, which is my next point about the protesters:

4. They created a good scenario for conflict.

By claiming space in Zuccotti Park (also known as Liberty Plaza), #OccupyWallStreet set up an action scenario that has effectively created suspense and generated interest over time.

Participants there have invoked Tahrir Square. On the one hand, the comparison is silly, but on the other hand, the fact that occupations of public space have taken on a new significance in the past year is another thing that made #OccupyWallStreet a good idea. If the authorities allow them to continue camping out in lower Manhattan, the protesters can claim victory for their experiment in “liberated space.” Of course, everyone expects that police will eventually swoop in and clear the park. But, contrary to what some people think, civil disobedients have long known that arrests do not work against the movement. Rather, they illustrate that participants are willing to make real sacrifices to speak out against Wall Street’s evils.

The fact that police have used undue force (in one now-famous incident, pepper spraying women who were already detained in a mesh police pen and clearly doing nothing to resist arrest) only reinforces this message.

When will the police finally come and clear out the occupation’s encampment? We don’t know. And the very question creates further suspense and allows the protest to continue gaining momentum.

5. They are using their momentum to escalate.

Lastly, but probably most importantly, the #OccupyWallStreet effort is using its success at garnering attention in the past week and a half to go even bigger. Their action is creating offshoots, with solidarity protests (#OccupyBoston, #OccupyLA) now gathering in many other cities. Protesters in Liberty Plaza are encouraging more participants to join them. And they are preparing more people to risk arrest or other police reprisal.

It might seem obvious that a protest movement would treat a successful event as an occasion to escalate. But, in fact, it is quite rare. More established organizations are almost invariably afraid to do so: afraid of legal repercussions, afraid of the resources it would require to sustain involvement, afraid of bad press or other negative outcomes. Such timidity is anathema to strategies of nonviolent direct action.

In this respect, the fact that #OccupyWallStreet has not relied on established progressive organizations ends up being a strength. Its independent participants are inspired by the increasing attention their critique of Wall Street is getting, and they are willing to make greater sacrifices now that their action has begun to capture the public imagination.

This can only be regarded as a positive development. For the more that people in this country are talking about why outraged citizens would set up camp in the capital of our nation’s financial sector, the better off we will be. #OccupyWallStreet protesters have gotten that much right.

By Mark Engler

30 September, 2011

YES! Magazine

Mark Engler is a senior analyst with Foreign Policy In Focus and author of How to Rule the World: The Coming Battle Over the Global Economy (Nation Books, 2008). He can be reached via DemocracyUprising.com. He is a contributor to Dissent Magazine, where this article originally appeared.

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The European institutions have clearly changed course in relation to Greece. Instead of the “rescue” of the country, they are now discussing its bankruptcy, and reducing the risk of contagion. The euro rescue fund, supposed to guarantee Greece’s solvency, is being used to secure the creditor banks against the consequences of state bankruptcy.

The change of course has happened gradually, under the pressure of intense fluctuations on the stock exchanges and financial markets, the threat of bank failures and growing opposition to the austerity measures of the Greek government. But it follows unmistakeable class logic.

The fear of an uncontrollable chain reaction had previously prevented the EU from risking a collapse of Greece. They feared the bankruptcy of the largest creditor banks, which in turn would have drawn more banks into the abyss—like Lehman Brothers in the US after its bankruptcy in September 2008. Other heavily indebted countries such as Portugal, Ireland, Spain and Italy are also threatened with being cut off from access to credit if Greece, a member of the euro zone, goes bankrupt.

Under these circumstances, Greece’s billion-euro rescue packages serve to gain time. They have not benefited the Greek state, and certainly not the Greek population, but went directly into the coffers of the creditor banks, which received their loans repaid in full with all interest due. The European Central Bank also bought large quantities of Greek government bonds on the open market, thus relieving the risks banks faced from their additional papers.

The Greek rescue packages have been linked to drastic cost-cutting measures, which from the outset ruled out Greece’s mounting an economic recovery. Even to a layperson, it was obvious that the recession caused by the austerity measures would nullify any budgetary savings.

The purpose of the austerity measures was not so much to restructure the budget, but to ruin the working class. Under the dictates of the so-called troika—the European Central Bank, the European Commission and the International Monetary Fund—the Greek government has cut pensions and incomes, destroyed tens of thousands of public sector jobs and driven the self-employed into bankruptcy by raising taxes, while the rich elite have hoarded their wealth in foreign bank accounts.

Meanwhile, protests against these measures are increasingly threatening the Greek government. This month alone there have been several general strikes and protest actions. The unions, which are working closely with the government, are finding it increasingly difficult to keep the resistance under control.

The representatives of the troika have concluded from this that the time has come to abandon Greece. State bankruptcy would mean that the government had no funds to pay salaries and pensions, as well as for other public spending. Just as US automotive firms exploited bankruptcy procedures to wipe out their financial obligations to the workforce in one stroke, the Greek government could effectively annul its existing contracts and legal arrangements. The question then would not be how many jobs would be eliminated and how far salaries were being cut, but who has a job at all.

Greek state bankruptcy would also be used to intimidate workers in the other European countries. It would represent an unequivocal threat, showing what awaits them if they do not accept the austerity measures being imposed by their own governments.

In Greece itself, state bankruptcy would provoke violent social unrest. But the EU expects to be able to isolate this with the help of the unions, who have so far refused to organise any international solidarity with the Greek workers. The Greek military has also spoken out again, and threatened to bring down the PASOK government. Under the rule of the “colonels”, the military suppressed the Greek working class from 1967 to 1974 with a bloody dictatorship.

The main concern of the EU at present is how to prevent a Greek state bankruptcy from bringing down international banks and other European countries. All the decisions and debates of the last weeks and days revolved around this question.

The euro zone governments had already agreed in June to increase the euro rescue fund (EFSF) and expand its powers. Rather than simply provide credit guarantees to ailing euro zone countries, the EFSF may now also buy up government bonds of vulnerable states on the open market and so remove the risks facing the banks.

Increasing the banks’ capital holdings with funds from the EFSF or other public monies is also now up for discussion. This was the central theme at the meeting of EU finance ministers on Tuesday last week. The ministers commissioned the European Banking Authority (EBA) to verify the resilience of the European banks if Greece were to default on its payments.

On Wednesday, German Chancellor Angela Merkel also agreed to this line. If banks urgently needed money, the European states should not delay financial aid because this would be “money reasonably invested”, she said after a meeting with EU President Jose Manuel Barroso and the leaders of the main international financial institutions.

On Thursday, the European Central Bank decided, in turn, to support threatened banks with large amounts of money.

In other words, instead of rescuing euro zone countries faced with bankruptcy, the funds of the euro rescue package and the ECB are now being used to bail out the banks when indebted countries go bankrupt.

Experts believe that the European banks need at least €200 billion to €300 billion of additional capital to survive a Greek state bankruptcy. Like the bank bailout in the 2008 financial crisis, these funds would be recouped again through austerity measures at the expense of working people.

Many politicians and media representatives now regard a Greek state bankruptcy as a certainty.

Spiegel Online commented on the events of last week, saying: “Now the financial institutions are to be supported with taxpayers’ money. That might be cheaper than rescuing countries in crisis.”

And Europe’s leading financial newspaper, the Financial Times, published a comment on Thursday under the headline “Save the euro—let Greece default”.

“Given its debt, its budget and current account deficits and its woeful lack of competitiveness, Greece cannot escape the debt trap”, it stated. “Austerity piled on austerity will simply kill the patient.”

To manage the country’s bankruptcy, the Financial Times calls for “a co-ordinated recapitalisation of the banks and a quadrupling to €2,000bn or so in the firepower of the European Financial Stability Facility.” The bill for these measures will have to be paid by working people throughout Europe, in the form of further cuts and austerity measures.

The preparations for Greek state bankruptcy mark a new stage in the offensive of the ruling financial elite against the working class. This offensive can only be answered by a common struggle of European workers on the basis of a socialist programme, which focuses on the expropriation of the banks and big corporations and the establishment of the United Socialist States of Europe.

By Peter Schwarz

European businesses and consumers face at least 20 years of electricity price rises, according to a leaked European Commission report on how the region can meet its green energy targets.

It also forecasts a huge growth in the number of wind farms, which would push up prices even higher.

In an assessment that examines a range of ways in which fossil fuels such as coal can be replaced with cleaner sources of energy, the 112-page report says all scenarios point to wind farms becoming the biggest source of electricity in the bloc by 2050, outstripping both coal and nuclear power.

Wind farms could provide as much as 49 per cent of EU electricity by that date, the report suggests, up from just 5 per cent today.

Average electricity prices for households and businesses would rise “strongly up to 2020-2030” under all scenarios, the document says, and the highest prices would occur after 2030 if renewable sources of power, such as wind and solar, make up a large share of energy production. For example, average prices for households could jump by more than 100 per cent by 2050 if this were the case but only by 43 per cent under a scenario that assumed more nuclear power and carbon capture and storage were used.

The report suggests this would be partly due to new infrastructure investments but it also appears to assume that conventional fuel plants would not run as much as they do now, meaning higher prices would have to be charged to cover initial investment costs.

The report is a draft impact assessment of the sorts of energy policies needed if European Union countries are to meet their goal to cut greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050.

It is now circulating as officials prepare what the commission calls its “Energy Roadmap to 2050”, due to be released by the end of this year.

The assessment shows what would happen to prices, costs and energy sources under five different scenarios to make the EU less dependent on conventional fossil fuels such as coal and gas, which now account for more than half the electricity generated in the bloc.

Nuclear plants are the next biggest source, with a share of 28 per cent, while wind and hydro-electric plants, the two main sources of renewable energy, produce a combined total of 18 per cent.

 Of the five scenarios examined, the highest electricity prices are forecast in a “high renewables” scenario which envisages more supply of North Sea off-shore wind plus “significant” concentrated solar power – plants that concentrate the sun’s rays to produce steam and drive a turbine – and micro power generation from solar and wind.

The cheapest prices are predicted in a so-called “diversified supply” scenario, which assumes support for renewable energy but also acceptance of nuclear power and the commercial viability of carbon capture and storage.

A spokeswoman for the European Commission’s energy commissioner, Günther Oettinger, said she was unable to comment on leaked documents.

By Pilita Clark

16 October 2011

@ The Financial Times

It began in Tunisia and Egypt, then spread throughout the Middle East and North Africa. It spilled into Spain, Greece, and Ireland. It leapfrogged to Wall Street. And this past weekend it erupted in London, Rome, Paris, Tokyo, Taipei, and Sydney. In hundreds of towns and cities around the world the uprising’s refrain is similar: economic misery resulting from fizzling economic growth is leading protesters to question corruption both in governments and in financial institutions, and to demand an end to extreme economic inequality.

As long as economies grew, inequality was tolerable. And if the rabble demanded perks, governments could simply borrow money to fund social programs. Corruption could fester unnoticed. But now the economic tide is no longer lifting all boats. Bursting financial bubbles have led economies to contract. That has in turn led to falling tax revenues, which have made existing government debts in several key countries unrepayable. Therefore government bonds held by banks as assets suddenly have little value. Which causes the economy to teeter further. The system is broken.

The universal solution: austerity—a strategy of cutting government spending, government jobs, and government services to the poor and middle classes. Suddenly social safety nets are being withdrawn, and extreme economic inequality is no longer socially tolerable.

The only thing that could stop the uprising is a return to growth—which would generate new jobs, higher tax revenues, and solvency in the financial industry. But instead the world economy seems poised on a precipice perhaps more dangerous than the one it faced in 2008. This means the protesters likely aren’t going home anytime soon. For governments, there are only two realistic responses: repression or major reform

Brutal police and military repression of the protests could buy time for politicians, but it would solve nothing. The unrest would go underground and tear at the social fabric, leading eventually to revolution or societal breakdown.

Reform, if it is to make a difference, must be fundamental. It must start by addressing issues of economic inequality, but then must eliminate the massive debt overhang that plagues not just governments but households and the entire financial sector. In essence, policy makers must cobble together a new economic model that meets human needs in the absence of economic growth.

Politicians take note: Forces are being unleashed that cannot be tamed. So far, crisis has been dealt with by a combination of denial and delay. Those tactics no longer work. Extraordinary times call for extraordinary measures.

By Richard Heinberg

17 October 2011

@ Post Carbon Institute

Richard Heinberg is Senior Fellow-in-Residence at Post Carbon Institute. He is the author of ten books, including The Party’s Over, Peak Everything, and the soon-to-be-released The End of Growth. He is widely regarded as one of the world’s most effective communicators of the urgent need to transition away from fossil fuels.

Former US Secretary of Defense Donald Rumsfeld has given an interview to Al Jazeera, ending his feud with a channel he once described as “vicious”.

Questioned by Sir David Frost, Bush’s former right-hand man, who many see as the architect of the second Gulf War, struck a conciliatory tone in the interview.

“Its audience has grown and it can be an important means of communication in the world,” he said of the channel.

“I am delighted you are doing what you are doing.”

The interview is to be broadcast on Al Jazeera English on Friday night.

The Al Jazeera network started in 1996 as an Arabic news channel, and was the first rolling-news media operation to be based in the Middle East.

The channel came to western attention following the 9/11 attacks, when it routinely aired broadcasts of Osama bin Laden.

It quickly gained a reputation among many in the west as a mouthpiece for Al-Qaeda, promoting Islamic militancy and a strong anti-western message.

In 2001, a US bomb destroyed Al Jazeera’s office in Kabul; an incident the Bush Administration maintained was an “accident”.

Relations between the network and Washington were further strained when in 2003 a US plane fired upon the channel’s office in Baghdad, killing reporter Tareq Ayyoub. Again, US authorities called the incident a “mistake”.

On April 15 2004, Rumsfeld denounced the TV station at a Pentagon briefing, calling its reporting of the Iraq War “vicious, inaccurate and inexcusable”.

“They are simply lying,” Rumsfeld said following an Al Jazeera report that an American assault on Fallujah was terrorizing citizens.

The nadir of the relationship came a day later when President Bush reportedly told Prime Minister Tony Blair that he wanted to bomb the channel’s headquarters in Doha, Qatar.

Reports emerged of the conversation later that year based on transcripts, though it remains unknown exactly what was said or as to whether Bush was joking.

That November, the White House referred to the reports of the conversation as “outlandish”, however Wadah Khanfar, then the director-general of Al Jazeera, sent a letter to Downing Street demanding clarification from Blair as to what was said in the meeting.

The English version of the channel launched in 2006 with veteran presenter Frost as its marquee name. Its launch, along with the end of the Bush regime, led to a thawing of relations. In April this year, President Obama hosted Emir Hamad bin Khalifa al-Thani of Qatar, the new boss of the channel, in Washington.

Suspicions remain as to the impartiality of the channel’s Dohar operation, but the Rumsfeld interview, along with a recent broadcast of Frost and David Cameron, provides some indication of Al Jazeera’s more accepted standing in the halls of Washington and London.

First Posted: 30/9/11 00:00 GMT Updated: 1/10/11 11:37 GMT Paul Vale (The Huffington Post)

Chomsky vividly shares his reflections on the wall street protests and warns of an impending serious poverty and real unemployment similar to the great depression, he talks about the 2012 American presidential campaign spending and how positions in both the white house and the congress are being bought, not earned and he refers to the killing of Osama Bin Laden and how this marks a shift of American policy from Bush’s abducting and torturing whoever the CIA thought posed a threat to the U.S to Obama’s “just kill `em when you spot `em” approach regardless of the legalities overlooked in the process.

He concludes that the killing of Osama Bin Laden was done, in such a way, as to infuriate, and may be implicate the Pakistani military, something he seriously regards as extremely dangerous.

In regard to the Arab spring, Chomsky acknowledges that the U.S and its western allies did not support the Tunisian or the Egyptian revolutions; rather they opposed them, and backed the dictator till the last minute and then shifted policy when they were overthrown.

Pinning its hopes on the sole support of the US, Chomsky warns “the Zionist state would risk a collapse if that support was to be withdrawn or compromised – much like apartheid-era South Africa.” He recalls how South Africans felt safe to ignore a UN embargo and corporations pulling out of their country throughout the 1980s, as long as the Reagan administration continued to support them.

As soon as the US withdrew its support, the apartheid regime collapsed. “For 35 years, the US and Israel have been rejecting a political settlement that is supported virtually by the entire world.

A couple of months ago, there was a meeting of the oligarchs — people who pretty much run the economy of Israel,” Chomsky says, “and they warned the government that it better accept something like this resolution, because otherwise, Israel will be, as they put it, South Africanized: even more isolated, with boycotts, refusal to load ships, and their economy will collapse.”

By Dr. Ashraf Ezzat

Austerity not the way to go for Europe

Most economists thought that when the euro was put together, it was an incomplete task. They’d taken out too many adjustment mechanisms and had not put anything in its place.

One of the things that makes the American common currency work across the country is we have a common fiscal authority and high migration – we’re willing to allow North Dakota to become empty.

In Europe, there’s no fiscal authority, migration is more difficult and most of the countries are not willing to let themselves become empty. So the framework for allowing for an effective common currency is not there.

Now you might be able to make up for the deficiencies in one part by strengthening another part, for instance by having a stronger fiscal authority. But they don’t have that.

What they did fiscally was tie themselves to the stability and growth pact, which was a pact for recession rather than for growth because limiting deficits when you have a shock is a recipe for recession, which is what is happening in Greece.

So the question was always: when a crisis occurred would they be able to finish the task? And I think the jury is still out.

Misguided

The agreement that they made in July was a reasonably good agreement. It recognised that Greece needed help to grow but they haven’t put in any money and the process of ratification has been very slow.

So I think it’s really a question that has not yet been resolved.

There are a number of institutional ways of going about helping to resolve it. The European Financial Stability Facility (EFSF) needs to be larger or to have more ability to leverage itself. That’s a minimum.

Over the longer term they’re going to need European bonds and a number of other actions, and they have to recognise the framework of austerity is not the way to go.

Issuing bonds should be one part of the fiscal framework.

The problem with the eurozone was the one part of the framework that they thought they needed was limiting fiscal deficits and that was just a misguided analysis.

Ireland and Spain had surpluses before the crisis. But they thought that having limited fiscal deficits was necessary and sufficient for protecting the economic framework and that was just wrong.

Politics

The July agreement was a good start if they implement it quickly. But that’s not been happening.

Let me say, for democracy it’s not been that slow. Two months to get landmark legislation through is not a long time. But markets move quickly. So I don’t criticise the fact that there’s been a deliberate pace – that’s the nature of democracy.

My criticism is they didn’t do anything in the 10 years before there was a crisis.

I suspect that we’re going to see a lot of volatility. Whether at the end the eurozone will emerge intact or not, it’s hard at this point to say.

It all depends on the politics. Even though I think the commitment of the leaders to do something is there, the political process in some ways is not in tune with the economics. The problems are deep.

I think there is a reasonably good chance that a year from now you would find the eurozone smaller than what it is today.

There’s a broad consensus among economists that the best way of doing it would be for the northern European countries to leave. That would be the easiest adjustment.

But the general view is that is not what’s going to happen. The view is that some of the weaker countries will leave and that will lead to very large trauma in the global financial markets such as freezing the credit markets, a repeat of 15 September 2008 (when Lehman Brothers collapsed).

Growth potential

If Europe insists on going forward with the kind of austerity packages in Germany and without the kind of assistance they need to help those countries with severe economic problems, such as Greece, then almost surely the eurozone will break up.

But if they come forward with that money, then it can survive, at least for a while.

The European Central Bank (ECB) is the one institution that has the kind of flexibility that is necessary to deal with the crisis. It will be absolutely essential, because they will be able to step into the breach and be willing to do that.

Now the problem is that some people in Germany and elsewhere have said the ECB should not be buying Italian and Spanish bonds and that it should not be stepping into the breach. But if the ECB doesn’t do that, then the eurozone’s prospects are very, very bleak.

It’s not inevitable that Greece will default if they come forward with enough assistance for it to grow. It has enormous growth potential, so if Europe comes up with enough money, it will grow and that will enable it to manage its debts.

But so far I’ve seen nothing in the form of growth assistance as opposed to austerity assistance just to meet its budget shortfall, and I’m not very optimistic that it will avoid a default.

By  Joseph Stiglitz

3 October 2011

@ BBC News

Joseph Stiglitz is a Professor at Columbia University and also a recipient of a Nobel Prize in Economics and a former chief economist at the World Bank.