The Bankruptcy Of Casino Capitalism

Via: The SocialistWorker.org.
Editorials

The Goldman Sachs scandal offers an opportunity to focus on our critique to the capitalist system itself.

EVEN THE guy who made a name for himself defending the British Empire can’t stomach Goldman Sachs’ style of capitalism.

“Whether or not there is any basis for the [Securities and Exchange Commission's] claim that [Goldman] misled investors, the key point is that the synthetic collateralized debt obligation (CDO) at issue was nothing more than an elaborate wager on the future price of some mortgage-backed securities–a wager with as much economic utility as a gigantic bet on a roulette wheel or a horse race,” wrote investor Ted Forstmann and economic historian Niall Ferguson, the pro-colonial author of Empire: The Rise and Demise of the British World Order.

They concluded: “Facilitating such bets has become a huge part of the business of the world’s biggest banks.”

And the bets keep coming. Will the Greek government default on its debt? Speculators are wagering that it will–and stand to profit if a default comes.

Other investors are sizing up state and local governments in the U.S. with a similar aim. They’re buying credit default swaps (CDS), a form of insurance that will pay up if those government entities default on their bonds. “As U.S. cities and towns wrestle with financial problems, investors are finding a new way to profit on their misery: by buying derivatives that essentially bet municipalities will default,” the New York Times reported.

It’s CDS trading that’s at the center of the scandal surrounding Goldman Sachs.

According to the SEC’s lawsuit, Goldman conspired with billionaire hedge fund boss John Paulson to cook up complex securities–those CDOs disdained by Ferguson and Forstmann–based on residential mortgages that were likely to go bad. Paulson then bought CDS insurance that paid him $1 billion when the mortgages failed. But Goldman kept Paulson’s negative bet quiet–and according to the SEC, that omission constitutes fraud.

Legal or not, this is standard practice on Wall Street. But the Goldman scandal has revived critical voices that were largely drowned out since the financial crisis of 2008 eased.

Among them was New York Times business columnist Roger Lowenstein:

Wall Street’s purpose, you will recall, is to raise money for industry: to finance steel mills and technology companies and, yes, even mortgages. But the collateralized debt obligations involved in the Goldman trades, like billions of dollars of similar trades sponsored by most every Wall Street firm, raised nothing for nobody.

In essence, they were simply a side bet–like those in a casino–that allowed speculators to increase society’s mortgage wager without financing a single house.

The Real War Reporters. By William Rivers Pitt

Via: truthout.

A good friend noted recently how little we hear of Iraq and Afghanistan in the news anymore, and further noted the deafening silence regarding those ongoing wars from what he described as “dishwater left-leaning political activists” whose disengagement from the issue, according to him, makes them full of something I can’t repeat in print. That bogus disengagement, he asserts, stems from the fact that Obama is in office now, so everything must be OK. It isn’t, of course, but it is hard to miss the fact that we haven’t heard much about the wars, or the protesters, since a couple of Januarys ago.

It’s hard to argue against his point, and worse, the sense of being made of dishwater myself is difficult to avoid. I’ve written about the deadly messes in Iraq and Afghanistan several times in the last year or so, but it is nothing compared to the focus I had on those two conflicts going back to 2002. Back then, and until 2009, I wrote three books on those two wars, discussed them in detail in this space on a weekly basis, joined political campaigns based solely on the candidate’s stance on those conflicts, and went to dozens of public protests all over the country.

Why did my coverage of these conflicts get dialed back? There are several reasons, most of which sound like excuses. Obama’s new administration brought forth a torrent of issues that also deserved coverage – the Sotomayor nomination, the retirement of Justice Stevens, the rescue of Detroit’s auto industry, health care reform, and the eruption of right-wing insanity both in Congress and out in the streets, to name only a few – but in the end, my own attention has most definitely wandered from two wars that deserve much more attention.

Other reporters, like Truthout’s own Dahr Jamail have certainly not stepped back from covering these conflicts. Jamail, who went to Iraq to see and report what was happening from the ground, has consistently reminded us that the mayhem and bloodshed continue unabated.

Israel Loves Settlers, For Good Reason. By Joharah Baker

Via: MIFTAH.

“We’ve proven to Netanyahu, Obama and Mitchell that we’re the bosses in Jerusalem.” If we look at the situation on the ground today in the city, most of us will have to concur with this outrageous statement by ultra-right wing settler Ben Gvir, who marched on Silwan along with 50 other extremist Israeli settlers on April 25.

It has often been said and unfortunately it is all too true that the minority settler population in Israel calls many of the shots of Israeli government policy. Never mind that every single settler living in every single home in the West Bank and east Jerusalem is there illegally according to international law. To the Israelis, they are the de facto policy makers, the feared minority and the sector of society that wreaks the most havoc.

A perfect case in point is the Silwan march. The Israeli government was initially wary of giving the settlers a permit for the march because it coincided with US envoy George Mitchell’s visit. Apparently Israeli Prime Minister Benjamin Netanyahu wanted to spare himself yet another embarrassment after the last fiasco involving US Vice President Joe Biden and the announcement of 1,600 additional homes to be constructed in an east Jerusalem settlement. He even tried to postpone the march as late as Saturday night, but Israel’s attorney general okayed it anyway. This was most likely a face-saving policy for Netanyahu who could then technically claim that “he tried” in case the situation gets out of hand later. Sadly, Israel does not consider the actual injustice of the action at hand (in this case the settler march into a Palestinian town) but rather the diplomatic backlash it might generate. The only option Israel’s government allows itself is to postpone the rally or the settlement construction, not to cancel it altogether.

In this case, the government kowtowed to the settlers yet again, granting them the permit to provocatively march through Silwan, carrying large Israeli flags and chanting slogans against what they called the “illegal construction” in the city – that is, Palestinian homes, they say are built there without a proper license. The settlers also urged the government to demolish the homes. Whether their march embarrassed their own government or not was not a source of concern for these settlers who cockily reminded others that, ‘Mitchell is not the prime minister” and that they would march “even if Mitchell doesn’t like it.”

Greece: Driven into Crisis. By Ingo Schmidt

Via: Socialist Project.

Neoliberal order reigns in the world. Stock markets are recovering from the crash in the fall of 2008. Private banks are no longer weighed down by bad loans that were added to public deficits. The latter were rising anyways because the economic crisis had sent tax revenues on a downward slide. Add further bailout money for financial companies and fiscal stimulus and you get a veritable fiscal crisis of the state.

Workers in Greece protest government attacks on wages and benefits.

Meanwhile, rating agencies like Moody’s and Standard and Poor’s cast judgement on the viability of fiscal deficits and public sector cuts, as if their assessments of the financial sector had nothing to do with the ‘manias, panics, and crashes’ that pushed a cyclical recession near depression in the first place. Public deficits between 12% and 13% of GDP in Britain and the U.S. are bad, they say, but not so bad that the austerity measures they consider appropriate can’t be left to Number 10 Downing Street and the White House. In the European periphery, however, things are, according to the master evaluators of the world, quite different. Lumped together as PIGS, short for Portugal, Ireland Greece and Spain (or PIIGS, in adding Italy), these countries are charged with notorious wasteful spending and an inability to reign in deficits. Therefore, deficits in these countries, while not exceeding the British-American 12-13% range, are a threat to private investments in government bonds and loans.

Iran a Threat? I Mean, Really? By Ray McGovern

Via: Common Dreams.

With all the current hype about the “threat” from Iran, it is time to review the record — and especially the significant bits and pieces that find neither ink nor air in our Israel-friendly, Fawning Corporate Media (FCM).

First, on the chance you missed it, Secretary of State Hillary Clinton has said publicly that Iran “doesn’t directly threaten the United States.” Her momentary lapse came while answering a question at the U.S.-Islamic World Forum in Doha, Qatar, on Feb. 14.

Fortunately for her, most of her FCM fellow travelers must have been either jet-lagged or sunning themselves poolside when she made her unusual admission. And those who were present did Clinton the favor of disappearing her gaffe and ignoring its significance. (All one happy traveling family, you know.)

But she said it. It’s on the State Department Web site. Those who had been poolside could have read the text after showering. They might have recognized a real story there. Granted, the substance was so off-message that it would probably not have been welcomed by editors back home.

In a rambling comment, Clinton had charged (incorrectly) that, despite President Barack Obama’s reaching out to the Iranian leaders, he had elicited no sign they were willing to engage:

“Part of the goal — not the only goal, but part of the goal — that we were pursuing was to try to influence the Iranian decision regarding whether or not to pursue a nuclear weapon. And, as I said in my speech, you know, the evidence is accumulating that that [pursuing a nuclear weapon] is exactly what they are trying to do, which is deeply concerning, because it doesn’t directly threaten the United States, but it directly threatens a lot of our friends, allies, and partners here in this region and beyond.” (Emphasis added)

Qatar Afraid? Not So Much

The moderator turned to Qatari Prime Minister Sheikh Hamad Bin Jassim Al-Thani and invited him to give his perspective on “the danger that the Secretary just alluded to…if Iran gets the bomb.”

Al-Thani pointed to Iran’s “official answer” that it is not seeking to have a nuclear bomb; instead, the Iranians “explain to us that their intention is to use these facilities for their peaceful reactors for electricity and medical use…

“We have good relations with Iran,” he added.  “And we have continuous dialogue with the Iranians.” The prime minister added, “the best thing for this problem is a direct dialogue between the United States and Iran,” and “dialogue through messenger is not good.”

Al-Thani stressed that, “For a small country, stability and peace are very important,” and intimated — diplomatically but clearly — that he was at least as afraid of what Israel and the U.S. might do, as what Iran might do.

All right. Secretary Clinton concedes that Iran does not directly threaten the United States. Now who are these “friends” to whom she refers? First and foremost, Israel, of course.  How often have we heard Israeli officials warn that they would consider nuclear weapons in Iran’s hands an “existential” threat?

Time to do a reality check. Former French President Jacques Chirac is perhaps the best-known world statesman to hold up to public ridicule the notion that Israel, with between 200 and 300 nuclear weapons in its arsenal, would consider Iran’s possession of a nuclear bomb an existential threat.

Terrorizing Immigrants. By Stephen Lendman

Via: SteveLendmanBlog.

On April 20, Reuters headlined, “Arizona passes tough illegal immigration law,” saying:

State lawmakers “passed a controversial immigration bill on Monday (April 19) requiring police in the state (to) determine if people are in the United States illegally, a measure critics say is open to racial profiling.”

Called “Support Our Law Enforcement and Safe Neighborhood Act,” the Arizona House and Senate passed it, sending it to Governor Jan Brewer who signed it on April 23 to make it Arizona law.

The National Network for Immigrant and Refugee Rights (NNIRR) works for “a just immigration and refugee policy in the United States (for) all immigrants, regardless of immigration status….advocating for their full labor, environmental, civil and human rights.”

“We are ALL Arizona,” it said before the bill became law. “Stop the Criminalization of Immigrants, End Racial Profiling! Tell AZ Governor to Veto (this) Anti-Immigrant Bill,” saying:

“The Arizona State Legislature just passed a law (SB 1070) that legalizes unchecked racial profiling by police of anyone they ‘suspect’ is undocumented. It would criminalize all undocumented immigrants as ‘trespassers’ and subject them to misdemeanor or, in some cases, felony charges for a new ‘trespass’ crime.”

In a letter to Governor Brewer urging her veto, NNIIR said:

“If you sign SB 1070 into law, you will make Arizona a police state unprecedented in modern US history.

By vetoing SB 1070, you will help to safeguard the health and safety of immigrants and people of color in the state of Arizona. Your veto will be a resounding NO to unbridled racial profiling by police of anyone they ‘suspect’ (by skin color, spoken language, or other characteristics) is undocumented. Your veto will say NO to the criminalization of immigrants and YES to respecting (the) constitutional rights of all persons, regardless of their immigration status or citizenship.

Don’t take Arizona backwards to a police state where racial discrimination is legalized. Please stand up for our human and civil rights.

VETO SB 1070 today.”

Brewer, however, signed it into law giving police authority to stop anyone for any reason, question their residency legitimacy, and demand proof of legal entry or citizenship, without which anyone may be arrested, fined, jailed, and/or deported without cause.

On April 19 in his article headlined, “Immigration Bill Reflects a Firebrand’s Impact,” New York Times writer Randal C. Archibold said Senator Russell Pearce who wrote the bill once “appeared in a widely (2007) circulated photograph with a man who was a featured speaker at a neo-Nazi conference.”

In 2006, he was criticized “for speaking admirably of a 1950s federal deportation program called Operation Wetback, and for sending an e-mail message to supporters that included an attachment – inadvertently, he said – from a white supremacist group.”

SB 1070 requires immigrants to carry authorization papers. Failing to do so is a crime. Pearce said he’s on a mission to rid the state of undocumented immigrants and discourage others from coming.

At issue is will other states and Washington enact similar measures, clear police state constitutional violations if they do. If so, no one will be safe from illegal searches and seizures – on streets, in their vehicles, at work, in stores, at school, places of worship, or at home at any hour, day or night, if authorities demand papers on threat of arrest, fines, imprisonment, and/or deportation, without habeas or due process rights.

Indian Writer Arundhati Roy Threatened With Prosecution Under Anti-Terrorism Law. By Kranti Kumara

Via: WSWS.

Police in the east Indian state of Chhattisgarh are “exploring” laying charges under the state’s draconian anti-terrorism law against Arundhati Roy, a Booker Prize-winning novelist, essayist and human rights campaigner.

The police initiated their investigation of Roy in response to a complaint filed by one Viswajit Mitra that accused Roy of “glorifying Maoists” in an article published in the March 29 issue of Outlook India. Titled “Walking with the Comrades,” Roy’s 33-page magazine article reports on a clandestine visit she made to Dandakaranya, a forest highland area largely inhabited by tribal people or adivasi, so that she could speak with, and bear witness to, the activities of Maoist guerrillas.

Mitra claims to be “an ordinary citizen.” But he is reportedly a local leader of the Bahujan Samaj Party or BSP, the ruling party in Uttar Pradesh, India’s most populous state.

Chhattisgarh’s director general of police (DGP), Viswa Ranjan, told the press, “The matter shall be investigated before taking any further steps.… I have asked the legal experts to give their opinion and come up with a decision.”

That the DGP believes Mitra’s outrageous anti-democratic “complaint” has merit was exemplified by his further remarks. “I do not know,” said Ranjan, “whether Arundhati Roy has been wrongly influenced by others or she is actually a mole in the civil society. How do I know?”

Roy is threatened with prosecution under Chhattisgarh’s notorious Special Public Security Act (2005) or CPSA. The law, which was authored by the Hindu supremacist Bharatiya Janata Party (BJP), provides a sweeping definition of “unlawful activities.”

Under its provisions, an act or even a written or verbal communication that “poses a danger or fear thereof” to “public order,” or that “has a tendency to pose an obstacle” to “the administration of law,” or that “encourages” disobedience to any law or institutions “set up by law” is unlawful and could result in a seven-year prison term.

A Nation Born in Deception. By William A. Cook

Via: Atlantic Free Press.

As Israel attempts today to gloss over the reality of its birth 62 years ago with a sweeping public relations campaign extolling the miraculous “resurrection” of ancient Zion in contemporary times, a new nation seeking only peace with its neighbors, it might be enlightening and valuable to examine the truth.

On May 14, 1948 President Harry S. Truman received a letter from the Jewish Agency for Palestine announcing the impending proclamation of the independent republic of Israel (Harry S. Truman Library, document filed August 22, 1949). That date marks not only the beginning of the State of Israel but, sub missa voce, the assumption by the State of Israel of the calculated, systematic and determined ethnic cleansing of the indigenous population of the land of Palestine that had been the business of “The Consultancy” and its agents before May 14, as identified by Dr. Ilan Pappe in his monumental The Ethnic Cleansing of Palestine.

The letter notes that the republic has been established within “frontiers approved by the General Assembly of the United Nations in its Resolution of November 29, 1947, and that a provisional government has been charged to assume the rights and duties of government for preserving law and order within the boundaries of Israel, for defending the state against external aggression, and for discharging the obligations of Israel to the other nations of the world in accordance with international law.” The letter was signed by Eliahu Epstein, Agent, Provisional Government of Israel.

The letter is notable not for what it announces, but for what it does not reveal. Truth requires revelation of all the facts, not concealment by omission of that which would prejudice an understanding. During the six months between the adoption of UN Resolution 181 and the date of this letter, and in subsequent months, the prospective state of Israel launched a massive military incursion into territory designated by that same Resolution for the Palestinian people, creating in its wake “three quarters of a million Palestinian refugees,” the destruction of “hundreds of entire villages … not only depopulated but obliterated …and houses blown up or bulldozed” (Walid Khalidi, All That Remains, xv). Khalidi’s massive study focuses on 418 villages, once the homes of Palestinians, 292 completely destroyed, 90 others “largely destroyed,” the remainder re-inhabited by Jews called Israeli settlers.

In blunt terms, the Jewish Agency for Palestine lied to the American President that it had established a provisional government that “has been charged to assume the rights and duties … for preserving law and order within the boundaries of Israel … and for discharging the obligations of Israel to the other nations of the world in accordance with international law.”

Africa Still Struggles Against Imperialism. By Abayomi Azikiwe

Via: Workers World.

The year 2010 is the 50th anniversary of the Year of Africa, when 17 former colonial territories gained their national independence during 1960.

The liberation movements in Africa had gained momentum after World War II, when the European colonial powers were weakened by their mutual destruction from 1939 to 1945.

Colonialism was a vicious system of national oppression and exploitation with origins in the Atlantic Slave Trade starting in the 15th century. After four centuries of enslaving Africans in Western Europe, the Caribbean, Latin America, North America and on the African continent itself, the imperialists solidified their colonial system with the 1884-1885 Berlin Conference.

African people resisted the rapacious slave trade and colonialist encroachment for centuries. Beginning in the late 19th century, anti-colonial revolts and movements blossomed throughout the African continent and other territories throughout the world.

Despite the two inter-imperialist wars in the first half of the 20th century, as of 1945 colonialism in Africa remained largely intact. To justify their crimes, the European colonialists claimed that their presence in Africa spurred economic development and prepared African states for eventual independence in the 20th century. The introduction of capitalist systems of production and trade, however, only managed to maximize profits and maintain political control for the imperialists.

For example, in the West African state of Ghana, which was called the Gold Coast during the colonial period, British rule established a one-cash-crop economy of cocoa, providing the British ruling class with an effective means of exploiting the African territory.

Gold mining provided an impulse for the territory’s first railway, which extended from the gold-mining district of Tarkwa to Sekondi by 1901. After the railway line’s construction in the Gold Coast, the rate of profit extracted from gold mining grew quickly. Gold exports expanded from £22,000 (all numbers in pound sterling) in 1897 to £255,000 by 1907 and £1,687,000 by 1914, the beginning of World War I.

The railway extended to Kumasi in 1903 in order to ensure the political and military dominance over the Ashanti nation. This factor led to the penetration of the forest areas where the British carried out the process of rubber-tapping. The expansion of cocoa farming brought about another round of windfall profits for the British colonialists.

Empower The People. By Ralph Nader

Via: Nader.org.

Dear President Obama, Senator Schumer and Senator Shelby:

On the eve of the portentous Senate debate over the extent to which the financial industry is to be so as to avert future megacollapses on the backs of taxpayers, workers and consumers, a great gap has been left unattended.

That gap pertains to the continued powerlessness of the investors and consumers—the people who bear the ultimate brunt of Wall Street’s recklessness, avarice and crimes and who have the greatest interest in strong regulatory enforcement.

Among all the amendments filed for the upcoming Senate debate, only amendment number 29, introduced by Senator Schumer, provides a facility to establish an independent non-governmental non-profit Financial Consumers’ Association (FCA).

Amendment 29 includes the following for funding this unique institution:

“…the financial industry has enjoyed virtually unlimited access to represent its interest before Congress, the courts, and State and Federal regulators, while financial services consumers have had limited representation before Congress and financial regulatory entities;” and

“…the Federal Government has a substantial interest in the creation of a public purpose, democratically controlled, self-funded, nationwide membership association of financial services consumers to enhance their representation and to effectively combat unsound financial practices.”

Anyone modestly familiar with the history of regulatory failures knows that the gross disparity of power and organized advocacy between big business and consumers outside of government leads to an absence of fair standards and law enforcement.

It also leads, as everyone knows, to massive taxpayer bailouts, subsidies and guarantees when these giant banks and other financial firms immolate themselves, after enriching their bosses, while engulfing tens of millions of innocent people in the subsequent economic conflagration.

Yes, we need an honest immigration debate. But this tough talk isn’t it. By Gary Younge

Via: The Guardian.

Racist fear-mongering prevents discussion of the poverty, natural disasters and wars that cause people to emigrate

Back in the mid-1980s, when Britain was contemplating what assurances to give immigrants from Hong Kong after the handover to China, my elderly next door neighbour, Mrs Stilling, expressed her concern.

“We’re only a small island,” she said, raising her arm at the elbow like a lever. “We can’t take in all those people or the country would tip up.”

It took me a while to realise that Mrs Stilling was not being metaphorical. She had a clear image in her head that if too many people came to the country the place could be upended, with the south sinking under the pressure as the nation flipped on its axis.

Mrs Stilling, a loyal Daily Mail reader who has since died, was a fantastic human being and a wonderful neighbour. Indeed it was precisely because she was a fantastic human being that we were her neighbours.

When my parents sought housing in the mid-1960s they had met with the frosty glares of home counties folk who did not welcome the idea of black people next door. Mrs Stilling was different. She had welcomed them and offered to warm the milk for my brother, who was still a baby. From that time on she was a great source of support and affection to my family.

Her views about the existential threat that immigration posed to Britain’s geological bearings were not rooted in racial animus or cultural antipathy. But it was not rooted in fact either.

I could sympathise with her anxiety. Temperamentally, she was always ready to take a journey towards a future Britain she could never have imagined growing up. The trouble was that politically no one in power would ever accompany her, let alone occasionally challenge her.

This country has long needed a thoroughgoing conversation about immigration that could raise the debate among the general public. The fact that we have yet to have one is not because the left is unprepared or unwilling to engage, but because the right has proved itself incapable of contributing anything to that discussion that is intelligent, honest or informed.

Let’s start with the clear acknowledgement that immigration in this period does pose serious problems. First of all, much of it is not voluntary but forced by extreme poverty, natural disasters and wars. It would be a better world if people did not have to move to eat. Environmental policies – particularly on climate change – arms control and a responsible foreign policy without unnecessary wars are all integral to immigration policy since they would all assist in allowing many people to stay where they would rather be: at home.

Edward Said’s commitment in conversation. Book Review By Robin Yassin-Kassab

Via: The Electronic Intifada.

Edward Said was one of the great public intellectuals of the 20th century — prolific, polymathic, principled and always concerned to link theory to practice. Perhaps by virtue of his Palestinian identity, he was never an ivory tower intellectual. He never feared dirtying his hands in the messy, unwritten history of the present moment. Neither was he ever a committed member of a particular camp. Rather he offered a discomfiting, provocative, constantly critical voice. And against the postmodern grain of contemporary academia, his perspective was consistently moral, consistently worried about justice.

Said was primarily a historian of ideas. More precisely, he was interested in “discourse,” the stories a society tells itself and by which it (mis)understands itself and others. His landmark book Orientalism examined the Western constructs of Islam and the “East,” as depicted by Gustave Flaubert and Ernest Renan, Bernard Lewis and CNN. Said’s multi-disciplinary approach, his treatment of poetry, news coverage and colonial administration documents as aspects of one cultural continuum, was hugely influential in academia, helping to spawn a host of “postcolonial” studies. Said’s Culture and Imperialism expanded the focus to include Western depictions of India, Africa, the Caribbean and Latin America, and the literary and political “replies” of the colonized.

Edward Said died in 2003. His friend Eqbal Ahmad — who wrote one of the excellent introductions to The Pen and the Sword, published this year by Haymarket Books — died in 1999. This book — a collection of five interviews with Said conducted between 1987 and 1994 by David Barsamian, the founder of Alternative Radio — serves partly as a memoriam for Said himself and for the generation he represented.