The Journey. From Babylon to Zion, from ignorance back to innocence. To meet destiny and opportunity halfway with a little work and the benefit of the doubt.
Blog Archive
-
▼
2009
(40)
-
▼
December
(10)
- The "Ottawa Initiative on Haiti"
- President Carter: Many Children Were Tortured Unde...
- Worlwide Corporate Control of Agriculture
- US House passes pro-Wall Street banking bill
- Potential Hazard of Ionizing Radiation in Smoke De...
- Iraq: The Crime of the Century
- US House passes pro-Wall Street banking bill
- UN-occupied Haiti’s two-faced democracy
- Torn between two Models – Funes follows Obama
- Aminetu Haidar –In Spite of Everything
-
▼
December
(10)
Dec 19, 2009
The "Ottawa Initiative on Haiti"
Dec 15, 2009
President Carter: Many Children Were Tortured Under Bush
"You have the power to hold your leaders accountable." - President Obama, Ghana, July 14, 2009
(Ralph Lopez) -- While congress says it is gearing up to investigate what is old news, that CIA and Special Ops forces are killing Al Qaeda leaders, a decision of far different gravity is being contemplated by Attorney General Eric Holder. The new insistence of Congress on its oversight role, conspicuously absent throughout 8 years of Bush, is suddenly rearing its head in the form of questioning a policy which has been in place with no controversy for years. The U.S. has been hunting and killing Al Qaeda leaders outside of official war zones since 2004, when the New York Times reported that Secretary of Defense Donald Rumsfeld had signed an order authorizing Special Forces to kill Al Qaeda where they found them.
As recently as September 2008 CBS reported that Special Forcesstruck Qaeda leadership in Pakistan.
The decision faced by Holder, whether or not to appoint a Special Prosecutor on torture, is of a different gravity altogether. A weight of evidence keeps building which indicates torture was employed on innocent men, that it didn't work, and that it didn't prevent any attacks. And it gets worse. Bush's own FBI Director Robert Mueller recently confirmed to the New York Times what he told Vanity Fair a year ago, that "to [his] knowledge" torture didn't prevent a single attack. Former Legendary CIA Director William Colby has said that torture is "ineffective."
Harper's Magazine's Scott Horton nows suggests there are two Eric Holders at war with each other: Holder the good soldier who knows well the preference of his boss for prosecutions to not take place, and Holder the servant of the law who is aware that what he does now may determine what is likely to happen again.
It is becoming clear that such an investigation, if it happens, will not stop with a few low-ranking scapegoats. Horton notes:
"President Obama’s assurance to CIA officials who relied on the opinions of government lawyers in implementing these programs, an assurance that Holder himself repeated, would have to be worked in. That suggests that the focus would likely be on the lawyers and policymakers who authorized use of the new techniques."
And CIA whistleblower Ray McGovern writes this week:
the buck stops - actually, in this case, it began - with President Bush. Senate Armed Services Committee leaders Carl Levin and John McCain on Dec. 11, 2008, released the executive summary of a report, approved by the full committee without dissent, concluding that Bush's Feb. 7, 2002, memorandum "opened the door to considering aggressive techniques."
What changed with Holder? Horton writes in "The Torture Prosecution Turnaround?":
Holder began his review mindful of the clear preference of President Obama’s two key political advisers—David Axelrod and Rahm Emanuel—that there be no investigation. Axelrod and Emanuel are described as uninterested in either the legal or policy merits of the issue of a criminal investigation. Their concerns turn entirely on their political analysis...Holder initially appeared prepared to satisfy their wishes.
This attitude seemed to change after Obama's speech at the CIA, when Emanual and Axelrod moved out front to say there would be no prosecutions. According to Horton:
"In the days after Obama’s speech at the CIA, both Axelrod and Emanuel insisted that the White House had made the decision that there would be no prosecutions. According to reliable sources, that incensed Holder, who felt that the remarks had compromised the integrity both of the White House and Justice Department by suggesting that political advisers made the call on who would or would not be criminally investigated."
To make things worse for the Bush administration, evidence is emerging that they can no longer even rely on exhibit A and B of the Torture Works theory, Al Zabudaya and Kalid Shiek Mohammed, the latter of whom is still confessing to everything short of being the real Boston Strangler. I guess if I'd been waterboarded 82 times I'd be babbling too. The FBI Special Agent who interrogated Abu Zubayda, recently breaking a 7-year silence after reading the "torture memos,"wrote in the New York Times:
"One of the most striking parts of the memos is the false premises on which they are based. The first, dated August 2002, grants authorization to use harsh interrogation techniques on a high-ranking terrorist, Abu Zubaydah, on the grounds that previous methods hadn’t been working. The next three memos cite the successes of those methods as a justification for their continued use.
It is inaccurate, however, to say that Abu Zubaydah had been uncooperative. Along with another F.B.I. agent, and with several C.I.A. officers present, I questioned him from March to June 2002, before the harsh techniques were introduced later in August. Under traditional interrogation methods, he provided us with important actionable intelligence...This experience fit what I had found throughout my counterterrorism career: traditional interrogation techniques are successful in identifying operatives, uncovering plots and saving lives."
Then there is the political risk to the Obama administration that Axelrod and Emanual have miscalculated, and that, in fact, the rest of the president's agenda is hamstrung while a growing number of Americans call for existing laws to be enforced. What is haunting Americans could be, in Washington jargon, "sucking oxygen" out of the debate, and "moving forward" is a pipe dream until pending business is dealt with. Spontaneous and planned rallies calling for a Special Prosecutor are growing, not diminishing. In addition, the worse revelations may be yet to come in the horrifying saga of what happened when, as Major General Anthony Taguba says:
[a] permissive environment [was] created by implicit and explicit authorizations by senior US officials to "take the gloves off"...
President Jimmy Carter wrote that the Red Cross, Amnesty International and the Pentagon "have gathered substantial testimony of torture of children, confirmed by soldiers who witnessed or participated in the abuse." In "Our Endangered Values" Carter said that the Red Cross found after visiting six U.S. prisons "107 detainees under eighteen, some as young as eight years old." And reporter Hersh, (who broke the Abu Ghraib torture scandal,) reported 800-900 Pakistani boys aged 13 to 15 in custody.
Journalist Seymour Hersh's (who broke the Abu Ghraib scandal)bombshell before the ACLU some years ago has been in a temporary slumber, as there is question as to whether the videotapes in possession of the Pentagon were among those claimed to be destroyed. Destroyed or not, there is still the conscience of soldiers and agents who bore witness to contend with, as the reign of political terror against whistleblowers which characterized the Bush administration subsides. Hersh said:
" Some of the worst things that happened you don't know about, okay? Videos, um, there are women there. Some of you may have read that they were passing letters out, communications out to their men. This is at Abu Ghraib ... The women were passing messages out saying 'Please come and kill me, because of what's happened' and basically what happened is that those women who were arrested with young boys, children in cases that have been recorded. The boys were sodomized with the cameras rolling. And the worst above all of that is the soundtrack of the boys shrieking that your government has. They are in total terror. It's going to come out."
Republican Senator Lindsey Graham said at the time:
"The American public needs to understand, we're talking about rape and murder here. We're not just talking about giving people a humiliating experience. We're talking about rape and murder and some very serious charges."
History is just beginning to sort out the Bush era, with stubborn facts showing a resilience that Fox News talking points cannot, and more emerging. Today, even among Republicans, it is difficult to find those who will embrace Richard Nixon, though for a while he was every bit the perceived victim of "left-wing hate" that Bush and Cheney are now. Incredibly, to compare Nixon to Bush-Cheney is to do a deeply flawed man a disservice. Nixon inherited Vietnam. He did not orchestrate from whole cloth a campaign to link Saddam with 9/11, and strenuously push to war despite the objections of his countrymen and the world. Nixon spied on political enemies. He did not use a tragedy to illegally spy on millions, the true numbers of which we still do not know because congress has never investigated.
It's almost possible to feel sorry for the shifty, friendless Nixon. It is less possible to feel so for the smirking Bush, who thought nothing of telling soldier's families that war critics were saying that their loved ones "had died in vain."
A compilation in November2008 of other evidence of alleged incidents involving children at the time recounts:
-- Iraqi lawyer Sahar Yasiri, representing the Federation of Prisoners and Political Prisoners, said in a published interview there are more than 400,000 detainees in Iraq being held in 36 prisons and camps and that 95 percent of the 10,000 women among them have been raped. Children, he said, "suffer from torture, rape, (and) starvation" and do not know why they have been arrested. He added the children have been victims of "random" arrests "not based on any legal text."
-- Former prisoner Thaar Salman Dawod in a witness statement said, "[I saw] two boys naked and they were cuffed together face to face and [a U.S. soldier] was beating them and a group of guards were watching and taking pictures and there was three female soldiers laughing at the prisoners."
-- Iraqi TV reporter, Suhaib Badr-Addin al-Baz, arrested while making a documentary and thrown into Abu Ghraib for 74 days, told Mackay he saw "hundreds" of children there. Al-Baz said he heard one 12-year-old girl crying, "They have undressed me. They have poured water over me." He said he heard her whimpering daily.
-- Al-Baz also told of a 15-year-old boy "who was soaked repeatedly with hoses until he collapsed." Amnesty International said ex-detainees reported boys as young as 10 are held at Abu Ghraib.
-- German TV reporter Thomas Reutter of "Report Mainz" quoted U.S. Army Sgt. Samuel Provance that interrogation specialists "poured water" over one 16-year-old Iraqi boy, drove him throughout a cold night, "smeared him with mud" and then showed him to his father, who was also in custody. Apparently, one tactic employed by the Bush regime is to elicit confessions from adults by dragging their abused children in front of them.
-- Jonathan Steele, wrote in the British "The Guardian" that "Hundreds of children, some as young as nine, are being held in appalling conditions in Baghdad’s prisons...Sixteen-year-old Omar Ali told the "Guardian" he spent more than three years at Karkh juvenile prison sleeping with 75 boys to a cell that is just five by 10 meters, some of them on the floor. Omar told the paper guards often take boys to a separate room in the prison and rape them.
-- Raad Jamal, age 17, was taken from his Doura home by U.S. troops and turned over to the Iraqi Army’s Second regiment where Jamal said he was hung from the ceiling by ropes and beaten with electric cables.
-- Human Rights Watch (HRW) last June put the number of juveniles detained at 513. In all, HRW estimates, since 2003, the U.S. has detained 2,400 children in Iraq, some as young as ten.
-- IRIN, the humanitarian news service, last year quoted Khalid Rabia of the Iraqi NGO Prisoners’ Association for Justice(PAJ), stating that five boys between 13 and 17 accused of supporting insurgents and detained by the Iraqi army "showed signs of torture all over their bodies," such as "cigarette burns over their legs," she said.
-- One boy of 13 arrested in Afghanistan in 2002 was held in solitary for more than a year at Bagram and Guantanamo and made to stand in stress position and deprived of sleep, according to the "Catholic Worker."
Worlwide Corporate Control of Agriculture
Worlwide Corporate Control of Agriculture: The New Farm Owners
(GlobalResearch) -- With all the talk about "food security," and distorted media statements like "South Korea leases half of Madagascar's land,"1 it may not be evident to a lot of people that the lead actors in today's global land grab for overseas food production are not countries or governments but corporations. So much attention has been focused on the involvement of states, like Saudi Arabia, China or South Korea. But the reality is that while governments are facilitating the deals, private companies are the ones getting control of the land. And their interests are simply not the same as those of governments.
"This is going to be a private initiative." - Amin Abaza, Egypt's Minister of Agriculture, explaining Egyptian farmland acquisitions in other African nations, on World Food Day 2009
Take one example. In August 2009, the government of Mauritius, through the Ministry of Foreign Affairs, got a long-term lease for 20,000 ha of good farmland in Mozambique to produce rice for the Mauritian market. This is outsourced food production, no question. But it is not the government of Mauritius, on behalf of the Mauritian people, that is going to farm that land and ship the rice back home. Instead, the Mauritian Minister of Agro Industry immediately sub-leased the land to two corporations, one from Singapore (which is anxious to develop the market for its proprietary hybrid rice seeds in Africa) and one from Swaziland (which specialises in cattle production, but is also involved in biofuels in southern Africa).2 This is typical. And it means that we should not be blinded by the involvement of states. Because at the end of the day, what the corporations want will be decisive. And they have a war chest of legal, financial and political tools to assist them.
"What started as a government drive to secure cheap food resource has now become a viable business model and many Gulf companies are venturing into agricultural investments to diversify their portfolios."
- Sarmad Khan, "Farmland investment fund is seeking more than Dh1bn", The National, Dubai, 12 September 2009
Moreover, there's a tendency to assume that private-sector involvement in the global land grab amounts to traditional agribusiness or plantation companies, like Unilever or Dole, simply expanding the contract farming model of yesterday. In fact, the high-power finance industry, with little to no experience in farming, has emerged as a crucial corporate player. So much so that the very phrase "investing in agriculture", today's mantra of development bureaucrats, should not be understood as automatically meaning public funds. It is more and more becoming the business of ... big business.
The role of finance capital
GRAIN has tried to look more closely at who the private sector investors currently taking over farmlands around the world for offshore food production really are. From what we have gathered, the role of finance capital -- investment funds and companies -- is truly significant. We have therefore constructed a table to share this picture. The table outlines over 120 investment structures, most of them newly created, which are busy acquiring farmland overseas in the aftermath of the financial crisis.3 Their engagement, whether materialised or targeted, rises into the tens of billions of dollars. The table is not exhaustive, however. It provides only a sample of the kinds of firms or instruments involved, and the levels of investment they are aiming for.
Private investors are not turning to agriculture to solve world hunger or eliminate rural poverty. They want profit, pure and simple. And the world has changed in ways that now make it possible to make big money from farmland. From the investors' perspective, global food needs are guaranteed to grow, keeping food prices up and providing a solid basis for returns on investment for those who control the necessary resource base. And that resource base, particularly land and water, is under stress as never before. In the aftermath of the financial crisis, so-called alternative investments, such as infrastructure or farmland, are all the rage. Farmland itself is touted as providing a hedge against inflation. And because its value doesn't go up and down in sync with other assets like gold or currencies, it allows investors to successfully diversify their portfolios.
"We are not farmers. We are a large company that uses state-of-the-art technology to produce high-quality soybean. The same way you have shoemakers and computer manufacturers, we produce agricultural commodities." Laurence Beltrão Gomes of SLC Agrícola, the largest farm company in Brazil
But it's not just about land, it's about production. Investors are convinced that they can go into Africa, Asia, Latin America and the former Soviet bloc to consolidate holdings, inject a mix of technology, capital and management skills, lay down the infrastructures and transform below-potential farms into large-scale agribusiness operations. In many cases, the goal is to generate revenue streams both from the harvests and from the land itself, whose value they expect to go up. It is a totally corporate version of the Green Revolution, and their ambitions are big. "My boss wants to create the first Exxon Mobil of the farming sector," said Joseph Carvin of Altima Partners' One World Agriculture Fund to a gathering of global farmland investors in New York in June 2009. No wonder, then, that governments, the World Bank and the UN want to be associated with this. But it is not their show.
From rich to richer
"I'm convinced that farmland is going to be one of the best investments of our time. Eventually, of course, food prices will get high enough that the market probably will be flooded with supply through development of new land or technology or both, and the bull market will end. But that's a long ways away yet." - George Soros, June 2009
Today's emerging new farm owners are private equity fund managers, specialised farmland fund operators, hedge funds, pension funds, big banks and the like. The pace and extent of their appetite is remarkable - but unsurprising, given the scramble to recover from the financial crisis. Consolidated data are lacking, but we can see that billions of dollars are going into farmland acquisitions for a growing number of "get rich quick" schemes. And some of those dollars are hard-earned retirement savings of teachers, civil servants and factory workers from countries such as the US or the UK. This means that a lot of ordinary citizens have a financial stake in this trend, too, whether they are aware of it or not.
It also means that a new, powerful lobby of corporate interests is coming together, which wants favourable conditions to facilitate and protect their farmland investments. They want to tear down burdensome land laws that prevent foreign ownership, remove host-country restrictions on food exports and get around any regulations on genetically modified organisms. For this, we can be sure that they will be working with their home governments, and various development banks, to push their agendas around the globe through free trade agreements, bilateral investment treaties and donor conditionalities.
"When asked whether a transfer of foreign, 'superior', agricultural technology would be welcome compensation for the acquisition of Philippine lands, the farmers from Negros Occidental responded with a general weariness and unequivocal retort that they were satisfied with their own knowledge and practices of sustainable, diverse and subsistence-based farming. Their experience of high-yielding variety crops, and the chemical-intensive technologies heralded by the Green Revolution, led them to the conclusion that they were better off converting to diverse, organic farming, with the support of farmer-scientist or member organisations such as MASIPAG and PDG Inc." - Theodora Tsentas, "Foreign state-led land acquisitions and neocolonialism: A qualitative case study of foreign agricultural development in the Philippines", September 2009
Indeed, the global land grab is happening within the larger context of governments, both in the North and the South, anxiously supporting the expansion of their own transnational food and agribusiness corporations as the primary answer to the food crisis. The deals and programmes being promoted today all point to a restructuring and expansion of the industrial food system, based on capital-intensive large-scale monocultures for export markets. While that may sound "old hat", several things are new and different. For one, the infrastructure needs for this model will be dealt with. (The Green Revolution never did that.) New forms of financing, as our table makes plain, are also at the base of it. Thirdly, the growing protagonism of corporations and tycoons from the South is also becoming more important. US and European transnationals like Cargill, Tyson, Danone and Nestlé, which once ruled the roost, are now being flanked by emerging conglomerates such as COFCO, Olam, Savola, Almarai and JBS.4 A recent report from the UN Conference on Trade and Development pointed out that a solid 40% of all mergers and acquisitions in the field of agricultural production last year were South-South.5 To put it bluntly, tomorrow's food industry in Africa will be largely driven by Brazilian, ethnic Chinese and Arab Gulf capital.
Exporting food insecurity
Given the heavy role of the private sector in today's land grabs, it is clear that these firms are not interested in the kind of agriculture that will bring us food sovereignty. And with hunger rising faster than population growth, it will not likely do much for food security, either. One farmers' leader from Synérgie Paysanne in Benin sees these land grabs as fundamentally "exporting food insecurity". For they are about answering some people's needs - for maize or money - by taking food production resources away from others. He is right, of course. In most cases, these investors are themselves not very experienced in running farms. And they are bound, as the Coordinator of MASIPAG in the Philippines sees it, to come in, deplete the soils of biological life and nutrients through intensive farming, pull out after a number of years and leave the local communities with "a desert".
"Entire communities have been dispossessed of their lands for the benefit of foreign investors. (...) Land must remain a community heritage in Africa."
- N'Diogou Fall, ROPPA (West African Network of Producers and Peasant Organisations), June 2009
The talk about channelling this sudden surge of dollars and dirhams into an agenda for resolving the global food crisis could be seen as quirky if it were not downright dangerous. From the United Nations headquarters in New York to the corridors of European capitals, everyone is talking about making these deals "win-win". All we need to do, the thinking goes, is agree on a few parameters to moralise and discipline these land grab deals, so that they actually serve local communities, without scaring investors off. The World Bank even wants to create a global certification scheme and audit bureau for what could become "sustainable land grabbing", along the lines of what's been tried with oil palm, forestry or other extractive industries.
Before jumping on the bandwagon of "win-win", it would be wise to ask "With whom? Who are the investors? What are their interests?" It is hard to believe that, with so much money on the line, with so much accumulated social experience in dealing with mass land concessions and conversions in the past, whether from mining or plantations, and given the central role of the finance and agribusiness industries here, these investors would suddenly play fair. Just as hard to believe is that governments or international agencies would suddenly be able to hold them to account.
"Some companies are interested in buying agricultural land for sugar cane and then selling it on the international markets. It's business, nothing more" Sharad Pawar, India's Minister of Agriculture, rejecting claims that his government is supporting a new colonisation of African farmland, 28 June 2009
Making these investments work is simply not the right starting point. Supporting small farmers efforts for real food sovereignty is. Those are two highly polarised agendas and it would be mistaken to pass off one for the other. It is crucial to look more closely at who the investors are and what they really want. But it is even more important to put the search for solutions to the food crisis on its proper footing.
1 - It was not South Korea, but Daewoo Logistics.
2 - See GRAIN, "Mauritius leads land grabs for rice in Mozambique", Oryza hibrida, 1 September 2009. http://www.grain.org/hybridrice/?lid=221 (Available in English, French and Portuguese.)
3 - The table covers three types of entities: specialised funds, most of them farmland funds; asset and investment managers; and participating investors. We are aware that this is a broad mixture, but it was important for us to keep the table simple: http://www.grain.org/m/?id=266
4 - COFCO is based in China, Olam is based in Singapore, Savola is based in Saudi Arabia, Almarai is based in Saudi Arabia, and JBS is based in Brazil.
5 - World Investment Report 2009, UNCTAD, Geneva, September 2009, p. xxvii. Most foreign direct investment takes place through mergers and acquisitions.
Dec 14, 2009
US House passes pro-Wall Street banking bill
By Barry Grey
14 December 2009
The US House of Representatives on Friday passed a bill, backed by the Obama administration, to revise government regulations covering banks and financial firms. The bill has been widely reported in the media as the most sweeping reform of bank regulations since the New Deal measures passed in the wake of the stock market crash of 1929. It is being cast as a rebuke to Wall Street for its role in precipitating the financial crash and recession, and a major tightening of government oversight of the banks.
In his weekly address on Saturday, President Barack Obama hailed passage of the House measure as a major step in restoring “free and fair markets in which recklessness and greed are thwarted.” He used the bill’s passage to strike a populist pose, decrying the “irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products, seeking short-term profits and big bonuses with little regard for long-term consequences.”
At the same time, he made a point of allocating blame for the economic crisis on the American people as a whole, chastising “millions of Americans” who “borrowed beyond their means, bought homes they couldn’t afford, and assumed that housing prices would always rise and the day of reckoning would never come.”
Despite having pointed to pervasive fraud and corruption on Wall Street, Obama made clear that his “reforms” would not bar financial speculation, but only ensure that “the kind of risky dealings that sparked the crisis would be fully disclosed and properly regulated.”
As part of the Democrats’ public relations effort to placate popular anger against Wall Street, Speaker of the House Nancy Pelosi said, “We are sending a clear message to Wall Street. The party is over. Never again.”
Pelosi to the contrary, Wall Street’s “party” continues unabated, notwithstanding the social devastation its profiteering has inflicted on the American and international working class. There can be little doubt that Obama and the House Democrats were determined to pass a bank regulation bill in advance of the announcement of year-end bonuses on Wall Street, which are likely to surpass $28 billion and, at least for some of the biggest banks, set new records.
The Democrats’ claims for the administration’s financial regulatory overhaul are fraudulent. The measure passed by the House does nothing to reverse the deregulation of banking carried out over the past three decades—which has dismantled the restrictions imposed in the 1930s—or introduce serious structural reforms to limit, let alone ban, the speculative practices that have become increasingly critical to the accumulation of profit and personal wealth by the American ruling class.
Obama and the congressional Democrats have rejected capping executive pay or reining in credit default swaps, collateralized debt obligations, structured investment vehicles and other exotic forms of speculation that played a major role in the financial crash.
Far from limiting the size and power of the big banks, they have used the crisis to encourage a further consolidation of the banking system. As a result of the disappearance of Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia and Washington Mutual—to name just the biggest bank failures—the four largest US banks today account for 70 percent of the country’s bank assets, as compared to less than 50 percent at the end of 2000. The process of consolidation will accelerate under Obama’s regulatory scheme.
Its most important innovation is the establishment of a “resolution” process giving the Treasury and the Federal Reserve Board unilateral authority, without congressional approval, to seize large bank and non-bank financial institutions before they fail. The cost of such rescue operations is to be borne in the first instance by taxpayers, with major banks subsequently to be charged fees totaling $150 billion. Even if the banks were forced to pay these fees, the payments could be stretched out over years.
The “resolution” provision amounts to the institutionalization of government bailouts of the banking system, as opposed to the ad hoc methods that were employed after the financial meltdown of 2008.
One provision of the bill, which has garnered little comment either by its official proponents or the media, would give the Federal Deposit Insurance Corporation (FDIC), with the consent of the treasury secretary and the Federal Reserve Board, the power to “extend credit or guarantee obligations … to prevent financial instability during times of severe economic distress.”
The House bill passed by a vote of 223 to 202, with 37 Democrats joining all of the Republicans in voting “no.” For the measure to become law, it must also be passed by the Senate. That chamber is currently considering its own version of a regulatory overhaul, and is not expected to vote on a bill until some time next year.
Indicative of the social interests that determined the substance of the House bill was the body’s vote to reject an amendment which would have allowed bankruptcy judges to reduce the mortgage principals of homeowners facing foreclosure. More than 70 Democrats joined with the Republicans to kill the amendment, which has been fiercely opposed by the banking and mortgage lobbies. Obama has tacitly dropped his previous support for this revision of the bankruptcy laws, in deference to the banks.
In another open sop to the banks, the House bill significantly weakens the 2002 Sarbanes-Oxley Act, which was passed in the aftermath of the Enron and WorldCom scandals. Sarbanes-Oxley empowers the Securities and Exchange Commission (SEC) to conduct audits of the internal controls of publicly traded companies in order to detect the type of accounting and business fraud that contributed to the collapse of Enron, WorldCom and other corporations at the beginning of the decade.
The House bill contains a provision exempting companies with less than $75 million in publicly traded shares from such audits, a step that is seen on Wall Street as the precursor to similar exemptions for large corporations. The Wall Street Journal on Saturday hailed this provision in an editorial entitled “Sarbox Routed in House,” in which it urged the SEC to “consider relief for larger firms.”
Aside from the “resolution” authority provision, the House bill establishes a council of regulators, led by the Federal Reserve, to oversee major financial institutions. It requires so-called “too big to fail” institutions to increase their capital reserves as a hedge against future crises.
The much touted Consumer Financial Protection Agency to be established under the bill has been watered down to the point of near irrelevance. At the behest of the banks, the author of the bill, House Financial Services Committee Chairman Barney Frank (Democrat of Massachusetts), incorporated provisions exempting 98 percent of US banks from the agency’s oversight, as well as auto dealerships and retailers. He also included a provision giving the federal government the power to override more stringent state consumer protection laws.
Another major provision ostensibly brings the derivatives market under federal regulation. This currently unregulated market in credit default swaps and similar murky deals between banks, hedge funds and other corporations—estimated to total nearly $600 trillion—played a major role in the collapse of the insurance giant American International Group (AIG), which, in turn, nearly toppled the global financial system.
However, the House bill contains exemptions and caveats that, in practice, allow the major players in the derivatives market to continue to function without serious government oversight. The bill exempts so-called “customized” derivatives—among the most lucrative of such contracts—from oversight by federal regulators. Virtually all non-financial firms that employ derivatives are exempted. So-called “standard” derivatives are to be traded on privately owned and controlled clearing houses with close ties to Wall Street banks. The actual powers of federal agencies over the clearinghouses are tightly circumscribed.
The bill does not change the basic functioning of credit rating firms, which played a key role in the financial meltdown by awarding top ratings to mortgage-backed securities that were based on unviable sub-prime loans. These companies will continue to be paid, as before, by the very banks and financial firms whose securities they rate.
On executive pay, the bill includes a toothless provision for bank shareholders to cast an advisory vote on the compensation packages awarded to bank officials.
The legislative process that produced the House bill is a mockery of democracy. The banking industry has spent over $330 million to lobby House and Senate members on the regulatory scheme. Lobbyists have been hard at work for months wining and dining key legislators, whose elections were funded by millions in campaign contributions from the banks, insurance companies, hedge funds, etc.
Wall Street lawyers have helped draft the details of the House bill in closed-door meetings, while Obama and his top economic advisers have conferred repeatedly with the CEOs of the most powerful firms.
The character of the bill can be gleaned from the fact that both Treasury Secretary Timothy Geithner and Lawrence Summers, the director of the White House’s National Economic Council, were intimately involved in the deregulation of the banks that preceded the financial crash. Geithner was president of the Federal Reserve Bank of New York before being picked by Obama to become his treasury secretary. In his former post, he played a key role in orchestrating the bailout of the banks during the Bush administration.
Summers was treasury secretary under Bill Clinton and was instrumental in the repeal of the Depression-era Glass-Steagall Act, which separated commercial banking from investment banking, as well as the passage of a law deregulating the derivatives markets.
The guiding premise of the banking bills in the House and Senate is that the capitalist “free market” must at all costs be safeguarded, along with the personal fortunes of the financial oligarchy. The informing notion behind the proposed changes is to allow the banks to return to business as usual, recouping their gambling losses at the expense of this and future generations of working people, while setting in place mechanisms for the government to more effectively manage the next financial debacle.
Labels
- Politics
- Finance
- Environment
- Alternative Society
- Military Power
- US House passes pro-Wall Street banking bill
- A Disturbing Look at the Dairy Industry
- A Millionaire is a Larger Strain on Resources than Hundreds of Peasant Families
- AFRICOM: Pentagon's First Direct Military Intervention In Africa
- Aminetu Haidar –In Spite of Everything
- Are Wind farms a Health Risk?
- Ban and Bill (Clinton) In Haiti
- Billionaire club in bid to curb overpopulation
- Birth Without Violence
- Blackwater's Own Private Africa
- Brazil: Occupying Slum
- Canada´s shame
- Cancun climate agreement and Bolivia's dissent
- Chomsky: U.S. Savage Imperialism
- Congo Resource Wars and Rwanda
- Crisis of Capitalism
- Dan Rather´s $70m Lawsuit
- Day of Bullies - animal experimentation
- Deadly Dudus Raid
- Death and Life of Great American Newspapers
- Demagoguery and Realism
- Democracy in America Is a Useful Fiction
- Dumped in Africa: Britain's Toxic Waste
- EU - Caribbean Partnership Agreement is harmful
- Echelon - global survellance
- Economic illiteracy
- Ethanol's African Landgrab
- From Infinite War to Infinite Crisis
- Garbage Wars
- Great Pacific Garbage Patch
- Greenhouse Gas That Nobody Knew
- HISTORY OF MONEY
- Haiti Post-Earthquake
- Haiti: Whose Rights? What Sort of Democracy?
- Hegemony
- Hemp´s real story
- How to reduce fuel consumption by 75%
- Hugo Chavez on Bolivia: The Yes Vote Triumphed
- Iraq: The Crime of the Century
- Israel 'cutting Palestinian water'
- La Via Campesina denounces Gates Foundation
- Life without airplanes
- Link Between Factory Farms and Human Illness
- Military's Pandora's Box
- Monsanto’s fall from grace
- Naomi Klein Calls for Boycott of Israel
- Obama the impotent
- Obama´s Appointments
- Our Exhausted Oceans
- Pentagon’s Hand Behind TV Analysts
- Plutonomics
- Potential Hazard of Ionizing Radiation in Smoke Detectors
- President Carter: Many Children Were Tortured Under Bush
- Putting World Hunger Into Perspective
- SOA Grads Become Latin Death Squad
- Sankofa
- Social Advances of the Chavez Administration
- Swine Flu Scare: It’s All about The Adjuvant
- THE INEFFECTIVENESS OF VACCINES
- Tax havens batten down as the hurricane looms
- The "Ottawa Initiative on Haiti"
- The 10 Worst Corporations of 2008
- The Greenhouse Gas That Nobody Knew
- The end of Dutch tolerance?
- Thousands died even after receiving vaccine shots
- Top Secret America
- Torn between two Models – Funes follows Obama
- Torture Worked to Sell the Iraq War
- Truth and Deception 9 / 11
- U.S. Unconventional Warfare in the 21st Century
- UN Security Council Regime of Tribunals
- UN-occupied Haiti’s two-faced democracy
- Ugly side of solar panels
- Washington on Haiti
- Who are the real 'pirates' in Africa?
- Wiki-Leaks on Shell
- Wikileaks
- Worlwide Corporate Control of Agriculture
- Zimbabwe: Zuma Blasts Sanctions’ Extension
- baby foods less nutritious than a cheeseburger