Adonis Diaries

Archive for the ‘politics/finance Today’ Category

People firing corrupt civil servants and officials: Tunisia revolt

Judge Mokhtar Meddeb revealed that magistrates removed 6 judges bought out by the entourage of ex-President Ben Ali.  Fiscal civil servants expelled their corrupt director  who was at the service of the mafia of Ben Ali.  The newly appointed foreign minister Ahmed Adberraouf Ounais of the transitory government was prevented from entering his cabinet building: The crowed chanted “Go home. You have no longer our confidence”.  This 75 year-old minister had delivered an interview the evening before that demonstrated that he didn’t get it that time have changed. The minister resigned the same day.  Ten days later, it was the turn of the newly appointed French Ambassador to taking his leave of absence.

Foreign journalists had to agree that the Tunisian revolution is “polite and sympathetic”.  Why, the people behaved correctly and civil in front of ministers and cultural centers, and never tried to break in or steal or raise brutal hell.  For example, as a hundred Moslem salafists arrived in front of the assembled and knelt down for prayer, people just circumvented the praying Moslems and left them in peace.

General Rashid Ammar didn’t make a fuss when Ben Ali fired him for not shooting at demonstrators.  Ammar just declared to the crowd that he is on sick leave.  The officers attached to Ammar neutralized the troops of his nemesis General Seriati.  As Ben Ali fled to Saudi Arabia, and the restauration of a provisional government, General Ammar asked the demonstrator to disband for void generates terror and terror brings back dictators, as what happened during the French revolution of 1789.

The revolution in Tunisia was Not a military coup in disguise as many Arab and western medias wanted us to believe.  Ben Ali just lost the confidence and trust of his people, before he lost his army, and after his people discovered hunger and humiliation.  The Syrian dictator Bashar Al Assad will have to step down, even though he did not lose the support of his army and his people are not hungry, but simply because the Syrian people have got enough of 30 years of dictatorship of a family clan.  Dictator Bashar Al Assad might institute reforms, but how could he regain the trust of a people vomiting anything that smack of absolute rule?

The women in Tunisia played a significant role in the success of this “Jasmin revolution”. Women marched in Bourguiba Avenue and  courageously faced off the insults of the religious salafists.  They also joined the civic demonstration on Feb. 19 reclaiming the institution of a secular State and dropping the clause in the Constitution that Islam is the religion of the State… The jurist Soukeina Bouraoui, author Raja Ben Slama, the human rights militant Sana Ben Achour discussed openly on women conditions on TV, using local Arabic dialect, on topics related to the veil, equal rights between genders…

The critical discussion is what kind of political system to establish?  Is it going to be another Presidential system or a Parliamentary system?  Both systems have far more serious disadvantages than a tradeoff political structure.   What can guarantee avoidance of dictatorship, oligarchy, and mafia corruption?

It is a Constitution firmly applied,which does not permit exceptions to the rules, a constitution prohibiting any successive re-election of authority after the first term, even deputies of Parliament.  Authority should not enjoy more than four years of government so that they fail to weave efficient mafia-type corruption systems.  High ranking civil servants should not remain in their positions for more than five years, and they should revert to private life after early retirement.  There are plenty of capable people in any community in order not to rely on the “intelligence” of a few.

Note: Article was inspired from the French book “Spring of Tunisia: metamorphosis of history” by Abdelwahab Meddeb


Youth Economic Forum for Lebanon:  How little money does great jobs

It is no secret for most Lebanese that they never enjoyed a valid and strong central State, that the successive governments since independence in 1943 were huge creative smokescreens for the real power structure in Lebanon represented by the “officially recognized” 18 religious sects and the private banking institutions. But the Lebanese youth in the last two years have been actually building a civic true State from the ground up.

Lebanon political structure has de facto handed down to the “officially recognized” 18 religious sects the responsibility to identify a citizen and run his social and civic status (a sort of de facto multi-theocratic State).  The youth of every generation have taken to the streets for a fair and equitable election laws, but there never existed a government to listen and act upon youth expectations.  The Arab spring upheavals are giving youth movements in Lebanon live engagement ammunition to hope for successful demands to reforms.

So far, the only duty of the government is to issuing passports, coining currency, and taxing the people. But the Lebanese youth in the last two years have been organizing in specialized NGO to supplement the deficiencies of a non-existing civic central government in gathering data on our social reality and problems.

Youth movements, and the Youth Economic Forum for example, have demonstrated of being capable of doing great things and executing good jobs with little money. What’s the story?

Two years ago, the finance ministry organized training sessions and invited university students to participate. At the end of the sessions, Yahya Mawloud took the initiative to establishing an association with the goal of canvasing Lebanon for collecting feedback of local urgent needs to development.  Apparently, 300 university students joined the association called Youth Economic Forum, and were willing to pay about $15 per year as dues. The well-to-do and more engaged members contributed more to the treasury and enabled the association of undertaking its mission.  About 70 paying members participate every year in electing the benevolent board of directors.

Youth Economic Forum (YEF), headquartered in Badaro, organizes day-long conferences, two-day workshops in four districts, outside of the Capital Beirut.  The conferences are done in universities and students are invited to participate such as in Balamand, Lebanese International, NDU, Antounieh, Al Manar, USJ, Sagesse, LAU…  Workshops were initiated Nabatieh, Marje3youn, Majdal Anjar, Jeb Jenine, Zahleh, Baalbak, Koura, Tripoli, Mina, Badawi, Donnieh…

The conferences approach topics related to individual initiatives, creation of small enterprises, link between economy and higher education, role of youth, hardship of reality, disaster preparation…

The workshops training sessions relate to public policy research methodology, brainstorming sessions for feasible project ideas and plans, written evaluation procedures, filling forms for project grants…Workshop are planned to accommodate local mayors, elected officials, and local NGO in order to present the social and economic conditions and priority lists of urgent projects that government and authorities usually ignores or have limited engagement.

Economic development are divided into two main categories: Human development (education, health, housing, environment…) and economic development (fiscal policies, public transport, telecom, power generation, agriculture, administrative reforms…)  I think development categories should be separated along human development indicators as defined by the UN such as infantile mortality, elementary education, preventive health care, basic sanitation… and State investment in human skills, education programs, job creation, administrative reforms, direct access to forms and application…

It’s projected that within two months, Youth Economic Forum will publish 33 ideas for decentralized projects, ideas gathered and discussed in workshops around the country.  The ideas are meant to modernize Lebanon. USAID will incur the expense of publishing the booklet of ideas.

A few dedicated graduate students, barely earning a living, are doing great jobs.  The project manager earns $100 for a day work, the project coordinator $40, and the field officer $20.  No work, no pay. They sleep in inexpensive hostels ($25 per night).  The corporate does not offer health benefits, annual or sick leaves, does not withhold or file taxes on behalf of the contractor.  The contractor agrees to hold YEF harmless for any loss, damage, or injury incurred as a result of work under the agreement…

Note: Cedric designed the blog page  The blog shows details on the workshops, videos, and the schedule of workshops and conferences…

George W. Bush explains: The financial crisis

“The information and pieces of intelligence I had, the principles that I followed, and the decisions that I took…In a few decades, I hope to be appreciated as a President who kept his promises to protecting his country…A president who took advantage of the influence of America in order to disseminating liberty…Whatever is the verdict of History, I wish I am no longer among the living.” G.W. Bush

I am reading the French version of “George W. Bush: Decisive moments”.  I consider this book an “Official documents”: A President of the USA is not entitled to lie on facts.  It is our duty to mine this document for another set of facts in order to rectify distorted images and impressions.

“In my first budget of 2001, I warned of the two gigantic private societies of Fannie Mae and Freddie Mac.  These two powerful financial institutions, guaranteed by Federal government, have grown to be potential problems:  They expanded outside their initial guidelines of promoting private properties into functioning within speculative funds.  Fannie Mae and Freddie Mac had huge leverage compared to institutions of same size and initial capital: vast amounts of transactions were done with all kinds of investment enterprises, and they were taking huge risks susceptible of carrying decisive repercussions in the financial markets.”

My plan was to reduce taxes. By 1999, taxes represented the highest share in the GNP since WWII.  President Clinton and Congress had agreed to increase discretionary expenses by 16% in 2001. In March 2001, we witnessed a recession and I begged Congress to act quickly on my tax reduction reforms of 1.35 billion.  Tax reform will not take effect until 2003.(See note 1)

Then, the attack on the Twin Tower in 9/11/2001 devastated our economy.  The US lost 500 billion in a single year, an additional one million workers were out of jobs, airliners had no passengers, and tourism dropped 90%.  Whatever budget surpluses we had vanished in thin air.

In 2003, I advanced a project of laws to tighten regulations on Fannie Mae and Freddie Mac, which enjoyed government support.  It turned out that most high level personnel in Fannie Mae and Freddie Mac and the key deciders, were previous government officials and these enterprises had established vast web connections and interests among the Congress and Senate members, particularly with democrats.  For example, Chris Dodd and Barney Franks who declared: “Fannie Mae and Freddie Mac are not facing any financial crisis.”

In the 2005 budget, I iterated my strong warning: “Enterprises and organizations financed by federal governments are viewed by financial enterprises as enjoying strong leverage compared to other private enterprises.  Consequently, any minor error in government supported financial institutions can send devastating waves in the country economy…”

Treasury secretary John Snow worked closely with Senator Richard Selby, president of banking committee, for stricter regulations that would reduce the portfolio of government guaranteed financial institutions.  The democrats in the Senate opposed the reforms.

Investment bank Bear Stearns was facing serious liquidity problems in March 13, 2007:  This financial institution had borrowed $33 for each dollar in capital as leverage to invest in real estates titles. Treasury secretary Hank Paulson, (a former investment banker of Goldman Sachs), found a buyer in JPMorgan Chase on condition that the government extend a loan of 30 billion to purchasing “toxic titles”. JPMorgan Chase purchased Bear Stearns for $2 a share.

By summer 2008, I had demanded the financial regulation reform 17 times.  In July 2008, Congress adopted the reform, but gave the treasury secretary additional power to injecting capitals Fannie Mae and Freddie Mac to maintaining liquidity, if need be. Jim Lockhart realized in August 2008 that Fannie Mae and Freddie Mac were on the verge of bankrapcy.  China and international financial institutions were dead certain that Fannie Mae and Freddie Mac were financially guaranteed by the Federal government.

Treasury secretary Hank Paulson decided to place Fannie Mae and Freddie Mac under direct government supervision.  Paulson said: “We’ll act so swiftly and take them by surprise, Fannie Mae and Freddie Mac won’t have time to say ouf!”  Amazingly, Fannie Mae and Freddie Mac decided not to challenge the decision in court.

On September 2008, Lehman Brothers declared a loss of 4 billion in the last quarter and its stock market dropped from $16 to 3.6.  Bank of America was more interested in acquiring Merrill Lynch, and the British bank of Barclay was faced by a rejection of the British government for the deal.  On Monday Sept. 15, the 158 year-old investment institution closed door.

Question: “Why Lehman was not saved by the government as it did with Bear Stearns?” Plausible answer: Hank Paulson wanted a serious competitor in investment banking to disappear!

“Wall Street gets drunk: It is up to common people to wake up with headaches”

Note 1: Bush claims that tax break on the richest 1% increased from 38.4 to 39.1% (whao), while the poorest 50% of the population enjoyed a reduction from 3.4 to 3.1% (double whao)

Note 2: So far, G.W. Bush keeps the record of worst perpetrator of crimes against humanity in this century: Bush Junior was directly responsible of the death of more than one million Iraqi civilians during his “preemptive war” against a dictator that was no threat to any State anymore.

Conversation with Julian Assange: Conducted by Hans Ulrich Obrist

The professions of my parents were  in theater, and I moved to over 50 cities in Australia of the 70,s and attended 37 schools in rural areas.  You can imagine Tom Sawyer in this modern time:  I rode horses, explored caves, dived and did motorcyclist….

In Adelaide, my mother helped whisk out nuclear documents of the British testing site in Maralinga. At the age of 15 I started decoding systems meant to preventing the dissemination of open programs.

Before the advent of Internet, Australia was kind living in the outback and it was a pleasure to discover the outside world and get inside the Pentagon archives of the 8th Air Force, (the strategic nuclear air force in the USA).

At 17, I had founded an underground magazine and the Federal police rounded us.  I had already set the foundation for Australia Internet using a provider that I created. I used cryptography and mathematics to protect my sources and get inside systems.

You see, there are three kinds of information: Knowledge disseminated by schooling systems, books, and manuscripts that are slowly degrading and in the way out of circulation; information related to the economic industrial functioning of societies such as the “know how” of hydraulic systems …which are protected by lobbies; and the third type of information that are actively censored and prevented from entering the public domain.  “The secret type of information” is a serious handicap for a just, fair, and intelligent interaction among communities.

Until I was 20 of age, I was basically a hacker continuing his university studies in Melbourne.  I edited an underground magazine called “International Subversive”.  In that period, every developed State had its own Internet system and its own network, but they were not interconnected.  For example, you had Arpanet and Well in the US connecting universities, and X.25 connecting telecommunication industries, QSD in France, Altos in Germany…We were a very restricted community of hackers, scientists, and people in power; we were young, active, and motivated and we invested the embryonic internet.

Our phones were bugged and we witnessed six years of legal prosecutions in the US, England and Australia.  We were mostly young geniuses with the faculty of easy adaptation to this newer intellectual horizon, even though many of us did not finish formal higher education.  I was inspired by the book of Alexander Solzhenitsyn “The God of darkness”, Louis Fischer, Arthur Koestler, Ignazio Silone, Stephen Spender, Richard Wright and the Black Panthers radical traditions.

1994 witnessed the apogee of the micro-movement “Cypherpunk”  (decoding punk).  True hackers disliked the absurd term of cyberpunk.  The “Cypherpunk” community were mostly from California, Europe and Australia and we had understood the nature of the power relation among individuals and States, mainly based on the science of cryptography. We had no founding members or a guiding philosophy, but had starting principles originating from John Young, Eric Hughes, and Timothy C. May…We formed circles of discussion and we had this concept that with talents in mathematics and programming we can empower individuals to confront the power of States, to say No to public power. We could code and decode as efficiently as States could.  WikiLeaks was a combination of various ideas circulated during the discussion groups.  The economic feasibility in internet communication was not exorbitant to start a internet-type enterprise.

There was abundance of information and the critical problem was “which piece of intelligence is worth saving and analyzing even further”?  We discovered that information with “feeble light” (not widely diffused) must have been undergoing economic censorship to take out of the public domain, thus, highly important to State powers and affecting the safety and stability of the regular people.

Once a State or institution endeavor to censor anything, it means the power-to-be feels threatened by the information.  Unless most power relationships are transformed by financial interests, political censorship will be highly dangerous.  Thus, free expression and free gathering are dangerous to political ideological systems.

Note: Hans Ulrich Obrist is an artist from Switzerland and organizes biennial in Vienna and Berlin.  He is the director of international projects at the Serpentine Gallery in London.

Why Israel committed this Genocide in 1982: In the Palestinian camps of Sabra and Chatila (Beirut)?

Robert Fisk, the credible British investigative reporter wrote in his book “Affliction of a Nation” something to that effect: “By June 5, Israeli forces have cordoned off the city of Saida from all sides, including the sea.  It started shelling the city and bombing from air and sea, and killed over 2,000 civilians.  As Israeli army tried to enter the Palestinian camp of Ain Helweh, 47 Israeli soldiers and officers were made prisoners. The Palestinian leader of the camp, Abu al Zaim, chained the Israeli soldiers around a residence and negotiated the safe exit of the Palestinian fighters from the camp.  As the Palestinian fighters were out of the camp, Abu al Zaim ordered the explosion of the house and the Israeli prisoners were killed.  After this feat, Israel never ventured to enter any Palestinian camp in Lebanon.”

Israel encircled the Capital Beirut and shelled it for over a month.  A deal was struck with Yasser Arafat and 15, 000 Palestinian fighters to vacate Lebanon to Tunisia.  The US and Israel guaranteed the safety of the Palestinian civilians.  Two weeks before the entrance of Israel to the Capital Beirut, the US contingent left Lebanon.  Sharon and his officers had vengeance in mind to the killing of 47 Israeli soldiers in Ain Helweh, but never dared enter the camps.

After the assassination of the elected President to Lebanon Bashir Gemayel, Sharon got the idea of facilitating the entrance of hundreds of Phalanges militias into the Sabra and Chatila camps, supposedly to vendicate the assassination of their “leader” Bashir. Israel discharged about 50 fighters of the stooge Lebanese South army of Major Saad Haddad in a helicopter on the airport.  These soldiers (militias) of the South Army were indeed Israeli/Lebanese and out of control of Saad Haddad who was dying and a smokescreen for the presence of Israel in South Lebanon.  The principal task of the “Saad Haddad” contingent was to control, supply, and initiate the genocide of the Phallenges militias.  Israel had totally cordoned off the two Palestinian camps of Sabra and Chatila and prevented the Palestinian civilians from exiting the camp.

Robert Fisk reported that on the day he arrived in Beirut, Israel was illuminating the night sky of the neighborhood of the camps.  Already, rumors that mass killing is rampant in the camps, but no firm intelligence pieces were coming out.

After three nights and two days of slaughtering civilian Palestinians (women and children) in the two Palestinian camps of Sabra and Chatila, where over 2,500 civilians were savagely exterminated, Fisk was among the first reporters to enter the camps.  The stench was preceded with legions of flies invading any orifice, mouth, nose, and ears…Fisk reported gruesome details of what he witnessed, which I might translate in a followed up article.

Robert Fisk joined an Israeli unit of fresh new recruits, which was dispatched to enter the camps where mass genocide had taken place.  The young soldiers were white of fright and constantly warned Fisk to watch out for the “terrorists”.  “I kept telling them: “What terrorists are you referring to?  In these camps there are but slaughtered women and children.  Can’t you smell decomposed bodies?  The terrorists have already done their job, and they are not the Palestinians…”

Apparently, the Israeli soldiers freshly arriving had no idea of what happened in the last three days:  The Israeli government and army officers had done a nice job propagating the menace of “terrorists in general” hiding in the camps… However, the Israeli soldiers who cordoned off the camps were very much aware of what was happening inside.

The US Ambassador Philip Habib admitted that the US and Israel had guaranteed the safety of Palestinian civilians, after the retreat of the Palestinian fighters.  Philip Habib was in San Francisco when he heard the news of the genocide and called President Ronald Reagan for the default of the US on its written guarantee.

You may read detailed accounts of the international reactions to the genocide in the link of note 2.

Note 1: Sharon had detailed the goal of that invasion ten months prior to the invasion.  Sharon told the Israeli military reporter that Israel had in mind to kick the Palestinian fighters out of Beirut, and force them to settle in Jordan so that they establish a Palestinian State in Jordan…The State of Lebanon will be ruled by Christian stooge government…

Note 2:

“Heading to Haifa: Want to see my home up close”: Who is Leila Khaled?

No, nothing is written for Leila, nothing is Maktoub for Laila: She will not die a refugee!

It is August 29, 1969.  Leila Khaled and her Palestinian comrade Salim Issawi, another refugee from Haifa, hijacked TWA 840 plane from Rome airport to Tel-Aviv as destination.  The purpose was to take Yitzhak Rabin prisoner and be tried in front of a Palestinian tribunal for crimes against humanity.  Rabin (Ambassador in the USA then) had missed the plane.

Leila and Salim are carrying hand grenades. The Captain and pilot tried several times to redirect the plane to Tripoli (Libya) where the US has a military base. Leila was trained to reading the gauges (the plane has enough autonomy for more than 5-hour flight), and she would correct the flight course.

Leila order the plane to El-Ladd airport.  The smart-ass pilot corrects Leila: “You mean Lod airport in Israel?” “No, it is al Ladd, a name known for millinea, and it is not this stupid Zionist State won’t change it”

Leila orders the pilot to descend at 12,000 feet.  The Israeli air traffic controller is summoned not to mention TWA 840 but call it PFLP, and he finally agreed to obey after the Captain warns him that there are 140 passengers on board.

The controller refuses the landing of the plane and two Israeli Mirage planes are accompanying the civilian plane to prevent it from descending below 12,000 feet.  Leila orders to resume the descent and the Mirage jets made room.

Without warning, Leila orders the pilot to head north to the city of Haifa: “I want to see my home from up close” said Leila.

The plane circled the city twice and was ordered to head to Damascus, where it landed softly. After the passengers exited safely, Leila blew up the cockpit of the plane, and surrendered to the Syrian police.

Three passengers were Israelis and were exchanged for 71 Syrian and Egyptian prisoners three months later.

Life was pleasant in Haifa before April 9, 1948, the 4th birthday of Leila Khaled.

Leila lived in a house on Stanton Street, by the Jewish quarter of Hadar Hacarmel.  On that date of 1949, the Palestinian family of Leila had to vacate the city and seek refuge in Lebanon: Israel has entered the city and 80,000 more Palestinians living in Haifa did the same trip.

The family settled in a camp in Tyre called Bourj al Chemali, where 7,000 Palestinians refugees from Haifa crowded it.  Since that date, Leila would refuse to celebrate her birthday, a day of mourning for her, the nakba for her family.

In 1958, Leila and her sister Nawal are sent to a boarding school in Saida, run by Evangelists, though a Moslem teacher made her memorize verses of the Coran, as Leila was learning to read.

In 1963, at the age of 19, Leila is attending the American University of Beirut (AUB):  Her brother Mohammad, working in Kuwait, paid her tuition.  Her father preferred to pay the tuition of her brother who failed his high school public exam.  Leila could not finish her university degree for lack of financial support and ended up in Kuwait in 1966.

Leila joins the Palestinian Resistance Movement, the main faction of Fateh.

Yasser Arafat is still not ready to train women for military exercises, and Leila tells him that the Popular Front for the Liberation of Palestine (PFLP), headed by Georges Habash, trained both genders and sent them in active duties. She said: “We’ll meet again“, and went ahead and joined the PFLP.

It is September 6, 1970.  Leila does it again and hijacked the Israel El Al plane at the airport of Schiphol (Holland).  Her comrade is Patrick Arguello, originally from Guatemalla and run by dictator Somoza at the time. Patrick had no idea who was his companion boarding as his wife Maria Sanchez.

The attempt failed. Patrick is shot dead and Leila is interrogated by the British police. Leila endures 3 hours of interrogation and kept repeating: “I am the leader of the hijack.  My name is Leila Khaled and a member of the PFLP and from the unit of Rasmieh Odeh, a Palestinian woman prisoner“.

She declare that she want to be considered a prisoner of war.  Scotland Yard officer said: “England is not at war with the Palestinians”. And Leila replies: “Yes, England is at war with us since the declaration of the Balfour document in 1917, promising a homeland for the Jews, in return of a handful of silver coins to prosecute the war against Germany.  England carried out this promise, and is directly responsible for the displacement of million of Palestinians, robbing us from a State and inflicting humiliation, miseries, and indignity on us for decades.” (I developed a bit on that answer).

Four hours later, the officer returns and said: “Three more planes have been successfully hijacked and landed in the Zarka in Jordan.  They want your liberation in return of the passengers.”

In April 1996, Leila is crossing the Allenby Bridge to the West Bank.

A “peace” deal was struck between Rabin and Arafat in Oslo.  The Israeli soldier is interrogating Leila before crossing the border. Leila tells him: “Yes, I belong to a Palestinian organization, I do not agree with this peace deal, and yes I want peace with the Jews. My profession was hijacking Israeli planes. No, I don’t want this peace where I cannot return home without an Israeli soldier interrogating me. Remember young man: I am Leila Khaled.”

“We are refugees, we’ll die refugees” would frequently repeat Leila’s father.  No, nothing is written for Leila: She will not die a refugee. Leila is currently living In Amman (Jordan) by the Jordanian intelligence agency and is married with two kids. She is a member of the Palestinian National Council, and of the Palestinian Women General Union.

Note 1: Article inspired by a chapter of the French book “12 women of the Orient who changed History” by Gilbert Sinoue.

Note 2:  Leila Khaled published her autobiography “My people shall live” in 1973.

Note 3:  After the successive triple hijacking to Zarkat, the Jordanian Monarch Hussein chased out the Palestinian factions into Lebanon, and Lebanon witnessed three decades of bloodshed and calamities.

The Lesser Depression? Who is Paul Krugman?

“You do not know, my son, with how little wisdom the world is governed.”

Paul Krugman published an article on July 21, 2011 in The New York Times.  Krugman is a Nobel laureate in economics and has been frequently explaining the current world financial problems.  I will exhibit a few extracts with my own editing style, and develop my comments.

“These are interesting times, in the worst way. We are currently looking at not one, but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of State fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.”

“We can only hope that the politicians, huddled in Washington and Brussels, succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

“In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended. Why our economies are (still) so depressed.

The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

Everything might still have been bearable if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did. In particular, cash-rich corporations see no reason to invest that cash in the face of weak consumer demand.

Nor did governments do much to help. Some governments — those of weaker nations in Europe, and State and local governments here — were actually forced to slash spending in the face of falling revenues. And the modest efforts of stronger governments — including the Obama stimulus plan — were, at best, barely enough to offset this forced austerity.  So we have depressed economies. What are policy makers proposing to do about it? Less than nothing.

The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It’s not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remains near historic lows.

Yet the conversations in Washington and Brussels are all about spending cuts (and maybe tax increases, I mean revisions). That’s obviously true about the various proposals being floated to resolve the debt-ceiling crisis here. But it’s equally true in Europe.

On Thursday, the “heads of State or governments of the euro area and the E.U. institutions” — that mouthful tells you, all by itself, how messy European governance has become — issued their big statement. It wasn’t reassuring.  For one thing, it’s hard to believe that the “Rube Goldberg statement” can really resolve the Greek crisis, let alone the wider European crisis.

But, even if it does, then what? The statement calls for sharp deficit reductions “in all countries except those under a program” to take place “by 2013 at the latest.” Since those countries “under a program” are being forced into drastic fiscal austerity, this amounts to a plan to have all of Europe slash spending at the same time. And there is nothing in the European data suggesting that the private sector will be ready to take up the slack in less than two years.

For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937:  The premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last, until World War II finally provided the boost the economy needed.  The European Central Bank  seems determined to make things even worse by raising interest rates.

The lack of wisdom is on full display, as policy elites on both sides of the Atlantic bungle the response to economic trauma, ignoring all the lessons of history. And the Lesser Depression goes on.” (End of quote)

I am wondering: What if Congress agrees to raise the ceiling of the debt?  How the US government used to pay off, in the first place, the nominal portion of its dept?  It is not through the surplus of its economic activities, or the savings of the citizens, or the slashing of military spending…

The US has been borrowing heavily by encouraging foreign State governments, which managed to save money, into purchasing US Treasury Bills and bonds.  Currently, this mechanism of relying on foreign savings is not working, and the Federal Reserve has been manufacturing money and lending it to the US government to cover short-term and urgent immediate deficit.

The dollar has been effectively being devalued consistently by 10% per year since 1945, and this rate in devaluation is increasing rapidly since 2007.

Do you realize what a deficit amounting to 14 trillion means?  It is more than the total worth of France, if sold stock, lock, and land.  Imagine thousand of years of  labor by millions of “French people” to sustaining a country, who could not accumulate enough wealth to pay off the US public deficit!

All these economic and financial decisions are meant to buy short-term leverage, before the inevitable global crisis fall on our head, very shortly.  How can the US people pay-off this huge deficit if not by “creating a preemptive global war”, as were the cases in 1914 and 1939?

The US has nothing much to offer economically for stabilizing world economy and finances.  What Europe needs from the US are two things:

First, releasing the huge ammunition reserves for resuming the small-scale preemptive wars in Libya and the potential unstable regimes around the Mediterranean Sea and parts of Africa.  It is the abundance of the US military hardware and ammunition that is making NATO organization an acceptable agreement to the EU.

Second, the EU hopes that the dollar will maintain its global status for a couple of years before a basket of currencies is agreed upon. What else the US can be of any help for the time being?

These spring uprising of youth movements around the world have a common denominator: “We want to have a direct say in public decisions”




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