Friday, January 12, 2007

Blogwire 2 - Jan 12

Middle East Research and Information Project. on the 'surge'

Editor's note: I will try to move over to the other blog here.
Date: Wednesday, January 10, 2007

Chris Toensing
Editor of Middle East Report and Executive Director of the Middle East Research and Information Project.


The U.S. administration's pending proposal to escalate the war in Iraq, the so called "new strategy in Iraq", and the proposed addition of at least 20,000 more U.S. troops to the occupying force in Iraq despite increased opposition to it in the United States.

Pray for a miracle

About all we can do
BAYSIDE, TEXAS - There's an old sign posted at U.S. Army Ranger School. It says simply: "Hope is not a method, unless you are the chaplain."

President Bush went on national television this week and laid out for the American people a plan for a "New Way Forward" in Iraq that appears to be based on nothing more than hoping for a miracle.

He did precisely what was predicted: Announced a temporary escalation of U.S. forces in Iraq by the curious number of 21,500, or approximately five brigades. Four brigades will deploy into the bloody streets of Baghdad and one brigade into the equally bloody Anbar province to the west, the seat of Iraq's Sunni Muslim insurgency.

The Decider said that he's laid down the law to Iraqi Prime Minister Nouri al-Maliki. Maliki cannot put the huge Shiite neighborhood of Sadr City off-limits to U.S. forces, and he must begin disarming all sectarian militias, especially the Mahdi Army commanded by radical, anti-American Shiite cleric Moqtada al-Sadr.

The president made a perfunctory nod at humility, noting that if there've been mistakes in the conduct of the Iraq War -- and, boy, have there been some doozies -- that he bore responsibility for them.

Then he turned belligerent and uttered thinly veiled threats of unspecified U.S. military action against Iraq's neighbors, Iran and Syria. President Bush already had underlined and telegraphed those threats by ordering a second aircraft carrier battle group to the Persian Gulf and sending additional minesweepers to the same theater.

l l l

LET'S REVIEW THE BIDDING ON THIS. As the Iraq misadventure heads toward its fifth year, everyone, including Bush, has admitted that the situation is grave and deteriorating and that constant combat deployments have stretched our Army and Marines to the breaking point.

Before the announced "surge" of the additional 21,500 troops to Iraq, we were already tapped out for any combat-ready reserve to deal with emergencies elsewhere in this troubled world. We have fewer than 10,000 troops who could in theory respond to trouble somewhere else. Say, Korea.

Iran occupies a very long and largely unguarded and unpoliced border with Iraq, whose Shiite majority shares the religious beliefs of the Iranians. Those Shiites sit squarely astride the U.S. supply lines that stretch some 300 miles through southern Iraq from Baghdad to Kuwait City.

Iran also sits on the Persian Gulf and the Strait of Hormuz, through which supertankers haul Middle East oil to Japan, Europe and, yes, the United States.

Does anyone suppose that we can send bombers to strike Iran's nuclear enrichment plants -- widely dispersed and dug deeply into the granite under mountains -- and not expect that action to set the Middle East on fire and paralyze economies at home and abroad by sending the price of oil beyond $100 or even $200 a barrel?

Does anyone think that Iran's ayatollahs wouldn't signal Iraqi Shiite militias and Iran's own deeply embedded commando teams inside Iraqi to launch new and deadly attacks against our troops scattered across the Iraqi battlegrounds and cut our long and vulnerable supply lines that feed, fuel and provide ammunition to our forces? And what signals might the Iranians send to their Hezbollah allies in Lebanon and beyond, and to their Shiite allies in western Afghanistan?

The Iraq Study Group certainly urged the Bush administration to engage with Iran and Syria, but they recommended diplomatic engagement, not military engagements.

Throwing an additional 21,500 U.S. troops into the cauldron that is the Iraq civil war is not a new way forward. It's not even new: We've done this several times before, and it won't work.

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EXPANDING A WAR THAT WE'RE LOSING in Iraq to a neighboring nation three times larger, with a much better army and far more whacked-out religious fanatics, is hardly something that our commander in chief should even be dropping hints about at this juncture in a growing disaster.

Good God, man, what were you thinking during the last six weeks of supposedly listening to advice from all comers? Is this the best you can do? Just when we begin to think that things couldn't get much worse, they do.

Pardon me if I'm reminded of a time long ago when another disaster of a president, Richard M. Nixon, thought that he could turn a losing war in Vietnam around by bombing and invading neighboring Cambodia.

It didn't work in Cambodia. It only set the stage for a Communist Khmer Rouge genocide that took as many as 2 million Cambodian lives after Indochina fell.

Perhaps it's time for all of us to hope for a miracle. We can all hope, and pray, too, that this commander in chief comes to his senses before he sets our world afire in the two years he has left in the highest office in the land.

Good God, man, what were you thinking during the last six weeks of supposedly listening to advice from all comers?

(Joseph L. Galloway is former senior military correspondent for Knight Ridder Newspapers.)

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There is no justification for this hellhole

Moazzam Begg

There are fathers held in Guantanamo who have never seen their children

Published: 12 January 2007

I was still a free man on 11 January 2002 when, like the rest of the world, I saw images of the first set of captives in orange jumpsuits. The men looked a bit like extraterrestrials in a low-budget 1950s sci-fi movie, with face masks, blacked-out goggles, ear muffs and all. Only this movie was painfully real. There was something subhuman, alien, in how they were made to appear. The US President secured a coalition of the willing in his Operation Enduring Freedom, but many of his allies too were disquieted by the images of the men in Camp X-Ray, Guantanamo Bay.

I remember Donald Rumsfeld saying that the men - alleged members of al-Qa'ida and the Taliban - were "killers and terrorists. He said the detainees were well cared for, sheltered and "warm". Not surprising, I remember thinking, since Cuba lies between the Tropic of Cancer and the Equator. They were obviously stifling from the heat and gear they were made to wear - as I was to discover myself within weeks - and Rumsfeld knew it.

At the time of my abduction by American and Pakistani intelligence thugs, it seemed as if the US government not only seized people from around the world with impunity, but could hold them indefinitely, without charge or trial, in inhumane, degrading and torturous conditions. But I always hoped that reason would prevail. It was, after all, the US, not a despotic Third World regime. Five years on, the despots can cite their precedent.

Today there are fathers held in Guantanamo who have never seen their children. At least I was fortunate finally to see my three-year-old son when I was released two years ago.

Three of the Guantanamo men were finally released to their loved ones last year - in coffins. They were said to have either committed suicide out of despair, or as a planned act. Their families and former detainees believe otherwise. Last year, controversy raged after statements issued by US officials called the deaths "PR stunts" and acts of "asymmetric warfare".

Realising the public-relations disaster created by his subordinates, President Bush distanced himself by momentarily appeasing the world's press with the claim: "I would like to see the camp closed". In reality, two permanent, multimillion-dollar, state-of-the-art structures - Camp Five and Camp Six -were being completed as he spoke. As if on cue, it was announced that 14 "high-ranking Al-Qa'ida operatives", hitherto held in secret "ghost" sites around the world, the existence of which was previously denied by the US, had arrived in Guantanamo.

Meanwhile, captives around the world were released sporadically after years of incarceration without charge, explanation or apology. Some of them came home to find relatives had passed away. My own paternal uncle and aunt died when I was in Guantanamo. Of the hundreds of men remaining, several have learned about the deaths of mothers and fathers who clung, in vain, to the hope of seeing their sons once more. The prisoners are not allowed visits, telephone calls or any other meaningful communication with the outside world. Letters arrive both to and from Guantanamo - if at all - heavily and ludicrously censored, often months, and sometimes years, after they were written.

This week marks the fifth anniversary of Guantanamo and by now most people are asking the question: who exactly has been found guilty of involvement in the plot that justified the existence of the place to begin with? The reply: no one - so far. When 14 "high-level" al-Qa'ida operatives were brought to Guantanamo, all talk of wanting to "see it closed" had ceased. Even though Bush's military commissions process was introduced to try detainees for war crimes (something I was designated for myself in 2003), the US Supreme Court ruled that Bush had acted illegally in ordering such trials.

And then, by bizarre concurrence, the Military Commissions act was passed, which removed the illusory right of habeas corpus granted to detainees in 2004. It's ironic that an act designed to prosecute the handful of people it has taken years to charge - including the one man who is said to have planned the 11 September attacks - removes the right of the overwhelming majority to challenge their incarceration.

For the record, the overwhelming majority were not captured on the battlefield, nor anywhere near one; they were not engaged in acts of terrorism, and will never face charges in Guantanamo. The ones who do, will, in the words of Lord Steyn, face "a mockery of justice that derives from the jumps of the kangaroo".

The writer is a former Guantanamo detainee and spokesman for Cageprisoners

Norah O'Donnell Questions the Israel Lobby

the new york observer
Norah O'Donnell Questions the Israel Lobby

Norah O'Donnell on MSNBC just now did a very aggressive job of interviewing Steve Berman, one of the Jews who resigned from the Carter Center advisory board in protest of Carter's book. O'Donnell asked whether he had been "lobbied" by Jewish groups to do so. Berman said he hadn't. She didn't seem to believe him, virtually repeating the question, and then bridled at the fact that these good friends of Carter did all this without even talking to their former hero ahead of time. Didn't you owe the former President that? she asked.

O'Donnell made her own point of view clear when she showed footage of Carter, on Hardball, saying that the United States has been deprived (by the lobby) of the vigorous debate about the Occupied Territories that goes on every day in Israel itself. I applaud her for being a tough journalist who knows what a smokescreen is.

O'Donnell's stance is significant. It demonstrates that, 10 months on, and notwithstanding the cowardice of the New York Times and Washington Post, Walt & Mearsheimer have mainstreamed the "lobby" as an issue. And American attitudes on Israel are changing: more and more Americans recognize that the hateful Israeli occupation has undermined our image across the Arab world.

FILE UNDER: Journalism, U.S. Policy in the Mideast

Posted by Phil Weiss on January 12, 2007 11:31 AM |

The decline of empire

Arrogant and deaf to history, the American imperial moment already appears short-lived, writes Ayman El-Amir

Few empires in history have recognised the limits of their power and in good time saved themselves from the consequences of over-ambition. While historians point to the Roman Empire as the most classical example of the decline of overstretched empires, there are equally disastrous models in modern history. The Romanov's imperial Russia, the Austro-Hungarian Empire of the Habsburg and the Ottomans who ruled the Islamic State all collapsed under circumstances of revolution or global conflict. The British Empire learned the lesson of the limits of imperial power after it was battered by Germany in World War II and pressured by national liberation movements. London chose to relinquish the empire on which "the sun never sets" because it was unsustainable. The Soviet Empire, on the other hand, imploded. Contrary to claims by some US analysts, it was not Ronald Reagan's confrontational policies that brought it down.

The US, the most recent imperial power on the world stage, is missing a rare opportunity to learn these historical lessons. Either its political elite does not read history -- except perhaps its own -- or that it is carried away by an arrogant sense of invincibility (an old-time imperial trait). Thanks to the Bush administration and its neo-cons, the US is deeply wedged in the turbulent Middle East. It is bogged down in Iraq with no clear strategic direction on how to get out, it is in confrontation with Iran over the latter's quest for nuclear technology, and has frozen the Palestinian-Israeli peace process, strangulated the democratically-elected Palestinian government, is working with Israel to divide the Palestinian Authority, and has unleashed the murderous Israeli military machine against the Palestinian people.

Elsewhere, the Bush administration is pursuing similar confrontational policies. It is still embroiled in Afghanistan, where the Soviet Union fought a decade-long war and lost; it has stymied progress made by the Clinton administration in negotiations with North Korea over its nuclear weapons programme, replacing dialogue with threats and punitive sanctions; it encouraged Ethiopia to intervene militarily in the civil war in Somalia, thus inciting a potential major conflagration in the Horn of Africa; and it is fuelling an arms race in the Gulf region. Moreover, President Bush's war on terrorism is enhancing, not diminishing this dangerous global phenomenon. Imperial USA is stretched beyond limits.

Following historical patterns, the rise of US imperial power came on the heels of the collapse of the former Soviet Union. The execution of the first Gulf War that threw invading Iraq out of Kuwait was the first test of imperial prowess. It was not until the end of the two successive administrations of Democratic President Bill Clinton, the coming to power of George W Bush and his "neo-con" entourage, and the catastrophic events of 11 September 2001 that the imperial ambitions of the US became full-fledged. The preceding seven decades of bipolar international relations, until 1990, were marked by self-restraint based on limiting the exercise of power to spheres of influence. In a landmark White House strategy paper released September 2002, entitled The National Security Strategy of the United States, the neo-conservative Republicans unveiled their global imperial vision. It basically announced that the US will not allow its military supremacy, maintained since the collapse of the former Soviet Union, "to be equalled or surpassed"; that the US will launch pre-emptive strikes against countries that are suspected of developing weapons of mass destruction and which could be "perceived as a threat to the US"; and that it will attack, disrupt and destroy terrorist organisations that have global reach. The empire was in full swing and prepared to invade Iraq, which it did in March 2003.

The centrepiece of US imperial strategy, Iraq may soon prove its nemesis. By all standards, the invasion and occupation of Iraq is a typical example of old-time colonial conquest for economic gain. No one can recall exactly what the illegal invasion was supposed to achieve, and for whom. Was it the elimination of weapons of mass destruction that were never found? Was it to re-mould Iraq into a model of democracy for other Middle Eastern countries to follow? Was it the fairy-tale claim of crushing non-existent collaboration between Saddam Hussein's secular Baathist regime and Al-Qaeda? Or was it to get rid of Saddam Hussein, the dictator whose brutal execution, and the international indignation it provoked, served to redeem him more than to punish him?

The clearest purpose to emerge so far is that the US invasion sought to dominate the oil-rich Gulf region, reorient incorrigible Arab regimes and destabilise and weaken Iran in the interest of Israel. Four years into the war, and despite claims to the contrary, the US campaign in Iraq and beyond has failed. President Bush's new policy direction to send more troops to Iraq will do little to change the situation; Iraq has been destroyed beyond reconstruction, sectarian violence is rampant, US and Iraqi casualties continue to mount and a de facto partition of the country has taken hold. As the International Crisis Group has noted, Iraq faces "complete disintegration into failed-state chaos" -- the result of misadventure by an inexperienced imperial power.

The only way forward for the US in Iraq is the way out, be it as a result of rising casualties, the reigning state of chaos, or by the defiant opposition of the Democratic majority in the US Congress to an open-ended war. By mid-2007, the Bush administration will enter the state of lame-duck hibernation in preparation for the 2008 presidential election. By then, everyone will either try to put Iraq behind his back or use it to score popularity points over the Republicans in campaign polls. With the inevitable exit of the US from Iraq, the Middle East/Gulf region will never be the same and the exercise of imperial power will undergo fundamental change.

Whatever spin the US may put on its eventual exit from Iraq, there is no avoiding the universal conclusion that its invasion was a dismal failure. This will embolden terrorists and jihadists, strengthen autocratic regimes that will gleefully view US departure as a regression of the call for genuine democratic change, and enhance the influence of Iran which will come into indirect, and possibly direct, confrontation with Israel. US military presence that will be left behind in the Gulf region will create a casus belli for nationalist forces opposed to foreign military presence on Arab territory. It will also undermine regimes loyal to the US and that increasingly will be viewed as collaborators with a foreign military power. The only alternative Gulf Arab countries can afford is to build their own military power, with US assistance, to deter Iran, reward the US arms industry with generous contracts and avoid being caught unprepared in any future conflict between Israel and Iran. This attitude is already fuelling an arms race in the Gulf region that may escalate into non-conventional weapons acquisition. Saudi Intelligence chief, Prince Muqrin Bin Abdel-Aziz, told a security conference in Bahrain 8 December 2006 that "the fact that Israel has nuclear weapons is the most dangerous threat against Gulf security." Israeli Prime Minister Ehud Olmert hinting that Israel possessed nuclear weapons touched a raw nerve in many parts of the region.

When the US fought a decade-long traumatic war in Vietnam, it came out in 1974 badly bruised and empty-handed, with no success to show in rolling back the perceived communist threat. It was not even an imperial power then, only a superpower with a misguided strategic view of the Southeast Asian region. It was harassed and undermined by other superpowers, the Soviet Union and China. US defeat in Iraq will mark the end of a short-lived era of imperial power. The US will end up one of several powers in equal competition for the assets of a strategic and wealthy region.

* The writer is former correspondent for Al-Ahram in Washington DC. He also served as director of the United Nations Radio and Television in New York.

© Copyright Al-Ahram Weekly. All rights reserved

Al-Ahram Weekly Online

Protests worldwide mark the 5-year anniversary of Guantanamo

Posted on Thu, Jan. 11, 2007

By Carol Rosenberg and Lesley Clark

McClatchy Newspapers


From anti-Iraq war mom Cindy Sheehan in Cuba to protesters in a Washington, D.C., courthouse, demonstrators fanned out across the globe Thursday to protest America's five-year-old experiment in offshore incarceration at Guantanamo Bay, Cuba.

The protests came as a top Democrat said Congress would scrutinize the Bush administration's handling of the Guantanamo prison camps with an eye toward closing the facility.

"The new Democratic majority has every intention of conducting vigorous oversight on these issues and getting answers on the administration's detention practices," said House Majority Leader Steny Hoyer, D-Md. "The administration has said it hopes to close the facility at Guantanamo, an objective that I share."

About 100 protesters were arrested in a Washington courthouse, and U.N. Secretary General Ban Ki-moon used his first news conference to likewise call for closure of the remote U.S. prison in southeast Cuba.

"Gitmo prison is a source of shame. No more torture in our name," chanted protesters in Cuba-controlled Guantanamo, where Sheehan marched with a dozen or so international protesters on the other side of a minefield from the U.S. Navy base.

Amnesty International and other human rights groups choreographed the daylong protests from Europe to Australia to the Americas on five years to the day when the Pentagon opened the detention and interrogation center for international captives airlifted from Afghanistan.

The protests achieved their desired results.

News photographs of orange jumpsuit-clad protesters - on the march, on their knees or in chains - splashed across the Internet from such far-flung cities as Melbourne, Australia, Budapest, Hungary, and Thessaloniki, Greece.

The Pentagon argues that the prison camps are a war-on-terror necessity. About 395 men and teens are held there, some of whom could soon face war-crimes trials, once the Defense Department unveils its new design for military commissions.

At the U.S.-controlled corner of Guantanamo, the day passed peacefully and without notice, although 14 captives were listed as hunger strikers. Five were being fed through tubes in their noses under military medical protocols for forced feedings.

A minefield and no-man's land separated the chants of Sheehan and her fellow protesters from the 45-square-mile U.S. Navy base.

"It's a normal work day here," reported U.S. Army Col. Lora Tucker by e-mail. It passed with "nothing special going on to mark the anniversary," she added. "We are just continuing our mission of safe, humane care of the detainees."

Not so in downtown Washington, not far from Congress, where about 100 demonstrators were arrested in a federal courthouse for waving signs and wearing T-shirts that said "Stop Torture" and "Shut Down Guantanamo."

They were led away in plastic handcuffs.

Earlier, hundreds of foes of U.S. detention policy fanned out on the steps of the Supreme Court, some in detainee-style jumpsuits and black hoods, others in mock military garb, and staged some political theater of their own in the frigid winter weather.

"Guantanamo has brought shame to our nation," Larry Cox, executive director of Amnesty International, told the crowd from a lectern entwined with barbed wire.

Behind him stood dozens of protesters, some with black tape across their mouths, others bearing the names of detainees. "There's no evidence that we have been made safer," said Cox, "but there is growing evidence that the moral authority of the United States has been severely diminished."

Rosenberg reported from Miami, Clark from Washington.

Wes Clark, Are You Ever in Hot Water With the Israel Lobby!

January 10, 2007 at 1:09 am

Shmuel Rosner, one of the U.S. Israel Lobby's best friends in the Israeli media, is on the warpath against Wes Clark. Why? Because he had the temerity to "out" the Lobby (particularly Aipac) for beating the drums for war against Iran.

Arianna Huffington got a call from Clark after he'd read a Bibi Netanyahu interview with Arnaud de Borchgrave in which the old 'peacenik' detailed his efforts to lobby the Bush regime to take out the Iranian nuke facilities. Bibi asserts in the interview that American military intervention is all but a done deal. I don't know about you, but I'm with Wes on this one. This sort of stuff is Netanyahu's metier. It's what he's made for as a politician. Manipulating public opinion in favor of harsh nationalist Israeli policies using hysteria and paranoia. I, for one am glad Clark called Netanyahu out on this one. If Netanyahu wants to be Slim Pickens ridin' that H-bomb down to the ground to nuke some "Russkies" in Dr. Strangelove, I'd prefer that the bomb not have U.S. markings on it. Let Bibi find someone else to do Israel's dirty work for it (not that I'm advocating that Israel bomb Iran either).

This was Wes' statement to Huffington:

"How can you talk about bombing a country when you won't even talk to them?" said Clark. "It's outrageous. We're the United States of America; we don't do that. Don't get me wrong, I'm not saying the military option is off the table — but diplomacy is not what Jim Baker says it is. It's not, What will it take for you boys to support us on Iraq? It's sitting down for a couple of days and talking about our families and our hopes, and building relationships."

When we asked him what made him so sure the Bush administration was headed in this direction, he replied: "You just have to read what's in the Israeli press. The Jewish community is divided but there is so much pressure being channeled from the New York money people to the office seekers."

Boy oh boy is Wes in hot water with the Israel Lobby. He just yanked their chain and are they going to roar like a lion. This guy's gonna be called an anti-Semite and far worse things. Actually, it's already started. Rosner wrote this:

Gee, what can he possibly mean by "pressure being channeled from the New York money people"?…How and why has it become so easy to speak in this way about the Jews? Second: What does it mean politically?

It is, actually, rather troubling, even scary. People in elite circles somehow came to the conclusion that denouncing the Jewish community and its support for Israel is now becoming acceptable. Walt and Mersheimer came first, than former president Carter, now Clark - and we already have a new trend on our hands. A Jewish leader with whom I spoke yesterday asked me this most disquieting question: Is the ice thinner than one might have thought?

Politically, it is voices coming from the Democratic party, again, a nuance that the Republican Jewish Coalition could hardly miss. Yesterday, it released a statement [sic] "strongly condemned 'blatantly anti-semitic' remarks made by Retired General Wesley Clark in an interview with Arianna Huffington and urged the Democrat presidential aspirant to apologize… This is yet another sign that the veiled and not-so-veiled anti-Semitic sentiments that are rampant in the left-wing blogosphere are seeping into the 'mainstream' of Democrats' political discourse."

Gimme a break. When asked about U.S. military action against Iran, Clark correctly notes that the mainstream American Jewish community is "divided," but that the Israel Lobby's leaders ("New York money people") are united in favor. What is factually inaccurate about that statement?? Nothing. Everyone knows that Aipac has been promoting war with Iran for a terribly long time. If you don't believe me go look at the media coverage of their last national gathering. And do you really believe that Aipac is NOT trying to influence the White House & Congress on the issue of bombing Iran?

I wouldn't have said "NY money people" because Aipac's leadership is spread all over the country. It's an unfortunate and imprecise choice of words. But calling them "pro-Israel donors" would've worked just as well.

The Republican Jewish Coalition is a bunch of neocon hacks trawling for an issue. Clark's interview seems just as good a way to take it to the Dems as any. So they went on the warpath. And Rosner is their willing handmaiden. A non-issue, boys. As Bill Clinton used to say: "This dog won't hunt." But hey, you can't fault 'em for trying. They spent $1-million plus trying to dent Jewish support for Dems in the last election. What happened? Jewish support went UP.

Wes, DO NOT apologize. Hold your ground. You're precisely right. Much of the national Jewish leadership is sounding the trumpet for us to blow Iran's nukes to smithereens. But American Jews are by no means united behind such a position. Democrats need to oppose U.S. military action against Iran. If that means tangling with Aipac then so be it. Aipac should get out of the way on this issue and let the U.S. decide what is in its national interests. It should not be trying to tell U.S. leaders that what is in Israel's interest (and it is highly debatable whether such adventurism would be in Israel's interest) is also in the U.S. national interest.

Haaretz, known for its progressive analysis of the Israeli-Arab conflict, has some of the most acute, passionate, and profound columnists writing on this subject. It has had tremendous correspondents like Amos Elon covering the U.S. beat. Now it has Shmuel Rosner. It's as if CBS passed the national news anchor baton directly from Walter Cronkite to Charles Johnson. What an embarrassment.

Filed under Mideast Peace, Politics & Society

aipac supports attacking iran haaretz huffington post netanyahu lobbies u.s. leaders for iran attack shmuel rosner


Sins of omission

The true story behind the Ethiopian invasion of Somalia, the US bombardment of the country and the instalment of the pro-Western and secular transitional government has yet to be told, writes Gamal Nkrumah

Events in Somalia have been set in motion by the Ethiopian invasion of the sprawling Horn of Africa. It was patent that an Ethiopian invasion would lead to an instant and catastrophic conflagration of the Islamist military strongholds in Somalia. Ominously, the United States intervened militarily in Somalia for the first time since 1993. It was a humiliating debacle for the US in which the late Somali warlord Mohamed Farah Aideed masterminded America's most disastrous firefight loss since the Vietnam War -- code-named Black Hawk Down. Ironically, Aideed's son, Hussein, now interior minister of the Transitional Federal Government (TFG), welcomed American intervention with open arms. He is, after all, an American citizen.

In the Somali capital Mogadishu, the TFG of President Abdallah Youssef is widely regarded as a stooge of the Americans and their Ethiopian beneficiaries. President Youssef and his Prime Minister Ali Mohamed Gedi are widely seen as yes-men of Addis Ababa and Washington. Indeed, there is no way they could have triumphantly stormed Mogadishu without superior Ethiopian and American military might. Ethiopia, a country of 75 million people, has Africa's largest standing army. It is also an impressive battle-hardened force.

Thousands of Mogadishu residents demonstrated against the American air attack on southern Somalia which claimed the lives of hundreds of innocent Somalis. They also protested against the military presence of the Ethiopians in the Somali capital.

Public resentment is rife and Mogadishu, a former stronghold of the Council of Islamic Courts (CICs), is teetering on the brink of civil war. Already, the discredited and much loathed warlords have returned to the capital and their militiamen, notorious for their thievery and gangster-like bravado, are looting property and are engaged in indiscriminate killings.

Popular discontent with the TFG has reached a crescendo. Already Ethiopian and TFG troops have come under attack from unidentified gunmen, suspected of being sympathisers of the CICs.

Even the Americans acknowledge that the CICs had managed to run war-torn Somalia effectively. The Somalia Contact Group meeting in the Kenyan capital Nairobi was superseded by US airstrikes by the AC-130 gunships on the southern extremities of Somalia on Tuesday and Wednesday: the US bombardment of Hayo, Afmadow and Ras Kambona near the Kenyan border. The area is impenetrable equatorial and mangrove forests. The awesome firepower of the AC-130 with infrared and radar sensors that find and track targets are reported to have caused serious civilian casualties.

The US claims that it was after three suspected terrorists: Fazul Abdullah Mohamed -- a most wanted man in the US; Abu Talha Al-Sudani, and Saleh Ali Saleh Nabhan. These men are suspected of having taken part in the 1998 US Embassy bombings in Nairobi and Dar Es-Salam.

The Islamists were too stiff-necked to liberalise their regime or to admit the TFG to their confidence. Rather, they were making reconciliatory overtures while strengthening ties with militant Islamist movements the world over.

The hard fact is that the international community at large, Somalia's neighbours and the US are fearful of the ramifications of a strategically-located country under the hegemony of Islamist militants -- the CICs. The aim of the attack was to send a warning signal to the CICs' sympathisers. Ethiopian Prime Minister Meles Zennawi had long warned that the CICs worked in conjunction with Al-Qaeda and other international terrorist organisations.

"The [Ethiopian] government has attempted to explore all options for peace. Thus, it has met with the representative of the terrorist leadership of the United Islamic Courts (UICs) in Djibouti in an effort to convince them to evict anti-Ethiopian forces from areas under their control, to halt sheltering and smuggling them into Ethiopia and to renounce the war they declared against Ethiopia," Meles Zennawi explained.

"We do not have any intention or desire to interfere in Somali politics beyond support delivered within the framework of the AU. Emanating from our strong belief that it is the right of the Somali people alone to determine the political future of Somalia, our defense force will pull out from Somalia immediately upon successful completion of its mission," he stressed.

Is an Islamist-governed Somalia really something to worry about? "The [Somalia contact] group clearly felt it was important that there not be a security vacuum," said US Assistant Secretary of State for African Affairs Jendayi Frazer in Nairobi. She conceded that the CICs did an admirable job of administering the Somali capital Mogadishu and the other areas under its control. The UN Security Council authorised an African peacekeeping force to bolster the TFG -- resolution 1725 of December 2006.

Such advice gets short shrift from militant Islamists. Al-Qaeda's number two man Ayman El-Zawahri urged Islamist militants to launch attacks against Ethiopian troops.

Yemen's Foreign Minister Abu Bakr Al-Qirbi announced that Somali Islamist leaders were in neighbouring Yemen to speed up Somali peace talks. There are an estimated one million Somali refugees in Yemen and Kenya. And, Jendayi Frazer stressed that some form of cooperation with the CICs is essential for the smooth-running of Somalia.

Frazer didn't visit the Somali capital Mogadishu as scheduled for security reasons. She would have been the first US official to set foot in Somalia since the 1994 debacle when the US withdrew all its diplomats in the country. It is not as if the CICs has meandered so far off track. The TFG may not be able to govern, but it has acquired plenty of negative power.

The Islamists questioned the TFG's patriotism repeatedly, but they did evade the invading Ethiopian forces.

A war of manoeuver was in any case out of the question. The CICs were determined they would stand and fight on home ground. It is clear that the CICs will resort to guerilla warfare.

Yet amid all this hyperbole and scare-mongering, there is the real danger that Somalia will become like Afghanistan and Iraq -- countries occupied by foreign powers with a restive population where insurgencies abound. But for the moment at least, the Ethiopians and the Americans hold temporary sway.

Secular Ethiopia cannot deal with religiosity, and the Somalis' reluctance to comply with the TFG's mandate to disarm bodes ill. From the perspective of many Somalis the TFG's is a bad system just made worse.

The Islamist resistance had petered out and the heart went out of the Islamist warlords. Everyone thought that they would stand and fight on their home ground and not evade invading forces.

C a p t i o n : Protestors in Mogadishu throw stones at a public transport vehicle; the AC-130 gunship, an armed variant of the C-130 Hercules transport plane

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Who rules America?

James Petras

In the broadest and deepest sense, understanding how the US political system functions, the decisions of war and peace are taken, who gets what, how and why, requires that we address the question of ‘Who rules America?’
:: 01.11.2007


In tackling the question of ‘ruling’ one needs to clarify a great deal of misunderstandings, particularly the confusion between those who make governmental decisions and the socio-economic institutional parameters which define the interests to be served. ‘Ruling’ is exacting: it defines the ‘rules’ to be followed by the political and administrative decision-makers in formulating budgetary expenditures, taxes, labor and social legislation, trade policy, military and strategic questions of war and peace. The ‘rules’ are established, modified and adjusted according to the specific composition of the leading sectors of a ruling class (RC). Rules change with shifts in power within the ruling class. Shifts in power can reflect the internal dynamics of an economy or the changing position of economic sectors in the world economy, particularly the rise and decline of economic competitors.

The ‘rules’ imposed by one economic sector of the RC at a time of favorable conditions in the world economy, will be altered as new dominant economic sectors emerge and unfavorable external conditions weaken the former dominant economic sectors. As we shall describe below the relative and absolute decline of the US manufacturing sector is directly related to the rise of a multidimensional ‘financial sector’ and to the greater competitiveness of other manufacturing countries. The result is an accelerating process of liberalization of the economy favored by the ascending financial sectors. Liberalization in pursuit of unregulated flows of investments, buyouts, acquisitions and trade increases the financial sector’s profits, commissions, incomes and bonuses. Liberalization facilitates the financial sector’s acquisition of assets. The declining competitiveness of the older ruling class manufacturing sector dependent on statist protectionism and subsidies leads to ‘rear-guard’ policies, attempting to fashion an unwieldy policy of liberalization abroad and protectionism at home.

The answer to the question of who rules depends on specifying the historical moment and place on the world economy. The answer is complicated by the fact that shifts among ‘sectors’ of the ruling class involves a prolonged ‘transitional period’. During this period declining and ascending sectors may intermingle and the class members of declining sectors ‘convert’ to the rising sector. Hence while power between economic sectors may change, the leading class groupings may not lose out or decline. They merely shift their investments and adapt to the new and more lucrative opportunities created by the ascending sector.

For example, while US manufacturing sector has declined relative to ‘finance capital’, many of the major investment institutions have shifted to the new financial ‘growth sectors.’ Concomitantly, the converted sectors of the ruling class will shift their policies toward greater liberalization and deregulation, thus severely weakening the rear-guard demands of the uncompetitive manufacturing sector. Equally important within the declining economic sectors of the RC, drastic structural changes may ensue, to regain profitable returns and retain influence and power. Foremost of these changes is relocation of production overseas to low wage, low tax, non-union locations, the introduction of IT technology designed to reduce labor costs and increase productivity, and diversification of economic activity to incorporate lucrative financial ‘services’.

For example General Electric has moved from manufacturing toward financial services, relocated labor intensive activity off-shore and computerized operations. Through these moves the distinction between ‘manufacturing’ and financial capital has been made obsolete in describing the ‘ruling class’.

To the degree that older manufacturing capitalists retain any economic and political weight in the RC, they have done so via sub-contracting overseas to Asia and Mexico (General Motors/Ford), invested in overseas plants to capture foreign markets, or have been converted in large part into commercial and importing operations (shoes, textiles, toys, electronics and computer chips).

Locally based manufacturers which remain in the RC are largely found among military contractors living off the largesse of state spending and depending on the political support of congressional and trade union officials, eager to secure employment for a shrinking manufacturing labor force.

During this transitional period of rapid and all-encompassing changes in the ruling class, enormous financial opportunities have opened up throughout the world. As a result of political tensions within the ‘governing class’, key policymakers are drawn directly from the most representative institutions of Wall Street. Key economic policies, especially those which are most relevant to the RC, tend to be overwhelmingly in the hands of tried and experienced top leaders from Wall Street.

Despite (or because of) the ascendancy of various sectors of financial capital in the RC, and their agreements on a host of ‘liberalizing’ economic policies, they are not homogeneous in all of their political outlooks, party affiliations, or their foreign policy outlook. Most of these political differences are questions of small matter – except on one issue where there is a major and growing rift, namely in the Middle East. A sector of the RC strongly aligned with the state of Israel supports a bellicose policy toward the Jewish state’s adversaries ( Iran , Syria , Hezbollah and Palestine ) as opposed to another sector of the RC favoring a diplomatic approach, directed toward securing closer ties with Arab and Persian elites. Given the highly militarized turn in US foreign policy (largely due to the ascendancy of neo-conservative ideologues, the strong influence of the Zionist Lobby, and the instability and failures of their policies in the Middle East and China ) the RC has pressed for and secured direct control over foreign economic policy.

The tensions and conflicts within the RC – especially between the Zioncons and the ‘free marketeers’ – have been papered over by the enormous economic benefits accruing to all sectors. All RC financial sectors have been enriched by White House and Congressional policies. All have benefited from the ascendancy of ‘liberalizing regimes’ throughout the world. They have reaped the gains of the expansionary phase of the international economy. While the entire ruling financial, real estate and trading sectors have been the main beneficiaries, it has been the financial groups, particularly the investment banks that have led the way and provide the political leadership.

Ascendancy of Financial Capital

‘Finance capital’ has many faces and cannot be understood without reference to specific sectors. Investment banks, pension funds, hedge funds, savings and loan banks, investment funds are only a few of the operative managers of a multi-trillion dollar economy. Moreover each of these sectors have specialized departments engaged in particular types of speculative-financial activity including commodity and currency, trading, consulting and managing acquisition and mergers. Despite a few exposés, court cases, fines and an occasional jailing, the financial sector writes its rules, controls its regulators and has secured license to speculate on everything, everywhere and all the time. They have created the framework or universe in which all other economic activities (manufacturing, retail sales and real estate) take place.

‘Finance capital’ is not an isolated sector and cannot be counterposed to the ‘productive economy’ except in the most marginal ‘local activity’. In large part finance capital interacts with and is the essential driving force in real estate speculation, agro-business, commodity production and manufacturing activity. To a large degree ‘market prices’ are as influenced by speculative intervention as they are by ‘supply and demand’. Equally important, the entire architecture of the ‘paper empire’ (the entire complex of inter-related financial investments) is ultimately dependent on the production of goods and services. The structure of power and wealth takes the form of an inverted triangle in which a vast army of workers, peasants and salary employees produce value which becomes the basis for near and remote, simple and exotic, lucrative and speculative financial instruments. The transfer of value from the productive activities of labor up through the ladder and branches of financial instruments is carried out through various vehicles: direct financial ownership of enterprises, credit, debt leveraging, buyouts and mergers. The tendency of ‘productive capitalists’ is to start-up an enterprise, innovate, exploit labor, capture markets and then ‘sell-out’ or go ‘public’ (stock offerings). The financial sector acts as combined intermediary, manager, proxy-purchaser and consultant, capturing substantial fees and expanding their economic empires and… preparing the way to higher levels of acquisitions and mergers… ‘Finance capital’ is the midwife of the concentration and centralization of wealth and capital as well as the direct owner of the means of production and distribution. From exacting a larger and larger ‘tribute’ or ‘rent’ (commission or fee) on each large-scale capital transaction, ‘finance capital’ has moved toward penetrating and controlling an enormous array of economic activities, transferring capital across national and sectoral boundaries, extracting profits and dumping shares according to the business, product and profit cycle.

Within the ruling class, the financial elite is the most parasitical component and exceeds the corporate bosses (CEOs) and most entrepreneurs in wealth and annual payments. It falls short of the annual income and assets of the super-rich entrepreneurs like William Gates and Michael Dell.

The financial ruling class is internally stratified into three sub-groups: at the top are big private equity bankers and hedge-fund managers, followed by the Wall Street chief executives, who in turn are above the next rung of senior associate or vice-presidents of a big private equity funds who is followed by their counterparts at Wall Street’s public equity funds. Top hedge fund managers and executive have made $1 billion dollars or more a year – several times what the CEO’s make at publicly traded investment houses. For example in 2006 Lloyd Blankfein, CEO of Goldman Sachs, was paid $53.4 million, while Dan Ochs, executive of the hedge fund Och-Ziff Capital paid himself $220 million dollars. That same year the Morgan Stanley CEO received $40 million dollars, while the chief executive of the hedge fund Citadel was paid over $300 million dollars.

While the ‘hedge fund’ speculators receive the highest annual salaries, the private equity executives can equal their hundreds of millions payments through deal fees and special dividend payments from portfolio companies. This was especially true in 2006 when buyouts reached a record $710 billion dollars. The big bucks for the private equity bosses comes from the accumulating stake executives have in portfolio companies. They typically skim 20% of profits, which are realized when a group sells or lists a portfolio company. At that time, the payday runs into the hundreds of millions of dollars.

The subset of the financial ruling class is the ‘junior bankers’ of private equity firms who take about $500,000 a year. At the bottom rung are the ‘junior bankers’ of publicly traded investment houses (‘Wall Street’) who average $350,000 a year. The financial ruling class is made up of these multi-billionaire elites from the hedge funds, private and public equity bankers and their associates in big prestigious corporate legal and accounting firms. They in turn are linked to the judicial and regulatory authorities, through political appointments and contributions, and by their central position in the national economy.

Within the financial ruling class, political leadership does not usually come from the richest hedge fund speculators, even less among the ‘junior bankers’. Political leaders come from the public and private equity banks, namely Wall Street - especially Goldman Sachs, Blackstone, the Carlyle Group and others. They organize and fund both major parties and their electoral campaigns. They pressure, negotiate and draw up the most comprehensive and favorable legislation on global strategies (liberalization and deregulation) and sectoral policies (reductions in taxes, government pressure on countries like China to ‘open’ their financial services to foreign penetration and so on). They pressure the government to ‘bailout’ bankrupt and failed speculative firms and to balance the budget by lowering social expenditures instead of raising taxes on speculative ‘windfall’ profits.

The Dance of the Billions: Finance Capital Reaps the Profits from their Power

Speculators of the world had a spectacular year in 2006 as global equities hit double digit gains in the US , European and Asian markets. China, Brazil, Russia and India were centers of speculative profiteering as the China FTSE index rose 94%, Russia’s stock market rose 60%, Brazil’s Bovespa was up 32.9% and India’s Sensex climbed 46.7%. In large part the stock markets rose because of cheap credit (to speculate), strong liquidity (huge financial, petrol and commodity profits and rents) and so-called ‘reforms’ which gave foreign investors greater access to markets in China, India and Brazil. The biggest profits in stock market speculation occurred under putative ‘center-left’ regimes ( Brazil and India ) and ‘Communist’ China , which have realigned themselves with the most retrograde and ‘leading’ sectors of their financial ruling class.

Russia ’s booming stock market reflects a different process involving the re-nationalization of gas and petroleum sectors, at the expense of the gangster-oligarchs of the Yeltsin era and the ‘give-away’ contracts to European/US oil and gas companies (Shell, Texaco). As a result huge windfall profits have been re-cycled internally among the new Putin era millionaires who have been engaged in conspicuous consumption, speculation and investment in joint ventures with foreign manufacturers in transport and energy related industries.

The shift toward foreign-controlled speculative capital emerging in China , India and Brazil as opposed to ‘national and state’ funded investment in Russia accounts for the irrational and vitriolic hostility exhibited by the western financial press to President Putin.

One of the major sources of profit-making is in the area of ‘mergers and acquisitions’ (M&A) – the buying and selling of multinational conglomerates, with $3,900 billion in deals for 2006. Investment banks took $18.8 billion dollars in ‘fees’ leading to multi-million dollar bonuses for ‘M&A’ bankers. M&A, hostile or benign, are largely speculative activity fueled by cheap debt and leading to the greater concentration of ownership and profits. Today it is said 2% of the households own 80% of the world’s assets. Within this small elite, a fraction embedded in financial capital owns and controls the bulk of the world’s assets and organizes and facilitates further concentration of conglomerates. The value of speculative M&A on a world scale is 16% higher than at the height of the ‘DOTCOM’ speculative boom in 2000. In the US alone over $400 billion dollars worth of private equity deals were struck in 2005, three times higher than the previous year.

To understand who are the leading members of the financial ruling class one needs only to look at the ten leading private equity banks and the value and number of M&A deals in which they were engaged:

Private equity rankings by M&A deals (Year to Dec 20 2006)

US ** Value $bn ** Number

Blackstone ** 85.3 ** 12

Texas Pacific ** 81.9 ** 11

Bain Capital Partners ** 74.7 ** 9

Thomas H Lee Partners ** 53.4 ** 6

Goldman Sachs ** 51.2 ** 5

Carlyle ** 50.0 ** 14

Apollo Management ** 44.9 ** 7

Kohlberg Kravis Roberts ** 44.5 ** 3

Merrill Lynch ** 35.9 ** 3

Cerberus Capital Management ** 28.6 ** 4

Industry Total ** 402.6 ** 1,157

( Financial Times 12/27/2006 p 13 - FT montage:Bob Haslett

The crucial fact is that these private equity banks are involved in every sector of the economy, in every region of the world economy and increasingly speculate in the conglomerates which are acquired.

In the era of the ascendancy of speculative finance capital it is not surprising that the three leading investment banks, Goldman Sachs, Lehman Brothers and Bear Stearns reported record annual profits, based on their expansion in Europe and Asia , and their transfer of profits from manufacturing and services to the financial sector. For the year 2006, Goldman Sachs (GS) recorded the most profitable year ever for a Wall Street investment bank, on the basis of big (speculative) ‘trading gains and lucrative investment in the world’s worst sweatshops in Asia. GS reported a 69% jump in annual earnings to $9.54 billion dollars. Lehman Brothers (LB) and Bear Stearns (BS) equity banks also recorded record earnings. LB earned a record $4billion for the year. SB earned a record $2.1 billion dollars. For the year Lehman set aside about $334,000 dollars per junior banker, while top speculators and bankers earned a big multiple of that amount.

For the year 2006 investment banking revenue reached nearly $38 billion dollars compared to $25 billion dollars in 2004 – an increase of 34% ( Financial Times Dec. 13, 2006 p.15).

The dominance of finance capital has been nurtured by the speculative activity of the controllers and directors of state-owned companies. ‘State’ ownership is an ambiguous term since it raises a further more precise question: ‘Who owns the state’? In the Middle East there are seven state-owned oil and gas companies. In six of those companies the principal beneficiaries are a small ruling elite. They recycle their revenues and profits through US and EU investment banks largely into bonds, real estate and other speculative financial instruments ( FT Dec 15, 2006 p.11). State ownership and speculative capital, in the context of closed ‘Gulf-State’ type of ruling classes, are complementary, not contradictory, activities. The ruling regime in Dubai converts oil rents into building a regional financial center. Many Jewish-American-led Wall Street investment banks cohabitate with new Islamic-based investment houses, both reaping speculative returns.

Much of the investment funds now in the hands of US investment banks, hedge funds and other sectors of the financial ruling class originated in profits extracted from workers in the manufacturing and service sector. Two inter-related processes led to the growth and dominance of finance capital: the transfer of capital and profits from the ‘productive’ to the financial and speculative sector and the transfer of finance capital overseas, in the form of take-over of foreign assets now equivalent of around 80% of the US GDP. The roots of finance capital are embedded in three types of intensified exploitation: 1) of labor (via extended hours, transfer of pension and health costs from capital to labor, frozen minimum wage, stagnant and declining real wages and salaries); 2) of manufacturing profits (through higher rents, inter-sectoral transfers to financial instruments, interest payments and fees and commissions for mergers and acquisitions); and 3) via state fiscal policies by lowering capital gains taxes, increasing tax write-offs and tax incentives for overseas investments and imposing regressive local, state and federal taxes.

The result is increasing inequality between, on the one hand, senior and junior bankers, public, private equity, investment and hedge fund directors, and their entourage of lawyers, accountants and, on the other hand, wage and salaried workers. Income ratios range between 400 to 1 and 1,000 to 1, between the ruling class and median wage and salary workers is the norm.

Crisis of the Working and Middle Class – (Begin to Worry the Ruling Class)

Living standards for the working and middle class and the urban poor have declined substantially over the past thirty years (1978-2006) to a point where one can point to a burgeoning crises. While real hourly wages in constant 2005 dollars have stagnated, health, pension, energy and educational costs (increasingly borne by wage and salary workers) have skyrocketed. If extensions in work time and intensification of work place production (increases in productivity) are included in the equation, it is clear that living (including working) conditions have declined sharply. Even the financial press can write articles entitled: “Why Ordinary Americans have Missed Out on the Benefits of Growth” ( FT November 2, 2006 p.11).

Financial and investment banks are in charge of advising and directing the ‘restructuring’ of enterprises for mergers and acquisitions by downsizing, outsourcing, give-backs and other cost-cutting measures. This has led to downward mobility for the wage and salaried workers who retain their jobs even as their tenure is more precarious. In other words, the greater the salaries, bonuses, profits and rents for the financial ruling class engaged in ‘restructuring’ for M&As, the greater the decline in living standards for the working and middle class.

One measure of the enormous influence of the financial ruling class in heightening the exploitation of labor is found in the enormous disparity between productivity and wages. Between 2000 and 2005, the US economy grew 12%, and productivity (measured by output per hour worked in the business sector) rose 17% while hourly wages rose only 3%. Real family income fell during the same period ( FT November 2, 2006 p.11). According to a poll in the fall of November 2006, three quarters of Americans say they are either worse off or no better off than they were six years ago ( FT November 3, 2006 p.13).

The impact of the policies of the financial ruling class on both the manufacturing and service sectors transcends their profit skimming, credit leverage on business operations and management practices. It embraces the entire architecture of the income, investment and class structure. The growth of vast inequalities between the yearly payments of the financial ruling class and the medium salary of workers has reached unprecedented levels. The financial elite receives something in the range of a ratio of 500 up to 1000 times that of an average worker, depending on how narrowly or broadly we conceive of the financial ruling class.

Members of the financial ruling class have noted these vast and growing inequalities and express some concern over their possible social and political repercussions. According to the Financial Times (December 21, 2006), billionaire Stephen Schwartzman, CEO of the private equity group Blackstone warned “that the widening gap between Wall Street’s lavish pay packages and middle America’s stagnating wages risks causing a political and social backlash against the US’s ‘New Rich’”. Treasury Secretary and former CEO of Goldman Sachs, Hank Paulson admitted that median wage stagnation was a problem and that amidst “strong economic expansion many Americans simply are not feeling (sic!) the benefits” ( FT November 2, 2006 p. 11).

Ben Bernanke, Chairman of the Federal Reserve Bank testified before the Senate that “inequality is potentially a concern for the US economy…to the extent that incomes and wealth are spreading apart. I think that is not a good trend” (Ibid). In 2005 the proportion of national income to GDP going to profits, rents and other non-wage and salary sources is at record levels – 43%. Inequality in the distribution of national income in the US is the worst in the entire developed capitalist world. Moreover studies of time series data reveal that in the US inequality increased far greater and intergenerational social mobility was far more difficult in the US than any country in Western Europe . The growth of monstrous and rigid class inequalities reflects the narrow social base of an economy dominated by finance capital, its ingrown intergenerational linkages and the exorbitant entry fees ($50,000 per annum tuition with room and board) to elite private universities and post-graduate business schools. Equally important, the political power of finance capital and its ‘associated’ conglomerates wield uncontested political power in the US in comparison to any country in Europe . As a result the US government redistributes far less through the tax and social security, health and educational system than other countries. (ibid)

While some financial rulers express some anxiety about a ‘backlash’ from the deepening class divide, not a single one publicly supports any tax or other redistributive measures. Instead they call for increases in educational up-grading, job retraining and greater geographical mobility, though it is precisely among the educated middle class which is suffering salary stagnation.

Neither the Democratic Party majority in Congress, nor the Republican-controlled Executive offer any proposals to challenge the financial ruling class’s dominance nor are there any proposals to reverse its most retrograde policies causing the growing inequalities, wage stagnation and the increasing rigidity of the class structure. The reason has been reported in the Wall Street Journal and the Financial Times : An overwhelming chunk of the funds that Democrats raise nationally for election campaigns comes either from Wall Street financiers or Silicon Valley software entrepreneurs. ( FT November 3, 2006 p. 13). The Democratic congressional electoral campaign was tightly controlled by two of Wall Street’s favorite Democrats, Senator Charles ‘Israel First’ Schumer and Congressman Rahm Immanuel, who selectively funded candidates who were pro-war, pro-Wall Street and unconditionally pro-Israel. Democrats slated to head strategic Congressional committees like Zion-Lib Barney Frank have already announced they have ‘good working relations’ with Wall Street.

The Financial Ruling Class Also Governs

Ruling classes rule the economy, are at the top of the social structure and establish the parameters and rules within which the politicians operate. More often than not few actually engage directly in congressional politics, preferring to build economic empires while channeling money toward candidates prepared to do their bidding. Only when an apparent division occurs, especially within the Executive, between the interests of the ruling class and the policies of the regime will elite members of the ruling class intervene directly or take a senior executive position to ‘rectify’ policy.

Ruling Class Political Power: Paulson Takes Over Treasury

Several sharp divergences occurred during the Bush regime between finance capital and policymakers. These policies prejudiced or threatened to seriously damage important sectors of the financial ruling class. Theses include: 1) the aggressive militarist and protectionist policies pursued by senior Pentagon officials and ‘Zion-con’ Senators toward China; 2) the political veto by Congress of the sale of US port management to a Gulf State-owned company and of a US oil company to China; 3) the failure of the Bush regime to secure the privatization of social security and to weaken the regulatory measures introduced in the aftermath of the massive corporate (Enron and World Com) and Wall Street swindles and 4. the need to put a check on the uncontrolled growth of fiscal deficits resulting from the Middle East wars, the ballooning trade deficits and the weakening dollar.

The headlines of the financial press ( FT December 4, 2006 p.3) spell out finance capital’s direct intervention into key White House policy making:

“Goldman Sachs Top Alumni Wield Clout in White House”


“Former Bank Executives Hold Unprecedented Power within a US Administration”

US financial and manufacturing ruling classes have long influenced, advised and formulated policy for US Presidents. But given the stakes, the risks and the opportunities facing the financial ruling class, it has moved directly into key government posts. What is especially unprecedented is the dominant presence of members from one investment bank – Goldman Sachs. In late November 2006, Goldman Sachs (GS) senior executive William Dudley took over the Federal Reserve Bank of New York markets group. Hank Paulson, ex-CEO of GS is Treasury Secretary – explicitly anointed by President Bush as undisputed czar of all economic policies. Reuben Jeffrey, a former GS managing partner is the chief regulator of commodity futures and options trading, Joshua Bolten, White House Chief of Staff (he decides who Bush sees, when and for how long – in other words arranges Bush’s agenda) served as GS executive director. Robert Steel, former GS vice chairman, advises Paulson on domestic finance. Randall Fort, ex-GS director of global security, advises Secretary of State Rice. The ex-GS officials also dominate Bush’s working group on financial markets and financial crisis management. The investment bankers wielding state power will control the Bush regime’s biggest housing giants (Fannie Mae and Freddie Mac), tax policy, energy markets – all issues that directly affect the investment banks. In other words, the financial banks will be ‘regulated’ by their own executives. The degree of finance capital’s stranglehold on political power is evidenced by the total lack of criticism by either party. As one financial newspaper noted: “Neither Mr. Bush nor Goldman have been criticized by Democrats for holding too many powerful jobs in part because the investment bank (GS) also has deep ties to Democrats. Goldman represented the biggest single donor base to the Democrats ahead of this (2006) year’s mid-term election”. ( FT December 4, 2006)

Among Paulson’s first moves was to organize a top level delegation to China and a working group to work on forming a ‘strategic partnership’. Its task is to accelerate the ‘opening’ of China ’s financial markets to penetration and majority takeovers by US operated investment funds. This represents a potential multi-trillion dollar window of opportunity. By seizing the initiative Paulson hopes to undercut the anti-China cohort of neo-con, Pentagon and White House militarists, as well as backwater backers of Taiwanese independence and Congressional chauvinist demagogues like Senator Schumer who threaten to undermine lucrative US-Chinese economic relations.

To lower the fiscal deficit, Paulson proposes to ‘reform’ entitlements - reduce spending on Medicare and Medicaid and to work out a deal with the Democrats to privatize Social Security piecemeal.

Where finance capital has not been able to fashion a coherent economic strategy is with regard to Washington ’s Middle East wars. Because of the pull of the Zionist Lobby on many of leading lights of Wall Street – including its unofficial mouthpieces – the Wall Street Journal and the NY Times – Paulson has failed to formulate a strategy. He sis not even pay lip service to the Baker Iraq Study Group report’s proposal to gradually draw down troops for fear of alienating some key senior executives of Goldman Sachs, Stern, Lehman Brothers et al who follow the ‘Israel First’ line. As a result, Paulson has to work around the Lobby by focusing on dealing with the Gulf city-state monarchies and Saudi Arabia in order to avoid another disastrous repetition of the Dubai Port management sale. Paulson above all wants to avoid Zionist political interference with the two way flow of finance capital between the petrol-financial-banking complexes in the Gulf States and Wall Street. He wants to facilitate US finance capital’s access to the large dollar surpluses in the region. It is not surprising that the Israeli regime has accommodated their wealthy and influential financial backers on Wall Street by drawing a distinction between ‘moderate’ ( Gulf States ) with whom they claim common interests and ‘Islamic extremists’. Israeli Prime Minister Olmert has directed his zealots in the US-Jewish Lobby to take heed of the refinements in the Party Line in dealing with US-Arab relations.

Nevertheless with all its concentrated political power and its enormous wealth and economic leverage over the economy, Wall Street cannot control or avoid serious economic vulnerabilities or possible catastrophic military-political events.

The Future of the Financial Ruling Class

What is abundantly clear is that one of the main threats to world markets – and the health of the financial ruling class – is an Israeli military attack on Iran . This will extend warfare throughout Asia and the Islamic world, drive energy prices beyond levels heretofore known, cause a major recession and likely a crash in financial markets. But as in the case of the relationships between Israel and the US , the Zionist Lobby calls the shots and its Wall Street acolytes acquiesce. As matters now stand, the Jewish Lobby supports the escalation of the Iraq war and the savaging of Palestine , Somalia and Afghanistan . It has neutralized the biggest and most concerted effort by big name centrist political figures to alter White House policy. Baker, Carter, former military commanders of US forces in Iraq have been savaged by the Zionist ideologues. Under their influence the White House is putting into practice the war strategy presented by the ‘American’ Enterprise Institute (a Zioncon thinktank). As a result parallel to Bush’s appointment of Paulson and Wall Streeters to run imperial economic policy, he has appointed an entire new pro-war civilian military-security apparatus to escalate and extend the Middle East wars to Africa ( Somalia ) and Latin America ( Venezuela ).

Sooner or later a break between Wall Street and the militarists will occur. The additional costs of an escalating wars, the continual ballooning debt payments, huge imbalances in the balance of payments and decreasing inflows of capital as multi-national repatriate profits and overseas central banks diversify their currency reserves will force the issue. The enormous and growing inequalities, the massive concentration of wealth and capital at a time of declining living standards and stagnant income for the vast majority, gives the financial ruling class little political capital or credibility if and when an economic and financial crisis breaks.

With foreign investors owning 47% of all marketable US Treasury bonds in 2006 compared to 33% in 2001 and foreign holdings of US corporate debt up to 30% today, from 23% just 5 years ago, a rapid sell-off would totally destabilize US financial markets and the economic system as well as the world economy. A rapid sell-off of dollars with catastrophic consequences cannot be ruled out if US-Zionist militarism continues to run amuck, creating conditions of extended and prolonged warfare.

The paradox is that some of the most wealthy and powerful beneficiaries of the ascendancy of finance capital are precisely the same class of people who are financing their own self-destruction. While cheap finance fueling multi-billion dollar mergers, acquisitions, commissions and executive payoffs, heightened militarism operates on a budget plagued by tax reductions, exemptions and evasions for the financial ruling class and ever greater squeezing of the overburdened wage and salary classes. Something has to break the cohabitation between ruling class financiers and political militarists. They are running in opposite directions. One is investing capital abroad and the other spending borrowed funds at home. For the moment there are no signs of any serious clashes at the top, and in the middle and working classes there are no signs of any political break with the two Wall Street parties or any challenge to the militarist-Zionist stranglehold on Congress. Likely it will take a catastrophe, like a White House-back Israeli nuclear attack on Iran to detonate the kind of crisis which will provoke a deep and widespread popular backlash of all things military, financial and made in Israel.

January 2007

A state with temporary borders would spell the end of the Palestinian cause and rights

Once bitten

Mustafa Barghouti

Every now and then it is useful to take a closer look at the nature of the ongoing struggle in Palestine, for it is easy to miss the forest for the trees. The general idea is simple. The Palestinians are fighting for a fully independent state on all the land occupied in 1967, including Jerusalem, and demanding recognition of the rights of Palestinian refugees. Meanwhile, Israel, which wants to create a system of apartheid and domination, is trying to get the Palestinians to accept a state with temporary borders, minus Jerusalem and other areas, and minus independence. Israel's recent decision to build a new settlement in the Jordan Valley is a case in point.

Shall we have a comprehensive and final solution to the conflict, or a temporary and interim one similar to that of the Oslo Accords? This is the big question facing the Palestinians today. A long-term transitional deal is what Israel wants. The Israelis want to force the Palestinians to give up large segments of the West Bank, including Jerusalem, and abandon refugee rights as part of an interim solution. But such a solution is likely to be permanent, not temporary.

Also, Israel wants the Palestinian Authority to remain ineffective and shorn of sovereignty. It wants the authority to act as Israel's bodyguard while Israel maintains all economic, political and security power.

Israel is pushing for an interim solution because it doesn't want the Palestinians to benefit from opportunities the US debacle in Iraq, Afghanistan, and the rest of the Middle East has created. With the Baker-Hamilton report calling for a solution to the Palestinian problem and with international community increasingly critical of Israel's policies, the tide is turning. Who would have imagined that a former US president, Jimmy Carter, would conclude that apartheid is worse in Palestine than it ever was in South Africa? The pressure on Israel is mounting, as is evident in the Spanish-French-Italian call for an international conference and a final settlement of the conflict. Europe wants a lasting solution to the Palestinian issue, and Israel -- fully cognizant -- is buying time.

Israel is trying to weaken the drive for genuine peace in the Middle East. In particular, it is trying to stop US officials from altering their policy in a way that could be beneficial to the Palestinians. And the Israelis are yet again using the Palestinians to avoid the consequences of a just and comprehensive settlement to the 40-year-old conflict.

Here is what Israel is doing. First, Israel is trying to portray the Palestinian scene as part of a battle between good and evil, a battle between those who belong to the so-called "Axis of Evil" and those described as moderates.

Second, Israel is trying to portray the conflict between Fatah and Hamas as a power struggle over who controls the occupied territories. The debate has thus been shifted to the nature and composition of government and to the terms under which Israel and other international parties would approve of the Palestinian government. This mustn't go on. The Palestinians need a unified national command, one that is capable of managing the conflict and breaking the siege.

Third, Israel is trying to get Fatah and Hamas to haggle, through international brokers, over partial and interim solutions. This also must stop. Fatah and Hamas should discuss their differences over the final peace settlement rather than waste their time on who is to negotiate a partial deal. It is essential for all Palestinian parties to denounce any partial deals and never accept a state with temporary borders.

The Palestinians need a unified position and strategy. They need a unified command, something that has been missing for almost three decades now. The last thing the Palestinians need is for domestic rivalries to distract them from managing the conflict. Let's keep in mind that political plurality can be a blessing or a curse. It would be a blessing if the Palestinians insist on a comprehensive solution. And it would be a curse if divisions weaken our negotiating position.

We need a government of national unity and we need it soon. More importantly, we need a unified command that can organise and coordinate action among the three components of the Palestinian people: those living outside Palestine; those living in the occupied territories; and those living in Israel, who are currently 22 per cent of the Palestinian population.

Opinion polls suggest that a majority of Palestinians and Israelis want a comprehensive solution. But the so-called Israeli peace movement has become inactive since talks shifted to partial and interim solutions. Israel must come to the realisation that apartheid is a non-starter and that the only way ahead is that of comprehensive peace. We've tried Oslo once. Let's not try it again.

* The writer is a member of the Palestinian Legislative Council and secretary-general of the Palestinian National Initiative.

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Trapped at Guantanamo

"...they wait. When we last saw Saber in November, he was in his sixth month of solitary confinement. Since August, he has seen us, his legal team, twice and a psychiatrist on three brief occasions. For a few minutes each day, he sees the camp guards who bring his meals. He has had no other human contact. The glaring lights in his cell are on 24 hours a day, seven days a week. When we left the cell, we could hear Saber shouting -- brief, truncated cries. We could not understand what he was saying.

Five years of freedom can never be reclaimed. Congress should right the Guantanamo wrong now.

Melissa Hoffer is an attorney practicing in Boston.

Shut down Guantánamo - and make sure it never happens again

Torture, Suicide and Imprisonment: A Look Back at Five Years of Guantanamo
from the January 11, 2007 edition -

Detainees are still held in troubling conditions, and many may never be tried.

By Helena Cobban


Thursday marks the fifth anniversary of the day the US military flew the first of some 700 battlefield detainees from Afghanistan to Guantánamo. Some of those same men are among the 395 still held at Guantánamo today. None of the detainees has ever had anything approaching a fair trial. Only 10 have ever had formal charges laid against them. Many are reportedly held in near-total isolation, and over the years both camp staff and released detainees have reported highly abusive treatment at the camp.

Guantánamo is a stain on America's honor. Like the episodes of abuse at Abu Ghraib prison in Iraq, Guantánamo (rightly) affects the standing of the US around the world. Even President Bush recognizes the problem: He has expressed a desire eventually to shut Guantánamo down. He and Congress should work speedily together to achieve this goal.

Lives in limbo

But meanwhile, the US military has constructed additional "supermax" cell blocks there. It's true, plans are also under way to build courtrooms that may one day help reduce the number of detainees, though officials admit that only a small number of detainees will ever be tried there. And even these trials, held under the Military Commissions Act (MCA) that Congress passed last September, are the subject of court challenges that may take many months to resolve.

So the detainees' lives remain in limbo. They are still held in troubling conditions, unable to see a clear end to their situation and unable, for now, to see or challenge any of the US government's evidence against them.

This is a real problem for a nation that considers itself a nation of laws and in the past has worked hard to uphold the rule of law in the international arena.

One fundamental principle of the rule of law is that a government may deprive a person of his liberty only under conditions regulated either by its own national legal system or (in certain circumstances) under the international laws of war, primarily, the Geneva Conventions.

Under national legal systems, prisoners should normally be entitled to a timely and fair trial, at which they can see and challenge the evidence against them. Under the Geneva Conventions, combatants captured in war have no right to trial, but they must be kept in humane conditions and released to their home countries when the war ends.

After the US invaded Afghanistan in October 2001, it found itself holding thousands of men captured on or near the battlefield. The Bush administration declared that the "war on terror" it was fighting there was unlike all previous wars, and therefore these captives were not entitled to Geneva protections. In Iraq in 2003, by contrast, the administration said the Geneva Conventions did apply.

The men the US detained in Afghanistan fell into a legal black hole, and for many of them, the name of that black hole has been Guantánamo. Administration lawyers argued for several years that US jurisdiction did not apply there. Last June, the Supreme Court ruled that it does, but it also ruled that the detainees don't have all the rights of US citizens.

When Congress passed the MCA last September, it tried to define what rights the detainees have and what kind of a trial they're entitled to.

However, government lawyers say they're unwilling to disclose the evidence they have against many detainees in a courtroom. (This is why only a few detainees will be granted a trial.)

The US lawyers probably have some legitimate concerns about disclosing the sources of secret evidence. But it's also likely that they don't want to disclose the circumstances of the interrogations from which most of their alleged evidence was acquired.

Facing the moral challenge

The government's problems regarding Guantánamo remain unresolved. The MCA courts promise no speedy closing for the prison camp there. And the "war on terror" that has been used to justify those prisoners' detention without trial will probably never have the kind of clear end that - if they were regular prisoners of war - would allow their release and repatriation.

Guantánamo is also a major moral challenge for the American people. We need to find a way to close this camp of shame and shine a light on the abuses committed there so that they're never repeated.

The detainees against whom there is solid evidence should be tried, and if found guilty, incarcerated. Let's see and fully examine all the evidence. The rest should be released and given help for their rehabilitation after their years of dehumanizing detention.

Will the new Congress take up this task? I certainly hope so.

Helena Cobban is the author of "Amnesty after Atrocity? Healing Nations after Genocide and War Crimes."