Saturday, March 20, 2010

Congressman Grayson Demands Release of AIG Emails

AIG Credit Facility Trust

Trustee Peter A. Langerman

Trustee Chester B. Feldberg

Trustee Jill M. Considine

Arnold & Porter LLP

399 Park Avenue
New York, NY 10022

Dear Mr. Langerman, Mr. Feldberg and Ms. Considine,

I write to request that you turn over to this office, and the public, e-mails backed up on AIG’s servers, including internal accounting documents and financial models developed by the company in the last decade. The public owns AIG. We bought it, for an initial down payment of $182 billion. You are the representatives of the public, through your positions as the three trustees of the AIG Credit Facility Trust.

The public is unhappy with the purchase. In March, 2009, a poll found that 82% of the public wanted bonuses to AIG employees returned. This didn’t happen. We do not know who is responsible for the company’s collapse, or whether they are working now at other banks or for the Federal government. We do not know if they got bonuses, if they were committing fraud, whether there were kickbacks from counterparties, or if there was any significant restraining role played by the regulatory community. We cannot separate the bad decision-makers from innocent employees, because we simply do not know what went on. You can address this problem, by releasing to us and on the internet, with reasonable discretion, all or sustainably all of the emails and documents that describe the web of relationships and practices behind AIG’s failed business.

Last year, I asked former AIG CEO Ed Liddy to give me the names of the people who destroyed AIG and cost taxpayers tens of billions of dollars. He refused. I asked the Government Accountability Office (GAO) to look into the matter. The GAO wrote that it didn’t have the authority to do an audit. I requested that the Special Inspector General of TARP look into the problem. I was told that the problem is too complicated.

The ball is in your court. As experienced fraud investigators Bill Black, Eliot Spitzer, and Frank Portnoy wrote in December, 2009:

Once the documents are available for everyone to inspect, a thousand journalistic flowers can bloom, as reporters, victims and angry citizens have a chance to piece together the story. In past cases of financial fraud — from the complex swaps that Bankers Trust sold to Procter & Gamble in the early 1990s to the I.P.O. kickback schemes of the late 1990s to the fall of Enron — e-mail messages and internal documents became the central exhibits in our collective understanding of what happened, and why.

[Here is Black, Spitzer and Portnoy's letter.]

On Wall Street, winners can win, but losers must lose. This did not happen with AIG. AIG itself, AIG employees, and AIG counterparties were bailed out. It is beyond outrageous that this company, which taxpayers capitalized after Wall Street used it as a slush fund, hides nearly all relevant facts from its owners, the public. Should this information be released, it is likely that the value of AIG’s remaining businesses will be unchanged. In any event, the public and public markets will benefit dramatically from transparency, because reliable information is the cornerstone of effective markets.

I ask that you exercise prudent judgment as stewards of the public interest, and direct the release of all or substantially all emails and financial records into the public domain.


Alan Grayson

Member of Congress


NEW curbs on vitamin and mineral pills by Brussels are threatening to push hundreds of UK health food stores out of business with the loss of up to 4,000 jobs.

Campaigners say the EU Commission’s plans will hit hundreds of their best-selling supplements, including vitamins A, C, and D, folic acid, calcium and iron.

Many of these products could fall foul of changes to EU laws because their vitamin or mineral content would be illegally high, according to the Consumers For Health Choice campaign.


It warns that the loss of these key products would force up to 700 health food stores to close.

Roger Craddock, legal director of health food chain Holland & Barrett, which supports the campaign, said: “We do not believe this legislation is necessary in the UK, as our food supplements market is radically different from other EU member states.”

The EU is expected to make an announcement within weeks detailing its new permitted levels for vitamins and minerals in food supplements. Other products affected will be vitamins E, K, and B, magnesium and zinc.

Mr Craddock said: “The decision could actually encourage consumers to buy the products from an unregulated environment over the internet where they could be purchasing poor quality or even fake products.”

The CHC campaign, which has 11,000 UK members, says France and Germany are pushing the European Commission to legislate to allow only low-dose levels of vitamins and minerals to be used in food supplements. A spokesman for the group said: “The UK is one of only a few countries pressing for higher levels. We will simply be outvoted in the European decision-making process.”

David Adams, spokesman for the Health Food Manufacturers’ Association, said: “Our research suggests that this issue will have a major impact resulting in both store closures and job losses.”

Britons spend £396million a year on vitamin tablets and supplements and sales have remained strong despite the recession. One in three women takes some form of health food supplement, as does one in four men.

Iran: The Next Crisis

The United States has become well accustomed to imposing economic sanctions against any state that defies it. Such actions are taken without regard to how badly they affect the quality of life of the people in the sanctioned country. The cruel rationale in Washington is that, if people suffered the terrible consequences emanating from those sanctions, they would overthrow the existing government. When that did not happen, as in Iraq for instance, the administration of George W. Bush decided to topple the regime of Saddam Hussein through a military invasion.

The United States is manifesting a similar amount of eagerness about imposing economic sanctions on Iran, which has remained much more defiant than Saddam Hussein ever was in terms of challenging the America’s dominance of the Middle East. It is important to ask whether Iran will meet a similar fate as Iraq, perhaps not a direct military invasion, but other actions whose purpose would still be to bring about regime change. President Obama has already stated that his administration would consider aggressive sanctions on Iran.

Iran remains the last major state that consistently rejects any proposition of kowtowing to American diktat or its hegemony in the Middle East. It has accumulated ample clout in that region in the aftermath of the U.S. invasion of Iraq. The United States, either for propaganda reasons or merely in order to underscore the nature of Iran’s anti-Americanism, consistently harped on the growing Iranian influence in post-Saddam Iraq. Indeed, if the U.S. assertion of Iran’s role in the political turbulence in Iraq between 2005 and 2007 was true, it can be safely concluded that Iran played a crucial role in America’s decision to actively seek an exit strategy. After all, it was largely as a result of intense political instability emanating from the violent role played by the Iraqi insurgents and Islamists groups that forced Washington to calculate that it could not stay in Iraq for long. Iran had strong ties with a number of those insurgents. That was a coup de grace from the perspective of Iran’s interests in Iraq, because the neoconservatives – working as the brains of the Bush administration – had an elaborate plan to make the entire Middle East a part of pax-Americana.

Iran’s military and material support of Hezbollah was very crucial in that organization’s ability to withstand the punishing Israeli attack on Lebanon during the short war of July-August 2006. The resultant general perception in the Arab world was that Hezbollah won that round of the battle against the Jewish state. Iran’s strategic dominance in that region was emerging as a new phenomenon regarding which neither Washington nor Jerusalem could produce effective countermeasures. Consequently, U.S.-Iran ties became even more antagonistic than before.

A major strategic shift from the Bush administration to the Obama administration in the Middle East and South Asia is that, in terms of conducting military operations, the U.S. would rely on a multilateral approach. The military operations conducted under the auspices of NATO in Afghanistan emerged as the best multilateral vehicle. However, the constraining aspect of the role of NATO is that it cannot be used anywhere without the approval of the entire Alliance; and that approval is very hard to secure. That fact ties the hands of any future American president who would develop any notion of adventurism a la George W. Bush in Iraq. That reality also prevents the United States from taking any military action against Iran, even in the wake of its intransigence about abandoning its nuclear research program.

The preceding constraint might be a major reason why the United States would heavily rely on the use of covert operations. President Obama has become the most prolific user of such operations by regularly ordering drone attacks against Islamist groups in Pakistan, Yemen, and Somalia. One can only guess how many other covert operations involving U.S. Special Forces are being carried out presently in South Asia, the Horn of Africa, Yemen, and other Middle Eastern countries.

Because of an inordinate technological gap between the United States and the Islamist forces in the aforementioned countries, the use of covert operations has emerged as the most convenient weapon of the strong. As long as American soldiers are not returning home in body bags, U.S. public opinion remains highly supportive of such operations. That is why the United States is likely – if it hasn’t already been doing so – to use covert tactics in Iran in order to destabilize the Islamic Republic.

According to a report prepared in July 2008 by the muckraking journalist, Seymour Hersh, the United States secretly allocated up to $400 million to underwrite covert operations against the Islamic Republic. Such operations “involved ‘working with opposition groups and passing money.’ The Finding provided a whole new range of activities in southern Iran and in the areas, in the east, where Baluchi political opposition is strong.”

The chief problem that President Barack Obama faced when he first became president is that there is no proven record of diplomatic encounters between the United States and Iran since the days of President Jimmy Carter. Even Carter – one of the most ardent promoters of justice and constitutionalism in the Middle East and the most successful former president – did his best to oust the fledgling Islamic Republic in 1980, while he was still in office. All American presidents who followed him spent a lot time and capital in their attempts to overthrow the Islamic Republic, even by going to the extreme of cooperating with Saddam Hussein during his brutal aggression against Iran in 1981.

In the wake of Iran’s refusal to buckle under the pressure of the United States to abandon its nuclear research program, Obama could have made a courageous decision to abandon the covert operations that Bush had started. However, the United States’ heavy reliance on covert operations in Pakistan tells us that Obama envisions such operations as safe alternatives to any bold new measures, which still might not persuade Iran to cooperate with the United States. In the meantime, the hyperactive Israeli lobby has made sure that any actions other than imposition of harsh economic sanctions are unfailingly condemned as “appeasement” of the Ayatollahs.

It should also be noted that the Iranian leaders did nothing to make their own case in the court of the world’s public opinion when they seem to have fraudulently stolen the election from the reformist candidate, Hussein Moussavi, last June. In the aftermath of those elections, it was interesting to watch how adamant the anti-Iranian forces inside the U.S. Congress were in their insistence that the President strongly condemn the Iranian leaders for allegedly stealing the elections. One should contrast that eagerness with the deafening silence inside the U.S. government following the murder of the Hamas leader, Mahmoud al-Mabhouh, allegedly perpetrated by Mossad in Dubai.

Given the strategic environment that is marked with a high degree of hostilities and intense distrust on both sides, the chances of the resolution of the nuclear program-related crisis through peaceful means are slim, at best. The United States has even attempted to go to the extent of creating Arab endorsements for its harsh economic sanctions on Iran. The U.S. Secretary of Defense, Robert Gates, went to Riyadh asking the government to persuade China to agree to sanctions on Iran, which Saudi Arabia wisely rejected. However, Gates was not about to give up. He proceeded on the same mission to the UAE. His chances of gaining a somewhat favorable reception from that country are pretty decent, given its long-term tensed relations with Iran. But the UAE is not Saudi Arabia. Even its endorsement of U.S. sanctions on Iran would not sway any other major Arab state.

As the United States’ diplomatic choices regarding Iran narrow, Israeli pressure for military action against that country is likely to intensify. The question is whether or how long Obama is likely to withstand it. A lot depends on whether he becomes politically stronger as a result of a potential passage of the healthcare bill in the next few weeks.

At least for now, the government of Benyamin Netanyahu has been digging a diplomatic hole for itself by allegedly orchestrating the murder of the Hamas leader in Dubai. To further deteriorate its case, Israel, during a visit of the U.S. Vice President Joe Biden, announced the building of new housing projects in East Jerusalem. However, no one should underestimate the Israeli hubris concerning its strong support inside the U.S. Congress. The Jewish state has long understood the nature of its political support inside the U.S. and has assiduously worked through its tool, AIPAC, to solidify that support. Just based on that fact, chances are high that it would push President Obama hard to take military action against Iran. How wise is such an action likely to be from the viewpoint of American strategic interests in the Middle East? It would be very foolish, indeed. However, Israel has not been known to waste time thinking about what is best for America in the Middle East. Friends of Israel inside the United States incessantly, and without even giving it a second thought, confuse Israeli interests with American interests. So, the world should not rule out the high probability of U.S. military action against Iran in the coming months, which would create another hell for American strategic interests in that region.

China Drawing High-Tech Research From U.S.

For years, many of China's best and brightest left for the United States, where high-tech industry was more cutting-edge. But Mark R. Pinto is moving in the opposite direction.

Mr. Pinto is the first chief technology officer of a major American tech company to move to China. The company, Applied Materials (AMAT), is one of Silicon Valley's most prominent firms. It supplied equipment used to perfect the first computer chips. Today, it is the world's biggest supplier of the equipment used to make semiconductors, solar panels and flat-panel displays.

In addition to moving Mr. Pinto and his family to Beijing in January, Applied Materials, whose headquarters are in Santa Clara, Calif., has just built its newest and largest research labs here. Last week, it even held its annual shareholders' meeting in Xi'an.

It is hardly alone. Companies -- and their engineers -- are being drawn here more and more as China develops a high-tech economy that increasingly competes directly with the United States.

A few American companies are even making deals with Chinese companies to license Chinese technology.

The Chinese market is surging for electricity, cars and much more, and companies are concluding that their researchers need to be close to factories and consumers alike. Applied Materials set up its latest solar research labs here after estimating that China would be producing two-thirds of the world's solar panels by the end of this year.

"We're obviously not giving up on the U.S.," Mr. Pinto said. "China needs more electricity. It's as simple as that."

China has become the world's largest auto market, and General Motors has a large and growing auto research center in Shanghai.

The country is also the biggest market for desktop computers and has the most Internet users. Intel (INTC) has opened research labs in Beijing for semiconductors and server networks.

Not just drawn by China's markets, Western companies are also attracted to China's huge reservoirs of cheap, highly skilled engineers -- and the subsidies offered by many Chinese cities and regions, particularly for green energy companies.

Now, Mr. Pinto said, researchers from the United States and Europe have to be ready to move to China if they want to do cutting-edge work on solar manufacturing because the new Applied Materials complex here is the only research center that can fit an entire solar panel assembly line.

"If you really want to have an impact on this field, this is just such a tremendous laboratory," he said.

Xi'an -- a city about 600 miles southwest of Beijing known for the discovery nearby of 2,200-year-old terra cotta warriors -- has 47 universities and other institutions of higher learning, churning out engineers with master's degrees who can be hired for $730 a month.

On the other side of Xi'an from Applied Materials sits Thermal Power Research Institute, China's world-leading laboratory on cleaner coal. The company has just licensed its latest design to Future Fuels in the United States.

The American company plans to pay about $100 million to import from China a 130-foot-high maze of equipment that turns coal into a gas before burning it. This method reduces toxic pollution and makes it easier to capture and sequester gases like carbon dioxide under ground.

Future Fuels will ship the equipment to Pennsylvania and have Chinese engineers teach American workers how to assemble and operate it.

Small clean-energy companies are headed to China, too.

NatCore Technology of Red Bank, N.J., recently discovered a way to make solar panels much thinner, reducing the energy and toxic materials required to manufacture them. American companies did not even come look at the technology, so NatCore reached a deal with a consortium of Chinese companies to finish developing its invention and mass-produce it in Changsha, China.

"These other countries -- China, Taiwan, Brazil -- were all over us," said Chuck Provini, the company's chief executive. President Obama has often spoken about creating clean-energy jobs in the United States. But China has shown the political will to do so, said Mr. Pinto, 49, who is also Applied Materials' executive vice president for solar systems and flat-panel displays.

Creating our Own Credit: The Growing Movement for Publicly-Owned Banks

As the states’ budget and credit crises deepen, four states have initiated bills for state-owned banks, and candidates in seven states have included that solution in their platforms.

"Hundreds of job-creating projects are still on hold because Michigan businesses and entrepreneurs cannot get bank financing. We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs."

--Lansing Mayor Virg Bernero in the Detroit News, May 9, 2010 

Michigan has an unemployment rate of 14% and has been particularly hard hit by the nation’s economic downturn. Virg Bernero, mayor of the state’s capitol and a leading Democratic candidate for governor, proposes that the state relieve its economic ills by opening a state-owned bank. He says the bank could protect consumers by making low-interest loans to those most in need, including students and small businesses; and could help community banks by buying mortgages off their books and working with them to fund development projects. 

Bernero joins a growing list of candidates proposing this sensible solution to their states’ fiscal ills.  Local economies have collapsed because of the Wall Street credit freeze. To reinvigorate local business, Main Street needs a heavy infusion of credit; and publicly-owned banks could fill that need.

A February posting tracked candidates in five states running on a state-bank platform and one state with a bill pending (Massachusetts).  There are now three more bills on the rolls – in Washington State, Illinois and Michigan – and two more candidates on the list of proponents (joining Bernero is Gaelan Brown of Vermont). That brings the total to seven candidates in as many states (Florida, Oregon, Illinois, California, Washington State, Vermont, and Idaho), including three Democrats, two Greens, one Republican and one Independent.  

The Independent, Vermont’s Gaelan Brown, says on his website, "Washington DC has lost all moral authority over Vermont." He maintains that:

"Vermont should explore creating a State-owned bank that would work with private VT-based banks, to insulate VT from Wall Street corruption, and to increase investment capital for VT businesses, modeled after the very successful State-owned Bank of North Dakota."

The Bank of North Dakota, currently the nation’s only state-owned bank, is the model (with variations) for all the other proposals on the table. The Bank of North Dakota acts as a "bankers’ bank," including doing "participation loans" with other banks, allowing them to compete with larger banks. In a participation loan, the community bank originates the loan and takes responsibility for it, while the participating bank contributes funds and shares in the risk and profits. The Bank of North Dakota also makes low-interest loans to students, farmers and businesses; underwrites municipal bonds; and serves as the state’s "Mini Fed," providing liquidity and clearing checks for more than 100 banks around the state.

Three New Bills Pending for Publicly-owned Banks

Proposals for publicly-owned banks in other states have now gone beyond the campaign talk of political hopefuls to be drafted into several bills.

The Michigan Development Bank

The Michigan bill has gotten the most press. Introduced into the legislature earlier this month, it mirrors Bernero’s state bank idea. According to a press release issued by Senate Democrats on March 9, the bill’s aim is to "keep Michigan’s money in Michigan" by putting tax dollars into a proposed "Michigan Development Bank". The Bank would function like a traditional bank but would focus on economic development rather than profit. The press release quoted Senator Gretchen Whitmer (D-East Lansing):

"Investing in the state’s economy is the greatest way to create jobs, and this proposal will provide small businesses and entrepreneurs the funding they need to invest and grow. Our economy has stagnated due in part to stale thinking in Lansing, and this is just the type of innovative idea we need to create real economic change, using our own money to rebuild the state."

Senate Democratic Leader Mike Prusi (D-Ishpeming) stated:

"Michigan’s economy has been suffering, and working families in the state have had difficulty keeping up with credit card bills, college tuition prices and mortgage payments. Establishing the Michigan Development Bank will keep our hard-earned dollars right here in the state to invest in small business, create good-paying jobs to get people back to work, and help protect the middle class."

Also quoted was Senator Hansen Clarke (D-Detroit):

"With the current state of our economy, every dollar counts, yet we’re depositing our money in other people’s pockets by investing in big corporate banks without seeing much lending in return. It’s time for the Mitten State to lend itself a helping hand and establish a bank that is willing to invest in our small businesses and offer the financial support necessary to see job growth."

For startup capital, Senate Democrats suggested that Michigan could sell voter-approved bonds. With an initial capitalization of $150 million, they estimated the bank could lend up to $1 billion to small businesses, students and farmers, and offer low-interest credit cards to consumers. For deposits, the bank could follow the model of the Bank of North Dakota and use state revenues. So says Gene Taliercio, a Republican candidate for the state Senate, who has also put his weight behind the Michigan Development Bank. In a video clip on the website of the local Oakland Press, he says:

"We’re talking about restructuring the whole tax system, in the sense that the way its set up is that all taxes are going to go into this central bank. . . . Every dollar that the state of Michigan makes goes into this bank."

The State Bank of Washington

A similar bill, HB 3162, was introduced to the Washington State Legislature on February 1. The bill has generated so much interest that Steve Kirby, chair of the Financial Institutions and Insurance Committee, has scheduled a special work session on it. According to John Nichols in The Nation, the State Bank of Washington was formally proposed by House finance committee vice chair Bob Hasegawa, a Seattle Democrat. Nichols quotes Hasegawa:

"Imagine financing student aid, infrastructure, industry and community development. Imagine providing access to capital for small businesses, or otherwise leveraging our resources instead of having to do it with tax incentives. Imagine keeping our resources local instead of exporting them as profits, never to be seen again—that’s what this bank could do."

Leveraging rather than taxing is how private banks have been creating "credit" for centuries. States could do the same thing, cutting the middlemen out of the equation, saving significant sums in interest and fees and generating revenue for the state.

A nonpartisan analysis of the Washington bill prepared for the state legislature noted that the bank would be the depository for all state funds and the funds of state institutions, and that these deposits would be guaranteed by the state. The bank would be run by a board of 11 members and would be chaired by the State Treasurer. It would have the same rules and privileges as a private bank chartered in the state. To get the bank off the ground, voters would have to approve amendments to the state Constitution, since current law prohibits the state from lending credit and investing in private firms.

The Community Bank of Illinois

A third bill, introduced by Illinois Representative Mary Flowers, is on its way through the legislative process in Illinois. According to the Illinois General Assembly website, the Community Bank of Illinois Act would establish a state bank with the express purpose of boosting agriculture, commerce and industry. State funds and money held by penal, educational, and industrial institutions owned by the state would be deposited in the bank and would serve as reserves for loans. The bank could also serve as a clearinghouse for other banks, including handling domestic and foreign exchange; and it could buy property under Eminent Domain. All deposits would be guaranteed with the assets of the state. The Bank would be managed and controlled by the Department of Financial and Professional Regulation, with input from an advisory board representing private banking and public interests.

An amendment to the initial bill would enable the Community Bank of Illinois to make loans directly to the state’s General Revenue Fund, helping the state cope with its current budget challenges.

A Massachusetts-owned Bank

On March 12, the Associated Press reported that a jobs bill sponsored by Massachusetts Senate President Therese Murray also includes a call to study a Massachusetts-owned bank. She told a business group that a state-owned bank has worked in North Dakota, helping to insulate that state from the worst of the recession while also keeping its foreclosure rate down. A state-owned bank could spur job creation and free up lending to Massachusetts businesses.

Grandfather of the Concept: The Bank of North Dakota

All of these proposals take their inspiration from the Bank of North Dakota, which was founded in 1919 to resolve a credit crisis like that facing other states today. Last year, North Dakota had the largest budget surplus it had ever had; and it was the only state that was actually adding jobs when others were losing them. In March 2009, when 46 of 50 states were in fiscal crisis, North Dakota was in the enviable position of discussing tax cuts and looking for ways to spend its surplus.

By January 2010, according to a National Public Radio news clip, only two states could still meet their budgets – North Dakota and Montana. On February 8, however, the Montana paper the Missoulian reported that the Montana State Legislature’s chief revenue forecaster foresees a budget deficit by mid-2011, leaving North Dakota the only state still boasting a surplus.

North Dakota’s riches have been attributed to oil, but many states with oil are floundering. The sole truly distinguishing feature of North Dakota seems to be that it has managed to avoid the Wall Street credit freeze by owning and operating its own bank. According to the North Dakota Department of Commerce, the BND turned a profit in 2009 of $58.1 million; and this money goes into the state’s General Fund. North Dakota’s economy is ten times smaller than Michigan’s, suggesting that Michigan could generate $500 million per year in this way; and Washington State and Illinois present similarly inviting possibilities.

That defuses the objection raised in a March 15 editorial in The Detroit News, arguing that Michigan can ill afford the $150 million capital investment to start a bank. If operated like the BND, the Michigan Development Bank would soon be a net generator of state revenues. There are other possibilities besides a bond issue for providing the capital to start a bank, but that subject will be reserved for another article.

The BND’s 90-year track record of prudent and profitable lending defuses another objection to state-owned banks: that a public agency cannot be trusted to act responsibly in managing public funds. The Detroit News editorial concluded that Michigan should "leave banking to the bankers," but it is precisely because the bankers have destroyed the economy with their reckless lending practices that the public needs to step in. We need a "public option" in banking to set standards and keep private banks honest.

The True Potential of Publicly-owned Banks

North Dakota broke new ground nearly a century ago, but the true potential of publicly-owned banks remains to be explored. Nearly all of our money today is created by banks when they extend loans. (See the Chicago Federal Reserve’s "Modern Money Mechanics", which begins, "The actual process of money creation takes place primarily in banks.") We the people have given away our sovereign money-creating power to private, for-profit lending institutions, which have used it to siphon wealth from the productive economy. If we were to take that power back, we could generate the credit we need to underwrite a whole cornucopia of projects that we don’t even consider because we think we lack the "money."  We have the labor and we have the materials; we just lack the "liquidity" necessary to put them together to create products and services.

Money today is just a ticket, a receipt for work performed and goods delivered.  We can fund the work we need done by creating our own credit. The real promise of publicly-owned banks is not that they can bail out subprime borrowers but that they can jumpstart the economy by creating real wealth. They can provide the liquidity to put labor and materials together, allowing the economy to build and grow. Our private, profit-driven banking sector has been bleeding wealth from the rest of the economy. Public-interest banks can transfuse the economy with the credit it needs to flourish and be productive once again.

For more updates on the movement for publicly-owned banks, see To sign a petition for a citizen-owned bank in California, go to

A History of Israeli-MOSSAD False-Flags Against the USA and others

Israel, our only 'friend' in the ME, wouldn't attack us, would they?

OMG! Only a raving loonie and a certified 'anti-Semite' would accuse that 'peace' loving nation of Israel as being behind numerous false-flags, including 9/11 and preparing to set off another one to get Americans enraged so we'll "Shock and Awe" Tehran into oblivion.

Fool The World: Suspicious Novels and Authors: Prophets or Insiders?

The Last Jihad is the title of a "fictional" novel written by Joel Rosenberg
(well worth you time to click on this link). Mr. Rosenberg has been called the Christian Nostradamus but he is Jewish and an Israeli citizen. The Last Jihad was written long before 9/11 occurred, and opens with a hijacked airliner flying a kamikaze mission into an American city which leads into a war with Saddam Hussein over weapons of mass destruction. Then 9/11 happened, and then the war in Iraq happened --his fiction became reality... to a T. It is extremely interesting to note that Rosenberg was educated at the University of Tel Aviv and has previously worked for Israeli head of state Benjamin Netanyahu. Maybe Netanyahu provided Rosenberg with the plot for this book seeing as he also seems to have predicted 9-11 in his book written in 1995 called Terrorism: "How the West Can Win."
An article about the [Army School of Advanced Military Studies] report appears in the Washington Times on September 10, 2001. The report refers to Israel’s armed forces as a “500-pound gorilla in Israel” that is “well armed and trained” and is “known to disregard international law to accomplish mission.” Of the Mossad, the report says: “Wildcard. Ruthless and cunning. Has capability to target US forces and make it look like a Palestinian/Arab act.
EXPECT FALSE FLAG ATTACK TERROR ATTACK TO PRECEDE INVASION OF IRAN by Paul Craig Roberts, former editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury

April 1950: Anti-Jewish Bombings in Iraq Are Attributed to Israelis

A series of bombings targets Jews in Iraq. These attacks are later attributed to Israeli agents to allegedly panic Jews into emigrating to Israel, starting a long-standing controversy that continues unresolved. [HA'ARETZ, 6/4/2006]

July 1954: Israel Commits Bombing Attacks in Egypt, Tries to Blame Muslim Brotherhood

Bombs explode in British and American cultural centers and libraries, and in post offices in Alexandria and Cairo. The campaign ends when a bomb explodes prematurely in the pocket of an Israeli agent who is about to plant it in a British-owned cinema. The plan is to damage the relations between Egypt and the US and Britain by placing the blame for the bombings on the Muslim Brotherhood, an Egyptian Islamic militant group. An initial inquiry places blame on the Minister of Defense, Pinhas Lavon, but a subsequent inquiry authorized by Sharett finds that Lavon was set up using forged documents, and that the true author of the false-flag attack was none other than David Ben Gurion, the “father of the Israeli State. (see March 2005)” [NEW YORK TIMES, 12/11/1954; NEW YORK TIMES, 3/30/1975; HIRST, 2003, PP. 290-296] These events, which later become known as the Lavon Affair, will be documented in the diaries of Israeli Prime Minister Moshe Sharett, who did not learn of the plot until after it was completed. [ROKACH, 1986]

1967-2001: Israel Provides Support to Militant Islamic Groups in the West Bank and Gaza

1984-1989: Israeli Intelligence Officer Supplies Arms to Iran; Some Profits Allegedly Used to Fund False Flag Attacks

By his own account, Israeli intelligence officer Ari Ben-Menashe runs a covert Israeli arms network, primarily supplying weapons to the Islamic fundamentalist regime in Iran for use in the Iran-Iraq War. Huge profits are made. “At various times the fund reached peaks of more than $1 billion,” he later explains in his book, Profits of War. “At its height it stood at $1.8 billion.… Between 1984 and 1989 no less than $160 million was funneled to [Israeli Prime Minister Yitzhak] Shamir’s [Likud] faction.” He also says that the money helped finance the intelligence community’s “black” operations including “Israeli-controlled ‘Palestinian terrorists’ who would commit crimes in the name of the Palestinian revolution but were actually pulling them off, usually unwittingly, as part of the Israeli propaganda machine.” The Israeli government will later deny that Menashe had any association with their intelligence services. But faced with evidence, the government will change its story, alleging that he was only a low-level translator who had taken to freelancing arms deals. However, Ben-Menashe is able to produce strong evidence to support his version of events and his 1991 trial in New York will culminate in his acquittal on the grounds that the jury disbelieves the Israeli government’s denials. [BEN-MENASHE, 1992, PP. 120; CONSORTIUM NEWS, 1997
All of these Israeli terrorist ops and false-flags--and more--are available at History Commons
CONFESSIONS OF AN EX-MOSSAD AGENT: IN April of 1986, Israel tricks the USA into bombing Libya in "Operation Trojan"

"After the bombing of Libya, our friend Qadhafi is sure to stay out of the picture for some time. Iraq and Saddam Hussein are the next target. We're starting now to build him up as the big villain. It will take some time, but in the end, there's no doubt it'll work."
Yes, Israel's plan to build up Saddam Hussein into a boogieman worked wonders for that Zionist entity. And is still paying off for Israel, but not for the 1.3 million murdered Iraqis.
The Other Side of Deception: A Rogue Agent Exposes the Mossad's Secret Agenda

Particularly shocking to American readers is Ostrovsky's claim that a right-wing clique within Mossad decided, unbeknownst to then-Prime Minister Yitzhak Shamir, to assassinate President George Bush when the president was in Madrid at the end of October 1991 for the opening of Arab-Israeli peace talks. Evidence was to be manufactured implicating the Palestinians.

Three named Palestinian extremists were "taken" from Beirut to Israel's Negev desert and held incommunicado, according to Ostrovsky. Meanwhile Mossad-generated threats on the president's life, seemingly from Palestinians, were leaked. These were designed to throw suspicion on the organization of rogue Palestinian terrorist Abu Nidal. Names and descriptions of the three terrorists were leaked to Spanish police so that, if the plot was successful, blame would automatically fall on them.

Eventually, however, the assassination plot was called off... In a grisly conclusion to the story, however, the three Palestinian prisoners met the fate that had been decreed for them from the time the plot was hatched. In the Negev hideout where they were being held they were "terminated," to employ Ostrovsky's chilling word.
Did Israel also harvest their organs?

And was Robert Kennedy's alleged assassin, Sirhan Sirhan, another Israeli MOSSAD agent? If RFK had won the 1968 presidential election, you can damn well bet he would have taken a serious look into the murder of his brother, JFK and the thought of that made some very uneasy.
Operation Entebbe

According to a UK government file on the crisis, an unnamed contact within the Euro-Arab Parliamentary Association attempted to convince a British diplomat in Paris, shortly after the hijacking, that the Israeli Secret Services and the Popular Front for the Liberation of Palestine (PFLP), had acted together to seize the plane. According to this version, the Shin Bet helped design the operation to undermine the PLO's standing in France and its rapprochement with the USA.
The Israel Lobby and US Foreign Policy By John Mearsheimer and Stephen Walt
Finally, we should not forget that the Zionists used terrorism when they were in a similarly weak position and trying to obtain their own state. Between 1944 and 1947, several Zionist organizations used terrorist bombings to drive the British from Palestine, and took the lives of many innocent civilians along the way. Israeli terrorists also murdered U.N. mediator Count Folke Bernadotte in 1948, because they opposed his proposal to internationalize Jerusalem. Nor were the perpetrators of these acts isolated extremists: the leaders of the murder plot were eventually granted amnesty by the Israeli government and one of them was elected to the Knesset. Another terrorist leader, who approved the murder but was not tried, was future Prime Minister Yitzhak Shamir. Indeed, Shamir openly argued that "neither Jewish ethics nor Jewish tradition can disqualify terrorism as a means of combat." Rather, terrorism had "a great part to play … in our war against the occupier [Britain]." If the Palestinians' use of terrorism is morally reprehensible today, so was Israel's reliance upon it in the past, and thus one cannot justify U.S. support for Israel on the grounds that its past conduct was morally superior.
Anyone who says Israel would commit a false-flag to get the USA to "Shock and Awe" Iran into oblivion is just a raving anti-semite.' Right?

Right? And if using that worn-out canard doesn't have the desired effect, then scream that the one asking questions is a Holocaust™ denier!
When Israel Attacked the USS Liberty

A particularly damning report compiled by a CIA informant suggests that Israeli Defense minister Moshe Dayan personally ordered the attack and wanted it to proceed until the Liberty was sunk and all on board killed. A heavily redacted version of the report was released in 1977. It reads in part:

"[The source] said that Dayan personally ordered the attack on the ship and that one of his generals adamantly opposed the action and said, 'This is pure murder.' One of the admirals who was present also disapproved of the action, and it was he who ordered it stopped and not Dayan."

This amazing document generated little attention from the press and Dayan was never publicly questioned about his role in the attack.

The analyses by the intelligence agencies are collected in a 1967 investigation by the Defense Subcommittee on Appropriations. Two and half decades later that report remains classified. Why? A former committee staffer said: "So as not to embarrass Israel."

More proof has recently come to light from the Israeli side. A few years after Attack on the Liberty was originally published, Ennes got a call from Evan Toni, an Israeli pilot. Toni told Ennes that he had just read his book and wanted to tell him his story. Toni said that he was the pilot in the first Israeli Mirage fighter to reach the Liberty. He immediately recognized the ship to be a US Navy vessel. He radioed Israeli air command with this information and asked for instructions. Toni said he was ordered to "attack." He refused and flew back to the air base at Ashdod. When he arrived he was summarily arrested for disobeying orders.
Israel Urges US to Attack Iraq: "Sooner, Rather than Later" Sharon's advisor: Urges US to accelerate aggression on Iraq, says postponement bad for Israel January, 2003

Published November 5, 2002 in the Times/UK Attack Iran the Day Iraq War Ends, Demands Israel

The Military KNOWS Israel pulled off 911

"The White House knew within minutes of the USS Liberty attack, that the perpetrator was really Israel. On two separate occasions, the White House recalled aircraft rescue missions for the Liberty. On the last attempt, LBJ told Rear-Admiral Lawrence Geis of the Sixth Fleet, “I WILL NOT EMBARRASS OUR ALLY.” The Liberty was then left “dead in the water,” without any assistance for over 16 hours."
Are we still covering up for Israel and 9/11 so we "don't embarrass our ally?"

And what kind of 'ally' regularly kills Americans, spies on the USA, stealing our most secret military info, uses the LOBBY to corrupt Congress and determine who wins elections and uses its agents to loot tremendous amounts of money from Wall Street?

That kind of 'ally' we can do without.


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Latvia government collapses amid economic crisis

Latvia's coalition government has collapsed after failing to tackle a crippling economic crisis.

Banks had been braced for Latvia's government to collapse
Banks had been braced for Latvia's government to collapse

The People's Party, the largest group in a five-party coalition, walked out amid disputes over how to cope with the country's severe problems.

Unemployment has now hit 20 per cent and the economy contracted by 18 per cent last year.

The People's Party quit after its action plan failed to get the backing of Valdis Dombrovskis, the Latvian prime minister, who labelled it "populist".

Mr Dombrovskis warned the People's Party's departure could cause yet further economic instability.

"Any contradictions in the government are immediately reflected in the financial markets, and they directly affect the fiscal stability our country... a policy that is truly responsible for the country cannot be self-centred," he said.

But he said remained confident that an emergency IMF bail-out worth £6.7bn would remain unaffected by the political instability.

New Era, Mr Dombrovskis's party, confirmed it had already extended invitations to other parties to join a new coalition in an attempt on gain the majority in Latvia's 100-seat parliament.

It attempted to play down concerns about the prospect of a minority government at the helm of country in severe economic turmoil.

Laila Dimrote, a spokeswoman for New Era, said: "This is not a big deal. Latvia has had many minority governments in the past, and often this is the case prior to elections."

Wachovia pays $160 million to stop drugs probe

Wachovia has agreed to pay US prosecutors 160 million dollars for its failure to stop drug money being laundered to Mexican affiliates, the DEA said Wednesday.

The embattled bank admitted it failed to stop an estimated 110 million dollars from being sent from the US to Mexico by wire transfer that was used to buy cocaine-transporting aircraft.

The Drug Enforcement Administration said Wachovia-run foreign exchange houses in Mexico -- or casas de cambio (CDCs) -- were involved in the illicit trades between 2004 and 2007.

At least four aircraft bought with the cash were later seized along with large quantities of cocaine, by unnamed foreign governments.

The DEA said the bank had agreed to pay the fine to "resolve charges that it willfully failed to establish an anti-money laundering program."

"In light of Wachovia's willingness to acknowledge responsibility for its actions and omissions... the government has agreed to defer prosecution of the criminal charge in the information for 12 months," the agency said.

Wachovia, which was taken over by Wells Fargo in a crisis-inspired fire sale in 2008, was given five days to pay the fine.

Although Wachovia admitted that 110 million dollars could have been laundered, the DEA said "Wachovia failed to effectively monitor for potential money laundering activity more than 420 billion dollars in financial transactions with the CDCs."

Federal Reserve Must Disclose Bank Bailout Records

March 19 (Bloomberg) -- The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a
federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of
Lehman Brothers Holdings Inc. The ruling upholds a decision of a
lower-court judge, who in August ordered that the information be

The Fed had argued that it could withhold the information under an exemption that allows federal agencies to refuse disclosure of “trade secrets and commercial or financial
information obtained from a person and privileged or

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion.
“If the Board believes such an exemption would better serve the
national interest, it should ask Congress to amend the

The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a
rehearing or appeal to the full appeals court and eventually
petition the U.S. Supreme Court.

Right to Know

If today’s ruling is upheld or not appealed by the Fed, it will have to disclose the requested records.

“We’re obviously pleased with the court’s decision, which is an important affirmation of the public’s right to know what its government is up to,” said Thomas Golden, a partner at New
York-based Willkie Farr & Gallagher LLP and Bloomberg’s outside

“We are reviewing the decision and considering our options for reconsideration or appeal,” said Fed spokesman David Skidmore.

The court was asked to decide whether loan records are covered by FOIA. Historically, the type of government documents sought in the case has been protected from public disclosure
because they might reveal competitive trade secrets. The Board
of Governors of the Federal Reserve System had argued that
disclosure of the documents threatens to stigmatize borrowers
and cause them “severe and irreparable competitive injury.”

Payment Processors

The Clearing House Association, which processes payments among banks, joined the case and sided with the Fed. The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc,
Bank of America Corp., The Bank of New York Mellon Corp.,
Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan
Chase & Co
., US Bancorp and Wells Fargo & Co.

Oscar Suris, a spokesman for Wells Fargo, JPMorgan spokeswoman Jennifer Zuccarelli and RBS spokeswoman Linda Harper all declined to comment. Deutsche Bank spokesman Ronald Weichert
couldn’t immediately comment.

Bloomberg, majority-owned by New York Mayor Michael Bloomberg, sued after the Fed refused to name the firms it lent to or disclose loan amounts or assets used as collateral under
its lending programs. Most of the loans were made in response to
the deepest financial crisis since the Great Depression.

Lawyers for Bloomberg argued in court that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money.

Wall of Secrecy

“Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Golden wrote in court


Did The Exodus Really Happen?

Click this link ....

Synagogue Bomb Suspects: The Feds Put Us Up to It!

Onta Williams also known as Hamza is led by police officers from a federal building in New York, after being arrested by the FBI  on charges related to a plot to bomb targets in the Bronx.

Defense attorneys say an alleged plot to bomb New York synagogues was hatched and directed by a federal informant.

Lawyers for four men from Newburgh have filed a motion to dismiss the terror indictment against them.

They said the informant badgered the defendants until they got involved in the plot.

They said the informant chose the targets, supplied fake bombs for the synagogues and a fake missile to shoot down planes. The motion said he also offered to pay the defendants, who attorneys alleged weren't inclined toward any crime until the informant began recruiting them.

Caught on Tape: Terror Plot Suspects Arrested

Caught on Tape: Terror Plot Suspects Arrested

Caught on Tape: Terror Plot Suspects Arrested

"The government well knew that their case had been a government-inspired creation from day one and that the defendants had not been independently seeking weapons or targets," the motion said.

Ffederal court spokesman Herb Hadad said the government would file its response next month.

The four men, who were arrested last May, face up to life in prison if convicted. They have been previously identified as James Cromitie, 55, David Williams, 28, Onta Williams, 32, and Laguerre Payen, 27, all of Newburgh in upstate New York, where authorities were conducting raids at their homes, sources said.

Authorities have said they had the plotters under surveillance since June of 2008 and there was "no chance" the alleged scheme could succeed. They credited the work of a long time informant with keeping tabs on the group.

The FBI has said the Muslim suspects were angry and full of hate for America.

Read the full complaint

According to the criminal complaint, Cromitie said "I hate those f-ing Jewish bastards." He bragged that it would be a "piece of cake" to bomb a Jewish Center in Riverdale, according to the complaint.

He said his father lives in Afghanistan and he was upset about U.S. military presence there.

"The fact that this type of hatred exists means that we all have to be vigilant all of the time," city councilman Jeffrey Dinowitz said Thursday.

Cromitie was the first to approach the informant, authorities said. He told the informant he has ties to the terrorist group Jaish-e-Mohammad. Authorities said Cromitie had 27 past arrests and had recently been working at a nation-wide discount retailer, authorities said.

Several of the suspects have previously been arrested on drug charges and may have converted to Islam in prison, authorities said.

The four men allegedly would meet in a safe house in Newburgh, which authorities said they had bugged with audio and video equipment.

The suspects said they wanted to get their hands on stinger missiles to shoot down planes at the nearby Air National Guard Base at Stewart Airport, according to a criminal complaint unsealed late Wednesday. The suspects also received what they believed were two stinger missiles which they intended to use to shoot down military planes, the complaint said. They also bought cell phones to allegedly use in the plot.

Officials said they moved in when they did so the alleged plot could not progress any further.

In a separate motion, defense attorneys demanded more information on inducements that the informant may have offered the defendants.

The dismissal motion identified the government's agent as Shaheed Hussain, a "professional informant" for the FBI. The defense claimed he was directed to visit suburban mosques, find members with anti-American leanings and recruit them to join a fake terror plot supposedly funded by a Pakistan-based group.

He suggested there could be as much as $250,000 available and the government provided him with a BMW, a Hummer and other cars to make him appear well-funded, the defense filings said.

The defense alleged that Hussain tried to incite the defendants by blaming Jews for the world's evil and telling them that attacks against non-Muslims were endorsed by Islam.

Nevertheless, they said, he failed to motivate the defendants to any action on their own. Months went by between meetings, and the filings quote Cromitie as saying, "I'm not gonna hurt anybody" and "The plane thing ... is out of the question."

Hussain suggested the targets, paid for the defendants' groceries, bought a gun, provided the fake bombs and missile, assembled the explosive devices and acted as chauffeur, the defense said.

Since the 9/11 attacks, authorities have arrested suspects in a number of alleged plots against area targets, including the Fort Dix New Jersey military base, John F. Kennedy Airport, the Herald Square subway station in Manhattan and the Brooklyn Bridge.

First Published: Mar 19, 2010 12:23 PM EDT

Obama nearing victory on healthcare

Click this link ......

Pentagon Sees a Threat From Online Muckrakers

To the list of the enemies threatening the security of the United States, the Pentagon has added, a tiny online source of information and documents that governments and corporations around the world would prefer to keep secret.

The Pentagon assessed the danger posed to the Army in a report marked “unauthorized disclosure subject to criminal sanctions.” It concluded that “ represents a potential force protection, counterintelligence, OPSEC and INFOSEC threat to the U.S. Army” — or, in plain English, a threat to Army operations and information.

WikiLeaks, true to its mission to publish materials that expose secrets of all kinds, published the 2008 Pentagon report about itself on Monday.

Lt. Col. Lee Packnett, an Army spokesman, confirmed that the report was real. Julian Assange, the editor of WikiLeaks, said the concerns the report raised were hypothetical.

“It did not point to anything that has actually happened as a result of the release,” Mr. Assange said. “It contains the analyst’s best guesses as to how the information could be used to harm the Army but no concrete examples of any real harm being done.”

WikiLeaks, a nonprofit organization, has rankled governments and companies around the world with its publication of materials intended to be kept secret. For instance, the Army’s report says that in 2008, access to the Web site in the United States was cut off by court order after Bank Julius Baer, a Swiss financial institution, sued it for publishing documents implicating Baer in money laundering, grand larceny and tax evasion. Access was restored after two weeks, when the bank dropped its case.

Governments, including those of North Korea and Thailand, also have tried to prevent access to the site and complained about its release of materials critical of their governments and policies.

The Army’s interest in WikiLeaks appears to have been spurred by, among other things, its publication and analysis of classified and unclassified Army documents containing information about military equipment, units, operations and “nearly the entire order of battle” for American forces in Iraq and Afghanistan in April 2007.

WikiLeaks also published an outdated, unclassified copy of the “standard operating procedures” at the military prison in Guantánamo Bay, Cuba. WikiLeaks said the document revealed methods by which the military prevented prisoners from meeting with the International Red Cross and the use of “extreme psychological stress” as a means of torture.

The Army’s report on WikiLeaks does not say whether WikiLeaks’ analysis of that document was accurate. It does charge that some of WikiLeaks’s other interpretation of information is flawed but does not say specifically in what way.

The report also airs the Pentagon’s concern over some 2,000 pages of documents WikiLeaks released on equipment used by coalition forces in Iraq and Afghanistan. The Pentagon concluded that such information could be used by foreign intelligence services, terrorist groups and others to identify vulnerabilities, plan attacks and build new devices.

WikiLeaks, which won Amnesty International’s new media award in 2009, almost closed this year because it was broke and still operates at less than its full capacity. It relies on donations from humans rights groups, journalists, technology buffs and individuals, and Mr. Assange said it had raised just two-thirds of the $600,000 needed for its budget this year and thus was not publishing everything it had.

Perhaps the most amusing aspect of the Army’s report, to Mr. Assange, was its speculation that WikiLeaks is supported by the Central Intelligence Agency. “I only wish they would step forward with a check if that’s the case,” he said.

Canadian Labour from 1940-1975: Dog Paddling in Shark Infested Waters –

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Recognition of the necessity for economic reforms accompanied the return of Canadian veterans following World War 2 (WW2). Soldiers had defended democratic ideals with their lives, and there was little sympathy for oppressive, fascist-leaning legislation implemented during the war under the auspices of protecting production levels and profit margins. Although unionization made substantial progress before and during the war, many sectors remained woefully under-organized. Labourʼs success hinged upon its ability to amass and maintain numerical majorities in a society fragmented by race, gender, religion, occupation, class and language. From 1940-1975, labour pursued securities which opened Canadian society to unprecedented levels of unionization, but opposition from management and the federal government successfully institutionalized hegemony.

Relations between labour and the government fermented during WW2. Labour was typically underrepresented or excluded during the drafting of policies. Realizing that decisions made rarely reflected working-class interests and dissatisfied with the inadequacy of existing legislation, a pursuit of collective bargaining replaced union recognition as labourʼs dominant grievance.1 Industrial union proliferation within the war-time labour market led to increases in wages and improved working conditions, but did not secure adequate wages for most industrial workers. Insecurities over inflation and the escalating cost of living combined with a fearful recollection of severe economic depression and motivated many workers to join unions.2 However, the combo of the War Measures Act – which gave the federal government virtually dictatorial control over the working class – and a wage control policy enacted in 1940 left unions marginalized and diminished. In order to confront these challenges, the labour movement was fundamentally restructured. Craft unions had traditionally relied on controlling a monopoly of available skills in order to cajole employers, but many industrial jobs required little to no skill and striking workers could easily be replaced. Unable to meaningfully withhold access to their skill, industrial unions relied on strength in numerical superiority.3 Industrial workersʼ common experience and resentment of “industrial autocracy” heightened a shared sense of entitlement.4 When employers and the government refused to enforce a profit ceiling, labour chaffed at the blatant hypocrisy. As “equal” participants in the war-effort, industrial workers acknowledged sacrifices needed to be made by labour, employers and the government; but in return they expected “equal rights on the job, in the economy, and in the councils of the nation.”5

Awareness of inequalities during and after WW2 sparked a level of industrial militance unmatched since 1919.6 Many attempts at gaining recognition or concessions ended in defeat, but the cumulative effects reinforced labour solidarity. Complaining of long hours and low wages, workers at the National Steel Car (NASCO) plant in Hamilton sought redress of grievances through a conciliation board. For as long as possible, the Steelworkersʼ Organizing Committee (SWOC) was ignored. When a conciliation board was convened, management turned a deaf ear to the boardʼs decision and SWOC remained unrecognized. On April 29, 1941, the SWOC local unanimously voted to strike, and steelworkers in nearby Trenton and Sault Ste-Marie signaled an inclination to walk out in sympathy. The War Measures Act made such dissent illegal – leading some within the government and management to support police intervention – but the overt federal response was to appoint a controller of the plant. Although the controller was supposedly appointed to implement the conciliation boardʼs report, the federal government had covertly instructed him to leave SWOC unrecognized.7 Rather than meeting directly with SWOC, workers were asked to nominate a “representative collective committee”8 which could be used to fragment the steelworkers and subvert opposition. A compromise was eventually reached following the appointment of a new controller, but the federal government stood “unprepared to support union recognition [and] condoned the establishment of an employer dominated committee [...] to undermine the existing union.”9

Coincident with Hamiltonʼs NASCO strike, SWOC workers in the Peck Rolling Mills plant in Montreal organized and struck for wage increases. The federal government had legislated a freeze in wage increases under P.C. 7740, but after hearing testimony from workers the conciliatory board returned a split decision: majority opinion compared 1941 wages with those paid in 1926-1929, found increases unjustified and was enthusiastically received by the company; minority opinion noted that P.C. 7740 was intended to prevent “wages which were already reasonable from rising unduly,” suggested that it was not illegal to raise unreasonably low wages and recommended an increase in the base wage to 40 cents an hour. Compared with steelworkers in other plants and regions, Peck Rolling Millsʼ wages were substandard, but there was no provision in existing legislation to enforce wage standardization. Indignant following the public release of the conciliatory boardʼs split-report, Peck workers went on strike in April 1941. In a daft ploy to convince strikers to return to work without acknowledging the dispute or SWOC, the federal government increased the minimum wage to 25 cents an hour for women and 35 cents an hour for men.10 The plot was successful and strikers conceded, but the subterfuge exacerbated labourʼs discontentment with a haphazardly enforced wage policy that protected gross inequalities.

Labourʼs disapprobation reached a crescendo following governmental improprieties during the Kirkland Lake mining strike. The local union had organized a strong majority of miners and requested company recognition. When management refused to recognize union representation, the government intervened and appointed a “fact-finding body” to ascertain whether a conciliation board was necessary. After hearing worker testimony, the Industrial Disputes Inquiry Commission proposed the “Kirkland Lake Formula,” which called on workers to appoint “employee committees” and to forget about union recognition. When miners were finally granted a conciliation board, the boardʼs decision – which recommended union recognition – was ignored by management. Miners then applied for a strike vote supervised by the government, as legislated under P.C. 7307. The government strategically procrastinated and forced miners to strike at a most unpropitious time – the dead of winter. The government was ready to compel labour into submission, but was disinterested in accepting compulsory union recognition. The strike predictably ended in defeat, but miners found solidarity among the CCL and TLC, who unsuccessfully attempted to leverage concessions from an indifferent federal government. This experience catalyzed increased politicization among unions and in 1942 both the CCL and TLC launched national campaigns pushing for collective bargaining legislation.11

Many within management and the government actively opposed unions, but labour occasionally benefited from friends in unlikely places. History might remember Hamiltonʼs 1946 Stelco strike quite differently had it not been for the pro-labour sentiments of Chief Magistrate Sam Lawrence and a wellspring of support from veterans. Although Stelco envisioned itself as a “righteous and virtuous” employer, workers grumbled following racially- inspired layoffs that prioritized ethnicity over seniority and competence. Stelcoʼs workers were unionized under the United Steel Workers of America, but they were decidedly more militant than union headquarters. In an attempt to calm the rising storm, the union sent Larry Sefton to help organize dissent. As a moderate, Sefton would be instrumental in replacing communists with “CCF-types”, but his platitudes failed to resonate with combative workers. An incisive American speaker from the CIO, however, elicited an immediate – and illegal – picket of the Stelco plant. Hoping to reveal whether employees or the employer were in violation of the law, Prime Minister Mackenzie King sought conciliation rather than arrests. The federal response was to appoint a controller, staff the factory with scabs paid triple normal wages and continue production; however, determined picketers blocked transport into and out of the factory. Picketers were not timorous and did not hesitate to resort to violence in order to maintain the blockade, but a pragmatic decision allowed council woman Nora Francis Hendersen, the “spokesperson of law and order,” to break the picket rather than risk losing public support. Two days after symbolically stabbing labour in the back, Nora pushed for police intervention. 250 Royal Canadian Mounted Police and another 250 of Ontarioʼs Provincial Police were summoned, and unequivocal backlash immediately followed. More than 15,000 took to the streets in protest. Ordinary citizens and the entire Studebaker workforce joined veterans in historic opposition to fascist tyranny. Lawrenceʼs pro-labour municipal government refused to impose a crackdown and police were unwilling to quarrel with the war heroes. A victim of the Red Scare, Mackenzie King feared the momentum communists would enjoy following a union win and used subterfuge to settle the strike after an 86 day siege.12

Communism continued to be victimized by intense politicization. Following a ban on the Canadian Communist Party in 1941, many of its members reorganized within the Labour-Progressive Party (LPP). Communists persisted in championing economic reforms and public education campaigns under this banner, but negative public sentiment and a split in the leftist vote significantly limited their potential for political success. An Iron Curtain fell across Europe and Igor Gouzenkoʼs Soviet spy ring was discovered in Ottawa, triggering a Canadian witch-hunt that was used by employers and politicians to suppress dissent of the status quo. In the 1950ʼs and 60ʼs this anti-communist rhetoric was especially virulent in Alberta, where miners had a tradition of socialist sympathies. Prominent civic areas had been given leftist names, the school board declared the anniversary of the Russian revolution a holiday, and socialist provincial legislators targeted the wealthy by laying a tax on pedigreed dogs. In response, rabidly anti-communist authorities sanctioned the RCMPʼs gestapo tactics to acquire a dossier on every major leftist leader in Canada. Hoping to stay in office, liberal politicians accepted a social contract that called on them to “kick out the leftists.” Their declining power was hastened with the incremental adoption of steam-based technologies, which devastated the coal industry and undercut the militant backing of communists and socialists. The discovery of oil united the LPP and CCF in a push to nationalize the industry, but politicians and corporate interests were far more interested in profits than Canadian sovereignty and the movement was panned as a “communist plot.”13

Blatant greed and misanthropy within corporate capitalism alienated some labour groups that had traditionally taken a soft line on corporatism. Beginning in the 1950ʼs, the evolution of the Confederation de travailleurs catholiques du Canadaʼs (CTCC) position on corporatism was a major factor in Quebecʼs Quiet Revolution.14 Ideologic transformations within the CTCC followed recognition of the similarities between corporatism and fascism,15 the inherent inferiority of denominational labour groups,16 and a growing acceptance of union action.17 Facing strong resistance to their campaigns for corporate reform, the CTCC came to see “liberal capitalism” as idolatry of profit and proposed alternatives aimed at humanizing the economic system. Since recognition of union representation was a hard battle where clear majorities were key, the CTCCʼs insistence on Catholicism was gradually replaced with a nondenominational Christian character.18 The secularization of membership requirements revitalized the CTCC with new ideas, but their political ambitions were mostly limited to educational campaigns.19 Although the CTCC was amendable to organizing affiliated unions, there was an implacable refusal to affiliate under international unions.20 Inter-union rivalries limited the CTCCʼs impact and continued to complicate labour solidarity.

Inter-union solidarity may be difficult to procure or maintain, but when achieved it is capable of remarkable accomplishments. The producersʼ strike of 1958-1959 enjoyed tremendous popular support, but it also generated an unprecedented schism in labour solidarity. Locked into obsolete contracts with no chance of review, fringe benefits, or job security, Quebecʼs francophone television producers petitioned the Canadian Broadcasting Company (CBC) for union recognition. Citing federal law, the CBC rationalized declining the request on the basis that producers exercised authority and were a part of management. Since management was forbidden from collective organization and bargaining, producers were also excluded. Successive failures at the negotiating table pressed producers into striking on December 29, 1958. Francophone artists, media darlings and intellectuals launched a public relations campaign and public support rallied behind the producers. The Union des Artists and over 2,000 of Radio Canadaʼs script writers, prop coordinators and set designers supported the producersʼ picket lines as a matter of principle. As the strike dragged on, many protesters faced exceptional financial duress. In order to raise funds, the Union des Artists traveled around the province hosting “The Difficulties are Temporary”, a traveling variety show attended by most of the periodʼs stars. Unfortunately this level of solidarity did not extend to francophone/anglophone relations. Quebecʼs anglophone population did not think the producersʼ efforts were relevant, and their willingness to break pickets made language a clear line of demarcation. Following a march on Ottawa, parliamentarian Egen Chambers tried to end the stalemate with more negotiations. A weekʼs worth of deliberations produced an agreement both sides accepted, so when the CBC rescinded a few days later, public contempt swelled. Police were sent to disperse the picketers, but they were overwhelmed. In a fit of tyranny, twenty horse-mounted police charged the crowd. Jean Marchand, Rene Levesque and many other protestors were forcibly arrested. Newspapers unilaterally condemned the brutality and further marshaled public support for the producers, but the CBC continued resisting ratification of Chambersʼ agreement until the federal government intervened and forced a resolution. The producers were able to capitalize on public sentiment to force concessions, but other oppressed labour groups would find this much more difficult.21

Black porters were consistently manipulated by rail companies and disenfranchised by institutional racism. The Canadian Pacific Railway and the Canadian National Railways imported scores of American blacks to work as porters in Canadian trains22 – even during depression.23 They were paid substantially less than whites,24 dehumanized,25 used to replace higher-paid whites with seniority,26 and ruthlessly prevented from organizing. Blacks were excluded or marginalized from most contemporary industrial unions,27 and those showing an inclination to organize were quickly fired.28 Constant travel imbued porters with a greater sense of culture and allowed them to enjoy “higher status among non-professional blacks,”29 but professional obligations often conflicted with familial ties. Porters pursued visitation privileges for their families, vacation time, wage increases and professional mobility. Their victimization within a “submerged split labour market was the result of a collaboration between higher priced labour and employers who shared the same ethnic stereotypes.”30 Opposed by unionized whites, management and the government, the threat of organized blacks aggravated ethnic antagonism.31

Various ethnic groups used diverse tactics to confront the racism permeating Canadian society. In the wake of WW2 Italians made up a significant portion of the Canadian immigration boom. Toronto served as the dominant destination for labourers fleeing harsh living conditions in Southern Italy.32Since women were “familiar with economic strategies that involved the temporary breakup of the family unit [in order to secure] its long-term survival,” males often left their families in Italy until they could earn enough money to finance their immigration.33 Italian females were dependent on male relatives34, confined by culture, and segregated by familial allegiances,35 but they were instrumental in managing the household economy36 and privately wielded great influence.37 Women shouldered immense domestic responsibilities,38 contributed to husbandry39 and found ways to earn extra cash.40 Since Italian culture places a premium on clannishness,41 integration within the Canadian cultural milieu was unlikely; however, family-linked chain migration “acted as a buffer against the alienating features of immigration.”42 This form of limited solidarity helped immigrants grapple with prejudice, but it prevented them from solidifying working-class consciousness.43 Italian women often sought employment in domestic services and manufacturing, where their cheap labour depressed wages and strengthened ethnic divisions.44 Disinterest in unionization lasted until the 1960ʼs, when self-respect motivated Italian women to push for more recognition.45

Another expansion of organization occurred among civil servants. The federal government sought public regulation of the economy, the provincial governments controlled natural resources, and beginning in the 1940s Keynesian interventionism ballooned Canadian bureaucracy to unprecedented levels. Nova Scotia went from 1,900 civil servants in 1953 to 7,300 in 1976, and other provinces experienced similar growth.46 White collar workers in the private sector lacked the job security or benefits of government employees; however, civil servants were traditionally ensnared within a pro-management service ethic where consent became a matter of patriotism,47 and were shielded by an employer “immune to the general rules of collective bargaining.”48 This produced asymmetrical unionization. The organization of civil servants was actively opposed by the government and management. Nova Scotiaʼs provincial employees were denied inclusion under the Trade Union Act and the liberal government blocked union recognition for employees affected by the Civil Service Act. Employers lacked any compulsion to grant concessions since there was no legislated procedure for conflict resolution and effective dissent was seen as “incompatible with the basic principles of public service.”49 Despite their subjugation, civil servants prioritized good relations with the government through labour/management cooperation, and militancy was constrained.50 This goodwill was not reciprocated and labourʼs efforts were nearly derailed, but by the 1960s dissent became a political liability and concessions already secured by the private sector were extended to government employees.51

Canadian postal workers were also plagued by a treacherous leadership. Postal workers and letter carriers had been organized under the Federal Association of Letter Carriers and Canadian Postal Employees Association, but there was no union recognition, grievance procedure or collective agreement. Between 1956-1965 the Treasury Board granted two small wage increases, froze wages twice and rescinded promised increases twice. Although the federal government lacked the money to pay labourers a living wage, it continued to subsidize business use of 2nd class mail. Employment levels were static, but postal volume had doubled within a decade and inhumane work-measurement schemes were introduced to further increase production. While employees worked twelve hour days with no overtime pay, association leadership fretted over neckties and was clearly disinterested in militant opposition to management. However, militant employees circumvented association leadership and secured concessions directly from Ottawa in a victory that stimulated employee confidence and nurtured an acceptance of strikes as a legitimate method of dissent. Militance proliferated, and in June 1965, Montrealʼs postal workers demanded $660/month. A bewildered federal government appointed Justice Anderson to examine the situation, but his recommendation of $300-360/month was met with derision by Willie Houle and the rank-and-file. Ignoring the employee associationsʼ complacent leadership and the complete lack of strike funds, Houle united with disgruntled postal workers in Vancouver in a synchronized strike of letter carriers and postal clerks in Montreal, Vancouver, Toronto, Hamilton and 30 other urban centers across Canada. The views of labourʼs established leadership were clarified when the president of Torontoʼs Letter Carriers Association broke picket lines and publicly called for strikers to be jailed, the Canadian Congress of Labour leaned heavily on strike leaders to force an end to the strike, and the Postal Workers of Canada ridiculed the dissent as “irresponsible.” Leadership in the Postal Workersʼ Brotherhood conspired to fraudulently undercut support, confuse strikers and sew distrust in the strikeʼs leadership, but even the Army could not dampen the strikersʼ high morale. In a historic turning point for Canadaʼs civil servants, postal workers in Montreal struck until they were offered a wage/benefits package of $550/month. Returning workers were infused with dignity and antipathy, leadership was quickly voted out, and new labour organizations were created.52 Postal workers illustrated the power of a unified labour movement, but scurrilous leadership and agents of the government would not hesitate to resort to subterfuge.

Following WW2, Canadian labour aggressively pursued securities from employers and a hostile government. Although the federal government restricted wages and legislated dissent, labour stood ready to strike. Opposition from management continued to threaten labour solidarity, and increasingly relied on subversion and propaganda to placate workers. From 1945-1965, the unionization of labour progressively penetrated Canadian society, previously unorganized workers battled against an entrenched oligarchy, and traditionally business-friendly labour organizations increasingly adopted humanist platforms. Labour leaders launched historic strikes and marshaled tremendous public sympathy, but solidarity could be threatened by language and ethnicity; while the specter of the Cold War provided a rationale for silencing opposition to the status quo. Labour had demonstrated all the necessities for successful dissent, but political integration of the capitalist agenda ensured a long, uphill battle.

• The Back Row: Labourʼs Cold War in Alberta [video recording]. Produced and directed by Don Bouzek. Edmonton: D. Active Productions, 2005.

• Calliste, A. “Sleeping Car Porters in Canada: An Ethnically Submerged Split Labour Market.” Canadian Working Class History. Eds. Laurel Sefton MacDowell and Ian Radforth. Toronto: Canadian Scholarsʼ Press, 2000. p. 597-615.

• Defying the Law (Building a Nation Series) [video recording]. Produced by Marta Nielsen Hastings & David Wesley. Directed by Marta Nielsen Hastings. Toronto: Norflicks Productions, 1997.

• Iacovetta, F. “From Contadina to Worker: Southern Italian Immigrant Working Women in Toronto, 1947-1962.” Canadian Working Class History. Eds. Laurel Sefton MacDowell and Ian Radforth. Toronto: Canadian Scholarsʼ Press, 2000. p. 620-640.

• MacDowell, L. S. “The Formation of the Canadian Industrial Relations System During WWII.” Canadian Working Class History. Eds. Laurel Sefton MacDowell and Ian Radforth. Toronto: Canadian Scholarsʼ Press, 2000. p. 526-544.

• Memory and Muscle: The Postal Strike of 1965 [video recording]. Produced and directed by Michael Ostroff. Ottawa: Canadian union of Postal Workers, 1995.

• The Producersʼ Strike (Building a Nation Series) [video recording]. Produced by Richard Nielsen, Max Cacopardo, Jean Lebel, & Roger Racine. Directed by Jean Lebel. Montreal: Production de 9 Mars, 1959, 1999.

• Rouillard, J. “Major Changes in the Confederation de Travailleurs Catholiques du Canada, 1940-1960.” Canadian Working Class History. Eds. Laurel Sefton MacDowell and Ian Radforth. Toronto: Canadian Scholarsʼ Press, 2000. p. 575-595.

• Thomson, A. “The Nova Scotia Civil Service Association, 1956-1967.” Canadian Working Class History. Eds. Laurel Sefton MacDowell and Ian Radforth. Toronto: Canadian Scholarsʼ Press, 2000. p. 641-662.

1 MacDowell, L. S. p. 526.
2 Ibid.
3 Ibid.
4 Ibid.
5 Ibid.
6 Ibid.
7 Ibid.
8 Ibid.
9 Ibid.
10 Ibid. p. 532-3.
11 Ibid. p. 534-5.
12 Defying the Law.
13 The Back Row: Labourʼs Cold War in Alberta.
14 Rouillard, J. p. 575-6.
15 Ibid. p. 577.
16 Ibid. p. 581.
17 Ibid. p. 584-5.
18 Ibid. p. 580-1.
19 Ibid. p. 592.
20 Ibid. p. 588.
21 The Producersʼ Strike.
22 Calliste, A. p. 597.
23 Ibid. p. 599.
24 Ibid. p. 597.
25 Ibid. p. 608.
26 Ibid. p. 599.
27 Ibid. p. 600.
28 Ibid. p. 602, 604.
29 Ibid. p. 599.
30 Ibid. p. 611.
31 Ibid. p. 610.
32 Iacovetta, F. p. 621.
33 Ibid. p. 627.
34 Ibid. p. 622.
35 Ibid. p. 623.
36 Ibid. p. 629.
37 Ibid. p. 625.
38 Ibid. p. 624.
39 Ibid. p. 625.
40 Ibid. p. 629.
41 Ibid. p. 623.
42 Ibid. p. 628.
43 Ibid. p. 634.
44 Ibid. p. 631.
45 Ibid. p. 635.
46 Thomson, A.
47 Ibid. p. 641.
48 Ibid. p. 654.
49 Ibid. p. 643.
50 Ibid. p. 645.
51 Ibid. p. 657.
52 Memory and Muscle: The Postal Strike of 1965.