Monday, July 12, 2010

Hawaii Gov. Linda Lingle Likens Gay Marriage To Incest

In announcing her decision to veto a civil unions bill approved by lawmakers, Hawaii Governor Linda Lingle insisted she had treated supporters of a civil unions bill with “respect and dignity.” But in her first interview since that announcement, Lingle likened gay marriage to an incestuous relationship.

Saying the legislation had “touched the hearts and minds of our citizens as no other social issue of our day,” Lingle sounded concerned about how the bill would affect all the people of Hawaii.

“I hope that the citizens on both sides of this issue have felt that I've treated them with respect and dignity throughout this process,” she told reporters on Thursday.

In a radio interview Friday, Lingle defended her decision and rejected the idea that legal recognition of gay unions is a civil rights issue.

“For those people who want to make this into a civil rights issue, and of course those in favor of the bill, they see it as a civil rights issue,” she said. “And I understand them drawing that conclusion. But people on the other side would point out, well, we don't allow other people to marry even – it's not a civil right for them. First cousins couldn't marry, or a brother and a sister and that sort of thing.”

“It really can't be a civil right if we are restricting it in other cases, and it's been found to be legal in those other cases, that the restrictions.”

Eight years ago, candidate Lingle said she would not veto a bill that recognizes gay and lesbian unions with domestic partnerships.

“On the issue of domestic partnerships, I have stated that if the Legislature [should] pass legislation granting certain rights, I would not veto that legislation,” Lingle answered PBS moderator Linda Taira during a live debate.

Lingle argued that the proposed civil unions bill was too similar to marriage.

Gay groups have announced they will continue the fight in court.

East Africa internet cable firm Seacom identifies fault

Rory Cellan-Jones reports in 2009 from Mombasa, where the Seacom cable came ashore

A problem with the undersea cable that brought high-speed net access to East Africa has been identified.

The cable owners, Seacom, said the faulty section is "at one of the deepest points along its route, some 4700m below sea level".

The cable, finished in 2009, connects South Africa, Tanzania, Kenya, Uganda and Mozambique to Europe and Asia.

Seacom said repairs could take up to two weeks, giving a provisional end date of 22 July 2010.

In a statement, it said the fault may require robotic tools "to be deployed to locate and retrieve the cable for repairs to be undertaken on board the specialised repair ship, before replacing the cable back on the ocean floor."

Restoring capacity

The firm said it had been working, since the problem was first reported on 5 July, to find alternative methods to route internet traffic, including alternative cables.

Seacom cable comes ashore The Seacom cable was completed in July 2009

In an update on 9 July, Seacom said: "The deployment of restored capacity via other cable systems has progressed very well and Seacom is pleased with the positive support received from clients and suppliers alike.

"In addition to the alternative capacity already in place, Seacom will also continue to source and activate additional capacity to meet customer requirements for the duration of the repairs."

When the cable was completed in July 2009, it promised to bring cheap internet access across the region. However, experts say that costs are beyond many people who live in the region.

So far, the fault has mostly affected home users, as many businesses in the region have back-up plans for such problems.

It is the second major outage the cable has experienced since it went live.

Outages of this kind happen periodically. A cable cut in the Mediterranean in 2008 temporarily disrupted up to 70% of internet traffic to Egypt and 60% to India.

News of the outage came as another cable - the Main One cable linking Europe with Western Africa - was switched on.

Click here

Secret gold swap has spooked the market (Telegraph)

IT takes a lot to spook the solid old gold market. But when it emerged last week that one or more banks had lent 380 tonnes of gold to the Bank of International Settlements in return for foreign currencies, there was widespread surprise and confusion » Full Story on Yahoo! Finance UK

Iran Guards making ‘astronomical profits’ from sanctions: Opposition leader

TEHRAN -- Opposition leader Mehdi Karroubi has said Iran's elite Revolutionary Guards back sanctions against Tehran as they make "astronomical profits" from the punitive measures, a website said on Sunday.

"I believe that part of the Iranian rule as well as the Revolutionary Guards are in favour of sanctions as they make gigantic and astronomical profits from them," Karroubi was quoted as saying on opposition website

The Guards regularly shrug off international sanctions imposed on Iran for its defiant nuclear programme, with some top commanders expressing willingness to take on projects abandoned by Western companies, including in the energy sector.

Karroubi, who steadfastly opposes the government of President Mahmoud Ahmadinejad, again blamed the hardliner for the latest sets of sanctions imposed by the UN Security Council, the European Union and the United States.

"Imprudence in (Iran's) foreign policy and the lack of political sanity in the actions and political and diplomatic words of the man in charge of the government have imposed high costs on the country," the reformist cleric said in a direct attack on Ahmadinejad.

"We should not give an excuse through shallow words and bungling actions and allow others to easily impose sanctions against Iran," the website quoted Karroubi as saying on Saturday at a meeting with families of detained opposition members.

Iran is under four sets of UN sanctions for its sustained pursuance of the nuclear programme, all of which have been imposed since Ahmadinejad first became president in 2005.

Western governments suspect Iran's nuclear programme is a cover for a weapons drive, something Tehran has repeatedly denied, maintaining it is aimed solely at power generation and medical research.

Karroubi, along with Iran's other main opposition leader Mir Hossein Mousavi, continue to level accusations that Ahmadinejad's re-election last year was the result of a massive vote rigging.

Nazi war crimes suspect dies before trial begins in Germany

A 90-year-old former SS sergeant who was under investigation for Nazi war crimes has died before he could be brought to trial, German authorities said Tuesday.

Adolf Storms died at his home in the western city of Duisburg on June 28, Dortmund prosecutor Andreas Brendel said. He said he did not know the exact cause of death. Brendel's office charged Storms in November with 58 counts of murder for his alleged involvement in a massacre of Jewish forced laborers in a forest near the Austrian village of Deutsch Schuetzen. Storms and other unidentified accomplices were accused of forcing at least 57 of the Jewish laborers to hand over their valuables and kneel by a grave before fatally shooting them from behind. A day after the March 29, 1945 massacre, Storms was alleged to have shot another Jew who could no longer walk during a forced march in Austria from Deutsch Schuetzen to the village of Hartberg. Several former members of the Hitler Youth who were helping the SS guard the prisoners on the march provided witness statements, and Brendel said he thought he had strong evidence against Storms. "I would have liked to have tried the case," he said.

Storms worked unnoticed for decades as a train station manager until a University of Vienna student doing undergraduate research uncovered his alleged involvement in the wartime massacre. The student and his professor, Walter Manoschek, tracked him down and Manoschek then visited Storms several times. The professor conducted about 12 hours of interviews in which Storms repeatedly said that he does not remember the killings.

Richardson: Canceled Border Conference Shows Arizona Law Hurting Foreign Policy

New Mexico Gov. Bill Richardson on Sunday said that a border-state governors conference canceled following objections from Mexican officials is the latest sign that Arizona's immigration law is hurting U.S. foreign policy.

Arizona Gov. Jan Brewer canceled the conference, set for September in Phoenix, last month after all six Mexican border governors threatened to boycott over the state's immigration law. Richardson is still trying to salvage the conference, but he said Sunday that the standoff demonstrates the harmful side effects of the law -- which the federal government challenged in a lawsuit filed Tuesday.

"Right now, we have six Mexican border governors refusing to attend a yearly border conference with American border governors because of this incident, because of this issue in Arizona. So it is harming our foreign policy," Richardson said on CNN's "State of the Union."

The Justice Department claimed the Arizona law wrongly infringed on federal responsibilities over immigration enforcement. As part of its argument, the Obama administration said the law could hurt diplomatic relations with Mexico and other countries.

However, supporters of the law say Arizona is well within its rights to enforce federal immigration law and that the state should not have to factor in foreign policy.

Rep. Trent Franks, R-Ariz., speaking alongside Richardson on Sunday, said Brewer cannot be held responsible for Mexican officials pulling out of the border conference.

"I'm a little tired of her being kicked around and treated like that somehow she is at fault for canceling or for being the one to have to postpone this governors conference, when it was the governors from the Mexican states ... that were the ones that said that they wouldn't come," Franks said.

Obama’s “jobs program”: Poverty wages and mass unemployment

In a series of speeches and interviews this week, the Obama administration signaled a further shift to the right in its social and economic policy, abandoning even its minimal stimulus proposals under pressure from the financial-corporate elite.

On Wednesday, President Obama announced the formation of a panel, called the President’s Export Council, to coordinate the administration’s pledge to double US exports over the next five years. He touted the increase in exports as the key to reviving the economy and creating jobs.

He spoke before a White House gathering dominated by corporate executives, and packed the 19-member panel with the CEOs of some of the largest and most powerful US corporations, including Boeing, Ford, Xerox, UPS, ADM, Verizon and Walt Disney.

On Thursday, he spoke at a small Kansas City electric truck factory to promote his economic policy.

Obama made not a single reference in either speech to the failure of Congress to extend emergency jobless benefits, depriving millions of long-term unemployed workers of any income. Nor did he note Congress’ failure to approve additional federal Medicaid aid to the states, which will result in hundreds of thousands of new public employee and teacher layoffs and further cuts in education and other essential services.

In both speeches, Obama made repeated assertions that the economy is "headed in the right direction" and "moving forward," in spite of mounting signs of an economic slowdown that negates any prospect of significant job growth.

The real unemployment rate in the US is above 20 percent. Long-term joblessness is at a post-war high. Millions of youth have no prospect of finding work. Home values—the major source of wealth for most families—continue to fall. Foreclosures, homelessness, hunger, utility shutoffs and poverty are soaring. Schools, parks and museums are being closed, and what remains of a social safety net is being shredded.

Obama seeks to put a positive spin on this social catastrophe so as to justify his refusal to take serious measures to create jobs or provide relief for the unemployed, and to drop even the paltry measures he initiated in 2009.

Appearing deaf, dumb and blind to the plight of tens of millions of Americans, Obama oozed solicitude for the barons of Wall Street and corporate America at his White House announcement. He issued paeans to the "private sector" as "the source of our job creation, our economic growth, and our prosperity."

He proclaimed his commitment to prosperity for "all of our people," giving equal rhetorical weight to "our workers" and "our CEOs,"—that is, to 200 million workers and a few thousand multi-millionaire capitalists.

Obama called for a "new foundation" for the US economy based on a revival of manufacturing and expansion of factory exports. Hinting at how this is to be achieved, he called for an end to "bubbles of consumption." His corporate audience welcomed the message: the wages and living standards of American workers will be driven down and their output driven up so as to make American factories a cheap labor platform for exports to the world market.

Obama insinuated that the working class has been living beyond its means. In fact, working class living standards in the US have been stagnant or declining for the past 40 years. It is the financial aristocracy that has been on a consumption binge based on its plundering of the national wealth.

Obama’s appointment to the Export Council of Ford CEO Alan Mullaly is telling. Ford, along with GM and Chrysler, is poised to reap bumper profits on the basis of mass layoffs and plant closures and a 50 percent cut in the wages of newly hired workers, thanks to the intervention last year of Obama’s Auto Task Force.

Another appointment underscored Obama’s cowering before big business. In May, Obama asked the Business Roundtable to let him know what government policies it disliked. Speaking for the association, Verizon CEO Ivan Seidenberg publicly lashed out against the administration, accusing it of pursuing anti-business policies. Obama made a point of naming Seidenberg to his export panel.

The corporate elite has been placing increasing pressure on the White House to speed up and intensify its attacks on working class living standards, including the abandonment of even minimal stimulus measures. They want a more rapid turn to austerity, including cuts in basic social programs such as Medicare and Social Security.

Sections of big business are also dissatisfied with even the token measures included in the administration’s financial regulatory overhaul. They want still bigger tax cuts and subsidies, and an end to the business-bashing rhetoric in which Obama and other administration officials have occasionally indulged.

This pressure is reflected in the hardening of opposition by Republicans and a growing number of Democrats in Congress to even the most minimal relief measures, such as a continuation of emergency jobless benefits.

Recent days have seen press reports documenting a major shift in corporate campaign donations from the Democrats to the Republicans, including a Washington Post piece headlined "Democratic Campaign Committees Losing Big Wall Street Donors."

The administration is impervious to the needs and wishes of millions of workers who are struggling to keep a roof over their heads and their families fed. But Obama jumps to attention when Wall Street speaks.

The White House has launched a public relations campaign to refute the charge that it is anti-business. White House Chief of Staff Rahm Emanuel gave an interview Thursday to Politico in which he frankly and accurately outlined the administration’s uniformly pro-business record.

Politico wrote: "Emanuel argued that rather than recoiling against Obama, business leaders should be grateful for his support on at least a half-dozen counts: his advocacy of greater international trade and education reform and open markets despite union skepticism; his rejection of calls from some quarters to nationalize banks during the financial meltdown; the rescue of the automobile industry; the fact that the overhaul of health care preserved the private delivery system; the fact that billions in the stimulus package benefited business with lucrative new contracts, and that financial regulation reform will take away the uncertainty that existed with a broken, pre-crash regulatory apparatus."

So too with the unemployment crisis. Big business wants to keep unemployment high for years in order to use mass joblessness as a battering ram to drive down workers’ wages and working conditions. The White House is carrying out precisely this policy, notwithstanding its professions of concern for the plight of the unemployed.

The inability of a Democratic president—an African-American promoted as the standard-bearer of the party’s liberal wing—to give the slightest expression to the deep-seated anger in the population, or even distance himself from the corporate criminals who precipitated an economic, social—and with the BP oil blowout, ecological—catastrophe, is an expression of the imperviousness of the entire political system to the elementary needs of the population.

The de facto dictatorship of capital—its complete domination over both parties and all branches of government—has never been more complete.

What conclusions are to be drawn? That the capitalist profit system is incompatible with the basic needs of the broad masses of the people. That to defend its elementary interests—a job, decent wages, education, health care, housing, a secure retirement—the working class must break from both parties of big business and fight for the socialist transformation of society.

Tom Eley and Barry Grey

Hacker Creates Plugin That Trashes Chrome’s Security

We hate to scare you on Friday right before a good weekend, but this story is alarming enough that you need to hear about. Before we proceed, know that this exploit is out in the open, be extra careful when you install any Chrome plugin; you may be at risk.

The exploit, developed by programmer Andreas Grech, employs a plugin coded using jQuery to track users’ login information and have it emailed to himself. He claims that he has tested the plugin, and that it has been successful against Twitter, Gmail, and Facebook. In his own words:

The Google Chrome browser allows the installation of third-party extensions that are used to extend the browser to add new features. The extensions are written in JavaScript and HTML and allow manipulation of the DOM, amongst other features.

By allowing access to the DOM, an attacker can thus read form fields…including username and password fields. This is what sparked my idea of creating this PoC.

The extension I present here is very simple. Whenever a user submits a form, it tries to capture the username and password fields, sends me an email via an Ajax call to a script with these login details along with the url and then proceeds to submit the form normally as to avoid detection.

If you doubt his statements, he has included the code for the plugin on his website.

In some way, we all owe Mr. Grech a thank you for finding the flaw and proving its existence. Now that this is well known, Google can plug the hole and restore peace of mind to its millions of users.

For now, only install plugins from people you know and trust, this exploit is dangerous.

The Drums of War? Pentagon Provokes New Crisis With China

Three news features appearing earlier this week highlight tensions between the United States and the People's Republic of China that, at least in relation to the language used to describe them, would have seemed unimaginable even a few months ago and are evocative more of the Korean War era than of any time since the entente cordiale initiated by the Richard Nixon-Mao Zedong meeting in Beijing in 1972.

To indicate the seriousness of the matter, the stories are from Global Times, a daily newspaper published in conjunction with the People's Daily, official press organ of the ruling Communist Party of China, and Time, preeminent American weekly news magazine. Both accounts use as their point of departure and source of key information a July 4 report in Hong Kong's major English-language daily.

On July 6 writer Li Jing penned a news article for Global Times called "US subs reach Asian ports: report," which detailed the following recent developments:

"Three of the largest submarines of the US Seventh Fleet surfaced in Asia-Pacific ports last week, the South China Morning Post reported Monday [July 5]. The appearance of the USS Michigan in Pusan, South Korea, the USS Ohio in Subic Bay, the Philippines, and the USS Florida in the strategic Indian Ocean outpost of Diego Garcia was a show of force not seen since the end of the Cold War, the paper said, adding that the position of those three ports looks like a siege of China." [1]

The piece from the Hong Kong newspaper cited was entitled "US submarines emerge in show of military might: Message unlikely to be lost on Beijing as 3 vessels turn up in Asian ports," and was in fact dated July 4.

The author, South China Morning Post Asia correspondent Greg Torode, described the simultaneous arrival of three "Ohio-class submarines" equipped with "a vast quantity of Tomahawk cruise missiles" as a reflection of "the trend of escalating submarine activity in East Asia...." [2]

He further added this noteworthy data: "Between them, the three submarines can carry 462 Tomahawks, boosting by an estimated 60 per cent-plus the potential Tomahawk strike force of the entire Japanese-based Seventh Fleet - the core projection of US military power in East Asia."

The author quotes without identifying his name or nation a veteran Asian military attache with reported close ties to both Chinese and U.S. military officials: "460-odd Tomahawks is a huge amount of potential firepower in anybody's language.

"It is another sign that the US is determined to not just maintain its military dominance in Asia, but to be seen doing so...that is a message for Beijing and for everybody else, whether you are a US ally or a nation sitting on the fence." [3]

On July 8 Time magazine's Mark Thompson elaborated on the earlier report with language, including that of his title, "U.S. Missiles Deployed Near China Send a Message," derived from the South China Morning Post piece, which Thompson claims contained information planted by "U.S. officials...on July 4, no less" [4] in a clear signal to the government in mainland China.

The Time journalist added details, though, not in the original story, replete with a good deal of editorializing that perhaps serves the same source he attributes the contents of the Hong Kong article to and for the same reason: As a shot across the bow to China.

His account of last week's deployments included: "A new class of U.S. superweapon had suddenly surfaced nearby. It was an Ohio-class submarine, which for decades carried only nuclear missiles targeted against the Soviet Union, and then Russia."

The U.S. has eighteen nuclear-powered Ohio class ballistic missile submarines, fourteen still armed with nuclear warhead-tipped Trident missiles and four which "hold up to 154 Tomahawk cruise missiles each, capable of hitting anything within 1,000 miles with non-nuclear warheads."

"The 14 Trident-carrying subs are useful in the unlikely event of a nuclear Armageddon, and Russia remains their prime target. But the Tomahawk-outfitted quartet carries a weapon that the U.S. military has used repeatedly against targets in Afghanistan, Bosnia, Iraq and Sudan." [5]

With the arrival of the USS Ohio in the Philippines, the USS Michigan in South Korea and the USS Florida "in the strategic Indian Ocean outpost of Diego Garcia" [6] on the same day, "the Chinese military awoke to find as many as 462 new Tomahawks deployed by the U.S. in its neighborhood." [7]

The Time report also revealed that all four Ohio class Tomahawk-armed submarines were operationally deployed away from their home ports for the first time.

Thompson wrote that the coordinated actions were "part of a policy by the U.S. government to shift firepower from the Atlantic to the Pacific theater, which Washington sees as the military focus of the 21st century."

Regarding the submarines still carrying Trident missiles, he rhetorically added, "Why 14 subs, as well as bombers and land-based missiles carrying nuclear weapons, are still required to deal with the Russian threat is a topic for another day." [8]

All three journalists cited - Jing, Torode and Thompson - place the U.S. submarine deployments within a broader and also a more pressing context.

The South China Morning Post writer stated: "In policies drafted under then-president George W. Bush, a Republican, and continued by the administration of his successor, Democrat Barack Obama, the Pentagon is shifting 60 per cent of its 53 fast-attack [as distinct from ballistic and guided missile] submarines to the Pacific - a process that is now virtually complete.

"But the presence of the larger cruise-missile submarines shows that, at times, the US forward posture will be significantly larger."

The USS Ohio, for example, "has been operating out of Guam for most of the last year, taking advantage of the island's expanding facilities to extend its operations in the western Pacific.

"It is due to return soon, but the Florida and the Michigan are likely to remain in the region for many months yet, using Guam and possibly Diego Garcia for essential maintenance and crew changes."

Additionally, "The presence of the Florida, based on the US east coast, appears to confirm the US is still routinely bringing submarines under the arctic ice cap to East Asia." [9]

Just as the Pentagon is moving nuclear submarines under the northern polar ice cap to the Indian Ocean, so it has recently reached an "agreement [that] will allow troops to fly directly from the United States over the North Pole" to Afghanistan and "the region" by way of Kazakhstan, which borders China as well as Russia. [10]

The U.S. military "siege of China" is proceeding on several fronts, on land as well as under water and in Central as well as South and East Asia. But what primarily had been a policy of surveillance and probing China's perimeter is now entering a new phase.

That the U.S. currently has over 60 per cent of the Tomahawk cruise missiles assigned to its Japan-based Seventh Fleet near China emphasizes the qualitative escalation of Washington's show of strength vis-a-vis Beijing. One related to, as was seen above, a strategic shift of attack submarines nearer China and also to the crisis on the Korean Peninsula that was exacerbated by the sinking of a South Korean warship, the Cheonan, in March.

There has even been speculation that U.S. submarine deployments and other "messages" delivered to China of late were designed to pressure Beijing into taking a tougher stance toward North Korea over the Cheonan incident. What journalists have been referring to as messages would in an earlier age have been called saber-rattling and gunboat diplomacy.

U.S.-China relations sharply deteriorated this January when the Obama administration finalized an almost $6.5 billion arms sales package for Taiwan which includes 200 Patriot missiles. [11] An article on the subject in the New York Times on January 31 was titled, revealing enough, "U.S. Arms for Taiwan Send Beijing a Message."

China suspended military ties with the U.S., and bad blood has persisted throughout the year, resulting in Secretary of Defense Robert Gates scrapping plans to visit Beijing early last month when he was effectively disinvited by Chinese officialdom on the prompting of the military.

The White House and the Pentagon have been sending a number of unequivocal - and increasingly provocative - messages to China this year.

The new U.S. administration signalled a confrontational approach early on. In May of 2009 Secretary of State Hillary Clinton, barely three months in her post, stated, “The Obama administration is working to improve deteriorating U.S. relations with a number of Latin American nations to counter growing Iranian, Chinese and Russian influence in the Western Hemisphere....” [12]

Later in the year then Director of National Intelligence (and retired admiral and former commander-in-chief of the Pacific Command) Dennis Blair released the latest quadrennial National Intelligence Strategy report which said “Russia, China, Iran, and North Korea pose the greatest challenges to the United States’ national interests. [13]

While Blair headed up the Pacific Command (PACOM) from 1999-2002, his role included overseeing a vast area of the planet that includes China (since the Ronald Reagan administration assigned it to that military command in 1983).

Arrogating the right to divide the entire world into military zones, areas of operation, has never been attempted by any other nation, any group of nations, not even all the nations of the world collectively (in the United Nations or otherwise). But the U.S. has and does do just that. It has even added two new Unified Combatant Commands - Northern Command and Africa Command - in recent years, in 2002 and 2007 respectively.

The Pacific Command is the oldest and largest of the six current regional commands (the others being the Africa, Northern, European, Central and Southern Commands), and was formed during the dawning of the Cold War in 1947. Its area of responsibility takes in over 50 per cent of the world - 105 million square miles - 36 nations and almost 60 per cent of the world's population.

300,000 troops from all major branches of the U.S. armed forces - the Air Force, Army, Marine Corps and Navy - are assigned to it, 20 per cent of all active duty American service members.

Pacific Command is in charge of military defense treaties with Australia, Japan, New Zealand, the Philippines and South Korea.

The U.S. is also alone in assigning the world's oceans and seas to naval commands. Washington has six naval fleets - the Fourth Fleet (the Caribbean, Central and South America) was reactivated in 2008 after being disbanded in 1950) - and just as Pacific Command is the largest unified, multi-service command, so the Seventh is the largest forward-deployed fleet, with 50-60 warships, 350 aircraft and as many as 60,000 Sailors and Marines at any given time. It is based in Japan and its area of responsibility includes over 50 million square miles of the (largely western) Pacific and Indian Oceans.

The U.S. also has eleven aircraft carriers, ten of them nuclear-powered and all eleven part of strike groups. [14] (China has no and Russia one carrier.)

The Time magazine article quoted from earlier mentioned that the deployment of four U.S. guided missile submarines to East Asia and the Indian Ocean is not the only development that China needs to be concerned about. The U.S. is simultaneously presiding over six-week biennial Rim of the Pacific (RIMPAC) military exercises in Hawaii with over 20,000 troops, 36 warships and submarines (25 American) and 180 planes and helicopters.

This year's RIMPAC, which began on June 23 and is to be completed by the end of July, includes for the first time the participation of France, Colombia - with which the U.S. has recently concluded an agreement for the use of seven of its military bases [15] - and the Southeast Asia nations of Malaysia and Singapore. The other countries involved are Australia, Canada, Chile, Indonesia, Japan, the Netherlands, Peru, South Korea and Thailand. The five-week war games involve "missile exercises and the sinking of three abandoned vessels playing the role of enemy ships." [16]

The combined task force commander for RIMPAC 2010 is commander of the U.S. Third Fleet, whose area of responsibility is approximately 50 million square miles of the eastern Pacific, Vice Admiral Richard Hunt, who stated, "This is the largest RIMPAC that we've had," and one which "clearly focuses on maritime domain awareness dealing with expanded military operations across the complete spectrum of warfare." [17]

Time's Mark Thompson also wrote: "Closer to China, CARAT 2010 - for Cooperation Afloat Readiness and Training - just got underway [July 5] off Singapore. The operation involves 17,000 personnel and 73 ships from the U.S., Singapore, Bangladesh, Brunei, Cambodia, Indonesia, Malaysia, the Philippines and Thailand.

"China is absent from both exercises, and that's no oversight." [18]

This February Cobra Gold 2010, "the largest multinational military exercise in the world," [19}, was launched in Thailand (separated from China by only one nation, either Laos or Myanmar) and as with all previous Cobra Gold war games was run by U.S. Pacific Command and the Royal Thai Supreme Command. Joining the U.S. and Thailand in this year's exercises, designed "to build interoperability between the United States and its Asia-Pacific regional partners," [20] were the armed forces of Japan, Indonesia, Singapore and, for the first time, South Korea.

From June 8-25 the latest U.S. Air Force-led Red Flag Alaska air maneuvers were held near the eastern Pacific. "The Red Flag exercises, conducted in four-to-six cycles a year by the 414th Combat Training Squadron of the 57th Wing, are very realistic aerial war games. The purpose is to train pilots from the U.S., NATO and other allied countries for real combat situations." [21]

Over a thousand airmen from five nations - the U.S., Japan, South Korea, Romania and Belgium - assembled at Alaska's Elmendorf and Eielson Air Force Bases for air combat training which "unites forces from all over the world."

"South Korea, a country already accustomed to working with U.S. troops, is also in Alaska to strengthen the two nations' ties after the sinking of a South Korean warship by a North Korean submarine.

"'We have the American Air Force in Korea, and the coalition and the combined working environment is very important,' said Lt. Hoon Min Kim, a member of South Korea's air force. 'And being able to perform under a combined environment is therefore essential as well.'" [22]

The incorporation of progressively more Asia-Pacific nations into what has been referred to as an Asian NATO is by no means directed solely at North Korea nor is it understood as such by officials in Beijing.

Participants in that arrangement, among them Australia, New Zealand, Singapore, South Korea and Mongolia, have troops serving under NATO in Afghanistan. Recently 140 new South Korean forces arrived at the Bagram Air Base in Afghanistan to reinforce a base in Parwan province recently subjected to repeated rocket attacks. Seoul's troop strength in the war zone is now at 230.

This month the government of Singapore announced it will increase its soldiers in the NATO-led International Security Assistance Force to "a record 162, from 97 last year."

"Next month, the Singapore Armed Forces (SAF) will send a 52-man unmanned aerial vehicle (UAV) team - its biggest deployment to Afghanistan - to Oruzgan [Uruzgan], one of two provinces where Singapore has troops." [23]

Earlier this year NATO announced that Mongolia and South Korea have become the 45th and 46th nations to provide it with troops for the war in Afghanistan. Mongolia borders both China and Russia and is the object of intense efforts by the U.S. to increase military cooperation and integration. [24] On July 6 NATO's Assistant Secretary General for Political Affairs and Security Policy Dirk Brengelmann paid a two-day visit to South Korea, where he stated, "Our security interests and security interests of countries like Korea coincide today more than ever."

A news report of his visit paraphrased his comments as asserting that "The world's biggest military alliance, NATO, is looking to increase cooperation with South Korea and other partners beyond Europe and North America," and added that "Speaking of cooperation, Brengelmann noted NATO's show of support for South Korea in light of the sinking of its warship Cheonan....The diplomat said some NATO members also serve on the U.N. Security Council and that the NATO members will try to ensure any Security Council action on the Cheonan sinking will represent their views expressed in the NATO statement." [25]

Another country that shares borders with China and Russia, Kazakhstan, has allowed the U.S. and NATO transit and overflight rights for the Afghan war and last week the nation's president, Nursultan Nazarbayev, signed a law permitting the Pentagon to ship "special cargo" - armored vehicles - through his country.

The U.S. and NATO have transited hundreds of thousands of troops through the Manas Air Base (now Transit Center at Manas) in Kyrgyzstan, which also borders China, since 2001 and in recent months troops have passed in and out from Afghanistan at the rate of 55,000 a month, 660,000 a year. [26] Washington has announced plans to open new training bases in Kyrgyzstan and Tajikistan, the second nation also adjoining China.

With Afghanistan and Pakistan, which also have borders with China, the U.S. and NATO have a military presence in five nations on China's western flank and a foothold in Mongolia. The U.S. and NATO war in South Asia will enter its tenth year this autumn with no sign of Western military presence departing from China's backyard.

The U.S. military remains ensconced in Japan and South Korea, has returned to the Philippines (including camps in Mindanao), is solidifying bilateral and multilateral military relations with practically all nations in Southeast Asia, and for the past five years has cultivated India as a military partner. [India is currently an observer at the RIMPAC exercises.) Japan, Taiwan and Australia are being integrated into a U.S.-designed regional and broader global interceptor missile system.

The U.S. is conducting regular military exercises, building military partnerships, stationing troops and opening bases around China's periphery, in addition to the positioning of warships, submarines and aircraft carriers in the waters off its coasts.

What alarms China most at the moment, though, is a proposed joint U.S.-South Korean military exercise in the Yellow Sea, enclosed by both Koreas to the east and China to the north and west.

China's Global Times recently quoted Xu Guangqian, military strategist at the People's Liberation Army's Academy of Military Sciences, issuing this warning: "China's position on the Yellow Sea issue demonstrates its resolution to safeguard national rights and interests. It also reflects that China is increasingly aware of the fact that its strategic space has confronted threats from other countries." [27]

China, which just concluded six days of naval drills of its own in the East China Sea, had more reason to be concerned when it was disclosed earlier this month that a U.S. aircraft carrier would join the maneuvers off its Yellow Sea coast.

On July 8 China renewed its opposition to the planned U.S.-South Korean war games, with Foreign Ministry spokesman Qin Gang telling reporters, "China has expressed its serious concerns with relevant parties. We are firmly opposed to foreign military vessels engaging in activities that undermine China's security interests in the Yellow Sea or waters close to China." [28]

An unsigned editorial in the Chinese Global Times of July 8 stated, "Beijing sees the joint exercise not only as being aimed at Pyongyang, but also as a direct threat to its territorial waters and coastline," and blamed South Korean President Lee Myung-bak for worsening relations between the two nations:

"It is not known whether Lee had thought of China's reaction when he announced in May the drill with the US.

"Did he foresee Chinese people's anger? Or, did he intend to provoke the country on the other side of the Yellow Sea?

"It is a shame and a provocation on China's doorstep.

"If a US aircraft carrier enters the Yellow Sea, it will mean a major setback to Seoul's diplomacy, as hostility between the peoples of China and South Korea will probably escalate, which Beijing and Seoul have been working for years to avoid." [29]

President Lee met with his American counterpart, Barack Obama, on the sidelines of the Group of Eight summit in Toronto late last month, during which a previous arrangement to transfer wartime command of South Korean forces to the nation in 2012 were postponed if not abandoned. In Obama's words, "One of the topics that we discussed is that we have arrived at an agreement that the transition of operational control for alliance activities in the Korean peninsula will take place in 2015." In the five-year interim "if war were to break out on the Korean peninsula the United States would assume operational command of South Korean forces." [30]

If Washington is planning direct intervention on the Korean Peninsula as its military buildup in the region, including off China's shores, might indicate, the words of former South Korean president Kim Young-Sam a decade ago are worth recalling. Two years after stepping down as head of state, Kim revealed to one of his nation's main newspapers that he had intervened to prevent a second Korean war, that his government "stopped US President Bill Clinton from launching an air strike against North Korea's nuclear facilities in June 1994."

He initiated a last-minute phone conversation with the U.S. president which "saved the Korean peninsula from an imminent war," as "The Clinton government was preparing a war" by deploying an aircraft carrier off the eastern coast of North Korea "close enough for its war planes to hit the North's nuclear facilities in Yongbyon."

Furthermore, Kim warned the U.S. ambassador in Seoul that "another war on the Korean peninsula would turn all of Korea into a bloodbath, killing between 10 and 20 million people and destroying South Korea's prosperous economy." [31]

Any catastrophic event on the Korean Peninsula, and war is the ultimate cataclysm, could lead to hundreds of thousands of North Korean refugees fleeing to Russia and millions to China.

The nearly nine-year war in Afghanistan being waged by the U.S. and NATO has led to an explosion of violence and destabilization in three nations flanking China: Afghanistan itself, Pakistan and Kyrgyzstan.

Also, since 2001 Afghanistan has become the world's largest producer of opium and hashish, flooding the European and other drug markets. A forum entitled "Afghan Drug Production - A Challenge to the International Community" was held in Moscow a month ago.

A Russian report on the meeting stated "The situation around drug production in Afghanistan has gained a catastrophic character. Some 100,000 people died globally from Afghan drugs in 2009 alone. In all, Afghan-made opiates have claimed one million human lives in the past decade, and 16 million more ruined their health." [32] 30,000 of the drug-related deaths occurred in Russia. The United Nations estimates that Afghanistan currently accounts for 92 per cent of world opium cultivation.

China and Russia are viewed as, if not challengers to U.S. global dominance, impediments to its further consolidation. And not in the military sphere but in the fields of economics, trade, energy and transportation. Destabilization of their neighborhoods and frontiers is one manner of limiting competition.

All means fair and foul are employed to eliminate obstacles to uncontested supremacy, and what the world's sole military superpower (the term is President Obama's from his Nobel Peace Prize acceptance speech) truly excels at is expanding its international military machine with an unflinching willingness to use it.


1) Global Times, July 8, 2010
2) South China Morning Post, July 4, 2010 (Subscribers only)
3) Ibid
4) Time, July 8, 2010,8599,2002378,00.html?xid=rss-topstories
5) Ibid
6) South China Morning Post, July 4, 2010
7) Time, July 8, 2010
8) Ibid
9) South China Morning Post, July 4, 2010
10) Kazakhstan: U.S., NATO Seek Military Outpost Between Russia And China
Stop NATO, April 14, 2010
11) U.S.-China Military Tensions Grow
Stop NATO, January 19, 2010
12) Associated Press, May 1, 2009
13) Radio Free Europe/Radio Liberty, September 16, 2009
14) U.S. Consolidates Military Network In Asia-Pacific Region
April 28, 2010
15) Colombia: U.S. Escalates War Plans In Latin America
Stop NATO, July 22, 2009
16) Time, July 8, 2010
17) Navy Times, July 6, 2010
18) Ibid
19) American Forces Press Service, January 13, 2010
20) Ibid
22) KTUU TV, June 24, 2010
23) AsiaOne, July 1, 2010
24) Mongolia: Pentagon Trojan Horse Wedged Between China And Russia
Stop NATO, March 31, 2010
25) Yonhap News Agency, July 6, 2010
26) Kyrgyzstan And The Battle For Central Asia
Stop NATO, April 7, 2010
27) Global Times, July 6, 2010
28) Agence France-Presse, July 8, 2010
29) Global Times, July 8, 2010
30) Agence France-Presse, July 27, 2010
31) Agence France-Presse, May 24, 2000
32) Itar-Tass, June 9, 2010

Rick Rozoff is a frequent contributor to Global Research. Global Research Articles by Rick Rozoff

"You can have my ignorance when you pry it from my cold dead mind"

The above words are from Les Visible. It's a great line.

Wherever the American dream is buried, I bet it is the epitaph on the tombstone ... or should be.

Since sorrow never comes too late,
And happiness too swiftly flies.
Thought would destroy their paradise.
No more, where ignorance is bliss,
'Tis folly to be wise.
Thomas Gray

Have you ever been involved in a conversion where you try to interject a bit of information, maybe even what could be considered truth that's relevant to our lives and get the response; "I don't want to know?"

It's frustrating. Being passionate about the truth, about exposing the crimes and lies of our time often means one expects everyone else to feel that same passion. It just doesn't work that way. You preach to the choir, they shout and sing, but getting new converts to your position is a slow and difficult process. Folks hold their beliefs close to the heart and think they must in order to survive.

It's a cliche now ... "Everything I Know is Wrong" but still not a bad philosophy. I always thought it meant to never stop learning and don't believe everything you see and hear. When thrown in with the "seek and ye shall find" meme it forms the basics of a lifetime of searching. Simple but effective.

Of course, many are going to tell you that everything you know is still wrong. Just asking questions, especially the politically incorrect kind, gets you labeled as a heretic because control, manipulation and social engineering work much better if the masses sleepwalk.

Ignorance is never really bliss. No matter how ugly the truth, it still beats a pretty lie.

This is a Racism Test

Click this link ......

A Brutal Case of Backwards Justice in America

Michael Ellner said this about our crazy society: "Just look at us. Everything is backwards. Everything is upside down. Doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the major media destroy information, and religion destroys spirituality."

This past week, BART police officer Johannes Mehserle was convicted in State court of involuntary manslaughter in the case of the New Year's Day 2009 fatal police shooting of an unarmed man, 22-year-old Oscar Grant. The local black community is rightfully outraged, but this is much bigger than race -- it’s about how our society defines justice.

Strip away all the labels; the fact remains that an armed man shot an unarmed restrained man in the back, period. This case should not be about an alleged black troublemaker and an overzealous white cop. Their race shouldn’t matter; the circumstances of why Grant was detained shouldn’t matter; and Mehserle being a cop shouldn’t matter either. Grant was a sovereign, unarmed, outnumbered, restrained, and harmless American citizen and was shot in the back in cold blood. To make matters worse, Grant was being toyed with by the cops like a domesticated cat does with a mouse before he ultimately rips him to shreds.

The scene was unequivocally premeditated first-degree murder. Furthermore, the backup police officers who witnessed, participated in, and lied about the event should also be prosecuted as accomplices, just as you and I would be if we had done the same thing.

A justice system that allows an officer of the law to shoot a restrained man in the back with little more than a slap on the wrist, while citizens defending themselves and their families from an intruder is charged with a crime, is severely backwards. We can now chalk up our justice system as yet another gross failure of America.

I guess by now we should not be surprised that this is how our criminal government works in our upside-down society. After all, we were told that 19 members of Al Qaeda attacked us on September 11th, killing over 3000 people, and we proceed to kill well over 1 million innocent Iraqis who had nothing to do with 9/11. Does anyone still believe our decision-makers are the good guys?

It seems in every case that the media uses race, religion, patriotism, or any red herring they can conjure up to distract us from the obvious truth about right and wrong, justice, and common human decency.

Ain’t No Money in Being Productive

There ain’t no money in being productive. The only money to be made is in feasting upon the carcass of this once great nation.

Seriously. Think about it. What sector of the economy is making serious money right now? The banking industry. And how do they make money? By taking funds from the fed at near 0% interest rates and then doing a couple of things. They can lend it to the Federal Government at interest and make money on the spread. They can trade in the stock market for their own account; a rigged game with their nano second front running at the expense of their retail & wholesale customers. All of the majors had a perfect quarter last quarter meaning they had no trading day losses. Easy to do if you know in advance what everyone else is going to do.

Let’s take it back a step in time. Let’s take it back to the vulture capitalists. Do you know they make their money? By being a brilliant capitalist? That’s what they would want you to believe. No, they make money by using borrowed money to buy family owned businesses, saddling the company with debt, taking a multi million dollar fee from the borrowed money for doing so, operating the company for a while and then selling it on for a larger amount to someone else using borrowed money saddling the company with more debt, and taking out a profit in the transaction. Brilliant, right? Depends. If you are the vulture, you get a nice check. If you are the worker at the company, you eventually lose your job as the company closes because the company could no longer service the debt payments. In other words extracting money from the carcass of productivity. Geniuses, all and they are worshiped as gods of capitalism.

Step forward to the world of mortgage securitization. It is clear from the SEC’s complaint against Goldman Sachs and the Magnetar case out of Chicago exposed by the NY Times and Pro Publica that the brilliant ones came to the conclusion a long time ago that it was more lucrative to feast upon destruction than it was to be constructive. In both those cases, securitized loan trusts were set up designed to fail and then the very ones who created those securitized pools bet against their investors for those vehicles to fail. They made billions by selling credit default swaps based upon their known, guaranteed failure while screwing their customers with their foreknowledge.

In the real estate world, the only thing moving are the foreclosures and the turnover thereof. Some may say this is expunging the system of a bad hangover, I’m not so sure. The whole system is based upon credit – meaning money issued as debt. It takes a productive job to be able to have the money to service debt. If there are no productive jobs, who is going to be left to buy the houses? And even if the ones who have the few remaining money paying jobs buy these houses as rental properties, who are they going to rent to? You have, no doubt, heard about the ever growing tent cities? It’s a shame, all of these houses sitting empty, and all of these people living in tents. In my book, the foreclosure/real estate industry is feeding on the carcass.

And productive work? Forget about it. No one seems to be interested anymore.

A case in point. There is a technology sitting on the shelf right now which quite literally turns you shit into gold. It takes fresh, raw humanure and extracts line grade methane gas from it at volumetric parity. What does that mean? It means for every gallon of poo which is processed, you get a gallon of line grade natural gas. And what would that mean were it implemented in a community? It would mean the municipal waste treatment plant would go from a money sucking, power sucking critical community infrastructure liability, to a money generating, power creating community infrastructure asset. It pays for itself. It pays for its operation, it pays for its replacement.

Is it used? No. And do you want to know why? Because the patents have expired. No one is willing to develop it to a community wide application because it can be done by anyone. Unless it can be protected with patents, no one is willing to “risk” the money to develop it. Productive? Absolutely. Does it make money? Absolutely. Will it be developed? What, are you kidding?

There is the primary economy, the secondary economy, and the tertiary economy. The primary economy is directly tied to the land. Farming, forestry, mining. The secondary economy is what is done to the primary economy. Transportation, manufacturing, distribution. The tertiary economy is the financial services which provides the grease (money) to make the primary and secondary function smoothly.

Up until now, whenever there have been difficulties in the primary or secondary economy, tweaking and tinkering with the tertiary could alter the way the primary or secondary functioned and things would be fine. For a while. But eventually, those tweaks stopped working because the level of complexity became so great, it becomes overbearing.

That’s where we are now. So what is wrong that the tertiary is the only way to create money? It should be the primary or secondary, the productive work, which creates wealth, not the tertiary. How did it get so wrong?

Here is what is wrong. It is money as debt.

Why is there price inflation? Classic economics would tell you it is too much money chasing too few goods. If that were the case, more goods would alleviate the problem. But it doesn’t.


Very few businesses are self financing. Most use borrowed money. If borrowed money is used, it must be paid back with interest. The only way to cover the interest cost is to raise prices. So if your supplier uses borrowed money, and you use borrowed money (and even if you don’t’ use borrowed money), the interest money needs to be found.

When money is borrowed into existence, the interest money doesn’t come with it so there is more owed back than exists. Everyone screams about how we need to pay off the debt, but the way things are currently set up, if we did that, you wouldn’t have any money to buy groceries, gas, clothes, rent, mortgage. It wouldn’t exist. It would all grind to a halt.

It is the duty of the sovereign to provide the coin of the realm. This duty was abdicated in this country for the fourth time in our history 100 years ago to private hands for their private profit. And profit they have indeed. They are the only ones making money these days. Productive work doesn’t pay. Soft hands pay.

Until this duty is reclaimed by the sovereign, until money becomes the public utility it needs to be, we shall forever be enslaved to the monied class. Productive work will decline, and a financial elite shall feed upon the carcass while the rest starve amongst plenty. The primary and secondary economies are grinding to a halt as the tertiary economy removes the grease from the wheels of commerce. Non productive work, feasting upon the dying carcass of the productive class will be the only thing that pays.

And here’s the kick.

Eventually, the primary and secondary economies grind to a complete halt which means the tertiary economy does too. And it all comes tumbling down. For everyone.

And what is the solution?

The magic number three.

1) The sovereign has the right, nay, the duty, to provide the coin of the realm and must reclaim its duty. The sovereign has no need to “borrow” money. It exists in abundance simply because the sovereign exists.

2) There can be no fractional reserve banking. Fractional reserve banking creates money out of nothing and is counterfeit. It usurps the right and duty of the sovereign and must be met with fierce retribution.

3) All levels of the sovereign, city, county, state and federal, must accept only the sovereign’s coin as payment of taxes. This gives immediate legitimacy and circulation to the sovereign’s coin.

Somewhere along the line, things became horribly mixed up. Money became commerce. Money is not commerce. Money is what enables commerce. Pops told me a long time ago that this country started to go to hell when General Motors got out of the business of making cars and into the business of making money. “They have it backwards” he would say.

Until we can get away from the idea that money is commerce, the primary and secondary economies shall continue to grind to a halt and there shall be immense pain for the country.

The Financial Con Of The Decade Explained So Simply Even A Congressman Will Get It

Sometimes, when chasing the bouncing ball of fraud and corruption on a daily basis, it is easy to lose sight of the forest for the millions of trees (all of which have a 150% LTV fourth-lien on them, underwritten by Goldman Sachs, which is short the shrubbery tranche). Luckily, Charles Hugh Smith, of has taken the time to put it all into such simple and compelling terms, even corrupt North Carolina congressmen will not have the chance to plead stupidity after reading this.

Of course, to those familiar with the work of Austrian economists, none of this will come as a surprise.

1. Enable trillions of dollars in mortgages guaranteed to default by packaging unlimited quantities of them into mortgage-backed securities (MBS), creating umlimited demand for fraudulently originated loans.

2. Sell these MBS as "safe" to credulous investors, institutions, town councils in Norway, etc., i.e. "the bezzle" on a global scale.

3. Make huge "side bets" against these doomed mortgages so when they default then the short-side bets generate billions in profits.

4. Leverage each $1 of actual capital into $100 of high-risk bets.

5. Hide the utterly fraudulent bets offshore and/or off-balance sheet (not that the regulators you had muzzled would have noticed anyway).

6. When the longside bets go bad, transfer hundreds of billions of dollars in Federal guarantees, bailouts and backstops into the private hands which made the risky bets, either via direct payments or via proxies like AIG. Enable these private Power Elites to borrow hundreds of billions more from the Treasury/Fed at zero interest.

7. Deposit these funds at the Federal Reserve, where they earn 3-4%. Reap billions in guaranteed income by borrowing Federal money for free and getting paid interest by the Fed.

8. As profits pile up, start buying boatloads of short-term U.S. Treasuries. Now the taxpayers who absorbed the trillions in private losses and who transferred trillions in subsidies, backstops, guarantees, bailouts and loans to private banks and corporations, are now paying interest on the Treasuries their own money purchased for the banks/corporations.

9. Slowly acquire trillions of dollars in Treasuries--not difficult to do as the Federal government is borrowing $1.5 trillion a year.

10. Stop buying Treasuries and dump a boatload onto the market, forcing interest rates to rise as supply of new T-Bills exceeds demand (at least temporarily). Repeat as necessary to double and then triple interest rates paid on Treasuries.

11. Buy hundreds of billions in long-term Treasuries at high rates of interest. As interest rates rise, interest payments dwarf all other Federal spending, forcing extreme cuts in all other government spending.

12. Enjoy the hundreds of billions of dollars in interest payments being paid by taxpayers on Treasuries that were purchased with their money but which are safely in private hands.

Charles' conclusion does not need further commentary as it is absolutely spot on:

Since the Federal government could potentially inflate away these trillions in Treasuries, buy enough elected officials to force austerity so inflation remains tame. In essence, these private banks and corporations now own the revenue stream of the Federal government and its taxpayers. Neat con, and the marks will never understand how "saving our financial system" led to their servitude to the very interests they bailed out.

The circle is now complete: in "saving our financial system," the public borrowed trillions and transferred the money to private Power Elites, who then buy the public debt with the money swindled out of the taxpayer. Then the taxpayers transfer more wealth every year to the Power Elites/Plutocracy in the form of interest on the Treasury debt. The Power Elites will own the debt that was taken on to bail them out of bad private bets: this is the culmination of privatized gains, socialized risk.

In effect, it's a Third World/colonial scam on a gigantic scale: plunder the public treasury, then buy the debt which was borrowed and transferred to your pockets. You are buying the country with money you borrowed from its taxpayers. No despot could do better.

As for part two of this epic con we are all living through, Charles explains as follows:

The Con of the Decade (Part II) meshes neatly with the first Con of the Decade. Yesterday I described how the financial Plutocracy can transfer ownership of the Federal government's income stream via using the taxpayer's money to buy the debt that the taxpayers borrowed to bail out the Plutocracy.

In order for the con to work, however, the Power Elites and their politico toadies in Congress, the Treasury and the Fed must convince the peasantry that low tax rates on unearned income are not just "free market capitalism at its best" but that they are also "what the country needs to get moving again."

The first step of the con was successfully fobbed off on the peasantry in 2001: lower the taxes paid by the most productive peasants marginally while massively lowering the effective taxes paid by the financial Plutocracy.

One Year Later, No Sign of Improvement in America's Income Inequality Problem:

Income inequality has grown massively since 2000. According to Harvard Magazine, 66% of 2001-2007's income growth went to the top 1% of Americans, while the other 99% of the population got a measly 6% increase. How is this possible? One thing to consider is that in 2001, George W. Bush cut $1.3 trillion in taxes, and 32.6% of the cut went to the top 1%. Another factor is Bush's decision to increase the national debt from $5 trillion to $11 trillion. The combination of increased government spending and lower taxes helped the top 1% considerably.

The second part of the con is to mask much of the Power Elites' income streams behind tax shelters and other gaming-of-the-system so the advertised rate appears high to the peasantry but the effective rate paid on total income is much much lower.

The tax shelters are so numerous and so effective that it takes thousands of pages of tax codes and armies of toadies to pursue them all: family trusts, oil depletion allowances, tax-free bonds and of course special one-off tax breaks arranged by "captured" elected officials.

Step three is to convince the peasantry that $600 in unearned income (capital gains) should be taxed in the same way as $600 million. The entire key to the U.S. tax code is to tax earned income heavily but tax unearned income (the majority of the Plutocracy's income is of course unearned) not at all or very lightly.

In a system which rewarded productive work and provided disincentives to rampant speculation and fraud, the opposite would hold: unearned income would be taxed at much higher rates than earned income, which would be taxed lightly, especially at household incomes below $100,000.

If the goal were to encourage "investing" while reining in the sort of speculations which "earn" hedge fund managers $600 million each (no typo, that was the average of the top 10 hedgies' personal take of their funds gains), then all unearned income (interest, dividends, capital gains, rents from property, oil wells, etc.) up to $6,000 a year would be free--no tax. Unearned income between $6,000 and $60,000 would be taxed at 20%, roughly half the top rate for earned income. This would leave 95% of U.S. households properly encouraged to invest via low tax rates.

Above $60,000, then unearned income would be taxed the same as earned income, and above $1 million (the top 1/10 of 1% of households) then it would be taxed at 50%. Above $10 million, it would be taxed at 60%. Such a system would offer disincentives to the speculative hauls made by the top 1/10 of 1% while encouraging investing in the lower 99%.

Could such a system actually be passed into law and enforced by a captured, toady bureaucracy and Congress? Of course not. But it is still a worthy exercise to take apart the rationalizations being offered to justify rampant speculative looting, collusion, corruption and fraud.

The last step of the con is to raise taxes on the productive peasantry to provide the revenues needed to pay the Plutocracy its interest on Treasuries. If the "Bush tax cuts" are repealed, the actual effective rates paid on unearned income will remain half (20%) of the rates on earned income (wages, salaries, profits earned from small business, etc.) which are roughly 40% at higher income levels.

The financial Plutocracy will champion the need to rein in Federal debt, now that they have raised the debt via plundering the public coffers and extended ownership over that debt.

Now the con boils down to insuring the peasantry pay enough taxes to pay the interest on the Federal debt--interest which is sure to rise considerably. The 1% T-Bill rates were just part of the con to convince the peasantry that trillions of dollars could be borrowed "with no consequences." Those rates will steadily rise once the financial Power Elites own enough of the Treasury debt. Then the game plan will be to lock in handsome returns on long-term Treasuries, and command the toady politicos to support "austerity."

The austerity will not extend to the financial Elites, of course. That's the whole purpose of the con. "Some are more equal than others," indeed.

h/t Andrew

With news like this, who needs PR?

Do you really need to read a government press release to be told that you're being pillaged for your own good?

Contrary to the American press' reputation for giving voice to the voiceless, the largest voice is given to the most powerful monopolies, whose fallacies, lies, and assumed righteousness are amplified and multiplied with precious little skepticism.

Perhaps you have seen the following justification for the U.S. military occupation of Iraq; a version has appeared for years in news reports and official releases.

"The persistent violence also has raised concerns about the readiness of Iraq’s government to take over responsibility for security as the U.S. prepares to withdraw its forces by the end of next year." ["Al-Qaida in Iraq adopting Taliban tactics," AP, 6/17/10]

While that may seem logical at first glance, one eventually wonders whether the editor is counting on a reader's ignorance of the obvious: U.S. forces were in Iraq at the time. Apparently, the U.S. military occupation — which is obviously not achieving its goals of peace and stability — must continue anyway.

You also may have read that U.S. and NATO forces only "accidentally" kill civilians in an effort to "gain the trust of the Afghan people," and that it's all part of a "counterinsurgency strategy" — which was "used successfully against both Sunni and Shiite insurgents in Iraq" — aimed at "securing the Afghan population"; while, when "insurgents" kill civilians, they are "seeking to sow fear and undermine confidence in . . . government." ["NATO accepts blame for killing 6 Afghan civilians," AP, 7/9/10]

Another way the popular press influences public opinion in favor of empire is by presenting only one side's war-making as violent and extreme, and therefore contemptible: "Army offensives and U.S. missile strikes are believed to have decreased militant attacks in Pakistan, but the violence is far from ended." ["Major militant attacks in Pakistan in 2010," AP, 7/9/10] "But the violence ..." means more war is necessary.

That report goes on to list only those attacks reported to have been perpetrated by the "militants," who — perhaps due to their lack of a standing army, drones, and F-18s — are not capable of such noble actions as "offensives" and "strikes."

Government officials speak through the editor, and vice versa. The NYT and the AP are quite at ease with preaching American exceptionalism, using the U.S. government's own terminology and apologies for various aggression:

U.S. Secretary of State Hillary Rodham Clinton faced sharp rebukes from Pakistani audiences Friday, including one woman who accused the U.S. of conducting "executions without trial" [scare quotes] in aerial drone strikes. Slapping back, Clinton questioned Pakistan's commitment to fighting terrorists [no scare quotes]. . . .

As she sparred with Pakistani citizens and journalists, Clinton faced sharp questions about the secret U.S. program that uses unmanned aircraft to launch missiles to kill terrorists along the porous, ungoverned border with Afghanistan [excuse for drone strikes].

But she refused to go into detail about the classified strikes that have killed both key terror leaders and bystanders [unlike bystanders, innocent civilians wouldn't just stand by as those terrorists do their terrorism], long a source of outrage among Pakistan's population despite an equally deadly campaign of militant-spawned bombings. ["Pakistanis confront Clinton over drone attacks" AP, 10/31/9]

"Despite an equally deadly campaign of militant-spawned bombings" means those Pakistanis have contempt only for Americans.

Similarly, in federal affairs, readers are led to perceive that most "lawmakers" opposed to "economic stimulus," "defense appropriations," or "health care reform" are driven merely by ideology or the threat of being unseated in the election. While that may be true in many cases, it is no reason to ignore those who defy the stereotype.

If anyone should have their voices amplified, it would be the empire's victims and opposition. Instead, those who oppose an aggressive foreign policy, or immoral and unconstitutional legislation, are made to look as though their opposition is purely political or dishonest; an all-powerful and ever-expanding central authority is tacitly accepted as a divine inevitability.

With a press like that, who needs a Ministry?

WSJ: The Estate Tax Death Panel -- Too Rich to Live Past 2010?

Weekend Wall Street Journal, Too Rich to Live?:

The estate tax is set to come roaring back in January. That sets the stage for a perverse calculus: End it all—or leave a massive bill for your heirs to deal with.

It has come to this: Congress, quite by accident, is incentivizing death.

When the Senate allowed the estate tax to lapse at the end of last year, it encouraged wealthy people near death's door to stay alive until Jan. 1 so they could spare their heirs a 45% tax hit. Now the situation has reversed: If Congress doesn't change the law soon—and many experts think it won't—the estate tax will come roaring back in 2011. Not only will the top rate jump to 55%, but the exemption will shrink from $3.5 million per individual in 2009 to just $1 million in 2011, potentially affecting eight times as many taxpayers.

The math is ugly: On a $5 million estate, the tax consequence of dying a minute after midnight on Jan. 1, 2011 rather than two minutes earlier could be more than $2 million; on a $15 million estate, the difference could be about $8 million.

Of course, there is a "death incentive" whenever Congress raises the estate tax. But it hasn't happened in decades; the top rate has held steady or fallen since 1942, according to tax historian Joseph Thorndike of Tax Analysts, a nonprofit group. In fact, the jump from zero to 55% would be "the largest increase in a major tax that we've ever seen," Mr. Thorndike says.

That possibility presents a bizarre menu of options for wealthy older people—and their heirs. Estate planning was never cheerful, but now it is getting downright macabre, at least for the tax averse.

"You don't know whether to commit suicide or just go on living and working," says Eugene Sukup, an outspoken critic of the estate tax and the founder of Sukup Manufacturing, a maker of grain bins that employs 450 people in Sheffield, Iowa. Born in Nebraska during the Dust Bowl, the 81-year-old Mr. Sukup is a National Guard veteran and high school graduate who founded his firm, which now owns more than 70 patents, with $15,000 in 1963. He says his estate taxes, which would be zero this year, could be more that $15 million if he were to die next year. ...

Senators are divided among three possible solutions. Some favor the pre-Bush rate of 55%, while others advocate a 35% rate (with a more generous exemption). A third group prefers the old 45% rate. ...

The IRS has yet to issue guidance explaining current estate-tax law, and no one knows if Congress will include retroactive elements when members deal with the tax. ...

Mr. Aucutt, who has practiced estate-tax law for 35 years, expects to see "truly gruesome" cases toward the end of the year, given the huge difference between 2010 and 2011 rates. Without knowing what the estate tax is, has been or will be, advisers say it is difficult to offer counsel that applies broadly, as techniques that work under one version of the law backfire in others. ...

What about the options for taxpayers who are so eager to reduce their heirs' tax burden that they are considering ending their lives? Three states—Oregon, Washington and Montana—allow versions of the practice. ... Still, states strongly discourage what's becoming known as "suicide tourism" with elaborate residency and documentation requirements.

Similarly, some countries, such as Switzerland and the Netherlands, have long allowed physicians to aid patients in dying. But only Switzerland extends this benefit to foreigners.

(Hat Tip: Scott Radmall.)

US banks' role in Mexican drug trade

Ever wonder why it is the border between Mexico and the US is not really a secure border?
And, why the Obama administration is coming down so hard on Arizona for enforcing immigration/border crossing laws?

Could it be, because the US administration really doesn't want a secure US/Mexican border? One that may impede that which is being transported across the border?

A DC-9 jet lands in the port city of Ciudad del Carmen, 500 miles east of Mexico City
The crew attempts to keep soldiers away by saying their is a dangerous oil spill.
The soldiers become suspicious and check the plane. What do they find?
They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the United States: Wachovia Corp. and Bank of America Corp.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. San Francisco's Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers - including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

Wachovia admitted it didn't do enough to spot illicit funds in handling $378.4 billion for Mexican currency exchange houses from 2004 to 2007. That's the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history - a sum equal to one-third of Mexico's current gross domestic product.

So Wachovia strikes a deal with federal prosecutors? Which means, we have to know this is a token plea. Meant to ensure the masses, to create the perception, the government is getting tough. But, would they government really 'get tough' on the banksters?

Now for a word from an insider who quit the bank in disgust-

"It's the banks laundering money for the cartels that finances the tragedy," said Martin Woods, director of Wachovia's anti-money-laundering unit in London from 2006 to 2009.

Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia's branch network.

"If you don't see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you're missing the point," he said.

Banks profits, open borders and chaos. Money laundering for drug traffickers. If you don't see the correlation, your missing the point.

This bit of news is made much more credible, not that I had any doubts, of the bankers involvements with drug trafficking, when you recall this older posting February 11/2009

Wow, Drug money flowed into banks!

The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

Standard operating procedure for the banks. Laundering drug money. So very profitable!!!

Mortgage Investors Turn to State Courts for Relief

INVESTORS who lost billions on boatloads of faulty mortgage securities have had a hard time holding Wall Street accountable for selling the things in the first place.

For the most part, banks have said they can’t be called out in court on any of this because they had no idea that so many of these loans went to people who lacked the resources to make even their first mortgage payment.

Wall Street firms were intimately involved in the financing, bundling and sales of these loans, so their Sergeant Schultz defense rings hollow. They provided hundreds of millions of dollars in credit to dubious underwriters, and some even had their own people on site at the loan factories. Many Wall Street firms owned mortgage lenders outright.

Because many of the worst lenders are now out of business, investors in search of recoveries have turned to the banks that packaged the loans into securities. But successfully arguing that Wall Street aided lenders in a fraud is tough under federal securities laws. This is largely a result of Supreme Court decisions barring investors from bringing federal securities fraud cases that accuse underwriters and other third parties as enablers.

Where there’s a will, however, there’s a way. And state courts are proving to be a more fruitful place for mortgage investors seeking redress, legal experts say.

In late June, for example, Martha Coakley, the attorney general of Massachusetts, extracted $102 million from Morgan Stanley in a case involving Morgan’s extensive financing of loans made by New Century, a notorious and now defunct lender that was based in California.

Morgan packaged the loans into securities and sold them to clients, even after its due diligence uncovered problems with the underlying mortgages that New Century fed to the firm, Ms. Coakley said. In settling the matter, Morgan neither admitted nor denied the allegations. Her investigation is continuing.

One of the most interesting aspects of this case “is the active role of state regulators relying upon state law to protect investors,” said Lewis D. Lowenfels, an authority on securities law at Tolins & Lowenfels in New York. “This state focus may well fill a void left by the U.S. Supreme Court’s increasingly narrow interpretation of the antifraud provisions of the federal securities laws as well as the relatively few S.E.C. enforcement actions initiated in this area.”

Last Friday, an investment management firm that lost $1.2 billion in mortgage securities it bought for clients filed suit in Massachusetts state court against 15 banks, accusing them of abetting a fraud. The firm, Cambridge Place Investment Management of Concord, Mass., purchased $2 billion in mortgage securities from the banks, and it says the banks misrepresented the risks in the underlying loans — both in prospectuses and sales pitches.

The complaint says the banks misled Cambridge Place by maintaining that the mortgages in the securities it bought had met strict underwriting requirements related to the borrowers’ ability to repay the loans. Cambridge also contends it relied on the banks’ claims of having conducted due diligence to verify the quality of the loans bundled into the securities.

The complaint also details the anything-goes lending practices during the subprime mortgage boom.

Interviews in the complaint with 63 confidential witnesses turned up such gems as Fremont Investment & Loan, which had been based in California, approving loans for pizza delivery men with reported monthly incomes of $6,000, and management at Long Beach Mortgage, also in California, directing underwriters to “approve, approve, approve.”

One Long Beach program made loans to self-employed borrowers based on three letters of reference from past employers. A former worker said some letters amounted to “So-and-so cuts my lawn and does a good job,” adding that the company made no attempt to verify the information, the complaint stated.

Such tales are hardly shockers. But they provide important context when Cambridge moves up the ladder to the banks that bundled and sold the loans.

For example, the complaint contended that Credit Suisse, from whom it bought $88 million of mortgage securities in 2005 and 2006, told Cambridge of its “superior” due diligence, including a performance review of every loan. Three-quarters of these loans are delinquent, in default, foreclosure, bankruptcy or repossession, the complaint said.

Bear Stearns, now a unit of JPMorgan Chase, sold Cambridge $65 million of securities. It owned three mortgage lenders and told Cambridge it sampled the loans it sold to check underwriting procedures, borrower documentation and compliance, the complaint said.

Among others named in the suit are Bank of America, Barclays, Citigroup, Countrywide, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS. All of those, as well as Credit Suisse and JPMorgan, declined to comment.

CAMBRIDGE’S lawyers brought its case in Massachusetts under laws barring those who sell securities from making false statements about them or omitting material facts. Jerry Silk, a senior partner at Bernstein Litowitz Berger & Grossmann who represents Cambridge, said, “This case represents yet another example of Wall Street banks’ failure to live up to their basic responsibility to investors — to tell the truth about the securities they are selling.”

Mr. Silk’s firm has jousted with Wall Street underwriters before. In 2004, it recovered $6 billion in a suit against banks that underwrote debt issued by WorldCom, the defunct telecom. Denise L. Cote, the federal judge overseeing that matter, concluded that because investors rely so heavily on underwriters, courts must be “particularly scrupulous in examining the conduct,” she said.

It is too soon to tell if investors will recover losses in mortgage securities. But the efforts are reminiscent of those in the mid-90s against brokerage firms that cleared trades and provided capital to dubious penny-stock outfits such as A. R. Baron and Sterling Foster.

For decades, companies that cleared such trades — Bear Stearns was a big one — escaped liability for fraud at these so-called “bucket shops.” But regulators went after clearing firms by accusing them of facilitating such acts; in a 1999 lawsuit, the Securities & Exchange Commission accused Bear Stearns of enabling a fraud at A. R. Baron. Bear Stearns paid $35 million in fines and restitution to settle the case.

If trust in capital markets is to return, investors must be able to believe what they read in prospectuses. Without that minimum standard, how can Wall Street expect the markets to function again?