What happens when the economy stops growing — forever?
Category Archives: Issues
IMF warns that world risks sliding into a 1930s-style slump
The Guardian reports: The world risks sliding into a 1930s-style slump unless countries settle their differences and work together to tackle Europe’s deepening debt crisis, the head of the International Monetary Fund has warned.
On a day that saw an escalation in the tit-for-tat trade battle between China and the United States and a deepening of the diplomatic rift between Britain and France, Christine Lagarde issued her strongest warning yet about the health of the global economy and said if the international community failed to co-operate the risk was of “retraction, rising protectionism, isolation”.
She added: “This is exactly the description of what happened in the 1930s, and what followed is not something we are looking forward to.”
The IMF managing director’s call came amid growing concern that 2012 will see Europe slide into a double-dip recession, with knock-on effects for the rest of the global economy. “The world economic outlook at the moment is not particularly rosy. It is quite gloomy,” she said.
How do you define American?
Israeli military base attacked by Jewish extremists in West Bank
The Guardian reports: A gang of 50 Jewish settlers and rightwing activists have broken into an army base near the Israeli settlement of Kedumim in the West bank, setting fire to tyres and hurling rocks at both Israeli soldiers and Palestinians.
One settler forced open the door of a jeep carrying the Efraim Regional Brigade’s commander, who was hit in the head with a rock and suffered minor injuries. Soldiers managed to force the group back outside the base after several minutes but by the time Israeli police arrived at the scene, most of the attackers had fled. Only two were arrested.
The attack is the latest in a wave of violent retributions exacted by extremist Jewish settler groups against Palestinians and the Israeli Defence Forces in response to government policy to evacuate illegal outposts in the West Bank. A spokesperson for the Israeli military said it was the most serious assault on its forces by Jewish activists to date.
Israel’s defence minister, Ehud Barak, described the incident as “homegrown terror”, which he warned would not be tolerated. “We will capture those responsible and they will stand trial,” he vowed. “They endangered lives and their actions threaten to damage the delicate relations Israel has with its neighbours.”
Iran hijacked U.S. drone, says Iranian engineer
Christian Science Monitor reports in an exclusive: Iran guided the CIA’s “lost” stealth drone to an intact landing inside hostile territory by exploiting a navigational weakness long-known to the US military, according to an Iranian engineer now working on the captured drone’s systems inside Iran.
Iranian electronic warfare specialists were able to cut off communications links of the American bat-wing RQ-170 Sentinel, says the engineer, who works for one of many Iranian military and civilian teams currently trying to unravel the drone’s stealth and intelligence secrets, and who could not be named for his safety.
Using knowledge gleaned from previous downed American drones and a technique proudly claimed by Iranian commanders in September, the Iranian specialists then reconfigured the drone’s GPS coordinates to make it land in Iran at what the drone thought was its actual home base in Afghanistan.
“The GPS navigation is the weakest point,” the Iranian engineer told the Monitor, giving the most detailed description yet published of Iran’s “electronic ambush” of the highly classified US drone. “By putting noise [jamming] on the communications, you force the bird into autopilot. This is where the bird loses its brain.”
The “spoofing” technique that the Iranians used – which took into account precise landing altitudes, as well as latitudinal and longitudinal data – made the drone “land on its own where we wanted it to, without having to crack the remote-control signals and communications” from the US control center, says the engineer.
The revelations about Iran’s apparent electronic prowess come as the US, Israel, and some European nations appear to be engaged in an ever-widening covert war with Iran, which has seen assassinations of Iranian nuclear scientists, explosions at Iran’s missile and industrial facilities, and the Stuxnet computer virus that set back Iran’s nuclear program.
Now this engineer’s account of how Iran took over one of America’s most sophisticated drones suggests Tehran has found a way to hit back. The techniques were developed from reverse-engineering several less sophisticated American drones captured or shot down in recent years, the engineer says, and by taking advantage of weak, easily manipulated GPS signals, which calculate location and speed from multiple satellites.
Western military experts and a number of published papers on GPS spoofing indicate that the scenario described by the Iranian engineer is plausible.
“Even modern combat-grade GPS [is] very susceptible” to manipulation, says former US Navy electronic warfare specialist Robert Densmore, adding that it is “certainly possible” to recalibrate the GPS on a drone so that it flies on a different course. “I wouldn’t say it’s easy, but the technology is there.”
CIA drones quit one Pakistan site — but U.S. keeps access to other airbases
The Bureau of Investigative Journalism reports: Despite its very public withdrawal from Shamsi airfield at the weekend, the United States continues to have access to a number of military airfields inside Pakistan – including at least one from which armed drones are able to operate, the Bureau understands.
The first concrete indications have also emerged that the US has now effectively suspended its drone strikes in Pakistan. The Bureau’s own data registers no CIA strikes since November 17.
Islamabad is furious in the wake of a NATO attack which recently killed 24 Pakistani soldiers on its Afghan borders. As well as suspending NATO supply convoys through Pakistan, anti-aircraft missiles have also reportedly been moved to the border with Afghanistan. Pakistan also demanded that the US withdraw from Shamsi, a major airfield in Balochistan controlled and run by the Americans since late 2001.
US Predator and Reaper drones have operated from the isolated airbase for many years. Technically the base is leased to Abu Dhabi in the United Arab Emirates, which allowed Pakistan to deny a US presence for many years. Now the US has quit Shamsi, with large US transporter planes stripping military hardware from the base.
But the US will continue to have access to at least five other Pakistani military facilities, according to a Pakistani source with extensive knowledge of US-Pakistani military and intelligence co-operation.
Israeli vs Palestinian right to protest
The ‘new anti-Semitism’ smear is getting old
Max Blumenthal writes: Last week began with former AIPAC flack Josh Block accusing writers at two progressive think tanks in Washington of advancing the “new” anti-Semitism, conflating their criticisms of Israeli policies with straightforward Jew-hatred. “Either they can allow people to say borderline anti-Semitic stuff,” Block told Politico, “and to say things that are antithetical to the fundamental values of the Democratic party, or they can fire them and stop it.” By the end of the week, Block was feverishly denying ever accusing anyone of anti-Semitism and was reportedly hanging on by a thread to his own jobs at two Beltway policy institutes.
This week began with Thomas Friedman sending the self-appointed defenders of Israel into a petulant frenzy. “I sure hope that Israel’s prime minister, Benjamin Netanyahu, understands that the standing ovation he got in Congress this year was not for his politics. That ovation was bought and paid for by the Israel lobby,” Friedman wrote. Like clockwork, Friedman came under heavy fire from Jennifer “Round Up His Captors” Rubin, Rep. Steve Rothman (D-NJ), Elliot Abrams, and Jonathan Tobin.
While Tobin explicitly accused Friedman of trafficking in the “New Anti-Semitism,” Abrams did so implicitly, falsely claiming that Friedman had “refer[red] so nastily to the ‘Jewish Lobby.'” (In fact, as Jim Lobe noted, Friedman never used the phrase “Jewish lobby.”) Thus Friedman, that fierce anti-Zionist crusader who once warned of “a trend, both deliberate and inadvertent, to delegitimize Israel,” was branded by two of America’s most prominent neoconservatives as a dangerous Jew hater.
The two pathetic episodes crystallized an encouraging trend: the “New Anti-Semitism” smear is finally getting old.
The end of one American war: ‘They destroyed the country and now they are leaving.’
As the United States officially ended it military presence in Iraq with a small parade at Baghdad airport that neither Iraq’s president nor prime minister bothered attending, The Guardian reported:
On the streets of Baghdad, the ceremony caused little fuss. It was carried live by state television, but groups of men in several coffee halls in the city’s eastern suburbs largely remained ambivalent.
Assad Mohammed, 48, a spare parts shop owner said. “I don’t have any emotions about the events of today. I’m not happy and I’m not sad.
“Whether they are here or not, it’s the same. Stability isn’t in the hands of the government, or the Americans. It’s in the hands of the Iraqi people.
“Sovereignty is not something that will be given to us. Sovereignty is when the people step forward and take it.”
Another man, Mundhar Kamel, 65, said the departure changed little. “This move is them exiting from one door and entering from another. In the embassy they still have 15,000 people and there is talk about 3,000 more [military] trainers. This is not a withdrawal, this is an act on a stage.
“We haven’t gained anything from the country. They destroyed the country and now they are leaving.”
Adham Abul Razzak, 30, saw hope in the withdrawal. “I am very happy because of this withdrawal. I wish that this step would be the first towards unifying Iraqis and expelling sectarianism.
“The effect of the occupation is still with us because of the relations between the two sides and the presence of such a large embassy. I don’t think there will be violence after the withdrawal, the opposite in fact. But only if the neighbouring countries do not interfere in our business.”
Syria’s torture machine
Jonathan Miller reports: A short drive from the frontier, along hair-pinned mountain roads, past Lebanese checkpoints where friendly soldiers shiver, is a Syrian safe-house. There is no electricity. The place is crammed with refugees; there are children sleeping everywhere. In an upstairs room, next to a small wood-burner, a weathered former tractor driver from Tal Kalakh – who is in his 50s – winces as pains shoot through his battered body, lying on a mattress on the concrete floor. He manoeuvres himself on to a pile of pillows and lights a cigarette. He’s relieved to have escaped to Lebanon but he’s already yearning to go home. He can’t though. His right leg is now gangrenous below the knee; he can barely move. So far he’s had only basic medical treatment.
Before sunrise one morning, he told me, as troops laid siege to his town, he’d been shot twice by “shabiha”, pro-al-Assad militia. Unable to run, he had been rounded up, thrashed and driven down the road to nearby Homs with many other detainees, being beaten all the way. For the next few weeks, his bullet wounds were left to fester, he says, while he was subjected to torture so extreme that his accounts of what had happened to him left those of us who listened stunned and feeling sick. During his time in detention, he had been passed, he claimed, to five different branches of al-Assad’s sadistic secret police, the Mukhabarat.
In flickering candle-light, he told me in gruesome detail of beatings he’d received with batons and electric cables on the soles of his feet (a technique called “falaka”). He had been hung by his knees, immobilised inside a twisting rubber tyre, itself suspended from the ceiling. He had been shackled hand and foot and hung upside down for hours – the Mukhabarat’s notorious “flying carpet”. Then hung up by his wrists (“the ghost”), and whipped and tormented with electric cattle prods.
When he wasn’t being tortured, he had been crammed into cells with up to 80 people, without room to sit or sleep, he claimed. They stood hungry, naked and frightened in darkness, in their filth, unfed, unwashed. He recalled the stench and listening to the screams of others echoing through their sordid dungeon. He told of being thrown rotting food. And of the sobbing of the children.
“I saw at least 200 children – some as young as 10,” he said. “And there were old men in their 80s. I watched one having his teeth pulled out by pliers.” In Syria’s torture chambers, age is of no consequence, it seems. But for civilians who have risen up against al-Assad, it has been the torture – and death in custody – of children that has caused particular revulsion.
The tractor driver told of regular interrogations, of forced confessions (for crimes he never knew he had committed); he spoke of knives and other people’s severed fingers, of pliers and ropes and wires, of boiling water, cigarette burns and finger nails extracted – and worse: electric drills. There had been sexual abuse, he said, but that was all he said of that.
Having finished in one place, he’d been transferred to yet another branch of the Mukhabarat and his nightmare would start all over again. And as the beatings went on day in, day out, his legs and the soles of his feet became raw and infected. That was when they forced him to “walk on rocks of salt”. He told me, speaking clearly, slowly: “When you are bleeding and the salt comes into your flesh, it hurts a lot more than the beating. I was forced to walk round and round to feel more pain.”
He lit another cigarette, then said: “Although we are suffering from torture, we are not afraid any more. There is no fear. We used to fear the regime, but there is no place for fear now.” If the intention of torture is to terrorise, it has in recent months had the opposite effect. Each act of brutality has served, it seems, to reinforce the growing sense of outrage and injustice and has triggered ever more widespread insurrection.
For U.S. marines, killing civilians was ‘a cost of doing business’ in Iraq
The New York Times reports: One by one, the Marines sat down, swore to tell the truth and began to give secret interviews discussing one of the most horrific episodes of America’s time in Iraq: the 2005 massacre by Marines of Iraqi civilians in the town of Haditha.
“I mean, whether it’s a result of our action or other action, you know, discovering 20 bodies, throats slit, 20 bodies, you know, beheaded, 20 bodies here, 20 bodies there,” Col. Thomas Cariker, a commander in Anbar Province at the time, said to investigators as he described the chaos of Iraq. At times, he said, deaths were caused by “grenade attacks on a checkpoint and, you know, collateral with civilians.”
The 400 pages of interrogations, once closely guarded as secrets of war, were supposed to have been destroyed as the last American troops prepare to leave Iraq. Instead, they were discovered along with reams of other classified documents, including military maps showing helicopter routes and radar capabilities, by a reporter for The New York Times at a junkyard outside Baghdad. An attendant was burning them as fuel to cook a dinner of smoked carp.
The documents — many marked secret — form part of the military’s own internal investigation, and confirm much of what happened at Haditha, a Euphrates River town where Marines killed 24 Iraqis, including a 76-year-old man in a wheelchair, women and children, some just toddlers.
Haditha became a defining moment of the war, helping cement an enduring Iraqi distrust of the United States and a resentment that not a single Marine was ever prosecuted. That is one of the main reasons that all American combat troops are leaving by the weekend.
But the accounts are just as striking for what they reveal about the extraordinary strains on the soldiers who were assigned here, their frustrations and their frequently painful encounters with a population they did not understand. In their own words, the report documents the dehumanizing nature of this war, where Marines came to view 20 dead civilians as not “remarkable,” but as routine.
Iraqi civilians were being killed all the time. Maj. Gen. Steve Johnson, the commander of American forces in Anbar Province, in his own testimony, described it as “a cost of doing business.”
Why the U.S. economy is at risk of another Great Depression
Joseph Stiglitz explains what caused the Great Depression: The argument has been made that the Fed caused the Depression by tightening money, and if only the Fed back then had increased the money supply—in other words, had done what the Fed has done today—a full-blown Depression would likely have been averted. In economics, it’s difficult to test hypotheses with controlled experiments of the kind the hard sciences can conduct. But the inability of the monetary expansion to counteract this current recession should forever lay to rest the idea that monetary policy was the prime culprit in the 1930s. The problem today, as it was then, is something else. The problem today is the so-called real economy. It’s a problem rooted in the kinds of jobs we have, the kind we need, and the kind we’re losing, and rooted as well in the kind of workers we want and the kind we don’t know what to do with. The real economy has been in a state of wrenching transition for decades, and its dislocations have never been squarely faced. A crisis of the real economy lies behind the Long Slump, just as it lay behind the Great Depression.
For the past several years, Bruce Greenwald and I have been engaged in research on an alternative theory of the Depression—and an alternative analysis of what is ailing the economy today. This explanation sees the financial crisis of the 1930s as a consequence not so much of a financial implosion but of the economy’s underlying weakness. The breakdown of the banking system didn’t culminate until 1933, long after the Depression began and long after unemployment had started to soar. By 1931 unemployment was already around 16 percent, and it reached 23 percent in 1932. Shantytown “Hoovervilles” were springing up everywhere. The underlying cause was a structural change in the real economy: the widespread decline in agricultural prices and incomes, caused by what is ordinarily a “good thing”—greater productivity.
At the beginning of the Depression, more than a fifth of all Americans worked on farms. Between 1929 and 1932, these people saw their incomes cut by somewhere between one-third and two-thirds, compounding problems that farmers had faced for years. Agriculture had been a victim of its own success. In 1900, it took a large portion of the U.S. population to produce enough food for the country as a whole. Then came a revolution in agriculture that would gain pace throughout the century—better seeds, better fertilizer, better farming practices, along with widespread mechanization. Today, 2 percent of Americans produce more food than we can consume.
What this transition meant, however, is that jobs and livelihoods on the farm were being destroyed. Because of accelerating productivity, output was increasing faster than demand, and prices fell sharply. It was this, more than anything else, that led to rapidly declining incomes. Farmers then (like workers now) borrowed heavily to sustain living standards and production. Because neither the farmers nor their bankers anticipated the steepness of the price declines, a credit crunch quickly ensued. Farmers simply couldn’t pay back what they owed. The financial sector was swept into the vortex of declining farm incomes.
The cities weren’t spared—far from it. As rural incomes fell, farmers had less and less money to buy goods produced in factories. Manufacturers had to lay off workers, which further diminished demand for agricultural produce, driving down prices even more. Before long, this vicious circle affected the entire national economy.
How James Murdoch’s phone-hacking cover-ups went belly-up
David Leigh writes: The wagons of the Murdoch media empire have long been circled protectively around one man, as the hacking scandal has raged on. Many other Murdoch myrmidons have been arrested, sacked, or turned out into the snow in his father’s brutal closure of the News of the World: but not him.
James Murdoch’s luck is still holding, in one way. The explosive news this week was that new evidence knocks a hole in his “I knew little” defence. But it failed to emerge in time to affect the recent shareholder revolt at BSkyB. For some reason, the News International group of executives and lawyers who are supposedly rooting out all evidence of malpractice, were a fraction slow in discovering this smouldering email chain and turning it over to a Commons committee. Had they been quicker, the outcome at Sky might have been different.
James’s luck has held in another way too. Some public attention has been distracted by the timing of Scotland Yard’s announcement that the murdered Milly Dowler’s voicemails were indeed hacked by exploitative NI journalists, but probably not additionally deleted on purpose. The NI attack dogs have been set to bay at maximum diversionary volume, even trying to accuse the Guardian, which originally reported the deletions, of deliberately “sexing up” their disclosures. Tellingly, even this week NI refuses to confirm or deny whether its journalists did delete Milly’s voice messages.
But in a more fundamental sense, James’s luck has finally run out. The publication of the newly discovered emails between him and the then editor of the News of the World, documents not only the mechanism of a big cover-up but also, crucially, the way that James has repeatedly shifted his story and sought to blame others. It is not a good look for the would-be captain of a mighty international corporation.
A revolution for all seasons
U.S. anti-terrorism bill: Liberty vs security
The Sunni Awakening braces for an Iraq without the U.S.
The New York Times reports: Meeting various neighbors and supplicants on a recent evening, America’s staunchest ally in Iraq, Sheik Ahmed Abu Risha, sat in a tent sipping tea from an implausibly tiny glass cup. He greeted each new visitor with a hearty outburst of “dear one” and a kiss on the cheek.
At one point a young man walked in carrying an M-16 rifle, leaned over and kissed the sheik on the cheek, too, in a clear sign of loyalty from a member of a tribal militia.
Mr. Abu Risha is often credited with helping turn the tide of the Iraq war beginning in 2006 by rallying local tribal leaders to fight Al Qaeda in Mesopotamia, the homegrown Qaeda affiliate in Iraq, which has some foreign members. He still commands, by his own estimate, about 80,000 militia members.
With two weeks left before the United States military completes its withdrawal from Iraq, these units, known broadly as the Sunni Awakening, still remain outside the new Iraqi police force and army. Ragtag groups of men wearing jeans and carrying rifles at dusty checkpoints throughout western Iraq, they are a loose end left by the United States.
Some Awakening members are former insurgents and members of Saddam Hussein’s Baath Party who fought in a nationalist wing of the Sunni uprising early in the war, a matter of grave concern to the Shiite-dominated government of Prime Minister Nuri Kamal al-Maliki. Without the buffer provided by the Americans, relations between the Awakening and the central government, always touchy, are growing increasingly strained, and the government now wants the Awakening to disband by Dec. 31, the deadline for the exit of the United States military.
Mr. Abu Risha, in an interview in his compound beside a lazy bend in the Euphrates River, said members of the tribal militias in western Iraq were not likely to disarm quickly — and certainly not by the end of the month.
Ordinary citizens at war — the ‘Martyr’s Brigade’ fighting outside Misrata in Libya
The rise and fall of Zuccotti Park — and the future of the movement it birthed
Christopher Ketcham writes: In the month before the destruction of the encampment in Zuccotti Park, I got in the habit of biking across the Brooklyn Bridge each night to talk with the Wall Street Occupiers and wander among the tents. There was always work to behold—bigger tents going up, new volunteers welcomed, the kitchen doling out free food, the media groups live-streaming, dishes being done, cops being teased—and always conversation to be had and heard.
The protesters liked to work, but they loved to talk, and mostly what they talked about was how to organize to destroy the power of money in America. They were pissed off about it—pissed off at the corporations, the banks, the financiers, the corrupt legislators, the corrupt presidents, the corrupt everything. “It doesn’t matter which party is in power,” Jeff Smith, a 41-year-old former media consultant, told me. “The banks and the corporations own them both.” And President Barack Obama? “He is worse than a corporate whore like Bill Clinton,” Smith said. “He’s like a Trojan Horse for the right-wing agenda. Obama mesmerizes his base of true believers with the skill of a televangelist and then turns around and sells them out in backroom deals with the plutocrats he seems to worship. It’s hard not to realize that his incompetence and/or duplicity is a driving factor behind Occupy Wall Street.”
Such was the talk. When they spoke honestly, the Occupiers admitted that they had no idea what to do about the total corruption of everything—except what they were doing in Zuccotti Park.
So they would occupy the space, hold the ground, and fill it with unwashed humanity, which is the kind of thing that’s not supposed to happen in Manhattan’s Financial District. They came in all races, all ages. There were schoolteachers, professors, ex-servicemen, sculptors, painters, dancers, musicians, writers, at least one retired male stripper, at least one Native American, many college students, some high-schoolers, and the homeless. They carved a community out of the park, a society in miniature, with its own rules and government and infrastructure—a library, kitchen, clinic, a newspaper called The Occupied Wall Street Journal, and even a tobacconist. They marched on Wall Street each day, made trouble, made noise, got arrested, met in a daily “general assembly” and in “working groups,” planned for the winter, and organized, not least, to make more trouble.
“This is not a protest,” one of their signs said. “This is an affirmation of the vitality and idealism erupting from underneath the AMERICAN NIGHTMARE.” The library grew ever larger—it soon had 5,000 titles, the only all-night library in the city—and the signs proliferated. “Jobs, Justice, Education,” they said. And: “End Student Debt.” And: “Reinstate Glass-Steagall; Make Corporate Lobbying Illegal.” The signs said that Wall Street was “the enemy of humanity.” They said, “We need only overthrow the investors—not the government.” More tents sprung up through October and November, the campers packing in by the hundreds, until little space was left. The expanding movement was forced to find nearby offices, at 50 Broadway, where it could now claim to have a bureaucracy. [Continue reading…]