The Rag Blog

On August 19-21, demonstrators across Canada will protest the conference of prime minister Stephen Harper, U.S. president George Bush, and Mexican president Felipe Calderon in Montebello, Quebec. The conference aims to promote the three countries’ integration in a world-wide drive for profiteering, repression, and war, in which Canada’s special assignment is to wage war on the people of Afghanistan. For information on the protests, contact the Canadian Peace Alliance at www.acp-cpa.ca.

Canada’s political and military rulers are scrambling to salvage their part in the NATO-led war in Afghanistan. The stated goal of NATO and Canada — to destroy the resistance of Afghan fighters to foreign occupation — is proving very difficult to achieve. Popular support in Afghanistan for the resistance is on the rise, and the resistance is proving capable of shifting its battle tactics while remaining an effective fighting force.

Meanwhile, unease is growing at home as more and more media reports detail terrible suffering of the Afghan people under the regime of foreign occupation, and as the number of dead Canadian soldiers rises.

A slim but stubborn majority of Canadians refuses to support the war. Opposition is even higher in Quebec. There is mounting pressure on the federal government to stick to the previous government’s vague promise to ”end the mission” by February 2009.

On June 22 hundreds of protesters marched in Quebec City to the site of a public sendoff of a new contingent of 2,500 Canadian soldiers to the war theatre. Protesters appealed to soldiers to refuse to serve. One brother of a female soldier went public with his appeals to her.

News all bad

Sixty-six Canadian soldiers have died in Afghanistan since 2002; 22 since the beginning of 2007. Contrary to repeated boasts that Afghan resistance fighters are being killed in large numbers and driven out of action, resistance attacks are on the rise. Canadian troops are increasingly restricted to fortified compounds, able to travel only in heavily-armed convoys.

Even convoys are at risk. On July 26, the vehicle of the head of the Canadian armed forces in Afghanistan, Brigadier-General Tim Grant, narrowly missed being hit by a roadside bomb only a short distance from the main Canadian base in Kandahar city. The vehicle in front of him was blown off the road.

In most of Panjwai, a region where Canadian forces claimed an overwhelming military victory last year, resistance forces are again operating freely. A July 6 article in the Globe and Mail was headlined, “How Panjwai slipped out of control.”

The most stalwart ally in the region of the foreign occupation of Afghanistan is the military dictatorship that rules Pakistan. But that regime is facing widespread and growing internal opposition, and it has proven utterly incapable of suppressing the use of Pakistan territory by Afghan resistance forces. In fact, to the embarrassment of NATO forces that refuse any and all negotiations, it signed a truce agreement with the “Taliban” earlier this year.

Torture and abuse

In late 2005, at the outset of its offensive in Kandahar, Canada announced that, like its U.S. ally, it does not consider itself bound to the Geneva Conventions governing the treatment of prisoners of war.

In April of this year, revelations of torture and abuse of Afghans detained by Canadian soldiers appeared once again in news reports across Canada. But this time the reports did not go away — they ignited several months of public debate on the issue. Canadian policy is to turn detained Afghans over to “Afghan authorities” when torture is required to extract information.

The government’s first claimed that it had arranged with the International Red Cross to guarantee the proper treatment of prisoners. “Not true”, said the Red Cross in an extraordinary statement denying the Canadian claim.

Then the government said it had received new guarantees from “Afghan authorities” for proper treatment in the future. That, too, was a lie. News reports quickly showed that few facilities and resources exist to verify such guarantees. Abuse of prisoners continues.

Finally the government and military authorities resorted to the tried and true method of occupation forces in a foreign land — they cut off the supply of information. Journalists no longer have access to the reports of prisoner treatment that the government and military receive.

Canadian soldiers themselves are targets of abuse by their own military. For example, the family of killed soldier Mathew Dinning went public in order to shame military authorities into paying the full cost of their son’s funeral. Other reports have detailed inadequate medical services for injured and returned soldiers, and enormous stresses on spouses and children of soldiers sent to the war theatre.

(Mistreatment of Canadian soldiers by the Canadian government is nothing new: 1,700 former military personnel or families have launched a class action lawsuit because they were deliberately sprayed with Agent Orange during chemical weapons testing on Canadian military bases during the 1950’s, 1960’s and 1970’s. The military refuses to accept responsibility for its actions.)

Anti-women policies

Canadian and NATO claims to be fighting to liberate women in Afghanistan have also received a rough ride as reports have detailed the anti-women policies of the Afghan governing regime.

In this summer of angst and grim foreboding about what further assaults against common sense and common decency the Bush Administration might inflict upon the people of the world, how many times during the day do those of us — still possessed of mind, heart and conscience — take pause, hoping we’ve seen the worst of it, then, fearing we haven’t yet, attempt to push down the dread rising within us, so that we might simply make it through the day and be able to rest at night? Accordingly, those who have been paying attention are aware that the outward mechanisms of martial law are in place. We shudder knowing that Bush has issued an executive decree that grants him dictatorial power in the event of some nebulously defined national emergency. In addition, the knowledge nettles us that a vast network of internment camps bristle across the length of the U.S., standing at wait for those who might raise objections to the fascistic fury unloosed by the American empire’s version of the Reichstag fire.

Moreover, a closer look would reveal that the inner processes by which an individual begins the act of acceptance of authoritarian excess — the mixture of chronic passivity, boredom, low grade anxiety and unfocused rage inherent in the citizens/consumers of the corporate state that primes an individual for fascism — have been in place for quite some time within the psyches of the American populace, both elites and hoi polloi alike. Although, don’t look for torch-lit processions thronging the nation’s streets and boulevards; rather, look for a Nuremberg Rally of couch-bound brownshirts. Instead of ogling the serried ranks of jut-jawed, SS soldiers, a contemporary Leni Riefenstahl would be forced to film chubby clusters of double-chinned consumers, saluting the new order with their TV remotes. In the contemporary United States, the elation induced by the immersion of one’s individual will to the mindless intoxication of the mob might only be possible, if Bush seized dictatorial control of the state while simultaneously sending out to all citizens gift certificates to Ikea.

After the catastrophes spawned by the rise of European fascism in the 1930s, a number of brilliant, original thinkers (including Hannah Arendt, Roberto Freire, Wilhelm Reich, and R. D. Laing) set out to study the phenomenon in order to learn how future calamities might be prevented. Although the methodologies and conclusions of these thinkers varied, each noted that alienation and dehumanization festered at the core of the death urge of fascism.

Nowadays, in contrast, the elites of the corporate media have proven themselves useless in this regard, believing, as they do, they constitute the thin line between the rabble at large (me and you) and the chaos begot by freedom. At present, mega-churches attract alienated suburbanites. Right wing talk show hosts misdirect their listeners alienation towards so-called illegal “aliens” and exploit their audience’s sense of powerlessness (created by the rigged system of corporate capitalism) against elitist liberals (who themselves, ironically, benefit from the present system and who only want to change it to the degree that their own privilege will not be affected. In other words, not at all).

Combine the above with the American character trait of being hostile towards introspection and it becomes evident that the present disaster has been building for quite a while now. And it can (and most likely will) get worse — far worse.

Most Americans alive today have been trained since birth to adapt to and serve the corrupt corporate structure by means of the shunning of critical thinking and have been conditioned to be in constant (empty) motion or in the thrall of mass media distraction. We have been taught that passivity is for losers, yet we find ourselves nearly powerless before the corporate/consumer/military/police/ entertainment state. In this way, we serve our corporate masters; it serves the corpocracy that the lower orders refuse meaningful self-awareness. If one were to glimpse one’s own illusions, then it follows one might begin to question collective delusions — and this would upset the social order.

Those who have studied the dangers of authoritarian rule have advised us to be wary of people who carry an inner emptiness. Of course, these unfortunates yearn for the void to be filled. But with their hearts and minds mortared closed — what makes it through the self-constructed prison is loud, stupid, and fascistic. At present, what penetrates is: Fundamentalist Sermons on Armageddon; violent video games; the empty spectacle of steroid-induced professional sports hype; the lethal fantasies of American exceptionalism; the exercise in Rock and Roll imperialism that U.S. foreign policy has become. In short, all the banal Sturm and Drang necessary to pierce those protective walls and penetrate the pervasive inner emptiness.

When the people of a culture have been conditioned to worship power — but feel powerless — there’s trouble ahead. The elites must displace the public’s rage by a demagogic sleight-of-hand such as the demonization of marginalized groups. In the US, we’ve been inundated by years of state and commercial propaganda that has degraded and demonized the country’s permanent underclass by the labeling of them as welfare parasites and career criminals.

It has been noted that the mindset, methods, and procedures of America’s punitive, profit-driven prison-industrial complex was a prototype for the systemic cruelty of Guantanamo and Abu Ghraib; furthermore, it is a given that those institutional affronts to human decency will have served as prototypes for the methods and procedures that will be practiced upon those who are swept-up in the purges and detainment mania following the declaration of martial law in the United States.

We push this knowledge away from us, fearing we will be paralyzed by its crushing implications. Worse, what is nearly impossible to admit is, most likely, the system crushed us long ago. Apropos, R. D. Laing averred that being able to adapt and function within an insane, authoritarian system renders one for all practical purposes insane — only insane in a manner acceptable to a power mad ruling elite.

This is the knowledge we push down, every hour of everyday. Otherwise, we would be driven to admit outright that the system has crushed our individual hopes, aspirations and yearnings. We must, at all costs, keep these feelings concealed; otherwise, we might be compelled to contemplate what we have forsaken, what passions and truths we have traded away for the false sense of security that the corporate order offered us when we tacitly agreed to surrender what was most sacred, vital and alive within us. One psychological manifestation of this phenomenon is the incessant chanting of that mantra of the American corporate workforce: “I’m not my job. I’m not what I do all day long.”

For a moment, meditate on the calamity implicit in such a sentiment. Because If we cannot locate and engage our true selves during our waking hours — then who the hell are we anyway? This is a profoundly troubling circumstance. Moreover, if we’ve condemned our daylight selves to a void of non-being, what then remains of us?

We experience this dislocation of the life force as a sense of nebulous dread. Everything, these days, the architecture and accouterment of our lives seems so fragile and unreal; it feels as if everything could just fly apart, at any given moment. The world and our place in it seems so flimsy: an empire built of eggshells; it could all shatter in an instant.

Living on credit, the house of cards of the real estate market, jobs evaporating, most of us languishing only a couple of paychecks away from ruin: The empire is coming undone. As it is, it seems the nation is only being held together with hydrogenated fat, wheat gluten, over-extended credit and particle board. Ergo, there is one law the lawless Bush administration and their keepers from the plundering class cannot flout: the second law of thermodynamics. They won’t be able to claim executive privilege to avoid the consequences of negative entropy.

In a similar vein, we, the underlings of empire, stand helpless before the prevailing madness. Individual reason rarely acts as a countervailing force to stem a drowning tide of cultural cognitive dissonance. Because the more epic and all-compassing the mistake, the more epic and all-encompassing come the rationalizations, the scapegoating and the compulsion for do-overs. If the surge isn’t working as fantasized, then we’ll double-dog surge you and then bomb Iran. If police state tactics fail to alleviate a sense of anxiety, then we must construct more detainment camps, more maximum security prisons, enact more federal death penalty statutes. “Bring back the electric chair; being put to sleep, like stray pets, is too good for the traitors,” the mob will rage. That’s the solution, but (cognitive dissonance being what it is) we need to go bigger — we need an electric sofa — yet, bigger still — an electric dining room set! “Aahh … the smell of deep-fried dissidents in the morning.”

And over the smoking corpses, let us pray. We need to pray for … what? … more prayer. These prayers would work, the homicidally faithful will insist — if every single doubter was induced to drop to their knees and pray. Hence, we need prayer in the public schools. We need prayer on public transportation. We need prayer in public restrooms!

Animus, ignorance, and magical thinking are a tragic mix — and I’m afraid that vintage of mind is the hideous wine of our times. The social criteria that gives rise to fascism is in place in the U.S. and those in positions of power have a strong interest in seeing things remain that way. All we can do is what folks (a minority) have always done … exile or resistance.

In my opinion, both are honorable. The other options are varying degrees of “little Eichmann[ism]” — Ward Churchill’s much scorned, career purge-inducing — but never-the-less accurate phrase. If one does the “soul work,” to appropriate archetypal psychologist James Hillman’s term, it is still possible to resist complicity. Training yourself to avoid lying for provisional gain is a time honored means of prevented alliances with exploitive assholes. They will avoid you, fire you, curse your name from the darkness of their inner abyss — but this will solve the problem of dependance on them — and you’ll be forced to live by other means. Generally, one is more adaptable than one believes.

Keep yourself as healthy and as sane as possible: we’re going to need you around after the inevitable collapse of the present system. Also, beware of those reductionist demons of the mind who diminish the soul-making possibilities of “mere” words. The acts of writing and reading are seen as passive; to crackpot realists, these activities seem useless, unproductive — the feckless indulgences of a class of the thin-wristed effete.

Accordingly, Americans have all but ceased reading. Worse, they displace their feelings of self-loathing borne of their own corporately induced passivity upon writers and thinkers. If the tenets of democratic discourse are to survive, it is imperative that writers and thinkers begin to engage in a passionate defense of themselves against the kvetching armies of crackpot realists that have encircled and laid siege to our collective hearts and minds.

But don’t expect to be lauded with praise for the effort. It’s doubtful our adversaries will be moved by our entreaties: There cannot be a rapprochement with reality for those who have never had a relationship with it in the first place. Yet verbal imagery and depth-inducing insights are the DNA of compassionate engagement. It is not a coincidence that George W. Bush is an inarticulate oaf. Conversely, there are many things in this world that require being touched by words, for there are occasions when words alone can suffice to take us deep and lift us up and serve to ameliorate our alienation.

It is in this spirit that I offer the words above to you; I’m traveling light; they’re all I’m carrying with me, at this late hour, in these dark and dangerous times.

NEW YORK (Aug. 11) – An Arabic-themed public school will still open in September, despite the abrupt departure of its embattled principal, the city Department of Education said.

So far, 45 students have enrolled in the Khalil Gibran International Academy, which is eventually to cover grades 6 to 12. But the Brooklyn school and its intended principal, Debbie Almontaser, have faced questions and criticism since plans for the academy were announced in February.

Almontaser resigned Friday after coming under fire for failing to condemn the use of the highly charged word “intifada” on T-shirts.

“I became convinced yesterday that this week’s headlines were endangering the viability of Khalil Gibran International Academy, even though I apologized,” she said in a statement.

Almontaser’s departure comes on the heels of an editorial flaying in the New York Post and an article this week that connected Almontaser to Arab Women Active in Art and Media.

That group is selling shirts imprinted with the words “Intifada NYC.” It shares office space with the Saba Association of American Yemenis, which counts Almontaser among its board members.

The tabloid asserted the shirts had a subversive meaning: “The inflammatory tees boldly declare ‘Intifada NYC’ – apparently a call for a Gaza-style uprising in the Big Apple.”

Almontaser, a public school teacher with 15 years of experience, told the paper that was a stretch. She said the word, which is most commonly associated with the violent Palestinian uprising against the Israelis, “basically means ‘shaking off.”‘

“That is the root word if you look it up in Arabic,” she said. “I understand it is developing a negative connotation due to the uprising in the Palestinian-Israeli areas. I don’t believe the intention is to have any of that kind of (violence) in New York City.”

KANO, Nigeria (AP) – A security guard in this dusty Nigerian city is living with tragedy – a 14-year-old son whose dazed eyes, slow speech and uneven gait signal brain damage. Mustapha Mohammed says he knows who to blame – Pfizer Inc., the world’s largest drug maker.

New York-based Pfizer is facing four court cases – two filed by the Nigerian government and two by officials in the northern Nigerian state where Mohammed lives – over a decade-old drug study that included Mohammed’s son.

The company, which denies any wrongdoing, is accused of using a 1996 meningitis epidemic to push through a sloppily managed drug study that contributed to death in some and infirmities in others.

The fallout provides a case study of the ethical dilemmas that arise when Western medical priorities run into Third World poverty and ignorance. The communication gap between those handing out medical alms and those receiving has bred mistrust and anger in Kano – with damaging, far-reaching effect.

The Pfizer case was cited as one reason residents of Kano and the state of the same name boycotted a polio vaccine in 2003, fearing it was a plot to make Africans infertile. Polio exploded in Nigeria and eventually spread to 25 previously polio-free countries.

Though the meningitis epidemic is long over and the polio vaccination program is back on track, misinformation and suspicion persist.

Mohammed is sure no one asked his permission to test a drug on his child. But he also wasn’t asking many questions when he rushed his son to the hospital in 1996.

“We were desperate for drugs. We just took it in good faith,” said Mohammed, who lives in a tiny house off a dirt road in one of Kano’s poorer neighborhoods. Mohammed – who can’t read or write – only later found out that the pink paper he kept with Pfizer’s name and treatment dates meant his son had been in the study.

Pfizer says it explained the study to families using practices in line with U.S. and international guidelines, even employing Nigerian nurses and doctors who spoke Hausa, a main Nigerian language. Written permission was obtained when possible, or oral consent if parents were illiterate.

Across town, Abu Abdullahi Madaki can’t be sure if her daughter Firdausi took part in the Pfizer study. Citing privacy concerns, Pfizer has declined to release the names of the 200 children it treated.

All Madaki knows is she took a feverish 8-month-old infant to the hospital in 1996, and now her daughter suffers severe brain damage that left her unable to sit up or talk.

Meningitis – a brain infection – leaves 10 percent to 20 percent of survivors with mental damage, hearing loss, or learning disabilities, according to the World Health Organization.

But Madaki said: “My younger sister had meningitis, but it was nothing like this. My younger sister is now a mother with children.”

Madaki, who is illiterate, said she’d always felt that the hospital did something wrong. She decided when she heard about the charges against Pfizer on the radio that her daughter must have been in the study.

Pfizer says it brought the drug – an antibiotic called Trovan – to Nigeria as a humanitarian effort. Trovan had already been tested on humans in the U.S. It was a tablet, which could be easier to use with children than the standard meningitis treatment – a painful injection.

More than 11,000 children died in Nigeria during the epidemic.

“When this epidemic occurred, the government asked people to come and help them,” said Ngozi Edozien, regional director of the Pfizer branch that covers Nigeria. She said Pfizer wanted to help, but could only offer Trovan through a clinical study because the drug was not yet approved.

Edozien argued that approval to use Trovan to treat epidemic meningitis would not have been a windfall for the company, but for the poor countries that face the disease. She also noted that Pfizer donated medical supplies and equipment to the government to help in the epidemic.

NEW YORK (Aug. 11) – Authorities were taking extra counterterrorism precautions Friday in response to what they said was an unsubstantiated radiological threat to the city.

Officials said they had not changed the city’s terror alert status in response to online chatter mentioning a truck packed with radioactive material. But police deployed extra radiological sensors on street, water and air patrols, and were stopping vehicles at checkpoints in lower Manhattan and around the city.

Deputy Police Commissioner Paul J. Browne called the measures “strictly precautionary.” He said an Israeli Web site reported that online posts were made following a video released Sunday featuring an American member of al-Qaida threatening foreign diplomats and embassies across the Islamic world.

“We are closely monitoring the situation,” said Homeland Security Department spokesman Russ Knocke. “There continues to be no credible information telling us that there’s a threat to the homeland at this time.”

08/11/07 “ICH’ — — Twenty-four hours after I reported China’s announcement that China, not the Federal Reserve, controls US interest rates by its decision to purchase, hold, or dump US Treasury bonds, the news of the announcement appeared in sanitized and unthreatening form in a few US news sources.

The Washington Post found an economics professor at the University of Wisconsin to provide reassurances that it was “not really a credible threat” that China would intervene in currency or bond markets in any way that could hurt the dollar’s value or raise US interest rates, because China would hurt its own pocketbook by such actions.

US Treasury Secretary Henry Paulson, just back from Beijing, where he gave China orders to raise the value of the Chinese yuan “without delay,” dismissed the Chinese announcement as “frankly absurd.”

Both the professor and the Treasury Secretary are greatly mistaken.

First, understand that the announcement was not made by a minister or vice minister of the government. The Chinese government is inclined to have important announcements come from research organizations that work closely with the government. This announcement came from two such organizations. A high official of the Development Research Center, an organization with cabinet rank, let it be known that US financial stability was too dependent on China’s financing of US red ink for the US to be giving China orders. An official at the Chinese Academy of Social Sciences pointed out that the reserve currency status of the US dollar was dependent on China’s good will as America’s lender.

What the two officials said is completely true. It is something that some of us have known for a long time. What is different is that China publicly called attention to Washington’s dependence on China’s good will. By doing so, China signaled that it was not going to be bullied or pushed around.

The Chinese made no threats. To the contrary, one of the officials said, “China doesn’t want any undesirable phenomenon in the global financial order.” The Chinese message is different. The message is that Washington does not have hegemony over Chinese policy, and if matters go from push to shove, Washington can expect financial turmoil.

Paulson can talk tough, but the Treasury has no foreign currencies with which to redeem its debt. The way the Treasury pays off the bonds that come due is by selling new bonds, a hard sell in a falling market deserted by the largest buyer.

Paulson found solace in his observation that the large Chinese holdings of US Treasuries comprise only “one day’s trading volume in Treasuries.” This is a meaningless comparison. If the supply suddenly doubled, does Paulson think the price of Treasuries would not fall and the interest rate not rise? If Paulson believes that US interest rates are independent of China’s purchases and holdings of Treasuries, Bush had better quickly find himself a new Treasury Secretary.

Now let’s examine the University of Wisconsin economist’s opinion that China cannot exercise its power because it would result in losses on its dollar holdings. It is true that if China were to bring any significant percentage of its holdings to market, or even cease to purchase new Treasury issues, the prices of bonds would decline, and China’s remaining holdings would be worth less. The question, however, is whether this is of any consequence to China, and, if it is, whether this cost is greater or lesser than avoiding the cost that Washington is seeking to impose on China.

American economists make a mistake in their reasoning when they assume that China needs large reserves of foreign exchange. China does not need foreign exchange reserves for the usual reasons of supporting its currency’s value and paying its trade bills. China does not allow its currency to be traded in currency markets. Indeed, there is not enough yuan available to trade. Speculators, betting on the eventual rise of the yuan’s value, are trying to capture future gains by trading “virtual yuan.” The other reason is that China does not have foreign trade deficits, and does not need reserves in other currencies with which to pay its bills. Indeed, if China had creditors, the creditors would be pleased to be paid in yuan as the currency is thought to be undervalued.

Despite China’s support of the Treasury bond market, China’s large holdings of dollar-denominated financial instruments have been depreciating for some time as the dollar declines against other traded currencies, because people and central banks in other countries are either reducing their dollar holdings or ceasing to add to them. China’s dollar holdings reflect the creditor status China acquired when US corporations offshored their production to China. Reportedly, 70% of the goods on Wal-Mart’s shelves are made in China. China has gained technology and business knowhow from the US firms that have moved their plants to China. China has large coastal cities, choked with economic activity and traffic, that make America’s large cities look like country towns. China has raised about 300 million of its population into higher living standards, and is now focusing on developing a massive internal market some 4 to 5 times more populous than America’s.

The notion that China cannot exercise its power without losing its US markets is wrong. American consumers are as dependent on imports of manufactured goods from China as they are on imported oil. In addition, the profits of US brand name companies are dependent on the sale to Americans of the products that they make in China. The US cannot, in retaliation, block the import of goods and services from China without delivering a knock-out punch to US companies and US consumers. China has many markets and can afford to lose the US market easier than the US can afford to lose the American brand names on Wal-Mart’s shelves that are made in China. Indeed, the US is even dependent on China for advanced technology products. If truth be known, so much US production has been moved to China that many items on which consumers depend are no longer produced in America.

Now let’s consider the cost to China of dumping dollars or Treasuries compared to the cost that the US is trying to impose on China. If the latter is higher than the former, it pays China to exercise the “nuclear option” and dump the dollar.

The US wants China to revalue the yuan, that is, to make the dollar value of the yuan higher. Instead of a dollar being worth 8 yuan, for example, Washington wants the dollar to be worth only 5.5 yuan. Washington thinks that this would cause US exports to China to increase, as they would be cheaper for the Chinese, and for Chinese exports to the US to decline, as they would be more expensive. This would end, Washington thinks, the large trade deficit that the US has with China.

This way of thinking dates from pre-offshoring days. In former times, domestic and foreign-owned companies would compete for one another’s markets, and a country with a lower valued currency might gain an advantage. Today, however, about half of the so-called US imports from China are the offshored production of US companies for their American markets. The US companies produce in China, not because of the exchange rate, but because labor, regulatory, and harassment costs are so much lower in China. Moreover, many US firms have simply moved to China, and the cost of abandoning their new Chinese facilities and moving production back to the US would be very high.

When all these costs are considered, it is unclear how much China would have to revalue its currency in order to cancel its cost advantages and cause US firms to move enough of their production back to America to close the trade gap.

To understand the shortcomings of the statements by the Wisconsin professor and Treasury Secretary Paulson, consider that if China were to increase the value of the yuan by 30 percent, the value of China’s dollar holdings would decline by 30 percent. It would have the same effect on China’s pocketbook as dumping dollars and Treasuries in the markets.

Consider also, that as revaluation causes the yuan to move up in relation to the dollar (the reserve currency), it also causes the yuan to move up against every other traded currency. Thus, the Chinese cannot revalue as Paulson has ordered without making Chinese goods more expensive not merely to Americans but everywhere.

Compare this result with China dumping dollars. With the yuan pegged to the dollar, China can dump dollars without altering the exchange rate between the yuan and the dollar. As the dollar falls, the yuan falls with it. Goods and services produced in China do not become more expensive to Americans, and they become cheaper elsewhere. By dumping dollars, China expands its entry into other markets and accumulates more foreign currencies from trade surpluses.

Now consider the non-financial costs to China’s self-image and rising prestige of permitting the US government to set the value of its currency. America’s problems are of its own making, not China’s. A rising power such as China is likely to prove a reluctant scapegoat for America’s decades of abuse of its reserve currency status.

A BUZZFLASH GUEST CONTRIBUTION
by Daniel Ellsberg

[Remarks of Daniel Ellsberg at a press conference August 9, 2007 at which Cindy Sheehan announced her independent candidacy for the 8th Congressional District of California, an office now held by Nancy Pelosi, Speaker of the House.]

I don’t speak for Cindy Sheehan — whom I admire unreservedly — or for her campaign. When I say “we” in what follows, I’m really just giving my own perspective on this campaign, as one of her supporters.

I see this campaign as aiming much higher than putting Cindy Sheehan in Congress in 2009. Well before that time, we aim to help restore our Constitution, to end a war and avert starting a new one, and to remove from power, two officials — George W. Bush and Richard Cheney — who block those objectives before they can do more harm in their remaining months in office.

That’s an ambitious project; but there’s a clear path to achieving it. We will work to change public awareness and, as a result, Nancy Pelosi’s policies as Speaker of the House well before the election, by revealing to the public real alternatives to the courses she and the Democrats have followed so far, and demonstrating the breadth and strength of public support for those alternatives.

The truth is that Democrats, and even Republicans, can do much better than they have been doing, under Pelosi’s leadership in the House, to protect our freedoms and our security. In this campaign, we will publicize specifics of what can and should be done, and let the public tell the politicians which approach they want.

One essential demand is for Pelosi to encourage, rather than to block, Congressional investigations of past and ongoing Administration deception, unwisdom, illegality, and unconstitutionality in pursuing an aggressive war and in curtailing our rights. Such investigations, calling forth testimony under oath of current and former officials, many of whom are eager to tell the truth at last, as well as demonstrating continued Administration stonewalling will almost surely lead to what does not yet exist: irresistible pressure from a belatedly informed public for the impeachment and removal of Bush and Cheney.

Further, we need Pelosi’s leadership in rescinding the unconstitutional parts — which will not leave much — of the PATRIOT Acts, the Military Commissions Act, and the recent, outrageous legislation purporting to legalize warrantless wiretaps and data mining. And — absolutely essential to ending our war in Iraq, ever — public pressure is needed to demand that Congress defund our indefinite occupation, providing funds only for the orderly, safe withdrawal of all our troops, contractors, and bases on an announced timetable.

If this campaign can help bring about even the first of these, it will also, almost incidentally, put Cindy Sheehan within reach of success in the election. This is, in fact, a historic campaign opportunity, exploiting an opening unique in American politics. At this moment, Cindy appears to face insuperable odds, opposing without party support, a powerful, heavily funded incumbent. But we aim to change that. All we are asking is for Nancy Pelosi to do what she should: to uphold her oath of office, which is not to obey a Commander-in-Chief or to enlarge a Democratic majority but to uphold and defend the Constitution.

If we can induce her to do that, then a year from now, Cindy Sheehan should be running for an open seat, or against a brand-new incumbent appointed by our Republican governor. Nancy Pelosi, third in line for succession when Bush and Cheney are impeached and removed, will be in the White House. That will, as it happens, leave an open field for Cindy.

So you see, it’s nothing personal for us. After all, as representatives of big business go, Nancy Pelosi is better than most. We don’t aim to kick her out of politics; we aim to kick her upstairs. And there’s a bonus: President Pelosi as a write-in candidate in November. She’s far from ideal, from the point of view of members of this campaign, but for Democrats, we could do a lot worse. Off the record, some of us see this as the best strategy for keeping Hillary out of the White House without letting a Republican in.

So there it is: a vision for 2009 that can evoke some real enthusiasm: Cindy in the House, Pelosi in the White House, the U.S. out of Iraq, our Constitution back, and Bush and Cheney under criminal indictment.

A BUZZFLASH GUEST CONTRIBUTION

George Bush’s pronouncements on the relationship between Iran and Afghanistan lower his credibility even further.

On Monday, the Iranophobia of US president George Bush was once again on display. The occasion was the joint press conference he gave at his Camp David resort along with Afghanistan’s president, Hamid Karzai.

Contradicting Karzai’s statement in a CNN interview on Sunday that Iran was “a helper and a solution” to his country, Bush urged him to be “very cautious about whether or not the Iranian influence there in Afghanistan is a positive force”.

Such a statement could only come from someone ignorant of the recent history of Tehran’s relationship with its eastern neighbour.

Long before 9/11, the Iranian regime was at loggerheads with the Taliban who captured Kabul in September 1996. As orthodox Sunnis of the Hanafi code, the Taliban held Shias in low esteem, and banned their annual ritual of Ashura.

When the Taliban authorities held a dozen Iranian diplomats hostage in Mazar-e Sharif in the summer of 1998, relations between the two neighbours deteriorated to the point when a war between them seemed imminent. In the end cool heads prevailed. Iran withdrew the revolutionary guard troops it had amassed along the Afghan-Iranian border.

Following 9/11, as the Bush administration prepared to attack the Taliban, the Iranians shared intelligence with it surreptitiously.

At their urging, Ismail Khan, the anti-Taliban Afghan leader based in the Iranian city of Mashhad, along with his fighters, coordinated his attack on the Taliban in western Afghanistan with the Pentagon’s campaign in the north and the east. Ismail Khan’s militia captured Herat, an important city near the Iranian border.

At the international conference held in Bonn, Germany, in late December 2001, Iran’s foreign minister, Kamal Kharrazi, actively co-operated with the Americans to install Hamid Karzai as the leader of the post-Taliban Afghanistan.

At the subsequent international donors’ gathering, in Tokyo, Iran pledged $500m aid to Afghanistan over five years. Unlike many other nations at the Tokyo conference, it has fulfilled its initial promise. It has been involved in several infrastructure and health care projects, particularly in western Afghanistan.

In 2003, when Ismail Khan, an ethnic Tajik, refused to send an envoy to Kabul when Karzai, an ethnic Pashtun, was formally installed as president, it was the Iranian government which persuaded him to fly his son for the inaugural ceremony. In return, Karzai appointed Khan’s son as a cabinet minister.

Furthermore, ever since the Islamic revolution in Iran in 1979, the Iranian regime has been battling the Afghan drug dealers who use Iran as a transit route for shipping their products to Europe. In the course of hundreds of fire fights between the smugglers and the Iranian Revolutionary Guards (charged with monitoring the national borders), a few thousand guards have lost their lives.

The anti-narcotic campaign by Iran, which has continued since the overthrow of the Taliban in December 2001, has been praised not only by the Karzai government but also by the UN.

However, given Bush’s deep-seated aversion towards the Islamic Republic, it was unlikely that a brief history of Iran’s anti-narcotic campaign was conveyed to him during the “more than a fair amount of time” he spent with Karzai discussing the fact that Afghanistan accounted for 95% of the world’s poppy production used to produce heroin.

Overall, in the light of the recent history of the region, Karzai’s description of Iran as “a helper and a solution” of Afghanistan was rooted in facts.

By contrast, Bush damaged his already low credibility in foreign affairs when he went on to claim that Iran had a government “that has proclaimed its desire to build a nuclear weapon.”

This statement is false. On September 12 2004, Iran’s supreme leader Ayatollah Ali Khamanei issued a fatwa (religious decree) that it was “un-Islamic” to use an atom bomb.

In his Friday prayer sermon on November 5 2004, Khamanei declared that “developing, producing or stockpiling nuclear weapons is forbidden under Islam” and for “our believing nation”, and added: “They accuse us of pursuing nuclear weapons program. I am telling them as I have said before that we are not even thinking about nuclear weapons.” (See Middle East International, Issue December 4 2004.)

WASHINGTON — President Bush charged Thursday that Iran continues to arm and train insurgents who are killing U.S. soldiers in Iraq, and he threatened action if that continues.

At a news conference Thursday, Bush said Iran had been warned of unspecified consequences if it continued its alleged support for anti-American forces in Iraq. U.S. Ambassador to Iraq Ryan Crocker had conveyed the warning in meetings with his Iranian counterpart in Baghdad, the president said.

Bush wasn’t specific, and a State Department official refused to elaborate on the warning.

Behind the scenes, however, the president’s top aides have been engaged in an intensive internal debate over how to respond to Iran’s support for Shiite Muslim groups in Iraq and its nuclear program. Vice President Dick Cheney several weeks ago proposed launching airstrikes at suspected training camps in Iran run by the Quds force, a special unit of the Iranian Revolutionary Guard Corps, according to two U.S. officials who are involved in Iran policy.

The debate has been accompanied by a growing drumbeat of allegations about Iranian meddling in Iraq from U.S. military officers, administration officials and administration allies outside government and in the news media. It isn’t clear whether the media campaign is intended to build support for limited military action against Iran, to pressure the Iranians to curb their support for Shiite groups in Iraq or both.

Nor is it clear from the evidence the administration has presented whether Iran, which has long-standing ties to several Iraqi Shiite groups, including the Mahdi Army of radical cleric Muqtada al Sadr and the Badr Organization, which is allied with the U.S.-backed government of Prime Minister Nouri al Maliki, is a major cause of the anti-American and sectarian violence in Iraq or merely one of many. At other times, administration officials have blamed the Sunni Muslim group al Qaida in Iraq for much of the violence.

For now, however, the president appears to have settled on a policy of stepped-up military operations in Iraq aimed at the suspected Iranian networks there, combined with direct American-Iranian talks in Baghdad to try to persuade Tehran to halt its alleged meddling.

The U.S. military launched one such raid Wednesday in Baghdad’s predominantly Shiite Sadr City district.

But so far that course has failed to halt what American military officials say is a flow of sophisticated roadside bombs, known as explosively formed penetrators, into Iraq. Last month they accounted for a third of the combat deaths among U.S.-led forces, according to the military.

Cheney, who’s long been skeptical of diplomacy with Iran, argued for military action if hard new evidence emerges of Iran’s complicity in supporting anti-American forces in Iraq; for example, catching a truckload of fighters or weapons crossing into Iraq from Iran, one official said.

The two officials spoke on condition of anonymity because they weren’t authorized to talk publicly about internal government deliberations.

Secretary of State Condoleezza Rice opposes this idea, the officials said. Defense Secretary Robert Gates has stated publicly that “we think we can handle this inside the borders of Iraq.”

Lea Anne McBride, a Cheney spokeswoman, said only that “the vice president is right where the president is” on Iran policy.

Bush left no doubt at his news conference that he intended to get tough with Iran.

“One of the main reasons that I asked Ambassador Crocker to meet with Iranians inside Iraq was to send the message that there will be consequences for . . . people transporting, delivering EFPs, highly sophisticated IEDs (improvised explosive devices), that kill Americans in Iraq,” he said.

He also appeared to call on the Iranian people to change their government.

“My message to the Iranian people is, you can do better than this current government,” he said. “You don’t have to be isolated. You don’t have to be in a position where you can’t realize your full economic potential.”

The Bush administration has launched what appears to be a coordinated campaign to pin more of Iraq’s security troubles on Iran.

Last week, Lt. Gen. Raymond Odierno, the No. 2 U.S. military commander in Iraq, said Shiite militiamen had launched 73 percent of the attacks that had killed or wounded American troops in July. U.S. officials think that majority Shiite Iran is providing militiamen with EFPs, which pierce armored vehicles and explode once inside.

Last month, Brig. Gen. Kevin Bergner, a multinational force spokesman, said members of the Quds force had helped plan a January attack in the holy Shiite city of Karbala, which lead to the deaths of five American soldiers. Bergner said the military had evidence that some of the attackers had trained at Quds camps near Tehran.

Bush’s efforts to pressure Iran are complicated by the fact that the leaders of U.S.-supported governments in Iraq and Afghanistan have a more nuanced view of their neighbor.

Maliki is on a three-day visit to Tehran, during which he was photographed Wednesday hand in hand with Iranian President Mahmoud Ahmadinejad. Unconfirmed media reports said Maliki had told Iranian officials they’d played a constructive role in the region.

Asked about that, Bush said he hadn’t been briefed on the meeting. “Now if the signal is that Iran is constructive, I will have to have a heart-to-heart with my friend the prime minister, because I don’t believe they are constructive. I don’t think he in his heart of hearts thinks they’re constructive either,” he said.

Bush and Afghan President Hamid Karzai differed on Iran’s role when they met last weekend, with Karzai saying in a TV interview that Iran was “a helper” and Bush challenging that view.

The toughening U.S. position on Iran puts Karzai and Iraqi leaders such as Maliki in a difficult spot between Iran, their longtime ally, and the United States, which is spending lives and treasure to secure their newly formed government.

A senior Iraqi official in Baghdad said the Iraqi government received regular intelligence briefings from the United States about suspected Iranian activities. He refused to discuss details, but said the American position worried him.

The United States is “becoming more focused on Iranian influence inside Iraq,” said the official, who requested anonymity to discuss private talks with the Americans. “And we don’t want Iraq to become a zone of conflict between Iran and the U.S.”

Proposals to use force against Iran over its actions in Iraq mark a new phase in the Bush administration’s long internal war over Iran policy.

Until now, some hawks within the administration — including Cheney — are said to have favored military strikes to stop Iran from furthering its suspected ambitions for nuclear weapons.

Rice has championed a diplomatic strategy, but that, too, has failed to deter Iran so far.

Patrick Clawson, an Iran specialist at the Washington Institute for Near East Policy, said a strike on the Quds camps in Iran could make the nuclear diplomacy more difficult.

Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”

Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, “the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar.”

If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve.

The precarious position of the US dollar as reserve currency has been thoroughly ignored and denied. The delusion that the US is “the world’s sole superpower,” whose currency is desirable regardless of its excess supply, reflects American hubris, not reality. This hubris is so extreme that only 6 weeks ago McKinsey Global Institute published a study that concluded that even a doubling of the US current account deficit to $1.6 trillion would pose no problem.

Strategic thinkers, if any remain who have not been purged by neocons, will quickly conclude that China’s power over the value of the dollar and US interest rates also gives China power over US foreign policy. The US was able to attack Afghanistan and Iraq only because China provided the largest part of the financing for Bush’s wars.

If China ceased to buy US Treasuries, Bush’s wars would end. The savings rate of US consumers is essentially zero, and several million are afflicted with mortgages that they cannot afford. With Bush’s budget in deficit and with no room in the US consumer’s budget for a tax increase, Bush’s wars can only be financed by foreigners.

No country on earth, except for Israel, supports the Bush regimes’ desire to attack Iran. It is China’s decision whether it calls in the US ambassador, and delivers the message that there will be no attack on Iran or further war unless the US is prepared to buy back $900 billion in US Treasury bonds and other dollar assets.

The US, of course, has no foreign reserves with which to make the purchase. The impact of such a large sale on US interest rates would wreck the US economy and effectively end Bush’s war-making capability. Moreover, other governments would likely follow the Chinese lead, as the main support for the US dollar has been China’s willingness to accumulate them. If the largest holder dumped the dollar, other countries would dump dollars, too.

The value and purchasing power of the US dollar would fall. When hard-pressed Americans went to Wal-Mart to make their purchases, the new prices would make them think they had wandered into Nieman Marcus. Americans would not be able to maintain their current living standard.

Simultaneously, Americans would be hit either with tax increases in order to close a budget deficit that foreigners will no longer finance or with large cuts in income security programs. The only other source of budgetary finance would be for the government to print money to pay its bills. In this event, Americans would experience inflation in addition to higher prices from dollar devaluation.

This is a grim outlook. We got in this position because our leaders are ignorant fools. So are our economists, many of whom are paid shills for some interest group. So are our corporate leaders whose greed gave China power over the US by offshoring the US production of goods and services to China. It was the corporate fat cats who turned US Gross Domestic Product into Chinese imports, and it was the “free trade, free market economists” who egged it on.

How did a people as stupid as Americans get so full of hubris?

The Bush Administration is now incriminated in the recent scandal involving Chiquita Brands International Inc. financially supporting a Colombian terrorist organization.

Chiquita was forced to pay a $25 million settlement to the U.S. Justice Department for providing $1.7 million in “protection money” to United Self-Defense Forces of Colombia (AUC), a group the State Department designated a “Foreign Terrorist Organization” in October 2001.

In April 2003 a former Chiquita executive told Secretary of Homeland Security (who at the time was assistant attorney general) Michael Chertoff that the company was paying off this paramilitary group. Chertoff recognized that the payments were illegal, but wasn’t quite sure whether they were really that wrong. It was reported that he told the company to wait to do anything–like possibly stop financing a terrorist group–until he got back to them. He never did, and Chiquita made an additional $134,000 in payments over the next year.

In 2002, the Justice Department under John Ashcroft issued an indictment charging leaders of AUC with “trafficking over 17 tons of cocaine into the United States and Europe since 1997.” In addition, “In 2001, the AUC killed at least 1,015 civilians, a statistic that greatly surpasses the 197 civilians killed by the FARC. The AUC also committed over 100 massacres in 2001, a typical terror tactic used to displace large portions of the peasant population…the U.S. State Department noted that the AUC was responsible for about 43 percent of Colombia’s internally displaced people in 2001.” So what Chiquita calls “protection money”, others might call blood money.

“Even though Chiquita didn’t murder anyone, that’s what the money was used for — to buy weapons,” a former prosecutor in the Chiquita case told the Wall Street Journal.

The Washington Post reported that Chiquita’s illegal activities in Colombia may have gone beyond financing weapons–the company actually helped smuggle them. It reported that “An Organization of American States report in 2003 said that Chiquita participated in smuggling thousands of arms for paramilitaries into the Northern Uraba region, using docks operated by the company to unload thousands of Central American assault rifles and ammunition.”

The Post also uncovered that “For some high-level administration officials, Chiquita’s payments were not aiding an obvious terrorism threat such as al-Qaeda; instead, the cash was going to a violent South American group [even though it is designated a terrorist group by the State Department] helping a major U.S. company maintain a stabilizing presence in Colombia.”

Venezuela´s Bolivarian Revolution and in particular its experiments with workers co-management and in some instances workers control, is at the cutting edge of the global movement against capitalism. With the bosses’ lockout in 2002-2003, which shut down much of the Venezuelan economy for a period of two months, hundreds of factories were closed down and workers turned out onto the streets to fend for themselves. However, workers have stepped up to the challenge and it is estimated that some1200 factories have been taken over and occupied after being shut down. In 2005 the Chavez government initiated a series of decrees to allow for expropriation of industry and workers’ co-management in the interests of ‘public utility.’ On July 24 I was able to visit Inveval, a valve manufacturing company that has been under workers control since April 2005, with a delegation from the International Miranda Center to talk to the workers and find out more about their struggle, their history, their experience of workers control, the challenges they face as well as the broader question of how workers are strategizing to transform Venezuelan society in the struggle for ‘Socialism in the 21st Century’.

Whilst showing us around the factory Francisco Pinero, Inveval’s treasurer, explained that although Inveval is legally constituted as a cooperative with 51% owned by the state and 49% owned by the workers, “real power lies with the workers assembly.” Rather than supervisors, the workers at Inveval elect, through a workers assembly, recallable ‘coordinators of production,’ for a period of one year.

“Everyone here gets paid exactly the same, whether they work in administration, political formation, security or keeping the grounds clean,” another worker, Marino Mora added.

“We want the state to own 100%, but for the factory to be under workers control, for workers to control all production and administration. This is how we see the new productive model; we don’t want to create new capitalists here,” Pinero made clear.

This contrasts sharply with the experience of Invepal, (a Venezuelan paper company) where a workers’ cooperative became private owners of 49% of the company, and began to contract out the work to casual workers, becoming bosses themselves in the process and reproducing capitalist relations within the factory.

“Initially we never had in mind workers control, we were just struggling for our jobs,” Pinero added.

However, he said, the formation of the workers’ assembly in the factory developed organically, “We were members of the union [Sintrametal – formerly aligned to the old corrupt CTV], however, when we wanted to take over the factory we asked the union for legal help, but they didn’t help us. Because the union didn’t help us we began to form assemblies, and through that process began to negotiate with the Minister [of Labor, then Maria Christina Iglesias], who helped us a lot.”