Waiting for the new boss in Egypt

After Mubarak: What's Next? - by Stephen Lendman

The line from Gilbert & Sullivan's HMS Pinafore relates well to what's going on in Egypt, perhaps elsewhere in the region as well, saying: "Things are seldom as they seem. Skim milk masquerades as cream."

Visceral street anger is real. What's orchestrating it, however, is suspect, especially its likely Washington impresario, implementing long-planned regime change for new faces continuing old policies, leaving deep-rooted hardships unaddressed. The script is familiar.

In his book "Freedom Next Time," John Pilger discussed Nelson Mandela's betrayal in post-apartheid South Africa, embracing what he called "Thatcherism," telling Pilger:

"You can put any label on it you like; you can call it Thatcherite, but for this country, privatization is the fundamental policy."

In 1990, two weeks before freed from prison, he was quoted saying:

"The nationalization of the mines, banks and monopoly industries is the policy of the ANC (and changing) our views....is inconceivable. Black economic empowerment is a goal we fully support and encourage, but in our situation state control of certain sectors of the economy is unavoidable."

In 1955, that view became ANC Freedom Charter policy. Its liberation struggle wasn't just political but also economic. White mine workers earned 10 times more than blacks, and large industrialists used security forces to enforce order by disappearing dissenters.

Post-apartheid, a new way was possible, Mandela poised to lead it by rejecting market orthodoxy for economic justice. In 1994, ANC candidates won overwhelmingly. Nonetheless, despite transitioning peacefully, betrayal, not progressive change followed. Black South Africans became predatory capitalist hostages. They still are, worse off now than under apartheid.

Even The New York Times noticed, writer Celia Dugger headlining on September 26, 2010: "Wage Laws Squeeze South Africa's Poor," saying:

"In the 16 years since the end of apartheid, South Africa has followed the prescriptions of the West, opening its market-based economy to trade, while keeping inflation and public debt in check (by following IMF diktats). It has won praise for its efforts," but at a price. "For over a decade, the jobless rate been among the highest in the world," exacerbated by the global economic crisis, "wiping out more than a million jobs."

Overall, the toll included:

-- double the number of people impoverished on less than $1 a day from two to four million;

-- unemployment doubling to 48% from 1991 - 2002, currently even higher;

-- two million South Africans losing their homes while the government built only 1.8 million others;

-- in the first decade of ANC rule, nearly one million South Africans lost farms; as a result, shack dwellers grew by 50%;

-- in 2006, 25% of South Africans lived in them with no running water or electricity;

-- the HIV/AIDS infection rate is about 20%; ANC officials deny its severity and do little to help; as a result, average life expectancy is lower than in 1990;

-- 40% of schools have no electricity;

-- 25% of people have no clean water, and most with it can't afford the cost;

-- 60% have inadequate sanitation, and 40% no telephones.

Post-apartheid came at a high price with political empowerment traded for economic betrayal, and no planned relief for millions of suffering South Africans, victims of predatory capitalism.

Post-Communist Russia

The Berlin Wall's fall should have been triumphant for millions. Instead it was tragic for Russia and post-Soviet states like Ukraine, Georgia, Estonia, Latvia, Lithuania and others.

In March 1985, Mikhail Gorbachev came to power, promising political and social change, but wasn't around long enough to lead it. He liberalized the country, introduced elections, and favored (then) Scandinavian-style social democracy, combining free market capitalism with strong social safety net protections. He envisioned "a socialist beacon for all mankind," an egalitarian society, but never got the chance to build it.

When the Soviet Union dissolved, he was out. Boris Yeltsin replaced him, supporting harsh Chicago School orthodoxy, masquerading as "reform." Former apparatchiks profited along with a new oligarch "nouveaux billionaire" class, strip-mining Russia's wealth, then shipping it offshore to tax havens.

Predatory capitalism devastated ordinary Russians, enriching a select few at their expense. The toll included:

-- 80% of farmers bankrupt;

-- about 70,000 state factories closed, causing an epidemic of unemployment;

-- 74 million Russians (half the population) impoverished; for 37 million of them conditions were desperate, and the country's underclass remained permanent;

-- alcohol, painkilling and hard drug used soared;

-- since 1995, HIV/AIDS increased 20-fold;

-- suicides also rose, and violent crime more than fourfold; and

-- Russia's population declined by around 700,000 a year before leveling off; unfettered capitalism killed 10% of it - a startling condemnation of how capitalist excess harms so many, including in other post-Soviet states.

Free Market Repression in Haiti

Except briefly in 1804 after revolutionary liberation turned slaves into citizens and during Jean-Bertrand Aristide's tenure as president, Haitians suffered harsh predatory capitalist exploitation, making it the region's poorest nation and one of the poorest globally. Even before the devastating January 2010 earthquake, followed by greater than ever depravation and raging cholera, its burdens included:

-- imperial control as a de facto US colony;

-- its ruling elite having dominant social and economic control; six families controllig the economy, media, universities, commerce and trade;

-- the region's most unequal wealth distribution and one the most unequal globally;

-- 1% of Haitians controlling half the country's wealth;

-- in contrast, over 80% enduring harrowing poverty;

-- three-fourths of the population living on less than $2 a day and over half (56%) less than $1 a day;

-- 5% of the population owning 75% of the arable land;

-- rampant unemployment and underemployment; two-thirds or more of workers with no reliable jobs, and most with them earn below-subsistance pay;

-- structural adjustments decimating the rural economy, forcing displaced peasants to cities for non-existent jobs;

-- public sector employment the lowest in the region at less than .7%;

-- life expectancy only 53 years; the highest hemispheric death rare, and infant mortality is double the regional average at 76 per 1000;

-- the World Bank placing Haiti in its bottom rankings based on deficient sanitation, poor nutrition, high malnutrition, and inadequate health services;

-- over half its people food insecure and half its children undersized from malnutrition;

-- more than half with no access to clean drinking water;

-- its bottom hemispheric ranking in health care spending with only 25 doctors and 11 nurses per 100,000 population and most rural areas with no access;

-- the highest HIV-AIDS incidence outside sub-Sararan Africa;

-- the region's lowest sweatshop wages for Haitians lucky enough to have work;

-- called "the Republic of NGOs," most exploit Haitians brutally for profit; and

-- its longstanding "restavec" system, entrapping hundreds of thousands of children in forced bondage;

Overall, America maintains imperial dominance, controlling Haiti's resources, its economy and politics. It exploits Haitians ruthlessly, strip-mines the country for profits, and installs new regimes no different from old ones.

The same story repeats globally, including in Iraq and Afghanistan, plagued by war, occupation, torture, oppression, appalling poverty and unemployment, no security, clean water, enough food, shelter, medical care or other essential services. US "liberation" brought millions of deaths, disease, hunger, depravation, and grievous unaddressed human suffering. Moreover, privation levels keep rising as well at home because Washington refuses to address them.

A Final Comment

Post-WW II decolonization produced neocolonial regimes, Cold War politics, the Non-Aligned Movement, emergent nationalism, ethnic conflicts, and American imperial dominance, distinguished by its:

-- abhorrence of democracy;

-- support for neocolonial strongmen, mostly police state dictatorships serving Western interests; and

-- use of direct or proxy belligerence for world capitalist enforcement, keeping the world safe for big money.

Old orders passed. New ones emerged. Everything changed but stayed the same, more than ever dominated by finance capital and monopoly corporations, controlling governments for their own self-interest at the expense of harshly exploited workers globally. As a result, today's world is characterized by instability, declining living standards, police state harshness, and enormous human suffering, especially in areas like the Middle East.

Across the region, people want it ended, pitting revolutionary populism against imperial harshness offering pretense, not change. As a result, expect new faces continuing old policies, yielding nothing unless sustained mass outrage persists. That's today's reality, resolution still in doubt, but odds always favor the strong.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.progressiveradionetwork.com/the-progressive-news-hour/.

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THE EGYPTIAN TINDERBOX: HOW BANKS AND INVESTORS ARE STARVING THE THIRD WORLD

By Ellen Brown
Web of Debt, February 2nd, 2011

“What for a poor man is a crust, for a rich man is a securitized asset class.”
--Futures trader Ann Berg, quoted in the UK Guardian

Underlying the sudden, volatile uprising in Egypt and Tunisia is a growing global crisis sparked by soaring food prices and unemployment. The Associated Press reports that roughly 40 percent of Egyptians struggle along at the World Bank-set poverty level of under $2 per day. Analysts estimate that food price inflation in Egypt is currently at an unsustainable 17 percent yearly. In poorer countries, as much as 60 to 80 percent of people's incomes go for food, compared to just 10 to 20 percent in industrial countries. An increase of a dollar or so in the cost of a gallon of milk or a loaf of bread for Americans can mean starvation for people in Egypt and other poor countries.

Follow the Money

The cause of the recent jump in global food prices remains a matter of debate. Some analysts blame the Federal Reserve’s “quantitative easing” program (increasing the money supply with credit created with accounting entries), which they warn is sparking hyperinflation. Too much money chasing too few goods is the classic explanation for rising prices.

The problem with that theory is that the global money supply has actually shrunk since 2006, when food prices began their dramatic rise. Virtually all money today is created on the books of banks as “credit” or “debt,” and overall lending has shrunk. This has occurred in an accelerating process of deleveraging (paying down or writing off loans and not making new ones), as the subprime housing market has collapsed and bank capital requirements have been raised. Although it seems counterintuitive, the more debt there is, the more money there is in the system. As debt shrinks, the money supply shrinks in tandem.

That is why government debt today is not actually the bugaboo it is being made out to be by the deficit terrorists. The flipside of debt is credit, and businesses run on it. When credit collapses, trade collapses. When private debt shrinks, public debt must therefore step in to replace it. The “good” credit or debt is the kind used for building infrastructure and other productive capacity, increasing the Gross Domestic Product and wages; and this is the kind governments are in a position to employ. The parasitic forms of credit or debt are the gamblers’ money-making-money schemes, which add nothing to GDP.

Prices have been driven up by too much money chasing too few goods, but the money is chasing only certain selected goods. Food and fuel prices are up, but housing prices are down. The net result is that overall price inflation remains low.

While quantitative easing may not be the culprit, Fed action has driven the rush into commodities. In response to the banking crisis of 2008, the Federal Reserve dropped the Fed funds rate (the rate at which banks borrow from each other) nearly to zero. This has allowed banks and their customers to borrow in the U.S. at very low rates and invest abroad for higher returns, creating a dollar “carry trade.”

Meanwhile, interest rates on federal securities were also driven to very low levels, leaving investors without that safe, stable option for funding their retirements. “Hot money” – investment seeking higher returns – fled from the collapsed housing market into anything but the dollar, which generally meant fleeing into commodities.

New Meaning to the Old Adage “Don’t Play with Your Food”

At one time food was considered a poor speculative investment, because it was too perishable to be stored until market conditions were right for resale. But that changed with the development of ETFs (exchange-traded funds) and other financial innovations.

As first devised, speculation in food futures was fairly innocuous, since when the contract expired, somebody actually had to buy the product at the “spot” or cash price. This forced the fanciful futures price and the more realistic spot price into alignment. But that changed in 1991. In a revealing July 2010 report in Harper’s Magazine titled “The Food Bubble: How Wall Street Starved Millions and Got Away with It,” Frederick Kaufman wrote:

The history of food took an ominous turn in 1991, at a time when no one was paying much attention. That was the year Goldman Sachs decided our daily bread might make an excellent investment. . . .

Robber barons, gold bugs, and financiers of every stripe had long dreamed of controlling all of something everybody needed or desired, then holding back the supply as demand drove up prices.

As Kaufman explained this financial innovation in a July 16 interview on Democracy Now:

Goldman . . . came up with this idea of the commodity index fund, which really was a way for them to accumulate huge piles of cash for themselves. . . . Instead of a buy-and-sell order, like everybody does in these markets, they just started buying. It’s called "going long." They started going long on wheat futures. . . . And every time one of these contracts came due, they would do something called "rolling it over" into the next contract. . . . And they kept on buying and buying and buying and buying and accumulating this historically unprecedented pile of long-only wheat futures. And this accumulation created a very odd phenomenon in the market. It’s called a "demand shock." Usually prices go up because supply is low . . . . In this case, Goldman and the other banks had introduced this completely unnatural and artificial demand to buy wheat, and that then set the price up. . . . [H]ard red wheat generally trades between $3 and $6 per sixty-pound bushel. It went up to $12, then $15, then $18. Then it broke $20. And on February 25th, 2008, hard red spring futures settled at $25 per bushel. . . . [T]he irony here is that in 2008, it was the greatest wheat-producing year in world history.

. . . [T]he other outrage . . . is that at the time that Goldman and these other banks are completely messing up the structure of this market, they’ve protected themselves outside the market, through this really almost diabolical idea called "replication" . . . . Let’s say, . . . you want me to invest for you in the wheat market. You give me a hundred bucks . . . . [W]hat I should be doing is putting a hundred bucks in the wheat markets. But I don’t have to do that. All I have to do is put $5 in. . . . And with that $5, I can hold your hundred-dollar position. Well, now I’ve got ninety-five of your dollars. . . . [W]hat Goldman did with hundreds of billions of dollars, and what all these banks did with hundreds of billions of dollars, is they put them in the most conservative investments conceivable. They put it in T-bills. . . . [N]ow that you have hundreds of billions of dollars in T-bills, you can leverage that into trillions of dollars. . . . And then they take that trillion dollars, they give it to their day traders, and they say, "Go at it, guys. Do whatever is most lucrative today." And so, as billions of people starve, they use that money to make billions of dollars for themselves.

Other researchers have concurred in this explanation of the food crisis. In a July 2010 article called “How Goldman Sachs Gambled on Starving the World’s Poor – And Won,” journalist Johann Hari observed:

Beginning in late 2006, world food prices began rising. A year later, wheat price had gone up 80 percent, maize by 90 percent and rice by 320 percent. Food riots broke out in more than 30 countries, and 200 million people faced malnutrition and starvation. Suddenly, in the spring of 2008, food prices fell to previous levels, as if by magic. Jean Ziegler, the UN Special Rapporteur on the Right to Food, has called this "a silent mass murder", entirely due to "man-made actions.”

Some economists said the hikes were caused by increased demand by Chinese and Indian middle class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 percent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.

According to a study by the now-defunct Lehman Brothers, index fund speculation jumped from $13 billion to $260 billion from 2003 to 2008. Not surprisingly, food prices rose in tandem, beginning in 2003. Hedge fund manager Michael Masters estimated that on the regulated exchanges in the U.S., 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely in anticipation of price inflation and resale. George Soros said it was "just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices."

An August 2009 paper by Jayati Ghosh, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Dehli, compared food staples traded on futures markets with staples that were not. She found that the price of food staples not traded on futures markets, such as millet, cassava and potatoes, rose only a fraction as much as staples subject to speculation, such as wheat.

Nomi Prins, writing in Mother Jones in 2008, also blamed the price hikes on speculation. She observed that agricultural futures and energy futures were being packaged and sold just like CDOs (collateralized debt obligations), but in this case they were called CCOs (collateralized commodity obligations). The higher the price of food, the more CCO investors profited. She warned:

[W]ithout strong regulation of electronic exchanges and the derivatives products that enable speculators to move huge proportions of the futures markets underlying commodities, putting a bit of regulation into the London-based exchanges will not alleviate anything. Unless that's addressed, this bubble is going to take more than homes with it. It's going to take lives.

What Can Be Done?

According to Kaufman, the food bubble has now increased the ranks of the world’s hungry by 250 million. On July 21, 2010, President Obama signed a Wall Street reform bill that would close many of the regulatory loopholes allowing big financial institutions to play in agriculture commodity futures markets, but Kaufman says the bill's solutions are not likely to work. Wall Street innovators can devise new ways to speculate that easily dance around cumbersome, slow-to-pass legislation. Attempts to ban all food speculation are also unlikely to work, he says, since firms can pick up the phone and do their trades through London, or arrange over-the-counter (private) swaps.

As an alternative, Kaufman suggests a worldwide or national grain reserve, so that regulators can bring wheat into the market when needed to stabilize prices. He notes that we actually kept a large grain reserve in the Clinton era, before the mania for deregulation. President Franklin Roosevelt pledged to maintain a large grain reserve in his second Agricultural Adjustment Act in 1938.

Chris Cook, former director of a global energy exchange, maintains:

The only long term solution is to completely re-architect markets. Firstly, cutting out middlemen -- which is a process already under way. Secondly, a new settlement between producer and consumer nations -- a Bretton Woods II. 

Speculative markets today are driven more by fear, says Cook, than by greed. Investors are looking for something safe that will give them an adequate return, which means something they can live on in retirement. They need these investments because their employers and the government do not provide an adequate safety net.

At one time, federal securities were a safe and adequate investment for retirees. Then federal interest rates plunged, and investors moved into municipal bonds. Now that market too is collapsing, due to threats of bankruptcy among bond issuers. Cities, counties and states floundering from the credit crisis have been denied access to the quantitative easing tools used to bail out the banks -- although it was the banks, not local governments, that caused the crisis. See “The Fed Has Spoken: No Bailout for Main Street.”

Meanwhile, pensions are being slashed and social security is under attack. Arguably, along with the grain reserves institutionalized under Franklin Roosevelt, we need an Economic Bill of Rights of the sort he envisioned, one that would guarantee citizens at least a bare minimum standard of living. This could be done through job guarantees when people were able to work and social security when they were not. The program could be funded with government-created credit or government-bank-created credit, and this could be donewithout causing hyperinflation. To support that contention would take more space than is left here, but the subject has been tackled in my book Web of Debt. In the meantime, the credit needed to get local economies up and running again can be furnished through publicly-owned banks. For more on that possibility, see http://PublicBankingInstitute.org.

Niko Kyriakou contributed to this article.

Ellen Brown is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are http://WebOfDebt.com, http://EllenBrown.com and http://PublicBankingInstitute.org.


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Automatic Autopilot Override of Pilot Control of Boeing Aircraft Available Circa 2001

Another 9/11 smoking gun from 911Blogger.com - Paying Attention to 9/11 Related Alternative News: 

The capability of an aircraft Flight Management Computer (FMC) to take control of an aircraft away from a pilot and turn over control to its autopilot system apparently existed circa September 11, 2001. In a 2003 "Aviation Week" report, Honeywell describes an already existing "secret" disabling FMC code that can allow a GPS-guided aircraft autopilot system to take away control of an aircraft from a pilot during emergencies. Honeywell state-of-the-art Flight Management Systems (FMS) were used by the four aircraft reportedly hijacked on September 11, 2001.


"Assisted recovery builds on existing enhanced ground proximity warning systems (EGPWS), autopilot or fly-by-wire technologies to prevent an aircraft from crashing into terrain or buildings ... If pilots don't respond to warnings within a certain amount of time, assisted recovery directs autopilot or fly-by-wire control systems to steer aircraft away from a crash ... A Honeywell spokesman said an override option does exist in its assisted recovery system through a secret disabling code."[1]


The development a collision avoidance, control override capability within a Boeing 757 is documented as early as 1999. Boeing 757s and 767s containing common avionics, were used during the 9/11 attacks.
"Ultimately, if required, the system could initiate an automatically flown evasive maneuver. Validation flights were completed at the NASA Wallops Flight Facility and in-flight demonstrations of the system were completed at Minneapolis-St. Paul International Airport in November 1999 for FAA officials and other Government and industry representatives. The NASA B-757 ARIES and a Honeywell Gulfstream IV (G-IV) were used in the flight test effort."[2]
A 2005 report on ground proximity warning systems states that the Boeing 767's that were crashed into the World Trade Center (WTC) relied on navigation databases that contained the locations of the WTC towers:
"The hijacked passenger jets that hit the World Trade Center buildings were equipped with EGPWS ... The twin towers were in the database"[3]
[1] http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=aviatio...
[2] http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=awst&id... Shows Interest in Honeywell's Auto Pull-Up Software
[3] http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=awst&id... Shows Interest in Honeywell's Auto Pull-Up Software

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