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The Back Story on Hamas

Hamas

by Beverley Milton-Edwards and Stephen Farrell

(2010 Polity Press)

Note: the corporate media is omitting important historical context in their current reporting on the recent creation of a “Unity” government uniting the West Bank and Gaza. Two of the most important omissions include the role of the Israeli government in fostering the rise of Hamas and the Hamas victory in the 2006 elections – over all of Palestine, not just Gaza. The Israel and the US refused to recognize the democratically elected Hamas government, installed a puppet government run by Mahmoud Abbas (as they have done recently in Ukraine) and launched a CIA-led 18 month military coup to install Abbas’s illegitimate Fatah government in Gaza. Hamas successfully repelled the coup.

Hamas is about the militant Palestinian group which was democratically elected to run the Palestinian Authority in 2006. The book clearly documents the role Israel played in promoting the rise of Muslim fundamentalism in Palestine.

According to Milton-Edwards and Farrell, Israel’s motives in backing the rise of the Muslim Brotherhood in Palestine were identical to those of the US in Afghanistan and Anwar Sadat in Egypt. In all cases, the goal of supporting the Islamic fundamentalism was to counter the secular Arab leftists and nationalists who controlled most Middle Eastern states prior to 1967. The US and its allies had enormous concerns that that the leaders in power would form a single Arab economic or political block that would thwart US corporate and strategic interests.

Milton-Edwards and Farrell trace the origins of Hamas to the decision by the Muslim Brotherhood to open offices in Palestine in the 1940s, when it was still under the British Mandate. As a condition of their World War I defeat, the old Ottoman (Turkish) empire was divided up among European powers. In 1947 Britain surrendered control of Palestine, and the UN partitioned it into Jewish and Palestinian Arab states.

Outraged that Palestinian Jews, who represented on 32% of the population were awarded 56% of Palestine, in 1949 Syria, Egypt and Jordan joined with Palestine’s Muslim Brotherhood, in declaring war on Israel.

In the resulting settlement, Palestinian Arabs lost even more territory, forcing 726,000 refugees to flee to neighboring states. Gaza, to the west of Israel, came under Egyptian control. Jordan, to Israel’s east, assumed control of the West Bank. The king of Jordan, an autocratic totalitarian ruler, immediately closed the West Bank offices of the Muslim Brotherhood and placed their members under close police surveillance.

In the 1967 six day war, Egypt, Jordan and Syria attacked Israel and were once again defeated. The West Bank and Gaza came under Israeli military occupation, while Israel banned the Palestinian Liberation Organization (PLO) and forced Yasar Arafat and other PLO leaders to flee into exile.

Israel Turns a Blind Eye to Mijamma Violence

Prior to 1973, the Palestinian Muslim Brotherhood saw their primary role as performing charitable works and speaking out against the liberal Westernized culture Palestinian youth brought back when they went to university in Egypt. In 1973 they formed a new organization Al-Mijamma ‘al-Islami (The Islamic Center), under the leadership of a charismatic wheelchair bound cleric named Sheikh Ahmed Yassin. Mijamma’s ultimate goal was to reclaim Palestinian land and homes Israel had seized in 1947 and 1967. However they felt the first step in building a militant resistance organization was to re-establish Palestine as an Islamic society. Thus their main focus was on islamization, which they approached by teaching, preaching and setting up community institutions to provide food and other social services to impoverished Palestinian families.

Assuming control of the Islamic University of Gaza in 1973, they began harassing and expelling female students who refused to wear Islamic dress, as well as beating up men who spoke out against these activities.

Israel, which governed both the West Bank and Gaza after 1967, turned a blind eye to this lawless violence, as well as providing direct financial to the Islamic Academy in Hebron, where many of Hamas’s military leaders would receive their training. In 1978 Israel went so far as to grant official recognition to Mijamma, allowing it to meet openly and publicly, at a time when all other Palestinian parties were banned as illegal terrorist organizations.

The Birth of Hamas

During the 1987 insurrection or Intifada, Mujamma renamed itself Hamas. Despite their full participation alongside the PLO in the Intifada, Israel continued to allow foreign money to flow freely to Hamas, while they continued to freeze PLO assets. Likewise Israel allowed Hamas to keep their schools open in Gaza, while they force West Bank Palestinian schools to close.

It wasn’t until 1990 that Israel finally cracked down on Hamas, following the murder of two Israeli soldiers. Their leader Sheikh Hassan was arrested, tried and imprisoned. Three years later, Israel illegally (under international law) deported 400 Hamas members, following the kidnapping of an Israeli border guard.

The PLO Endorses Sadam Hussein

Meanwhile the PLO, Hamas’s rival, made the tragic mistake of endorsing Sadam Hussein’s invasion of Kuwait in 1991. This resulted in the suspension of all aid the PLO previously received from wealthy Gulf oil states. Because they were nearly bankrupt with the loss of their Gulf donors, in 1993 the PLO abandoned their pledge to liberate Palestine through armed struggle. This decision to negotiate a peace with Israel made them enormously unpopular with one million Gazan refugees. Still intent on returning to the lands they had lost in Israel, they had no interest whatsoever in creating a Palestinian state.

The response from Hamas was to issue a fatwa (death sentence issued by Islamic religious leaders) against the Fatah-led PLO. Determined to derail the negotiations, they also launched a massive campaign of violence, incorporating or the first time a new tactic known as “martyrdom” (i.e. suicide) bombings. Each martyrdom bombing resulted in a payment of approximately $25,000 to the suicide bomber’s family, financed mainly by Saddam Hussein and Saudi Arabia.

The Creation of the Palestinian Authority

The 1993 negotiated settlement, known as the Oslo Accords, granted the West Bank and Gaza limited autonomy under Israeli military control. It also created the Palestinian Authority (PA), a shrewd move the US and Israel employed to split and crush the Palestinian resistance. By making the Palestinian leadership the civil authority, they shifted much popular anger away from Israel and towards the PLO.

Arafat and the PLO leadership returned from exile to run the Palestinian Authority (PA). Owing to a continuing embargo by Gulf donors, Arafat had to lay off hundreds of public sector workers and slash social services to prevent a total meltdown of the Palestinian economy. Israel, meanwhile, made Arafat responsible for controlling Hamas militants. His solution was to put thousands of them in prison and torture them. There were numerous reports of prisoners being beaten, forced to shave their beards and sodomized with coke bottles.

Meanwhile PA security services routinely blackmailed families, with offers to release prisoners in return for bribes of $10,000 or more. All this occurred as Israel was continuing to destroy Palestinian homes and olive trees to build more Jewish settlements in the occupied territories.

The Second Intifada

In 2000, Palestinian anger at their extreme poverty and repression boiled over in armed insurrection, the second Intifada. In 2002, the Saudis put forward a peace proposal which would have normalized Israel’s relations with the Arab world in return for their withdrawal from the occupied territories. As before Hamas, which still demanded the right of return (to their Israeli homelands) for all exiled Palestinians, tried to derail peace negotiations with a wave of sniper attacks and car and suicide bombings. These were directed against the PLO security services, Jewish settlers in Palestine and civilians inside Israel. Instead of retaliating against Hamas, Israel punished Arafat by sending tanks into the West Bank to bombard his headquarters, commencing a military siege that kept him prisoner until he died in 2004.

Hamas Enters Electoral Politics

Hamas boycotted the January 2005 presidential elections, giving the Fatah candidate Mahmoud Abbas an easy victory. In May 2005, the Hamas leadership made a controversial decision to pursue direct political power by standing candidates in Gaza and West Bank local body elections. They did so in parallel with militant attacks on Israel. Following Ariel Sharon’s unilateral withdrawal of Israeli settlers and soldiers from Gaza in August 2005, this included Qassam rocket attacks on Israeli border towns.

Hamas never expected to win the parliamentary elections in January 2006, a success Milton-Edwards and Farrell attribute to widespread disgust, both in the West Bank and Gaza, with Fatah/PLO corruption and inefficiency. Refusing to recognize the Hamas victory, Mahmood Abbas installed his own non-elected parliament in the West Bank. He also refused to relinquish Fatah-controlled security posts to the new Hamas government. Israel, meanwhile, froze funds needed to pay PA officials in Gaza. When Europe and the US also froze Palestinian developmental assistance, Hamas had no choice but to turn to Iran for training, weapons and financial aid.

The Failed CIA Coup

After a brief experiment with a “unity” government, in which Fatah and Hamas ruled jointly, the CIA and Abbas launched an 18 month military coup, determined to dislodge Hamas from power in Gaza. In June 2006, Hamas came out the victor, employing 16,000 fighters to force 70,000 CIA-backed members of Abbas’ Preventive Security Organization to flee Gaza.

Hamas Drops in the Opinion Polls

By June 2008, their popularity waning owning to brutal sanctions and shortages of food, medicine and other necessities, Hamas was in the exact same situation as Fatah in 1993. In desperation they agreed to a temporary ceasefire (ending suicide bombings and Qassam rocket attacks), on condition Israel end their embargo. Hamas honored the ceasefire for six months, despite Israel’s failure to end their economic blockade. In December 2008, Hamas broke the ceasefire by firing rockets into Israel. The book ends with a description of Operation Castlead, which Israel launched against Gaza in retaliation. Castlead destroyed or damaged nearly every Palestinian security installation, killed 1,300 Palestinians (including 900 civilians) and destroyed hundreds of homes and business institutions.

***

Beverly Milton-Edwards is Professor in the School of Politics, International Studies and Philosophy at Queen’s University Belfast . Steven Farrell, who has dual British-Irish citizenship, is Middle East Correspondent for The New York Times.

Upcycyling: Saving the Planet by Design

The Upcycle: Beyond Sustainability – Designing for Abundance

 By William McDonough and Michael Braungart

2013 Northpoint Press

 Book Review

In The Upcycle, American architect William McDonough and German chemist Dr Michael Braungart offer a new improved version of the cradle to cradle (C2C) vision they first introduced with their 2002 book Cradle to Cradle: Remaking the Way We Make Things.

C2C design is an approach to architecture and manufacturing that seeks to lessen environmental damage and the impact of resource scarcity by revolutionizing the way we design products, factories, buildings and cities – as opposed to trying to undo or minimize the negative effects of conventional production. There are no villains in C2C design. McDonough and Braungart are highly critical of the current tendency to demonize carbon, given its role as an essential building block of life. There’s simply too much of it accumulating in the atmosphere when it should be returning to the soil for food production. They also object to labeling incandescent light bulbs, air travel, long showers and disposable diapers as “bad for the environment.” Instead of shaming and penalizing people who use these products for “wasting energy,” we should be trying to find more efficient ways to produce them.

Imitating Nature’s Design Principles

A fundamental precept of C2C design is its emphasis on biomimicry, i.e. copying the genius of nature’s design principles. One of the major drawbacks of conventional industry is a built-in inefficiency in which valuable resources are lost to the landfill, incineration or runoff. In C2C design, as in nature, there is no waste. Instead products, industries and processes are designed in such a way that waste from one provides the raw materials for others. McDonough and Braungart argue that the initial design of any product, building or factory should include detailed planning for the new products that will be made from its basic elements when it wears out or is torn down. For example, a C2C computer would be designed to be returned to the manufacturer and easily disassembled into safe, environmentally friendly components that can easily be put to other uses.

The Cradle to Cradle Products Innovation Institute

With their new book, the authors elaborate on their earlier work by introducing the concept of “upcycling.” This they define as optimizing the materials, ingredients and process pathways in such a way that waste is converted to raw materials for nature or some other industry. By ensuring that scarce natural resources, such as aluminum, copper, water and wood, are continuously reused, there is less pressure to destroy more and more of the environment to replace them.

After consulting with hundreds of businesses and cities on adopting C2C design principles, in 2010 they started McDonough-Braungart Design Chemistry (MBDC) and the Cradle to Cradle Products Innovation Institute. The latter issues C2C certification for companies and products based on five quality categories:

Use of materials that are safe and healthy for humans and the environment
Incorporation of design principles that allow all products to be reused by nature or industry.
Use of renewable, non-polluting energy in the manufacture and assembly process.
Use of production processes that protect and enrich the water supply.
Treatment of all people involved in a socially responsible way.

The Upcycle presents numerous real life cases demonstrating the enormous economic advantages C2C technology can have for business. Lower energy and water processing costs can save tens of millions of dollars in both upfront capital costs and long term operational costs.

The Argument Against Biofuels, Nuclear Energy and Dam-Based Hydropower

A large section of The Upcycle analyzes the cost and desirability of current renewable energy options. Biofuels, nuclear energy and dam-based hydropower are rejected as being incompatible with C2C technology. Not only is the current biofuel industry responsible for massive rainforest destruction in Indonesia, but it offers no significant reduction in CO2 emissions (because they contain the same complex carbon chains, biofuels produce as much CO2 as fossil fuels).

Nuclear technology, in turn, creates a massive amount of permanent waste that can’t be diverted to other safe uses.

Meanwhile large dams, which cause the same kind of environmental damage and habitat destruction as strip mining and nuclear energy, has virtually decimated the wild salmon population in the Pacific Northwest. The authors give much higher marks to small scale high head hydro generation in which water flowing downstream turns a ferris wheel-type generator.

They also feel solar, wind (especially offshore wind generation, which is less aesthetically controversial), geothermal and biogas from manure and landfill waste have great promise. They note that as of June 2 2012 wind-generated electricity is two cents per kilowatt hour cheaper than coal.

Michael Braungart is featured in the following video Pyramids of Waste aka The Lightbulb Conspiracy:

A Roadmap to Redesigning Civilization

Redesigning Civilization – with Permaculture

by Toby Hemenway (2013)

Film Review

Toby Hemenway defines permaculture as a branch of ecological design that employs natural ecosystems as a model. Although most permaculture design relates to food production, its principles can be applied to the management of all human needs, including water, shelter, waste, energy, finance, culture/spirituality and even sports and security.

Permaculture-based food production focuses on returning to a “horticultural” method of food production with “food forests” and other self-maintained food systems, as opposed to our current mechanized, open field method of food production. Permaculture relies on ecologically designed gardens, rather than open fields, and mixed crops, rather than monoculture. It also employs the continuous plant succession typical of natural ecosystems, rather than starting with a clear cut every year.

For me, the most interesting part of the film is Hemenway’s discussion of archeological evidence that civilization preceded the Agricultural Revolution (around 10,000 BC). This contradicts the prevailing belief that the agricultural made civilization possible by creating a food surplus. It’s been argued for more than a century that the creation of a food surplus through open field agriculture freed up non-farmers to specialize in higher pursuits, such as art, science, music, religion, and literature.

According to Hemenway, more recent archeological evidence suggests that civilization came first. This includes Venus figurines which dating from 40,000 years ago, religious symbols from 30,000 years ago, evidence of horticulture (plant tending) 30,000 years ago and evidence of irrigation 20,000 years ago.

He makes reference to an archeological site in Gokikli Tepi Turkey from 14,000 years ago suggestive of routine spiritual gatherings of hundreds of people. Feeding large crowds poses a specific technological challenge.

Hemenway believes these large gatherings may have been the impetus for large scale open field cultivation. “Agriculture” (from “ager” meaning field) made it possible to produce large amounts of grain which, unlike other foods, can be stored for long periods.

Hemenway goes on to discuss some of the immediate drawbacks of grain-based agriculture (based again on archeological evidence):

Overpopulation, famine, and warfare – agriculture immediately caused a population boom, as grains are the one of the easiest foods to convert to calories. They increase female fertility, as well as allowing for early weaning (breast feeding inhibits ovulation). This population boom made settlements more susceptible both to conquest from neighboring tribes and famine due to failed harvests.
Shorter life span and poorer health – following the introduction of agriculture, people tended to be shorter, suffer from more degenerative disease, and have shorter life spans (by about 20-30%). They also became subject to deadly viral epidemics (such as small pox) transmitted from domesticated animals.
Less leisure time – following the introduction of agriculture, people had to work 60+ hour weeks just to survive. This was in part due to the need to support a priesthood, nobility, and military to protect the grain surplus. A hunter gatherer can generally collect sufficient food in four hours to last him a week.
Agriculture created a fear of nature (of insects, weeds, wilderness, wild animals, and wild people) and a mindset in which people came to see themselves as separate, rather than part of nature.

Hemenway goes on to outline the basic permaculture design principles, with specific examples of their application to all aspects of sustainable living:

Catching, storing, and reusing energy and materials, essentially eliminating the concept of waste.
Becoming pattern literate – learning to observe ecosystems to see how a small change can have a big effect.
Focusing on community and regional self-reliance rather than individual self-sufficiency.

Drawing on real-life examples, the film finishes with recommendations of what viewers can do to facilitate the transition to a “permaculture” lifestyle in their own communities.

Originally published in Dissident Voice

Speculating with our Food

In 2011, “food derivative” speculation replaced financial derivatives as the hot new investment promoted by major investment banks like Goldman Sachs and JP Morgan. According to numerous studies, food speculation rather than shortages, are the main reason for skyrocketing food costs.

The really scary news is that in addition to speculating heavily on food commodities, these same private equity funds are also buying up huge tracts of land in the third world.

The Great Land Grab

A 2009 research project by the Oakland Institute (The Great Land Grab) reveals startling facts about the corporate land grab in the third world – another major factor in skyrocketing food prices.

According to the International Food Policy Research Institute (IFPRI), foreign investors have secured more than 50 million acres of African farmland to develop factory farms for export crops. In addition to investment banks and private equity funds, multilateral agencies, such as the International Financial Corporation (the private sector branch of the World Bank), are also major players in the “corporatization” of global agriculture.

The IFC plays a dual role in increasing private investment in the third world – via direct investment and by pressuring developing countries to create “business enabling environments.” Another World Bank agency, The Foreign Investment Advisory Service (FIAS ), also plays a role by pressuring third world governments to improve their “investment climate,” by relaxing environmental, tenant rights and food security laws and abolishing tax and duties on foreign investments.

Africa is the major target, both for western investment banks and booming Asian economies, driving tens of thousands of subsistence farmers off land they have farmed for generations.

Corporatizing the Global Food Supply

A UK company started in 1997, called  Emergent Asset Management, claims to be the largest speculative fund investing in African industrial agriculture. It uses private equity to take control of large tracts of African farm land. Their prospectus attracts investors by predicting a armed conflict between the West and China will trigger mass food shortages – accompanied by price spikes that guarantee a handsome return to investors. Emergent’s founders, Susan Payne and David Murrin are former high level traders for Goldman Sachs and JP Morgan – well-known as the architects of food derivative speculation.

Emergent’s direct control of large amounts of agricultural land – combined with its ability to attract investors through its equity fund – puts unprecedented control of the global food supply in private hands. It does so by creating a new type of vertical integration, in which a single company controls vast amounts of land, food production and processing — while simultaneously inflating global food prices due to the speculative nature of the fund. As you can see in the video Emergent uses in their pitch to investors:

The Perp Walk – the 1% Have Names

In 2011, the Oakland Institute fingered other millionaires and billionaires grabbing African land via unscrupulous deals with corrupt village leaders (who sign away communal land rights without community consultation) – and by helping to orchestrate armed attacks on families who refuse to leave their land. At the top of the list are

Bruce Rastetter — CEO of Pharos Ag, which has bought more than 300,000 hectares in Tanzania for large-scale food crop, beef, poultry, and biofuel production. This project will displace tens of thousands of civil war refugees awaiting Tanzanian citizenship.

Leonard Henry Thatcher and David Neiman — runs Nile Trading and Development (NTD), which has bought 600,000 hectares in South Sudan through a secret agreement with influential locals who went behind the backs of other community members.

Kevin Godlington — (close associate of former prime minister Tony Blair) CEO of Crad-l and Director of Sierra Leone Agriculture (SLA) and its parent company, the UK-based CAPARO Renewable Agriculture Developments. SLA has bought 43,000 hectares in Sierra Leone to plant palm oil plantations.

Enter the Bill and Melinda Gates Foundation

The March 31 Guardian reports that the Bill and Melinda Gates Foundation (along with USAID and the Dutch and Danish governments) are backing a new World Bank scheme to further industrial agriculture at the expense of the smallholder farmers who produce 80% of the food consumed in the developing world. The new program is a ranking system called the Benchmarking the Business of Agriculture (BBA).

Here’s what the Our Land is Our Business campaign, organized by the Oakland Institute and like-minded food rights groups, has to say about the BBA:

“Despite a language that claims concerns for small farmers, the goal of this new agriculture-focused ranking system is far too clear: [to] further open up countries’ agriculture sectors to foreign corporations. The doing business [rankings] give points to countries when they act in favor of ‘ease of doing business’. This consists of smoothing the way for corporations’ activity in the country by, for instance, cutting administrative procedures, lowering corporate taxes, removing environmental and social regulations or suppressing trade barriers.”

People can sign on at Our Land is Our Business to send a message to the World Bank about looking after people rather than corporations.

 

Egypt’s Petty Bourgeoisie Dance the Danse Macabre

stuartbramhall:

 

 

This humorous interpretation of the recent Egyptian election is spot on.

Originally posted on American Everyman:

by Scott Creighton

For Egypt’s up and coming class, it’s time to celebrate. Another age of American neoliberalism is upon them and they can hardly contain their happy-happy-joy-joy mood.

Sure, the publicly approved  anti-neoliberal constitution was shredded. Sure, the democratically elected government was toppled. Sure, the IMF has their hooks in the country. Sure hundreds upon hundreds of their fellow citizens have been killed and thousands jailed for simply sharing a political belief. But hey… they were poor working class Egyptians. So? What does their opinion mean? They’re poor.

Watch the dance of the organized petty bourgeoisie opposition. Watch them and know the dance. Learn the dance. Because you will see it here soon enough. And if you aren’t dancing when the fascists throw down the gauntlet, you are the terrorists and must be dealt with appropriately in the land of the free and the home of the brave.

Behold…

View original 95 more words

How to Tell Where Your Food Comes from

Consumers in North America and Europe are consciously opting for nationally – or better still locally – grown foods as a way of reducing fossil fuel use and carbon dioxide emissions. Increasing concern over “food miles” (i.e. the distance their food travels before reaching their table) has led the US Congress to enact country of origin labeling (COOL) on fresh beef, pork, lamb, fresh fruits, nuts and vegetables. The right of the US government to require COOL was recently upheld by the World Trade Organization, in response to a complaint by Canada and Mexico. The WTO ruling is confusing, as the secret tribunal that decides such matters also ruled the COOL labeling requirements the US was requiring were excessively burdensome. See WTO Dispute Settlement.

Although COOL labeling is not required on frozen, canned or processed foods, the country responsible for manufacturing an item is indicated by the first three digits of the bar code. The latter is used universally in automated checkout systems.

Deciphering the bar code:

00-13 USA & Canada
30-37 France
40-44 Germany
49 Japan
50 UK
57 Denmark
64-Finland
76 Switzerland and Liechtenstein
93 Australia
94 New Zealand
480–489 Philippines
628 Saudi-Arabia
629 United Arab Emirates
690-695 China (including Hong Kong)
740-745 Central America
750 Mexico
885 Thailand
893 Vietnam

Consumers need to be aware that China, Hong Kong, Thailand and Vietnam have no food inspection regulations. Thus there is no guarantee food manufactured in these countries is safe.

For more country codes go to EAN codes

photo credit: jDevaun via photopin cc

How Big Corporations Avoid Tax

The Tax Free Tour

Film Review

VPRO-Marijee Meerman 2013

The Tax Free Tour is an hour long Dutch documentary (in English) about the highly specialized field of corporate tax avoidance. I found it astounding how many American corporations use overseas tax havens to avoid paying tax in the US. Some of the better known names include Walt Disney, Wells Fargo, Google, AT&T, Apple and even companies that promote themselves as socially responsible, like Starbucks and Amazon.

Apple, one of the worst offenders, pays only 1.9% of their annual income in corporate tax. As a US company headquartered in Silicon Valley, Apple should be liable to the standard 35% corporate tax rate. Their secret is diverting nearly all their income to a subsidiary in Ireland (which has one of the lowest corporate tax rates) – after first passing their royalty income through a Netherlands subsidiary (the Dutch charge virtually no tax on intellectual property revenue), a company listed in Virgin Islands and back to Ireland. In the accounting trade, this is known as a Double Irish with a Dutch sandwich.

The filmmakers calculate that profits offshored for tax avoidance purposes totaled more than $20 trillion in 2010. Approximately 100 of the world’s largest companies have subsidiaries in the Netherlands, owing to their low taxes on intellectual property royalties. Walmart has six Dutch companies, even though they don’t have a single Dutch store. Starbucks also diverts all their royalty income to the Netherlands. Because they have a trademark on “frappuccino,” they declare a certain percentage of the price as a “royalty” (and pay no tax on it).

My favorite part is near the end when a British Select Committee challenges a Starbucks executive on his claim that their British coffee houses have been running at a loss for fifteen years. After asking why they don’t close their British stores, she gets him to admit they avoid $1.6 million pounds in corporate taxes by diverting their UK income to the Netherlands. He won’t tell her how much tax they pay the Dutch government. Allegedly Starbucks and the Dutch government have a secret agreement not to disclose the amount. The committee chair sternly reminds the executive of all the free public services Starbucks receives in the UK, at the expense of other taxpayers.

Amazon avoids corporate tax by diverting a sizable portion of their revenue to Luxemburg. Google shelters their profits in Bermuda. Other favored corporate tax havens include Cyprus, the Cayman Islands, Mauritius, Singapore, Hong Kong, the UAE and Kenya.

The irony is that most of this income can’t be transferred to shareholders. Paying it out as dividends would necessitate repatriating the revenue to the company’s home country – and paying the prevailing corporate rate. Thus much of this money is loaned (as treasury bonds) to deeply indebted western countries – who struggle to balance their books owing to the trillions of dollars lost from tax avoidance.

Crossposted at Daily Censored

Giving Capitalism a Feminine Face

Historically the IMF and World Bank, like the WTO, have been characterized by “faceless” leadership. Prior to the mid-nineties, only a handful of liberal intellectuals knew these powerful international institutions existed. Even after the 1999 Battle of Seattle effectively launched the antiglobalization movement, the leaders of these august institutions remained anonymous. When the IMF issued warnings against countries with excessive public spending, they originated from the agency itself, rather than IMF officials.

Prior to his June 2011 arrest for alleged sexual assault, no one outside of France had heard of Dominique Strauss-Kahn, who ran the IMF from 2007 and 2011.

The Historic Role of the IMF

The IMF was founded at the end of World War II at Bretton Woods. The British delegation, led by economist Maynard Keynes, wanted the IMF to be a cooperative fund member states could draw on to maintain economic activity and employment through the periodic economic crises that are characteristic of capitalist economies. The US delegation saw the IMF as more of a bank serving the needs of private lenders by ensuring borrowing states repaid their debts on time (see IMF History).

The US prevailed, and IMF loans came to be known as “structural adjustment” loans because they forced borrowing governments to adjust the structure of their economic activity. In most cases, this involved extreme austerity measures favorable to multinational corporations seeking access to cheap resources and labor markets. Such measures included privatizing publicly owned assets (airlines, telecoms, railroads, health systems, etc); liberalizing trade and financial markets; increasing incentives (corporate and individual tax cuts and waivers of environmental/labor regulations) for foreign investment; and supporting commercial export crops at the expense of food production.

Developing countries that blindly followed these policies, especially in South America and Africa, found their countries mired in debt and huge social inequalities. Russia was one of the most extreme cases: its economy shrank by 55% before President Vladimir Putin set the country on an alternative path to recovery.

Repackaging the IMF’s Image

Given the historic anonymity of the IMF leadership, you have to wonder about all the publicity being lavished on Christine Lagarde, the current IMF managing director. Although global economics is a low priority in the US media, she receives near daily attention in the British and international media. At sixty, Lagarde is still a strikingly attractive woman. Presumably, however, there is some political agenda behind the decision to promote this “rock star of the economic world,” as several media outlets have branded her

Lagarde’s Mission

Besides her carefully cultivated public persona, Lagarde is also unique in her willingness to lay out the IMF’s economic and political agenda. The policies she advocates include

Stronger economic growth (allegedly to promote global re-employment)
Ceeper “integration” of European economies (translation: creation of a centralized fiscal body capable of making budgetary decisions for the entire Eurozone)
Improved “fiscal consolidation” for the US and Japan (translation: less deficit spending)
More domestic consumption and less reliance on foreign investment and exports in emerging economies (especially China)
A stronger firewall against debt contagion (translation: no bailouts) around weaker Eurozone nations like Greece, Italy and Spain
“Structural reform” (translation: anti-union legislation and reduced public spending) to improve the “competitiveness” of the industrial north.

Rebranding Structural Adjustment

Lagarde gives double messages about structural adjustment and austerity cuts. After warning that budget cuts lead to “recessionary tendencies,” she states that some countries (which, like Greece, are on the verge of economic collapse) need to cut their public budgets immediately. She feels others can stretch their cuts out over time.

Among specific “structural reforms” Lagarde favors are pension reform, with an optimal retirement age of 67, “wage restraint” (i.e. abandoning the expectation that wages will keep pace with inflation), and social service reforms in which “recipients of social assistance are expected to improve their situation.”*

The Fox Guarding the Henhouse

LaGarde isn’t without her critics. Former IMF chief economist Simon Johnson refers to her appointment as “the fox guarding the henhouse.” Johnson, like former World Bank economist Joseph Stiglitz, has been highly critical of the extreme concentration of financial power and it threat it poses to the global economy. This is the subject of Johnson’s recent book, Thirteen Bankers.

His criticism.of Lagarde centers mainly around her proposal to solve the Eurozone crisis by issuing additional loans to the debt-ridden “peripheral” countries (Greece, Spain, Italy, Portugal and Belgium). He maintains all these countries are looking at a default scenario, no matter how much money she throws at them. He accuses her of allowing EU leaders to use the IMF to conceal flaws in the Eurozone structure from voters.

*A questionable objective in countries with double digit unemployment

photo credit: Adam Tinworth via photopin cc

The Real Cause of Greece’s Economic Crisis

Debtocracy

(2011) Katerina Kitidi and Aris Hatzistefanou

Film Review

The 2011 Greek documentary Debtocracy effectively dispels the media myths about lazy Greek workers and and scofflaw Greek taxpayers being responsible for Greece’s present economic crisis.

The film begins with an overview of what its filmmakers (and I) feel has been a basic goal of both globalization and the creation of a single European currency – namely “labor discipline” and the suppression of wages in heavily unionized countries.

They show how sweeping deregulation in the industrialized world in the 1980s allowed manufacturers to eliminate unions by shutting plants down and reopening them as sweatshops in the third world. The subsequent creation of the Euro as a single currency allowed the central European countries (Germany and France) to use the mechanism of debt to weaken strong unions in peripheral Eurozone countries like Greece, Spain and Italy.

Thanks to relatively weak unions following reunification, Germany imposed a virtual ten year wage freeze. While workers suffered, German companies and banks racked up immense profits and stacks of cash, which they loaned to “peripheral” countries to finance big corporate tax cuts.

The bulk of the film focuses on the concept of “odious” debt and whether the Greek people should be forced to repay fraudulent loans from which they received no direct benefit. As Debtocracy poignantly depicts, Athens and other Greek cities are experiencing a third world humanitarian crisis, with massive homelessness, hunger and untreated illness.

Odious Debt: An American Invention

Odious debt was a principle invented by the US in the early 20th century to avoid repaying Spain’s war debt after the US took possession of Cuba following the Spanish-American War. George Bush invoked it following the US occupation of Iraq. His goal was to avoid repayment of Sadam Hussein’s debts to China, France, Germany and Russia. Since then approximately a dozen countries – most notably Argentina, Ecuador and Iceland – have repudiated so-called “illegitimate” debt incurred by deposed leaders.

The film focuses mainly Argentina’s and Ecuador’s default on their foreign debt. In 2001 the structural adjustments the IMF forced on Argentina bankrupted the country. A popular uprising forced the Argentine president to flee (in a helicopter), and the new government declared the IMF debt illegal and unconstitutional.

When Ecuador experienced a similar economic crisis and uprising in 2007, they, too, sent their president packing in a helicopter. In 2008, their new president Rafael Correa appointed a Debt Audit Commission to study the strong arm tactics (some of which John Perkins describes in Confessions of an Economic Hit Man) that caused Ecuador to borrow billions of dollars to pay for US-built infrastructure that only benefited Ecuador’s wealthy elite. Correa’s Debt Audit Commission ascertained that only 30% of their external debt was legitimately incurred.

CADTM’s Call for a Greek Debt Audit Commission

Iric Toussaint, a French economist who participated in the Ecuadorian Debt Audit Commission, believes a major proportion of Greek debt may have been fraudulently incurred. The following evidence supports this view:

Nearly one billion euros of debt resulted from a risky swap (of yen and dollars for euros) Goldman Sachs persuaded Greece to make in 2001. The transaction netted Goldman Sachs $600 million in profit (see Secret Greek loan).
Major German and French loans were issued on condition that the Greek government incur further indebtedness to purchase hundreds of millions of euros of German and French armaments.
Billions of dollars of Greek debt resulted from major cost overruns on the 2004 Greek Olympics (which cost twice as much as the Sydney Olympics in 2000). These have never been explained nor investigated.
In 2010 a former Goldman Sachs official was hired to manage the Greek public debt authority, with the result that the entire 2010 rescue package (103 million euros) was used to bail out Greek banks.

The film also discusses the March 2011 call by the Committee for the Abolition of Third World Debt (CADTM) to create an audit commission to examine Greek public debt. It ends with the ominous sound of a helicopter, eerily foreshadowing the forced resignation of Greek prime minister George Papandreou last November, when CNN advised him to get a helicopter to save himself from angry protestors (see Fall of Papandreou).

Resist or Die

END:CIV Resist or Die

2011, directed by Franklin Lopez

Film Review

According to the promo, END:CIV “examines our culture’s systemic addiction to violence and environmental exploitation.”

The title is drawn from Pac Man, an arcade came that first came out in 1980. In one of the world’s first video games, the player guides Pac Man, a small faceless mouth, through a maze while he devours Pac Dots and tries to escape blob monsters. The first three minutes of END:CIV superimpose a Pac Man game over images of old growth clear cuts, belching smokestacks, factory hog farms, wild fires, hurricanes and the US military’s ruthless killing machine. The sequence ends as a gigantic “GAME OVER” flashes across the screen.

The film is based on the Endgame, the best selling two volume book Derrick Jensen published in 2006. In Endgame, Jensen argues that mankind urgently needs to bring down “civilization” before it destroys the planet. He bases his case on twenty basic premises he lists at the beginning of both volumes. The film END:CIV examines four of them.

Premise 1 – industrialized civilization has never been and will never be sustainable, mainly because it’s based on non-renewable resources.

The film, like Jensen’s book, traces the rise of cities, which by necessity steal resources from distant regions and eventually denude the entire landscape of those resources. After making the case that the corporate elite are mindlessly and voraciously consuming an ever increasing amount of energy, land, water and other resources, the filmmaker reminds us that we live on a finite planet. He then argues that corporations will most likely continue this greedy consumption until everything is used up – or until we stop them.

Premise 2 – A major focus of industrialized civilization has been to destroy indigenous communities by force – because they don’t willingly allow the confiscation of their natural and mineral resources. A corollary of Premise 2 is that without its heavy reliance on violence, industrial civilization would collapse.

In an cameo from a public forum, Jensen explains that much of violence is invisible and a matter of conditioning. He gives the example of the cop who will pull a gun and drag you to jail if you don’t pay your rent or satisfy your hunger by eating off grocery shelves. Yet we are all indoctrinated to believe that people must pay for the right to exist on this planet.

The film goes on to criticize the main message put out by the nonprofit environmental movement: that people can remedy pervasive violence, resource theft and exploitation by making politically correct purchases.

In the view of Jensen and other activists featured in the film, Greenpeace, Sierra Club, Forest Ethics and similar “eco-bureaucracies” have essentially sold out by making preservation of the global economy more important than saving the planet.

This section is also highly critical of the dogmatic opposition of the environmental movement towards violent resistance. Jensen does a great send up of the movie Star Wars. In his version, the rebels don’t destroy Darth Vader by blowing up the death star. Instead they promote eco-tours and Fair Trade products from endangered planets and send waves of compassion and loving kindness towards Darth Vader, while locking themselves down on his ship. They also vote to condemn and exclude the renegades who propose to blow up the death star – for allowing themselves to be contaminated by Darth Vader’s culture of violence.

Premise 3 – the culture (of industrialized society) as a whole and most of its inhabitants are insane.

The section points out that, contrary to popular belief, no combination of fossil or alternative fuels will allow us to continue our current “happy motoring” society. It focuses on Alberta’s insane tar sands project, the most environmentally destructive enterprise in history.

Premise 4 – from the beginning, the culture of civilization has been a culture of occupation.

The film ends with a brief overview of the resistance movement in Nazi-occupied Europe. In the final scene, Jensen poses the provocative and disarming question:

“If your homeland was invaded by aliens who cut down the forests, poisoned the water and air and contaminated your food supply, at what point would you resist?”