Bulletin N°411




11 June 2009
Grenoble, France

Dear Colleagues and Friends of CEIMSA,

Being born rich, a friend from Texas once told me, gives you about a 30-year head start. You can save a lot of time with that advantage. His family was rich and he smugly enjoyed the advantages, both imaginary and real.

Meanwhile, you've probably heard the class-conscious joke of the man in the bar, who asks the barman for a glass of whisky :

"Barman, give me a whisky!" A parrot sitting above the bar repeats, "Give me a Coca!"
The barman serves the whisky, and the man drinks it; then he asks for another: "Barman, give me a whisky!"  and the parrot repeats: "Give me a Coca!"
The barman pours the whisky and looks angrily at the parrot: "One more remark from you, and I'll nail you to the wall."
The man drinks his whisky and asks for a third one: "Barman, give me a whisky!" and again the parrot repeats: "Give me a Coca!"
The irate barman grabs the parrot and nails him to the wall behind the counter.
Just above the parrot is a wooden crucifix hanging on the wall. The parrot looks up at wooden figure on the cross and asks: "Did you ask for a Coca, too?"

In the 7 items below CEIMSA readers will experience the many forms of struggle against false consciousness, as it is manifested in our daily news.

Item A. is a copy of the University of California-Berkeley commencement speech delivered by Barbara Ehrenreich at the U.C. School of Journalism in June 2009 : "Welcome to the Working Class".

Item B. is an article by Noam Chomsky on President Obama's Israel strategy and U.S. corporate interests.

Item C. is an 8-minute video broadcast of Howard Zinn speaking about the Obama phenomena 100 days later, in Greece.

Item D. is a commentary sent to us by William Blum, author of several books of U.S. foreign policy, including the classic textbook, Killing Hope. Here he reminds us of the linguistic power of social control and the role it plays in creating silence and self-censorship.

Item E.  is an article by Pennsylvania Professor Edward S. Herman on class warfare in the United States.

Item F., sent to us by Grenoble Professor Vicki Briault , is an article by Eric Toussaint and Damien Millet on hope after the European Elections of 7 June.

We conclude this CEIMSA Bulletin with copy of the film documentary (which is accessible in the Internet for the next 6 or 7 days) made for German and French television by ARTE and sent to us by University of Grenoble secretary, Christelle Jullien, on the Second Great Depression and its causes :

Le malheur est dans le prêt


etraçant la genèse de l'explosion de la bulle immobilière aux États-Unis, ce film montre à quel point cette crise était prévisible, voire prévue par certains.
Ce film revient sur la crise des subprimes et sur ses répercussions mondiales, de l'Ohio, où il enquête sur la spéculation immobilière, à l'Allemagne et la France, où le désarroi est grand, en passant par New York et Londres, incontournables places commerciales et financières. Le documentaire donne la parole aux victimes de la crise mais aussi à ses acteurs : boursiers, cadres des agences de notation, analystes financiers. Les témoignages des uns et les aveux des autres sont commentés par Peter Sloterdijk, philosophe, Friedhelm Hengsbach, spécialiste d'éthique sociale, ou Richard Sennett, sociologue, pour qui le néolibéralisme s'achève en "désastre économique et culturel". Et pour Peer Steinbrück, le ministre allemand des Finances, le pire est peut-être encore à venir.

(Allemagne, 2009, 52mn)
Réalisateur: Kersten Schüßler

Francis McCollum Feeley
Professor of American Studies
Director of Research
Université Stendhal Grenoble 3

from Barbara Ehrenreich :
Date: 9 June 2009
Subject: "Welcome to the working class."

Barbara Ehrenreich, AlterNet: "So let's get the worst out of the way right up front: You are going to be trying to carve out a career in the worst economic downturn since the Great Depression. You are furthermore going to be trying to do so within what appears to be a dying industry. You have abundant skills and talents - it's just not clear that anyone wants to pay you for them. Well, you are not alone."

Welcome to a Dying Industry, J-School Grads
by Barbara Ehrenreich


from Z Net :
Date: 8 June 2009
Subject: Obama's Israel strategy and U.S. corporate interests.

Turning Point?
by Noam Chomsky

The Obama-Netanyahu-Abbas meetings in May, followed by Obama's speech in Cairo, have been widely interpreted as a turning point in US Middle East policy, leading to consternation in some quarters, exuberance in others.  Fairly typical is Middle East analyst Dan Fromkin of the Washington Post, who sees "signs Obama will promote a new regional peace initiative for the Middle East, much like the one championed by Jordan's King Abdullah... [and also] the first distinct signs that Obama is willing to play hardball with Israel." (WP, May 29).  A closer look, however, suggests considerable caution.
King Abdullah insists that "There is no change to the Arab Peace Initiative, and there is no need to amend it. Any talk about amending it, is baseless" (AFP, May 16). Abbas, regularly described as the president of the Palestinian Authority (his term expired in January), firmly agrees.  The Arab Peace Initiative reiterates the long-standing international consensus that Israel must withdraw to the international border, perhaps with "minor and mutual adjustments," to adopt official US terminology before it departed sharply from world opinion in 1971, endorsing Israel's rejection of peace with Egypt in favor of settlement expansion (in the northeast Sinai).  Furthermore, the consensus calls for a Palestinian state to be established in Gaza and the West Bank after Israel's withdrawal.  The Arab Initiative adds that the Arab states should then normalize relations with Israel.
The Initiative was later adopted by the Organization of Islamic States, including Iran (Akiva Eldar, Ha'aretz, June 1).
Obama has praised the Initiative and called on the Arab states to proceed to normalize relations with Israel.  But he has so far scrupulously evaded the core of the proposal, thus implicitly maintaining the US rejectionist stand that has blocked a diplomatic settlement since the 1970s along with its Israeli client, in virtual isolation.  There are no signs that Obama is willing even to consider the Arab Initiative, let alone "promote" it.  That was underscored in Obama's much heralded address to the Muslim world in Cairo on June 4, to which I will return.
The US-Israel confrontation -- with Abbas on the sidelines -- turns on two phrases: "Palestinian state" and "natural growth of settlements."  Let's consider these in turn.
Obama has indeed pronounced the words "Palestinian state," echoing Bush.  In contrast, the (unrevised) 1999 platform of Israel's governing party, Netanyahu's Likud, "flatly rejects the establishment of a Palestinian Arab state west of the Jordan river."  Nevertheless, it was  Netanyahu's 1996 government that was the first to use the phrase.  It agreed that Palestinians can call whatever fragments of Palestine are left to them "a state" if they like -- or they can call them "fried chicken" (David Bar- Illan, director of Communications and Policy Planning in the office of the Prime Minister; Interview, Palestine-Israel Journal, Summer/Autumn 1996).
The 1996 Netanyahu government's contemptuous reference to Palestinian aspirations was a shift towards accommodation in US-Israeli policy.  As he left office shortly before, Shimon Peres forcefully declared that there will never be a Palestinian state (Amnon Barzilai, Ha'aretz, Oct 24, 1995).  Peres was reaffirming the official 1989 position of the US (Bush-Baker) and the Israeli coalition government (Shamir-Peres) that there can be no "additional Palestinian state" between Israel and Jordan - the latter declared to be a Palestinian state by US-Israeli fiat.  In the Peres-Shamir-Baker plan, barely reported (if at all) in the US, the fate of the occupied territories was to be settled in terms of the guidelines established by the government of Israel, and Palestinians were permitted to take part in negotiations only if they accepted these guidelines, which rule out Palestinian national rights.
Contrary to much misunderstanding, the Oslo agreements of September 1993 - the "Day of Awe," as the press described it - changed little in this regard.  The Declaration of Principles accepted by all participants established that the end point of the process would be realization of the goals of UN 242, which accords no rights to Palestinians.  And by then, the US had withdrawn its earlier interpretation of 242 as requiring Israeli withdrawal from the territories conquered in 1967, leaving the matter open.
The Peres-Shamir-Baker declarations of 1989 were in response to the official Palestinian acceptance of the international consensus on a two-state solution in 1988.  That proposal was first formally enunciated in 1976 in a Security Council resolution introduced by the major Arab states with the tacit support of the PLO, vetoed by the US (again in 1980).  Since then US-Israeli rejectionism has persisted unchanged, with one brief but significant exception, in President Clinton's final month in office.
Clinton recognized that the terms he had offered at the failed 2000 Camp David meetings were not acceptable to any Palestinians, and in December, proposed his "parameters," inexplicit but more forthcoming.  He then announced that both sides had accepted the parameters, though both had reservations.  Israeli and Palestinian negotiators met in Taba Egypt to iron out the differences, and made considerable progress.  A full resolution could have been reached in a few more days, they announced in their final joint press conference.  But Israel called off the negotiations prematurely, and they have not been formally resumed.
The single exception suggests that if an American president were willing to tolerate a meaningful diplomatic settlement, it might very well be reached.
The facts are well documented in Hebrew and English sources (for review, see Chomsky, Failed States).  But like much of the relevant history, they are regularly reshaped to suit doctrinal needs; for example by Jeffrey Goldberg, who writes that "By December of 2000, Israel had accepted President Bill Clinton's `parameters,' offering the Palestinians all of the Gaza Strip, 94 percent to 96 percent of the West Bank and sovereignty over Arab areas of East Jerusalem. Arafat again rejected the deal" (NYT, May 24). That is a convenient tale, false or seriously misleading in all particulars, and another useful contribution to US-Israeli rejectionism.
Returning to the phrase "Palestinian state," the crucial question on the US side is whether Obama means the international consensus or "fried chicken." So far that remains unanswered, except by studious omission, and - crucially - by Washington's steady funding of Israel's programs of settlement and development in the West Bank.  All of these programs violate international law, as Israeli Defense Minister Moshe Dayan conceded in 1967 and as has been reaffirmed by the Security Council and the World Court.  Probably Netanyahu would still accept his 1996 position.
The contours of "fried chicken" are being carved into the landscape daily by US-backed Israeli programs.  The general goals were outlined by Prime Minister Olmert in May 2006 in his "Convergence program," later expanded to "Convergence plus." Under "Convergence," Israel was to take over the territory within the illegal "separation wall" along with the Jordan Valley, thus imprisoning what is left, which is broken into cantons by several salients extending to the East.  Israel also takes over Greater Jerusalem, the site of most of its current construction projects, driving out many Arabs.  These Jerusalem projects not only violate international law, as do all the others, but also Security Council resolutions (at the time, still backed by the US).
The plans being executed right now are designed to leave Israel in control of the most valuable land in the West Bank, with Palestinians confined to unviable fragments, all separated from Jerusalem, the traditional center of Palestinian life.  The "separation wall" also establishes Israeli control of the West Bank aquifer.  Hence Israel will be able to continue to ensure that Palestinians receive one-fourth as much water as Israelis, as the World Bank reported in April, in some cases below minimum recommended levels.  In the other part of Palestine, Gaza, regular Israeli bombardment and the cruel siege reduce consumption far below.
Obama continues to support all of these programs, and has even called for substantially increasing military aid to Israel for an unprecedented ten years (Stephen Zunes, Foreign Policy in Focus, March 4).  It appears, then, that Palestinians may be offered fried chicken, but nothing more.  Israel's forced separation of Gaza from the West Bank since 1991, intensified with US support after a free election in January 2006 came out "the wrong way," has also been studiously ignored in Obama's "new initiative," thus further undermining prospects for any viable Palestinian state.
Gaza's forced separation from Palestine, and its miserable condition, have been almost entirely consigned to oblivion, an atrocity to which we should not contribute by tacit consent.  Israeli journalist Amira Hass, one of the leading specialists on Gaza writes that "The restrictions on Palestinian movement that Israel introduced in January 1991 reversed a process that had been initiated in June 1967. Back then, and for the first time since 1948, a large portion of the Palestinian people again lived in the open territory of a single country-to be sure, one that was occupied, but was nevertheless whole... The total separation of the Gaza Strip from the West Bank is one of the greatest achievements of Israeli politics, whose overarching objective is to prevent a solution based on international decisions and understandings and instead dictate an arrangement based on Israel's military superiority...  Since January 1991, Israel has bureaucratically and logistically merely perfected the split and the separation: not only between Palestinians in the occupied territories and their brothers in Israel, but also between the Palestinian residents of Jerusalem and those in the rest of the territories and between Gazans and West Bankers/Jerusalemites. Jews live in this same piece of land within a superior and separate system of privileges, laws, services, physical infrastructure and freedom of movement" (April 24, BitterLemons.org).
The leading academic specialist on Gaza, Sara Roy, adds that "Gaza is an example of a society that has been deliberately reduced to a state of abject destitution, its once productive population transformed into one of aid-dependent paupers...Gaza's subjection began long before Israel's recent war against it. The Israeli occupation--now largely forgotten or denied by the international community--has devastated Gaza's economy and people, especially since 2006... After Israel's December [2008] assault, Gaza's already compromised conditions have become virtually unlivable. Livelihoods, homes, and public infrastructure have been damaged or destroyed on a scale that even the Israel Defense Forces admitted was indefensible. In Gaza today, there is no private sector to speak of and no industry. 80 percent of Gaza's agricultural crops were destroyed and Israel continues to snipe at farmers attempting to plant and tend fields near the well-fenced and patrolled border. Most productive activity has been extinguished... Today, 96 percent of Gaza's population of 1.4 million is dependent on humanitarian aid for basic needs. According to the World Food Programme, the Gaza Strip requires a minimum of 400 trucks of food every day just to meet the basic nutritional needs of the population. Yet, despite a 22 March decision by the Israeli cabinet to lift all restrictions on foodstuffs entering Gaza, only 653 trucks of food and other supplies were allowed entry during the week of May 10, at best meeting 23 percent of required need.. Israel now allows only 30 to 40 commercial items to enter Gaza compared to 4,000 approved products prior to June 2006." (Harvard Crimson, June 2, 2009).
It cannot be too often stressed that Israel had no credible pretext for its December attack on Gaza, with full US support and illegally using US weapons.  Near-universal opinion asserts the contrary, claiming that that Israel was acting in self-defense.  That is utterly unsustainable, in light of Israel's flat rejection of peaceful means that were readily available (see Chomsky, "Exterminate all the Brutes," updated footnoted version at www.chomsky.info).  That aside, Israel's siege of Gaza is itself an act of war, as Israel of all countries certainly recognizes, having repeatedly justified launching major wars on grounds of partial restrictions on its access to the outside world.
One crucial element of Israel's siege, little reported, is the naval blockade.  Peter Beaumont reports from Gaza that "On its coastal littoral, Gaza's limitations are marked by a different fence where the bars are Israeli gunboats with their huge wakes, scurrying beyond the Palestinian fishing boats and preventing them from going outside a zone imposed by the warships." (Guardian, 27 May).  According to reports from the scene, the naval siege has been tightened steadily since 2000.  Fishing boats have been driven steadily out of Gaza's territorial waters and towards the shore by Israeli gunboats, often violently without warning and with many casualties.  As a result of these naval actions, Gaza's fishing industry has virtually collapsed; fishing is impossible near shore because of the contamination caused by Israel's regular attacks, including the destruction of power plants and sewage facilities.
These Israeli naval attacks began shortly after the discovery by the British Gas group of what appear to be quite sizeable natural gas fields in Gaza's territorial waters.  Industry journals report that Israel is already appropriating these Gazan resources for its own use, part of its commitment to shift its economy to natural gas.  The standard source, Platt's Commodity News, reports (Feb. 3, 16) that "Israel's finance ministry has given the Israel Electric Corp. approval to purchase larger quantities of natural gas from BG than originally agreed upon, according to Israeli government sources [which] said the state-owned utility would be able to negotiate for as much as 1.5 billion cubic meters of natural gas from the Marine field located off the Mediterranean coast of the Palestinian controlled Gaza Strip.  Last year the Israeli government approved the purchase of 800 million cubic meters of gas from the field by the IEC.... Recently the Israeli government changed its policy and decided the state-owned utility could buy the entire quantity of gas from the Gaza Marine field.  Previously the government had said the IEC could buy half the total amount and the remainder would be bought by private power producers."
The pillage of what could become a major source of income for Palestine is surely known to US authorities.  It is only reasonable to suppose that the intention to steal Palestine's limited resources is the motive for preventing Gaza fishing boats to enter Gaza's territorial waters.  It would also not be a great surprise if we were to discover some day that the same intention was in the background of the criminal US-Israeli attack on Gaza in December 2008.
The restrictions on movement used to destroy Gaza have long been in force in the West Bank as well, with grim effects on life and the economy.  The World Bank has just reported that Israel has established "a complex closure regime that restricts Palestinian access to large areas of the West Bank... The Palestinian economy has remained stagnant, largely because of the sharp downturn in Gaza and Israel's continued restrictions on Palestinian trade and movement in the West Bank." The Bank "cited Israeli roadblocks and checkpoints hindering trade and travel, as well as restrictions on Palestinian building in the West Bank, where the Western-backed government of Palestinian President Mahmoud Abbas holds sway" (AP; Avi Issacharoff, Ha'aretz; May 6).
All of this constitutes what Israeli activist Jeff Halper calls a "matrix of control" to subdue the colonized population, in pursuit of Defense Minister Moshe Dayan's recommendation to his colleagues shortly after the 1967 conquests that we must tell the Palestinians in the territories that "we have no solution, you shall continue to live like dogs, and whoever wishes may leave, and we will see where this process leads" (Yossi Beilin, Mehiro shel Ihud, 42).
Turning to the second bone of contention, settlements, there is indeed a confrontation, but it may again be less dramatic than portrayed.  Washington's position was presented most strongly in Hilary Clinton's much-quoted statement rejecting "natural growth exceptions" to the policy opposing new settlements.  Netanyahu, along with President Peres and in fact virtually the whole Israeli political spectrum, insists on permitting "natural growth" within the areas that Israel intends to annex, complaining that the US is backing down on Bush's authorization of such expansion within his "vision" of a Palestinian state.
Senior Netanyahu cabinet members have gone further.  Minister Yisrael Katz announced that "the current Israeli government will not accept in any way the freezing of legal settlement activity in Judea and Samaria." (Ha'aretz, May 31).  The term "legal" in US-Israeli parlance means "illegal, but authorized by the government of Israel." In this usage, unauthorized outposts are termed "illegal," though apart from the dictates of the powerful, they are no more illegal than the settlements granted to Israel under Bush's "vision."
The harsh Obama-Clinton formulation is not new.  It repeats the wording of the 2003 Road Map, which stipulates that in Phase I, "Israel freezes all settlement activity (including natural growth of settlements)." All sides formally accept the Road Map - consistently overlooking the fact that Israel, with US support, at once added 14 "reservations" that render it inoperable.
If Obama were serious about opposing settlement expansion, he could easily proceed with concrete measures, for example, by reducing US aid by the amount devoted to this purpose.  That would hardly be a radical or courageous move. The Bush I administration did so (reducing loan guarantees), but after the Oslo accord in 1993, President Clinton left calculations to the government of Israel.  Unsurprisingly,, there was "no change in the expenditures flowing to the settlements," the Israeli press reported:  "[Prime Minister] Rabin will continue not to dry out the settlements," the report concludes. "And the Americans? They will understand" (Hadashot, Oct. 8; Yair Fidel, Hadashot Supplement, Oct. 29, 1993).
Obama administration officials informed the press that the Bush I measures are "not under discussion," and that pressures will be "largely symbolic" (Helene Cooper, NYT, June 1).  In short, Obama "understands."
The US press reports that "A partial freeze has been in place for several years, but settlers have found ways around the strictures... construction in the settlements has slowed but never stopped, continuing at an annual rate of about 1,500 to 2,000 units over the past three years. If building continues at the 2008 rate, the 46,500 units already approved will be completed in about 20 years... If Israel built all the housing units already approved in the nation's overall master plan for settlements, it would almost double the number of settler homes in the West Bank" (Isabel Kirshner, NYT, June 2).  The probable source, Peace Now, which monitors settlement activities, estimates further that the two largest settlements would double in size: Ariel and Ma'aleh Adumim, built mainly during the Oslo years in the salients that subdivide the West Bank into cantons.
"Natural population growth" is largely a myth, Israel's leading diplomatic correspondent, Akiva Eldar, points out, citing demographic studies by Col (res.) Shaul Arieli, deputy military secretary to former prime minister and incumbent defense minister Ehud Barak.  Settlement growth consists largely of Israeli immigrants in violation of the Geneva Conventions, assisted with generous subsidies.  Much of it is in direct violation of formal Government decisions, but carried out with the authorization of the Government, specifically Barak, considered a dove in the Israeli spectrum (Eldar, Ha'aretz, June 2).
Some deride the "long-dormant Palestinian fantasy," revived by Abbas, "that the United States will simply force Israel to make critical concessions, whether or not its democratic government agrees" (Jackson Diehl, WP, May 29).  He does not explain whether refusal to participate in Israel's illegal expansion - which, if serious, would "force Israel to make critical concessions" -- would be improper interference in Israel's democracy.
Diehl also refers to a recent Olmert peace plan of unprecedented generosity offered to Abbas, which he turned down, though it yielded just about everything to which Palestinians might reasonably aspire.  Others have also confidently referred to this mysterious plan and its rejection by Abbas.   Efforts to unearth the plan have so far been unavailing.   The only sources detected in an assiduous search by David Peterson are comments by Palestinians in the Arab media that appear to be part of internal conflict about power sharing, not the usual source for Western commentators.   Eliot Abrams dates the plan to January 2009 (WP, April 8, citing unspecified press reports, while also falsifying earlier plans for which records exist; June 3 response to query about his sources).
If there were any truth to this tale, one can be confident that it would be trumpeted by Israeli propaganda and its enthusiasts here, as a welcome demonstration that Palestinians simply will not accept peace, even the most moderate of them.  It is highly dubious on other grounds.  For one thing, Olmert was in no position to offer any credible proposal, having announced his resignation as he was facing indictment for serious corruption charges.  The alleged plan is also hard to reconcile with the steady ongoing expansion of settlement under Olmert, vitiating even far less forthcoming offers.
Returning to reality, all of these discussions about settlement expansion evade the most crucial issue about settlements: what Israel has already established in the West Bank.  The evasion tacitly concedes that the illegal settlement programs already in place are somehow acceptable (putting aside the Golan heights, annexed in violation of Security Council orders) - though the Bush "vision," apparently accepted by Obama, moves from tacit to explicit.  What is in place already suffices to ensure that there can be no viable Palestinian self-determination.  Hence there is every indication that even on the unlikely assumption that "natural growth" will be ended, US-Israeli rejectionism will persist, blocking the international consensus as before.
It might be different if a legitimate "land swap" were under consideration, a solution approached at Taba and spelled out more fully in the Geneva Accord reached in informal high-level Israel-Palestine negotiations.  The Accord was presented in Geneva in October 2003, welcomed by much of the world, rejected by Israel, and ignored by the US.
There is a "land swap" under consideration, but a radically different one.  The ultra-right Israeli leader Avigdor Lieberman, now Foreign Minister, proposed to reduce the non-Jewish population of Israel by transferring concentrations of Israeli Arabs (specifically, Wadi Ara in the Galilee) to a derisory "Palestinian state" - over the overwhelming opposition of the victims, to be sure.  When first advanced, these ideas were denounced as virtually neo-Nazi - which is a little odd; they were first proposed by Democratic Socialist political philosopher Michael Walzer, who wrote 30 years before Lieberman that those who are "marginal to the nation" (Palestinians) should be "helped to leave" in the interests of peace and justice.   These ideas have now shifted to the political center in Israel, and are praised by New York Times Israel correspondent Ethan Bronner, who writes that the left likes Lieberman's "willingness to create two states, one Jewish, one Palestinian, which would involve yielding areas that are now part of Israel" in a land swap (NYT, Feb. 12) - a polite way of saying that Israeli citizens of the wrong ethnicity will be transferred by force from a rich first world country to "fried chicken."
Obama's June 4 Cairo address to the Muslim world kept pretty much to his well-honed "blank slate" style - saying very little of substance, but in a personable manner that allows listeners to write on the slate what they want to hear.  CNN captured its spirit in headlining a report "Obama looks to reach the soul of the Muslim world." Obama had announced the goals of his address in an interview with NYT columnistThomas Friedman (June 3): "`We have a joke around the White House,' the president said. ‘We're just going to keep on telling the truth until it stops working -- and nowhere is truth-telling more important than the Middle East'." The White House commitment is most welcome, but it is useful to see how it translates into practice.
Obama admonished his audience that it is easy to "point fingers... But if we see this conflict only from one side or the other, then we will be blind to the truth: the only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security."
Turning to truth, there is a third side, with a decisive role throughout: the US.  But that participant in the conflict is unmentioned.  The omission is understood to be normal and appropriate, hence unmentioned:  Friedman's column is headlined "Obama speech aimed at both Arabs and Israelis"; the front-page Wall St. Journal report on Obama's speech appears under the heading "Obama Chides Israel, Arabs In His Overture to Muslims." Other reports are the same.  The convention is understandable on the doctrinal principle that though the US government sometimes makes "mistakes," its intentions are by definition benign.  Washington has always sought desperately to be an honest broker, only yearning to advance peace and justice.  The doctrine trumps truth, of which there is no hint in the speech or the mainstream coverage.
Obama once again echoed Bush's advocacy of two states, without saying what he means by the phrase "Palestinian state." His intentions are clarified not only by crucial omission, but also by his one explicit criticism of Israel: "The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop" (my emphasis).  That is, Israel should live up to Phase I of the 2003 Road Map, though the truth is that Obama has ruled out even steps of the Bush I variety to withdraw from participation in these crimes.
The operative words are "legitimacy" and "continued." By omission, Obama indicates that he accepts Bush's "vision": the vast existing settlement project and infrastructure is "legitimate," thus ensuring that the phrase "Palestinian state" means "fried chicken."
Even-handed, Obama also had an admonition for the Arab States: they "must recognize that the Arab Peace Initiative was an important beginning, but not the end of their responsibilities." Plainly, it cannot be a meaningful "beginning" if Obama continues to reject its core principles: implementation of the international consensus.  But to do so is evidently not Washington's "responsibility" in Obama's vision, presumably because the US has no responsibilities other than to persist in its traditional vocation of doing good.
On democracy, Obama said that "we would not presume to pick the outcome of a peaceful election" - as in January 2006, when Washington turned at once to severe punishment of the Palestinians because it did not like the outcome of the peaceful election.  Obama politely refrained from comment about his host, President Mubarak, one of the most brutal dictators in the region, though elsewhere he has had some illuminating words about him.  As he was about to board the plane to Saudi Arabia and Egypt, the two "moderate" Arab states, "Mr. Obama signaled that while he would mention American concerns about human rights in Egypt, he would not challenge Mr. Mubarak too sharply, calling him a `force for stability and good' in the Middle East... Mr. Obama said he did not regard Mr. Mubarak as an authoritarian leader. `No, I tend not to use labels for folks,' Mr. Obama said. The president noted that there had been criticism `of the manner in which politics operates in Egypt,' but he also said that Mr. Mubarak had been `a stalwart ally, in many respects, to the United States'" (Jeff Zeleyna and Michael Slackman, NYT, June 4).
Obama also had observations on nuclear weapons, a matter of no slight significance in the light of his focus on Iran.  Obama repeated his hope for their general abolition and called on all signers of the Non-Proliferation Treaty to abide by the responsibilities it imposes.  His comments pointedly excluded Israel, which is not a signer of the NPT, along with India and Pakistan, all of them supported by the US in their development of nuclear weapons - Pakistan particularly under Reagan, India under Bush II.  India and Pakistan are now escalating their nuclear weapons programs to a level that is highly threatening (see, e.g., Jeffrey Smith and Joby Warrick, "Nuclear Aims By Pakistan, India Prompt U.S. Concern," WP, May 28, 2009).  But our significant role in this confrontation confers no "responsibility."
Some who are placing their hopes in Obama have cited remarks of Assistant Secretary of State Rose Gottemoeller: "Universal adherence to the NPT itself - including by India, Israel, Pakistan and North Korea - also remains a fundamental objective of the United States." But the threat that her comment might mean something was quickly allayed by the report of a senior Israeli diplomat that Israel had received assurances that Obama "will not force Israel to state publicly whether it has nuclear weapons,... [but will] stick to a decades-old U.S. policy of `don't ask, don't tell'." And as the Institute for Public Accuracy was quick to remind us, the Bush administration had also adopted Gottemoeller's stand, calling for "universal adherence to the Non-Proliferation Treaty.(Julian Borger, Guardian, May 6.  Reuters, May 21, http://www.reuters.com/article/latestCrisis/idUSLL942309.  http://www.accuracy.org/newsrelease.php?articleId=222.).
It appears, then, that "universality" applies to Iran's alleged programs, but not to the actual ones of US allies and clients - not to speak of Washington's own obligations under the NPT.
With regard to Iran's nuclear programs, Obama chose his words carefully.  He said that "any nation - including Iran - should have the right to access peaceful nuclear power if it complies with its responsibilities under the nuclear Non-Proliferation Treaty." His words again reiterate the Bush administration's position: it too held that Iran could "access peaceful nuclear power." But the contentious issue has been whether Iran has the rights guaranteed to signers of the NPT under Article IV: "Nothing in this Treaty shall be interpreted as affecting the inalienable right of all the Parties to the Treaty to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty," which refer to nuclear weapons.  There is a considerable difference between research and production, as Article IV permits, and "access," which Bush and Obama are willing to permit, meaning access from the outside.  That has been the heart of the dispute, and remains so.  The Non-aligned Movement, most of the world's states, has forcefully affirmed Iran's position (which is also supported by the majority of Americans).  The "international community" - a technical term referring to Washington and whoever happens to agree with it - opposes allowing Iran the rights guaranteed to NPT signers, and Obama, by careful choice of misleading words, indicates his continued adherence to this stand.
There is a sensible approach to the threat of nuclear weapons in the region: to join in the overwhelming international support (including a large majority of Americans) for a nuclear-weapons-free zone including Iran, Israel, and US forces deployed there.  Adequate verification is by no means impossible.  That should mitigate, if not terminate, the regional nuclear weapons threat.  But it is not on the agenda.
It is too easily forgotten that the US is officially committed to establishing a NWFZ in the region, in accord with Security Council Resolution 687 in 1991. This Resolution assumes special significance for the US and UK, because they appealed to it in their half-hearted attempt to provide at least some thin legal basis for their invasion of Iraq.  The resolution calls for elimination of  Iraqi WMD and delivery systems, as a step towards "the goal of establishing in the Middle East a zone free from weapons of mass destruction and all missiles for their delivery and the objective of a global ban on chemical weapons" (Article 14).  Since that includes Israel, it was never intended seriously by the US and UK, and it was quickly dispatched to the memory hole along with other inconvenient truths that escape the commitment to "keep on telling the truth until it stops working."
It should perhaps be added that despite much fevered rhetoric, rational souls understand that the Iranian threat is not the threat of attack - which would be suicidal.  Wayne White, former deputy director of the Near East and South Asia office of State Department intelligence (INR), quite plausibly estimates the likelihood that the Iranian leaders would carry out "some quixotic attack against Israel with a nuclear weapon," thus instantly destroying Iran and themselves, as "down there with that 1 percent possibility." Also timely is his confirmation, from direct knowledge as the INR Iraq intelligence analyst at the time, that Israel's 1981 attack on Iraq's nuclear reactor did not end Saddam's nuclear weapons program, but initiated it.
No one wants Iran - or anyone - to develop nuclear weapons, but it should be recognized that the perceived threat is not that they will be used in a suicide mission, but rather the threat of deterrence of US-Israeli actions to extend their domination of the region.  And to repeat, if the concern were Iranian nuclear weapons, there would be sensible ways to proceed - to which, furthermore, the US is officially committed.
Obama's "new initiative" is spelled out more fully by John Kerry, the 2004 Democratic presidential candidate, now chair of the Senate Foreign Relations Committee, in an important speech at the Brookings Institute on March 9. (http://kerry.senate.gov/cfm/record.cfm?id=309250).  In interpreting Kerry's words, we have to suspend normal rationality, and agree that the actual facts of history are completely irrelevant.  What is important is not the contrived picture of past and present, but the plans outlined.
Kerry urges that we acknowledge that our honorable efforts to bring about a political settlement have failed, primarily because of the unwillingness of the Arab states to make peace.  Furthermore, all of our efforts to "to give the Israelis a legitimate partner for peace" have foundered on Palestinian intransigence.  Now, however, there is a welcome change.  With the Arab Initiative of 2006, the Arab states have finally signaled their willingness to accept Israel's presence in the region.  Even more promising is the "unprecedented willingness among moderate Arab nations to work with Israel" against our common enemy Iran.  "Moderate" here is used in its technical meaning: "willing to conform to US demands," irrespective of the nature of the regime.  "This re-alignment can help to lay the groundwork for progress towards peace," Kerry said, as we "re-conceptualize" the problem, focusing on the Iranian threat.
Kerry goes on to explain that there is also at last some hope that a "legitimate partner" can be found for our peace-loving Israeli ally: Abbas and the Palestinian Authority.   How then do we proceed to support Israel's new legitimate Palestinian partner?  "Most importantly, this means strengthening General [Keith] Dayton's efforts to train Palestinian security forces that can keep order and fight terror... Recent developments have been extremely encouraging:  During the invasion of Gaza, Palestinian Security Forces largely succeeded in maintaining calm in the West Bank amidst widespread expectations of civil unrest.   Obviously, more remains to be done, but we can help do it."
Routinely, Kerry describes the attack on Gaza as entirely right and just: by definition, since the US crucially participated in it.  It doesn't matter, then, that the pretext lacks any credibility, under principles that we all accept - with regard to others.
General Dayton's forces, armed and trained in Jordan with Israeli participation and supervision, are the soft side of population control.  The tougher and more brutal forces are those trained by the CIA: General Intelligence and Preventive Security.
Kerry is right that we can do more to ensure that West Bank Palestinians are so effectively controlled that they cannot even protest the slaughter in Gaza -- let alone move towards meaningful self-determination.   For this task, the US can draw on a long history of colonial practice, developed in exquisite detail during the US occupation of the Philippines after the murderous conquest a century ago, then widely applied elsewhere.  This sophisticated refinement of traditional imperial practice has been highly successful in US dependencies, while also providing means of population control at home.  These matters are spelled out in groundbreaking work by historian Alfred McCoy (Policing America's Empire, forthcoming).  Kerry should be familiar with these techniques from his service in South Vietnam.  Applying these measures to Palestine, collaborationist paramilitary forces can be employed to subdue the domestic population with the cooperation of privileged elites, granting the US and Israel free rein to carry forward Bush's "vision" and Olmert's Convergence-plus.  Gaza can meanwhile be kept under a strangling siege as a prison and occasional shooting gallery.
Washington's new initiative for Middle East peace, so it is hoped, will integrate Israel among the "moderate" Arab states as a bulwark for US domination of the vital energy-producing regions.  It fits well into Obama's broader programs for Afghanistan and Pakistan, where military operations are escalating and huge "embassies" are being constructed on the model of the city-within-a-city in Baghdad, clearly signaling Obama's intentions (Saeed Shah and Warren Strobel, McClatchy Newspapers, May 27).
The "re-conceptualization" is evidently satisfactory to US high tech industry, which continues to enhance its intimate relations with Israel.  One striking illustration as a gigantic installation that Intel is constructing in Israel to implement a revolutionary reduction in size of chips, expecting to set a new industry standard and to supply much of the world with parts from its Kiryat Gat facility.  Relations between US and Israeli military industry remain particularly close.  Israel continues to provide the US with a strategically located overseas military base for prepositioning weapons and other functions.  Intelligence cooperation goes back half a century.
These are among the unparalleled services that Israel provides for US militarism and global dominance.  They afford Israel a certain leeway to defy Washington's orders - though it is skating on thin ice if it tries to push its luck too far, as history has repeatedly shown.  So far the jingoist extremism of the current government has been constrained by more sober elements: for example, the shelving of the proposals to require a loyalty oath and to prevent citizens from commemorating the Nakba - the disaster for Palestinians in 1948.  But if Israel goes too far, there might indeed erupt a confrontation of the kind that many commentators perceive today, so far, with little basis.

from Howard Zinn :
Date: 6 June 2009
Subject: From Greece in late May.

This is an interview that Howard Zinn gave to the Greek TV station TVXS during his visit to Greece two weeks ago.


from William Blum :
Date: 9 June 2009
Subject: Rhetoric and social control, an illustration from modern history.

Team Obama/Cult Obama
by William Blum

The praise heaped on President Obama for his speech to the Muslim world by writers on the left, both here and abroad, is disturbing.  I'm referring to people who I think should know better, who've taken Politics 101 and can easily see the many hypocrisies in Obama's talk, as well as the distortions, omissions, and contradictions, the true but irrelevant observations, the lies, the optimistic words without any matching action, the insensitivities to victims.  Yet, these commentators are impressed, in many cases very impressed.  In the world at large, this frame of mind borders on a cult.

    In such cases one must look beyond the intellect and examine the emotional appeal.  We all know the world is in big trouble -- Three Great Problems: universal, incessant violence; financial crisis provoking economic suffering; environmental degradation.  In all three areas the United States bears more culpability than any other single country.  Who better to satisfy humankind's craving for relief than a new American president who, it appears, understands the problems; admits, to one degree or another, his country's responsibility for them; and "eloquently" expresses his desire and determination to change US policies and embolden the rest of the world to follow his inspiring example.  Is it any wonder that it's 1964, the Beatles have just arrived in New York, and everyone is a teenage girl?

     I could go through the talk Obama gave in Cairo and point out line by line the hypocrisies, the mere platitudes, the plain nonsense, and the rest.  ("I have unequivocally prohibited the use of torture by the United States." -- No mention of it being outsourced, probably to the very country he was speaking in, amongst others. ... "No single nation should pick and choose which nation holds nuclear weapons." -- But this is precisely what the United States is trying to do concerning Iran and North Korea.)  But since others have been pointing out these lies very well I'd like to try something else in dealing with the problem -- the problem of well-educated people, as well as the not so well-educated, being so moved by a career politician saying "all the right things" to give food for hope to billions starving for it, and swallowing it all as if they had been born yesterday.  I'd like to take them back to another charismatic figure, Adolf Hitler, speaking to the German people two years and four months after becoming Chancellor, addressing a Germany still reeling with humiliation from its being The Defeated Nation in the World War, with huge losses of its young men, still being punished by the world for its militarism, suffering mass unemployment and other effects of the great depression.  Here are excerpts from the speech of May 21, 1935.  Imagine how it fed the hungry German people.

----------------------------------- 000 ------------------------------------

Iconceive it my duty to be perfectly frank and open in addressing the nation.  I frequently hear from Anglo-Saxon tribes expressions of regret that Germany has departed from those principles of democracy, which in those countries are held particularly sacred.  This opinion is entirely erroneous.  Germany, too, has a democratic Constitution.
 Our love of peace perhaps is greater than in the case of others, for we have suffered most from war.  None of us wants to threaten anybody, but we all are determined to obtain the security and equality of our people.
 The World War should be a cry of warning here.  Not for a second time can Europe survive such a catastrophe.
 Germany has solemnly guaranteed France her present frontiers, resigning herself to the permanent loss of Alsace-Lorraine.  She has made a treaty with Poland and we hope it will be renewed and renewed again at every expiry of the set period.
 The German Reich, especially the present German Government, has no other wish except to live on terms of peace and friendship with all the neighboring States.
 Germany has nothing to gain from a European war.  What we want is liberty and independence.  Because of these intentions of ours we are ready to negotiate non-aggression pacts with our neighbor States.
 Germany has neither the wish nor the intention to mix in internal Austrian affairs, or to annex or to unite with Austria.
 The German Government is ready in principle to conclude non-aggression pacts with its individual neighbor States and to supplement those provisions which aim at isolating belligerents and localizing war areas.
 In limiting German air armament to parity with individual other great nations of the west, it makes possible that at any time the upper figure may be limited, which limit Germany will then take as a binding obligation to keep within.
 Germany is ready to participate actively in any efforts for drastic limitation of unrestricted arming. She sees the only possible way in a return to the principles of the old Geneva Red Cross convention. She believes, to begin with, only in the possibility of the gradual abolition and outlawing of fighting methods which are contrary to this convention, such as dum-dum bullets and other missiles which are a deadly menace to civilian women and children.

    To abolish fighting places, but to leave the question of bombardment open, seems to us wrong and ineffective. But we believe it is possible to ban certain arms as contrary to international law and to outlaw those who use them. But this, too, can only be done gradually.  Therefore, gas and incendiary and explosive bombs outside of the battle area can be banned and the ban extended later to all bombing.  As long as bombing is free, a limitation of bombing planes is a doubtful proposition. But as soon as bombing is branded as barbarism, the building of bombing planes will automatically cease.

    Just as the Red Cross stopped the killing of wounded and prisoners, it should be possible to stop the bombing of civilians. In the adoption of such principles, Germany sees a better means of pacification and security for peoples than in all the assistance pacts and military conventions.

    The German Government is ready to agree to every limitation leading to abandonment of the heaviest weapons which are especially suitable for aggression. These comprise, first, the heaviest artillery and heaviest tanks.

    Germany declares herself ready to agree to the delimitation of caliber of artillery and guns on dreadnoughts, cruisers and torpedo boats. Similarly, the German Government is ready to adopt any limitation on naval tonnage, and finally to agree to the limitation of tonnage of submarines or even to their abolition, provided other countries do likewise.

    The German Government is of the opinion that all attempts effectively to lessen tension between individual States through international agreements or agreements between several States are doomed to failure unless suitable measures are taken to prevent poisoning of public opinion on the part of irresponsible individuals in speech, writing, in the film and the theatre. The German Government is ready any time to agree to an international agreement which will effectively prevent and make impossible all attempts to interfere from the outside in affairs of other States. The term ‘interference’ should be internationally defined.

    If people wish for peace it must be possible for governments to maintain it. We believe the restoration of the German defense force will contribute to this peace because of the simple fact that its existence removes a dangerous vacuum in Europe. We believe if the peoples of the world could agree to destroy all their gas and inflammable and explosive bombs this would be cheaper than using them to destroy one another. In saying this I am not speaking any longer as the representative of a defenseless State which could reap only advantages and no obligations from such action from others.

    I cannot better conclude my speech to you, my fellow-figures and trustees of the nation, than by repeating our confession of faith in peace: Whoever lights the torch of war in Europe can wish for nothing but chaos.  We, however, live in the firm conviction our times will see not the decline but the renaissance of the West. It is our proud hope and our unshakable belief Germany can make an imperishable contribution to this great work.[1]

-- End of speech excerpts --

How many people in the world, including numerous highly educated Germans, reading or hearing that speech in 1935, doubted that Adolf Hitler was a sincere man of peace and an inspiring, visionary leader? 
[1] The entire speech can be found at: http://members.tripod.com/~Comicism/350521.html

from Edward Herman :
Date: 6 June 2009
Subject: Class war intensifies in the United States.

Corporate Reform in an Age of Intensified Class Warfare
by Edward S. Herman

In a system where corporations are central in economic activity, economic crises have always and necessarily produced plans and programs of renovation and improvement designed to make corporations more responsive to the public interest. Of course, there have always been some who urged nationalization or worker control; i.e., the replacement of the corporate system with a genuinely new order. Thus far, the system has been able to fend off all such demands, although government ownership has sometimes spurted in emergencies, so far only briefly (e.g., during World War II and as a result of the Savings & Loan crisis), followed by subsequent divestment. Over time, government ownership has declined as the business system has sought to occupy all space in which profits can be made. Thus, as the military budget has grown, in-house arms production has largely disappeared, displaced by the "contract state." The triumph of neo-liberalism and the parallel intensified class war has been associated with further "privatization," which has not only opened up more avenues for private profits, but also weakened the state as a potential agent of ordinary citizens.

A similar point can be made as regards worker control. It does not fit well into a neoliberal system in which worker protection at all levels tends to be eroded in favor of "flexible" labor markets. Workers' rights got a major boost during the Great Depression, with the Wagner Act and the federal government serving to some extent as an employer of last resort. But class warfare was renewed with the 1947 Taft-Hartley Act and the "red scare" and purges of the Truman-McCarthy era. It subsided for the next decade or so, but the Vietnam War, peace and civil rights protests, and new competition from abroad revitalized business class war aggressiveness. The resultant decline of the labor movement and reduced labor bargaining power has manifested in a weakened safety net, stagnant wages, greater inequality, and increased worker insecurity and loss of control.


Other long-standing reform strategies have been decentralization­breaking up the large corporations so as to reduce their political muscle and enhance competition­and regulation, sometimes involving the establishment of government bodies to oversee corporate activities and approve or disapprove corporate decisions. These have a long history, reflected in antitrust laws and policies and regulatory authority over many activities, from railroads, banks, and public utilities to alcoholic beverages and waste dumps. Regulation surged in the Great Depression, forcing the separation of commercial and investment banks and establishing the SEC and securities regulation. Antitrust was revitalized and public utility holding companies were broken up.

Today there is talk of breaking up the giant financial conglomerates that are "too big to fail" and there is some possibility that large companies like GM and Chrysler, as well as AIG, might be sold off in pieces as part of bankruptcy proceedings (and government ownership actions as regards AIG). But with respect to the largest financial institutions, there has been a tendency to favor them with extraordinary subsidies and guarantees and to encourage them to merge into still larger entities. The situation is still volatile, but major decentralizations would appear less likely than greater concentration, along with an increased unwillingness to allow the super-giants to fail and an even closer relationship between big finance and big government.

Regulatory changes in the 1930s included the splitting off of commercial and investment banks, required disclosure of corporate developments, bans on insider trading, tightened supervision of banks and bank holding companies, and the regulation of investment companies (mutual and closed-end funds). Equally important, of course, was that the regulators in the early years tended to believe in regulation and often actually tried to enforce the law. We had William Douglas in charge of the SEC in the 1930s, a rather marked contrast with the regulation-hostile (and incompetent) Christopher Cox chairing the SEC in the Bush-Cheney era.

Regulation in the 1930s and afterwards put a fair amount of weight on disclosure in the belief that compelling business to reveal all the relevant business facts would protect buyers of securities and other products from abuses like insider trading and market manipulation and would make markets work more efficiently. In the oft-quoted line by Louis D. Brandeis, "Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." There is some truth in this and there is little doubt that required disclosure has been economically beneficial. But it has its limitations, as truth can be buried in an avalanche of irrelevancies ("kitchen-sinking"), important facts may not be meaningful without context, and weak regulation may make it good business to suppress inconvenient truths. The explosion in executive (over-)compensation took place in a world of theoretical "full disclosure," but with the media and government doing their duty for the vested interests, this explosion was only brought under some limited constraint by the 2007-2009 economic collapse.

In the midst of each economic crisis, there is also a regular outcry at the failure of corporate boards to keep managers in line and prevent their suddenly more evident and better publicized personal aggrandizement and mistaken policies. There is also criticism of large investors, individual and corporate, who failed to press the boards and managers to do the right thing. There is a demand for new laws and improved regulation of corporations, more independent directors, and a change in the outlook and sense of responsibility of these directors and stakeholders who should be guiding and constraining the managers.

There also has been an important line of thought that the managers themselves should take a more generous and community-oriented view and self-transform the system. This kind of thinking was encouraged by the 1932 publication of The Modern Corporation and Private Property by A.A. Berle and Gardiner Means, which argued and gave empirical evidence for the view that the wide dispersion of stock and management control of the proxy machinery led to the dominance of managers in the leading corporations. This gave the managers a fair amount of discretion, and, arguably, they could use it to benefit a range of stakeholders.


This line of argument was pursued later by A.A. Berle in articles and books on corporate responsibility and managers as trustees. The phrase "corporate soul" is traceable back to Berle, who thought corporations had them and whose soulfulness and trustee service in the larger social interest should be encouraged and would develop further. It should be noted that these ideas were evolving in the 1930s crisis, at a time when the corporate system was very much on the defensive and regulation and antitrust thinking was on the upswing. The corporate soul and corporate trustee role for society were last gasp ideas of a system and ideology in retreat, and Berle, who was an official in the New Deal and later a noted Cold War hawk, served that ideology, which later made such a spectacular comeback.

As we know, the reformers of the 1930s didn't depend on soulful managers doing their duty to society, but from then up to the present corporate law was grounded in the belief that the directors, and especially the independent directors, would keep managers in line, and in particular help make them agents of the shareholders. This has never worked, because the directors are not very independent­they are selected or approved by the top managers, who may be their friends, are well paid, lack the knowledge or time needed for effective surveillance or challenge, and who may have or want business relationships with the companies they serve as directors. Deference by leaders of other companies may be part of a system of reciprocal behavior. It is especially hard to actively intervene and constrain managers when companies prosper.

Of course, in theory and law the directors represent the shareholders, but the managers themselves are also supposedly agents of the shareholders. There is a long tradition of belief that, especially with the growth of large institutional holdings of stock by mutual funds, pension funds, bank trust departments, and other substantial investors, that these would intervene, individually or collectively, to press the directors and keep managers from looting or making grave decision errors. This also has never worked because the big holders don't have the staff to intervene and, more important, don't want to disaffect the managers and lose access to useful corporate information. When they lose faith in the managers, they sell the companies' stock and go elsewhere. This is called the "Wall Street Rule."

It is interesting and even amusing to see Gretchen Morgenson in the New York Times building the case for activating those big investors as the route to corporate reform, using as her source John Bogle, the retired head and founder of the Vanguard Group of money managers and mutual funds ("He doesn't Let Money Managers Off the Hook," April 12, 2009). Bogle complains that the big investors have failed to serve as shareholder agents, as they did 50 years ago. He calls for passing a law "establishing the basic principle that money managers are there to service their shareholders...[and that] fiduciaries act with due diligence and high professional standards."

As it happens, in 1962 a Wharton School group, of which I was a member, working under the auspices of the SEC, published "A Study of Mutual Funds," the first large-scale study of that rapidly growing institution. John Bogle was one of a group of mutual fund representatives who met with the group and worked hard to soften any criticisms of the industry. The study was critical of the high management fee rates charged by the funds, which often failed to decline as a rate even with major asset growth; and it pointed up the fact that investment advisers charged higher fees to their affiliated mutual funds than to outside clients (a continuing problem mentioned by Bogle to Morgenson, but definitely not new). The study also described the wide use of mutual fund brokerage to reward people who sold a lot of mutual fund shares, a use of brokerage fees that served the advisers but surely not the mutual fund shareholders.

Most interesting, the 1962 study featured the fact that the mutual funds were quite inactive in using their holdings to discipline portfolio company managers (this was a part of the study that I worked on and wrote). Rather than intervening to serve the fiduciary interests of the company's shareholders, they followed the Wall Street Rule when managerial behavior displeased them. So there was no golden age of mutual fund (or other institutional investor) behavior 50 years ago. John Bogle has changed and become something of a moral force and conscience in the industry, but he remains an exception. Laws and exhortations are not going to make institutional investors into manufacturers of a corporate soul.

Edward S. Herman is an economist and media analyst. He is professor emeritus of finance at the Wharton School at the University of Pennsylvania and author of numerous articles and books, among them Manufacturing Consent (with Noam Chomsky).

from Vicki Briault :
Date: 8 June 2009
Subject: Torturing Democracy.

After the European Parliament elections
let us act to eradicate capitalism
and all forms of oppression

by Eric Toussaint - Damien Millet

The partisans of capitalism, and among them, prominently, the EU leaders, have lost all credibility. For years now they have trampled on the rights of peoples while not wavering when it came to making decisions directly opposed to their advertised principles in order to bail out major banks. European government parties could have acted differently and nationalised the banks, thus retrieving the cost of the bailout on the patrimony of major shareholders and CEOs. The public credit instrument that would have resulted could finance socially useful and environment-friendly projects while guaranteeing individual savings. The crisis has brought back onto the agenda proposals that had been swept aside during the long  neoliberal night such as a radical reduction of working time (with creation of jobs and no loss of pay) or indexation of wages and social benefits on the cost of living. Europe needs new financial discipline: company ledgers have to be opened to external and internal auditing (through the trade unions among others), all financial products must be regulated, and it must be forbidden for companies to have assets in any tax haven. Major means of production, trade, finance, communication and other services must be transferred to the public sphere and taken away from capitalists’ control. Access to public goods must be systematically promoted.

In a political perspective, European citizens must retrieve the political power that has been taken away from them. The populations who were able to have their say on the Constitutional Treaty turned it down, but leaders ignored their votes without a second thought. Meanwhile Venezuela, Ecuador and Bolivia show us the way. There, citizens elected a Constituant Assembly in order to draw up a new draft Constitution, which is to be discussed with social movements and sanctioned by referenda. In these three countries voters can now revoke any elected representative mid-mandate, whereas no European Constitution mentions any such highly democratic mechanism.

The countries of Europe must stop plundering the natural resources and know-how of the South.  They must increase official development aid, which ought to be called ‘contribution to reparations’ by way of repairing the historical, social and environmental damage they brought about. Europe must cancel Third World Debt and implement the Universal Declaration of Human Rights in all its dimensions, including article 13, the right to freedom of movement and residence. Europe must turn away from nuclear power and dismantle all nuclear weapons currently on its territory. Europe must leave NATO and withdraw its troops from all territories under military occupation. Europe must close down all US military bases on its territory. All EU member countries must grant complete independence to populations they still wield colonial power over (the ‘French’ and ‘Dutch’ Antilles, British overseas territories, New Caledonia, Reunion Island…). Europe must rescind all partnership agreements with Israel and see to it that the rights of the Palestinian people be at long last respected.

Capitalism has drawn humankind down into a deep multidimensional crisis: it affects the financial sector, the economy, the climate, food and energy supplies, not to mention wars and the arms race. The patriarchal system perpetuates the oppression of women in all areas of life. As asserted at the Women’s Assembly at the World Social Forum in Belem on 1 February 2009 : We are not interested in palliative answers based on market logic in response to these crises ; this can only lead to perpetuation of the same system. We need to move forward in building alternatives if we are to oppose the capitalist and patriarchal system that oppresses and exploits us. |1|

We also support the declaration of indigenous peoples adopted at Belem: The capitalist development model, a model that is Eurocentric, sexist and racist, is in absolute crisis, and is leading us to the greatest social and environmental crisis in the history of humankind.  Structural unemployment is aggravated by the financial, economic, energy and production crisis, along with social exclusion, sexist and racist violence and religious fanaticism. That there should be so many simultaneous crises, and so deep, forebodes an authentic crisis of civilization, a crisis of “capitalist and modern development” that endangers all forms of life.  But there are those who continue to dream of improving this model and refuse to acknowledge that what is in crisis is capitalism, Euro-centrism, with its model of a State destined for one culturally homogeneous nationality, western positive rights, developmentalism and the commodification of life. |2|

Capitalism, patriarchy, and all forms of oppression will not disappear of their own accord: only the conscious and deliberate actions of men and women can yield another system whose goals would be to guarantee indivisible human rights and to protect the environment. We must free our minds of the tragic Stalinist caricature of communism, do away with capitalism, and invent an ecologically viable, socialist and feminist project rooted in the realities of the 21st century.

|1| In the Declaration of the Women’s Assembly http://www.cadtm.org/spip.php?page=imprimer&id_article=4104  

|2| http://www.indigenousportal.com/News/Declaration-of-Indigenous-Peoples-at-the-World-Social-Forum-Bel%C3%A9m-Amazon-Brazil.html

Translated by Christine Pagnoulle in collaboration with Vicki Briault.