Showing posts with label Security. Show all posts
Showing posts with label Security. Show all posts

Pakistan’s Regulatory Framework Doesn’t Work!

Posted by FS On Friday, 29 November 2013 0 comments
BY SHEMREZ NAUMAL AFZAL

Under the Musharraf regime,starting from 2002 onwards (after elections to the national and provincial assemblies were held),many new regulatory bodies and mechanisms were set up at the federal level so as to allow greater and more efficient government oversight of various economic,social,and even political spheres of life. These regulatory frameworks –whether set up as a result of negotiations or demands by international donor agencies or not –were designed to bring the state of Pakistan into the 21st century,because after the misgovernance and wholescale corruption witnessed in the 1990′s –the “decade of democracy”as it is known –both the state and the government had lost its credibility in the eyes of the general public. The best example of that is the small tax base and even lower tax collection figures that the then-Central Bureau of Revenue (now Federal Bureau of Revenue) showed in its yearly public statements –the people of Pakistan,especially the small taxpayers,did not trust the government or the state of Pakistan with their money;they did not believe that the state was adequately or effectively providing them the services that it ought to –or that their tax rupees guaranteed them;and instead of paying tax,most taxpayers (and other entities) chose to bribe employees of the government and the state in order to get any kind of work done. Even the Finance Minister of Pakistan acknowledged in 2009 that more than Rs. 500 billion worth of tax revenue was either lost (that is,not recovered by the authorities) or not properly accounted for by the tax administration and the CBR/FBR authorities. This “leakage”or hole of exorbitant proportions became a huge controversy in the Public Accounts Committee –then headed by the Leader of the Opposition,who later resigned when leakages in tax collection to the tune of the same amount continued in subsequent years.
As a result of the Pakistani state’s “modernization”after 2002,many regulatory bodies were established:the Oil and Gas Regulatory Authority (OGRA) was created to regulate the flow of natural resources from refineries and production factories to petrol pumps and eventually the ultimate consumer;the National Electric Power Regulatory Authority (NEPRA) was created to provide an overarching body that would regulate power tarriffs,electricity distribution among the provinces and in various cities and districts,and ensure that different electricity supply corporations (LESCO,IESCO,KESC,etc.) were operating within the rules and regulations set forth for them (and ultimately,with the public interest in mind);the Pakistan Electronic Media Regulatory Authority (PEMRA) was created to regulate the mushroom growth in electronic media,television channels,radio stations,and eventually the internet and social media –but the growing power of news media outlets practically disemboweled and emasculated this national body. However,other regulatory authorities are also not performing up to the mark,and there are various reasons for each of the bodies as to why they are not able to carry out their roles and responsibilities effectively so as to benefit the people of Pakistan.
While the PEMRA is now well-known to be scared of crossing any news media outlet,especially after the restoration of the independent judiciary under Chief Justice Iftikhar Muhammad Chaudhry –who believes that freedom of the media means continuing to report without any boundaries,and present opinions as “information”and “fact”,and report irresponsibly and in a biased manner whenever asked to do so by their corporate overlords (who pay their salaries,their executives’salaries,and for air-time on television advertisments),other regulatory authorities are no less effective. In fact,they are huge,burgeoning bureaucratic entities under the auspices of the Cabinet Division that continue to exact a toll on the taxpayers through the federal budget because they have to pay the exorbitant salaries of Directors,Joint Directors,Executive Directors,Senior Executive Directors,Members and Chairmen of these authorities.
It would not be wrong to say that these regulatory authorities –which are actually supposed to regulate different economic and bureaucratic entities while holding public interest supreme –are in fact beholden to corporate interests and to senior political figures when it comes to the due discharge of their functions. If Pakistan’s electronic media –especially news channels –was responsible and unbiased enough to report on the public interest (which it claims to do,but in fact only reports its own opinions so as to promote the interests of its various corporate backers) it would note how many illegal (as the Supreme Court had declared it so) CNG licenses were issued at the behest of political pressure on former OGRA chairman Tauqeer Sadiq –who was only caught after the Supreme Court was informed that the former chairman had amassed over Rs. 80 billion in the outright “sale”of these licenses,instead of having the licencees go through the regular channels and inspection procedures before the licenses were issued. Since OGRA regulates all downstream natural resource activity,it has recently started harassing petrol pump stations and owners and OMCs (oil marketing companies,like Shell,Chevron,PSO,etc.) with its new “Enforcement”department,even though the powers vested in the Ministry of Petroleum and Natural Resources’Oil department and Gas department (each headed by a Director General with over thirty years of experience in both the private and public sector,as well as scientific knowledge and background of the specific natural resource in question) have not been transferred to OGRA. Some media outlets finally figured out which senior political personality Tauqeer Sadiq was related to when he was made chairman of OGRA (and heavily recommended by this personality to the then-Prime Minister,who belonged to the same political party). But media investigations or public inquiries by the government or the superior judiciary into the widespread net of corruption and harassment established by the underlings at OGRA –starting from the Joint Executive Director level all the way up to the Member level,often with the willing,unwitting or forced support of their subordinates –have yet to even start,much less see the light of day. The problem also lies in the fact that any complain regarding OGRA is filed with the regulatory authority itself:the Federal Ombudsman or the National Accountability Bureau (long defunct and dysfunctional because it is considered “Musharraf’s tool to terrorize politicians”who are now in power) does not look into either complaints made regarding OGRA,or the massive corruption (in terms of rupees as well as misuse of state power and authority) that OGRA employees are engaged in even to this day!
The NEPRA is another big pink elephant in the room that nobody talks about:if this organization was performing its tasks and functions appropriately,rather than enjoying the exorbitant,“market-competitive”salaries (not to mention perks and privileges,and ensured pensions) that were being given to its employees for NO services rendered,then Pakistan would have accurately projected –and even made preparations and contingency plans –for the electricity dimension of the energy crisis that it is now facing. Given,NEPRA is only responsible for the electricity sector,which is only a part of Pakistan’s nearly-destroyed energy sector (with long lines for CNG whenever it is available,low gas pressure on the stove,and other energy resource problems faced by consumers and the general public at home),but the most serious facet of the energy crisis was –and is –exhibited by the long and often unannounced electricity outages (or “loadshedding”,as the term has now become known throughout the nation) which result in unnecessary pain and planning to the home consumer,which borders on psychological trauma. The economy has also suffered immensely because of consistent electricity outages,rendering large factories useless and putting hundreds if not thousands of daily-wage labourers out of work. Those factories which have developed workarounds –like petrol-powered or gas-powered generators –have had to see increased costs in operations,or received notices from the government saying that they cannot use gas for generating electricity in their factories. This has led to a mass exodus of industries and factories from Pakistan to other countries which are also facing energy crises,but have effective mechanisms in place so as to ensure that the industrial and manufacturing sector bears little to no brunt of the “loadshedding”or of interruptions in power/electricity supply. While the employees of NEPRA continued to earn their salaries for every month in the past decade,the divergence between electricity demand and electricity supply grew slowly and steadily,until it reached a point where cities would receive electricity for less than one-thirds of a day,and rural areas for only a few hours every day. Despite a renewed focus (by the government,not NEPRA) towards energy conservation,power generation (including the controversial Rental Power Projects or RPPs),and scheduled timings of power outages or “loadshedding”,the seasonal variation of Pakistan’s electricity shortfall lies anywhere between 4,000MW to 6,000MW. Politicians who love to dwell in the past raise the issue of Kalabagh dam –of support for it or opposition towards it –claiming that had the large dam been constructed,Pakistan would not have been facing the electricity problems it is facing today. And as for Thar coal and the vast amounts of coal discovered in that area –and government claims that the coal will be used for energy creation and electricity generation –any viable or concrete step to that effect has yet to be taken,and when it does,it will not bear fruit before four or five years of hard work and meticulous attention to the details of any Thar coal-related project that will serve the public interest and turn the electricity shortfall into an electricity surplus.
So what should the government do with the regulatory agencies that have fallen into its lap,which have failed to modernize the state or offer a chance for more effective governance,and which have failed to protect and promote public interest while they only protect corrupt bureaucrats and promote their exorbitant salaries and state-provided perks and privileges? Should the government do away with these federal regulatory mechanisms altogether,and let the provinces develop their own regulatory bodies –since major powers have been devolved to the provinces under the 18th Amendment –or should the government overhaul each and every single one of these regulatory authorities and revise their rules and regulations,their modes of operation,and most importantly,shuffle their staff in terms of merit and competency while kicking out those who have abused their powers and those who have no experience or reason for being in their posts?
According to the simplest definition of democracy,it is a government “for the people,by the people,of the people”,but in more than 60 years of independent governance,Pakistan’s state has yet to shake off its post-colonial tendencies,outlook and persona. In the 21st century,a modern democratic government is elected by the people,and is formed of people who belong to –or are from –those who elect them,and finally,the modern democratic government works for the people,the general public;it works day and night for their benefit,for their progress and prosperity,and to ensure a better future for the people who elected them (as well as those who did NOT elect them),their children,and their children’s children. The government is not just a name or an entity:it is a large mechanism,a framework in itself which –if deemed illegitimate by the people it governs –has no right to exist in the first place,paving way for a revolution (violent or otherwise) as the Arab Spring has shown.


    Only time will tell whether the rulers of Pakistan –those who govern Pakistan,those who are in the government of Pakistan –realize what a modern democracy is made of,what their electors want,and how to choose and progress on a path which would be a veritable means of achieving an end where the people of Pakistan enjoy prosperity,justice and peace. Because without prosperity and justice,there can be no peace…
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    Kashmir- the violence never abated

    Posted by FS On Tuesday, 20 November 2012 0 comments

    In the modern era, various forms of state terrorism continue by the Israeli armed forces on the Palestinians. While with the backing of Burmese military regime and the covert assistance...
    In the modern era, various forms of state terrorism continue by the Israeli armed forces on the Palestinians. While with the backing of Burmese military regime and the covert assistance of Hindus, recent bloodshed of the minority Rohingya Muslim community at the hands of the Rakhine extremist Buddhists in Burma (Myanmar) presents another such example. Similarly, during the Bosnian War (19921995), Serb forces slaughtered more than 10,000 Muslims in Bosnia and Herzegovina and buried them in the unamed mass graves. That genocide was repeated in Kosovo where several men and women were murdered.
    While, these atrocities are still fresh in the minds of every Muslim, but with the official backing of the government, massacre and harassment of Muslims by the Indian military including paramilitary troops in the Indian-held Kashmir has become a permanent feature.
    In this regard, instead of granting the people their genuine right of self-determination and holding plebiscite in the controlled territories of Kashmir in accordance with the UN resolutions, various sorts of state terrorism have become part of a deliberate campaign by the Indian army against Muslim Kashmiris, especially since 1989. It has manifested in brutal tactics such as crackdowns, curfews, illegal detentions, massacre, targeted killings, sieges, burning the houses, torture, disappearances, rape, breaking the legs, molestation of Muslim women and killing of persons through fake encounter.
    In this respect, in its report released on October 13, 2012 about detentions under the Jammu and Kashmir Public Safety Act (PSA) 1978, Amnesty International disclosed under the title, PSA Still a Lawless Law that despite pressure on Indian government, the PSA has not been reviewed and amended. Therefore, new records are being made by Indian law-enforcing agencies and security forces in human rights violations in the Indian occupied Kashmir.
    In its previous report, Amnesty International has pointed out: The Indian governments disregard for human rights in Jammu and Kashmir means that in practice people reportedly died in custody and that the whereabouts of the disappeared persons continue to be unknowngovernment forces continue to commit serious violations of humanitarian lawthe Muslim majority population in the Kashmir Valley suffers from the repressive tactics of the security forces. Under the Jammu and Kashmir Disturbed Areas Act, and the Armed Forces (Jammu and Kashmir) Special Powers Act and Public Safety Act, security forces personnel have extraordinary powers to shoot suspected lawbreakers, and to destroy structures suspected of harboring militants or arms.
    Notably, after visiting more than 50 villages, similarly Citizens Council of Justice (CCJ) published a report in Srinager in September, 2012 on human rights violations in the Indian controlled Kashmir. On the basis of its survey, research and analysis, the CCJ report under the caption, Atrocity and Suffering revealed that a total of 502 people were either murdered or enforcedly disappeared, 2048 individuals were physically tortured, 6888 were subjected to forced labour and 40 people were killed in custody by Indian Security Forces. 234 Mosques and 700 civilian properties worth 103.8 crores were destroyed in the garb of anti-Mujahideen operations, while after being released from jails freedom fighters, faced different detention periods.
    But it was a limited survey, as All Parties Hurriyet Conference Azad Jammu and Kashmir disclosed that from 1989 to 15 October 2012, there have been deaths of 93,274 innocent Kashmiris, 6,969 custodial killings, 117,345 arrests and destruction of 105,861 houses. Indian brutal security forces have orphaned over 107, 351 children, widowed 22,728 women and gang raped 9,920 women in the Indian held Kashmir.
    Over the two decades of violence in Jammu and Kashmir, Human Rights Watch has documented several failures to ensure protection of human rights. It has called for the repeal of those laws which provide the armed forces with extraordinary powers to search, detain, and use lethal force, leading to numerous human rights violations. They also provide immunity for security forcestheir prosecutions, even where the facts are well established, are rare.
    In the recent past, Kashmir Quarterly also reported, Indian Forces killed a number of citizens, torched mosques, shops and houses in various parts of the valley. As a result, there were protest demonstrations in many cities. Troops desecrated the central Srinagar mosque and tortured worshippers whom they found inside.
    It is of particular attention that in 2008, a rights group reported unmarked graves in 55 villages across the northern regions of Baramulla, Bandipore and Handwara. Then researchers and other groups reported finding thousands of single and mass graves without markers. In this context, in the last few years, rights groups discovered nearly 3,000 unnamed graves in the various districts of Kashmir.
    It is mentionable that in August, 2011, Indian Jammu and Kashmir State Human Rights Commission (SHRC) officially acknowledged in its report that innocent civilians killed in the two-decade conflict have been buried in unmarked graves. The report indicated 2,156 unidentified bodies which were found in mass graves in various regions of the Indian-held Kashmir. Notably, foreign sources and human rights organisations have disclosed that unnamed graves include those innocent persons, killed by the Indian military and paramilitary troops in the fake encounters including those who were tortured to death by the Indian secret agency RAW.
    Recently, Chinas leading News Agency Xinhua has unearthed more gruesome details on world-stunning unmarked graves in Poonch of the Indian occupied Kashmir. It pointed out the statement of Sofi Aziz Joo, caretaker of a graveyard as saying, Police and Army used to bring those bodies and direct me to bury them. The bodies were usually bullet-ridden, mutilated, faces disfigured and sometimes without limbs and heads.
    While, Association of Parents of Disappeared Persons (APDP) and rights groups have stated that more than 10,000 people have disappeared, accusing government forces of staging fake gun battles to cover up killings. They also revealed that suspected persons had been arrested and were murdered through arbitrary executions, and then buried in unmarked graves.
    Besides, on June 28, 2010, BBC reported, three men went missing in Indian-administered Kashmir in Aprilbut their bodies were discovered near the Line of Controla senior officer of the Indian army had kidnapped them by offering them jobs as porters. The troops later informed the police that they had killed three militants. Kashmirs law minister, Ali Mohammad Sagar says there have been several proven cases of fake encounters in the past 20 years.
    BBC explained, There are hardliners in the Indian Army and intelligence agencies, who think that by raising the bogey of infiltration and gun battles near the border they can create terror among people and also put pressure on Pakistan.
    It seems that non-condemnation of Indian massive human rights violations and non-interference for the seettlement of this issue by the so-called civilized international community, especially the US have further encouraged New Delhi to keep on going with its atrocities on the armless Kashmiri masses. Ignorence of the dipute by them involves the risk of nuclear war between Pakistan and India.
    Indian authorities are not willing to talk with Kashmiri people on political grounds. New Delhi has reached a conclusion that only bullet is the right way of dealing with them. Surprisingly, Indian successive governments are trying to ignore the dynamics of the freedom movement of Kashmiris to maintain their alien rule.
    However, despite the employment of various forms of massacre and harassment in the Indian occupied Kashmir, the war of liberation by the Kashmiri people will continue until they get their legitimate right of self-determination. If New Delhi could not suppress the movement in the past, it could also not do so in present and future.
    Sajjad Shaukat writes on international affairs and is author of the book: US vs Islamic Militants, Invisible Balance of Power: Dangerous Shift in International Relations.
    By Sajjad Shaukat
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    Civilian death toll escalates as Gaza conflict heats up

    Posted by FS On 0 comments

    An Israeli air attack has killed 12 members of one family in the Gaza Strip, just hours after Binyamin Netanyahu, Israeli prime minister, said his country was ready to “significantly expand” its operation...
    An Israeli air attack has killed 12 members of one family in the Gaza Strip, just hours after Binyamin Netanyahu, Israeli prime minister, said his country was ready to “significantly expand” its operation against Palestinian fighters in the territory.
    Barack Obama, the US president, said that while Israel had a right to defend itself, it would be “preferable” to avoid an Israeli ground invasion.
    Sunday’s 30 deaths in Gaza, including the deaths of seven civilians on Monday, have brought the total number of Palestinians killed to 82 since the Israeli air strikes began targeting the Hamas-ruled territory six days ago.
    On their part, fighters in Gaza continued to fire rockets into Israel. Two of them, aimed at the commercial hub of Tel Aviv, were shot down by Israel’s anti-missile system, police said.
    “The operation in the Gaza Strip is continuing, and we are preparing to expand it,” Netanyahu said at the weekly cabinet meeting on Sunday.
    “We are extracting a heavy price from Hamas and the terror organisations.”
    Meanwhile, thousands of Israeli troops backed by armour massed along the Gaza border, fuelling fears that Israel is poised to expand its aerial bombing campaign into a ground operation.
    Gaza fatalities
    Ashraf al-Kidra, spokesperson of the health ministry in Gaza, said on Sunday that civilians accounted for half of the Palestinian death toll. More than 750 other Palestinians have been wounded.
    In the single deadliest attack of the Israeli operation so far, 12 civilians were killed in Sunday’s air attack on a four-storey house in northern Gaza City, health officials said.
    Two or three missiles fired by F-16 fighter jets reduced the house in the Sheikh Radwan neighbourhood to rubble, witnesses said.
    Five women, including one 80-year-old, and four small children were among the dead, Kidra said.
    The Israeli military said the target was a top rocket mastermind of the Islamic Jihad group. The claim could not be verified, and Kidra said the two men killed in the attack were also civilians.
    Earlier, medical sources in Gaza said at least three children – including an 18-month-old infant - and two women were killed in a air raid east of Bureij refugee camp in central Gaza.
    An air raid before dawn in Gaza City targeted a building housing the offices of local Arab media, wounding several journalists from al-Quds television.
    “At least six journalists were wounded, with minor and moderate injuries, when Israeli warplanes hit the Al-Quds TV office in the Showa and Housari building in the Rimal neighbourhood of Gaza City,” Ashraf al-Qudra, health ministry spokesman, told AFP news agency.
    He said one journalist lost his leg.
    Witnesses reported extensive damage to the building, and said journalists had evacuated after an initial strike, which was followed by at least two more on the site.
    A second media centre was targeted later on Sunday morning. Sky News, Al-Arabiya and the official Hamas-run Al-Aqsa TV channel have offices in the building.
    Russian television station RT said its office was destroyed, adding that none of its staff were injured.
    The Israeli military said it had targeted “two Hamas operational communication sites” and had only targeted communication devices located on the roof to “minimise the damage to non-involved persons”.
    Huge plumes of smoke were billowing in the sky after a security building in Gaza City was hit.
    Two other attacks on houses in the Jabalya refugee camp killed one child and wounded 12 other people, medical officials said.
    Hamas remained defiant, however, with Abu Ubaida, its military spokesperson, insisting that despite Israel’s blows the group “is still strong enough to destroy the enemy”.
    “This round of confrontation will not be the last against the Zionist enemy and it is only the beginning,” he said on TV.
    ‘Ground incursion’
    Gaza has been under attack since Wednesday, when Israel launched a military offensive with the declared goal of deterring fighters in the Palestinian enclave from launching rockets into its territory.
    During this period, more than 500 rockets fired from Gaza have hit Israel, killing three people and injuring dozens.
    Al Jazeera’s Nadim Baba, reporting from Gaza City, said some people who live near the northern and eastern borders with Israel had been leaving their homes to seek shelter with relatives elsewhere.
    In Gaza City, streets were relatively quiet on Sunday.
    “People still do think that the Israeli military might actually launch a ground incursion,” he said.
    “They are of course also worried that they might be near targets of the Israeli military, and they might also be near to a place from where rockets are being launched.”
    Our correspondent witnessed a rocket being launched from a waste ground in the city. “Then I saw civilians running away from that area,” he said.
    Rocket fire from Gaza into Israel subsided during the night but resumed in the morning with at least 50 rockets fired, the Israeli army said.
    At least 17 of them were intercepted by the so-called Iron Dome, Israel’s a missile-defence system meant to shoot down rockets and artillery shells fired at populated areas.
    Two people were lightly injured by a rocket hitting a house in the coastal city of Ashkelon, the Magen David Adom emergency services said.
    Coastal attacks
    The military said Israeli aircraft had targeted dozens of underground rocket launchers overnight, “causing severe damage to the rocket launching capabilities of Hamas and other terror organisations”.
    It also confirmed that its navy had shelled Gaza, hitting targets on the northern Gaza shore line.
    Netanyahu told the Sunday cabinet meeting that he was holding talks with world leaders, “and we appreciate their understanding of Israel’s right to self-defence”.
    Al Jazeera’s Hoda Abdel-Hamid, reporting from Sderot in southern Israel, said the Israeli leader had a lot of support for a ground operation, especially in the southern parts of the country.
    However, a ground invasion would cost Israel much international sympathy and support, according to William Hague, UK foreign secretary.
    Hague told Sky News television it was much more difficult to limit civilian casualties in a ground assault and it would threaten to prolong the conflict.
    “A ground invasion is much more difficult for the international community to sympathise with or support – including the United Kingdom,” he said.
    Hague said Britain would like to see an agreed ceasefire, with an end to the rocket attacks being an essential component of any peace deal.
    Ghazi Hamad, a Hamas spokesperson, has told Al Jazeera that 90 per cent of the terms of a ceasefire currently being discussed in the Egyptian capital, Cairo, have been agreed upon.
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    Anaesthetizing America to the wounds of drone warfare

    Posted by FS On 0 comments

    How Drone War Became The American Way of Life In the American mind, if Apple made weapons, they would undoubtedly be drones, those remotely piloted planes getting such great press here.  They...
    How Drone War Became The American Way of Life
    In the American mind, if Apple made weapons, they would undoubtedly be drones, those remotely piloted planes getting such great press here.  They have generally been greeted as if they were the sleekest of iPhones armed with missiles.
    When the first American drone assassins burst onto the global stage early in the last decade, they caught most of us by surprise, especially because they seemed to come out of nowhere or from some wild sci-fi novel.  Ever since, they’ve been touted in the media as the shiniest presents under the American Christmas tree of war, the perfect weapons to solve our problems when it comes to evildoers lurking in the global badlands.
    And can you blame Americans for their love affair with the drone?  Who wouldn’t be wowed by the most technologically advanced, futuristic, no-pain-all-gain weapon around?
    Here’s the thing, though: put drones in a more familiar context, skip the awestruck commentary, and they should have been eerily familiar.  If, for instance, they were car factories, they would seem so much less exotic to us.
    Think about it: What does a drone do?  Like a modern car factory, it replaces a pilot, a skilled job that takes significant training, with robotics and a degraded version of the same job outsourced elsewhere.  In this case, the “offshore” location that job headed for wasn’t China or Mexico, but a military base in the U.S., where a guy with a joystick, trained in a hurry and sitting at a computer monitor, is “piloting” that plane.  And given our experience with the hemorrhaging of good jobs from the U.S., who will be surprised to discover that, in 2011, the U.S. Air Force was already training more drone “pilots” than actual fighter and bomber pilots combined?
    That’s one way drones are something other than the futuristic sci-fi wonders we imagine them to be.  But there’s another way that drones have been heading for the American “homeland” for four decades, and it has next to nothing to do with technology, advanced or otherwise.
    In a sense, drone war might be thought of as the most natural form of war for the All Volunteer Military.  To understand why that’s so, we need to head back to a crucial decision implemented just as the Vietnam war was ending.
    Disarming the Amateurs, Demobilizing the Citizenry
    It’s true that, in the wake of grinding wars that have also been debacles – the Afghan version of which has entered its 11th year — the U.S. military is in ratty shape.  Its equipment needs refurbishing and its troops are worn down. The stress of endlessly repeated tours of duty in war zones, brain injuries and other wounds caused by the roadside bombs that have often replaced a visible enemy on the “battlefield,” suicide rates that can’t be staunched, rising sexual violence within the military, increasing crime rates around military bases, and all the other strains and pains of unending war have taken their toll.
    Still, ours remains an intact, unrebellious, professional military.  If you really want to see a force on its last legs, you need to leave the post-9/11 years behind and go back to the Vietnam era.  In 1971, in Armed Forces Journal, Colonel Robert D. Heinl, Jr., author of a definitive history of the Marine Corps, wrote of “widespread conditions among American forces in Vietnam that have only been exceeded in this century by the French Army’s Nivelle mutinies of 1917 and the collapse of the Tsarist armies [of Russia] in 1916 and 1917.”
    The U.S. military in Vietnam and at bases in the U.S. and around world was essentially at the edge of rebellion.  Disaffection with an increasingly unpopular war on the Asian mainland, rejected by ever more Americans and emphatically protested at home, had infected the military, which was, after all, made up significantly of draftees.
    Desertion rates were rising, as was drug use.  In the field, “search and evade” (a mocking, descriptive accurate replacement for “search and destroy”) operations were becoming commonplace.  “Fraggings” — attacks on unpopular officers or NCOs — had doubled. (“Word of the deaths of officers will bring cheers at troop movies or in bivouacs of certain units.”)  And according to Col. Heinl, there were then as many as 144 antiwar “underground newspapers” published by or aimed at soldiers.  At the moment when he wrote, in fact, the antiwar movement in the U.S. was being spearheaded by a rising tide of disaffected Vietnam veterans speaking out against their war and the way they had fought it.
    In this fashion, an American citizen’s army, a draft military, had reached its limits and was voting with its feet against an imperial war.  This was democracy in action transferred to the battlefield and the military base.  And it was deeply disturbing to the U.S. high command, which had, by then, lost faith in the future possibilities of a draft army.  In fact, faced with ever more ill-disciplined troops, the military’s top commanders had clearly concluded: never again!
    So on the very day the Paris Peace Accords were signed in January 1973, officially signaling the end of U.S. involvement in Vietnam (though not quite its actual end), President Richard Nixon also signed a decree ending the draft.  It was an admission of the obvious: war, American-style, as it had been practiced since World War II, had lost its hold on young minds.
    There was no question that U.S. military and civilian leaders intended, at that moment, to sever war and war-making from an aroused citizenry.  In that sense, they glimpsed something of the future they meant to shape, but even they couldn’t have guessed just where American war would be heading.  Army Chief of Staff General Creighton Abrams, for instance, actually thought he was curbing the future rashness of civilian leaders by — as Andrew Bacevich explained in his book The New American Militarism – “making the active army operationally dependent on the reserves.”  In this way, no future president could commit the country to a significant war “without first taking the politically sensitive and economically costly step of calling up America’s ‘weekend warriors.’”
    Abrams was wrong, of course, though he ensured that, decades hence, the reserves, too, would suffer the pain of disastrous wars once again fought on the Eurasian mainland.  Still, whatever the generals and the civilian leaders didn’t know about the effects of their acts then, the founding of the All-Volunteer Force (AVF) may have been the single most important decision made by Washington in the post-Vietnam era of the foreshortened American Century.
    Today, few enough even remember that moment and far fewer have considered its import.  Yet, historically speaking, that 1973 severing of war from the populace might be said to have ended an almost two-century-old democratic experiment in fusing the mobilized citizen and the mobilized state in wartime.  It had begun with thelevée en masse during the French Revolution, which sent roused citizens to the front to save the republic and spread their democratic fervor abroad.  Behind them stood a mobilized population ready to sacrifice anything for the republic (and all too soon, of course, the empire).
    It turned out, however, that the drafted citizen had his limits and so, almost 200 years later, another aroused citizenry and its soldiers, home front and war front, were to be pacified, to be put out to pasture, while the empire’s wars were to be left to the professionals.  An era was ending, even if no one noticed.  (As a result, if you’re in the mood to indulge in irony, citizen’s war would be left to the guerrillas of the world, which in our era has largely meant to fundamentalist religious sects.)
    Just calling in the professionals and ushering out the amateurs wasn’t enough, though, to make the decision truly momentous.  Another choice had to be married to it.  The debacle that was Vietnam — or what, as the 1970s progressed, began to be called “the Vietnam Syndrome” (as if the American people had been struck by some crippling psychic disease) — could have sent Washington, and so the nation, off on another course entirely.
    The U.S. could have retreated, however partially, from the world to lick its wounds.  Instead, the country’s global stance as the “leader of the free world” and its role as self-appointed global policeman were never questioned, nor was the global military basing policy that underlay it.  In the midst of the Cold War, from Indonesia to Latin America, Japan to the Middle East, no diminution of U.S. imperial dreams was ever seriously considered.
    The decision not to downsize its global military presence in the wake of Vietnam fused with the decision to create a military that would free Washington from worry about what the troops might think.  Soon enough, as Bacevich wrote, the new AVF would be made up of “highly trained, handsomely paid professionals who (assuming that the generals concur with the wishes of the political leadership) will go anywhere without question to do the bidding of the commander-in-chief.”  It would, in fact, open the way for a new kind of militarism at home and abroad.
    The Arrival of the Warrior Corporation
    In the wake of Vietnam, the wars ceased and, for a few years, war even fled American popular culture.  When it returned, the dogfights would be in outer space.  (Think Star Wars.)  In the meantime, a kind of stunned silence, a feeling of defeat, descended on the American polity — but not for long.  In the 1980s, the years of Ronald Reagan’s presidency, American-style war was carefully rebuilt, this time to new specifications.
    Reagan himself declared Vietnam “a noble cause,” and a newly professionalized military, purged of malcontents and rebels, once again began invading small countries (Grenada, Panama).  At the same time, the Pentagon was investing thought and planning into how to put the media (blamed for defeat in Vietnam) in its rightful place and so give the public the war news it deserved.  In the process, reporters were first restrained from, then “pooled” in, and finally “embedded” in the war effort, while retired generals were sent into TV newsrooms like so many play-by-play analysts on Monday Night Football to narrate our wars as they were happening.  Meanwhile, the public was simply sidelined.
    Year by year, war became an ever more American activity and yet grew ever more remote from most Americans.  The democratic citizen with a free mind and the ability to rebel had been sent home, and then demobilized on that home front as well.  As a result, despite the endless post-9/11 gab about honoring and supporting the troops, a mobilized “home front” sacrificing for those fighting in their name would become a relic of history in a country whose leaders had begun boasting of having the greatest military the world had ever seen.
    It wasn’t, however, that no one was mobilizing.  In the space vacated by the citizen, mobilization continued, just in a different fashion.  Ever more mobilized, for instance, would be the powers of big science and the academy in the service of the Pentagon, the weapons makers, and the corporation.
    Meanwhile, over the years, that “professional” army, that “all volunteer” force, began to change as well.  From the 1990s on, in a way that would have been inconceivable for a draft army, it began to be privatized — fused, that is, into the corporate way of war and profit.
    War would now be fought not for or by the citizen, but quite literally for and by Lockheed Martin,Halliburton, KBR, DynCorp, Triple Canopy, and Blackwater (later Xe, even later Academi).  Meanwhile, that citizen was to shudder at the thought of our terrorist enemies and then go on with normal life as if nothing whatsoever were happening.  (“Get down to Disney World in Florida. Take your families and enjoy life the way we want it to be enjoyed,” was George W. Bush’s suggested response to the 9/11 attacks two weeks after they happened, with the “war on terror” already going on the books.)
    Despite a paucity of real enemies of any substance, taxpayer dollars would pour into the coffers of the Pentagon and the military-industrial complex, as well as a new mini-homeland-security-industrial complex and a burgeoning intelligence-industrial complex, at levels unknown in the Cold War years.  Lobbyists would be everywhere and the times would be the best, even when, in the war zones, things were going badly indeed.
    Meanwhile, in those war zones, the Big Corporation would take over the humblest of soldierly roles — the peeling of potatoes, the cooking of meals, the building of bases and outposts, the delivery of mail — and it would take up the gun (and the bomb) as well.  Soon enough, even the dying would be outsourced to corporate hirees.  Occupied Iraq and Afghanistan would be flooded with tens of thousands of private contractors and hired guns, while military men trained in elite special operations units would find their big paydays by joining mercenary corporations doing similar work, often in the same war zones.
    It was a remarkable racket.  War and profit had long been connected in complicated ways, but seldom quite so straightforwardly.  Now, win or lose on the battlefield, there would always be winners among the growing class of warrior corporations.
    The All-Volunteer Force, pliant as a military should be, and backed by Madison Avenue to the tune of hundreds of millions of dollars to insure that its ranks were full, would become ever more detached from most of American society.  It would, in fact, become ever more foreign (as in “foreign legion”) and ever more mercenary (think Hessians).  The intelligence services of the national security state would similarly outsource significant parts of their work to the private sector. According to Dana Priest and William Arkin of the Washington Post, by 2010, about 265,000 of the 854,000 people with top security clearances were private contractors and “close to 30% of the workforce in the intelligence agencies [was] contractors.”
    No one seemed to notice, but a 1% version of American war was coming to fruition, unchecked by a draft Army, a skeptical Congress, or a democratic citizenry.  In fact, Americans, generally preoccupied with lives in which our wars played next to no part, paid little attention.
    Remotely Piloted War
    Although early drone technology was already being used over North Vietnam, it’s in another sense entirely that drones have been heading into America’s future since 1973.  There was an eerie logic to it: first came professional war, then privatized war, then mercenary and outsourced war — all of which made war ever more remote from most Americans.  Finally, both literally and figuratively, came remote war itself.
    It couldn’t be more appropriate that the Air Force prefers you not call their latest wonder weapons “unmanned aerial vehicles,” or UAVs, anymore.  They would like you to use the label “remotely piloted aircraft” (RPA) instead.  And ever more remotely piloted that vehicle is to be, until – claimbelievers and enthusiasts — it will pilot itself, land itself, maneuver itself, and while in the air evenchoose its own targets.
    In this sense, think of us as moving from the citizen’s army to a roboticized, and finally robot, military — to a military that is a foreign legion in the most basic sense.  In other words, we are moving toward an ever greater outsourcing of war to things that cannot protest, cannot vote with their feet (or wings), and for whom there is no “home front” or even a home at all.  In a sense, we are, as we have been since 1973, heading for a form of war without anyone, citizen or otherwise, in the picture — except those on the ground, enemy and civilian alike, who will die as usual.
    Of course, it may never happen this way, in part because drones are anything but perfect or wonder weapons, and in part because corporate war fought by a thoroughly professional military turns out to be staggeringly expensive to the demobilized citizen, profligate in its waste, and — by the evidence of recent history — remarkably unsuccessful.  It also couldn’t be more remote from the idea of a democracy or a republic.
    In a sense, the modern imperial age began hundreds of years ago with corporate war, when Dutch,British and other East India companies set sail, armed to the teeth, to subdue the world at a profit.  Perhaps corporate war will also prove the end point for that age, the perfect formula for the last global empire on its way down.
    By Tom Engelhardt
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    Ex- Neo-Nazi and Taliban member regrets life decisions

    Posted by FS On Saturday, 17 November 2012 0 comments

    Berlin - A German neo-Nazi who converted to Islam and ran off to join the German Taliban Mujahidin (GTM) in Pakistan with his wife, regrets his choice. He deplored the lack...
    Berlin - A German neo-Nazi who converted to Islam and ran off to join the German Taliban Mujahidin (GTM) in Pakistan with his wife, regrets his choice. He deplored the lack of hygiene and the Talibans macho attitude towards women,
    The 27-year-old German skinhead, identified only as Thomas U, is on trial in a Berlin court for involvement in a foreign terrorist group. In 2009 the aspiring jihadist joined the GTM in Waziristan, to rid the area of “infidel occupiers,” the Telegraph reported.He even appeared in a Taliban propaganda video. However, he soon became disillusioned with the reality of life as a jihadist, finding his fellow terrorists took drugs and lacked basic hygiene. According to YNet his wife missed shopping in supermarkets and her cell phone. Thomas U also disliked the Talibans attitude towards women. In his statement he said:”In one case a Taliban fighter went to the German widow of a dead comrade and told her that she would marry him. The proposal was made without any consultation with her, as if she was just an object.”After being forced to hand over £4,000 to the cause, witnessing the “badly mangled bodies” of three fellow German fighters, and contracting Hepatitis A, the Islamic convert had a change of heart. When his wife became pregnant they escaped to Turkey where they were arrested. His wife subsequently gave birth in a Turkish prison.In his statement to the court Thomas U said:“I admit that I made a terrible mistake. Waziristan was not what I had been looking for. It was a terrible experience. I was shocked at the lack of hygiene, people were spitting and vomiting. My wife was very unhappy because traditionally women are treated badly.”Back on German soil he has turned his back on radical Islam and his wife is now allowed to flout the severe Islamic dress code. He is relieved that the couple are once again allowed to hold hands in public.
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    The Invisible War

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    According to one of the more hard line analysts a fourth generation war—4GW—has been declared on Pakistan. The dots he connects to make the mosaic are—the insurgency in FATA, the...
    According to one of the more hard line analysts a fourth generation war—4GW—has been declared on Pakistan. The dots he connects to make the mosaic are—the insurgency in FATA, the lawlessness and violence in Baluchistan and Karachi, the insidious propaganda to defame and defang the military and intelligence institutions, the rapid economic decline and the overall destabilization created by bomb blasts, kidnappings, extortion rackets and high profile robberies. He traces the origin of this situation to the convergence in US, Indian and Afghan interests and those within the country who wittingly or unwittingly have become their collaborators or willing tools. He does not mince his words when he says that the states’ response capacity has been overwhelmed and the only way out is for a national emergency to be declared and the military asked to clean up the mess and restore stability. Failing this, he thinks the military has to step in to save the country. Failing either of these the country will fall apart.
    A softer voiced analyst thinks the overall situation is so complex that all the problems have become interconnected and intertwined so the option of tackling each situation separately and sequentially is no longer there. Any operation in North Waziristan would lead to orchestrated violent reprisals in the urban areas possibly with the Baluchistan and Karachi situations spiraling out of control. He traces the origin of this mess to political inaction and, not just mis-governance but a total absence of governance in areas where it is most needed. That others are exploiting our internal vulnerability goes without saying because foreign policy is the first victim of internal divides and weaknesses that shape the image of a failed or failing country.
    Both are saying the same thing but the remedies they suggest are different — one wants a military response to the ‘war’ being waged against us while the other wants political resolve and action. The fact acknowledged by all is that there are ungoverned or marginally governed gaps that have emerged and widened within the country and these gaps are being filled by those who cannot see beyond their noses, those who can but choose not to and those who are actively exploiting the mess either because of personal agendas or because of personal gains and ambitions. The result is that all the threats that lay dormant because of state control are now out in the open with no holds barred. Sectarian killings are being systematically carried out. A culture of intolerance, bigotry and hatred is being deliberately and insidiously fostered. Militant wings of political parties have made Karachi the battleground for control over extortion, drugs, gambling and other criminal rackets. The insurgents in the west have forged linkages in the heartland with extremist elements thereby vastly increasing the scope, scale and dimensions of their activities. State institutions are being pitted against each other in a fragmented and fractured society with the media using its newly acquired clout for blatant power play and commercial gain. In such an environment the economy is going in the only direction it can — downwards. The political segment is touting the next elections as the watershed moment that will herald change — though the majority sees massive political problems post elections.
    What is urgently needed is bipartisan agreement on the response to the challenges facing the country. This kind of agreement is impossible to achieve in the present environment and this will certainly not happen by each institution telling the others what to do. What is possible is that a strong government team must sit with all the other major institutions to devise a response to the challenges that are overwhelming the state — Baluchistan, Karachi, militancy, the endless violence in the west, internal instability and insecurity, the economy and important bilateral relations. All the institutions should put aside their reservations and differences, suspend or postpone the activities that are creating exploitable vulnerabilities and come together with the government to evolve the multi-dimensional response required to reclaim our country. This is the need of the hour.
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    What challenges will Obama be faced with in his second term

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    The American people have spoken. Barack Obama remains the president of the United States – and by extension leader of the world – for the next four years. The people...
    The American people have spoken. Barack Obama remains the president of the United States – and by extension leader of the world – for the next four years. The people of Asia, Africa, Europe and Latin America had no say in this choice, but they must live with the consequences.  The policies pursued by the reelected American president, be it dealing with the economy, Iran, terrorism or trade, promise to have a profound effect on the lives and livelihoods of billions of people in all parts of the globe.
    The promises that presidential candidates make on the campaign trail do not necessarily dictate the policies pursued, But presidents tend to attempt to implement their promises. Moreover, American public opinion on a range of issues facing the next president is clear, with priority on the economy, preventing a nuclear Iran and catching up with China. Obama will defy such sentiment at his political peril.
    The potential for either collaboration or friction between the new administration and foreign governments is ever-present. Europeans, Asians, Africans and Latin Americans attempting to gauge the implications of Obama’s victory understandably wonder if commitments made in the heat of a US presidential election really matter once a candidate becomes president. They do.
    “About 75 percent of the promises made by presidents from Woodrow Wilson through Jimmy Carter were kept,” concluded Michael Krukones in his 1984 book Promises and Performance: Presidential Campaigns as Policy Predictors. More recently, PolitiFact, the winner of the 2009 Pulitzer Prize for its efforts to keep US politicians honest, concluded that of the 508 separate promises candidate Obama made during the 2008 presidential campaign, he broke only 88 – despite a polarized Congress intent on blocking Democratic initiatives.
    Of 508 promises Obama made during the 2008 campaign, he broke 88 – despite a polarized Congress.
    Thus when a presidential candidate’s promise is buttressed by the support of the American public, or at least the backing of his party stalwarts, it may be safe to assume that he’ll try to implement that commitment. Some of Obama’s economic commitments will be tested over the next few weeks.
    The US economy risks careening over what many call a “fiscal cliff’ in January 2013, when, as the result of the debt deal struck between Congress and the White House in August 2011, dramatic cuts must be made to defense and social-welfare spending and taxes must be raised unless a comprehensive deficit-reduction plan is agreed upon. The nonpartisan US Congressional Budget Office estimates that implementing such spending cuts and tax increases would shrink the American economy by 0.5 percent in 2013. Such a course would ripple through the global economy already hobbled by near recession in Europe and slowdown in China, India and Japan.
    Doing nothing would mean that the US government deficit would remain above $1 trillion for a fifth consecutive year, risking a spike in interest rates that could slow growth anyway. Obama will be intensely involved in negotiations with congressional leaders about the “fiscal cliff” even before his 20 January inauguration.
    Obama has promised to cut the federal budget deficit from 8.5 percent in 2012 to 3 percent by 2017 – by slashing defense spending from 4.6 percent of GDP to 2.9 percent by 2017 and raising tax rates from 35 percent to 39.6 percent for those making more than $250,000 a year, among other measures.
    Obama faces a serious conundrum. Republicans, who in the past have opposed any proposals to increase taxes as part of a package of measures to deal with the deficit, remain in control of the US House of Representatives. Under current rules the Republican minority in the Senate has sufficient votes to block legislation.
    Americans support a combination of budget cuts and tax increases, especially for the wealthy.
    Moreover, the American public is divided. They support a combination of budget cuts and tax increases, especially for the wealthy. By two to one, 44 percent to 22 percent, Americans say that raising taxes on incomes above $250,000 would help the economy rather than hurt it. At the same time, 56 percent oppose reductions in defense spending. There is strong resistance to major tinkering with government-funded entitlement programs, the national pension scheme and health insurance for the elderly – to reduce the deficit; 51 percent of Americans say that maintaining such benefits is more important than deficit reduction.
    On other economic issues, such as trade, there is greater clarity as to the trajectory of US policy in the wake of the election. Obama is committed to completing the Trans-Pacific Partnership free trade agreement with nations surrounding the Pacific basin. In 2013, he’s expected to launch a free-trade agreement with Europe. And, if his campaign rhetoric is any clue, he’ll continue Washington’s “get tough” policy with China on trade issues. But all US presidents talk tougher on China, and earlier on Japan, than they actually act.
    Obama will have mixed public support. Americans assume that free-trade agreements kill jobs and undermine wages, which could make a Trans-Pacific deal particularly hard to sell to Congress. At the same time, an October 2012 Pew Research Center survey found that by 49 percent to 42 percent, Americans preferred being tough in dealing with China on economic issues over building a strong relationship. Backing for this more hardnosed approach increased nine percentage points since March 2011.
    The Obama reelection also has strategic implications. During the campaign, Obama promised that Iran would not produce a nuclear weapon on his watch. Now that he will continue as president, he has the support of the American people to be tough with Tehran. A majority, 56 percent, want him to take a firm stand against Iran’s nuclear program, even at the cost of a military conflict, according to a Pew Research Center survey in October. But less than half of Democrats and young people agree, signaling a potential break with his core constituency in any future confrontation.
    Absence of strong international backing
    for a strike on Iran complicates US ability
    to build a united diplomatic front.
    Obama will lack public support for such action among many key nations around the world. There is almost universal opposition to the Iranian nuclear-weapons program across the 21 nations surveyed by the Pew Research Center’s Global Attitudes Project in spring 2012. But among those who oppose Iran acquiring a nuclear arsenal, Americans’ support for the use of military force to halt Iranian efforts exceeds that in any other country: 63 percent of Americans would support military action, compared with 51 percent in France and Britain, 50 percent in Germany, 40 percent in Japan, 30 percent in China and 24 percent in Russia.
    The absence of strong international backing for a strike on Iran only complicates the new president’s ability to build and hold together a united diplomatic front in any effort to deny Iran nuclear weapons.
    Obama can be expected to continue the US-led efforts to fight terrorism, which enjoy 75 percent support among the American public. Drone strikes are supported by 62 percent of Americans, including 74 percent of Republicans and 58 percent of Democrats, and are likely to be one of the principal methods of prosecuting that war. But people in most other nations take a sharply negative view, portending difficulties.
    American elections are consequential events, not just for the United States, but for the world. President Obama’s reelection is likely to bring to a head a number of long-smoldering economic and strategic concerns. He has a mandate to govern, but his mandate on specific issues is far from clear, facing opposition both at home and abroad. His biggest challenge may be to bridge the divides among the American people and with America’s allies.
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    Bankers actually do rule the World

    Posted by FS On 0 comments

    In the 2012 edition of Occupy Money released this month, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers,...
    In the 2012 edition of Occupy Money released this month, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our gross domestic product.
    That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of “Wall Street greed” but because of the inexorable mathematics of our private banking system.
    This hidden tribute to the banks will come as a surprise to most people, who think that if they pay their credit card bills on time and don’t take out loans, they aren’t paying interest. This, says Kennedy, is not true. Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills. They must pay for labor and materials before they have a product to sell and before the end buyer pays for the product 90 days later. Each supplier in the chain adds interest to its production costs, which are passed on to the ultimate consumer. Kennedy cites interest charges ranging from 12% for garbage collection, to 38% for drinking water to, 77% for rent in public housing in her native Germany.
    Her figures are drawn from the research of economist Helmut Creutz, writing in German and interpreting Bundesbank publications. They apply to the expenditures of German households for everyday goods and services in 2006; but similar figures are seen in financial sector profits in the United States, where they composed a whopping 40% of US business profits in 2006. That was five times the 7% made by the banking sector in 1980. Bank assets, financial profits, interest, and debt have all been growing exponentially.

    Adapted from here .
    Exponential growth in financial sector profits has occurred at the expense of the non-financial sectors, where incomes have at best grown linearly.
    By 2010, 1% of the population owned 42% of financial wealth, while 80% of the population owned only 5% of financial wealth. Dr Kennedy observes that the bottom 80% pay the hidden interest charges that the top 10% collect, making interest a strongly regressive tax that the poor pay to the rich.
    Exponential growth is unsustainable. In nature, sustainable growth progresses in a logarithmic curve that grows increasingly more slowly until it levels off (the red line in the first chart above). Exponential growth does the reverse: it begins slowly and increases over time, until the curve shoots up vertically (the chart below). Exponential growth is seen in parasites, cancers… and compound interest. When the parasite runs out of its food source, the growth curve suddenly collapses.
    People generally assume that if they pay their bills on time, they aren’t paying compound interest; but again, this isn’t true. Compound interest is baked into the formula for most mortgages, which compose 80% of US loans. And if credit cards aren’t paid within the one-month grace period, interest charges are compounded daily.
    Even if you pay within the grace period, you are paying 2% to 3% for the use of the card, since merchants pass their merchant fees on to the consumer. Debit cards, which are the equivalent of writing checks, also involve fees. Visa-MasterCard and the banks at both ends of these interchange transactions charge an average fee of 44 cents per transaction – though the cost to them is about four cents.
    How to recapture the interest
    The implications of all this are stunning. If we had a financial system that returned the interest collected from the public directly to the public, 35% could be lopped off the price of everything we buy. That means we could buy three items for the current price of two, and that our paychecks could go 50% farther than they go today.
    Direct reimbursement to the people is a hard system to work out, but there is a way we could collectively recover the interest paid to banks. We could do it by turning the banks into public utilities and their profits into public assets. Profits would return to the public, either reducing taxes or increasing the availability of public services and infrastructure.
    By borrowing from their own publicly owned banks, governments could eliminate their interest burden altogether. This has been demonstrated elsewhere with stellar results, including in Canada,Australia, and Argentina among other countries.
    In 2011, the US federal government paid US$454 billion in interest on the federal debt – nearly one-third the total $1,100 billion paid in personal income taxes that year. If the government had been borrowing directly from the Federal Reserve – which has the power to create credit on its books and now rebates its profits directly to the government – personal income taxes could have been cut by a third.
    Borrowing from its own central bank interest-free might even allow a government to eliminate its national debt altogether. In Money and Sustainability: The Missing Link (at page 126), Bernard Lietaer and Christian Asperger, et al, cite the example of France.
    The Treasury borrowed interest-free from the nationalized Banque de France from 1946 to 1973. The law then changed to forbid this practice, requiring the Treasury to borrow instead from the private sector. The authors include a chart showing what would have happened if the French government had continued to borrow interest-free versus what did happen. Rather than dropping from 21% to 8.6% of GDP, the debt shot up from 21% to 78% of GDP.
    “No ‘spendthrift government’ can be blamed in this case,” write the authors. “Compound interest explains it all!”
    More than just a Federal solution
    It is not just federal governments that could eliminate their interest charges in this way. State and local governments could do it too.
    Consider California. At the end of 2010, it had 
    general obligation and revenue bond debt of $158 billion
    . Of this, $70 billion, or 44%, was owed for interest. If the state had incurred that debt to its own bank – which then returned the profits to the state – California could be $70 billion richer today. Instead of slashing services, selling off public assets, and laying off employees, it could be adding services and repairing its decaying infrastructure.
    The only US state to own its own depository bank today is North Dakota. North Dakota is also theonly state to have escaped the 2008 banking crisis, sporting a sizable budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest foreclosure rate, and the lowest default rate on credit card debt.
    Globally, 40% of banks are publicly owned, and they are concentrated in countries that also escaped the 2008 banking crisis. These are the BRIC countries – Brazil, Russia, India, and China – which are home to 40% of the global population. The BRICs grew economically by 92% in the last decade, while Western economies were floundering.
    Cities and counties could also set up their own banks; but in the US, this model has yet to be developed. In North Dakota, meanwhile, the Bank of North Dakota underwrites the bond issues of municipal governments, saving them from the vagaries of the “bond vigilantes” and speculators, as well as from the high fees of Wall Street underwriters and the risk of coming out on the wrong side of interest rate swaps required by the underwriters as “insurance.”
    One of many cities crushed by this Wall Street “insurance” scheme is Philadelphia, which has lost $500 million on interest swaps alone. (How the swaps work and their link to the LIBOR scandal was explained in an earlier article here.) This month, the Philadelphia City Council held hearings on what to do about these lost revenues. In an October 30 article titled “Can Public Banks End Wall Street Hegemony?“, Willie Osterweil discussed a solution presented at the hearings in a fiery speech by Mike Krauss, a director of the Public Banking Institute.
    Krauss’ solution was to do as Iceland did: just walk away. He proposed “a strategic default until the bank negotiates at better terms”. Osterweil called it “radical”, since the city would lose its favorable credit rating and might have trouble borrowing. But Krauss had a solution to that problem: the city could form its own bank and use it to generate credit for the city from public revenues, just as Wall Street banks generate credit from those revenues now.
    A solution whose time has come
    Public banking may be a radical solution, but it is also an obvious one. This is not rocket science. By developing a public banking system, governments can keep the interest and reinvest it locally. According to Kennedy and Creutz, that means public savings of 35% to 40%. Costs can be reduced across the board; taxes can be cut or services can be increased; and market stability can be created for governments, borrowers and consumers. Banking and credit can become public utilities, feeding the economy rather than feeding off it.
    Ellen Brown is an attorney and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com, http://EllenBrown.com, and http://PublicBankingInstitute.org.
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