Friday, August 28, 2009

Man dies in LA subway after being Tasered three times

From Raw Story

By Associated Press

Published: August 27, 2009 Sheriff's Department says a man has died after a deputy shocked him three times with an electric stun gun at a subway station.

Red Line station Wednesday night when a deputy repeatedly asked if he had a ticket.

The man didn't answer, so the deputy took hold of his hands to stop and question him.

Whitmore says the man broke free, raised clenched fists and charged the deputy several times. He was Tasered, then shocked twice more when he got up and charged again.

Whitmore says a pipe used to smoke drugs fell to the ground during the scuffle.

Thursday, August 27, 2009

Lehman's ex-president files claim for $233m

[233 million dollar bonus. WTF wouldn't prison be more appropriate for these Wall Street thieves and grifters?]

Joseph Gregory, second-in-command to former chief executive Dick Fuld, seeks compensation from collapse of Wall Street bank

Employees carrying their possessions in boxes leave the Lehman Brothers' building in Canary Wharf, London, on 15 September 2008. Photograph: Graeme Robertson

The former president of Lehman Brothers has filed a legal claim seeking $233m (£145m) in remuneration from liquidators of the bankrupt Wall Street bank, whose collapse 11 months ago wrought havoc in global financial markets.

Joseph Gregory, who served as second-in-command to Lehman's chief executive, Dick Fuld, lodged his demand with liquidators who are sorting through the remnants of what was the fourth-biggest investment bank in the US until its abrupt demise.

The precise amount of the former executive's claim is $232,999,548.71. Gregory maintains that he is entitled to this sum in restricted stock and options, some of which were linked to performance criteria through awards dating back to 1997.

Employees and creditors have until 22 September to submit demands in Lehman's bankruptcy proceedings. The week before this deadline will mark the first anniversary of the bank's collapse, on 15 September 2008 – an event that sparked the most tumultuous period of the global financial crisis, prompting panic on the markets as investors lost confidence in the broader banking system.

Gregory joined Lehman in 1974 and worked his way up. He served as president and chief operating officer until June 2008, when he was stripped of his role in a boardroom coup by executives concerned about mounting financial woes.

Since the bank's demise, Gregory has faced financial challenges in other directions. He put his eight-bedroom seaside mansion in the Hamptons, on Long Island, New York, up for sale for $32.5m but has had to cut the asking price to $27.9m because of gloom in the property market.


Wednesday, August 26, 2009

Protestors converge on Cambridge Whole Foods, attacking CEO's comments on health care reform

From Infoshop News

Tuesday, August 25 2009 @ 12:21 AM CDT

Contributed by: WorkerFreedom

Cries for health care reform rang out as a crowd formed in front of Whole Foods Market on Prospect Street on Friday afternoon. Around 4:30 p.m., a couple dozen people gathered outside the Cambridge market to protest Whole Foods CEO John Mackey’s recent opinion piece in the Wall Street Journal, one that they felt opposed health care changes and ultimately, human rights.

By Jessica Bal
Wicked Local Cambridge
August 23, 2009

Cambridge — “People die while we wait! Tomorrow is too late!” Cries for health care reform rang out as a crowd formed in front of Whole Foods Market on Prospect Street on Friday afternoon. Around 4:30 p.m., a couple dozen people gathered outside the Cambridge market to protest Whole Foods CEO John Mackey’s recent opinion piece in the Wall Street Journal, one that they felt opposed health care changes and ultimately, human rights.

In the op-ed piece, Mackey responded to Obama’s call for constructive ideas regarding health care reform by outlining his own suggestions for alterations to the system. In contrast to Obama’s interest in government-funded care, Mackey emphasized the development of high-deductible health insurance plans coupled with health savings accounts.

His statement shocked some, who feel that health care is a necessity for all. “He basically said: ‘If you can’t afford health care, then I guess you can’t afford to be healthy,’” said Jake Williams, a member of Massachusetts Jobs with Justice, which organized the protest.

Mackey stated that it would be unwise to pursue a system that would increase government spending and control, as this would simply create more deficits. Instead, Mackey favors reforms that allow for more individual choice and responsibility. “A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter,” Mackey wrote in the letter. “That’s because there isn’t any. This ‘right’ has never existed in America.”

“The majority of Americans are struggling, and we need a public option,” said Jennifer Doe, another organizer with Mass Jobs for Justice. “The Whole Foods insurance system is not available and affordable for everyone. Whole Foods can afford that system because they charge an exorbitant amount for people to shop there.”

Much of the surprise regarding Mackey’s statements stems from the company’s otherwise liberal reputation and commitment to organics, local agriculture, and fighting poverty with their Whole Planet Foundation. “The store has strong values in their approach to nutrition and social responsibility and the environment, but this is just inconsistent,” said Robert Gaw, 58, of Sudbury. “This is a ‘what’s in it for me’ approach to health care.”

Robin Rehfield, a spokesperson at Whole Foods, stood by to answer customer questions and address concerns. “John Mackey is not opposed to health care reform,” said Rehfield. “He was asked to write an op-ed piece, and he did just that. He gave his opinion. We respect that everyone has opinions and they have the right to voice them.”

Rehfield echoed Mackey’s own response to the op-ed reactions, which he posted to his blog on the Whole Foods Web site. According to Mackey’s blog, the title of the piece was changed by Wall Street Journal staff from “Health Care Reform” to “Whole Foods Alternative to ObamaCare,” giving the impression that Mackey is actively opposing the President’s plan. While protesters like 21-year-old Jordan McLaughlin of Jamaica Plain called for a retraction and said, “[Mackey’s] attacks on Obama’s plan are based on lies,” the CEO asserted that he “did not mention the president at all in this piece.”

Despite reminders that Mackey’s statements are personal opinion rather than an official company position on health care reform, many have decided to boycott the market, including several of Friday’s protesters. “When you shop at Whole Foods, you are giving money to the causes that the CEO supports,” said Jeremy Sher, 32, of the South End. “People should put their money where their heart is.”

Anna Knaap, a Cambridge resident originally from the Netherlands, stopped to see what all the buzz was about as she wheeled her Whole Foods purchases to her car on Friday afternoon. “It’s a shame that emotions flare up so much here regarding the healthcare issue,” Knaap said. “For us [in the Netherlands] it seems so boring and calm in comparison. I think the majority of Americans would benefit from universal health care.” The Dutch system utilizes competing private insurers and requires universal coverage, with subsidies that guarantee affordable care for all.

As cars outside of Whole Foods honked in support, James Murphy, 28, of Jamaica Plain spent his day off from work waving a sign and joining the chants for reform.

“More people need to give thought to the public option for health care and be more vocally supportive so that no one is left out in the cold,” said Murphy. “It’s not a cost thing, it’s a human rights issue.”

Friday, August 21, 2009

Rise of the Super-Rich Hits a Sobering Wall

The rich have been getting richer for so long that the trend has come to seem almost permanent.

They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.

But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.

For every investment banker whose pay has recovered to its prerecession levels, there are several who have lost their jobs — as well as many wealthy investors who have lost millions. As a result, economists and other analysts say, a 30-year period in which the super-rich became both wealthier and more numerous may now be ending.

Continue Reading at:

The rich have come to own the working class as surely as if those outside the ultra wealthy were slaves.

Perhaps it is time for people to identify with Spartacus and stage a modern version of the French Revolution of 1789 or the Bolshevik Revolution of 1917.

The slogan "Eat the Rich" comes to mind as does the imagry of pitchforks and torches.

Nationalizing the Health Care System would be a good start along with nationalizing the energy industry and deprivatizing the ownership of the water supply.

Taxing the ultra Wealthy at the same level as they were under JFK would also help as would a VAT on home price above say a million dollars.

Thursday, August 20, 2009

The Failure of Law Enforcement Agencies To Investigate Right Wing Hate Groups

I was a member of SDS including Weatherman. I knew people in the Black Panthers. I live in Berkeley in the late 1960s and early 1970s.

We couldn't turn around or have a meeting without having a red squad or Cointelpro Agent in the group.

Popular mythology has it that much of the violence in the 1960s was perpetrated by the left wing. While it is true that we engaged in property damage, rioting and breaking windows most of our violence was not directed at human beings. With the obvious exception of the deaths during the racially motivated ghetto up risings.

Even most of the deaths involving the Black Panther Party were Panthers murdered by police or by Ron Karinga's group.

As I said we had cops up our asses from the get go.

On the other hand the main perpetrators of 1960s violence were conservative groups such as the KKK with their lynchings, murders and bombings.

Other groups perpetrating violence since the 1960s have included Aryan Nation.

Indeed right wing radio encourages both violence and bigotry. Groups like Aryan Nation stockpile far greater arsenals of weapons than any left wing group I have ever known, including the Panthers. Yet there is no evidence of there being a Cointelpro operation aimed at disrupting these groups who represent a far greater terrorist threat to the nation than some of the groups named in recent years. Groups investigated have included Quakers and Vegetarians for Peace among others.

It is almost as though the ultra right wing militias and law enforcement are on the same team.

This make recent events of armed ultra right wing conservatives showing up at places where President Obama is speaking seem surreal.

Why aren't these gun toting threats to the President in jail and being subjected to harsh interrogation?

What Planet Are They From?

Barney Frank asked that question of one of the reich wing anti health care plants at one of his town hall meetings.

I work retail in Texas.

They come from the land of the corporate zombies. Home schooled by ignorant brainwashed Christian followers of the far right wing corporate shills.

They are the sort who believe, "If it is healthy then it can't taste good." Or if it is lower in sodium and lacking in cholesterol then I won't like it.

They believe every thing the racist Glenn Beck says, bless their little hearts.

They believe too much regulation and greedy lying home buyers caused the economic crisis.

They are working at a big box store but still believe in the benevolence of the corporations that sent the manufacturing jobs abroad. After all it was the greedy unions that benevolent bosses to do that.

Not one of them would roof a house or cut the grass on their own lawn in the middle of a Texas summer but believe all their economic woes are caused by the Mexicans.

They have a teen pregnancy rate and a divorce rate based on adultery that would cause the citizens of the godless North East and California to blush yet blame their broken marriages and teen pregnancies on the social permissiveness that gives LGBT/T people equal marriage rights.

I think they must come from the planet ,Denial.

Starbucks Workers Protest Rise in Health Premiums

From Infoshop

Saying it spends nearly as much on health insurance for its workers as it does on coffee, Starbucks recently announced that it would increase the amount that eligible employees need to contribute to keep their health care coverage. On Monday evening, newly unionized Starbucks baristas gathered at the company’s regional headquarters in Manhattan to protest the move, which they said would effectively double the cost of their health insurance.

By A. G. Sulzberger

Updated, Aug. 18 | Saying it spends nearly as much on health insurance for its workers as it does on coffee, Starbucks recently announced that it would increase the amount that eligible employees need to contribute to keep their health care coverage.

On Monday evening, newly unionized Starbucks baristas gathered at the company’s regional headquarters in Manhattan to protest the move, which they said would effectively double the cost of their health insurance.

The change would increase the cost of the most basic plan to $20 from $12.50 each paycheck and the annual sign-up cost to $200 from $100, according to Liberte Locke, a barista who has been active in unionization efforts with the Industrial Workers of the World.

“If they’re going to charge us this amount, our pay needs to increase,” she said. She added that a growing number of employees were ineligible for the health insurance because they worked fewer than 20 hours a week.

A Starbucks spokesman said in a statement that the protest was the work of “a small group of people with an outside agenda aimed at promoting itself and its interest.”

The coffee company has battled with the union repeatedly, and in December, the National Labor Relations Board judge ruled that Starbucks had illegally fired three baristas and otherwise violated federal labor laws at several of its nearly 600 locations in New York City, in an effort to halt the unionization efforts.

A letter to all employees from Starbucks’s chief executive, Howard Schultz, dated July 27, warned that employees, whom the company calls partners, would have to pay more for their health care. (It also announced that matching 401(k) payments would continue, after warning last year that the matching payments might be suspended.)

“Despite this, Starbucks remains committed to providing comprehensive, affordable health coverage for our partners. While we hope the economy continues to improve and that we are able to see meaningful health care reform, Starbucks is committed to offering affordable health coverage,” the letter said. “Next year our most economical, basic health plan will be available for $20 a paycheck. In addition, there will be no changes made to our eligibility requirements, which makes our plan more generous than other major retailers.”

Wednesday, August 12, 2009

'Evil and Orwellian' – America's right turns its fire on NHS

Andrew Clark in New York,

Tuesday 11 August 2009 21.00 BST

Republican Chuck Grassley claimed that Ted Kennedy (above) would be left to die untreated from a brain tumour in Britain. Photograph: Steve Connolly/Rex Features

The National Health Service has become the butt of increasingly outlandish political attacks in the US as Republicans and conservative campaigners rail against Britain's "socialist" system as part of a tussle to defeat Barack Obama's proposals for broader government involvement in healthcare.

Top-ranking Republicans have joined bloggers and well-funded free market organisations in scorning the NHS for its waiting lists and for "rationing" the availability of expensive treatments.

As myths and half-truths circulate, British diplomats in the US are treading a delicate line in correcting falsehoods while trying to stay out of a vicious domestic dogfight over the future of American health policy.

Slickly produced television advertisements trumpet the alleged failures of the NHS's 61-year tradition of tax-funded healthcare. To the dismay of British healthcare professionals, US critics have accused the service of putting an "Orwellian" financial cap on the value on human life, of allowing elderly people to die untreated and, in one case, for driving a despairing dental patient to mend his teeth with superglue.

Having seen his approval ratings drop, Obama is seeking to counter this conservative onslaught by taking his message to the public, with a "town hall" meeting today at a school in New Hampshire.

Last week, the most senior Republican on the Senate finance committee, Chuck Grassley, took NHS-baiting to a newly emotive level by claiming that his ailing Democratic colleague, Edward Kennedy, would be left to die untreated from a brain tumour in Britain on the grounds that he would be considered too old to deserve treatment.

"I don't know for sure," said Grassley. "But I've heard several senators say that Ted Kennedy with a brain tumour, being 77 years old as opposed to being 37 years old, if he were in England, would not be treated for his disease, because end of life – when you get to be 77, your life is considered less valuable under those systems."

The degree of misinformation is causing dismay in NHS circles. Andrew Dillon, chief executive of the National Institute for Health and Clinical Excellence (Nice), pointed out that it was utterly false that Kennedy would be left untreated in Britain: "It is neither true nor is it anything you could extrapolate from anything we've ever recommended to the NHS."

Others in the US have accused Obama of trying to set up "death panels" to decide who should live and who should die, along the lines of Nice, which determines the cost-effectiveness of NHS drugs.

One right-leaning group, Conservatives for Patients' Rights, lists horror stories about British care on its website. An email widely circulated among US voters, of uncertain origin, claims that anyone over 59 in Britain is ineligible for treatment for heart disease.

The British embassy in Washington is quietly trying to counter inaccuracies. A spokesman said: "We're keeping a close eye on things and where there's a factually wrong statement, we will take the opportunity to correct people in private. That said, we don't want to get involved in a domestic debate."

A $1.2m television advertising campaign bankrolled by the conservative Club for Growth displays images of the union flag and Big Ben while intoning a figure of $22,750. A voiceover says: "In England, government health officials have decided that's how much six months of life is worth. If a medical treatment costs more, you're out of luck."

The number is based on a ratio of £30,000 a year used by Nice in its assessment of whether drugs provide value for money. Dillon said this was one of many variables in determining cost-effectiveness of medicines. He said of his body's portrayal in the US: "It's very disappointing and it's not, obviously, the way in which Nice describes itself or the way in which we're perceived in the UK even among those who are disappointed or upset by our decisions."

On Rupert Murdoch's Fox News channel, the conservative commentator Sean Hannity recently alighted upon the case of Gordon Cook, a security manager from Merseyside, who used superglue to stick a loose crown into his gum because he was unable to find an NHS dentist. The cautionary tale, which was based on a Daily Mail report from 2006, prompted Hannity to warn his viewers: "If the Democrats have their way, get your superglue ready."

The broader tone of the US healthcare debate has become increasingly bitter. The former vice-presidential candidate Sarah Palin last week described president Obama's proposals as "evil", while the radio presenter Rush Limbaugh has compared a logo used for the White House's reform plans to a Nazi swastika. Hecklers have disrupted town hall meetings called to discuss the health reform plans.

David Levinthal, a spokesman for the nonpartisan Centre for Responsive Politics, said the sheer scale of the issue, which will affect the entire trajectory of US medical care, was arousing passions: "It's no surprise you have factions from every political stripe attempting to influence the debate and some of those groups are certainly playing to the deepest fears of Americans. There's been a great deal of documented disinformation propagated throughout the country." Defenders of Britain's system point out that the UK spends less per head on healthcare but has a higher life expectancy than the US. The World Health Organisation ranks Britain's healthcare as 18th in the world, while the US is in 37th place. The British Medical Association said a majority of Britain's doctors have consistently supported public provision of healthcare. A spokeswoman said the association's 140,000 members were sceptical about the US approach to medicine: "Doctors and the public here are appalled that there are so many people on the US who don't have proper access to healthcare. It's something we would find very, very shocking."

US corporations squeezing more output from workers and paying lower wages

From World Socialist Web Site
By Patrick O’Connor
12 August 2009

US Labor Department data released yesterday showed productivity up 6.4 percent in the second quarter, the largest gain since 2003 and higher than economists’ forecasts of 5.5 percent. Over the same period, workers’ compensation fell sharply.

The Bureau of Labor Statistics explained that productivity—which measures hourly output per employee—increased “due to hours worked declining faster than output.”

In other words, big business is using the rise in unemployment to extract greater output from employed workers through speedup and other forms of intensified exploitation.

Nonfarm productivity rose 6.4 percent as a result of output declining by 1.7 percent and total hours worked plummeting 7.6 percent.

Data also showed that real hourly employee compensation fell by 1.1 percent in the second quarter, or by 2.2 percent on an annualized basis. The combined impact of declining wages and rising productivity brought unit labor costs down by a huge 5.8 percent in the three months from April to June.

In manufacturing, quarterly productivity rose 5.3 percent, a result of output falling by 9.9 percent and hours by 14.4 percent. In the durable manufacturing sub-category, the output and hours decline was even greater—16.5 percent and 19.6 percent respectively.

The recent productivity boost, unlike that seen in previous periods, has involved no developments in productive technique. Mark Vitner of Wells Fargo Bank told Dow Jones Newswire that the second quarter gain “is almost entirely the result of cost-cutting, not improved ways of producing goods and providing services.”

Several commentators frankly admitted that the productivity boost was the product of intensified pressure on the working class. In a comment for Dow Jones’ MarketWatch, Tom Bernis wrote: “Anybody lucky enough to hang onto his or her job in this recession is working flat out to keep it. That’s one take on the latest US productivity numbers...

“The severity of the recession has pushed the hours worked to levels not seen since the mid-1990s, even as units of output have risen nearly 40 percent. So, with the economy essentially in ‘idle,’ it takes far fewer workers to keep things moving than nearly a decade-and-a-half ago. That’s good news for profits, but not so good for the unemployed.”

Ian Shepherdson, chief domestic economist for High Frequency Economics, added: “These are spectacular numbers and help explain why so many recently reporting companies have beaten earnings estimates.”

Bloomberg News highlighted DuPont, the third-biggest US chemical company, which last month announced a better-than-anticipated $417 million second quarter profit. This was achieved after outlining a strategy to cut fixed costs by $1 billion, partly by laying off 2,500 permanent workers and 10,000 contractors. “Our aggressive actions to improve productivity and reduce costs across the company are paying off,” Chief Executive Officer Ellen Kullman declared.

According to Time magazine’s Justin Fox, a recent report by the Goldman Sachs portfolio strategy team compared current corporate profits with previous periods. In an extraordinary finding, the researchers concluded that if financial companies, auto producers and utilities are excluded, corporations in the S&P 500 index had higher profit margins during the worst of the current crisis than they did during any point of the mid-1980s economic boom.

This conclusion points to the class character of the Obama administration and the social interests being served by its policies.

The economic policies advanced by successive Democratic and Republican administrations over the last three decades produced significant productivity increases at the same time that average real wages stagnated or declined. This led to an unprecedented shift in national income distribution, away from wages towards corporate profits, massively increasing social inequality.

These tendencies are accelerating, with the Obama administration, on behalf of the major corporations and banks, advancing a sweeping economic restructuring agenda aimed at permanently driving down workers’ wages and conditions. Every aspect of the administration’s agenda—from the bailout of the banks, to mass layoffs and wage and benefit concessions in the auto industry, to sweeping cuts in health care for workers and retirees—is directed towards protecting the ruling elite’s wealth at the expense of the majority of the population.

Obama sent a clear signal to big business with the restructuring of the auto industry. The federally supervised bankruptcy of General Motors and Chrysler involved the destruction of large sections of each company’s productive capacity, the elimination of tens of thousands of jobs, and the imposition of wages and conditions equivalent to those last experienced in the industry in the 1930s. This set the stage for an economy-wide corporate offensive against jobs, wages, and conditions, the initial results of which are reflected in the latest productivity and labor cost data.

Sunday, August 9, 2009

Three more US banks collapse

From World Socalist Web Site

72 failures so far this year

By Patrick O’Connor
10 August 2009

US regulators closed another three banks last Friday: First State Bank and Community National Bank, based in Florida, and Oregon’s Community First Bank. The Federal Deposit Insurance Corporation (FDIC) is expected to pay out $185 million to cover closure costs and insured deposits for the three institutions. A total of 72 US banks have collapsed so far this year, up from 25 in all of 2008 and three in 2007.

Recent bank failures have highlighted the financial system’s unresolved toxic asset crisis. An estimated $2 trillion in bad debt remains on the banks’ books, with banks refusing to write down or sell assets whose real worth is only a small fraction of their nominal value. Compounding many banks’ problems is the ongoing contraction in economic activity, which, in turn, is rebounding on the financial sector. A collapse in the commercial real estate market is now widely feared.

At the end of the first quarter this year, the FDIC listed 305 unnamed institutions with a combined asset value of $220 billion as “problem banks” at risk of collapse.

Smaller regional banks have been among the first to go under. Of the latest collapses, Community National Bank had assets of $97 million and deposits of $93 million, Community First Bank had $209 million in assets and $182 million in deposits, and First State had $463 million in assets and $387 million in deposits. These figures pale in comparison to the trillion dollar holdings of the largest US banks.

The elimination of many smaller institutions is in line with the strategy of the biggest banks, aided by the Obama administration, to utilize the economic crisis to engineer a sweeping reorganization of the banking and financial system, concentrating greater market share and economic power in the hands of a few giant firms. The Troubled Asset Relief Program (TARP) and other bailout measures overseen by the Obama administration and the Federal Reserve have enabled firms such as Goldman Sachs and JP Morgan Chase to reap record or near-record profits—and reward their leading personnel with bonuses as big or bigger than the multi-million-dollar payouts that preceded the crash of 2008. This is in part due to the elimination of major rivals such as Bear Sterns, Merrill Lynch, Washington Mutual and Lehman Brothers.

In the banking sector, the FDIC is playing the central role in the consolidation drive that aims at creating a network of mega-banks.

This year’s string of bank collapses has cost the federal insurance fund more than $15 billion in insured deposits and other expenses. As a result, the fund is 75 percent under its statutory minimum balance.

To help make up the shortfall, a fee has been levied on member banks, further eating into the limited revenues of many smaller institutions. The Baltimore Business Journal recently noted the case of Maryland’s Sandy Spring Bank, which on July 23 reported second quarter losses of $1.5 million after paying an FDIC surcharge of $1.7 million. Additional levies are expected later in the year.

At the same time, the FDIC is selling failed banks to larger institutions at bargain prices—and in many cases with a no-loss guarantee on bad debts. “Cleaning up after bank failures is one chore you won’t hear bankers complaining about,” Fortune magazine noted in an article last month, which highlighted the FDIC’s so-called loss-sharing agreements. “It’s this provision—capping the acquirer’s losses at the expense of the fund—that is most alluring.”

Throughout the economic crisis, the Obama administration’s central imperative has been to protect the interests of the financial elite by placing virtually unlimited public funds at its disposal.

The Federal Reserve has enacted a series of measures—without either public discussion or congressional authorization—to funnel public monies to leading banks and financial institutions. The Financial Times last week noted the highly favorable terms granted to securities traders by the Fed, which has emerged as one of the financial sector’s biggest customers.

Citing officials and industry executives, the newspaper concluded: “Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties.”

Major banks are also set to collect nearly $1 billion in fees from the Fed for their role in breaking up the failed insurance giant American International Group (AIG). The Wall Street Journal, which calculated the figure, noted that this “would represent one of Wall Street’s biggest pay days.” Morgan Stanley, set to collect up to $250 million, is among the largest beneficiaries. Goldman Sachs, Bank of America, and JPMorgan Chase are also expected to cash in through advisory services and underwriting assignments.

AIG stock rose 18 percent last Friday after the insurer and financial services company—now 80 percent government-owned—reported an unexpected second quarter profit of $1.82 billion. The profit was AIG’s first since late 2007. Executives reported that it was due to parts of its business stabilizing as well as a favorable accounting change.

AIG also announced that it was paying $249 million in so-called retention bonuses to executives for the second half of 2009. This includes $93 million for its Financial Products division, whose speculation in derivatives led to the company’s near-collapse last year and a $173 billion government bailout. The firm’s entire retention program is set to cost more than $1 billion over the next three years.

The announcement, made just five months after the public furor over AIG’s bonus payments to those responsible for bankrupting the company, bore a provocative character and reflected the brazenness of the financial oligarchy. Late last month, a report issued by New York’s attorney general showed that nine leading banks and financial institutions receiving government bailout money paid out bonuses totaling $33 billion last year. Six of the nine paid out more in bonuses than they made in profits. (See: “Billions in bonuses for bailed-out bankers”)

One of the firms listed in the report, Wells Fargo Bank, last week announced that it was awarding its four senior executives pay rises of between 400 to 600 percent. CEO John Stumpf will now receive a $900,000 base salary and $4.7 million in company stock. The massive salary increases are designed to evade federal rules limiting bonus payments for companies holding TARP bailout money. These mandated limits, as Wells Fargo has now demonstrated, were never more than token measures promoted by Democratic congressmen as a means of covering themselves in the face of mounting public anger.

The socially destructive activities of the banks and financial institutions are continuing to inflict severe hardship on broad sections of the population.

Credit for consumers and small business owners remains either unavailable or too expensive. The Federal Reserve reported Friday that consumer credit in the US declined in June for the fifth straight month. Banks have also hiked their fees and charges, disproportionately affecting low-income earners.

The Financial Times yesterday reported that research company Moebs Services found US banks stood to collect $38.5 billion in customer overdrafts this year. “The crisis has prompted many banks to lift charges on overdrafts and credit cards in order to boost profits,” the Financial Times noted. “The most cash-strapped customers are the hardest hit by such fees, with 90 percent of overdraft revenues coming from 10 percent of the 130 million checking accounts in the US. Regular use of overdrafts is most common among consumers with low credit scores, Moebs discovered.”

While the major banks, bolstered by trillions of dollars in government cash and subsidies, are reporting higher earnings, American workers are suffering a drastic fall in wages. Commerce Department data released August 4 showed a 4.7 percent fall in wages and salaries in the twelve months to June—the largest decline since records began in 1960. Data also showed reduced personal income and consumer spending.

Edmund Phelps, a Nobel Prize-winning economist at New York’s Columbia University, responded to the Commerce Department figures by telling Bloomberg Television: “Households are going to have to do an awful lot of rebuilding of their wealth. Even if that rebuilding goes on at a pretty good clip, it will take 12 or 15 years for households to get to the wealth level that they had several years ago.”

Anarchist Jeff Monson could face jail time

From Infoshop

Anarchist grappler and MMA fighter Jeff Monson could face jail time over an alleged November 2008 graffiti incident on the Capitol Building and an army recruitment centre in Olympia, Washington, USA. Monson, who has used his high-profile to discuss anarchist politics, was arrested initially in January. Authorities claim that the graffiti, which included circle-As, a peace symbol and phrases such as "no poverty" and "no war", cost a ridiculous $19,000 to clean-up.

Professional MMA fighter and anarchist Jeff Monson faces potential jail time when sentenced this October in connection to a graffiti incident in November 2008.

Anarchist grappler and MMA fighter Jeff Monson could face jail time over an alleged November 2008 graffiti incident on the Capitol Building and an army recruitment centre in Olympia, Washington, USA. Monson, who has used his high-profile to discuss anarchist politics, was arrested initially in January. Authorities claim that the graffiti, which included circle-As, a peace symbol and phrases such as "no poverty" and "no war", cost a ridiculous $19,000 to clean-up.

Monson has used fight press-conferences to criticise the US military presence in Iraq, and has been vocal about his wish to see the state and class society abolished. Monson had been involved with IWW in his home state, and earlier this year, took time out before his fight at Cage Wars in Belfast to talk to local anarchists and fight fans about sport and politics. In previous years Jeff has met with anarchists in Manchester Solidarity Federation and CNT-Vignoles in Paris.

In court on July 29, Monson, currently on a seven-fight winning streak after defeating Jimmy Arbriz last month, pleaded guilty to malicious mischief in the Capitol Building case (which itself carries a maximum penalty of a $20,000 fine and 10 years jail) and entered an ‘Alford plea’ for graffiti at the Lacey armed services recruitment centre. An Alford plea means he maintains he did not commit the graffiti act but acknowledges that enough evidence exists that would convince a jury. Prosecutors are recommending Monson pay a fine of $21,894 in restitution as part of the plea deal, and serve a 90-day jail sentence. Sentencing is scheduled for October 1st.

Travelers strike blow at blockade of Cuba

From Worker's World

Published Aug 9, 2009 1:01 PM

Buffalo, N.Y.—Some 300 people who traveled to Cuba on a trip with the Venceremos Brigade, Pastors for Peace, U.S./Cuba Labor Exchange and Africa Awareness struck a blow against the U.S. blockade of Cuba when they crossed back into the U.S. via both New York and Texas on Aug. 3. They marched, danced and chanted as they declared openly that they had traveled to Cuba.

At a welcoming picnic organized by local Buffalo, N.Y., activists, including members of the International Action Center, Buffalo City Council representatives declared their support and solidarity with ending the U.S. blockade of Cuba and defended both travel challengers and the Cuban people’s right to determine their own system.

In Cuba, the two travel groups had met with the families of the Cuban Five, political prisoners in U.S. custody for a decade now. The travelers pledged to multiply efforts to free the five Cuban heroes and win visitation rights for their family members, particularly Olga Salanueva and Adriana Perez.

There was a marked difference in U.S. federal officials’ attitude to the delegations this year, showing that the travel ban has been defeated on the ground. Now is the time to end the laws blockading revolutionary socialist Cuba!

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Contractor held for murder of fellow Briton and Australian in Baghdad

• ArmorGroup Iraq says two staff died in 'firearms incident'
• Suspect could be first westerner to face Iraqi murder trial

A British contractor has been arrested in Iraq on murder charges after two of his colleagues, one of them a fellow Briton, were shot dead in the Green Zone in Baghdad this morning. Iraqi officials allege that Daniel Fitzsimons killed a British contractor, Paul McGuigan, and an Australian colleague, Darren Hoare, and wounded an Iraqi translator. He could face the death penalty if found guilty.

An interior ministry spokesman, Major General Abdul-Kareem Khalaf, said the men had been drinking earlier in the day inside the heavily defended area, which is sealed off from the rest of the capital, when an argument broke out and Fitzsimons allegedly fired on the others.

"He tried to run away but he was then arrested. He's now in Iraqi police custody and he will be tried under Iraqi law, which could result in execution," Khalaf said.

A second British national detained for questioning was later released.

Patrick Toyne-Sewell, a spokesman for the company involved, ArmorGroup Iraq, said McGuigan and Hoare died "in a firearms incident" and their families had been informed. "We are working closely with the Iraqi authorities to investigate the circumstances of their deaths," he added.

Fitzsimons is understood to be an experienced ArmorGroup operative who had recently returned to Iraq after taking a break. The men were employed as bodyguards on a US-funded programme to protect local government officials.

It is the second killing in the Green Zone involving contractors in less than three months. In May, James Kitterman, who ran a construction firm based in the zone, was found blindfolded, bound and stabbed in his car. Five US security contractors were arrested by Iraqi authorities, but later released and no charges have been brought in that case.

In the past six years, the Green Zone has become home to thousands of security contractors and businessmen, most of whom operate from compounds behind rows of grey fortified concrete walls that line most streets.

The remains of Saddam Hussein's once opulent palaces pepper the landscape, as do embassies and shipping containers, from where bootleg liquor is sold along with paramilitary clothing and supplies. Their customers are mostly ex-military and often tribal in attitude. Former army unit flags and company colours often line the walls of makeshift bars and, in the past six anarchistic years, disputes have regularly been settled with fists.

Qassim al-Moussawi, a military spokesman, told the Associated Press that the latest incident allegedly began as a "squabble". He said: "The suspect is facing a premeditated murder charge. The matter is now in the hands of Iraqi justice."

A spokeswoman for the Foreign Office said: "We are aware of an incident involving British nationals in Baghdad. The Iraqi police are investigating."

Fitzsimons could be the first westerner to face an Iraqi trial on murder charges since a new security pact took effect on 1 January. The pact, which replaced the UN mandate for foreign forces, lifted the immunity that had been enjoyed by foreign contractors in Iraq for much of the last six years since the overthrow of Saddam's regime.

The new security pact was provoked by outrage over a shooting in Baghdad in September 2007 involving another security firm, Blackwater Worldwide, now known as Xe. The agreement also set a timeline for the withdrawal of American forces from urban areas by the end of this month, and from the entire country by 2012.

ArmorGroup, which was bought last year by G4S, the world's largest security services provider, has some 1,000 foreign workers in Iraq, together with a local staff of about 750. Toyne-Sewell said the company had "an exemplary track record" in the country. It has earned more than £68m since early 2007 from Foreign Office contracts in Iraq and Afghanistan – more than any of its rivals.

Banks make $38bn from overdraft fees

Repeat after me. Bankers are the scum of the earth. they are thieves who rob you with sneaky words that would make a post-modern academic squirm.

By Saskia Scholtes and Francesco Guerrera in New York

Published: August 9 2009 22:52 | Last updated: August 9 2009 22:52

US banks stand to collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s, according to research. The fees are nearly double those reported in 2000.

The finding is likely to increase public hostility towards the financial sector, which has been under political pressure to ease the burden on consumers by increasing credit availability and lending more fairly after being bailed out by taxpayers.

Continue reading at:

Saturday, August 8, 2009

US payrolls fell another quarter-million in July

From World Socialist Web site

As long-term joblessness soared

By Patrick Martin
8 August 2009

The US economy shed another 247,000 jobs in July, the Labor Department reported Friday, marking the 19th consecutive month that nonfarm payrolls declined.

Manufacturing employment fell by 52,000, service employment fell 119,000, construction employment fell 76,000, and retail trade fell 44,000. There were small payroll increases in government, tourism and healthcare.

Of the 271 industries tracked by the Labor Department, 70 percent are cutting jobs, while only 30 percent are adding jobs or maintaining existing employment. That figure is an improvement from the 80 percent cutting jobs during the first quarter of 2009, but still indicates an economy mired in a deep recession.

The official unemployment rate actually dropped slightly, from 9.5 percent in June to 9.4 percent, but this actually reflects an aspect of the worsening job market, not an improvement. Some 422,000 unemployed people gave up looking for work in July and were no longer counted officially as jobless. The proportion of the adult population with jobs actually fell from 59.5 percent in June to 59.4 percent in July.

The unemployment rate was much higher for the traditionally more vulnerable groups: 12.3 percent for Hispanics, 12.6 percent for single mothers, 14.5 percent for African-Americans, 23.8 percent for teenagers.

The manufacturing decline was somewhat steeper than shown by the Labor Department figure, due to another statistical aberration. The agency reported that jobs in auto production increased by 28,000, on a seasonally adjusted basis, despite the virtual collapse of the industry. Keith Hall, commissioner of the Bureau of Labor Statistics, explained, “Because layoffs in auto manufacturing already had been so large, fewer workers than usual were laid off for seasonal shutdowns in July.”

The White House, Wall Street and the corporate-controlled media lauded the jobs numbers as a signal that the economic slump in the United States has bottomed out. President Obama went before television cameras barely an hour after the numbers were released, pointing to the overall unemployment rate and the slower pace of job losses, from 700,000 in January to 467,000 in June and 247,000 in July.

It is only by comparison to the past eight months that July’s number could be portrayed as “hopeful.” In any year before the present, there would have been no White House photo-op to celebrate such a dismal employment report.

The stock market surged Friday to a new 2009 high. But the nearly 50 percent rise in the Dow Jones average since March is due not to a recovery in the labor market or the broader economy, but rather to the multitrillion-dollar bailout of the banks and financial institutions by the US Treasury.

Despite the statistical oddity of a drop in the unemployment rate, both the actual number of jobless workers and the duration of unemployment are increasing. The US economy has lost some 6.7 million jobs since the official start of the recession in December 2007.

According to Labor Department figures, 14.5 million Americans were out of work in July, another 8.8 million were working only part-time when they wanted full-time work, and 2.3 million had become “discouraged” and were no longer looking for work. This brings the combined total of unemployed and underemployed to 25.6 million, or 16.3 percent of the work force.

Long-term unemployment continues to rise month by month. According to the Economic Policy Institute web site, the number of workers unemployed for more than six months increased by 584,000 in July to nearly 5 million, so that now one third of those officially unemployed have been out of work more than half a year, a record since such data was first collected in 1948. The number of long-term unemployed has jumped from 2.6 million in February to 4.9 million in July, an increase of nearly 90 percent in only five months.

As of July 25, 6.31 million people were collecting long-term unemployment benefits, according to Labor Department data. All told, about 9.9 million people were collecting some form of unemployment benefits in the week of July 18. It was reported earlier this week that tens of thousands of workers are already running out of extended benefits, and by the end of the year that number will rise to 1.5 million.

The Labor Department reported Thursday that 550,000 workers filed new claims for unemployment compensation in the week ended August 1, a drop of 38,000 from the previous week, but still far above the 250,000 to 300,000 figure that typically characterizes a stable US labor market. Among states in the industrial Midwest, the jobs crisis was reflected in Wisconsin, which reported that initial jobless insurance claims through last week were 80 percent higher than at the same point last year.

The Obama administration’s response to the unemployment figures demonstrates again that its real constituency is Wall Street and the financial aristocracy, not working people. Obama declared in his brief appearance—without taking questions—that the jobless figures showed “the worst may be behind us” and “today, we’re pointed in the right direction.”

“We’ve rescued our economy from catastrophe,” he said, referring to the bailout of the banks. He hailed the run-up on the stock exchange, while trying to put a populist spin on it, saying that “a rising market is restoring value to those 401(k)s that are the foundation of a secure retirement.”

In fact, retired workers are being systematically robbed—like tens of thousands of General Motors retirees cut off from medical benefits and facing drastically reduced pensions—but Wall Street is celebrating higher stock prices with huge bonuses.

The actual direction of the US economy is reflected in reports that GM is expected to announce another 7,500 layoffs because too few workers accepted early retirement or buyout packages. An even bigger job cut is looming at the US Postal Service, which has already eliminated 27,000 jobs over the past year. USPS officials went before a Senate committee Thursday to propose the elimination of Saturday delivery and the closure of at least 700 post offices.

There was also a plunge in July retail sales figures, down 5.1 percent from June. There were sharp drops at Abercrombie & Fitch, Gap, JC Penney and Macy’s, and even sharper declines at some of the upscale retailers. This reflects the growing economic distress among broad sections of the population.

Meanwhile, the bankrupt insurance giant AIG revealed that it has set aside $249 million for “retention bonuses” for executives for the second half of 2009. This includes $93 million for AIG’s Financial Products division, whose speculation in derivatives led to the company’s near-collapse last year and a federal bailout of more than $182 billion.

Thursday, August 6, 2009

Stocks, profits up—Jobs, income down

From World Socialist Web Site

Whose recovery?

6 August 2009

As the Obama administration and the corporate-controlled media tout the supposed signs of an economic recovery, American workers confront a worsening job market, declining real incomes, and the spread of poverty and social deprivation on a scale not seen since the 1930s.

The New York Stock Exchange cracked the 9,000 mark on the Dow-Jones Industrial Average in late July for the first time since January 2, profits for banks and other financial institutions are up, and Wall Street has begun a new round of seven-, eight- and even nine-figure bonuses, with $100 million set aside by Citigroup to reward a single trader in energy futures.

The moneyed elite suffered a severe scare, particularly in the period between September 15, 2008, when Lehman Brothers collapsed, and March 6, 2009, when the Dow hit a low of 6,547. The all-out mobilization of US government financial resources behind Wall Street, with a total potential liability of $23.7 trillion, has at least temporarily restored confidence in the financial markets and pushed stocks up 40 percent. But there has been no bailout for working people.

Unemployment has surged to a 27-year high, with the Labor Department expected to announce another new high Friday for the month of July, approaching an official figure of 10 percent out of work. The consultant firm Challenger, Gray & Christmas reports that big US companies announced 31 percent more layoffs in July than in June. The 97,373 job cuts announced in July brought the total this year to 994,048, 72 percent more than in the same period in 2008.

The payroll firm ADP reported Wednesday that private employers overall cut 371,000 jobs in July, which the company called a “notable improvement,” since it was the smallest such total since last October. But ADP warned, “despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months, albeit at a diminishing rate.”

On top of outright layoffs, employers have imposed wage cuts (20 percent of big companies, according to a recent survey) and shorter working hours or furloughs (another 16 percent, by the same study). The combined impact on working class living standards is devastating. The Labor Department reported Tuesday that personal income fell in June by 1.3 percent, the largest drop in four years.

An even more ominous measure was the Labor Deployment’s Employment Cost Index, which includes health benefits and 401(k) contributions as well as wages. It showed a 1.8 percent rise for all workers, private and public, in the second quarter of 2009, compared to the year before, well below the rise in consumer prices.

For private-sector workers, the rise of only 1.5 percent was the smallest yearly increase since the government began collecting these statistics in 1980. Benefits for private sector workers were particularly hard hit, up at an annual rate of less than 1 percent—meaning that workers are bearing nearly the entire burden of soaring health care costs, which rose 10.6 percent in 2008.

A study reported in the New York Times Tuesday pointed to longer-term effects of mass unemployment on incomes and consumer spending. It found the long-term earnings of workers who lost their jobs in the recession of the early 1980s—the deepest slump since World War II, until the current one—never recovered to pre-layoff levels.

The study by Columbia University Professor Till von Wachter found that “even 15 to 20 years later, most on average had not returned to their old wage levels. He also concluded that their earnings were about 15 percent to 20 percent less than they would have been had they not been laid off.”

The slide in jobs and incomes, with its devastating impact on spending for consumer goods, undercuts the prospects for a significant upturn in actual production—as opposed to the parasitic and socially retrograde operations of the financial markets. The service sector, by far the largest component of the US economy, declined in June, according to Wednesday’s report by the Institute for Supply Management.

The ISM index, in which 50 marks the boundary between a shrinking and a growing economy, fell from 47 to 46.4. June was the tenth straight monthly reading below 50. Manufacturing activity was up 0.4 percent, but much of that was the result of higher prices for the products of oil refineries.

As for the housing market, where runaway financial speculation helped trigger the collapse, there was a slight slowing of the plunge in housing prices, and sales of new homes have leveled off. But the long-term outlook can only be described as catastrophic. A Deutsche Bank study issued Wednesday predicted that the percentage of US homeowners owing more than their house is worth on the market will leap from 26 percent in March of this year to 48 percent in 2011. In other words, about half of all US homeowners will be “underwater.”

When Obama & Co. boast of a recovery, they are speaking not about the vast majority of the American population. They are talking about a recovery of profitability for Wall Street and the corporate elite, who are their real masters.

More than any previous administration in US history, the Obama administration is pursuing an openly class-based economic policy. Having shoveled trillions of dollars into the coffers of the banks and other financial institutions, the administration is now proclaiming the virtues of austerity and “fiscal discipline” when it comes to programs like Social Security, Medicare and Medicaid, on which tens of millions of working people and the retired depend.

The disparity between the vast sums plundered by the financial elite and the token amounts offered to working people was on display Wednesday as Obama visited Elkhart, Indiana, an industrial city battered by the slump, with an unemployment rate topping 16.8 percent. He announced $2.4 billion in federal contracts to GM and other companies to make components for a future electric car, spread over locations in 25 states. This is exactly one-one thousandth of the amount already pledged by the Treasury and the Federal Reserve Board to insure the profits and bonuses of the Wall Street oligarchy.

Every aspect of government policy, from the bank bailout to the restructuring of the health care system, serves the same class purpose: to boost the wealth and profits of the ruling elite at the expense of the vast majority of the American people. The “recovery” hailed by the spokesmen for big business is a permanent reduction in the living standards of the working class and the destruction of what little remains of a social safety net. This is the deliberate and conscious aim of the Obama administration.

Patrick Martin

Germany: 6 million unemployed

From World Socialist Web Site

By Dietmar Henning
6 August 2009

In Germany, the real rate of unemployment has risen to nearly 6 million. This figure is approximately 2.5 million more than the official figure.

Unemployment is one of the main indicators of the extent and consequences of the economic crisis for the working population. Official job statistics in Germany have been doctored for years precisely to disguise the real extent of unemployment and corresponding levels of poverty.

“The German economy is in the severest recession since the founding of the Federal Republic,” declared the Federal Labour Agency (BA). The economic crisis has left “clear traces on the job market.” The fact that the increase in the unemployment rate slowed in July, when seasonal factors were taken into account, “cannot be evaluated as a trend reversal.”

The number of registered unemployed rose in June by 52,000 to a total of 3,460,000. This is an increase of 250,000 compared to one year ago. Taking into account seasonal adjustments, unemployment in Germany increased by around 6,000 in July.

The latest unemployment figures mean that the official rate has risen to 8.2 percent throughout Germany. In east Germany, the rate is significantly higher at 13 percent. Immigrant workers are especially hard hit, their level of unemployment at nearly 17 percent.

“Seasonally adjusted” means that many redundancies resulting from the current economic crisis can be blended out of the unemployment statistic on the basis of seasonal influences. Many employers—e.g., in the construction industry—seek to save on costs by dismissing their staff over the summer and re-employing them some months later. There are many indications, however, that this year many such workers will not be re-employed.

The BA was forced to concede that the relative slowdown in the unemployment rate in July was primarily linked to a “reorientation of the related labour-market policy instruments.” Without such a “reorientation,” unemployment would have risen by about 30,000—also on a “seasonally adjusted” basis.

In fact, this “reorientation” involves the cancellation of a number of current BA schemes and a change in criteria, which means that many existing unemployed persons no longer appear in the statistics.

Since the start of the year, 370,600 unemployed have been transferred into new “measures for activation and vocational integration” and are not officially regarded as unemployed.

In addition, the following groups are also not included:

• 176,000 unemployed undertaking a short training programme or who have been declared incapable of work.
• 658,000 persons seeking work who are engaged in government-subsidised “one-euro jobs,” retraining programmes, or older workers in early retirement.
• 232,000 unemployed who have terminated their unemployment by setting up their own small businesses or older workers carrying out part-time work.

Other groups are also not counted. Unemployed workers over the age of 58 who have received unemployment benefit II (Hartz IV), but have not received a job offer, are excluded. Unemployed persons who do not receive unemployment benefit because they have failed to fulfill the extensive criteria for such payments are also not included. There are many reports demonstrating that job authorities are making excessive demands on the unemployed in order to save on benefit payments.

Workers on reduced hours are also excluded from the statistic. It is this total, however, that gives a clear indication of the true extent of the contraction of production and permits conclusions to be drawn on the threat of increased unemployment in the autumn.

According to the latest figures, which give details for March, around 1.3 million workers were working reduced “short time” hours and receiving 67 percent of their normal wages. There are no official figures for more recent months, but many more workers have been put on short time recently and the total is increasing.

This means that a total of nearly 6 million persons are unemployed or underemployed in Germany. “In July, 5,982,000 employable persons received wage compensations [unemployment pay I] or payments to cover living costs [unemployment pay II] in July 2009,” the BA writes in its monthly report. But only about half of them are officially counted as unemployed. In March (i.e., the most recent data), 6.1 million received payments from the BA, of which just 53 percent were officially registered as unemployed.

The government is desperately trying to disguise the real extent of the crisis by extending the period in which short-time working subsidies can be paid from the current time span of 6 months to 24. It is likely that after the federal elections on September 27, many companies will finally announce their plans for dismissals. At that point, unemployment will again rise drastically.

Due to the extent of short-time working and an increase in demand for unemployment benefits, the Federal Labour Agency anticipates a deficit of more than €16 billion this year, growing to €20 billion next year. The government has, however, stipulated that the contribution for unemployment insurance—paid on a fifty-fifty basis by worker and employer—be restricted to 2.8 percent of gross wages up until 2010 in order to assist employers. The mounting deficits for the BA will be paid for by the unemployed in the form of future cuts to their benefits.

Following the September election, regardless of who wins, cuts will be implemented that far exceed the vicious anti-welfare Hartz reforms and the Agenda 2010 introduced by the former government of Social Democratic Party chancellor Gerhard Schröder.

Blackwater founder implicated in murder

From Socialist worker

Independent journalist Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army [1], documents new revelations about the shadowy mercenary company and its founder Erik Prince.

A FORMER Blackwater employee and an ex-U.S. Marine who has worked as a security operative for the company have made a series of explosive allegations in sworn statements filed August 3 in federal court in Virginia.

The two men claim that the company's owner, Erik Prince, may have murdered or facilitated the murder of individuals who were cooperating with federal authorities investigating the company. The former employee also alleges that Prince "views himself as a Christian crusader tasked with eliminating Muslims and the Islamic faith from the globe," and that Prince's companies "encouraged and rewarded the destruction of Iraqi life."

In their testimony, both men also allege that Blackwater was smuggling weapons into Iraq. One of the men alleges that Prince turned a profit by transporting "illegal" or "unlawful" weapons into the country on Prince's private planes. They also charge that Prince and other Blackwater executives destroyed incriminating videos, e-mails and other documents and have intentionally deceived the U.S. State Department and other federal agencies. The identities of the two individuals were sealed out of concerns for their safety.

These allegations and a series of other charges are contained in sworn affidavits, given under penalty of perjury, filed late at night August 3 in the Eastern District of Virginia as part of a 70-page motion by lawyers for Iraqi civilians suing Blackwater for alleged war crimes and other misconduct.

Susan Burke, a private attorney working in conjunction with the Center for Constitutional Rights, is suing Blackwater in five separate civil cases filed in the Washington, D.C., area. They were recently consolidated before Judge T.S. Ellis III of the Eastern District of Virginia for pretrial motions. Burke filed the August 3 motion in response to Blackwater's motion to dismiss the case. Blackwater asserts that Prince and the company are innocent of any wrongdoing, and that they were professionally performing their duties on behalf of their employer, the U.S. State Department.

The former employee, identified in the court documents as "John Doe #2," is a former member of Blackwater's management team, according to a source close to the case. Doe #2 alleges in a sworn declaration [2] that, based on information provided to him by former colleagues, "it appears that Mr. Prince and his employees murdered, or had murdered, one or more persons who have provided information, or who were planning to provide information, to the federal authorities about the ongoing criminal conduct."

John Doe #2 says he worked at Blackwater for four years; his identity is concealed in the sworn declaration because he "fear[s] violence against me in retaliation for submitting this Declaration." He also alleges, "On several occasions after my departure from Mr. Prince's employ, Mr. Prince's management has personally threatened me with death and violence."

In a separate sworn statement [3], the former U.S. Marine who worked for Blackwater in Iraq alleges that he has "learned from my Blackwater colleagues and former colleagues that one or more persons who have provided information, or who were planning to provide information about Erik Prince and Blackwater, have been killed in suspicious circumstances."

Identified as "John Doe #1," he says he "joined Blackwater and deployed to Iraq to guard State Department and other American government personnel." It is not clear if Doe #1 is still working with the company as he states he is "scheduled to deploy in the immediate future to Iraq." Like Doe #2, he states that he fears "violence" against him for "submitting this Declaration." No further details on the alleged murder(s) are provided.

"Mr. Prince feared, and continues to fear, that the federal authorities will detect and prosecute his various criminal deeds," states Doe #2. "On more than one occasion, Mr. Prince and his top managers gave orders to destroy e-mails and other documents. Many incriminating videotapes, documents and emails have been shredded and destroyed."

The Nation cannot independently verify the identities of the two individuals, their roles at Blackwater or what motivated them to provide sworn testimony in these civil cases. Both individuals state that they have previously cooperated with federal prosecutors conducting a criminal inquiry into Blackwater.

"It's a pending investigation, so we cannot comment on any matters in front of a grand jury, or if a grand jury even exists on these matters," John Roth, spokesperson for the U.S. Attorney's office in the District of Columbia, told the Nation. "It would be a crime if we did that."

Asked specifically about whether there is a criminal investigation into Prince regarding the murder allegations and other charges, Roth said: "We would not be able to comment on what we are or are not doing in regards to any possible investigation involving an uncharged individual."

The Nation repeatedly attempted to contact spokespeople for Prince or his companies at numerous e-mail addresses and telephone numbers. When a company representative was reached by phone and asked to comment, she said, "Unfortunately no, one can help you in that area." The representative then said that she would pass along The Nation's request. As this article goes to press, no company representative has responded further to The Nation.

- - - - - - - - - - - - - - - -

DOE #2 states in the declaration that he has also provided the information contained in his statement "in grand jury proceedings convened by the United States Department of Justice."

Federal prosecutors convened a grand jury in the aftermath of the September 16, 2007, Nisour Square shootings in Baghdad, which left 17 Iraqis dead. Five Blackwater employees are awaiting trial on several manslaughter charges and a sixth, Jeremy Ridgeway, has already pleaded guilty to manslaughter and attempting to commit manslaughter, and is cooperating with prosecutors. It is not clear whether Doe #2 testified in front of the Nisour Square grand jury or in front of a separate grand jury.

The two declarations are each five pages long and contain a series of devastating allegations concerning Erik Prince and his network of companies, which now operate under the banner of Xe Services LLC. Among those leveled by Doe #2 is that Prince "views himself as a Christian crusader tasked with eliminating Muslims and the Islamic faith from the globe":

To that end, Mr. Prince intentionally deployed to Iraq certain men who shared his vision of Christian supremacy, knowing and wanting these men to take every available opportunity to murder Iraqis. Many of these men used call signs based on the Knights of the Templar, the warriors who fought the Crusades.

Mr. Prince operated his companies in a manner that encouraged and rewarded the destruction of Iraqi life. For example, Mr. Prince's executives would openly speak about going over to Iraq to "lay Hajiis out on cardboard." Going to Iraq to shoot and kill Iraqis was viewed as a sport or game. Mr. Prince's employees openly and consistently used racist and derogatory terms for Iraqis and other Arabs, such as "ragheads" or "hajiis."

Among the additional allegations made by Doe #1 is that "Blackwater was smuggling weapons into Iraq." He states that he personally witnessed weapons being "pulled out" from dog food bags. Doe #2 alleges that "Prince and his employees arranged for the weapons to be polywrapped and smuggled into Iraq on Mr. Prince's private planes, which operated under the name Presidential Airlines," adding that Prince "generated substantial revenues from participating in the illegal arms trade."

Doe #2 states: "Using his various companies, [Prince] procured and distributed various weapons, including unlawful weapons such as sawed off semi-automatic machine guns with silencers, through unlawful channels of distribution." Blackwater "was not abiding by the terms of the contract with the State Department and was deceiving the State Department," according to Doe #1.

This is not the first time an allegation has surfaced that Blackwater used dog food bags to smuggle weapons into Iraq. ABC News' Brian Ross reported [4] in November 2008 that a "federal grand jury in North Carolina is investigating allegations the controversial private security firm Blackwater illegally shipped assault weapons and silencers to Iraq, hidden in large sacks of dog food." Another former Blackwater employee has also confirmed this information to The Nation.

- - - - - - - - - - - - - - - -

BOTH INDIVIDUALS allege that Prince and Blackwater deployed individuals to Iraq who, in the words of Doe #1, "were not properly vetted and cleared by the State Department." Doe #2 adds that "Prince ignored the advice and pleas from certain employees, who sought to stop the unnecessary killing of innocent Iraqis."

Doe #2 further states that some Blackwater officials overseas refused to deploy "unfit men," and sent them back to the U.S. Among the reasons cited by Doe #2 were "the men making statements about wanting to deploy to Iraq to 'kill ragheads' or achieve 'kills' or 'body counts,'" as well as "excessive drinking" and "steroid use." However, when the men returned to the U.S., according to Doe #2, "Prince and his executives would send them back to be deployed in Iraq with an express instruction to the concerned employees located overseas that they needed to 'stop costing the company money.'"

Doe #2 also says Prince "repeatedly ignored the assessments done by mental health professionals, and instead terminated those mental health professionals who were not willing to endorse deployments of unfit men." He says Prince and then-company president Gary Jackson "hid from Department of State the fact that they were deploying men to Iraq over the objections of mental health professionals and security professionals in the field," saying they "knew the men being deployed were not suitable candidates for carrying lethal weaponry, but did not care because deployments meant more money."

Doe #1 states that "Blackwater knew that certain of its personnel intentionally used excessive and unjustified deadly force, and in some instances used unauthorized weapons, to kill or seriously injure innocent Iraqi civilians." He concludes, "Blackwater did nothing to stop this misconduct."

Doe #1 states that he "personally observed multiple incidents of Blackwater personnel intentionally using unnecessary, excessive and unjustified deadly force." He then cites several specific examples of Blackwater personnel firing at civilians, killing or "seriously" wounding them, and then failing to report the incidents to the State Department.

Doe #1 also alleges that "all of these incidents of excessive force were initially videotaped and voice recorded," but that "[i]mmediately after the day concluded, we would watch the video in a session called a 'hot wash.' Immediately after the hotwashing, the video was erased to prevent anyone other than Blackwater personnel seeing what had actually occurred." Blackwater, he says, "did not provide the video to the State Department."

Doe #2 expands on the issue of unconventional weapons, alleging Prince "made available to his employees in Iraq various weapons not authorized by the United States contracting authorities, such as hand grenades and hand grenade launchers. Mr. Prince's employees repeatedly used this illegal weaponry in Iraq, unnecessarily killing scores of innocent Iraqis."

Specifically, he alleges that Prince "obtained illegal ammunition from an American company called LeMas. This company sold ammunition designed to explode after penetrating within the human body. Mr. Prince's employees repeatedly used this illegal ammunition in Iraq to inflict maximum damage on Iraqis."

Blackwater has gone through an intricate re-branding process in the 12 years it has been in business, changing its name and logo several times. Prince also has created more than a dozen affiliate companies, some of which are registered offshore and whose operations are shrouded in secrecy. According to Doe #2, "Prince created and operated this web of companies in order to obscure wrongdoing, fraud and other crimes."

"For example, Mr. Prince transferred funds from one company (Blackwater) to another (Greystone) whenever necessary to avoid detection of his money laundering and tax evasion schemes." He added: "Mr. Prince contributed his personal wealth to fund the operations of the Prince companies whenever he deemed such funding necessary. Likewise, Mr. Prince took funds out of the Prince companies and placed the funds in his personal accounts at will."

Briefed on the substance of these allegations by the Nation, Rep. Dennis Kucinich replied, "If these allegations are true, Blackwater has been a criminal enterprise defrauding taxpayers and murdering innocent civilians." Kucinich is on the House Committee on Oversight and Government Reform and has been investigating Prince and Blackwater since 2004.

"Blackwater is a law unto itself, both internationally and domestically. The question is why they operated with impunity. In addition to Blackwater, we should be questioning their patrons in the previous administration who funded and employed this organization. Blackwater wouldn't exist without federal patronage; these allegations should be thoroughly investigated," Kucinich said.

A hearing before Judge Ellis in the civil cases against Blackwater is scheduled for August 7.

First published at [5].

Make corporations pay!

From Worker's World

Calif. budget cuts services, slashes jobs
Tax wealthy, oil profits, not workers and poor

Published Aug 5, 2009 5:52 PM

Due to the economic crisis hitting California so acutely, state legislators are dealing with what they say will be a $60-billion revenue loss projected through June 2010.

However, instead of trying to tap into many possible rich sources of funds, both the Democrats and Republicans came up with a budget that targets social services and the working class but not super-rich monopolies like the oil companies or the banks.

As July ended, the California Legislature approved draconian cutbacks that will even take food directly out of the mouths of children.

Although the state has always attempted to solve its financial crises on the backs of working and poor people, these cuts and their level of disproportionate takeaways from the working class are—like the economic crisis—unprecedented.

Two-thirds of the $15.5 billion in cuts affect public schools from grades K-12, colleges and universities. Another $1.3 billion will be taken from workers’ salaries by way of mandatory days off, or furloughs. Medi-Cal, which is California’s Medicaid program, will lose $1.3 billion.

Billions of dollars more will be taken from public assistance and health care programs for low-income children, elderly and disabled people. This includes cuts of In-Home Supportive Services. In addition, it will curtail services for women and children who have faced domestic violence.

The cuts to education from grades K-12 will drag California down from 46th to 48th place in state per-pupil spending.

While Gov. Arnold Schwarzenegger lauds this budget for not raising taxes on the rich or on wealthy corporations, the budget makers didn’t mind playing with the taxes of working people.

By increasing income tax withholdings from paychecks, the state can “borrow” $600 million in revenue early in the year and then pay it back, without interest, in the form of higher tax refunds or lower taxes next April.

Another trick used to balance the budget this year was to delay workers’ paychecks. The state will now get an extra $900 million by delaying state workers’ pay for another day, thus passing on the cost to the next fiscal year beginning July 1, 2010.

This is all without paying interest, like the additional plan to raise $1.7 billion by upping tax rates on those taxpayers making quarterly estimated payments for the first six months of the year. The state would adjust for the increase during the second half of the year, which would, in turn, lower revenue in the following fiscal year.

Workers forced to loan money to state

California workers, who are disproportionately affected by these policies and are already hurting from past cutbacks and job losses, are being forced to become lenders to the state. The workers, unlike the banks that have been bailed out with trillions of dollars, will not be able to collect interest on their loans.

In addition, local cities and counties and their agencies will see $3.2 billion of their funding taken by the state, supposedly to be paid back later.

Not only will this force local governments to make further infrastructure and social service cuts, it makes balancing the budget next year and in the future even more difficult, thus leading to even deeper cuts going forward.

This is also true with regard to cutbacks in children’s health care programs.

Even the politicians realize this saves nothing. Alberto Torrico, State Assembly majority leader, says: “The governor’s budget calls for taking one million kids off the healthy families program. That’s just foolish because those kids will end up in the emergency room, which will cost local government millions while the state loses the three or four dollars for every dollar we spend in federal matching funds.”

Unions protest wage cuts

The attack on workers’ wages is pushing the unions into a fight with legislators. A posting on the Web site of California Service Employees Local 1021 says:

“Governor Arnold Schwarzenegger and his band of loyal lawmakers proved they’re [decisive] with the budget cuts by taking healthcare from the sick and frail and every kind of care from the elderly; by closing schools so kids have nowhere to learn, and after-school programs so they have nowhere else to go. They closed the deficit by privatizing public services and throwing public servants under the bus, while taking money with impudence from those who remain. And if you thought these outcomes were shocking, here’s the most shocking thing of all: California lawmakers managed all of this without taxing corporations one single additional dime.” (

Why not tax Big Oil, banks?

Given that these cuts are so devastating and actually will make it more difficult to balance future budgets, why would the legislators ignore alternatives, like taxing the oil companies or going after the bailed-out banks?

State Senate President Pro Tem Darrell Steinberg, a Democrat, said their options were limited because they wanted to avoid new taxes without destroying the state’s social safety net.

Obviously, the Legislature’s priority was avoiding new taxes on the rich. They did that, but they ripped up the safety net.

Why avoid the obvious source of revenue?

Last year Exxon Mobil made record profits of more than $45 billion. Chevron made $24 billion. However, unlike all other oil-producing states in the U.S., California does not collect a severance tax on crude oil extractions made there.

According to the California Tax Reform Association, “California has the lowest total taxes on oil in the country by a substantial margin.” One study put the state’s 2008 effective corporate oil tax rate at only 3 percent. (

California is the third-largest producer of crude oil in the country. According to the state’s Energy Commission, the 240 million barrels extracted from the state annually could bring in $1 billion to $2 billion if it were taxed at 6 percent—a rate proposed in Proposition 87 in 2006. (Big Oil defeated it.)

Alternatively, if the state used the same extraction tax rate used by “anti-taxation” former Alaska Gov. Sarah Palin beginning in 2007, it would bring in $4 billion to $8 billion a year, depending on crude oil prices, which have fluctuated between $70 and $130 a barrel.

However, why stop there? Why not tax oil companies the way workers are taxed? Workers lose more than 30 percent of their wages in taxes, on average. This alone would generate much more than what is needed to cover the education cutbacks from grades K-12.

Like the yacht tax, which could have been a part of the budget, why wasn’t an oil severance or extraction tax included?

Money talks.

Exxon Mobil Corporation spent $150 million to defeat a severance taxation bill and also contributed heavily to candidates in California in 2007.

However, taxing oil companies is not the only solution that could have been tapped.

According to some estimates, even without any new loans, in three years the state will spend a record 6.1 percent of its budget just to service the debt it already has. Imagine how that equation would change if California could deduct from the interest it pays banks the money it has already paid out to them in bailouts.

This would take a political fight, but the governor’s rationale in passing these budget cuts was that California is in a state of emergency. Why should that justify taking the property, livelihood and very lives of the workers, while not touching the bosses?

Organize community-labor alliance

The union movement waged a campaign to fight these cuts. Unions organized protests from Los Angeles to Sacramento. However, a community/labor alliance must be organized to meet this unprecedented assault and expose further this blatant betrayal by elected officials, whether Republican or Democrat.

California labor/community participation in the G-20 jobs summit in Pittsburgh on September 20-26 could be a big part of building that fightback.

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