Jul 312013
 

Posted by SnakeArbusto and greydogg, 99GetSmart

Not_facebook_dislike_thumbs_down

Submitted by Turkish political analyst / blogger, Gürkan Özturan, from Istanbul:

Transportation Minister Binali Yildirim had announced some weeks ago that Twitter did not respond positively to a “cooperation” agreement to determine and spot those who get involved in “criminal activities” by expressing their views online. This statement’s rhetoric would make any reader feel that Facebook is cooperating with the Turkish government, and it was Twitter that was declared a menace to society by Prime Minister Erdogan. The flow of information and the pace at which news spread nationally as well as internationally must have been felt deeply, and initially it was the Metropolitan Mayor of Istanbul Kadir Topbas who requested that the Gezi Park protesters tweet in English saying that “everything is fine in Istanbul and life is back to normal.”

Not long after this “request” came threats and rumors that opposition pages would be closed down on Facebook as soon as possible but definitely before the elections – mainly citizen journalism, leftistKurdishAlevi religious or LGBT pages. Although one might not want to believe in this possibility, apparently it was true that dozens of pages that reflect an alternative to the government’s rhetoric on the Internet have been closed down for no valid reason (the reason given for the closing down of some news sources was that they share pornographic content).

In order to protest this process of silencing opposition voices on Facebook, many users have been involved in a series of digital protests mainly involving twitter hashtags, penguin spamming (of Facebook’s official page), ad boycotting, and lastly a 24-hour account deactivation boycott on July 21. Even after these actions, Facebook does not seem to have heard the voice of the Turkish opposition and repeatedly closes down reserve pages of the same titles (which used to have hundreds of thousands of followers), this time not even giving a reason.

The cyber-army of government-leaning hackers have been terrorizing the social-media platforms through the use of an excessive number of fake accounts, organizing spam attacks and filing complaint reports about opposition pages stating that they are promoting sexual content. As Facebook has been avoiding any involvement in fighting hate speech and instigation to violence on hate groups, it actually now contributes to the ongoing “digitocide” happening in the cyber-lands of Gezi Park.

Among the pages that have been closed down are Ötekilerin Postasi (the biggest citizen journalism platform in Turkey that has broken the news of many big events that the mainstream media shunned), DurDe (an unofficial NGO that aims to prevent hate speech and hate crimes), BDP (one of the parliamentary parties, representing mainly the Kurdish population in the country), and Carsi (football fans, mainly of Besiktas). All these groups and pages in total welcomed millions of users, who are not giving up and continue to “like” the new pages.

MORE STORIES by Gürkan Özturan @ http://radicaldemocrat.blog.com

MORE UPDATES RE: TURKEY @ http://99getsmart.com/category/turkey/

FOR DAILY LIVESTREAM UPDATES ON TURKEY AND WORLD EVENTS:

Occupy World News Network (OWNN) @ http://www.livestream.com/occupyworldnewsnow

Jul 302013
 

By William Blum, 99GetSmart

hypocrisy

 

It’s not easy being a flag-waving American nationalist. In addition to having to deal with the usual disillusion, anger, and scorn from around the world incited by Washington’s endless bombings and endless wars, the nationalist is assaulted by whistle blowers like Bradley Manning and Edward Snowden, who have disclosed a steady stream of human-rights and civil-liberties scandals, atrocities, embarrassing lies, and embarrassing truths. Believers in “American exceptionalism” and “noble intentions” have been hard pressed to keep the rhetorical flag waving by the dawn’s early light and the twilight’s last gleaming.

That may explain the Washington Post story (July 20) headlined “U.S. asylum-seekers unhappy in Russia”, about Edward Snowden and his plan to perhaps seek asylum in Moscow. The article recounted the allegedly miserable times experienced in the Soviet Union by American expatriates and defectors like Lee Harvey Oswald, the two NSA employees of 1960 – William Martin and Bernon Mitchell – and several others. The Post’s propaganda equation apparently is: Dissatisfaction with life in Russia by an American equals a point in favor of the United States: “misplaced hopes of a glorious life in the worker’s paradise” … Oswald “was given work in an electronics factory in dreary Minsk, where the bright future eluded him” … reads the Post’s Cold War-clichéd rendition. Not much for anyone to get terribly excited about, but a defensive American nationalist is hard pressed these days to find much better.

At the same time TeamUSA scores points by publicizing present-day Russian violations of human rights and civil liberties, just as if the Cold War were still raging. “We call on the Russian government to cease its campaign of pressure against individuals and groups seeking to expose corruption, and to ensure that the universal human rights and fundamental freedoms of all of its citizens, including the freedoms of speech and assembly, are protected and respected,” said Jay Carney, the White House press secretary. 1

“Campaign of pressure against individuals and groups seeking to expose corruption” … hmmm … Did someone say “Edward Snowden”? Is round-the-clock surveillance of the citizenry not an example of corruption? Does the White House have no sense of shame? Or embarrassment? At all?

I long for a modern version of the Army-McCarthy hearings of 1954 at which Carney – or much better, Barack Obama himself – is spewing one lie and one sickening defense of his imperialist destruction after another. And the committee counsel (in the famous words of Joseph Welch) is finally moved to declare: “Sir, you’ve done enough. Have you no sense of decency, sir? At long last, have you left no sense of decency?” The Congressional gallery burst into applause and this incident is widely marked as the beginning of the end of the McCarthy sickness.

US politicians and media personalities have criticized Snowden for fleeing abroad to release the classified documents he possessed. Why didn’t he remain in the US to defend his actions and face his punishment like a real man? they ask. Yes, the young man should have voluntarily subjected himself to solitary confinement, other tortures, life in prison, and possible execution if he wished to be taken seriously. Quel coward!

Why didn’t Snowden air his concerns through the proper NSA channels rather than leaking the documents, as a respectable whistleblower would do? This is the question James Bamford, generally regarded as America’s leading writer on the NSA, endeavored to answer, as follows:

I’ve interviewed many NSA whistleblowers, and the common denominator is that they felt ignored when attempting to bring illegal or unethical operations to the attention of higher-ranking officials. For example, William Binney and several other senior NSA staffers protested the agency’s domestic collection programs up the chain of command, and even attempted to bring the operations to the attention of the attorney general, but they were ignored. Only then did Binney speak publicly to me for an article in Wired magazine. In a Q&A on the Guardian Web Snowden cited Binney as an example of “how overly-harsh responses to public-interest whistle-blowing only escalate the scale, scope, and skill involved in future disclosures. Citizens with a conscience are not going to ignore wrong-doing simply because they’ll be destroyed for it: the conscience forbids it.”

And even when whistleblowers bring their concerns to the news media, the NSA usually denies that the activity is taking place. The agency denied Binney’s charges that it was obtaining all consumer metadata from Verizon and had access to virtually all Internet traffic. It was only when Snowden leaked the documents revealing the phone-log program and showing how PRISM works that the agency was forced to come clean. 2

“Every country in the world that is engaged in international affairs and national security undertakes lots of activities to protect its national security,” US Secretary of State John Kerry said recently. “All I know is that it is not unusual for lots of nations.” 3

Well, Mr. K, anti-semitism is not unusual; it can be found in every country. Why, then, does the world so strongly condemn Nazi Germany? Obviously, it’s a matter of degree, is it not? The magnitude of the US invasion of privacy puts it into a league all by itself.

Kerry goes out of his way to downplay the significance of what Snowden revealed. He’d have the world believe that it’s all just routine stuff amongst nations … “Move along, nothing to see here.” Yet the man is almost maniacal about punishing Snowden. On July 12, just hours after Venezuela agreed to provide Snowden with political asylum, Kerry personally called Venezuelan Foreign Minister Elias Jaua and reportedly threatened to ground any Venezuelan aircraft in America’s or any NATO country’s airspace if there is the slightest suspicion that Snowden is using the flight to get to Caracas. Closing all NATO member countries’ airspace to Venezuelan flights means avoiding 26 countries in Europe and two in North America. Under this scenario, Snowden would have to fly across the Pacific from Russia’s Far East instead of crossing the Atlantic.

The Secretary of State also promised to intensify the ongoing process of revoking US entry visas to Venezuelan officials and businessmen associated with the deceased President Hugo Chávez. Washington will also begin prosecuting prominent Venezuelan politicians on allegations of drug trafficking, money laundering and other criminal actions and Kerry specifically mentioned some names in his conversation with the Venezuelan Foreign Minister.

Kerry added that Washington is well aware of Venezuela’s dependence on the US when it comes to refined oil products. Despite being one of the world’s largest oil producers, Venezuela requires more petrol and oil products than it can produce, buying well over a million barrels of refined oil products from the United States every month. Kerry bluntly warned that fuel supplies would be halted if President Maduro continues to reach out to the fugitive NSA contractor. 4

Wow. Heavy. Unlimited power in the hands of psychopaths. My own country truly scares me.

And what country brags about its alleged freedoms more than the United States? And its alleged democracy? Its alleged civil rights and human rights? Its alleged “exceptionalism”? Its alleged everything? Given that, why should not the United States be held to the very highest of standards?

American hypocrisy in its foreign policy is manifested on a routine, virtually continual, basis. Here is President Obama speaking recently in South Africa about Nelson Mandela: “The struggle here against apartheid, for freedom; [Mandela’s] moral courage; this country’s historic transition to a free and democratic nation has been a personal inspiration to me. It has been an inspiration to the world – and it continues to be.” 5

How touching. But no mention – never any mention by any American leader – that the United States was directly responsible for sending Nelson Mandela to prison for 28 years. 6

And demanding Snowden’s extradition while, according to the Russian Interior Ministry, “Law agencies asked the US on many occasions to extradite wanted criminals through Interpol channels, but those requests were neither met nor even responded to.” Amongst the individuals requested are militant Islamic insurgents from Chechnya, given asylum in the United States. 7

Ecuador has had a similar experience with the US in asking for the extradition of several individuals accused of involvement in a coup attempt against President Rafael Correa. The most blatant example of this double standard is that of Luis Posada Carriles who masterminded the blowing up of a Cuban airline in 1976, killing 73 civilians. He has lived as a free man in Florida for many years even though his extradition has been requested by Venezuela. He’s but one of hundreds of anti-Castro and other Latin American terrorists who’ve been given haven in the United States over the years despite their being wanted in their home countries.

American officials can spout “American exceptionalism” every other day and commit crimes against humanity on intervening days. Year after year, decade after decade. But I think we can derive some satisfaction, and perhaps even hope, in that US foreign policy officials, as morally damaged as they must be, are not all so stupid that they don’t know they’re swimming in a sea of hypocrisy. Presented here are two examples:

In 2004 it was reported that “The State Department plans to delay the release of a human rights report that was due out today, partly because of sensitivities over the prison abuse scandal in Iraq, U.S. officials said. One official … said the release of the report, which describes actions taken by the U.S. government to encourage respect for human rights by other nations, could ‘make us look hypocritical’.” 8

And an example from 2007: Chester Crocker, a member of the State Department’s Advisory Committee on Democracy Promotion, and formerly Assistant Secretary of State, noted that “we have to be able to cope with the argument that the U.S. is inconsistent and hypocritical in its promotion of democracy around the world. That may be true.” 9

In these cases the government officials appear to be somewhat self-conscious about the prevailing hypocrisy. Other foreign policy notables seem to be rather proud.

Robert Kagan, author and long-time intellectual architect of an interventionism that seeks to impose a neo-conservative agenda upon the world, by any means necessary, has declared that the United States must refuse to abide by certain international conventions, like the international criminal court and the Kyoto accord on global warming. The US, he says, “must support arms control, but not always for itself. It must live by a double standard.” 10

And then we have Robert Cooper, a senior British diplomat who was an advisor to Prime Minister Tony Blair during the Iraq war. Cooper wrote:

The challenge to the postmodern world is to get used to the idea of double standards. Among ourselves, we operate on the basis of laws and open cooperative security. But when dealing with more old-fashioned kinds of states outside the postmodern continent of Europe, we need to revert to the rougher methods of an earlier era – force, pre-emptive attack, deception, whatever is necessary to deal with those who still live in the nineteenth century world of every state for itself. 11

His expression, “every state for itself”, can be better understood as any state not willing to accede to the agenda of the American Empire and the school bully’s best friend in London.

So there we have it. The double standard is in. The Golden Rule of “do unto others as you would have others do unto you” is out.

The imperial mafia, and their court intellectuals like Kagan and Cooper, have a difficult time selling their world vision on the basis of legal, moral, ethical or fairness standards. Thus it is that they simply decide that they’re not bound by such standards.

Hating America

Here is Alan Dershowitz, prominent American lawyer, jurist, political commentator and fervent Zionist and supporter of the empire, speaking about journalist Glenn Greenwald and the latter’s involvement with Edward Snowden: “Look, Greenwald’s a total phony. He is anti-American, he loves tyrannical regimes, and he did this because he hates America. This had nothing to do with publicizing information. He never would’ve written this article if they had published material about one of his favorite countries.” 12

“Anti-American” … “hates America” … What do they mean, those expressions that are an integral part of American political history? Greenwald hates baseball and hot dogs? … Hates American films and music? … Hates all the buildings in the United States? Every law? … No, like most “anti-Americans”, Glenn Greenwald hates American foreign policy. He hates all the horrors and all the lies used to cover up all the horrors. So which Americans is he anti?

Dershowitz undoubtedly thinks that Snowden is anti-American as well. But listen to the young man being interviewed:

“America is a fundamentally good country. We have good people with good values who want to do the right thing.”

The interviewer is Glenn Greenwald. 13

Is there any other “democratic” country in the world which regularly, or even occasionally, employs such terminology? Anti-German? Anti-British? Anti-Mexican? It may be that only a totalitarian mentality can conceive of and use the term “anti-American”.

“God appointed America to save the world in any way that suits America. God appointed Israel to be the nexus of America’s Middle Eastern policy and anyone who wants to mess with that idea is a) anti-Semitic, b) anti-American, c) with the enemy, and d) a terrorist.” – John LeCarré, London Times, January 15, 2003

Notes

  • White House Press Briefing, July 18, 2013 ↩
  • Washington Post, June 23, 2013 ↩
  • Reuters news agency, July 2, 2013 ↩
  • RT television (Russia Today), July 19, 2013, citing a Spanish ABC media outlet ↩
  • White House press release, June 29, 2013 ↩
  • William Blum, Rogue State: A Guide to the World’s Only Superpower, chapter 23 ↩
  • Reuters, July 22, 2013 ↩
  • Los Angeles Times, May 5, 2004 ↩
  • Washington Post, April 17, 2007 ↩
  • Hoover Institute, Stanford University, Policy Review, June 1, 2002 ↩
  • The Observer (UK), April 7, 2002 ↩
  • “Piers Morgan Live”, CNN, June 24, 2013 ↩
  • Video of Glen Greenwald interviewing Edward Snowden (at 2:05 mark) ↩

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

Jul 272013
 

Posted by greydogg, 99GetSmart

* U.S. LAWMAKERS BLAST GUANTANAMO’S $2.7 MILLION PER PRISONER COST

By Patricia Zengerle, Reuters

Guantanamo-Bay-007

Democratic lawmakers pushing to close the detention center at Guantanamo Bay said on Wednesday its cost has skyrocketed to $2.7 million per inmate this year and argued it is too expensive to keep open while the country is fighting budget deficits.

“This is a massive waste of money,” Senator Dianne Feinstein said during a Senate Judiciary subcommittee hearing on the base.

Guantanamo has been dubbed the most expensive prison on Earth, and President Barack Obama in May cited its cost – then calculated at about $900,000 per prisoner – as one of many reasons to close it.

Representative Adam Smith, the top Democrat on the House of Representatives Armed Services Committee, testified during the hearing that the current cost of operating the facility has jumped to $454 million in the fiscal year ended September 30, according to the U.S. Department of Defense, or about $2.7 million for each of the 166 inmates.

Smith said overall, $4.7 billion has been spent running Guantanamo since the facility opened in 2002.

By comparison, super-maximum security prisons in the United States spend about $60,000 to $70,000 at most to house their inmates, analysts say. […]

READ @ http://www.rawstory.com/rs/2013/07/25/u-s-lawmakers-blast-guantanamos-2-7-million-per-prisoner-cost/

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* BANKERS OWN THE WORLD … AND ARE ULTIMATELY DESTROYING IT

By Chris Martenson, PeakProsperity

banksters

In every era, there are certain people and institutions that are held in the highest public regard as they embody the prevailing values of society. Not that long ago, Albert Einstein was a major public figure and was widely revered. Can you name a scientist that commands a similar presence today?

Today, some of the most celebrated individuals and institutions are ensconced within the financial industry; in banks, hedge funds, and private equity firms. Which is odd because none of these firms or individuals actually make anything, which society might point to as additive to our living standards. Instead, these financial magicians harvest value from the rest of society that has to work hard to produce real things of real value.

While the work they do is quite sophisticated and takes a lot of skill, very few of these firms direct capital to new efforts, new products, and new innovations. Instead they either trade in the secondary markets for equities, bonds, derivatives, and the like, which perform the ‘service’ of moving paper from one location to another while generating ‘profits.’ Or, in the case of banks, they create money out of thin air and lend it out at interest of course.

Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.

~ Josiah Stamp – Bank of England Chairman, 1920s

Because these institutions and individuals accumulate vast sums of money for their less-than-back-breaking efforts, they are well respected if not idolized by most. Many of the most successful paper-accumulators are household names. They get invited to the best parties, are lured by major networks to appear on their shows, speak at the biggest conferences, and their views and words find an easy path to the ears of millions.

But this is more than just an idle set of observations for the curious. It’s actually a critically important phenomenon to be aware of. For the current configuration of financially powerful entities has, at the tail end of a decades-long debt-based money experiment, achieved an astonishing concentration of power, money, and influence.

We raise this topic because our work centers on changing the conversation towards the things that really matter while there is still time to engineer a better outcome, and that requires illuminating the status quo and having a conversation about whether it needs to be modified. Unfortunately, those at the center of the status quo are not at all interested in having any such conversation, because all of their accumulated power depends on maintaining things as they are.

Money is power.

And history has shown that power is never ceded spontaneously or willingly. […]

READ @ http://www.peakprosperity.com/blog/82432/bankers-own-world

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* INVESTIGATE MICHAEL HASTING’S DEATH

Source: youtube

Abby Martin takes a closer look at the death of award winning journalist Michael Hastings, featuring interviews with Michael’s close friend, Joe Biggs, who suspects his death was not an accident, and Kimberly Dvorak, an investigative journalist who has been conducting an investigation into the anomalies despite stonewalling from the LAPD.

VIDEO @ http://www.youtube.com/watch?v=EysdTBx-ShI&feature=em-subs_digest-vrecs

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* DETROIT CHAPTER 9 BANKRUPTCY OBJECTIONS DENIED

By Tyler Durden, zerohedge

Detroit

The judge has decided to over-rule both objections and that nothing with regard the Chapter 9 process is held up.

  • *DETROIT JUDGE OVERRULES OBJECTIONS CLAIMING BANKRUPTCY INVALID
  • *DETROIT JUDGE SAYS HE HAS POWER TO GRANT GOVERNOR SUIT IMMUNITY
  • *DETROIT BANKRUPTCY FILING IS VALID, FEDERAL JUDGE RULES
  • *DETROIT BANKRUPTCY ELIGIBILITY TO BE DECIDED IN FEDERAL COURT

Now, we proceed to the Federal eligibility hearing (whether the city is eligible to proceed with Chapter 9). Remember this took almost a year with Stockton, CA. For now, Unions 0 – Orr 1 but it seems like neither side will be a winner when this is all over (which makes sense as while there is the law and the Obama-law, there is simply no money).

The current plan (for now rejected by creditors) means a 90% loss for muni-worker retirees, 81% loss for unsecured creditors, and a 75% loss for secured creditors.

Via AP:

A federal judge has put a stop to lawsuits threatening Detroit’s bankruptcy and declared that he will handle any challenges.

The decision Wednesday after two hours of arguments is a victory for Detroit. A county judge last week said Gov. Rick Snyder ignored the Michigan Constitution and acted illegally in approving the Chapter 9 filing, the largest ever U.S. municipal bankruptcy.

Retirees sued, claiming their pensions are protected by the constitution and are at risk in a bankruptcy.

U.S. Bankruptcy Judge Steven Rhodes suspended any pending lawsuits and barred new ones. He says his court will be the exclusive venue for any legal action regarding the bankruptcy. […]

READ @ http://www.zerohedge.com/news/2013-07-24/detroit-chapter-9-bankruptcy-objections

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* THE GHASTLY ACCOUNT OF MARTA – POLICE ABUSE IN ITALY

Source: youtube

VIDEO @ https://www.youtube.com/watch?feature=player_embedded&v=8MkWoOnRJBc

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* HOW SUCCESSFUL COOPERATIVE ECONOMIC MODELS CAN WORK WONDERFULLY … SOMEWHERE ELSE

By Frank Joyce, AlterNet

Capitalism rests on a foundation of myths, the first of which is that there is no alternative.

alternatives_1Years ago food critic Ruth Reichl declared, “There is no bad food in Italy.” She was right. Within Italy, the Emilia Romagna region is thought by many to offer the best food of all.

But that is by no means its only distinction. What I did not appreciate until a recent trip to Bologna, is that major components of the entire economy are organized as co-ops. That includes global market manufacturing businesses, facilities management, social services, transportation, food and wine production,  banking and other financial services and food sales from small markets to nationwide supermarkets and hypermarkets (similar to Meijer).

Capitalism rests on a foundation of myths. One of them is that capitalism somehow “invented” entrepreneurship. Another is that capitalism provides the only “market” economy. Then there is the self-proclaimed virtue of capitalism that only capitalism is compatible with “self-reliance” and individual responsibility. (The reality of course is that most people are utterly dependent on capitalists for jobs,  financing, education,  transportation, health care, shelter and just about everything else.) Capitalism also presents itself as the model of “efficiency,” when in truth it generates enormous waste of all kinds.

Finally, the biggest whopper of all is that There Is No Alternative. All of this is nonsense. The economy of  the Emilia Romagna region of Italy and its largest city, Bologna, is living proof.

Even though Emilia Romagna has a “leftist” history, co-ops did not arise as an “anti-capitalist” phenomenon. Many of the largest and most successful co-ops trace their origins back to the 19th century. Understanding that markets—a place where buyers and sellers meet—were in existence for thousands of years before capitalism privatized ownership of the means of production, co-ops offer a different way of organizing economic activity.

Production co-ops empower workers to create products and services. The manufacturers of Emilia Romagna make industrial machines, ceramic tile and many other products. They are multi-billion-dollar businesses that compete successfully in the global market. Likewise Manutencoop, from its art-filled and architecturally spectacular headquarters in Bologna, coordinates facilities management (janitorial,  security, building maintenance etc.) for schools, hospitals and shopping malls throughout Italy.

Many co-ops contract with the government to provide various services. While this is similar to “outsourcing” as we would describe it in the US, the result is very different because the intent is not to drive down the wages, benefits and working conditions of those doing the work. […]

READ @ http://www.alternet.org/economy/how-successful-cooperative-economic-models-can-work-wonderfully-somewhere-els

Jul 262013
 

By James Petras, 99GetSmart

get_img

Lessons from El Salvador for the Columbian FARC

In Memory of Manuel Marulanda, Farabundo Marti and Augusto Sandino

Introduction

It is commonly assumed that “peace agreements” between pro-US rightwing regimes and leftwing insurgents lead to peace, justice and greater security.  A number of peace agreements which were signed and implemented in the 1990’s in Central America, South Africa, Philippines and elsewhere provide us with ample data over two decades to confirm or reject this commonplace assumption.

We will examine the case of El Salvador where a powerful guerilla movement (FMLN) signed off on a peace accord in 1992.

Method of Evaluating the Peace Accord

In approaching the analysis of the Peace Accord it is important to begin by focusing on the evolution of the FMLN – the ideological, organizational and political changes that led to the negotiations, the eventual pact with the rightwing regime and the socio-economic and political results.  The second part of the essay compares and contrasts the socio-economic and political results and policies which followed from the pact and how they affected the mass of the people.  This allows us to see who benefited and who lost; what socio-economic class and political structures emerged; what foreign policies were followed.

The third section of the paper will focus on drawing lessons which can be learned from the El Salvador experience which are applicable to the current Colombian peace negotiations between the FARC and the Santos regime.

The FMLN:  From Socialist Revolution to Capitalist Electoralism

In 1980 four major guerilla groups joined forces to form the Farabundo Marti National Liberation Front (FMLN).  The leading component, the FPL, envisioned a prolonged struggle, uniting the guerilla and mass movements in a common anti-imperialist and social revolutionary struggle.  The lesser allies, led by the Communist Party envisioned a two stage “democratic to social revolution”.

In a little over two years, the three minority components, the ERP, the Communist Party, the RN shifted FMLN policies, eliminating the struggle for socialism based on workers and peasants in favor of a ‘democratic revolution’, which included the “progressive modern bourgeois”.  As the struggle continued, the internal alignments of the FMLN favored a further turn to the ‘center’.. FMLN leaders emphasized political incorporation into the electoral system, legalization of the FMLN, the opening of negotiations without any prior agreements and a willingness to work within the capitalist-electoral framework.  When negotiations began the FMLN dropped its demand for dismantling of the military, the expropriation of the leading financial, banking, commercial and mining interests and accepted a “truth commission” which would “examine” war crimes – the mass murder of over 75,000 civilians.

By 1992 when the peace agreement was signed, the ex-guerillas, the El Salvadorian regime and the US government hailed it as a “great historical turning point opening the country and people to a new era of peace and prosperity”.  Most leftist academics and journalists joined the chorus hailing the “pragmatism” and “flexibility” of the leaders of the FMLN.  European social democrats, especially the Spanish Socialist regime offered training courses to the ex-guerillas, on the ways and means of acting in government and municipal affairs.

Evaluating the Politics of the FMLN in Opposition and Government

Once the FMLN leaders turned from armed struggle and mass mobilization to electoral politics, they directly benefited:  many were elected to public office and secured middle class living standards.  As Congress people, political advisers, staff assistants and mayors, the FMLN elite received substantial salaries, bought homes in middle class neighborhoods, new automobiles and obtained security guards for protection.

Most FMLN politicos retained a social democratic ideology and mouthed radical rhetoric.  Some, like the former head of the ERP, Joaquin Villalobos allied with the rightwing, denounced the popular movements , received a scholarship to Oxford and became a consultant for murderous death squad regimes in Colombia, Philippines, North Ireland and elsewhere.

The urban and rural mass movements were virtually abandoned by the FMLN turned electoral party.  During the mass uprising between 1980 – 1990, the peasants secured a land reform, public employees’ salaries increased, and popular organizations proliferated as the government and US attempted to undercut the mass base of the insurgency.  Once the FMLN leaders entered the parliament and prioritized electoral politics, the pressure on the ruling classes was relieved, mass struggle declined and land reform ended.  The trade unions received scant support from the FMLN politicos.  The FMLN led by Shafik Handel pursued an alliance with the “modern bourgeoisie” to “isolate” the “traditional” landowning oligarchy”, to stabilize democracy and ensure their position in Congress as a “loyal opposition”.  In 2009 the FMLN won the presidency running a neo-liberal Christian Democrat Mauricio Funes and gained a plurality in Congress.

Salvadorian Society After the Peace Pact

The FMLN signed the so-called peace pact without any democratic dialogue with their members, without consulting the mass social movements; they discarded the major structural reforms which thousands of militants fought for and died.  Instead they ‘consulted’ their own interests in a parliamentary career.  They dictated their settlement to their middle level cadres, expelled critics and directed the masses to acquiesce offering them more phony and broken promises “to continue the struggle”.  They reneged on promises for jobs, income and land redistribution; the ‘reform’ of the military and judicial processes against officials involved in massive human rights violations never took place.

From 1992 to 2013, El Salvador continues as the country with the second worst inequalities in Latin America.  Unemployment especially for young people continues to exceed over 50%.  Over 60% of the “working population” does not have formal employment.  They work without pensions, health plans, vacations or social security, mostly in low paid “services”, i.e. street vendors, domestic servants etc.  Over 2.5 million Salvadorians were forced to migrate to other countries for lack of opportunities.  They young guerilla fighters were abandoned by their guerilla leaders.  Some were offered land, but without training, credit, extension services, they turned to urban and rural drug gangs.  Over 25,000 mostly young people are members of drug gangs.  El Salvador has the second highest rate of violent homicide in the Americas.  In fact more Salvadorians have been murdered in the aftermath of the “Peace Pact” (1992-2012) then were killed during the civil war (1980-91).From March 2012 when the two principle gangs signed a truce the killings have sharply declined.

The Peace Agreement set up a “Truth Commission” to uncover and prosecute war crimes and human rights violations.  Instead the Generals and military elite were granted an amnesty.  The Commission lacked financial and political support and no war criminals, even those identified with the most egregious crimes were ever tried let alone sent to jail.

The main beneficiaries of the Peace Pact were the ‘modern bourgeois’ – the banking, commercial, agro-business, maquiladora elite – who reaped high profits, paid little taxes, received state subsidies and exploited cheap labor in the maquiladoras.  Private security companies prospered as the new rich ruling class – including the “new rich”, FMLN elite-hired an army of private guards armed with automatic rifles and sub-machine guns, to protect their homes, businesses, private clubs and resorts.

El Salvador is a neo-liberal paradise’ before and after the Presidential victory of the FMLN;  free trade agreements, low wages, no-union, low paid maquiladora workers, in the free trade zones are the centerpiece of FMLN economic policy.

The so-called “Democratic Revolution” has been emptied of any socio-economic content. The social distance between the leaders of the FMLN and their business contractor allies on the one hand and the masses is abysmal.  The FMLN leaders live in modern apartments and houses, protected by three meter walls covered with broken glass and barbed wire, with paved streets and flowered gardens.  The majority of poor Salvadorians live in crowded hovels, on unpaved streets, controlled by armed drug gangs and corrupt police officials.

The FMLN regime has supported the US and EU free market agreement in Central America and US military bases.  Their “free trade policies” undermine small and medium producers .Ther military ties to the Pentagon strengthen the US military position against Venezuela and Ecuador.

Political Consequences of Peace Pact

During the civil war, the class struggle raised class consciousness, enhanced independent class organization and forced the ruling class and its US ‘mentors’ to make concessions including a land reform for peasants and wage increases for labor.  In the aftermath of the peace pact, the mass organizations have diminished in size and militancy; leaders have been co-opted by the FMLN elite.  Centralized political control over social movements ensures conformity to neo-liberal policies.  FMLN attempts to legitimize its embrace of the current socio-economic order by citing its “glorious and heroic guerrilla past”.  Corrupt FMLN politicos evoke their past role as “guerilla commanders” to cover up their current corrupt links to the economic elite. Whenever, a trade union goes on strike for higher wages or better working conditions, such as the health, educational or municipal workers, the FMLN leaders accuse them of “politics” or “aiding” the bourgeois opposition.      The FMLN has become a bureaucratic political machine driven by elite factions fighting for positions of power and privilege within the neoliberal state bureaucracy.

In the face of the abject failure of the FMLN and its government to attend to the most elementary needs of the urban poor and peasants, several hundred NGOs, funded by US AID and EU regimes, and set up by middle class professionals have established local self-help projects, that enrich the NGO leaders, undermine local social movements and fail to reduce poverty.

Given the lack of peace, security, and social justice and the decline of social movements, is it any wonder that tens of thousands of Salvadorian flee their country every year? There are over 2.5 million Salvadoreans living abroad, over 90%in the USA.

Conclusion:  Why the Peace Pact Failed

From any objective analysis, it is clear that the peace pact signed by the FMLN has failed to meet the most minimum socio-economic and political demands of its mass supporters.  Despite great sacrifices and untold examples of personal heroism, the great mass of Salvadorians were defrauded of any positive outcome.  The powerful movements were dismantled by decree of the guerilla commanders. The top leaders who dictated policy either because collaborators with the US military (Villalobos) or allies of the so-called “progressive” bourgeoisie.

Various lessons can be drawn.

(1)    A militant military past is no guarantee of progressive socio-economic commitments after a negotiated settlement.

(2)   A peace agreement dictated by an elite is likely to sacrifice mass socio-economic interests in order to secure political respectability.

(3)   Foreign ‘radical’ allies, like Cuba, have their own political interests in securing regional stability and peace, which may not coincide with the socio-economic needs of a revolutionary mass movement.

(4)   Peace agreements must include the direct influence of the representatives of mass popular movements and incorporate their demands.

(5)   Peace agreements which disarm the insurgents and maintain the military, which sustain the economic ruling class and its control over all the strategic sectors of the economy, results in the continuation of neo-liberal policies, US military bases and the incorporation of former guerilla leaders into a corrupt, reactionary political system.

(6)   A peace pact that does not lead to massive public investments in jobs, public works, agrarian reform and other productive activity will result in unemployed armed young people turning to violent crime and drug trafficking.

(7)   Ex-guerilla leaders who promote their electoral careers and work within the system, adopt neo-liberal policies— as numerous examples demonstrate. In Colombia for example Antonio Navarro Wolff formerly of the M-19 became an ally of then President Alvaro Uribe’s death squad regime when he was governor of Nariño.  Teodoro Petkoff, the Venezuelan ex-guerilla, became the architect of the IMF austerity program of President Caldera.  Joaquin Villalobos the former Salvadorian guerilla leader of the ERP became an adviser to the CIA and any murderous regime which paid his lucrative consultation fees.

The people’s movements must establish their socio-economic priorities and presence in any “peace process”.  Incorporation of the guerillas into the electoral system should have the lowest priority.

The vast majority of the workers, peasants and students want peace that is accompanied by structural changes in the socio-economic system. This includes expropriation of fertile, irrigated land; the end of trade union repression and new labor laws protecting large scale unionization; doubling the minimum wage and the formation of workers’  committees to oversee management.

Large scale public program to create employment require new progressive taxes on the rich to provide financing of infrastructures and productive enterprises.  Environmental agencies composed of ecologists, Indian and peasant leaders need to be empowered to regulate mining operations and to enforce an equitable distribution of tax receipts and royalty payments.

Above all a peace agreement requires the democratization of the state:  the dismantling of Special Forces, counter-insurgency programs, advisory missions and foreign military bases.  The abject failure of the FMLN to change Salvadorian society and improve the socio-economic position of the masses was directly linked to their insertion in the capitalist state and subordination to the neo-liberal economy.

The “stage theory” of FMLN guru Shafik Handel argued that “capitalist modernization and democracy” in alliance with the modern bourgeoisie was the ‘immediate goal’ and socialism was for the “distant future”.  This “stage theory” overlooked the fact that the “modern bourgeoisie” was structurally tied to the traditional landowning, banking and imperial elites and was not in any way committed to any so-called “democratic revolution”.  The FMLN, discarded socialism, never achieved a “democratic revolution” and ended up presiding over a crime infested, impoverished country in which the political elite joined the same country clubs as their former class enemies.

It behooves the FARC to carefully study the negative lessons of the past, the disastrous peace agreements of Central America, the MR-19 surrender to the narco-state, in order to pursue a peace agreement that consults and benefits the majority and not simply secures  seats in Congress.

Jul 262013
 

El análisis de James Petras para CX36 Radio Centenario, 99GetSmart

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“Detroit fue el centro de los automóviles por casi un siglo y se han declarado en banca rota, han bajado la población de 2.700.000 a 700.000. Hay edificios vacíos, abandonados, la ciudad ahora está controlada por el administrador que desplazó a gobierno elegido, el alcalde queda al margen de la política”. “Han financiado la deuda, recibe primera prioridad en el pago y la industria manufacturera está en la baja frente al ascenso de Wall Street.Mientras Detroit se declara en banca rota, Wall Street declaró record de ganancias, los grandes bancos que conocemos (Morgan, Citibank, Wells Fargo) están cosechando las mayores ganancias en toda su historia. Son dos caras de una misma realidad” Lo que sigue es la transcripción de la Columna de james Petras, que puede escuchar todos los  lunes a las 11.30 horas de Uruguay en www.radio36.com.uy  y descargar en el siguiente link: https://soundcloud.com/nachov3/entrevista-realizada-a-james

Chury: James Petras, bienvenido, buenos días. ¿Cómo estás?

Petras: Estamos muy bien, esperando la llamada.

Chury: Muy bien, Petras, nosotros también porque habían algunos temas que los habíamos empezado el otro día y que después el tiempo dio la razón a lo que tú estabas anticipando. Me estoy refiriendo para el comienzo a todo lo que ha pasado en Egipto a partir de ese momento y por lo tanto ese es el tema con el que quería arrancar para ratificar lo que ese día tú nos estabas adelantando…

Petras: El golpe de Estado de los militares ya se está consolidando precisamente nombrando un gabinete con un mayoria de oficiales de la dictadura de Mubarek que están totalmente entregados al Fondo Monetario y de OTAN.

Los militares buscan de alguna forma crear una fachada civil donde puede manejar la política neoliberal atrás de los civiles.

Ahora, el problema es que el partido islámico de Mursi sigue en grandes manifestaciones. No se van a ir a la casa y olvidar el hecho de que su presidente estaba derrocado.

Sigue la polarización en el país,pero no hay posibilidad de algún levantamiento en este momento, los militares concentran con más de 300.000 tropas todas las armas y las capacidades militares.

Ahora, los grandes perdedores en todo eso son los civiles , demócratas y socialistas que se pusieron a apoyar el golpe y derrocar el gobierno elegido. Ahora están peor porque antes tenían la capacidad de enfrentar un gobierno civil a pesar de que era neoliberal, islámico y lo que quisieran. Ahora las condiciones son mucho más difíciles, están totalmente marginados del poder, los militares van a consolidar el sistema de corrupción y de poderes económicos militares, las empresas lucrativas.

En esta situación poco a poco los países imperialistas van a llegar a acuerdos con este gobierno, van a convocar a elecciones con los islámicos marginados. Hay poca posibilidad que puedan volver al poder por la vía electoral, como las elecciones ya están bien guardadas por los militares, muy exclusivo, la purga de los medios de comunicación va a eliminar la posibilidad de una competencia igual.

Hemos vuelto a la época de Mubarak  con viejas y  nuevas caras civiles. Poco a poco, el deterioro de este régimen, va a dejarlo como un gobierno minoritario y tal vez en otro momento las manifestaciones puedan volver con más fuerza.

Pero por el momento  Egipto está totalmente controlado por los países de OTAN a partir de los militares que son el verdadero poder.

Y toda la  izquierda, Samir Amin, y todos los intelectuales que apoyaran el golpe deben sentir una gran vergüenza por su incapacidad de entender la dinámica del conflicto.

Chury: ¿Esto tiene alguna vuelta atrás o ya casi es irreversible?

Petras: En el Medio Oriente, hay situaciones complejas. Obviamente en Palestina los EE.UU. han conseguido comprar el voto de Mahmud Abbas para participar en un pseudo diálogo con Netanyahu. Eso sin parar los asentamientos, las construcciones y colonias israelíes en territorio palestino y la expulsión de las beduinas, 40.000 destruyendo sus casas tradicionales.

Abbas es uno de los personajes políticos más corruptos e toda la historia del Medio Oriente, eso está diciendo mucho por todos los antecedentes de muchos líderes. Pero acordar una nueva fase de negociaciones mientras Israel está extendiendo sus colonias, me parece una política absolutamente en banca rota.

Pero en Siria tenemos otro cuadro donde las fuerzas nacionales de Bashar Al-Assad han avanzado mucho. Y entre la oposición ahora hay una guerra dentro de la guerra, entre las fuerzas neoliberales de los mercenarios pro-occidentales apoyados por la OTAN y las fuerzas terroristas de Al-Qaeda apoyados por Arabia Saudita, y los emirites del Golfo .Están matándose entre sí. Sienten que van a poner la hegemonía de Al-Qaeda sobre la lucha anti- Assad.Pero mientras tanto están debilitando el frente invasor. Y ahora con la hegemonía de los terroristas de Al-Qaeda, hay un dilema para los países de OTAN que tiene miedo de que muchos de los terroristas vuelvan con armas conseguidas por la OTAN y los países del Golfo y empezar otra fase de la lucha en Pakistán, en Jordania y otras partes.

Entonces,  si los occidentales siguen armando las fuerzas invasoras, va a tener un efecto búmeran. Tarde o temprano estas armas van a circular y volver a desestabilizar a los clientes occidentales en el mundo. En Irak, en cualquier otra parte. Fortalecer a los talibanes en Pakistán, en Afganistán e incluso en los países del Golfo.

Entonces, en Siria el cuadro es muy negro para las fuerzas imperiales, mientras en Egipto han conseguido una victoria coyuntural.

Y en otros países, Libia, Túnez siguen sin definición final, a pesar de que en un momento aparecían éxitos militares y políticas por el Occidente, los regímenes son muy inestables. Libia está muy fragmentada, no hay ninguna autoridad nacional, todos son mezclados de tribus, fanáticos y no hay ningún futuro occidental en Libia.

Ese es el panorama. Yo creo que es un cuadro bastante diferenciado.

Chury: Concretamente, la situación de corrupción en el gobierno español que vinculó al propio Rajoy, que vinculó a Bárcenas, a Luis “el cabrón”. ¿Hay una situación política difícil en este momento en España?

Petras: Es muy difícil por el gobierno porque ya no tiene más apoyo de los más fanáticos de los franquistas, un 20% según las últimas encuestas, significando más de ¾ partes de la población que ya quieren que se vaya el gobierno.

Pero la oposición está dividida entre los parlamentarios, la Izquierda Unida, el Socialista, y los movimientos populares., y no tienen capacidad de elaborar una estrategia capaz de desplazar al gobierno. Siguen poniendo resoluciones, censura, cuestionamiento, procesos judiciales pero hasta ahora no han dado ningún resultado más que desprestigiar al gobierno.

No hay que olvidar que el Partido Socialista tiene una responsabilidad por la crisis, tiene su propios escándalos y no tiene mucha confianza entre la gran masa que se está oponiendo al gobierno de Rajoy.

Hasta hay un esfuerzo a paralizar la economía, poner en cuestión el funcionamiento cotidiano del gobierno.  Rajoy tiene la táctica de evitar cualquier renuncia, porque en el momento en que renuncie va a entrar en el juzgado, van a haber posibilidades de procesarlo como delincuente que es.

En ese sentido hay un empate entre el parlamentarismo de los partidos, las grandes manifestaciones y la decisión del gobierno de quedarse en el poder a toda costa. En este sentido el desprestigio gubernamental no tiene como resultado un cambio, hace que haya un gran empuje desde abajo, una decisión que va más allá de la institucionalidad.

Chury: Muy bien, Petras, el próximo lunes estaremos nuevamente dialogando…

Petras: Bueno, quiero mencionar una cosa que no hemos tocado y es muy importante, es la declaración de bancarota de la ciudad de Detroit.

Detroit fue el centro de los automóviles por casi un siglo y se han declarado en bancarota , han bajado la población de 2.000.000 a 700.000. Hay 79.000 edificios vacíos, abandonados.La ciudad ahora está controlada por el administrador que desplazó a gobierno elegido, el alcalde queda al margen de la política.

Y hay que entender cómo llegamos a eso.Tiene que ver con la salida de las grandes multinacionales, las grandes empresas automóviles como General Motors, Ford, Chrysler, han ido a otros países como México y otras ciudades, y han abandonado a sus empresas allá para evitar los salarios sindicalizados, las pensiones, dejando todo a la carga de la Municipalidad. No pagan impuestos, ya los ingresos están muy a la baja, las pensiones amenazados por la bancarrota..

Ahora con la banca rota el interventor dice que no hay obligaciones de pagar las pensiones, no hay obligación de respetar a los sindicatos. La declaración de banca rota es un pretexto para eliminar el sindicalismo, bajar los salarios y, por lo menos, limitar lo que van a pagar de pensiones.

La culpa es compartida entre gobiernos que han dado exoneraciones a las empresas y principalmente las empresas multinacionales que mueven su capital según sus propios intereses y ganancias.

Ese es el peligro de depender en el crecimiento, en la economía, de multinacionales. Porque en un momento puede parecer nuevo flujo de inversiones, pero la contrapartida es la salida masiva de capitales abandonando el lugar y fomentando la banca rota, la pobreza, la miseria.

El 80% de los alumnos en Detroit ahora recibe comida gratis por la pobreza que tienen en la casa.

Chury: Realmente una noticia sorprendente de que Detroit, ese símbolo de la industria automovilística norteamericana esté en esas condiciones ¿no?

Petras: Sí, y es emblemática de la dominacion  del capital financiero. Han financiado la deuda, recibe primera prioridad en el pago y la industria manufacturera está en la baja frente al ascenso de Wall Street.

Mientras Detroit se declara en banca rota, Wall Street declaró record de ganancias, los grandes bancos que conocemos (Morgan, Citibank, Wells Fargo) están cosechando las mayores ganancias en toda su historia.

Son dos caras de una misma realidad.

Chury: Muy bien, Petras, un abrazo muy grande, gracias por tu aporte…

Petras: Un abrazo para ustedes y saludos a los oyentes…

Chury: Gracias.

Jul 252013
 

Posted by greydogg, 99GetSmart

“Propaganda” exposes a multitude of important topics such as false-flags, religion, and media indoctrination. Narrated from the perspective of a North Korean national it is fascinating to see this in-depth analysis of Western culture from one of America’s most fabled ‘enemies’.

This film illustrates how we came to be the apathetic, sleepy slaves that we are; captives in our own countries.

Armed with this knowledge, however, we can render the enemy powerless over us. It just takes a conscious decision to override the unconscious reflexive behavior and derail their agenda.

Much of the world has figured it out, but North America seems to be lagging. While Iceland ousts the government and banksters entirely, we allow status quo. While Hungary ploughs under and burns Monsanto GMO crops, California overturns the GMO labelling initiative Prop 37.

If we turn off the propaganda and think for ourselves, view our world from a clearer perspective and take inspired action, we can take back our power. When you look at the statistics, it’s stunning: 99%… 1%.

I think one thing is painfully clear. The longer we wait, the more difficult it will be. NOW is the time.

VIDEO @ http://www.youtube.com/watch?v=jGxbOVscHPs

Related post: 

The Century of the Self – Full Length Documentary: http://99getsmart.com/?p=802

This film is about the techniques of Edward Bernays, the father of propaganda and marketing.

Jul 242013
 

By James Petras, 99GetSmart

Introduction

Burning forest in Brazil. The removal of forest to make way for cattle ranching was the leading cause of deforestation in the Brazilian Amazon from the mid 1960s. Soybeans have become one of the most important contributors to deforestation in the Brazilian Amazon.

Burning forest in Brazil. The removal of forest to make way for cattle ranching was the leading cause of deforestation in the Brazilian Amazon from the mid 1960s. Soybeans have become one of the most important contributors to deforestation in the Brazilian Amazon.

Brazil has witnessed one of the world’s most striking socio-economic reversals in modern history: from a dynamic nationalist industrializing to a primary export economy. Between the mid 1930’s to the mid 1980’s, Brazil averaged nearly 10% growth in its manufacturing sector largely based on state interventionist policies, subsidizing, protecting and regulating the growth of national public and private enterprises. Changes in the ‘balance’ between national and foreign (imperial) capital began to take place following the military coup of 1964 and accelerated after the return of electoral politics in the mid-1980’s.  The election of neo-liberal politicians, especially with the election of the Cardoso regime in the mid-1990’s, had a devastating impact on the strategic sectors of the national economy: wholesale privatization was accompanied by the denationalization of the commanding heights of the economy and the deregulation of capital markets.[1]  Cardoso’s regime set the stage for the massive flow of foreign capital into the agro-mineral, finance, insurance and real estate sectors. The rise in interest rates as demanded by the IMF and World Bank and the speculative market in real estate raised the costs of industrial production. Cardoso’s lowered tariffs ended industrial subsidies and opened the door to industrial imports. These neo-liberal policies led to the relative and absolute decline of industrial production.[2]

The Presidential victory of the self-styled “Workers Party” in 2002 deepened and expanded the ‘great reversal’ promoted by its neo-liberal predecessors. Brazil reverted to becoming a primary commodity exporter, as soya, cattle, iron and metals exports multiplied and textile, transport and manufacturing exports declined.[3]  Brazil became one of the leading extractive commodity exporters in the world. Brazil’s dependence on commodity exports was aided and abated by the massive entry and penetration of imperial multi-national corporations and financial flows by overseas banks. Overseas markets and foreign banks became the driving force of extractive growth and industrial demise.

To gain a better understanding of Brazil’s ‘great reversion’ from a dynamic nationalist-industrializing to a vulnerable imperial driven agro-mineral extractive dependency, we need to briefly review the political-economy of Brazil over the past fifty years to identify the decisive ‘turning points’ and the centrality of political and class struggle.

Military Model: Modernization from Above

Under the military dictatorships (1964-1984) economic policy was based on a hybrid strategy emphasizing a triple alliance of state, foreign and national private capital[4] focused primarily on industrial exports and secondarily on agriculture commodities (especially traditional products like coffee).

The military discarded the nationalist-populist model based on state industries and peasant cooperatives of the ousted leftist President Goulart and put in place an alliance of industrial capitalists and agribusiness. Riding a wave of expanding global markets and benefiting from the repression of labor, the compression of wages and salaries, comprehensive subsidies and protectionist policies, the economy grew by double digits from the late 1960’s to the mid 1970’s, the so-called “Brazilian Miracle”[5]. The military while ending any threats of nationalizations, put in place a number of ‘national content’ rules on the foreign multi-nationals which expanded Brazil’s industrial base and enlarged the size and scope of the urban working class especially in the automotive industry. This led to the growth of the metal workers union and later the Workers’ Party. The ‘export model’ based on light and heavy industry, foreign and domestic producers, was regionally based (southeast). The military modernization strategy heightened inequalities and integrated the local ‘national’ capitalists to imperial MNCs. This laid the groundwork for the onset of the anti-dictatorial struggles and the return of democracy. Neo-liberal parties gained hegemony with the turn to electoral politics.

Electoral Politics, the Rise of Neo-Liberalism and the Ascendancy of Extractive Capitalism

The electoral opposition which succeeded the military regimes was initially polarized between a liberal, free market, agro-mineral elite allied with imperial MNC and on the other hand a worker, peasant, rural worker and lower middle class nationalist bloc, intent on promoting public ownership, social welfare, the redistribution of income and agrarian reform. Militant labor formed the CUT; landless peasants formed the MST and both joined the middle class to form the PT[6]

The first decade of electoral politics 1984-94, was characterized by the tug and pull between the residual statist capitalism inherited from the previous military regime and the emerging liberal ‘free market’ bourgeoisie. The debt crises, hyper-inflation, massive systemic corruption, the impeachment of President Collor and economic stagnation severely weakened the statist capitalist sectors and led to ascendancy of an alliance of agro-mineral and finance capital, both foreign and local capitalists, linked to overseas markets.  This retrograde coalition found their political leader and road to power with the election of Fernando Henrique Cardoso, a former leftist academic turned free market zealot.

The election of Cardoso led to a decisive break with the national statist policies of the previous sixty years.  Cardoso’s policies gave a decisive push toward the denationalization and privatization of the economy, essential elements in the reconfiguration of Brazil’s economy and the ascendancy of extractive capital[7].  By almost all indicators Cardoso’s ultra neo-liberal policies led to a precipitous great leap backward, concentrating income and land, and increasing foreign ownership of strategic sectors. Cardoso’s “reform” of the economy at the expense of industrial labor, public ownership, landless rural workers provoked widespread strikes and land occupations[8]. The ‘extractive economy’ especially the opening of lucrative sectors in agriculture, mining and energy took place at the expense of the productive forces: the relative position of manufacturing, technology and high end services declined.  In particular labor earnings as a whole declined as a percentage of GNP[9].

The average growth rate of industry declined to a paltry 1.4%. Employment in the industrial sector fell by 26%, unemployment rose to over 18.4%, the ‘informal sector’ rose from 52.5% in 1980 to 56.1% in 1995[10].

Privatization of public enterprises like the giant and lucrative telecommunication firm Telebras led to the massive firing of workers and subcontracting of labor at lower wages and without social benefits. Under Cardoso, Brazil had the highest rates of inequality (Gini coefficient) in the world – bar one country.

Cardoso used state subsidies to promote foreign capital especially in the agrarian export and mining sectors while the small and medium size farmers were starved for credit. His program of financial deregulation led to currency speculation, massive windfall profits for Wall Street banks as the regime raised interest rates by over 50%[11]. Bankruptcy of farmers led to their dispossession by agro-export capitalists. Concentration of land took a decisive turn as .7% of large landowners owning farms over 2,000 hectares increased their acreage from 39.5% to 43% of Brazilian farmland[12].

During Cardoso’s eight years in office, (1994-2002) there was a tsunami of foreign investment:  over $50 billion flowed in just the first 5 years – ten times the total of the previous 15 years[13]. Foreign owned agro-mineral companies among the top foreign owned companies (as of 1997) numbered over one-third and growing. Between 1996-1998 foreign MNC acquired eight major food, mining and metal production firms[14].

Cardoso’s neo-liberal policies opened the door wide open for foreign capital takeover of critical industrial and banking sectors. Nevertheless, it was the subsequent “Workers Party” presidents Da Silva and Rousseff who completed the Brazilian economy’s Great Leap Backward by decisively turning to extractive capital as the driving force of the economy.

From Neoliberalism to Extractive Capital

Cardoso’s privatizations were sustained and deepened by the Lula regime.  Cardoso’s outrageous privatization of the Vale do Doce iron mine at a fraction of its value was defended by Lula; the same was the case with Cardoso’s defacto privatization of the state oil company Petrobras. Lula embraced the restrictive monetary policies, budget surplus agreements with the IMF and followed the budgetary prescriptions of the IMF directors[15].

The Lula regime (2003-2011) took Cardoso’s neo-liberal policies as a guide to further reconfigure Brazil’s economy to the benefit of foreign and domestic capital located now in the primary, raw material export sector. In 2005 Brazil exported $55.3 billion dollars in raw materials and $44.2 billion in manufacturing goods; in 2011 Brazil tripled its raw material exports to $162.2 billion while its manufacturing exports increased to a mere $60.3 billion[16].

In other words the difference between the value of raw material and manufacturing exports increased from $13 billion to over $100 billion in the last 5 years of Lula’s regime. The relative de-industrialization of the economy, the growing imbalance between the dominant extractive and manufacturing sector illustrates the reversion of Brazil to its ‘colonial style of development’.

Agro-Mining Capitalism, the State and the People

Brazil’s export sector benefited enormously from the rise in commodity prices. The prime beneficiary was its primary agro-mineral sector. But the cost to industry, public transport, living conditions, research and development and education was enormous. Agro-mineral exports provided great revenues to the state but also extracted great subsidies, tax benefits and profits.

Brazil’s industrial economy was adversely affected by the commodity boom because of the rise in the value of its currency, the real by 40% between 2010 – 2012 which increased the price of manufacturing exports and decreased the competitiveness of manufacturing products[17]. The “free market” policies also facilitated the entrance of lower priced manufactured goods from Asia, particularly from China. While Brazil, primary exports to China boomed, its manufacturing sector, particularly consumer goods like textiles and footwear, declined from 2005-2010 by over 10%[18].

Under the Lula-Rousseff regimes, the extreme dependence on a limited number of commodities led to a sharp decline in the productive forces, measured by investments in technological innovations, especially those related to industry[19]. Moreover, Brazil became more dependent than ever on a single market. From 2000 to 2010 Chinese imports of soy – the major agro export – represented 40% of Brazil’s exports; Chinese imports of iron – the key mining export – constitute over a third of the total exports of that sector.  China also imports about 10% of Brazil’s exports of petrol, meat, pulp and paper[20]. Under the Lula and Rousseff regimes, Brazil has reverted to a quasi-mono-cultural economy dependent on a very limited market. As a result the slowdown of China’s economy has predictably led to a decline in Brazil’s growth to fewer than 2% from 2011 to 2013[21].

Brazil: Finance Capital’s Economic Paradise

Under the Workers Party free market policies, finance capital has flooded into Brazil, as never before. Foreign direct investment jumped from about $16 billion in 2002 during the last year of the Cardoso regime to over $48 billion in the last year of Lula’s rule[22]. Portfolio investment – the most speculative sort – rose from a negative $5 billion in 2002 to $67 billion in 2010. Net inflows of FDI and portfolio investments totaled $400 billion during 2007 – 2011 compared to $79 billion during the previous 5 year period[23].  Portfolio investments in high interest bonds, securities returned between 8% – 15% ,triple and quadruple the rates in North America and Europe. Lula and Dilma are poster presidents of Wall Street.

By most important economic indicators the policies of the Lula-Dilma regimes have been the most lucrative for  overseas financial capital and the investors in the primary agro-mineral sectors in the recent history of Brazil.

Agro-Mineral Model and the Environment

Despite their political rhetoric in favor of family farming, the Lula-Dilma regimes have been among the biggest promoters of agro-business in recent Brazilian political history. The largest share of state resources allocated to agriculture, finances agribusiness and large landowners. According to one study, in 2008/2009 small holders received about $6.35 billion (US), while agribusiness and large landholders received $31.9 billion (US) in funding and credit[24]. Less than 4% of government resources and research was directed to family farming and agro-ecological farms.

Under Lula the destruction of the rain forests occurred at a rapid pace. Between 2002 and 2008 the Cerrado region’s vegetation was reduced by 7.5% or over 8.5 million hectares, mostly by agro-business corporations[25]. The Brazilian Cerrado is one of the world’s most biologically rich savannah regions concentrated in the center-east region of the country. According to one study 69% of all the land owned by foreign corporations is concentrated in Brazil’s Cerrado[26]. Between 1995 – 2005 the share of foreign capital in Brazil’s agro-industrial grain sector jumped from 16% to 57%.  Foreign capital has capitalized on the neo-liberal policies under Cardoso, Lula and Dilma to move into agro-fuel (ethanol) sector, controlling about 22% of Brazilian sugar cane and ethanol companies[27] – and rapidly encroaching on the Amazon forest.

Between May 2000 and August 2005, thanks to the expansion of the export sector, Brazil lost 132,000 square kilometers of forest due to the expansion of large landowners and multinationals engaged in cattle raising, soya and forestry[28].  Between 2003 – 2012 over 137 square kilometers have been deforested, aided and abetted by multi-billion dollar government infrastructure investments, tax incentives and subsidies.

In 2008 damage to the Amazon rain forest surged 67%. Under pressure from indigenous, peasant and landless rural workers’ and ecology movements the government took action to curtail deforestation. It declined from a peak of 27,772 square kilometers in 2004 (second only to the highest ever under Cardoso in 1995, 29,059 square kilometers) to 4,656 sq. km in 2012[29].

Cattle ranching is the leading cause of deforestation in the Brazilian Amazon. Estimates attribute over 40% to big capitalist and MNC meat processing corporations[30]. The Lula-Dilma regimes’ major infrastructure investments, especially roads, opened previously inaccessible forest lands to corporate cattle firms. Under Lula and Dilma, commercial agriculture, especially soya beans became the second biggest contributor to deforestation of the Amazon.

Accompanying the degradation of the natural environment, the expansion of agro-business has been accompanied by dispossession, assassination and enslavement of indigenous peoples. The Christian, Pastoral Land Commission reported that landlord violence reached its highest level in at least 20 years in 2004 – Lula’s second year in office. Conflicts rose to 1,801 in 2004 from 1,690 in 2003 and 925 in 2002[31].

According to the government, cattle and soy corporations exploit at least 25,000 Brazilians (mostly dispossessed Indians and peasants) under “conditions analogous to slavery”. Leading NGOs claim the true figure could be ten times that number. Over 183 farms were raided in 2005 freeing 4,133 slaves[32].

Mining: The Vale Rip-off as “Privatization” and the Number One Polluter

Nearly 25% of Brazil’s exports are composed of mineral products – highlighting the growing centrality of extractive capital in the economy. Iron ore is the mineral of greatest importance, representing 78% of total mining exports. In 2008, iron ore accounted for $16.5 of a $22.5 billion of the industry’s earnings[33]. The vast majority of iron exports are dependent on a single market – China. As China’s growth slows, demand declines and increases Brazil’s economic vulnerability.

One firm, privatized during the Cardoso presidency, Vale, through acquisitions and mergers controls almost 100% of Brazil’s productive iron mines[34]. In 1997 Vale was sold by the neoliberal state for $3.14 billion, a small fraction of its value.  Over the following decade it concentrated its investments in mining, establishing a global network of mines in over a dozen countries in North and South America, Australia, Africa and Asia. The Lula – Dilma regime played a major role in facilitating Vale’s dominance of the mining sector and the exponential growth of its value: Vale’s net worth today is over $100 billion but it pays one of the lowest tax rates in the world, despite being the second largest mining company in the world, the largest producer of iron ore and the second largest of nickel.  Maximum royalties on mineral wealth rose from 2% to 4% in 2013[35]; in other words during the decade of the “progressive” government of Lula and Dilma, the tax rate was one-sixth that of conservative Australia with a rate of 12%.

Vale has used its enormous profits to diversify its mining operations and related activities. It sold off businesses such as steel and wood pulp, for $2.9 billion – nearly the price paid for the entire mineral complex.Instead it concentrated on buying up the iron mines of competitors and literally monopolizing production. Vale expanded into manganese, nickel, copper, coal, potash, kaolin, bauxite; it has bought out railroads, ports, container terminals, ships and at least eight hydroelectric plants; two-thirds of its hydro-electrical plants were built during the Lula regime[36].

In sum, monopoly capitalism flourished during the Lula regime with record profits in the extractive sector, extreme damage to the environment and massive displacement of indigenous peoples and small scale producers. The Vale mining experience underlines the powerful structural continuities between the neo-liberal Cardoso and Lula regimes: the former privatized Vale at a “fire sale” price; the latter promoted Vale as the dominant monopoly producer and exporter of iron, totally ignoring the concentration of wealth, profits and powers of extractive capital.

In comparison to the geometrical growth of monopoly profits for the extractive sector, Lula and Dilma’s paltry two dollars a day subsidy to reduce poverty hardly warrants calling the regime “progressive” or “center-left”.

While Lula and Dilma were enraptured with the growth of Brazil’s “mining champion” (Vale), others were not. Into 2002 Public Eye a leading human rights and environmental group gave Vale an “award” as the worst corporation in the world: “The Vale Corporation acts with the most contempt for the environment and human rights in the world”[37]. The critics cited Vale’s construction of the Belo Monte dam in the middle of the Amazon rain forest as having “devastating consequences for the regions unique biodiversity and indigenous tribes”[38].

The mining sector is capital intensive, generates few jobs and adds little value to its exports.  It has degraded water, land and air; adversely affected local communities, dispossessed Indian communities and created a boom and bust economy.

With the marked slowdown of the Chinese economy, especially its manufacturing sector in 2012-14, iron, copper prices have fallen.  Brazil’s export revenues have declined, undermining overall growth. Especially important, channeling resources into infrastructures for the agro-mineral sectors has resulted in the depletion of funds for hospitals, schools and urban transport – which are run down and provide poor service to millions of urban workers.

The End of the Extractive “Mega Cycle” and the Rise of Mass Protests

Brazil’s extractive led model entered a period of decline and stagnation in 2012-2013 as world market demand – especially Asia – declined especially in China[39]. Growth hovered  around 2% ,barely keeping up with population growth. The class based growth model, especially the narrow stratum of foreign portfolio investors, monopoly mining and big agro-business corporations which controls and reaped most of the revenues and profits, limited the “trickle down effects” which the Lula-Dilma regimes promoted as their “social transformation”. While some innovative programs were initiated, the follow-up and quality of services actually deteriorated.

In-patient hospital beds have declined from 3.3 beds per 1,000 Brazilians in 1993, to 1.9 in 2009, the second lowest in the OECD[40]. Hospital admissions financed by the public sector have fallen and long waits and low quality is endemic.

Federal spending on the health system has fallen since 2003, when adjusted for inflation according to the OECD study. Public spending on health is low: 41% compared to the UK at 82% and the US, 45.5%[41].  The class polarization embedded in the agro-mineral extractive model extends to government spending, taxes, transport and infrastructure:  massive financing for highways, dams, hydro-electric power stations for extractive capital versus inadequate public transport and declining spending for public health education and transport.

The deeper roots of the mass upheavals of 2013 are located in the class politics of a corporate state. The Cardoso, Lula-Dilma regimes, over the past two decades, have pursued a conservative elitist agenda, cushioned by clientelistic and paternatistic politics which neutralized mass opposition for an extended period of time, before the mass rebellion and nationwide protests unmasked the “progressive” facade.

Leftist publicists and conservative pundits who claimed Lula as a “pragmatic progressive” overlooked the fact that during his first term, state support for the agro-business elite was seven times  that offered to the family farmers who represented nearly 90% of the rural labor force and provide the bulk of food for local consumption. During Lula’s second term, the Ministry of Agriculture’s financial support for agro-business during the 2008-09 harvest was six times larger than the funds allocated for Lula’s poverty reduction program, the highly publicized “Bolsa Familia” program[42]. Economic orthodoxy and populist demagogy is no substitute for substantive structural changes, involving a comprehensive agrarian reform embracing 4 million landless rural workers, and a re-nationalization of strategic extractive enterprises like Vale in order to finance sustainable agriculture and preserve the rainforest.

Instead Lula and Dilma jumped full force into the ethanol boom: “sugar, sugar everywhere” but never asking, “Whose pocket does it fill?” Brazil’s growing structural rigidity, its transformation into an extractive capitalist economy, has enhanced and enlarged the scope for corruption. Competition for mining contracts, land grants and giant infrastructure projects encourages agro-mineral business elites to pay-off the “party in power” to secure competitive advantages. This was particularly the case for the “Workers Party” who’s executive and party leadership (devoid of workers) was composed of upwardly mobile professionals, aspiring to elite class positions who looked toward business payoffs for their ‘initial capital’, a kind of ‘initial accumulation through corruption’.

The commodity boom, for almost a decade, papered over the class contradictions and the extreme vulnerability of an extractive economy dependent on primary goods exports to limited markets. The neo-liberal policies adapted to further commodity exports led to the influx of manufactured goods and weakened the position of the industrial sector. As a result the efforts of Dilma to revive the productive economy to compensate for the decline of commodity revenues has not worked:  stagflation, declining budget surpluses and weakening trade balances plague her administration precisely when the mass of workers and the middle class are demanding a large scale reallocation of resources from subsidies to the private sector to investments in public services.

Rousseff’s and her mentor, Lula’s entire political fortunes were built on the fragile foundations of the extractive model.  They have failed to recognize the limits of their model, let alone formulated an alternative strategy. Patchwork proposals, political reforms, anti-corruption rhetoric in the face of million person protests spanning all the major and minor cities of the country do not address the basic problem of challenging the concentration of wealth, property and class power of the agro-mineral and financial elite. Their MNC allies control the levers of political power, with and without corruption and block any meaningful reforms.

Lula’s era of “Wall Street Populism” is over. The idea that high revenues from extractive industries can buy popular loyalties via consumerism, funded by easy credit ,has passed. Wall Street investors are no longer praising the BRICs as a new dynamic market.  As is predictable they are shifting their investments to more lucrative activity in new regions. As portfolio investments decline, and the economy stagnates, extractive capital intensifies its push into the Amazon and with it the terrible toll on the indigenous population and the rain forest.

The year 2012 was one of the worst years for the indigenous peoples. According to the Indigenous Missionary Council, affiliated with the Catholic Church, the number of violent incidents against the Indian communities increased 237%[43]. The Rousseff regime has given Indians the least number of legal title (homologado) to land of any president since the return of democracy (seven titles). At this rate the Brazilian state will take a century to title land requests of the Indian communities. At the same time in 2012, 62 Indian territories were invaded by landowners, miners and loggers, 47% more than in 2011[44]. The biggest threat of dispossession is from mega dam projects in Belo Monte and giant hydro-electric projects being promoted by the Rousseff regime. As the agro-mineral economy falters the Indian communities are being squeezed (“silent genocide”) to intensify agro-mineral growth.

The biggest beneficiaries of Brazil’s extractive economy are the world’s top commodity traders who, worldwide, pocketed $250 billion over the 2003-2013 period, surpassing the profits of the biggest Wall Street firms and five of the biggest auto companies. During the mid-2000’s, some traders enjoyed returns of 50 – 60 percent. Even as late as 2013 they were averaging 20 – 30% (Financial Times 4/15/13, p. 1).  Commodity speculators earned more than 10 times what was spent on the poor.  These speculators profit from price fluctuations between locations, from the arbitrage opportunities offered by an abundance of price discrepancies between regions. Monopoly traders eliminated competitors and low taxes (5-15%) have added to their mega wealth. The biggest beneficiaries of the Lula-Dilma extractive model, surpassing even the agro-mineral giants are the twenty biggest commodity traders-speculators.

Extractive Capital, Internal Colonialism and the Decline of the Class Struggle

The class struggle, especially its expression via strikes led by trade unions and by rural workers located in campsites (campamentos) who launch land occupations has declined precipitously over the past quarter of a century. Brazil during the period following the military dictatorship (1989) was a world leader in strikes with 4,000 in 1989. With the return of electoral politics and the incorporation and legalization of the trade unions especially in tripartite collective bargaining framework, strikes declined to an average of 500 during the 1990’s. With the advent of the Lula regime (2003-2010) strikes declined further from 300-400 a year[45].  The two major trade unions CUT and Forca Sindical allied with the Lula regime became virtual adjuncts of the Ministry of Labor:  trade unionists secured positions in government and the organizations received major subsidies from the state, ostensibly for ‘job’ training and worker education  With the commodity boom and the rise in state revenues and export earnings, the governments formulated a trickle down strategy, increasing the minimum wage and launching new anti-poverty programs. In the countryside, the MST continued to demand an agrarian reform and engaged in land occupations but its position of critically supporting the Workers Party in exchange for social subsidies led to a sharp decline in campsites (campamentos) from which to launch land occupations.  At the start of Lula’s presidency (2003) the MST had 285 campamentos, in 2012 it had 13[46].

The decline of class struggle and the co-optation of the established mass movements coincided with the intensification of extractive capitalist exploitation of the interior of the country and the violent dispossession of the indigenous communities. In other words, the heightened exploitation of the ‘interior’ by agro-mineral capital facilitated the concentration of wealth in the large urban centers and the established rural areas, leading to co-optation of trade unions and rural movements. Hence despite some declaratory statements and symbolic protests, agro-mineral capital encountered little organized solidarity between urban labor and the dispossessed Indians and enslaved rural workers in the ‘cleared’ Amazon.  Lula and Dilma played a key role in neutralizing any national united front against the depredations of agro-mineral capital.

The degeneration of the major labor confederations is visible not only in their presence in government and in the absence of strikes but also in the organization of the annual May 1 workers meetings. The recent events have included virtually no political content. There are music spectacles, spiced with lotteries offering automobiles and other forms of consumerist entertainment, financed and sponsored by major private banks and multi-nationals[47]. In effect this relation between city and Amazon resembles a kind of internal colonialism, in which extractive capital has bought off a labor aristocracy as a complicit ally to its plunder of the interior communities.

Conclusion Mass Movements The Extractive Model under Siege

If the CUT and Forca Sindical are co-opted, the MST is weakened and the low income classes received monetary raises how and why did unprecedented mass movements emerge in close to a hundred major and minor cities throughout the country?

The contrast between the new mass movements and the trade unions was evident in their capacity to mobilize support during the June/July(2013) days of protest: the former mobilized 2 million ,the latter 100,000

What needs to be clarified is the difference between the small student and local groups (Movemiento Passe Livre-MPL) which detonated  the mass movements over a raise in bus fares and the pharaonic state expenditure on the World Cup (soccer championship) and Olympics and the spontaneous mass movements which questioned the state’s budgetary policies and priorities in their entirety.

Many publicists for the Lula-Dilma regimes accept at face value, the budgetary allocations destined for social and infrastructure projects, when in fact only a fraction is actually spent as much is stolen by corrupt officials. For example between 2008-12

R$6.5 billion was designated for public transport in the principal cities but only 17% was actually spent.(Veja ano 46,no29 7/17/2013) According to the NGO “Contas Abertas” (Open Accounts) over a ten year period Brazil spent over R$160 billion in public works which are unfinished, never left the drawing board or were stolen by corrupt officials. One of the most egregious cases of corruption and mismanagement is the construction of a 12 kilometer subway in Salvador, with the provision that it would be completed in 40 months at the cost ofR$307 million. Thirteen years later (2000-13) expenditures increased to nearly 1 billion reales and barely 6 kilometers have been completed. Six locomotors and 24 wagons purchased for 100 million reales have broken down and the manufacturers warranty has expired (Veja ano 46.no 29 7/17/13). The project has been paralyzed by claims of corrupt  overcharging (sobrefacturacion) involving federal, state and municipal officials. Meanwhile 200,000 passengers are forced daily to travel on dilapidated buses.

The deep corruption which infects the entire Lula-Dilma administration has driven a deep wedge between the achievements claimed by the regime and the deteriorating everyday experience of the great majority of the Brazilian people. The same gap exists regarding expenditures to preserve the Amazon rain forest, the Indian lands, and to fund the anti-poverty programs: corrupt PT officials siphon funds to finance their election campaigns rather then reduce environmental destruction and reduce poverty.

If the wealth from the boom in the agro-mineral extractive model “percolated” into the rest of the economy and raised wages, it did so in a very uneven, unequal and distorted fashion. The great wealth concentrated at the top found expression in a kind of new caste-class system in which private transport – helicopters and heliports – private clinics, private schools, private recreation areas, private security armies for the rich and affluent was funded by state promoted subsidies. In contrast the masses experienced a sharp relative and absolute decline in public services in the same essential life experiences. The raise in minimum wage did not compensate for 10 hour waits in crowded public emergency rooms, irregular and crowded public transport, daily personal threats and insecurity (50,000 homicides). Parents, receiving the anti-poverty dole sent their children to decaying schools where poorly paid teachers rushed from one school to another barely meeting their classes and providing meager learning experiences. The greatest indignity to those receiving subsistence handouts was to be told that, in this class-caste society, they were “middle class”; that they were part of an immense social transformation that lifted 40 million out of poverty, as they crawled home from hours in traffic, back from jobs whose monthly salary paid for one tennis match at an upscale country club. The agro-mineral extractive economy, accentuated all Brazil’s socio-economic inequalities and the Lula-Dilma regime accentuated these difference by raising expectations, claiming their fulfillment and then ignoring the real social impacts on everyday life. The government’s large scale budgetary allocations for public transport and promises of projects for new subway and train lines have been delayed for decades by large scale, long term corruption. Billions spent over the years have yielded minimum results-a few kilometers completed. The result is that the gap between the regime’s optimistic projections and mass frustration has vastly increased. The gap between the populist promise and the deepening cleavage between classes could not be papered over by trade union lotteries and VIP lunches. Especially for an entire generation of young workers who are not attached to the ancient memories of Lula the “metal worker” a quarter century earlier. The CUT, the FS, the Workers’ Party are irrelevant or are perceived to be part of the system of corruption, social stagnation and privilege. The most striking feature of the new wave of class protest is the generational and organizational split: older metal workers are absent, young unorganized service workers are present. Local, spontaneous organizations replace the co-opted trade unions.

The point of confrontation is the street – not the workplace. The demands transcend monetary wages and salaries – the issues are the social wage, living standards, national budgets. Ultimately the new social movements raise the issue of national class priorities. The regime is dispossessing hundreds of thousands of residents of favelas – a social purge – to build sports complexes and luxury accommodations. Social issues inform the mass movements. Their organizational independence and autonomy underline the deeper challenge to the entire neo-liberal extractive model; even though no national organizations or leadership of these mass movements has emerged to elaborate an alternative. Yet the struggle continues. The traditional mechanisms of co-optation fail because there are no identifiable leaders to buy off. The regime, facing the decline of export markets and commodity prices, and deeply committed to multi-billion dollar non-productive investments in the Games has few options. The PT long ago lost its anti-systemic cutting edge.  Its politicos are linked with and funded by the banks and agro-mining elites. The trade union leaders protect their fiefdoms, automatic dues deductions and stipends. The mass movements of the cities like the Indian communities of the Amazon will have to find  new political instruments. But having taken the path of “direct action” they have taken a big first step.

[1] James Petras and Henry Vettmeyer Cardoso’s Brazil:  A land for Sale (Lanham, Maryland:  Rowman and Littlefield 2003/Chapter 2.

[2] ibid Chapter 1.

[3] James Petras, Brasil e Lula – Ano Zero (Blumenau: EdiFurb 2005) Chapter 1.

[4] Peter Evans, Dependent Development:  The Alliance of Multinational State and Local Capital in Brazil (Princeton NJ: Princeton University Press 1979.

[5] Jose Serra “The Brazilian Economic Miracle” in James Petras Latin America from Dependence to Revolution (New York:  John Wiley 1973) pp. 100 – 140.

[6] Brasil e Lula op cit. Ch. 1

[7] Cardoso’s Brazil  Ch. 5

[8] ibid, Ch.3 and 6

[9] ibid, Table A.12, p. 126

[10]iIbid, Ch. 3.

[11] ibid, Ch. 1, 2.

[12] ibid, Ch. 5

[13] ibid, Ch. 2.

[14] ibid, Table A. 6.

[15] Brasil e Lula, Ch. 1.

[16] Brazil Exports by Product Section (USD) http:\\www.INDEXMUNDI.com/trade/exports/Brazil

[17] Peter Kingstone “Brazil’s Reliance on Commodity Exports threatens its Medium and Long Term Growth Prospects” http://www.americasquarterly.or/icingstone.

[18] Brazil Exports op cit.

[19] Kingstone op cit.

[20] Kingstone op cit. World Bank Yearbook 2011.

[21] Financial Times 3/26/13, p. 7.

[22] Brazil’s Surging Foreign Investment:  A Blessing or Curse?  VSITC Executive Briefing on Trade Oct. 2012.

[23] ibid

[24] http://rainforests:mongabay.com/amazon_destruction

[25] Ibid.

[26] Bernard Mancano Fernandes and Elizabeth Alice Clements “Land Grabbing, Agribusiness and the Peasantry in Brazil and Mozambique” Agrarian South (April 2013).

[27] Rainforests op cit.

[28] Rainforests op cit.

[29] Rainforests op cit.

[30] ibid

[31] Jose Manual Rambla “La agonia de los pueblos indigenas, buera de la agenda reivindicativa de Brasil” rebellion.org/notice, 5/7/13.

[32] Rainforests ibid p. 8

[33] Brazil Mining http://www.e-mj.com/index.php/reatures/850-Brazil-,mining.

[34] Wikipedia Vale http://en.wilkipedia.org/wiki/vale_miningcompany.

[35] The Economist, June 2, 2013.

[36] Wikipedia, p. 9.

[37] Guardian, Jan. 27, 2012.

[38] ibid

[39] Financial Times, July 13, 2013, p. 9.

[40] Financial Times, July 1, 2013.

[41] ibid

[42] Rainforest op cit.

[43] ibid

[44] ibid

[45] Raul Zibechi “Elfindel consenso lulista” rebellion 7/7/13

[46] Ibid.

[47] Ibid.

 

Jul 232013
 

Posted by greydogg, 99GetSmart

* THIS WEEK IN PRESS FREEDOMS AND PRIVACY RIGHTS

By Glenn Greenwald, Guardian

A military judge this week refused to dismiss the most serious charge against Bradley Manning. Photograph: Patrick Semansky/AP

A military judge this week refused to dismiss the most serious charge against Bradley Manning. Photograph: Patrick Semansky/AP

The travesty calling itself “the Bradley Manning court-martial”, the kangaroo tribunal calling itself “the FISA court”, and the emptiness of what the Obama DOJ calls “your constitutional rights”

[…] (1) In the utter travesty known as “the Bradley Manning court-martial proceeding”, the military judge presiding over the proceeding yet again showed her virtually unbreakable loyalty to the US government’s case by refusing to dismiss the most serious charge against the 25-year-old Army Private, one that carries a term of life in prison: “aiding and abetting the enemy”. The government’s theory is that because the documents Manning leaked were interesting to Osama bin Laden, he aided the enemy by disclosing them. Harvard Law Professor Yochai Benkler explained in the New Republic in March why this theory poses such a profound threat to basic press freedoms as it essentially converts all leaks, no matter the intent, into a form of treason.

At this point, that seems to be the feature, not a bug. Anyone looking for much more serious leaks than the one that Manning produced which ended up attracting the interest of bin Laden should be looking here. The Obama White House yesterday told Russia that it must not persecute “individuals and groups seeking to expose corruption” – as Bradley Manning faces life in prison for alerting the world to the war abuses and other profound acts of wrongdoing he discovered and as the unprecedented Obama war on whistleblowers rolls on. That lecture to Russia came in the context of White House threats to cancel a long-planned meeting over the Russian government’s refusal to hand over NSA whistleblower Edward Snowden to the US to face espionage charges.

(2) The kangaroo tribunal calling itself “the FISA court” yesterday approved another government request (please excuse the redundancy of that phrase: “the FISA court approved the government’s request”). Specifically, the “court” approved the Obama administration’s request for renewal of the order compelling Verizon to turn over to the NSA all phone records of all Americans, the disclosure of which on June 6 in this space began the series of NSA revelations. This ruling was proudly announced by the office of the Director of National Intelligence, which declassified parts of that program only after we published the court ruling. In response, the ACLU’s privacy expert Chris Soghoian sarcastically observed: “good thing the totally not a rubberstamp FISA court is on the job, or we might turn into a surveillance state”; the Wall Street Journal’s Tom Gara noted: “Reminder: The style guide for mentioning the FISA court is that it’s written ‘court’ with scare quotes.”

(3) In response to our NSA reporting, several groups, including the ACLU and EFF, filed lawsuits challenging the constitutionality of the US government’s spying programs. A federal court yesterday heard arguments in the suit brought by the ACLU, and the Obama DOJ asked the court to dismiss it on several grounds, including that it “cannot be challenged in a court of law”.

(4) Speaking of the Obama DOJ attempting to block judicial adjudication of the legality of its actions: a different federal judge heard a lawsuit yesterday challenging the constitutionality of Obama’s extra-judicial killings by drones of three American citizens, including the 16-year-old American-born Abdulrahaman Awlaki, whose grandfather wrote this powerful Op-Ed in the New York Times this week under the headline “The Drone That Killed My Grandson”. The judge repeatedly expressed incredulity at the DOJ’s argument that courts had no role to play in reviewing the legality of these killings, which then led to this exchange:

“‘Are you saying that a US citizen targeted by the United States in a foreign country has no constitutional rights?’ she asked Brian Hauck, a deputy assistant attorney general. ‘How broadly are you asserting the right of the United States to target an American citizen? Where is the limit to this?’

“She provided her own answer: ‘The limit is the courthouse door’ . . . .

“‘Mr. Hauck acknowledged that Americans targeted overseas do have rights, but he said they could not be enforced in court either before or after the Americans were killed.'”

Re-read that last line, as it’s the Obama administration in a nutshell: of course you have those pretty rights, dear citizens. It’s just that nobody can enforce them or do anything to us when we violate them. But you do have them, and they’re really, really important, and we do value them so very highly, and President Obama will deliver another really majestic speech soon in front of the Constitution about how cherished and valued they are.[…]

READ / VIDEO @ http://www.guardian.co.uk/commentisfree/2013/jul/20/press-freedoms-manning-risen

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* AUGUST 2007 – FISA DEBATE: RUSH HOLT

Source: youtube

The US House of Rep debated changes to FISA requested by the Bush administration.

VIDEO @ http://www.youtube.com/watch?v=TMNix9wYORM#at=92

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* AMERICA NO LONGER HAS A FUNCTIONING JUDICIAL SYSTEM

Source: WashingtonsBlog

kangaroo-court-440x240

The Separation of Powers Which Define Our Democracy Have Been Destroyed

The Department of Justice told a federal court this week that the NSA’s spying “cannot be challenged in a court of law”.

(This is especially dramatic given that numerous federal judges and legal scholars – including a former FISA judge – say that the FISA spying “court” is nothing but a kangaroo court.)

Also this week, the Department of Justice told a federal court that the courts cannot review the legality of the government’s assassination by drone of Americans abroad:

“‘Are you saying that a US citizen targeted by the United States in a foreign country has no constitutional rights?’ [the judge]  asked Brian Hauck, a deputy assistant attorney general. ‘How broadly are you asserting the right of the United States to target an American citizen? Where is the limit to this?’

“She provided her own answer: ‘The limit is the courthouse door’ . . . .

“‘Mr. Hauck acknowledged that Americans targeted overseas do have rights, but he said they could not be enforced in court either before or after the Americans were killed.’”

(Indeed, the Obama administration has previously claimed the power to be judge, jury and executioner in both drone and cyber-attacks.  This violates Anglo-Saxon laws which have been on the books in England and America for 800 years.)

The Executive Branch also presents “secret evidence” in many court cases … sometimes even hiding the evidence from the judge who is deciding the case.

Bush destroyed much of the separation of powers which made our country great.  But under Obama, it’s gotten worse.

For example, the agency which decides who should be killed by drone is the same agency which spies on all Americans.

Daniel Ellsberg notes that even the Founding Fathers didn’t have to deal with a government claiming that it could indefinitely detain Americanseven on American soil.

After Pulitzer Prize winning journalist Chris Hedges, journalist Naomi Wolf, Pentagon Papers whistleblower Daniel Ellsberg and others sued the government to enjoin the NDAA’s allowance of the indefinite detention of Americans – the judge asked the government attorneys 5 times whether journalists like Hedges could be indefinitely detained simply for interviewing and then writing about bad guys. The government refused to promise that journalists like Hedges won’t be thrown in a dungeon for the rest of their lives without any right to talk to a judge.

The Department of Justice has also tapped Congressional phones, and a high-level NSA whistleblower says that the NSA is spying on – and blackmailing – top government officials and military officers including all 9 Supreme Court justices.

It’s not just the Executive Branch which has attacked the courts.  For example, Congress passed a bill stripping courts of the power to review issues related to genetically modified foods. […]

READ @ http://www.washingtonsblog.com/2013/07/america-no-longer-has-a-functioning-judiciary.html

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* THE HUNTED AND THE HATED: AN INSIDE LOOK AT THE NYPD’s STOP-AND-FRISK POLICY

Source: youtube

A secret audio recording of a stop-and-frisk in action sheds unprecedented light on a practice that has put the city’s young people of color in the NYPD’s crosshairs. Read the full story at: http://www.thenation.com/article/1704…

VIDEO @ http://www.youtube.com/watch?v=7rWtDMPaRD8#at=621

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* KOCH BROTHERS FLOUT LAW GETTING RICHER WITH SECRET IRAN SALES

By Asjylyn Loder & David Evans, Bloomberg

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In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.

“I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”

She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.

By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France.

“Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.

Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination. […]

READ @ http://www.bloomberg.com/news/2011-10-02/koch-brothers-flout-law-getting-richer-with-secret-iran-sales.html

Jul 222013
 

Posted by greydogg, 99GetSmart

* 25 FACTS ABOUT THE FALL OF DETROIT THAT WILL LEAVE YOU SHAKING YOUR HEAD

By Michael Snyder, TheEconomicCollapse

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It is so sad to watch one of America’s greatest cities die a horrible death.  Once upon a time, the city of Detroit was a teeming metropolis of 1.8 million people and it had the highest per capita income in the United States.  Now it is a rotting, decaying hellhole of about 700,000 people that the rest of the world makes jokes about.  On Thursday, we learned that the decision had been made for the city of Detroit to formally file for Chapter 9 bankruptcy.  It was going to be the largest municipal bankruptcy in the history of the United States by far, but on Friday it was stopped at least temporarily by an Ingham County judge.  She ruled that Detroit’s bankruptcy filing violates the Michigan Constitution because it would result in reduced pension payments for retired workers.  She also stated that Detroit’s bankruptcy filing was “also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy“, and she ordered that a copy of her judgment be sent to Barack Obama.  How “honoring the president” has anything to do with the bankruptcy of Detroit is a bit of a mystery, but what that judge has done is ensured that there will be months of legal wrangling ahead over Detroit’s money woes.  It will be very interesting to see how all of this plays out.  But one thing is for sure – the city of Detroit is flat broke.  One of the greatest cities in the history of the world is just a shell of its former self.  The following are 25 facts about the fall of Detroit that will leave you shaking your head…

1) At this point, the city of Detroit owes money to more than 100,000 creditors.

2) Detroit is facing $20 billion in debt and unfunded liabilities.  That breaks down to more than $25,000 per resident.

3) Back in 1960, the city of Detroit actually had the highest per-capita income in the entire nation.

4) In 1950, there were about 296,000 manufacturing jobs in Detroit.  Today, there are less than 27,000.

5) Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.

6) There are lots of houses available for sale in Detroit right now for $500 or less.

7) At this point, there are approximately 78,000 abandoned homes in the city.

8) About one-third of Detroit’s 140 square miles is either vacant or derelict.

[…]

It is easy to point fingers and mock Detroit, but the truth is that the rest of America is going down the exact same path that Detroit has gone down.

Detroit just got there first.

All over this country, there are hundreds of state and local governments that are also on the verge of financial ruin… […]

READ @ http://theeconomiccollapseblog.com/archives/25-facts-about-the-fall-of-detroit-that-will-leave-you-shaking-your-head

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* MODERN RUINS OF ABANDONED DETROIT (PHOTOS)

By Matthew Neugeboren and Stephanie Valera, TheWeatherChannel

The United Artists Theater in Detroit. (Yves Marchand and Romain Meffre)

The United Artists Theater in Detroit. (Yves Marchand and Romain Meffre)

Symbolizing the dramatic decline of Motor City, many buildings and structures in the former manufacturing mecca of Detroit, Mich. lay in crumbling and weather-beaten ruins. In his bestselling book, “The World Without Us,” Alan Weisman (who has reported from abandoned cities such as Chernobyl, Ukraine and Varosha, Cyprus) wrote that structures crumble as weather does unrepaired damage and other life forms create new habitats. A common structure would begin to fall apart as water eventually leaks into the roof, erodes the wood and rusts the nail, he wrote. Without intervention, many of Detroit’s abandoned structures would eventually succumb to nature’s elements.

But there is a haunting beauty to the decaying ruins of a post-industrial city such as Detroit, which has become the largest American city to file for bankruptcy. And this is what photographers Yves Marchand and Romain Meffre captured in their series “The Ruins of Detroit” (Steidl, 2011). In the images above, Marchand and Meffre document a city’s disintegration, showcasing structures that were formerly a source of civic pride. […]

READ @ http://www.weather.com/travel/modern-ruins-abandoned-detroit-photos-20130715

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* DETROIT, AND THE BANKRUPTCY OF AMERICA’S SOCIAL CONTRACT

By Robert Reich

Michigan Central Station

Michigan Central Station

One way to view Detroit’s bankruptcy — the largest bankruptcy of any American city — is as a failure of political negotiations over how financial sacrifices should be divided among the city’s creditors, city workers, and municipal retirees — requiring a court to decide instead. It could also be seen as the inevitable culmination of decades of union agreements offering unaffordable pension and health benefits to city workers.

But there’s a more basic story here, and it’s being replicated across America: Americans are segregating by income more than ever before. Forty years ago, most cities (including Detroit) had a mixture of wealthy, middle-class, and poor residents. Now, each income group tends to lives separately, in its own city — with its own tax bases and philanthropies that support, at one extreme, excellent schools, resplendent parks, rapid-response security, efficient transportation, and other first-rate services; or, at the opposite extreme, terrible schools, dilapidated parks, high crime, and third-rate services.

The geo-political divide has become so palpable that being wealthy in America today means not having to come across anyone who isn’t. […]

READ @ http://robertreich.org/post/55976062830

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* DETROIT’S COLLAPSE REVEALS THE AWFUL DYSTOPIA THAT THE UNITED STATES IS BECOMING

By Juan Cole, AlterNet

Packard Motors Plant

Packard Motors Plant

The Motor City’s problems — deindustrialization, robotification, long-term unemployment, racial division — are America’s problems.

The big question is whether Detroit’s bankruptcy and likely further decline is a fluke or whether it tells us something about the dystopia that the United States is becoming. It seems to me that the city’s problems are the difficulties of the country as a whole, especially the issues of deindustrialization, robotification, structural unemployment, the rise of the 1% in gated communities, and the racial divide. The mayor has called on families living in the largely depopulated west of the city to come in toward the center, so that they can be taken care of. It struck me as post-apocalyptic. Sometimes the abandoned neighborhoods accidentally catch fire, and 30 buildings will abruptly go up in smoke.

Detroit had nearly 2 million inhabitants in its heyday, in the 1950s. When I moved to southeast Michigan in 1984, the city still had over a million. I remember that at the time of the 1990 census, its leaders were eager to keep the status of a million-person city, since there were extra Federal monies for an urban area of that size, and they counted absolutely everyone they could find. They just barely pulled it off. But in 2000 the city fell below a million. In 2010 it was 714,000 or so. Google thinks it is now 706,000. There is no reason to believe that it won’t shrink on down to almost nothing.

The foremost historian of modern Detroit, Thomas J. Sugrue, has explained the city’s decline. First of all, Detroit grew from 400,000 to 1.84 million from 1910-1950 primarily because of the auto industry and the other industries that fed it (machine tools, spare parts, services, etc.) From 1950 until now, two big things happened to ruin the city with regard to industry. The first was robotification. The automation of many processes in the factories led to fewer workers being needed, and produced unemployment. (It was a trick industrial capitalism played on the African-Americans who flocked to Detroit in the 1940s to escape being sharecroppers in Georgia and elsewhere in the deep South, that by the time they got settled the jobs were beginning to disappear). Then, the auto industry began locating elsewhere, along with its support industries, to save money on labor or production costs or to escape regulation.

The refusal of the white population to allow African-American immigrants to integrate produced a strong racial divide and guaranteed inadequate housing and schools to the latter. Throughout the late 1950s and the 1960s, you had substantial white flight, of which the emigration from the city after the 1967 riots was a continuation. The white middle and business classes took their wealth with them to the suburbs, and so hurt the city’s tax base. That decrease in income came on top of the migration of factories. The fewer taxes the city brought in, the worse its services became, and the more people fled. The black middle class began departing in the 1980s and now is mostly gone. […]

READ @ http://www.alternet.org/economy/detroits-collapse-reveals-awful-dystopia-united-states-becoming?paging=off

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* DETROIT MAYOR WARNS “WE MAY BE ONE OF THE FIRST … BUT WE ABSOLUTELY WON’T BE THE LAST”

By Tyler Durden, zerohedge

Fisher Body 21 Plant

Fisher Body 21 Plant

Amid the furore of Sunday morning political programming, Detroit Mayor Bing and Michigan Governor Snyder have been quite vocal. Bing made it clear that “a lot of negotiations will go into fixing our city,” and when asked whether he will seek a Federal bailout, he responded, “not yet.” The decisions following this huge bankruptcy are likely to be precedent-setting as Bing noted that more than 100 urban US cities “are having the same  problems we’re having.” As the WSJ reports, Bing warned, “We may be one of the first. We are the largest. But we absolutely will not be the last. And so we have got to set a benchmark in terms how to fix our cities.” Snyder was a little more hopeful that salvation will come from above as he stated that while “I don’t view that as the right answer… if the federal government wants to [bail us out], that’s their option.”

Via WSJ:

Detroit Mayor Dave Bing on Sunday left the door open for a federal bailout after the city’s bankruptcy filing, saying the nation’s response would “set a benchmark” for aiding other struggling cities.

Asked directly whether Detroit would seek a federal bailout, Mr. Bing said “not yet.”

More than 100 urban U.S. cities “are having the same problems we’re having,” Mr. Bing said. “We may be one of the first.  We are the largest. But we absolutely will not be the last.  And so we have got to set a benchmark in terms how to fix our cities.”

Republican Michigan Gov. Rick Snyder, appearing on other Sunday news programs, also left the door open for federal bailout money. “If the federal government wants to do that, that’s their option,” he said on CBS’s “Face the Nation.” But he added, “I don’t view that as the right answer.”

… […]

READ @ http://www.zerohedge.com/news/2013-07-21/detroit-mayor-warns-we-may-be-one-first-we-absolutely-wont-be-last

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* ONLY WALL STREET WINS IN DETROIT CRISIS REAPING $474 MILLION FEE

By Darrel Preston & Chris Christoff, Bloomberg

The city started borrowing to plug budget holes in 2005 under former Mayor Kwame Kilpatrick, who was convicted this week on corruption charges. That year, it issued $1.4 billion in securities to fund pension payments. Last year, it added $129.5 million in debt, 9.3 percent of its general-fund budget, in part to repay loans taken to service other bonds.

The city started borrowing to plug budget holes in 2005 under former Mayor Kwame Kilpatrick, who was convicted this week on corruption charges. That year, it issued $1.4 billion in securities to fund pension payments. Last year, it added $129.5 million in debt, 9.3 percent of its general-fund budget, in part to repay loans taken to service other bonds.

The only winners in the financial crisis that brought Detroit (9845MF) to the brink of state takeover are Wall Street bankers who reaped more than $474 million from a city too poor to keep street lights working.

The city started borrowing to plug budget holes in 2005 under former Mayor Kwame Kilpatrick, who was convicted this week on corruption charges. That year, it issued $1.4 billion in securities to fund pension payments. Last year, it added $129.5 million in debt, 9.3 percent of its general-fund budget, in part to repay loans taken to service other bonds.

Detroit, which is trying to avoid becoming the largest U.S. municipal bankruptcy, struggles to serve residents after revenue declined when the auto industry collapsed and the city began to empty. Michigan (BEESMI)’s Republican governor, Rick Snyder, is preparing to name an emergency manager, who will have to address debt and derivatives taken on in the last eight years.

“We have no lights, no buses, poor streets and now we’re paying millions of dollars a year on our debt,” said David Sole, a retired municipal worker and advocate for Moratorium Now Coalition, a Detroit group that fights foreclosures and evictions. “The banks said they need to be paid first. But there is no money.”

The city, which peaked at 1.85 million residents in 1950, has lost more than a quarter of its population since 2000. The 700,000 inhabitants who remain endure unreliable buses, inadequate police and fire protection and broken street lights that have darkened entire blocks.

Covering Shortfalls

Banks including UBS AG (UBS), Bank of America Corp.’s Merrill Lynch and JPMorgan Chase & Co (JPM). have enabled about $3.7 billion of bond issues to cover deficits, pension shortfalls and debt payments since 2005, according to data compiled by Bloomberg. Liabilities rose to almost $15 billion, including money owed retirees, according to a state treasurer’s review.

The debt sales cost Detroit $474 million, including underwriting expenses, bond-insurance premiums and fees for wrong-way bets on swaps, according to data compiled by Bloomberg. That almost equals the city’s 2013 budget for police and fire protection.

The largest part is $350 million owed for derivatives meant to lower borrowing costs on variable-rate debt. […]

READ @ http://www.bloomberg.com/news/2013-03-14/only-wall-street-wins-in-detroit-crisis-reaping-474-million-fee.html