Geithner's 'Dirty Little Secret': The Entire Global Financial System is at Risk

GlobalResearch.ca

US Treasury Secretary Tim Geithner has unveiled his long-awaited plan to put the US banking system back in order. In doing so, he has refused to tell the 'dirty little secret' of the present financial crisis. By refusing to do so, he is trying to save de facto bankrupt US banks that threaten to bring the entire global system down in a new more devastating phase of wealth destruction.
The Geithner Plan, his so-called Public-Private Partnership Investment Program or PPPIP, as we have noted previously is designed not to restore a healthy lending system which would funnel credit to business and consumers. Rather it is yet another intricate scheme to pour even more hundreds of billions directly to the leading banks and Wall Street firms responsible for the current mess in world credit markets without demanding they change their business model. Yet, one might say, won't this eventually help the problem by getting the banks back to health?
Not the way the Obama Administration is proceeding. In defending his plan on US TV recently, Geithner, a protégé of Henry Kissinger who previously was CEO of the New York Federal Reserve Bank, argued that his intent was 'not to sustain weak banks at the expense of strong.' Yet this is precisely what the PPPIP does. The weak banks are the five largest banks in the system.
The 'dirty little secret' which Geithner is going to great degrees to obscure from the public is very simple. There are only at most perhaps five US banks which are the source of the toxic poison that is causing such dislocation in the world financial system. What Geithner is desperately trying to protect is that reality. The heart of the present problem and the reason ordinary loan losses as in prior bank crises are not the problem, is a variety of exotic financial derivatives, most especially so-called Credit Default Swaps.
In 2000 the Clinton Administration then-Treasury Secretary was a man named Larry Summers. Summers had just been promoted from No. 2 under Wall Street Goldman Sachs banker Robert Rubin to be No. 1 when Rubin left Washington to take up the post of Vice Chairman of Citigroup. As I describe in detail in my new book, Power of Money: The Rise and Fall of the American Century, to be released this summer, Summers convinced President Bill Clinton to sign several Republican bills into law which opened the floodgates for banks to abuse their powers. The fact that the Wall Street big banks spent some $5 billion in lobbying for these changes after 1998 was likely not lost on Clinton.
One significant law was the repeal of the 1933 Depression-era Glass-Steagall Act that prohibited mergers of commercial banks, insurance companies and brokerage firms like Merrill Lynch or Goldman Sachs. A second law backed by Treasury Secretary Summers in 2000 was an obscure but deadly important Commodity Futures Modernization Act of 2000. That law prevented the responsible US Government regulatory agency, Commodity Futures Trading Corporation (CFTC), from having any oversight over the trading of financial derivatives. The new CFMA law stipulated that so-called Over-the-Counter (OTC) derivatives like Credit Default Swaps, such as those involved in the AIG insurance disaster, (which investor Warren Buffett once called 'weapons of mass financial destruction'), be free from Government regulation.
At the time Summers was busy opening the floodgates of financial abuse for the Wall Street Money Trust, his assistant was none other than Tim Geithner, the man who today is US Treasury Secretary. Today, Geithner's old boss, Larry Summers, is President Obama's chief economic adviser, as head of the White House Economic Council. To have Geithner and Summers responsible for cleaning up the financial mess is tantamount to putting the proverbial fox in to guard the henhouse.
The 'Dirty Little Secret'
What Geithner does not want the public to understand, his 'dirty little secret' is that the repeal of Glass-Steagall and the passage of the Commodity Futures Modernization Act in 2000 allowed the creation of a tiny handful of banks that would virtually monopolize key parts of the global 'off-balance sheet' or Over-The-Counter derivatives issuance.
Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency's Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default.
The five are, in declining order of importance: JPMorgan Chase which holds a staggering $88 trillion in derivatives (€66 trillion!). Morgan Chase is followed by Bank of America with $38 trillion in derivatives, and Citibank with $32 trillion. Number four in the derivatives sweepstakes is Goldman Sachs with a 'mere' $30 trillion in derivatives. Number five, the merged Wells Fargo-Wachovia Bank, drops dramatically in size to $5 trillion. Number six, Britain's HSBC Bank USA has $3.7 trillion.
After that the size of US bank exposure to these explosive off-balance-sheet unregulated derivative obligations falls off dramatically. Just to underscore the magnitude, trillion is written 1,000,000,000,000. Continuing to pour taxpayer money into these five banks without changing their operating system, is tantamount to treating an alcoholic with unlimited free booze.
The Government bailouts of AIG to over $180 billion to date has primarily gone to pay off AIG's Credit Default Swap obligations to counterparty gamblers Goldman Sachs, Citibank, JP Morgan Chase, Bank of America, the banks who believe they are 'too big to fail.' In effect, these five institutions today believe they are so large that they can dictate the policy of the Federal Government. Some have called it a bankers' coup d'etat. It definitely is not healthy.
This is Geithner's and Wall Street's Dirty Little Secret that they desperately try to hide because it would focus voter attention on real solutions. The Federal Government has long had laws in place to deal with insolvent banks. The FDIC places the bank into receivership, its assets and liabilities are sorted out by independent audit. The irresponsible management is purged, stockholders lose and the purged bank is eventually split into smaller units and when healthy, sold to the public. The power of the five mega banks to blackmail the entire nation would thereby be cut down to size. Ooohh. Uh Huh?
This is what Wall Street and Geithner are frantically trying to prevent. The problem is concentrated in these five large banks. The financial cancer must be isolated and contained by Federal agency in order for the host, the real economy, to return to healthy function.
This is what must be put into bankruptcy receivership, or nationalization. Every hour the Obama Administration delays that, and refuses to demand full independent government audit of the true solvency or insolvency of these five or so banks, inevitably costs to the US and to the world economy will snowball as derivatives losses explode. That is pre-programmed as worsening economic recession mean corporate bankruptcies are rising, home mortgage defaults are exploding, unemployment is shooting up. This is a situation that is deliberately being allowed to run out of (responsible Government) control by Treasury Secretary Geithner, Summers and ultimately the President, whether or not he has taken the time to grasp what is at stake.
Once the five problem banks have been put into isolation by the FDIC and the Treasury, the Administration must introduce legislation to immediately repeal the Larry Summers bank deregulation including restore Glass-Steagall and repeal the Commodity Futures Modernization Act of 2000 that allowed the present criminal abuse of the banking trust. Then serious financial reform can begin to be discussed, starting with steps to 'federalize' the Federal Reserve and take the power of money out of the hands of private bankers such as JP Morgan Chase, Citibank or Goldman Sachs.
F. William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order; and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). His newest book, Full Spectrum Dominance: Totalitarian Democracy in the New World Order (Third Millennium Press) is due out at end of April. He may be reached through his website, www.engdahl.oilgeopolitics.net.

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White House sets tough deadline to force overhaul of ailing US carmakers

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StarTribune.com

President Barack Obama refused further long-term federal bailouts for General Motors and Chrysler, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility Monday of controlled bankruptcy for one or both of the beleaguered auto giants.
At the same time, eager to reassure consumers, Obama announced the federal government would immediately begin backing the warranties that new car buyers receive -- a step designed to signal that it is safe to purchase U.S.-made autos and trucks despite the distress of the industry.
In a statement read at the White House, Obama said he was "absolutely committed" to the survival of a domestic auto industry that can compete internationally. And yet, "our auto industry is not moving in the right direction fast enough," he added.
With his words, Obama underscored the extent to which the government is now dictating terms to two of the country's iconic corporations, much as it has already taken an ownership stake in banks, the insurance giant AIG and housing titans Fannie Mae and Freddie Mac.
In an extraordinary move, the administration forced the departure of Rick Wagoner as CEO of General Motors over the weekend, and implicit in Obama's remarks was that the government holds the ability to pull the plug on that company or Chrysler.
Uncertainty about the industry's fate sent stocks tumbling, with the Dow Jones industrial average losing as much as 300 points in midday trading.
Ford Motor Co., the third member of the Big 3, has not requested federal bailout funds, and was not included in the president's remarks.
The Bush administration late last year approved $17 billion in federal funds to help GM and Chrysler survive. It also demanded both companies submit restructuring plans that the Obama administration would review.
Even as he pronounced their effort unsatisfactory, the president said the administration will offer General Motors "adequate working capital" over the next 60 days to produce a reorganization plan acceptable to the administration.
He said Chrysler's situation is more perilous, and the government will give the company 30 days to overcome hurdles to a merger with Fiat SpA, the Italian automaker. If they are successful "we will consider lending up to $6 billion to help their plan succeed," Obama said.
He also announced several steps to reassure consumers, and improve the chances that U.S. automakers will be able to sell their cars and trucks.
The president said the government will now stand behind warrantees issued by the carmakers, a sweeping new guarantee that some in Congress had sought.
He also noted that the economic stimulus legislation he recently signed allows the purchasers of new domestic cars to deduct the cost of any sales and excise taxes. Obama said this provision could "save families hundreds of dollars and lead to as many as 100,000 new car sales."
He also said funds ticketed for the purchase of new vehicles for government agencies would be spent as quickly as possible. The president was flanked by numerous administration officials as he spoke, including Treasury Secretary Tim Geithner.
Obama spoke at the White House with U.S. automakers at yet another crossroads. As the president noted, the industry has shed more than 400,000 jobs in the past year as the recession took hold. Officials announced last week bailout funds would be made available to companies that supply the automakers, an attempt to keep them afloat.
Obama said he is committed to the survival of an auto industry -- on terms that will allow it to compete internationally.
"But we also cannot continue to excuse poor decisions," he said. "And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars."
He also said some of the industry's progress has scarcely been noticed. He mentioned that the North American car of the year in 2008 was produced by GM.
"Let me be clear: The United States government has no interest in running GM; we have no intention in running GM," Obama said.
But that was at the same time he was formally announcing the departure of Wagoner, whom administration officials forced into retirement on Sunday in preparation for the president's remarks.
"This is not meant as a criticism of Mr. Wagoner, who has devoted his life to this company; rather it's a recognition that it will take a new vision and new direction to create the GM of the future," Obama said.
Other changes at GM include new directors on its board. Fritz Henderson, GM's president and chief operating officer, became the new CEO. Board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.
"The board has recognized for some time that the company's restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement.
The Obama move comes amid public outrage over bonuses paid to business leaders and American International Group executives -- set against a severely ailing economy.
GM failed to make good on promises made in exchange for $13.4 billion in government loans. Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years. In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more.
GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.
GM and Chrysler employ about 140,000 workers in the U.S. In February, GM said it intended to cut 47,000 jobs around the globe, or almost 20 percent of its work force, close hundreds of dealerships and focus on four core brands -- Chevrolet, Cadillac, GMC and Buick.

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Pakistani intelligence backing al Qaeda: US admiral

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DAWN.COM

There are 'indications' that elements of Pakistan's intelligence service lend support to Al-Qaeda and Taliban militants, the top US military officer said on Friday.
'There are certainly indications that's the case,' Admiral Mike Mullen told CNN when asked if elements of Pakistan's spy agency were backing the al Qaeda network and its Taliban allies.
'Fundamentally that's one of the things that have to change.' Pakistan's Directorate for Inter-Services Intelligence (ISI) has been widely accused of refusing to sever its links with Islamist groups that date back to the Cold War and the US-backed fight against Soviet forces in Afghanistan.
After the September 11 attacks, Washington demanded that Islamabad ensure the ISI cut its ties with the Taliban and al Qaeda, but there have been persistent reports that some members of the spy service remain in league with the extremist networks.
Mullen's comments came as President Barack Obama unveiled a new strategy for the war in Afghanistan, in which he called for Islamabad to crack down on insurgents operating within Pakistan's borders.
The admiral earlier told reporters that Pakistan's role posed a major challenge to the war in Afghanistan, although he acknowledged that Islamabad had made some progress in fighting insurgents on its border with Afghanistan.
'They've moved dramatically over the last seven, eight months with their Frontier Corps who's had a big impact,' Mullen said, referring to Pakistan's troops on the western border.
'It's dramatically improved' compared to two years ago, he added. 'They've done pretty well, they've done a lot.' Larger numbers of Pakistan regular army troops were also now operating in the border area in recent months, he said.
Mullen expressed hope for more progress but said there was a 'trust deficit' between Pakistan and the United States that he and other government officials were working to overcome.
A crucial part of the new strategy for Afghanistan was a 'regional approach' that would try to reduce tension on Pakistan's eastern border with India over the disputed territory of Kashmir to free up Pakistani troops to counter militants on the western border, Mullen said.
'One of the reasons the regional approach is so important is to de-tension the Kashmir border so that the Pakistani military is not completely tied up on that border, and they are able to train, equip and fight on the western border in the counter-insurgency effort,' he said.
Pakistan sees itself as fighting a 'two-front' war, in Kashmir and against insurgents in the northwest, he added.
Asked about what leverage the United States had over Pakistan, Mullen suggested that aid Washington was offering might be linked to progress in fighting insurgents.
'There are linkages between support, aid, whatever the case might be, that I think we need to evaluate in terms of that assistance,' he said.

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Russia plans to create Arctic military force

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Tri-City Herald

Russia plans to create a new military force to protect its interests in the disputed Arctic region, a Kremlin strategy paper says.
The document outlines Russia's policy for the Arctic, which is believed to contain as much as 25 percent of the world's undiscovered oil and gas. The paper was signed by President Dmitry Medvedev in September and released by presidential Security Council, but only reported by Russian media on Friday.
Russia, the United States, Canada, Denmark and Norway have been trying to assert jurisdiction over parts of the Arctic.
The dispute has intensified amid growing evidence that global warming is shrinking polar ice, opening up new shipping lanes and allowing natural resources to be tapped.
The Kremlin paper says the Arctic must become Russia's "top strategic resource base" by the year 2020.
It calls for strengthening border guard forces in the region and updating their equipment, while creating a new group of military forces to "ensure military security under various military-political circumstances."
By 2011, it says, Russia must complete geological studies to prove its claim to Arctic resources and win international recognition of its Arctic borders. The paper has been posted on the Security Council's Web site.
Moscow first submitted its claim in 2001 to the United Nations, but was rejected for lack of evidence. Russia now hopes to prove that an underwater mountain range crossing the polar region is part of Russia's continental shelf.
In 2007 two Russian civilian mini-submarines descended to the Arctic seabed to collect geological and water samples and drop a titanium canister containing the Russian flag. More such missions have been planned, officials have said.
Polar scientist Artur Chilingarov, who took part in the 2007 submarine mission, praised the new strategy paper.
"The creation of Arctic forces reflects a normal desire to protect our territory," Chilingarov was quoted as saying by the business daily Kommersant.
Earlier this week, a deputy chief of staff of the Russian Navy also said submarines from Russia's Northern Fleet could be involved in efforts to claim and protect Arctic resources.
Russian diplomats have voiced concern in recent days about a military exercise in Norway.
"The increased NATO activities in the Arctic could erode constructive cooperation between littoral nations," Russian Foreign Ministry spokesman Andrei Nesterenko said Thursday.

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Pakistani and Afghan Taliban Unify in Face of U.S. Influx

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The New York Times

After agreeing to bury their differences and unite forces, Taliban leaders based in Pakistan have closed ranks with their Afghan comrades to ready a new offensive in Afghanistan as the United States prepares to send 17,000 more troops there this year.
In interviews, several Taliban fighters based in the border region said preparations for the anticipated influx of American troops were already being made. A number of new, younger commanders have been preparing to step up a campaign of roadside bombings and suicide attacks to greet the Americans, the fighters said.
The refortified alliance was forged after the reclusive Afghan Taliban leader, Mullah Muhammad Omar, sent emissaries to persuade Pakistani Taliban leaders to join forces and turn their attention to Afghanistan, Pakistani officials and Taliban members said.
The overture by Mullah Omar is an indication that with the prospect of an American buildup, the Taliban feel the need to strengthen their own forces in Afghanistan and to redirect their Pakistani allies toward blunting the new American push.
The Pakistani Taliban, an offspring of the Afghan Taliban, are led by veterans of the fighting in Afghanistan who come from the border regions. They have always supported the fight against foreign forces in Afghanistan by supplying fighters, training and logistical aid.
But in recent years the Pakistani Taliban have concentrated on battling the Pakistani government, extending a domain that has not only threatened Pakistan but has also provided an essential rear base for the Taliban insurgency in Afghanistan.
At the same time, American officials told The New York Times this week that Pakistan's military intelligence agency continued to offer money, supplies and guidance to the Taliban insurgency in Afghanistan as a proxy to help shape a friendly government there once American forces leave.
The new Taliban alliance has raised concern in Afghanistan, where NATO generals warn that the conflict will worsen this year. It has also generated anxiety in Pakistan, where officials fear that a united Taliban will be more dangerous, even if focused on Afghanistan, and draw more attacks inside Pakistan from United States drone aircraft.
"This may bring some respite for us from militants' attacks, but what it may entail in terms of national security could be far more serious," said one senior Pakistani official, who spoke on condition of anonymity because he is not permitted to talk to news organizations. "This would mean more attacks inside our tribal areas, something we have been arguing against with the Americans."
The Pakistani Taliban is dominated by three powerful commanders -- Baitullah Mehsud, Hafiz Gul Bahadur and Maulavi Nazir -- based in North and South Waziristan, the hub of insurgent activity in Pakistan's tribal border regions, who have often clashed among themselves.
Mullah Omar dispatched a six-member team to Waziristan in late December and early January, several Taliban fighters said in interviews in Dera Ismail Khan, a town in North-West Frontier Province that is not far from South Waziristan. The Afghan Taliban delegation urged the Pakistani Taliban leaders to settle their internal differences, scale down their activities in Pakistan and help counter the planned increase of American forces in Afghanistan, the fighters said.
The three Pakistani Taliban leaders agreed. In February, they formed a united council, or shura, called the Council of United Mujahedeen. In a printed statement the leaders vowed to put aside their disputes and focus on fighting American-led forces in Afghanistan.
A spokesman for the Afghan Taliban, Zabiullah Mujahid, denied that the meetings ever took place or that any emissaries were sent by Mullah Omar. The Afghan Taliban routinely disavow any presence in Pakistan or connection to the Pakistani Taliban to emphasize that their movement is indigenous to Afghanistan. "We don't like to be involved with them, as we have rejected all affiliation with Pakistani Taliban fighters," Mr. Mujahid said. "We have sympathy for them as Muslims, but beside that, there is nothing else between us."
Several Pakistani officials, who spoke on condition of anonymity because they were not permitted to talk to news organizations, confirmed the meetings. But they said that the overture might have been inspired by Sirajuddin Haqqani, an Afghan Taliban leader who swears allegiance to Mullah Omar but is largely independent in his operations.
Mr. Haqqani, and his father Jalaluddin Haqqani, the most powerful figures in Waziristan, are closely linked to Al Qaeda and to Pakistani intelligence, American officials say. From their base in North Waziristan, they have directed groups of fighters into eastern Afghanistan and increasingly in complex attacks on the Afghan capital, Kabul.
The Taliban fighters said the Afghan Taliban delegation was led by Mullah Abdullah Zakir, a commander from Helmand Province in southern Afghanistan, whose real name is reported to be Abdullah Ghulam Rasoul.
A front-line commander during the Taliban government, Mullah Zakir was captured in 2001 in northern Afghanistan and was detained at Guantánamo Bay, Cuba, until his release in 2007, Afghan Taliban members contacted by telephone said.
The Pakistani fighters described Mullah Zakir as an impressive speaker and a trainer, and one said he was particularly energetic in working to unite the different Taliban groups. Beyond bolstering Taliban forces in Afghanistan, both the Afghan and Pakistani Taliban leaders had other reasons to unite, Pakistani officials said.
One motivation may have been to shift the focus of hostilities to Afghanistan in hopes of improving their own security in Waziristan, where more than 30 drone strikes in recent months have been directed at both Mr. Mehsud and Mr. Nazir. Two senior commanders of the Haqqani network have been killed.
The Pakistani Taliban leaders also rely on Mr. Haqqani and their affiliation with the Afghan mujahedeen for legitimacy, as well as the money and influence it brings.
In their written statement, decorated with crossed swords, the three Pakistani Taliban leaders reaffirmed their allegiance to Mullah Omar, as well as the leader of Al Qaeda, Osama bin Laden.
The mujahedeen should unite as the "enemies" have united behind the leadership of President Obama, it said. "The mujahedeen should put aside their own differences for the sake of God, God's happiness, for the strength of religion, and to bring dishonor on the infidels." The Taliban fighters interviewed said that the top commanders removed a number of older commanders and appointed younger commanders who were good fighters to prepare for operations in Afghanistan in the coming weeks.
In confident spirits, the Taliban fighters predicted that 2009 was going to be a "very bloody" year.
Ismail Khan contributed reporting from Peshawar, Pakistan; Pir Zubair Shah from Dera Ismail Khan, Pakistan; and Taimoor Shah from Kandahar, Afghanistan.
Copyright 2009 The New York Times Company

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Zambia's Copperbelt Reels From Global Crisis

washingtonpost.com

The global economic meltdown swept into this company town and took down the copper mine in January. It left in its wake a crisis measured in unsold tomatoes at the market, empty stomachs and desperate people lined up outside Chishimba Kambwili's pink house each morning.
"This town is fully dependent on the mine," Kambwili, the town's parliamentary representative, said before handing $9 of his own money to one visitor who said that laid-off miners no longer buy her sugary fritters, that the landlord was about to kick her out and that she had six mouths to feed. "The majority of people are now wallowing in abject poverty."
Mines here in Zambia's Copperbelt region drive this poor nation's economy, but a plunge in global trade has slashed demand for the copper used to construct electronics and houses in the United States and Asia. That is prompting mines here to slow and shut, limiting tens of thousands of Zambians' access to schooling, health care and regular meals.
Africa's resource-fueled economies have grown steadily in recent years, improving the lives of millions of people. Now, as prices drop for Botswana's diamonds, Chad's oil and Tanzania's cotton, a crisis that began in the rich world is threatening to drive millions more into poverty, according to the World Bank, and raising the specter of unrest.
For laid-off mine electrician Lucas Ngoma, feeding a family of eight has come to mean bartering a DVD player for a sack of dried fish.
"We used to eat three meals a day. Now we do one," said Ngoma, 45. "We will be rationing. One fish can be shared."
Of the 26 countries the International Monetary Fund has flagged as "highly vulnerable" to the shocks of the global crisis, half are in Africa. The fund has scaled back its 2009 growth forecast for the continent from 6.7 percent to 3.25 percent.
The problem is not just a collapse in commodities prices. Foreign investment is receding in countries such as South Africa and Kenya. Remittances are dropping in Liberia. Aid flows from economically stressed donor countries might retreat. Much will depend on how quickly advanced economies recover, according to experts and African leaders, who warn that a prolonged downturn could stir turmoil.
"We must ensure that Africa is not left out," Dominique Strauss-Kahn, the IMF's managing director, told African finance ministers at a conference this month. "This is not only about protecting economic growth and household incomes -- it is also about containing the risk of civil unrest, perhaps even of war. It is about people and their futures."
Among the hardest-hit African nations is copper-rich Zambia, which derives about two-thirds of its export earnings from the metal. The industry boomed as the price of copper soared to more than $8,000 a ton last summer, helping drive Zambia's 5.8 percent growth rate for 2008. By December, when the price had fallen more than 60 percent, the mines, which had spent billions in recent years on exploration and new technologies, began operating at losses. In recent days, the price has been about $3,900 per ton.
The nation's currency, the kwacha, has tumbled more than 70 percent against the dollar since last summer. Zambia's government predicts 5 percent growth this year, a rate economists say would be miraculous. Most forecast growth of 2.5 to 3.5 percent.
Scrambling to deal with the crunch, Zambia is seeking a $200 million emergency loan from the IMF. It has extended a carrot to mining houses by scrapping a major tax on their profits. To curb dependence on copper, the finance minister has proposed boosting funds for agriculture, tourism and infrastructure -- key, experts say, to developing industries in a landlocked nation with few paved roads and a dismal power system.
But the timing might be all wrong, some say.
"You cannot diversify under a crisis of this nature," said Oliver Saasa, a consultant and former economics professor at the University of Zambia in Lusaka, the capital. "In Zambia, we will depend on what happens elsewhere."
According to unions, mines have shed nearly 10,000 permanent workers and thousands of contractors and suppliers, and more layoffs are in the pipeline. Those numbers are significant in a nation with a formal workforce estimated at 400,000, 10 percent of which is employed in mining.
Government officials have said they are pressuring limping mines to surrender their assets to the state and can quickly find new owners, a claim industry executives and economists doubt given the global credit crunch. Officials said one firm interested in the Luanshya mine is NFC Africa, a Chinese company that runs one Zambian mine. That is a wildly unpopular option among many miners and officials, who complain that the firm pays poorly and provides unsafe working conditions.
"But in terms of us as the government bailing out the mines," Maxwell Mwale, minister of mines and minerals development, said in an interview, "we have no capacity."
In this northern province, copper is the lifeblood. Nearly all mines provide schools and hospitals for miners and their families, and salaries of at least $200 a month provide something resembling a living.
The mines were privatized in the late 1990s, and their expansion since then has had a ripple effect. Guesthouses sprang up to lodge visiting executives from Canada and India. Grocery stores and bars serving miners mushroomed. Though little wealth trickled down, state data indicate that steady economic growth has coincided with reduced poverty in urban areas.
Now, copper is driving things the other way. The Mining Mirror newspaper is in danger of folding because of plummeting ad revenue. Copperbelt soccer teams have lost sponsorships from the mining houses, and the massive Konkola Copper Mines has stopped paying the salary for the coach of the national team. Traffic on the roads has slowed, and goods are expiring on store shelves.
Lizzy Sifaya, the owner of a cleaning company with contracts at many of the mines, said she has had to lay off nearly 80 percent of her 350 employees as mines cut costs. One large mine, she said, told her to forget cleaning the offices and "focus on the toilets."
Over the past year, malnutrition among children younger than 5 has jumped 15 to 20 percent in urban areas, including Copperbelt towns, said Pablo Recalde, country director for the World Food Program.
Luanshya Copper Mines, one of Zambia's smallest, shut down in January, and 1,720 miners were let go. The maximum severance pay was 10 months' salary, money that in many cases was immediately devoured by bank loans, said Stanslas Mwimbe, a Luanshya representative for the Mineworkers Union of Zambia. Though few in town worked there, Kambwili, the parliamentary representative, estimated that the mine supported 90 percent of Luanshya's 180,000 residents.
The mine still allows miners' families to use its school and clinic free of charge. But in interviews, several residents who did not work there -- but whose businesses thrived on miners' consumption -- said they were unable to pay for health care or public school fees.
Kambwili said he thinks the frustration will soon explode if the mine does not reopen.
"There's always a limit for people to be patient," said Kambwili, who last month led 1,000 Luanshya residents in a protest against the mine closure. "They will have to fight for what belongs to them."

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Zambia's Copperbelt Reels From Global Crisis

washingtonpost.com

The global economic meltdown swept into this company town and took down the copper mine in January. It left in its wake a crisis measured in unsold tomatoes at the market, empty stomachs and desperate people lined up outside Chishimba Kambwili's pink house each morning.
"This town is fully dependent on the mine," Kambwili, the town's parliamentary representative, said before handing $9 of his own money to one visitor who said that laid-off miners no longer buy her sugary fritters, that the landlord was about to kick her out and that she had six mouths to feed. "The majority of people are now wallowing in abject poverty."
Mines here in Zambia's Copperbelt region drive this poor nation's economy, but a plunge in global trade has slashed demand for the copper used to construct electronics and houses in the United States and Asia. That is prompting mines here to slow and shut, limiting tens of thousands of Zambians' access to schooling, health care and regular meals.
Africa's resource-fueled economies have grown steadily in recent years, improving the lives of millions of people. Now, as prices drop for Botswana's diamonds, Chad's oil and Tanzania's cotton, a crisis that began in the rich world is threatening to drive millions more into poverty, according to the World Bank, and raising the specter of unrest.
For laid-off mine electrician Lucas Ngoma, feeding a family of eight has come to mean bartering a DVD player for a sack of dried fish.
"We used to eat three meals a day. Now we do one," said Ngoma, 45. "We will be rationing. One fish can be shared."
Of the 26 countries the International Monetary Fund has flagged as "highly vulnerable" to the shocks of the global crisis, half are in Africa. The fund has scaled back its 2009 growth forecast for the continent from 6.7 percent to 3.25 percent.
The problem is not just a collapse in commodities prices. Foreign investment is receding in countries such as South Africa and Kenya. Remittances are dropping in Liberia. Aid flows from economically stressed donor countries might retreat. Much will depend on how quickly advanced economies recover, according to experts and African leaders, who warn that a prolonged downturn could stir turmoil.
"We must ensure that Africa is not left out," Dominique Strauss-Kahn, the IMF's managing director, told African finance ministers at a conference this month. "This is not only about protecting economic growth and household incomes -- it is also about containing the risk of civil unrest, perhaps even of war. It is about people and their futures."
Among the hardest-hit African nations is copper-rich Zambia, which derives about two-thirds of its export earnings from the metal. The industry boomed as the price of copper soared to more than $8,000 a ton last summer, helping drive Zambia's 5.8 percent growth rate for 2008. By December, when the price had fallen more than 60 percent, the mines, which had spent billions in recent years on exploration and new technologies, began operating at losses. In recent days, the price has been about $3,900 per ton.
The nation's currency, the kwacha, has tumbled more than 70 percent against the dollar since last summer. Zambia's government predicts 5 percent growth this year, a rate economists say would be miraculous. Most forecast growth of 2.5 to 3.5 percent.
Scrambling to deal with the crunch, Zambia is seeking a $200 million emergency loan from the IMF. It has extended a carrot to mining houses by scrapping a major tax on their profits. To curb dependence on copper, the finance minister has proposed boosting funds for agriculture, tourism and infrastructure -- key, experts say, to developing industries in a landlocked nation with few paved roads and a dismal power system.
But the timing might be all wrong, some say.
"You cannot diversify under a crisis of this nature," said Oliver Saasa, a consultant and former economics professor at the University of Zambia in Lusaka, the capital. "In Zambia, we will depend on what happens elsewhere."
According to unions, mines have shed nearly 10,000 permanent workers and thousands of contractors and suppliers, and more layoffs are in the pipeline. Those numbers are significant in a nation with a formal workforce estimated at 400,000, 10 percent of which is employed in mining.
Government officials have said they are pressuring limping mines to surrender their assets to the state and can quickly find new owners, a claim industry executives and economists doubt given the global credit crunch. Officials said one firm interested in the Luanshya mine is NFC Africa, a Chinese company that runs one Zambian mine. That is a wildly unpopular option among many miners and officials, who complain that the firm pays poorly and provides unsafe working conditions.
"But in terms of us as the government bailing out the mines," Maxwell Mwale, minister of mines and minerals development, said in an interview, "we have no capacity."
In this northern province, copper is the lifeblood. Nearly all mines provide schools and hospitals for miners and their families, and salaries of at least $200 a month provide something resembling a living.
The mines were privatized in the late 1990s, and their expansion since then has had a ripple effect. Guesthouses sprang up to lodge visiting executives from Canada and India. Grocery stores and bars serving miners mushroomed. Though little wealth trickled down, state data indicate that steady economic growth has coincided with reduced poverty in urban areas.
Now, copper is driving things the other way. The Mining Mirror newspaper is in danger of folding because of plummeting ad revenue. Copperbelt soccer teams have lost sponsorships from the mining houses, and the massive Konkola Copper Mines has stopped paying the salary for the coach of the national team. Traffic on the roads has slowed, and goods are expiring on store shelves.
Lizzy Sifaya, the owner of a cleaning company with contracts at many of the mines, said she has had to lay off nearly 80 percent of her 350 employees as mines cut costs. One large mine, she said, told her to forget cleaning the offices and "focus on the toilets."
Over the past year, malnutrition among children younger than 5 has jumped 15 to 20 percent in urban areas, including Copperbelt towns, said Pablo Recalde, country director for the World Food Program.
Luanshya Copper Mines, one of Zambia's smallest, shut down in January, and 1,720 miners were let go. The maximum severance pay was 10 months' salary, money that in many cases was immediately devoured by bank loans, said Stanslas Mwimbe, a Luanshya representative for the Mineworkers Union of Zambia. Though few in town worked there, Kambwili, the parliamentary representative, estimated that the mine supported 90 percent of Luanshya's 180,000 residents.
The mine still allows miners' families to use its school and clinic free of charge. But in interviews, several residents who did not work there -- but whose businesses thrived on miners' consumption -- said they were unable to pay for health care or public school fees.
Kambwili said he thinks the frustration will soon explode if the mine does not reopen.
"There's always a limit for people to be patient," said Kambwili, who last month led 1,000 Luanshya residents in a protest against the mine closure. "They will have to fight for what belongs to them."

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Thousands of immigrants held in US in violation of international law

Minnesota Independent

A comprehensive report issued by Amnesty International USA Wednesday finds that tens of thousands of immigrants -- and, in one case, a Minnesota-born citizen -- have been held in detention in the United States, many in violation of international law.
Conducted by Amnesty researchers based on interviews over the course of a year with immigration lawyers and judges, asylum seekers, government officials and non-governmental organizations, the report finds that U.S. immigration policy has increasingly detained immigrants - including lawful residents and even some U.S. citizens - without a meaningful ability to challenge their detentions in an objective judicial proceeding, without access to a lawyer to help them determine their legal status, and often in inhumane conditions, commingled with criminals and denied access to minimal health care.
One case highlighted in the Amnesty report tells of "Mr. W," a Minnesota-born U.S. citizen who says he has never set foot outside of the country. He was placed in immigration detention in Florence, Arizona, and because he couldn't access his birth certificate, he had to work work in the prison kitchen for a dollar a day to raise the $30 needed to order a copy of his birth certificate. He was released after more than a month in lockup.
"America should be outraged by the scale of human rights abuses occurring within its own borders," said Larry Cox, executive director of AIUSA, in a statement released with the report. "Officials are locking up thousands of human beings without due process and holding them in a system that is impossible to navigate. . . . The U.S. government must ensure that every person in immigration detention has a hearing to determine whether that detention is necessary."
Such arbitrary detentions violate international standards such as the United Nations International Covenant on Civil and Political Rights, says Amnesty. The group calls on Congress to amend the immigration laws to eliminate arbitrary detention, use alternatives to detention where possible and improve detention conditions.
[..]
Meanwhile, advocates for restrictive immigration policies claim that detention is necessary to ensure that immigrants show up to their immigration hearings.
"The reason they detain people is because if you let them go, they disappear," said Ira Mehlman, spokesman for the Federation for Immigration Reform. "So they detain them for very good reason. You have people who have no apparent claim for entry into the [United States], and if you let them out on the streets you're never going to see them again."
In fact, the Amnesty report notes that there are effective and far less costly alternatives to detention, most of which takes place in jails run by private companies under contract with the U.S. government. The average cost of detaining a migrant is $95 per person, per day -- approximately $2,850 per month. Alternatives to detention, such as regular reporting to authorities, cost as little as $12 a day. A study by the Vera Institute of Justice found that such alternatives to detention are generally effective - in approximately 91 percent of cases, the immigrants shows up for their hearings.
Meanwhile, detaining immigrants is getting more and more expensive as the numbers of detainees in the U.S. has soared, from 10,000 in 1996, reports Amnesty, to more than 30,000 in 2008. Of the more than 300,000 men, women and children taken into custody by US immigration authorities each year, many are asylum seekers, torture survivors, human trafficking victims, lawful permanent residents and parents of U.S. citizen children, Amnesty reports.
Take, for example, the case of a 26-year-old Chinese woman who told Amnesty researchers that she fled to the United States after she and her mother were beaten in China for handing out religious fliers. She arrived in the United States seeking asylum in 2008 and was detained at the airport, then transferred to a county jail. No one told her why she was being held. Without explanation, an ICE Field Office Director ordered her to remain in detention unless she could pay $50,000 bond. But neither her relatives in the United States nor her family in China was able to raise the money. Finally, after almost a year in detention, they were able to post the bond and win her release.
Although in the past asylum seekers who could establish community ties could be released, in November 2007 ICE issued new guidelines that restricted asylum seeker's ability to receive parole. And the Justice Department does not have authority to review decisions made by ICE field office directors involving migrants stopped at the border.
[..]
The result is that whether or not someone is detained or released pending an asylum determination is often arbitrary. Only 4 percent of those seeking asylum in Newark, New Jersey were granted it, reports Amnesty, while 98 percent were released in Harlingen, Texas.
Although ICE reported an average detention stay of 37 days in 2007, Amnesty found that immigrants and asylum seekers were often detained for months or even years before anyone determined whether they're actually allowed to remain in the United States.
And according to a 2003 study, asylum seekers who were eventually granted asylum spent an average of 10 months in detention; at least one was detained for as long as three and a half years. An Associated Press investigation recently found, similarly, that nearly 10,000 immigrants had been in custody longer than the average length of detention that ICE cites.
Immigrants arrested at the border don't even have a right to have their detention reviewed by an immigration judge. And although technically those arrested inside the United States do have a right to review before a judge, Amnesty's researchers found that those reviews often do not take place. Those ordered deported to countries that refuse to take them back, meanwhile, may remain in detention indefinitely -- violating both domestic and international legal standards, Amnesty claims.
Adding to immigrants' troubles is that unlike in criminal proceedings, they have no right to a lawyer in immigration proceedings. Those who manage to retain one at their own expense often fall prey to incompetent and unlicensed attorneys, or notarios, as the Washington Independent has reported.
[..]
According to ICE, 74 people have died while in immigration detention between 2004 and July 2008. Amnesty's report describes several incidents where severe illness or injury were overlooked by immigration officials, resulting in death, such as the case of Boubacar Bah, a 52-year-old tailor from Guinea who had overstayed a tourist visa. While in detention, other detainees report that he collapsed and hit his head on the floor. Instead of receiving medical treatment, he was shackled to the floor and placed in solitary confinement for "behavioral problems." More than 13 hours later, during which he was unresponsive and foaming at the mouth, he was taken for emergency surgery for a skull fracture and brain hemorrhage. He slipped into a coma and died four months later.
Lawful residents and even U.S. citizens, unable to prove their legal status, may also get caught in the immigration system's snare. Amnesty International "has identified more than a hundred cases in the past ten years in which US citizens and lawful permanent residents have incorrectly been placed into removal proceedings."
The Washington Independent previously reported on the case of a developmentally disabled U.S. citizen living in Los Angeles who was deported to Mexico because he could not produce his passport. He was left homeless in Mexico until his family found him in Tijuana three months later.

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Thousands of immigrants held in US in violation of international law

Minnesota Independent

A comprehensive report issued by Amnesty International USA Wednesday finds that tens of thousands of immigrants -- and, in one case, a Minnesota-born citizen -- have been held in detention in the United States, many in violation of international law.
Conducted by Amnesty researchers based on interviews over the course of a year with immigration lawyers and judges, asylum seekers, government officials and non-governmental organizations, the report finds that U.S. immigration policy has increasingly detained immigrants - including lawful residents and even some U.S. citizens - without a meaningful ability to challenge their detentions in an objective judicial proceeding, without access to a lawyer to help them determine their legal status, and often in inhumane conditions, commingled with criminals and denied access to minimal health care.
One case highlighted in the Amnesty report tells of "Mr. W," a Minnesota-born U.S. citizen who says he has never set foot outside of the country. He was placed in immigration detention in Florence, Arizona, and because he couldn't access his birth certificate, he had to work work in the prison kitchen for a dollar a day to raise the $30 needed to order a copy of his birth certificate. He was released after more than a month in lockup.
"America should be outraged by the scale of human rights abuses occurring within its own borders," said Larry Cox, executive director of AIUSA, in a statement released with the report. "Officials are locking up thousands of human beings without due process and holding them in a system that is impossible to navigate. . . . The U.S. government must ensure that every person in immigration detention has a hearing to determine whether that detention is necessary."
Such arbitrary detentions violate international standards such as the United Nations International Covenant on Civil and Political Rights, says Amnesty. The group calls on Congress to amend the immigration laws to eliminate arbitrary detention, use alternatives to detention where possible and improve detention conditions.
[..]
Meanwhile, advocates for restrictive immigration policies claim that detention is necessary to ensure that immigrants show up to their immigration hearings.
"The reason they detain people is because if you let them go, they disappear," said Ira Mehlman, spokesman for the Federation for Immigration Reform. "So they detain them for very good reason. You have people who have no apparent claim for entry into the [United States], and if you let them out on the streets you're never going to see them again."
In fact, the Amnesty report notes that there are effective and far less costly alternatives to detention, most of which takes place in jails run by private companies under contract with the U.S. government. The average cost of detaining a migrant is $95 per person, per day -- approximately $2,850 per month. Alternatives to detention, such as regular reporting to authorities, cost as little as $12 a day. A study by the Vera Institute of Justice found that such alternatives to detention are generally effective - in approximately 91 percent of cases, the immigrants shows up for their hearings.
Meanwhile, detaining immigrants is getting more and more expensive as the numbers of detainees in the U.S. has soared, from 10,000 in 1996, reports Amnesty, to more than 30,000 in 2008. Of the more than 300,000 men, women and children taken into custody by US immigration authorities each year, many are asylum seekers, torture survivors, human trafficking victims, lawful permanent residents and parents of U.S. citizen children, Amnesty reports.
Take, for example, the case of a 26-year-old Chinese woman who told Amnesty researchers that she fled to the United States after she and her mother were beaten in China for handing out religious fliers. She arrived in the United States seeking asylum in 2008 and was detained at the airport, then transferred to a county jail. No one told her why she was being held. Without explanation, an ICE Field Office Director ordered her to remain in detention unless she could pay $50,000 bond. But neither her relatives in the United States nor her family in China was able to raise the money. Finally, after almost a year in detention, they were able to post the bond and win her release.
Although in the past asylum seekers who could establish community ties could be released, in November 2007 ICE issued new guidelines that restricted asylum seeker's ability to receive parole. And the Justice Department does not have authority to review decisions made by ICE field office directors involving migrants stopped at the border.
[..]
The result is that whether or not someone is detained or released pending an asylum determination is often arbitrary. Only 4 percent of those seeking asylum in Newark, New Jersey were granted it, reports Amnesty, while 98 percent were released in Harlingen, Texas.
Although ICE reported an average detention stay of 37 days in 2007, Amnesty found that immigrants and asylum seekers were often detained for months or even years before anyone determined whether they're actually allowed to remain in the United States.
And according to a 2003 study, asylum seekers who were eventually granted asylum spent an average of 10 months in detention; at least one was detained for as long as three and a half years. An Associated Press investigation recently found, similarly, that nearly 10,000 immigrants had been in custody longer than the average length of detention that ICE cites.
Immigrants arrested at the border don't even have a right to have their detention reviewed by an immigration judge. And although technically those arrested inside the United States do have a right to review before a judge, Amnesty's researchers found that those reviews often do not take place. Those ordered deported to countries that refuse to take them back, meanwhile, may remain in detention indefinitely -- violating both domestic and international legal standards, Amnesty claims.
Adding to immigrants' troubles is that unlike in criminal proceedings, they have no right to a lawyer in immigration proceedings. Those who manage to retain one at their own expense often fall prey to incompetent and unlicensed attorneys, or notarios, as the Washington Independent has reported.
[..]
According to ICE, 74 people have died while in immigration detention between 2004 and July 2008. Amnesty's report describes several incidents where severe illness or injury were overlooked by immigration officials, resulting in death, such as the case of Boubacar Bah, a 52-year-old tailor from Guinea who had overstayed a tourist visa. While in detention, other detainees report that he collapsed and hit his head on the floor. Instead of receiving medical treatment, he was shackled to the floor and placed in solitary confinement for "behavioral problems." More than 13 hours later, during which he was unresponsive and foaming at the mouth, he was taken for emergency surgery for a skull fracture and brain hemorrhage. He slipped into a coma and died four months later.
Lawful residents and even U.S. citizens, unable to prove their legal status, may also get caught in the immigration system's snare. Amnesty International "has identified more than a hundred cases in the past ten years in which US citizens and lawful permanent residents have incorrectly been placed into removal proceedings."
The Washington Independent previously reported on the case of a developmentally disabled U.S. citizen living in Los Angeles who was deported to Mexico because he could not produce his passport. He was left homeless in Mexico until his family found him in Tijuana three months later.

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Do the Secret Bush Memos Amount to Treason? Top Constitutional Scholar Says Yes

Image via Wikipedia

AlterNet

Legal expert Michael Ratner calls the legal arguments made in the infamous Yoo memos, "Fuhrer's law."
In early March, more shocking details emerged about George W. Bush legal counsel John Yoo's memos outlining the destruction of the republic.
The memos lay the legal groundwork for the president to send the military to wage war against U.S. citizens; take them from their homes to Navy brigs without trial and keep them forever; close down the First Amendment; and invade whatever country he chooses without regard to any treaty or objection by Congress.
It was as if Milton's Satan had a law degree and was establishing within the borders of the United States the architecture of hell.
I thought this was -- and is -- certainly one of the biggest stories of our lifetime, making the petty burglary of Watergate -- which scandalized the nation -- seem like playground antics. It is newsworthy too with the groundswell of support for prosecutions of Bush/Cheney crimes and recent actions such as Canadian attorneys mobilizing to arrest Bush if he visits their country.
The memos are a confession. The memos could not be clearer: This was the legal groundwork of an attempted coup. I expected massive front page headlines from the revelation that these memos exited. Almost nothing. I was shocked.
As a non-lawyer, was I completely off base in my reading of what this meant, I wondered? Was I hallucinating?
Astonished, I sought a reality check -- and a formal legal read -- from one of the nation's top constitutional scholars (and most steadfast patriots), Michael Ratner of the Center for Constitutional Rights, which has been at the forefront of defending the detainees and our own liberties.
Here is our conversation:
Naomi Wolf: Michael, can you explain to a layperson what the Yoo memos actually mean?'
Michael Ratner: What they mean is that your book looks moderate in respect to those issues now. This -- what is in the memos -- is law by fiat.
I call it "Fuhrer's law." What those memos lay out means the end of the system of checks and balances in this country. It means the end of the system in which the courts, legislature and executive each had a function and they could check each other.
What the memos set out is a system in which the president's word is law, and Yoo is very clear about that: the president's word is not only law according to these memos, but no law or constitutional right or treaty can restrict the president's authority.
What Yoo says is that the president's authority as commander in chief in the so-called war on terror is not bound by any law passed by Congress, any treaty, or the protections of free speech, due process and the right to be free from unreasonable searches and seizures. The First, Fourth and Fifth amendments -- gone.
What this actually means is that the president can order the military to operate in the U.S. and to operate without constitutional restrictions. They -- the military -- can pick you or me up in the U.S. for any reason and without any legal process. They would not have any restrictions on entering your house to search it, or to seize you. They can put you into a brig without any due process or going to court. (That's the Fourth and Fifth amendments.)
The military can disregard the Posse Comitatus law, which restricts the military from acting as police in the the United States. And the president can, in the name of wartime restrictions, limit free speech. There it is in black and white: we are looking at one-person rule without any checks and balances -- a lawless state. Law by fiat.
Who has suspended the law this way in the past? It is like a Caesar's law in Rome; a Mussolini's law in Italy; a Fuhrer's law in Germany; a Stalin's law in the Soviet Union. It is right down the line. It is enforcing the will of the dictator through the military.
NW: The mainstream media have virtually ignored these revelations, though it seems to me this is the biggest news since Pearl Harbor.
MR: I think that's right. We had a glimmering of the blueprint for some of this -- when they picked up Jose Padilla, the military went to a prison and snatched an American citizen as if they had a perfect right to do so.
Now we can see that these memos laid the legal groundwork for such actions. We knew the military could do this to an individual. We did not know the plan was to eliminate First Amendment constitutional rights for the entire population.
NW: If Bush only wanted these powers in order to prosecute a war on terror, why does he need to suspend the First Amendment? Isn't that the smoking gun of a larger intention toward the general population?
MR: Part of this plan was actually implemented: for instance, they tried to keep people like Padilla from getting to a magistrate. They engaged in the wiretapping, because according to these memos there was no Fourth Amendment.
They had to be planning some kind of a takeover of the United States to be saying they could simply abolish the First Amendment if the president believed it was necessary in the name of national security. It lays the groundwork for what could have been a massive military takeover of the United States.
Here they crept right up and actually implemented part of the plan, with Padilla, with the warrantless wiretapping. Yet they are saying in the White House and in Congress that it is looking backward to investigate the authors of these memos and those who instructed Yoo and others to write them.
But investigation and prosecutions are really looking forward -- to say we need the deterrence of prosecution so this does not happen again.
NW: What about the deployment of three brigades in the U.S.? How should we read that?'
MR: With terrorism as less of a concern to many, but now with the economy in tatters there is a lot more militant activism in U.S. -- the New School and NYU student takeovers, protests around the country and strikes are just the beginning. I think governments are now concerned over people's activism, and people's anger at their economic situation. I don't think those brigades can be detached from the idea that there might well be a huge amount of direct-action protest in the U.S.
There could have also been a closer election that could have been stolen easily and then a huge protest. Those troops would have been used to enforce the will of the cabal stealing the election.
NW: As a layperson, I don't fully understand what powers the memos actually manifest. Are they theoretical or not just theoretical? What power did the memos actually give Bush?
MR: They were probably, in fact almost for sure, written in cahoots with the administration -- [Karl] Rove, [Dick] Cheney -- to give them legal backing for what they planned or wanted to carry out.
What I assume happened here is people like Cheney or his aides go to the Office of Legal Counsel and say, "We are going to need legal backing, to give a face of legality to what we are doing and what we are planning." When the president then signs a piece of paper that says, "OK, military, go get Jose Padilla," these memos give that order a veneer of legality.
If you are familiar with the history of dictators, coups and fascism (as I know you are), they (the planners) prefer a veneer of legality. Hitler killed 6 million Jews with a veneer of legality -- getting his dictatorial powers through the Reichstag and the courts.
These memos gave the Bush administration's [lawless] practices the veneer of legality.
NW: So are you saying that these memos actually created a police state that we did not know about?
MR: If you look at police state as various strands of lawlessness, we knew about some of this lawlessness even before this latest set of memos.
But the memos revealed how massive the takeover of our democracy was to be -- that this wasn't just going to be a few individuals here or there who suffered the arrows of a police state.
These memos lay the groundwork for a massive military takeover of the United States in cahoots with the president. And if that's not a coup d'etat then, nothing is.
NW: Can I ask something? I keep thinking about the notion of treason. In America now, people tend to read the definition of treason in the Constitution as if they are thinking of a Tokyo Rose or an American citizen acting as an agent for an enemy state -- very much a World War II experience of the traitor to one's country.
But I've been reading a lot of 16th and 17th century history, and it seems to me that the founders were thinking more along the lines of English treason of that era -- small groups of Englishmen, usually nobility, who formed cabals and conspired with one another to buy or recruit militias to overthrow the crown or Parliament.
The notion that a group might conspire in secret to overthrow the government is not a wild, marginal concept, it is a substantial part of European, and especially British, Renaissance and Reformation-era history and would have been very much alive in the minds of the Enlightenment-era founders. (I just visited the Tower of London where this was so frequent a charge against groups of English subjects that there is a designated Traitor's Gate.)
So clearly you don't have to act on behalf of another state to commit treason. The Constitution defines it as levying war against the United States or giving aid and comfort to its enemies. It says nothing about the enemy having to be another state.
When the Constitution was drafted, the phrase "United States" barely referred to a singular country; it referred to a new federation of many united states. They imagined militias rising up against various states; it was not necessarily nation against nation.
Surely, when we have evidence Bush prepared the way to allow the military to imprison or shoot civilians in the various states and created law to put his own troops over the authority of the governors and the national guard of the various states, and when the military were sent to terrorize protesters in St. Paul, [Minn.], Bush was levying war in this sense against the united states?
Hasn't Bush actually levied war against Minnesota? And if our leaders and military are sworn to protect and defend the Constitution, and there is clear evidence now that Bush and his cabal intended to do away with it, are they not our enemies and giving aid and comfort to our enemies? Again, "enemy" does not seem to me to be defined in the Constitution as another sovereign state.
MR: You are right. Treason need not involve another state. Aaron Burr was tried for treason. I do think that a plan to control the military, use it in the United States contrary to law and the Constitution and employ it to levy a war or takeover that eliminates the democratic institutions of the country constitutes treason, even if done under the president of the United States.
The authority given by these memos that could be used to raid every congressional office, raid and search every home, detain tens of thousands, would certainly fit a definition of treason.
This would be the president making war against the institutions of the United States.
Naomi Wolf is the author of Give Me Liberty (Simon and Schuster, 2008), the sequel to the New York Times best-seller The End of America: A Letter of Warning to a Young Patriot (Chelsea Green, 2007).

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