Top Obama Bank Watchdog to Call for CEO Heads to Roll, Attacks Geithner-Summers Plan

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AlterNet

Elizabeth Warren, chief watchdog of America's $700bn bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration's approach to saving the financial system from collapse.
Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (TARP), is also set to call for shareholders in those institutions to be "wiped out." "It is crucial for these things to happen," she said. "Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade." She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173bn in bailout money, and banking giant Citigroup, which has had $45bn in funds and more than $316bn of loan guarantees.
Warren also believes there are "dangers inherent" in the approach taken by treasury secretary Tim Geithner, who she says has offered "open-ended subsidies" to some of the world's biggest financial institutions without adequately weighing potential pitfalls. "We want to ensure that the treasury gives the public an alternative approach," she said, adding that she was worried that banks would not recover while they were being fed subsidies. "When are they going to say, enough?" she said.
She said she did not want to be too hard on Geithner but that he must address the issues in the report. "The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous."
The report will also look at how earlier crises were overcome -- the Swedish and Japanese problems of the 1990s, the US savings and loan crisis of the 1980s and the 30s Depression. "Three things had to happen," Warren said. "Firstly, the banks must have confidence that the valuation of the troubled assets in question is accurate; then the management of the institutions receiving subsidies from the government must be replaced; and thirdly, the equity investors are always wiped out."

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Startling Revelations about Three Mile Island Disaster Raise Doubts Over Nuke Safety

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AlterNet

A growing body of personal and scientific evidence contradicts the official story that the accident posed no threat to the public.
It was April Fool's Day, 1979 -- 30 years ago this week -- when Randall Thompson first set foot inside the Three Mile Island nuclear power plant near Middletown, Pa. Just four days earlier, in the early morning hours of March 28, a relatively minor problem in the plant's Unit 2 reactor sparked a series of mishaps that led to the meltdown of almost half the uranium fuel and uncontrolled releases of radiation into the air and surrounding Susquehanna River.
It was the single worst disaster ever to befall the U.S. nuclear power industry, and Thompson was hired as a health physics technician to go inside the plant and find out how dangerous the situation was. He spent 28 days monitoring radiation releases.
Today, his story about what he witnessed at Three Mile Island is being brought to the public in detail for the first time -- and his version of what happened during that time, supported by a growing body of other scientific evidence, contradicts the official U.S. government story that the Three Mile Island accident posed no threat to the public.
"What happened at TMI was a whole lot worse than what has been reported," Randall Thompson told Facing South. "Hundreds of times worse."
Thompson and his wife, Joy, a nuclear health physicist who also worked at TMI in the disaster's aftermath, claim that what they witnessed there was a public health tragedy. The Thompsons also warn that the government's failure to acknowledge the full scope of the disaster is leading officials to underestimate the risks posed by a new generation of nuclear power plants.
[..]What the Thompsons say they found out during their time inside TMI suggests radiation releases from the plant were hundreds if not thousands of times higher than the government and industry have acknowledged -- high enough to cause the acute health effects documented in people living near the plant but that have been dismissed by the industry and the government as impossible given official radiation dose estimates.
The Thompsons tried to draw attention to their findings and provide health information for people living near the plant, but what they say happened next reads like a John Grisham thriller.
They tell of how a stranger approached Randall Thompson in a grocery store parking lot in late April 1979 and warned him his life was at risk, leading the family to flee Pennsylvania. How they ended up in New Mexico working on a book about their experiences with the help of Joy's brother Charles Busey, another nuclear Navy vet and a former worker at the Hatch nuclear power plant in Georgia. How one evening while driving home from the store Busey and Randall Thompson were run off the road, injuring Thompson and killing Busey. How a copy of the book manuscript they were working on was missing from the car's trunk after the accident. These allegations were detailed in several newspaper accounts back in 1981.
[..]But the official story that there were no health impacts from the disaster doesn't jibe with the experiences of people living near TMI. On the contrary, their stories suggest that area residents actually suffered exposure to levels of radiation high enough to cause acute effects -- far more than the industry and the government has acknowledged.
Some of their disturbing experiences were collected in the book Three Mile Island: The People's Testament, which is based on interviews with 250 area residents done between 1979 and 1988 by Katagiri Mitsuru and Aileen M. Smith.
It includes the story of Jean Trimmer, a farmer who lived in Lisburn, Pa. about 10 miles west of TMI. On the evening of March 30, 1979, Trimmer stepped outside on her front porch to fetch her cat when she was hit with a blast of heat and rain. Soon after, her skin became red and itchy as if badly sunburned, a condition known as erythema. About three weeks later, her hair turned white and began falling out. Not long after, she reported, her left kidney "just dried up and disappeared" -- an occurrence so strange that her case was presented to a symposium of doctors at the nearby Hershey Medical Center. All of those symptoms are consistent with high-dose radiation exposure.
There was also Bill Peters, an auto-body shop owner and a former justice of the peace who lived just a few miles west of the plant in Etters, Pa. The day after the disaster, he and his son -- who like most area residents were unaware of what was unfolding nearby -- were working in their garage with the doors open when they developed what they first thought was a bad sunburn. They also experienced burning in their throats and tasted what seemed to be metal in the air. That same metallic taste was reported by many local residents and is another symptom of radiation exposure, commonly reported in cancer patients receiving radiation therapy.
Peters soon developed diarrhea and nausea, blisters on his lips and inside his nose, and a burning feeling in his chest. Not long after, he had surgery for a damaged heart valve. When his family evacuated the area a few days later, they left their four-year-old German shepherd in their garage with 200 pounds of dog chow, 50 gallons of water and a mattress. When they returned a week later, they found the dog dead on the mattress, his eyes burnt completely white. His food was untouched, and he had vomited water all over the garage. They also found four of their five cats dead -- their eyes also burnt white -- and one alive but blinded. Peters later found scores of wild bird carcasses scattered over their property.
Similar stories surfaced in The People of Three Mile Island, a book by documentary photographer Robert Del Tredici. He found local farmers whose cattle and goats died, suffered miscarriages and gave birth to deformed young after the incident; whose chickens developed respiratory problems and died; and whose fruit trees abruptly lost all their leaves. Local residents also collected evidence of deformed plants, some of which were examined by James Gunckel, a botanist and radiation expert with Brookhaven National Laboratory and Rutgers University.
"There were a number of anomalies entirely comparable to those induced by ionizing radiation -- stem fasciations, growth stimulation, induction of extra vegetative buds and stem tumors," he swore in a 1984 affidavit.
Scientists say these kinds of anomalies simply aren't explained by official radiation release estimates.
Evidence of harm

The evidence that people, animals and plants near TMI were exposed to high levels of radiation in the 1979 disaster is not merely anecdotal. While government studies of the disaster as well as a number of independent researchers assert the incident caused no harm, other surveys and studies have also documented health effects that point to a high likelihood of significant radiation exposures.
In 1984, for example, psychologist Marjorie Aamodt and her engineer husband, Norman -- owners of an organic dairy farm east of Three Mile Island who got involved in a lawsuit seeking to stop TMI from restarting its Unit 1 reactor -- surveyed residents in three hilltop neighborhoods near the plant. Dozens of neighbors reported a metallic taste, nausea, vomiting and hair loss as well as illnesses including cancers, skin and reproductive problems, and collapsed organs -- all associated with radiation exposure. Among the 450 people surveyed, there were 19 cancer deaths reported between 1980 and 1984 -- more than seven times what would be expected statistically.
[..]That survey came to the attention of the industry-financed TMI Public Health Fund, created in 1981 as part of a settlement for economic losses from the disaster. The fund's scientific advisors verified the Aamodts' calculations and launched a more comprehensive study of TMI-related cancer deaths led by a team of scientists from Columbia University. The researchers found an association between estimated radiation doses received by area residents and instances of non-Hodgkin's lymphoma, lung cancer, leukemia and all cancers combined. Crucially, however, the researchers decided there wasn't "convincing evidence" that TMI radiation releases were linked to the increase in cancers in the area because of the "low estimates of radiation exposure." The paper did not consider what conclusions could be drawn if those "low estimates" turned out to be wrong.
By the time the Columbia research was published in the early 1990s, a class-action lawsuit was underway involving about 2,000 plaintiffs claiming that the radiation emissions were much larger than admitted by the government and industry. (The federal courts eventually rejected that suit, though hundreds of out-of-court settlements totaling millions of dollars have been reached with victims, including the parents of children born with birth defects.)
Consulting for the plaintiffs' attorneys, the Aamodts contacted Dr. Steven Wing, an epidemiologist at the University of North Carolina School of Public Health in Chapel Hill to provide support for the plaintiffs. Dr. Wing was reluctant to get involved because -- as he wrote in a 2003 paper about his experience -- "allegations of high radiation doses at TMI were considered by mainstream radiation scientists to be a product of radiation phobia or efforts to extort money from a blameless industry." But impressed with the Aamodts' compelling if imperfect evidence, Wing agreed to look at whether there were connections between radiation exposure from TMI and cancer rates.
Wing reanalyzed the Columbia scientists' data, looking at cancer rates before the TMI disaster to control for other possible risk factors in the 10-mile area. His peer-reviewed results, published in 1997, found positive relationships between accident dose estimates and rates of leukemia, lung cancer and all cancers. Where the Columbia study found a 30 percent average increase in lung cancer risk among one group of residents, for example, Wing found an 85 percent increase. And while the Columbia researchers found little or no increase in adult leukemias and a statistically unreliable increase in childhood cases, Wing found that people downwind during the most intense releases were eight to 10 times more likely on average than their neighbors to develop leukemia.
Dr. Wing reflected on his findings at a symposium in Harrisburg marking the 30-year anniversary of the Three Mile Island disaster last week.
"I believe this is very good evidence that releases were thousands of times greater than the story we've been told," he said. "As we think about the current plans to open more nuclear reactors, when we hear -- which we hear often -- that no one was harmed at Three Mile Island, we really should question that."
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Wow! Michele Bachmann Out-Crazies Herself

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Minnesota Independent

U.S. Rep. Michele Bachmann says she fears the Obama administration will create "re-education camps for young people, where young people have to go and get trained in a philosophy that the government puts forward and then they have to go to work in some of these politically correct forums." Audio after the jump.
Here's what Bachmann said on Minnesota radio station KTLK-AM (podcast) this weekend (in reference to The Edward M. Kennedy Serve America Act, a proposed expansion of the AmeriCorps program that Obama may sign into law this week):

It's under the guise of -- quote -- volunteerism. But it's not volunteers at all. It's paying people to do work on behalf of government. ...
I believe that there is a very strong chance that we will see that young people will be put into mandatory service. And the real concerns is that there are provisions for what I would call re-education camps for young people, where young people have to go and get trained in a philosophy that the government puts forward and then they have to go to work in some of these politically correct forums.

AlterNet

There's going to be a lot more Pittsburghs if this kind of talk continues, I'm afraid.

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The world economy is tracking or doing worse than during the Great Depression

Vox EU

To summarise: the world is currently undergoing an economic shock every bit as big as the Great Depression shock of 1929-30. Looking just at the US leads one to overlook how alarming the current situation is even in comparison with 1929-30.
The good news, of course, is that the policy response is very different. The question now is whether that policy response will work.

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Israeli Physician's Group Condemns Ethics of IDF

Al Jazeera English

Israel's army violated codes of ethics and international law during the war in Gaza by attacking medics and refusing to allow the treatment of wounded, a human-rights group says.
In a report published on Monday, the group Physicians for Human Rights (PHR) calls for an independent body to investigate the military's conduct during its 22-day war on Gaza, which ended on January 18. The actions reflect a "demonisation of Palestinians [which] bears a heavy price for Israeli society".
In its defence, the Israeli army said it had not yet concluded its investigation, but that fighters from Gaza's ruling Hamas had fought under the cover of ambulances and medical facilities.
'Indiscriminate attacks'
Among the offences listed by PHR are "attacks on medical personnel; damage to medical facilities and indiscriminate attacks on civilians not involved in the fighting". The report further says: "Israel placed numerous obstacles in the course of the operation that impeded emergency medical evacuation of the sick and wounded and also caused families to be trapped for days without food, water and medications.
"The actions ... violate directives of international law which forbid attacks on medical centres and medical teams during fighting" and "blatantly violated codes of ethics."
The PHR report is the latest in a string of accusations relating to the conduct of the Israeli army during the Gaza offensive. Lieutenant-General Gabi Ashkenazi, Israel's army chief of staff, dismissed on Monday allegations that civilians were killed during the assault, based on soldiers' testimonies published last week. "I do not believe that IDF troops hurt Palestinian civilians in cold blood," he said in a speech. We will wait the outcome of an investigation, but my impression is that the IDF acted morally and if such cases did take place they were isolated."
Family tragedy
During the offensive, Israeli fire killed 16 Palestinian medical personnel and wounded 25 others while eight hospitals and 26 primary care clinics were attacked, according to figures from the United Nations and the PHR. Among the specific incidents cited by the PHR report is that of a "Mr Shurrab" whose two sons were shot by Israeli forces while they drove towards the southern city of Khan Younis on January 16.
"One of the sons died immediately, the other bled to death for 12 hours," PHR said. "All that time the Israeli soldiers were within a short distance from the Shurrabs but did not provide any assistance despite the father's repeated requests."
PHR condemned the Israeli army, which it said "flaunts its morality", for "declining to help evacuate injured civilians and trapped families, when soldiers acted in a trigger-happy manner as they opened fire on ambulances, medical installations and medical personnel".
Dani Filc Chairman, Physicians for Human Rights, an Israel NGO said: "We have noticed a stark decline in IDF [Israeli Defence Forces] morals concerning the Palestinian population of Gaza, which in reality amounts to a contempt for Palestinian lives. It is critical that the investigation of Operation Cast Lead is completed by a neutral, external investigator without ties to the IDF."
The Israeli army said it is investigating the claims in a "thorough" manner. It insisted that soldiers were instructed to "act with the utmost caution in order not to cause harm to medical vehicles and medical facilities".
Hamas blamed
In a statement, the Israeli army blamed Hamas for putting health personnel and medical facilities in harm's way.
"Throughout the fighting, Hamas methodically made use of medical vehicles, facilities and uniforms in order to conceal and camouflage terrorist activity, and in general used ambulances to carry terror activists and weapons," it said. "Hamas used ambulances to "rescue" terror activists from the battlefield and used hospitals and medical facilities as hiding places". Such actions "greatly complicated the co-ordination of rescue and medical evacuation", the army said. "It must be emphasised that under international law, the protections afforded to medical teams or "protected institutions" ... cease to exist when these medical teams or institutions are not used for humanitarian purposes rather for carrying out actions intended to harm the state of Israel".

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Maddoff Was A Piker -- America's Big Banks Are a Far Larger Fraudulent Ponzi Scheme

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One of America's top bank fraud experts explains the financial industry's "liar's loans" and wholesale greed that got us in this mess.

Want to know what happened in our biggest banks? Bill Moyers Journal in past weeks has been the best source of the truth I've found. This is a must read/see piece this week.
Transcript is here: AlterNet
Previous weeks video and transcripts are here: Moyers Journal The latest will be posted soon. This one is really good!
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Lieberman and Wiping Countries off the face of the Map

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Informed Comment

Avigdor Lieberman, the Moldovan night club bouncer, is now foreign minister of Israel. The world has had a lot of fun laughing at the pronouncements of Iranian President Mahmoud Ahmadinejad, who stands falsely accused of threatening to wipe Israel off the face of the map. But Ahmadinejad has protested that it would be wrong to kill large numbers of civilians.
Avigdor Lieberman, the Moldovan night club bouncer, is now foreign minister of Israel. The world has had a lot of fun laughing at the pronouncements of Iranian President Mahmoud Ahmadinejad, who stands falsely accused of threatening to wipe Israel off the face of the map. But Ahmadinejad has protested that it would be wrong to kill large numbers of civilians.
In contrast, Lieberman has threatened to wipe at least two countries, Egypt and Palestine, off the map. Monstrously, he suggested bombing the Aswan Dam, which would have the effect of murdering all 80 million Egyptians and sweeping them into the Mediterranean in a vast continental African tsunami.
Lieberman promptly announced on assuming office that the Mideast peace process is dead. Well, at least we have an outbreak of frankness.
Whereas Ahmadinejad was humiliated by Columbia University president Lee Bollinger on his visit to that university, which provoked public protests, Lieberman's acceptance into the Israeli government has been greeted mildly and he was allowed to come to the Brookings Institution and meet with Bill and Hillary Clinton. Lieberman is a Central/Eastern European ultra-nationalist in the mold of Slobodan Milosevic and Jorg Haider, and it is shameful that he was allowed into the government and more shameful that this travesty has passed without a peep in the civilized world.
The Electronic Intifada lists "Some of Avigdor Lieberman's infamous statements":
' # In 1998, Lieberman called for the flooding of Egypt by bombing the Aswan Dam in retaliation for Egyptian support for Yasser Arafat.
# In 2001, as Minister of National Infrastructure, Lieberman proposed that the West Bank be divided into four cantons, with no central Palestinian government and no possibility for Palestinians to travel between the cantons.
# In 2002, the Israeli daily Yedioth Ahronoth quoted Lieberman in a Cabinet meeting saying that the Palestinians should be given an ultimatum that "At 8am we'll bomb all the commercial centers ... at noon we'll bomb their gas stations ... at two we'll bomb their banks ..."
# In 2003, the Israeli daily Haaretz reported that Lieberman called for thousands of Palestinian prisoners held by Israel to be drowned in the Dead Sea and offered to provide the buses to take them there.
# In May 2004, Lieberman proposed a plan that called for the transfer of Israeli territory with Palestinian populations to the Palestinian Authority. Likewise, Israel would annex the major Jewish settlement blocs on the Palestinian West Bank. If applied, his plan would strip roughly one-third of Israel's Palestinian citizens of their citizenship. A "loyalty test" would be applied to those who desired to remain in Israel. This plan to trade territory with the Palestinian Authority is a revision of Lieberman's earlier calls for the forcible transfer of Palestinian citizens of Israel from their land. Lieberman stated in April 2002 that there was "nothing undemocratic about transfer."
# Also in May 2004, he said that 90 percent of Israel's 1.2 million Palestinian citizens would "have to find a new Arab entity" in which to live beyond Israel's borders. "They have no place here. They can take their bundles and get lost," he said.
# In May 2006, Lieberman called for the killing of Arab members of Knesset who meet with members of the Hamas-led Palestinian Authority.'
Nice.

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FBI Director Pushes to Renew PATRIOT Act Surveillance Powers

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AlterNet

Earlier this month, the ACLU released a report taking stock of the USA PATRIOT Act, almost eight years after its passage. The study, titled "Reclaiming Patriotism," identifies key sections of the law that codified the most radical abuses of power under the Bush administration, interweaving stories of people who were unlawfully spied on, coerced, and intimidated through the PATRIOT Act's sweeping powers.
"More than seven years after its implementation, there is little evidence to demonstrate that the Patriot Act has made America more secure from terrorists," the report's authors write. "But there are many unfortunate examples that the government abused these authorities in ways that both violated the rights of innocent people and squandered precious security resources."
The ACLU report highlights three specific provisions of the PATRIOT Act that have led to unprecedented surveillance against Americans:
Section 215 -- which drastically broadens the kinds of information the government can demand under FISA to "any tangible thing" (while lowering the burden of proof to obtain an order). As the Washington Post explains, this measure "allows investigators probing terrorism to seek a suspect's records from third parties such as financial services and travel and telephone companies without notifying the suspect. The American Civil Liberties Union has criticized the provision, saying it violates the First Amendment rights of U.S. citizens."
Section 206 -- which grants the authority to use secret "roving wiretaps." "In the past, authorities had to seek court approval for each electronic device carried by a suspect, from a cellphone and a BlackBerry to a home computer," writes the Post, "But under the provision, one warrant can cover all of those machines." "Unlike roving wiretaps authorized for criminal investigations," the ACLU explains, "section 206 does not require the order to identify either the communications device to be tapped nor the individual against whom the surveillance is directed, which is what gives section 206 the Kafkaesque moniker, the "John Doe roving wiretap provision."
Section 6001 -- or the "lone wolf" provision, which allows for secret FISA surveillance orders against people who have no connections to a terror group or foreign nation. "The government justified this provision by imagining a hypothetical "lone wolf," an international terrorist operating independently of any terrorist organization," explains the ACLU, "but there is little evidence to suggest this imaginary construct had any basis in reality."
All three provisions are set to expire on December 31st.
Yesterday, however, during an appearance before the Senate Judiciary Committee, FBI Director Robert S. Mueller made it clear that he considers these PATRIOT Act provisions valuable tools in intelligence gathering and will pressure Congress to keep them past their expiration date.
Questioned by Sen. Benjamin L. Cardin (D-Md.) about the "three major provisions that will sunset in 2009" and which have proven to be "somewhat controversial" in the past, Mueller said, "My hope, quite obviously, is that they will be less controversial as they come up this time, because we have seen their use and have some track record with it."
He described provision 215 as "exceptionally helpful," saying that the FBI had used it 223 times between 2004 and 2007. He said that the roving wiretaps provision had been used 147 times, "and that also has eliminated a substantial amount of paperwork and, I would say, confusion in terms of the ability for us to maintain electronic surveillance on an individual."
As for the "lone wolf" provision, Mueller did not have figures to share. "While we have not -- there has not been a 'lone wolf,' so to speak, indicted," he said, but "that provision is tremendously helpful where we have difficulty showing a tie between a particular individual about whom we have information that he might be supporting terrorism -- or be a terrorist -- but we have difficulty in identifying the foreign power for which he is an agent."
Based on this theoretical, Mueller said the provision was "beneficial" and "should be reenacted."
Mueller said he had not yet had a chance to discuss the sunset provisions in the PATRIOT Act with the Obama Department of Justice -- "My hope is that the [DOJ] will support the re-enactment of all three" -- but given Obama's embrace of -- and the Democrats' utter capitulation to -- warrantless wiretapping last year, it may be an uphill fight to convince Congress to block the reauthorization of these PATRIOT Act provisions based on First Amendment concerns. But it's never too early to start trying. "Our lawmakers have, over time, built a massive surveillance mechanism bit by bit," Caroline Fredrickson, Director of the ACLU Washington Legislative Office said upon releasing the ACLU report. "Now is the time take it apart, examine each piece and develop wiser policies."
At the hearing, Sen. Cardin urged Mueller to re-examine the provisions while there is still time. "There may need to be modifications -- not necessarily restrictions -- there may need to be a fine tuning of these provisions to make sure they're more effective and used as intended by Congress," he said.
"This issue is going to come up quicker than we think."

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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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