We have gone mad, Your Majesty, and only you can cure our affliction.

 

An open letter to the leader of Opec's biggest oil producer, the one man who can force Britain to cut its carbon emissions

• 
• • George Monbiot
  • The Guardian,
  • Tuesday May 27 2008
  • Article history

King Abdaullah of Saudi Arabia
Your Majesty,
In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.
You and I know that there are several reasons for the high price of oil. Low prices at the beginning of this decade discouraged oil companies from investing in future capacity. There is a global shortage of skilled labour, steel and equipment. The weak dollar means that the price of oil is higher than it would have been if denominated in another currency. While your government says that financial speculation is an important factor, the Bank of England says it is not, so I don't know what to believe. The major oil producers have also become major consumers; in some cases their exports are falling even as their production has risen, because they are consuming more of their own output.
But what you know and I do not is the extent to which the price of oil might reflect an absolute shortage of global reserves. You and your advisers are perhaps the only people who know the answer to this question. Your published reserves are, of course, a political artefact unconnected to geological reality. The production quotas assigned to its members by Opec, the oil exporters' cartel, reflect the size of their stated reserves, which means that you have an incentive to exaggerate them. How else could we explain the fact that, despite two decades of furious pumping, your kingdom posts the same reserves as it did in 1988?
You say that you are saving your oil for the benefit of future generations. If this is true, it is a rational economic decision: oil in the ground looks like a better investment than money in the bank. But, reluctant as I am to question your Majesty's word, I must remind you that some oil analysts are now wondering whether this prudence is a convenient fiction. Are you restricting supply because you want to conserve stocks and keep the price high, or are you unable to raise production because your fabled spare capacity does not in fact exist?
I do not expect an answer to this question. I know that the true state of your reserves is a secret so closely guarded that oil analysts now resort to using spy satellites to try to estimate the speed of subsidence of the ground above your oil fields, as they have no other means of guessing how fast your reserves are running down.
What I know, and you may not, is that the high price of oil is currently the only factor implementing British government policy. The government claims that it is seeking to reduce carbon dioxide emissions, by encouraging people to use less fossil fuel. Now, for the first time in years, its wish has come true: people are driving and flying less. The AA reports that about a fifth of drivers are buying less fuel. A new study by the Worldwide Fund for Nature shows that businesses are encouraging their executives to use video conferences instead of flying. One of the most fuel-intensive industries of all, business-only air travel, has collapsed altogether.
In other words, your restrictions on supply - voluntary or otherwise - are helping the government to meet its carbon targets. So how does it respond? By angrily demanding that you remove them so that we can keep driving and flying as much as we did before. Last week, Gordon Brown averred that it's "a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market". In the United States, legislators have gone further: the House of Representatives has voted to bring a lawsuit against Opec's member states, and Democratic senators are trying to block arms sales to your kingdom unless you raise production.
This illustrates one of our leaders' delusions. They claim to wish to restrict the demand for fossil fuels, in order to address both climate change and energy security. At the same time, to quote Britain's Department for Business, they seek to "maximise economic recovery" from their remaining oil, gas and coal reserves. They persist in believing that both policies can be pursued at once, apparently unaware that if fossil fuels are extracted they will be burnt, however much they claim to wish to reduce consumption. The only states that appear to be imposing restrictions on the supply of fuel are the members of Opec, about which Brown so bitterly complains. Your Majesty, we have gone mad, and you alone can cure our affliction, by keeping your taps shut.
Our leaders, though they do not possess the least idea of whether the oil supplies required to support it will be sustained, are also overseeing a rapid expansion of our transport infrastructure. In the UK, we are building or upgrading thousands of miles of roads and doubling the capacity of our airports, in the expectation that there will be no restriction in the supply of fuel. The government's central forecast for the long-term price is just $70 a barrel.
Over the past few months, I have been trying to discover how the government derives this optimistic view. In response to a parliamentary question, it reveals that its projection is based on "the assessment made by the International Energy Agency in its 2007 World Energy Outlook". Well, last week the Wall Street Journal revealed that the IEA "is preparing a sharp downward revision of its oil-supply forecast". Its final report won't be released until November, but it has already concluded that "future crude supplies could be far tighter than previously thought". Its previous estimates of global production were wrong for one simple and shocking reason: it had based them on anticipated demand, rather than anticipated supply. It resolved the question of supply by assuming that it would automatically rise to meet demand, as if it were subject to no inherent restraints.
Our government must have known this, but it has refused to conduct its own analysis of global oil reserves. Uniquely among possible threats to the economy and national security, it has commissioned no research of any kind into this question. So earlier this year, I asked the Department for Business what contingency plans it possesses to meet the eventuality that the IEA's estimates could be wrong, and that global supplies of petroleum might peak in the near future. "The government," it replied, "does not feel the need to hold contingency plans." I am sure I do not need to explain the implications if its forecasts turn out to be wildly wrong.
Your Majesty, I recognise that this is not among your usual duties as the ruler of Saudi Arabia. But I respectfully beg you to save us from ourselves.
Yours Sincerely,
George Monbiot

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They're wrong about oil!

Rip up your textbooks, the doubling of oil prices has little to do with China's appetite

Anatole Kaletsky

Just as the credit crunch seemed to be passing, at least in the US, another and much more ominous financial crisis has broken out. The escalation of oil prices, which this week reached a previously unthinkable $130 a barrel (with predictions of $150 and $200 soon to come), threatens to do far more damage to the world economy than the credit crunch.
Instead of just causing a brief recession, the oil and commodity boom threatens a prolonged period of global "stagflation", the lethal combination of high inflation and economic stagnation last seen in the world economy in the 1970s and early 1980s. This would be a disaster far more momentous than the repossession of a few million homes or collapse of a couple of banks.
Commodity inflation is far more lethal than a credit crunch for two reasons. It prevents central banks in advanced economies from cutting interest rates to keep their economies growing. Even worse, it encourages the governments of developing countries to turn their backs on global markets, resorting instead to price controls, trade restrictions and currency manipulations to protect their citizens from the rising costs of energy and food. For both these reasons, the boom in oil and commodity prices, if it lasts much longer, could reverse the globalisation process that has delivered 20 years of almost uninterrupted growth to America and Europe and rescued billions of people from extreme poverty in China, India, Brazil and many other countries.
That is the bad news. The good news is that the world is not as impotent as is often suggested in the face of this danger, since soaring commodity prices are not the ineluctable outcome of some fateful conjuncture of global economic forces, but rather the product of a typical financial boom-bust cycle, which could be deflated - especially with some help from sensible political action - as quickly as it built up.
The present commodity and oil boom shows all the classic symptoms of a financial bubble, such as Japan in the 1980s, technology stocks in the 1990s and, most recently, housing and mortgages in the US. But surely, you will say, this commodity boom is different? Surely it is driven by profound and lasting changes in global supply and demand: China's insatiable appetite for food and energy, geopolitical conflicts in the Middle East, the peaking of global oil reserves, droughts caused by global warming and so on. All these fundamental points are perfectly valid, but they tell us nothing about whether the oil price will soon jump to $200, stay at $130 or fall back to $60 next month.
To see that these "fundamentals" are all irrelevant, we have merely to ask which of them has changed in the past nine months. The answer is none. The oil markets didn't suddenly discover China's oil demand nine months ago so this cannot explain the doubling of prices since last August. In fact, China's "insatiable" demand growth has decelerated. In 2004 it was consuming an extra 0.9 million barrels a day; in 2007 it was consuming just an extra 0.3 mbd. In the same period global demand growth has slowed from 3.6 mbd to 0.7 mbd. As a result, the increase in global demand growth is now well below last year's increase of 0.8 mbd in non-Opec production, according to Mike Rothman, of ISI, a leading New York consulting group.
Why, then, are commodity prices still rising? The first point to note is that many no longer are. Rice, wheat and pork are 20 to 30 per cent cheaper than they were two months ago, when financial pundits identified Asian and African food riots as the first symptoms of a commodity "super-cycle" that would drive prices much higher. And the price of industrial commodities such as lead, zinc and nickel, supposedly in short supply a year ago, has now dropped by 40 to 60 per cent. In fact, most major commodity indices would already be in a downtrend were it not for the dominance of oil.
But oil is the commodity that really matters and surely the latest jump in prices proves that demand really does exceed supply? Not at all. In the late stages of financial bubbles, it is quite normal for prices to become completely detached from economic fundamentals. House prices in Florida and Spain kept rising even after property developers built far more homes than they could possibly sell. The same thing happened in credit markets: mortgage securities kept rising even while banks created "special purpose vehicles" to acquire vast "inventories" of bonds for which there were no genuine buyers - and dozens of similar examples can be cited from the bubbles in internet stocks and Japan. Similarly, the International Gold Council reported this week that gold demand for commercial uses and investment fell 17 per cent in January, just as the gold price surged through $1,000 for the first time.
Now consider the situation today in oil markets: the Gulf, according to Mr Rothman, is crammed with supertankers chartered by oil-producing governments to hold the inventories of oil they are pumping but cannot sell. That physical oil is in excess supply at today's prices does not mean that producers are somehow cheating by storing their oil in tankers or keeping it in the ground. All it suggests is that there are few buyers for physical oil cargoes at today's prices, but there are plenty of buyers for pieces of paper linked to the price of oil next month and next year. This situation is exactly analogous to the bubble in credit markets a year ago, where nobody wanted to buy sub-prime mortgage bonds, but there was plenty of demand for "financial derivatives" that allowed investors to bet on the future value of these bonds.
In short, the standard economic assumption that supply and demand drive prices is only a starting point for understanding financial markets. In boom-bust cycles, the textbook theory is not just slightly inaccurate but totally wrong. This is the main argument made by George Soros in his fascinating book on the credit crunch, The New Paradigm for Financial Markets, launched at an LSE lecture last night. In this book Mr Soros explains how financial bubbles always start with some genuine economic transformation - the invention of the internet, the deregulation of credit or the rise of China as a commodity consumer.
He could have added the Netherlands' emergence as a financial centre triggering Tulipmania or Britain's global dominance as a naval power before the South Sea Bubble of 1720. The trouble is that these initial perceptions of a new paradigm tell us nothing about how far financial prices will adjust in response - will Chinese demand drive oil prices to $50 or $100 or $1,000?
Instead they can create a self-fulfilling momentum of rising prices and an inbuilt bias in the way that investors interpret the world. The resulting misconceptions drive market prices to a "far from equilibrium position" that bears almost no relation to the balance of underlying supply and demand.
The people who tell you that commodity prices today are driven by "economic fundamentals" are the same ones who said that house prices in Britain were rising because of land shortages. The amazing thing is that just months after losing hundreds of billions in the housing and mortgage bubbles, investors and governments around the world have reverted to the discredited fallacy that financial markets always reflect economic reality, instead of the boom-bust cycles and misconceptions that George Soros's book vividly describes.

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Why bananas are a parable for our times

 

Johann Hari

Thursday, 22 May 2008

Below the headlines about rocketing food prices and rocking governments, there lays a largely unnoticed fact: bananas are dying. The foodstuff, more heavily consumed even than rice or potatoes, has its own form of cancer. It is a fungus called Panama Disease, and it turns bananas brick-red and inedible.

There is no cure. They all die as it spreads, and it spreads quickly. Soon – in five, 10 or 30 years – the yellow creamy fruit as we know it will not exist. The story of how the banana rose and fell can be seen a strange parable about the corporations that increasingly dominate the world – and where they are leading us.
Bananas seem at first like a lush product of nature, but this is a sweet illusion. In their current form, bananas were quite consciously created. Until 150 ago, a vast array of bananas grew in the world's jungles and they were invariably consumed nearby. Some were sweet; some were sour. They were green or purple or yellow.
A corporation called United Fruit took one particular type – the Gros Michael – out of the jungle and decided to mass produce it on vast plantations, shipping it on refrigerated boats across the globe. The banana was standardised into one friendly model: yellow and creamy and handy for your lunchbox.
There was an entrepreneurial spark of genius there – but United Fruit developed a cruel business model to deliver it. As the writer Dan Koeppel explains in his brilliant history Banana: The Fate of the Fruit That Changed the World, it worked like this. Find a poor, weak country. Make sure the government will serve your interests. If it won't, topple it and replace it with one that will.
Burn down its rainforests and build banana plantations. Make the locals dependent on you. Crush any flicker of trade unionism. Then, alas, you may have to watch as the banana fields die from the strange disease that stalks bananas across the globe. If this happens, dump tonnes of chemicals on them to see if it makes a difference. If that doesn't work, move on to the next country. Begin again.
This sounds like hyperbole until you study what actually happened. In 1911, the banana magnate Samuel Zemurray decided to seize the country of Honduras as a private plantation. He gathered together some international gangsters like Guy "Machine Gun" Maloney, drummed up a private army, and invaded, installing an amigo as president.
The term "banana republic" was invented to describe the servile dictatorships that were created to please the banana companies. In the early 1950s, the Guatemalan people elected a science teacher named Jacobo Arbenz, because he promised to redistribute some of the banana companies' land among the millions of landless peasants.
President Eisenhower and the CIA (headed by a former United Fruit employee) issued instructions that these "communists" should be killed, and noted that good methods were "a hammer, axe, wrench, screw driver, fire poker or kitchen knife". The tyranny they replaced it with went on to kill more than 200,000 people.
But how does this relate to the disease now scything through the world's bananas? The evidence suggests even when they peddle something as innocuous as bananas, corporations are structured to do one thing only: maximise their shareholders' profits. As part of a highly regulated mixed economy, that's a good thing, because it helps to generate wealth or churn out ideas. But if the corporations aren't subject to tight regulations, they will do anything to maximise short-term profit. This will lead them to seemingly unhinged behaviour – like destroying the environment on which they depend.
Not long after Panama Disease first began to kill bananas in the early 20th century, United Fruit's scientists warned the corporation was making two errors. They were building a gigantic monoculture. If every banana is from one homogenous species, a disease entering the chain anywhere on earth will soon spread. The solution? Diversify into a broad range of banana types.
The company's quarantine standards were also dire. Even the people who were supposed to prevent infection were trudging into healthy fields with disease-carrying soil on their boots. But both of these solutions cost money – and United Front didn't want to pay. They decided to maximise their profit today, reckoning they would get out of the banana business if it all went wrong.
So by the 1960s, the Gros Michel that United Fruit had packaged as The One True Banana was dead. They scrambled to find a replacement that was immune to the fungus, and eventually stumbled upon the Cavendish. It was smaller and less creamy and bruised easily, but it would have to do.
But like in a horror movie sequel, the killer came back. In the 1980s, the Cavendish too became sick. Now it too is dying, its immunity a myth. In many parts of Africa, the crop is down 60 percent. There is a consensus among scientists that the fungus will eventually infect all Cavendish bananas everywhere. There are bananas we could adopt as Banana 3.0 – but they are so different to the bananas that we know now that they feel like a totally different and far less appetising fruit. The most likely contender is the Goldfinger, which is crunchier and tangier: it is know as "the acid banana".
Thanks to bad corporate behaviour and physical limits, we seem to be at a dead end. The only possible glimmer of hope is a genetically modified banana that can resist Panama Disease. But that is a distant prospect, and it is resisted by many people: would you like a banana split made from a banana split with fish genes?
When we hit up against a natural limit like Panama disease, we are bemused, and then affronted. It seems instinctively bizarre to me that lush yellow bananas could vanish from the global food supply, because I have grown up in a culture without any idea of physical limits to what we can buy and eat.
Is there a parable for our times in this odd milkshake of banana, blood and fungus? For a hundred years, a handful of corporations were given a gorgeous fruit, set free from regulation, and allowed to do what they wanted with it. What happened? They had one good entrepreneurial idea – and to squeeze every tiny drop of profit from it, they destroyed democracies, burned down rainforests, and ended up killing the fruit itself.
But have we learned? Across the world, politicians like George Bush and David Cameron are telling us the regulation of corporations is "a menace" to be "rolled back"; they even say we should leave the planet's climate in their hands. Now that's bananas.
To purchase 'Banana: The Fate of the Fruit That Changed the World', click here

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Gresham’s Law in Present day India

 

May, 20 2008

By Girish Mishra 

 

If one looks at India's post-Independence scenario in political, social, cultural, academic, literary, journalistic, religious or any other sphere, one comes across the phenomenon of the inferior elements pushing out, by and large, the superior competent ones.

 

To understand the change, let us take, for example, the politics of the Nehruvian days and cite a few representative instances. A member of parliament was thrown out by unanimous vote because he had, knowingly, given a false statement. Acharya Narendra Dev, a leading socialist leader voluntarily resigned his membership of the U.P. state assembly as he had left the Congress on whose ticket he was elected. The Acharya fought on the Socialist Party ticket and he was defeated by the Congress candidate. He had no regrets because his was a principled stand. One must remember that, during those days, it was not legally binding on the Acharya to resign his seat in the assembly as there was no law, making it obligatory for a defector to quit. Take another instance, Harihar Nath Shastri, president of the Indian National Trade Union Congress and an M.P. was killed in an air crash soon after the first general election. Nehru and the Congress offered to make his wife Shakuntala Devi, their candidate in the by-election, but she refused because she was a member of the Socialist Party and not willing to desert it for a sure win. She contested as a Socialist candidate and lost, but had no regrets for turning down the offer from Nehru.

 

Look at the present scenario. Members of central and state legislature frequently defect from one party to another but do not resign their seats. They try to cling to them by exploring some loophole or the other in the anti-defection law. The instances of mass defection by members of Bihar legislature, led by B.P. Mandal in 1967-68 and by Haryana legislators under the leadership of Bhajan Lal are widely known. In both the cases, the defectors formed the government and ruled over their respective states. Only recently, when K. Natwar Singh, a former foreign minister of India, was thrown out by the Congress as his and his son's names figured in the "food for oil" scandal, concerning Iraq, he did not resign his seat in the upper house of the Parliament and lobbied for a seat from the BJP, after his term expired, notwithstanding his self-proclaimed loyalty to secularism and the Nehruvian thinking. H. D. Devegoda, a former prime minister, who heads a party, called Janata Dal (Secular), entered into an alliance with the BJP that has never taken kindly to secularism, just to make his son chief minister of Karnataka, but when the turn of the BJP for heading the government came, he, all of a sudden, woke up to the fact that his party was secular while the BJP was not! Only the other day, a Congress M.P., after being dropped from ministership, crossed over to Mayawati's party, as if ideology was just a shirt to be put on according to one's convenience. The same can be said of a number of politicians who don secular or Hindutva caps, according to expediency.

 

During Nehru's days, K. D. Malviya, then minister for oil and natural gas, had to resign from the cabinet because he had openly recommended the name of a Muslim freedom fighter for some assistance to a nationalist businessman. No quid pro quo was involved. Around the same time Lal Bahadur Shastri, the railway minister resigned, owning moral responsibility for railway accidents.

Those days are long past. Today, ministers cling to their positions even though there are corruption cases against them going on in courts of law. There are members of parliament and assemblies, convicted in the cases involving heinous crimes like murders, thefts, robberies, human smuggling and so on, yet none of them have quit their posts. The list is too long.

 

Very few parliamentarians and legislators have any interest in reading and writing. The latest report from U.P. points out that legislators rarely visit the rich library of the legislature. If one goes through the records of parliament library showing the books borrowed by honourable members, one will not reach any different conclusion. The declining standard of debates is another indicator.

 

If one turns one's attention to academic and literary world, one reaches the same conclusion. By and large, inferior elements, pushing aside the qualified and meritorious ones, have come to occupy dominant positions. If one prepares the lists of all those persons who have been occupying positions of importance in academic institutions or have been nominated to the upper house of parliament or state legislature as "distinguished persons" or awarded literary prizes or Padma decorations, the point will be obvious. The proximity to the people in power, sycophancy, corruption, etc. have been playing no mean role. To give a concrete example, the list of "literary" people, sponsored by various government and semi-government organizations to attend the World Hindi Conference last year, contained quite a sizable number of inferior and fake writers. Pulls and pressures had played a significant role in the preparation of this list.

 

Lately, by floating two fashionable nonsensical concepts, namely, bazaarwad (marketism) and global realism, some inferior writers have been trying to climb up the ladder of eminence. In fact, bazaarwad has been brought in to replace capitalism so that its exploitative character is covered up. Bazaarwad cannot have any place for exploitation because unrestrained market forces assign every commodity whether material or capacity to labour its true value and no one is cheated. Obviously, the champions of this concept serve the interests of capitalism.

If one observes carefully the quality of programmes on electronic media and the character of comments, articles and dispatches in print media over time, the deterioration becomes crystal clear.

 

The phenomenon or tendency, illustrated by the above examples, is not a novel one. It was first mentioned two and a half centuries ago in Greek literature. Aristophanes (456 BC - 386 BC) in his well-known comedy the Frogs underlined it. The play tells the story of the god Dionysus who despairs the plight of Athens as a result of the disastrous Battle of Argiusae. Athens was defeated because the inferior, dishonest, and unqualified people had become dominant after pushing aside superior ones.

To quote the relevant lines:

"The course our city runs is the same towards men and money.

She has fine new gold and ancient silver,

Coins untouched with alloys, gold or silver,

Each well minted, tested each and ringing clear

Yet we never use them!

Others pass from hand to hand,

Sorry brass just stuck last week and branded with a wretched brand.

So with men we know for upright, blameless lives and noble names.

These we spurn for men of brass."

 

Centuries later, in 1858, British economist Henry Dunning Macleod termed this phenomenon "Gresham's Law". Since then this has been in common parlance. In his book Elements of Political Economy. Macleod claimed to have brought to light "a great and fundamental law of currency" that showed the disappearance of good money from circulation with increasing preponderance of bad one. He christened it as Gresham Law on the basis of a letter by Sir Thomas Gresham to Queen Elizabeth I. Sir Thomas, an English merchant, was working as the Crown's financial representative in Antwerp. He informed the Queen that gold coins were disappearing from the circulation as a result of the entry of debased coins, introduced by Henry VIII. The latter had reduced the gold content of coins from six ounces fine to three ounces fine of gold.

 

History shows that the phenomenon that bad money drives good money from circulation was widely known during the earlier periods too. For example, it occurs in the writings of astronomer Copernicus (1473-1543).

 

In the course of time, it has been found that Gresham's Law may be applied to other fields too. People accept inferior goods in place of genuine ones for lack of correct information or the deception created by high voltage advertisement. In the market for second hand cars, lemon automobiles that are analogous to bad money drive out the good cars. Similarly, it is quite dominant in management science. While honest and devoted managers and business leaders take a long time to bring in tangible results while sly ones show good results by employing all kinds of tricks and manipulations. Thus, in the short run, investors and clients are lured by them. It is a different matter that they, ultimately, come to grief when such companies collapse. In India, non-banking financial institutions, only a few years ago, duped large number of gullible investors and then vanished in thin air.

 

In India, even in civil and police administration, a number of incompetent and dishonest people have risen by manipulation and nexus with corrupt politicians. One may look at the startling facts that have emerged after some of them have been caught indulging in corrupt practices and brought before courts of law. One senior officer of civil administration has been found to have a huge real estate besides tens of bank accounts all over the country. In political parties, too, manipulators have risen pushing out the loyal and competent workers and leaders. The Samajwadi Party, led by Mulayam Singh Yadav is a typical example where racketeers with no ideological and political commitments have pushed aside the old ideologically committed workers and leaders.

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This week, I've been ashamed to be a woman

 

Yasmin Alibhai-Brown

Cherie still defends the war in Iraq. Hillary would go nuke Iran

Monday, 19 May 2008

In 1988 I was on BBC TV debating politics with an all-female audience. For most guests, the 1979 election of Margaret Thatcher had marked an optimistic turn of history. I disagreed vehemently. Our leaderine made me biliously ashamed to be a woman.

Today that old shame heaves again, and stomach acids fill my throat as two more grasping women betray themselves and rob us of our ideals. Hillary Clinton and Cherie Blair would refute the charges. Heed not their denials, not after this week. The two mates are covetous of clout and wealth, rapt in cringing marital dotage, above all, morally questionable and beholden to none. God is always on their blessed side to exonerate any (tiny) trespasses. From those who share their chromosomes, they expect, nay demand, infinite sympathy and fulsome appreciation.
Is this where it leads to, our long road towards gender parity? It might have been better for us not to have started the journey. I don't mean that really. Blame the gloom which is set to deepen as we get a whole week of chirpy Cherie on Radio 4 reading from her (allegedly) million-pound memoir, a well spun tale – Scouse lass from a broken family gets to marry a British PM, just like that assistant in Love Actually... In reality, Mrs Blair's example is less than inspirational. As soon as she stepped over that famous threshold, she turned, like fresh milk left out overnight in the summer. She blames her embarrassing photos after election night, when, bleary and dishevelled, she opened the door to receive flowers. What tosh. All those years building up a reputation as a respected human rights lawyer and champion of equality, her passion and purpose, the luminous intelligence and warmth were jacked in as she fell into the perfidious embrace of power. It was glitzy and wildly exciting, never mind the political corruption that came with the privilege.
Meanwhile, Hillary carries on a noxious, malignant campaign covered in pustules of lies, expediency and congealing ambition. Though she tries hard to wash herself clean, to deodorize the air around her, the stench of forgery lingers on. Five years ago, Hillary wrote her own self-aggrandizing memoir and was paid eight million for the sentimental drivel. Both ex First Ladies have studied law and should know the inviolability of facts and evidence. Hillary misspeaks involuntarily, as if she suffers from a strange brain disease that twists out falsehoods and forces them to be uttered. She pretended to be shot at in Bosnia and insists her name comes from Edmund Hillary, who at her christening had not yet climbed Everest. Observers say both Clintons will tell a big lie when a small one will do and a small lie when the truth would suffice.
But hey, men who rule over us or want to are natural born fibbers so why this level of ire? Are women commentators always bitchy to other women? Because both Cherie and Hillary have used womanhood to get on, but only when it suits.
Over the nomination campaigns, Hillary has come across as a man in bad frocks, a "ventriloquist" says Jane Fonda. Arguably, you have to be a manly woman to get elected – but then she and Cherie climbed up through marriage to stand on the shoulders of husbands with lethal defects and judgements. Though unelected, the wives sought illegitimate influence over national politics and policies. Cherie wanted not only more money, more things, more foreign trips, more kudos, but a vastly more important role. So did Hillary and the claims to "experience" come from exactly that pushy presence she exerted in the White House.
Cherie still defends the war in Iraq. Then she believed New Labour women "should be supporting our men in these difficult decisions, not making it worse by nagging them". So being a sweet little wifie was more important than the law, deaths of innocents, human rights. WHAT? Today those Iraqi wives and mothers who are not grieving are being suppressed, veiled, killed for the freedoms they once had.
After tortuous obfuscations, Hillary now wants to distance herself from her old war-mongering self, but still would go nuke Iran. Both have defended laws curtailing fundamental civil rights and yet both are drawn to back frightfully worthy charities to help womankind.
Finally, the two women lack political conscience. Cherie is no better than John Prescott and, like him, has damaged the Labour party this difficult week. By not stepping aside, Hillary will destroy the Democrats and possibly let the Republicans back in. As women, they ought to know and act better. We should have higher standards otherwise what is the point?

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This government has been the most rightwing since the second world war,

The prospect of a Tory in No 10 does worry me - but no more so than another term for this cabinet of war criminals

George Monbiot The Guardian, Tuesday May 20 2008 Article historyAbout this articleClose This article appeared in the Guardian on Tuesday May 20 2008 on p27 of the Comment & debate section. It was last updated at 00:04 on May 20 2008. You can hear the wringing of hands and tearing of cloth all the way down Farringdon Road. Dismayed by the local election results, convinced that Labour will be crushed in Thursday's byelection, afraid that this will presage disaster in the next general election, my fellow columnists are predicting the end of the civilised world. But I can't understand why we should care.

Yes, I worry about what the Tories might do if they get in. I also worry about what Labour might do if it wins another term. Why should anyone on the left seek the re-election of the most rightwing government Britain has had since the second world war?

New Labour's apologists keep reminding us of the redistributive policies it has introduced: Sure Start children's centres, reductions in child poverty, raising the school leaving age, the national minimum wage, flexible hours for parents and carers, better conditions for part-time workers, the decent homes programme, free museums, more foreign aid. All these are real achievements and deserve to be celebrated. But the catalogue of failures, backsliding and outright destruction is much longer and more consequential.

One fact alone should disqualify this government from office: we have a cabinet of war criminals. The Nuremberg tribunal characterised a war of aggression as "the supreme international crime". It is not just that Britain's Labour government launched and sustained an unprovoked war, it also sabotaged all means of achieving a peaceful resolution. In April 2002 it helped the Bush administration to sack José Bustani, the head of the Organisation for the Prohibition of Chemical Weapons, in order to prevent him settling the dispute over Iraq's alleged weapons of mass destruction. In two separate offers before the invasion, Saddam Hussein agreed to meet the terms the US and Britain were demanding. But they slapped him down and concealed his offers from their electorates. (All references are on my website.)

Cluster bombs can be legally used because the British government helped to block an international ban in 2006: it is still holding out against an outright ban at the current talks in Dublin. The government has undermined another international peace agreement - the nuclear non-proliferation treaty - by deciding to renew the Trident missile programme. It was the first administration to announce a policy of pre-emptive nuclear attack: even the great nuclear enthusiast Harold Macmillan never went this far. In 2007 the defence secretary, without parliamentary debate, revealed that the US would be allowed to use the listening station at Menwith Hill for its missile defence system.

Labour appears to be prepared to meet any demand the Bush administration makes, however outrageous. In 2003 the government signed a one-sided extradition treaty, permitting the US to extract our citizens without producing prima facie evidence of an offence. In the same year the defence secretary announced that he would restructure the British armed forces to make them "inter-operable" with those of the United States, ensuring for the first time in British history that they became functionally subordinate to those of another sovereign power.

Labour's foreign policy is as unethical as Margaret Thatcher's. It provides military aid to the government of Colombia, whose troops are involved in a campaign of terror against the civilian population. It granted an open licence for weapons exports to the government of Uzbekistan, and sacked the British ambassador when he tried to draw attention to the regime's human rights abuses. It has collaborated with the US programme of extra-judicial kidnapping and imprisonment, left our citizens to languish in Guantánamo Bay, and made use of Pakistani torture chambers in seeking to extract testimony from British suspects. Until 2005 it tied its foreign aid programme to the privatisation of public utilities in some of the world's poorest countries. Last year it held out against reform of the International Monetary Fund's unfair allocation of votes.

The proportion of the British population in prison has risen by a fifth since the Tories left office. Today Britain locks up 151 out of every 100,000 people. The Chinese judiciary, by contrast, which is notorious for its willingness to bang up anyone and everyone, jails 119 people per 100,000; Burma imprisons 120; Saudi Arabia 132. The Serious Organised Crime and Police Act, passed in 2005, contains clauses that permit the police to ban any demonstration, however peaceful. It is one of a long series of bills the Labour government has passed that restrict the right to protest.

The citizen has been re-regulated; business has been deregulated. Last year deaths caused by serious injuries at work rose by 11%: a predictable result of the sacking of 1,000 staff at the Health & Safety Executive and a 24% reduction in workplace inspections. In 2006 the government instructed the Serious Fraud Office to drop its corruption case against the arms manufacturer BAE Systems. It has obstructed efforts by other states to investigate the company.

Labour has shifted taxation from the rich to the poor, cutting corporation tax from 33% to 28% and capital gains tax from 40% to 18%, and introducing a new entrepreneurs' relief scheme, taxing the first million of capital gains at just 10%. It tried to raise the income tax paid by the poorest earners from 10% to 20%. Labour has lifted the inheritance tax threshold from £300,000 to £700,000, and maintained the cap on the highest rates of council tax. While vigorously prosecuting benefits cheats, it has allowed tax avoidance, mostly by the very rich, to reach an estimated £41bn. Inequality today is slightly worse than it was when Labour took power in 1997 (the Gini coefficient which measures it has risen from 0.33 to 0.35).

Both as chancellor and prime minister, Gordon Brown has forced the private finance initiative into almost all public services. His privatisation schemes have crept into places where the Conservative government never dared to tread. Labour has waged war against our planning system and overseen a disastrous decline in social housing: under Thatcher an average of 46,600 social homes were built every year; under Tony Blair the average was 17,300. Labour is closing post offices, small schools and GPs' surgeries, while overseeing a doubling of airport capacity and the construction of 4,000km of trunk roads. These developments ensure that even the modest targets in the climate change bill are likely to be missed. Carbon dioxide pollution fell faster under the Conservatives than under Labour.

Above all, the Labour government has destroyed hope. It has put into practice Thatcher's dictum that "there is no alternative" to a market fundamentalism that subordinates human welfare to the demands of business. Labour has created a political monoculture that kills voters' enthusiasm, and has delayed electoral reforms that would have given smaller parties an opportunity to be heard. All we are left with is fear: the fear that this awful government might be replaced by something slightly worse. Fear has destroyed the Labour party, but people keep supporting it in trepidation of letting the other side win.

Save this government? I would sooner give money to the Malarial Mosquito Conservation Project. Of all the causes leftist thinkers might support, New Labour must be the least deserving.

The Cyclone Disaster In Myanmar And The Human Tragedy Of Global Capitalism

By Li Onesto

20 May, 2008
Countercurrents.org

On May 2, 2008, Cyclone Nargis swept through the country of Myanmar, leaving in its wake a catastrophic human disaster. Deaths are estimated as high as 100,000 people, and at least one million are now homeless. Entire towns and villages have been washed away. 10,000 people died in one coastal town alone.

The densely populated Irawaddy Delta of 6 million people, with many fishing communities, was hit hard. Yangon (the former capital) on the edge of the Delta, where another 6.5 million people lived, was completely flooded. Flimsy houses in the poor shantytowns around cities were demolished. Some 24 million people in the five disaster-hit states—almost half of Myanmar’s population of 57 million—were affected by the cyclone with its 120 mph winds and 12-foot waves that surged up to seven miles inland.

Even areas not hit as hard are now running out of food and water. Crops, livestock, and fish have been ruined, along with irrigation systems, rice mills, and storage barns. The areas hit by the cyclone make up half of the irrigated farmland in Myanmar—which had produced 65 percent of Myanmar's rice. Millions of people who survived are now facing hunger, disease and lack of shelter.

*****

People around the world are witnessing the terrible plight of the Myanmar people unfold before their eyes. In the face of such immense human tragedy, there is hope that everything possible will be done to provide aid and relieve the terrible suffering.

There is tremendous wealth, resources, and technology in the world that could be used to respond to this disaster. There is no shortage of people with skills and compassion that could be mobilized to help. But clearly, this is not happening.

The Western mainstream media says this is because: The U.S. and other countries are trying to help but a despotic regime in Myanmar is refusing to cooperate and is therefore to blame for the high death toll and continuing suffering.

This article will break down this storyline, look at what’s behind it and compare it to reality.

To understand the situation in Myanmar today you have to examine two interpenetrating contradictions. One is the relations between the world imperialist system and Myanmar as a poor country oppressed and dominated by global capitalism. The other dynamic is the geostrategic importance of Myanmar to imperialism and the rivalry between different capitalist countries in the region. These larger factors have deeply influenced the extent and character of the destruction caused by the cyclone, as well as the rescue and relief efforts.

Natural Disasters and Man-Made Conditions

The official storyline argues: In the face of natural disasters like Cyclone Nargis, humanitarian aid trumps everything. Condoleezza Rice says: “What remains is for the Burmese government to allow the international community to help its people. It should be a simple matter. It is not a matter of politics.”

In reality: There are terrible natural disasters human beings have little control over. But what happens in the face of such catastrophes is profoundly affected by the organization of human society. So, to answer Condoleezza Rice: It is NOT a “simple matter” of relief efforts. It IS very much a matter of politics, economic relations, and power relations, from beginning to end.

Disaster relief and aid—both within a particular country, and between particular countries—doesn’t take place in a vacuum.

We live on a planet where human life is susceptible to tornados, tsunamis, cyclones, and earthquakes. Scientific understanding exists to predict and prepare, to a certain degree, for such acts of nature. But whether and how this works and what happens in the wake of such disasters is profoundly imprinted with and goes through the workings of the world capitalist system.

Look what did and did not happen before, during, and after Hurricane Katrina. Everyone saw how power relations in society, poverty, and the oppression of Black people affected who got out and who didn’t; who died and who survived. Everyone saw how all the inequalities that already existed affected what happened as the floodwaters rose.

Natural disasters do not “discriminate”—people all over the world are hit by tornados, hurricanes, and earthquakes. But different people and different countries are not affected equally.

We live in a hugely lopsided world where a handful of rich, imperialist countries dominates the rest of the planet. The U.S. sits at the top of a global capitalist system driven and shaped by the maximization of profit. The majority of people live in poor countries oppressed and dominated by imperialism and by social-economic structures that reflect and reinforce the interests of local elites who are subordinate to imperialism. Development of these countries has been stunted and distorted by imperialism. And all this profoundly affects the capacity and ability of governments and people to respond to a natural disaster.

Myanmar already faced rising costs for basic foods, commodities, and especially fuel. 10 percent of the population did not receive enough food to meet its basic daily needs. In many rural areas 70 percent lived under the absolute poverty line. Shantytowns surrounded the cities.

What we see now is a vivid example of how the poverty and distorted development that comes from being dominated and oppressed by foreign powers can turn a natural disaster into catastrophic human tragedy. As Debarati Guha-Sapir, Director of the Centre for Research on the Epidemiology of Disasters in Brussels, said: “The villages are in such levels of desperation — housing quality, nutritional status, roads, bridges, dams — that losses were more determined by their condition rather than the force of the cyclone.”

It is also the case that international political relations—where Western imperial powers are generally hostile to the military regime in Myanmar—are behind the contentiousness over aid getting into Myanmar. China’s economic interests and political relationship with Myanmar have factored into international relief efforts. And Myanmar’s economic and political relationships with other countries in South Asia have also figured into what aid has been offered.

“Isolated” from the World?

The official storyline says: Myanmar is run by a bunch of dictators who chose to isolate themselves from the rest of the world.

Reality: Myanmar society is repressive and relatively closed off from the outside world. The reactionary military regime seeks to maintain power and control society through brutal force and by limiting contact with the rest of the world. But this is not why the U.S. criticizes Myanmar.

What the U.S. really means when it says Myanmar has “isolated” itself is that Myanmar has not fully opened its doors to U.S. imperialism. The military regime has not been completely pliable, compliant, and subservient to the United States. And now it has refused to accept aid from the U.S. that has all kinds of conditions and potential “strings attached”—such as Bush’s insistence that Myanmar open its borders to U.S. officials, aid workers and military personnel.

It is not surprising that Myanmar hesitated to accept U.S. help, given there is open speculation and discussion about the use of U.S. military aircraft, troops, and warships to deliver aid. A Time magazine headline read: “Is It Time to Invade Burma?” And France is pushing to invoke a UN “responsibility to protect” doctrine to deliver aid without Myanmar’s permission.

U.S. sanctions on Myanmar (that began in 1997 and have since been extended) ban new investments in the country and prohibit imports into the U.S. from Myanmar. The U.S. says it maintains these sanctions because of human rights abuses. But in fact, this U.S. “isolation” of Myanmar is aimed at undermining and destabilizing the government and creating conditions to bring to power a regime more subservient to the United States.

Reality: In fact, Myanmar is not “isolated” and cut off from the rest of the world. Historically and up to today, Myanmar’s development has been conditioned by its integration into and subordination tothe global system of imperialism.

Burma (which changed its name to Myanmar in 1989) was a colony of British imperialism for over 60 years. In fact the commercial production of oil in Myanmar dates back to 1871 when British colonialists set up the Rangoon Oil Company.

Since formal independence in 1948, different imperialist powers have exploited the country’s people and plundered its resources. It is beyond the scope of this article to review this history. But an example of imperialist control and development of Myanmar’s energy resources provides a picture of the country’s relationship to the world capitalist system.

Myanmar has the world's tenth largest gas reserves. It has been producing natural gas since the 1970s. Today, gas exports are Myanmar's most important source of national income.

In the 1990s Myanmar granted gas concessions to foreign companies from France and Great Britain. Later Texaco and Unocal (now absorbed into ChevronTexaco) gained rights to Myanmar’s gas as well.

In 2005 other countries in the region, including China, Thailand, and South Korea invested in Myanmar’s oil and gas industry.

What did this mean for the masses of people in Myanmar?

In 1996 a human rights suit was filed against the American-based Unocal Corp. A group of villagers accused Unocal of using forced labor conscripted by Myanmar soldiers. Villagers were raped, murdered, and brutally relocated during the construction of a $1.2 billion gas pipeline to Thailand, started in 1990.

The suit, which Unocal settled in 2004, brought to light the kind of horrible crimes that were being committed by a consortium of foreign companies, including Unocal, all of which were receiving support and protection from the military regime.

One woman testified how soldiers came to her home, shot her husband, and killed her baby. Other villagers recounted how their neighbors were executed because they refused to leave the area Unocal wanted. Two girls said soldiers raped them at knifepoint (The Nation, June 30, 2003). Human Rights Watch interviewed hundreds of villagers who were driven from their homes and farms, many forced to work at gunpoint and beaten by guards.

The UN issued warnings of serious human rights abuses in 1995. After such embarrassing evidence came out, Texaco left the country in 1997. But Unocal retained 28 percent interest in the pipeline.

The U.S. State Department even acknowledged forced labor was being used. But still the U.S. government openly defended Unocal in this suit. Then Attorney General John Ashcroft filed a brief denouncing the villagers' attempt to sue Unocal, arguing that the suit (and similar suits) should be dismissed because they interfere with U.S. foreign policy and undermine the U.S. “war on terrorism.”

Today, on the blood and bones of the Myanmar people, the Unocal pipeline transports some 700 million cubic feet of gas per day.

This story provides a window into Myanmar’s relationship to world imperialism – how the development of Myanmar has been conditioned by its integration into and subordination tothe global system of imperialism.

*****

Beyond the interest of imperialism in profiting off the resources and people in Myanmar there is the geostrategic importance of this in the world. And this is a big factor in how the U.S. and various international forces look at their relationship with Myanmar and how they have responded to the current disaster.

U.S. Geostrategic Interests in Myanmar

The official storyline: Laura Bush joined the chorus of U.S. critics calling the Myanmar government “inept” for failing to alert people about the cyclone and standing in the way of getting humanitarian aid to people.

Reality: It is shameless and utter hypocrisy for the U.S. to be criticizing any government for not helping people in the face of a natural disaster. The U.S. has more money and resources than any other country in the world—many, many times those of a poor country like Myanmar. But when Hurricane Katrina hit New Orleans, the Bush regime was responsible for horrible humanitarian crimes. It failed to evacuate people to safety, abandoned thousands to die in the rising floodwaters and then subjected tens of thousands, overwhelmingly African-Americans, to the most inhuman and degrading treatment.

The inadequacies and failures of the Myanmar government in responding to the cyclone disaster have everything to do with two defining facts: its reactionary nature, and larger geo-political dynamics.

The military regime in Myanmar is an oppressive and corrupt force that has ruled the country since 1962. It has not hesitated to use the most brutal methods to crush any popular resistance and is widely hated by the people.

The military dominates and administers major aspects of the country’s economy. Only military personnel are allowed to own shares in the military-run corporations that form a significant part of the economy. Military officials occupy top positions in almost every government agency. It oversees a society and economy of great inequality and savage capitalist and semi-feudal exploitation.

In the last 15 years, the economy has in fact become more integrated with the world capitalist economy, especially through the development of the country’s oil and natural gas industries. The military has entered into various kinds of joint ventures with foreign energy companies—and, as in the case of Unocal [[see Part 1]], even provided these companies with brutally conscripted forced labor.

The reality is: The US criticism of the Myanmar government has nothing to do with concern for the victims of the cyclone. It has everything to do with cold calculations about how to use this disaster to further U.S. interests—to pry open the country, to weaken the military regime, and to create more favorable conditions for a full-out regime change. The U.S. wants to bring to power a government in Myanmar that more fully serves U.S. economic and political interests, including in relationship to U.S. contention with other capitalist powers. To understand this, we need to first of all look at the geostrategic interests the U.S. is pursuing in Myanmar.

Three great regions of Asia come together where Myanmar sits on the planet—China in the north, Southeast Asia in the south, and India in the west. Looking at a map, it becomes clear how Myanmar is key to establishing land-links between Central Asia in the west, Japan in the east and Russia in the north.

Off the coast of Myanmar is the Strait of Malacca. This waterway between Malaysia and Indonesia is one of the world’s most strategic water passages. It links the Indian and Pacific Oceans and is the shortest sea route between the Persian Gulf and China. Each and every day, supertankers carrying more than 12 million barrels of oil pass through this strait. More than 80% of all China's oil imports are shipped through this waterway.

Since 9/11, the U.S. has been trying to strengthen its military influence in this region—arguing that this is part of the “war on terror.” The U.S. has set out to further and deepen its empire in the world. The focus of the U.S. right now is dominating and controlling the Middle East. At the same time there is a whole complex of world contradictions in which control in Southeast Asia is highly important.

The U.S. has been virulently critical of the military government in Myanmar—not because of the regime’s reactionary nature. The real reason for U.S. hostility towards Myanmar is because its government is not the kind of pliant pro-U.S. neo-colonial state the United States wants and needs in the region.

It is no secret that the U.S. wants a “regime change” in Myanmar. It plays the “human rights card,” backs pro-U.S. anti-government movements, and aims to demonize and strangle the regime through sanctions and other measures. The military regime in turn has responded by seeking closer ties with China and other countries in the region. And part of the reason the U.S. wants greater influence and control in Southeast Asia (including in Myanmar) is that it wants to counter China’s growing regional strength.

Capitalist China has invested heavily in countries in Southeast Asia and has looked to profit off of Myanmar’s timber, minerals and natural gas. Myanmar provides an overland route for Chinese goods to the Indian Ocean. Trade between the two countries has grown. Since 1989 China has given the Myanmar regime some $1.5 billion worth of military hardware.

For the U.S., Myanmar is a strategically important choke point in relationship to economic and geo-strategic interests. And now the U.S. is looking for ways to exploit the devastating tragedy in Myanmar to step up its maneuverings for a “regime change” in Myanmar. Bush stated: “We're prepared to move U.S. Navy assets to help find those who have lost their lives, to help find the missing, to help stabilize the situation. But in order to do so, the military junta must allow our disaster assessment teams into the country.”

Economist and author F. William Engdahl has written about U.S. efforts to bring about “regime change” in Myanmar and the particular role of the National Endowment for Democracy, an entity funded by the U.S. government and designed to support U.S. foreign policy objectives. Engdahl says:

“The U.S. State Department has recruited and trained key opposition leaders from numerous anti-government organizations in Myanmar. Since 2003, the U.S. has provided the NED with more than $2.5 million a year for activities that promote a regime change in Myanmar. The NED funds key opposition media including the New Era Journal, Irrawaddy and the Democratic Voice of Burma radio... In reality the U.S. State Department has recruited and trained key opposition leaders from numerous anti-government organizations in Myanmar. It has poured the relatively huge sum (for Myanmar) of more than $2.5 million annually into NED activities in promoting regime change in Myanmar since at least 2003.”

All this is behind the scenes and clearly at play now as the U.S. offers assistance and aid to Myanmar in the wake of Cyclone Nargis. Such “humanitarian help” comes with political strings and a whole imperialist agenda. The Bush administration says a condition for aid is that U.S. officials, aid workers and military personnel be allowed to come into Myanmar and directly handle emergency relief operations—rather than let the authorities in Myanmar administer and deliver the aid.

In 1997 the U.S. imposed sanctions against Myanmar, which prohibited new investments in the country. In 2003 the U.S. banned Myanmar imports into the U.S. and restricted financial transactions with named government officials. In 2007 Bush imposed new financial sanctions against Myanmar, freezing U.S. assets of additional members of the military government. One week before the cyclone hit Myanmar, the U.S. ban on trade and investment and the freezing of assets for the country was strengthened even further. Then on May 17, two weeks after the cyclone, Bush ordered the sanctions to remain in effect. This has only further exacerbated the economic plight of the people in Myanmar. Meanwhile ChevronTexaco continues to operate its gas pipeline project in Myanmar, which is the single largest foreign investment project in the country and the single largest source of income for the military regime.

*****

When a terrible natural disaster strikes a country like Myanmar, millions of people are affected; many lives hang in the balance. Humanity’s knowledge and resources need to be brought together. People need to be mobilized to save lives, provide medical care and deliver food. But in the world today—dominated by the global system of capitalism—the driving interests of profit, not the needs of the people, are put first and foremost.

Today in such human catastrophes, the outmoded economic, political and social relations of imperialism stand out in stark relief. The world needs revolution, and things could be a different way. In a whole new socialist society power would be in the hands of the people. Society’s resources and knowledge and, most especially, the compassion, creativity, and political consciousness of the masses, could and would be fully mobilized to build a whole new emancipating society that will be able to figure out and solve all kinds of problems, including how to deal with natural disasters.


Li Onesto is a writer for Revolution and author of the book, Dispatches from the People's War in Nepal, (Pluto Press and Insight Press, 2004)