War On You: Breaking Alternative News » Poverty & Famine

Harsh Labor For Little Money: Hershey Exchange Student Warnings Were Ignored

WarOnYou — Tue, 18 Oct 2011 05:34:23 +0000

Harsh Labor For Little Money: Hershey Exchange Student Warnings Were Ignored

October 17, 2011

Source: NyT

Godwin Efobi at a protest this summer at the Hershey’s store in Times Square.

The college student from Moldova was in the United States on a cultural exchange program run for half a century by the federal government, a program designed to build international understanding by providing foreign students with a dream summer of fun in America. So he summoned his best English for the e-mail he sent to the State Department in June.

“Pleas hellp,” wrote the student, Tudor Ureche. He told them about “the miserable situation in which I’ve found myself cought” since starting a job under the program in a plant packing Hershey’s chocolates near the company’s namesake town in Pennsylvania.

Students like Mr. Ureche, who had paid as much as $6,000 to take part in the program, expected a chance to see the best of this country, to make American friends and sightsee, with a summer job to help finance it all.

Instead, many students who were placed at the packing plant found themselves working grueling night shifts on speeding production lines, repeatedly lifting boxes weighing as much as 60 pounds and financially drained by low pay and unexpected extra costs for housing and transportation. Their complaints to the contractor running the program on behalf of the State Department were met with threats that they could be sent home.

Events this summer at the Hershey packing plant in Palmyra, Pa., revealed major holes in the State Department’s oversight of its summer work and travel program, the largest and most ambitious of its cultural exchanges. The program, which placed 130,000 foreign students in all sorts of jobs across the country this year, has a large impact in shaping the country’s image for young generations overseas.

The Hershey students finally got the department’s attention on Aug. 17 when 200 of them, waving placards and chanting union slogans, walked out of the plant, the first labor protest in the 50-year history of the department’s exchange programs.

The protests raised questions about whether the State Department is equipped to manage what has become a vast temporary work program, especially in times when suitable jobs for foreign students — even short-term jobs — are harder to come by as high unemployment persists in the United States.

The protests also exposed serious lapses by the Council for Educational Travel, USA, a nonprofit group based in California and one of more than 70 sponsors contracted by the State Department to organize the students’ trips to the United States and find jobs and housing for them.

The group, known as Cetusa, placed nearly 400 foreigners from 18 countries, many of them graduate students in medicine, engineering and economics, in physically arduous jobs at the Palmyra factory that were overwhelming for some.

The students, who were earning about $8 an hour, said they were isolated within the plant, rarely finding moments to practice English or socialize with Americans. With little explanation or accounting, the sponsor took steep deductions from their paychecks for housing, transportation and insurance that left many of them too little money to afford the tourist wanderings they had eagerly anticipated.

Program documents and interviews with 15 students show that Cetusa failed to heed many distress signals from students over many months, and responded to some with threats of expulsion from the program.

A Cry for Help

Mr. Ureche, 22, an engineering student, said he had begun to appeal to Cetusa for a different job as soon as he went to work lifting boxes loaded with Hershey’s candies.

“I’ve been having serious back pains since the first day of work,” Mr. Ureche reported in his e-mail to the State Department on June 6, sent two weeks after he started on the job. “If I continue in this rythm of work, it may cause me serious health damages.”

He felt “mistreated and ignored by my sponsor,” he wrote. And the organization told him, he said, that if he complained to Washington, “they will immediately cancel my visa.” A few days later Mr. Ureche quit his job, making his way to New York and finding work.

When the walkout came two months later, State Department officials reacted swiftly, opening an investigation centering on Cetusa that has not yet concluded.

Alain Delaquérière contributed reporting.

US Supreme Court to hear Nigeria-Shell rights case

WarOnYou — Tue, 18 Oct 2011 05:31:40 +0000

US Supreme Court to hear Nigeria-Shell rights case

October 17, 2011

Print Version

Source: AFP

WASHINGTON (AFP) – The Supreme Court said Monday it will consider a lawsuit accusing Royal Dutch Shell of human rights abuses, a case that could make US firms liable for torture or genocide committed overseas.

The plaintiffs — relatives of seven Nigerians killed by the country’s former military regime — sued the Anglo-Dutch energy giant and other firms for apparently enlisting the government to suppress resistance to oil exploration in the Niger Delta in the 1990s.

The case will assess the potential liability of corporations — not just natural persons — under the Alien Tort Statute, a US law dating back to 1789 which scholars say was meant to assure foreign governments that the United States would help prevent breaches of international law.

The Famine in Somalia. The Use of Food as an Instrument of Warfare

WarOnYou — Sat, 23 Jul 2011 07:15:06 +0000

U.S. and Ethiopia Kill Somalis With Food Weapon

Global Research, July 21, 2011

The drought that threatens more than ten million lives in the Horn of Africa has been made vastly more deadly by U.S. and Ethiopian use of food as a weapon of war. The Americans last year forced the collapse of cooperation between aid agencies and Shabab resistance fighters in Somalia. And Ethiopia, a center of the drought, has virtually sealed off its rebellious Ogaden region from outside observers and aid providers, including the International Red Cross, in order to conceal its brutal, collective punishment of ethnic Somalis.

“The Ethiopian government has blocked the International Red Cross and other aid agencies from carrying out relief work in the region.”

At least 10 million people are in danger of starvation in Kenya, Djibouti, Ethiopia and Somalia, under the worst drought conditions in 60 years. This should be taken as fact. But when it comes to which humans are to blame for relief supplies being unavailable to the victims, don’t believe a word that the United States government says. Washington is not only the greatest purveyor of violence in the world, it is also the biggest liar on the planet, none of whose words can be taken at face value.
The Americans claim the Shabab Islamist fighters made the drought crisis worse by preventing international aid agencies from distributing food relief. But only last year, in February 2010, the New York Times was running a headline, “UN Officials Assail U.S. for Withholding Somali Aid [8].” We explored that story [9] in Black Agenda Report. Back then, United Nations officials charged the U.S. with imposing conditions that made it “impossible” to deliver tens of millions in food aid to hungry Somalis. The Americans refused to allow food to be transferred from warehouses in Kenya, claiming it might enrich the coffers of the Shabab, who controlled about half of Somalia. The U.S. finally let some food pass through, but only on the condition that aid workers not pay any fees at Shabab checkpoints around the country. Aid workers on the ground said that following U.S. orders would make them “look like spies.” Apparently, they were right.
It was a clear case of the United States using food as a weapon of war, starving the people of Somalia in order to destroy the social base for the resistance to U.S. proxy rule over the country. We do know that the relationship between the Shabab and international aid agencies fell apart, at that point, so one could conclude that Washington succeeded in its mission. Starving people are now paying the price.

“A look at the map of the drought-stricken areas shows that the Ogaden is a center of the crisis.”

The U.S.-backed puppet government in Somalia’s capital, Mogadishu, waited until this week to declare a drought emergency in Somalia. Kenya, another American puppet, refused to allow Somalis to enter a brand new – and empty – refugee camp. Ethiopia may be the worst case. Not only did it bring on what was then Africa’s “worst humanitarian crisis,” according to the UN, by invading the country in late 2006, at the instigation of the United States – Ethiopia has virtually sealed off its vast Ogaden region to outside observers, and a look at the map of the drought-stricken areas shows that the Ogaden is a center of the crisis!

The Ogaden is populated by ethnic Somalis who have been fighting their own guerilla war against the Ethiopian dictatorship, whom they charge with using food as a weapon of war [10]. Of the 10 million people at risk of starvation, a huge portion live – or are now dying – in the Ogaden. As the dependable Thomas C. Mountain reports [11] from nearby Eritrea, the Ethiopian government has blocked the International Red Cross and other aid agencies from carrying out relief work in the region. The Obama administration, which now gives the Ethiopian dictatorship more money than any regime in Africa, could force the doors to the Ogaden open with one phone call. But it won’t, because Ethiopia and the U.S. are on the same mission, and there is nothing humanitarian about it. For Black Agenda Radio, I’m Glen Ford. On the web, go to www.BlackAgendaReport.com [12].

BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com [13].

http://traffic.libsyn.com/blackagendareport/20110720_gf_SomaliaDrought.mp3 [14] Somalia

Source URL: http://blackagendareport.com/content/us-and-ethiopia-kill-somalis-food-weapon

Notes

[1] http://blackagendareport.com/category/department-war/africom
[2] http://blackagendareport.com/category/department-war/food-weapon-war
[3] http://blackagendareport.com/category/other/ba-radio-commentary
[4] http://blackagendareport.com/category/africa/ethiopia
[5] http://blackagendareport.com/category/africa/kenya
[6] http://blackagendareport.com/category/africa/somalia
[7] http://blackagendareport.com/sites/www.blackagendareport.com/files/lets_starve_somalia_0.jpg
[8] http://www.markacadey.net/main/news.php?readmore=2695
[9] http://www.blackagendareport.com/content/us-wages-food-war-against-somalia
[10] http://www.ogaden.com/hornnews/ethiopia/1258-stop-the-regime-of-meles-zenawi-from-using-hunger-as-means-of-collective-punishment-to-destroy-the-ogaden-community-.html
[11] http://www.counterpunch.org/mountain05102011.html
[12] http://www.BlackAgendaReport.com/
[13] mailto:Glen.Ford@BlackAgendaReport.com
[14] http://www.addtoany.com/share_save?linkurl=http%3A%2F%2Fblackagendareport.com%2Fcontent%2Fus-and-ethiopia-kill-somalis-food-weapon&linkname=U.S.%20and%20Ethiopia%20Kill%20Somalis%20With%20Food%20Weapon

How Goldman Sachs Created the Food Crisis

WarOnYou — Fri, 06 May 2011 00:57:17 +0000

How Goldman Sachs Created the Food Crisis

May 5th, 2011

I covered this back in 2008:

If I buy a wheat contract, I should have to take delivery of the physical wheat on the specified date. If I sell a wheat contract, I should have to deliver the physical wheat on the specified date. I should not be allowed to buy or sell those leveraged contracts without having to take delivery, or deliver, physical goods. I shouldn’t be allowed to close my position without an exchange of goods.

The same should hold true for gold, coffee, palladium or any other commodity.

It is absolute madness that commodities are bought and sold using leveraged vehicles in markets that allow participation by speculators; individuals and organizations who have no interest or connection to the underlying physical commodity.

Via: Foreign Policy:

Don’t blame American appetites, rising oil prices, or genetically modified crops for rising food prices. Wall Street’s at fault for the spiraling cost of food.

Bankers recognized a good system when they saw it, and dozens of speculative non-physical hedgers followed Goldman’s lead and joined the commodities index game, including Barclays, Deutsche Bank, Pimco, JP Morgan Chase, AIG, Bear Stearns, and Lehman Brothers, to name but a few purveyors of commodity index funds. The scene had been set for food inflation that would eventually catch unawares some of the largest milling, processing, and retailing corporations in the United States, and send shockwaves throughout the world.

America’s Middle Class Crisis

WarOnYou — Fri, 06 May 2011 00:56:12 +0000

America’s Middle Class Crisis

May 5th, 2011

Via: Yahoo Finance:

Schwenninger’s recent report “The American Middle Class Under Stress” has some stunning facts that highlight the struggles the average American is having getting a decent-paying job and keeping up with rising cost of living.

Here are just some of the sobering facts:

– There are 8.5 million people receiving unemployment insurance and over 40 million receiving food stamps.

– At the current pace of job creation, the economy won’t return to full employment until 2018.

– Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.

– Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.

– 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree.

– Over the past year, nominal wages grew only 1.7% while all consumer prices, including food and energy, increased by 2.7%.

– Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010. Government transfers have risen from 11.7% of personal income in 1980 to 18.4% in 2010, a post-war high.

UN Food Advisor says let them eat insects

WarOnYou — Mon, 02 May 2011 22:25:47 +0000

UN Food Advisor says let them eat insects

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May 2, 2011

Print Version

Source: UK Telegraph

“Most of the world’s population will live in urban areas. Trying to feed the whole planet enough protein from cows won’t work,” Mr Verniau said last week.

Insects are eaten from the wild in Laos, but are not farmed on a large scale. He wants to increase research into the field and host a conference on edible insects in 2012.

Insect farming is also environmentally safer – with a recent study by FoodServiceWarehouse.com suggesting that swapping pork and beef for crickets and locusts could help reduce greenhouse gas emissions by 95pc.

The livestock farming contribution of emissions to global warming is huge, with 35pc to 40pc of the Earth’s methane, 65pc of the Earth’s nitrous oxide and 9pc of the Earth’s carbon dioxide being attributed to the industry.

As well as emitting fewer gases insects also have twice the protein of meat and fish, whilst being rich in unsaturated fat.

Mr Verniau’s research continues: “You can make powder from crickets that is very rich in protein. It’s low in fat and it can be added to biscuits in problem areas where food rations are distributed.”

Wal-Mart: Our shoppers are ‘running out of money’

WarOnYou — Fri, 29 Apr 2011 02:58:36 +0000

Wal-Mart: Our shoppers are ‘running out of money’

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April 28, 2011

Print Version

Source: CNN Money

NEW YORK (CNNMoney) — Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.

“We’re seeing core consumers under a lot of pressure,” Duke said at an event in New York. “There’s no doubt that rising fuel prices are having an impact.”

Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.

Lately, they’re “running out of money” at a faster clip, he said.

“Purchases are really dropping off by the end of the month even more than last year,” Duke said. “This end-of-month [purchases] cycle is growing to be a concern.

Read Full Article Here…

Soaring Costs Force Some Renters To Choose Between Shelter And Food

WarOnYou — Thu, 28 Apr 2011 06:24:12 +0000

Soaring Costs Force Some Renters To Choose Between Shelter And Food

April 27th, 2011

Via: Huffington Post:

Around 10 million American households — or one in every four families that rent their homes — could have to choose between paying rent, buying groceries or keeping current with bills, according to a report released Tuesday.

The number of households spending more than 50 percent of their income on rent and bills jumped by 2.6 million over the last decade, according to a Harvard Joint Center for Housing Studies report. Economists generally consider “affordable” rent to cost about 30 percent of a tenant’s income.

When housing costs hit certain levels, many Americans are forced to choose between rent and food.

Why Poverty Spreads Across America

WarOnYou — Sun, 28 Nov 2010 02:45:26 +0000

Why Poverty Spreads Across America

Global Research, November 27, 2010

by Sherwood Ross

Pockets of poverty, like the sores of some malignant disease, are spreading across America, as its states and cities go broke and bankrupt.

“Camden, New Jersey, stands as a warning of what huge pockets of America could turn into,” The Nation magazine reports in its Nov. 22nd issue. In fact, it has already happened, it is happening all over, and there is no signal on the horizon that poverty and blight will not continue to spread. It is not that Americans are lazy and shiftless; rather, they are reeling from betrayal—for they have been betrayed both by their employers, who have shown not an ounce of loyalty to their work forces, and they have been betrayed by their Federal government, which has lied the nation into costly criminal wars.

“Camden is the poster child of postindustrial decay,” writes Chris Hedges, the former foreign correspondent for The New York Times. “It stands as a warning of what huge pockets of the United States could turn into as we cement into place a permanent underclass of the unemployed, slash state and federal services in a desperate bid to cut massive deficits, watch cities and states go bankrupt and struggle to adjust to a stark neofeudalism in which the working and middle classes are decimated.” In an article titled “City of Ruins,” Hedges reports that 70 percent of Camden’s high school students drop out, that the city’s unemployment rate is probably 30 to 40 percent, and that its dangerous streets “are filled with the unemployed.”

What is thriving in Camden is prostitution, the drug trade and crime. “There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13,” Hedges writes. “Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses…Camden is awash in guns…” (and) in 2009 had the highest crime rate in the nation with 2,333 violent crimes per 1,000 population vs. a national average of just 455, Wikipedia reported.

Camden is no isolated example. More than half of its residents, 52 percent, live in poverty. The United States Conference of Catholic Bishops in 2006 ranked it fourth highest among cities with under 250,00 residents as 35.6 percent of its population lived in poverty. It followed Brownsville, Tex., 40.6%; and College Station, Tex., 37.3%. Other poverty-struck cities were Edinburg, Tex., 35.4%; Bloomington,Ind., 34.7%; Flint, Mich., 34.1%; Kalamazoo, Mich., 33.4; Florence-Graham, Ca. (in Los Angeles County), 33.0%; Gary, Ind., 32.8%; and Muncie, Ind., 32.6%

The poverty rates of major cities show similar patterns of despair. The ten having the worst poverty rates are Detroit, 32.5%; Buffalo, 29.9%; Cincinnati, 27.8%; Cleveland, 27.0%; Miami, 26.9%; St. Louis, 26.8%; El Paso, 26.4%; Milwaukee, 26.2%; Philadelphia, 25.1%; and Newark, 24.2%.

High poverty rates, of course, stem largely from persistent, structural unemployment. As the Washington Post reported last January 15th, “Blacks, Hispanics and men have suffered the most mainly because they have been disproportionately employed in sectors hardest hit in the recession — manufacturing and construction. For instance, the unemployment rate for blacks is expected to reach 27 percent in Michigan, which has been shedding auto industry jobs. Other states with jobless rates above 20 percent for blacks are Alabama, Illinois, Ohio and South Carolina.”

Where the New Deal’s Work Projects Administration(WPA) alone in the Great Depression created 8-million new jobs, nothing of that scope exists today. The same Post article notes, “The Congressional Black Caucus wants the government to create training programs and jobs in low-income communities with the highest unemployment rates.” “It’s like triage in an emergency room — you take care of people who need the most help first and you help the others later,” said Kai Filion, research analyst at the Economic Policy Institute. Economic losses, the analyst said, could result in a 50 percent poverty rate for black children, up from 34 percent in 2008. While statistics defining the plight of African-Americans make for grim reading, it should be remembered that the majority of America’s unemployed are Caucasian and that the real unemployment figure according to some authorities is 20 percent, not the 10 percent reported by Washington.

It is hardly accidental that cities with high unemployment rates also have high crime rates. In terms of violent crime, as FBI statistics for calendar year 2009 show, Detroit, noted above to have the highest poverty rate, also has the most violent crime per 1,000 citizens, with 19.67 cases. Other major cities are (2) Memphis, 18.06; (3)Oakland, 16.79; (4) Baltimore, 15.13; (5) Buffalo, 14.59; (6) Cleveland, 13.95; (7)Kansas City, 13.00; (8) Stockton, 12.67; (9) Washington, D.C., 12.65; and (10), Philadelphia, 12.38. As Sir Thomas More wrote in his classic Utopia, published in 1516: “You allow these people to be brought up in the worst possible way, and systematically corrupted from their earliest years. Finally, when they grow up and commit the crimes that they were obviously destined to commit, ever since they were children, you start punishing them. In other words, you create thieves, and then punish them for stealing,” Could he have better explained America’s 2.3-million prison population today?

In Camden, there isn’t a single inner city supermarket that can put ghetto kids to work at an honest job after school and weekends but reporter Hedges says there are plenty of drug markets. Often, the only job a teenager can land is one on the staff of the local drug lord. The other employment choice for ghettoized youth is the military. While Pentagon recruiters strongly deny they target low-income neighborhoods, a careful reading of the home towns of those reported killed in the Middle East may well cast doubt upon this contention. Camden once was a significant manufacturing hub but those days are long gone. In many communities, major employers abandoned their workers with no compunction (and often without deserved pensions), automating employees out of their jobs. Other employers, as in Detroit, simply relocated their plants overseas entirely. The idea of a prosperous work force based on a vibrant local economy to underpin “the American Dream” got lost in the race to maximize corporate profits. In Trenton, N.J., the sign on a bridge across the Delaware River, “Trenton Makes, The World Takes,” is the boast of a bygone era. Reduced employment means reduced purchasing power and reduced tax take for local governments. This year, according to The Christian Science Monitor, California faces a $20 billion budget gap. It has already resorted to “mandatory furloughs for all state workers, teacher layoffs, (and reduced) aid to the university system 20 percent, (and made) massive cuts to education, corrections, and social services.” This grim picture is mirrored everywhere. The rising unemployment in New York City’s workforce, for example, has worsened its budget crisis, Financial Times reported Nov. 22nd.

At the same time, U.S. corporations continue their race to the bottom for cheap labor. Cable News Network’s “Exporting America” broadcast listed hundreds of “U.S. companies either sending American jobs overseas or choosing to employ cheap overseas labor instead of American workers.” A very small fraction of the companies on CNN’s list are reprinted in the following three paragraphs to convey some idea of the enormity of the indifference of employers for their workers:

Aetna, AIG, Alamo Rent a Car, Alcoa, Allstate, Anheuser-Bush, AT&T, Bank of America, Bechtel, BellSouth, Best Buy, Borden Chemical, Boeing, Bristol-Myers Squibb, Caterpillar, ChevronTexaco, Citigrouup, Continental airlines, Delta Air Lines, Dow Chemical, DuPont, Eastman Kodak, Eli Lilly, ExxonMobil, Fedders Corp., Fluor, Ford Motor, General Electric, General Motors, and Goldman Sachs.

Also, Halliburton, Hershey, Hewlett-Packard, Honeywell, IBM, Illinois Tool Works, ITT Industries, John Deere, Johns Manville, Johnson & Johnson, Kellogg, Kerr-McGhee Chemicals, Kimberly-Clark, Kraft Foods, Lear Corp., Levi Strauss, Lockheed Martin, Mattel, Maytag, Merrill Lynch, MetLife, Microsoft, Monsanto, Motorola, Nabisco, Northrop Grumman, Northwest Airlines, Office Depot, Orbitz, Oracle, Otis Elevator, Owens Corning, PepsiCo, Pfizer, Polaroid, Pratt & Whitney, Procter & Gamble, and Prudential Insurance.

Also, Quaker Oats, Radio Shack, Rayovac, Rohm & Haas, Safeway, Sara Lee, Seco Manufacturing, Square D, State Farm Insurance, Target, Tenneco Automotive, Texas Instruments, Time Warner, Tropical Sportswear, TRW Automotive, Tupperware, Tyco Electronics, Union Pacific, UNISYS, United Plastics Group, United Technologies, Verizon, Wachovia Bank, Weyerhaeuser, Xerox, and Zenith.

Why hasn’t the Obama administration taken swift and forceful action to relieve the situation, perhaps even to launch the Domestic Marshall Plan for the cities the Urban League’s Whitney Young called for as far back as 1962? Perhaps it’s because like President Bush before him Mr. Obama is more focused on waging war. Here, again, Sir Thomas More speaks to us: “To start with, most kings are more interested in the science of war…than in useful peacetime techniques. They’re far more anxious, by hook or by crook, to acquire new kingdoms than to govern their existing ones properly.”

This, of course, applies perfectly to America’s kings, for not only have our presidents assumed the powers and prerogatives of kings but they have, in fact, acted no better than medieval kings, waging wars with armies raised from the poorest strata of society and spending lavishly to conquer while ignoring their own citizenry’s cries for bread and opportunity. Put another way, the Pentagon is spending more money for war (52 cents of every tax dollar) than all 50 states combined spend for all purposes to improve the lot of 300 million Americans. In their book, “The Three Trillion Dollar War”(W.W. Norton), Joseph Stiglitz and Linda Bilmes write, “A $3 trillion figure for the total cost strikes us as judicious, and probably errs on the low side. Needless to say, this number represents the cost only to the United States. It does not reflect the enormous cost to the rest of the world, or to Iraq.” (Stiglitz is former chief economist at the World Bank and a Nobel Prize laureate and Bilmes is a public policy authority at Harvard.) Given the wars’ colossal and criminal waste of human life and treasure, it is little wonder states and cities the nation over are starved for income, record numbers of homes are being foreclosed, and soup kitchens are reporting a rising influx of patrons, many of them bewildered former members of the shrinking middle class.

This situation has pertained in America now for several generations. Before Iraq and Afghanistan there was the Viet Nam aggression. Democratic presidential candidate George McGovern attempted to make the connection between war abroad and hard times at home when he said, “For every bomb that falls in Viet Nam a house somewhere in America collapses from neglect.” McGovern was defeated by incumbent Richard Nixon in a landslide. It is apparent from the recent elections that Americans today, just as in the national election of 1972, do not grasp the reality of the terminal disease that is war. They do not recognize how it is driving them relentlessly into poverty while sacrificing their children like some primitive culture on the altar of the military-industrial complex to ensure a profitable harvest from their blood. #

Sherwood Ross is director of the Anti-War News Service of Coral Gables, Fla. His prior experience includes work as a reporter for the Chicago Daily News, as a “workplace” columnist for a wire service, and as News Director for a major civil rights organization. To comment or contribute to his News Service reach him at sherwoodross10@gmail.com

Israeli government documents show deliberate policy to keep Gazans at near-starvation levels

WarOnYou — Sun, 07 Nov 2010 22:41:37 +0000

Israeli government documents show deliberate policy to keep Gazans at near-starvation levels

Saed Bannoura

IMEMC, November 6, 2010

Documents whose existence were denied by the Israeli government for over a year have been released after a legal battle led by Israeli human rights group Gisha. The documents reveal a deliberate policy by the Israeli government in which the dietary needs for the population of Gaza are chillingly calculated, and the amounts of food let in by the Israeli government measured to remain just enough to keep the population alive at a near-starvation level. This documents the statement made by a number of Israeli officials that they are “putting the people of Gaza on a diet”.

Calculation sheet from newly-released documents (image from Gisha)

In 2007, when Israel began its full siege on Gaza, Dov Weisglass, adviser to then Prime-Minister Ehud Olmert, stated clearly, “The idea is to put the Palestinians on a diet, but not to make them die of hunger.” The documents now released contain equations used by the Israeli government to calculate the exact amounts of food, fuel and other necessities needed to do exactly that.

The documents are even more disturbing, say human rights activists, when one considers the fact that close to half of the people of Gaza are children under the age of eighteen. This means that Israel has deliberately forced the undernourishment of hundreds of thousands of children in direct violation of international law and the Fourth Geneva Convention.

This release of documents also severely undermines Israel’s oft-made claim that the siege is “for security reasons”, as it documents a deliberate and systematic policy of collective punishment of the entire population of Gaza.

Gisha’s director said, in relation to the release of documents, “Israel banned glucose for biscuits and the fuel needed for regular supply of electricity – paralyzing normal life in Gaza and impairing the moral character of the State of Israel. I am sorry to say that major elements of this policy are still in place.”

In its statement accompanying the release of the documents, Gisha wrote:
The documents reveal that the state approved “a policy of deliberate reduction” for basic goods in the Gaza Strip (section h.4, page 5*). Thus, for example, Israel restricted the supply of fuel needed for the power plant, disrupting the supply of electricity and water. The state set a “lower warning line” (section g.2, page 5) to give advance warning of expected shortages in a particular item, but at the same time approved ignoring that warning, if the good in question was subject to a policy of “deliberate reduction”. Moreover, the state set an “upper red line” above which even basic humanitarian items could be blocked, even if they were in demand (section g.1, page 5). The state claimed in a cover letter to Gisha that in practice, it had not authorized reduction of “basic goods” below the “lower warning line”, but it did not define what these “basic goods” were.

Commentator Richard Silverstein wrote: “In reviewing the list of permitted items for import, you come to realize that these are the only items allowed. In other words, if an item is not on the list, it’s prohibited. So, for example, here is the list of permitted spices: Black pepper, soup powder, hyssop, sesame. cinnamon, anise, babuna (chamomile), sage. Sorry, cumin, basil, bay leaf, allspice, carraway, cardamon, chiles, chives, cilantro, cloves, garlic, sesame, tamarind, thyme, oregano, cayenne. Not on the list. You’re not a spice Palestinians need according to some IDF dunderhead. And tomatoes, potatoes, cucumbers, lettuce, toys, glassware, paint, and shoes? You can forget about them too. Luxuries all, or else security threats.”

Despite the disturbing nature of the documents, which show a calculated policy of deliberate undernourishment of an entire population, no major media organizations have reported the story.

The full text of the released documents, and the original Freedom of Information Act request filed by Gisha, can be found on Gisha’s website at the link below:
http://www.gisha.org/index.php?intLanguage=2&intItemId=1904&
intSiteSN=113

Obama, Republicans Prepare for Joint Assault on American Workers

WarOnYou — Sat, 06 Nov 2010 02:11:38 +0000

Obama, Republicans Prepare for Joint Assault on American Workers

World Socialist Web Site

by Patrick Martin

In back-to-back press conferences Wednesday, the day after sweeping Republican gains in the 2010 midterm election, victorious Republican Party leaders and Democratic President Barack Obama took their first tentative steps towards an open political partnership directed against the American working class.

The man who will become speaker of house in January, Ohio Republican Congressman John Boehner, made an appearance on Capitol Hill, flanked by Senate Minority Leader Mitch McConnell and Governor Haley Barbour of Mississippi, chairman of the Republican Governors Association.

All three repeated bromides about listening to the American people and following their lead, although the policies they support—slashing social programs such as Social Security, Medicare, education and unemployment compensation, and further tax breaks for the rich—are overwhelmingly opposed by the population.

Boehner was conciliatory in his demeanor, calling on the Obama White House and congressional Democrats, who still control the Senate, to work together with the new Republican majority in the House for a “smaller, less costly and more accountable government in Washington, DC.”

McConnell was more belligerent, declaring, “We’ll work with the administration when we agree with it and confront it when we don’t.” But he said, “it’s clear that we’ll have to have some kind of bipartisan agreement” on spending cuts, adding, “We anticipate enough Democrats will support this to make progress.”

Barbour issued the clearest call for across-the-board cuts in spending, saying, “In state government, we’ve learned to make real cuts, and we hope that will be an example to the new Congress.”

The calls for spending restraint and “smaller” government apply only to the programs that provide assistance to working people, the sick and the elderly. No Republican congressional leader favors cuts in spending on the military or the gargantuan tax subsidies to Wall Street and the wealthy.

On the contrary, Boehner and McConnell both reiterated their support for an extension of the Bush administration tax cuts for the wealthy, which are due to expire December 31. An extension has been held up by the dispute between the White House, which wants to limit the cuts to those making $250,000 a year or less, and the congressional Republicans, with considerable Democratic support, who want the tax cuts continued without any income ceiling, at the cost of $800 billion.

At his press conference an hour later, President Obama made it clear that he was open to the Republican approach, pledging bipartisan cooperation to cut spending and repeatedly suggesting areas of “common ground,” such as energy policy, education and tax cuts for investment.

Obama blamed the Democratic Party rout in the election on the dismal state of the US economy, particularly the widespread concern over the lack of jobs and high unemployment. But he proposed absolutely nothing to create jobs except more tax breaks for business, while offering to listen to any measures the Republicans might propose.

In an echo of the statements of an earlier Democratic president, Bill Clinton, after his party lost control of Congress in 1994, Obama asserted his continued relevance, declaring, “no one party will be able to dictate where we go from here” and expressing his desire to sit down with Boehner and McConnell.

In a comment that is particularly significant coming on the eve of a long trip to Asia, including a G20 economic summit in South Korea, Obama said, “The most important contest we face is not the contest between Democrats and Republicans. In this century, the most important competition we face is between America and our economic competitors around the world.”

This suggests an appeal to the Republicans to join forces for an aggressive program of economic nationalism to promote the interests of American corporations against their international rivals. A key element in the Obama administration’s campaign for “export-led” growth is to lower the wage levels of American workers so that American corporations can become more competitive in the world market.

In response to repeated questions about whether the election represented a repudiation of his administration’s policies, Obama would concede only that the US economy had so far failed to generate enough jobs for the rapidly growing number of unemployed, although he claimed to have “stabilized the economy” and produced “job growth in the private sector.” He added, “But people all across America aren’t feeling that progress. They don’t see it.”

In a clear olive branch to his right-wing opponents, Obama embraced their rhetoric against “big government.” He said that in the course of his first two years in office, with crisis interventions in the banking system, the auto industry and health care, “I think people started looking at all this and it felt as if government was getting much more intrusive into people’s lives than they were accustomed to.”

It is notable that neither Obama nor his Republican opponents classify government spying, wiretapping, secret prisons or assassination orders—all the trappings of a police state—as “big government.” What the Republicans demonize is the slightest government restriction on the activities of giant corporations, banks and wealthy individuals to plunder and exploit working people.

Obama pointed to the bipartisan deficit commission he appointed in March, which is to submit proposals next month for cuts in entitlement programs such as Medicare, Medicaid and Social Security, as well as possible consumption taxes on the working class.

He also touted his embrace of accelerated depreciation rules for business, so companies “get a huge tax break next year,” citing this as “an idea that business groups and Republicans I think have supported for a very long time.”

Obama concluded with a paean to the capitalist market that could have been given by newly elected Republican Senator Rand Paul, declaring, “The reason we’ve got a unparalleled standard of living in the history of the world is because we’ve got a free market that is dynamic and entrepreneurial, and that free market has to be nurtured and cultivated.”

What “unparalleled standard of living” is Obama talking about? American workers who are facing levels of poverty, unemployment and social misery unprecedented in three-quarters of a century might respond with an impolite gesture.

The president wanted above all to reassure corporate America that he had learned his lesson from the election and would never again speak ill of Wall Street, no matter what crimes are committed by the bankers and CEOs. Citing the financial crash, the scandal of huge executive bonuses, and the BP oil spill in the Gulf of Mexico, he said, “I think business took the message that, well, gosh, it seems like we may be always painted as the bad guy.”

This extraordinary apology to those who have wrecked the US and world economy, despoiled the environment, and destroyed the livelihoods of tens of millions of working people demonstrates the complete subservience of both parties and all of official Washington to the ruling financial aristocracy.

Poverty In Suburbs Increasing Rapidly During Economic Downturn

WarOnYou — Mon, 18 Oct 2010 00:39:39 +0000

Poverty In Suburbs Increasing Rapidly During Economic Downturn

Published on 10-17-2010

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Source: Associated Press

WASHINGTON — The American suburb is no longer a refuge from poverty in cities.

A pair of analyses by the nonprofit Brookings Institution paints a bleak economic picture for the 100 largest metropolitan areas over the past decade and in coming years, and finds that suburbs now are home to one-third of the nation’s poor, and rising.

The study of census data finds that since 2000, the number of poor people in the suburbs jumped by 37.4 percent to 13.7 million. The growth rate of suburban poverty is more than double that of cities and higher than the national rate of 26.5 percent.

At the same time, social service providers are spread thin in many suburban areas, according to a detailed Brookings survey of groups in representative metropolitan areas of Chicago, Los Angeles and the District of Columbia. That has forced providers to turn away many poor people due to scarce aid that typically goes to cities first.

“Millions of Americans at all income levels moved to the suburbs looking for better schools, better jobs, affordable housing, and a sense of security, but in recent years, as incomes have fallen, people had a harder and harder time making ends meet,” said Scott Allard, a University of Chicago professor who co-wrote one of the reports.

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Mullen: National Debt is a Security Threat

WarOnYou — Sat, 28 Aug 2010 02:20:41 +0000

Mullen: National Debt is a Security Threat

Published on 08-27-2010

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Source: Executive Gov.

The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.

“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.

“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”

He also called on the defense industry to hire veterans and become more robust in the future.

“I need the defense industry, in particular, to be robust,” he said. “My procurement budget is over $100 billion, [and] I need to be able to leverage that as much as possible with those [companies] who reach out [to veterans].”

Mullen highlighted the unity of purpose between the government and industry as well, in working to solve national security issues.

“I have found that universally, [private-sector workers] care every bit as much about our country, are every bit as patriotic and wanting to make a difference … as those who wear the uniform and are in harm’s way,” he said.

Labor Fights Back for Living Wages and Jobs For All

shamuscook — Wed, 21 Jul 2010 06:50:33 +0000

Labor Fights Back for Living Wages and Jobs For All

by Shamus Cooke

If the U.S. economy eventually recovers and current trends continue, U.S. workers won’t be celebrating in the streets. The corporate establishment has made it clear that a “strong recovery” depends on U.S. workers making “great sacrifices” in the areas of wages, health care, pensions, and more ominously, reductions in so-called “entitlement programs” — Social Security, Medicare, and other social services.

These plans have been discussed at length in corporate think tanks for years, and only recently has the mainstream media begun a coordinated attack to convince American workers of the “necessity” of adopting these policies. The New York Times speaks for the corporate establishment as a whole when it writes:

“American workers are overpaid, relative to equally productive employees elsewhere doing the same work [China for example]. If the global economy is to get into balance, that gap must close.”

and:

“The recession shows that many workers are paid more than they’re worth…The global wage gap has been narrowing [because U.S. workers’ wages are shrinking], but recent labor market statistics in the United States suggest the adjustment has not gone far enough.”

The New York Times solution? “Both moderate inflation to cut real wages [!] and a further drop in the dollar’s real trade-weighted value [monetary inflation to shrink wages] might be acceptable.” (November 11, 2009).

The business journal, The Atlantic, agrees:

“So how do we keep wages high in the U.S.? We don’t…U.S. workers cannot ultimately continue to have higher wages relative to those in other nations [China, India, etc.] who compete in the same industries.”

President Obama speaks less bluntly about the wage subject for political purposes, but he wholeheartedly agrees with the above opinions, especially when he repeatedly said:

“We must lay a new foundation for growth and prosperity, where we consume less [as a result of lower wages] at home and send more exports abroad.”

So how will Obama implement his economic vision that inspired Wall Street to give him millions during his Presidential campaign? Much of the work is happening automatically, due to the Great Recession. Bloomberg news reports:

“More than half of U.S. workers were either unemployed or experienced reductions in hours or wages since the recession began in December 2007… The worst economic slump since the 1930s has affected 55 percent of adults in the labor force…” (June 30, 2010).

Employers are exploiting fears of joblessness by demanding workers take wage cuts and reductions or eliminations in benefits. The millions of unemployed are giving corporations an excuse to slash wages, since desperate workers will work for almost anything.

Federal, State and municipal workers are being specifically targeted and blamed — especially teachers — by politicians and corporate groups. The state budget crises and the federal deficit are being used as reasons to demand that public employees take huge reductions in wages and benefits, for those who aren’t laid off. Laid off public workers then enter the private workforce where they are to compete with millions of other unemployed workers. Democratic politicians nationwide have recently agreed with Republicans of the “necessity” of state workers to make huge “sacrifices.”

Ultimately, years of Wall Street gambling and corporate greed in general have destroyed the U.S. economy, sending jobs overseas to exploit slave wages with the inevitable result of slave wages coming to the U.S. Decades of tax-cuts for the rich combined with overseas wars for profit have undermined the foundation of economic stability — and U.S. workers are being asked to foot the bill.

In the long-term, the U.S. economy will need to be re-structured, meaning that giant corporations cannot continue to dominate the economy for their personal profits. In the short term, U.S. workers will need to organize themselves to fight back. Alliances with Democratic politicians are no longer an option to stave off attacks from corporations, since the attacks are now coming from both sides of the two-party system.

Labor unions must work together with community groups to demand that the rich pay for the recession with higher tax rates. As AFL-CIO President Richard Trumka recently argued before Obama’s Deficit Reduction Commission: “We believe it is only fitting to ask Wall Street to pay to rebuild the economy it helped destroy.” And he called for higher taxes on the rich in general, pointing out that “effective tax rates applicable to high-income taxpayers (earning over $250,000 in 2009 dollars) reached their lowest level in at least half a century in 2008.”

U.S. workers have been forced to bear the brunt of the current economic crisis, though they had no part in causing it. Meanwhile, Wall Street is back to speculative trading and rewarding itself with big bonuses. It is time to turn the tables and start properly rewarding hard-working Americans. U.S. workers have sacrificed enough!

This October 2, 2010, SEIU Local 1199, the NAACP, and other progressive organizations are staging a march on Washington, D.C., calling on the government to create more jobs. The AFL-CIO has recently endorsed this demonstration and is actively building it. Other major endorsers include the California Labor Federation and the American Federation of Teachers. The SEIU president is predicting the march will be “massive – we believe historic.” It might prove to be the beginning of organized labor’s comeback.

How Wall Street Starved Millions and Got Away With It

WarOnYou — Sat, 17 Jul 2010 04:29:34 +0000

The Food Bubble:
How Wall Street Starved Millions and Got Away With It

Democracy Now! – July 16, 2010

While Goldman Sachs agreed to pay $550 million to resolve a civil fraud lawsuit filed by the SEC, Goldman has not been held accountable for many of its other questionable investment practices. A new article in Harper’s Magazine examines the role Goldman played in the food crisis of 2008 when the ranks of the world’s hungry increased by 250 million. We speak to Harper’s contributing editor Frederick Kaufman.

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MY GOODMAN: We continue with Goldman Sachs.

JUAN GONZALEZ: Well, while Goldman Sachs agreed Thursday to pay $550 million to resolve a civil fraud lawsuit filed by the SEC, Goldman has not been held accountable for many of its other questionable investment practices. A new article in Harper’s Magazine examines the role Goldman played in the food crisis of 2008, when the ranks of the world’s hungry increased by 250 million. The article is titled “The Food Bubble: How Wall Street Starved Millions and Got Away With It.”

AMY GOODMAN: The author of the article, Frederick Kaufman, joins us now. He’s a contributing editor at Harper’s Magazine.

Well, explain. We’re talking about Goldman Sachs today, this—they call it a landmark settlement, but they made more after-hours in trading last night than they will have to pay. So let’s look at Goldman Sachs and its record overall.

FREDERICK KAUFMAN: Yeah, this is really—it’s really outrageous. And on a certain level, this reform bill is really a sham, because it does not cover, in any way, shape or form, what Goldman Sachs—and really, let’s be honest here, it wasn’t just Goldman; it was Goldman, and it was Bear, and it was AIG, and it was Lehman, it was Deutsche, it was all across the board, JPMorgan Chase—what these banks were able to do in commodity markets, really which reached its peak from 2005 to 2008, in what is now known as the food bubble. And as Juan points out, this is unconscionable what happened, in the sense that their speculation and their restructuring of these commodity markets pushed 250 million new people into food insecurity and starving, and brought the world total up to over a billion people. This is the most abysmal total in the history of the world.

JUAN GONZALEZ: Now, what were these commodities markets like before the Wall Street firms got involved? And you have a haunting picture, especially of the Minneapolis Exchange, what it was before, what it was like. Could you talk about how things operated and then what Goldman Sachs did precisely?

FREDERICK KAUFMAN: The wheat markets, in particular, in this country are the outcome of a process of development of over 150 years. And that is why, from about 1903 to 2003, the real price of wheat in this country has gone down. And this was one of the great reasons for America’s great twentieth century, the fact that we had cheap food, we had cheap bread. And Goldman, in 1991, came up with a new idea and a new product, which, as I said before, completely restructured this market and completely threw it out of whack.

But before we go there, we just have to maybe review for a second a little bit about how these markets worked and what kept that wheat price stabilized. And Juan, you mentioned the Minneapolis Grain Exchange, this kind of obscure syndicate in the Midwest, which is where the price of this particular kind of wheat, hard red spring wheat, which is the most widely traded wheat in the world, and it’s the most widely exported wheat from the American continent—we kind of set the world price on this wheat. This is where it happens. What’s the history of that price being stabilized is you have, traditionally, in the wheat futures market, two kinds of players: one of the farmers and the millers and the warehousemen—right? And this, of course, includes players like Domino’s Pizza and Sara Lee and General Mills, very large business, capitalist stakes are in this wheat market, right? And they are called bona fide hedgers, because they’re actually buying and selling real wheat. As the price fluctuates in the futures markets, you also traditionally have speculators in this market, people who don’t want wheat, who wouldn’t have any place to put it if they bought it, but they’re making money off buy orders and sell orders, as the price fluctuates each day, and hopefully they’re bringing in some money for themselves every day. That’s the idea.

Now, the key here is that both the bona fide hedgers and the speculators, every time they buy, they’re also selling, and every time they sell, they eventually buy. So their positions are cleared off at the end of the day, OK? Goldman, we have to understand, and a lot of these banks, are not interested in the particular structure of any of these markets. I think it’s a lot of mistake people make when they think about how these bankers are working. We think that they’re actually interested in the markets. We think that they’re—no. What they’re after are very large pools of cash for themselves. They’re after accumulating huge pools of money that they can do with whatever they like on a day-to-day basis. Right? And so, Goldman, in 1991, came up with this idea of the commodity index fund, which really was a way for them to accumulate huge piles of cash for themselves. It wasn’t really about the markets, anyway. The market was just an excuse. And so, the fact that they threw these wheat markets out of whack didn’t really matter to them.

How did this work? Instead of a buy-and-sell order, like everybody does in these markets, they just started buying. It’s called “going long.” They started going long on wheat futures. OK? And every time one of these contracts came due, they would do something called “rolling it over” into the next contract. So they would take all those buy promises they had made and say, “OK, we still—we’re just going to—we’ll buy more later. And plus we’re going to buy more now.” And they kept on buying and buying and buying and buying and accumulating this unprecedented, this historically unprecedented pile of long-only wheat futures. And this accumulation created a very odd phenomenon in the market. It’s called a “demand shock.” Usually prices go up because supply is low, right? That’s the idea. There’s not a lot of supply, so the price goes up. In this case, Goldman and the other banks had introduced this completely unnatural and artificial demand to buy wheat, and that then set the price up. Now, a lot of people are saying, “Oh, it was biofuel production. It was drought in Australia. It was floods in Kazakhstan.” Let me tell you, hard red wheat generally trades between $3 and $6 per sixty-pound bushel. It went up to $12, then $15, then $18. Then it broke $20. And on February 25th, 2008, hard red spring futures settled at $25 per bushel. This is completely beyond the pale, particularly at a—

JUAN GONZALEZ: Almost ten times its historic price.

FREDERICK KAUFMAN: Yeah. It was just completely out of control. And, of course, the irony here is that in 2008, it was the greatest wheat-producing year in world history. The world produced more wheat in 2008 than ever before.

And here’s the other outrage of it, which is that at the time that Goldman and these other banks are completely messing up the structure of this market, they’ve protected themselves outside the market, through this really almost diabolical idea called “replication,” which is what I discovered when I was looking into how they had structured this. What they do—let’s say, Juan, you want me to invest for you in the wheat market. You give me a hundred bucks, OK? Well, what I should be doing is putting a hundred bucks in the wheat markets. But I don’t have to do that. All I have to do is put $5 in. Good-faith promise. And with that $5, I can hold your hundred-dollar position. Well, now I got ninety-five of your dollars. What am I going to do with them? Well, what Goldman did with hundreds of billions of dollars, and what all these banks did with hundreds of billions of dollars, is they put them in the most conservative—no fools, they—they put them in the most conservative investments conceivable. They put it in T-bills. And then what did they do? Well, now that you have hundreds of billions of dollars in T-bills, you can leverage that into trillions of dollars. This is what I’m talking about, large pools of cash for themselves. And then they take that trillion dollars, they give it to their day traders, and they say, “Go at it, guys. Do whatever is most lucrative today.” And so, as billions of people starve, they use that money to make billions of dollars for themselves.

JUAN GONZALEZ: And the result was, as the price went up, that there were food riots around the world.

FREDERICK KAUFMAN: Yeah.

JUAN GONZALEZ: And what about the human dislocation that occurred?

FREDERICK KAUFMAN: Yeah, in 2008, there were food riots in more than thirty countries. The global price of food rose over 80 percent. This had an effect not only on wheat, but on corn, on soy, on cooking oil, on rice. You know, people talk about globalization. “We don’t need to set prices or have tariffs, because we’re globalized. You know, people can buy their wheat, anyway.” Well, gee, guess what happened. When the price of wheat started to go through the roof, something new, which was something old, came up, called “nationalism,” and people said, “OK, sorry, we’re closing our wheat, and we’re setting up tariffs.” And you had—you had riots. You had hunger. You had a disaster. You had a global disaster, because, remember, in America, we’re spending maybe 15 percent of our weekly paycheck on food, right? I mean, maybe you remember, a couple years ago, why was that dozen eggs so expensive? Why was that milk so expensive? Why was that meat so expensive? That’s 15 percent. For most people on the earth, they’re spending more than 50 percent of their daily income on their daily bread. And when their daily bread moves up 80 percent, they’ve just moved right into the ranks of the food insecure. And it was not only in Burkina Faso. This was in America. You had 49 million hungry families in America. You had one out of five children in America at soup kitchens. You had a million hungry people in Los Angeles.

So, I mean, it is unconscionable that Wall Street has completely lost touch with the reality. They’ve forgotten that there is their mathematical formula, there’s virtuality, on the one hand—”Gee, I can make a lot of money by making a formula”—and on the other hand, there’s reality. There are real things that they are affecting, and they’ve completely forgotten about it, to devastating effect.

AMY GOODMAN: What do you think needs to be done?

FREDERICK KAUFMAN: Well, the solution is interesting, and it certainly is not going to be solved by the financial reform bill we’ve just seen, because, of course, the people I talk to at the Minneapolis Grain Exchange and all over, they’re already prepared for every single trade being exchange-traded. The people at the Minneapolis Grain Exchange have already prepared 50,000 exchange-traded slots for anything that people want to trade. Now, when I was talking to the hedge fund guys and the traders and all my contacts on this, and I said, you know, “What if Wall Street—I’m sorry, what if the federal government regulates you?” they just laugh. They literally laugh. They scoff at federal regulators, because they’re like, “By the time they get around, they figure out what we’re doing, we’re so far beyond it.” And in fact, the commodity index funds, the long-only commodity index funds that I looked at now, they’re already dinosaurs. They’re onto second-, third- and fourth-generation reiterations of this. There’s no way the federal government is going to be on top of them, because they’re so far ahead.

So, what’s the other possibility? The other possibility is simply outlaw it, say, if you’re a bank, you’re not allowed a stake, you’re not allowed a stake in actual commodity markets. And I said to these guys, you know, “What if they just outlaw you?” And once again, rather unsurprisingly, their reaction is outright laughter, because it takes them about ten seconds to get over that problem. Either they make a phone call to London and do all their trading out of the London Exchange, or they do an over-the-counter swap with a Cargill or a Nestlé or a bona fide hedger, and it’s taken care of.

So what’s the solution? I think the best solution that’s been floated around in Washington in the groups I’ve been close to is an actual international or national grain reserve. I mean, we actually in this country, before this kind of mania of deregulation, had a farmer-owned grain reserve under the Clinton administration, real grain held back, so that in times of a bubble like this, regulators can say, “Look, you know, we have plenty of real wheat. Here’s a hundred million bushels of wheat. We can bring it to the market. We can bring that price back into a stable band.” And this is, I think, in some ways, the best solution: real wheat to counter virtual madness.

JUAN GONZALEZ: Well, yet, as you were saying, that the Wall Street firms are always able to devise new ways to get around regulation. I was reading in today’s paper on the new bill, the financial regulation bill, that the banks have already devised new methods. For instance, that they are no longer able to charge such exorbitant interest rates on credit cards, so now they’re going to begin imposing fees on checking accounts. And they just come up with an immediate new solution to keep making huge amounts of money and getting around the regulators. So, even with this reserve situation that you raise about creating grain reserve, are there potentials for the Wall Street firms to figure out a new way to continue to control and make money off the food supply?

FREDERICK KAUFMAN: Well, I think the theory behind what you’re saying, Juan, is called “market capture,” in the sense that whenever you have a group of people, be they in the auto business or in the healthcare business, whenever they fear regulation from the government, this group is, of course, the most at-risk group. They are the ones who put more of their resources into understanding this regulation than anybody else, more of their lobbyists, more of their money into understanding what’s going on, and therefore, they’re the ones who ultimately—the people whose interest it touches most intrinsically are the ones who then capture that reform, market capture. So what I like about the grain reserve is that it’s actually outside of the purview, outside of the financial purview. As I said before, it’s no longer in the realm of the virtual; it’s no longer in the realm of the numbers. It’s actual real wheat, and you can actually bring it to bear. You can bring it to markets. There was a complete madness for hard red spring wheat in 2008, when you had international orders coming in from Nigeria, from all over the world, and there literally was the perception that there was no wheat out there. And so this thing, as you say, goes up and up and up and up and up. If there is actually somebody who can say, who can bring real wheat and calm these markets, you’re going to save lives. It’s not just that you’re going to save mortgages or that you’re going to save, you know, finances; it is that, literally, you no longer have those outrageous numbers of starving people on earth, most of them women and children.

AMY GOODMAN: We’re going to leave it there. I want to thank you very much for being with us. “The Food Bubble” is Frederick Kaufman’s piece in Harper’s Magazine, “How Wall Street Starved Millions and Got Away With It.” We’ll link to it at democracynow.org .

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