Obama Is Preparing for War in South America

Interview with Eva Golinger…

1 Mike Whitney—-The US media is very critical of Venezuelan President Hugo Chavez. He’s frequently denounced as “anti-American”, a “leftist strongman”, and a dictator. Can you briefly summarize some of the positive social, economic and judicial changes for which Chavez is mainly responsible?

Eva Golinger—-The first and foremost important achievement during the Chávez administration is the 1999 Constitution, which, although not written nor decreed by Chávez himself, was created through his vision of change for Venezuela. The 1999 Constitution was, in fact, drafted – written – by the people of Venezuela in one of the most participatory examples of nation building, and then was ratified through popular national referendum by 75% of Venezuelans. The 1999 Constitution is one of the most advanced in the world in the area of human rights. It guarantees the rights to housing, education, healthcare, food, indigenous lands, languages, women’s rights, worker’s rights, living wages and a whole host of other rights that few other countries recognize on a national level. My favorite right in the Venezuelan Constitution is the right to a dignified life. That pretty much sums up all the others. Laws to implement these rights began to surface in 2001, with land reform, oil industry redistribution, tax laws and the creation of more than a dozen social programs – called missions – dedicated to addressing the basic needs of Venezuela’s poor majority. In 2003, the first missions were directed at education and healthcare. Within two years, illiteracy was eradicated in the country and Venezuela was certified by UNESCO as a nation free of illiteracy. This was done with the help of a successful Cuban literacy program called “Yo si puedo” (Yes I can). Further educational missions were created to provide free universal education from primary to doctoral levels throughout the country. Today, Venezuela’s population is much more educated than before, and adults who previously had no high school education now are encouraged to not only go through a secondary school program, but also university and graduate school.

The healthcare program, called “Barrio Adentro”, has not only provided preventive healthcare to all Venezuelans – many who never had access to a doctor before – but also has guaranteed universal, free access to medical attention at the most advanced levels. MRIs, heart surgery, lab work, cancer treatments, are all provided free of cost to anyone (including foreigners) in need. Some of the most modern clinics, diagnostic treatment centers and hospitals have been built in the past five years under this program, placing Venezuela at the forefront of medical technology.

Other programs providing subsidized food and consumer products (Mercal, Pdval), job training (Mission Vuelvan Caras), subsidies to poor, single mothers (Madres del Barrio), attention to indigents and drug addicts (Mission Negra Hipolita) have reduced extreme poverty by 50% and raised Venezuelans standard of living and quality of life. While nothing is perfect, these changes are extraordinary and have transformed Venezuela into a nation far different from what it looked like 10 years ago. In fact, the most important achievement that Hugo Chávez himself is directly responsible for is the level of participation in the political process. Today, millions of Venezuelans previously invisible and excluded are visible and included. Those who were always marginalized and ignored in Venezuela by prior governments today have a voice, are seen and heard, and are actively participating in the building of a new economic, political and social model in their country.

2 MW—On Monday, President Chavez threw a Venezuelan judge in jail on charges of abuse of power for freeing a high-profile banker. Do you think he overstepped his authority as executive or violated the principle of separation of powers? What does this say about Chavez’s resolve to fight corruption?

Eva Golinger—-President Chávez did not put anyone in jail. Venezuela has an Attorney General and an independent branch of government in charge of public prosecutions. Chávez did publicly accuse the judge of corruption and violating the law because that judge overstepped her authority by releasing an individual charged with corruption and other criminal acts from detention, despite the fact that a previous court had not granted conditional freedom or bail to the suspect. And, the judge released the suspect in a very irregular way, without the presence of the prosecutor, and through a back door. The suspect then fled the country.

This is part of Venezuela’s fight against corruption. Unfortunately – as in a lot of countries – corruption is deeply rooted in the culture. The struggle to eradicate corruption is probably the most difficult of all and will probably not be achieved until new generations have grown up with different values and education. In the meantime, the Chávez administration is trying hard to ensure that corrupt public officials pay the consequences. That judge, for example, engaged in an act of corruption and abuse of authority by illegally releasing a suspect and therefore was charged by the Public Prosecutor’s office and will be tried. It has nothing to do with what Chávez said or didn’t say, it has to do with enforcing the law.

3 MW—Why is the United States building military bases in Colombia? Do they pose a threat to Chavez or the Bolivarian Revolution?

Eva Golinger—-On October 30th, the US formally entered into an agreement with the Colombian government to allow US access to seven military bases in Colombia and unlimited use of Colombian territory for military operations. The agreement itself is purported to be directed at counter-narcotics operations and counter-terrorism. But a US Air Force document released earlier this year discussing the need for a stronger US military presence in Colombia revealed the true intentions behind the military agreement. The document stated that the US military presence was necessary to combat the “constant threat from anti-US governments in the region”. Clearly, that is a reference to Venezuela, and probably Bolivia, maybe Ecuador. It’s no secret that Washington considers the Venezuelan government anti-US, though it’s not true. Venezuela is anti-imperialist, but not anti-US. The US Air Force document also stated that the Colombian bases would be used to engage in “full spectrum military operations” throughout South America, and even talked about surveillance, intelligence and reconnaisance missions, and improving the capacity of US forces to execute “expeditionary warfare” in Latin America.

Clearly, this is a threat to the peoples of Latin America and particularly those nations targeted, such as Venezuela. Most people in the US don’t know about this military agreement, but it they did, they should question why their government, led by Nobel Peace Prize winner Barack Obama, is preparing for war in South America. And, in the midst of an economic crisis with millions of people in the US losing jobs and homes, why are millions of dollars being spent on military bases in Colombia? The US Congress already approved $46 million for one of the bases in Colombia. And surely more funds will be supplied in the future.

4 MW—What is ALBA? Is it a viable alternative to the “free trade” blocs promoted by the US?

Eva Golinger—-The Bolivarian Alliance of the Americas – Trade Agreement for the People, is a regional agreement created five years ago between Venezuela and Cuba, and now has 9 members: Bolivia, Cuba, Ecuador, Honduras, Nicaragua, Venezuela, Antigua and Barbuda, St. Vincent and the Grenadines, and Dominica. ALBA is a trade agreement based on integration, cooperation and solidarity, contrary to US trade agreements which are based on competition and exploitation. It promotes a way of trading between nations that assures mutual benefits. For example, Venezuela sells oil to Cuba and Cuba pays with services – doctors, educators and technological experts that help to improve Venezuela’s industries. Venezuela sells oil to Nicaragua and Nicaragua pays with food products, agricultural technology and aide to build Venezuela’s own agricultural industry, which long ago was abandoned by prior governments only interested in the rich oil industry. ALBA seeks to not just provide economic benefits to its member nations, but also social and cultural advances. The idea is to find ways to help members develop and progress in all aspects of society. ALBA recently created a new currency, the SUCRE, which will be used as a form of exchange between member nations, eliminating the US dollar as the standard for trade.

5 MW—Are US NGO’s and intelligence agents still trying to foment political instability in Venezuela or have those operations ceased since the failed coup?

Eva Golinger—-In fact, the funding of political groups in Venezuela, and others throughout Latin America that promote US agenda, has increased since the April 2002 coup against President Chávez. Through two principal Department of State agencies, USAID and the National Endowment for Democracy (NED), the US government has channeled more than $50 million to opposition groups in Venezuela since 2002. The USAID/NED budget to fund groups in Venezuela in 2010 is nearly $15 million, doubled from last year’s $7 million. This is a state policy of Washington, which the Obama Administration plans to amp up. They call it “democracy promotion”, but it’s really democracy subversion and destabilization. Funding political groups favorable to Empire, equipping them with resources, strategizing to help formulate political platforms and campaigns – all geared towards regime change – is a new form of invasion, a silent invasion. Through USAID and NED, and their “partner NGOs” and contractors, such as Freedom House, International Republican Institute, National Democratic Institute, Pan-American Development Foundation and Development Alternatives, Inc., hundreds of political groups, parties and programs are presently being funded in Venezuela to promote regime change against the Chávez government. US taxpayer dollars are being squandered on these efforts to overthrow a democratically elected government that simply isn’t convenient for Washington. Remember, Venezuela has 24% of world oil reserves. That’s a lot!

6 MW—How hard has Venezuela been hit by the economic crisis? Do the people understand Wall Street’s role in the meltdown?

Eva Golinger—-Actually, the Chávez government has taken important steps to shelter Venezuela from the financial crisis. People here in Venezuela absolutely understand Wall Street’s role in the crisis and know that the US capitalist-consumerist system is principally responsible for causing the financial crisis, but also the climate crisis that the world is facing. The Venezuelan government took preventive steps against the financial crisis, such as withdrawing Venezuela’s reserves from US banks two years ago, creating cushion funds to ensure social programs would not be cut and diversifying Venezuela’s oil clientele so as not to be dependent solely on US clients. Recently, several banks have been nationalized by the Venezuelan government and others have been liquidated. But this was more due to the mismanagement and internal corruption within those banks. The Venezuelan government reacted quickly to take over the banks and guarantee customers’ savings would not be lost. In fact, it’s the first time in Venezuela’s history that no customers have lost any of their money during a bank liquidation or takeover. This is part of the Chávez Administration’s policy of prioritizing social needs over economic gain.

7 MW—Here’s an excerpt from a special weekend report by Bloomberg News:

“Americans have grown gloomier about both the economy and the nation’s direction over the past three months even as the U.S. shows signs of moving from recession to recovery. Almost half the people now feel less financially secure than when President Barack Obama took office in January…Fewer than 1 in 3 Americans think the economy will improve in the next six months….Only 32 percent of poll respondents believe the country is headed in the right direction, down from 40 percent who said so in September.” (Bloomberg)

The frustration and disillusionment with the US political/economic system has never been greater in my lifetime. Do you think people in the United States are ready for their own Bolivarian Revolution and steps towards a more progressive, socialistic model of government?

Eva Golinger—-The rise of Barack Obama neutralized a growing sentiment for profound change inside the US. Hopefully, the slowdown in US activism will only be temporary. South of the border, there is tremendous change taking place. New social, political and economic models are being built by popular grassroots movements in Venezuela, Bolivia and other Latin American nations that seek economic and social justice. I believe strongly that models in process, like the Bolivarian Revolution, provide inspiration and hope to those in the US and around the world that alternatives to US capitalism do exist and can be successful.

The US has a rich history of revolution. There are many groups inside the US dedicated to building a better, more humanist system. Unity and a collective vision are essential aspects of building a strong movement capable of moving forward. Every nation has its moment in history. This is the time of Latin America. But there is great hope that the people of the US will soon unite with their brothers and sisters south of the border to bring down Empire and help build a true world community based on social and economic justice for all.

Eva Golinger, winner of the International Award for Journalism in Mexico (2009), named “La Novia de Venezuela” by President Hugo Chávez, is a Venezuelan-American attorney from New York, living in Caracas, Venezuela since 2005 and author of the best-selling books, “The Chávez Code: Cracking US Intervention in Venezuela” (2006 Olive Branch Press), “Bush vs. Chávez: Washington’s War on Venezuela” (2007, Monthly Review Press), “The Empire’s Web: Encyclopedia of Interventionism and Subversion”, “La Mirada del Imperio sobre el 4F: Los Documentos Desclasificados de Washington sobre la rebelión militar del 4 de febrero de 1992” and “La Agresión Permanente: USAID, NED y CIA”. Since 2003, Eva, a graduate of Sarah Lawrence College and CUNY Law School in New York, has been investigating, analyzing and writing about US intervention in Venezuela using the Freedom of Information Act (FOIA) to obtain information about the US Government’s efforts to destabilize progressive movements in Latin America. Her first book, The Chávez Code, has been translated and published in six languages (English, Spanish, French, German, Italian & Russian) and is presently being made into a feature film.

Understanding the Global-warming Jihadists

“I was born with a chronic anxiety about the weather,” said John Burroughs in 1877. Today, anxiety about the weather is more common than ever, although it’s not inborn but cultivated in schoolrooms, through television sets and by lying, rapacious ex-vice presidents. And I have anxiety about the weather, too — especially when it’s being used to promote a destructive agenda.

This brings us to Climategate, the scandal everyone is talking about and that inspired British journalist James Delingpole to write “it’s [the climate con is] all unravelling now.” I only wish I could be so optimistic. Sure, we have the smoking gun of the hacked emails from the University of East Anglia, which provide evidence that we “deniers” were only denying a lie. And the erstwhile head of its Climatic Research Unit, Phil Jones — a con man with a science degree if ever there were one — had to resign in disgrace. But don’t for a moment confuse a smoking gun with a coup de grace, or being sacrificed for the team with waving the white flag. I say this because I long ago realized something about man’s nature, something that may sound like a gross exaggeration: If a person has a strong enough vested interest in believing 2+2=5, he will surely insist it is so — in the face of all evidence to the contrary. But before I talk about who the real deniers are and what is being denied, let’s discuss the ugly reality reaffirmed by Climategate.

Here is the lowdown in a nutshell: Governments have used billions of dollars of our money to fund fraudulent science, which, in turn, is used to justify policy that would steal untold billions more from us through taxation and the handicapping of the private sector. This will, of course, stifle the creation of wealth, but it will also be a transfer of it. But this would not be so much from the rich to the poor; it would be from the poor and middle class to the rich and well-connected. Carbon-credit con men such as Al Gore will add to their many millions, while subtracting from the many millions some of the latter’s few dollars. It would move us toward a situation in which we’d have two Americas, as John Edwards might say. One would be a lying, covetous ruling class of John Edwardses. The other would be the masses, who would be perpetually mired in serfdom.

Yet defeating the climate con won’t be easy, because it isn’t just money that drives the con men. In fact, many of them are so married the climate con that they have become one with their misguided notions. Call it the Zen of Being Wrong.

One reason not to do wrong is that an ounce of prevention is worth a pound of cure. Obviously, Bill Clinton, John Edwards and Tiger Woods would never have felt the urge to lie about their affairs if they had never had affairs. Of course, the lying was immoral, but this is how one sin leads to another. A transgression leads to a lie, which leads to a full-blown cover-up, etc. And the deeper you dig that hole, the harder and more painful it is to climb out of it.

In the case of the climate con artists, the pain would be great and the price steep. Their creed has been likened to a religion, and in many ways it is. They aren’t global-warming theorists.

They are global-warming fundamentalists.

They have invested so much of their time, energy, emotion, ego and reputations in the climate con that to relinquish it would be to relinquish themselves; to call it a lie is to call their lives a lie. It’s just a bit like asking a Jihadist to give up Islam. These are not people who subscribe to AGW theory; they have submitted to it.

Then you have those who are using this religion to make money — and they and the true believers are often one and the same. These are the carbon-credit capitalists, the green-technology givers and greenback grabbers.

And we have to add to this the fact that all these people had become science’s Torquemadas, inquisitors bent on stifling inquisitiveness. Al Gore told us “The debate is over” as he and his co-religionists strove to root out heresy and sought to destroy the “deniers.” Thus, they have no reason to expect mercy. Surrender is simply not an option.

So forget about icebergs; the meltdown the climate con artists fear is that of their reputations, egos, finances and faith. Scientists or not, to admit error is not merely the alteration of a hypothesis to them; it is the loss of religion and meaning, the end of empire, the fall of Rome. It is complete and utter personal destruction.

Yet destruction is precisely what the climate-change con men would visit on the economies of nations in their delusional grip. Other lands, such as China and India, will never yield to such insanity. They may pay lip service to it, though, especially if doing so will encourage us to more thoroughly handicap ourselves. Then they can laugh and rise to prominence while we become the most recent great civilization to descend into backwater status.

As I write this, the climate-change con artists are meeting in Copenhagen, where useful-idiot communists are protesting in the streets while their standard bearers, Venezuelan President Hugo Chavez, Zimbabwean strongman Robert Mugabe and Bolivian President Evo Morales are railing against free markets and beating the red drum. Do you really think these folks care about the environment? The green that really concerns them is your money — and I do mean your money. Because if there is an “international” agreement to fight the phantom of climate change, you can bet your depreciating bottom dollar that we Americans will pay the freight. We are, after all, the world’s biggest energy suckers.

The question is, are we just the world’s biggest suckers?

Chavez, Mugabe and China are betting yes. And if we want to make fools out of them, we’ll cause radical climate change — to the political climate in Washington in 2010. It’s probably our last chance to prove who the fools really are.

Deception, Spin and Lies

“By way of deception thou shalt do war” The Mossad motto…

Less than a week after Ankara cancelled an air exercise with Israel, Turkey’s state-sponsored channel TRT1 broadcast “Ayrilik” * (“Farewell”), a new prime-time TV show that depicts the true image of Israel’s genocidal military operation in Gaza last January.

The Israelis are not happy. “Broadcasting this series is a serious case of state-sponsored incitement. …,” said Israel’s Foreign Minister Avigdor Lieberman this morning. “Such a series, which doesn’t even have a weak connection to reality presents the IDF’s soldiers as murderers of innocent children….” I wonder whether one should remind hardliner Lieberman, who happens to be an enthusiastic ethnic cleanser and a proud Judeo supremacist racist, that the reality on the ground last January was ‘connected enough’ to establish a genocidal war crime inquiry and a crime against humanity. It left over 1400 fatal casualties. It also left thousands more injured, most of them children, women and elders. However, for once Lieberman happens to read the map. The Turkish TV-show indeed depicts the IDF’s soldiers as murderers of children women and elders for this is what Israeli soldiers are and this is exactly what Israel stands for politically, symbolically, ideologically and practically.

Though Lieberman tries to appease his Israeli crowd and may even be successful in doing so, his chances to mount pressure on Turkish TV and the government are rather limited. By now we all happen to know Israel is all about the establishment of a ‘Jew-only state’ in a stolen land named Palestine.

As it happens we tend to spend a lot of time writing and analysing the Israeli-Palestinian conflict. But the facts on the ground are actually very simple. Zionism is an ideology aspired by the plunder of Palestine. Israel has put the robbery of Palestine and the Palestinians into practice. We are talking here about a national revival project that is taking place at the expense of another people. It is a murderous project inherently inspired by the bible and an unethical plundering project of ‘home coming’. It is a lethal combination of some deadly interpretations of the Old Testament together with a non-ethical present. The only question to be asked is how have they got away with it? How do they continue to get away with plunder, murder, spreading white phosphorus and piling up nuclear weapons?

Spin, Deception and Lies are the Answer

A few weeks ago, Israeli PM Benjamin Netanyahu stood in front of the UN waving the Wannsee Conference’s protocols suggesting that he was holding the ‘proof for the Nazi extermination of European Jewry’. With typical histrionics, he pleaded for the nations empathy. “Is this a lie?” he cried out. Embarrassingly enough, though the document he presented to the assembly was genuine, he was actually spinning the usual Zionist lines. The Wannsee protocol refers in a rather general manner, to the deportation to the East of the entire Jewish population from Germany and German occupied territories. Though the document refers to ‘Final Solution’, the very ‘solution’ it prescribed is rather different from the common interpretation offered by the Zionist Shoa narrative. The Wannsee protocol refers basically to a sinister plan to exhaust the deported Jews in hard labour in roadwork.

As much as Wannsee document is devastating, its relevance to the history of the holocaust is rather limited for the ‘Wannsee plan’ has never materialised into an actual operative program. It has actually nothing to do with the historicity of Jewish extermination known as the Shoa. It doesn’t set any plan for death camps or gas chambers whatsoever. As a legal document, it proves nothing but general Nazi inclinations. As a historic document it by no means ‘proves’ the Shoa and the extermination of the Jews, it just affirms that the Nazi regime was committed to the idea of Judenreine (Jews Free). However, this fact is well established and widely accepted even by most if not all holocaust revisionists. As much as Netanyahu insisted to boost the Holocaust with some fresh credibility, he ended up waving a relatively insignificant paper in front of the nations. Needless to say, he got away with it.

However, far more crucial is the fact that the Wannsee Protocol lines out a program that is not that different from Lieberman’s deadly plan for the Palestinians. In reality it is the Jewish state that murders Palestinians en masse and starves those who survive. Moreover, it is very interesting also to elaborate on the following questions: how is it that the leader of the Jewish state is standing in front of the nation and spins in broad daylight in the name of Israel and the name of the Jewish people? What can we learn from the fact that an Israeli leader tries to fool the entire UN assembly? How is it that as Israeli PM manages to divert the attention so easily from his own crimes against humanity that are taking place in the present into a relatively insignificant historical document? In short, how does he get away with it?

The answer may be pretty trivial. Like in the case of the Mossad motto, they make their wars by deception. The entire Jewish revival project is grounded on sets of lies. The entire tale of Jewish ‘home coming’ is nothing less than a daylight collective crime based on false argument and lies again. Initially Zionists were deceiving their fellow Jews but as time passed by they have been extending their tactics. For more than a while they have been spinning us all. The Israelis and Zionists are born into a lie, they live their life through a lie, they tend to believe that they can get away with lies and deception and the sad truth must be said. As far as world leaders are concerned, they actually do. As we know, not a single world leader challenged Netanyahu’s spin at the UN. More disturbing is the fact that not a single historian or intellectual tried to point out to the Israeli PM that more than anything else, the Wannsee Protocol actually describes his own policies at home.

Very few World Leaders have the guts to oppose the Zionist spin operation. Recently we have witnessed the courageous Iranian Mahmud Ahmadinejad, Venezuela’s Hugo Chavez and Turkish PM Tayyip Erdogan. This is not a lot considering the level of colossal atrocities committed by the Jewish state. However, it is better than nothing.

The good news is that Humanism and Humanity is not exactly in the possession of politicians or so called ‘world leaders’. It is actually our property, the members of the human race, the people out there who happen to witness the emerging evil. True Humanity and Humanism is delivered by kindness and an aspiration for ethics and truthfulness. In most cases it is actually artists and ordinary people who transform Humanism into a vivid message. Our elected interventionalists, for some reason insist on dragging us all into more and more Zionist wars in the name of the holocaust, democracy and liberation’.

Tragically enough, our Western leaders are still silenced or at least ‘captivated’ by Zionist lies. But this shouldn’t be a major concern anymore. The betrayal of Western ideologies (left, right and centre), politicians and institutions are an established fact. Succumbing to Zionist lies is apparently just one symptom amongst too many. Not only that truth will win, it is actually winning already. The identification of the Zionist spin is becoming common knowledge. As the foggy cloud of the Zionist brutality expands we all develop a growing yearning for some beams of truth and grace. We are beginning to grasp that they make their wars by the means of deception. They may win a few more pyrrhic battles but they are losing the war.

Much ado about nothing?

What is there about the Iranian election of June 12 that has led to it being one of the leading stories in media around the world every day since? Elections whose results are seriously challenged have taken place in most countries at one time or another in recent decades. Countless Americans believe that the presidential elections of 2000 and 2004 were stolen by the Republicans, and not just inside the voting machines and in the counting process, but prior to the actual voting as well with numerous Republican Party dirty tricks designed to keep poor and black voters off voting lists or away from polling stations. The fact that large numbers of Americans did not take to the streets day after day in protest, as in Iran, is not something we can be proud of. Perhaps if the CIA, the Agency for International Development (AID), several US government-run radio stations, and various other organizations supported by the National Endowment for Democracy (which was created to serve as a front for the CIA, literally) had been active in the United States, as they have been for years in Iran, major street protests would have taken place in the United States.

The classic “outside agitators” can not only foment dissent through propaganda, adding to already existing dissent, but they can serve to mobilize the public to strongly demonstrate against the government. In 1953, when the CIA overthrew Iranian Prime Minister Mohammed Mossadegh, they paid people to agitate in front of Mossadegh’s residence and elsewhere and engage in acts of violence; some pretended to be supporters of Mossadegh while engaging in anti-religious actions. And it worked, remarkably well.¹ Since the end of World War II, the United States has seriously intervened in some 30 elections around the world, adding a new twist this time, twittering. The State Department asked Twitter to postpone a scheduled maintenance shutdown of its service to keep information flowing from inside Iran, helping to mobilize protesters.² The New York Times reported: “An article published by the Web site True/Slant highlighted some of the biggest errors on Twitter that were quickly repeated and amplified by bloggers: that three million protested in Tehran last weekend (more like a few hundred thousand); that the opposition candidate Mir Hussein Mousavi was under house arrest (he was being watched); that the president of the election monitoring committee declared the election invalid last Saturday (not so).” ³

In recent years, the United States has been patrolling the waters surrounding Iran with warships, halting Iranian ships to check for arms shipments to Hamas or for other illegal reasons, financing and “educating” Iranian dissidents, using Iranian groups to carry out terrorist attacks inside Iran, kidnapping Iranian diplomats in Iraq, kidnapping Iranian military personnel in Iran and taking them to Iraq, continually spying and recruiting within Iran, manipulating Iran’s currency and international financial transactions, and imposing various economic and political sanctions against the country.⁴

“I’ve made it clear that the United States respects the sovereignty of the Islamic Republic of Iran, and is not at all interfering in Iran’s affairs,” said US President Barack Obama with a straight face on June 23. “Some in the Iranian government [have been] accusing the United States and others outside of Iran of instigating protests over the elections. These accusations are patently false and absurd.”⁵

“Never believe anything until it’s officially denied,” British writer Claud Cockburn famously said.

In his world-prominent speech to the Middle East on June 4, Obama mentioned that “In the middle of the Cold War, the United States played a role in the overthrow of a democratically elected Iranian government.” So we have the president of the United States admitting to a previous overthrow of the Iranian government while the United States is in the very midst of trying to overthrow the current Iranian government. This will serve as the best example of hypocrisy that’s come along in quite a while.

So why the big international fuss over the Iranian election and street protests? There’s only one answer. The obvious one. The announced winner, Mahmoud Ahmadinejad, is a Washington ODE, an Officially Designated Enemy, for not sufficiently respecting the Empire and its Israeli partner-in-crime; indeed, Ahmadinejad is one of the most outspoken critics of US foreign policy in the world.

So ingrained is this ODE response built into Washington’s world view that it appears to matter not at all that Mousavi, Ahmadinejad’s main opponent in the election and very much supported by the protesters, while prime minister 1981-89, bore large responsibility for the attacks on the US embassy and military barracks in Beirut in 1983, which took the lives of more than 200 Americans, and the 1988 truck bombing of a US Navy installation in Naples, Italy, that killed five persons. Remarkably, a search of US newspaper and broadcast sources shows no mention of this during the current protests.⁶ However, the Washington Post saw fit to run a story on June 27 that declared: “the authoritarian governments of China, Cuba and Burma have been selectively censoring the news this month of Iranian crowds braving government militias on the streets of Tehran to demand democratic reforms.”

Can it be that no one in the Obama administration knows of Mousavi’s background? And do none of them know about the violent government repression on June 5 in Peru of the peaceful protests organized in response to the US-Peru Free Trade Agreement? A massacre that took the lives of between 20 and 25 indigenous people in the Amazon and wounded another 100.⁷ The Obama administration was silent on the Peruvian massacre because the Peruvian president, Alan Garcia, is not an ODE.

And neither is Mousavi, despite his anti-American terrorist deeds, because he’s opposed to Ahmadinejad, who competes with Hugo Chavez to be Washington’s Number One ODE. Time magazine calls Mousavi a “moderate”, and goes on to add: “It has to be assumed that the Iranian presidential election was rigged,” offering as much evidence as the Iranian protestors; i.e., none at all.⁸ It cannot of course be proven that the Iranian election was totally honest, but the arguments given to support the charge of fraud are not very impressive, such as the much-repeated fact that the results were announced very soon after the polls closed. For decades in various countries election results have been condemned for being withheld for many hours or days. Some kind of dishonesty must be going on behind the scenes during the long delay it was argued. So now we’re asked to believe that some kind of dishonesty must be going on because the results were released so quickly. It should be noted that the ballots listed only one electoral contest, with but four candidates.

Phil Wilayto, American peace activist and author of a book on Iran, has observed:

Ahmadinejad, himself born into rural poverty, clearly has the support of the poorer classes, especially in the countryside, where nearly half the population lives. Why? In part because he pays attention to them, makes sure they receive some benefits from the government and treats them and their religious views and traditions with respect. Mousavi, on the other hand, the son of an urban merchant, clearly appeals more to the urban middle classes, especially the college-educated youth. This being so, why would anyone be surprised that Ahmadinejad carried the vote by a clear majority? Are there now more yuppies in Iran than poor people?⁹

All of which is of course not to say that Iran is not a relatively repressive society on social and religious issues, and it’s this underlying reality which likely feeds much of the protest; indeed, many of the protesters may not even have strong views about the election per se, particularly since both Ahmadinejad and Mousavi are members of the establishment, neither is any threat to the Islamic theocracy, and the election can be seen as the kind of power struggle you find in virtually every country. But that is not the issue I’m concerned with here. The issue is Washington’s long-standing goal of regime change. If the exact same electoral outcome had taken place in a country that is an ally of the United States, how much of all the accusatory news coverage and speeches would have taken place? In fact, the exact same thing did happen in a country that is an ally of the United States, three years ago when Felipe Calderon appeared to have stolen the presidential election in Mexico and there were daily large protests for more than two months; but the American and international condemnation was virtually non-existent compared to what we see today in regard to Iran.

Iranian leaders undertook a recount of a random ten per cent of ballots and recertified Ahmadinejad as the winner. How honest the recount was I have no idea, but it’s more than Americans got in 2000 and 2004.

By what standard shall we judge Barack Obama?

Many of my readers have been upset with me for my criticisms of President Obama’s policies. Following my last two reports, more than a dozen have asked to be removed from my mailing list. But if you share my view that the numerous atrocities US foreign policy is responsible for constitute the greatest threat to world peace, prosperity and happiness, then I think you have to want leaders who are unambiguously opposed to America’s military adventures, because those interventions are unambiguously harmful. There’s nothing good to be said about dropping powerful bombs on crowds of innocent people, invading their land, overthrowing their government, occupying the country, breaking down the doors of the citizens, killing the father, raping the mother, traumatizing the children, torturing those opposed to all this … Barack Obama has no problem with this, if we judge him by his policies and not his rhetoric.

And neither does Al Franken, who’s about to become a Democratic Senator from Minnesota. The former Saturday Night Live comedian would like you to believe that he’s been against the war in Iraq since it began, but he’s gone to Iraq four times to entertain the troops. Does that make sense? Why does the military bring entertainers to soldiers? To lift the soldiers’ spirits. Why does the military want to lift the soldiers’ spirits? A happier soldier does his job better. And what’s the soldier’s job? All the charming things listed above. Doesn’t Franken know what these guys do? He criticized the Bush administration because they “failed to send enough troops to do the job right.”¹⁰ What “job” did the man think the troops were sent to do that had not been performed to his standards because of lack of manpower? Did he want them to be more efficient at killing Iraqis who resisted the occupation?

Franken has been lifting soldiers’ spirits for a long time. This past March he was honored by the United Service Organization (USO) for his ten years of entertaining troops abroad. That includes Kosovo in 1999, as imperialist an occupation as you’ll want to see. He called his USO experience “one of the best things I’ve ever done.”¹¹ Franken has also spoken at West Point, encouraging the next generation of imperialist warriors. Is this a man to challenge the militarization of America at home and abroad? No more so than Obama.

Tom Hayden wrote this about Franken in 2005 when Franken had a regular program on the Air America radio network:

Is anyone else disappointed with Al Franken’s daily defense of the continued war in Iraq? Not Bush’s version of the war, because that would undermine Air America’s laudable purpose of rallying an anti-Bush audience. But, well, Kerry’s version of the war, one that can be better managed and won, somehow with better body armor and fewer torture cells. This morning Franken was endorsing Sen. Joe Biden’s proposal to send 5,000 NATO troops to close the Syrian-Iraq border, bring in foreign trainers for the Iraqi officer corps, and put Iraqis to work cleaning up the destruction of our invasion. … Now that Bush has manipulated us into the invasion, Franken thinks we have no choice but to … stay until we crush the insurgents. It’s a humanitarian excuse for open-ended American occupation. And it’s shared widely by the professional political and pundit class who think of themselves as the conscience of the American establishment and the leadership of the Democratic Party.¹²

I know, I know, I’m taking away all your heroes. But such people shouldn’t be your heroes. You can learn to see through the liberal, Democratic Party apologists for the empire. Only a week ago, documents released by the Nixon Library in California revealed that five days before US and South Vietnamese troops made their surprise invasion of Cambodia on April 29, 1970 – which elicited widespread, angry protests in the US, resulting in the fatal shootings by the National Guard of students at Kent State University in Ohio – President Richard Nixon got approval for the invasion from the top Democrat on the Senate Armed Services Committee, Sen. John Stennis of Mississippi. Stennis told the president: “I will be with you. … I commend you for what you are doing.”¹³

Long live the Cold War

President Manuel Zelaya of Honduras was overthrown in a military coup June 28 because he was about to conduct a non-binding survey of the population, asking the question: “Do you agree that, during the general elections of November 2009 there should be a fourth ballot to decide whether to hold a Constituent National Assembly that will approve a new political constitution?” One of the issues that Zelaya hoped a new constitution would deal with is the limiting of the presidency to one four-year term. He also expressed the need for other constitutional changes to make it possible for him to carry out policies to improve the life of the poor; in countries like Honduras, the law is not generally crafted for that end.

At this writing it’s not clear how matters will turn out in Honduras, but the following should be noted: the United States, by its own admission, was fully aware for weeks of the Honduran military’s plan to overthrow Zelaya. Washington says it tried its best to change the mind of the plotters. It’s difficult to believe that this proved impossible. During the Cold War it was said, with much justification, that the United States could discourage a coup in Latin America with “a frown”. The Honduran and American military establishments have long been on very fraternal terms. And it must be asked: In what way and to what extent did the United States warn Zelaya of the impending coup? And what protection did it offer him? The response to the coup from the Obama administration can be described with adjectives such as lukewarm, proper but belated, and mixed. It is not unthinkable that the United States gave the military plotters the go-ahead, telling them to keep the traditional “golpe” bloodiness to a minimum. Zelaya was elected to office as the candidate of a conservative party; he then, surprisingly, moved to the left and became a strong critic of a number of Washington policies, and an ally of Hugo Chavez of Venezuela and Evo Morales of Bolivia, both of whom the Bush administration tried to overthrow and assassinate.

Following the coup, National Public Radio (NPR) showed once again why progressives refer to it as National Pentagon Radio. The station’s leading news anchor, Robert Siegel, interviewed Johanna Mendelson Forman, of the conservative think tank, Center for Strategic and International Studies:

Siegel: “There hasn’t been a coup in Latin America for quite a while.”

Forman: “I think the last one was in 1983″

Siegel did not correct her.¹⁴

This is ignorance of considerable degree. There was a coup in Venezuela in 2002 that briefly overthrew Hugo Chavez, a coup in Haiti in 2004 that permanently overthrew Jean-Bertrand Aristide, and a coup in Panama in 1989 that permanently overthrew Manuel Noriega. Is it because the US was closely involved in all three coups that they have been thrown down the Orwellian Memory Hole?

Notes

1. William Blum, Killing Hope, chapter 9 ^↩
2. Associated Press, June 16, 2009 ^↩
3. New York Times, June 21, 2009 ^↩
4. See Seymour Hersh, New Yorker magazine, June 29, 2008; ABC News, May 22, 2007; and Paul Craig Roberts in CounterPunch, June 19-21, 2009 for descriptions of some of these and other anti-Iran covert activities. ^↩
5. White House press conference, June 23, 2009 ^↩
6. The only mention is by Jeff Stein in “CQ Politics” [Congressional Quarterly], online, June 22, 2009, “according to former CIA and military officials”. ^↩
7. Center for International Policy (Washington, DC) report, June 16, 2009 ^↩
8. Time magazine, June 29, 2009, p.26 ^↩
9. AlterNet.org, June 14, 2009; Wilayto is the author of “In Defense of Iran: Notes from a U.S. Peace Delegation’s Journey through the Islamic Republic” ^↩
10. Washington Post, February 16, 2004 ^↩
11. Star Tribune (Minneapolis), March 26, 2009 ^↩
12. Huffington Post, sometime in June 2005, but it may no longer be there. ^↩
13. Washington Post, June 30, 2009 ^↩
14. NPR, All Things Considered, June 29, 2009 ^↩

Has the U.S. Played a Role in Fomenting Unrest During Iran’s Election?

Following the announcement of victory for Mahmoud Ahmadinejad over his main opponent Mir Hossein Mousavi in Iran’s presidential election on June 12, the country erupted in turmoil as supporters of Mousavi flocked to the streets to protest what they claimed was a fraudulent election, while state security and militia forces cracked down on dissenters, sometimes violently. Iran claimed that the unrest was being fueled by foreign interference, a charge reported but generally dismissed in Western media accounts. But there is ample reason to believe that the U.S. likely had a hand in fomenting the chaos that has since plagued the country many commentators have compared to the 1979 revolution that overthrew the Shah.

The role of the U.S. in overthrowing the democratically elected Prime Minister of Iran Mohammed Mossadegh in 1953 and installing the brutal regime of Shah Mohammad Reza Pahlavi is by now well known. In his speech in Cairo last month, President Barack Obama even referenced the CIA-backed coup, acknowledging that “In the middle of the Cold War, the United States played a role in the overthrow of a democratically elected Iranian government.”[1]

The U.S. lost their principle ally in the Middle East, however, when the Shah was in turn overthrown as a result of the Islamic revolution that swept the country in 1979, resulting in the clerical regime that continues to this day under Supreme Leader Grand Ayatollah Ali Khamenei, who took over the title from the leader of the revolution, Ayatollah Ruhollah Khomeini.

During the Reagan administration, the U.S. illegally sold arms to the Iranian regime even while supporting Saddam Hussein in Iraq’s devastating war against the Islamic Republic. And while neoconservatives in Washington had their eye on Iran as a target for regime change throughout the Clinton years, it wasn’t until George W. Bush came to be president that a strategy for bringing this about began in earnest. Whether the policy of regime change implemented under Bush has been quashed or continued by the administration of President Barack Obama remains to be seen, but what is incontrovertible is that the U.S. has a long and sordid history of interference in Iranian affairs.

The National Endowment for Democracy

One mechanism by which the U.S. interferes in the internal political affairs of other nations is the National Endowment for Democracy (NED), a quasi-governmental agency with funding from both Congress and private individuals whose purpose is to support foreign organizations sympathetic to U.S. foreign policy goals.

NED’s website states that its creation in the early 1980s was “premised on the idea that American assistance on behalf of democracy efforts abroad would be good both for the U.S. and for those struggling around the world for freedom and self-government.”[2]

The idea behind NED was to create an organization to do overtly what the CIA had long been doing clandestinely, and the organization has developed its own history of foreign interference. “A lot of what we do today was done covertly 25 years ago by the CIA,” acknowledged Allen Weinstein, one of NED’s founders.[3]

In Nicaragua, for instance, the CIA provoked opposition activities in the hopes that it would prompt an “overreaction” from the Sandinista government. The NED was there, also, providing money to opposition groups while the CIA armed contra terrorists (using money from the sale of arms to Iran, incidentally).[4]

In the Bulgarian elections of 1990, NED spent over $1.5 million in an effort to defeat the Bulgarian Socialist Party (BSP). When the effort failed and the BSP won, NED backed opposition groups that sowed chaos in the streets for months until the president and prime minister finally resigned. [5]

The NED was in Albania supporting the opposition to the communist government that was elected in 1991. Once again, turmoil in the streets led to the collapse of the government, forcing a new election in which the U.S.-backed Democratic Party won.[6]

Between 1990 and 1992, NED financed the Cuban-American National Foundation, an anti-Castro group out of Miami that in turn funded Luis Posada Carriles, a terrorist harbored by the U.S. who was responsible for the bombing of a Cuban airliner in 1976 that killed 73 people.[7]

NED was present in Mongolia helping to unite opposition parties under the National Democratic Union to defeat the Mongolian People’s Revolutionary Party that had won elections in 1992. With backing from NED, the NDU won in 1996 and U.S. media lauded the economic “shock-therapy” that the new pro-West government would implement. Under the new government, the National Security Agency (NSA) also set up shop with listening posts to spy on China. [8]

During the Clinton administration, NED was in Haiti working with the opposition to ousted president Jean-Bertrand Aristide.[9]

And NED was in Venezuela financing the opposition to President Hugo Chavez, including groups involved in the attempted coup in 2002 that nearly succeeded in his overthrow.[10]

NED is also active in Iran, granting hundreds of thousands of dollars to Iranian groups. From 2005 to 2007, NED gave $345,000 to the Abdorrahman Boroumand Foundation (ABF).[11] The group claims “no political affiliation” on its website, but is named for the founder of the National Movement of the Iranian Resistance (NAMIR), an opposition group to the clerical regime founded in 1980. According to the group’s website, Boroumand was murdered by agents of the Iranian government in Paris, France, in 1991.[12] The website is registered to the Boroumand Foundation, listed at Suite 357, 3220 N ST., NW, Washington, D.C.[13]

Another recipient of NED grants is the National Iranian American Council (NIAC), which received $25,000 in 2002, $64,000 in 2005, and $107,000 in 2006. The 2002 grant was to carry out a “media training workshop” to train participants representing various civic groups in public relations. The 2005 money was given in part to “strengthen the capacity of civic organizations in Iran”, including by advising Iranian groups on “foreign donor relations.” The 2006 grant was similarly designed to “foster cooperation between Iranian NGOs and the international civil society community and to strengthen the institutional capacity of NGOs in Iran.”[14]

The group’s president is Dr. Trita Parsi, whose parents fled political repression in Iran when he was four. He studied for his Doctoral thesis at the Johns Hopkins’ School for Advanced International Studies under Professor Francis Fukuyama.[15]

Fukuyama wrote in 2007 that “Ahmadinejad may be the new Hitler”, but that the use of military force against Iran “looks very unappealing”, and that airstrikes “would not result in regime change”, which was “the only long-term means of stopping” Iran’s alleged nuclear weapons program.[16] The NIAC similarly opposes the use of military force against Iran, and instead “supports the idea of resolving the problems between the US and Iran through dialogue in order to avoid war.”[17]

Following the Iranian election and subsequent violence, NIAC issued a statement saying that “The only plausible way to end the violence is for new elections to be held with independent monitors ensuring its fairness.”[18]

Last November, the Iranian ambassador to the United Nations Mohammad-Javad Zarif charged the U.S. with attempting to orchestrate a “velvet revolution” in Iran. One of the means by which this was being carried out, he said, was by means of workshops. “American officials have been inviting Iranian figures to so-called scientific seminars over the past few years”, he said. “However, when the Iranians attend these sessions, they realize they have gathered to discuss measures to topple the Iranian government”.[19]

The Office of Iranian Affairs

In February, 2006, Secretary of State Condoleezza Rice requested emergency funding from Congress to the amount of $75 million, on top of a previously allocated $10 million, “to mount the biggest ever propaganda campaign against the Tehran government”, in the words of The Guardian. The money “would be used to broadcast US radio and television programmes into Iran, help pay for Iranians to study in America and support pro-democracy groups inside the country.” The propaganda effort would include “extending the government-run Voice of America’s Farsi service from a few hours a day to round-the-clock coverage.” In announcing the request, Rice said the U.S. “will work to support the aspirations of the Iranian people for freedom and democracy in their country.”[20]

The Christian Science Monitor reported candidly on the “implicit goal” of the requested funds as being “regime change from within”, and similarly noted that “The money will go toward boosting broadcasts in Farsi to Iran, support for opposition groups, and student exchanges.”

A former specialist on the Middle East from the National Security Council, Raymond Tanter suggested the U.S. could work with an Iranian opposition group, the Mujahideen-e-Khalq (MEK). “If we are serious about working with groups from within,” he said, “it will have to be with the MEK, because there’s no other opposition force the regime cares about.”

Mehdi Marand, a spokesman for the Council for Democratic Change in Iran, similarly said that some in the Congress were ready to remove the MEK from the terrorist list. “If the US really wants to help the democratic forces inside Iran,” he said, “the only way is to remove restrictions from the opposition.”[21]

The problem is that the MEK is on the State Department’s list of terrorist organizations. Based in Iraq, the group came under the sway of the U.S. after the 2003 invasion that overthrew the regime of Saddam Hussein.

According to former U.N. weapons inspector Scott Ritter, who was among a few lone voices pointing out prior to the invasion of Iraq that there was no credible evidence the country still possessed weapons of mass destruction, the U.S. was already working with the MEK. Well prior, in 2005, Ritter wrote that the Bush administration had authorized a number of covert operations inside Iran. “The most visible of these”, he wrote, “is the CIA-backed actions recently undertaken by the Mujahideen-e-Khalq, or MEK, an Iranian opposition group, once run by Saddam Hussein’s dreaded intelligence services, but now working exclusively for the CIA’s Directorate of Operations.” The MEK’s CIA-backed operations within Iran included “terror bombings”, Ritter charged.[22]

A State Department cable unclassified in March, 2006 and entitled “Recruiting the Next Generation of Iran Experts” began by asserting that “Effectively addressing the Iran challenge ranks as one of the highest foreign policy priorities for our Government over the next decade.” The document outlines a plan developed under then Secretary of State Condoleezza Rice to “promote freedom and demoncracy [sic] in Iran.”

To this end, the State Department created the Office of Iranian Affairs (OIA) under the Bureau of Near Eastern Affairs, which would “reach out to the Iranian people” and bring more Iran experts into the Foreign Service and more Persian-speaking officers into the OIA, the Intelligence and Research Bureau (INR), and other branches of the State Department. Part of the “outreach” effort would be based in Dubai, a “natural location” for a regional office due to its “proximity to Iran and access to an Iranian diaspora”.[23]

The Dubai office would be modeled on the listening station in the Latvian capital of Riga, according to the document, which was where the U.S. had a listening station to gather information on the Soviet Union during the 1920s (George Kennan was at one time stationed there). The Iranian media has referred to the station as the “regime-change office.” A State Department official based in Dubai said the office’s purpose “is to get a sense of what’s going on in Iran. It is not some recruiting office and is not organizing the next revolution in Iran.”[24]

But the State Department cable also stated that among responsibilities of the Deputy Director of the Dubai station would be to seek “ways to use USG programs and funding to support Iranian political and civic organizations” and “to alert Washington on [the] need to issue statements on behalf of Iranian dissidents.”

The OIA would also create an International Relations Officer Generalist (IROG) position in Istanbul to advance “U.S. policy objectives with the Iranian [expatriate] community” in Turkey and Israel. A similar position would be created for the same purpose in Frankfurt, London, and Baku.[25]

In an op-ed in the Los Angeles Times critical of the Bush administration’s designs on Iran, Charles A. Kupchan, a professor of international affairs at Georgetown University and senior fellow at the Council on Foreign Relations (CFR), and Ray Takeyh, also a senior fellow at the CFR, observed that the objective was “not just to contain Tehran’s nuclear ambitions but also to topple the Iranian government.” Their main criticism with the new “strategy for regime change” is that it was likely to “backfire and only strengthen Tehran’s hard-liners” by giving them cause to decry “U.S. ‘interference’” and thus lending them political leverage to implement a crackdown on dissidents.[26]

When asked whether the OIA was intended to promote regime change, a State Department senior official told CNN it was “to facilitate a change in Iranian policies and actions” before acknowledging, “Yes, one of the things we want to develop is a government that reflects the desires of the people, but that is a process for the Iranians.”[27]

Then US ambassador to the United Nations John Bolton acknowledged in October 2006 that regime change was the “ultimate objective” of the U.S. sanctions policy, and adding that it “puts pressure on them internally” and “helps democratic forces” within the country and amongst the Iranian diaspora.[28]

Administration officials told the New York Times that then Vice President Dick Cheney was promoting the “drive to bring Iranian scholars and students to America, blanket the country with radio and television broadcasts and support Iranian political dissidents.” The program was to be “overseen by Elizabeth Cheney, a principal deputy assistant secretary for Near Eastern affairs, who is also the vice president’s daughter.”[29]

A Washington Post article on the new office noted money would be spent on “opposition activities” and observed that “Although administration officials do not use the term ‘regime change’ in public, that in effect is the goal they outline as they aim to build resistance to the theocracy.” The Post also noted that a “setback” for the Bush administration had come when Congress cut $19 million from the funding that would mainly affect broadcast operations, thus affecting plans to increase Voice of America (VOA) broadcasts into Iran to 24-hours a day.[30]

The Financial Times reported in April, 2006 that the effort was being coordinated with the U.K. and noted that criticism of the administration’s strategy included some of the same Iranians the program was designed to bolster. “Serious Iranian opposition politicians are virtually unanimous in saying that foreign funding of activities designed to promote democracy, especially by the US or UK, would be counter-productive”, the Financial Times reported. The article also quoted Ali Akbar Javanfekr, a press adviser to President Ahmadinejad, as saying that Iranians are “alert” to the “propaganda of enemies”.[31]

In May, the Los Angeles Times reported that the OIA was headed by David Denehy, a specialist at the International Republican Institute (IRI).[32] The IRI has been a recipient of NED funds, and was active in Venezuela, including the year of the attempted coup, when the IRI received $299,999 from NED to “train” political parties (including the IRI, over $1 million in grants was given by NED to groups operating in Venezuela in 2002).[33]

NIAC president Trita Parsi explained the goal of the U.S. policy by saying, “The administration is trying to make regime change through democratization the policy, instead of making confrontation by military means the policy.”

The L.A. Times also reported that “at the Pentagon, an Iranian directorate will work with the State Department office to undercut the government in Tehran.” The new Iranian directorate, the report noted, “has been set up inside its policy shop, which previously housed the Office of Special Plans [OSP]“.[34]

The OSP was the office headed by Douglas Feith that was created to bypass the normal intelligence review process and stovepipe information bolstering the policy of regime change in Iraq, including information from Iraqi dissidents like Ahmad Chalabi, who was afforded little credibility outside Feith’s office.

In an article for Rolling Stone, author James Bamford revealed how a member of Feith’s cabal at the OSP, Michael Ledeen, set up a meeting with Iranian dissidents to further the goal of regime change in Iran. Ledeen had served as the Reagan administration’s intermediary with Israel during the illegal arms deal that became known as the Iran-Contra Affair.

At the meeting in Rome, Ledeen, along with Larry Franklin and Harold Rhode, met with an Iranian named Manucher Ghorbanifer in a safehouse provided by Nicolò Pollari, the director of Italy’s Military Intelligence and Security Service (SISMI). Pollari had just months before been responsible for providing to that Bush administration what would later be revealed to have been fabricated documents purporting to show that Saddam Hussein had obtained yellowcake uranium from Africa. The men discussed the possibility of using the MEK to further their goal of regime change in Iran, according to Bamford’s sources who were familiar with the meeting.

Additionally, Larry Franklin, who worked under Feith in the OSP, later met with two other men “who were also looking for ways to push the U.S. into a war with Iran.” The two men were Steven Rosen and Keith Weissman of the American Israel Public Affairs Committee (AIPAC). With the FBI watching, Franklin illegally passed classified information on a National Security Presidential Directive dealing with U.S. policy on Iran to AIPAC with the goal of having the influential Israeli lobby exert pressure on the White House to adopt the draft directive.

In the July 24 article, Bamford wrote, “Over the past six months, the administration has adopted almost all of the hard-line stance advocated by the war cabal in the Pentagon…. To back up the tough talk, the State Department is spending $66 million to promote political changes inside Iran-funding the same kind of dissident groups that helped drive the U.S. to war in Iraq.”

Writing in the New York Times Magazine in June, 2007, Negar Azimi wrote about how the Iranian newspaper Kayhan “editorializes almost daily about an elaborate network conspiring to topple the regime. Called ‘khaneh ankaboot,’ or ‘the spider nest,’ the network is reportedly bankrolled by the $75 million and includes everyone from George Soros to George W. Bush to Francis Fukuyama to dissident Iranians of all shades.”

Azimi added, “If the spider’s nest had a headquarters, it might well be the Office of Iranian Affairs, which sits on the second floor of the State Department” and “was charged with outlining, in close consultation with Denehy, how to spend the democracy fund.”

$36.1 million of the funds was to go to VOA Persian and Radio Farda. VOA has often featured Reza Pahlavi, son of the former Shah, who now lives in Maryland. On April 1, 2007, VOA featured the head of the Balochi terrorist group Jundallah, Abdel Malek Rigi, who was “introduced as the leader of an armed national resistance group.”

Mehdi Khalaji, a fellow at the Washington Institute for Near East Policy who previously had worked for three years at Radio Farda, told Azimi that the VOA’s new administrators “do not seem to be able to distinguish between journalism and propaganda…. If you host the head of Jundallah and call him a freedom fighter or present a Voice of America run by monarchists, Iranians are going to stop listening.”[35]

U.S. Covert Operations in Iran

In April, 2006, investigative journalist Seymour M. Hersh wrote in the New Yorker magazine that “The Bush Administration, while publicly advocating diplomacy in order to stop Iran from pursuing a nuclear weapon, has increased clandestine activities inside Iran and intensified planning for a possible major air attack.”

A source with ties to the Pentagon told Hersh that American units were operating in Iran and “working with minority groups in Iran, including the Azeris, in the north, the Balochis, in the southeast, and the Kurds, in the northeast.” The principle goal was to “‘encourage ethnic tensions’ and undermine the regime.”[36]

Asia Times Online reported shortly thereafter that a “former Iranian ambassador and Islamic Republic insider” had provided details “about US covert operations inside Iran aimed at destabilizing the country and toppling the regime – or preparing for an American attack.” According to the source, “The Iranian government knows and is aware of such infiltration.”

Richard Sale, intelligence correspondent for United Press International, corroborated the charges made by Hersh, saying that “The Iranian accusations are true,” but that “it is being done on such a small scale – a series of pinpricks – it would seem to have no strategic value at all.”

The Asia Times Online article continued, noting recent unrest in Iranian ethnic minority communities, including amongst Kurdish, Arab, and Balochi populations. In one incident “in late January, a previously unknown Sunni Muslim group called Jundallah (Soldier of Allah) captured nine Iranian soldiers in the remote badlands of Sistan-Balochistan province that borders Afghanistan and Pakistan.”[37]

In July, Seymour Hersh repeated in an interview with NPR that the U.S. was supporting anti-regime terrorist groups including the MEK, Jundallah, and the Party of Free Life of Kurdistan (PJAK). “The strategic thinking behind this covert operation is to provoke enough trouble and chaos so that the Iranian government makes the mistake of taking aggressive action which will give the impression of a country in acute turmoil”, Hersh said, in order to give the White House a casus belli.[38]

In a July 29 article, Scott Ritter wrote that “American taxpayer dollars are being used, with the permission of Congress, to fund activities that result in Iranians being killed and wounded, and Iranian property destroyed…. The CIA today provides material support to the actions of the MEK inside Iran. The recent spate of explosions in Iran … appears to be linked to an MEK operation….”[39]

Hersh wrote another article in the New Yorker in November noting that the Pentagon was increasingly conducting covert operations that had traditionally been the CIA’s domain and giving further details about its activities in Iran. “In the past six months, Israel and the United States have been working together in support of a Kurdish resistance group known as the Party for Free Life in Kurdistan”, which has conducted raids into Iran. He repeated that the “Pentagon has established covert relationships with Kurdish, Azeri, and Balochi tribesman, and has encouraged their efforts to undermine the regime’s authority in northern and southeastern Iran.”[40]

On Democracy Now! with Amy Goodman, investigative journalist Seymour Hersh joined Scott Ritter in a conversation about the topic of Ritter’s book, Target Iran: The Truth About the White House’s Plans for Regime Change, which claimed the U.S. was conducting operations in Iran using the MEK. Ritter said the Israeli intelligence agency Mossad was building a station in Azerbaijan to work with Iran’s Azeri population and was also working closely with the MEK.[41]

On February 27, 2007, the London Telegraph reported, “America is secretly funding militant ethnic separatist groups in Iran in an attempt to pile pressure on the Islamic regime to give up its nuclear program.

“In a move that reflects Washington’s growing concern with the failure of diplomatic initiatives, CIA officials are understood to be helping opposition militias among the numerous ethnic minority groups clustered in Iran’s border regions.

“The operations are controversial because they involve dealing with movements that resort to terrorist methods in pursuit of their grievances against the Iranian regime.

“In the past year there has been a wave of unrest in ethnic minority border areas of Iran, with bombing and assassination campaigns against soldiers and government officials.

“Such incidents have been carried out by the Kurds in the west, the Azeris in the north-west, the Ahwazi Arabs in the south-west, and the Balochis in the south-east.”

A former high-ranking CIA official told the Telegraph that the CIA’s funding for opposition and separatist groups was “no great secret”.

Fred Burton, a former US State Department counter-terrorism agent and author of Ghost: Confessions of a Counterterrorism Agent (published in 2008), also told the Telegraph that “The latest attacks inside Iran fall in line with US efforts to supply and train Iran’s ethnic minorities to destabilize the Iranian regime.”

And John Pike of the Global Security think tank in Washington said, “The activities of the ethnic groups have hotted up [sic] over the last two years and it would be a scandal if that was not at least in part the result of CIA activity.” Pike also said that “A faction in the Defense Department wants to unleash” the MEK. “They could never overthrow the current Iranian regime but they might cause a lot of damage.”[42]

Journalist and later author of The Iran Agenda: The Real Story of U.S. Policy and the Middle East Crisis (published in October 2007) Reese Erlich told Amy Goodman on Democracy Now! in March 2007 that the U.S. was using Kurdish groups against Iran. “In the case of one group,” he disclosed, “the P.K.K. or the Kurdistan Workers Party and they are, along with Israel, sponsoring them to carry out guerilla raids inside Iran, and it’s part of a much wider plan by the United States to foment discontent and actual terrorist activities by ethnic Iranians in various parts of Iran. And when I was in northern Iraq, I was able to determine that that kind of activity is going on from Iraqi soil under the Kurdish controlled areas of Iraq, into Iran.”

Erlich also explained how the PJAK was formed as a breakaway group from the PKK and added that “they’re playing a very similar game with the Mujahideen-e-Khalq, another Iranian Group, and with groups in Balochistan, which is near the Pakistan Iranian border where some revolutionary guard bus was blown up.” He added that Israel was also “backing various Kurdish groups.”[43]

Further corroboration was given in April, according to the ABC News blog “The Blotter”, which reported that according to U.S. and Pakistani intelligence sources, the Balochi group Jundullah, operating out of the Balochistan province in Pakistan, was carrying out deadly operations inside Iran under the guidance and encouragement of the U.S. Funding for Jundullah was not provided directly, but instead, “Tribal sources tell ABC News that money for Jundullah is funneled to its youthful leader, Abdel Malik Regi, through Iranian exiles who have connections with European and Gulf states.”

Referencing the attack on the bus Erlich spoke of in his interview with Amy Goodman, ABC News noted that Jundullah had taken credit for a number of terrorist attacks and kidnappings, including “an attack in February that killed at least 11 members of the Iranian Revolutionary Guard riding on a bus in the Iranian city of Zahedan.”[44]

Again in May, ABC News reported that “The CIA has received secret presidential approval to mount a covert ‘black’ operation to destabilize the Iranian government,” according to current and former intelligence officials. The presidential finding “reportedly includes a coordinated campaign of propaganda, disinformation and manipulation of Iran’s currency and international financial transactions.”

Retired CIA senior official Bruce Riedel said he couldn’t “confirm or deny whether such a program exists”, but added that “it would be consistent with an overall American approach trying to find ways to put pressure on the regime”.

Vali Nasr, adjunct senior fellow for Mideast studies at the Council on Foreign Relations, told ABC News, “I think everybody in the region knows that there is a proxy war already afoot with the United States supporting anti-Iranian elements in the region as well as opposition groups within Iran”.[45]

The same day as the ABC News report, the Telegraph also reported that “President George W Bush has given the CIA approval to launch covert ‘black’ operations to achieve regime change in Iran, intelligence sources have revealed.” The official document endorsed “CIA plans for a propaganda and disinformation campaign intended to destabilize, and eventually topple, the theocratic rule of the mullahs.” The plan would also include sabotaging Iran’s economy “by manipulating the country’s currency and international financial transactions.”[46]

In July, 2008, former Pakistan Army Chief General Mirza Aslam Baig went public with the charge that the U.S. was backing Jundullah operations based out of Balochistan province.[47]

Jundullah claimed responsibility for the suicide bombing of the Amir al-Mohini mosque in the city of Zahedan on May 14, 2009, and said the target had Revolutionary Guards holding a meeting inside. Iran accused the U.S. of being behind the bombing.[48]

Jalal Sayyah, an official at the governor’s office in Sistan-Baluchestan province, told state radio, “The terrorists, who were equipped by America in one of our neighboring countries, carried out this criminal act in their efforts to create religious conflict and fear and to influence the presidential election”.[49] Interior Minister Sadegh Mahsooli similarly said, “Enemies try to influence the election by terror, just as they did in Zahedan yesterday…. The terror agents are neither Sunni nor Shiite but American and Israeli seeking a Sunni-Shiite divide.” Opposition candidate to President Ahmadinejad Mir-Hossein Mousavi also blamed “foreign forces” for the bombing.[50]

The U.S. naturally denied the charge. “We condemn this terrorist attack in the strongest possible terms,” said State Department spokesman Ian Kelly. “We do not sponsor any form of terrorism in Iran.”[51] White House spokesman Robert Gibbs issued a statement saying, “The United States strongly condemns the recent terrorist attacks in Iran…. The American people send their deepest condolences to the victims and their families. No cause justifies terrorism, and the United States condemns it in any form, in any country, against any people.”[52]

The next day, gunmen attacked President Ahmadinejad’s campaign headquarters in Zahedan, and three men were arrested as they tried to escape.[53] The Islamic Republic News Agency (IRNA) reported that three people, including a child, had been wounded in the attack. According to Al-Arabiya, a Saudi-financed channel in Dubai, Jundullah had claimed responsibility for the attack.[54]

On June 9, 2009, just days before the presidential election, the Iranian state news agency Press TV reported that the brother of Jundullah leader Abdel Malik Rigi, Abdulhamid Rigi, had confirmed in an interview that the U.S. had met with the group since 2005 and helped to arm them. He himself had also met with the Americans in Islamabad, Pakistan, he said, according to the report.[55]

A ‘Velvet Revolution’

Two months before the election, Iran announced that its Revolution Guards Corps (IRGC) had uncovered a plot to overthrow the regime and accused the Netherlands of conspiring with the U.S. and U.K. to provide financial support to opposition groups and websites for “anti-government activities” to bring about a “soft overthrow” of the government.[56]

Following the disputed election that resulted in an overwhelming win for the incumbent candidate President Ahmadinejad, rallies erupted in the streets of Tehran, with protesters charging that the election had been fraudulent and calling for an annulment of the announced result. Protests in some cases turned into riots resulting in property destruction and acts of arson. State security forces responded violently to some protests, and the state-backed Basij militia was blamed for storming Tehran University and killing 13.[57] The Basij was also blamed for other atrocities, including the murder of a young woman identified as Neda Agha Soltan. Neda was captured on a grisly video that has gone viral on the internet showing her lying in the street bleeding to death after apparently having been shot.[58]

Amid the chaos and charges of foreign interference in the elections, Iran cracked down further on dissent, blocking websites and issuing a ban on foreign reporters. During the confusion, the social-networking internet site Twitter reportedly became an important means for protesters to organize and keep each other updated. A Twitter user posts brief updates (“tweets”) via a web browser or cell phone text messaging. Other users may subscribe to that user’s tweets to receive instant updates. Thus, despite efforts to block other internet sites, Iran could not put a stop to Twitter activity without blocking all SMS communications.

But the “Twitter Revolution”, as some Western media have dubbed it, may not be all it appears. Blogs in the U.S. exploded with unconfirmed reports based on anonymously submitted tweets, many ostensibly coming from inside Iran. But as the Washington Post observed, “It is hard to say how much twittering is actually going on inside Iran.”[59]

While much of what was being Twittered has since been confirmed, there has been no shortage of dubious information going around. The New York Times observed that “just as Twitter has helped get out first-hand reports from Tehran, it has also spread inaccurate information, perhaps even disinformation.” Among the false information spread via Twitter and repeated by bloggers were: “That three millon protested in Tehran last weekend (more like a few hundred thousand); that the opposition candidate Mir Hussein Moussavi was under house arrest (he was being watched); that the president of the election monitoring committee declared the election invalid last Saturday (not so).”[60]

The popularity of the latter claim was in no small part due to a post by Andrew Sullivan in his popular blog “The Daily Dish” at The Atlantic. Sullivan reported, “Yes, the president of Iran’s own election monitoring commission has declared the result invalid and called for a do-over. That is huge news: when a regime’s own electoral monitors beak [sic] ranks, what chance does the regime have of persuading anyone in the world or Iran that it has democratic legitimacy?”[61]

Sullivan linked to a Farsi language website as his source, Peykeiran.com,[62] but Sullivan admittedly cannot read Farsi, so he was clearly merely relaying information he saw elsewhere, perhaps on Twitter, without attribution. Sullivan’s relayed claim, whatever its true origin, was promptly repeated in blogs across the net following his posting it at The Daily Dish.

But when shown the post and the linked-to page in Farsi, Kourosh Ziabari, an Iranian journalist and correspondent for Foreign Policy Journal, replied, “Actually, Andrew Sullivan has made a mistake, as far as I see. The one who asserted that the election results were invalid was Ali-Akbar Mohtashami, the Administrator for the Committee of Votes Preservation at the national campaign of Mir-Hossein Mousavi.”[63] This is hardly the same “huge news” Sullivan claimed it to be.

The New York Times also observed that “Not only is it hard to be sure that what appears on Twitter is accurate, but some Twitterers may even be trying to trick you.” An example cited is that of fabricated posts purporting to be from ABC News reporter Jim Sciutto.[64]

In that case, Sciutto said, the Iranian government attempted “to turn technology against the protesters. Officials have started a number of fake opposition pages on Twitter, which are tweeting propaganda and misleading information.”[65]

Sciutto offered no evidence that it was actually the Iranian government that was responsible for Twittering in his name, but then, of course, it is easy to accept that the Iranian government is using Twitter to spread misinformation simply as a matter of faith. And yet, despite the great amount of false or unsubstantiated claims made by apparent supporters of the opposition, there’s reluctance on the part of the mainstream media and bloggers to attribute to it the word “propaganda”, much less to suggest that there might have been a coordinated effort by anti-regime groups or foreign intelligence services to spread misinformation or foment unrest.

Evgeny Morozov, a blogger for Foreign Policy and a fellow at the Open Society Institute, questioned the “Twitter revolution” in an op-ed for the Boston Globe. He pointed out that “social media could do wonders when it comes to making many people aware of government’s abuse or the venue of a rally”, but “organizing protests is quite different from publicizing them; the former requires absolute secrecy, that latter one strives for the opposite.”

“However tempting it might be to attribute the Iranian protests to the power of Twitter, Facebook, and other social media,” Morozov added, “we should be extremely careful in our conclusions, especially given that the evidence we are working with is extremely sparse.”[66]

Morozov also told the Washington Post that it “is not at all certain” that Twitter “has helped to organize protests”, but “in terms of involving the huge Iranian diaspora and everyone else with a grudge against Ahmadinejad, it has been very successful.”

During a live discussion with readers, he observed that many posters had listed their location as Tehran in “solidarity” and that the Iranian diaspora was highly active in using social media. He also pointed out that it isn’t known whether a person with an Iranian sounding name posting content Farsi about events in Tehran was actually “in Tehran or, say, Los Angeles”.[67]

When Twitter Inc scheduled maintenance for the website, the U.S. asked the company to postpone the work so the service would not be interrupted as it was being used to rally people into the streets to protest the election. “One of the areas where people are able to get out the word is through Twitter,” a senior State Department official told reporters. “They announced they were going to shut down their system for maintenance and we asked them not to.”[68]

Iran shortly thereafter summoned the Swiss ambassador, who also represents U.S. interests in the country since the U.S. severed diplomatic relations after the 1979 revolution, to complain about American interference in Iranian affairs.[69]

One might be tempted to argue that the strategy for regime change implemented under the Bush administration that including funding for propaganda, support for Iranian dissident groups, and backing for anti-regime militants and terrorists has changed under the new administration of President Barack Obama. There is no evidence, many have pointed out, of U.S. meddling in the Iranian election.

But then, neither is there any clear indication that Obama ever revoked the policy strategy implemented under Bush. The most likely scenario is that Obama has put the military option favored by some in the Bush administration on the back burner in favor of other means to carry out a change of regime in Iran.

Whatever the case may be, given the record of U.S. interference in the state affairs of Iran and clear policy of regime change, it certainly seems possible, even likely, that the U.S. had a significant role to play in helping to bring about the recent turmoil in an effort to undermine the government of the Islamic Republic.

---

Certain name variants in this report have been changed within quoted text for consistency. British spellings have also been changed to American English.

An earlier version of this report said that Al-Arabiya was a “state owned” channel. It is a Saudi-financed channel operating out of Dubai and the text has been changed to reflect this.

[1] Remarks by President Barack Obama in Cairo, Egypt, White House, June 4, 2009

http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-at-Cairo-University-6-04-09/

[2] David Lowe, “Idea To Reality: A Brief History of the National Endowment for Democracy”, National Endowment for Democracy, Accessed June 22, 2009

http://www.ned.org/about/nedhistory.html

[3] William Blum, Rogue State: A Guide to the World’s Only Superpower (Monroe, Maine: Common Courage Press, 2000), p. 180

[4] Susan F. Rasky, “C.I.A. Tied to Nicaragua Provocations”, New York Times, September 21, 1988

http://www.nytimes.com/1988/09/21/world/cia-tied-to-nicaragua-provocations.html

William Blum, Rogue State, p. 175

[5] William Blum, Rogue State, p. 157

[6] Ibid., p. 157-8

[7] Ibid., p. 183

[8] Ibid., p. 177

[9] Ibid., p. 182

[10] William Blum, “US coup against Hugo Chavez of Venezuela, 2002″ (Excerpted from Freeing the World to death: Essays on the American Empire), KillingHope.org, accessed June 22, 2009

http://killinghope.org/essays6/venez.htm

Eva Golinger, “The Proof is in the Documents: The CIA Was Involved in the Coup Against Venezuelan President Chavez”, VenezuelaiFOIA.info, accessed June 22, 2009

http://venezuelafoia.info/evaenglish.html

[11] Information on grants for years 2005-2007 available on the National Endowment for Democracy website, accessed June 22, 2009

http://www.ned.org

[12] Information from the Abdorrahman Boroumand Foundation website, accessed June 22, 2009

http://www.iranrights.org/

[13] WHOIS domain lookup, accessed June 22, 2009

http://www.whois.net

[14] National Endowment for Democracy website, accessed June 22, 2009

http://www.ned.org/grants/06programs/grants-mena06.html#iran

[15] Information from the National Iranian American Council website, accessed June 22, 2009

http://www.niacouncil.org/index.php?option=com_content&task=view&id=826&Itemid=28

[16] “The neocons have learned nothing from five years of catastrophe”, The Guardian, January 31, 2007

http://www.guardian.co.uk/commentisfree/2007/jan/31/comment.usa

[17] National Endowment for Democracy website, accessed June 22, 2009

[18] “NIAC Calls for New Election in Iran”, National Iranian American Council Press Release, June 20, 2009

http://www.niacouncil.org/index.php?option=com_content&task=view&id=1452&Itemid=2

[19] “US plotting Velvet Revolution in Iran?”, Press TV, November 18, 2008

http://www.presstv.ir/detail.aspx?id=75784&sectionid=351020101

[20] Ewen MacAskill and Julian Borger, “Bush plans huge propaganda campaign in Iran”, The Guardian, February 16, 2006

http://www.guardian.co.uk/media/2006/feb/16/usnews.iran

[21] Howard LaFranchi, “A bid to foment democracy in Iran”, Christian Science Monitor, February 17, 2006

http://www.csmonitor.com/2006/0217/p03s03-usfp.html

[22] Scott Ritter, “The US War with Iran has Already Begun”, Al Jazeera, June 20, 2005

http://www.commondreams.org/views05/0620-31.htm

[23] “Recruiting the Next Generation of Iran Experts: New Opportunities in Washington, Dubai and Europe”, Unclassified State Department Cable, released March, 2006

http://images1.americanprogress.org/il80web20037/ThinkProgress/2006/0293_001.pdf

“New ‘Office of Iranian Affairs’ Outlined in State Department Cable”, Think Progress, March 1, 2006

http://thinkprogress.org/2006/03/01/iran-doc/

[24] Lionel Beehner and Greg Bruno, “Intelligence on Iran Still Lacking”, Council on Foreign Relations, December 4, 2007

http://www.cfr.org/publication/12721/

[25] “Recruiting the Next Generation of Iran Experts”

[26] Charles A. Kupchan and Ray Takeyh, “The wrong way to fix Iran”, Los Angeles Times, February 26, 2006

http://articles.latimes.com/2006/feb/26/opinion/oe-kupchan26

[27] Elise Labott, “U.S. to sharpen focus on Iran”, CNN, March 2, 2006

http://www.cnn.com/2006/POLITICS/03/02/us.iran/

[28] Guy Dinmore and Daniel Dombey, “Bolton: sanctions ‘help regime change’”, Financial Times, October 24, 2006

http://us.ft.com/ftgateway/superpage.ft?news_id=fto102420061730242214&page=2

[29] Steven R. Weisman, “Cheney Warns of ‘Consequences’ for Iran on Nuclear Issue”, New York Times, March 8, 2006

http://query.nytimes.com/gst/fullpage.html?res=9801E0D61531F93BA35750C0A9609C8B63&sec=&spon=&pagewanted=all

[30] Peter Baker and Glenn Kessler, “U.S. Campaign Is Aimed at Iran’s Leaders”, Washington Post, March 13, 2006; A01

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/12/AR2006031201016.html

[31] Guy Dinmore, “US and UK develop democracy strategy for Iran”, Financial Times, April 21, 2006

http://us.ft.com/ftgateway/superpage.ft?news_id=fto042120061741075322&page=1

[32] Laura Rozen, “U.S. Moves to Weaken Iran”, Los Angeles Times, May 19, 2006

http://articles.latimes.com/2006/may/19/world/fg-usiran19

[33] Grant information obtained from the National Endowment for Democracy website, accessed June 23, 2009

http://www.ned.org/grants/02programs/grants-lac.html

[34] Laura Rozen, “U.S. Moves to Weaken Iran”, Los Angeles Times, May 19, 2006

http://articles.latimes.com/2006/may/19/world/fg-usiran19

[35] Negar Azimi, “Hard Realities of Soft Power”, New York Times Magazine, June 24, 2007

http://www.nytimes.com/2007/06/24/magazine/24ngo-t.html?_r=3&oref=slogin&pagewanted=print

[36] Seymour M. Hersh, “The Iran Plans”, New Yorker, April 17, 2006

http://www.newyorker.com/archive/2006/04/17/060417fa_fact

[37] “Tehran insider tells of US black ops”, Asia Times Online, April 25, 2006

http://www.atimes.com/atimes/Middle_East/HD25Ak02.html

[38] “Seymour Hersh On Covert Operations in Iran”, NPR, June 30, 2006

http://www.npr.org/templates/story/story.php?storyId=92025860

[39] Scott Ritter, “Acts of War”, Truthdig, July 19, 2008

http://www.truthdig.com/report/item/20080729_acts_of_war/

[40] Seymour M. Hersh, “The Next Act”, New Yorker, November 27, 2006

http://www.newyorker.com/archive/2006/11/27/061127fa_fact

[41] “Target Iran: Former UN Weapons Inspector Scott Ritter and Investigative Journalist Seymour Hersh on White House Plans for Regime Change”, Democracy Now!, December 21, 2006

http://www.democracynow.org/2006/12/21/target_iran_former_un_weapons_inspector

[42] William Lowther and Colin Freeman, “US funds terror groups to sow chaos in Iran”, Telegraph, February 25, 2007

http://www.telegraph.co.uk/news/worldnews/1543798/US-funds-terror-groups-to-sow-chaos-in-Iran.html

[43] “Report: U.S. Sponsoring Kurdish Guerilla Attacks Inside Iran”, Democracy Now!, March 27, 2007

http://www.democracynow.org/2007/3/27/report_u_s_sponsoring_kurdish_guerilla

[44] “ABC News Exclusive: The Secret War Against Iran”, ABC News ‘The Blotter’, April 3, 2007

http://blogs.abcnews.com/theblotter/2007/04/abc_news_exclus.html

[45] “Bush Authorizes New Covert Action Against Iran”, ABC News ‘The Blotter’, May 22, 2007

http://blogs.abcnews.com/theblotter/2007/05/bush_authorizes.html

[46] Tim Shipman, “Bush sanctions ‘black ops’ against Iran”, The Telegraph, May 27, 2007

http://www.telegraph.co.uk/news/worldnews/1552784/Bush-sanctions-black-ops-against-Iran.html

[47] “Former Pakistan Army Chief General Retired Mirza Aslam Baig says Iran and Pakistan under siege of western conspiracies”, Pakistan Daily, July 8, 2008

http://www.daily.pk/politics/politicalnews/5406-former-pakistan-army-chief-general-retired-mirza-aslam-baig-says-iran-and-pakistan-under-siege-of-western-conspiracies.html

“‘US backs Jundullah to destabilize Iran’”, Press TV, July 9, 2008

http://www.presstv.ir/Detail.aspx?id=63054&sectionid=351020101

[48] ‘Gunmen attack’ south Iran election office”, BBC News, May 29, 2009

http://news.bbc.co.uk/2/hi/middle_east/8074640.stm

[49] “Iran official blames U.S. in deadly mosque bombing”, Reuters, May 29, 2009

http://www.reuters.com/article/topNews/idUSTRE54R5O320090529?feedType=RSS&feedName=topNews

[50] “Gunmen attack Ahmadinejad election office”, Agence France-Presse, May 29, 2009

http://rawstory.com/news/afp/Gunmen_attack_Ahmadinejad_election__05292009.html

[51] “‘Gunmen attack’ south Iran election office”, BBC News, May 29, 2009

http://news.bbc.co.uk/2/hi/middle_east/8074640.stm

[52] “US condemns ‘terrorist attacks’ in Iran”, Agence France-Presse, May 30, 2009

http://www.google.com/hostednews/afp/article/ALeqM5jj8UWc4-2zQ2Ix1VBz_0RwB7iVGQ

[53] “‘Gunmen attack’ south Iran election office”

[54] “Gunmen attack Ahmadinejad election office”

[55] “Rigi’s brother exposes US ties with Jundullah”, Press TV, June 9, 2009

http://www.presstv.ir/detail.aspx?id=97484&sectionid=351020101

[56] “Iran ‘uncovers cyber plot to topple gov’t'”, Press TV, April 11, 2009

http://www.presstv.ir/detail.aspx?id=91129&sectionid=351020101

[57] Johns Lyons, “Students slaughtered in Tehran university attack”, The Australian, June 19, 2009

http://www.theaustralian.news.com.au/story/0,25197,25658596-601,00.html

[58] Michael Weissenstein and Anna Johnson, “Amateur video turns woman into icon of Iran unrest”, Associated Press, June 23, 2009

http://www.google.com/hostednews/ap/article/ALeqM5jeJnPi6AOx5JpqWi2Wwv3AaesBPAD9902QK00

[59] Mike Musgrove, “Twitter Is a Player In Iran’s Drama”, Washington Post, June 17, 2009

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/16/AR2009061603391.html

[60] Noam Cohen, “Twitter on the Barricades: Six Lessons Learned”, New York Times, June 20, 2009

http://www.nytimes.com/2009/06/21/weekinreview/21cohenweb.html

[61] Andrew Sullivan, “Follow-Up On Earlier Posts”, The Atlantic ‘The Daily Dish’, June 13, 2009

http://andrewsullivan.theatlantic.com/the_daily_dish/2009/06/followup-on-earlier-posts.html

[62] Peykeiran.com webpage, accessed June 23, 2009

http://www.peykeiran.com/Content.aspx?ID=2104

[63] E-mail correspondence with Kourosh Ziabari

[64] Noam Cohen

[65] “ABC’s Jim Sciutto’s Twitter Account ‘Hijacked’ By Pro Iranian Government Messengers”, ABC News ‘The World Newser’, June 18, 2009

http://blogs.abcnews.com/theworldnewser/2009/06/abcs-jim-sciuttos-twitter-account-hijacked-by-pro-iranian-messengers.html

[66] Evgeny Morozov, “The repercussions of a ‘Twitter revolution’”, Boston Globe, June 20, 2009

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/06/20/the_repercussions_of_a_twitter_revolution/

[67] Evgeny Morozov, “Iran Elections: A Twitter Revolution?”, Washington Post, June 17, 2009

http://www.washingtonpost.com/wp-dyn/content/discussion/2009/06/17/DI2009061702232.html

[68] Mike Musgrove

[69] Ali Akbar Dareini, “Iran accuses the US of meddling in election crisis”, Associated Press, June 17, 2009

http://news.yahoo.com/s/ap/20090617/ap_on_re_mi_ea/ml_iran_election

No End In Sight

It’s been 21 months since two Bear Stearns hedge funds defaulted setting off a series of events which have led to the gravest economic crisis since the Great Depression. No one expected the financial meltdown to hit this hard or spread this fast. The failure at Bear triggered a freeze in the secondary market where mortgage loans are repackaged into securities and sold to investors. That market is now completely paralyzed cutting off 40 percent of funding for consumer and business loans and thrusting the broader economy into a deep recession. Banks and financial institutions have been forced to curtail their off-balance sheet operations and build their reserves which have ballooned from $45 billion to nearly $700 billion in the last 6 months alone. Like millions of homeowners who have seen their home equity vanish and their retirement savings slashed in half, the banks are hunkering down hoping they can outlast the deflationary hurricane ahead.

The deteriorating economic conditions have taken their toll on consumer confidence and forced businesses to lay off employees that won’t be needed during the slowdown. The system is bursting with overcapacity. Demand is falling faster than any time since the 1930s. Inventories will have to be trimmed and budgets cut to muddle through the down-times. Foreign trade has slowed to a crawl, auto sales are down by 40 percent or more, and unemployment is rising at 650,000 per month. Policymakers have pushed through a $800 billion stimulus plan, but it won’t be nearly enough to stop the steady rise in unemployment or take up the slack in an economy where industrial output has been cut in half, new home construction has dropped to record lows, and manufacturing has fallen off a cliff. Economists warn that when governments don’t step in and provide stimulus to increase aggregate demand, consumers cut back sharply on spending and push the economy deeper into depression.

Treasury Secretary Geithner and Fed chief Bernanke have lent or committed $13 trillion trying to keep the financial system functioning, but they’ve only managed to plug a few holes and avoid a system-wide collapse. The financial system is hobbled and unable to provide sufficient credit to generate growth. Every sector has suffered cutbacks, layoffs and slimmer profits. The problems go beyond toxic assets or complex derivatives. The system is plagued with stagnation, overcapacity and redundancy. Economics professor Robert Brenner sums it up like this in an interview in the Asia Pacific Journal:

Robert Brenner: “The current crisis is more serious than the worst previous recession of the postwar period, between 1979 and 1982, and could conceivably come to rival the Great Depression, though there is no way of really knowing. Economic forecasters have underestimated how bad it is because they have over-estimated the strength of the real economy and failed to take into account the extent of its dependence upon a buildup of debt that relied on asset price bubbles. In the U.S., during the recent business cycle of the years 2001-2007, GDP growth was by far the slowest of the postwar epoch. There was no increase in private sector employment. The increase in plants and equipment was about a third of the previous, a postwar low. Real wages were basically flat. There was no increase in median family income for the first time since World War II. Economic growth was driven entirely by personal consumption and residential investment, made possible by easy credit and rising house prices. Economic performance was weak, even despite the enormous stimulus from the housing bubble and the Bush administration’s huge federal deficits. Housing by itself accounted for almost one-third of the growth of GDP and close to half of the increase in employment in the years 2001-2005. It was, therefore, to be expected that when the housing bubble burst, consumption and residential investment would fall, and the economy would plunge. ” (“Overproduction not Financial Collapse is the Heart of the Crisis”, Robert P. Brenner speaks with Jeong Seong-jin, Asia Pacific Journal)

The economy is now in a downward spiral. Tightening in the credit markets has made it harder for consumers to borrow or businesses to expand. Overextended financial institutions are forced to shed assets at firesale prices to meet margin calls from the banks. Asset deflation is ongoing with no end in sight. Price declines in housing have reached 30 percent already and are now accelerating on the downside. This is the nightmare scenario that Bernanke hoped to avoid; a capitulation in real estate that drags the rest of economy into a black hole. Economist Nouriel Roubini and market analyst Meredith Whitney predict that housing prices will drop another 20 percent before they hit bottom. Nearly half of all homeowners will be underwater and owe more on their mortgages than the current value of their homes. That will increase the foreclosures and push scores of banks into default. According to Merrill Lynch’s economist David Rosenberg:

“It would take over three years to achieve price stability (in housing) The problem is that prices do not begin to stabilize until we break below eight months’ supply – and they tend to deflate 3% per quarter until that happens. So as impressive as it is that the builders have taken single-family starts below underlying sales, their efforts are just not sufficient to prevent real estate prices from falling further. In fact, even if the builders were to declare a moratorium immediately, that is, taking starts to zero, demand is so weak and the unsold inventory so intractable that it would now take over three years to achieve the holy grail of price stability in the residential real estate market.”

The main economic indicators all point to a long period of retrenchment ahead. The slowdown in global trade has hit Germany, Japan, and most of Asia particularly hard. The export-driven model of growth has suffered a major setback and won’t rebound for some time to come. With the US consumer unable to continue his debt-fueled spending spree, surplus countries will have to develop domestic markets for growth, but it won’t be easy. Chinese workers save 50 percent of what they earn and German workers already have a comfortable life without increasing personal consumption. Higher wages and lower interest rates can help stimulate demand, but cultural influences make it difficult to change spending habits. Meanwhile, the economy will continue to languish operating well below its optimum capacity.

Capital flows have also suddenly reversed causing turmoil in the currency markets. January’s TIC data indicates that net capital outflows for the US were negative $148 billion in January. Capital is now fleeing the country. Financial protectionism has triggered the repatriation of foreign investment causing a sharp drop in the purchase of US sovereign debt. This is from Brad Setser, economist for the CFR:

“The obvious implication of the recent downturn in total reserve holdings – and the $180 billion fall in q4 wasn’t driven by currency moves – is that the pace of growth in the world’s dollar reserves has slowed dramatically…

The obvious implication: most of the 2009 US fiscal deficit WILL NEED TO BE FINANCED DOMESTICALLY. The Fed’s custodial data indicates central banks are still buying Treasuries, though at a somewhat slower pace than in late 2008. But their demand hasn’t kept up with issuance. (Foreign Central banks aren’t going to finance much of the 2009 US fiscal deficit; Their reserves aren’t growing anymore”, Brad Setser, Council on Foreign Relations)

The United States does not have the reserves to finance it own massive deficits which will soar to $1.9 trillion by the end of 2009. The Fed will have to increase its purchases of US Treasuries and monetize the debt. Foreign holders of Treasuries and dollar-backed assets ($5 trillion overseas) will be watching carefully as Bernanke revs up the printing presses to fight the recession and meet government obligations. China, Russia, Venezuela and Iran have already called for a change in the world’s reserve currency. It won’t happen overnight, but the momentum is steadily growing.

The S&P 500 has soared 23 percent in the last four weeks, but the current bear market rally is misleading. The prospects for a quick recovery are remote at best. The fundamentals are all weak. Corporate profits are down, GDP is negative 6 percent, housing is in a shambles, and the banking system broken. The Fed has increased the money supply by 22 percent, but economic activity is at a standstill. The velocity at which money is spent is the slowest since 1987. Nothing is moving. The banks are hoarding, credit has dried up, and consumers are saving for the first time in 2 decades. The banks’ credit-conduit cannot function properly until bad assets are removed from their balance sheets. But the magnitude of the losses make it impossible for the government to purchase them outright without bankrupting the country. According to the Times Online, the IMF has increased its estimates of how much toxic mortgage-backed paper the banks are holding:

“Toxic debts racked up by banks and insurers could spiral to $4 trillion, new forecasts from the International Monetary Fund (IMF) are set to suggest.

The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.

Banks and insurers, which so far have owned up to $1.29 trillion in toxic assets, are facing increasing losses as the deepening recession takes a toll, adding to the debts racked up from sub-prime mortgages. The IMF’s new forecast, which could be revised again before the end of the month, will come as a blow to governments that have already pumped billions into the banking system.”

Since banks lend at a ratio of 10 to 1; the amount of credit cut off to the broader economy will ensure that sluggish growth well into the future. If there is a recovery, it will be weak. The Obama administration will have to increase its capital injections even though they will add to mushrooming deficits. So far, financial institutions have only written down $1 trillion or 25 percent of their losses. This means the banking system is insolvent. Eventually, Obama will have to resolve the bad banks and auction off troubled assets, even though political support is rapidly eroding. According to political analyst F. William Engdahl, most of the garbage assets are concentrated in the nation’s five biggest banks:

“Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default.

The five are, in declining order of importance: JPMorgan Chase which holds a staggering $88 trillion in derivatives (€66 trillion!). Morgan Chase is followed by Bank of America with $38 trillion in derivatives, and Citibank with $32 trillion. Number four in the derivatives sweepstakes is Goldman Sachs with a ‘mere’ $30 trillion in derivatives. Number five, the merged Wells Fargo-Wachovia Bank, drops dramatically in size to $5 trillion. Number six, Britain’s HSBC Bank USA has $3.7 trillion. (“Geithner’s ‘Dirty Little Secret’: The Entire Global Financial System is at Risk”, F. William Engdahl, Global Research)

These five banking Goliaths are at the center of political power in America today. Their White House emissary, Timothy Geithner, has concocted a rescue plan–the Public-Private Investment Program–which will provide 94 percent funding from the FDIC for the purchase bad assets. The program is designed to keep asset prices artificially high while transferring the bulk of the losses to the taxpayer. The plan has been widely criticized and has even raised a few eyebrows even among usually-supportive members of the establishment like the Financial Times:

“US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JP Morgan Chase, are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn (£680bn) plan to revive the financial system.

The plans proved controversial, with critics charging that the government’s public-private partnership – which provide generous loans to investors – are intended to help banks sell, rather than acquire, troubled securities and loans.

Banks have three options if they want to buy toxic assets: apply to become one of four or five fund managers that will purchase troubled securities; bid for packages of bad loans; or buy into funds set up by others. The government plan does not allow banks to buy their own assets, but there is no ban on the purchase of securities and loans sold by others.” (The Financial Times)

It’s a multi-billion dollar shell game with myriad opportunities for fraud. In theory, the banks could create their own off-balance sheet operations (SIVs or SPEs) and use them to purchase their own bad assets taking advantage of the government’s 94 percent low interest non recourse loans. It’s a blatant swindle and another windfall for Wall Street.

Geithner’s plan does not fix the problems with the banks, it only delays the final outcome. The next leg-down in the recession will push many of the undercapitalized banks into receivership. Geithner’s PPIP won’t change that. As housing prices fall and foreclosures rise, the capital position of many of the banks will become untenable leading to a rash of bank failures. An article in Monday’s Wall Street Journal puts adds some historical perspective to today’s financial crisis:

“The events of the past 10 years have an eerie similarity to the period leading up to the Great Depression. Total mortgage debt outstanding increased from $9.35 billion in 1920 to $29.44 billion in 1929. In 1920, residential mortgage debt was 10.2% of household wealth; by 1929, it was 27.2% of household wealth….

The causes of the Great Depression need more study, but the claims that losses on stock-market speculation and a monetary contraction caused the decline of the banking system both seem inadequate. It appears that both the Great Depression and the current crisis had their origins in excessive consumer debt — especially mortgage debt — that was transmitted into the financial sector during a sharp downturn.

Why does one crash cause minimal damage to the financial system, so that the economy can pick itself up quickly, while another crash leaves a devastated financial sector in the wreckage? The hypothesis we propose is that a financial crisis that originates in consumer debt, especially consumer debt concentrated at the low end of the wealth and income distribution, can be transmitted quickly and forcefully into the financial system. It appears that we’re witnessing the second great consumer debt crash, the end of a massive consumption binge.” (From Bubble to Depression? Steven Gjerstad and Vernon L. Smith, Wall Street Journal)

PARTY LIKE ITS 1929

Two leading economic historians, Barry Eichengreen and Kevin H. Rourke, have written an article “A Tale of Two Depressions” which has been widely circulated on the Internet. It illustrates (with graphs) how the global economy is plummeting faster now than during the 1930s.
http://www.voxeu.org/index.php?q=node/3421

By nearly every objective standard, the present downturn is worse than the Great Depression. Manufacturing, industrial production, foreign trade, capital flows, consumer confidence, housing, and even stocks are falling faster today than after the crash of 1929. So far, Bernanke’s monetary bandaids have prevented the wholesale collapse of the financial system, but that could change. The economy continues its downhill slide and it looks like there’s nothing to stop it from falling further still.

The Great Financial Crisis

Interview of John Bellamy Foster

John Bellamy Foster is editor of Monthly Review and professor of sociology at the University of Oregon. He is the coauthor with Fred Magdoff of The Great Financial Crisis: Causes and Consequences, recently published by Monthly Review Press.

MW: Do you think that the American people have been misled into believing that the current financial crisis is the result of subprime loans and toxic assets? Aren’t these merely the symptoms of a deeper problem; financialization? Can you explain financialization and how the economy became more and more detached from productive activity and more and more dependent on the accumulation of paper wealth?

JBF: I think it is true, as you say, that the American people have been misled by analysis of the crisis into focusing on mere symptoms, or on the straws that broke the camel’s back, such as subprime loans. There is still a great deal of toxic financial waste out there in the financial superstructure of the economy, but the real problems go much deeper. One reason for this failure to account realistically for the crisis is that those at the top of the system have very little clue themselves, given the near bankruptcy of orthodox economics. A second reason is that the dominant ideology is designed to naturalize any economic disaster, pretending it has nothing to do with the fundamental nature of the system but is simply the result of external forces, mistakes of federal regulators, deregulation, corruption of a few individuals, etc. Under these circumstances, what you get from the elites and the media is mostly nonsense, though there are individuals in the financial community, in particular, that are now analyzing the problem at a deeper, more realistic level.

The first thing to recognize is that this is a very serious crisis, of an order of magnitude comparable to the Great Depression. It is not a regular business cycle downturn or credit crunch. This should suggest that there are long-term forces at work. These include, over the last third of a century, stagnation, or the slowing down of the economy, and the financialization, the shift in the center of gravity of the economy from production to finance. Financialization refers not to just one or two financial bubbles (such as the New Economy bubble and the housing bubble) but to the growing reliance on financial speculation, which can be treated as a whole series of bubbles one after the other, each new one bigger than the last. This has been the dominant economic development since the 1970s, and especially since the 1980s. This financialization was occurring on top of a “real economy” or productive economy that was more and more stagnant. Given the rot below, financial speculation thus became the only game in town, serving to lift the economy. More and more economic activity was geared not to production but to the pursuit of paper claims to wealth. The last bubble-bursting episode, associated with the housing or subprime bubble, was so severe that it brought financialization to an end, generating what we call in the title of our new book The Great Financial Crisis.

The idea at the top was that the financial explosion could be managed, and a financial collapse prevented. The central banks as lenders of last resort could pour liquidity into the system at critical points to avoid a financial avalanche. And in fact they succeeded in doing this for decades. Ben Bernanke, the current head of the Federal Reserve, even referred a few years ago to “The Great Moderation,” in which the business cycle had been overcome by monetary policy. Following the successful leveraging of the system out of the 2001 crisis that followed the 2000 bursting of the New Economy bubble he assumed that they now had discovered the elixir of indefinite financial-based growth. Yet, the scale of the financial superstructure of the economy kept on rising in relation to the stagnant production system underlying it and finally it overwhelmed the capacity of the Federal Reserve and other central banks to stave off the inevitable financial collapse.

From a long-term perspective we can say that there is a kind of mean reversion taking place whereby the financial system and the inordinate profits it generated over decades is reverting to the long-term trend of the overall stagnant economy, which means that trillions upon trillions upon trillions of dollars in capital assets are being lost. And with financialization no longer lifting the economy as it has in decades past we are face to face with the underlying forces of long-term stagnation. For this reason the best economists and financial analysts are now saying that when the recovery from this crisis begins, perhaps in 2011, it will be an L-shaped recovery, pointing toward long-term stagnation as in the depression decade. Without financialization there is nothing on the horizon to boost the U.S. and other advanced capitalist economies.

MW: Is the financial crisis the result of deregulation, lax lending standards and too much leveraging or are there more important factors involved? In your new book The Great Financial Crisis, you say that stagnation is unavoidable in mature capitalist economies because “a handful of corporations control most industries” which has ended “price warfare”. How has “monopoly capital” paved the way for financialization and the creation of derivatives, structured debt instruments and other complex investments? Could you clarify what you mean by stagnation is and how it led to the present crisis?

JBF: The long-term process of the growth of financial speculation or financialization (the shift in gravity of the economy from production to finance) was a process that had to keep going because once it stopped you would have a financial avalanche. As increased debt is used more and more to leverage financial speculation the quantity of debt increases while its quality decreases. This means that the level of risk keeps rising. As speculation becomes more extreme various mechanisms are introduced to manage risk. Structured debt instruments like collateralized debt obligations and credit default swaps, and a host of other exotic financial instruments, were introduced supposedly to reduce the risk of the individual investor, but ended up expanding risk system-wide. Ideologically the increased risk is rationalized in various ways–for example the presumed high tech basis of the New Economy bubble and the notion that new financial instruments had sliced and diced risk and thereby lessened risk exposure in the subprime bubble. But eventually, the decrease in quality that goes along with the increase in quantity of debt has its effect. In this respect, the giving out of subprime loans was simply part of the normal evolution (though this time on a massive scale) of financial instability basic to speculative finance. This was well explained by economist Hyman Minsky in his various works on the “financial instability hypothesis,” largely ignored by mainstream economists.

Regulation of this system was impossible, since the risk had to keep rising and any attempt to place any limits on the system once financialization got to a certain point risked a financial meltdown. The capitalist state therefore had no choice but gradually to dismantle the entire financial regulatory system and to allow risk to grow. Indeed, in every major financial crisis over the last thirty years the response was financial deregulation. The risk-prone structure that emerged was presented as “optimal” in the governing ideology and the IMF and other institutions worked at imposing the same supposedly advanced, high-risk “financial architecture” on all the countries of the world.

The real underlying problem, as indicated above, was stagnation. Explaining stagnation is a long and complex process. It was analyzed in depth by Paul Baran, Paul Sweezy, and Harry Magdoff. For a fuller understanding, beyond what I am able to give in this short space, I recommend our book The Great Financial Crisis and earlier works by Baran, Sweezy, and Magdoff, especially Baran and Sweezy’s Monopoly Capital. There are two factors basically to consider: maturity and monopoly. Maturity stands for the fact that industrialization is an historical process. In the beginning, i.e., the initial industrial revolution phase, there is a building up of industry virtually from scratch as in the United States in the nineteenth century and China today. During this period the demand for new investment seems infinite and if there are limits to expansion they lie in the shortage of capital to invest. Eventually, however, industry is built up in the core areas and after that production is geared more and more to mere replacement, which can be financed out of depreciation funds.

In a mature economy growth is increasingly dependent on finding investment outlets, and capital tends to generate more surplus (or investment-seeking capital) than can be absorbed in existing outlets. New industries arise (such as the computer, digital product industry of today), but normally the scale of such industries relative to the whole economy is too small to constitute a major boost to the entire economic system. Although the capitalist economy is not often discussed in terms of such a historical process of industrialization (which lies outside the governing ideology,) it is taken for granted in discussions of the world economy that the more mature economies of the United States, Europe, and Japan are only going to grow nowadays at, say, a 2.5 percent rate, while emerging economies may grow much faster. The maturity argument was influenced by Keynes and developed by Alvin Hansen in the late 1930s and early 1940s in such works as Full Recovery or Stagnation? and Fiscal Policy and Business Cycles. But the most powerful and clearest theoretical discussion of maturity was provided by Paul Sweezy, building on a Marxian frame of analysis, in his Four Lectures on Marxism.

The second factor is monopoly (or oligopoly). Marx was the first to discuss the tendency in capitalist economies toward the concentration and centralization of capital, an emphasis that has distinguished Marxian economics. In Marxian and radical institutionalist economics this led to the emergence by the last quarter of the nineteenth century (consolidated only in the twentieth century) of a new stage of capitalism that came to be known as the monopoly stage (or monopoly capitalism) displacing the earlier freely competitive stage of capitalism of the nineteenth century. In essence, the economy in the nineteenth century was dominated by small family firms (other than railroad capital). In the twentieth century this turns into an economy of big corporations. Although monopoly capital, remained a stage of capitalism, the laws of motion of the system were modified. The biggest change is the effective banning of price competition. Monopolistic (or oligopolistic) firms, as Paul Sweezy, then a young Harvard economist, famously explained in the 1930s in his theory of the kinked-demand curve of oligopolistic pricing, tend to shift prices in only one direction–up. Price competition among the majors is seen as self-defeating, and replaced by a steady upward movement of prices, usually a form of indirect collusion, following the price leader (usually the biggest firm in an industry).

With the effective banning of price competition in mature industries (there is still price competition in rising industries where a shakedown process is occurring) the main assumption of orthodox conceptions of the capitalist economy is violated. Competition continues over low cost position in an industry (i.e. over productivity), and in other areas aimed at market share, such as advertising and branding of products (referred to as “monopolistic competition”). But actual price competition under monopoly capital is usually treated as “price warfare,” which is no longer acceptable. Throughout the nineteenth century in the United States the general price level fell with the exception of the Civil War years. Throughout the twentieth century the general price level rose with the exception of the Great Depression years.

The result of all of this is that, given rising productivity, monopolistic corporations end up grabbing as surplus a larger portion of the gains of productivity growth (and virtually all the gains when real wages are also stagnant), leading to a tendency of the surplus of monopoly capital to rise. There is then a vast and growing investment-seeking surplus, which, however, encounters relatively diminished investment outlets due to a number of factors: industrial maturity, growing inequality which negatively affects consumption (insofar as this is based on paychecks not debt), and persistent unused industrial capacity which discourages the further expansion of capacity. In Marxian terms, we can say that the rate of surplus value (or the rate of exploitation) within production is too high for all of the surplus value potentially generated through production to be realized in final sales.

As Keynes taught savings/surplus (ex ante) that is not invested simply disappears, so this slows down the economy as a whole. But the problem of surplus capital seeking investment is not thereby alleviated, since monopoly capital tends to adopt measures that continually pump up potential surplus even in a crisis. So the contradiction continues.

Baran and Sweezy summed up their argument by claiming that stagnation was the normal tendency of the monopoly capitalist economy. This was in sharp contradiction to received economic theory which assumed that capitalism by nature tended toward rapid economic growth and full employment. In the mainstream view, rapid growth and full employment were intrinsic to the system, so the emergence of slow growth required a specific explanation. In contrast, Baran, Sweezy, and Magdoff, building on a long line of thinkers before them (Marx, Veblen, Keynes, Hansen, Kalecki, Steindl), argued the opposite, that it was periods of rapid growth under monopoly capitalism, such as the now fabled Golden Age of the 1950s and ’60s, that needed to be explained as due to special factors. In their view, it was necessary to point to the specific historical stimuli that propelled extraordinary periods of rapid development (in the Golden Age: enormous consumer liquidity after the war, a second great wave of automobilization, military spending associated with two regional wars in Asia and the Cold War, the expansion of the sales effort, etc.). Stagnation itself was the normal tendency of the system and so could be accounted for simply by the waning of such special factors.

If investment and consumption are inadequate to maintain demand, as is the normal case under monopoly capitalism, the government is called into help. In the United States this has often taken the form of increased military spending (which is crucial the imperial goals of the system) and lately through financialization. Both of these means of maintaining demand, however, have reached their limits (the U.S. accounts for as much military spending as the whole rest of the world put together and cannot easily expand this at present), resulting in a deepening economic stagnation.

Baran and Sweezy’s Monopoly Capital had pointed to financial sector expansion as a possible countervailing factor to stagnation, but in the 1960s this was merely potential and had not emerged to any large extent. The evolution of the system from the 1970s on became so dependent on the growth of finance, and the incorporation of the giant corporations into this, that I have termed this later phase “monopoly-finance capital.”

MW: As the economy has become more dependent on financialization for growth, the gap between rich and poor has grown wider and wider. As you point out in your book, “In the United States the top 1 percent of wealth holders in 2001 owned more than twice as much as the bottom 80 percent of the population. If this was simply measured in terms of financial wealth, the top 1 percent owned more than four times the bottom 80 percent.” (p 130). How have working class people managed to keep their heads above water with all this wealth being shifted to the rich?

JBF: The answer is fairly obvious. If people cannot maintain their standard of living on the basis of their income, they will borrow against income and against whatever wealth they have. The result-if their incomes don’t rise, or if the value of whatever assets they have do not increase-is that they will simply get deeper and deeper in debt in an attempt simply to stand still. I became concerned about the growth of working-class household debt in 2000 and carried out a study of The Survey of Consumer Finances, which is published every three years by the federal government with a three year lag in the data. This is the only major federal government data source that we have on household debt broken down into income groups so that we can determine the debt burden of different classes. I published an article based on this research in the May 2000 issue of Monthly Review entitled “Working-Class Households and the Burden of Debt.” I then followed this up six years later with an article in the May 2006 Monthly Review on “The Household Debt Bubble,” which was to be incorporated into The Great Financial Crisis. There I wrote that “The housing bubble and the strength of consumption in the economy are connected to what might be termed the ‘household debt bubble,’ which could easily burst as a result of rising interest rates and the stagnation or decline of housing prices.” This is of course what happened, and the reason why this crisis has turned out to be so severe was the destruction over decades of the finances of working-class households, on the back of which financialization took place.

MW: Will you define “debt-deflation” and explain its potential danger to the economy? As credit continues to tighten and housing prices sink; aren’t we slipping into a reinforcing deflationary spiral? Do you think that fiscal policy will reverse this trend or is the stimulus package too small to stop real estate and equities from continuing to slide?

The term “debt-deflation” is associated particularly with the work of Irving Fisher during the Great Depression. Fisher wrote an article for the journal Econometrica in 1933 entitled “The Debt-Deflation Theory of Great Depressions.” Deflation as applied to the general economy is a drop in the general price level, something not seen in the United States since the Great Depression, and catastrophic in the economy of monopoly capital (and even more so under monopoly-finance capital). In the first place, deflation (or disinflation, i.e. the reduction of inflation to what the Federal Reserve calls “below optimal” levels) means that the profit margins of corporations are squeezed, even if the cost structure of production, and productivity remain the same. Under these circumstances price competition is reactivated with giant firms actually in a life and death struggle. This also generates pressure for heavy layoffs and wage reductions, creating all sorts of vicious cycles.

But the real fear of deflation has to do with the enormously bloated financial structure and the huge debt load of the economy. Under inflation, which is usually assumed to be built into the advanced capitalist economy, debts are paid back with smaller dollars (that is, worth less over time). In a deflationary economy, however, debt has to be paid back with bigger dollars (worth more over time). This then creates a debt-deflation spiral, enormously accelerating financial meltdown. As Fisher put it, “deflation caused by the debt reacts on the debt. Each dollar of debt still unpaid becomes a bigger dollar, and if the over-indebtedness with which we started was great enough, the liquidation of debt cannot keep up with the fall of prices which it causes.” Stated differently, quoting from The Great Financial Crisis (p. 116), “prices fall as debtors sell assets to pay their debts, and as prices fall the remaining debts must be repaid in dollars more valuable than the ones borrowed, causing more defaults, leading to yet lower prices, and thus a deflationary spiral.” In order to check this deflationary tendency, the Federal Reserve and the Treasury have been trying to reflate the economy by printing money (euphemistically called “quantitative easing”). But they have not succeeded and deflationary forces are still very strong, causing President Obama to warn shortly after his election that “we now risk falling into a deflationary spiral that could increase our massive debt even further.”

It is also worth mentioning the effect that deflation has on investment. With capital faced with the fact that a few years down the line the price level could be lower than it is now, expected profits on investment in new productive capacity (given that this takes years to be built and has to paid for in current prices) are depressed, creating a deeper stagnation of accumulation.

The stimulus package introduced by the Obama administration is far too small to pump up demand and reflate the economy under these circumstances. It is less than $400 billion a year, forty percent of which is tax cuts, so that the increased governmental spending is miniscule compared to the size of the hole created by the drastic drop in consumption, investment, and state and local government spending. It is also dwarfed by the total federal government support programs, primarily to financial institutions, which now amount to more than $9.7 trillion in the form of cash infusions, debt guarantees, swaps of Treasuries for financial toxic waste, etc.

MW: Karl Marx seems to have anticipated the financial meltdown we are now facing. In Capital, he said, “The superficiality of political economy shows itself in the fact that it views the expansion and contraction of credit as the cause of the periodic alterations of the industrial cycle, while it is a mere symptom of them.” Marx appears to agree with your theory that the real problem is deeper—economic stagnation which forces surplus capital to look for more profitable investments. While the monetarist theories of Milton Friedman are under withering attack, Keynes and Marx seem to have held up rather well. What does Marx mean when he talks about “political economy”?

JBF: Marx was an acute analyst of financial crises in his time and described their main features. However, he saw financial expansions (as economists in general have until recently) as occurring at the peak of a boom, not as a secular phenomenon. Financialization in the sense of a long-term shift in the center of gravity of the economy toward finance, with financial speculation building over decades, is a completely unprecedented situation.

Marx and Engels did place great emphasis on the growth of joint-stock companies/corporations and the appearance of a market for industrial securities that began to appear near the end of the nineteenth century. It was this creation of the modern market for industrial securities that was the real beginning of the emergence of finance as a relatively independent aspect of the monopoly capitalist economy. There are essentially two pricing structures to the economy: one in the real economy related to the production of goods and services, the other in the financial realm associated with the pricing of assets (paper claims to wealth). The two are interrelated but can be disassociated from each other for periods of time. Keynes in the 1930s singled-out the dangers of an economy that was increasingly governed by the speculative pricing of financial assets. Marx was such an acute observer of capitalism, that even in his time he began to see the contradictions emerging between money (or fictitious) capital and real capital.

One thing that Marx did argue in this context is that surges in financial speculation were responses to stagnation and decline in the real economy, as capital desperately sought a way to maintain and expand its surplus. Thus he wrote that the “plethora of money capital” in such periods was due to “difficulties in employment, through a lack of spheres of investment, i.e. due to a surplus in the branches of production” and showed nothing so much as the immanent barriers to capitalist expansion (quoted in The Great Financial Crisis, p. 39).

Marx remains the strongest foundation for the critique of the capitalist economy, down to our day. But the real Keynes (not to be confused with the bastardized Keynesianism of today) is also important, since he emphasized what he called the “outstanding faults” of the capitalist economy: the tendency to high inequality and high unemployment. He also pointed to the dangers of a system geared to speculative finance.

MW: Is wage stagnation and income inequality a direct result of financialization?

I would put it the other way around. Wage stagnation and growing income and wealth inequality are components of the underlying stagnation tendency. Both have shown a tendency to worsen over time, resulting in deepening stagnation tendencies within the overall economy. Real wages in the United States peaked in 1971, when Richard Nixon was president, and by 2008 had fallen back to 1967 levels, when Lyndon Johnson was president. This is in despite of the enormous growth of productivity and expansion of wealth over the intervening decades. Hence, this is a marker of “the tendency of surplus to rise,” as Baran and Sweezy put it, or a rising rate of surplus value, in Marx’s own terms. This was accompanied by a massive growth of income and wealth at the top. As we stated in The Great Financial Crisis (p. 130), “From 1990 to 2002, for each added dollar made by those in the bottom 90 percent [of income] those in the uppermost 0.01 percent (today about 14,000 households) made an additional $18,000.” By 2007 income/wealth inequality in the United States had reached 1929 proportions, i.e., the level reached just prior to the 1929 Stock Market Crash that led to the Great Depression.

I do think you are right, though, that financialization made income and wealth inequality worse, and contributed to the stagnation of wages. We can see neoliberalism as basically the ideology of monopoly-finance capital, introduced originally as the ruling class response to stagnation, and then increasingly geared to promoting the financialization of capital, itself a structural response to stagnation. Neoliberalism promoted incessant breaking of unions, forcing down wages, cutting state social welfare spending, deregulation, free mobility of capital, development of new financial architecture, etc. One way to understand this is the enormous need for new cash infusions to feed a financial superstructure that was voracious in its demand for new money capital, which it needed to leverage still more piling up of debt and financial speculation. Insurance companies, real estate, and mutual funds all provided infusions into this financial superstructure, as did the state. All limits were removed. Under these circumstances workers were encouraged to use their houses like piggy banks to finance consumption, credit cards were handed out to teenagers, subprime loans were pushed on those with little ability to pay. Individual retirement packages were shifted toward IRAs that were tied into the speculative financial system. This had all the signs of an addictive system. In these circumstances, too, the real economy, particularly production of goods and manufacturing, was decimated. In the introduction to The Great Financial Crisis we include a chart covering the period since 1960 showing production of goods as a percentage of GDP in a slow, long-term decline, while debt as a percentage of GDP is skyrocketing over the same period. All of this meant a massive redistribution away from working people to capital, and to those at the pinnacle of the financial pyramid.

MW: In your book The Great Financial Crisis, you are critical of Paulson’s capital injections into the banks saying that “at most they buy the necessary time in which the vast mass of questionable loans can be liquidated in an orderly fashion, restoring solvency but at a far lower rate of economic activity–that of a serious recession or depression.” On Friday, Timothy Geithner told CNBC that “We will preserve the system that is owned and managed by the private sector.” This suggests that the Treasury Secretary might not liquidate the toxic assets at all, but try maintain the appearance that these underwater banks are solvent. What do you think will happen if Geithner refuses to nationalize the banks?

I would not interpret Geithner’s statement that way. Rather we are experiencing one of the greatest robberies in history. I have written on the question of nationalization for the “Notes from the Editors” forthcoming in the March 2009 Monthly Review. All the attempts to rescue the financial system at this time go in the direction of nationalization. The federal government is providing more and more of the capital and assuming financial responsibility for the banks. However, they are doing everything they can to keep the banks in private hands, resulting in a kind of de facto nationalization with de jure private control. Whether the federal government is forced eventually toward full nationalization (that is, assuming direct control of the banks) is a big question. But even that is unlikely to change the nature of what is going on, which is a classic case of the socialization of losses of financial institutions while leaving untouched the massive gains still in the hands of those who most profited from the whole extreme period of financial speculation.

To get an idea of what is happening one has to understand that the federal government, as I have already indicated, has committed itself thus far in this crisis $9.7 trillion in support programs primarily for financial institutions. The Federal Reserve (together with the Treasury) now has converted itself into what is called a “bad bank.” It has been swapping Treasury certificates for toxic financial waste, such as collateralized debt obligations. As a result the Federal Reserve has become the banker of last resort for toxic waste with the share of Treasuries in the Fed’s balance sheet dropping from about 90 percent to about 20 percent over the course of the crisis, with much of the rest now made up of financial toxic waste.

Obviously, full, straightforward nationalization would be more rational than this. But one has also to remember the system of power-both economic and political-that we are dealing with at present. The classic case of full bank nationalization was Italian corporatist capitalism of the 1920s and ’30s, and was carried out by the fascist regime. Without suggesting that we are headed this way now it should be clear from this that nationalization of banks itself is no panacea.

The fact that Geithner, Obama’s pick for Treasury Secretary, is overseeing the enormous robbery taking place, probably exceeding any theft in history, with the ordinary taxpayers picking up the tab, should certainly cause one to ask questions about the “progressive” nature of the new administration.

MW: Former Fed chief Alan Greenspan has dismissed criticism of his monetary policies saying that no one could have seen the humongous bubble developing in housing. In your book, however, you make this observation: “It was the reality of economic stagnation beginning in the 1970s…that led to the emergence of the ‘new financialized capitalist regime’s kind of ‘paradoxical financial Keynesianism’ whereby demand in the economy was stimulated primarily ‘thanks to asset bubbles.’” (p 129) The statement suggests that the Fed knew exactly what it was doing when it slashed rates and created a speculative frenzy. Debt-fueled asset bubbles are a way of shifting wealth from one class to another while avoiding the stagnation of the underlying economy. Can this problem be fixed through regulation and better oversight or is it something that is intrinsic to capitalism itself?

Greenspan is of course trying desperately to salvage his reputation and to remove any sense that he is culpable. I would agree that the Fed knew what it was doing up to a point, and deliberately promoted an asset bubble in housing-what Stephanie Pomboy called “The Great Bubble Transfer” following the bursting of the New Economy tech bubble in 2000. The view that no one saw the dangers of course is false. It reminds me of Paul Krugman’s face-saving claim in his The Return of Depression Economics and the Crisis of 2008 that while some people thought that financial and economic problems of the 1930s might repeat themselves, these were not “sensible people.” According to Krugman, “sensible people” like himself (that is, those who expressed the consensus of those in power) knew that these things could never happen-but turned out to be wrong. It is true, as Greenspan says, no one could have foreseen precisely what really happened. And certainly there were a lot of blinders at the top. But there were lots of warnings and concerns. For example, I drafted an article (“The Great Fear”) for the April 2005 issue of Monthly Review that referred to “rising interest rates (threatening a bursting of the housing bubble supporting U.S. consumption)” as one of the key “perils of a stagnating economy.” Other close observers of the economy were saying the same thing.

The Federal Reserve Board, indeed, was internally debating in these years whether to adopt a policy of pricking the asset bubbles before they got further out of control. But Greenspan and Bernanke were both against such a dangerous operation, claiming that this could bring the whole rickety financial structure down. Since they didn’t know what to do about asset bubbles they simply sat on their hands and tried to talk the market up. The dominant view was that the Federal Reserve could stop a financial avalanche by putting a rock in the right place the moment there was a sign of trouble. So Bernanke went ahead, closed his eyes and prayed, raising interest rates to restrict inflation (an action demanded by the financial elite) and the rest is history.

At all times it was those at the commanding heights of the financial institutions that called the shots, and the Fed followed their wishes. Greenspan himself is no dummy. He wrote in Challenge Magazine in March-April 1988 of the dangers associated with housing bubbles. But as a Federal Reserve Board chairman he pursued financialization to the hilt, since there was no other option for the system. Needless to say, such financialization was associated with the growing disparities in wealth and income in the country. Debt itself is an instrument of power and those at the bottom were chained by it, while those at the top were using it to leverage rising fortunes. The total net worth of the Forbes 400 richest Americans (an increasing percentage of whom were based in finance) rose from $91.8 billion in 1982 to $1.2 trillion in 2006, while most people in the society were finding it harder and harder to make ends meet. None of this was an accident. It was all intrinsic to monopoly-finance capital.

MW: The financial crisis is quickly turning into a political crisis. Already governments in Iceland and Latvia have collapsed and the global slump is just beginning to accelerate. Riots and street violence have broken out in Greece, Latvia and Lithuania and worker-led protests have become commonplace throughout the EU. As unemployment skyrockets and economic activity stalls, countries are likely to experience greater social instability. Do you see this crisis as an opportunity political mobilization? How does one take deep-seated discontent and rage and shape it into a political movement for structural change?

JBF: The first thing to recognize is that we are suddenly in a different historical period. One of my favorite quotes comes from Gillo Pontecorvo’s 1969 film Burn!, where the main character, William Walker (played by Marlon Brando) states: “Very often between one historical period and another, ten years suddenly might be enough to reveal the contradictions of an entire century.” We are living in such a period; not only because of the Great Financial Crisis and what the IMF is now calling a depression in the advanced capitalist economies, but also because of the global ecological crisis that during the last decade has accelerated out of control under business as usual, and due to the reappearance of “naked imperialism.” What made sense ten years ago is nonsense now. New dangers and new possibilities are opening up. A whole different kind of struggle is emerging.

The sudden fall of the governments in Iceland and Latvia as a result of protests against financial theft is remarkable, as are the widespread revolts in Greece and throughout the EU, with millions in the streets. The general strikes in Guadeloupe and Martinique, the French Antilles, and the support given to these movements by the French New Anti-Capitalist Party is a breakthrough. In fact much of the world is in ferment. Latin Americans are engaged in a full-scale revolt against neoliberalism, led by Venezuela’s Bolivarian Revolution, and the aspiration of a new socialism for the 21^st century (as envisioned also in Bolivia, Ecuador and Cuba). The Nepalese revolution has offered new hope in Asia. Social struggles on a major scale are occurring in emerging economies such as Brazil, Mexico, and India. China itself is experiencing unrest.

The one place in the world where this world historical ferment appears to not be having telling effect at present is the United States. This can be traced to two reasons. First, the United States as the center of a world empire is a fortress of conservatism. Second, the election of the Obama administration has confused progressive forces, leading to absurd notions that the Democrats under Obama are going to create a New New Deal without renewed pressure arising from a revolt from below. Meanwhile, under Obama’s watch, and with the help of his chosen advisers, vast amounts of state funds are being infused into the financial system to benefit private capital.

What is needed in the United States today, we argue in The Great Financial Crisis, is a renewal of the classic concept of political economy (with its class perspective), whereby it comes to be understood that the economy is subject to public control, and should be wrested from the domination of the ruling class. The bailing out of the system right now is going on with taxpayer funds but without the say of the public. A revolt to gain popular control of the political economy is therefore necessary.

It is possible to start with the demand for a New New Deal rooted in the best legacy of the Roosevelt administration in the 1930s, most notably the Works Progress Administration. But as Robert McChesney and I argued in “A New New Deal Under Obama?” in the February 2009 issue of Monthly Review, the struggle has to move quickly beyond that to an expansion of workers’ rights along socialist principles, breaking with the logic of capital. For this to occur there has to be a great revolt from below on at least the scale of the industrial unionization movement of the 1930s that created a new political force in the country (later destroyed in the McCarthy Era). The story of this struggle is told in David Milton’s classic account, The Politics of U.S. Labor, which also points out that the rising labor movement was led by socialists and radical syndicalists.

It is important, as István Mészáros explained in his Beyond Capital, that the radical politics opened up in this historical moment not be diverted into attempting to save the existing system, but be directed at transcending it. As Mészáros wrote: “To succeed in its original aim, radical politics must transfer at the height of the crisis its aspirations-in the form of effective powers of decision making at all levels and all areas, including the economy-to the social body itself from which subsequent material and political demands would emanate.”

In the United States a primary goal of any radical politics should be to cut military spending, which is the imperial iron heel holding down the entire world, while corrupting the U.S. body politic and diverting surplus from pressing social needs.

The obvious weak link of the whole political, ideological and economic structure in command in the United States today, is that the system has clearly failed to meet peoples’ real needs. Rather than addressing these pressing needs in the crisis, the emphasis of the economic overlords is to bailout private capital at virtually any cost. Between October 2008 and January 2009 the federal government provided about $160 billion in capital and infusions and debt guarantees to the Bank of America, which had a total net worth in late January of only a small fraction of that amount. The rest had gone down the rat hole.

The robbing of public funds to bailout private capital is now on a scale probably never before seen. A politicized, organized working class capable of understanding and reacting to that theft, and choosing thereby to restructure society, to meet real social, egalitarian needs is what is now to be hoped for. The title of a recent cover story Newsweek declared: “We Are All Socialists Now.” As it turned out, Newsweek‘s editors were simply referring to the increase in public spending now taking place-hardly an indication of socialism. But the fact that this is said at all in the mainstream media points to the fact that we are in a different historical moment in which radical forces have the possibility of moving forward.

Red Oil

This True Stories documentary unravels the tangled tale of Venezuela’s oil industry, which was taken into state control by President Hugo Chavez in 2002. Filmed in the style of a Latin American telenovela, True Stories: Red Oil asks if a multinational oil corporation can deliver President Chavez’ socialist dream. This revealing film explores the greed, power and passion behind Venezuela’s State Oil corporation.

Mediaco-op / Majade – Red Oil

The War on Democracy

‘The War on Democracy’ is John Pilger’s first major film for the cinema – in a career that has produced more than 55 television documentaries. Set in Latin America and the US, it explores the historic and current relationship of Washington with countries such as Venezuela, Bolivia and Chile.

“The film tells a universal story,” says Pilger, “analyzing and revealing, through vivid testimony, the story of great power behind its venerable myths. It allows us to understand the true nature of the so-called war on terror”.

Thousands march against Israel

PARIS – Tens of thousands of protesters marched through central Paris and other French cities Saturday to denounce Israeli’s offensive in Gaza and express support for the Palestinian cause.

Thousands of French men and women carried Palestinian banners, amid cries of “Israel murderer.”

As the various groups gathered, portraits of slain Hamas chief Sheikh Ahmed Yassin and Lebanese Hezbollah leader Hassan Nasrallah were carried behind those of revolutionary Che Guevara and Venezuela’s President Hugo Chavez.

A banner strung along a truck carrying a sound system declared: “Support for Hamas,” as all the chants laid the blame for the fighting at Israel’s door.

“We are all Palestinians. We are all children of Gaza,” the cortege chanted as it set off down a treelined boulevard separating eastern Paris’ districts from the Marais, the city’s oldest Jewish quarter.

“I have no problem marching with Hamas. Hamas has been victim of a campaign of disinformation,” Mark Cramer, a 62-year-old a former journalist from New York and founder member of Paris group “Americans Against the War.”

Cramer put the blame for the collapse of the Middle East ceasefire on Israel. “There was a medieval siege against Gaza. That siege was violent. People were starving,” he said.

Some 3,800 police were deployed, equipped with riot shields and body armour, but remained discreetly in side streets as the crowd marched on under a sea of Palestinian and Hezbollah flags.

Despite the biting winter chill, organisers claimed a turnout of 100,000.

“We want to point to the hypocrisy of an international community which votes for tons of resolutions that it never enforces,” declared Olivier Besancenot, the well-known leader of France’s Revolutionary Communist League.

While the groups organising the demonstration focused their slogans on the suffering of Palestinian civilians, many homemade banners declared “Zionism equals Nazism” and depicted Israeli flags emblazoned with Swastikas.

Elsewhere in France, smaller crowds gathered for similar demonstrations in several cities. In Nice, on the Mediterranean Riviera, protesters smashed the windows of a McDonald’s restaurant and threw stones at the Ruhl casino.

“McDonald’s because they’re American, they’re the paymasters,” one marcher said.

In the northern industrial city of Lille around 10,000 protesters gathered, according to both police and organisers.

Other protests took place in Toulouse in the southwest and Mulhoise in the east.