All Entries in the "Foreign Policy" Category

Afghan War Leaks Expose Costly Folly

WikiLeaks Bombshell Docs Paint Afghan War as Utter Disaster — Will We Finally Stop Throwing Money and Lives at This Catastrophe?

By Ray McGovern:

The brutality and fecklessness of the U.S.-led war in Afghanistan have been laid bare in an undisputable way just days before the House of Representatives is scheduled to vote on whether to throw $33.5 billion more into the Afghan quagmire, when that money is badly needed at home.

On Sunday, the Web site Wikileaks released some 92,000 documents written mostly by U.S. forces in Afghanistan during a six-year period from January 2004 to December 2009. The authenticity of the material – published under the title “Afghan War Diaries” – is not in doubt.

The New York Times, which received an embargoed version of the documents from Wikileaks, devoted six pages of its Monday editions to several articles on the disclosures, which reveal how the Afghan War slid into its current morass while the Bush administration concentrated U.S. military efforts on Iraq.

Wikileaks also gave advanced copies to the British newspaper, The Guardian, and the German newsmagazine, Der Spiegel, thus guaranteeing that the U.S. Fawning Corporate Media could not ignore these classified cables the way it did five years ago with the “Downing Street Memo,” a leaked British document which described how intelligence was “fixed” around President George W. Bush’s determination to invade Iraq.

Full Story: Consortiumnews.com.

Exclusive: Eager for new ‘Curveball,’ CIA may have been duped by Iranian double agent

Despite an Iranian claim that scientist Shahram Amiri was a double agent who gave Iran an “intelligence victory” over the CIA, US officials continue to maintain the line that Amiri had been a valuable long-term US intelligence asset who had provided valuable intelligence on the Iranian nuclear program before he returned to Iran out of concern for the family he had left behind.

A change of heart by a defector is far from unknown in the history of US espionage, but some former intelligence officials wonder if the CIA’s failure to exercise normal caution in its handling of Amiri could have led them to fall for a “dangle” — someone who offers to spy on his own government but who is actually working for that government’s intelligence service.

rsilogo Exclusive: Eager for new Curveball, CIA may have been duped by Iranian double agentFormer CIA official Philip Giraldi, who was briefed on the case last week by CIA officials with direct knowledge of it, said those who had been responsible for handling Amiri still did not regard him as a double agent. But he said an investigation had been opened by the CIA on the procedures that had been used in the case, indicating a serious concern that Amiri might have been deceiving the agency all along.

The Sunday Telegraph reported last week that a former CIA operative said the CIA was indeed investigating whether Amiri had been a double agent. The Washington Post’s Greg Miller quoted a “former high-ranking CIA official” as saying, “They have to go over everything he did provide and put a big caveat on it.”

Full Story: Exclusive: Eager for new ‘Curveball,’ CIA may have been duped by Iranian double agent | Raw Story.

Stop the Madness! People Should be SHOCKED

Ernest F. Hollings:

Our only hope is for President Obama to enforce our trade laws to protect the economy and make it profitable for Corporate America to produce in the United States in the trade war.

People are shocked to learn:

1. That almost a year before the recession, in February 2007, the Princeton economist, Alan Blinder, estimated that in ten years we would be losing 30 to 40 million jobs to offshoring. That’s about 300,000 jobs a month lost to offshoring.

2. President Obama has stimulated to save or create jobs lost from the recession, but totally ignores the 300,000 jobs lost to offshoring.

3. President Bush and the Federal Reserve stimulated the economy $7.5 trillion during his eight year term, and household debt during the same time stimulated the economy another $7 trillion for a total of a $14.5 trillion stimulation. President Obama stimulated the economy his first year over $1 trillion, and we have already stimulated the economy this year $1.142 trillion (6/9/10) with four months to go. So we have borrowed and stimulated the economy over the past nine and a half years $16.6 trillion, and the private sector is only creating 41,000 new jobs a month.

Full Story: Stop the Madness! People Should be SHOCKED | Economy In Crisis.

China’s Threat to National Security; What Will Congress Do?

In October 2008, Chinese officials threatened to liquidate their vast holdings of foreign reserves- $1.33 trillion- to counteract congressional pressure to revalue their currency.

Foreign governments with interests adverse to the U.S. are stockpiling vast sums of money and buying out our country for strategic purposes that threaten national security.

This alarming reality has prompted a congressional hearing today about the threats posed by China’s $200 billion government controlled sovereign wealth fund.

From Businessweek:

Several congressional Democrats and academics on Thursday will warn that investment by China’s government-run funds carries national security risks.

….

“What we’re seeing is not merely private foreign investment — it is foreign government investment in our infrastructure and banking system”- Senator James Webb, D-Va

Using investments against American interests isn’t new; in fact China threatened America recently with similar action: In October 2008, Chinese officials threatened to liquidate their vast holdings of foreign reserves- $1.33 trillion- to counteract congressional pressure to revalue their currency.

Full Story: China’s Threat to National Security; What Will Congress Do? | Economy In Crisis.

Free Trade is a Failure

No other country loses so many jobs, so much productive, and so much investment capital to international trade. No country can even come close to losing so much money.

Universities in the United States produce some of the best economists, engineers, historians, scientists, and political theorists in the world. The quality of education up the high school level has fallen off precipitously in the past few decades, but for those who strive for higher education there is virtually no better place to do it than here in the U.S.

Unfortunately, while the brain trust of academia has largely been unable to breech the ivory tower that is Washington politics. Our politicians have to deal with issues on a daily basis that affect every sector of the economy, and ever sector of everyday life in America. Yet the vast majority of them are attorneys. Their professional training is in litigation; not civil engineering, economics, or hard sciences.

After sprinkling in a few medical doctors and former military service members, and a growing number of former corporate executives, you have accounted for nearly every elected official in our nation’s capital.

Full Story: Free Trade is a Failure | Economy In Crisis.

APEC and America’s Dangerous Free Trade Deception

We know for a fact that America’s listless pursuit of “free trade at all costs” has resulted in lost jobs, reduced GDP, and weakened national security. The figures are undeniable.

On July 14 the National Center for APEC (NCAPEC) held a private get together just inches from the White House at the Willard Intercontinental hotel. Aside from the various businesses and trade groups in attendance, the private party also played host to United States Trade Representative Ron Kirk, and Representative Kevin Brady (R-Texas). Senator Max Baucus (Montana), after a long delay, arrived just in time to provide the keynote.

The room erupted into a congratulatory cacophony when the ambassador from the Republic of Korea was introduced and thanked for his hard work on forging ahead with the Korea-U.S. Free Trade Agreement. According to both Senator Baucus and Representative Brady, ratifying this treaty in Congress will be the most important thing our national legislature accomplishes in the next year.

In the avenue of international commerce, our political leadership has no goals. They have empty ideals and failed methodology. They ingratiate themselves with organizations like APEC in order to forward their own positions, but they provide nothing substantive and lasting to the people they represent.

Full Story: APEC and America’s Dangerous Free Trade Deception | Economy In Crisis.

Netanyahu In 2001: ‘America Is A Thing You Can Move Very Easily’

A newly released video of Israeli Prime Minister Benjamin Netanyahu could add some additional strain to the sometimes tense relationship between him and President Obama.

In the video, which is from 2001, Netanyahu — who reportedly did not know his speech was being recorded — speaks frankly in Hebrew about relations with the Clinton White House and the peace process.

As noted in Haaretz, Netanyahu seems to boast of his knowledge of the US by saying, “I know what America is. America is a thing you can move very easily, move it in the right direction. They won’t get in their way.”

He also boasts of manipulating the U.S. in the ongoing peace process, as the Washington Post points out:

Full Story: Netanyahu In 2001: ‘America Is A Thing You Can Move Very Easily’.

Petraeus for McChrystal: Lipstick on a Pig

The Senate voted unanimously to confirm Gen. David Petraeus to replace fired Gen. Stanley McChrystal to lead the International Security Assistance Force in Afghanistan. General Petraeus stepped down as the head of US Central Command and will continue with General McChrystal’s counterinsurgency strategy in Pakistan and Afghanistan.

Many view President Obama’s decision to replace McChrystal with Petraeus as a bold and brilliant political strategy. President Obama was able to shift the focus away from McChrystal and the Rolling Stone article by demonstrating a level of leadership that, up to this point, many wondered if he had.

If the issue were simply a political one, all would be better at 1600 Pennsylvania Avenue, but it’s not. In his June 23 statement in the Rose Garden introducing General Petraeus, President Obama said, “… this is a change in personnel but it is not a change in policy.” Mr. President, the policy is the problem. Replacing McChrystal with Petraeus is a new face on a failed strategy. Without a clear and substantive change in policy, a change in leadership is simply rearranging the deck chairs on the Titanic or putting lipstick on a pig.

Full Story: t r u t h o u t | Petraeus for McChrystal: Lipstick on a Pig.

Administration Warned That It Must Do More To Curb China’s Currency Manipulation

Lawmakers and others are warning administration officials that they must do more to ensure a more fairly-valued Chinese currency, or otherwise put American jobs and President Obama’s hopes to grow the U.S. economy in jeopardy.

The U.S. Treasury issued a report Thursday designating the Chinese currency as undervalued — but stopped short of designating China as a currency manipulator.

China’s undervalued yuan, also called renminbi, artificially depresses the cost of Chinese products and falsely increases the price of American goods. The resulting lopsided trade has closed American factories and cost American jobs.

Full Story: On The Hill: Administration Warned That It Must Do More To Curb China’s Currency Manipulation.

The Case Against Kissinger Deepens, Continued

Scott Horton — Harper’s Magazine : -

The Case Against Kissinger,” built a strong though circumstantial case connecting Henry Kissinger to a series of assassinations in Chile….

As I noted earlier, Christopher Hitchens’s two-part 2001 article, “The Case Against Kissinger,” built a strong though circumstantial case connecting Henry Kissinger to a series of assassinations in Chile around the time of the overthrow and killing of President Salvador Allende. The evidence has continued to grow since Hitchens’s arguments appeared. On Friday, the release of a taped conversation between Kissinger and President Richard M. Nixon added more. Jeff Stein reports in the Washington Post’s Spytalk blog:

President Richard M. Nixon and his national security adviser, Henry A. Kissinger, joked that an “incompetent” CIA had struggled to successfully carry out an assassination in Chile, newly available Oval Office tapes reveal. At the time, in 1971, Nixon and Kissinger were working to undermine the socialist administration of Chilean President Salvador Allende, who would die during a U.S.-backed military coup two years later. One of the key figures to stand in the way of Chilean generals plotting to overthrow Allende was the Chilean army commander-in-chief, Rene Schneider, who was killed during a botched kidnapping attempt by military right-wingers in 1970.

The new tapes won’t end the argument, but they add persuasive evidence that the CIA was at least trying to eliminate Schneider, and perhaps with the connivance of Nixon and Kissinger. The key exchange between the president and his national security adviser occurred on June 11, 1971. They were discussing another assassination in Chile, this time of one of Allende’s political adversaries, former Christian Democratic party interior minister Edmundo Pérez Zujovic, who was murdered on June 8, 1971, by an extreme leftist group.

Here’s a transcript of the tape:

Full Story: The Case Against Kissinger Deepens, Continued—By Scott Horton (Harper’s Magazine).

US taxpayers’ Afghan aid money buys rich Afghans’ Dubai villas

You already might have heard that it costs the United States $1 million for each solider per year in Afghanistan, to cover the cost of the soldiers’ benefits, troop transports and other material. What you might not have heard is that your hard earned taxpayer dollars are also being used to buy well-connected Afghans posh villas in Dubai.

Der Spiegel remarks curtly, “Amid concerns that the money could be the result of corruption, American politicians have temporarily cut off aid to the Afghan government.” The German daily adds:

…Huge amounts of money [are] regularly being secreted out of Afghanistan by plane in boxes and suitcases. According to some estimates, since 2007, at least $3 billion (€2.4 billion) in cash has left the country in this way. The preferred destination for these funds is Dubai, the tax haven in the Persian Gulf. And, given the fact that Afghanistan’s total GDP amounts to the equivalent of $13.5 billion, there is no way that the funds involved in this exodus are merely the proceeds of legal business transactions…

Full Story: US taxpayers’ Afghan aid money buys rich Afghans’ Dubai villas | Raw Story.

Newsweek editor asks: ‘Why are we fighting a major war in Afghanistan?’

International editor questions war in country with ‘fewer than 100 al Qaeda fighters’

Since the resignation of General Stanley McChrystal as the commander of US forces in Afghanistan and CIA Director Leon Panetta’s admission a week ago that there may be no more than fifty to a hundred al-Qaeda members in that nation, there have been increasing signs of a loss of support for the Afghan War.

Fareed Zararia, the editor of Newsweek’s international editions and CNN host, criticized the war in his strongest terms yet on his CNN program Sunday. “If Al Qaeda is down to a hundred men there at the most,” Zakaria asked, “why are we fighting a major war?”

Noting that there were more than a hundred deaths among NATO soldiers last month and that the war is estimated to cost the US more than $100 billion this year alone, Zararia wondered again,”Why are we fighting this major war against the Taliban? … If al-Qaeda itself is so weak, why are we fighting against its allies so ferociously?”

Full Story: Newsweek editor asks: ‘Why are we fighting a major war in Afghanistan?’ | Raw Story.

Against counterinsurgency in Afghanistan

Bulletin of the Atomic Scientists:

“…. you could put Mother Teresa in charge of Afghanistan and, with flows of resources of that magnitude, she would be unable to prevent the kind of corruption we see in Afghanistan today.”

It says something about American politics that Gen. Stanley McChrystal was not fired because U.S. casualties in Afghanistan are running at record levels, because the much vaunted Marja initiative has failed, or because the Kandahar offensive is already in trouble during its preliminary rollout. No, he was fired because he and his team embarrassed the White House with carelessly frank talk to a journalist. “This is a change in personnel, but not a change in policy,” said President Barack Obama in announcing General McChrystal’s dismissal. Or, in the words of Rep. James McGovern, we have the “same menu, different waiter.”

However, the real story should not be the change in personnel but the continuation of a failed policy, and there is abundant evidence that the policy is failing–both in the Rolling Stone article that got General McChrystal fired and in other recent media reports. Coalition casualties are steadily rising, and this month is the deadliest yet with over 46 U.S. and 95 coalition troops killed already. Over the past year, IED attacks have doubled. The Marja campaign, intended to model the power of the new counterinsurgency strategy, is failing: The Taliban are more popular in Marja than the corrupt official government with which the U.S. is allied and, having melted away during the front-page U.S. military offensive, Taliban fighters are now back in force. General McChrystal himself referred to Marja as “a bleeding ulcer” (a much more significant quote than what his aides might have called Vice President Joe Biden). The Kandahar campaign, for which Marja was supposed to be a glorious dress rehearsal, is months behind schedule in the face of opposition from local elders and second thoughts from an ill-prepared Afghan government. So tenuous is U.S. control of the countryside that coalition forces cannot move essential supplies along major transport routes without paying warlords hundreds of dollars per truck in protection money, some of which gets passed on to the Taliban fighters sworn to kill U.S. soldiers. Most devastating of all (and the least reported in secondary media accounts), the Rolling Stone article quotes American grunts on the frontlines saying they have lost faith in the U.S. counterinsurgency strategy. And the U.S. ambassador to Afghanistan, Karl Eikenberry, has become like Robert McNamara in Vietnam, telling his government in private that counterinsurgency is not working, only to fall in line behind the policy in public. Finally, the U.S. is losing the war on the home front too, with the Christian Science Monitor reporting that only 41 percent of Americans now believe that the war in Afghanistan can be won, while 53 percent of Americans disapprove of the way Obama is managing it.

Full Story: Against counterinsurgency in Afghanistan | Bulletin of the Atomic Scientists.

Death by Remote: But Is It Legal?

As the Barack Obama administration continues to roll out justifications for its policy of targeting U.S. citizens and others thought to be attacking U.S. troops, legal and national security experts are pondering a central question: What if there’s a mistake and the wrong person gets killed?

There are no do-overs. It is a death sentence. That, in fact, has already happened. A Reuters cameraman was killed by a U.S. drone strike when the operator mistook his camera’s long-range lens for a rocket-propelled grenade. Nevertheless, a top Obama counterterrorism official is defending the government’s right to target U.S. citizens perceived as terror threats for capture or killing, citing the example of the renegade al Qaeda-linked cleric Anwar al- Awlaki.

Al-Awlaki, 39, was born in Las Cruces, New Mexico, and is an Islamic lecturer who is a dual citizen of the U.S. and Yemen. He is a spiritual leader and former imam who has purportedly inspired Islamic terrorists. His sermons are said to have been attended by three of the 9/11 hijackers.

Full Story: Death by Remote: But Is It Legal? – IPS ipsnews.net.

Sober Up

Ernest F. Hollings:

Few people realize that for the past fifty years the policy of the United States government has been to get rid of jobs.

Beginning with the Marshall Plan after World War II the government sent money, equipment and expertise to revive the economies of Europe and the Pacific Rim. In doing so, the U. S. called for open markets and “free trade.” Europe responded, but Japan never opened its market. Instead, Japan started a trade war for market share by closing its domestic market, subsidizing and selling its exports at cost, and making up the profit in the closed market. It worked. Today, Toyota is #1, while Ford, GM and Chrysler struggle. We have yet to force Japan to open its market. We in Congress tried, but numerous attempts to open Japan’s market and enforce our trade agreements were thwarted by the White House or vetoed by the president. Our attempts were all led by Corporate America to protect their investment and jobs in country. With the advent of NAFTA with Mexico and Permanent Normal Trade Relations with China, Corporate America gave up and joined production in China, India and Mexico. Jobs hemorrhaged. Two years ago Alan Blinder, the Princeton economist, estimated that the nation would lose thirty to forty million jobs in ten years to offshoring. The economy boat has sprung leaks from derivatives and credit default swaps. With stimulus, we bail as fast as we can to stop the leaks, but do nothing to plug the hole in the hull ripped by offshoring. Stimulation can be a total success and we’ll still loss more jobs than are created.

Full Story: Sober Up | Economy In Crisis.

Move the Money, Starve the Empire

We can’t address the economic crisis blighting neighborhoods throughout the United States without moving money away from war.

June 26 may have been the last day of the U.S. Social Forum (USSF) in Detroit, but it might very well be the emergence of a more powerful antiwar movement in this country.

The U.S. Social Forum is a meeting place for progressive social justice organizations to discuss issues, strategies, and ideas for building a social movement in this country. The sessions on the antiwar and anti-militarism track made several linkages: between the domestic economic crisis and the bloated military budget, the expansion of U.S. bases and the displacement of farmers and indigenous peoples from their land and livelihoods, and the rise of militarism and violence against women.

We can’t address the economic crisis blighting neighborhoods throughout the United States without moving money away from war. That’s the only part of the national budget not being cut. Organizers at the USSF united two disparate sectors. One is comprised of grassroots base-building organizations with multicultural constituencies working to secure jobs, education, and services. The other includes national peace organizations with mostly white, middle-class membership.

Full Story: Foreign Policy In Focus | Move the Money, Starve the Empire.

Why should we trust the IMF?

Dean Baker:

The IMF is shouting about the need for austerity today, but it was strangely quiet during the build-up of the bubble that got us here

Is advice from the IMF better than advice from a drunk in the street? That is the question that people around the world should be asking as the International Monetary Fund dishes out its prescription for austerity. The IMF programme calls for cutbacks in government support for healthcare, pensions, and a wide range of other public services. It also calls for weakening labour market regulations that provide workers with job security.

These recommendations are being given in a context where the world economy is suffering from a massive shortfall of demand. In other words, tens of millions of people are unemployed right now because there is not enough spending to keep them employed. The IMF’s programme is almost certain to reduce spending further leading to even larger shortfalls in demand and more unemployment.

But, the IMF says that we should trust them. The question we should all be asking is: “why?”

Full Story: Why should we trust the IMF? | Dean Baker | Comment is free | guardian.co.uk.

G-20 Leaders Pledge To Halve Deficits By 2013

Wary of slamming on the stimulus brakes too quickly but shaken by the European debt crisis, world leaders pledged Sunday to reduce government deficits in richer countries in half by 2013, with wiggle room to meet the goal.

Leaders of 20 major industrial and developing countries generally sided with cutting spending and raising taxes, despite warnings from President Barack Obama that too much austerity too quickly could choke off the global recovery.

“Serious challenges remain,” they cautioned in a closing statement. “While growth is returning, the recovery is uneven and fragile, unemployment in many countries remains at unacceptable levels, and the social impact of the crisis is still widely felt,” according to the document from the Group of 20 major industrial and developing nations.

via G-20 Leaders Pledge To Halve Deficits By 2013.

Financial Regulation Bill Contains Measure To Address ‘Conflict Minerals’

Congressional negotiators reached a deal yesterday to reconcile the House and Senate versions of financial regulatory reform. The bill contains an obscure provision “that requires any publicly traded company that uses certain minerals to file reports annually with the Securities and Exchange Commission certifying whether the minerals originated in Congo or neighboring countries.” Many of the minerals used in electronic devices like cell phones and computers are mined in the Congo, a country “plagued by regional conflict and a deadly scramble for its vast natural resources.”

The mineral sales finance “multiple armed groups, many of whom use mass rape as a deliberate strategy to intimidate and control local populations.” The provision in the financial regulation bill is designed to, according to its sponsor Sen. Sam Brownback (R-KS), “bring accountability and transparency to the supply chain of minerals used in the manufacturing of many electronic devices.”

The Center for American Progress’ Enough Project helped advocate for the inclusion of this provision. Enough is an organization “helping to build a permanent constituency to prevent genocide and crimes against humanity.” Earlier this week, Enough sat down with Sen. Blanche Lincoln’s (D-AR) team to alleviate “the Senator’s concern that auditing minerals supply chains will cost too much.” Enough’s Jenny Russell addresses the argument that the provision is too expensive:

Full Story: Think Progress » Financial Regulation Bill Contains Measure To Address ‘Conflict Minerals’.

War for Resources: From Slander to Clarion Call

David Sirota

Reading this week’s New York Times headline—“U.S. Identifies Vast Riches of Minerals in Afghanistan”—many probably wondered how this information was being presented as “news” in 2010. After all, humanity has long been aware of the country’s vast natural resources. As Mother Jones magazine’s James Ridgeway said after recalling past public accounts of the ore deposits, “This ‘discovery’ in fact is ancient history tracing back to the times of Marco Polo.”

The intrigue in the Times dispatch, then, is not Afghanistan’s “huge veins of iron, copper, cobalt, gold and critical industrial metals” that the paper quotes Pentagon officials gushing about—it is the gushing itself. Indeed, the real question is: What would prompt the government to portray well-known geology as some sort of blockbuster revelation?

The Atlantic’s Marc Ambinder proffers a convincing answer. Noting the military’s coordinated quotes in the Times piece, he writes that the Pentagon is probably trying to bolster Americans’ support for the flagging Afghanistan campaign by “publicizing or re-publicizing valid but already public information about the region’s potential wealth.”

Full Story: David Sirota: War for Resources: From Slander to Clarion Call – Truthdig.

Trade war? Bill would ban government from buying Chinese

The US government would be barred from buying any Chinese goods or services under legislation unveiled Friday by US senators angry at Beijing’s policy of buying only from domestic sources.

The prohibition would last until China, a World Trade Organization (WTO) member for nearly 10 years, signs on to the WTO’s “Agreement of Governmental Procurement,” enabling Washington to challenge Beijing’s procurement rules.

“China continues to discriminate against American businesses, refusing to let our companies bid on Chinese government contracts,” said Democratic Senator Debbie Stabenow, the measure’s lead author.

Full Story: Trade war? Bill would ban government from buying Chinese | Raw Story.

Ag Department Cuts Ties with U.S. Food Inspector in China

An investigation of the company’s Chinese operation found at least 10 different facilities in which a conflict of interest was evident.

One of the top American inspectors of organic foods in China has been banned from operating there by the U.S. Agriculture Department after conflicts were discovered, The New York Times reports.

The Nebraska-based Organic Crop Improvement Association, a private contractor for the Agriculture Department, allegedly partnered with a Chinese government agency and used its officials to inspect state-controlled farms. The agents were given the ultimate decision on whether or not a food product would receive the USDA certified label that customers would eventually see in stores.

China, one of the largest exporters of agricultural products to the U.S. at $3 billion worth of goods a year, has 669 certified organic producers. OCIA was responsible for inspecting roughly one-third of those operations, according to The New York Times.

Full Story: Ag Department Cuts Ties with U.S. Food Inspector in China | Economy In Crisis.

U.S. Unilaterally Disarming Itself in Trade War

While most politicians go out of their way to avoid the term “trade war,” which harkens back to the days of the Depression and protectionist tariffs, the fact of the matter is that the United States is currently engaged in just such a battle.

Unfortunately, the U.S. is unilaterally disarming itself in the trade war by allowing China and other nations to get away with mercantilist practices with no consequences.

“The USA has laws against: unsafe working conditions, pollution, child labor, sub-minimum wages, theft of intellectual property, etc. Violating those laws is considered cheating. If our government keeps our companies from getting an unfair price advantage by ignoring those laws, why do they let China do it?” Jeff Putnam writes at MFRTech.com.

Full Story: U.S. Unilaterally Disarming Itself in Trade War | Economy In Crisis.

Present Free Trade Aggreements are Destroying Us and 16 Senators are Pushing for More

Proposed free trade agreements  contributed to the near-collapse of the economy.

Proposed NAFTA-style free trade agreements with Columbia, South Korea and Panama have stalled in Congress for several years now as lawmakers increasingly oppose the policies that some believe contributed to the near-collapse of the economy.

Editor’s Note: Thanks to “free trade” agreements like NAFTA and the WTO, the United States is facing economic disaster on a scale few nations have ever experienced. The idea that any of our leaders would continue on this reckless path of economic destruction should make us question who these people are working for. It is clear that America is losing a major economic war by relinquishing management and control of the economy through the effects of our failed “free trade” agreements. Now we have no choice but to conform our laws, regulation and administrative procedures to the will of countries we signed these agreements with, instead of to our own Constitution. Why would we want to keep shooting ourselves in the foot? This must stop now!

A group of 16 Republican Senators, led by Sen. Orrin Hatch (UT), sent a letter to President Barack Obama urging him to move forward with a trio of stalled free trade agreements leftover from the Bush administration.

Proposed NAFTA-style free trade agreements with Columbia, South Korea and Panama have stalled in Congress for several years now as lawmakers increasingly oppose the policies that some believe contributed to the near-collapse of the economy. Critics of free trade had hoped that inaction on the trade pacts signaled their defeat. But, Hatch and his 15 cohorts are trying to revive the once-dead trade pacts.

Full Story: Present Free Trade Aggreements are Destroying Us and 16 Senators are Pushing for More | Economy In Crisis.

US backs international role in flotilla probe

The United States backed calls Tuesday for international participation in Israel’s probe into its deadly raid on a Gaza-bound aid flotilla saying it was “essential” to ensure credibility.

“We understand that the international participation in investigating these matters will be important to the credibility everybody wants to see,” State Department spokesman Philip Crowley said.

“We recognize that international participation… would be an essential element to putting this tragedy behind us and then hopefully creating some additional trust and momentum to get us to our ultimate destination, which is an agreement that ends the conflict once and for all.”

Full Story: US backs international role in flotilla probe – Yahoo! News.

US demands N. Korea be made to pay for ‘provocations’

The United States demanded North Korea pay a price for allegedly sinking a South Korean warship even as Washington and its Asian allies brace for possible “provocations” by the Pyongyang regime.

In a show of solidarity, US, Japanese and South Korean defence chiefs met in Singapore to discuss punitive steps against North Korea as the UN Security Council prepares to take up the crisis triggered by the sinking of the Cheonan.

US Defense Secretary Robert Gates told his counterparts that “it’s important we have a unified front to deter further provocations,” his press secretary, Geoff Morrell, told reporters.

Full Story: US demands N. Korea be made to pay for ‘provocations’ | Raw Story.

Prestowitz: What U.S. Industrial Policy Gets Wrong

The growing U.S. trade deficit and the decline of American manufacturing have both been explained away as “fair bargains”: We get inexpensive goods from abroad, and in turn shift our economy from commodity manufacturing to intellectual innovation. But according to Clyde Prestowitz, author of The Betrayal of American Prosperity, this has actually been a terrible deal.

Prestowitz spoke with Eric Schurenberg about unfair competition, protectionism, and the difference between smart and dumb industrial policy.

The standard explanation is that fair trade and open trade has been a good deal for Americans. You disagree. Why?

Well, I think that we often don’t have fair trade or open trade, and in fact, I think it’s a misnomer to talk about trade. What we have is globalization. Trade is: I produce something, ship it to you, you produce something ship it to me. What we have now is global corporations — I put my factory in your country, you put your factory in my country. We have massive cross-border flows of capital and technology. Trade theory assumes that those cross border technology and capital flows don’t take place. But they obviously do take place. So when we talk free trade, it really doesn’t describe the situation that we have globally, and because of that, when we talk about the benefits we’re not really thinking about the totality of the situation.

Full Story: TradeReform.org – Prestowitz: What U.S. Industrial Policy Gets Wrong.

An Emerging Global Threat

No matter how many trillions we borrow from China to throw at the U.S. economy, there can be no long-term recovery without a revitalized U.S. manufacturing base

A U.S.-CHINA TRADE WAR IS RAPIDLY brewing, as President Barack Obama pushes China to adopt a “market-oriented exchange-rate policy” and Premier Wen Jiabao sharply retorts that the yuan isn’t undervalued. Meanwhile, 130 members of the U.S. House of Representatives are pressing the Treasury Department to brand China a “currency manipulator” and to impose countervailing duties, while China promises swift retaliation.

China’s fixed exchange-rate policy isn’t harming just the U.S. It is also threatening the global economic recovery, even as an artificially weak yuan has given rise to what Premier Wen has branded Public Enemy No. 1 in China — rapidly rising inflation.

In fact, Wen’s claim that the yuan is fairly valued is ludicrous. Every credible study draws the opposite conclusion, while the International Monetary Fund and all its major trading partners — from Brazil, Europe and Russia to Japan, South Korea and the U.S. — have called on China to raise the value of its currency.

Full Story: An Emerging Global Threat | Economy In Crisis.

Army Plans $100 Million Special Ops HQ in Afghanistan

The Army is looking to spend as much as $100 million to expand its Special Operations headquarters in northern Afghanistan.

All around Afghanistan, from Kandahar Airfield to the Bagram jail, the U.S. military is on a building spree, spending hundreds of millions of dollars on wartime encampments. By one count, America and its allies now have 700 bases in Afghanistan. But most of the construction — and most of the extra troops “surging” into the country — are going to the violent south and the dangerous east.

Until recently, northern Afghanistan was considered quiet. Regional hub Mazar-e-Sharif was the first major city in Afghanistan to be taken from the Taliban. But, especially in nearby Kunduz province, violence is bubbling up once again.

Full Story: Army Plans $100 Million Special Ops HQ in Afghanistan | Danger Room | Wired.com.

Pelosi: ‘I Don’t Want To Go Into A Discussion Of The Blockade Of Gaza’

Today, House Speaker Nancy Pelosi (D-CA) held a conference call with bloggers, where she received questions — including from ThinkProgress — about Israel’s raid of the flotilla carrying humanitarian aid and activists bound for Gaza. Pelosi refused to speak directly about whether Israel’s blockade is causing a humanitarian crisis in Gaza, saying that the focus should instead be on solving Middle East peace through a two-state solution:

PELOSI: Well, first of all, this incident, as you mentioned, is very recent. There is very strong interest in getting the facts and a transparent and credible investigation is what people are calling for — that’s what the White House has mentioned, and that’s what I support as well. We have to have the facts on which to make a judgment about how we go forward. I don’t know — I appreciate what you’re saying that people are suffering from different physical challenges because of the blockade. I don’t know that. I know blockades have consequences. … But the fact is, this is a terribly regrettable situation. I regret the loss of life first and foremost, and again, call for a credible and transparent investigation about how this came to be. […]

TP QUESTION: Do you think the blockade of Gaza should be lifted because it’s causing undue suffering on the people in the region?

PELOSI: [...] I don’t want to go into a discussion of the blockade of Gaza. I hope that we can end that by having a resolution in terms of Middle East peace. That’s where we spend our time, not necessarily on one particular tactics of one country or the next, but on the bigger picture, which is we must have peace in the Middle East. It must respect both sides, it must have a two-state solution — and I emphasize the solution part of it, so that both sides feel respected and well-treated and safe as they go forward with the new peace agreement — and I hope that whatever actions are taken on both sides, it’s in furtherance of that peace.

Full Story: Think Progress » Pelosi: ‘I Don’t Want To Go Into A Discussion Of The Blockade Of Gaza’.

The American Century Is So Over

Irrespective of their politics, flawed leaders share a common trait. They generally remain remarkably oblivious to the harm they do to the nation they lead. George W. Bush is a salient recent example, as is former British Prime Minister Tony Blair. When it comes to foreign policy, we are now witnessing a similar phenomenon at the Obama White House.

Here is the Obama pattern: Choose a foreign leader to pressure. Threaten him with dire consequences if he does not bend to Washington’s will. When he refuses to submit and instead responds vigorously, back off quickly and overcompensate for failure by switching into a placatory mode.

In his first year-plus in office, Barack Obama has provided us with enough examples to summarize his leadership style. The American president fails to objectively evaluate the strength of the cards that a targeted leader holds and his resolve to play them.

Full Story: The American Century Is So Over | CommonDreams.org.

Report: US weighs military option in Pakistan

Planning for a retaliatory attack was spurred by ties between alleged Times Square bomber Faisal Shahzad and elements of the Pakistani Taliban, the Post said in an article posted on its website Friday night, quoting unidentified senior military officials.

The military would focus on air and missile strikes but also could use small teams of U.S. Special Operations troops currently along the border with Afghanistan, the Post said.

Airstrikes could damage the militants’ ability to launch new attacks but also might damage U.S.-Pakistani relations.

Full Story: Report: US weighs military option in Pakistan – Yahoo! News.

OPS: well, if he’s forced to pull out troops from Iran (not the mercenaries, just the US Troops) we can’t expect him to just bring them home…when they’re already over there….

Japan PM in deal to keep US base on Okinawa

Japan and the US say they have agreed to relocate a controversial American military base on the island of Okinawa.

The two sides issued a statement saying the Futenma base would be moved from its current urban location to a less crowded part of the Japanese island.

Japanese PM Yukio Hatoyama recently backed down on an election pledge to move the base off Okinawa altogether, angering many locals.

A coalition partner who refused to back the deal has lost her cabinet post.

Full Story: BBC News – Japan PM in deal to keep US base on Okinawa.

The IMF Knows How to Help America

Thom Hartmann -

The Financial Times is reporting that leading nations are still piling up debt even though there’s technically been an economic recovery. In particular, the IMF is looking at US debt over the next decade and predicting that it’ll be unsustainable if we don’t do something quick. Of course, what conservatives want to do is slash Social Security and Medicare while letting the government keep all those funds we’ve paid into the system.

Full Story: The IMF Knows How to Help America | The Smirking Chimp.

Darkness at the End of the Tunnel

When will we wake up to the realization that some of the agreements we have signed, most specifically our agreement with the World Trade Organization (WTO) and our agreement with Canada and Mexico, the North American Free Trade Agreement (NAFTA), are preventing us from doing what is in our best interest?

Currently, we are being controlled and directed – told what to do – by other nations, for their benefit and to our detriment. Our current direction in so-called “free trade” is not just hurting us – it is destroying us. One look at our current condition and present direction will clearly show we are in a mode of self destruction.

Every year the U.S. spends $1 trillion on the military, this money is stretched too thin all across the globe, yet we have no one protecting us at home economically. Despite all our fire power, we absolutely cannot determine our own fate as members of the WTO. We are now guided economically by the agreements we signed. We must, must, must be our own masters. We must be able to run our own country for our own benefit, which we, attributable to our agreements with the WTO and NAFTA, are not allowed to do.

Full Story: Darkness at the End of the Tunnel | Economy In Crisis.

US, China, Russia agree on ’strong’ Iran sanctions: Clinton

US Secretary of State Hillary Clinton announced Tuesday that the major world powers have clinched “strong draft” UN sanctions in a response to an Iran-Turkey-Brazil deal.

In a surprise announcement before the Senate Foreign Relations committee, Clinton said the draft resolution would be circulated later Tuesday to the 15-member UN Security Council, which includes Brazil and Turkey.

“This announcement is as convincing an answer to the efforts undertaken in Tehran over the last few days as any we could provide,” Clinton told senators.

Full Story: US, China, Russia agree on ’strong’ Iran sanctions: Clinton | Raw Story.

Study: US missile defense plans based on ‘technical myths’

Scientists fear ‘flawed and dangerous’ plan will result in ‘foreign policy disaster’

US missile defense plans are based on “technical myths” and interceptors have mostly failed to knock out incoming warheads in military tests, a new study argues.

Two American scientists reviewed 10 tests of the SM-3 “kill vehicle,” designed to take out ballistic missiles, and concluded that the interceptor succeeded in directly hitting mock warheads in only one or two cases.

“This means that, in real combat, the warhead would have not been destroyed but would have continued toward the target and detonated in eight or nine of the 10 SM-3 experimental tests,” wrote George Lewis of Cornell University and Theodore Postol of MIT in the latest issue of “Arms Control Today.”

Full Story: Study: US missile defense plans based on ‘technical myths’ | Raw Story.

Protectionism Didn’t Cause the Great Depression

The debate over free trade is riddled with myth after myth. One that keeps resurfacing again and again, no matter how many times it is discredited, is the idea that protectionism caused the Great Depression. One occasionally even hears that the same protectionism—specifically the Smoot-Hawley tariff of 1930— was responsible in significant part for World War Two! This is nonsense dreamed up for propaganda purposes by free traders, and can easily be debunked.

Let’s start by reminding ourselves of a basic fact: the Depression’s cause was monetary. The Federal Reserve had allowed the money supply to balloon excessively during the late 1920s, piling up in the stock market as a bubble. The Fed then panicked, miscalculated, and let the money supply collapse by a third by 1933, depriving the economy of the liquidity it needed to breathe. Trade had nothing to do with it.

The Smoot-Hawley tariff was simply too small a policy change to have so large an effect as triggering a Depression. For a start, it only applied to about one-third of America’s trade: about 1.3 percent of our GDP. One point three percent! America’s average tariff on goods subject to tariff went from 44.6 to 53.2 percent—not a very big jump at all. America’s tariffs were higher in almost every year from 1821 to 1914. Our tariffs went up in 1861, 1864, 1890, and 1922 without producing global depressions, and the great recessions of 1873 and 1893 spread worldwide without needing the help of any tariff increases.

Full Story: Protectionism Didn’t Cause the Great Depression | Economy In Crisis.

US joins Alliance of Civilizations

The Obama administration said Thursday it has decided to join the UN Alliance of Civilizations aimed at fostering greater cross-cultural understanding but shunned by the previous Bush administration.

State Department spokesman Philip Crowley told reporters that the United States will, for the first time, attend an alliance gathering when Brazil hosts the next forum in Rio de Janeiro on May 28-29.

“The United States has decided to join the Alliance of Civilizations,” Crowley said.

Full Story: US joins Alliance of Civilizations – Yahoo! News.

Federal Reserve opens credit line to Europe

The Federal Reserve late Sunday opened a program to ship U.S. dollars to Europe in a move to head off a broader financial crisis on the continent.

Other central banks, including the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank and the Bank of Japan also are involved in the dollar swap effort.

The move comes after the European Union and International Monetary Fund pledged a nearly $1 trillion defense package for the embattled euro, hoping to calm jittery markets and halt attacks on the eurozone’s weakest members. The ECB also jumped into the bond market Sunday night, saying it is ready to buy eurozone bonds to shore up liquidity in “dysfunctional” markets.

Full Story: Federal Reserve opens credit line to Europe – Yahoo! News.

Look Out, Obama Seems to Be Planning for a Lot More War

Judging by the Barack Obama administration’s reports, pronouncements and actions in recent months point to even greater war-making across the planet.

There’s more war in America’s future – a great deal more, judging by the Barack Obama administration’s reports, pronouncements and actions in recent months.
The United States government presides as a military colossus of unrivalled dimension, but the QDR, which was published in February, suggests Washington views America as being constantly under the threat of attack from a multitude of fearsome forces bent on its destruction. As such, trillions more dollars must be invested in present and future wars – ostensibly to make safe the besieged homeland.

Full Story: Look Out, Obama Seems to Be Planning for a Lot More War | | AlterNet.

Tensions Rising Between U.S. and China

Economic tensions between the U.S. and China continued to escalate on Thursday after the Chinese Ministry of Commerce announced that it would impose anti-subsidy duties on U.S. imports of poultry products.

The tariffs will range from 3.8 percent to 31.4 percent and will be added on top of anti-dumping duties that China imposed on poultry products just two months ago. Beijing alleges that feed for chicken in the U.S. is highly subsidized, putting Chinese competitors at a severe disadvantage.

“The US government has provided subsidies to poultry farmers for forage crops like maize and soybeans which are used as feed for broiler chickens, which is raised specifically for meat production. This has not only given the US companies an unfair advantage in the Chinese market, but also hurt the interests of domestic companies,” the ministry said in a statement.

Full Story: Tensions Rising Between U.S. and China | Economy In Crisis.

The WTO Now Controls Our Economy, Fate and Future

All our decisions regarding trade must be supervised and approved by this foreign undemocratic body – often to our detriment

All our decisions regarding trade must be supervised and approved by this foreign undemocratic body – often to our detriment. This is why we can no longer do what is in our best interest and are forced to concede to their demands. Most decisions made by the WTO are unjustifiably made to our detriment.

The World Trade Organization (WTO) is an undemocratic non-American organization run by the rich, for the rich. The bylaws of the organization supersede our own Constitution. They override, supervise and control all our international trade laws.

The U.S. Constitution states that all treaties made under the authority of the United States become supreme law of the land. However, our government backtracked and irresponsibly allowed the World Trade Organization to rule over us when they signed this treaty. Now we have no choice but to conform many of our laws, regulations and administrative procedures to the agreement.

Full Story: The WTO Now Controls Our Economy, Fate and Future | Economy In Crisis.

ACLU to Obama: ‘Entire world is not a war zone’

Targeted killings program could lead to ‘foreign governments hunting and killing their enemies within our borders’

The American Civil Liberties Union has sent a strongly-worded letter to President Barack Obama, asking him to end an alleged program that allows ‘targeted killings’ of terror suspects outside of war zones.

In the letter (PDF), the civil liberties group argues that the alleged program — which, according to news reports, is now targeting at least one US citizen — is unlawful and unconstitutional, and could set a dangerous precedent leading to foreign governments killing people on US soil.

Full Story: ACLU to Obama: ‘Entire world is not a war zone’ | Raw Story.

House Members Urge the Renegotiation of NAFTA Trucking Provision

A bipartisan coalition of 77 House members sent a letter Wednesday to U.S. Trade Rep. Ron Kirk and Transportation Secretary Ray LaHood imploring them to renegotiate a section of the North American Free Trade Agreement that provides Mexican trucks with full access to U.S. roadways.

That provision of the trade agreement has sparked a bitter trade dispute between the U.S. and Mexico. NAFTA was supposed to allow Mexican trucks full access to U.S. roadways by 1995, however, opposition led by safety advocates and organized labor managed to keep the borders closed to Mexican trucks, more-or-less. After a Mexican trucking company successfully sued the U.S. for its failure to meet its obligations under the agreement, the Bush administration instituted a pilot program that was later scuttled by Congress. In response, the Mexican government levied tariffs on some 89 U.S. products totaling $2.4 billion.

The pilot program gave access to up to 500 Mexican trucks to drive deeper into the United States than previously allowed under law, which posed a whole host of safety risks, according to the letter.

Full Story: House Members Urge the Renegotiation of NAFTA Trucking Provision | Economy In Crisis.

China’s Threat to National Security; What Will Congress Do?

Foreign governments with interests adverse to the U.S. are stockpiling vast sums of money and buying out our country for strategic purposes that threaten national security.

This alarming reality has prompted a congressional hearing today about the threats posed by China’s $200 billion government controlled sovereign wealth fund.

From Businessweek:

Several congressional Democrats and academics on Thursday will warn that investment by China’s government-run funds carries national security risks.

….

“What we’re seeing is not merely private foreign investment — it is foreign government investment in our infrastructure and banking system”- Senator James Webb, D-Va

Full Story: China’s Threat to National Security; What Will Congress Do? | Economy In Crisis.

Tariffs Slapped on Chinese-Made Steel Tubing

The U.S. Commerce Department announced that it would impose steep tariffs on imports of Chinese-made oil field pipe.

American steel producers won a major victory Friday as the U.S. Commerce Department announced that it would impose steep tariffs on imports of Chinese-made oil field pipe after an investigation found that much of the product was highly subsidized by the government and illegally dumped in the U.S. market.

“As a result of this final determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond equal to the weighted-average dumping margins,” the ruling said.

The duties to be imposed rage from 30 percent on some companies, to 99 percent on others.

Full Story: Tariffs Slapped on Chinese-Made Steel Tubing | Economy In Crisis.

The Time For Talking Is Over

“Every administration has thought it could get something done by talking to China. But years of experience have shown that the Chinese will not be moved by words; they
only respond to tough action,”

Sen. Chuck Schumer (D-NY)

In the wake of Treasury Secretary Timothy Geithner’s unscheduled meeting with Chinese Vice Premier Wang Qishan in Beijing Thursday to discuss China’s undervalued currency, the message coming from Capitol Hill appears to be “Time for talking is over.”

With the national unemployment rate hovering dangerously close to 10 percent and, in an election year already expected to be unkind to many incumbents, a sizable portion of lawmakers have made tackling China’s currency manipulation – and saving American jobs by doing so – a top priority issue.

That’s why many lawmakers were so obviously disappointed last week when Geithner announced that the Treasury Department would delay a report on international currency. After failing to name China in its first two reports, it was widely expected that the Asian powerhouse would finally get the label that it deserved. But Geithner chose to delay the report in favor of high-level discussion with Chinese officials, which many believe is an exercise in futility.

Full Story: The Time For Talking Is Over | Economy In Crisis.

America is caught in a ‘free trade’ trap

When our government ends its fiscal year Sept. 30, 2010, I would like the following information.

First of all, I would like the trade imbalance with every one of our trading partners in dollars. We can start with China, Japan, India, South Korea, Canada, Mexico, Germany, France, Vietnam, etc., Now I know this request is just a matter of record and can, within a month, be made public. What isn’t made public is the number and quality of the jobs our imports from all our trading partners takes away from our American economy and how many jobs our exports to the same countries provides for our American economy.

Giving us figures, in dollars, of our trade imbalance just tells us where our money has gone. For example, (and these are ballpark figures) if China exported $380 billion to America and they only imported $90 billion from us, they had a $290 billion trade imbalance with America.

Now what I want to know is how many jobs did our exports to China give us and how many jobs did our imports from China take away from us?

Full Story: America is caught in a ‘free trade’ trap – Fosters.

White House Plans to Move Forward With Stalled FTAs

Proposed NAFTA-style free trade agreements with Columbia, South Korea and Panama have stalled in Congress for several years now as lawmakers increasingly oppose the policies that some believe contributed to the near-collapse of the economy.

Despite a slew of Congressional attempts to roll back America’s failed trade policies and restore a sense of fairness in the beleaguered economy, the Obama administration plans to forge ahead with a trio of trade pacts negotiated under the Bush administration.

Proposed NAFTA-style free trade agreements with Columbia, South Korea and Panama have stalled in Congress for several years now as lawmakers increasingly oppose the policies that some believe contributed to the near-collapse of the economy. Critics of free trade had hoped that inaction on the trade pacts signaled their defeat. But, U.S. Trade Representative Ron Kirk told the Dow Jones Newswire that the administration is still determined to push those agreements through Congress.

Full Story: White House Plans to Move Forward With Stalled FTAs | Economy In Crisis.

The US was behind the Rwandan Genocide: Installing a US Protectorate in Central Africa

16 Years Ago. 7 April 1994

The civil war in Rwanda and the ethnic massacres were an integral part of US foreign policy, carefully staged in accordance with precise strategic and economic objectives.

From the outset of the Rwandan civil war in 1990, Washington’s hidden agenda consisted in establishing an American sphere of influence in a region historically dominated by France and Belgium. America’s design was to displace France by supporting the Rwandan Patriotic Front and by arming and equipping its military arm, the Rwandan Patriotic Army (RPA)

From the mid-1980s, the Kampala government under President Yoweri Musaveni had become Washington’s African showpiece of “democracy”. Uganda had also become a launchpad for US sponsored guerilla movements into the Sudan, Rwanda and the Congo. Major General Paul Kagame had been head of military intelligence in the Ugandan Armed Forces; he had been trained at the U.S. Army Command and Staff College (CGSC) in Leavenworth, Kansas which focuses on warfighting and military strategy. Kagame returned from Leavenworth to lead the RPA, shortly after the 1990 invasion.

Full Story: The US was behind the Rwandan Genocide: Installing a US Protectorate in Central Africa.

Obama ‘Seriously Considering’ Proposing American Peace Plan For Israeli-Palestinian Conflict

Obama weighs new peace plan for the Middle East

Despite recent turbulence in U.S. relations with Israel, President Obama is “seriously considering” proposing an American peace plan to resolve the Palestinian conflict, according to two top administration officials.

“Everyone knows the basic outlines of a peace deal,” said one of the senior officials, citing the agreement that was nearly reached at Camp David in 2000 and in subsequent negotiations. He said that an American plan, if launched, would build upon past progress on such issues as borders, the “right of return” for Palestinian refugees and the status of Jerusalem. The second senior official said that “90 percent of the map would look the same” as what has been agreed in previous bargaining.

The American peace plan would be linked with the issue of confronting Iran, which is Israel’s top priority, explained the second senior official. He described the issues as two halves of a single strategic problem: “We want to get the debate away from settlements and East Jerusalem and take it to a 30,000-feet level that can involve Jordan, Syria and other countries in the region,” as well as the Israelis and Palestinians.

Full Story: David Ignatius – Obama weighs new peace plan for the Middle East.

Protectionism Didn’t Cause the Great Depression

The debate over free trade is riddled with myth after myth. One that keeps resurfacing again and again, no matter how many times it is discredited, is the idea that protectionism caused the Great Depression.

One occasionally even hears that the same protectionism—specifically the Smoot-Hawley tariff of 1930— was responsible in significant part for World War Two! This is nonsense dreamed up for propaganda purposes by free traders, and can easily be debunked.

Let’s start by reminding ourselves of a basic fact: the Depression’s cause was monetary. The Federal Reserve had allowed the money supply to balloon excessively during the late 1920s, piling up in the stock market as a bubble. The Fed then panicked, miscalculated, and let the money supply collapse by a third by 1933, depriving the economy of the liquidity it needed to breathe. Trade had nothing to do with it.

The Smoot-Hawley tariff was simply too small a policy change to have so large an effect as triggering a Depression. For a start, it only applied to about one-third of America’s trade: about 1.3 percent of our GDP. One point three percent! America’s average tariff on goods subject to tariff went from 44.6 to 53.2 percent—not a very big jump at all. America’s tariffs were higher in almost every year from 1821 to 1914. Our tariffs went up in 1861, 1864, 1890, and 1922 without producing global depressions, and the great recessions of 1873 and 1893 spread worldwide without needing the help of any tariff increases.

Full Story: Protectionism Didn’t Cause the Great Depression | Economy In Crisis.

Declining Superpower Act

China’s currency peg to the U.S. dollar prevents correction of the U.S. trade imbalance and imperils the U.S. dollar’s role as the international reserve currency.

In the post World War II period, the dollar took over the reserve currency role from the British pound, because the supremacy of U.S. manufacturing guaranteed U.S. trade surpluses. The British pound lost its role due to debts from two world wars, loss of empire, a run-down industrial base and socialist attack on U.K. business.

The reserve currency conveys unique advantages on the favored country. As the reserve currency, the U.S. dollar is guaranteed a high level of demand. Foreign central banks hold their reserves in dollars, and countries are billed in dollars for their oil imports, which

requires other countries to buy dollars with their currencies.

Full Story: Declining Superpower Act | Economy In Crisis.

Obama Limits When U.S. Would Use Nuclear Arms

President Obama said Monday that he was revamping American nuclear strategy to substantially narrow the conditions under which the United States would use nuclear weapons.

But the president said in an interview that he was carving out an exception for “outliers like Iran and North Korea” that have violated or renounced the main treaty to halt nuclear proliferation.

Discussing his approach to nuclear security the day before formally releasing his new strategy, Mr. Obama described his policy as part of a broader effort to edge the world toward making nuclear weapons obsolete, and to create incentives for countries to give up any nuclear ambitions. To set an example, the new strategy renounces the development of any new nuclear weapons, overruling the initial position of his own defense secretary.

Full Story: Obama Limits When U.S. Would Use Nuclear Arms – NYTimes.com.

The U.S. Must Eliminate the Trade Deficit: Here’s How | Economy In Crisis

W. Raymond Mills  -

All trading nations would be better off abandoning “free trade” and adapting equal trade. Equal trade will expand exports and thus expand domestic production in each nation to the level of the goods traded.

The U.S. needs to cut our trade deficit in half in the next three years and force the quality of our domestic products to improve so they are competitive with foreign made products. We also need to reduce America’s intake of imports. In order to retain competition while simultaneously reducing imports we must be selective in the imports that are attacked. We want to eliminate only those imports that are creating the trade deficit. We have no interest in reducing imports from those nations that accept as many exports from us as we receive from them. All those nations in the world that can maintain an equal trade with the U.S. are welcome to sell their products in the U.S.

The U.S. should impose a tariff of 20 percent on all goods made in the five countries that account for 60 percent of the U.S. merchandise trade deficit (as of the year 2005), which are China, Japan, Germany, Canada and Mexico. These countries have the largest trade surplus with the U.S. Even after paying a tariff of 20 percent, they will be able to sell some products in the U.S. Thus, domestic producers will face competition from every nation in the world, but the most effective competitors will operate with a handicap. All nations that have near equal trade with the U.S. will also benefit from the tariff because they will have a better opportunity to sell in the U.S.

Full Story: The U.S. Must Eliminate the Trade Deficit: Here’s How | Economy In Crisis.

US delaying currencies report amid China dispute

The Obama administration is delaying a report to Congress on currency policies amid calls from some lawmakers that it should cite China as a currency manipulator harmful to the U.S. economy.

Treasury Secretary Timothy Geithner said Saturday that he will delay publication of the report, due April 15, because several high-level international meetings in the coming months will be a better way to advance the United States’ position.

Still, Geithner said in a statement that China should adopt “a more market-oriented exchange rate” to balance the U.S. trade deficit with China, which totaled $226.8 billion last year – the largest imbalance with any country. U.S. manufacturers say China’s yuan is undervalued by as much as 40 percent and is a big reason for the massive trade deficit.

Full Story: News from The Associated Press.

We Need to Rescind Permanent Normal Trade Relations With China

Byron Dorgon -

There are many good examples that illustrate the failure of U.S. trade policy over the last two decades – but none is as significant as our trading relationship with China.

Our country has short-sightedly embraced the following bargain. We get all kinds of cheap products from China, produced and exported under unfair conditions and sold at big-box retailers like Wal-Mart. In exchange, we allow our manufacturing base to be decimated and we assume a growing debt with the Chinese.

The numbers tell the story. In 2000, when the United States granted permanent normal trade relations with China, our merchandise trade deficit with China stood at $83 billion. By the end of last year, that trade deficit had exploded to $233 billion. Today, for every six dollars of merchandise that we buy from China, the Chinese buy only one dollar of merchandise from us.

Full Story: We Need to Rescind Permanent Normal Trade Relations With China | Economy In Crisis.

Chinese-Made Drywall Destroys, Poisons U.S. Homes: Now Who Pays?

Thousands of U.S. homes tainted by Chinese drywall should be gutted, according to new guidelines released Friday by the Consumer Product Safety Commission.

The guidelines say electrical wiring, outlets, circuit breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes and drywall need to be removed.

“We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again,” said Inez Tenenbaum, chairwoman of the commission, the federal agency charged with making sure consumer products are safe.

Full Story: Chinese-Made Drywall Destroys, Poisons U.S. Homes: Now Who Pays?.

Clinton Rethinking Trade Policy

Clinton, who was key in pushing the North American Free Trade Agreement over the finish line in Congress during his presidency, acknowledged earlier this month that pushing free trade policies on developing nations was a mistake.

Former President Bill Clinton, now a United Nations Special Envoy to earthquake ravished Haiti, acknowledged earlier this month that pushing free trade policies on developing nations was a mistake.

“I think it was a mistake,” he said, according to Voice of America. “I think it was part of a global trend that was wrong-headed.”

Clinton, who was key in pushing the North American Free Trade Agreement over the finish line in Congress during his presidency, negotiated tariff reductions in 1994 that opened Haiti’s agricultural sector up to highly subsidized U.S. imports.

Full Story: Clinton Rethinking Trade Policy | Economy In Crisis.

Schumer: U.S. Devastated by Unfair China Currency Manipulation

Touring Crucible Industries, a Syracuse, New York-based steel manufacturer that has struggled to compete with cheap Chinese imports, Sen. Chuck Schumer (D-NY) said that tackling the illegal Chinese policy is a surefire way to spur job growth.

U.S. lawmakers and domestic manufacturers continue to ratchet up the pressure on the Obama administration to vigorously address China’s policy of systematically undervaluing its currency, which they say devastates the nation’s manufacturing sector.

Touring Crucible Industries, a Syracuse, New York-based steel manufacturer that has struggled to compete with cheap Chinese imports, Sen. Chuck Schumer (D-NY) said that tackling the illegal Chinese policy is a surefire way to spur job growth.

“China’s currency manipulation would be unacceptable even in good economic times. At a time of 10 percent unemployment, we simply will not stand for it. There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China’s currency manipulation,” he said in a statement.

Full Story: Schumer: U.S. Devastated by Unfair China Currency Manipulation | Economy In Crisis.

Free Trade Isn’t Free

America’s leaders must recognize that free trade is simply an academic theory that does not exist, nor work, in the real world.

If America is to compete in international trade against nations such as China and Japan that purposely game the system in their favor, it will have to adopt a more “defensive mercantilist” stance, according to Ian Fletcher, an adjunct fellow at the U.S. Business and Industry Council and author of .

“The answer is the United States simply has to get back into the game which we played for hundreds of years,” he said.

According to Fletcher, for most of its history, the U.S. practiced a form of protectionism that allowed it to thrive economically. With the emergence of the free trade era, however, America has taken the lead and unilaterally disarmed itself in an economic war.

Full Story: Free Trade Isn’t Free | Economy In Crisis.

Alexander Hamilton’s Advice To The Obama Administration

Alexander Hamilton’s industrial policy made America the most powerful industrial nation in the world; now we are the largest importer of other people’s industry, and the most indebted nation in the world.

Thom Hartmann -

Alexander Hamilton, in 1791, proposed to the United States our first true industrial policy. We adopted it over the next few years, Abraham Lincoln reaffirmed it fourscore years later, and it was again affirmed by every President of the United States until Reagan began his now-28-year “Reagan Revolution” which has disassembled America’s industrial base and impoverished our nation.

For over 200 years, Hamilton’s policy made America the most powerful industrial nation in the world; now – after just 28 years of Reagonomics and Clinton/Rubinomics – we are the largest importer of other people’s industry, and the most indebted nation in the world.

The entirety of Hamilton’s paper is easily found on the web. The first third of it deals with Jefferson’s objections to it (which Jefferson withdrew later in his life), as Jefferson favored America being an agricultural rather than an industrial power in 1791. Once you cut past that, though, Hamilton gets right to the rationale for, and the details of, his 11-point plan to turn America into an industrial power and build a strong manufacturing-based middle class. Ironically, his policies are exactly – EXACTLY – what Japan, South Korea, and China are doing today. And what we have ceased to do.

Full Story: OpEdNews – Article: Alexander Hamilton’s Advice To The Obama Administration.

China’s Labor Cost Advantage in the Context of Currency Manipulation

U.S. producers of food and goods have to reduce their costs by an astounding 35 percent to become competitive with the Chinese due to their currency intervention.

China is sometimes assumed to be a low cost manufacturing country, in large part because of cheap labor. However, China is a high-cost manufacturing country because of low productivity, immature infrastructure, and the artificially high cost of imported energy and components, among other factors. While labor costs are a local market, capital and raw materials costs are more often priced in international markets. Thus China can only have an advantage on labor, but not necessarily raw materials and capital costs.

The labor cost differential is largely irrelevant to trade where currency manipulation exists. There are few major U. S. production sectors, if any, wherein labor makes up 35 percent or more of the cost of production. Let’s assume an industry sector in which labor is 10 percent of the cost of production. Let’s further assume that we could, by government fiat, cause the labor input portion of costs to be zero. If that occurred, China would still have a 25 percent advantage due to currency alone.

Full Story: China’s Labor Cost Advantage in the Context of Currency Manipulation | Economy In Crisis.

DeFazio Urges Overhaul of NAFTA Truck Provisions

Rep. Peter DeFazio (D-OR) is urging House members to attach their names to a letter asking President Barack Obama to renegotiate the cross-border trucking program, which was included as part of the North American Free Trade Agreement, claiming that the move could save countless jobs.

Nearly one year after a bitter trade dispute between the U.S. and Mexico over a cross-border trucking program began, there appears to be no resolution in sight, with one congressman attempting to rally support among colleagues to ban the program permanently.

Rep. Peter DeFazio (D-OR) is urging House members to attach their names to a letter asking President Barack Obama to renegotiate the cross-border trucking program, which was included as part of the North American Free Trade Agreement, claiming that the move could save countless jobs, according to Land Line Magazine.

“Removing the cross border trucking provision from NAFTA will also prevent more job losses at a time when we can least afford them,” the letter reads.

Full Story: DeFazio Urges Overhaul of NAFTA Truck Provisions | Economy In Crisis.

Flaws in Free Trade Economics

For some reason a debate continues to rage in this country about whether or not the U.S. should continue to embody all that is “free trade,” or whether it should adopt some of the so-called evils of “protectionism.”

The ongoing debate was given time in The Huffington Post over the weekend in a seemingly fair and balanced forum. But even on the most progressive of news sites the fair trade argument was given little credence.

The free trade argument is given the top billing. Its proponent, William J. Bernstein, is allowed to regale his audience with tales of trade wars of the past. Bernstein – a financial theorist whose only work with trade has come with pen, paper, and thought experiments – blames protectionism for everything from the Peloponnesian War to World War II. He then points out the majestic peace we have seen in Europe after the Second World War as evidence of the wonders of free trade systems

Full Story: Fletcher: Flaws in Free Trade Economics | Economy In Crisis.

Unfair China Trade Costing U.S. Jobs, Wealth and Prestige

Through mercantilism, China has managed to grow its trade surplus with the U.S. from $84 billion in 2001, to $270 billion in 2008.

Since China’s entry into the World Trade Organization in 2001, enormous trade deficits with the Asian nation have resulted in the loss of millions of jobs and precious export capacity, decidedly lower wages and less bargaining power for American workers and the accumulation of massive amounts of foreign debt, according to a new study conducted by the Economic Policy Institute.

“We have allowed the Chinese government to game the system for far too long, with serious consequences for the U.S. economy,” said the report’s author, EPI economist Robert Scott.

From 2001, the year China entered the WTO, until 2008, persistent trade deficits with China resulted in the loss of 2.4 million American jobs, or roughly 345,500 jobs per year. Well over half of those jobs were in the manufacturing sector, where total employment fell by 1.6 million jobs during that period.

Full Story: Unfair China Trade Costing U.S. Jobs, Wealth and Prestige | Economy In Crisis.

Obama, Netanyahu Meeting: Neither Side Will Discuss Details

The United States and Israel engaged in overtime talks Wednesday trying to win agreement on gestures Israel can take to restore confidence among Palestinians and the Obama administration and salvaging a diplomatic visit marred by the worst U.S.-Israeli breach in years.

U.S. and Israeli officials told The Associated Press that the closed-door talks were aimed at getting Israeli-Palestinian peace talks back on track. The talks ended at about 8 p.m. without any announcements, one official said.

The officials, who spoke on condition of anonymity to discuss the confidential session, said the administration’s special Mideast envoy, George Mitchell, met late Wednesday afternoon with visiting Israeli Prime Minister Benjamin Netanyahu, who extended his stay by hours to work on a deal.

Full Story: Obama, Netanyahu Meeting: Neither Side Will Discuss Details.

An Emerging Global Threat

China’s under- valued yuan provides a subsidy for Chinese exporters, while effectively levying a tax on U.S. exports to China. This currency manipulation, combined with China’s export subsidies, has resulted in chronic U.S. trade deficits.

The following article by Dan DiMicco and Peter Navarro appeared in Barron’s Online here. DAN DIMICCO is the chairman, CEO and president of Nucor Steel. PETER NAVARRO, a professor at the Merage School of Business, University of California/Irvine, is the author of The Coming China Wars.

Let’s get tough with China.

A U.S.-CHINA TRADE WAR IS RAPIDLY brewing, as President Barack Obama pushes China to adopt a “market-oriented exchange-rate policy” and Premier Wen Jiabao sharply retorts that the yuan isn’t undervalued. Meanwhile, 130 members of the U.S. House of Representatives are pressing the Treasury Department to brand China a “currency manipulator” and to impose countervailing duties, while China promises swift retaliation.

China’s fixed exchange-rate policy isn’t harming just the U.S. It is also threatening the global economic recovery, even as an artificially weak yuan has given rise to what Premier Wen has branded Public Enemy No. 1 in China — rapidly rising inflation.

Full Story: An Emerging Global Threat | Economy In Crisis.

The False Promises of Free Trade

It is clear that “free trade” has left a bad taste in the mouths of many Americans.

Even without the benefit of scientific survey and analysis, it is clear that “free trade” has left a bad taste in the mouths of many Americans.

Organizations like Public Citizen have done a great deal of evangelizing on the trade front since the beginning of the economic downturn. They hope to educate people as the hidden costs of our “free” approach to international commerce. With high unemployment and a continuing economic malaise, the message against “free trade” is starting to take root in America.

Full Story: The False Promises of Free Trade | Economy In Crisis.

Afghan Cops: A $6 Billion Fiasco

Six billion dollars later, the Afghan National Police can’t begin to do their jobs right—never mind relieve American forces.

Mohammad Moqim watches in despair as his men struggle with their AK-47 automatic rifles, doing their best to hit man-size targets 50 meters away. A few of the police trainees lying prone in the mud are decent shots, but the rest shoot clumsily, and fumble as they try to reload their weapons. The Afghan National Police (ANP) captain sighs as he dismisses one group of trainees and orders 25 more to take their places on the firing line. “We are still at zero,” says Captain Moqim, 35, an eight-year veteran of the force. “They don’t listen, are undisciplined, and will never be real policemen.”

Poor marksmanship is the least of it. Worse, crooked Afghan cops supply much of the ammunition used by the Taliban, according to Saleh Mohammed, an insurgent commander in Helmand province. The bullets and rocket-propelled grenades sold by the cops are cheaper and of better quality than the ammo at local markets, he says. It’s easy for local cops to concoct credible excuses for using so much ammunition, especially because their supervisors try to avoid areas where the Taliban are active. Mohammed says local police sometimes even stage fake firefights so that if higher-ups question their outsize orders for ammo, villagers will say they’ve heard fighting.

Full Story: Afghan Cops: A $6 Billion Fiasco – Newsweek.com.

Rob Portman Gets Blasted for Free Trade Record

The Ohio Conference on Fair Trade said that during the Portman-era as U.S. Trade Rep., 17,000 Ohio jobs were outsourced while the trade deficit rose 6.5 percent.  Portman also allowed the U.S. trade deficit with China to swell to over $200 billion for the first time in history.

The Ohio Democratic Party, with an assist from labor leaders and fair trade advocates, began their assault Wednesday on Rob Portman, the leading U.S. Senate candidate in the Republican primary, highlighting his past support for job-killing free trade agreements, according to The Youngstown Business Journal Daily.

On a conference call derisively said to be a “celebration” of the five-year anniversary of Portman’s nomination to become George W. Bush’s U.S. Trade Representative, participants laid out the case against Portman, who will likely face off against Lieutenant Governor Lee Fisher in the general election in November.

The Ohio Conference on Fair Trade said that during the Portman-era as U.S. Trade Rep., 17,000 Ohio jobs were outsourced while the trade deficit rose 6.5 percent.  Portman also allowed the U.S. trade deficit with China to swell to over $200 billion for the first time in history.

Full Story: Rob Portman Gets Blasted for Free Trade Record | Economy In Crisis.

The U.S. is in Real Trouble

The U.S. was founded on policies that put America first using strong economic buffers on our borders, the U.S. needs to protect itself once again

The government, media and the president lament the evils of protectionism in the free trade system. Meanwhile the U.S. is in the midst of an international trade war and is losing due to our lack of protectionism. The U.S. was founded on policies that put America first using strong economic buffers on our borders, it is time to protect our country once again

Video at Link

Full Story: The U.S. is in Real Trouble | Economy In Crisis.

The Truth About American and Israeli Interests Comes Out

The relationship between the United States and Israel has always rested on a number of pretensions, politically useful to politicians on both sides, but because they are untrue, certain eventually to prove destructive to both countries.

The destruction has now begun, as the pretensions and hypocrisies begin to fall. The cause of this is external and unexpected. Preoccupied with its own interests, and by the expansionist forces inside its society of secular Zionism, expressed in the Likud Party, and the equivalent expansionism motivated by millenarian religion, the Benjamin Netanyahu government has made itself an obstacle to American military security and to the interests of U.S. military forces operating in the Islamic world.

This has been obvious for many years but has only now been acknowledged by military commanders. As Mark Perry has reported on the Foreign Policy magazine website, a team dispatched by Gen. David Petraeus of Central Command briefed the Joint Chiefs of Staff on Jan. 16 to the effect that the conduct of Israel with respect to the Palestinians has now caused the Islamic forces cooperating with the United States, as well as those fighting it, to conclude that the U.S. is weak, and its military posture is subverted by American complicity with Israel’s intransigence on the Palestinian issue.

Full Story: William Pfaff: The Truth About American and Israeli Interests Comes Out – Truthdig.

China Asking U.S. Groups to Favor China over U.S.

With the 2010 election cycle about to jump into full swing, the nation’s many politicians are turning to tried and true methods of producing results. They are antagonizing against China. Politicians on the Left and Right are looking for opportunities to blast Chinese environmental policies, labor standards, human rights abuses, and international commercial manipulation.

Unfortunately, the rhetoric is creating a problem for the United States; it is upsetting the Chinese.

It is important to note that China does, in fact, do all of the things that it is being accused of. It has virtually no environmental or worker safety regulations. It practices overt mercantilist favoritism of domestic companies, it manipulates international currency markets, and takes full advantage of the good graces of open markets around the world.

On Tuesday China rebuked the United States for being “protectionist.” One of the most close and regulated economies in the world (China) accused the most open and unregulated (the United States) of evil protectionism, and the claim was given good press.

Full Story: China Asking U.S. Groups to Favor China over U.S. | Economy In Crisis.

The Foreign Value Added Tax: Making Our Exports Uncompetitive

Unknown to most Americans, the United States is losing the ability to compete in global trade because of the little known foreign Value-Added Tax (VAT).

Foreign governments use this tax against United States producers as a means to prevent the importation and consumption of U.S. goods, while providing incentives for their countries to export their goods to the U.S. The foreign VAT was a subsidy created after World War II to speed up beneficial other countries’ recovery. However, it is still used today by 149 countries to exploit this advantageous position against American trade. We have not used it domestically to off set theirs as a benefit to ourselves.

The foreign VAT gives the companies of other nations and their exports the upper-hand by providing incentives in the form of rebates equal to the indirect tax on the exported product. For example, the VAT rate is 19 percent in Germany; therefore the Germans receive a 19 percent rebate from their government on each product exported to the U.S. This acts as a subsidy for a product while encouraging the exportation of products to the U.S. However, the VAT imposes a punishment on U.S. exports by placing a VAT equivalent to the Value Added Tax rate of the importing country. This means all U.S. exports that enter into Germany are taxed 19 percent on top of another 19 percent for the transportation fees of the goods into the country. The VAT destroys American industries’ ability to promote exports, while encouraging foreigners to sell their products to Americans – it must be amended or eliminated.

Full Story: The Foreign Value Added Tax: Making Our Exports Uncompetitive | Economy In Crisis.

TPP Talks: NAFTA Round Two?

Negotiations began Monday in Melbourne, Australia, to iron out issues between the U.S. and seven other nations considering entering the proposed Trans-Pacific Partnership, which would be President Obama’s first major trade initiative since taking office.

[ Trans-Pacific Partnership ... ] Leading the U.S. delegation is U.S. Trade Representative Ron Kirk, who will be joined by his counterparts from the countries of Australia, New Zealand, Singapore, Chile, Brunei, Peru and Vietnam.

The proposed TPP would be by far the largest negotiated trade pact involving the U.S. since the North American Free Trade Agreement, and the free trade zone is expected to grow once implemented. Kirk has publicly stated that he would eventually like to see Japan, Malaysia, Peru and South Korea enter the fold. And AFP reports that some experts believe that Canada and Mexico – America’s partners in the failed NAFTA pact – could join as well.

Full Story: TPP Talks: NAFTA Round Two? | Economy In Crisis.

Congress letter urges action on renminbi

130 members of the US Congress on Monday called on the Obama administration to label China a currency manipulator

More than 100 members of the US Congress on Monday called on the Obama administration to label China a currency manipulator, in a move that highlighted the pressure on Washington to take a more confrontational stance towards Beijing.

In a letter to Timothy Geithner, Treasury secretary, and Gary Locke, commerce secretary, the 130 Congressmen demanded the administration designate China a manipulator when it issues its regular report on currency manipulation next month. They called for countervailing duties to be imposed on Chinese imports.

“I have not really seen this level of enthusiasm among members of Congress before,” said Tim Ryan, one of the Congressmen organising the bipartisan letter. “There is a heck of a coalition behind this and the time is right.”

Full Story: FT.com / US / Politics & Foreign policy – Congress letter urges action on renminbi.

Brewing up a Deadly, Toxic Recipe for Economic Disaster

Recipe for economic disaster: mix millions of outsourced jobs with millions of unemployed workers, pour in hundreds of billions of dollars for needless foreign wars, throw in a large dose of governmental failure to enact financial reforms to prevent abusive, unethical practices; combine these ingredients into a very large economic crisis and, presto, you have created a deadly, toxic recipe for economic disaster.

The current state of America is extremely tenuous; numerous states with massive budget deficits have been forced to lay off hundreds of teachers, police and firefighters. Education and the peoples' safety are being adversely affected. Kansas City school districts have just announced that they will have to close 29 out of 61 schools. And this negative trend is far from over; in fact, many more of these cutbacks are coming all over America.

Our nation’s governors have indicated that they will need nearly $1 trillion in federal aid to stave off bankruptcies; they need to be bailed out. But no bailout will be forthcoming from Uncle Sam because all available funds have been used to bailout the banking industry and financial sector and to fund our raging foreign wars.

Full Story: OpEdNews – Article: Brewing up a Deadly, Toxic Recipe for Economic Disaster.

U.S. Lawmakers Begin Effort to Repeal NAFTA

A bipartisan group of legislators representing a wide array of states, has introduced legislation in the House that would repeal the failed North American Free Trade Agreement.

Publisher’s Note: It’s about time! In 1993 Ross Perot warned implementing NAFTA would result in a “giant sucking sound,” which would lead to American jobs vanishing across the border. Thanks to NAFTA, our manufacturing base is being sucked from the U.S. Why would anyone want to manufacture in the U.S.? It is fiscally impossible to compete with Mexico’s lax labor and environmental standards.

A bipartisan group of legislators representing a wide array of states, has introduced legislation in the House that would repeal the failed North American Free Trade Agreement.

The effort, led by Democratic Rep. Gene Taylor of Mississippi, would require providing Canada and Mexico with a six-month notification of America’s intent to drop out of the trade pact.  After that, the U.S. would be free to leave the tri-lateral agreement.

“Timing is everything in life and it’s the right time to pass this legislation. Proponents have had more than enough time to make this work – It didn’t,” Taylor said in a statement.

Full Story: U.S. Lawmakers Begin Effort to Repeal NAFTA | Economy In Crisis.

Taking On China and Its Currency

Paul Krugman -

Tensions are rising over Chinese economic policy, and rightly so: China’s policy of keeping its currency, the renminbi, undervalued has become a significant drag on global economic recovery. Something must be done.

To give you a sense of the problem: Widespread complaints that China was manipulating its currency — selling renminbi and buying foreign currencies, so as to keep the renminbi weak and China’s exports artificially competitive — began around 2003. At that point China was adding about $10 billion a month to its reserves, and in 2003 it ran an overall surplus on its current account — a broad measure of the trade balance — of $46 billion.

Today, China is adding more than $30 billion a month to its $2.4 trillion hoard of reserves. The International Monetary Fund expects China to have a 2010 current surplus of more than $450 billion — 10 times the 2003 figure. This is the most distortionary exchange rate policy any major nation has ever followed.

Full Story: Op-Ed Columnist – Taking On China and Its Currency – NYTimes.com.

Obama’s Export Plan Pushing More Free Trade: a Continuing Disaster

Can’t we learn from our past mistakes?

Many members of Obama’s party simply do not believe that increased “free trade” will do much more than add to an already exploding trade deficit, ultimately resulting in massive job loss.

President Barack Obama Thursday laid out his plans for a National Export Initiative, which he says would double America’s exports in five years, create two million news jobs and allow the nation to remain the world’s top exporter.

In a speech at the annual Export-Import Bank conference, Obama said that his plan would rebuild “an economy where we generate more American jobs in more American industries by producing and exporting more goods and services to other nations.”

To achieve that goal, the president announced the creation of two new panels that would advise him on matters pertaining to trade and export promotion. The first is an informal export advisory panel. The president announced that Jim McNerney, president and CEO of Boeing, along with Xerox CEO Ursula Burns, would be the first two members appointed to the panel. Obama also announced the revival of the president’s Export Promotion Cabinet. It will be made up of Secretaries of State, Commerce, Treasury, Agriculture, Labor and other relevant agencies.

Full Story: Obama’s Export Plan Pushing More Free Trade: a Continuing Disaster | Economy In Crisis.

The U.S. will no longer turn a blind eye to Israeli settlements

Even Mahmoud Abbas would have been hard put to dream up a greater victory for Palestinian diplomacy than the one handed to him Tuesday on a silver platter by the Israeli Interior Ministry. The condemnations have been pouring in since the plan to build 1,600 homes in Jerusalem’s Ramat Shlomo neighborhood was announced. Not only from U.S. Vice President Joe Biden, but from the United Nations, the European Union and world leaders, all of them slamming the decision.

While government officials were busy yesterday blaming each other for the bad timing, it seems they were missing the bigger picture: Washington and the international community will no longer accept, even by looking the other way, Israeli construction in East Jerusalem. The capital is now the focus of the cold (but slowly warming) war between Israel and the Palestinians.

Full Story: The U.S. will no longer turn a blind eye to Israeli settlements – Haaretz – Israel News.

Tariff move by Brazil risks US trade war

Brazil moved to raise tariffs on a wide range of US goods yesterday, potentially igniting a trade war over cotton subsidies after eight years of litigation at the World Trade Organisation.

The decision takes effect next month, starting a 30-day period during which US and Brazilian officials will attempt to negotiate a solution to the dispute.

Gary Locke, US commerce secretary, and Michael Froman, deputy national security adviser for international economic affairs, are due to arrive in Brazil today. The cotton dispute is expected to be raised in meetings with government officials.

Under the Brazilian plan, duties would rise most steeply on cotton products. Many that are currently taxed at between 6 per cent and 35 per cent would be taxed at 100 per cent. The tariffs on beauty products would double, from 18 per cent to 36 per cent. Duties on household goods such as cookers, refrigerators, television sets and video cameras would also double, from 20 per cent to 40 per cent. Duties on cars would rise from 35 per cent to 50 per cent.

Brazil is allowed to impose the tariff increases- worth $560m – after winning a case at the WTO last year.

Full Story: FT.com / UK – Tariff move by Brazil risks US trade war.

Understanding the Value of Protectionism

It is no accident that the U.S. was historically a protectionist economy. The Founding Fathers understood the value of protectionism, so they explicitly granted Congress the power “to regulate commerce with foreign nations”

Dan’s cheery (if somewhat bubble-inflated) statistics on the recent general prosperity of the U.S. are a mere distraction here, as nothing about these figures indicates whether free trade worsened or improved them. So I will not address them.

Some of Dan’s analytically-relevant assertions, however, are demonstrably false, like his claim that “trade has created better jobs for millions of Americans.” The reality is that the U.S. economy has ceased generating net new jobs in internationally-traded sectors. All our job growth is now in non-tradable sectors like waitresses and security guards.

Full Story: Understanding the Value of Protectionism | Economy In Crisis.

China – Our Banker, Now With Leverage To Change U.S. Govt. Policies

Left unchecked America’s banker nations could have a veto power on U.S. foreign policy or totally destabilize our economy.

After having sold thousands of our best companies to foreign interests in recent years, and having dismantled much of our industrial infrastructure in favor of outsourcing our manufacturing, America has increasingly become dependent on imports to maintain the standard of living it has become accustomed to, but at what cost?

Look at the computer you type on, the pen you write with, the cell phone you carry. These little things add up.

These deficits are expanding. The U.S. government predicts a $1.56 trillion deficit in 2010, or 10.6 per cent of the economy measured by gross domestic product (GDP). The budget deficit will, among other things, fund the wars it fights all over the world. Japan, China and others buy large chunks of this debt in the form of T-bills to collect interest and allow the U.S. to continue its spending spree.

Full Story: China – Our Banker, Now With Leverage To Change U.S. Govt. Policies | Economy In Crisis.

Free Trade Fails in Both Theory and Practice

Free trade is gradually bleeding America’s economy to death, and the much-promoted myth that economics vindicates it does not survive serious scrutiny.

To debate this issue without bogging down in semantics, we need to make a few things clear at the outset. For a start, the phrase “free trade” has two meanings, which are often confused:

1) The purely theoretical concept of perfectly free trade as analyzed in economics text-books.

2) The current free trade policy of the U.S. This is about 99%, not 100%, free on America’s part, and much less so on the part of our major trading partners.

Full Story: International Economic Law and Policy Blog: The Great Trade Debate: Ian Fletcher – Free Trade Fails in Both Theory and Practice.

U.S. Lawmakers Begin Effort to Repeal NAFTA

A bipartisan group of legislators representing a wide array of states, has introduced legislation in the House that would repeal the failed North American Free Trade Agreement.

The effort, led by Democratic Rep. Gene Taylor of Mississippi, would require providing Canada and Mexico with a six-month notification of America’s intent to drop out of the trade pact. After that, the U.S. would be free to leave the tri-lateral agreement.

“Timing is everything in life and it’s the right time to pass this legislation. Proponents have had more than enough time to make this work – It didn’t,” Taylor said in a statement.

Full Story: U.S. Lawmakers Begin Effort to Repeal NAFTA | Economy In Crisis.

Union Cheers Broad Push To Repeal NAFTA

One of the nation's oldest and largest labor unions is praising new, bipartisan legislation that would withdraw the United States from NAFTA, and vanquish one of the biggest enemies of American organized labor for more than 15 years.

A remarkably broad coalition of lawmakers from across the political spectrum came together Thursday to sponsor a bill to repeal U.S. participation in the North American Free Trade Agreement (NAFTA).

“The lives of average workers in Mexico and in the U.S. have gotten so much worse since NAFTA,” says Jim Hoffa, head of the Teamsters, which represents 1.4 million American workers. “When you realize you've made a bad deal, you try to get out of it.”

Full Story: On The Hill: Union Cheers Broad Push To Repeal NAFTA.

Congressional Dems Displeased With Trade Policy

A long-time opponent of free trade policies that have cost his state thousands upon thousands of manufacturing jobs, Sen. Sherrod Brown said the administration should support the TRADE Act, which would completely overhaul the way America conducts trade.

One day after releasing the administration’s outline for its 2010 trade policy, which was roundly criticized by free trade opponents, U.S. Trade Representative Ron Kirk told the Christian Science Monitor that the issue should unite rather than divide.

“We can’t allow trade to become the next wedge issue,” Kirk said, according to the Christian Science Monitor.

That, however, is more fantasy than reality and short-lived.

Soon after the USTR’s office released the report, numerous Congressional Democrats, who have never been able to achieve unanimity on trade issues, expressed their displeasure with the administration’s handling of international trade, perhaps exposing a deep divide in the party and a serious impediment to meaningful action on trade issues.

“While I appreciate that the President's Trade Agenda is strong on trade enforcement and reciprocity, there is no emphasis on ensuring that the trade policies we are pursuing actually benefit the United States. We still need Ambassador Kirk to develop an action plan to address any negative effects from existing trade agreements,” Sen. Sherrod Brown (D-OH) said in a statement.

Full Story: Congressional Dems Displeased With Trade Policy | Economy In Crisis.

China’s investments in U.S. up sharply

The strategy seeks higher earnings by acquiring assets while prices are depressed.

Reporting from Washington – Made in China now has a fast-growing sibling: Bought by China.

Beijing is using its accumulation of billions of American dollars to step up its investments around the globe. In the last year, Chinese acquisitions in the U.S. have ranged from a relatively obscure theater in Branson, Mo., to stakes in such famous brands as Coca-Cola and Johnson & Johnson.

China’s huge stockpile of dollars stems in part from Americans’ enormous purchases of relatively inexpensive Chinese manufactured goods and the significantly smaller volume of U.S. exports to the Asian country.

By recycling much of its dollar trove over the years back to the United States with the purchase of U.S. government debt, China has in effect helped Washington finance its deficits.

Full Story: China’s investments in U.S. up sharply – latimes.com.

USTR, Obama Administration Ignore Failed Trade Policies

Had Obama’s campaign trade commitments been implemented, China would have been deemed a currency manipulator and countervailing duties put in place to staunch the flood of unfair Chinese imports, while NAFTA would be under renegotiation now.

The U.S. in 2010 will continue to enforce its rights in the rules-based global trading system by addressing non-tariff barriers through the WTO, but will do little else to reverse America’s failed trade policies, according to the office of the U.S. Trade Representative’s 2010 Trade Policy Agenda.

In fact, the report says, in 2010 America will be “seeking new international markets aggressively.”

“Ninety-five percent of the world’s consumers live outside the United States, and the President’s trade agenda will help to get American workers and businesses access to as many of those customers as possible,” said U.S. Trade Representative Ron Kirk said in a statement.

Full Story: USTR, Obama Administration Ignore Failed Trade Policies | Economy In Crisis.

White House Is Rethinking Nuclear Policy

As President Obama begins making final decisions on a broad new nuclear strategy for the United States, senior aides say he will permanently reduce America’s arsenal by thousands of weapons. But the administration has rejected proposals that the United States declare it would never be the first to use nuclear weapons, aides said.

Mr. Obama’s new strategy — which would annul or reverse several initiatives by the Bush administration — will be contained in a nearly completed document called the Nuclear Posture Review, which all presidents undertake. Aides said Secretary of Defense Robert M. Gates will present Mr. Obama with several options on Monday to address unresolved issues in that document, which have been hotly debated within the administration.

First among them is the question of whether, and how, to narrow the circumstances under which the United States will declare it might use nuclear weapons — a key element of nuclear deterrence since the cold war.

Full Story: White House Is Rethinking Nuclear Policy – NYTimes.com.

Mum’s the Word on “Free Trade”: Money Controls

Frm Sen. Ernest F. Hollings –

The President has the country headed in the wrong direction by continuing to get rid of our economy with “free trade.”

“Free trade” means different things to different people. To economists in the United States, “free trade” means an open market where goods are unfettered or unprotected by tariffs, quotas or subsidies. To one of John F. Kennedy’s Profiles in Courage, Henry Clay, “free trade” was pure fantasy. Clay thought “free trade” was an oxymoron. In 1832, he cried: “Free trade, free trade … It never existed … It never will.” Teddy Roosevelt thought “free trade” was dumb economics. He exclaimed in a letter: “Thank God I’m not a free trader.”

After World War II, Japan took our Marshall Plan money and started globalization or a trade war for market share by closing its domestic market, subsidizing its manufacturing, selling its exports at near cost, and making up the profit in its closed market. It took over market share in textiles and then globalized by seeking a country cheaper to produce, moving its textile manufacturing to Malaysia and changing its trade war from textiles to watches, to cameras, to electronics, to radios, to TVs, to computers, to communications, to automobiles.

Hence, “free trade” in the U. S. means an open market for profit; and “free trade” in Japan means a closed market for market share resulting in Toyota being #1 as Ford, GM, and Chrysler struggle. To China “free trade” means that the U. S. continues its open market while China with authoritarian rule closes its market and controls its labor and currency, but fails to control its air and water so as to have the cheapest production in globalization. Thus, globalization is nothing more than a trade war with production looking for a country cheaper to produce. Today, “free trade” to Corporate America, Wall Street, and the big banks, means the U. S. should not compete in globalization. It means the United States should not trade. “Free trade” means Corporate America should continue, unfettered by Congress, offshoring its investment, research, technology, development, production, jobs – literally, the U. S. economy. Today, “free trade” means to Corporate America that it be permitted to continue offshoring our economy while it builds the economies of Mexico, China and India. In short, “free trade” means for Corporate America to ruin the economy of the United States as it begs for bailouts and bonuses from the taxpayers.

Full Story: Mum’s the Word on “Free Trade”: Money Controls | Economy In Crisis.

Senators Calling Commerce Out on Currency Manipulation

A bipartisan group of 15 U.S. Senators representing 11 different states is calling on the Obama administration and the Commerce Department to do more than pay lip service to combating China’s well-known practice of systematically undervaluing its currency.

In an unusually harsh letter addressed to Commerce Secretary Gary Locke, the group of nine Democrats and six Republicans bashed the department head for his failure to seriously investigate numerous charges of Beijing currency manipulation.

In the letter, they claim that the Commerce Department has “prejudged the outcome of a subsidy investigation it has yet to do, rather than assessed the sufficiency of the allegation on the basis of ‘information reasonably available’ to petitioners to determine whether to launch an investigation.”

Full Story: Senators Calling Commerce Out on Currency Manipulation | Economy In Crisis.

Foreign Policy Hawks: Wrong Since 1938

Media Matters  -

In every international conflict, the side that favors war invariably gets to “own” the flag. Those favoring diplomacy can complain as much as they choose, but it’s always the hard-liners, the hawks, and the “bombs away” crowd that successfully portrays itself as defender of the nation’s interests. This is true during the build-up to war, throughout the war, and afterwards. No matter if the war turns out to have been built on lies or false premises — or even if its results harm the nation’s interests — the side that pushes for negotiations is always put on the defensive by flag wavers.

This is hardly new. Sometimes, it gets pretty hypocritical.

In 1962, just after the Cuban Missile Crisis, a “White House source” leaked a story to a major national magazine that America would not have prevailed if President Kennedy had heeded the recommendation of United Nations Ambassador Adlai E. Stevenson. The source — who, it was soon revealed, was JFK himself — said that Stevenson had proposed a “Munich.”

Full Story: Foreign Policy Hawks: Wrong Since 1938 | Media Matters Action Network.

US slaps duties on steel pipe from China

OPS: keep in mind that this story is from a Chinese newspaper.

The United States on Wednesday imposed preliminary duties ranging from 11 to 13 percent on steel pipe from China to offset government subsidies, the Commerce Department said.

The decision puts further strain on US-China trade relations, already tested by disputes over other US trade actions and China's currency policy.

It is a victory for US Steel Corp and the United Steelworkers union, which filed a petition in October asking for protection against the Chinese imports.

Texas company V&M Star LP and Illinois company TMK IPSCO also signed the petition asking for relief.

Full Story: US slaps duties on steel pipe from China.

Columbian Defense Minister Expects Trade Deal to Pass

The Columbia free trade agreement, negotiated and signed under the previous administration, has stalled in Congress as anti-free trade sentiment around the country has grown.

A top Columbian official earlier this month, while acknowledging the difficult domestic political situation many U.S. politicians will face come November, expressed optimism that U.S. lawmakers would ratify a previously negotiated free trade agreement with his country, according to Reuters.

Columbian Defense Minister Gabriel Silva told reporters that, despite a full-plate on the domestic agenda that includes health care reform, climate change legislation, financial reforms and a jobs bill combined with a toxic political environment for incumbents, he was confident the Columbia free trade agreement would successfully receive Congressional approval.

“The dynamics in the Congress could be in our favor and that is how we hope it will be,” Silva said, according to Reuters.

Full Story: Columbian Defense Minister Expects Trade Deal to Pass | Economy In Crisis.

Chinese Mercantilism Altering Role of U.S.

Every time the U.S. opens a new “free trade” deal with a developing nation it does so to “open markets up to American goods.” But what goods are made in America?

The Chinese economy has become one of the most exceptionally productive, efficient, effective and successful models in the world. By using the weak links of market economics against market economies, such as the United States; and by implementing the best aspects of state capitalism, like we see in Japan, China has become a true power.

China has the ability to sway domestic policies in the United States, and its global reach spreads from dominance of raw materials to dominance of labor-intensive export production. From time to time people in the American public call for reforms of the U.S.-China relationship, but few understand that there is little left to save.

Full Story: Chinese Mercantilism Altering Role of U.S. | Economy In Crisis.

Negotiating Away Our Sovereignty

Tariffs and restrictions used to prevent foreign subsidized companies and governments from disarming our industries. The rest of the world marveled with envy at the assets we had collected through our policies.

Our government must reexamine our involvement in organizations like the WTO, formerly GATT. GATT was established in 1948 in cooperation with the UN to help rebuild a devastated Europe and Asia following World War II. This was a major turning point in the history of America.

Prior to GATT, domestic policies were aimed at fostering growth and protecting our core industries. Tariffs and restrictions prevented foreign subsidized companies and governments from disarming our industries through predatory pricing, dumping, and buyouts. The rest of the world marveled with envy at the assets we had collected through our policies. They sought to establish “free-trade” that would allow them to access our markets and allow access to the wealth we had achieved.

Though this practice was effective in restoring and rehabilitating Europe and Asia, we have allowed these practices to run amuck and to continue unchecked to present day at the expense of our sovereignty regardless even of its potential detriment to national security. Specifically, Congress cannot legally pass laws that violate WTO bylaws even if such laws are necessary to ensure the safety of America.

Full Story: Negotiating Away Our Sovereignty | Economy In Crisis.