Nuke Only Option, Gulf 40% Covered By Underwater Oil Lakes Says Ocean Energy Institute Founder

Mexico 2010: Enter the Detonators

By Al Giordano [Narconews]

In recent weeks, Mexican television viewers have been deluged with an advertisement in power rotation on all networks, including cable channels, from an apparently wealthy consortium called “Iniciativa México,” or, the Mexico Initiative.

The ad features head coach Javier Aguirre of Mexico’s national soccer team (the original ad appears here) strutting around the Mexico City monument known as the Angel of Independence, wearing a suit jacket and unbuttoned white shirt, noting that 2010 marks the bicentennial of Mexican independence and the centennial of the revolution of 1910. And, he encourages the people of the nation not to fall into “the old complexes” this time and to be positive and sunshiney in this historic year.

You can't make this stuff up!

The reaction on the street, in the markets and other public places, was overwhelmingly negative. “Who is this futbol coach to tell us what to do?” was the typical reaction this reporter received everywhere he asked. Interestingly, everybody had seen the ad, and hated it.

Aguirre had already caused a national scandal last February when he told a Spaniard sports network that “Mexico es jodido” (“Mexico is fucked”) and that he keeps his family in Madrid so they can be safe. And after the Mexican team was disqualified from the World Cup finals last week, Aguirre quit in a public tantrum and said he wanted to move to England or Spain. Thus, his ad, which begins, “I’m Javier Aguirre and I love Mexico” has become a national joke of sorts, in the category of gallows humor. The gross ratings points that the Iniciativa México spent on airing this ad has had the opposite effect of its intent to calm down the public and strip them of any ideas of a centennial revolt in 2010. To the contrary, it got a lot of regular folks thinking about the possibilities. More than a few passersby I interviewed practically tried to recruit this international reporter for a revolution!

According to the Iniciative’s website, the consortium's board of advisors includes the owners of the two national television networks, Televisa and TV Azteca, also Channels 11 and 22, plus the owners of UNIRADIO, Radio Formula, Braca Communications, and the daily newspapers El Financiero, Novedades, Milenio, El Universal, El Siglo de Torreón, El Economista, in other words, the media oligarchs of the nation.

And the consortium’s technical advisory board includes, in addition to the media owners, the rectors of the National Autonomous University (UNAM), the Insituto Politechnico Nacional (IPN), the Tech de Monterrey (gotta keep those rambunctious students in line!), and the CEO of the cinema chain Cinépolis, among others.

It doesn’t take a degree in marketing to understand what the magnates are up to: their ad campaign reveals their intense fear that the historic memory of the Mexican people could turn on the aspiring owners of the country as they it in 1810 and 1910. The electoral fraud by which President Felipe Calderón came to power is still an open wound, unresolved, festering. And the wave of repression against pro-democracy social movements that escalated in Atenco and Oaxaca in 2006 continues raging into the present.

A sign that the State is at least somewhat worried about the potential detonation of 2010 came on Thursday when the Supreme Court of the Nation ordered the release of Ignacio “Nacho” del Valle and eleven other political prisoners from Atenco, the town that rose up and defeated the national airport planned for their farmlands in 2002.

Into this churning national cauldron today entered a group that calls itself “Los Detonadores” (“The Detonators”) with a video parody of the Initiative’s TV ad, that in a few short hours has already gone viral on the Internet.



[ ... ]

Here is a translation of the ad’s text, which borrows liberally from Aguirre’s narrative while turning his phrases against the intentions of the Mexico Initiative’s ad campaign:

I’m Field Smith and I love Mexico. In fact, I’m the owner of Mexico!

I don’t know if I always understand it, but I know that I always love it.

And I know that for some reason every hundred years the Mexican people go out from their homes to try to make things impossible for businessmen like me. And what’s worse is that if they rebel, they can achieve it.

In 1810 it seemed impossible that Mexico could be an independent country. And it has cost us a lot of money in troops and loans to your government to insure that it still is not.

In 1910 it seemed impossible that Mexico could be democratic. And thanks to the huge electoral frauds it still is not.

It’s 2010, and the clock of history is ringing anew.

And it seems impossible that this could be a great country, secure, prosperous and just, that the Mexican people want.

The time has come to ask you if you want to keep being a country for sale for failure, or if you are capable of ending this capitalist control over your country.

Mexicans, calm down!

The time has come to change the country doing no more than sitting and obeying orders, and believing exactly what they tell us on TV.

Because as my compadre Javier Aguirre said, “Mexico is fucked,” and it’s clear that neither the national soccer team nor the people can do anything because Mexico… is what it is.

It’s the hour to forget about the Mexico that fought for its indepdendence, to leave behind the Mexico that seeks to develop itself. And to keep being a Mexico in which all of you buy my products.

It’s time to change history, passing from the Mexico of “Yes, we can,” to the Mexico of “we’re already screwed.”

But it won’t be easy if the people remember that a country can transform itself during just one night of mass awaking.

The seed that Mexico yearns for is already transgenic.

For it to flower depends on its consumption by all of you.

Believe me that the most important things have already been done.

Keep being a country subjugated and unaware of its own history.

Welcome to the F*cked Mexico of 2010.

Thank you, Mexicans, for sending your sons and daughters to the United States to be my “illegal” slaves.

Thank you, Mexicans, for handing over your rivers, your beaches and mountains, to my companies.

Thank you, Mexicans, for lending yourselves to the war on drugs and allowing me to buy your politicians with the profits.

Thank you, Mexicans, for sitting in front of the TV during this bicentennial year!

Mexico is already our place. 2010 is our year. Now is the hour to sell your homeland to the highest bidder.

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Losing our minds to the web

By Evgeny Morozov [Prospect]

In 1889 the Spectator published an article, “The Intellectual Effects of Electricity,” intended to provoke its Victorian readers. Robert Cecil, the prime minister, had recently given a speech to the Institution of Electrical Engineers in which “he admitted that only the future could prove whether the effect of the discovery of electricity… would tell for good or evil.” The authors attacked him for being soft on electricity. Its material effects were welcome—“imagine the hundred million of ploughing oxen now toiling in Asia, with their labour superseded by electric accumulators!”—but its intellectual effects were not.

Electricity had led to the telegraph, which in turn saw “a vast diffusion of what is called 'news,' the recording of every event, and especially of every crime.” Foreshadowing Marshall McLuhan by almost a century, the magazine deplored a world that was “for purposes of 'intelligence' reduced to a village” in which “a catastrophe caused by a jerry-builder of New York wakes in two hours the sensation of pity throughout the civilised world.” And while “certainly it increases nimbleness of mind… it does this at a price. All men are compelled to think of all things, at the same time, on imperfect information, and with too little interval for reflection.”

Fast forward 120 years, and similar criticisms abound. Consider an anti-Twitter lament by the New Yorker writer George Packer in February, published, of all places, on his blog: “There's no way for readers to be online, surfing, emailing, posting, tweeting, reading tweets, and soon enough doing the thing that will come after Twitter, without paying a high price in available time, attention span, reading comprehension, and experience of the immediately surrounding world.” In May, even the US president Barack Obama—a self-confessed BlackBerry addict—complained about a “24/7 media environment that bombards us with all kinds of content and exposes us to all kinds of arguments, some of which don't always rank all that high on the truth meter,” adding that: “With iPods and iPads… information becomes a distraction, a diversion, a form of entertainment, rather than a tool of empowerment.” Of course there is a price to pay for processing information. But the real question is: is the price too high?

Enter Nicholas Carr, a technology writer and Silicon Valley's favourite contrarian, whose book The Shallows: What the Internet is Doing to Our Brains (Norton) has just come out in the US (and will be published in Britain by Atlantic in September). It is an expanded version of an essay, “Is Google Making Us Stupid?,” printed in the Atlantic magazine in 2008, which struck a chord with several groups. Those worrying about Google's growing hold on our culture felt Carr was justified in going after it (though there was little about the search giant in the article). Those concerned with the accelerating rhythm of modern life, the dispersion of attention, and information overload—all arguably made worse by the internet—found a new ally. Those concerned with the trivialisation of intellectual life by blogs, tweets, and YouTube videos of cats also warmed to Carr's message. Online magazine Slate has already compared The Shallows to Silent Spring, the 1962 book by Rachel Carson that helped launch the environmental movement.

Whatever one makes of Carr's broader claims about the internet, many readers will be impressed by his summation of recent discoveries in neuroscience. He builds on the work of Nobel-winner Eric Kandel and others to reveal that human brains adapt to new experiences—a feature known as “neuroplasticity.” This is helpful from an evolutionary perspective, but it also means some brain functions atrophy if we don't use them. Here Carr mentions an oft-cited study that found changes in the brain structures of London cab drivers as they began relying on GPS rather than their memories to navigate. He believes that neuroplasticity provides the “missing link” to understanding how the media has “exerted their influence over the development of civilisation and helped to guide, at a biological level, the history of human consciousness.”

This claim is backed up with research on how our brains process information. Some of these findings are disturbing, if predictable: multi-tasking makes us less productive; those reading online skim read; using multimedia to present data may make it harder to grasp, and so on. In particular Carr cites work by Gary Small, a professor of psychiatry at UCLA, who found that the use of modern media “stimulates the brain cell alteration and neurotransmitter release, gradually strengthening new neural pathways in our brains while weakening older ones.” His experiments showed that just five hours of internet use saw activity in parts of the brain's previously dormant prefrontal cortex—evidence, for Carr, that the internet “rewires” brains.

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Sheep For Slaughter: Is the Elite really trying to KILL us?

Eric Blair - [Activist Post]

There has been much in the mainstream news recently about population control. In fact, there seems to be a concerted effort by the Elite to introduce the idea as a legitimate debate about dealing with the “problem” of over-population. It appears the elite are trying to legitimize these claims using the global warming argument that CO2, which humans exhale, must be minimized at all costs.

Understandably, the notion that a small group of powerful people is consciously and methodically trying to kill off the majority of the population is a tough pill to swallow. Incidentally, people who refuse to question the events of September 11th usually do so for one reason: they don’t want to believe that the conspirators would kill over 3000 innocent people to advance their agenda. However, what has taken place in the aftermath of 9/11 seems to prove the true nature of the Elite in regards to how little they value human life.

For instance, the Environmental Protection Agency (EPA) knowingly lied about the air quality at ground zero, which has caused countless more illnesses and deaths among brave first responders, much like the EPA is now lying about the air quality surrounding the Gulf oil spill. Additionally, the attack on 9/11 spurred America’s preemptive, unprovoked, unsubstantiated wars for profit and resources in Iraq and Afghanistan where an estimated 1.5 million innocent people have been killed.

Concerned researchers have tried to warn the public for decades that depopulation plans were indeed happening in stealth, quoting members of the ruling class like Rockefeller and others who clearly had motivation to implement them.



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Euro 'will be dead in five years'

The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years, according to a selection of responses to the survey – the first major wide-ranging litmus test of economic opinion in the City since the election. The findings underline suspicions that the new Chancellor, George Osborne, will have to firefight a full-blown crisis in Britain's biggest trading partner in his first years in office.

Of the 25 leading City economists who took part in the Telegraph survey, 12 predicted that the euro would not survive in its current form this Parliamentary term, compared with eight who suspected it would. Five declared themselves undecided. The finding is only one of a number of remarkable conclusions, including that:

But the conclusion on the euro is perhaps the most remarkable finding. A year ago or less, few within the City would have confidently predicted the currency's demise. But the travails of Greece, Spain and Portugal in recent weeks, plus German Chancellor Angela Merkel's acknowledgement that the currency is facing an "existential crisis", have radically shifted opinion.

Two of the eight experts who predicted that the currency would survive said it would do so only at the cost of seeing at least one of its members default on its sovereign debt. Andrew Lilico, chief economist at think tank Policy Exchange, said there was "nearly zero chance" of the euro surviving with its current membership, adding: "Greece will certainly default on its debts, and it is an open question whether Greece will experience some form of revolution or coup – I'd put the likelihood of that over the next five years as around one in four."

Douglas McWilliams of the Centre for Economics and Business Research said the single currency "may not even survive the next week", while David Blanchflower, professor at Dartmouth College and former Bank of England policymaker, added: "The political implications [of euro disintegration] are likely to be far-reaching – Germans are opposed to paying for others and may well quit."

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China's new Silk Road into Europe

Golfis Yiannis stands on the dock of the Athenian port of Piraeus, unflinching among the dust clouds stirred by the thundering lorries and clattering forklift trucks unloading the vast container ships.

"That's Europe's new China Town over there," he says, pointing to the pier adjacent to where he is standing. "The only thing that is certain is that we've sold our soul to the Chinese."

Pier Two of the container port, where Mr Yiannis, 48, has worked for the last 22 years, may seem exactly the same as Pier One – certainly larger, but similarly flanked by gigantic ships and stacked with huge Lego brick-style containers.

But where as Pier One is Greek, Pier Two is now Chinese.

China's state-owned shipping giant Cosco last month took control of Pier Two in a £2.8 billion deal to lease the pier for the next 35 years, investing £470 million in upgrading the port facilities, building a new Pier Three and almost tripling the volume of cargo it can handle.

The container port, just next door to the Piraeus ferry harbour that is the tourist gateway to the Greek islands, can currently load and unload 1.8 million containers a year - meaning 5,000 come and go each day.

While many investors flee from the struggling European nation, which last month only avoided bankruptcy by accepting a 110 billion euro (£90 billion) bailout from the European Union and the IMF, China seen an opportunity to make strides into Europe, buying key assets at enticing prices and gaining access its valuable markets.

The Chinese envisage creating a network of ports, logistics centres and railways to distribute their products across Europe – in essence a modern Silk Road - hastening the speed of East-West trade and creating a valuable economic foothold on the continent. They aim to make the container port a hub to rival Rotterdam - Europe's largest port.

"The Chinese want a gateway into Europe," said Theodoros Pangalos, deputy prime minister. "They are not like these Wall St ****s, pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece."

It is not the first time China has seen opportunity where others see adversity. With their economy booming and their currency strong, the Chinese have made a series of controversial investments in mining and infrastructure in Africa, which critics say allow them to remove valuable raw materials with little benefit to the local economy.

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Turkey and Greece: Military spending and economy

By Eser Karakaş [Today's Zaman]

Turkish-Greek relations are passing through an interesting period. Mr. Derviş Eroğlu, who does not favor settlement of the Cyprus issue as part of his political affiliation and tradition, became the president of the Turkish Republic of Northern Cyprus (KKTC) and will take the helm of the negotiations.
                                                                                                                           
Although the authority that has/will have the last word in the negotiations, it will be interesting to see how he conducts the negotiations in the post-Mehmet Ali Talat period.

Greece is going through the worst economic crisis since its civil war, and this great crisis and the country's need to change individual and institutional economic behavior may urge it to make radical decisions.

In this interesting period, Prime Minister Recep Tayyip Erdoğan is paying an important visit to Athens, and if this visit triggers winds of friendship on both coasts of the Aegean Sea, there will be much for both countries to celebrate.

During this visit, the issue of mutual military spending will be an agenda item. I would like to provide readers with some standard information about the military spending and economic performance of these two countries for purposes of comparison.

Turkey's military spending about $14 billion in 2009

In 2009, Turkey spent about $10 billion of its central budget on military expenditures, not including the Undersecretariat for the Defense Industry (SSM) fund. Using a general definition of military spending and a comparable exchange rate, we can say that Turkey's military spending was about $14 billion in 2009. Since military service is a compulsory and unpaid service, the spending on personnel is not included in these calculations, meaning that if the Turkish Armed Forces (TSK) employs even a small portion of professional soldiers, Turkey's military spending would be much higher. Indeed, if economists calculate the opportunity costs of the currently applicable military recruitment methods, the result would certainly point to enormous budgets.

The TSK has about 600,000 members, and the breakdown of this figure is as follows: about 500,000 are part of the Land Forces, 50,000 are in the Naval Forces and 60,000 in the Air Forces.

The TSK also has about 4,500 tanks and about 430 warplanes.

I obtained these simple statistics from a number of foreign magazines and newspapers, and since they are neither Turkish nor Greek sources, we can assume that it is easier and more meaningful to compare them.

Greece allocates $6.5 billion to its military spending, but using a comparable exchange rate, its military spending overall slightly exceeds $10 billion. Given the fact that Greece's population is 10 million, roughly corresponding to one-seventh of ours, the rate of military spending per capita in this country is considerably high.

Yet, the rate of military spending per capita is not considered by many to be a meaningful indicator in defense economy terms because the effectiveness of military spending becomes completely irrelevant to the rate of military spending per capita if the two armies confront each other.

Still, we can give rough figures for this rate: It is about $200 per capita in Turkey, while it skyrockets to $1,000 for Greece. But I reiterate that military spending per capita is not a very operative definition for the defense economy.

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A Market Forecast That Says ‘Take Cover’

With the stock market lurching again, plenty of investors are nervous, and some are downright bearish. Then there's Robert Prechter, the market forecaster and social theorist, who is in another league entirely.

Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years.

In a series of phone conversations and e-mail exchanges last week, he said that no other forecaster was likely to accept his reasoning, which is based on his version of the Elliott Wave theory — a technical approach to market analysis that he embraces with evangelical fervor.

Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and '40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

“I'm saying: 'Winter is coming. Buy a coat,' ” he said. “Other people are advising people to stay naked. If I'm wrong, you're not hurt. If they're wrong, you're dead. It's pretty benign advice to opt for safety for a while.”

His advice: individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come. (For traders with a fair amount of skill and willingness to embrace risk, he suggests other alternatives, like shorting the market or making bets on volatility.) But ultimately, “the decline will lead to one of the best investment opportunities ever,” he said.

Buy-and-hold stock investors will be devastated in a crash much worse than the declines of 2008 and early 2009 or the worst years of the Great Depression or the Panic of 1873, he predicted.

For a rough parallel, he said, go all the way back to England and the collapse of the South Sea Bubble in 1720, a crash that deterred people “from buying stocks for 100 years,” he said. This time, he said, “If I'm right, it will be such a shock that people will be telling their grandkids many years from now, 'Don't touch stocks.' ”

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High Court Sides With Ex-Enron CEO Skilling

The U.S Supreme Court has severely restricted the ability of federal prosecutors to bring corruption cases against public officials and corporate executives. The court unanimously imposed stark limits on the so-called honest services law that for decades has been a key tool in prosecuting corruption cases.

The court's ruling came in the case of former Enron executive Jeffrey Skilling, convicted of engaging in a scheme to enrich himself by deceiving shareholders about his company's true financial condition. He was convicted of a variety of charges, including depriving the Enron investors of his honest services.

On Thursday, the Supreme Court ruled that the definition of honest services in federal law was so broad that, if viewed literally, it would be unconstitutionally vague, providing inadequate notice to citizens about what conduct is legal and what is not. Instead, a six-justice majority led by Ruth Bader Ginsburg declined to invalidate the law outright, but read it narrowly to cover only bribery and kickbacks.

In view of the history of the statute, she said, "there is no doubt that Congress intended [it] to reach at least bribes and kickbacks." To do more, Ginsburg added, without explicit authorization from Congress, would exceed the court's authority. Three other justices — Antonin Scalia, Anthony Kennedy and Clarence Thomas — would have, for all practical purposes, invalided the statute in its entirety.

Implications Of Ruling

For Skilling and many others, the court's decision may mean invalidation of some counts on which they were convicted, while leaving intact other charges that did not involve the honest services statute. The high court sent Skilling's case and a companion case involving Canadian media magnate Conrad Black back to the lower courts for further action.

Jacob Frenkel, a defense lawyer and former prosecutor, says the problem for Skilling and Black is that they were convicted of charges other than honest services fraud.

"Even if the honest services fraud counts are thrown out, they're going to continue to be guests of the United States Bureau of Prisons because the other convictions likely will continue to stand," Frenkel said.

Not everyone will stay in prison, though. Former prosecutors estimate that Thursday's decision may well invalidate hundreds of honest services convictions. Among those who are likely to challenge their convictions under the decision are two former governors, three former members of Congress and a variety of high-profile corporate executives.

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U.S. banks' role in Mexican drug trade

Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the United States: Wachovia Corp. and Bank of America Corp.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. San Francisco's Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers - including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

Wachovia admitted it didn't do enough to spot illicit funds in handling $378.4 billion for Mexican currency exchange houses from 2004 to 2007. That's the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history - a sum equal to one-third of Mexico's current gross domestic product.

"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor who handled the case.

Since 2006, more than 22,000 people have been killed in drug-related battles that have raged mostly along the 2,000-mile border that Mexico shares with the United States.

Among the dead are police, soldiers, journalists and ordinary citizens. In Ciudad Juarez, just across the border from El Paso, Texas, 700 people had been killed this year as of mid-June.

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Top Catholic Priest Accused of Sexually Abusing His Own Sons

A prominent Catholic priest, praised by Pope John Paul II as "an efficacious guide to youth," Father Marcial Maciel, sexually abused not only young seminarians under his control but also abused his own children, according to a lawsuit filed today in Connecticut by a man who claims to be Maciel's son.

In an interview to be broadcast Monday evening on ABC News Nightline, the priest's son, Raul Gonzalez, 30, says he thought his father worked for the CIA or an international oil company, until he saw the priest's picture in a 1997 magazine article detailing allegations of sexual abuse.

"My mom said, 'Is that you?' and my dad said, 'No, it's not me' and my mom said, 'Yeah, it's you,'" recalled Gonzalez in the interview, conducted by Jason Berry, an investigative journalist who first reported on widespread sexual abuse by Maciel at the Legion of Christ and writes for the National Catholic Reporter.

The Legion of Christ has acknowledged that Father Maciel fathered at least one child as a priest.

Under Father Maciel, the Legion of Christ became one of the Roman Catholic Church's most prominent, conservative and financially successful orders. Among its many supporters is Mexican billionaire Carlos Slim.

The lawsuit claims Vatican ignored reports of sexual abuse by Maciel since the 1950s, until he was forced out of the Legion by Pope Benedict XVI in 2006.

CLICK HERE TO READ THE ALLEGATIONS IN THE LAWSUIT

Citing his age, the Vatican Congregation for the Doctrine of the Faith declined to put Maciel on trial but he was ordered to a "life of prayer and penitence."

"Pope Benedict in 2006 moved my father, my daddy, or Marcial Maciel to rest. To pray. Why didn't he bring him to jail?" Gonzalez asked in the interview.

The lawsuit filed by Maciel's alleged son claims the Vatican and the presiding Pope from the 1950's until 2002 "engaged in a conspiracy to conceal their knowledge of Maciel's serial delicts, including the repeated sexual abuse of children."

The lawsuit claims Maciel "gained influence and protection from the Vatican through giving substantial monies to Vatican officials" and providing other benefits and gifts.

There was no immediate comment from the Vatican or the Legion of Christ.

In his interview, Gonzalez said his father was protected by Pope John Paul II.

"My dad told my mom that when John Paul II dies, he was going to be in trouble," Gonzalez said.

Gonzalez said when he was nine, his father took him to Rome for a private mass celebrated by John Paul II.

"I kissed [John Paul's] ring," Gonzalez said.

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Sticking the public with the bill for the bankers’ crisis

By Naomi Klein [Toronto Globe and Mail]

My city feels like a crime scene and the criminals are all melting into the night, fleeing the scene. No, I'm not talking about the kids in black who smashed windows and burned cop cars on Saturday.

I'm talking about the heads of state who, on Sunday night, smashed social safety nets and burned good jobs in the middle of a recession. Faced with the effects of a crisis created by the world's wealthiest and most privileged strata, they decided to stick the poorest and most vulnerable people in their countries with the bill.

How else can we interpret the G20's final communiqué, which includes not even a measly tax on banks or financial transactions, yet instructs governments to slash their deficits in half by 2013. This is a huge and shocking cut, and we should be very clear who will pay the price: students who will see their public educations further deteriorate as their fees go up; pensioners who will lose hard-earned benefits; public-sector workers whose jobs will be eliminated. And the list goes on. These types of cuts have already begun in many G20 countries including Canada, and they are about to get a lot worse.

They are happening for a simple reason. When the G20 met in London in 2009, at the height of the financial crisis, the leaders failed to band together to regulate the financial sector so that this type of crisis would never happen again. All we got was empty rhetoric, and an agreement to put trillions of dollars in public monies on the table to shore up the banks around the world. Meanwhile the U.S. government did little to keep people in their homes and jobs, so in addition to hemorrhaging public money to save the banks, the tax base collapsed, creating an entirely predictable debt and deficit crisis.

At this weekend's summit, Prime Minister Stephen Harper convinced his fellow leaders that it simply wouldn't be fair to punish those banks that behaved well and did not create the crisis (despite the fact that Canada's highly protected banks are consistently profitable and could easily absorb a tax). Yet somehow these leaders had no such concerns about fairness when they decided to punish blameless individuals for a crisis created by derivative traders and absentee regulators.

Last week, The Globe and Mail published a fascinating article about the origins of the G20. It turns out the entire concept was conceived in a meeting back in 1999 between then finance minister Paul Martin and his U.S. counterpart Lawrence Summers (itself interesting since Mr. Summers was at that time playing a central role in creating the conditions for this financial crisis – allowing a wave of bank consolidation and refusing to regulate derivatives).

The two men wanted to expand the G7, but only to countries they considered strategic and safe. They needed to make a list but apparently they didn't have paper handy. So, according to reporters John Ibbitson and Tara Perkins, “the two men grabbed a brown manila envelope, put it on the table between them, and began sketching the framework of a new world order.” Thus was born the G20.

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