The golden touch - Banker J. P. Morgan rescued the dollar and bailed out the nation

...With the government running big surpluses in the prosperous late 1880s and early 1890s, the effect of this monetary policy was masked. But when the crash of 1893 rolled in, bringing deep depression, the trickle of gold out of the Treasury became a flood. By early 1895 bets were being taken on Wall Street as to exactly when the Treasury would run out of gold and default. Two bond issues were sold to replenish the Treasury's gold supply, but the gold just cycled out again. Congress, with many free-coinage-of-silver members, refused to authorize another issue. That's when the deeply alarmed Morgan traveled to Washington in early February.

President Grover Cleveland at first refused to see him, but Morgan replied, in his best imperial manner, “I have come down to see the president, and I am going to stay here until I see him.” Cleveland saw him the next morning.

Cleveland, his attorney general, and the secretary of the Treasury all still hoped that they could persuade Congress to float another bond issue and thus avoid the embarrassment of having the gold standard rescued by the very symbol of Wall Street. A telephone call from New York informed them that the New York Subtreasury had only $9 million worth of gold left in its vaults. Morgan informed them that he knew of $12 million in drafts that might be presented at any moment. Cleveland's back was up against the wall.

“What suggestions have you to make, Mr. Morgan?” he asked.

Whereupon Morgan made an extraordinary offer: he and the Rothschilds, the two most powerful forces in international banking at that time, would purchase 3.5 million ounces of gold in Europe in exchange for 30-year gold bonds. (Morgan had uncovered a forgotten Civil War-era statute that allowed the Treasury to issue bonds in exchange for coin.) He also guaranteed that the gold would not flow back out of the Treasury, at least for a while...

~ more... ~

From Chechnya, a cautionary tale

...But scratch the surface, and Chechnya becomes a cautionary tale, particularly for the US odyssey in Iraq, now almost in its seventh year. A deadly insurgency, which the Kremlin has pronounced all but defeated, perseveres in the mountains that have sheltered rebels for centuries, and is spilling out beyond Chechnya's borders into other republics of Russia's North Caucasus.

The circumstances that fuel the insurgency are familiar to American troops and diplomats stationed in Iraq: a weak, nascent kleptocracy; staggering unemployment; revenge that is easily harvested by the enduring Islamic fundamentalism. Unable to keep the rebels in check, the government — with the tacit support of the Kremlin — carries out arbitrary abductions and summary executions.

After Sunday's election in Iraq, top American commanders said the performance of Iraqi security forces demonstrated that the country is on track to the level of stability and peace needed to withdraw American combat troops by Sept. 1. (That at least 38 people were killed in bombings and artillery attacks in Baghdad suggests that the commanders' bar for what is considered stability and peace — or good performance of Iraqi forces — is rather low.) As Washington gears up for the pullout it might serve it well to look at Chechnya as an example of one way violence can continue to bleed a former counterinsurgency battlefield long after the war is officially over.

The back history of the conflict in Chechnya — nearly 300 years of relentless opposition to the oppressive Russian rule — is radically different from that of Iraq. But the efforts by Washington and by the Kremlin to extricate themselves from their respective wars follow an uncomfortably similar pattern: Prop up a relatively amenable government and hand over to it the responsibility to quash rebellion; pour money into reconstruction projects, ignoring the ensuing corruption and graft; tolerate human rights violations in the name of relative political stability; accept occasional flare-ups of an Islamic rebellion; and declare — or, in the case of the United States, strive to declare — the end of major military operations.

In Chechnya, “the model failed,'' according to Sarah Mendelson, director of the Human Rights and Security Initiative at the Center for Strategic and International Studies in Washington. The end of the war here has given way to a smoldering, self-perpetuating conflict that is quietly ravaging the region like an underground peat fire.

A recent CSIS report shows that the number of suicide bombings in the North Caucasus in 2009 nearly quadrupled compared to the previous year. Most of the attacks occurred in Chechnya. Ambushes, shootings, and roadside bombings are also on the increase across the region: last year, more than 900 people were killed here, almost double from the year before.

Of course, bloodshed in Chechnya is less dramatic in scope than the bombings and shootings that are claiming lives today in Iraq. But Chechnya's population is smaller by almost 30 times. And this war is older. Think Iraq 2019...

~ more... ~

Americanizing the global mind?

 The last few years in American mental health have been marked by a brutal public flogging. Revelations in 2008 and 2009 that drug research at Harvard  and the University of Texas was tainted by millions of dollars in drug company undisclosed payments to the researchers (which were subsequently condemned on the floor of Congress by Senator Chuck Grassley) was followed by high profile media coverage of problems with the practice of psychotherapy.

In October 2009, findings from an article in the journal Psychological Science in the Public Interest, which chronicled how psychotherapists are notoriously ignorant of clinical advances in their field, were reported by Newsweek's Sharon Begley in a stinging criticism of the profession. In January of this year, a review in the Journal of the American Medical Association (JAMA) of the research on depression medication argued that studies suggesting that drugs are not effective result from unnecessary prescription. In other words, for the minority who are clinically depressed, medication is a godsend, but for the majority who receive it – people who are just sad – it doesn't do much.

Citing this and other research, Judith Warner called the entire field into question in the New York Times:

“This is the big picture of mental health care in America: not perfectly healthy people popping pills for no reason, but people with real illnesses lacking access to care; facing barriers like ignorance, stigma and high prices; or findings care that is ineffective.”

Now, this criticism has gone global with Crazy Like Us: The Globalization of the American Psyche, by journalist Ethan Watters, a book that takes aim at “the grand project of Americanizing the world's understanding of the human mind.”

~ more... ~

Indian children may have been 'sacrificed'

Five children poisoned to death in a village in India may have been "sacrificed", police say.

They say that the children were killed in Maharashtra state by a childless couple in a suspected black magic ritual to enable them to conceive.

The couple and parents of the accused husband have been arrested. Officials say post-mortem results are awaited.

Black magic is sometimes carried out in poorer parts of India by people who believe it will provide benefits.

These can include helping childless women to bear children and producing more rainfall.

'Foul play'

Police say they are looking for the tantrik, or witch doctor, who advised the couple to "sacrifice" 11 children in accordance with black magic rituals.

They say that Vitthal and Vandana Mokle were married for 12 years but were unable to conceive despite frequently visiting doctors.

Investigating Officer Sheikh Abdul Rauf told the BBC that after initial inquiries they suspected foul play in the deaths of the children.

"The first death occurred in December 2009 and the most recent one was in March," he said.

~ more... ~

We stand on the cusp of one of humanity's most dangerous moments

Aleksandr Herzen, speaking a century ago to a group of anarchists about how to overthrow the czar, reminded his listeners that it was not their job to save a dying system but to replace it: “We think we are the doctors. We are the disease.” All resistance must recognize that the body politic and global capitalism are dead. We should stop wasting energy trying to reform or appeal to it. This does not mean the end of resistance, but it does mean very different forms of resistance. It means turning our energies toward building sustainable communities to weather the coming crisis, since we will be unable to survive and resist without a cooperative effort.

These communities, if they retreat into a pure survivalist mode without linking themselves to the concentric circles of the wider community, the state and the planet, will become as morally and spiritually bankrupt as the corporate forces arrayed against us. All infrastructures we build, like the monasteries in the Middle Ages, should seek to keep alive the intellectual and artistic traditions that make a civil society, humanism and the common good possible. Access to parcels of agricultural land will be paramount. We will have to grasp, as the medieval monks did, that we cannot alter the larger culture around us, at least in the short term, but we may be able to retain the moral codes and culture for generations beyond ours. Resistance will be reduced to small, often imperceptible acts of defiance, as those who retained their integrity discovered in the long night of 20th-century fascism and communism.

We stand on the cusp of one of the bleakest periods in human history when the bright lights of a civilization blink out and we will descend for decades, if not centuries, into barbarity. The elites have successfully convinced us that we no longer have the capacity to understand the revealed truths presented before us or to fight back against the chaos caused by economic and environmental catastrophe. As long as the mass of bewildered and frightened people, fed images that permit them to perpetually hallucinate, exist in this state of barbarism, they may periodically strike out with a blind fury against increased state repression, widespread poverty and food shortages. But they will lack the ability and self-confidence to challenge in big and small ways the structures of control. The fantasy of widespread popular revolts and mass movements breaking the hegemony of the corporate state is just that – a fantasy.

~ more... ~