Counterpunch on Iraqi Incompetence

Why Airstrikes are Failing

ISIS at the Gates of Baghdad

by PATRICK COCKBURN

Three and a half months since the Iraqi army was spectacularly routed in northern Iraq by a far inferior force of Isis fighters, it is still seeing bases overrun because it fails to supply them with ammunition, food and water. The selection of a new Prime Minister, Haider al-Abadi, to replace Nouri al-Maliki last month was supposed to introduce a more conciliatory government that would appeal to Iraq’s Sunni minority from which Isis draws its support.

Mr Abadi promised to end the random bombardment of Sunni civilians, but Fallujah has been shelled for six out of seven days, with 28 killed and 117 injured. Despite the military crisis, the government has still not been able to gets its choice for the two top security jobs, the Defence Minister and Interior Minister, through parliament.

The fighting around Baghdad is particularly bitter because it is often in mixed Sunni-Shia areas where both sides fear massacre. Isis has been making inroads in the Sunni villages and towns such as in north Hilla province where repeated government sweeps have failed to re-establish its authority.

Mr Abadi is dismissing senior officers appointed by Mr Maliki, but this has yet to make a noticeable difference in the effectiveness of the armed forces, which are notoriously corrupt. During the battle for Mosul, Iraq’s second-largest city, in June, Iraqi government forces nominally numbered 60,000 in the army, federal police and local police, but only one third were actually on duty. A common source of additional income for officers is for soldiers to kickback half their salaries to their officers in return for staying at home or doing another job.

The same system is universal in civilian ministries, which have far more people on their payroll than are actually employed.

A World Bank report just published reveals that out of 8,206 guards employed by one ministry only 603 were actually working. Some 132 senior officers have recently been sacked by Mr Abadi, but there is as yet no sign of the army being able to make a successful counter-attack against Isis.  Worse, in Baghdad it has been unable to stop a wave of car bombs and suicide bombers, which continue to cause a heavy loss of civilian life.

An example of the continued inability of the Iraqi army to remedy the failings, which led to its loss of Mosul and Tikrit, came on 21 September when Isis overran a base at Saqlawiya, near Fallujah, west of Baghdad after besieging it for a week.

The final assault was preceded, as is customary with Isis attacks, by multiple suicide bombing attacks. A bomber driving a captured American Humvee packed with explosives was able to penetrate the base before blowing himself up.

This was followed up by an Isis assault team dressed in Iraqi army uniforms. Some 820 government soldiers stationed at the base broke up into small groups and fled by backroads but were ambushed.

What is striking about the loss of Saqlawiya is that during a siege lasting a week the Iraqi army was unable to help a garrison only 40 miles west of Baghdad. Complaints from the troops that they were left without reinforcements, ammunition, food or water are very much the same as those made in the first half of 2014 when rebels led by Isis outfought some five government divisions, a third of the 350,000-strong army, and inflicted 5,000 casualties.

Fallujah fell in January and  the army was unable to recapture it.

The US could embed observers with Iraqi troops to call in air strikes in close support, but people in the Sunni provinces are frightened of being reoccupied by the Iraqi army and Shia militias bent on revenge for their defeats earlier in the year. In areas where there are mixed Sunni-Kurdish populations both sides fear the military success of the other.

The military reputation of the Kurdish soldiers, the Peshmerga, has taken a battering since their defeat in Sinjar in August where its troops fled as fast as the Iraqi army had done earlier. The Peshmerga have not done much fighting since 1991, except with each other during the Kurdish civil wars, and even in the 1980s their speciality was rural guerrilla warfare, wearing the enemy down with pinprick attacks by 15 to 20 fighters.

Before the deployment of US air power, Isis in Iraq used motorised columns with 80 to 100 men which would launch surprise attacks.

With the possibility of US air strikes, this kind of highly mobile warfare is no longer feasible without taking heavy losses, But Isis has shown itself to be highly adaptable and is still able to operate effectively despite US intervention.

The problem for the US and its allies is that even if Iraqi divisions are reconstituted, there is no reason to think they will not break up again under Isis attack. The main military arm of the Baghdad government will remain Iranian-backed Shia militias, of which the Sunni population is terrified.

Patrick Cockburn is the author of The Jihadis Return: ISIS and the New Sunni Uprising

 

Counterpunch on ISIS

The Rise of ISIS and the Origins of the New Middle East War

by TARIQ ALI and PATRICK COCKBURN

Tariq Ali: I’m in conversation with Patrick Cockburn, who can  only be described as a veteran reporter and courageous journalist who has covered the wars of the United States in the Middle East since they began with the invasion of Iraq, and was reporting from the region a long time before on the sanctions against Iraq, the Gulf wars. We’re now at a critical stage where a new organisation has emerged.

Patrick has written a new book, The Jihadis Return, which is an extended essay on the emergence of ISIS and its links to the Sunni population in Iraq and the likely consequences of this for the region. Because there’s absolutely no doubt that what this opens up is yet another front in the unending war that has become a total misery for the people who live in the Arab world today. Patrick, let’s begin by sort of inquiring about the origins of the Islamic State group, ISIS as they call themselves, where do they come out from and when did this start? 

Patrick Cockburn: Well they come most immediately from al-Qaeda in Iraq, which was at the height of its influence in 2006 [and] 2007 when it was an element–but not the only element–in the Sunni resistance to a Shia government and the American occupation. Ideologically, it comes out of the Jihadi movement and actually its religious beliefs are not that much different from Saudi Wahhabism, the variant of the Islam which is effectively the state religion of Saudi Arabia with its denigration of Shia as heretics, [along with] Christians and Jews. It’s just carrying these beliefs to a higher and more violent level but it’s very much in the context of the Jihadi movementTariq Ali: Can I just interrupt you there? This Jihadi movement did not exist in Iraq as such prior to the American invasion and occupation.Patrick Cockburn: No, it didn’t. And Saddam arrested anybody who was an obvious Jihadi. I mean, it was always an absurd pretence at the time of the invasion of Iraq to say that Saddam had any connection with the Jihadis or 9/11. Though such was the volume of propaganda at the time that 60% of Americans believed that somehow Saddam was linked to 9/11

Tariq Ali: So following through on this, we have the American occupation, we have a Shia government, which they have effectively put into power, and we have the beginnings of an uprising in the early days of the occupation, which involved not just Sunnis but also Muqtada al-Sadr who was very hostile to the occupation. What happened to break up this sort of resistance, which was initially a combined resistance, such as Shia groups like Muqtada sending medical aid and help to the besieged Fallujah? Why did that break up?

Patrick Cockburn: The unity between the Sunni and Shia resistance to the Americans was always tentative, although taken very seriously by the Americans. I mean, the memoirs of American generals at the time said they were really worried that these two groups would unite in resisting the occupation. And it’s perhaps one of the many disasters to have happened to Iraq that they didn’t unite, that they remained sectarian, in fact remained more sectarian, on the Sunni side.

Tariq Ali: And so, if we come down to the speed with which this particular organisation swept through parts of Iraq, which you yourself talk about in the book, how do you explain the total collapse of the Iraqi army, Patrick? Is it in that sense not too much different from the army created by the West in Afghanistan, the fact that they are not prepared to fight and die for the United States?At that time it was, al-Qaeda and Iraq was only one of a number of serious resistance movements to the occupation but it was very evident in Baghdad at the time when I went to American briefings that anything that happened was attributed by the spokesman, the military spokesman, to al-Qaeda. Of course this played well back in the US, but in Iraq it had quite the contrary effect which people who were against the occupation think, oh it’s al-Qaeda who’s doing all this resisting, let’s go an get a black flag and join them…Patrick Cockburn: Yeah, and even more so. I mean I think this is, it’s difficult to think of another example in history, where there are 300 or 350 thousand men in the Iraqi army, they’d  spent 41.6 billion dollars on this army over the last three years. OR Book Going RougeBut it disintegrated because of an attack by maybe a couple of thousand people in Mosul. Why did it happen? Well, the army was rather extraordinary. I mean one  Iraqi general I was talking to who’d been forcibly retired said at the beginning of the disaster was the Americans, [who] when they set it up, insisted that supplies and things like that should be outsourced, privatised.

So immediately a colonel of a battalion nominally of 600 men would get money for 600 men, [but] in fact there were only 200 men in it, and would pocket the difference, which was spread out among the officers. And this applied to fuel, it applied to ammunition… At the time of the fall of Mosul there are meant to be 30,000 troops there. In fact, it’s estimated that only one in three was there. Because what you did was: you joined the army, you got your full salary and then you kicked back half that salary to your officer, who spread it among the officers. So I remember about a year ago talking to a senior Iraqi politician, and who said look: the army’s going to collapse if it’s attacked. I said surely some will fight, he said: no no no, you don’t understand. These officers are not soldiers, they’re investors!

They have no interest in fighting anybody; they have interest in making money out of their investment. Of course you had to buy your position. So in 2009, you want to be a colonel in the Iraqi army, it’ll cost you about 20,000 dollars, more recently it cost you about $200,000. You want to be divisional commander, and there are 15 divisions, it will cost you about 2 million. Of course, there are other ways of making money. Checkpoints on the roads act as sort of customs barriers and a tariff on each truck going through would be paid. So that’s why they ran away, led by their commanding officer, the three commanding generals got into a helicopter in civilian clothes and fled to Erbil, the Kurdish capital. And that led to the final dissolution of the army.

Tariq Ali: It is one of the most astonishing events in recent history, Patrick. I mean can you think of any other equivalent, even in the last century?

Patrick Cockburn: I can’t think of any of such a large well-equipped army disintegrating. You could say that Saddam’s army disintegrated in ’91 when attacked by the Americans, and again in 2003. But then it was attacked by the largest military force in the world and was being bombed. So it’s not a parallel. It of course shows that ISIS was quite effective in spreading terror through social media, by films of it decapitating Shia captives. So the soldiers were terrified of ISIS.

And also the whole Sunni community, about 20% of Iraqis, maybe 6 million in the Sunni provinces, were alienated by the Nouri al-Malaki’s regime. They were persecuted, they couldn’t get jobs, collective punishment, young men in villages around Fallujah – sometimes there aren’t many young men because they’re all in jail – and some were on death row going to be executed for crimes which somebody had already been executed for. It was completely arbitrary. So not surprisingly to this day  it’s one of the reasons that ISIS still has support, that for all its bloodthirstiness, for a lot of the Sunni community it’s better than the Iraqi army and the Iraqi Shia militias coming back.

Tariq Ali: I mean this is something which apart from yourself and possibly one other journalist in the entire Western media is not being reported at all, that however violent and brutal this group seems and is, it does have some support among the population…

Patrick Cockburn: Yes, ISIS has a number of different kinds of support. It has support of the alienated Sunni community in Iraq and also in Syria. That at least their victors, after all these people have been defeated – they were defeated in ’91 by the Americans, they were defeated again in 2003, they were marginalised, persecuted – so victory is important to them. I think also they appeal to jobless young men, I mean sometimes referred to as the underclass, but actually just the poor, poor young men.

Tariq Ali: Poor and unemployed.

Patrick Cockburn: Poor, unemployed young men with nothing in front of them: this does have an appeal for them. And the alternative is pretty bad. I mean, the few successful counterattacks made primarily by the Shia and Kurdish militias, that they’ve immediately driven out the Sunni from areas were ISIS had driven out the Shia. So from the Sunni point of view, they don’t have much alternative but to stick with ISIS.

Tariq Ali: And is there no alternative Sunni organisation, which at least offers a different political programme apart from this sort of fanaticism shown by ISIS. I mean, what about the Association of Sunni Scholars?

Patrick Cockburn: Many  sort of went along with ISIS trying to sort of ride the tiger. And … it was believed in Baghdad, and I think really until about a month ago, that, yes, ISIS had appeared to have won these great victories but in fact they were simply the shock troops of the Sunni community. And there were tribes and there were former army officers and there were others like the scholars who would displace them once the Sunni had got what they wanted.

Tariq Ali: And we thought this was wishful thinking because ISIS tends to monopolise power just as soon as it can, even when it took power in an area in combination with others. It’s also extremely paranoid, so it’s going to kill anybody whom it thinks is preparing to stab it in the back or rise up against it. In Mosul for instance, they seem to have taken hostage about 300 people. But former generals, sort of Sunni dignitaries, the sort of people who they suspect might lead that sort of resistance. And in Syria, in Deir ez-Zo province, one tribe sort of rose up against them, they crushed it immediately and executed 700 of its members. So I think it’s just wishful thinking to imagine that ISIS is going to be displaced in the areas it has conquered.

Let’s come to the next point. A lot of people have speculated that the Saudis in some form or the other, if not the government directly, people close to the government in Saudi Arabia, were partially responsible for creating, helping and funding this force as a sort of proto-Saudi intervention against Shia domination in Iraq after the occupation. To what extent is this true, if at all?

Patrick Cockburn: There’s some truth in it, but you want to avoid a conspiracy theory that the Saudis are the sort of master who moves the pawns on the board, which is sometimes believed in parts of the Middle East. The Saudis have always been behind the Jihadi movement in general, above all abroad, not within Saudi Arabia. And generally they will support those who oppose Shia governments, and don’t really distinguish or didn’t really distinguish who they were supporting. But it’s also pretty clear that a lot of their support did go to ISIS, did go to other groups like Jabhat al-Nusra, this was all through private donors, not just Saudi Arabia, but Kuwait  and Qatar, and Turkey.

The US and Britain would [try to] distinguish between the moderate Syrian opposition in this corner and the Jihadi extreme opposition in the other corner. But actually the two were together, I mean there was a report this very week by a research organisation itemising various weapons in the hands of ISIS that appear to have been supplied by Saudi Arabia last year to the supposedly moderate Syrian opposition, but were immediately transferred because the gap between the two is much more limited than you’d imagine…

Tariq Ali: Yeah. And there’s a report in, I think, in the newspapers today as we speak, that Steven Sotloff was sold to ISIS by a supposedly moderate Syrian organisation who captured him.

Patrick Cockburn: Yes, his family are saying this. And it’s also interesting that immediately the American spokesmen say: no no no that didn’t happen, because they can see how far this undermines what may be their policy to be announced today by Obama of building up a moderate opposition, a third force, which is going to supposedly fight Assad and fight ISIS simultaneously

Tariq Ali: It’s pure fantasy

Patrick Cockburn: It’s fantasy … in that form. But I mean it’s interesting that the commanding general of the Free Syrian Army says that the Free Syrian Army commanders in Syria, now get their orders directly from the Americans. He said he and the other officers in Turkey were meant to be the headquarters and the leaders of the Free Syrian Army. He said I think it’s 16 commanders in northern Syria and some other, about 60 of the smaller groups in the South, now get their equipment, advice and instructions directly from the Americans

Tariq Ali: But Patrick, this again is pretty astonishing. That here we had, not so long ago, the entire Western world led by the United States determined to get rid of Assad, arming all these people, and as you’ve pointed out arms flowing from one group to the other in the battle against Assad. And now we are facing a situation where the United States might actually be bombing ISIS sites inside Syria. Is this possible?

Patrick Cockburn: Well I think so. I think they’ve gone so far down this road to suggesting this that I think it’ll certainly happen at some point. One of the strengths of ISIS is being able to operate in Iraq and Syria

Tariq Ali: At the same time…

Patrick Cockburn: At the same time. And in fact its potential constituency in Syria is bigger than Iraq, because only 20 percent of Iraqis are Syri, are Sunni Arabs and 60 percent of Syrians are Sunni Arabs. So potentially they could dominate the Syrian opposition and not all of course of Syrian Sunni Arabs support the opposition, quite a lot support the government. But they can have a far bigger reach there and they are still expanding. I mean they are 30 miles from Aleppo. They inflicted some of the biggest defeats, in fact the biggest defeats, which the Syrian army has suffered in three years. [These] were inflicted in Raqqah province within the last month by ISIS.

Tariq Ali: Okay, now let’s come to the third factor in the situation, not discussed seriously but often referred to. The Kurdish parties in Syria and in Iraq are clearly opposed to all this and are fighting ISIS as best they can.The Kurds in Syria are under siege from them, the Kurds in Iraq are determined to fight them. To what extent is this effective and why was the Kurdish Peshmerga in Iraq not capable of dealing with them in a tougher way at the very beginning?

Patrick Cockburn: I think probably the reputation of the Peshmerga in Iraq was exaggerated anyway. They haven’t fought anybody apart from their own [separatist] war and that was in the 90s, for many years. They were always good at mountain ambushes and at public relations, but otherwise it was always a bit exaggerated. I mean maybe it’s not their fault, they were fighting Saddam’s enormous army. But that was exaggerated. And also it has become an oil state…many Kurds are just interested in making money and so forth. Now they say they weren’t properly equipped.

Well, you know, you can buy arms … it doesn’t all have to come from America. Why  are there all this big hotels in Erbil their capital, and why didn’t they have some heavy machine guns? And they also have got a 600 mile border to defend. And also they took advantage of the fall of Mosul to extend their territories into territories [that are] disputed with the Arabs. This made the Arabs in these mixed areas much more anti-Kurdish than they had been previously. So there was acceptability to what ISIS did in advancing among the Arabs, and one of the many toxic effects of this is that the populations are now separating. First of all the Yazidis and the Kurds and others fled, and now the Sunni Arabs are fleeing these areas to avoid revenge attacks

Tariq Ali: And what about the Syrian Kurds?

Patrick Cockburn: Well, that’s different because they are 10% of the population in Syria. They’re in enclaves mostly in the North East and the North.

Tariq Ali: And Assad has given them autonomy, this is true?

Patrick Cockburn: Not quite, but they’ve sort of [made an] opportunistic withdrawal, because he knows that … ISIS is going to attack them … and actually you know, the people that are attacking them are not just ISIS but Jabhat al-Nusra. All the other opposition groups suddenly come together to attack the Kurds in these areas. I mean it also undermines that idea that there is a moderate opposition and a Jihadi opposition. That the Free Syrian Army and all these others come to attack the Kurds. The [dominant] Kurds there are … the PKK which is basically the Turkish Kurdish opposition. But they are much more effective fighters than the Iraqi Peshmerga. In fact, they rescued quite a lot of the Yazidis in Sinjar in Western Kurdistan

Tariq Ali: The Syrian Kurd state….

Patrick Cockburn: The Syrian Kurds, yeah. Somewhat to the embarrassment of the [Kurds] of Erbil

Tariq Ali: Yeah. So, coming to the key thing now. You’ve written that the Skykes-Picot agreement has probably finally finished. This was the agreement after the First World War whereby Ottoman lands in the Arab world were divided up between France and Britain. But Patrick, you may be right. In 2006 I felt that there was no future for Iraq as a state because of what had happened and you’d probably have a Shia state and a pro-Saudi Sunni state and a Kurdish state. Do you think this is going to happen now in some shape or form over the next five years?

Patrick Cockburn: In some shape, but not exactly, you know I don’t think map-makers are going to sort of have the borders of their new states there. But I think you’ll effectively have three sovereign states in Iraq. And you do have that already. I mean, you’re a Shia in Baghdad. If I’m in Baghdad, I can’t go an hour North of Baghdad without having my head chopped off. Likewise a Kurd in the North and likewise any Sunni who tries to come through any checkpoint in Baghdad or into Kurdistan is likely to be arrested…

Tariq Ali: Well you’ve been visiting Baghdad for years, Patrick. Are you telling me that effectively there are ethnic borders now in Baghdad and you can’t move from one part of the city to the other?

Patrick Cockburn: No. Between Baghdad and the rest of Iraq you can’t. I mean there are Sunni parts of Baghdad, but you had a sectarian civil war 2006-7 in which the Sunni basically lost. So they have quite small enclaves in Baghdad. There aren’t many mixed areas left, the Shia dominate the city. Now these Sunni areas could rise up, but they’re also vulnerable to counterattack from the Shia majority. There could be a battle for Baghdad but the Sunni in the city are likely to lose it, which is one of the reasons why they are terrified.

Tariq Ali: And there’s a Kurdish population in Baghdad too, let’s not forget…

Patrick Cockburn: Yes, but a lot of them are, have melted into the local population.

Tariq Ali: Intermarriages?

Patrick Cockburn: Intermarriages…. There’s never been sort of hardcore Kurdish areas or enclaves in Baghdad with their own militia, which is true of the Shia, and in a covert way is true of the Sunni as well.

Tariq Ali: If we just move to Syria for a bit. What is your impression of the current state of play with the sort of emergence of ISIS, not just the emergence but the successes of ISIS, with the Americans  in NATO now trying to work up some sort of a plot or, not a plot, but openly debating how to destroy the organisation. Surely this is going to, I mean, immediately strengthen the Assad regime, regardless of what is intended or not…

Patrick Cockburn: Yes, I think that’s absolutely true. And that’s of course what has put them in such a muddle. I mean ISIS controls about 35, 40% of Syria. In eastern Syria, they control the oil fields.  They’re very close to Aleppo, which was the biggest city in Syria. They could take over the rebel held part and then maybe they could take over the whole city. This would be more significant than taking Mosul in Iraq. Jihadi organisations, particularly Jabhat al-Nusra, but also ISIS, are close to Hama, the fourth biggest city in Syria. So they’re in a strong position. It wouldn’t take much for ISIS to reach the Mediterranean there, where they were before they did a tactical withdrawal earlier in the year.

So it’s rather an extraordinary situation that you have America and the other Westerners and powers saying we’re going to intervene against ISIS but we’re not going to do anything to help Assad. But Assad is the main enemy of ISIS and if they’re trying to weaken Assad then they help ISIS. And it’s the result of their, to my mind, catastrophic policies over the last two years. It has been evident since the end of 2012 that Assad was not going to go, previous to that there was a presumption that in 2011 and 2012, in the Western capitals and elsewhere, that he was going to follow Gaddafi–he was going to go down. But they’ve sort of pretended that he was going to go. [In] negotiations in Geneva earlier this year it was said … that the only thing worth talking about was transition, Assad going.

But Assad obviously wasn’t going to go, because there are 14 provincial capitals in Syria and he held 13 of them. So if you said that, in fact, you were saying: well, then the war will go on because he wasn’t going to go. And I think for a time, they  – Washington, and the others, and the Saudis – were not unhappy with this. It was something they could live with because he was there but he was weak and was probably going to stay there. And then the Jihadis were there, but they were involved in their own civil war. But the great miscalculation was that on the Jihadis side one group would win out, which was ISIS. And secondly, this wasn’t going to remain Syrian on Syrian, or Iraqi on Iraqi, or even Muslim on Muslim, that after all the new caliphate claims the allegiance of all Muslims and claims the allegiance of the world. So its ambitions….

Tariq Ali: Are global…

Patrick Cockburn: Are global.

Tariq Ali: And its prospectus, which is very similar to the NATO prospectus, if you see both organisations’ prospectuses together, it’s obvious that ISIS has copied the NATO model. They have pictures like that one in their prospectus saying this is what we do, this is how many  people we killed here, there. There’s no shame at all about what they are doing. So in a weird way, despite the ideology which is Wahhabi and sort of born-again Muslimism, literalism, they are quite modern in their approach in some ways are they not?

Patrick Cockburn: Yes, I mean rather amazingly so. You know, at the beginning of the Arab uprisings in 2011, blogging, new Twitter, YouTube, were considered progressive instruments that would erode the power of police states and authoritarianism and so forth. But in fact, the people that have put them to greatest use have been Jihadi organisations, and ISIS in particular, to spread their views, to spread terror, very effectively. The families of an Iraqi soldier in Baghdad, you know, a soldier’s wife, his mother, they’ve all seen this stuff so, they say: don’t go back to the army, you’ll be killed. So this is pretty effective

Tariq Ali: Patrick, what is the United States going to do now, what are its options? I mean do you think they can have any success in wiping out ISIS, which seems to be their plan. I mean how the hell are they going to do it without ground troops and all the available reports suggest that the Pentagon is opposed to putting in ground troops. I mean are they going to find some Arab countries to act as their auxiliaries?

Patrick Cockburn: Well, yes, … auxiliaries. I don’t think they’re going to commit troops. I mean look what happened: the Iraqi army fled, the Syrian army fought, it still lost. It lost an important air base in Raqqah province a few weeks ago although it fought very hard. So I think they’ll be very nervous of fighting ISIS. The US is looking, Obama says, for local partners. It’s a bit unclear what this means. Local partners in Baghdad, the parties have sort of come together because they’re all terrified of ISIS but when you look more closely the Kurds have agreed to nothing. The Sunni leaders have taken some jobs in Baghdad, but these are Sunni leaders who dare not go back their own cities and towns because they’d get their heads chopped off. So it’s still very disorganised and divided and has only sort of happened under pressure from the US and Iran who have parallel interests there.

Tariq Ali: Well they know exactly the obvious ally in this, were they looking for serious allies in the region, would actually be Iran. Which they’re not prepared to consider because they’ve demonised Iran to such a level and the Israelis would probably be hostile to any such notion. Because the Iranians could use any alliance with the Americans now to get a bomb quickly like General Zia did during the war against Afghanistan. But apart from Iran, who else is there with the firepower?

Patrick Cockburn: Yes, and also this applies to Syria as well. the Americans and the others are sort of refusing to make a choice … Say we put a coalition backed by the United Arab Emirates and Saudi Arabia. These people have money, they have influence on the Jihadis maybe, on the Sunni community, but they’re avoiding changing relations or ending confrontation with Iran and in Syria Russia matters a lot. They’re still hostile to Hezbollah …  and the Kurds in Syria who are fighting ISIS rather effectively. So what is it? It’s really a recipe for a very long war in a very confused situation.

And, you know, what are they going to do if ISIS advances into Aleppo? Are they going to  bomb it there at the same time as the Syrian Air Force is bombing ISIS? How do they know that Syrian Air Force planes are not going to try to shoot down American planes? Of course, what they will do, I think, is have covert relations with the Assad government. In fact, I’m told they already do–not to do a public U-turn but have a sort of an understanding with them, as to some degree happened in Iraq after 2003… Iraqis always used to say that Iran and the US wave their fists at each other over the table, but they sort of shake hands under the table

Tariq Ali: Which they did.

Patrick Cockburn: Oh absolutely.

Tariq Ali: Without the Iranian green light it would have been difficult for them to take Iraq just like that.

Patrick Cockburn: Oh yes. Why did we have Nouri al-Maliki as the disastrous Prime Minister of Iraq for eight years and then reappointed in 2010? And I remember an Iraqi friend of mine, a diplomat, rang me up when Maliki …  basically got back as Prime Minister and said, you know, the great Satan America and the axis of evil Iran have come together with … catastrophic consequences for Iraqis.

Tariq Ali: Exactly. So Patrick, overall the situation is pretty grim and likely to remain so?

Patrick Cockburn: Yes, it’s grim because there are so many players involved. There are so many different crises entangled with each other that this is now likely to go on for a long time. There might have been a moment two years ago when they could’ve prevented ISIS taking off. Because really the war in Syria that changed the fortunes of ISIS. Previously in Iraq, it benefited from the alienation of the Sunni community, but suddenly the war in Syria relaunched ISIS, because it destabilised Iraq. It reignited the war in Iraq which had died down, but never quite ended. And Iraqi politicians, I remember Hoshyar Zebari, the foreign minister saying to me at that time, if the West allows the war in Syria to go on, that will inevitably destabilise Iraq and that is what has happened.

Tariq Ali: On that pessimistic note, we end this conversation. Thanks very much Patrick and we will talk again no doubt.

Patrick Cockburn: Great, thank you.

Tariq Ali is the author of  The Obama Syndrome (Verso).

Patrick Cockburn is the author of The Jihadis Return: ISIS and the New Sunni Uprising

 

Naked Capitalism: Zero Perp Walks for Bankers

William R. Black on Prosecuting Criminal Banker CEOs: Obama and Holder Don’t Even Care Enough to Fake It

Posted on September 29, 2014 by

By Lambert Strether of Corrente.

Bill Black gives a fine and focused interview, with Sharmina Peries, Executive Producer at TRNN.

It’s all good, but this passage in particular caught my eye:

BLACK: [E]ric Holder has surprised me. I always predicted that he would at least find one token case to prosecute some bank senior executive for crimes that led to the creation of the financial crisis and the global Great Recession.

PERIES: Why did it surprise you, Bill?

BLACK: Well, he’s actually going to leave without even a token conviction, or even a token effort at convicting. So, in baseball terms, he struck out every time, batting 0.000, but he actually never took a swing. ….

Yep. You don’t bat zero for the season without a plan. (And that goes for a lot of what the administration does, or does not do, if you think about it.) So Bill Black wasn’t cynical enough!

[BLACK: ]And I couldn’t believe that he would leave without at least having one attempted prosecution against these folks. So he hasn’t done the most–he never did the most elementary things required to succeed [for some definition of success --lambert]. He never reestablished the criminal referral process, which is from the banking regulatory agencies, who are the only ones who are going to do widescale criminal referrals against bank CEOs, because, of course, banks won’t make criminal referrals against their own CEOs. Holder could have reestablished that criminal referral process in a single email on the first day in office to his counterparts in the banking regulatory agencies, and he’s going to leave never having attempted to do so.

And now to the whistleblowers, perhaps even more vicious and reprehensible than the administrations refusal to prosecute banker CEOs for accounting control fraud, because the message it sends is that even if you see your company or agency controlled by criminals, you’ll get no help from government:

[BLACK: ]On top of that, if you’re not going to have criminal referrals from the agencies, the only other conceivable way that you’re going to learn about elite criminal misconduct of this kind is through whistleblowers. And as you mentioned, this administration, and Eric Holder in particular, are known for the viciousness of their war against whistleblowers. What the public doesn’t know–and it doesn’t know because of Eric Holder–is that in the three biggest cases involving banks–again, none of them, not a single prosecution of the elite bankers that drove this crisis–all three of those cases, against Citicorp, against JPMorgan, and against Bank of America, were made possible by whistleblowers. Eric Holder was the czar at the Department of Justice press conferences in each of these three cases, and he and the Justice Department officials, the senior Justice Department officials, at those press conferences, never mentioned the role of the whistleblowers–never praised the whistleblowers and never used those press conferences as a forum for asking whistleblowers to come forward. And so your viewers should take a look at the Frontline special on this, where the Frontline producers made clear that as soon as word got out that they were investigating the area, dozens of whistleblowers came forward, and each of them had the same story: the Department of Justice had never contacted them.

So, instead of going after the big guys–by the way, they didn’t go after the small CEOs either. I keep talking about elite CEOs, for obvious reasons: they cause far greater damage. But there are all these CEOs of the not very big mortgage banks who are not prestigious, who are not politically powerful, and Eric Holder refused to prosecute them as well.

Right.

If you’re a CEO, you have impunity. Case closed! Simon Johnson made the right call, lo these many years ago.

UPDATE I forgot, or repressed, this part:

PERIES: Well, Bill, who is likely to be appointed as the attorney general next?

BLACK: No one better.

Perhaps Holder’s crusading deputy, um…. Um…. Um….

Our Future in Privatization

Don Quijones: “Slimlandia,” The Land of Mexican Oligarchs

Posted on September 26, 2014 by

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Yves here. As Don Quijones explains, “In many ways, Mexico is the poster child of neoliberalism.” So take this as a cautionary tale of what rule by our modern oligarchs will look like.

By Don Quijones, a freelance writer and translator based in Barcelona, Spain, and editor at Wolf Street, where this article was originally published

Despite being Mexico’s second richest man and owning one of the world’s largest mining groups, German Larrea is an enigma. Until this month the only photo that existed of the media-shy recluse was a blurry black and white image.

All that has now changed: his name and a new photo – one taken of him schmoozing with Mexican President Enrique Peña Nieto at a recent meeting of Citibank’s Mexican division, Banamex – are plastered across the front and financial pages of Mexico’s daily newspapers.

This new wave of unwelcome public attention is the result of what many are describing as the worst ecological disaster in Mexican history. On August 6 the Buenavista del Cobre mine belonging to Larrea’s flagship company, Grupo Mexico, the country’s largest mining and infrastructure company, spewed 10 million gallons (40,000 cubic meters) of copper sulfate acid into the Sonora and Bacanuchi rivers, turning the waterways orange and poisoning the water supply of 24,000 people in seven communities along the rivers.

No Apologies

Authorities place the cost of the total cleanup in the hundreds of millions or even billions of Mexican pesos, yet so far the government has issued Grupo Mexico with a one-off sanction of just 40 million pesos (roughly $3 million). As for Larrea, he has quickly crawled back under the woodwork whence he came, having issued not a single public apology.

It is not the first time that Larrea has shown such callous disregard for the occasionally destructive externalities of his particular line of business. In 2006 a methane explosion in the Grupo Mexico-owned Pasta de Conchos coal mine left 65 miners trapped underground. Only two of the 65 bodies were found before the decision was made to call off the search, just five days after the explosion. During that time neither then-Mexican president Vicente Fox, nor Larrea, visited the mine or interacted with the families. In fact, not a single Grupo Mexico shareholder bothered to show up.

According to Forbes, Larrea is the 60th richest billionaire in the world, boasting a total wealth of $15 billion. Through the control of just over half of Grupo Mexico, he and his family own mining assets in Mexico (Minera México), Perú (Southern Copper) and the U.S. (Asarco). They also own Infraestructura y Transportes México (ITM), which runs two railroads, Ferrocarril Mexicano y Ferrosur, as well as a 30 percent stake in the Mexican airport operator Grupo Aeroportuario del Pacífico.

Larrea is also the majority owner of Cinemex, Mexico’s second largest cinema chain. He sits on the boards of Citi-owned Banamex, the Mexican stock exchange, the Mexican Shareholders Group, and until recently the giant Mexican media group Televisa. In fact, rumours are that Larrea is poised to take advantage of the recent shake-up of Mexico’s telecommunications sector to launch his own media empire.

Like many of his fellow Mexican billionaires, Larrea owes much of his fortune to one man: Carlos Salinas de Gortari, who served as president of Mexico between 1988 and 1994. During his six-year presidency Salinas not only signed up to NAFTA, but he also embarked on a privatization spree, selling off mines, banks, railways, electricity networks and, of course, Telmex, the national telephone company. Salinas relied on a relatively small group of Mexico’s oligarchy to supply him with campaign (and perhaps personal) funds, in return for the sale of state assets at favorable rates and terms. For example, Salinas’ close friend Carlos Slim, now the richest billionaire on the planet, was essentially able to pay for Telmex out of the future profits of the company.

Welcome to Slimlandia

While Slim is often celebrated in the international press for both his sharp business acumen and generous philanthropy, his success has come at a heavy price, in particular for Mexican consumers.

To wit, from Fortune:

George W. Grayson, a professor of government at the College of William & Mary, coined the term “Slimlandia” to describe how entrenched the Slim family’s companies are in the daily life of Mexicans.

It’s not a reverential term. Many Mexicans hoped privatization, which began in the early 1990s, would create competition and drive prices down drastically. That hasn’t happened. “Slim is one of a dozen fat cats in Mexico who impede that country’s growth because they run monopolies or oligopolies,” says Grayson. “The Mexican economy is highly inefficient, and it is losing its competitive standing vis-à-vis other countries because of people like Slim.”

According to a study by the Organization for Economic Co-operation and Development (OECD), between 2005 and 2009 Mexican consumers were overcharged $6.5 billion a year for landline usage. The total loss to the Mexican economy of Slim’s dominance in telecommunications is estimated at $129 billion over a five-year period, due to excess charges and poor investment in infrastructure.

Granted, Slim was recently forced by changes in Mexico’s telecommunications legislation to divest a large part of his holdings (worth some $10 billion) in América Movíl. But his dominance over the Mexican economy remains broadly unchallenged, as was shown by the government’s recent decision to award the tender to design Mexico City’s new airport to a firm run by Fernando Romero, a Mexican architect who just happens to be married to one of Carlos Slim’s daughters. What’s more, Grupo Carso, one of Slim’s many construction companies, is part of a consortium that is preparing to bid for contracts related to the new airport. If the consortium wins, it will lead a project forecast to be worth some 12 billion dollars – and probably a whole lot more given contractors’ tendency to go over budget.

The Rise of Mexico’s Oligarchs

Slim is not the only Mexican billionaire whose fortune was built from the ashes of once state-owned assets. Just as happened in Yeltsin’s Russia, the “liberalization” and privatization of Mexican markets has given rise to a new über-caste of oligarchs. More than half of the 11 Mexican tycoons featured on Forbes’ 2012 Rich List (who between them controlled a total wealth of $129.7 billion) are or once were owners of former state-run enterprises. They include owners or important shareholders of mines (Larrea and Alberto Bailleres), telecoms companies (Slim, Ricardo Salinas Pliego and Emilio Azcárraga) and banks (Roberto González Barrera, Alfredo Harp Helú and Roberto Hernández Ramírez).

But for every winner in a system founded along oligarchic lines, there must be countless losers. In Mexico, all the promises of miraculous growth, unstoppable development, cheaper prices, and better living have come to naught. Instead of state-run monopolies calling the shots, Mexico is subject to the whims of privately owned oligopolies run by a small coterie of hyper-connected individuals who now effectively own the country.

In many ways, Mexico is the poster child of neoliberalism. For decades and under successive governments the country has followed the standardized rule book of 21st century economic governance to the letter. According to the economist Julián Castaño, Mexico is now Latin America’s second most privatized nation. It has also signed more bilateral and multilateral free trade agreements than just about any other nation under the sun.

Yet the result, far from one of freer more open markets, is ever-increasing concentration of power and wealth, rising prices and dwindling choice for consumers – a trend that seems set to continue as Salinas’ disarmingly handsome apprentice, Enrique Peña Nieto, prepares to complete the project his master began 26 years ago.

Mexico, the tide may well be subtly turning against Monsanto and its fellow GMO oligopolies and in favor of independent food growers and consumers. Read… Mexican Judge Departs From Script, Turns Monsanto’s Mexican Dream Into Legal Nightmare

Naked Capitalism on the Argentine Vultures

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Battling to Curb “Vulture Funds”

Posted on September 26, 2014 by

Yves here. Martin Khor focuses on the alarm created by the ruling against Argentina that allowed a Paul Singer’s NML, a vulture fund with a small position in Argentina’s bonds, to vitiate a hard-fought bond restructuring. The particularly ugly part that don’t get the attention warranted is that it is widely believed that Singer took a much larger position in credit default swaps, meaning he was seeking to create and betting on an Argentine default. And another ugly wrinkle is the role of private law in these processes. ISDA, a private organization, determines what is an event of default for credit default swaps.

Singer was on the committee that voted whether Argentina was in default (recall it had made payment under the restructuring to the trustee, Bank of New York, but BONY was barred by the court from remitting payment to the bondholders). This gave him a direct say in an event in which he had a large economic interest. And that was no lucky accident.

Lisa Pollack of FT Alphaville described in 2011 how ISDA is set up to make sure CDS payouts take place, regardless of the merits of the case. Who will have CDS positions? Parties either buying insurance or betting on failure. Who gets to vote on whether an event of default has occurred? From her post (emphasis hers):

Imagine playing a game where you bet on the outcome of a certain event. Most of the time the final outcome is unambiguous: you play, and afterwards, it’s clear whether you won or you lost. But every now and then, the result is hazy. Did the ball go into the goal? Was there a handball? Did he reach base?

This is usually where a referee steps in to decide.

So, it’s worth asking, how should referees be chosen?

Knowledge of the game is a sensible prerequisite. Also, the referee shouldn’t be conflicted. For example, anyone who has bet on the outcome of a match probably shouldn’t be the one who awards penalties.

And there’s no reason why what’s true of sports referees shouldn’t also be true of market referees, such as the International Swaps and Derivatives Association (Isda).

However, Isda picks the members of a committee that determines who has won and lost in the game of credit derivatives by selecting those who have the greatest potential to be conflicted. (And then it indemnifies them.)

And her conclusion (emphasis ours):

In summary, 10 out of the 15 members of the committee are picked because they are likely to have the biggest positions in any CDS contract under examination.

In other words, aside from how inefficient this looting is (as in the very high economic costs to the economies involved relative to the returns the vulture funds make on their sovereign adventurism), there are separately serious issues about the legitimacy of the process by which they make their outsized returns.

This post describes how experts are very concerned about the precedent set by Judge Griesa’s ruling against Argentina. Bear in mind that some legal experts contend that it does not have broad implications, that Griesa’s ruling keyed off specific terms in Argentina’s bonds that are absent from most sovereign issues. Nevertheless, there is a troubling tendency in jurisprudence for ruling creep.

By Martin Khor, Executive Director of the South Centre, Geneva. Originally published at
The Star.

External debt is rearing its ugly head again. Many developing countries are facing reduced export earnings and foreign reserves.

No country would like to have to seek the help of the International Monetary Fund to avoid default.

That could lead to years of austerity and high unemployment, and at the end of it, the debt stock might even get worse.

Low growth, recession, social and political turmoil are probable. This has been experienced by many African and Latin American countries in the past, and by several European countries presently.

When no solution is found, some countries then restructure their debts. Since there is no international system for an orderly debt workout, the country would have to take its own initiative.

The results are usually messy, as it faces a loss of market reputation and the creditors’ anger. But the country swallows the pill, rather than have more turmoil at home.

Such was the experience of Argentina, whose public debt reached 166% of GDP in 2002. After many years of decline and political instability, Argentina defaulted in 2001.

Argentina then arranged for two debt swaps in 2005 and 2010, thus restructuring its debt with 93% of its creditors, who agreed to receive about a third of the original debt value. But 7% of creditors, known as “holdouts”, did not agree to the restructuring.

A few influential hedge funds (comprising only 1% of creditors) which had bought some of the debt very cheaply on the secondary market, sought a court order in New York (where the original loans had been contracted) to be paid in full.

There are several such funds, now popularly termed “vulture funds”, that specialise in buying distressed debt at low prices (say, 10% of the original loan value) and then insist through the courts on being paid in full with interest.

Like vultures, they circle overhead and swoop to make a meal of the dead or dying bodies. Only in this case the bodies are countries and they are asked to squeeze their shrivelled economies further to pay the vulture funds, like drawing blood from a stone.

The United States judiciary, after a long process that went to the Supreme Court, decided a few months ago that the holdout hedge funds that took up the case should indeed be paid in full, and with interest.

Further, it decreed that the 93% of creditors who had already agreed to be paid at a big discount, are now not allowed to be paid, unless the vulture funds are paid in full at the same time.

The New York judge used the principle of pari passu (that all creditors should be treated the same) in reaching the decision.

Argentina had already arranged with a bank in New York to pay out interest to the 93% a few weeks ago, but the bank refused to do so, due to the court order.

The vulture funds want their pound of flesh. The main fund, NML Capital, would make an estimated 1,600% profit.

Argentina’s President Cristina Kirchner refused to bow to these funds. If she did, the country might have to also repay all the creditors the full value, which is US$120bil (RM384bil), and that is impossible to do.

This incredible turn of events has caused outrage among many public interest groups and anger among developing countries’ governments.

The South Summit of the G77 in May in Bolivia criticised the vulture funds and called for a proper global debt restructuring mechanism.

Finance ministries of developed countries have been concerned as well as they are also affected.

Greece also went through debt restructuring, in which private creditors agreed to take a loss, a few years ago.

Accepting the court decision as the new template would make it quite impossible for any country to restructure their debts, since the now emboldened vulture funds would pounce and block it.

Influential Financial Times commentator Martin Wolf has supported Argentina in its battle with the vulture funds. Wolf even went so far as saying that it is unfair to the real vultures [i.e., the birds] to name the holdouts as such, since at least the real vultures perform a valuable task!

At the end of August, the Swiss-based International Capital Market Association, a group of bankers and investors, issued new standards aimed at reducing the ability of holdout investors to undermine debt restructuring.

Last week, the Group of 77, representing developing countries, succeeded in promoting a resolution at the United Nations General Assembly which recognised that a state’s efforts to restructure debt should not be impeded by hedge funds that seek to profit from distressed debt.

The General Assembly, by a vote of 124 in favour, 11 against and 41 abstentions, also decided to set up a multilateral legal framework for sovereign debt restructuring by the end of 2014, to increase the stability of the international financial system.

An international debt restructuring mechanism will be a systemic solution, since countries with debt crises can have recourse to an international court or system and need not do a messy debt restructuring on its own.

There will now be an uphill battle to get the resolution implemented, since the US, Germany and Britain (all key countries in global finance), were among those which objected.

Another resolution, initiated by Argentina, is now being considered by the UN Human Rights Council, aimed at setting up legal frameworks to curtail vulture funds’ activities and for sovereign debt restructuring.

One good thing is that the UN, which is a universal body in which developing countries have a greater say in decision-making, is now at the centre of the debt discussion.

The negotiations ahead will be tough but well worth it since preventing and managing a debt crisis is now a priority for a growing number of countries.

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Expanding Inequality

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Naked Capitalism on the Age of Capitalism

“The Most Remarkable Chart I’ve Seen in Some Time”: Rich Gain More Ground in Every US Expansion

Posted on September 25, 2014 by

If you had any doubt the US economy had been rearchitected to favor the haves versus the have-lesses, this chart by Pavlina Tcherneva should settle it. Justin Wolfers, hardly a raging liberal, just tweeted:

rich get richer in every expansion

While the overall trend is dramatic enough, you can also see two major shifts: the big change with the Reagan era, with its higher-income and capital-favoring tax cuts, of the top 10% suddenly reaping vastly disproportionate gains relative to the rest of the distribution.

The Bush Administration, with even more changed in taxes that shifted income to the rich, is another big ratchet. But arguably the most dramatic change is under the Obama Adminstration, where the top echelon’s gains came in part at the expense of everyone else.

Matt Stoller was early to notice this change. As he wrote in 2012:

A better puzzle to wrestle with is why President Obama is able to continue to speak as if his administration has not presided over a significant expansion of income redistribution upward.  The data on inequality shows that his policies are not incrementally better than those of his predecessor, or that we’re making progress too slowly, as liberal Democrats like to argue.  It doesn’t even show that the outcome is the same as Bush’s.  No, look at this table, from Emmanuel Saez (h/t Ian Welsh).  Check out those two red circles I added.

Yup, under Bush, the 1% captured a disproportionate share of the income gains from the Bush boom of 2002-2007.  They got 65 cents of every dollar created in that boom, up 20 cents from when Clinton was President.  Under Obama, the 1% got 93 cents of every dollar created in that boom.  That’s not only more than under Bush, up 28 cents.  In the transition from Bush to Obama, inequality got worse, faster, than under the transition from Clinton to Bush.  Obama accelerated the growth of inequality.

A bit hat tip to Pavlina, who has put this data together in a simple but powerful way that makes it hard to ignore how the rich really have gotten richer. And before you argue that this is the result of a technology (as opposed to rentier) driven transformation, please read the post yesterday, Is Rising Inequality Inevitable? Its conclusion: “Rising inequality is therefore not inevitable — it is a political choice.”

Jim Hightower on the Takeover of the American Farm

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How Wall Street’s Robber Barons Are Exploiting America’s Farmers

The rich get richer while farmers are turned into tenant laborers.

We know from the childhood song that Old McDonald had a farm — but e-i-e-i-o — look who’s got his farm now!

It’s groups like American Farmland and Farmland Partners. These aren’t dirt farmers wearing overalls and brogans, but Wall Street hucksters in Armani suits and Gucci loafers. The latest fast-buck fad for high-roller investment trusts, hedge funds and venture capital speculators is “farming.” Not that these dude ranch dandies are actually plowing and planting. No, no — these are soft-hands people, buying up farmlands with billions of rich investors’ dollars, and then tilling the tax laws and threshing the farmers who do the real cultivation.

For example, American Farmland Company — which owns 16 farms — is a combine of the largest real estate empire in New York City, two Florida sugar barons, a wealth management outfit, and the real estate brokerage arm of insurance giant Prudential. None of these nouveau sodbusters has a speck of dirt under their fingernails, but they’ve figured out how to work the land without touching it and still harvest a sweet profit. The founder of this scheme says, “It’s like gold, but better, because there is this cash flow.”

Cash flow? Yes, farmers are charged rent to till the Wall Streeters’ land. Then the financiers get a prime cut of any profits from the crops that the farmers produce. Also, the combine is set up as a real estate investment trust, providing an enormous tax break for the Wall Street plowboys. And, of course, there’s the mega-pay the moneyed elites will reap when they convert their scheme into securities for sale on the stock exchange.

The rich few get richer, farmers are turned into tenant laborers, and the farms are switched to high-profit crops that require heavy pesticide dosages and soak up scarce water resources. What a deal!

The fact of the matter is that gabillionaires who invest in hedge funds generally have the ethical and aesthetic sensibilities of dirt clods. They don’t care whether the fund managers put their money into toxic derivatives or skunk pelt futures — as long as the investment pays a super-fat return. But since Wall Street’s 2008 crash revealed that so many of these investment schemes were based on nothing more than financial cobwebs and fairy dust, some of the clods began seeking hedge funds that would put their money into something more tangible and down to earth. And this is how Wall Street discovered dirt. More specifically, farmland.

Such money handlers as BlackRock (the world’s largest asset manager) and multi-billionaire money manager George Soros now offer big pieces of America’s heartland as an asset that faraway super-rich penthouse dwellers can own and till for mega profits. As a result, ag professors report that their farmbelt conferences on land economics — which have normally drawn an audience of farmers and local farm lenders — are dominated these days by Wall Street speculators. Moreover, seminars on investing in American farmland are being held in such financial centers as Dubai and Singapore.

But this Wall Street land rush is as flimsy as the debt-derivatives fad proved to be, for it’s not based on economic realities. While crop prices are at record highs today, the painful historic record is that they will plummet tomorrow, destroying the cash flow that makes the hedge fund investment in land work. Then, of course, the gabillionaires will rush to shed their overalls. But — who will line up to buy the land? Certainly not real farmers, who can’t afford the inflated Wall Street price. And especially not young people who want to farm, but find it hard to locate affordable land. America desperately needs this next generation of food producers, yet we’re letting Wall Street speculators literally wall the land they need. To learn more, contact the National Young Farmers Coalition.

Jim Hightower is a national radio commentator, writer, public speaker, and author of the new book, “Swim Against the Current: Even a Dead Fish Can Go With the Flow.” (Wiley, March 2008) He publishes the monthly “Hightower Lowdown,” co-edited by Phillip Frazer.

 

Naked Capitalism in the Banksters’ Pocket

Bill Black: Roger Cohen’s Ode to Colonialism and Imperialism: Why is It “Insidious” to Want Justice for Banksters?

Posted on September 23, 2014 by

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Yves here. One of Bill Black’s regular themes about too much of what he sees in the media is that it reads like unintended self parody. Roger Cohen’s bankster defense in the form of Scotland shellacking is yet another revealing example.

The reason it’s important to keep tabs on these articles and ridicule them is that they are close cousins of the Big Lie strategy. The Big Lie in these cases isn’t in the headline, but it is such a strong part of the thesis of the article as to give any one who actually gets through the piece a major dose of propaganda. And unless you have trained yourself to read articles both for content and for argumentation, it’s very easy for this sort of intellectual toxin to start rotting your thinking processes.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

In another proof of our family rule that it is impossible to compete with unintentional self-parody, Roger Cohen has penned “The Great Unraveling.”  What makes the article perfect is that it brings together Cohen’s worst traits – and ends with praise for Rudyard Kipling, who set the bar for those traits.  Cohen is distressed about many things, but the first one that I focus on is his claim that the Scots’ response to the City of London’s elite financial criminals is “insidious.”  In the passage that he makes this claim Cohen denounces the Scots as childish Celts.

The northernmost citizens were bored. They were disgruntled. They were irked, in some insidious way, by the south and its moneyed capital, an emblem to them of globalization and inequality.

 

Roger Cohen, the inept apologist for centuries of despicable colonialism and imperialism, cannot even bring himself to feign enough respect to for the People he wishes to damn to use the words “Scots” or “Scotland.”  The Nation of Scotland and the Scots are reduced, like Woody Hayes’ famous refusal to utter the word “Michigan,” to the equivalent of “that state up north.”  But that is the point, only a Nation can demand and achieve respect for its People.  That is the primary reason so many Peoples have sought independence – including the U.S., Canada, Eire, Australia, and New Zealand.  Each of those Nations has been an enormous success largely because they chose independence.  Cohen crafts this paragraph to deny the Scots even the status of being a People.  They are reduced to being mere residents of a particular geographic area that is not even worthy of a general place name.

The Scots are not “bored” with England’s rule.  The Scots are not “bored” by the corrupt and anti-democratic process that produced the “union.”  The Scots are not “bored” by the fact that so many Scots fell and were maimed in England’s wars of aggression and colonialism.  The Scots are not “bored” that their young men bled so often in their role as England’s sharp spear that was wielded so shamefully to cut down the brave people in dozens of lands when they risked their lives to try to achieve independence and the ability to protect their families from the rapine, ruin, and famines produced by English colonial rule.

The most revealing and despicable word in Cohen’s attack on the Scots as immature adolescents (another direct steal from Kipling) is the word “insidious.”  That word means a subtle, secret, and treacherous strategy to cause undeserved harm to the righteous victim.  Cohen’s claim is that it is “insidious” of the Scots to be “irked” with the elite banksters of the City of London who “won” the global “race to the bottom” and created the global cesspool of finance that is the City of London.  The banksters caused the global financial crisis and the Great Recession.  The banksters created the largest cartel in history (Libor) – by three of four orders of magnitude.  The City of London’s banksters deliberately targeted – during and after the financial crisis – the elderly for the sale of grotesquely unsuitable financial products.  The City of London’s banksters became wealthy by leading these frauds and abuses.

The people then bailed out the banks and the banksters.  Virtually none of the controlling officers have been prosecuted or even had their fraudulent proceeds “clawed back.”  The Scots are not “irked” with the elite banksters of the City of London, the odious Tory mayor who slavishly protects the interests of the worst banksters, or the hundreds of “financial journalists” like Cohen who serve as apologists for the banksters.  The Scots are furious with the banksters and their fury is not “insidious” it is righteous.  Cohen indicates how deeply he is in the pocket of the banksters (and how willing he is to torture the English language) by claiming that it is “insidious” for the Scots to demand openly that the City of London’s banksters be brought to justice.

But Cohen’s horror that the Scots are “irked” with the City of London’s banksters is far more bizarre than I have yet explained in the context of his column.  Cohen’s primary claim is that civilization is “unraveling” and that it is vital that the civilized States “go to the mattresses” to fight and destroy the barbarians.  He begins with the sentence “It was a time of beheadings.”  It has apparently escaped Cohen’s attention that it has been the “time of beheadings” for many years.  Hundreds of Mexicans have been beheaded annually by drug lords.  (As I’ll explain in future columns, the British call their most murderous drug lord, Dr. William Jardine (a Scot), a “merchant.”)

The City of London’s banksters, of course, do not wield the knives personally when the Sinaloa cartel beheads its victims in order to sow terrorize.  The banksters’ $2,000 suits could be ruined by direct butchery – and if they actually used the knives they might see a murderer in the mirror rather than a “merchant.”  HSBC, however, knowingly laundered billions of dollars for the Sinaloa cartel while the cartel’s leaders were beheading hundreds of Mexicans.  If Cohen thinks that it is “insidious” for the Scots to be “irked” at the City of London’s banksters, he must be furious at Mexicans given how “irked” they are about HSBC’s hundreds of thousands of felonies on behalf of the Sinaloa cartel – and the fact that no senior HSBC banker was prosecuted for those acts.

But Cohen’s column also decries the failure of the civilized nations to go to war against the nations that support the terrorists.  HSBC and Standard Chartered took the lead in committing hundreds of thousands of felonies designed to defeat U.S. sanctions against a passel of nations that the U.S. government claims are actively funding terrorism (and seeking nukes).  Standard Chartered and HSBC trained their staff how to commit these tens of thousands of felonies in a manner that U.S. authorities would find difficult to spot because of false statements by HSBC personnel and the stripping of accurate information from the files.  When a U.S. manager warned his City of London counterpart that Standard Chartered’s actions were unlawful under U.S. law he reported that the City of London officer responded:

“You fucking Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”

If Cohen were inclined to introspection, he might have noticed a tension between the positions he thinks he’s championing.  Jardine, Lord Palmerston, HSBC, and Standard Chartered’s controlling officers’ view is that it is an obscene violation of the inviolable principle of “free trade” to keep a City of London bankster (sorry, “merchant of death,” check that, “merchant”) from financing the sale of opium to China, cocaine to the U.S., poison gas to Sudan, or nukes to Iran.  As the always elegant English officer at Standard Chartered put it, who are we, “fucking Americans” to tell the City of London’s banksters that they are not allowed to profit from mass murder?  After all, our effort to stop a voluntary transaction prevents a pareto-optimal gain in efficiency as any neo-liberal economist would be delighted to explain.  Cohen’s view in his article, however, is that there is an urgent need for the white man to again take up Kipling’s burden and make unremitting war on drug dealers (the world’s leading beheaders) and terrorists (number two in beheading and eager to be number one in mass murder).

If I did not know that it would be “insidious” to do so, I would have thought that Cohen should be “irked” at the City of London’s banksters choosing to grow wealthy by knowingly financing the groups that behead and terrorize and seeking to deceive we “fucking Americans” about this financing in violation of U.S. law.  Were it not “insidious” to be upset about elite banksters growing wealthy through knowingly aiding mass murderers, Cohen might even join the Scots (sorry, “the [bored] northernmost citizens”) and the American people (sorry, the “fucking Americans”) in being “irked” that no senior banker at Standard Chartered or HSBC was prosecuted for leading tens of thousands of felonies.  Cohen might even join us in calling for Attorney General Holder to resign in disgrace be replaced by a real prosecutor.

Indeed, if Cohen were ever moved to analysis and introspection he might consider the issues I’ve just discussed in light of the Kipling poem from which he drew his inspiration and the conclusion to his article.  Cohen might ask himself why he did not quote the next line of the poem.  Here is the full conclusion of Kipling’s poem.

There are only four things certain since Social Progress began.

That the Dog returns to his Vomit and the Sow returns to her Mire,

And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins

When all men are paid for existing and no man must pay for his sins,

As surely as Water will wet us, as surely as Fire will burn,

The Gods of the Copybook Headings with terror and slaughter return!

Kipling warns that when “no man must pay for his sins” the system will collapse.  Kipling, for all his faults, would have agreed that the collapse would be prompted when elites of enormous power no longer must pay for their sins.  Given Kipling’s ideology and biases and his obvious mocking of the entire concept of “Social Progress” it is clear that Kipling intended his conclusion to assert the folly of trying to help the poor, the sick, and those Kipling dismissed as inferior.  But it you reread the seven lines closely you will also see how much better they describe the banksters who “return” to their “toxic mortgages” (“vomit” and “mire”) because doing so makes them wealthy by following the “sure thing” of the accounting control fraud recipe.  The banksters were “paid” not because of their hard work or skill in making good loans but “for existing.”  And “no [bankster] must pay for his sins.”  That is guaranteed to produce economic “terror and slaughter” through the “return” of the fraud epidemics that drive our recurrent, intensifying financial crises.

Roger Cohen is so deep in the banksters’ pockets that he cannot see that he is a leader in the movement to ensure that no bankster will ever “pay for his sins.”  Cohen has already written to decry criticisms of the banksters.  He does not write to protest the refusal to prosecute the banksters or “claw back” their fraudulent proceeds.  He does not write to demand that they at least suffer the loss of their reputations.  Instead, he denounces Scots who criticize the banksters as “insidious.”

In an earlier passage that is actually the recurrent motif of the poem that Cohen cites, Kipling warns that crises came because “we worshipped the Gods of the Market Who promised these beautiful things.”  I discuss this motif in future articles in greater detail, but for now it suffices to say that the economic and regulatory systems became controlled in the U.S. and the City of London by virulent anti-regulators who “worshipped the Gods of the Market” and “promised these beautiful things.”

Humor: The Borowitz Report

NEW HAVEN (The Borowitz Report)—After a report from the Yale Center on Climate Change Communication showed that the term “climate change” elicits relatively little concern from the American public, leading scientists are recommending replacing it with a new term: “You will be burnt to a crisp and die.”

Other terms under consideration by the scientists include “your cities will be ravaged by tsunamis and floods” and “earth will be a fiery hellhole incapable of supporting human life.”

Scientists were generally supportive of the suggestions, with many favoring the term “your future will involve rowing a boat down a river of rotting corpses.”

“Any of these terms would do a better job conveying the urgency of the problem,” Tracy Klugian, a spokesperson for the newly renamed Yale Center for Oh My God Wake Up You Assholes, said.

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