http://www.sfgate.com/business/article/Fed-message-Economy-unlikely-to-improve-this-year-3646832.php

Fed message: Economy unlikely to improve this year

MARTIN CRUTSINGER, AP Economics Writer,June 21, 2012

WASHINGTON (AP) — The economy we've got today is more or less the economy we've got for the rest of the year.

That's the message from the Federal Reserve, which has sharply reduced its forecast for U.S. growth. It sees unemployment barely budging in the rest of 2012.

The Fed also says the economy is under threat from Europe's debt crisis and from the prospect of sharp spending cuts and tax increases that will kick in at year's end unless Congress acts.

None of which is comforting for companies, job seekers or President Barack Obama, whose re-election hinges in part on whether the economy improves between now and November.

Until recently, many economists were hopeful that the economy would strengthen in the second half of the year. But optimism is fading as hiring and growth have slowed for a third straight spring.

To prod businesses and consumers to borrow and spend more, the Fed said at the end of a two-day policy meeting Wednesday that it would extend a program designed to drive down long-term interest rates. It also reiterated plans to keep short-term rates at record lows until at least late 2014. And it said it's ready to do more to jolt the economy if necessary.

"If we're not seeing a sustained improvement in the labor market, that would require additional action," Bernanke said in his quarterly news conference.

Here's how a weak economy for the rest of the year could affect some categories of Americans:

— Job seekers

People looking for work aren't expected to enjoy much better opportunities in the rest of 2012. The Fed thinks the unemployment rate will fall no lower than 8 percent by year's end. It's now 8.2 percent.

American employers have become wary of hiring. They added just 69,000 jobs in May. Since averaging a healthy 252,000 a month from December through February, job growth has slowed to a lackluster 96,000 a month. And Fed officials and other economists don't think hiring will accelerate in coming months.

— Retirees and savers

The Fed's continued plan to keep short-term rates super-low through 2014 isn't happy news for people who depend on investment income. When the Fed keeps the rates it controls at record lows, rates throughout the economy generally stay low, too. That's why money market funds are paying rates barely above zero — well below inflation.

Anyone willing to lend money to the U.S. government over the next 10 years stands to receive about 1.6 percent interest. That's just about what the consumer inflation rate has been for the past 12 months. In exchange for buying long-term U.S. Treasurys, these investors will manage merely to run in place.

— President Barack Obama

Obama's re-election bid is getting no help from the economy — the core issue in the presidential campaign. The president's political team has been hoping the unemployment rate would drop by Election Day well below the roughly 8 percent level where the Fed thinks it will be at year's end. With job growth slumping, the president must make the tough case that it would improve in a second Obama term.

Still, unemployment might not be quite the threat to Obama that it appears. Unemployment rates in seven of the 10 battleground states that will likely determine the election are lower than the national average. That trend could blunt Republican candidate Mitt Romney's effort to capitalize on weak job growth to defeat Obama.

— Borrowers

The one group of Americans who are big winners in the Fed's low-interest-rate campaign are borrowers. They are, that is, if they meet tightened credit standards for consumer and business loans.

The average national rate nationally on a fixed-rate 30-year mortgage is just 3.71 percent. That's scarcely above the 3.67 percent average earlier this month — the lowest since long-term U.S. mortgages were introduced in the 1950s.

Mortgage rates have been sinking because they tend to track the yield on the 10-year Treasury note. Anxiety about Europe's debt crisis has led many investors to buy U.S. Treasurys, which are considered ultra-safe despite their puny yields. When demand rises for Treasurys, their yields fall.

On Wednesday, the Fed said it thinks the economy will grow between 1.9 percent and 2.4 percent this year, sharply less than in its previous estimate in April. And it's roughly the annual pace at which most economists think the economy is growing now.

"All economists have shaved down their forecasts for this year," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University.

Sohn said his own forecast was in line with the Fed's. He said he was surprised the Fed didn't downgrade its unemployment outlook even more based on its forecast for economic growth.

Even so, "If the Fed's forecast unfolds, that would be bad news for incumbent politicians," Sohn said. "If I were President Obama, I would be worried."

Some political strategists expect the picture the Fed sketched of the economy to play into Romney's hands.

"If I'm Mitt Romney, I immediately use Bernanke's comments to make the case that what I've been saying is right: Barack Obama isn't working, the stimulus has failed and the only way to take us out of this is to make a change in the White House," said Joe Brettell, a Republican strategist.

He said Romney's message is simple: "I'm the guy who can fix the problem."

Most people think the biggest problem is unemployment. Brian Bethune, an economics professor at Gordon College in Massachusetts, said he thinks the unemployment rate will end the year at 8.1 percent or 8.2 percent.

Bethune thinks the Fed might decide by early fall that the economy needs some aggressive new step, such as another bond buying program. The Fed has completed two such programs. It bought more than $2 trillion in Treasurys and mortgage-backed securities.

If such a program were launched and helped boost the economy, it could end up benefiting job seekers and perhaps Obama's re-election chances.

"If we are still seeing these terrible employment numbers," Bethune said, "then the Fed is going to have to consider another move. The economy can't just flop along at this level."

Bethune said the problem for incumbents like Obama is that perceptions about the economy tend to freeze about six months before an election — even if the economy improves after that.

Even so, economists note that continued declines in oil and gas prices could spur growth by giving consumers more spending power.

On Wednesday, the Fed said it will continue a program called Operation Twist through year's end. Under the program, the Fed has been selling $400 billion in short-term Treasurys since September and buying longer-term Treasurys. The Fed said it will extend Operation Twist using $267 billion in securities.

But it might not provide much benefit. Businesses and consumers who aren't borrowing now at historically low rates aren't likely to do so just because rates dipped a little more.

David Jones, chief economist at DMJ Advisors, estimates that extending Operation Twist will lower long-term rates by only about one-tenth of a percentage point.

Mortgage rates have been sinking because they tend to track the yield on the 10-year Treasury note. Anxiety about Europe's debt crisis has led many investors to buy U.S. Treasurys, which are considered ultra-safe despite their puny yields. When demand rises for Treasurys, their yields fall.

On Wednesday, the Fed said it thinks the economy will grow between 1.9 percent and 2.4 percent this year, sharply less than in its previous estimate in April. And it's roughly the annual pace at which most economists think the economy is growing now.

"All economists have shaved down their forecasts for this year," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University.

Sohn said his own forecast was in line with the Fed's. He said he was surprised the Fed didn't downgrade its unemployment outlook even more based on its forecast for economic growth.

Even so, "If the Fed's forecast unfolds, that would be bad news for incumbent politicians," Sohn said. "If I were President Obama, I would be worried."

Some political strategists expect the picture the Fed sketched of the economy to play into Romney's hands.

"If I'm Mitt Romney, I immediately use Bernanke's comments to make the case that what I've been saying is right: Barack Obama isn't working, the stimulus has failed and the only way to take us out of this is to make a change in the White House," said Joe Brettell, a Republican strategist.

He said Romney's message is simple: "I'm the guy who can fix the problem."

Most people think the biggest problem is unemployment. Brian Bethune, an economics professor at Gordon College in Massachusetts, said he thinks the unemployment rate will end the year at 8.1 percent or 8.2 percent.

Bethune thinks the Fed might decide by early fall that the economy needs some aggressive new step, such as another bond buying program. The Fed has completed two such programs. It bought more than $2 trillion in Treasurys and mortgage-backed securities.

If such a program were launched and helped boost the economy, it could end up benefiting job seekers and perhaps Obama's re-election chances.

"If we are still seeing these terrible employment numbers," Bethune said, "then the Fed is going to have to consider another move. The economy can't just flop along at this level."

Bethune said the problem for incumbents like Obama is that perceptions about the economy tend to freeze about six months before an election — even if the economy improves after that.

Even so, economists note that continued declines in oil and gas prices could spur growth by giving consumers more spending power.

On Wednesday, the Fed said it will continue a program called Operation Twist through year's end. Under the program, the Fed has been selling $400 billion in short-term Treasurys since September and buying longer-term Treasurys. The Fed said it will extend Operation Twist using $267 billion in securities.

But it might not provide much benefit. Businesses and consumers who aren't borrowing now at historically low rates aren't likely to do so just because rates dipped a little more.

David Jones, chief economist at DMJ Advisors, estimates that extending Operation Twist will lower long-term rates by only about one-tenth of a percentage point.

___

Associated Press writers Paul Wiseman, Christopher S. Rugaber and Philip Elliott contributed to this report.

America: Drugged up, dumbed down and crazy dangerous

America: Drugged up, dumbed down and crazy dangerous


Published: 21 June, 2012, 12:31
Edited: 22 June, 2012, 18:40

The dogs of war are barking in the backyard and some deranged minds seem determined to swing open the gates – again. At the same time, the American people, the only ones who can stop the savagery, are saddled with long-term debt, deficits and depression.

As the new age Romans mission-creep toward the next doomed Middle East neighborhood, this time in Syria, when does the quaint phrase “experiencing déjà vu” become just a polite way of saying we are apathetic spectators at the Circus Maximus? Does uttering mindless platitudes while the swords are swinging make us accomplices to death and destruction? Do our politicians – the nice guys who bailed out the bankers to the tune of trillions while we got cash for clunkers – really care about innocent civilians abroad who are getting caught in the crossfire?

By playing the knight in shining armor on behalf of every oppositional groundswell, we are actually encouraging these revolutionary uprisings from the start. As the Arab Spring shows, the opponents of the ruling authorities are seizing the reins of power through street violence, which seems to be the preferred method of political campaigning these days.

The opponents of vanquished Libyan leader Muammar Gaddafi, for example, did not have to prove their political prowess to win power. They only had to show up and demonstrate their staying power until NATO air support was called in. Eventually, the opposition revealed their true colors, however, when they dragged Gaddafi from a hole, Hussein-style, before summarily executing him. No trial, no judge, no jury, no worry. Welcome to the brave new political jungle where the side with the best crowd control always wins.

Essentially, the western powers are bankrolling unproven political wannabes not with hard cash, which is bad enough, but with overwhelming firepower. This opens the door to crimes of worse magnitude than would have been the case had nobody interfered in the first place. For example, if the Syrian political opposition understand, as they certainly must, the infinite power of global communication, then they will also understand the effectiveness of sending a message (tweeting, texting, whatever) that government forces committed an “atrocity.” Even if they have not.

Consider the May 25 massacre in the village of Houla. Nobody yet has been able to prove beyond a shadow of doubt the identity of the perpetrators behind that barbaric event, which saw the murder of 108 people, mostly women and children. The opposition claims government forces hired mercenaries known as Shabiha to carry out the attack. However, the government of Syrian President Bashar al-Assad maintains that armed groups were determined to sabotage UN peace talks (on May 15, one day before a UN Security Council meeting on Syria, militants carried out a massacre in the town of Homs, while the Houla attack coincided with a visit by UN negotiator Kofi Annan). Why would Assad, of all people, be opposed to ending the violence that threatens to topple his government, and possibly far worse?

To date, western forces have thrown their support behind the political opposition in Egypt, Libya and most infamously in Iraq. And how is that working? Egypt is witnessing a tense standoff between the Muslim Brotherhood and the military, while the new Libyan authorities have just detained four members of the International Criminal Court who were in town to provide a defense attorney to Gaddafi’s son. So much for planting the seeds of democracy. Meanwhile, many Americans are still scratching their heads over the “preemptive” attack on Iraq, which never had weapons of mass destruction or a hand in the terrorist attacks of 9/11.

Yet, we still have not learned the lessons of Iraq. In fact, some people are now twisting that failed operation to fit the new mission statement. A writer for Haaretz argued that the “world must intervene before 'Iraqization' of Syria,” reasoning that “the collapse of the Syrian army and Assad's regime is liable to lead to the ‘Iraqization’ of the country, in such a way that it will no longer be clear who controls it.”

Have we already forgotten that it was the US-led invasion of Iraq on March 20, 2003 that prompted the “Iraqization” of Iraq in the first place? Yes, Saddam Hussein was no nice guy, but Iraq itself was more or less a normal state before the US occupation.

Perhaps this is what Russian President Vladimir Putin partially meant when he once called the collapse of the Soviet Union “the greatest geopolitical catastrophe of the century.” Although the momentous event triggered severe dislocations across Russia and beyond, it also gave the United States an opportunity to behave like a veritable beast on the human stage. Now, after some 20 years of snorting and licking the mirror of power, the world’s solitary superpower, saying no-no-no to rehab, continues to do what it does best: acting like an infantile Bam-Bam from the Flintstones. So where is the homegrown American opposition to rein in these military misadventures? It's gone missing in action.

If you were planning to conquer the world, or at least a broad swath of it, the war would necessarily start at home. After all, no general worth his salt would rush into battle with his rear exposed. You’d have to muzzle the media, severely curtail political choice and dissent, while preaching to the world about democracy and human rights to cover your tracks. You’d have to construct the mother of all propaganda machines, which proclaims over every available wavelength that it’s the best darn civilization since Atlantis sunk to its watery grave three thousands years ago. It would be a bit like decorating the halls of a mental asylum with idyllic nature scenes. You’d also have to hire an army of loud-mouth talking heads to shout down any and all dissenters, accuse them of being conspiracy theorists and lunatics and commies, while keeping a paramilitary police force on the standby 24/7 should the bullying tactics fail.

You’d have to spoon-feed the populace with a liberal dose of anti-depressants, Jersey Shore, American Idol and 24-hour shopping channels with easy credit to prevent them from giving a moment’s thought to real-time, third-dimensional issues. You could also fuel battles over trifling cultural issues, like homosexuals in the military, Mel Gibson’s latest rant and Charlie Sheen’s complicated love life. What we are left with after the smoke has cleared bears no resemblance to a classic, text-book democracy. What we are left with is an obese, drug-addled Burlesque Empire, bursting at the seams with electronic circuses, cocaine and corn puffs, physically and mentally incapable of finding the remote control when the scenes of war become too unappetizing.

We are overstretched at home, and like despotic Rome, overstretched overseas. Now it is anybody’s guess where this depressing joyride will take us.

­Robert Bridge, RT

Biodiversity and the Environment: Silent Spring For Us?

Biodiversity and the Environment: Silent Spring For Us? By Dr. Paul Craig Roberts

Global Research, June 20, 2012

paulcraigroberts.org

URL of this article: www.globalresearch.ca/index.php?context=va&aid=31503

With her 1962 book, Silent Spring, Rachel Carson got DDT and other synthetic pesticides banned and saved bird life. Today it is humans who are directly threatened by technologies designed to extract the maximum profit at the lowest private cost and the maximum social cost from natural resources. Once abundant clean water has become a scarce resource. Yet, in the US ground water and surface water are being polluted and made unusable by mountain top removal mining, fracking and other such “new technologies.” Ranchers in eastern Montana, for example, are being forced out of ranching by polluted water. Offshore oil drilling and chemical farming run-off have destroyed fisheries in the Gulf of Mexico. In other parts of the world, explosives used to maximize short-run fish catches have destroyed coral reefs that sustained fish life. http://aquatek-california.com/coral-reef-destruction/ Deforestation for short-run agricultural production results in replacing bio-diverse rain forests with barren land. The “now generation” is leaving a resource scarce planet to future generations. Nuclear power plants are thoughtlessly built in earthquake and tsunami zones. Spent fuel rods are stored within the plants, a practice that adds their destructive potential to a catastrophic accident or act of nature. The newest threat comes from genetically modified seeds that produce crops resistant to herbicides. The active ingredient in Monsanto’s Roundup herbicide is glyphosate, a toxic element that now contaminates groundwater in Spain and according to the US Geological Survey is now “commonly found in rain and streams in the Mississippi River Basin.” In 2011 Don Huber, a plant pathologist and soil microbiologist, wrote to the US Secretary of Agriculture about the unexpected consequences of GMOs and the accompanying herbicides. He cited adverse effects on critical micronutrients, soil fertility, and the nutritional value of foods. He cited the impairment of metabolic pathways that prevents plants from accumulating and storing minerals, such as iron, manganese, and zinc, minerals important for liver function and immune response in animals and people. He cited toxic effects on the microorganisms in the soil that have disrupted nature’s balance and resulted in large increases in plant diseases. He cited livestock deaths from botulism, premature animal aging, and an increase in animal and human infertility. In an interview, Huber said that the power of agri-business has made it almost impossible to do research on GMOs and that regulatory agencies with the responsibility of protecting the public are dependent on the industry’s own self-serving studies and have no independent objective science on which to base a regulatory decision. In short, in order to secure bumper crops for several years, we are destroying the fertility of soil, animal and human life. Mankind has been destroying the world for a long time. In his fascinating book, 1493, Charles C. Mann describes the adverse effects on the environment, people, and civilizations of the globalism unleashed by Christopher Columbus. These include the international transfer of human and plant diseases, deforestation, destructions of peoples and empires, and the impact on distant China of Spanish new world silver. Mann provides a history lesson in unintended and unexpected consequences resulting from the actions of elites and of those that elites dominated. The Chinese government fixed taxation in terms of the quantity of silver, but the importation of Spanish silver inflated prices (decreased the value of a given quantity of silver) and left the government without sufficient revenues. A successor government or dynasty evicted Chinese from the coast in order to deprive pirates of resources. The displaced millions of people deforested mountainsides in order to sustain themselves with terrace agriculture. The result of deforestation was floods that not only washed away the terraces but also the crops in the fertile valleys below. Consequently, floods became one of China’s greatest challenges to its food supply. The first slaves were conquered new world natives, but the “Indians” had no immunity to European diseases. The second wave of slaves were European whites, but the Europeans had no immunity to malaria and yellow fever. By default slavery fell to blacks, many of whom had immunity to malaria and yellow fever. Thus, a black workforce could survive the infected environments and newly created wetlands in which to raise sugarcane, wetlands that were ideal homes for malaria and yellow fever bearing mosquitoes. Mann, of course, is merely reporting, not justifying black or any slavery. Mann points out that the lowly mosquito had a large impact on American history. The Mason-Dixon Line roughly splits the East Coast into two zones, the South in which disease carrying mosquitoes were an endemic threat, and the north in which malaria was not a threat. In the South, a person who survived childhood and grew into an adult had acquired immunity. Northerners had no such protection. This had enormous consequences when Northern armies invaded the South. Mann reports that “disease killed twice as many Union troops as Confederate bullets or shells.” Between the summers of 1863 and 1864, the official annual infection rate for what was called “intermittent fevers” was 233 percent. The average northern soldier was felled more than twice. In one year 361,968 troops were infected. Most of the deaths from malaria were indirect. The disease so badly weakened the troops that they died from dysentery, measles or strep infection. The mosquito was the South’s most powerful ally and so prolonged the war, despite the vast numerical superiority of the Union force, that Lincoln was forced to take action that he opposed and declare emancipation of slaves. Thus, Mann writes, it is not farfetched to conclude that blacks were freed by the very malaria mosquito that had caused blacks to be the preferred workforce. Mann shows that long before the birth of capitalism, greed drove men to barbarous treatment of their fellows. He also shows that policies, whether driven by greed or by well-intended socio-political design, inevitably had unexpected consequences. His multi-faceted history well illustrates the old adage, “the well laid plans of mice and men often go awry.” The old world’s colonization of the new world devastated new world peoples, but the new world bit back with the spread of the potato blight to Europe and Spanish and European inflation. Environmental destruction resulted mainly from deforestation and soils washed away by consequent floods. Prior to modern technology and toxic chemicals, the planet survived mankind. Today the prospects for the planet are different. The human population is vast compared to earlier times, putting far more pressure on resources, and the disastrous consequences of new technologies are unknown at the time that they are employed, when the focus is on the expected benefits. Moreover, these costs are external to the business, corporation, or economic unit. The costs are inflicted on the environment and on other humans and other animal life. The costs are not included when the business calculates its profit and return on its investment. The external costs of fracking, mountain top removal mining, chemical farming, and GMOs could exceed the value of the marketable products. Businesses have no incentive to take these costs into account, because to do so reduces their profits and could indicate that the full cost of production exceeds the value of the output. Governments have proven to be largely ineffective in controlling external costs, because of the ability of private interests to influence the decisions of government. Even if one country were to confront these costs, other countries would take advantage of the situation. Companies that externalize some of their costs can undersell companies that internalize all of the costs of their production. Thus, the planet can be destroyed by the short-term profit and convenience interests of one generation. The main lesson that emerges from Mann’s highly readable book is that people today have no better grasp of the consequences of their actions than superstitious and unscientific people centuries ago. Modern technological man is just as easily bamboozled by propaganda as ancient man was by superstition and ignorance. If you doubt that the peoples of Western civilization live in an artificial reality created by propaganda, watch the documentary on psyops at http://www.youtube.com/watch?v=lZiAV6fU2NM&feature=player_embedded#! The documentary does a good job despite wandering off into

The G20 Summit: A Wasted Opportunity in Mexico

RSIS presents the following commentary The G20 Summit: A Wasted Opportunity in Mexico by Barry Desker. It is also available online at this link. (To print it, click on this link.). Kindly forward any comments or feedback to the Editor RSIS Commentaries, at RSISPublication@ntu.edu.sg

---

No. 109/2012 dated 25 June 2012

The G20 Summit:
A Wasted Opportunity in Mexico

By Barry Desker

Synopsis

The G20 Summit in Mexico squandered an opportunity to take firm decisions to galvanise a concerted response to an impending global financial crisis. The United States should take the lead in building a consensus for unified action.

Commentary

THE G20 LEADERS met in Los Cabos, Mexico on 18 and 19 June 2012 even as the Eurozone dithered and the world headed towards a recession, with Spain poised to follow Ireland, Portugal and Greece in requiring international bailouts.

However those who expected firm decisions aimed at galvanising a concerted global response to an impending global financial crisis were disappointed. The G20 Summit produced a declaration long on rhetoric but weak on substance, especially in dealing with the immediate issue – the risk of financial contagion - which threatens to undermine global prosperity.

The G20 group was born out of the recognition that new charts were needed for a new age. As a shift in global power occurred with the emergence of rising powers such as China, India and Brazil and the re-emergence of Russia, a new global structure was needed which better reflected current power alignments. While the G7 represented the established powers, the G20 was seen as a more representative group with the participation of both established and rising powers.

By contrast, the United Nations is still dominated by the permanent members of the Security Council who wield vetoes. These states were the victors of World War Two but some are now second rank powers such as the United Kingdom and France, which are in any case members of the European Union.

The UN has the advantage of being globally representative and this makes it the venue of choice for small and medium sized states. On the other hand, the rising powers feel that their interests are under-represented in the UN and they have pushed for the G20 to be given greater prominence.

The rising powers among the G20 states are also seeking a larger role in global economic governance. They argue that the International Monetary Fund (IMF) is dominated by the United States. Key decisions require 85 per cent support. The United States, with 16.75 per cent voting rights based on its financial contribution of 17.69% to the IMF, has effectively a veto on decisions. The recent election of the new heads respectively of the IMF and the World Bank showed that these institutions are still in the thrall of Europe and the United States even though the significance of the West in the global economy today has declined.

Emerging economies to the rescue

The IMF needs at least US$1 trillion to have a credible bailout fund to restore confidence in the Eurozone and to prevent global financial contagion. In Mexico, the United States did not respond to the IMF’s call for the expansion of its crisis intervention fund. By contrast, on 18 June, the IMF said that China was offering $43 billion, Brazil, Russia, India and Mexico $10 billion each, and $5 billion came from Turkey, with smaller sums from a handful of other emerging economies. China joined Japan and Germany as the crisis fund’s three leading contributors.

As its share of the global economy increases, China will seek greater influence in the IMF in the decade ahead. But China will face strong resistance from the United States and Europe if it pushes for a redistribution of quotas or a change in the system of election for the head of the IMF or World Bank. The current crisis will therefore provide China and other rising powers with an opportunity to stake their claims for a larger role in these institutions if they are prepared to take on greater responsibilities.

Burden sharing in multi-polar world

The Los Cabos summit served as a reminder that we live in a world where power is more diffused and the US is no longer inclined to underwrite global prosperity. The leaders failed to agree on urgent action to increase the financial firewalls and to push for concerted action to use the available funds, especially the Eurozone’s bailout funds, to purchase sovereign bonds from countries like Spain and Italy. This highlights the lack of political will and the absence of global leadership. In previous crises, such as the Asian financial crisis in 1997-98, a dominant United States could galvanise its allies. But a multi-polar world complicates efforts to ensure more effective global governance and burden sharing.

As the risks of a financial panic increase, especially if there is a Greek exit from the Eurozone and outflows of funds from Spain and Italy occur, it is essential that both established and rising powers agree on concerted action. Domestic political agendas should not undermine a coordinated global response. While no significant decisions were reached on the issue in Los Cabos, the G20 will have to push Europe to stimulate its economy and to support those member states facing the onslaught of financial speculators and sharp declines in access to trade finance.

As the United States heads into a close election, it will be difficult for President Obama to provide leadership through an infusion of US funds. The US will have to cajole, use microphone diplomacy and work through multilateral institutions like the IMF to push Europe towards early action. The US should cooperate with other members of the G20 to support the IMF and to recognise the systemic role that it plays in ensuring global financial order. Even if there is no global financial hegemon today, there will be a need for leadership. This can now only be done by building a consensus for unified action.


The writer is Dean of the S. Rajaratnam School of International Studies, Nanyang Technological University.A version of this article was published in the Straits Times of 25 June 2012.

http://www.newsbyrd.com/the-keystone-pipeline-happy-days-for-hummers-or-hybrids/

The Keystone Pipeline: Happy Days for Hummers or Hybrids?

By Robin Roush -

(June 19, 2012) It is often said that American voters care more about the “rising” price of gasoline than anything else, and that Obama’s re-election prospects depend entirely upon that.

Let us focus our attention on Alberta, Canada, where a vast acreage of “Tar Sands” awaits development. Envisioned is a 2000 mile pipeline which will carry 900,000 barrels daily of these noxious tar sands from Canada, into the United States, over the mountains and across the plains to a refinery at Port Arthur, Texas, on the Texas Gulf Coast. This destination is a tax-free “foreign trade zone.” This project is the focus of intense debate in the United States, fueled by Big Oil and neo-conservative, anti-environmental-regulation lobby money. The political rhetoric funded by the these oil interests has been successful in promoting accelerated, partial approval (earlier this year Obama approved the southern half) by propagating several myths to the American people which are simply untrue, and are examined here:

Myth: The Keystone Pipeline is an American project which merely originates in Canada. Moreover, the Canadians are historic allies of the United States, so the project carries little risk to American interests.

To the contrary, the project is owned not by American interests, but instead by Transcanada, a large international company with headquarters in Canada, with multinational financing. It owns 35,000 miles of pipelines in Canada, the United States and Mexico. This 2000 mile project involves many subsidiaries, stakeholders, leaseholders, contractors, subcontractors and other entities too numerous to mention, let alone identify, regulate or monitor.

Myth: The Keystone Pipeline will assure energy independence for the United States essential to our national security, because, by bringing the oil to America we can decrease our dependence on foreign oil. To the contrary, the tar sands oil is not intended for America and no additional benefit to our energy independence will arise. The oil is intended to be sold overseas.

Presently, we import oil from Canada, Saudi Arabia, Mexico, Venezuela, Nigeria, Iraq, the United Kingdom, Norway, Angola, Algeria and Colombia. Transcanada says the project will supply roughly half of the amount of oil the US imports from the Middle East and Venezuela – but conveniently leaves out an essential point: This tar sands oil will not reduce imports from those nations because it is all heading overseas.

The Tar Sands is expected to carry only an additional 900,000 barrels of oil a day which amounts to less than 5% of the oil needed to maintain our present oil use at current levels. (We now use about 20 million barrels a day.) If the Republican dominated Congress were to approve the various proposed regulations presently addressing highway fuel efficiency standards alone, an amount equivalent to the output of the Tar Sands project would be saved. US oil consumption is on a steady decline, and small measures could reduce that consumption even further. According to the Department of Energy, gasoline use is declining, a trend which will continue, because of energy efficiency standards. We could reduce that by as much as 4 million barrels a day by requiring more efficient heavy trucks, airplanes, and buildings. In contrast, the Environmental Protection Agency estimates an even greater reduction of up to 7 million barrels a day.

It seems we never have “needed” the Pipeline in the first place.

The oil tar sands will enter the US from Canada and be transported to a site in Texas where it will be refined for overseas shipment. It is easy to imagine that Americans will have “first dibs” just because it is already in our country. The politicians and oil interests have allowed this fiction to stay afloat without any intelligent scrutiny whatsoever. Instead, the refined oil will be made available to the entire global economy, and we will instead be competing to buy it against rapidly growing, oil hungry, developing nations such as China, India, Korea and Iran. Iran, for example, could escape the sanctions and embargos, by buying this oil from one or another “rogue” nation. Always remember the oil is not “ours” to sell- it belongs to the vast group of multi-nationals who have leased the rights to mine, transport, refine, and ultimately sell it.

Nor is the refinery a particularly “American company.” The state of Texas has made major concessions to the refineries, to establish a refinery “zone” with preferential taxes and incentives to even more multinational companies. There is no expectation that the profits will remain here, or that there will be taxable assets with a reliable revenue stream. Americans will pay a higher price to have this shipped out of the “zone” and onto Main Street. Valero Energy Corporation, the pipeline’s largest customer, has announced that it will focus its Port Arthur refinery on exports rather than the domestic needs of America.

Myth: The Keystone Pipeline will create wealth and jobs for Americans. Not necessarily, and the labor unions affected are not in agreement. The pipeline will create wealth for the multinational corporation which owns it. But what about jobs? According to Transcanada’s own data, 11% of the construction jobs on the earlier built Keystone pipeline in South Dakota were filled by South Dakotans–most of them for temporary, low-paying manual labor. (Rainforest Alliance)

The State Department’s own study suggests that far fewer jobs will be created and most of them will be non-local and temporary (National Wildlife Foundation). Two infrastructure construction unions (Transport Workers Union (TWU) and the Amalgamated Transit Union (ATU), the UAW and the Steelworkers have noted these facts and earlier opposed the President’s decision to continue the project’s review.

Myth: The Keystone pipeline will keep the cost of gas from rising. To the contrary, the price per gallon for gasoline for our cars, while a critically significant political talking point in the next elections, results from a complex interaction of global factors over which we have very little, if any, control. American politicians have a hard time admitting this, since it is the appearance of control and national strength that attracts voters. Instead, the factors which affect the price of oil are entirely global: The Organization of Petroleum Exporting Countries (OPEC) controls most of the world’s oil, and sets the price of oil. Other factors influencing prices are the amount of strategic oil reserves available, global unrest, changing energy practices elsewhere, rising demand for cars (especially in China), the cost of extraction, here and elsewhere, and isolated events such as the closure of the Fukushima nuclear plant in Japan, forcing that unfortunate nation to turn to oil. When Iran recently threatened to shut down shipping lanes in the Strait of Hormuz, price increases predictions ranged from $4.75 and $8.00 a gallon.

The NRDC states, “The truth is that Keystone XL is likely to both decrease the amount of gasoline produced in U.S. refineries for domestic markets, and increase the cost of producing it, leading to even higher prices at the pump.” There is presently a glut in the Midwest which depresses the price of gas there. By building the pipeline so that gas can be sent overseas via Texas, those domestic prices will actually rise.

Energy independence is best achieved through rigorous pursuit of clean, sustainable, non-hazardous energy alternatives to oil. And because we have no controls whatsoever over which countries will eventually receive the refined oil, we can have no certainty about our future security, certainly no more than we have now.

VIDEO: http://www.newsbyrd.com/the-keystone-pipeline-happy-days-for-hummers-or-hybrids/

AND

Tar Sands Oil Extraction - The Dirty Truth

http://www.youtube.com/watch?feature=player_embedded&v=YkwoRivP17A#!

http://lezgetreal.com/2012/06/keystone-pipeline-amendment-pulled/

Keystone Pipeline Amendment Pulled

Posted by: Linda Carbonell on June 22, 2012.

Rep. Lee Terry

It is always useful to read your bills and amendments before putting them on the House floor. That’s Rep. Lee Terry’s and Rep. Connie Mack’s take-away from the amendment they attached to the massive transportation bill. They didn’t review it and now they have had to remove it because the language did the exact opposite of what they intended.

Rep. Terry, a Republican from Nebraska, is a long-standing advocate of the pipeline, and has put forward four of the six bills and amendments relating to the pipeline.

Now that the unnecessary Keystone XL amendment is gone, maybe the House can get around to voting on the important part, the transportation bill that will save 1.9 million jobs immediately and possibly create another million, compared to the 6,000 temporary jobs that Terry is so hot to create.

TransCanada (the company that will build the pipeline from their oilsands operation in northern Alberta to the Texas coast refineries and then sell the refined oil on the international market), the Obama administration and a variety of geologists, hydrologists and environmentalists have been negotiating and reviewing the plans for the pipeline. The administration does not outright object to the pipeline, as the Republicans say, but wants to find the best route for it. TransCanada has no problem with delaying this until the best route is found. The only people getting hysterical over the pipeline are the Republicans who have been overinflating its impact on the American economy throughout the debate. The oil will not be American. It will not improve America’s oil supplies. It will not create 20,000 “good paying jobs.” There is even some question as to whether or not the oil would actually be refined in Texas, as the Texas refineries are operating at capacity and there are no plans to build new capacity there.

TransCanada had an alternative route for their oilsands oil, across British Columbia to the port at Vancouver. Funny thing. The First Nations have objections to the idea. There are currently several issues being investigated in Canada relating to the entire oilsands project, starting with its impact on water supplies in the region.

http://www.freedumbnation.com/?p=2369

GLOBAL ELITES THROWN OUT OF ICELAND: Iceland Dismantles Corrupt Gov’t Then Arrests All Rothschild Bankers

Since the 1900s the vast majority of the American population has dreamed about saying “NO” to the Unconstitutional, corrupt, Rothschild bankster criminals, but no one has dared to do so. Why? If just half of our Nation, and the “1%”, who pay the majority of the taxes, just said NO MORE! Our Gov’t would literally change over night. Why is it so hard, for some people to understand, that by simply NOT giving your money, to large Corporations, who then send jobs, Intellectual Property, etc. offshore and promote anti-Constitutional rights… You will accomplish more, than if you used violence. In other words… RESEARCH WHERE YOU ARE SENDING EVERY SINGLE PENNY!!! Is that so difficult? The truth of the matter is… No nation on the planet, except the Icelanders’ culture, has been able to carry out this required action successfully. Not only have they been successful, at overthrowing the corrupt Gov’t, they’ve drafted a Constitution that will stop this from happening ever again. That’s not the best part… The best part, is that they have arrested ALL Rothschild bankster puppets responsible for the Country’s economic Chaos and meltdown.

Last week 9 people were arrested in London and Reykjavik for their possible responsibility for Iceland’s financial collapse in 2008, a deep crisis which developed into an unprecedented public reaction that is changing the country’s direction.

It has been a revolution without weapons in Iceland, the country that hosts the world’s oldest democracy (since 930), and whose citizens have managed to effect change by going on demonstrations and banging pots and pans. Why have the rest of the Western countries not even heard about it?

Pressure from Icelandic citizens’ has managed not only to bring down a government, but also begin the drafting of a new constitution (in process) and is seeking to put in jail all those bankers responsible for the financial crisis in the country. As the saying goes, if you ask for things politely it is much easier to get them.

This quiet revolutionary process has its origins in 2008 when the Icelandic government decided to nationalise the three largest banks, Landsbanki, Kaupthing and Glitnir, whose clients were mainly British, and North and South American.

After the State took over, the official currency (krona) plummeted and the stock market suspended its activity after a 76% collapse. Iceland was becoming bankrupt and to save the situation, the International Monetary Fund (IMF) injected U.S. $ 2,100 million and the Nordic countries helped with another 2,500 million.

Great little victories of ordinary people

While banks and local and foreign authorities were desperately seeking economic solutions, the Icelandic people took to the streets and their persistent daily demonstrations outside parliament in Reykjavik prompted the resignation of the conservative Prime Minister Geir H. Haarde and his entire government.

Citizens demanded, in addition, to convene early elections, and they succeeded. In April a coalition government was elected, formed by the Social Democratic Alliance and the Left Green Movement, headed by a new Prime Minister, Jóhanna Sigurðardóttir.

Throughout 2009 the Icelandic economy continued to be in a precarious situation (at the end of the year the GDP had dropped by 7%) but, despite this, the Parliament proposed to repay the debt to Britain and the Netherlands with a payment of 3,500 million Euros, a sum to be paid every month by Icelandic families for 15 years at 5.5% interest.

The move sparked anger again in the Icelanders, who returned to the streets demanding that, at least, that decision was put to a referendum. Another big small victory for the street protests: in March 2010 that vote was held and an overwhelming 93% of the population refused to repay the [unlawful] debt, at least with those conditions.

This forced the creditors to rethink the deal and improve it, offering 3% interest and payment over 37 years. Not even that was enough. The current president, on seeing that Parliament approved the agreement by a narrow margin, decided last month not to approve it and to call on the Icelandic people to vote in a referendum so that they would have the last word.

The bankers are fleeing in fear

Returning to the tense situation in 2010, while the Icelanders were refusing to pay a fraudulent debt incurred by financial sharks without consultation, the coalition government had launched an investigation to determine legal responsibilities for the fatal economic crisis and had already arrested several banksters and top executives closely linked to high risk operations.

Interpol, meanwhile, had issued an international arrest warrant against Sigurdur Einarsson, former president of one of the banks. This situation led scared bankers and executives to leave the country en masse.

In this context of crisis, an assembly was elected to draft a new constitution that would reflect the lessons learned and replace the current one, inspired by the Danish constitution.

To do this, instead of calling experts and politicians, Iceland decided to appeal directly to the people, after all they have sovereign power over the law. More than 500 Icelanders presented themselves as candidates to participate in this exercise in direct democracy and write a new constitution. 25 of them, without party affiliations, including lawyers, students, journalists, farmers and trade union representatives were elected.

Among other developments, this constitution will call for the protection, like no other, of freedom of information and expression in the so-called Icelandic Modern Media Initiative, in a bill that aims to make the country a safe haven for investigative journalism and freedom of information, where sources, journalists and Internet providers that host news reporting are protected.

The people, for once, will decide the future of the country while Rothschild banksters and corrupt politicians witness the transformation of a nation from the sidelines.