Targeting Iran

While on his Northern California book tour, David Barsamian spoke to Foaad Khosmood about his 2007 trip to Iran and his latest book Targeting Iran. The book features discussions with Noam Chomsky, Ervand Abrahamian and Nahid Mozaffari. Two short excerpts from the book are reproduced at the end of the interview by permission from the publishers.


Foaad Khosmood: Tell us about your trip to Iran. Why did you go? What were you hoping to accomplish and did you do it?

David Barsamian: I was in Iran for two weeks. I was actually attending 25th anniversary of the Fajr international film festival. And I met some of my Iranian heroes there, like Majid Majidi, Jafar Panahi, Bahman Ghobadi and other filmmakers. I was very excited to be there. As you know Iran has one of the most sophisticated and developed film industries in the world. I also was planning on publishing my book, Targeting Iran and I felt by my being there it would give the work credibility and authenticity when I could report eye-witness experiences.

FKh: Who did you talk to?

DB: I talked to all sorts of people. I held conversations with Islamists, people who support the regime in Iran. Their view was that they had been vindicated. You remember I said in my talk, that they had warned Khatami not to deal with the Americans and that he would only be humiliated and insulted.

I wanted to talk to the students. Iran is a very young country. It has 70 Million people with two thirds of the population under the age of 30. That means they don’t remember the Shah. They don’t remember the Islamic revolution of 1979. 65% of students in colleges and universities are women. Women are very active politically, culturally and socially in Iran.

FKh: How did you contact the Islamists and establishment figures?

DB: It wasn’t difficult. They were all over the place. Many of them were at the Fajr film festival, as a matter of fact. I also met with a new media initiative started by the government called “PRESS TV,” trying to get Iranian perspectives out to a wider audience.

FKh: Is this like an Al-Jazeera for Iran?

DB: Yes, except it is not as interesting and not as well done as Al Jazeera. That may be because it’s new and they are still finding their feet. It’s only been on the air for 6 month. Al Jazeera has a much longer history and a much wider network of followers throughout the Arab world.

FKh: What’s in your new book? What can you share with us about that?

DB: The book, Targeting Iran consists of an essay that I wrote. It touches on the importance of Iranian history, both past and contemporary, important moments in US-Iranian relations.

The book is written for Americans primarily. It has 3 chapters, one featuring Noam Chomsky who is the famous MIT professor and the leading American dissident. Chomsky talks about the US relationship with Iran. He says for example that Iran has a right to enrich Uranium, something that is not discussed very often. He also talks about the key 1953 overthrow of the Mohammad Mussadegh by the CIA, destroying democracy in Iran and ultimately leading to the events of 1979, 1980.

Another chapter features Ervand Abrahamian who is a professor of history at the City University of New York. He is regarded by many as the foremost scholar on Iran. He talks about the internal Iranian political structure which is very unusual. Most Americans are completely unaware of the fact, that for example, the President of the country is not the supreme leader; that he himself answers to a higher authority, which they call “rahbar.”

The supreme leader answers to a group of clerics that select him. So ultimately, Ahmadinejad, who of course, is the enemy du-jour of the United States, has to answer to the supreme leader. Abrahamian talks about those aspects of internal Iranian structure and framework.

The final chapter features Nahid Mozaffari, a brilliant Iranian woman based in New York now who talks about Iran’s great cultural achievements, not just historically but contemporary culture.

She talks about such poets as Ahmad Shamlu, for example, who when he died a few years ago, over one hundred thousand Iranians turned out to honor him. When I went to visit his resting place in Karaj, I saw many fresh flowers that had been placed on his grave, indicating that many people continue to go there to honor his memory.

She also talks about an important Iranian feminist poet, Forough Farrokhzad, who was killed in an auto accident some years ago but still has a very big influence in Iran.

Those kinds of things, the intersection of resistance and culture, art, poetry, literature, film, all of these aspects…. even though Iran has been under an Islamic regime since 1979, it is culturally producing very vibrant, rich and diverse work that I believe deserves our attention.

FKh: What were the attitudes toward the United States that you encountered in Iran?

DB: Well, of course, it’s mixed. The Islamists, of course, are quite hostile to US policies. But across the board, I found that Iranians, almost without exception, want to have diplomatic relations with the United States, want to have normal trade and cultural relations with the United States.
American culture still seems to be very popular in Iran. If one walks down Valiasr street in Tehran, if that’s any indication, the sidewalks are completely covered with DVDs of the latest Hollywood movies and books and CDs of American music.

So that aspect of American culture is still very strong in Iran. Of course you don’t see this kind of thing out in the open in Ghom, the religious capital of Iran, but who knows what’s going on behind the chador, you know?

I met a lot of young people. I went to several Universities. I was there after the incident where Ahmadinejad was at Amir Kabir University. That was in December. But recently in Daneshgah Tehran (Tehran University), he couldn’t get out of his car. He was verbally assaulted. There were signs saying “you are not welcome.” I remember one sign that said “Fascist President of Iran is not welcome at the University,” or words to that effect.

I think much of it also has to do with the poor economic situation inside the country. There is tremendous unemployment. Ahmadinejad was elected in 2005 on a platform of improving the daily lives of average Iranians, you know, providing them with more services and facilities. That hasn’t really happened and his veering off into international areas, I think, has made him intensely unpopular inside the country today.

I met some students at the University who said that we don’t need Holocaust conferences, we need jobs. He was referring to the ill-fated conference which was an enormous fiasco and a blow to Iran’s reputation, bringing people like David Duke of the United States and Robert Faurisson of France and others… putting them up in 5 start hotels, and putting on this conference. That’s not what people need in Iran. They need economic future. They need services and the like. Not the government wasting its time and money in pursuing such activities.

I must say visibly at least in terms of the posters and billboards and the like, there seems to be a lot of support for Iran to pursue its enrichment of Uranium under the NPT. You hear the slogans everywhere: It is our right to do this and no one can tell us not to do it.

So it’s become, the issue has become one of interference. Having been interfered with and intervened with so many times throughout it’s history, the idea of Western, white people, mostly Christian telling Iran what to do doesn’t sit well with a lot of Iranians.

FKh: How do you read the situation between Iran and the United States? In the event of a war with Iran, what can Iran do?

DB: Well they have significant assets in Afghanistan where half the population speaks Farsi and perhaps 20, 30% of the rest understand it. They have long cultural and civilizational ties with Afghanistan. There are of course many American troops there. They would be relatively easy targets for Iran and Iran’s allies.

Many of the major warlords in Afghanistan including those around the Northern Alliance in the Panjshir valley in the northeast as well as in Herat which is right along the Iranian border. One of the major war lords there is named Ismail Khan. They have some very strong ties to Tehran, so they could be activated to strike against US and NATO forces.

In addition Iraq is along Iran’s western border. And Iran has many many assets and allies inside Iraq. In fact the major political parties as well as political leaders, including the former Prime Minister Ibrahim Jafari and the current Prime Minister Nuri al-Maliki, were protected by Tehran throughout the 1980’s. That’s where the Dawa party was born, in Tehran. The same is true of Abdulaziz al-Hakim and his Supreme Council for Islamic Revolution in Iraq. That party also was literally supported by Iran throughout the rule of Saddam Hussein.

The other strategic advantage the Iran has is that it sits north of the Strait of Hormuz which is only 30 miles wide. It would not be very difficult for Iran to lay mines or sink ships passing through the straights which would have an immediate effect on world oil prices, catapulting them upward.

So Iran can do a lot of damage. Iran is not some banana republic like Grenada or El Salvador or Nicaragua that United States can simply punch around.

FKh: So, what’s the motivation behind Washington’s saber-rattling against Iran?

DB: Well, the main motivation is to show the world that anyone who defies the United States will be punished. This will not be tolerated. That is Iran’s principle crime: that it says no to Washington hegemony.

FKh: So, not “meddling”, not “interference in Iraq”, not “nuclear threat” that we keep hearing about?

DB: No, those are just excuses. I’m talking about the strategic reason which is as I just described it. In order to perpetuate US hegemony over the world and domination and control, any state that says no to Washington is singled out. And a state that is particularly rich in oil and natural gas has even more of an attraction to the United States.

Also, you’ll recall that the Shah was America’s strongman in the region. So the so-called “loss” of the Shah was a great blow to United States’ imperial interest in the Middle East. They have never accepted the Islamic revolution. They have always tried to roll it back. Now they are positioning the military forces, I believe, to carry out a major bombing campaign against Iran.

In the most recent Pentagon war appropriations bill, there was extra money, tens of Millions of dollars for new bunker buster bombs that were - and I’m quoting here – “urgently requested by field officers in the theater.” This is Pentagon speak: “Theater” means in the Middle East.

Now, the US completely controls the skies in Iraq and Afghanistan, why would they need such enormous bunker-buster bombs? By the way the power is almost nuclear, not quite. In terms of destructive capacity this is very very close to being a low yield atomic weapon.

This is clearly intended for use against Iran. There are three aircraft carrier battle groups positioned in the Persian Gulf right off the coast of Iran. And I believe, Washington wants to teach Iran a lesson and I think that will have very dire and catastrophic consequences.

FKh: Who are the imperialists in the US Government? Are they Democrats? Republicans? How do they control US policy?

DB: Well, no issues of US foreign policy… on issues of strategy there is no difference between Republicans and Democrats. The only difference is on tactics. So the fact that these people believe that United States rules the world and it can intervene in any country in the world, those are embedded ideas. The disagreements come over tactics. How do you implement policy in order to achieve those strategic goals, of domination of oil, control of the world? So these kinds of ideas are so deeply embedded in the political system.

But what is the debate? The debate is on how and when military force should be used against Iran. No one is saying that this would be a major war crime. That Iran is not a threat to the United States that any attack on Iran would constitute a grave breach of the UN charter and international law. No one is even uttering those words.

FKh: What is your message to the anti-war movement? I have heard you talk about HR 333, the Cheney impeachment resolution, but is that really the best strategy that you think the anti war movement should be pushing for?

DB: Well, it’s one strategy. I think it’s a very practical thing. Even though the votes are not there, to actually impeach the President in the House and then to have a trial in the Senate… and the Vice President incidentally, but I think by its introduction it would deter action against Iran.

So I think that is a very important thing that people can work on. Just the whiff of impeachment in the air will, I believe, have a leveling effect on the imperial war marching. And people should be writing and demonstrating and talking to Ana Eshoo and Nancy Pelosi and Tom Lantos. Those are three important congress-people from this area.

People sometimes get discouraged and think they should just give up, that there is no hope, their voices don’t matter; their votes don’t mater, etc. I think that would be a very foolish mistake for citizens to make.

FKh: What is your opinion on all the sanctions talk? UN sanctions and unilateral…

DB: Well, unilateral sanctions are a grave breach of the UN charter and are illegal and should be seen as such. The United States, because it rules the world, can unilaterally impose sanctions.

What’s been disturbing over the last few months is how obsequious Europe has become vis-à-vis the United States on the issue of Iran. I thought many European nations adopted a principled position on Iraq, but now with Iran, they seem to be in compliance with the United States.

Maybe the election of Merkel in Germany replacing Schroeder and Sarkozy in France replacing Chirac… they seem to be much more infatuated with US policy on Iran and have subordinated themselves to Washington.

Look, the US has had sanctions against Iran since 1980, since the hostage crisis. So this is not anything new. Basically it’s a little bit of an inconvenience at the moment. It has been an inconvenience for Iranians people and Iranian business people. But you know they have their offshore bank accounts in the Gulf.

When I was in Iran, I was there for the 22-Bahman celebrations of the revolution. I went to the Meydaneh Azadi. Ahmadinejad was there and there was the usual “Marg bar Amrika” slogans. The whole thing seemed totally artificial to me. They were just reciting their lines, there was no passion. There was no fervor. I feel like the revolution has gone stale, it has lost its flavor and people are just going through the motions. But if confrontation starts, they will not hesitate to defend their country because of nationalism; because they care about Iran.

I think Shirin Ebadi who was the Nobel Peace Prize winner in 2003, has it right. She said it would be grave mistake for the US to attack Iran. It would only solidify support for the regime. And it would also compromise the democracy movement inside Iran.

There is a movement in Iran that wants to make changes in the system of government in the country. But they don’t want it imposed from Washington. They want it to be Iranian. They want it to have an Iranian flavor, not an American flavor.

FKh: You’re talking about the reform movement.

DB: Right. They want to have some kind of opening to the west. They want to end this confrontational, hostile situation. Of course, they have been undermined by the US foreign policy. It’s not just Shirin Ebadi, Akbar Ganji has said this. Others have said this.

Every time, the US increases its bellicose, aggressive language vis-à-vis Iran there are domestic crackdowns, more repression inside the country. Because the government feels insecure and identifies anyone who is a dissident as somehow supporting Washington, which is not the case at all, but you can see how that syndrome perpetuates itself.

FKh: What’s the solution?

DB: One word: honesty. The lying has to end. The propaganda has to end. We have to talk clearly about Israel and about oil. There’s just too much lying, too much subterfuge.

Everything is buried under “freedom” and “democracy” and “liberty.” These are propagandistic slogans masking the real intentions of US foreign policy, which is domination of the Middle East, protection of Israel, no matter what, and control of world’s oil and natural gas resources.

David Barsamian is the award-winning founder and director of Alternative Radio (www.alternativeradio.org). He plans a return trip to Iran in February. Foaad Khosmood is a contributing editor to ZNet.

Excerpts from Target Iran reproduced by permission from City Lights publishers:

1. Noam Chomsky on US Threats and Sanctions against Iran:

“By US standards, Iran ought to be carrying out terrorist acts in the United States. In fact adopting US standards, we ought to be demanding that they do it. They’re under far greater threat than anything Bush or Blair ever conjured up, and that’s supposed to authorize what they call anticipatory self-defense, namely attack. They can’t bomb the United States. They could do something else. Of course that’s totally outrageous, but that just tells you something about US-British standards. However, Europe did not live up to its half of the bargain. Apparently under US pressure, it backed off. It did not make any offer to provide any guarantees of security. Shortly after, Iran backed off from its side of the bargain.

That bring us up to the present, with Europe refusing to live up to the bargain; the US and Israel continuing, extending in fact, the threats to Iranian security, which are serious; and Iran, we don’t know. They’re back to enriching uranium, and we don’t know for what purposes. No one wants Iran to get nuclear weapons. If there were a real interest in preventing that, what would happen is you would reduce the threats which are making it likely that they’ll develop them as a deterrent; implement the bargain that was made; and then move toward integrating Iran into the general international economic system; remove the sanctions, which are gains the people, not the government; and just bring them into the world system. The US refuses. Europe does what the US orders them to do.

One of the problems that the US is facing is that China is not intimidated. That’s why the US is so frightened of China. You see headlines on the front pages, ‘How Dangerous Is China?’ Of all the major nuclear powers, China has been the most restrained in its development of offensive weaponry. But China is frightening because it is not intimidated. Europe will back off, and China won’t. European companies, frightened of US, have backed away from investments in Iran, but China just proceeds. That’s why the US is so terrified of China. If you’re the Mafia don and somebody doesn’t pay protection money, that’s scary, especially when you can’t do anything about it.”
-- Targeting Iran, pages 37-38

2. Ervand Abrahamian on the relevance of Iranian history:

“This type of premise in Washington completely ignores Iranian history. Iranian history for the last 150 years has been a history of having to struggle with foreign imperialism. And in that history, the imperial powers, particularly Britain, were constantly giving ultimatums to Iran. In Iranian history, Iranian politicians who submitted to ultimatums were considered national traitors, and the national leaders who refuse to submit are invariably considered heroes. Even if they lost, they’ve been considered heroes.

So the present crisis in Iran is being seen as a replay of the oil nationalization crisis with Mossadegh, and the Iranians are drawing parallels to Iran in 1951-53, when Iran wanted to be a self-sufficient, self-respecting nation and have sovereignty over its resources. The Americans and the British offered these ultimatums: if you don’t give up your oil, we’re going to destroy you. And Mossadegh was a hero; even though he didn’t succeed, he stood up for national rights.

Iranians are seeing a similar thing, except now it’s the question of nuclear technology. If you look back to the twentieth century, a partial myth in Iranian historiography is that Iran couldn’t develop railways because British and Russian imperialism wouldn’t allow it. Every time Iran wanted to build railways, which was at the time the cutting edge of technology, the imperial powers stepped in and said, ‘No, you’re not good enough you’re not developed enough to have railways.’ This now plays into the question of nuclear technology, the argument is that Iran really doesn’t need it or Iran isn’t mature enough to have nuclear technology.”

Iceland best place to live, Africa worst - UN

Sans oublier que les USA sont passees de la 8ieme a la 12ieme place cette annee et 10ieme pour la France (voir page 244 pour la liste complete)
BRASILIA, Nov 27 (Reuters) - Iceland has overtaken Norway as the world's most desirable country to live in, according to an annual U.N. table published on Tuesday that again puts AIDS-afflicted sub-Saharan African states at the bottom.

Rich free-market countries dominate the top places, with Iceland, Norway, Australia, Canada and Ireland the first five but the United States slipping to 12th place from eighth last year in the U.N. Human Development Index.

But the index, blending 2005 figures for life expectancy, educational levels and real per capita income, finds that all 22 countries falling into its "low human development" category are in sub-Saharan Africa, with Sierra Leone last.

In 10 of these countries, two children in five will not reach the age of 40, said the compilers at the U.N. Development Program. Last year's report said HIV/AIDS had had a "catastrophic effect" on life expectancy in the region.

The index ranks 175 U.N. member countries plus Hong Kong and the Palestinian territories. It does not include 17 countries, including Iraq, Afghanistan and Somalia, because of inadequate data.

Norway had held top spot for six years but was edged into second place by Iceland this year because of new life expectancy estimates and updated figures for gross domestic product, or GDP, the report said.

U.N. officials played down the significance of minor short-term shifts in the rankings including the slide in the U.S. position. They said if subsequent data for the year in question been available for last year's report, the United States would have been in 10th, not eighth place.

The United States scores high on real per capita GDP, which at $41,890 is second only to that of Luxembourg ($60,228), but less well on life expectancy -- joint last in the top 26 countries, along with Denmark and South Korea, at 77.9 years.

Japanese have the longest life expectancy -- 82.3 years -- and Zambians the lowest, at 40.5.

The report said most countries had seen their human development index rise over the last 30 years, but in 16 it was lower than in 1990, and in three -- the Democratic Republic of Congo, Zambia and Zimbabwe -- lower than in 1975.

Per capita GDP is 45 times higher in Iceland than in Sierra Leone.

The United Nations has published its human development index every year since 1990. (Writing by Patrick Worsnip at the United Nations, editing by Cynthia Osterman)

Ahmadinejad offers to be an observer at US presidential election

Robert Tait in Tehran
Tuesday November 27, 2007
The Guardian

He denounces it as the "Great Satan" and frequently dismisses its power, but the overtures of the Iranian president, Mahmoud Ahmadinejad, to the US seem to grow ever more extravagant.

Having failed to win a response with an 18-page letter to President George Bush or to a request to visit the site of the September 11 2001 attack on New York, Ahmadinejad has offered himself as an observer in next year's presidential election.

The proposal came in a speech to volunteers with the Basij, a pro-regime militia. He said he was prompted by a belief that Americans would vote against the current administration in a truly free poll.

However, the terms of Ahmadinejad's offer appeared to betray some confusion about the potential candidates.

"If the White House officials allow us to be present as an observer in their presidential election we will see whether people in their country are going to vote for them again or not," he said. The US constitution prevents Bush from seeking a third consecutive term, while no member of his administration is expected to be in the running in next November's poll.

Bush and international human rights groups voiced doubts about the legitimacy of Iran's 2005 presidential election, which brought Ahmadinejad to power. More than 1,000 potential candidates were disqualified by the guardian council, a powerful body of clerics and judges.

Some domestic critics pointed out yesterday that Ahmadinejad's idea clashed with his government's opposition to allowing independent observers at Iranian elections. The interior ministry, controlled by one of the president's most hard-line allies, has rejected pressure for party representatives to be allowed to oversee proceedings at polling stations for next March's parliamentary poll.

The election is expected to provide a major test of Ahmadinejad's popularity. Leading regime figures, including two former presidents, Hashemi Rafsanjani and Mohammad Khatami, have warned against possible attempts to rig it through mass candidate disqualifications and other measures.

Forecast: U.S. dollar could plunge 90 pct

A financial crisis will likely send the U.S. dollar into a free fall of as much as 90 percent and gold soaring to $2,000 an ounce, a trends researcher said.

"We are going to see economic times the likes of which no living person has seen," Trends Research Institute Director Gerald Celente said, forecasting a "Panic of 2008."

"The bigger they are, the harder they'll fall," he said in an interview with New York's Hudson Valley Business Journal.

Celente -- who forecast the subprime mortgage financial crisis and the dollar's decline a year ago and gold's current rise in May -- told the newspaper the subprime mortgage meltdown was just the first "small, high-risk segment of the market" to collapse.

Derivative dealers, hedge funds, buyout firms and other market players will also unravel, he said.

Massive corporate losses, such as those recently posted by Citigroup Inc. and General Motors Corp., will also be fairly common "for some time to come," he said.

He said he would not "be surprised if giants tumble to their deaths," Celente said.

The Panic of 2008 will lead to a lower U.S. standard of living, he said.

A result will be a drop in holiday spending a year from now, followed by a permanent end of the "retail holiday frenzy" that has driven the U.S. economy since the 1940s, he said.

Coup D'Etat Rumblings in Venezuela

The Bush administration tried and failed three prior times to oust Hugo Chavez since its first aborted two-day coup attempt in April, 2002. Through FOIA requests, lawyer, activist and author Eva Golinger uncovered top secret CIA documents of US involvement that included an intricate financing scheme involving the quasi-governmental agency, National Endowment of Democracy (NED), and US Agency for International Development (USAID). The documents also showed the White House, State Department and National Security Agency had full knowledge of the scheme, had to have approved it, and there's little doubt of CIA involvement as it's always part of this kind of dirty business. What's worrying now is what went on then may be happening again in what looks like a prelude to a fourth made-in-Washington attempt to oust the Venezuelan leader that must be monitored closely as events develop.

Since he took office in February, 1999, and especially after George Bush's election, Chavez has been a US target, and this time he believes credible sources point to a plot to assassinate him. That information comes from Alimamy Bakarr Sankoh, president of the Hugo Chavez International-Foundation for Peace, Friendship & Solidarity (HCI-FPFS) in a November 11 press release. Sankoh supports Chavez as "a man of peace and flamboyant champion of human dignity (who persists in his efforts in spite of) growing US blackmail, sabotage and political blasphemy."

HCI-FPFS sources revealed the plot's code name - "Operation Cleanse Venezuela" that now may be unfolding ahead of the December 2 referendum on constitutional reforms. According to Sankoh, the scheme sounds familiar - CIA and other foreign secret service operatives (including anti-Castro terrorists) aiming to destabilize the Chavez government by using "at least three concrete subversive plans" to destroy the country's social democracy and kill Chavez.

It involves infiltrating subversive elements into the country, inciting opposition within the military, ordering region-based US forces to shoot down any aircraft used by Chavez, employing trained snipers with shoot to kill orders, and having the dominant US and Venezuelan media act as supportive attack dogs. Chavez is targeted because he represents the greatest of all threats to US hegemony in the region - a good example that's spreading. Venezuela also has Latin America's largest proved oil reserves at a time supplies are tight and prices are at all-time highs.

Sankoh calls Washington-directed threats "real" and to "be treated seriously" to avoid extending Bush's Middle East adventurism to Latin America. He calls for support from the region and world community to denounce the scheme and help stop another Bush administration regime change attempt.

More information on a possible coup plot also came from a November 13 Party for Socialism and Liberation article headlined "New US plots against the Venezuelan Revolution." It states Tribuna Popular (the Communist Party of Venezuela) and Prensa Latina (the Latin American News Agency) reported: "Between Oct. 7 and Oct 9, high-ranking US officials met in Prague, Czech Republic, with parts of the Venezuelan opposition (where they were) urged to convene social uprisings, sabotage the economy and infrastructure, destroy the food transportation chain and plan a military coup." It said Paul Wolfowitz and Madeleine Albright attended along with Humberto Celli, "a well-known coup-plotter from the Venezuelan party Accion Democratica."

The article further reported Tibisay Lucena, The National Electoral Council chairman, said the Venezuelan corporate media was "stoking a mood of violence amongst right-wing students" through a campaign of agitprop, and Hermann Escarra from the "pro-coup" Comando Nacional de la Resistencia openly incited "rebellion" last August and then called for constitutional changes to be stopped "through all means possible."

The Venezuelan news agency, Diaria VEA, also weighed in saying "anonymous students planned on committing acts of destabilization" as the December 2 vote approaches. Venezuelan Radio Trans Mundial provided proof with a recorded video of a youth dumping gasoline into an armored vehicle, ramming metal barricades into police on top of other vehicles, and knocking them from their roofs and hoods onto the ground.

The Threat of Street Protest Violence

For weeks, protests with sporadic violence have been on Venezuela's streets as anti-Chavistas use middle and upper class students as imperial tools to destabilize the government and disrupt the constitutional process. The aim is to discredit and oust the Chavez government and return the country to its ugly past with Washington and local oligarchs in charge and the neoliberal model reinstated.

Venezuela's Foreign Minister, Nicolas Maduro, weighed in on this on November 8. He accused Washington of meddling by staging violent Caracas street protests against proposed constitutional reforms to extend the country's participatory social democracy. Referring to a November 7 shootout at Caracas' Central University, he said: "We don't have any doubt that the government of the United States has their hands in the scheme that led to the ambush yesterday" that Chavez calls a "fascist offensive." Several students were wounded on the streets from a clash between pro and anti-Chavez elements.

"We know the whole scheme," Maduro added, and he should as it happened before in 2002, again during the disruptive 2002-03 oil management lockout, and most often as well when elections are held to disrupt the democratic process. These are standard CIA operating tactics used many times before for 50 years in the Agency's efforts to topple independent leaders and kill them. Chavez understands what's happening, and he's well briefed and alerted by his ally, Fidel Castro, who survived over 600 US attempts to kill him since 1959. He's now 81 and very much alive but going through a difficult recovery from major surgery 15 months ago.

Chavez has widespread popular support throughout the region and from allies like Ecuador's Raphael Correa and Nicaraguan President Daniel Ortega who expressed his "solidarity with the revolutionary people of Venezuela and our friend Hugo Chavez, who is being subjected to aggression from a counterrevolution fed by the traitors from inside the country and by the empire (referring to the US)." He compared the situation to his own country where similar efforts are being "financed by the United States Embassy" in Managua to support elements opposed to his Sandinista government even though it's very accommodative to Washington.

Even Brazil's Lula chimed in by calling Chavez's proposed reforms consistent with Venezuela's democratic norms, and he added: "Please, invent anything to criticize Chavez, except for lack of democracy."

Constitutional Reform As A Pretext for Protests

Washington's goal from all this is clear, but why now? Last July, Chavez announced he'd be sending Venezuela's National Assembly (AN) a proposed list of constitutional reforms to debate, consider and vote on. Under Venezuelan law, the President, National Assembly or 15% of registered voters (by petition) may propose constitutional changes. Under articles 342, 343, 344 and 345, they must then be debated three times in the legislature, amended if needed, and then submitted to a vote that requires a two-thirds majority to pass. Finally within 30 days, the public gets the last word, up or down, in a national referendum. It represents the true spirit of democracy that's unimaginable in the US where elitists control everything, elections are a sham, and the people have no say.

That was true for Venezuela earlier, but no longer. In its history, there have been 26 Constitutions since its first in 1821, but none like the 1999 Bolivarian one under Chavez that's worlds apart from the others. It created a model participatory social democracy that gave all citizens the right to vote it up or down by national referendum and then empowered them (or the government) later on to petition for change.

On August 15, Chavez did that by submitting 33 suggested amendment reforms to the Constitution's 350 articles and explained it this way: The 1999 Constitution needed updating because it's "ambiguous (and) a product of that moment. The world (today) is very different from (then). (Reforms are) essential for continuing the process of revolutionary transition" to deepen and broaden Venezuelan democracy. That's his central aim - to create a "new geometry of power" for the people along with more government accountability to them.

Proposed reforms will have little impact on the nation's fundamental political structure. They will, however, change laws with regard to politics, the economy, property, the military, the national territory as well as the culture and society and will deepen the country's social democracy.

The National Assembly (AN) completed its work on November 2 adding 25 additional articles to Chavez's proposal plus another 11 changes for a total of 69 articles that amend one-fifth of the nation's Constitution. The most important ones include:

-- extending existing constitutional law that guarantees human rights and recognizes the country's social and cultural diversity;

-- building a "social economy" to replace the failed neoliberal Washington Consensus model;

-- officially prohibiting monopolies and unjust consolidation of economic resources;

-- extending presidential terms from six to seven years;

-- allowing unlimited presidential reelections so that option is "the sovereign decision of the constituent people of Venezuela" and is a similar to the political process in countries like England, France, Germany and Australia;

-- strengthening grassroots communal councils, increasing their funding, and promoting more of them;

-- lowering the eligible voting age from 18 to 16;

-- guaranteeing free university education to the highest level;

-- prohibiting foreign funding of elections and political activity;

-- reducing the work week to 36 hours to promote more employment;

-- ending the autonomy of Venezuela's Central Bank to reclaim the country's financial sovereignty the way it should be everywhere; today nearly all central banks are controlled by private for-profit banking cartels; Republican presidential candidate Ron Paul wants to end that status in the US and correctly explains the Federal Reserve Bank is neither federal nor does it have reserves; it's owned and run by Wall Street and the major banks;

-- adding new forms of collective property under five categories: public for the state, social for citizens, collective for people or social groups, mixed for public and private, and private for individuals or private entities;

-- territorial redefinition to distribute resources more equitably to communities instead of being used largely by economic and political elites;

-- prohibiting sexual orientation discrimination and enacting gender parity rights for political candidates;

-- redefining the military as an "anti-imperialist popular entity;"

-- in cases where property is appropriated for the public good, fair and timely compensation to be paid for it;

-- protecting the loss of one's home in cases of bankruptcy; and

-- enacting social security protection for the self-employed.

The National Assembly also approved 15 important transitional dispositions. They relate to how constitutional changes will be implemented if approved until laws are passed to regulate them. One provision is for the legislature to pass 15 so-called "organic laws" that include the following ones:

-- a law on "popular power" to govern grassroots communal councils (that may number 50,000 by year end) that Chavez called "one of the central ideas....to open, at the constitutional level, the roads to accelerate the transfer of power to the people (in an) Explosion of Communal (or popular) Power;" five percent of state revenues will be set aside to fund it;

-- another promoting a socialist economy for the 21st century that Chavez champions even though he remains friendly to business; and

-- one relating to the country's territorial organization; plus others on education, a shorter workweek and more democratic changes.

Under Venezuelan law, and in the true spirit of democracy, these proposed changes will be for citizens to vote up or down on December 2. The process will be in two parts reversing an earlier decision to do it as one package, yea or nay. One part will be Chavez's 33 reforms plus 13 National Assembly additions, and the other for the remaining 23 articles.

Coup D'Etat Rumblings Must Be Taken Seriously

Now battle lines are drawn, opposition forces are mobilized and events are playing out violently on Venezuela's streets. The worst so far was on November 7 when CNN falsely reported "80,000" anti-Chavez students demonstrated "peacefully" in Caracas to denounce "Hugo Chavez's attempts to expand his power." The actual best estimates put it between 2000 and 10,000, and long-time Latin American expert James Petras calls the protesters "privileged middle and upper middle class university students," once again being used as an imperial tool.

In their anti-government zeal, CNN and other dominant media ignore the many pro-Chavez events writer Fred Fuentes calls a "red hurricane" sweeping the country. An impressive one was held on November 4 when the President addressed hundreds of thousands of supporters who participated in an 8.5 kilometer Caracas march while similar pro-reform rallies took place at the same time around the country. They're the start of a "yes" campaign for a large December 2 turnout that's vital as polls show strong pro-reform support by a near two to one margin.

In an effort to defuse it, orchestrated opposition turned violent and officials reported eight people were injured in the November 7 incident. No one was killed, but one was wounded by gunfire when at least "four (masked) gunmen (who looked like provocateur plants, not students) fir(ed) handguns at the anti-Chavez crowd." In an earlier October demonstration, opposition students clashed with police who kept them from reaching the National Assembly building and a direct confrontation with pro-Chavez supporters that might have turned ugly.

It did on November 7 when violence erupted between pro and anti-government students, but it wasn't as reported. Venezuelan and US corporate media claimed pro-Chavez supporters initiated the attack. In fact, they WERE attacked by elements opposing the President. They seized this time to act ahead of the referendum to disrupt it and destabilize the government as prelude to a possible planned coup.

One pro-Chavez student explained what happened. She and others were erecting posters supporting a "yes" referendum vote when they were attacked with tear gas and crowds yelling they were going to be lynched. Avila TV had the evidence. Its unedited footage showed an opposition student mob surrounding the School of Social Work area where pro-Chavez students hid for safety. They threw Molotov cocktails, rocks, chairs and other objects, smashed windows, and tried to burn down the building as university authorities (responsible for security) stood aside doing nothing to curtail the violence. Another report was that corporate-owned Univision operatives posing as reporters had guns and accompanied the elements attacking the school in an overt act of complicity by the media.

The pattern now unfolding on Caracas streets is similar to what happened ahead of the April, 2002 aborted coup attempt, and Petras calls it "the most serious threat (to the President) since" that time. The corporate media then claimed pro-government supporters instigated street violence and fired on "unarmed" opposition protesters. In fact, that was later proved a lie as anti-Chavez "snipers" did the firing as part of the plot that became the coup. A similar scheme may now be unfolding in Caracas and on other campuses around the country as well.

In his public comments, Foreign Minister Maduro accused the major media and CNN of misrepresenting events and poisoning the political atmosphere. It's happening in Venezuela and the US as the dominant media attacks Hugo Chavez through a campaign of vilification and black propaganda.

US Corporate Media on the Attack

On November 12, The Venezuela Information Office (VIO) reported that growing numbers of "US print newspapers lodged attacks against Venezuela" using "outdated cold-war generalizations" and without explaining any of the proposed democratic changes. Among others, they came from the Houston Chronicle that claimed:

-- constitutional reforms will "eliminate the vestiges of democracy" in Venezuela when, in fact, they'll strengthen it, and the people will vote them up or down;

-- Chavez controls the electoral system when, in fact, Venezuela is a model free, fair and open democracy that shames its US equivalent. The Chronicle falsely said reforms will strip people of their right to due process. In fact, that's guaranteed under article 337 that won't be changed.

VIO also reported on a Los Angeles Times editorial comparing Chavez to Bin Laden. It compounded that whopper by claiming reforms will cause a global recession due to higher oil prices that, of course, have nothing to do with changes in law. In another piece, the LA Times inverted the truth by falsely claiming a public majority opposes reforms. Then there's the Miami Herald predicting an end to freedom of expression if changes pass and the Washington Post commenting on how high oil prices let Chavez buy influence.

The Post then ran an inflamatory November 15 editorial headlined "Mr. Chavez's Coup" if which it lied by saying November 7 student protesters "were fired on by gunmen (whom) university officials later 'identified'....as members of government-sponsored 'paramilitary groups' when, in fact, there are no such groups. The editorial went on to say Chavez wants to "complete his transformation into an autocrat (to be able to) seize property....dispose of Venezuela's foreign exchange reserves....impose central government rule on local jurisdictions and declare indefinite states of emergency" as well as suspend due process and freedom of information. Again, misinformation, deliberate distortion and outright lies from a leading quasi-official US house organ.

Rupert Murdock's Wall Street Journal weighed in as well with its lead anti-Chavez attack dog and all-round character assassin extraordinaire, Mary Anastasia O'Grady. This writer has tangled with her several times before and earlier commented how one day she'll have a serious back problem because of her rigid position of genuflection to the most extreme hard-right elements she supports. Her latest November 12 column was vintage O'Grady and headlined "More Trouble for Chavez (as) Students and former allies unite against his latest power grab."

Like most of her others, this one drips with vitriol and outrageous distortions like calling Chavez a "dictator" when, in fact, he's a model democrat, but that's the problem for writers like O'Grady. Absent the facts, they use agitprop instead. O'Grady writes: "Mr. Chavez has been working to remove any counterbalances to his power for almost nine years (and) has met strong resistance from property owners, businesses, labor leaders, the Catholic Church and the media." Now add opposition well-off students. Omitted is that the opposition is a minority, it represents elitist interests, and Chavez has overwhelming public support for his social democracy and proposed reform changes including from most students O'Grady calls "pro-Chavez goons."

Once again, she's on a rampage, but that's her job. She claims the absurd and people believe her - like saying the media will be censored, civil liberties can be suspended, and government will be empowered to seize private property. He's a "demagogue," says O'Grady, waging "class warfare," but opposition to reform "has led to increased speculation (his) days are numbered." Wishing won't make it so, and O'Grady uses that line all the time.

The New York Times is also on the attack in its latest anti-Chavez crusade. It's been a leading Chavez critic for years, and Simon Romero is its man in Caracas. On November 3, he reported "Lawmakers in Venezuela Approve Expanded Power for Chavez (in a) constitutional overhaul (to) enhance (Chavez's) authority, (allow) him to be reelected indefinitely, and (give) him the power to handpick rulers, to be called vice-presidents, (and) for various new regions to be created in the country....The new amendments would facilitate expropriations of private property (and allow state) security forces to round up citizens (stripped of their) legal protections" if Chavez declares a state of emergency - to make him look like Pakistan's Musharraf when he's mirror opposite.

Romero also quoted Jose Manuel Gonzales, president of Venezuela's Fedecamaras (chamber of commerce), saying "Venezuelan democracy was buried today" and anti-Chavez Roman Catholic church leaders (always allied with elitists) calling the changes "morally unacceptable." Then on November 8, Romero followed with an article titled "Gunmen Attack Opponents of Chavez's Bid to Extend Power" and implied they were pro-Chavez supporters. Again false. Still more came on November 10 headlined "Students Emerge as a Leading Force Against Chavez" in an effort to imply most students oppose him when, in fact, these elements are a minority.

His latest so far is on November 17 titled "Chavez's Vision Shares Wealth and Centers Power" that in fairness shows the President addressing a huge crowd of supporters in Maturin on November 16. But Romero spoiled it by calling his vision "centralized, oil-fueled socialism (with) Chavez (having) significantly enhanced powers." Then he quotes Chavez biographer Alberto Barrera Tyszka who embarrassed himself and Romero saying the President is seizing and redirecting "power through legitimate means (and this) is not a dictatorship but something more complex," the 'tyranny' of popularity." In other words, he's saying democracy is "tyranny." The rest of the article is just as bad with alternating subtle and hammer blow attacks against a popular President's aim to deepen his socially democratic agenda and help his people.

Romero's measured tone outclasses O'Grady's crudeness that's pretty standard fare on the Journal's notorious opinion page. He's much more dangerous, however, with a byline in the influential "newspaper of record" because of the important audience it commands.

One other notable anti-Chavez piece is in the November 26 issue of the magazine calling itself "the capitalist tool" - Forbes. It shows in its one-sided commentary and intolerance of opposing views. The article in question, headlined "Latin Sinkholes," is by right wing economist and long-time flack for empire, Steve Hanke. In it, he aims right at Chavez with outrageous comments like calling him a "negative reformer (who) turned back the clock (and) hails Cuba, the largest open-air prison in the Americas, as his model. His revolution's enemy is the marketplace." He then cites a World Bank report saying "Venezuela is tied with Zimbabwe as this year's champion in smothering economic freedom," and compounds that lie with another whopper.

Point of fact - Venezuela and Argentina have the highest growth rates in the region and are near the top of world rankings in recent years. Following the devastating oil management 2002-03 lockout, Venezuela's economy took off and grew at double digit rates in 2004, 05 and 06 and will grow a likely 8% this year. Hanke, however, says "Venezuela's economic performance under Chavez has been anemic (growing) at an average rate of only 2% per year. In the same article, he aims in similar fashion at Ecuador's Raphael Correa calling him "ruthlessly efficient (for wanting to) pull off a Bolivarian Revolution in Ecuador." Hanke and most others in the dominant media are of one mind and never let facts contradict their opinions. Outliers won't be tolerated even when it's proved their way works best.

There's lots more criticism like this throughout the dominant media along with commentators calling Chavez "a dictator, another Hitler (and) a threat to democracy." Ignoring the rules of imperial management has a price. This type media assault is part of it as a prelude for what often follows - attempted regime change.

Further Venezuela Information Office (VIO) Clarification of Facts on the Ground

On November 15, VIO issued an alert update to dispel media inaccuracies "about Venezuela's constitutional reforms and the student protests" accompanying them. They're listed below:

-- Caracas has a student population of around 200,000; at most 10,000 participated in the largest protest to date, and VIO estimates it was 6000;

-- the major media ignore how the government cooperates with students and made various accommodations to them to be fair to the opposition;

-- Venezuelan police have protected student protesters, and article 68 of the Constitution requires they do it; it affirms the right of all Venezuelans to assemble peacefully;

-- in addition, student protest leaders linked to opposition parties were granted high-level meetings with government officials to present their concerns;

-- on November 1, their student representatives met with directors of the National Electoral Council (CNE) and presented a petition to delay the referendum;

-- on November 7, they again met with National Tribunal of Justice officials and presented the same petition;

-- on November 12, Minister of Interior and Justice Minister, Pedro Carreno, met 20 university presidents to assure them the government respects university autonomy and their students' right to assemble peacefully;

-- VIO reported what really happened at another November 1 protest after students met with CNE officials; some of them then tried to chain themselves to the building while others charged through police lines and injured six officers; in addition, one student had 20 liters of gasoline but never got to use it criminally; after the incident, the CNE president, Tibisay Lucena, issued a public statement expressing his disappointment about this kind of response to the government's good faith efforts; and

-- VIO said students and university presidents from across the nation filed a document with the Supreme Court on November 14 supporting constitutional reform. Chief justice Luisa Estela Morales praised their coming and said the court's doors are open to anyone wanting to give an opinion. The dominant media reported nothing on this. It also ignored the government's 9000 public events throughout the country in past weeks to explain and discuss proposed reforms and that a hotline was installed for comments on them, pro or con.

-- finally, when protests of any kind happen in the US, police usually attack them with tear gas, beatings and mass arrests to crush their democratic spirit and prevent it from being expressed as our Constitution's First and most important amendment guarantees. In Venezuela, the spirit of democracy lives. It never existed in the US, and we want to export our way to everyone and by force if necessary.

Here's a November 15 breaking news example of our way in action. At 8:00AM, 12 FBI and Secret Service agents raided the Liberty Dollar Company's office in Evansville, IN and for the next six hours removed two tons of legal Ron Paul Dollars along with all the gold, silver and platinum at the location. They also took all location files and computers and froze Liberty Dollar's bank accounts in an outrageous police state action against a legitimate business. This move also seems intended to impugn the integrity of a presidential candidate gaining popularity because he defies the bellicose mainstream and wants more people empowerment.

Chavez champions another way and answered his critics at a November 14 Miraflores Presidential Palace press conference where he denounced them for lying about his reform package. He explained his aim is to strengthen Venezuela's independence and transfer power to the people, not increase his own. "For many years in Venezuela," he said, "they weakened the powers of the state as part of the neoliberal imperial plan....to weaken the economies of countries to insure domination. While we remained weak, imperialism was strengthened," and he elaborated.

He then continued to stress his most important reform "is the transfer of power to the people" through an explosion of grassroots communal, worker, student and campesino councils, formations of them into regional and national federations, and the formation of "communes (to) constitute the basic nucleus of the socialist state." Earlier Chavez stated that democratizing the economy "is the only way to defeat poverty, to defeat misery and achieve the largest sum of happiness for the people." He's not just saying this. He believes and acts on it, and that's why elitists target him for removal even though he wants equity for everyone, even his critics, and business continues to thrive under his government. But not like in the "good old" days when it was all one-way.

Venezuelan Business is Booming - So Why Complain?

Business in Venezuela is indeed booming, and in 2006 the Financial Times said bankers were "having a party" it was so good. So what's the problem? It's not good enough for corporate interests wanting it all for themselves and nothing for the people the way it used to be pre-Chavez. Unfair? Sure, but in a corporate-dominated world, that's how it is and no outliers are tolerated. Thus Hugo Chavez's dilemma.

Last June, Business Week (BW) magazine captured the mood in an article called "A Love-Hate Relationship with Chavez - Companies are chafing under the fiery socialist. But in some respects, business has never been better." Writer Geri Smith asked: "Just how hard is it to do business in Venezuela" and then exaggerated by saying "hardly a day passes without another change in the rules restricting companies." Hardly so, but what is true is new rules require a more equitable relationship between government and business. They provide more benefits to the people and greater attention to small Venezuelan business and other commercial undertakings like an explosion of cooperatives (100,000 or more) that under neoliberal rules have no chance against the giants.

Nonetheless, the economy under Chavez is booming, and business loves it even while it complains. It's because oil revenues are high, Chavez spends heavily on social benefits, and the poor have seen their incomes more than double since 2004 when all their benefits are included. The result, as BW explains: "Sales of everything from basics" to luxury items "have taken off....and local and foreign companies alike are raking in more money than ever in Venezuela." In addition, bilateral trade has never been higher, but American business complains it's caught in the middle of a Washington - Caracas political struggle.

The article continues to show how all kinds of foreign business is benefitting from cola to cars to computer chips. Yet, it restates the dilemma saying "As Chavez continues his socialist crusade, there are signs of rising discontent," and it's showing up now on the country's streets with the latest confrontation still to be resolved, one way or another.

Events Are Ugly and Coming to A Head

Through the dominant media, Washington and Venezuelan anti-Chavez elements are using constitutional reform as a pretext for what they may have in mind - "to arouse the military to intervene" and oust Chavez, as Petras notes in his article titled "Venezuela: Between Ballots and Bullets." He explains the opposition "rich and privileged (coalition) fear constitutional reforms because they will have to grant a greater share of their (considerable) profits to the working class, lose their monopoly over market transactions to publicly owned firms, and see political power evolve toward local community councils and the executive branch."

Petras is worried and says "class polarization....has reached its most extreme expression" as December 2 approaches: "the remains of the multi-class coalition embracing a minority of the middle class and the great majority of (workers) is disintegrating (and) political defections have increased (including 14) deputies in the National Assembly." Add to them former Chavez Defense Minister, Raul Baduel, who Petras believes may be "an aspirant to head up a US-backed right-wing seizure of power."

The situation is ugly and dangerous, and lots of US money and influence fuels it. Petras puts it this way: "Venezuelan democracy, the Presidency of Hugo Chavez and the great majority of the popular classes face a mortal threat." An alliance between Washington, local oligarchs and elitist supporters of the "right" are committed to ousting Chavez and may feel now is their best chance. Venezuela's social democracy is on the line in the crucial December 2 vote, and the entire region depends on it solidifying and surviving.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net .

Also visit his blog site at sjlendman.blogspot.com and listen to The Steve Lendman News and Information Hour on TheMicroEffect.com Mondays at noon US Central time.

The End of America? Naomi Wolf Thinks It Could Happen

L'Amerique a change et continue de changer, d'apres le dernier livre de Naomi Wolf "The end of America":

By Don Hazen
AlterNet

Wednesday 21 November 2007

An interview with author Naomi Wolf, whose new book, "The End of America: Letter of Warning to a Young Patriot," may confirm your worries about democracy in America.

If you think we are living in scary times, your worst fears may be confirmed by reading Naomi Wolf's newest book, The End of America: Letter of Warning to a Young Patriot. In it, Wolf proves the old axiom that history does repeat itself. Or more accurately, history occurs in patterns, and in order to understand where our country is today and where it is headed, we need to read the history books.

Wolf began by diving into the early years leading up to fascist regimes, like the ones led by Hitler and Mussolini. And the patterns that she found in those, and others all over the world, made her hair stand on end. In "The End of America," she lays out the 10 steps that dictators (or aspiring dictators) take in order to shut down an open society. "Each of those ten steps is now under way in the United States today," she writes.

If we want an open society, she warns, we must pay attention and we must fight to protect democracy.

I met with Wolf to discuss what she learned while researching this book, how the American public has received her warnings, and what we can do to squelch the fascist narratives we are fed in this country each day.

Don Hazen: Let's take up a big question first - your fears about the upcoming U.S. presidential election and what the historical blue print about fascist takeovers shows in terms of elections.

Naomi Wolf: We would be naive given the historical patterns to have hope that there's going to be a transparent, accountable election in 2008. There are various ways the blueprint indicates how events are much more likely to play out. Historically, the months leading up to the national election are likely to be unstable.

What classically happens is either there will be a period of provocation, and we have a history of this in the United States - agitators who are dressed as or act like activist voter registration workers, anti-war marchers ... but who engage in actual violence, torch property, assault police officers. And that scares people. People are much less likely to vote for change when they're scared, and it gives them the excuse to crack down.

In addition, I'm concerned about the 2007 Defense Authorization Act, which makes it much easier for the president to declare martial law.

DH: Are you saying that they keep on adding coercive laws for no apparent reason?

NW: Yes. Why amend the law so systematically? Why do you need to make martial law easier? Another thing historical blueprints underscore is the hyped threat; intelligence will be spun or exaggerated, and sometimes there are faked documents like Plan Z with Pinochet in Chile.

DH: Plan Z?

NW:Yes, Plan Z. Pinochet, when he was overthrowing the Democratic government of Chile, told Chilean citizens that there was going to be a terrible terrorist attack, with armed insurgents. Now there were real insurgents, there was a real threat, but then he produces what he called Plan Z, which were fake papers claiming that these terrorists were going to assassinate all these military leaders at once.

And this petrified Chileans so much that they didn't stand up to fight for their democracy. So it's common to take a real threat and hype it. And close to an election it's very common to invoke a hype threat and scare people so much that they will not want to have a transparent election.

Americans have this very wrong idea about what a closed society looks like. Many despots make it a point to try to hold the elections, but they're corrupted elections. Corrupted elections take place all over the world in closed societies. Ninety-nine percent of Austrians voted yes for the annexation by Germany, because the SA were standing outside the voting booths, intimidating the voters and people counting the vote. So you can mess with the process.

One current warning sign is the e-mails that the White House is not yielding about the attorney general scandal. The emails are likely to show that there were plans afoot to purge all of the attorneys at once, like overnight. And then to let the country deal with the shock.

Now that's something that Goebbels did in 1933 in April, overnight. He fired everyone, focusing on lawyers and judges who were not a supporter of the regime. So you can still have elections ... in an outcome like that. If that had happened, if the bloggers and others actually hadn't helped to identify the U.S. attorney scandal, and they had been successful and fired them all, our election situation would be different.

Basically we'd still have an election, but it is possible the outcome would be predetermined because it's the U.S. attorneys that monitor what voting rights groups do, what is legal and who can decide the outcome of elections.

DH: Well there's a lot of activity currently in terms of the Justice Department aimed at purging voters ... reducing voter rolls ... that's an ongoing battle to try to keep voters eligible. Conservatives are always trying to reduce the electorate. By the way, are you familiar with Naomi Klein's book The Shock Doctrine: The Rise of Disaster Capitalism?

NW: Yes, and it all makes a lot of sense. And its certainly historically true. We're in this post-9/11 period when there is a lot of potential for these kind of "shock therapy" things to happen, but virtually everything ... has happened previously in history in patterns. It's just the blueprint. It's not rocket science.

I could tell last fall when a law was passed expanding the definition of terrorists to include animal rights activists, that people who look more like you and me would start to be called terrorists, which is a classic tactic in what I call a fascist expansion.

DH: Don't look at me - I'm not a vegetarian. Just kidding.

NW: (Laughs) Right. It's also predictive ... according to the blueprint, that the state starts to torture people that most of us don't identity with, because they're brown, Muslim, people on an island. They're called an enemy.

That there will be a progressive blurring of the line, and six months, two years later, you're going to see it spread to others. ... According to the blueprint, we're right on schedule that this kid recently got tasered in Florida, I gather, for asking questions.

There was a study by people who pioneered tasers, and the state legislature supported it; a Republican legislator put pressure on the provost, who put pressure on the university, and then the police at this university implemented the taser use. So unfortunately, it's likely that we're going to see more demonstrators, typical society leaders, in a call to restore "public order," leading up to the election. You put all those cases together ...

DH: I want to shift gears a bit and ask you to talk about what the response to the book, what kind of people have heard you speak, and what kind of reactions have they had?

NW: I'm really gratified by the response to the book. I have found, with the book's publication, though I'm not following everything that's been written about it, that most of America gets it - people across the political spectrum.

All kinds of people, including very mainstream people. Republican people. Progressive. Libertarian. Very moderate people. Very conservative people. They are basically saying to me, "Thank you for confirming our fears and showing us how these things fit together, and what we can do about them."

DH: I'm also interested in your process of deciding that you were comfortable in using words like "fascism," "Nazism," "Hitler," "Mussolini." Michael Ratner talks about it in the jacket of your book, when he writes: "Most Americans reject outright any comparisons of post-9/11 America with the fascism and totalitarianism of Nazi Germany or Pinochet's Chile. Sadly, what Wolf calls the echoes between those societies and America today are too compelling." At some point you must have come to this turning point in terms of the language - how far am I going to go, how am I going to talk about this? Was it a difficult decision?

NW: It was hard emotionally but it was unavoidable intellectually. The book actually got started with the influence of a holocaust survivor - a dear friend, who's the daughter of two holocaust survivors from Germany. She basically forced me to start reading history.

Not the end or outcome. She was talking about the early years and the effects on rights groups, gay rights groups, and sexuality forums and architecture, At first I didn't even want to draw conclusions, but my hair was just standing on edge.

When I saw that, then I went and read other history books, and looked at Stalin and Hitler, a real "innovator." I thought, if people want an open society, they need to pay attention.

You see the same things happening again and again and again. And historically people were really mislead and just reading kind of teaches us the blueprint. People use the same approach all over the world because it works. This is what they do.

Now we've just seen it in Burma. It is like clock work: monks in the street ... and because I know the blueprint, how long before they start curtailing free assembly, shooting monks, and cutting off that communication? And two days later ... you know what happened.

So intellectually I couldn't avoid using the language. Now in terms of the word "fascist," it's a very conservative usage in the book. I used the dictionary definition. There are many definitions of fascism. And even fascists disagree with other fascists. It's kind of like the Germans thought the Italian fascists weren't butch enough.

DH: So the Italians were wussier fascists than the Germans?

NW: Exactly. It gets better. The definition is pretty straightforward: "When the state uses violence against the individual to oppose democratic society." And that's what we're seeing.

And then looking back at Italy and Germany, which were the two great examples of modern constitutional democracies that were illegally closed by people that were elected ... duly elected ... most Americans don't remember. Mussolini, a National Socialist, came to power entirely legally. And they used the law to shut down the law. So that's what I call a fascist shift.

DH: So let's talk about what could happen here. Is America in denial? Or is avoidance an attitude that seemed to be present in all historical examples? That people assume it's not going to happen to them. Does the Americans' denial at this point run parallel with the denial of Germans and Italians? Or do we have our own version of denial here?

NW: That's a really great question; both are true. It's really instructive to read memoirs and journals from Germany. People writing, "This can't last ... we surely will come to our senses"; "they can't gain any ground in the next election ... you know, we're a civilized country"; "this is ridiculous, they're a bunch of thugs; no one takes them seriously."

History is particularly instructive in the early days of the fascist shifts in Germany and Italy, when things were really pretty normal. People go about their business, just like we're doing now. It's not like goose stepping columns of soldiers are everywhere. It looks like ordinary life. Celebrities, gossip columns, fashion, before getting caught up in a snare. People kept going to movies, worrying about feeding the cat. (laughs) Even while you watch the sort of inevitable unfold.

DH: And now in America?

NW: Right. So in some ways it is human nature to be in denial ... but Americans have our own special version, which is profoundly dangerous. Europeans know democracies are fragile, and they could close. They had closed. Bismarckian Germany was not a democracy.

But here we're walking around ... we usually have that sense that somehow our air will sustain us, even when no one else's air does. And we don't have to do anything about it. We have this like bubble, that somehow democracy will just take care of us, and we don't have to fight to protect democracy.

They can mow down democracies all over the world, but somehow we'll be just fine. But what's so ironic about that is that the Founding Fathers drafted the Bill of Rights in fear. They knew that you had to have checks and balances, because it's human nature to abuse power, no matter who you are. They knew the damage that the army could do breaking into your home. ... they knew that democracy is fragile, and the default is tyranny. They knew that. And that's why they created the system of checks and balances.

DH: In your book, on page 36, you write in terms of the political environment we are in: "But we are not wracked by rioting in the streets or a major depression here in America. That is why the success that the Bush administration has had in invoking Islamofascism is so insidious. We have been willing to trade our key freedoms for a promised state of security in spite of our living conditions of overwhelming stability, security, affluence and social order."

How and why has it been so easy here in the U.S. in terms of taking away liberties?

NW: I assume you mean how did it succeed even though we don't have Bolsheviks rioting in the street? Yes. I mean it is incredible looking back, but in a way it's not. I mean 9/11 was a complete left brain shock. If we had had wars at home, experienced the kind of violence at home that other countries have, we would not have gone into shock ... not have been willing to trade in our heritage in exchange for a manipulated false sense of security.

DH: Most people were not affected directly by 9/11 except traumatically by seeing it on the screen.

NW: Yes, but you can't undercredit the incredible sophistication of the way the Bush administration manipulates fear. For example, the sleeper cells narrative, which is Stalin's narrative, was totally made up.

And I give lots of examples in the book of alleged sleeper cells that never turned out to be the creepy, scary, nightmare scenario that the White House claimed they would be.

DH: In the book you say that fascists have great skills at changing public opinion.

NW: That's correct. That's exactly right. They've been very skillful at creating extremely terrifying narratives. And this is why looking at Goebbels is so instructive. Our leaders have been busy creating footage and sound bites that can be petrifying, and as a result, some of us live in a state of existential fear.

In contrast, in England and Spain, where they were hit by the same bad guys we're fighting, they're going after terrorists, but the population isn't walking around in a state of existential anxiety.

Gordon Brown said it, "Fighting terror ... well, terror's a crime." You can't underplay how sophisticated the Bush team has been about manipulating our fears. And one reason we really can't ignore is our home-grown ignorance. We now have two generations of young people who don't know about civics. A study came out that showed that even Harvard freshmen really don't understand how our government works.

And so we really don't know what democracy is anymore. I had to do a lot of learning to write this book - I'm not a constitutional scholar. I'm just a citizen. And we've been kind of divorced from our democracy. We've let a pundit class take it over. Where the Founders wanted us to know what the First Amendment was and what the Second Amendment does for us.

So as a consequence we don't feel the kind of warning bell of "Oh, my God, arbitrary search and seizure! That's when they come into your house and take your stuff and scare your children! We can't have that!"

Because there's this class of politicians, scholars and pundits who do the Constitution for us, so we don't bother educating ourselves. It's hard to educate yourself now these days.

All of that plays into how easily we can be manipulated. We really don't read history in America, so we don't notice warning signals. We tend not to pay attention to the rest of the world or the past, so we don't know what the classic scenarios are.

DH: In terms of your personal narrative, the kinds of books you've written about feminism and gender like the Beauty Myth, Fire With Fire and Promiscuities ... this book seems pretty far a field. It seems like it would have to be a wrenching realization to lead you to read everything and produce the book. Was it traumatic?

NW: Well, I would say that it's been traumatic.

DH: Is it because you are out there on the front lines now?

NW: That's not the trauma. I feel like I'm living inside a consciousness of urgency and potential horrific consequences. And that is much more uncomfortable than living inside my prior being where I generally thought, "We're living in a democracy where there are some annoying people doing the wrong things" kind of mindset.

But I know that there's a "true consciousness" that we need to overcome the false consciousness. I know it's the right consciousness to get the facts. And I guess what's heartening is that a bunch of other people seem to be collectively entering this consciousness. They are saying: "My gosh, there is a real emergency here with very devastating stakes." That is traumatic but necessary.

It is a loss of innocence to see how easy it is to degrade democracy. I certainly walk around with kind of hyperawareness tuned into, for example, the toll in Guantanamo and those children in Iraq. It doesn't get covered well.

There's basically a concentration camp being established in Iraq with children in it. And no one appears to be digging in to it ...

DH: As we are coming to an end here, there are a couple of concepts I found particularly interesting in the book. One is when you talked about the "10 steps," or the "blueprint" that fascists have used time and time again to close down democracies. You say that that these factors, ingredients, are more than the sum of their parts, which suggests a kind of synergy, "each magnifies the power of the others and the whole," as you write.

You also write about the pendulum cliché, that we have this illusion through our history that the pendulum always swings back. But because of the permanent war on terrorism, that may not be true anymore. Can you say a little bit more about those two things, and how that might fit together?

NW: Well part of the illusion is created because it seems we are in two different countries, operating at home and abroad. For example, they can come at you, anyone and claim you're an enemy combatant. They rendered people in Italy ... they can render people all over the world. And they can put people like Jose Padilla in solitary confinement for three years, literally drive sane healthy people insane.

If the president can say, Well, "Don is an enemy combatant," there is nothing you can do. It's like "Tag, you're it!" To that extent we can not be innocent. And then someone is in jail for three years without being able to see their families or have easy access to a phone.

If they can do that, the pendulum can't swing, because after the first arrest, it generally goes in one direction, and according to the blueprint, the time has come for those first arrests. We're having this conversation now, before these arrests. But if tomorrow you read in the New York Times or the Washington Post that New York Times editor Bill Keller has been arrested, the staff will all be scared, others will get scared. And people don't understand that that's how democracy closes down. And when that happens first, it's the tipping point at which we think it's still a democracy.

DH: That is when the rules have changed?

NW: Yes, and people need to believe and realize that that kind of negotiation is pretty much over. And there's just the lag time, which is so dangerous, when people still think it's a democracy, even while the martial law steps have begun. And that's where we are at, unless we get it.

Because you know, Congress keeps saying, "Hello, we're Congress." You have to answer us when we ask for information. The president's like, "Sorry, I'm ignoring you!" It starts becoming thinking like an abused woman, like: "Surely he's going to do it right this time, surely he's not going to do it again." And he does.

Happy Thanksgiving

Iran virtually free of U.S. dollar in oil revenues

• Reuters
• Monday November 19 2007

LONDON, Nov 19 (Reuters) - Iran, at odds with the West over its nuclear programme, has effectively cut all ties with the dollar when it comes to oil revenues, a top Iranian oil official said on Monday. For nearly two years, OPEC's second biggest producer has been reducing its exposure to the dollar, saying the weak U.S. currency is eroding its purchasing power. Tehran is now fetching roughly $87 a barrel on daily crude sales of 2.4 million.

"This is an economic decision and we've been proven right. Over time the dollar has got weaker and weaker," Hojjatollah Ghanimifard, international affairs director of the state owned National Iranian Oil Company (NIOC) told Reuters. "On a macro-economic level, nearly all of Iran's crude oil sales are now being paid for in non U.S. currencies."

Ghanimifard said less than 20 percent of Iran's oil export earnings are in yen and the rest in euros.

He explained that NIOC is receiving more than 80 percent of its payment for crude in currencies other than the dollar.

The remainder is settled in euros through a long-standing clearing arrangement between Iran's Central Bank and various Asian governments.

Iran presented its economic case against the dollar at an OPEC heads-of-state summit in Riyadh at the weekend.

The Islamic Republic and anti-U.S. ally Venezuela made clear before and after the summit they would press for action, which could include pricing oil in a basket of currencies.

"If there is a decision to do that, it would be a very easy procedure between the buyer's and seller's banks," said Ghanimifard.

About 60 percent of Iran's overall crude sales are destined for Asia, with the remainder moving mostly into Europe and Africa. The United States has banned imports of Iranian crude since 1995. (Reporting by Peg Mackey)

Gulf States Consider Revaluing Currencies, Person Familiar Says

By Matthew Brown and Anchalee Worrachate

Nov. 18 (Bloomberg) -- Gulf states, including Saudi Arabia and the United Arab Emirates, may revalue their currencies while maintaining their pegs to the U.S. dollar, a person familiar with Saudi monetary policy said.

The states may revalue by an unspecified amount in as soon as a month's time, the person, who declined to be identified because the matter is confidential, said yesterday. No decision has been made on whether to revalue, he said. The comments came as heads of state of the Organization of Petroleum Exporting Countries began a summit meeting in Riyadh.

Gulf states are facing record inflation, caused partly by the weakening dollar which has made imports from Europe more expensive. Consumer prices rose a record 4.9 percent in Saudi Arabia in August while inflation in the U.A.E. increased to a record 9.3 percent last year. Qatar has the highest inflation in the region, reaching 14.8 percent in the first quarter.

``It makes sense for them to do it,'' said Jens Nordvig, senior global markets economist at Goldman Sachs Group Inc. in New York, in a phone interview. ``Given the emerging inflation pressures, there are very good reasons for them to allow currency appreciation.''

The decline in the value of the dollar is a ``concern'' to OPEC members, Qatar's Energy Minister Abdullah Al-Attiyah said after a meeting of OPEC oil, finance and energy ministers in Riyadh Nov. 16.

Currency Basket

Saudi Arabia, Qatar, Bahrain and Oman have repeatedly said they have no plans to change exchange rate policies. U.A.E. Central Bank Governor Sultan Bin Nasser al-Suwaidi said on Nov. 15 the U.A.E. may drop the dirham's peg in favour of a basket of currencies. Gulf currencies are under pressure as investors bet governments cannot manage inflation and keep their pegs.

Heads of state from the six Gulf Cooperation Council states will hold their annual meeting in Qatar on Dec. 3-4 where they will discuss monetary policy and security. The person did not specify if a decision would be made at the meeting. Evidence has been gathered and will be presented to policy makers, he said, without giving details.

The leaders will, though, take a decision on whether to abandon a proposed Gulf single currency at the meeting, Hamad Saud al-Sayari, governor of the Saudi Arabian Monetary Agency, said after a meeting of finance ministers and central bank governors in Riyadh on Oct. 27.

``It's unlikely they are going to move to a flexible system,'' Nordvig said. ``If they're going to make an adjustment, they should make one that matters. Something in the 5 to 10 percent range seems like a range that would have some impact without being overly dramatic.''

Record Low

The dollar slid to a record low of $1.4752 against the euro on Nov. 9, taking it down 10 percent since the start of this year, and has fallen versus 15 of the 16 most actively traded currencies tracked by Bloomberg in the past 10 1/2 months.

The Saudi riyal rose to a 20-year high after the Fed cut rates on Sept. 18 and the Saudi Arabian Monetary Agency chose not to follow. The riyal and the dirham rose this week after al- Suwaidi questioned the U.A.E.'s currency peg.

The riyal was trading at 3.725 to the dollar at 10.09 p.m. in Riyadh, 0.7 percent higher than the peg price of 3.75. Contracts to buy U.A.E. dirhams in 12 months time rose the most in at least 10 years on Nov. 15 after al-Suwaidi's comments, and were trading at a 2.5 percent premium to the spot price yesterday.

Venezuelan Support

Venezuela backed an Iranian proposal to add the group's concern over the falling dollar to a summit declaration to be made today. Saudi Arabian Foreign Minister Prince Saud Al-Faisal said that no mention of the dollar should be made in the declaration because he didn't want the U.S. currency to ``collapse.''

Nigerian Finance Minister Shamsudeen Usman said on Nov. 16 his country's law has been changed to allow it to diversify its foreign reserves out of dollars. Angola may shift its international reserves away from the dollar, Finance Minister Jose Pedro de Morais said.

OPEC's $6 billion development fund is hedging its exposure to the weakening dollar, Director-General Suleiman Jasir al- Herbish told reporters in Riyadh yesterday. ``The issue of the dollar in our investments, we are tackling it. We are hedging; we have other instruments.''

Saudi Arabia's King Abdullah said OPEC shouldn't make oil a source of conflict, contradicting Venezuelan President Hugo Chavez who wants the oil exporter group to become an active ``political agent.''

``Oil is an energy for building and prosperity, it shouldn't become a means of conflict,'' King Abdullah said at the start of the group's summit in Riyadh yesterday. ``Those who want OPEC to become an organization of monopoly and exploitation ignore the truth.''

Geopolitical Force

OPEC, provider of more than 40 percent of the world's oil, is holding its third heads of state summit since it was founded in 1960. Saudi Arabia's foreign minister clashed yesterday with a push by Iran and Venezuela to debate pricing oil in currencies other than the U.S. dollar.

``OPEC was born as a geopolitical force and not only as a technical or economic one in the '60s,'' Chavez said, speaking before King Abdullah. ``We should continue to strengthen OPEC, but beyond that, OPEC should set itself up as an active political agent.''

The contrasting view on OPEC's role in the world comes a day after a disagreement between Venezuela's Oil Minister Rafael Ramirez and Al-Faisal on whether to move away from the dollar was accidentally aired on live television.

Chavez said in his speech yesterday that he's confident OPEC will do what it can to keep oil prices at a ``fair'' level, adding that if Iran was invaded, prices could easily rise to $200 a barrel.

Market Stability

Crude oil for December delivery rose $1.67 to $95.10 a barrel Nov. 16 on the New York Mercantile Exchange.

The last OPEC heads of state summit was in 2000 in Venezuela and was hosted by Chavez, who was sworn in as president a year earlier. Iran and Venezuela both have tense political relations with the U.S.

Ibrahim Ibrahim, an executive at Qatar Petroleum, said that while Venezuela has helped OPEC become a stronger organization over the years, ``there is no need for OPEC to be a political force now. It just has to ensure that the oil market is stable.''

Space Defense Program Gets Extra Funding

La course a l'armement continue. Voici un projet militaire US pour envoyer une bombe atomique de l'espace en moins de 2 heures:

By Walter Pincus

Monday, November 12, 2007; Page A19

While wrestling with wars in Iraq and Afghanistan, the Pentagon is preparing weapons to fight the next battle from space, according to information in the 621-page, House-Senate conference report on the fiscal 2008 defense appropriations bill.

The $459 billion bill, which awaits President Bush's signature, provides $100 million for a new "prompt global strike" program that could deliver a conventional, precision-guided warhead anywhere in the world within two hours. It takes funds away from development of a conventional warhead for the Navy's submarine-launched Trident Intercontinental Ballistic Missile and from an Air Force plan for the Common Aero Vehicle.

The new program, dubbed Falcon, for "Force Application and Launch from CONUS," centers on a small-launch-vehicle concept of the Defense Advanced Research Projects Agency. The agency describes Falcon as a "a reusable Hypersonic Cruise Vehicle (HCV) capable of delivering 12,000 pounds of payload at a distance of 9,000 nautical miles from [the continental United States] in less than two hours."

Hypersonic speed is far greater than the speed of sound. The reusable vehicle being contemplated would "provide the country with significant capability to conduct responsive missions with quick turn-around sortie rates while providing aircraft-like operability and mission-recall capability," according to DARPA.

The vehicle would be launched into space on a rocket, fly on its own to a target, deliver its payload and return to Earth. In the short term, a small launch rocket is being developed as part of Falcon. It eventually would be able to boost the hypersonic vehicle into space. But in the interim, it will be used to launch small satellites within 48 hours' notice at a cost of less than $5 million a shot.

Conferees added $100 million above the Bush administration's request for nearly $200 million to accelerate "space situational awareness." That is code for protecting U.S. satellites in space and being able to attack the enemy's satellites.

"Enhancing these capabilities is critical, particularly following the Chinese anti-satellite-weapons demonstration last January," the conferees wrote in their report. They were referring to a Jan. 11 incident in which a Chinese guided missile destroyed an aging weather satellite in orbit.

"Counterspace systems" that would warn of impending threats to U.S. satellites, destroy or defend against attackers, and interrupt enemy satellites are in the Bush budget for $53 million. Conferees gave them another $10 million.

One research project of $7 million in that category is directed at "offensive counterspace," described in the Pentagon's presentation to Congress as designing "the means to disrupt, deny, degrade or destroy an adversary's space systems, or the information they provide."

Another $18 million would go for research into a second-generation counter-satellite-communications system; it would explore and develop capabilities "to provide disruption of satellite communications signals in response to U.S. Strategic Command requirements," according to the Pentagon congressional presentation. The first-generation system is already operational, and an upgrade of those capabilities is in production.

The conferees want to increase funds for the Rapid Identification Detection and Reporting System, which already had $28 million in the Bush budget. This system is designed to provide "attack detection, threat identification and characterization, and support rapid mission impact assessments on U.S. space systems."

Its first-generation system is scheduled for initial operation at the end of next year, while the new funds will allow continuation of research on a second generation, which began this year.

Part of the funding will also go toward work on integrating this system, which detects enemy threats to U.S. satellites, with the offensive counterspace and counter-satellite-communications programs. Eventually, they would be linked with U.S. command-and-control systems "in support of space control and the counterspace mission areas," according to the Pentagon's presentation to Congress.

Integration of these developing counterspace missions with a current command-and-control system is expected by the middle of 2008, according to documents provided to Congress.

The uninvited guest: Chinese sub pops up in middle of U.S. Navy exercise, leaving military chiefs red-faced

When the U.S. Navy deploys a battle fleet on exercises, it takes the security of its aircraft carriers very seriously indeed.

At least a dozen warships provide a physical guard while the technical wizardry of the world's only military superpower offers an invisible shield to detect and deter any intruders.

That is the theory. Or, rather, was the theory.

Scroll down for more ...

Uninvited guest: A Chinese Song Class submarine, like the one that sufaced by the U.S.S. Kitty Hawk

American military chiefs have been left dumbstruck by an undetected Chinese submarine popping up at the heart of a recent Pacific exercise and close to the vast U.S.S. Kitty Hawk - a 1,000ft supercarrier with 4,500 personnel on board.

By the time it surfaced the 160ft Song Class diesel-electric attack submarine is understood to have sailed within viable range for launching torpedoes or missiles at the carrier.

According to senior Nato officials the incident caused consternation in the U.S. Navy.

The Americans had no idea China's fast-growing submarine fleet had reached such a level of sophistication, or that it posed such a threat.

One Nato figure said the effect was "as big a shock as the Russians launching Sputnik" - a reference to the Soviet Union's first orbiting satellite in 1957 which marked the start of the space age.

The incident, which took place in the ocean between southern Japan and Taiwan, is a major embarrassment for the Pentagon.

Scroll down for more ...

Battle stations: The Kitty Hawk carries 4,500 personnel

The lone Chinese vessel slipped past at least a dozen other American warships which were supposed to protect the carrier from hostile aircraft or submarines.

And the rest of the costly defensive screen, which usually includes at least two U.S. submarines, was also apparently unable to detect it.

According to the Nato source, the encounter has forced a serious re-think of American and Nato naval strategy as commanders reconsider the level of threat from potentially hostile Chinese submarines.

It also led to tense diplomatic exchanges, with shaken American diplomats demanding to know why the submarine was "shadowing" the U.S. fleet while Beijing pleaded ignorance and dismissed the affair as coincidence.

Analysts believe Beijing was sending a message to America and the West demonstrating its rapidly-growing military capability to threaten foreign powers which try to interfere in its "backyard".

The People's Liberation Army Navy's submarine fleet includes at least two nuclear-missile launching vessels.

Its 13 Song Class submarines are extremely quiet and difficult to detect when running on electric motors.

Commodore Stephen Saunders, editor of Jane's Fighting Ships, and a former Royal Navy anti-submarine specialist, said the U.S. had paid relatively little attention to this form of warfare since the end of the Cold War.

He said: "It was certainly a wake-up call for the Americans.

"It would tie in with what we see the Chinese trying to do, which appears to be to deter the Americans from interfering or operating in their backyard, particularly in relation to Taiwan."

In January China carried a successful missile test, shooting down a satellite in orbit for the first time.

Near-panic atmosphere as US Federal Reserve chairman testifies before Congress

By Barry Grey
9 November 2007

On Thursday, one day after American stock markets plummeted in the face of mounting bank losses, soaring oil prices and record lows for the US dollar, Federal Reserve Board Chairman Ben Bernanke gave a gloomy economic forecast in testimony before Congress’ Joint Economic Committee.

Bernanke admitted that the US housing slump and the credit crisis resulting from soaring defaults of subprime mortages had worsened since credit markets froze last August, and predicted that US economic growth would fall sharply in the fourth quarter of 2007 and the beginning of 2008.

He said the housing crisis would worsen in the coming months, as millions of homeowners with adjustable rate mortgages faced sharply higher interest payments when new rates kicked in, and hinted that the crisis on Wall Street could spiral into a full-blown recession.

On Wednesday, the Dow Jones Industrial Index fell 360.92 points, wiping out all the gains since the Fed’s half-point interest rate cut on September 18. The Standard & Poor’s 500 index dropped by 44.65, while the Nasdaq Composite Index shed 76.42 points. The rout on Wall Street was precipitated by a series of developments underscoring the depths of the financial crisis.

As the dollar hit record lows against the euro and other currencies, Chinese officials said the weakness of the US dollar could lead them to diversify their $1.43 trillion in foreign exchange reserves into stronger currencies, such as the euro. A Chinese central bank vice director told a conference that the dollar was “losing its status as the world currency.”

The US economy, saddled with massive trade and current account deficits, depends on daily inflows of billions of dollars in capital from China, Japan and other countries for the functioning of its financial system. Any significant contraction of these capital flows would lead to a collapse in the dollar, massive interest rate increases, deep recession and the possibility of a US and global depression.

Also on Wednesday, French President Nicolas Sarkozy, in an address to the US Congress, criticized Wall Street “excesses” and the weak dollar and warned that “monetary disorder risked turning into economic war.” Sarkozy was speaking for a European bourgeoisie that is increasingly angered by a US monetary policy that has cheapened the price of US exports, made European imports more expensive, and begun to seriously impact European business.

The same day, oil futures, up more than 65 percent in the past year, topped $98 a barrel for the first time. Gasoline prices in the US—already significantly higher than last month—are now expected to follow the surge in oil, and Americans’ winter heating bills are expected to rise even more sharply than initially feared.

The meltdown of so-called collateralized debt obligations (CDOs) and other subprime-linked securities continued with the announcement by Wall Street investment bank Morgan Stanley that it was writing off $3.7 billion for the fourth quarter, and that its losses could rise to $6 billion. It joined such other giants as Citigroup, Merrill Lynch and Goldman Sachs which have announced multi-billion-dollar write-downs in high-risk, high-yield investments in the housing market and other forms of financial speculation.

So far this year there have been an estimated $55 billion in losses suffered by financial institutions, but this is just the tip of the iceberg. The chief credit strategist at the Royal Bank of Scotland Group issued a report Wednesday estimating that the credit crunch will cause $250 billion to $500 billion in losses at banks and brokerage houses around the world. The upper range of his estimate is equal to the combined stock market value of the three largest US banks, Citigroup, JP Morgan Chase and Bank of America.

Adding to the mood of fear and crisis on Wall Street was the announcement by the American International Group, the world’s largest insurance company, that it had written down nearly $2 billion in investments related to mortgages in the third quarter and expected to write down an additional $550 million in the next quarter, and a warning from the savings and loan firm Washington Mutual that it faced massive credit losses. Washington Mutual stock fell more than 17 percent for the day.

Finanlly, General Motors took a $39 billion charge to its third-quarter results to offset the value of deferred tax assets.

The crisis atmosphere surrounding Bernanke’s appearance before Congress was further stoked by weaker-than-expected data on US retail sales released Thursday morning. The data, showing sluggish sales by such retail giants as Wal-Mart, Macy’s and Kohl’s, suggested that US consumer spending, which accounts for 70 percent of the economy, was falling off as a result of declining home values, rising foreclosures, soaring gasoline and heating costs, and pervasive economic insecurity. The reports made for a bleak prognosis for the holiday season, upon which retailers and the US economy as whole are hugely dependent.

The mood for Bernanke’s appearance before Congress was set by the opening statement from New York Senator Charles Schumer, the chairman of the Joint Economic Committee. The Democratic senator, known as a reliable mouthpiece for Wall Street interests, began by noting that since Bernanke’s previous appearance before the committee in March, “contrary to what you said at the time, the subprime mess has not been ‘contained,’ but instead has proved to be a contagion that has spread in dangerous ways throughout not just the housing market, but our economy and the global financial system.”

Schumer said that in the aftermath of the “seizing up of the credit markets” in the summer, “there is now a lack of confidence in credit-worthiness throughout the market.”

He continued: “However, while we did weather that summer storm, I’m very concerned that there may be a bigger storm on the horizon. Quite frankly, I think we are at a moment of economic crisis stemming from four key areas: falling housing prices, lack of confidence in credit-worthiness, the weak dollar and high oil prices. Each of these problems alone would be enough of a threat to our economic well-being. But taken together, they are essentially the four horsemen of economic crisis...

“Even our bedrock assumptions are being put into doubt. As housing prices decline, there are real fears that we won’t be able to depend on consumers, the engine of our economy over the past few years, to keep spending. And now we hear that foreign investors may no longer be confident in the dollar as the global currency of choice. I’m not surprised to hear experts, such as your predecessor Alan Greenspan, warn about the threat of recession. I’ve begun to worry about worse.

“In particular, as I watch bank after bank write down bad investments tied to baroque financial instruments that even sophisticated investors don’t understand, I fear for the stability of our financial system.”

Bernanke provided little solace. While noting that the US gross domestic product rose at a strong 3.9 percent rate in the third quarter, he warned that such a rate could not be sustained because of the “ongoing correction” in the housing market, and added that inflation was bound to rise because of “recent increases in energy prices.”

He admitted that financial markets remained under “significant pressure,” saying the “financial turmoil” was triggered by “investor concerns about the credit quality of mortgages, especially subprime mortgages with adjustable rates.” He spoke of the “continuing increase in the rate of serious delinquencies for such mortgages,” and warned that they were likely to rise further “as a sizable number of recent-vintage subprime loans experience their first interest rate resets.”

He explained that on average, from now until the end of 2008, nearly 450,000 subprime mortgages every quarter were scheduled to undergo their first interest rate reset, and that the resulting “payment shock” would be compounded by the decline in home prices and a tightening in lending terms. “A sharp increase in foreclosed properties for sale,” he said, “could also weaken the already struggling housing market and thus, potentially, the broader economy.”

Bernanke related the housing and mortgage crisis to the crisis in credit markets by explaining that while in the past most mortgages were held by the companies that originated them, today mortgages “are commonly bundled together into mortgage-backed securities or structured credit products, rated by credit agencies, and then sold to investors.”

Commenting, in rather diplomatic terms, on the collapse of the resulting edifice of financial speculation, he said, “As mortgage losses have mounted, investors have questioned the reliability of credit ratings, especially those of structured products”—such as CDOs.

Since no one really knows the value of these assets, “the loss of confidence in the credit ratings... led to a sharp decline in demand for these products.” In other words, banks and other financial institutions holding these securities are unable to unload them except at fire-sale prices, leading to potentially catastrophic losses on their balance sheets.

Bernanke went on to say that the collapse in confidence in subprime-backed securities had spread to virtually every sector of the credit markets, including securities backed by jumbo mortgages to home buyers with good credit and commercial paper traded between corporations. The market for leveraged buyouts, which had largely fueled the stock market boom of the last few years, had dried up, and banks were increasingly reluctant to lend to their customers and to each other.

“These events do imply,” the Fed chairman said, “a greater measure of financial restraint on economic growth as credit becomes more expensive and difficult to obtain.”

The short-term result, Bernanke said, would be a further contraction in “housing-related activity” and a slower growth in household spending.” Overall, the Fed “expected that the growth of economic activity would slow noticeably in the fourth quarter from its third quarter rate.” Putting an optimistic face on a dire situation, he said that growth, while remaining “sluggish” in the first part of 2008, would strengthen “as the effects of tighter credit and the housing correction began to wane.”

However, he acknowledged the “downside risks” of a worsening financial crisis “causing credit conditions to become even more restrictive than expected” and a more-than-expected weakening of housing prices, “which could further reduce consumers’ willingness to spend and increase investors’ concerns about mortgage credit.”

He also spoke of the “upside risks” of sharply higher inflation from soaring oil prices and a continuing weakening of the dollar.

He concluded with his standard statement that the Fed would “continue to carefully assess the implications for the outlook of the incoming economic data and financial market developments and act as needed to foster price stability and sustainable economic growth.”

The initial response on Wall Street to Bernanke’s testimony was a sharp fall in stock prices, with the Dow Jones index slumping more than 200 points. However, by the end of Thursday the Dow had recovered most of its losses, closing down 33.7 points. However, the technology-laden Nasdaq fell 52.76, or 1.9 percent. This was largely due to a negative projection from the networking giant Cisco, whose shares fell 10 percent, sparking a broader sell-off of hi-tech stocks.

The recovery, particularly in banking and financial stocks, may have reflected a consensus that Bernanke’s report was so dismal as to suggest a third successive interest rate cut when the central bank’s Federal Open Market Committee meets next on December 11. While many on Wall Street continue to clamor for rate cuts, in the hope that an expanded flow of cheap credit will save them from the consequences of years of financial manipulations and outright swindling, such an action can in no way resolve the mounting crisis of US and global capitalism.

In the short term, it will only intensify the crisis of the dollar and fuel the conditions for rampant inflation. More fundamentally, such policies compound the underlying instability and insolvency of the financial system.

Bernanke’s own testimony points to an inevitable reckoning, in which the vast global economic imbalances, the inherent anarchy of the capitalist market, and the rampant parasitism, of American capitalism in particular, produce an economic and social disaster.

Cheney makes geographical gaffe

US Vice-President Dick Cheney has made a geographical gaffe during a foreign policy speech, appearing to confuse Peru with Venezuela.

While criticising Venezuelan President Hugo Chavez, Mr Cheney said "the people of Peru deserve better".

Speaking in Dallas, Texas, he said he did not believe Mr Chavez represented the future of Latin America.

Mr Chavez and his socialist ideology have long concerned US President George W Bush's administration.

Mr Cheney said of the Venezuelan leader: "He spends a great deal of his time worrying about us and criticising the United States."

He added: "The people of Peru, I think, deserve better in their leadership. But that's obviously a matter they've got to resolve for themselves."

7 Countries Considering Abandoning the US Dollar

By Jessica Hupp

11/07/07 "CurrencyTrading" -- -- - It’s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn’t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they’ll have an effect on its value and the US economy.

1. Saudi Arabia: The Telegraph reports that for the first time, Saudi Arabia has refused to cut interest rates along with the US Federal Reserve. This is seen as a signal that a break from the dollar currency peg is imminent. The kingdom is taking “appropriate measures” to protect itself from letting the dollar cause problems for their own economy. They’re concerned about the threat of inflation and don’t want to deal with “recessionary conditions” in the US. Hans Redeker of BNP Paribas believes this creates a “very dangerous situation for the dollar,” as Saudi Arabia alone has management of $800 billion. Experts fear that a break from the dollar in Saudi Arabia could set off a “stampede” from the dollar in the Middle East, a region that manages $3,500 billion.
2. South Korea: In 2005, Korea announced its intention to shift its investments to currencies of countries other than the US. Although they’re simply making plans to diversify for the future, that doesn’t mean a large dollar drop isn’t in the works. There are whispers that the Bank of Korea is planning on selling $1 billion US bonds in the near future, after a $100 million sale this past August.
3. China: After already dropping the dollar peg in 2005, China has more trouble up its sleeve. Currently, China is threatening a “nuclear option” of huge dollar liquidation in response to possible trade sanctions intended to force a yuan revaluation. Although China “doesn’t want any undesirable phenomenon in the global financial order,” their large sum of US dollars does serve as a “bargaining chip.” As we’ve noted in the past, China has the power to take the wind out of the dollar.
4. Venezuela: Venezuela holds little loyalty to the dollar. In fact, they’ve shown overt disapproval, choosing to establish barter deals for oil. These barter deals, established under Hugo Chavez, allow Venezuela to trade oil with 12 Latin American countries and Cuba without using the dollar, shorting the US its usual subsidy. Chavez is not shy about this decision, and has publicly encouraged others to adopt similar arrangements. In 2000, Chavez recommended to OPEC that they “take advantage of high-tech electronic barter and bi-lateral exchanges of its oil with its developing country customers,” or in other words, stop using the dollar, or even the euro, for oil transactions. In September, Chavez instructed Venezuela’s state oil company Petroleos de Venezuela SA to change its dollar investments to euros and other currencies in order to mitigate risk.
5. Sudan: Sudan is, once again, planning to convert its dollar holdings to the euro and other currencies. Additionally, they’ve recommended to commercial banks, government departments, and private businesses to do the same. In 1997, the Central Bank of Sudan made a similar recommendation in reaction to US sactions from former President Clinton, but the implementation failed. This time around, 31 Sudanese companies have become subject to sanctions, preventing them from doing trade or financial transactions with the US. Officially, the sanctions are reported to have little effect, but there are indications that the economy is suffering due to these restrictions. A decision to move Sudan away from the dollar is intended to allow the country to work around these sanctions as well as any implemented in the future. However, a Khartoum committee recently concluded that proposals for a reduced dependence on the dollar are “not feasible.” Regardless, it is clear that Sudan’s intent is to attempt a break from the dollar in the future.
6. Iran: Iran is perhaps the most likely candidate for an imminent abandonment of the dollar. Recently, Iran requested that its shipments to Japan be traded for yen instead of dollars. Further, Iran has plans in the works to create an open commodity exchange called the Iran Oil Bourse. This exchange would make it possible to trade oil and gas in non-dollar currencies, the euro in particular. Athough the oil bourse has missed at least three of its announced opening dates, it serves to make clear Iran’s intentions for the dollar. As of October 2007, Iran receives non-dollar currencies for 85% of its oil exports, and has plans to move the remaining 15% to currencies like the United Arab Emirates dirham.
7. Russia: Iran is not alone in its desire to establish an alternative to trading oil and other commodities in dollars. In 2006, Russian President Vladmir Putin expressed interest in establishing a Russian stock exchange which would allow “oil, gas, and other goods to be paid for in Roubles.” Russia’s intentions are no secret–in the past, they’ve made it clear that they’re wary of holding too many dollar reserves. In 2004, Russian central bank First Deputy Chairmain Alexei Ulyukayev remarked, “Most of our reserves are in dollars, and that’s a cause for concern.” He went on to explain that, after considering the dollar’s rate against the euro, Russia is “discussing the possibility of changing the reserve structure.” Then in 2005, Russia put an end to its dollar peg, opting instead to move towards a euro alignment. They’ve discussed pricing oil in euros, a move that could provide a large shift away from the dollar and towards the euro, as Russia is the world’s second-largest oil exporter.

What does this all mean?

Countries are growing weary of losing money on the falling dollar. Many of them want to protect their financial interests, and a number of them want to end the US oversight that comes with using the dollar. Although it’s not clear how many of these countries will actually follow through on an abandonment of the dollar, it is clear that its status as a world currency is in trouble.

Obviously, an abandonment of the dollar is bad news for the currency. Simply put, as demand lessens, its value drops. Additionally, the revenue generated from the use of the dollar will be sorely missed if it’s lost. The dollar’s status as a cheaply-produced US export is a vital part of our economy. Losing this status could rock the financial lives of both Americans and the worldwide economy.

Did China just fire a warning shot at the Fed?

LONDON (MarketWatch) -- The full faith and credit of the United States are under a lot of stress these days, so much so that the public comments of an obscure Chinese official -- obscure to most Americans, at least -- are enough to spark big jumps in commodities, and equally big slides in stocks and the dollar to boot.

Cheng Siwei, vice chairman of the standing committee of the National People's Congress, reportedly suggested Wednesday that China might need to diversify its $1 trillion-plus holdings of foreign reserves because of the precipitous slide in the value of the dollar. See related story.

Bang!

Gold and oil stepped up their rallies, and the dollar accelerated its slide. See related story.

It's hard to know what Siwei, a UCLA-educated economist, hoped to accomplish by choosing this particular juncture to make his comments.

Perhaps it was just an innocent academic observation on the rapid decline of the U.S. currency and the fact that any entity stuck holding huge levels of dollars would have to rethink their approach in such circumstances.

However, Siwei's position and previous history suggest otherwise. After all, his comments about the dubious quality of equities on the Shanghai Stock Exchange earlier this year helped spark a temporary swoon that hit U.S. markets at the end of February.

So a more realistic reading, perhaps, is that China wanted to send a warning shot across the bow of the Federal Reserve. The message: the U.S. central bank shouldn't think about cutting interest rates again.

In a sense, it's a game of economic "chicken" played on a geopolitical scale.

But these things can have a way of getting out of hand, unless they're handled with great care. And conducting a "work-out" session in the press, using two very dissimilar languages, is a problematic exercise at best.

It's all enough to make you long for the good old days when the problem currencies had names like baht, peso and ruble.

But unless U.S. consumers -- and Washington polciymakers, for that matter -- get a realistic handle on their borrowing habits, the importance of whatever Vice-Chairman Siwei says to their economic futures is only likely to increase.

Port de Houston

Et vive la pollution

Lieberman Declares Mission Accomplished: ‘The Tide Has Turned In Iraq,’ ‘We Are Winning’

Le taux de mortalite des troupes americaines en Irak est un outil pour evaluer les performances/progres en Irak. Il est vrai que meme si le chiffre des pertes americaines a diminue au cours des derniers mois il n'en reste pas moins que l'annee 2007 a ete une veritable hecatombe et qu'il insiste a crier victoire a tout bout de champs:


The U.S. military announced the death of six soldiers yesterday, “taking the number of deaths this year to 851 and making 2007 the deadliest year of the war for American troops.”

While the violence rages in Iraq, Sen. Joe Lieberman (I-CT) is ready to declare mission accomplished. Yesterday, speaking to an audience who greeted him with “warm applause,” Lieberman declared that the U.S. was turning the corner in Iraq:

“I’m proud to say that the tide has turned in Iraq and we’re winning that war,” Lieberman said. “And if we don’t let down our troops, they’re going to bring home a victory that will protect us here at home from today’s threat — totalitarian terrorist Islamism that’s trying to take our liberty from us.”

In reality, the U.S. is drifting further away from “victory.” In October, civilian deaths increased, according to statistics obtained by the Iraqi government. A recent report from the Special Inspector General for Iraq reconstruction last month found little prospect of “lasting” reconciliation in Iraq.

Euro climbs to fresh dollar peak

The euro has hit a fresh high against the dollar, as negative views of the US economic outlook continue to take their toll on the US currency.

A steady sell-off of the dollar meant that one euro was worth $1.4571 at one point, while the pound hit $2.09 for the first time since the 1980s.

A steady stream of bad news coming from the US mortgage sector has sparked fears for the health of the economy.

These fears have prompted investors to sell dollars and buy euros or pounds.