Friday, November 21, 2008
Al Franken, Down Just 136 Votes
In Minnesota, Norm Coleman's lead over Al Franken is down to just 136 votes. As of last night, about 46% of the 2.9 million ballots had been counted as part of the statewide recount.
The Myth of Auto Worker Wages
To Bailout or Not To Bailout.
That is the question of the moment for the U.S. automotive industry.
If you have been following this debate you have probably noticed the growing conservative storyline which is blaming the Big Three's workers for the companies' financial difficulties. Since this is coming from the Wingnut Right, it is of course untrue, and what it really is, is pretty blatant union bashing.
The myth being put forward is that U.S. auto workers make $73 an hour, where as the average hourly cost per worker is only $28.48.
Today while listening to Stephanie Miller, I heard someone explain that this is a lie, and that someone used hinky math to come up with the $73 figure, and now we have conservative talking heads parroting the figure over and over, with no clue how it was established. Based on what I had heard I did a quick Google Search and found a great explanation as to how and why the conservatives are lying.
What I found was an article by Jonathan Cohn who did a really good job explaining why these conservative talking points are a total lie.
That is the question of the moment for the U.S. automotive industry.
If you have been following this debate you have probably noticed the growing conservative storyline which is blaming the Big Three's workers for the companies' financial difficulties. Since this is coming from the Wingnut Right, it is of course untrue, and what it really is, is pretty blatant union bashing.
The myth being put forward is that U.S. auto workers make $73 an hour, where as the average hourly cost per worker is only $28.48.
Today while listening to Stephanie Miller, I heard someone explain that this is a lie, and that someone used hinky math to come up with the $73 figure, and now we have conservative talking heads parroting the figure over and over, with no clue how it was established. Based on what I had heard I did a quick Google Search and found a great explanation as to how and why the conservatives are lying.
What I found was an article by Jonathan Cohn who did a really good job explaining why these conservative talking points are a total lie.
Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research -- who was my primary source for the figures you are about to read -- average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income -- hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers. [...]
[T]hen what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits -- namely, health insurance and pensions -- and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages -- again, $24 per hour -- and you get the $70 figure. Voila.
Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that -- probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees -- in other words, the cost of benefits for other people. [...]
Make no mistake: The argument over a proposed rescue package is complicated, in no small part because over the years both management and labor made some truly awful decisions while postponing the inevitable reckoning with economic reality. And even if the government does provide money, it's a tough call whether restructuring should proceed with or without a formal bankruptcy filing. Either way, yet more downsizing is inevitable.
But the next time you hear somebody say the unions have to make serious salary and benefit concessions, keep in mind that they already have -- enough to keep the companies competitive, if only they can survive this crisis.
Thursday, November 20, 2008
S&P 500 sinks to '97 low
This is getting very scary:
The Dow has lost 872 points, or 10.4%, over the last two sessions and now sits at 7552.29. On the New York Stock Exchange, losers beat winners by more than ten to one on volume of 2.23 billion shares. On the Nasdaq, decliners topped advancers by five to one on volume of 3.20 billion shares.
"Wall Street slumped Thursday afternoon and the S&P 500 closed at an 11-1/2 year low as fears of a prolonged recession sparked a massive selloff.... The Dow Jones industrial average lost 445 points or 5.6%. It closed at the lowest level since March 12, 2003, just above the low of the last bear market. The Nasdaq composite lost 5.1% and also closed at its lowest level since March 12, 2003."
The Dow has lost 872 points, or 10.4%, over the last two sessions and now sits at 7552.29. On the New York Stock Exchange, losers beat winners by more than ten to one on volume of 2.23 billion shares. On the Nasdaq, decliners topped advancers by five to one on volume of 3.20 billion shares.
Wednesday, November 19, 2008
Obama's Attorney General: Eric Holder
It is being reported that President-elect Obama has decided to tap Eric Holder as his attorney general, putting the veteran Washington lawyer in place to become the first African-American to head the Justice Department, according to two legal sources close to the presidential transition.
Holder served as deputy attorney general during the Clinton administration, and will still have to go through a formal “vetting” by the Obama transition team before the selection is final and is publicly announced. But it is being reported that Obama has offered Holder the job and he accepted.
The announcement is not likely to come until after Obama announces his choices to lead the Treasury and State departments.
Eric Holder has been on Obama’s “short list” for attorney general from the outset. A partner at the D.C. law firm of Covington & Burling, Holder served as co-chief (along with Caroline Kennedy) of Obama’s vice-presidential selection process. He also actively campaigned for Obama throughout the year and grew personally close to the president-elect. Holder has not returned a call seeking comment; a spokeswoman for the Obama transition team told Newsweek in an e-mail early Tuesday afternoon that no decision has been made.
The sources said the Obama transition team is still debating over who should serve under Holder in the key post of deputy attorney general. One top candidate, favored by Obama chief of staff Rahm Emanuel and other former Clinton White House officials, is Elena Kagan, dean of the Harvard Law School and a former lawyer in the White House counsel’s office under Clinton. Another top candidate, favored by other Obama advisors, is David Ogden, a former chief of staff to Attorney General Janet Reno, who is currently heading Obama’s Justice Department transition team. Kagan brings legal policy credentials; Ogden has more experience in the Justice Department trenches.
The only hesitancy about Holder’s selection was that he himself had reservations about going through a confirmation process that was likely to revive questions about his role in signing off on the controversial pardon of fugitive financier Marc Rich. Although there is no evidence that Holder actively pushed the pardon, he was criticized for not raising with the White House the strong objections that some Justice Department lawyers and federal prosecutors in New York had to pardoning somebody who had fled the country. But after reviewing the evidence in the case, and checking with staffers on the Senate Judiciary Committee, Obama aides and Holder both decided the issue was highly unlikely to prove an obstacle to his confirmation, one of the sources said--especially given the Democrats’ more sizable post-election majority in the Senate.
Holder is a New York City native who graduated from Columbia University and Columbia Law School. Holder also spent years as a federal prosecutor—a job in which he earned a reputation as tough and aggressive foe of public corruption. After serving in the public integrity section of the Justice Department’s Criminal Division and later a District of Columbia Superior Court judge, Holder was named by President Clinton as U.S. attorney for the District of Columbia. He became deputy attorney general in 1997 under Janet Reno and was viewed as a centrist on most law enforcement issues, though he has sharply criticized the secrecy and the expansive views of executive power advanced by the Bush Justice Department.
Holder served as deputy attorney general during the Clinton administration, and will still have to go through a formal “vetting” by the Obama transition team before the selection is final and is publicly announced. But it is being reported that Obama has offered Holder the job and he accepted.
The announcement is not likely to come until after Obama announces his choices to lead the Treasury and State departments.
Eric Holder has been on Obama’s “short list” for attorney general from the outset. A partner at the D.C. law firm of Covington & Burling, Holder served as co-chief (along with Caroline Kennedy) of Obama’s vice-presidential selection process. He also actively campaigned for Obama throughout the year and grew personally close to the president-elect. Holder has not returned a call seeking comment; a spokeswoman for the Obama transition team told Newsweek in an e-mail early Tuesday afternoon that no decision has been made.
The sources said the Obama transition team is still debating over who should serve under Holder in the key post of deputy attorney general. One top candidate, favored by Obama chief of staff Rahm Emanuel and other former Clinton White House officials, is Elena Kagan, dean of the Harvard Law School and a former lawyer in the White House counsel’s office under Clinton. Another top candidate, favored by other Obama advisors, is David Ogden, a former chief of staff to Attorney General Janet Reno, who is currently heading Obama’s Justice Department transition team. Kagan brings legal policy credentials; Ogden has more experience in the Justice Department trenches.
The only hesitancy about Holder’s selection was that he himself had reservations about going through a confirmation process that was likely to revive questions about his role in signing off on the controversial pardon of fugitive financier Marc Rich. Although there is no evidence that Holder actively pushed the pardon, he was criticized for not raising with the White House the strong objections that some Justice Department lawyers and federal prosecutors in New York had to pardoning somebody who had fled the country. But after reviewing the evidence in the case, and checking with staffers on the Senate Judiciary Committee, Obama aides and Holder both decided the issue was highly unlikely to prove an obstacle to his confirmation, one of the sources said--especially given the Democrats’ more sizable post-election majority in the Senate.
Holder is a New York City native who graduated from Columbia University and Columbia Law School. Holder also spent years as a federal prosecutor—a job in which he earned a reputation as tough and aggressive foe of public corruption. After serving in the public integrity section of the Justice Department’s Criminal Division and later a District of Columbia Superior Court judge, Holder was named by President Clinton as U.S. attorney for the District of Columbia. He became deputy attorney general in 1997 under Janet Reno and was viewed as a centrist on most law enforcement issues, though he has sharply criticized the secrecy and the expansive views of executive power advanced by the Bush Justice Department.
Tuesday, November 18, 2008
Big 3 carmakers beg for $25B
Detroit's Big Three automakers went to Capitol Hill today to plead to Congress for a $25 billion lifeline to save their once-proud titans of U.S. industry. They pointedly warned Congress of a national economic catastrophe should they collapse.
But the new rescue plan appeared stalled on Capitol Hill, opposed by the Bush administration and Republicans in Congress who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.
Rank and file Republicans and Democrats from states heavily impacted by the auto industry worked behind the scenes trying to hammer out a compromise that could speed some aid to the automakers before year's end. But it was an uphill fight.
But the new rescue plan appeared stalled on Capitol Hill, opposed by the Bush administration and Republicans in Congress who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.
Rank and file Republicans and Democrats from states heavily impacted by the auto industry worked behind the scenes trying to hammer out a compromise that could speed some aid to the automakers before year's end. But it was an uphill fight.
Breaking News: AP Calls Alaska for Mark Begich
Mark Schuester subbing for Keith Olberman on Countdown has just reported that the Senate race in Alaska has been called for Anchorage Mayor Mark Begich. Senator Ted Stevens, known as "Uncle Ted" to Alaska, has been unseated, and the Democratic Majority has grown stronger (even as they gut themselves over Lieberman).
This is good news for the Senate and for Alaska, as we will be spared Senator Sarah Palin.
Now hopefully Franken can win.
This is good news for the Senate and for Alaska, as we will be spared Senator Sarah Palin.
Now hopefully Franken can win.
Monday, November 17, 2008
Few Iranian Made Weapons Found In Iraq
A U.S. Task Force tasked with investigating Iranian involvement in Iraq has released a report that states that few Iranian arms have been found in Iraq. Over the last two years, the Bush administration and a certain segment of the US military have accused Iran of pooring weapons into Iran. They have continually promised to provide proof of Iranian meddling in Iraq in the form of Iranian-provided weaponry in the hands of terrorists insurgents special groups criminals, yet have constantly failed.
Their first effort to provide proof of Irainian support for Iraqi insurgents, the infamous Baghdad Briefing, fell flat on its face when even Secretary of Defense Bob Gates and then Joint Chiefs Chairman General Pace had to admit that the "evidence" presented was incredibly weak and it proved nothing. Since that first failed briefing, various promised "smoking gun" briefings have been announced, postponed and then cancelled. Even the previously gullible mainstream press had to notice that there was a lot more smoke than fire.
The data collected by the task force - known as Task Force Troy - shows that relatively few of the weapons found in Shi'a militia caches were manufactured in Iran.
Gareth Porter writes for IPSNews:
John Amato of Crooks & Liars points out:
In the paper Felter and Fishman criticised official U.S. statements on Iranian weapons in Iraq.
But there are clear reasons Iran isn't doing so well in the Iraqi arms market. Iranian equipment is less reliable and more expensive than Eastern Block materiel that flooded the region after the 2003 invasion -something which a certain imprisoned international arms dealer, ex-CIA and ex-US military contractor and supplier to despots and terrorists, Viktor Bout, may well know a fair bit about.
It's been a buyer's market and the Iranians are seeing market forces exclude their produce, with the exception of simple artillery rockets. They're more expensive than the Pakistani arms bazaar's copies coming down the old Silk Road routes and far less effective than easily available and comparitively-priced black market US weapons too.
It is often forgotten or ignored that over 190,000 US-provided guns found their way onto the black market in Iraq, simply disappearing from inventory after lax US and Iraqi accounting. Some US weapons have even found their way to Turkey, into the hands of PKK terrorists.
And to this day, no-one has held General Petreaus accountable for those 190,000 guns - worth over $50 million or about twice that on the street - that he says were "kicked out of helicopters" or misplaced by clerical errors on his watch, despite one of his closest aides pleading guilty to corruption and bribery charges in relation to procurement contracts by a company involved in illegal arms dealing of US-provided weapons.
In his hero status Petreaus has never been asked what he knew and when he knew it about the loss of arms. He's never been subjected to a formal enquiry on the matter. And a GAO investigation begun back in August last year seems to have gone very silent.
So now we have a deafening silence - both on earlier accusations of Iranian arms running and meddling, which will just be allowed to sit their in the public mind, and on the very real high-level incompetence and corruption which led to so many US-provided weapons being lost without trace. That's just part of the Bush administration's gag order on the largest war profiteering adventure in history.
Add yet another couple of items to the very long list of hard questions the Obama administration should be asking about its predecessor and its doings.
Gareth Porter discussed the false narrative of Iranian weapons in Iraq with AntiWar.Com back in May, watch it here:
LibertyAir Blog
Their first effort to provide proof of Irainian support for Iraqi insurgents, the infamous Baghdad Briefing, fell flat on its face when even Secretary of Defense Bob Gates and then Joint Chiefs Chairman General Pace had to admit that the "evidence" presented was incredibly weak and it proved nothing. Since that first failed briefing, various promised "smoking gun" briefings have been announced, postponed and then cancelled. Even the previously gullible mainstream press had to notice that there was a lot more smoke than fire.
The data collected by the task force - known as Task Force Troy - shows that relatively few of the weapons found in Shi'a militia caches were manufactured in Iran.
Gareth Porter writes for IPSNews:
According to the data compiled by the task force, and made available to an academic research project last July, only 70 weapons believed to have been manufactured in Iran had been found in post-invasion weapons caches between mid-February and the second week in April. And those weapons represented only 17 percent of the weapons found in caches that had any Iranian weapons in them during that period.
The actual proportion of Iranian-made weapons to total weapons found, however, was significantly lower than that, because the task force was finding many more weapons caches in Shi'a areas that did not have any Iranian weapons in them.
The task force database identified 98 caches over the five-month period with at least one Iranian weapon, excluding caches believed to have been hidden prior to the 2003 U.S. invasion. But according to an e-mail from the MNFI press desk this week, the task force found and analysed a total of roughly 4,600 weapons caches during that same period.
The caches that included Iranian weapons thus represented just 2 percent of all caches found. That means Iranian-made weapons were a fraction of one percent of the total weapons found in Shi'a militia caches during that period. The extremely small proportion of Iranian arms in Shi'a militia weapons caches further suggests that Shi'a militia fighters in Iraq had been getting weapons from local and international arms markets rather than from an official Iranian-sponsored smuggling network.
John Amato of Crooks & Liars points out:
Left out of the list of Iranian-made weaponry were 350 armour-piercing explosively formed penetrators (EFPs) found in Iraqi weapons caches. Despite the lurid claims of US officials, the task group couldn't ascribe an Iranian origin to a single one. Which along with press reports about finding EFP manufactories inside Iraq explains why, since mid-Summer, we've heard nothing about Iranian-made EFPs whereas before official reports and statements were full of them.Joseph Felter and Brian Fishman of the West Point military academy revealed this data in an academic research paper published last month by West Point's Counter-Terrorism Centre.
In the paper Felter and Fishman criticised official U.S. statements on Iranian weapons in Iraq.
"Some reports erroneously attribute munitions similar to those produced in Iran as Iranian, while other Iranian munitions found in Iraq were likely purchased on the open market."The co-authors note that Iranian arms can be purchased directly from the website of the Defence Industries of Iran with a credit card. Given how easy it is to purchase weapons, and a long, shared, porous border where there is a vast history of smuggling, the percentage of Iranian made arms is actually very low.
But there are clear reasons Iran isn't doing so well in the Iraqi arms market. Iranian equipment is less reliable and more expensive than Eastern Block materiel that flooded the region after the 2003 invasion -something which a certain imprisoned international arms dealer, ex-CIA and ex-US military contractor and supplier to despots and terrorists, Viktor Bout, may well know a fair bit about.
It's been a buyer's market and the Iranians are seeing market forces exclude their produce, with the exception of simple artillery rockets. They're more expensive than the Pakistani arms bazaar's copies coming down the old Silk Road routes and far less effective than easily available and comparitively-priced black market US weapons too.
It is often forgotten or ignored that over 190,000 US-provided guns found their way onto the black market in Iraq, simply disappearing from inventory after lax US and Iraqi accounting. Some US weapons have even found their way to Turkey, into the hands of PKK terrorists.
And to this day, no-one has held General Petreaus accountable for those 190,000 guns - worth over $50 million or about twice that on the street - that he says were "kicked out of helicopters" or misplaced by clerical errors on his watch, despite one of his closest aides pleading guilty to corruption and bribery charges in relation to procurement contracts by a company involved in illegal arms dealing of US-provided weapons.
In his hero status Petreaus has never been asked what he knew and when he knew it about the loss of arms. He's never been subjected to a formal enquiry on the matter. And a GAO investigation begun back in August last year seems to have gone very silent.
So now we have a deafening silence - both on earlier accusations of Iranian arms running and meddling, which will just be allowed to sit their in the public mind, and on the very real high-level incompetence and corruption which led to so many US-provided weapons being lost without trace. That's just part of the Bush administration's gag order on the largest war profiteering adventure in history.
Add yet another couple of items to the very long list of hard questions the Obama administration should be asking about its predecessor and its doings.
Gareth Porter discussed the false narrative of Iranian weapons in Iraq with AntiWar.Com back in May, watch it here:
LibertyAir Blog
Fed Says Recession Started Last Spring
Remember last spring when the Bush administration and Fox news kept saying that the nation was not in a Recession, and that it was all symantics, and the fundementals of the economy were strong. Guess those of us who actually were paying attention were right. It now turns out that the U.S. economy did fall into a recession last spring. And the expectation is that the U.S. economy will contract sharply this quarter as more than 200,000 workers per month are added to the rolls of the unemployed.
The Philadelphia Federal Reserve's latest Survey of Professional Forecasters removed any doubt with the survey that was released today. I have been amazed that there are some people who still want to deny that this nation is in a recession, even as corporate spending has collapsed.
The Philadelphia Fed's survey said the U.S. economy entered a recession in April and that it will last 14 months. It predicted gross domestic product would shrink by 2.9 percent in the fourth quarter, a sharp downgrade from the previous prediction of 0.7 percent growth.
The survey predicted the economy would shed an average of 222,400 jobs per month this quarter, versus the previous forecast of a loss of 45,400 per month. The survey said first-quarter GDP would decline by 1.1 pct and the unemployment rate would hit 7.0 percent during the first three months of next year.
The Philadelphia Federal Reserve's latest Survey of Professional Forecasters removed any doubt with the survey that was released today. I have been amazed that there are some people who still want to deny that this nation is in a recession, even as corporate spending has collapsed.
The Philadelphia Fed's survey said the U.S. economy entered a recession in April and that it will last 14 months. It predicted gross domestic product would shrink by 2.9 percent in the fourth quarter, a sharp downgrade from the previous prediction of 0.7 percent growth.
The survey predicted the economy would shed an average of 222,400 jobs per month this quarter, versus the previous forecast of a loss of 45,400 per month. The survey said first-quarter GDP would decline by 1.1 pct and the unemployment rate would hit 7.0 percent during the first three months of next year.
$3,800,000.000.000
The U.S. government bailout of Corporate America is three-point eight trillion dollars. That’s $3,800,000.000.000. CNBC is keeping tabs on the amount that the federal government has been forced to spend on the bailout.
Check out CNBC’s line-by-line breakdown of where the taxpayer funds are going here.
Check out CNBC’s line-by-line breakdown of where the taxpayer funds are going here.
Goldman CEO and Top Execs Will NOT Receive 2008 Bonuses
Well, it's a start.
Now hopefully we start to see more of Wall Street fall in line with similar announcements.
Now hopefully we start to see more of Wall Street fall in line with similar announcements.
Goldman Sachs Group Inc. CEO Lloyd Blankfein and six other top executives at the bank will not be receiving cash or stock bonuses for 2008, a spokesman said Sunday.
The decision was made by the seven executives themselves, said spokesman Lucas Van Praag, and approved Sunday by the Wall Street firm's compensation committee. The executives made the decision "because they think it's the right thing to do," Van Praag said.
The seven executives include Blankfein; Presidents and Co-Chief Operating Officers Jon Winkelried and Gary Cohn; Vice Chairmen John Weinberg, J. Michael Evans and Michael Sherwood; and Chief Financial Officer David Viniar.
They will receive no cash bonuses, no stock, and no options for 2008 — just their salaries, the spokesman said. Companies typically release compensation figures for top executives in the spring as part of their annual proxy statements.
Last year, Blankfein received total compensation of $54.0 million, according to calculations by The Associated Press — making him the 6th highest paid CEO at a Standard & Poor's 500 company in 2007. His salary that year was $600,000.
Oil prices fall on economy fears
Oil prices fall on more bad economic news and after Opec hinted it would not cut oil production soon. US light, sweet crude fell more than $1 to $55.93 a barrel. Brent crude lost 52 cents to $53.72. Prices fell after Opec's president downplayed the chance of a November output cut, and demand for oil is expected to be hurt as more countries slide into recession, with Japan's economy the latest victim. Oil prices have dropped more than 60% since their record highs of nearly $150 a barrel in July.
Japanese Economy Now in Recession
Japan's economy falls into its first recession since 2001 after shrinking by 0.1% in the July to September quarter. The world's second-biggest economy had previous shrunk by 0.9% in the April to June quarter. Growth in Japan has been hit by the global economic slowdown which has curbed demand for Japanese exports.
The eurozone officially slipped into recession last week, and the US is expected to follow.
The eurozone officially slipped into recession last week, and the US is expected to follow.
Citigroup set to cut 75,000 jobs
US bank Citigroup announces plans for up to 75,000 job cuts, up from a previously announced total of 23,000. Citigroup said in a statement the cuts represented a reduction of about 20% of its staff, leaving it with 300,000 jobs worldwide "in the near term".
Citigroup has lost more than $20bn in the past year because of the global financial crisis. It has posted four straight quarterly losses and some analysts believe the bank will not make a profit again until 2010.
Citigroup has lost more than $20bn in the past year because of the global financial crisis. It has posted four straight quarterly losses and some analysts believe the bank will not make a profit again until 2010.
G20 Summit Pledge to 'Restore Growth'
Considering the state of the world economy, I have been shocked at how little play the G20 financial summit received in the media. The G20 group of countries consists of 19 leading industrialised and developing countries, as well as the European Union, it's a pretty powerful group, meeting during a pretty major crisis. Should this event not have received a little more headlines? Is it just because President-elect Barack Obama was not participating? Is it because most people have moved past George W. Bush, the host of the financial summit?
Maybe.
Well the financial summit did take place and the G20 world leaders came together in Washington DC and have pledged to work together to restore global growth. They said they were determined to work together to achieve "needed reforms" in the world's financial systems.
This financial summit brought together leading industrial powers, such as the US, Japan and Germany, and also emerging market countries such as China, India, Argentina, Brazil and others - representing 85% of the world economy. The significance of this G20 financial summit was clear to the emerging economies - they now have to be taken into consideration in the management of the global economy.
Key issues agreed by world leaders at the G20 financial summit included:
Maybe.
Well the financial summit did take place and the G20 world leaders came together in Washington DC and have pledged to work together to restore global growth. They said they were determined to work together to achieve "needed reforms" in the world's financial systems.
This financial summit brought together leading industrial powers, such as the US, Japan and Germany, and also emerging market countries such as China, India, Argentina, Brazil and others - representing 85% of the world economy. The significance of this G20 financial summit was clear to the emerging economies - they now have to be taken into consideration in the management of the global economy.
Key issues agreed by world leaders at the G20 financial summit included:
- Reform of international financial institutions such as the World Bank and the International Monetary Fund
- An agreement by the end of 2008, leading to a successful global free-trade deal
- Improvements to financial market transparency and ensuring complete and accurate disclosure by firms of theirfinancial conditions
- Making sure banks and financial institutions' incentives "prevent excessive risk taking"
- Asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system
- Strengthening countries' financial regulatory regimes
- Taking a "fresh look" at rules that govern market manipulation and fraud
Sunday, November 16, 2008
Meet The Bloggers: Lieberman Must Go
Cenk Uyger of the Young Turks also hosts Robert Greenwald's Meet The Bloggers, every Friday afternoon. This last Friday Cenk interviewed Satyam Khanna from Think Progress about Joe Lieberman and Lieberman's actual record.
Check out this clip from Meet the Bloggers:
LibertyAir Blog
You can read the ThinkProgress report on Lieberman’s significant shift to the right in both foreign and domestic policy here.
Check out this clip from Meet the Bloggers:
LibertyAir Blog
You can read the ThinkProgress report on Lieberman’s significant shift to the right in both foreign and domestic policy here.
Paul Krugman: Depression Economics Returns
The economic news, in case you haven’t noticed, keeps getting worse. Bad as it is, however, I don’t expect another Great Depression. In fact, we probably won’t see the unemployment rate match its post-Depression peak of 10.7 percent, reached in 1982 (although I wish I was sure about that).
We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.
To see what I’m talking about, consider the implications of the latest piece of terrible economic news: Thursday’s report on new claims for unemployment insurance, which have now passed the half-million mark. Bad as this report was, viewed in isolation it might not seem catastrophic. After all, it was in the same ballpark as numbers reached during the 2001 recession and the 1990-1991 recession, both of which ended up being relatively mild by historical standards (although in each case it took a long time before the job market recovered).
But on both of these earlier occasions the standard policy response to a weak economy — a cut in the federal funds rate, the interest rate most directly affected by Fed policy — was still available. Today, it isn’t: the effective federal funds rate (as opposed to the official target, which for technical reasons has become meaningless) has averaged less than 0.3 percent in recent days. Basically, there’s nothing left to cut.
And with no possibility of further interest rate cuts, there’s nothing to stop the economy’s downward momentum. Rising unemployment will lead to further cuts in consumer spending, which Best Buy warned this week has already suffered a “seismic” decline. Weak consumer spending will lead to cutbacks in business investment plans. And the weakening economy will lead to more job cuts, provoking a further cycle of contraction.
To pull us out of this downward spiral, the federal government will have to provide economic stimulus in the form of higher spending and greater aid to those in distress — and the stimulus plan won’t come soon enough or be strong enough unless politicians and economic officials are able to transcend several conventional prejudices.
One of these prejudices is the fear of red ink. In normal times, it’s good to worry about the budget deficit — and fiscal responsibility is a virtue we’ll need to relearn as soon as this crisis is past. When depression economics prevails, however, this virtue becomes a vice. F.D.R.’s premature attempt to balance the budget in 1937 almost destroyed the New Deal.
Another prejudice is the belief that policy should move cautiously. In normal times, this makes sense: you shouldn’t make big changes in policy until it’s clear they’re needed. Under current conditions, however, caution is risky, because big changes for the worse are already happening, and any delay in acting raises the chance of a deeper economic disaster. The policy response should be as well-crafted as possible, but time is of the essence.
Finally, in normal times modesty and prudence in policy goals are good things. Under current conditions, however, it’s much better to err on the side of doing too much than on the side of doing too little. The risk, if the stimulus plan turns out to be more than needed, is that the economy might overheat, leading to inflation — but the Federal Reserve can always head off that threat by raising interest rates. On the other hand, if the stimulus plan is too small there’s nothing the Fed can do to make up for the shortfall. So when depression economics prevails, prudence is folly.
What does all this say about economic policy in the near future? The Obama administration will almost certainly take office in the face of an economy looking even worse than it does now. Indeed, Goldman Sachs predicts that the unemployment rate, currently at 6.5 percent, will reach 8.5 percent by the end of next year.
All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.
So the question becomes, will the Obama people dare to propose something on that scale?
Let’s hope that the answer to that question is yes, that the new administration will indeed be that daring. For we’re now in a situation where it would be very dangerous to give in to conventional notions of prudence.
We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.
To see what I’m talking about, consider the implications of the latest piece of terrible economic news: Thursday’s report on new claims for unemployment insurance, which have now passed the half-million mark. Bad as this report was, viewed in isolation it might not seem catastrophic. After all, it was in the same ballpark as numbers reached during the 2001 recession and the 1990-1991 recession, both of which ended up being relatively mild by historical standards (although in each case it took a long time before the job market recovered).
But on both of these earlier occasions the standard policy response to a weak economy — a cut in the federal funds rate, the interest rate most directly affected by Fed policy — was still available. Today, it isn’t: the effective federal funds rate (as opposed to the official target, which for technical reasons has become meaningless) has averaged less than 0.3 percent in recent days. Basically, there’s nothing left to cut.
And with no possibility of further interest rate cuts, there’s nothing to stop the economy’s downward momentum. Rising unemployment will lead to further cuts in consumer spending, which Best Buy warned this week has already suffered a “seismic” decline. Weak consumer spending will lead to cutbacks in business investment plans. And the weakening economy will lead to more job cuts, provoking a further cycle of contraction.
To pull us out of this downward spiral, the federal government will have to provide economic stimulus in the form of higher spending and greater aid to those in distress — and the stimulus plan won’t come soon enough or be strong enough unless politicians and economic officials are able to transcend several conventional prejudices.
One of these prejudices is the fear of red ink. In normal times, it’s good to worry about the budget deficit — and fiscal responsibility is a virtue we’ll need to relearn as soon as this crisis is past. When depression economics prevails, however, this virtue becomes a vice. F.D.R.’s premature attempt to balance the budget in 1937 almost destroyed the New Deal.
Another prejudice is the belief that policy should move cautiously. In normal times, this makes sense: you shouldn’t make big changes in policy until it’s clear they’re needed. Under current conditions, however, caution is risky, because big changes for the worse are already happening, and any delay in acting raises the chance of a deeper economic disaster. The policy response should be as well-crafted as possible, but time is of the essence.
Finally, in normal times modesty and prudence in policy goals are good things. Under current conditions, however, it’s much better to err on the side of doing too much than on the side of doing too little. The risk, if the stimulus plan turns out to be more than needed, is that the economy might overheat, leading to inflation — but the Federal Reserve can always head off that threat by raising interest rates. On the other hand, if the stimulus plan is too small there’s nothing the Fed can do to make up for the shortfall. So when depression economics prevails, prudence is folly.
What does all this say about economic policy in the near future? The Obama administration will almost certainly take office in the face of an economy looking even worse than it does now. Indeed, Goldman Sachs predicts that the unemployment rate, currently at 6.5 percent, will reach 8.5 percent by the end of next year.
All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.
So the question becomes, will the Obama people dare to propose something on that scale?
Let’s hope that the answer to that question is yes, that the new administration will indeed be that daring. For we’re now in a situation where it would be very dangerous to give in to conventional notions of prudence.
Frank Rich: The Moose Stops Here
ELECTION junkies in acute withdrawal need suffer no longer. Though the exciting Obama-McCain race is over, the cockfight among the losers has only just begun. The conservative crackup may be ugly, but as entertainment, it’s two thumbs up!
Over at Fox News, Greta Van Susteren has been trashing the credibility of her own network’s chief political correspondent, Carl Cameron, for his report on Sarah Palin’s inability to identify Africa as a continent, while Bill O’Reilly valiantly defends Cameron’s honor. At Slate, a post-mortem of conservative intellectuals descended into name-calling, with the writer Ross Douthat of The Atlantic labeling the legal scholar Douglas Kmiec a “useful idiot.”
In an exuberant class by himself is Michael Barone, a ubiquitous conservative commentator who last week said that journalists who trash Palin (more than a few of them conservatives) do so because “she did not abort her Down syndrome baby.” He was being “humorous,” he subsequently explained to Politico, though the joke may be on him. Barone writes for U.S. News & World Report, where his 2008 analyses included keepers like “Just Call Her Sarah ‘Delano’ Palin.” Just call it coincidence, but on Election Day, word spread that the once-weekly U.S. News was downsizing to a monthly — a step closer to the fate of Literary Digest, the weekly magazine that vanished two years after its straw poll predicted an Alf Landon landslide over Franklin Delano Roosevelt in 1936.
Will the 2008 G.O.P. go the way of the 1936 G.O.P., which didn’t reclaim the White House until 1952? Even factoring in the Democrats’ time-honored propensity for self-immolation, it’s not beyond reason. The Republicans are in serious denial. A few heretics excepted, they hope to blame all their woes on their unpopular president, the inept McCain campaign and their party’s latent greed for budget-busting earmarks.
The trouble is far more fundamental than that. The G.O.P. ran out of steam and ideas well before George W. Bush took office and Tom DeLay ran amok, and it is now more representative of 20th-century South Africa during apartheid than 21st-century America. The proof is in the vanilla pudding. When David Letterman said that the 10 G.O.P. presidential candidates at an early debate looked like “guys waiting to tee off at a restricted country club,” he was the first to correctly call the election.
On Nov. 4, that’s roughly the sole constituency that remained loyal to the party — minus its wealthiest slice, a previously solid G.O.P. stronghold that turned blue this year (in a whopping swing of 34 percentage points). The Republicans lost every region of the country by double digits except the South, which they won by less than double digits (9 points). They took the South only because McCain, who ran roughly even with Obama among whites in every other region, won Southern whites by 38 percentage points.
Those occasional counties that tilted more Republican in 2008 tended to be not only the least diverse, but also the most rural, least educated and slowest-growing in population. McCain-Palin did score a landslide among white evangelical Christians, though even in that demographic Obama shaved the G.O.P. margin by seven percentage points from 2004.
The Republicans did this to themselves, yet a convenient amnesia can be found in conservatives’ post-Election Day soul searching. There’s endless hand-wringing about Bush and McCain blunders and Abramoff-Stevens corruption, but there’s barely any mention of the nasty cultural brawls that defined the G.O.P. campaign narrative this year as the party clung bitterly once more to its 40-year-old “Southern strategy.”
There were as many Republican prejudices as candidates. In primary season, the whispered antipathy among some conservative evangelicals toward Mormons grew so loud that Mitt Romney felt compelled to give a speech defending his faith (but was so fearful of inciting further wrath that he said the word Mormon only once). The conservative gatekeeper Michael Medved spotlighted another whisper campaign in May, writing that the popular moderate Florida G.O.P. governor Charlie Crist had been “single since his divorce in 1980 (after a marriage that lasted only a year)” and was the subject of “nasty rumors of possible gay activity.” Crist announced his engagement to a woman weeks later, but by then he was no longer a serious contender for the ticket.
John McCain also might have held Florida had he prevailed with his first choice of a running mate, the pro-abortion-rights Joe Lieberman, but G.O.P. ayatollahs scuttled both him and the abortion moderate Tom Ridge, who might have helped win Pennsylvania. Not that McCain was innocent in these exclusionary escapades. He strenuously sought the endorsement of the Rev. John Hagee, even though Hagee had blamed gays for Hurricane Katrina, referred to the Roman Catholic Church as “the great whore,” and theorized that Hitler came about because God’s “top priority for the Jewish people is to get them to come back to the land of Israel.”
The icing on this rancid cake was the race-baiting of Obama and the immigrant bashing by G.O.P. hopefuls who tried to outdo the nativist fringe candidate Tom Tancredo. Yet Republican denial is unabated. In an interview with Palin the weekend before the election, a conservative Wall Street Journal editorialist asked whether “the G.O.P. doesn’t in fact have a perception problem, that it is no longer viewed as a big tent.” A perception problem? Hello — how about a reality problem?
Yet the G.O.P. really does believe that it’s all about perception. That’s why its 2000 convention offered a stage full of break dancers and gospel singers, wildly outnumbering the black delegates in the audience. Bush and Karl Rove regarded diversity as a public-relations issue to be finessed with marketing. Round up some black extras! Sell “compassionate conservatism” by posing Bush incessantly with black schoolchildren! Problem solved!
The 2004 Bush-Cheney campaign Web site even boasted a “Compassion” archive of photos of Bush with black folk, including Colin Powell. McCain used the same playbook this year, when he headed south to emote over Katrina victims and stock his own Web site with pictures depicting his adventures in black America. He had been a no-show in New Orleans during the six months after the hurricane hit, when his presence might have made a difference.
In defeat, the party’s thinking remains unchanged. Its leaders once again believe they can bamboozle the public into thinking they’re the “party of Lincoln” by pushing forward a few minority front men or women. The reason why they are promoting Palin and the recently elected Indian-American governor of Louisiana, Bobby Jindal, as the party’s “future” is not just that they are hard-line social conservatives; they are also the only prominent Republican officeholders under 50 who are not white men. The G.O.P. will have to dip down to a former one-term lieutenant governor of Maryland, Michael Steele, to put a black public face on its national committee.
Such window dressing aside, there remains only one Republican idea for reaching out to minority voters: Richard Land, of the Southern Baptist Convention, recommends pandering to socially conservative blacks and Hispanics with yet more hyperventilation about same-sex marriage. Weird though it may be, gays were the sole minority group that actually voted slightly more Republican this year (though still going Democratic by 70 to 27 percent). Pitting blacks and Latinos against them could open up a whole new bloody front in the G.O.P. civil war.
The only other widespread post-election conservative ideas are Bush 2000 retreads (market-based health care and education reform). Jindal offers generic gab about how the party must offer Americans “real solutions” and “substance,” but he has yet to offer a real solution to his own state’s gaping $1 billion budget shortfall. Indeed, the only two “new” ideas that the G.O.P. is pushing in defeat are those they condemn when practiced by Democrats: celebrity and identity politics. Palin’s manic post-election publicity tour, which may yet propel her and “the first dude” to “Dancing With the Stars,” is almost a parody of the McCain ad likening Obama to Paris and Britney. Anyone who says so is promptly called out for sexism by the P.C. police of the newly “feminist” G.O.P.
At the risk of being so reviled, let me point out that in the marathon of Palin interviews last week, the single most revealing exchange had nothing to do with her wardrobe or the “jerks” (as she called them) around McCain. It came instead when Wolf Blitzer of CNN asked for some substance by inviting her to suggest “one or two ideas” that Republicans might have to offer. “Well, a lot of Republican governors have really good ideas for our nation,” she responded, without specifying anything except that “it’s all about free enterprise and respecting equality.” Well, yes, but surely there’s some actual new initiative worth mentioning, Blitzer followed up. “Gah!” replied the G.O.P.’s future. “Nothing specific right now!”
The good news for Democrats is a post-election Gallup poll finding that while only 45 percent of Americans want to see Palin have a national political future (and 52 percent of Americans do not), 76 percent of Republicans say bring her on. The bad news for Democrats is that these are the exact circumstances that can make Obama cocky and Democrats sloppy. The worse news for the country is that at a time of genuine national peril we actually do need an opposition party that is not brain-dead.
Over at Fox News, Greta Van Susteren has been trashing the credibility of her own network’s chief political correspondent, Carl Cameron, for his report on Sarah Palin’s inability to identify Africa as a continent, while Bill O’Reilly valiantly defends Cameron’s honor. At Slate, a post-mortem of conservative intellectuals descended into name-calling, with the writer Ross Douthat of The Atlantic labeling the legal scholar Douglas Kmiec a “useful idiot.”
In an exuberant class by himself is Michael Barone, a ubiquitous conservative commentator who last week said that journalists who trash Palin (more than a few of them conservatives) do so because “she did not abort her Down syndrome baby.” He was being “humorous,” he subsequently explained to Politico, though the joke may be on him. Barone writes for U.S. News & World Report, where his 2008 analyses included keepers like “Just Call Her Sarah ‘Delano’ Palin.” Just call it coincidence, but on Election Day, word spread that the once-weekly U.S. News was downsizing to a monthly — a step closer to the fate of Literary Digest, the weekly magazine that vanished two years after its straw poll predicted an Alf Landon landslide over Franklin Delano Roosevelt in 1936.
Will the 2008 G.O.P. go the way of the 1936 G.O.P., which didn’t reclaim the White House until 1952? Even factoring in the Democrats’ time-honored propensity for self-immolation, it’s not beyond reason. The Republicans are in serious denial. A few heretics excepted, they hope to blame all their woes on their unpopular president, the inept McCain campaign and their party’s latent greed for budget-busting earmarks.
The trouble is far more fundamental than that. The G.O.P. ran out of steam and ideas well before George W. Bush took office and Tom DeLay ran amok, and it is now more representative of 20th-century South Africa during apartheid than 21st-century America. The proof is in the vanilla pudding. When David Letterman said that the 10 G.O.P. presidential candidates at an early debate looked like “guys waiting to tee off at a restricted country club,” he was the first to correctly call the election.
On Nov. 4, that’s roughly the sole constituency that remained loyal to the party — minus its wealthiest slice, a previously solid G.O.P. stronghold that turned blue this year (in a whopping swing of 34 percentage points). The Republicans lost every region of the country by double digits except the South, which they won by less than double digits (9 points). They took the South only because McCain, who ran roughly even with Obama among whites in every other region, won Southern whites by 38 percentage points.
Those occasional counties that tilted more Republican in 2008 tended to be not only the least diverse, but also the most rural, least educated and slowest-growing in population. McCain-Palin did score a landslide among white evangelical Christians, though even in that demographic Obama shaved the G.O.P. margin by seven percentage points from 2004.
The Republicans did this to themselves, yet a convenient amnesia can be found in conservatives’ post-Election Day soul searching. There’s endless hand-wringing about Bush and McCain blunders and Abramoff-Stevens corruption, but there’s barely any mention of the nasty cultural brawls that defined the G.O.P. campaign narrative this year as the party clung bitterly once more to its 40-year-old “Southern strategy.”
There were as many Republican prejudices as candidates. In primary season, the whispered antipathy among some conservative evangelicals toward Mormons grew so loud that Mitt Romney felt compelled to give a speech defending his faith (but was so fearful of inciting further wrath that he said the word Mormon only once). The conservative gatekeeper Michael Medved spotlighted another whisper campaign in May, writing that the popular moderate Florida G.O.P. governor Charlie Crist had been “single since his divorce in 1980 (after a marriage that lasted only a year)” and was the subject of “nasty rumors of possible gay activity.” Crist announced his engagement to a woman weeks later, but by then he was no longer a serious contender for the ticket.
John McCain also might have held Florida had he prevailed with his first choice of a running mate, the pro-abortion-rights Joe Lieberman, but G.O.P. ayatollahs scuttled both him and the abortion moderate Tom Ridge, who might have helped win Pennsylvania. Not that McCain was innocent in these exclusionary escapades. He strenuously sought the endorsement of the Rev. John Hagee, even though Hagee had blamed gays for Hurricane Katrina, referred to the Roman Catholic Church as “the great whore,” and theorized that Hitler came about because God’s “top priority for the Jewish people is to get them to come back to the land of Israel.”
The icing on this rancid cake was the race-baiting of Obama and the immigrant bashing by G.O.P. hopefuls who tried to outdo the nativist fringe candidate Tom Tancredo. Yet Republican denial is unabated. In an interview with Palin the weekend before the election, a conservative Wall Street Journal editorialist asked whether “the G.O.P. doesn’t in fact have a perception problem, that it is no longer viewed as a big tent.” A perception problem? Hello — how about a reality problem?
Yet the G.O.P. really does believe that it’s all about perception. That’s why its 2000 convention offered a stage full of break dancers and gospel singers, wildly outnumbering the black delegates in the audience. Bush and Karl Rove regarded diversity as a public-relations issue to be finessed with marketing. Round up some black extras! Sell “compassionate conservatism” by posing Bush incessantly with black schoolchildren! Problem solved!
The 2004 Bush-Cheney campaign Web site even boasted a “Compassion” archive of photos of Bush with black folk, including Colin Powell. McCain used the same playbook this year, when he headed south to emote over Katrina victims and stock his own Web site with pictures depicting his adventures in black America. He had been a no-show in New Orleans during the six months after the hurricane hit, when his presence might have made a difference.
In defeat, the party’s thinking remains unchanged. Its leaders once again believe they can bamboozle the public into thinking they’re the “party of Lincoln” by pushing forward a few minority front men or women. The reason why they are promoting Palin and the recently elected Indian-American governor of Louisiana, Bobby Jindal, as the party’s “future” is not just that they are hard-line social conservatives; they are also the only prominent Republican officeholders under 50 who are not white men. The G.O.P. will have to dip down to a former one-term lieutenant governor of Maryland, Michael Steele, to put a black public face on its national committee.
Such window dressing aside, there remains only one Republican idea for reaching out to minority voters: Richard Land, of the Southern Baptist Convention, recommends pandering to socially conservative blacks and Hispanics with yet more hyperventilation about same-sex marriage. Weird though it may be, gays were the sole minority group that actually voted slightly more Republican this year (though still going Democratic by 70 to 27 percent). Pitting blacks and Latinos against them could open up a whole new bloody front in the G.O.P. civil war.
The only other widespread post-election conservative ideas are Bush 2000 retreads (market-based health care and education reform). Jindal offers generic gab about how the party must offer Americans “real solutions” and “substance,” but he has yet to offer a real solution to his own state’s gaping $1 billion budget shortfall. Indeed, the only two “new” ideas that the G.O.P. is pushing in defeat are those they condemn when practiced by Democrats: celebrity and identity politics. Palin’s manic post-election publicity tour, which may yet propel her and “the first dude” to “Dancing With the Stars,” is almost a parody of the McCain ad likening Obama to Paris and Britney. Anyone who says so is promptly called out for sexism by the P.C. police of the newly “feminist” G.O.P.
At the risk of being so reviled, let me point out that in the marathon of Palin interviews last week, the single most revealing exchange had nothing to do with her wardrobe or the “jerks” (as she called them) around McCain. It came instead when Wolf Blitzer of CNN asked for some substance by inviting her to suggest “one or two ideas” that Republicans might have to offer. “Well, a lot of Republican governors have really good ideas for our nation,” she responded, without specifying anything except that “it’s all about free enterprise and respecting equality.” Well, yes, but surely there’s some actual new initiative worth mentioning, Blitzer followed up. “Gah!” replied the G.O.P.’s future. “Nothing specific right now!”
The good news for Democrats is a post-election Gallup poll finding that while only 45 percent of Americans want to see Palin have a national political future (and 52 percent of Americans do not), 76 percent of Republicans say bring her on. The bad news for Democrats is that these are the exact circumstances that can make Obama cocky and Democrats sloppy. The worse news for the country is that at a time of genuine national peril we actually do need an opposition party that is not brain-dead.
TYT Week's Highlights - 11-14-2008
Currently the best all around progressive talk show is the Young Turks. For those of you who have not seen it, it is an on-line/XM radio talk show.
They also have a YouTube Channel
Check out the Highlights for the week of 11-14-2008:
LibertyAir Blog
They also have a YouTube Channel
Check out the Highlights for the week of 11-14-2008:
LibertyAir Blog
NATO Supply Line Closed
Taliban fighters have been trying to strangle NATO's mission in Afghanistan by stepping up attacks on convoys in the Khyber Pass, and yesterday forced Pakistan to suspend all traffic along the route.
More than 350 trucks and oil tankers use the pass each day, carrying necessary supplies for NATO forces that have been shipped to the Pakistani port city of Karachi. But government officials in Islamabad said last night the suspension of this important land route had become inevitable because of intensified militant activity in the Khyber Tribal Agency.
Any long-term closure of this supply route would make the problem of resupplying coalition troops in Afghanistan very difficult. About 70 per cent of the fuel, clothes and food needed by the NATO forces is transported in civilian Pakistani trucks through the Khyber Pass, a vulnerable point in the long route from Karachi to Kabul.
The route is now too risky to transport weapons, and many supplies travel on the southern route from Quetta to Helmand.
The number of attacks on supply convoys is a military secret, but reports claimed they were occurring almost daily. Earlier this year, 42 oil tankers were destroyed in one attack.
The suspension of traffic along the highway came as the main Taliban commander in the area, Mustafa Kamran Hijrat, said he was determined to sever the coalition supply lines. The Taliban's tactics are similar to those used by mujaheddin guerillas in the 1980s, who crippled the Soviet army by attacking its supply convoys.
Commanders of the US-led NATO force in Afghanistan were stunned last week when Commander Hijrat's men captured a convoy of coalition supply trucks, and grabbed food supplies and several US Humvee armoured vehicles that were being carried in containers. The militants were later seen driving around the Khyber Agency in the US Humvees. Attempts by Pakistan forces in the tribal belt to recover the armoured cars - or even to bomb them from the air and put them out of action - proved fruitless.
NATO commanders are looking at alternative land routes to bring in supplies through central Asia, using Kazakhstan as a base. But the land route through Pakistan is preferred, because of the ability to ship military supplies into Karachi. However, the use of the port is becoming more tenuous, with widespread fears about the extent to which the Taliban and al-Qa'ida have been building up their forces in the city.
In the past few days, an oil tanker bound for Afghanistan was attacked close to Karachi.
There are reports the UN is pulling its workers out of the Pakistani provincial capital of Peshawar, next to the Khyber Agency, because of fears about the worsening situation. The UN workers were pulling back to Islamabad, a 90-minute drive from Peshawar. Other government and non-government aid agencies were also pulling back from Peshawar, which was described by Pakistan's leading newspaper The News yesterday as "the kidnapping capital of the world" and a "city under siege".
The newspaper said that in the past 10 months, 78 people had been kidnapped in Peshawar, including Afghanistan's ambassador-designate to Islamabad and an Iranian diplomat.
More than 350 trucks and oil tankers use the pass each day, carrying necessary supplies for NATO forces that have been shipped to the Pakistani port city of Karachi. But government officials in Islamabad said last night the suspension of this important land route had become inevitable because of intensified militant activity in the Khyber Tribal Agency.
Any long-term closure of this supply route would make the problem of resupplying coalition troops in Afghanistan very difficult. About 70 per cent of the fuel, clothes and food needed by the NATO forces is transported in civilian Pakistani trucks through the Khyber Pass, a vulnerable point in the long route from Karachi to Kabul.
The route is now too risky to transport weapons, and many supplies travel on the southern route from Quetta to Helmand.
The number of attacks on supply convoys is a military secret, but reports claimed they were occurring almost daily. Earlier this year, 42 oil tankers were destroyed in one attack.
The suspension of traffic along the highway came as the main Taliban commander in the area, Mustafa Kamran Hijrat, said he was determined to sever the coalition supply lines. The Taliban's tactics are similar to those used by mujaheddin guerillas in the 1980s, who crippled the Soviet army by attacking its supply convoys.
Commanders of the US-led NATO force in Afghanistan were stunned last week when Commander Hijrat's men captured a convoy of coalition supply trucks, and grabbed food supplies and several US Humvee armoured vehicles that were being carried in containers. The militants were later seen driving around the Khyber Agency in the US Humvees. Attempts by Pakistan forces in the tribal belt to recover the armoured cars - or even to bomb them from the air and put them out of action - proved fruitless.
NATO commanders are looking at alternative land routes to bring in supplies through central Asia, using Kazakhstan as a base. But the land route through Pakistan is preferred, because of the ability to ship military supplies into Karachi. However, the use of the port is becoming more tenuous, with widespread fears about the extent to which the Taliban and al-Qa'ida have been building up their forces in the city.
In the past few days, an oil tanker bound for Afghanistan was attacked close to Karachi.
There are reports the UN is pulling its workers out of the Pakistani provincial capital of Peshawar, next to the Khyber Agency, because of fears about the worsening situation. The UN workers were pulling back to Islamabad, a 90-minute drive from Peshawar. Other government and non-government aid agencies were also pulling back from Peshawar, which was described by Pakistan's leading newspaper The News yesterday as "the kidnapping capital of the world" and a "city under siege".
The newspaper said that in the past 10 months, 78 people had been kidnapped in Peshawar, including Afghanistan's ambassador-designate to Islamabad and an Iranian diplomat.
Iraqi Cabinet OKs Security Pact With US
The Iraqi cabinet has approved the Status of Forces Agreement (SOFA) with the United States, in a vote that was surprisingly one-sided. 27 of 28 cabinet members voted in favor of the agreement, and the deal will now be sent to parliament for consideration. The vote became much easier after Ayatollah Ali al-Sistani indicated he would not object to the deal so long as parliament supported it.
The current, and evidently final draft of the SOFA came only after the Iraqi government requested over 100 amendments to the previous “final” draft. The US withheld its response until after its own elections, and accepted most, but not all, of the changes.
Vital to stifling opposition to the pact was removing a clause which explicitly allowed the Iraqi government to continue the US presence beyond the December 31, 2011 deadline for a pullout. The clause wasn’t particularly meaningful: the Iraqi government is still free to do this at any rate, but it was a major complaint of the opposition.
Another important addition was a clause which says “Iraqi land, sea and air shall not be used as a launching or transit point for attacks against other countries.” This was seen as particularly important after the US attack on a Syrian border town last month, but again leaves a measure of wiggle room: while the attack was into another country, the US might argue it wasn’t necessarily against them.
Still a potential obstacle is the US unwillingness to change a clause on troop immunity: the drafts both allow Iraqi courts jurisdiction over US troops who commit major crimes only if they are off-base and off-duty. The Iraqi government sought to amend this so Iraq could determine when off-base US soldiers are in fact off-duty. A concern with the present wording is that the US can essentially block Iraqi jurisdiction by simply declaring the soldier on-duty after the fact.
Having passed the cabinet, the SOFA moves on to parliament, and the requirements for passing there are a matter of some dispute. The government maintains only a simple majority is needed, while opponents argue for a two-thirds majority. The issue was contentious enough that Prime Minister Nouri al-Maliki’s office said he wouldn’t submit the previous draft unless he was certain of a two-thirds majority.
And though the ruling Shi’ite coalition and strong supporters of the SOFA in the Kurdish Alliance would be sufficient for the simple majority, the two-thirds majority is by no means guaranteed, as the deal continues to have its opponents. The Association of Muslim Scholars, an influential Sunni religious group, has condemned the SOFA as a deal of “submission” to the US and warned it would continue a “despicable occupation.”
A spokesman for the political bloc of Shi’ite cleric Moqtada al-Sadr, who has likewise been an outspoken opponent of the SOFA, called the cabinet vote “meaningless” and predicted the deal would fail in parliament. Sadr has been key in organizing popular opposition to the SOFA.
The current, and evidently final draft of the SOFA came only after the Iraqi government requested over 100 amendments to the previous “final” draft. The US withheld its response until after its own elections, and accepted most, but not all, of the changes.
Vital to stifling opposition to the pact was removing a clause which explicitly allowed the Iraqi government to continue the US presence beyond the December 31, 2011 deadline for a pullout. The clause wasn’t particularly meaningful: the Iraqi government is still free to do this at any rate, but it was a major complaint of the opposition.
Another important addition was a clause which says “Iraqi land, sea and air shall not be used as a launching or transit point for attacks against other countries.” This was seen as particularly important after the US attack on a Syrian border town last month, but again leaves a measure of wiggle room: while the attack was into another country, the US might argue it wasn’t necessarily against them.
Still a potential obstacle is the US unwillingness to change a clause on troop immunity: the drafts both allow Iraqi courts jurisdiction over US troops who commit major crimes only if they are off-base and off-duty. The Iraqi government sought to amend this so Iraq could determine when off-base US soldiers are in fact off-duty. A concern with the present wording is that the US can essentially block Iraqi jurisdiction by simply declaring the soldier on-duty after the fact.
Having passed the cabinet, the SOFA moves on to parliament, and the requirements for passing there are a matter of some dispute. The government maintains only a simple majority is needed, while opponents argue for a two-thirds majority. The issue was contentious enough that Prime Minister Nouri al-Maliki’s office said he wouldn’t submit the previous draft unless he was certain of a two-thirds majority.
And though the ruling Shi’ite coalition and strong supporters of the SOFA in the Kurdish Alliance would be sufficient for the simple majority, the two-thirds majority is by no means guaranteed, as the deal continues to have its opponents. The Association of Muslim Scholars, an influential Sunni religious group, has condemned the SOFA as a deal of “submission” to the US and warned it would continue a “despicable occupation.”
A spokesman for the political bloc of Shi’ite cleric Moqtada al-Sadr, who has likewise been an outspoken opponent of the SOFA, called the cabinet vote “meaningless” and predicted the deal would fail in parliament. Sadr has been key in organizing popular opposition to the SOFA.
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