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Iran between a pragmatic pseudo-liberal and a theocratic hardliner

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Ayatollah Ali Akbar Hashemi Rafsanjani is thought to be a pragmatic conservative, ready to do whatever is necessary to protect mostly his own interests. In a 1999 sermon at the Tehran University he praised the government for using force to suppress student demonstrations. On July 17, 2009 , his highly anticipated speech at the Friday prayer satisfied neither the green opposition movement of the youth in the streets of Tehran nor did it rehabilitate his arch-enemy Ahmadinejad and his role in the most recent elections.

Rafsandjani is walking a tightrope in trying to preserve his influence and keeping pressure on Ahmadinejad and his supporters and at the same time not to alienate the Supreme Leader of Iran, Ayatollah Ali Khamenei. On the one hand he is a supporter of freedom of expression and civil society, and on the other hand he founded the radical Ansar-e-Hezbollah movement in Iran. In 1999 Hezbollah was involved in violent attacks on student protesters at anti-government demonstrations which lasted for about a week and resulted in a number of students being severely injured, some paralyzed and even murdered.

During his Friday prayer Rafsandjani spoke of doubt that has begrudged the people of Iran in this bitter era after the election. He suggested in order to return the trust to the people all, including the system, government, security forces, police and the people should move in line with the law. At this time it is worth mentioning that it was Rafsandjani and other Mousavi supporters who themselves deviated from the rule of law by demanding new elections when there was no legal basis for it. During his sermon Leader Ayatollah Khamenei reminded the opposition of the importance of the rule of law: "By Allah’s favor, the presidential election was accurately held, and the current matters should be pursued legally."

It was Rafsandjani who did not adhere to the law and yet he is now stating the obvious after the fact that protesters have already taken their demands to the streets. That kind of twisting the facts is malicious to say the least. It is the makings of a pragmatic politician who sees his fortunes threatened and is now desperately trying to take advantage of frustration that is settling in among the young generation in Iran. He wants to leave the door to debate open but fails to recognize that there cannot be a reasonable debate with people taking to the streets and chanting death to the dictator from their roof tops. He fails to recognize that protestors want a revolution yet Rafsandjani wants to protect only his own interests.

How did it get to the point that the country of the Iranian revolution is almost going to be torn apart between the forces of a modern, young, moderate Iran and a theocratic, old and conservative leadership? The answer of the theocrats is to suppress freedom in an effort to contain this threat to the system. The answer of the opposition is to revolt against the regime. The losers are most certainly people of Iran, young and old, who are about to be crushed in a vice between this two gigantic millstones.

Rafsandjani who’s role in the current revolt is appalling, nevertheless is most likely the only one who could lead the country out of the current deadlock. If you are going to drown you probably have to grab whatever you get, and Rafsandjani’s pragmatism is maybe just the right thing to pull them out. In the moment the nation of Iran does not really have any alternative.

The United States, Israel and its allies are about to raise the stakes for Iran in its nuclear stand off with the west. The New York Times has floated the prospects of tough sanctions against the nation of Iran from the Obama administration. There is talk about extreme economic sanctions by cutting off Iran’s imports of gasoline and other refined oil products. Iran imports about 40 percent of its gasoline from abroad. The sanctions could be implemented soon after Obama’s deadline to revive talks on Iran’s nuclear program ends in mid-September.

In the meantime the administration is rallying its allies behind a gasoline embargo, which is supposed to change Iran’s cost-benefit analysis according to president Obama. Congress is preparing legislation that would give the president the authority to act on extreme sanction. A bill, the Iran Refined Petroleum Sanctions Act, has already 71 sponsors a majority in the senate and is expected to pass the house as well. US lawmakers consider this bill to arm the president with sanctions authority more appropriate than authorizing the use of military force. They seemed to have learned from the Bush debacle after all.

Of course by some stretch of imagination this energy embargo scenario could also be viewed as an act of aggression not unlike war and its use of military force. Such a draconic measure is therefore not without risk. it could further destabilize an already weakened regime in Iran and change a rather benign and contained situation into uncontrollable violence and bloodshed. This will not be enough to deter the U.S. and its allies as long as the violence remains within Iran. The U.S. has certainly a long history in such ruthless endeavors.

There is also the possibility that Iran’s president Mahmoud Ahmadinejad will capitalize on tough sanctions and rally his fellow countrymen behind him. Enemy number one for most Iranians is still the U.S. and sanctions will only help to reinforce anti-American sentiment in the region. After his defeat in the first Persian Gulf War Saddam Hussein was hugely unpopular, but a decade lasting of crippling sanctions transformed him into Iraqi’s favorite leader once again.

In Iran’s nuclear standoff with the west the door is slam shut, neither the U.S. nor the theocratic leadership seem ready to compromise. The only hope to open a window of negotiations is through the pragmatic conservative Ayatollah Rafsandjani. His support for a free market domestically and his moderate position internationally brings him closer to the U.S. than any of the other Iranian clerics and in stark contrast to president Ahmadinejad. It can be assumed with absolute certainty that Rafsandjani is the main force behind the opposition movement and the current mini-revolt against Ahamdinejad and the Islamic revolution itself.

The fronts in this historic struggle for dominance are clear. Leader Khamenei and Ahmadinejad stand for the integrity of the Islamic revolution and are pitted against more moderate reformers around clerical businessman Rafsandschani and Mousavi. Initially everything seemed to fall in line with the Supreme Leader almost hastily anointing his candidate Ahmadinejad as the winner of the current election. Nobody expected the president to alienate his conservative friends by promoting Rahim Mashaie to the post of vice-president.

After Khamenei signaled his anger with this choice Ahmadinejad decided to ignore the Supreme Leader’s wish for almost a week before he finally gave in and demoted Mashaie to the post of his new chief of staff. Over the course of this row with the hard line, conservative leadership in Iran several of his ministers resigned from their posts causing a major stir among the theocratic system. His opponents immediately seized the opportunity to sense unease amongst conservatives over the disputed elections, and saw there claims of election fraud confirmed.

Some have even argued that Ahmadinejad was preparing for a coup d’état to install a military dictatorship in Iran. I think this is wrong. We have no credible evidence that the president is planning such radical action against Leader Khamenei. In his defense Ahmadinejad himself characterized his relationship with Khamenei like that of a father and son, going beyond politics and administration.

Still uncertainty remains about why would Mr. Ahamdinejad provoke his closest allies at a time when his opponents are already fiercely attacking him. The most likely explanation is, he lost his nerves. In an attempt to reach out, he wanted to include more moderate forces in his new cabinet. That did not ring through with ultraconservative, hard line members in the government. Unsure about how to resolve the current dispute with the opposition and end the threat that street protests pose to the system he charged ahead and fired some of his conservative members in the government.

Though we cannot be sure about the motives, friction between Leader Khamenei and his protégé Mr. Ahmadinejad  became apparent yesterday during the official endorsement ceremony for his second term as president.  A video shot during the procedure clearly showed how awkward the two men approached each other. In another sign of turmoil major critics of the recent election, including Mr. Rafsandjani, did not participate in the endorsement. In the meantime another influential ultraconservative cleric instructed the president to consult with parliament before naming his new ministry. Indeed Ahmadinejad seems to be marginalized in his power over the influential theocrats.

Among all the accusations and problems that have befallen the nation of Iran, Rafsandjani’s influence has gained importance but is still up against the ultraconservative Supreme Leader of Iran. We can only speculate about the outcome of this confrontation but can be fairly certain about the main actors in this drama. Although his motives are questionable moral objections have to be abandoned in favor of an end that justifies the means of ending a nuclear standoff with the west. But here is the problem. Rafsandjani who can help to end this international dispute can only do so by committing treason on the Iranian revolution and risking civil war in Iran. Today’s protestors in the streets of Tehran should be fearful to get what they wished for.

The case US justice department against UBS

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250 – 52000 – 7000.

In February Swiss bank giant UBS to settle a criminal investigation agreed to disclose 250 secret accounts from US customers. A landmark decision as it turned out because now the IRS of course wants more. The US government is finally determined to crack down on tax evaders who for decades stashed away hundreds of billions of dollars in secret foreign accounts.

UBS had originally agreed to disclose this small number of 250 on potential evidence of fraud associated with the accounts. The IRS now wants 52000 more tax evaders hiding in the vaults of the Swiss bank to pay their dues or else face the justice department.

The Swiss bank is now caught in this vice between the mighty US Department of Justice and the laws of its own country. Swiss law in an attempt to provide confidentiality forbids the bank to hand over the list of accountholders to the IRS. Government has already threatened to confiscate any Swiss document UBS would be required to hand over to US authorities. No matter what UBS seems on track to break the law. It therefore requested help from its own government to engage in direct discourse with Washington.

Judge Alan Gold, who presides over the civil law suit against UBS in the federal district court in Miami, has set  July 13 hearing on whether to enforce the “John Doe summonses”. Washington has asked the judge to postpone his decision. It looks as if Washington is up for a diplomatic solution in this case, a kind of government bailout of a legal predicament UBS and the US Department of Justice got themselves into.

But no matter what UBS seems to be on the losing end of this conflict, because as all parties involved will try their best to save face the third way will require money, lots of it. UBS will be squeezed like a lemon. In February the bank had already settled its dues by disclosing 250 secret accounts and paying $780 million to the US government. This time we are talking about 52000 accounts that would amount to 150 billion US dollar. Others expect UBS to pay a fine tantamount to a certain percentage of total taxes still owned to the US government. I think that is more realistic, but whatever it is it will hurt the bottom line of an already beleaguered balance sheet.

Swiss law allows for disclosure of otherwise secret accountholders if there is evidence of fraud associated with them. The actual number of accounts at UBS drawing increased scrutiny will be more likely closer to 7000.  These ominous 7000 are tied to offshore companies and trusts and are therefore more susceptible to fraud. Another 17000 more lucky accounts are less prone to have violated the law and are therefore save.

Judge Gold in a sign of precariousness about the situation asked Washington if they would be ready to seize UBS assets in case of an adverse verdict. It is obvious there is no legal precedence for this kind of procedure and diplomatic intervention is called for to settle this dispute between the US and Switzerland. According to Scott Michel, a lawyer who represents about 200 UBS clients in this case, a direct engagement of the White House will probably prevent the disclosure of names from account holders all together.

Once again the balance of justice is on a very very fine scale, this time by creating two classes of tax evaders. Those who violate the law and those who only bend it, the former being punished the latter going free. High finance much like high politics seem to be stuck forever in a thicket of dishonesty which begets only more dishonesty.

Written by Alfred

13. July 2009 at 5:01 pm

Is there a rift between the democratic party and the Obama administration?

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I have written about Goldman Sachs and how the investment firm contributed to the worst financial crisis since the Great Depression. Matt Taibbi alluded to GS as The Great American Bubble Machine contributing substantially to all major investment bubbles since the 1930s. GS has always been a talent hotbed where privileged alumni leave the firm through what Stieglitz calls a revolving door to end up in critical positions of government. The list of those exiting Goldman and entering the government is long, but it is clear that they are all associated with the Democratic party.

Next to this one there could be another list, one of detrimental political decisions that contributed to the current crisis. On top of it is the repeal of the Glass-Steagall-Act under former GS employee and Bill Clinton’s Treasury secretary Robert Rubin, which allowed bank holding companies to own other financial institutions and eventually become too big to fail and a systemic risk. This of course was never intended but as we painfully recognize one of those far-reaching wrong judgments made by a democratic administration. In light of this anything but impeccable track record we have to ask if democrats are truly forthcoming in their desire for real change or are they about to make another big mistake?

In November of 2008 a new spirit of political leadership in the US was finally entering into the halls of congress and the White House. President Obama has promised to bring change to Washington and the democratic party vowed to stand beside him and his ambitious agenda. In the meantime democrats together with two independents have a sound filibuster majority of 60 in the senate. They are now calling the shots in the government and the legislature. It is therefore even more disturbing to see how the House of Representatives overwhelmingly rejected a signing statement from their president.

In June a $106 billion war supplemental bill passed legislation in the House and Senate which included conditions on World Bank and IMF funding. The bill would extend a credit line of $108 billion for international financial institutions (IFI) to aid struggling developing economies crippled by the current financial and economic crisis. Major recipients of IFI funds could be nations in Eastern Europe under immense pressure to devalue their currencies in an attempt to avoid a default scenario. This would have a ripple effect and threaten the stability of the global financial system similar to events during the Asian crisis in the late 90s.

Despite severe and eventually devastating consequences to an already ailing global financial system of such a devaluation scenario, resistance is mounting among lawmakers who view IFI funding as an unnecessary ‘global bailout’ . To reach a compromise and find the votes to pass the bill House and Senate leaders included restrictions resulting in an amendment requiring the Treasury department to report on World Bank and International Monetary Fund (IMF) activities. Late Thursday the amendment passed with strong bipartisan support and an overwhelming majority of 492-2 votes against the Obama administration.

The president in a statement during signing of the original bill rejected this restrictions and vowed to ignore the amendment’s conditions. They would "interfere with my constitutional authority to conduct foreign relations (with international organizations and foreign governments)… by requiring consultation with the Congress prior to such negotiations or discussions," Obama said in the signing statement. With the passage of the amendment lawmakers including Barney Frank, a democrat and head of the powerful House Financial Services Committee (HFSC), are now threatening to withhold funds in a stand-off with the Obama administration.

492 to 2 speaks a clear language and it remains to be seen if the administration can afford to ignore congress under these conditions. Though it certainly would mean a severe blow to the authority of the president if he will be forced to revoke his signing statement. His foray into environmental politics (see also here), for the first time opening up the United States to international commitments to substantially reducing carbon emissions, could be called into question. So could his commitments he made during his Moscow speech (see also here), to the establishment of an international body together with and under the leadership of the U.S.

Much needed reform in Washington away from neoliberalism towards true and sustainable world leadership hangs on a thread. While first signs emerge of a search for an effective international body that more truthfully represents interests of all nations in a global economy, the coverage of the G-8 summit in Italy by mainstream media in the U.S. suggests otherwise.

The media are either ignoring or mocking efforts of the G-8 to increase the scope of their discussion round tables by opening it up to other powerful nations like China, Brazil, India, Mexico, South Africa and others. The NYT writes: “Eventually, the so-called Group of 8 started what might be considered auxiliary clubs. And that was how they ended up with a meeting on Thursday that was actually dubbed the G-8 + 5 + 1 + 5. Seriously.”

The Times also calls into question the relevance of the G-8 if they seemingly cannot take landmark action without enlisting others, and misses the point completely: It is not about relevance of the G-8 but rather about sustainable credibility within the G-15, G-20 or even G-194. It is not about America but rather about sustainable relations between all nations in a political and economic environment more and more intertwined by globalization. If we have learned nothing else from the current financial and economic crisis this should be it.

Leaving other nations out makes the G-8 nothing but an elite club of snobbish leaders who in a reactionary move desperately seek to conserve neoliberal, neoconservative mindset. Barak Obama, Angela Merkel, Nicolas Sarkozy and other powerful leaders understand that and therefore support this search for a new international world order. Reactionary dinosaur politicians will eventually face the same destiny. In the meantime there are still too many of them and they are still very powerful. President Obama’s stand-off with the congress on the issue of the signing statement serves as a litmus test about the determination towards change in a modernized America.

Obama’s Russia trip reveals search for true world political authority

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In the tradition of American pragmatism that seeks the meaning of truth only in those issues that relate to practical real-life consequences president Obama’s official trip to Russia is significant and can offer some insight into how and what the new world order in the twenty-first century will be like. Yesterday’s official release of the first social encyclical by Pope Benedikt XVI is another important milestone to that very same subject. The publication of the encyclical the day before political authorities from the World’s most powerful nations meet in Italy and president Obama is scheduled to meet the Pope for the first time, is testament to the daunting issues and problems that face all nations today.

President Obama’s two days in Russia were at best a mixed bag where the foundations of a lasting partnership may have been forged but the president himself admits that on divisive issues ‘a meeting of the minds won’t happen anytime soon’. Surely on issues of reducing nuclear arms and non-proliferation there was some progress but on others like Iran, NATO membership of Georgia and Ukraine, and democracy itself all efforts seem for naught.

let’s focus on the speech president Obama gave on US-Russian relations at the New Economic School graduation in Moscow. I will spare the issues of security, non proliferation and defeating violent extremism since these serve only as diversion from the real problem of global prosperity in a time of economic turmoil. That is not to say that issues like violent extremism and nuclear proliferation are not important, they certainly are, only not as important as others in the moment.

Like so many times before we could expect this president to plant the glimmer of hope into the hearts of people with the mere weapon of his words. Famous German philosopher and sociologist Jürgen Habermas once emphasized the importance of words in his main work about ‘The Theory of Communicative Action’:

“A higher degree of communicative rationality within communicative societies increases the latitude of unconstrained coordination of actions and consensual reconciliation of conflicts.”

So in this context it is worth noting that his speech was well received among young graduates who according to the president’s own words represent the future of their country and are therefore crucial in advancing US-Russian relations in the form of a global partnership. Obama called for a reset in relations between both countries to identify mutual interests and expanding dialogue and cooperation.

In front of an audience of young economists and future businessmen he stressed that economies only function within the rule of law. “People everywhere should have the right to do business or get an education without paying a bribe – that’s how people and countries will succeed in the 21st century”, Obama said.

On the issue of democratic governments the president was very forthcoming when he admitted that America should not impose any system of government on any other country, but we haven’t always done what we should have on that front. Alleging to the situation in Georgia and Ukraine, Obama emphasized the right of nations to have secure borders. “State sovereignty must be a cornerstone of international order”, he said. The question of NATO membership should be entirely up to the free will of a nation’s majority of its people. “NATO should be seeking collaboration with Russia, not confrontation.”

In his speech the president recognizes that no one nation alone can meet the challenges of the 21st century. It is therefore important to have an international system where all nations can pursue their interests peacefully.

President Obama: “…..a system where the universal rights of human beings are respected, and violations of those rights are opposed; a system where we hold ourselves to the same standards that we apply to other nations, with clear rights and responsibilities for all.”

Of course the president does not identify the specifics of such an international system but it is significant that he acknowledges the importance and necessity of it. One day before the world’s greatest nations gather in Italy it becomes increasingly obvious, the neoliberal movement in the US is broken. The economic crisis that is tormenting the global economy has forced the neo-conservative agenda to its knees. That’s the yin and yang of our political system: We get change for the better only if bad things happen first.

German philosopher and sociologist Habermas urgently advocated need for change a long time ago. In an interview with the newspaper Die Zeit in November last year, he acknowledged the demise of neoliberalism with far reaching consequences and at the same time encouraged engagement in an new world order. To fix what is broken the United Nations in its current form are according to Habermas not suitable enough. His great hope for a new revolutionary World domestic policy still remained the US, as the only liberal superpower left. Though for the US to lead this epochal effort and to take this chance of reason it would be necessary according to Habermas to thoroughly revise its neoconservative agenda.

Pope Benedikt XVI in his first social encyclical, Caritas in veritate, also stresses the importance of a true world political authority based on the rule of law and the principles of subsidiarity and solidarity. He calls for a reform of the United Nations Organizations, economic institutions and international finance to avoid a deterioration of the present crisis, to bring about disarmament, food security and peace, to protect the environment and to regulate migration.

From the encyclical:“The integral development of peoples and international cooperation require the establishment of a greater degree of international ordering, marked by subsidiarity, for the management of globalization. They also require the construction of a social order that at last conforms to the moral order, to the interconnection between moral and social spheres, and to the link between politics and the economic and civil spheres, as envisaged by the Charter of the United Nations.”

In today’s world of social and economic interconnections where borders and strict nationalism are increasingly counterproductive Pope Benedict, Jürgen Habermas and Barak Obama recognize the new challenges in the 21st century. The economic crisis that has spread to all nations is demanding a comprehensive readjustment of our common values. The answer we get from Pope Benedict’s encyclical is already in the title. Salvation, rescue and maybe even survival of mankind depends on it, a new felt devotion and passion towards honesty. Caritas in veritate- Charity in truth – would have prevented financial shenanigans from carelessly toying with the livelihood of millions. As Pope Benedict says in his encyclical there is nothing wrong with capitalism, there is nothing wrong with the desire of people to improve themselves, but it must not happen without charity in truth. It is urgent that our political leaders take notice. President Obama seems to understand, others may hopefully follow when they have the chance to read the Pope’s encyclical. It would be great if they do so before they gather at a meeting of the G8 and G20 this weekend.

Madoff, Valerie Plame and the Magna Carter

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image John of England signs "Articles of the Barons" on June 15, 1215

By the early thirteen century King John of England had become a very powerful and influential monarch in Europe. His empire stretched from the British Islands to the Normandy on the European continent. After his coronation King John increasingly became unpopular and lost support of his barons. At first King Phillip of France confiscated his land in the Normandy, later John’s policies of high taxes resulted in a revolt against him. On June 15, 1215 mighty King John was forced to sign the “Articles of the Barons”. This document later became known as the Magna Carta. Clause 61 of the original Magna Carter established a group of 25 barons who could on occasion and any time overrule the King’s will.

The Magna Carter became the first legal document binding the King to the rule of law, to proclaim certain rights to his citizens and to respect certain legal procedures. It therefore endured history to serve as legal foundation for the constitution of modern democratic states. Of course in this form of government people are the sovereign and not the ruling authorities.

The importance of signing the Magna Carter can not be emphasized enough in that it lay the foundation to control those in power by threatening to hold them responsible for their actions. In the early thirteen’s century that was certainly something out of the ordinary. Today we take it as granted that our governments are entirely based on the rule of law with its twin pillars of public and private law.

It applies to everybody including and in particular to those in power. One example how merciless the law punishes those who break it came to an end this week, when disgraced 71-year-old Wall Street Tycoon Berni Madoff faced judgment day. To atone for his crime of extensive fraud the judge sentenced him to 150 years imprisonment. This was the harshest sentence for any white-collar crime ever committed.

For decades money manager Madoff run a secretive investment fund on Wall Street which year after year promised returns of ten percent or more. When in the fall of 2008 the crisis on Wall Street reached its climax he confessed to his sons that his investment scheme was ‘all just one big lie’. They notified the SEC and Madoff pleaded guilty on security fraud in March of this year.

In a typical Ponzi-scheme Madoff, the investor with a Midas touch, simple used fresh funds to pay out non-realized gains on existing investments. By doing so he swindled investors out of more than $13 billion. Of course he claims that nobody else knew about it but this is hard to believe since this elaborate scheme was going on for too long and was too big to just exist in total obscurity.

The Security and Exchange Commission (SEC), under heavy fire itself, brushed off a whistle blower several times, who alleged to the agency that Madoff’s investment fund was a Ponzi scheme. The SEC charged ten more suspects in the Madoff fraud, and would not say who else faces charges, family members or others, because the investigation is ongoing. In the meantime the scandal became so toxic it reached even into the far corners of Europe, where a fund manager was charged with receiving more than $40 million in kickbacks to funnel billions of dollars to Madoff’s investments.

It certainly has something of a King John moment, when we finally realize that the rule of law applies to everybody. But does it really? In judicial lingo a civil law suit against Madoff would fall into the category of private law, which deals with the relationships between individuals or groups without the intervention of state or government. Public law on the other hand strives to coordinate the relationship of private individuals (private citizens or companies) with their state or government. Constitutional law is a  prominent subdivision of public law. So truly the Magna Carter is the ancient parent of modern public law and of our constitution.

On Tuesday, June 23 2009 the Supreme Court of the United States refused to hear a civil lawsuit filed by Valerie Plame Wilson and her husband, former Ambassador Joseph Wilson, to apply the rule of law to several officials of the Bush administration. The supreme court declined to set a precedent and allow the case to move forward.

In June and July of 2003 senior Bush administration officials disclosed Plame’s identity to the public, who at the time was working as an undercover CIA agent. They did so by leaking her name and employment to Robert Novak, who worked as a Times magazine columnist, which effectively revealed Mrs. Plame’s identity and destroyed her career.

A criminal probe and federal investigation into the identity of the leakers was central to allegations of abuse of power by the White House. A 70 minute interrogation of president Bush by special prosecutor Patrick Fitzgerald featured prominently in the Bush administration’s first term in office. Vice-president Cheney and several other high level officials had also been interrogated in that matter. 

What Fitzgerald’s investigation came up with was basically that Plame and her husband Joseph Wilson were being punished by White House officials for claiming the administration had manipulated prewar Iraq intelligence. When Wilson came back from his ambassadorial mission to Niger and revealed that the famous yellow cake’ documents were forgeries he embarrassed and undermined the administration’s efforts to go to war with Iraq. Something that could not be tolerated and therefore required swift punishment. Undercover CIA agent Valerie Plame’s name had to be revealed and her career destroyed.

To apply the rule of law the Wilson’s sued Dick Cheney, Karl Rove, Cheney’s ex-chief of staff Lewis "Scooter" Libby, and former Deputy Secretary of State Richard Armitage for violating their civil rights. Only Libby was convicted of obstruction of justice and sentenced to 30 months in prison. Bush later commuted the sentence and Libby never served a minute jail time.

The Wilsons still determined to apply the rule of law continued their fight by filing a civil suit, and again were rejected under the claim that government officials had the right to rebut criticism. The blow of the CIA cover was simply a causality of Wilson’s criticism of the administration argued the courts. The supreme court now refusing to proceed leaves the Wilsons without recourse and closes the three year old case.

Melanie Sloan, Wilsons’ attorney: “The Wilsons and their counsel are disappointed by the Supreme Court’s refusal to hear the case, but more significantly, this is a setback for our democracy," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, an attorney representing the Wilsons. "This decision means that government officials can abuse their power for political purposes without fear of repercussion. Private citizens like the Wilsons, who see their careers destroyed and their lives placed in jeopardy by administration officials seeking to score political points and silence opposition, have no recourse."

In many ways the court’s decision in this case runs counter and abolishes what the Magna Carter has achieved in almost 800 years. It seems that some are indeed above the law and not bound by it. Certainly what King John’s barons intended with their articles is called into question when the Supreme Court as the ultimate leveler in our courts refuses to apply the rule of law to all of us. By not going forward and being resolved properly this case indeed serves a terrible precedence: Criticism of the government will not be tolerated and may result in severe punishment. Even though there is some judicial scope left this does not necessarily mean final judgment for those in power. Valerie Plame’s case reveals an issue of privilege for those who are too powerful even for the courts. It reveals that our political system is still wrenched with imperfections and as a sign of our times foreshadows worse things yet to come. Madoff’s harsh sentence does not make me fell any better, when ultimately our political system and the rule of law does not sufficiently distinguish itself from rough regimes similar to those we like to criticize.

California’s budget crisis – Arnie this ain’t Hollywood

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‘I’ll be back’ Arnold Schwarzenegger’s famous movie quote will not scare California’s legislature. These days the governor of California is fighting with lawmakers in Sacramento over how to close the state’s staggering budget gap.

There is no agreement yet on how to balance the $26.3 billion deficit for 2009 although the new fiscal year started on Wednesday. Schwarzenegger has promised to not back down and not push the crisis down the road – the road stops here.

Where the legislature can agree on is that there is fundamental disagreement on how to solve the fiscal problems in California. The governor and his republican peers want deep spending cuts which would terminate social programs and threaten the needy. The democrats, who control the legislature, want to balance the budget by increasing taxes. This impasse has forced Schwarzenegger to declare fiscal emergency.

The White House has refused to offer any help but promised to keep a close eye on the situation. Now the State is preparing to issue short term debt in the form of IOU’s. Bank of America has already agreed to accept IOU’s through July 10. They will go out to those who receive state aid, like the elderly, disabled and college students. This month California plans to issue $3.36 billion to help make its most urgent payments.

A lot is at stake here. California’s income has plunged to a record low during the current economic crisis. Without a credible budget the Golden State may suffer investor confidence. Fitch has already downgraded California’s GOs by one notch to A-minus, the lowest for any US state. Standard & Poor’s has affirmed its A rating but kept it on credit watch with negative implications.

"Should the current impasse over a budget revision remain unresolved long enough that the state’s cash management actions no longer are sufficient to effectively insulate its priority payments — including debt service — the state’s GO rating will likely be lowered, possibly to below ‘A-‘," S&P said.

This is not only California’s problem. Today there are 30 states in the US starting their fiscal year without a budget. Many states will have to raise taxes and probably cut spending deeply if they have not already done so. For 2010 total budget shortfall of all 50 states is projected to be $166 billion, for 2011 its $180 billion. This of course is to be seen relative to other countries. In fiscal 2010 Germany, the world’s fourth largest economy, foresees in its official budget 86.1 billion euro of new borrowing which could balloon over 100 billion if further economic stimulus is needed. The debate about major tax hikes has already started.

State-by-state budget shortfall – interactive map:


Written by Alfred

2. July 2009 at 9:41 am

The new Bunch – climate change bill passes House

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Obama Democrats

I recently argued in What change – one step forward two steps back that when it comes to foreign policy the Obama administration lacks their long touted claims for change and yes we can. But I am willing to give Obama credit when it comes to making important progress on environmental policies. The bill passed by the House of Representatives on Friday can be viewed as a significant change and setback for neoliberal neoconservative forces in Washington.

After many years of stonewalling international efforts to fight climate change politicians in Washington demonstrated that change is indeed possible. Friday evening a much anticipated roll call on the floor of the House of Representatives succeeded with a narrow margin of 219 to 212 votes. This historic climate and energy legislation is a significant win for House Speaker Nancy Pelosi, a democrat from California, and president Barack Obama.

Of course this vote is only the first step to a final legislation finding its way to Obama’s desk. It is now up to the Senate to take the bill to the next level. This might be more challenging than Friday’s vote. Already Forty-four democrats voted against the bill and just eight republicans crossed the aisle to support it. In the Senate the margin of the vote for democrats is certainly smaller.

Some freshman democrats, who’s vote is up again in 2010, had to be protected by their older peers. Nevertheless a day long effort by leading democrats in the House of Representatives and outside obviously helped to secure the necessary votes. It is no secrete that republicans in general consider this bill unpopular among ordinary Americans and blast it as economic catastrophe . In an immediate reaction the National Republican Congressional Committee in a press release therefore accused more than two dozen democrats to support a bill that would cost jobs and raise electricity prices for already recession plagued consumers.

“This is the biggest job killing bill that’s ever been on the floor of the House of Representatives. Right here, this bill, said House Minority Leader John Boehner. And I don’t think that’s what the American people want.”

Old-America versus new-America is the struggle that is heating up since the Obama administration moved into the White House. The old neoconservative, neoliberal leadership is wearing down and a new modern America emerges with a renewal to the claim for World-leadership. The world is ready to say to America: If you just unite us we are ready to follow.

There is of course a long way to go but this bill is certainly a step in the right direction. The main sponsors were House Energy and Commerce committee chairman Henry Waxman (D-Ca.) and Massachusetts Rep. Edward Markey (D). Together Speaker Nancy Pelosi, former vice president Al Gore, the don of the climate-change world, and significant efforts from the White House helped to push it through.

“We passed transformational legislation which takes us into the future, Pelosi said at a press conference following the vote, after she and other leaders took congratulatory phone calls from Obama, former Vice President Al Gore and Senate Majority Leader Harry Reid.”

The final legislation will help to cut greenhouse gas emissions by 17 percent by 2020 and 83 percent by 2050. It will do so by putting a price on carbon dioxide emissions through a cap-and–trade system. It will help to increase energy efficiency and mandate a 20 percent renewable energy contribution by 2020. According to democrats it will, increase electricity prices for consumers only by $175 a year per household by 2020, much less than the $3000 price hike predicted by republicans.

More proof for democrats’ commitment to change in environmental policies came also on Friday with a $32.3 billion natural resources budget bill clearing the House. Additional funds will be used to increase Energy Protection Agency core programs in clean-water projects and Superfund toxic-waste cleanups. Unlike the climate-change vote this call, 261 to 179, was more decisive. Most republicans of course rejected the bill and argued that increasing EPA funds by almost 40 percent is simply irresponsible with the economy contracting. Funny I am sure they did not oppose the spending-on-the-troops part of a $106 billion war-funding bill that passed the House on June 16. Democrats argued that additional funding for EPA is only making up for years of real reductions under George W.

Written by Alfred

27. June 2009 at 11:10 am