My namesake: French Minister Pasqua implicated in Oil-for-Food

Pasqua is a former Minister of the interior of France (in 1986-88 and 1993-95). He has been involved in a number of shady stories in France in the past 30 years (I have lost count of the number of times he has been indicted) but he has not been sentenced for anything (yet).

He has long being a supporter of Saddam Hussein and has been prominently cited, like Galloway, as one of the high-profile presumed beneficiaries of Saddam’s money under the Oil-for-food programme abuses. He has denied this, but the big news in this afternoon’s Le Monde is that one of his closest advisors, Bernard Guillet, has apparently confirmed to a French judge that he acted for Pasqua in attempts to get funds from the Iraqi regime.

Quotes and translation below; as some of you may have seen from my e-mail, Guillet is my own family name but, as far as I know, I have no relation to this guy… (there is also another Guillet in Pasqua’s entourage, Jean-Jacques Guillet, a former member of parliament, also involved in the shady stuff, and also not a family member…) Talk about embarrassment!

L’Irak voulait récompenser M. Pasqua en barils de pétrole

Iraq wanted to reward Mr Pasqua with oil (all translations mine)

Le volet français de l’affaire Pétrole contre nourriture  (où des personnalités sont soupçonnées d’avoir bénéficié de fonds occultes du régime de Saddam Hussein)  menace désormais directement Charles Pasqua. Contre toute attente, la position de l’ancien ministre de l’intérieur, qui conteste toute implication dans cette affaire, a été ébranlée par l’un de ses proches, Bernard Guillet.

The French side of the Oil-for food scandal (whereby personalities are suspected of having received illegal funds from Saddam Hussein’s regime) now threatens Charles Pasque directly. In a surprise twist, the defense of the former interior minister, who denies any implication, has been severely weakened by one of his close associates, Bernard Guillet

(…)

Proche du régime baasiste, M. Guillet a confirmé avoir été en relation, à la fin des années 1990, avec les dirigeants de la SOMO. A la question : “Vous a-t-on dit, à la SOMO, que Saddam Hussein souhaitait octroyer une allocation de pétrole à M. Pasqua ?” , M. Guillet a répondu : “Oui, on me l’a dit. J’avais eu l’information de Tarek Aziz -ancien vice-premier ministre irakien- et, ensuite, il m’a dit qu’il fallait que j’aille voir les représentants de la SOMO car ils allaient m’expliquer comment tout cela allait fonctionner.”

Close to the baathist regime, Mr Guillet confirmed that he had been in contact, at the end of the 90s, with the leaders of SOMO [the Iraqi company which had the authority to export oil]. To the question “Were you told, at SOMO, that saddam Hussein wanted to allocate oil to Mr Pasqua?”, Mr Guillet replied “Yes, I was told that. I had first received the information from Tariq Aziz – the former vice-Prime Minister of Iraq – and then he told me to go see SOMO representatives who would explain to me how all this would work”

(…)

M. Guillet dit avoir rencontré plusieurs responsables de la SOMO, dont son directeur général, Kadhim Razouki. “D’entrée, ils m’ont dit qu’ils étaient contents de m’annoncer qu’ils avaient un projet de contrat, et je ne me souviens pas si c’étaient 2, 3 ou 4 millions de barils destinés à Pasqua. Ils m’ont bien confirmé que c’était pour Charles Pasqua. (…) C’est là qu’ils m’ont dit que pour que ça fonctionne, il fallait trouver une société pétrolière française ou européenne. Je leur ai dit que si ça passait par une société française ou européenne, cela entraînerait un scandale politique car je ne voyais pas comment un homme politique pouvait percevoir des barils de pétrole.” M. Guillet assure avoir rendu compte de l’entretien à la SOMO à M. Aziz “en lui disant qu’il était impossible de mettre en oeuvre un tel système, même si on était sensible au geste que le président Hussein tendait en faveur de M. Pasqua” .

Mr Guillet says he met several SOMO managers, including his general director, Kadhim Razouki. “From the start, they told me thay were happy to tell me that they had a contract draft, and I don’t remember if it was 2, 3 or 4 million barrels for Mr Pasqua. They did confirm it was for Pasqua. (…) That’s where they told me that a French or European oil company was required. That’s where I told them that in that case, it would create a politicla scandal and I did not see how a politician could receive oil. ” Mr Guillet asserts that he then informed Mr Aziz of his conversation with SOMO “telling him that it was impossible to put in place such a system, even if we appreciated the gesture by President Hussein in favor of Mr Pasqua”.

(…)

Les déclarations de M. Guillet donnent du crédit aux documents recueillis par M. Courroye auprès de la commission Volcker. Ainsi, une note du 17 juin 1999 adressée par M. Razouki au ministre du pétrole irakien indiquait : “Le président (que Dieu le protège) a approuvé l’attribution de 2 millions de barils à la personnalité française Charles Pasqua. La personnalité française Bernard Guillet nous a rendu visite ce matin au nom de Charles Pasqua et nous a demandé d’envoyer le contrat pétrolier à la société suisse Genmar pour le faire signer (…). Nous avons demandé à M. Guillet une lettre de la part de M. Pasqua par laquelle il désigne la société Genmar pour lever le pétrole brut. Il a refusé en expliquant qu’ils ne peuvent pas faire ainsi par peur de scandales politiques.” Une autre missive, du 20 juin 1999, adressée par la SOMO au ministre du pétrole, précisait : “La société suisse Genmar est la société désignée par M. Pasqua pour lever la quantité qui lui est allouée pour la sixième phase.” Sollicité mardi 17 mai, M. Pasqua n’a pu être joint. M. Guillet n’a pas souhaité s’exprimer.

Mr Guillets declarations give credit to documents that Judge Courroye [the French investigative magistrate in charge of that file] has received from the Volcker commission. One note, dated 17 June 199 from Mr Razouki to the Iraqi oil minister says “The President approuves the allocation of 2 million barrels to French personality Pasqua. French personality Guillet has visited us today on behalf of Pasqua and asked us to send the oil contract to Swiss company Genlar for signature. (…) We asked Mr Guillet for a letter form Pasque designating Genmar. He refused, explaining that they could not do so for fear of political scandal”. another, dated 20 June 1999, addressed by SOMO to the oil minister, adds: “Swiss company Genmar is the xompany designated by Mr Pasqua for the quantity allocated to him in the sixth phase. Both Mr Pasqua or Guillet refuse to provide any comment for this article.

Like I wrote above, Pasqua is one of the most picturesque caracters in French politics. He was in the Resistance during WWII, and was involved in the 60s and 70s in Gaullist paramilitary/vigilante groups, the SAC, active during the May 1968 events. He worked for a while as commericla director for Ricard, the famous anis drink which is a symbol of the leisurely life in Southern france (and he has the appropriate Marseille accent) He has supported Chirac since the late 70s and was his interior minister in 1986-88 (he famously said that he would “terrorise the terrorists” after the first big wave of islamist bobmbings in paris in 1986), and generally in charge of “parallel political organisation”. In 1995, he supported the other right wing candidate, Edouard Balladur, for the Presidential election, against Chirac, and he has been targeted  by Chirac for this betrayal ever since. He has always been a partisan of a pretty reactionary, hard right policy, a nationalist and a populist

So Pasqua is not someone that we should worry too much about defending on this site. His politics are totally opposed to everything dKos stands for, his methods have always been those of backroom deals, political police and blackmail, oiled by a lot of cash. He was an ally of Chirac for a while, but not since Chirac has been President, so it is actually pretty difficult to associate him in any meaningful way to French policy on Iraq since 1995.

Personally, I’d be happy to see him caught up with this. Some French elites (especially amongst the Gaullists and nationalists, including of the left, who saw him as an exemple of a rational, secular, paternalist State not unlike the French one of old times) were horribly complacent with Saddam Hussein and it has been a shame. But hey, Iraq was our ally, back then…

US left behind in world women’s rights ranking

This came out yesterday, but I don’t think I have seen any reference to it. It’s a new study by a think tank, so it should be treated with all the requisite care, but it IS making headlines, such as the one used for the title of this diary, in the Financial Times

Worl Economic Forum

The World Economic Forum is releasing today the first ever study that attempts to quantify the size of the “gender gap” in 58 countries.

Entitled Women’s Empowerment: Measuring the Global Gender Gap, the report measures the size of the gap between women and men in five critical areas based on UNIFEM’s (United Nations Development Fund for Women) findings of global patterns of inequality between men and women:

  1. economic participation – equal remuneration for equal work;
  2. economic opportunity – access to the labour market that is not restricted to low-paid, unskilled jobs;
  3. political empowerment – representation of women in decision-making structures;
  4. educational attainment – access to education;
  5. health and well-being – access to reproductive healthcare.

The United States (17) lags behind many Western European nations in addition to falling behind New Zealand (6), Canada (7) and Australia (10). It performs particularly well on educational attainment (8) and slightly less so on economic participation and political empowerment.

However, it ranks poorly on the specific dimensions of economic opportunity and health and well-being, compromised by meagre maternity leave, the lack of maternity leave benefits and limited government-provided childcare. Moreover, its health and well-being rank is brought down, in comparison with other developed nations, by the large number of adolescents bearing children, and by a relatively high maternal mortality ratio – especially given the high number of physicians available.

The specific rankings are never very relevant, but the general area where you are does have value (it’s not surprising to see Scandinavia near the top and Egypt near the bottom). I am most surprised by the rankings of Germany (too high?) and Switzerland (too low?) and would appreciate comments from local bootribers.

I’d say that a criteria about how easy it is for women to combine work and childcare is missing, but hey, what do I know?!

Khodorkhovski found guilty. Yukos = Enron?

Khodorkovsky guilty of fraud and tax charges

A Moscow court on Monday found Mikhail Khodorkovsky, formerly Russia’s richest man and founder of the Yukos oil company, guilty of fraud and tax evasion. The judge has passed a guilty verdict in four out of a possible seven charges, the hearing was adjourned until Tuesday.

The long-awaited judgment in the case of Mr Khodorkovsky, has been the most closely followed legal action in Russia since the trials of Soviet dissidents in the 1970s.

(…)

Chris Weafer, chief strategist at Alfa Bank, said the government and Mr Putin had recently been attempting to portray the case as “Russia’s Enron”, thus shifting perceptions it was an attack on Russia’s oligarchs or big business.

Please, let’s not fall for the “the-Russians-put-their-fraudsters-in-jail-Bushco-doesn’t” line, it could not be further form the truth.
Putting Khodorkhovski in jail has little to do with fraud and everything to do with politics:

  • he was challenging the Kremlin’s foreign policy by trying to promote his own, private, export routes for oil, such as a pipeline to China (Angarsk-Daqing) or a new pipleine mooted for exports to the US (going to Murmansk);
  • he was actively financing the only opposition groups, such as Yabloko (the closest thing to social-democrats in the Russian context, adn the only party with serious policy proposals) and the Communists (as the only real opposition force to the Kremlin);
  • by engineering the Yukos-Sibneft merger, he was creating a too-big-to-fail behemoth which could have allowed him to further increase his political power from an unassailable position (and virtually limitless funding).

While his politics were obviously self-interested (limiting taxation on his oil revenues), and his coming to fortune initially pretty murky (like all the Russian fortunes of the 90s, it was built on the appropriation on the cheap of State assets and constant piggybacking on State money or access), he was the only one of the so called “oligarchs” who was arguing for more democracy, respect of rights and the rule of law. Quite cynically, but not incorrectly in my view, he said that the rule of law, while granting him the full ownership of his own ill-acquired empire, would be beneficial to Russians as a whole, and was necessary to economic growth. The alternative would be to have another set of thieves or oligarchs replace the existing ones in an endless round of corruption to the detriment of the Russian population.

The fact that Bushco is now turning its back at Putin reflects their belated realisation that Putin, contrary to what many (naively) thought, was not going to bring any democracy of market economics to Russia. His attack on oligarchs was not a “cleaning up” move to reestablish the authority of the State and the rule of law, but a simple way to transfer Khodorkhovski’s wealth to a new group of cronies. They should be blamed for taking so long to note something that should have been expected, given Russia’s history in that respect (see that article I wrote in 2003 on that topic, initially published in the Wall Street Journal).

They were blinded by Khodorkhovski’s skillful promotion of Russia as a reliable supplier in the oil& gas business, which was initially backed by Putin’s decision to cooperate with the US after 9/11 and to appear as a stable partner in general. When Putin’s policies started to deviate from full submission to the White House’s goals (viz. Iraq, Iran, in Georgia or elsewhere), the Yukos/Khodorkhovski affaire was used as a pretext to bash Putin.

Which brings us back to Enron:

  • Enron was a case of a businessman who had effectively bought top politicians and expected that this allowed him to keep on going with ever crazier shenanigans and outright fraud without consequences. Enron’s bosses were  subversient to the politicians, useful for their money, and given favorable laws in return, but they were expandable, and they were duly “expended” when they became liabilities. The Justice system did its work and fraud was uncovered and more or less punished.
  • Khodorkhovski is the case of a businessman who was a force of its own, fighting it out with the politicians for the resources of the country, taking a politically independent view and fighting for that view as much as for his company. He was not expandable to the politicians, he was the enemy. He was “expanded” but it took a lot of effort and pain to take him out of the game. “Fraud” was conveniently extracted from the recent past when not a single business transaction in the country was legal, and nobody in its right mind will say that the Justice system did naything but a politically motivated hunt.
  • Enron was a loss making company that used fraud to hide its losses, and destroyed value for everybody: shareholders, workers and costumers;
  • Khodorkovski used fraud and all the other ways then prevalent in Russia in the nineties to grab some assets, but he made them valuable. When people note that he owned a 50 billion dollar company (at its peak value) that he purchased for only 150 million dollars in rigged transactions in 1996, they forget to mention that the company was still worth only a few hundred million dollars in 1999, and that it was his decision to bring in Western financial and engineering know how, to open up the accounts of the company and to pay generous dividends that attracted investors and created value (higher oil prices also helped, obviously). He did have a real positive impact on his company, once it was his, and on the whole industry in Russia.

Now, the irony is, of course, that Khodorkhovski will spend several years in jail – which is the best thing that can happen to his political career, as the image of his politically motivated jail time is the best way to tune out his previous (rightly deserved) image as robber baron and thief of the wealth of the Russian people. I expect that he took a conscious decision to go to jail (I know that he was offered a nice chunk of money and a golden exile to give up Yukos without fighting – and he refused) and that he will emerge as one of the most serious contenders for the Russian Presidency in 2012 or 2016. Of course, a lot can happen in the meantime.

Waste is Patriotic

US tries to staunch wasteful flow of anti-terror funds

Glenville is unlikely to figure high on any list of potential terrorist targets.

The small town in south-east Georgia is little more than a ramshackle collection of one-storey wooden homes and whitewashed churches, surrounded by miles of farmland. Yet, beside a road junction outside the town stands a large billboard advertising a government website that informs people how to prepare for a terrorist attack.

The image illustrates one of the most striking features of the US response to the events of September 11: that much of the government money to protect against future attacks is being spent in places foreign terrorists would have trouble even finding.

It’s time for action:

The House of Representatives is set to vote on Thursday on legislation that would require homeland security funds to be spent mainly where the risk of terrorist attack is deemed highest. If it succeeds, it would be the first step in rolling back a pattern of waste that has been egregious even by Washington standards.

The homeland security department’s inspector-general reported earlier this year, for instance, that while $560m had been granted to improve the security of US seaports, much of the money had gone to projects that had little effect.

(…)

In all, the report found that almost half the grants went for projects deemed marginal or unimportant by government reviewers.

(…)

Much of the problem has been due to the way in which Congress allocated the funds in the months after September 11. Under the influence of politicians from rural districts eager to get their share of the new windfall in homeland security spending, the 2001 Patriot Act guaranteed that each state would receive minimum shares regardless of its location or population.

This sounds pretty typical of the Bush motus operandi: take advantage of events to do things that appear to be related to these events, and use it instead to divert government funds towards favored constituencies without any consideration whether this is in any way useful. Make Blue States pay for (unnecessary) subsidies to Red states. And label people “unpatriotic” if they dare complain about the use of funds for “Homeland Security”.

The same happened with the pork-laden “Leave No Lobbyist Behind” Energy Bill, and the same is happening with the Iraqi “reconstruction” funds.

Money – vast amounts of money, amounting in tens of billions of dollars – are spent in useless and unaccountable ways, they always seem to go pretty directly to the corporates that have funded Bushco’s campaigns and their owners, and they are not even funded, as they are paid for by a massive increase in US federal debt (while programmes like Medicaid are cut).

This is the biggest robbery of all times. Several hundred billion dollars over a few years, directly from future taxpayers’ money to private pockets – with no measurable impact for society as a whole.

Possibly the only silver lining is that the people who are currently trying to tighten the Patriot Act (Christopher Cox, a Republican who represents a Los Angeles area district, has used his post as chairman of the House homeland security committee to highlight much of the waste; Susan Collins, R-Maine, in the Senate) are Republicans. Can they be pulled away from the fiscal madness of Bushco? Or are they just trying to bring pork back home?

Waste, graft, corruption. Where’s the accountability? Where’s the fiscal responsibility? Where’s the decency?

Why has 9/11 become a “windfall” for Bushco and Republicans? How did that happen?

France Votes on EU Constitution (IV). Democracy in Action.

I realise that’s it been almost a full month since my previous diary on that topic, but as the debates have been mostly focused on domestic issues and dominated by unknown (to most of you guys) local politicians, I did not really find an easy way to convey these to you without giving too many boring details on mundane French stuff.

The main thing in the past month is that the campaign has become a lot more serious and pervasive. It is one of the main topics of the news every day, and it is the main political topic every day, and a lot of good debate is taking place. Many opinions are provided on both sides, many of the real issues are raised and argued, so it has become a real exercise in democracy on a very fundamental topic, which is a good thing.

Obviously, not all the discussions are about the Constitution itself (despite the efforts of the partisans of the “yes” vote), and a lot is about (i) whether we like Europe as it is today (ii) whether the constitution itself is democratic and (iii) the current economic and social situation of France and the general discontent with Chirac and his government.

See previous diaries here:

EU Constitution – France Votes. (Diary III). What if it’s No?

European Constitution – France votes soon. Diary II

France Votes on EU Constitution (I)

1. Whither Europe?

(i) is a fairly natural side debate. A significant theme in all the talking about the Constitution is whether it is possible to be in favor of the “no” and still be “for” Europe. Almost all opponents of the constitution say that they are pro-Europe, and that they only want a “better” Europe.
In the case of the Sovereignists (those that favor the full sovereignty of the French State and want to reduce the power of “Brussels”, mostly on the hard right, but with a strong streak on the hard left as well) they have a fairly consistent position, i.e. that Europe has been given too many powers, taken away from the States, that this Constitution makes these explicit and irreversible, and should thus be opposed to have a try at a more limited “Union of Sovereign Nation-States” with limited powers. These are fairly explicitly opposed to Europe as it exists today, but still have a positive view for a different kind of “Europe”.
The big chunk of the Left which is opposed to the Constitution describes itself as strongly pro-European, but they claim that this Constitutional is too libéral (in the French meaning of that word, which, while also a political insult, means the opposite of what it means in the US – here it means  reagan/thatcher style laissez-faire policies) and that it is a betrayal of a Europe which is supposed to defend workers and social rights against unfettered capitalism. This group says that the Constitution formalises a weak Europe which will have no power to impose pan-European social rights, regulation, minimum tax levels, etc… but will be able to impose free trade, “race to the bottom” tax rates, unrestricted offshoring to the new Central European countries. For a round up of this position, see this counterpunch article.

The partisans of the “oui” say that it is unrealistic to expect people outside France to interpret a “no” vote as anything but France turning its back to Europe, and that it is totally unrealistic to expect others to renegotiate the Constitution after it’s been rejected by the French (and how should it be renegotiated – in a more sovereignist way or in a more social way?).
They also say that the “non” supporters provide arguments in bad faith and are trying to scare people off by claiming things that are simply not true (or claiming things that are true, but will remain true whether the Constitution is voted or not, i.e. are not linked to this vote).

As I’ve said before, I am strongly in favor of the “oui”, so bias may show, but I have tried to present arguments from both sides as fairly as I could.

As a partisan of the “oui”, I see two legitimate arguments for the non:

 <u>the sovereignist position</u&gt.
While I disagree with it, I can understand it. Sovereignty and democracy happen at the national level, and not wanting to transfer more and more power to supranational “Brussels” is a legitimate position, and voting “non” to this Constitution (which, in itself, does not really transfer more powers to Brussels, but makes explicit many of the powers that have previously been transferred over the years) makes sense in that context. I don’t really have arguments against this, as this a real political difference. Europe is a place where you have more power in general (to organise things on a continent wide scale, to talk with one voice on many topics, to coordinate issues that cannot be solved locally) but at the price of diluting your own power within that organisation. Whether you agree or not to sacrifice your autonomy for potentially higher collective efficiency is a real gap that cannot be bridged.

2. Is the Constitution Democratic?

<u>the “democratic” argument.</u&gt
 Those on the “non” side have a point when they say that they are unhappy because one of the main arguments of the “oui” is “vote yes – or it will be chaos and it will kill the European idea”. They say that if it is a bad document, it should be voted down, and that vote should not be seen as a vote against Europe, but as a vote against that document and its specific content. Threatening the “non” voters of chaos is a highly undemocratic position and by refusing to acknowledge that the document can be improved, the “oui” camp shows its true technocratic, elitist and anti-democratic face, and they show that they don’t have real arguments for the document.

See for instance:

Non, pour la démocratie (“No, for democracy”, by Vincent Fournier, a university profssor,  in French, and strangely already behind subscription wall)

Etienne Chouard (a law professor arguing that the EU Constitution does not fulfill the basic requirements of a constitution)

I admit that this is a real argument, to which I have the following replies:

  • it is not true that this is not a democratic document. It was prepared by an assembly representing all legitimate sources of power in Europe: the European Commission, the European Parliament, each national Government and each national Parliament (including these of the Central European countries, which were not even members when this took place). This assembly debated in public (translated in all languages) and the resulting compromise reflected the various positions across Europe, between the federalists and the sovereigntists, the big countries and the small countries, the left and the right. The compromise pretty much reflects what all people in Europe can agree to as basic rules to work and live together, on the basis of what already existed. It was democratic, it was legitimate, and it was public – and it was then approved by a unanimous decision of the European Council of Heads of States.
  • this is a compromise between many contradictory requirements (build on what exists, accomodate new members,  but make it simpler, more efficient and more transparent); it is also an hybrid document- despite being a Constitution, it only regulates a small portion of European powers, as countries will still exist and keep their sovereignty; it only applies to certain fields of action (those that have been delegated by the countries) and not to others, and thus general constitutional theories are difficult to apply to it.

Political power has tended to measure in the number and size of countries, and express itself in coalitions of countries, and not on the basis of ideological differences (although these are sometimes reflected in the composition of the governments representing each country); it is simply an unprecedented thing to mix left-right – or other relevant distinctions – political fight on issues on a continental basis simultaneously with the country to country negotiations typical of international organisations. The compromise that has been reached was made in the most legitimate and logical way in that context, and it is hard to see anything else better or even different come out of what will have to be a similarly messy process. If you don’t like the process, then come upfront with it and mark yourself as a sovereignist. If you don’t like the result, who’s undemocratic? Those that don’t accept a compromise reached by 25 countries and even more institutions, or those that try to live by the rules agreed by all?

3. The Revenge of the Worthies

But back to the campaign in France. As a result of the many polls that showed a victory of the “non” with up to 58% of the votes) , a number of old worthies have come back into the campaign to argue for the “oui”: people like Jacques Delors (former Minister of Finance of Mitterrand in 1981-84 and then President of the European Commission in 1985-95), Raymond Barre (conservative Prime Minister in 1976-81),  Simone Veil (conservative President of the European Parliament in 1979-84, she is also an Auschwitz survivor, the person that made abortion legal in France in 1975 and she is now a member of the Constitutional Court, the highest French judicial body) and Lionel Jospin (socialist Prime Minister 1997-2002). As a result of these efforts, and a generally worthy attempts by the press to explain what the Constitution means, the “oui” has crept back up in the polls, with a couple of them giving the “oui” victorious again now.

Many foreigners have weighed in the French debate: politicians, intellectuals and other well-known figures from other European countries have provided their opinion in French media, and they are all uniformly supporting a “oui” vote. Several “opportune” decisions by European bodies have been taken in recent weeks that favor French interests – some of which had been blocked for years sometimes (like Chirac’s effort to lower VAT on restaurants – this was a promise from his 2002 presidential campaign which requires a unanimous European decision and had been blocked by various countries and the Commission, worried about tinkering of one of the few coordinated taxes in Europe, which have suddenly decided that it would now be helpful…). The maiden flight of the Airbus 380 has also been praised as an example of what a strong Europe can do, and the choice of France for the site of ITER (the international thermonuclear fusion experimental reactor) against Japan thanks to the unified position of Europe, have also weighed in.

With 3 weeks to go, the campaign is essentially tied today, but momentum is slightly on the “oui” side. I’ll get into the economic and social issues, and the general discontent with the government, in my coming diary about Chirac.

A visionary President that "gets" energy policy

We can have an effective and comprehensive energy policy only if the government takes responsibility for it and if the people understand the seriousness of the challenge and are willing to make sacrifices.

Our energy problems have the same cause as our environmental problems — wasteful use of resources. Conservation helps us solve both at once. Conservation is the quickest, cheapest, most practical source of energy.

Prices should generally reflect the true replacement costs of energy. We are only cheating ourselves if we make energy artificially cheap and use more than we can really afford.

Hat tip: Common Dreams

[T]his is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.

It is a problem we will not solve in the next few years, and it is likely to get progressively worse.

We must not be selfish or timid if we hope to have a decent world for our children and grandchildren.

We simply must balance our demand for energy with our rapidly shrinking resources. By acting now, we can control our future instead of letting the future control us.

One choice is to continue doing what we have been doing before. We can drift along for a few more years. Our consumption of oil would keep going up every year. Our cars would continue to be too large and inefficient. Three-quarters of them would continue to carry only one person — the driver — while our public transportation system continues to decline. We can delay insulating our houses, and they will continue to lose about 50 percent of their heat in waste.

We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.

If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.

Of course, this was a serious President speaking (18 April 1977). He has been maligned for supposedly bringing a mood of despondency and weakness to the country, and being hopelessly naive, but that’s not what I see in that speech, nor in the infamous “Crisis of confidence”  speech (15 July 1979):

Intolerable dependence on foreign oil threatens our economic independence and the very security of our nation. The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.

I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did [two years ago] — never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the [next decade], for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade —

To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation’s history to develop America’s own alternative sources of fuel — from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun.

These efforts will cost money, a lot of money, and that is why Congress must enact [a] windfall profits tax without delay. It will be money well spent. Unlike the billions of dollars that we ship to foreign countries to pay for foreign oil, these funds will be paid by Americans to Americans. These funds will go to fight, not to increase, inflation and unemployment.

We often think of conservation only in terms of sacrifice. In fact, it is the most painless and immediate way of rebuilding our nation’s strength. Every gallon of oil each one of us saves is a new form of production. It gives us more freedom, more confidence, that much more control over our own lives.

I do not promise you that this struggle for freedom will be easy. I do not promise a quick way out of our nation’s problems, when the truth is that the only way out is an all-out effort. What I do promise you is that I will lead our fight, and I will enforce fairness in our struggle, and I will ensure honesty. And above all, I will act.

This is a President who has vision,  who has the best interests of his country and of ALL his citizens in mind, who has ambitious goals and did not shy from asking for all to contribute to them. In essence, he was launching a “Manhattan Project” for energy (and that was after having already created the Strategic Oil reserve, launched house insulation efforts, kickstarted solar energy development, and reinforced CAFE standards). He said it would require efforts and sacrifices from all, but that it would be worth it in terms of efficiency, quality of living and jobs – and freedom.

That was almost 30 years ago. 30 wasted years (well, 20. The early 80s saw the results of Carter’s efforts to reduce consumption, before it was all wiped away in a new orgy of consumption and waste, the “American way”.

If Carter had been listened to, maybe it would not have been necessary to waste thousand of lives, hundreds of billions of dollars and the worldwide reputation of the USA in a reckless foreign adventure, maybe GM would not be in the crisis it is now, maybe the USA would be the world leader in wind and solar energy instead of Germany and Japan, maybe sprawl would not have extended so far as to make public transport totally impractical.

But no, he was “naive” and “weak”. I say he was right. He was a visionary. He will stand the test of history a lot better than his successors. But it’s still time to follow his lead, to dust off his policy proposals and act on them NOW. It’s going to be harder than it would have been 30 years ago, but it will still be easier than if we wait longer. It is still possible, barely, to be in control of events rather than being pushed around by them.

He is the only President to have succeeded in reducing wasteful consumption and energy dependence, and his successor blew that “windfall” pretty quickly instead of making it permanent. It is high time to rehabilitate him and his proposed policies instead of being ashamed of them.

War in Iraq : the deadliest for the media since Vietnam

Reporters Sans Frontières (Reporters Without Borders), the media freedom watchdog group, has published its report on the toll of the Iraq war for journalists, and it is gruesome:

Iraq is the world’s most dangerous country for journalists and the place where the most are kidnapped. 56 journalists and media assistants have been killed there since the fighting began on 22 March 2003 and 29 kidnapped.

The Iraq conflict is the deadliest inter-state war for journalists since the one in Vietnam, when 63 were killed, but over a period of 20 years (1955-75). During the fighting in the former Yugoslavia (1991-95), 49 journalists were killed doing their job.

(…)

The media was targeted from the first day of the fighting in Iraq, when cameraman Paul Moran, of the Australian TV network ABC, was killed by a car bomb on 22 March 2003.

Go read the rest of that press release, and the full report here (pdf, 12 pages), it has more detailed information on who was killed, where, and by whom.

Bush not putting enough people in prison

Despite real efforts in 2003 and 2004, the US prison population has been mostly stagnant under Bushco, as compared to previous periods:


Source

Is Bush soft on crime?

Of course, I am being snarky. The recent news (linked to above) about the renewed growth of the prison population in the past 2 years have not been mentioned on dKos as far as I have been able to ascertain, and I thought I would provide these numbers and a few others below.
The real scandal is the sheer size of the prison population in the US, and its becoming another chunk of the militaro-industrial complex – or another “complex” on its own right.


Source

With an inflation of around 265% for the period, this means that police and justice budgets were flat or growing very slightly, the corrections budget doubled in real terms, and the prison population tripled. (of course, the Dow Jones was multiplied by 16 during the period)

It’s also interesting to note that this is a fairly recent trend:

Source: The Sentencing Project (pdf, 17 pages).

The result is that the US now have the highest incarceration rate

This graph comes again from The Sentencing Project, which thus analyses these numbers:

The high rate of imprisonment in the United States can be explained by several factors:

  • A higher rate of violent crime than other industrialized nations.
  • Harsher sentencing practices than in other nations, particularly for property and drug offenses.
  • Sentencing policy changes over a period of three decades, particularly the shift toward mandatory and determinate sentencing, restrictions on judicial discretion, and a greater emphasis on imprisonment as a preferred sanction.
  • Policy changes adopted as part of the “war on drugs,” leading to a vastly increased use of the criminal justice system as a means of responding to drug problems.

An even more terrifying statistic, provided in the first Yahoo link above, is that

An estimated 12.6 percent of all black men in their late 20s were in jails or prisons, as were 3.6 percent of Hispanic men and 1.7 percent of white men in that age group

That’s one in 8 in prison, which means that, with those that have been and those that will fall at some other point in the future, one black man in 3 or so will know jail in his twenties. How is that not a major scandal bringing real action? One man in three?

(Note that I am not claiming that minorities are treated any better in other countries: the Sentencing Project notes that the relative ratio of incarceration for minorities is similar or worse in other countries; but, combined with the high absolute level of incarceration, only the US sees such a high proportion of its young men go to jail)

Note also that with 2.1 million people in jail (and another 5 million under the control of the penal system), most of them of working age, the US unemployment rate is artificially lowered by at least 1.5 points (if not 5 points, depending on how you evaluate the employment prospects of ex convicts or people on probation).

The other scandal of course, is the way these people are treated while in jail. Abu Ghraib was not news to US inmates.

Abu Ghraib …. Shocking? What Happened There Is Commonplace at U.S. Prisons

in the typical American prison, designed and run to maximize degradation, brutalization, and punishment, overt torture is the norm. Beatings, electric shock, prolonged exposure to heat and even immersion in scalding water, sodomy with riot batons, nightsticks, flashlights, and broom handles, shackled prisoners forced to lie in their own excrement for hours or even days, months of solitary confinement, rape and murder by guards or prisoners instructed by guards–all are everyday occurrences in the American prison system.

The use of sex and sexual humiliation as torture in Abu Ghraib and the other American prisons in Iraq is endemic to the American prison. Psychological and physical sexual torture is exacerbated by the underlying policy of denying prisoners any volitional sex, making the only two forms of sexual activity that are physically possible–homosexuality and masturbation–both offenses subject to punishment. Strip searches, including invasive and often intentionally painful examination of the mouth, anus, testicles or vagina, frequently accompanied by verbal or physical sexual abuse, are part of the daily routine in most prisons. A 1999 Amnesty International report documented the commonplace rape of prisoners by guards in women’s prisons.[2]

Each year, numerous prisoners are maimed, crippled, and even killed by guards. Photographs could be taken on any day in the American prison system that would match the photographs from Abu Ghraib that shocked the public

Some US Prisons as Bad as Abu Ghraib

Prisoner Abuse: How Different are U.S. Prisons? (Human Rights Watch)

Abu Ghraib, USA (Anne-Maris Cusac, The Progressive – many more links in that article)

When I first saw the photo, taken at the Abu Ghraib prison, of a hooded and robed figure strung with electrical wiring, I thought of the Sacramento, California, city jail.

When I heard that dogs had been used to intimidate and bite at least one detainee at Abu Ghraib, I thought of the training video shown at the Brazoria County Detention Center in Texas.

When I learned that the male inmates at Abu Ghraib were forced to wear women’s underwear, I thought of the Maricopa County jails in Phoenix, Arizona.

And when I saw the photos of the naked bodies restrained in grotesque and clearly uncomfortable positions, I thought of the Utah prison system.

Donald Rumsfeld said of the abuse when he visited Abu Ghraib on May 13, “It doesn’t represent American values.”

But the images from Iraq looked all too American to me.

I’ve been reporting on abuse and mistreatment in our nation’s jails and prisons for the last eight years. What I have found is widespread disregard for human rights. Sadism, in some locations, is casual and almost routine.

Reporters and commentators keep asking, how could this happen? My question is, why are we surprised when many of these same practices are occurring at home?

A Visit to Valley State Prison for Women (Amnesty International, 1999)

Recommendations to address human rights violations in the USA (Amnesty, 2004)

But of course, inmates cannot vote.

Greenspan’s Bubbles: ‘It’s too late to escape the consequences’

For those of you that have followed my previous diaries (Greespan’s bubbles – more graphs) as well as Stirling Newberry‘s pieces, bonddad‘s “It’s the fucking economy, stupid” series, and taonow‘s “American Economic Disaster series, this should not come out as a surprise, but the Financial Times publishes yet another pessimistic article about the US economy.

Today’s installment is quite explicit: Property could fall like a house of cards

Nout Wellink, president of the Dutch central bank, last month warned that a hangover from the property boom could well exacerbate the next downturn. Both the Dutch experience and the history of housing booms suggest that this counsel deserves to be taken seriously. However, it is probably already too late for the leading Anglo-Saxon economies to escape lightly from the consequences of their property bubbles.

In the late 1990s, the Netherlands had one of the most successful economies in Europe. At the time, both Dutch house prices and household credit growth were rising at double-digit rates. As homeowners cashed in on their burgeoning home equity, the Dutch savings ratio collapsed (from more than 13 per cent of income in 1997 to less than 7 per cent three years later).

The Dutch housing market cooled after interest rates began climbing in 1999. The following year, house-price inflation came to a halt. Household credit growth slowed simultaneously – mortgage equity withdrawal fell from €10bn ($13bn) in 1999 to €5bn in 2002. This had an adverse effect on consumption. As consumer confidence dipped and unemployment climbed, the Dutch began to save more. Three years after the end of the housing boom, the economy contracted.

(…)

Contrary to popular perception it is not necessary for house prices to fall to create a serious problem for the economy at large. When house prices merely cease rising, the rate of credit growth normally slows, inducing householders to save more and spend less. At best, this produces a mild drag on the economy, as has been the case in the Netherlands. At worst, the economy undergoes a severe slowdown with soaring unemployment and a painful recession – as occurred in Japan, the UK and Scandinavia in the early 1990s.

Note this – you need perpetually increasing housing prices to support consumption when such consumption is not based on growing wages (stagnant in the US for the past 2 years) but on increasing asset prizes being monetised through equity withdrawals and mortgage refinancings on increasingly aggressive terms.

Even if prices stop increasing, you get economic pain: consumption slowdown, stagnant economic growth, with all the usual consequences: higher unemployment, bankruptcies, higher budgetary deficits as tax revenues decrease.

But it is not just borrowers who are hurt by a housing market collapse. Rising levels of bad debt inflict damage on lenders’ balance sheets. This often leads to a credit crunch and sometimes to a full-blown banking crisis. The failure of the Bank of United States in 1930, for instance, during the Great Depression, was due largely to losses on property lending. Furthermore, as over-indebted households cling tenaciously to their homes and lenders delay the politically unpopular and costly process of foreclosure, the banking system may have to deal with the aftermath of a housing crash for many years.

Remember also that houses represent the biggest share of US assets. For most people, their home is their single biggest asset; and their mortgage their single largest financial commitment. Should a serious economic crisis hit, banks will be seriously hit along with many of their clients, especially when they have provided highly leveraged financings (like the 30-year, no principal repayment, interest-only-in-the-first-few-years loans provided in some markets). And banking crises cost a lot of money in bailouts, and always have the risk of a systemic crisis (when there are bank runs or at least a massive loss of trust in the financial system). Furthermore, many of the recently invented financial instruments (like CDOs) have NEVER been tested through an economic downturn.

Government finances commonly deteriorate after housing booms end, as fiscal policy is employed aggressively to prevent the economy from slumping further. Since the end of the property bubble in the early 1990s, Japanese government debt as a percentage of gross domestic product has more than doubled and currently exceeds 160 per cent of national income.

That’s actually the worst part: housing market slowdowns have massive negative consequences for government budgets, which suffer mightily form the downturn. If you think that the budget deficit is bad, think what it will be like after that… The Bush administration has used up all reserves and spent recklessly despite benefitting from a supposedly strong economy.

It’s REALLY a house of cards. The recent apparent economic growth has been obtained by throwing massive amounts of money at an economy increasingly unable to absorb it (to invest) – that money has thus been spent, either in the total waste that the Iraqi war is, or on a growing volume of imports from China and other places. It’s not growth, it’s bingeing on plastic – and it leaves no room for manoeuver when the bad times actually come, as they will.

The end of housing bubbles in other countries has been associated with periods of prolonged economic weakness, increasing financial fragility, rising government deficits and the appearance of monetary instability.

We already have this before the end of the bubble, what will it be after?

Again, the blame goes to both Bush for his reckless budgetary policies and to Greenspan for his amazingly lax monetary policy. Call him “Bubbles” Greenspan each time you write and talk about him, because that’s the only way to put it. Stephen Roach, the markedly bearish chief efconomist of Morgan Stanley, which I quote often, has another piece this week where he wonders if there could actually be some kind of conspiracy in Greenspan’s act, in view of their obvious recklessness:

Morgan Stanley’s Global Economic Forum (25 April 2005)

I am not a believer in conspiracy theories.   But the Fed’s behavior since the late 1990s is starting to change my mind. 

In all my years in this business, never before have I seen a central bank attempt to spin the debate as America’s Federal Reserve has over the past six or seven years.   From the New Paradigm mantra of the late 1990s to today’s new theories of the current-account adjustment, the US central bank has led the charge in attempting to rewrite conventional macroeconomics and in making an effort to convince market participants of the wisdom of its revisionist theories.  The problem is that this recasting of macro is very self-serving.  It is a concentrated effort on the part of the Fed to exonerate itself from the Original Sin of failing to address asset bubbles.  The result is an ever-deepening moral hazard dilemma that poses grave threats to financial markets.

Go read the whole piece, it provides more in-depth explanations of how the Fed has dug itself deeper at every turn, by inflating a new, bigger bubble whenever the previous one threatened to burst. The housing one is likely to be the last (unless, as Sterling Newberry suggests, the Bushistas manage to raid the Social Security Trust fund for one last binge), and it will have consequences in the real world that are known, as they have been experienced many times in many countries.

I’ll let Edward Chancellor, the author of the Financial Times piece, conclude:

The head of the Dutch central bank now regrets what he calls the “artificial stimulus” provided to the economy by the housing boom. With the housing markets in the UK and the US vulnerable to rising interest rates, officials at the Federal Reserve and the Bank of England may shortly be forced to learn the same painful lesson.

30 days to block sale of ‘bunker-buster’ bombs to Israel

The Pentagon has formally notified Congress of its intention to sell “bunker-buster” bombs to Israel:

The Bush administration has proposed providing Israel with 100 “bunker-buster” bombs capable of destroying underground targets, a move seen as sending a message to Iran to halt its nuclear programme.

The Pentagon on Tuesday notified Congress of the possible sale of 5,000lb GBU-28 bombs, developed during the 1991 Gulf war to destroy Saddam Hussein’s hardened command centres. Congress has 30 days to object.

Any deal would be the first sale of the Lockheed Martin-built munition to a foreign country.

In January, Dick Cheney, US vice-president, suggested that Israel might take military action if the US and European Union failed to persuade Iran to give up its nuclear ambitions.
Financial Times

Call this Bolton-style diplomacy: bullying, blustering attempts to coerce others into doing what you want them to do in an obnoxious and aggressive way, without any regard for anybony else’ opinions or considerations, and without any regard for likely consequences; “let them hate us so long as they fear us”.

The problem is that, as more and more countries end up on the sharp end of US diplomacy, they are are all preparing various ways to protect themselves from its consequences, and are thus actively undermining US policies and goals. With the US so massively dependent on foreign oil (remember that all significant oil producers (including Iran, Venezuela, Russia or even Norway) can make prices skyrocket today by withholding their capacity, as there is no spare capacity available elsewhere around the world to fill the void that would be created) and foreign capital (2 billion dollars per day are required from foreign capital holders), the military is not the only way to exert power, and the US could soon find itself in a highly uncomfortable position.

I wonder if this is the goal of the US administration: step up the provocations so that any of these countries decide on a course of action which can be labelled as an “aggression” by the US and used as a pretext for military action, the only field where the US has a clear superiority?

In the meantime, you should act and contact your Representative to warn them of the danger of provoking Iran (and pissing off a number of other countries, including the poor Europeans who are still naively trying to keep the Iranians at the negotiating table)  by selling these bombs to Israel.

It’s still time to act to block that particular item of madness.