US, Japanese Researchers Mix Samples of 1918 Flu Pandemic to Recreate Deadly Code

by Lori Price

(Source)

Researchers recreate 1918 flu pandemic virus –Why? And, why is no one *asking* why? 29 Dec 2008 Researchers have found out what made the 1918 flu pandemic so deadly — a group of three genes that lets the virus invade the lungs and cause pneumonia. They mixed samples of the 1918 influenza strain with modern seasonal flu viruses to find the three genes and said their study might help in the development of new flu drugs. The discovery, published in Tuesday’s issue of the Proceedings of the National Academy of Sciences, could also point to mutations that might turn ordinary flu into a dangerous pandemic strain. Most flu experts agree that a pandemic of influenza will almost certainly strike again. No one knows when [the US unleashes it] or what strain it will be but one big suspect now is the H5N1 avian influenza virus.

US and Japanese researchers crack flu pandemic’s deadly code 30 Dec 2008 The genetic code that made the 1918 killer flu so deadly has finally been cracked, claim US and Japanese researchers, who say their discovery may lead to new drugs able to keep foment future outbreaks in check. By experimenting with genetic material recovered from preserved lung tissues of three victims of the so-called Spanish influenza, a team led by virologist Yoshihiro Kawaoka claims the virus landed a lethal one-two punch. First, it disrupted normal immune reactions, as previously known. But then it infected its victims’ lungs with deadly consequences. Ordinary flu bugs infect just the nose and throat.

• Unrest caused by bad economy may require military action, report says –‘Pervasive public health emergencies’ may require call on military 29 Dec 2008 A U.S. Army War College report warns an economic crisis in the United States could lead to massive civil unrest and the need to call on the military to restore order.
• Flu watchdog lab planned 29 Dec 2008 ‘The idea is to strengthen our surveillance against the dreaded bird flu and be ready with a disease control plan if it strikes.’
• Jakarta ends stand-off on bird flu vaccines –Indonesia’s health minister accused the US of trying to use bird flu samples to create a biological weapon. 24 Feb 2008
• DoD to carry out ‘military missions’ during pandemic, WMD attack 23 Oct 2007
• DoD to ‘augment civilian law’ during pandemic or bioterror attack 11 May 2007
• Scientists Recreate 1918 Flu and See Parallels to Bird Flu –In 2005, U.S. Army scientists reconstructed Spanish flu virus by extracting genetic fragments from the bodies of victims exhumed from the Alaskan permafrost. 18 Jan 2007
• KBR awarded Homeland Security contract worth up to $385M 24 Jan 2006 KBR, the engineering and construction subsidiary of Halliburton Co., said Tuesday it has been awarded a contingency contract from the Department of Homeland Security to supports its Immigration and Customs Enforcement facilities in the event of an emergency.
• Rumsfeld’s growing stake in Tamiflu –Defense Secretary, ex-chairman of flu treatment rights holder, sees portfolio value growing. 31 Oct 2005 The prospect of a bird flu outbreak may be panicking people around the globe, but it’s proving to be very good news for Defense Secretary Donald Rumsfeld and other politically connected investors in Gilead Sciences, the California biotech company that owns the rights to Tamiflu, the influenza remedy that’s now the most-sought after drug in the world. Rumsfeld served as Gilead (Research)’s chairman from 1997 until he joined the Bush administration in 2001, and he still holds a Gilead stake valued at between $5 million and $25 million, according to federal financial disclosures filed by Rumsfeld.
• Killer flu recreated in the lab 07 Oct 2004 Scientists have shown that tiny changes to modern flu viruses could render them as deadly as the 1918 strain which killed millions. A US team added two genes from a sample of the 1918 virus to a modern strain known to have no effect on mice.

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The Next Disaster

Narco violence is exploding--just as oil prices are plunging and Mexico is bracing for a deep U.S. recession.

Jesse Bogan, Kerry A. Dolan, Christopher Helman and Nathan Vardi,
Forbes Magazine

The Nov. 4 crash of a Learjet in an upper-class Mexico City neighborhood caused a disproportionate amount of destruction. All eight passengers were killed--including Interior Minister Juan Camilo Mouriño, President Felipe Calderón's right-hand man, and José Luis Santiago Vasconcelos, a leading prosecutor against the powerful drug cartels; seven people on the ground died, too.

Hours after the disaster, rumors shot across the capital city like the discharge of automatic weapons: The crash was the work of drug traffickers showing who was boss in this nation of 110 million souls. A preliminary report found no evidence of explosives and strongly suggested pilot error in turbulent conditions. Still, says Larry N. Holifield, former head of the Mexico City office of the U.S. Drug Enforcement Administration, "people won't believe it was an accident. They think everything down there is a conspiracy because half the time it really is." One witness to the crash believes the worst. "A plane just doesn't fall out of the sky," says Guadalupe Rodríguez, 42, a law firm assistant. "The narcos are saying, 'Here we are--and nobody's going to get rid of us.'"

You can forgive Rodríguez for thinking so. This year, through mid-November, there have been 4,300-plus drug-related deaths in Mexico, compared with 2,500 in 2007. Edgar Millán Gómez, who oversaw the joint efforts of the army and federal police, was assassinated in May in his home in Mexico City. Roberto Velasco Bravo, a federal chief of criminal investigations, was shot in the head a week earlier. The narcotraficantes have infiltrated the highest levels of law enforcement, including, allegedly, Mexico's principal link to Interpol and its former senior drug czar. Mexico, once again, is battling the ever powerful gangs. "It has been a fierce bloodbath," says Felipe González González, president of the Senate public security commission and former governor of the central state of Aguascalientes. "We have more dead than you have in Iraq."

Is Mexico descending into criminal and economic chaos? "Failed state? That is a very irresponsible remark," bristles Arturo Sarukhan, Mexico's ambassador to the U.S. "The challenge of corruption is being taken on. We are rooting out people who have been infiltrated. Look at the role of the Mexican private sector and civil society. Nowhere can you see signs of anything akin to a failed state."

But there is urgent concern north of the border about a potential strategic threat. "We're fixated on Iraq and Afghanistan, but from a homeland security perspective, right here on our border, isn't this more important?" asks Fred Burton, a former State Department counterterrorism official, now a vice president at Stratfor in Austin, Tex.

Washington, D.C. is fretting, too. "The consequences for both our countries in the near future and the not-so-near future could not be greater," says John Walters, director of the White House Office of National Drug Control Policy, a.k.a. the drug czar. "The consequences if President Calderón fails and the institutions of government, at least in the northern part of his country, become controlled by terrorist mafias--well, we worry about ungoverned spaces far away from the U.S., and this is right next door."

No disagreement from Antonio Oscar (Tony) Garza, U.S. ambassador to Mexico. "The focus of the last couple years has clearly been security," he says. In the so-called Mérida initiative, Uncle Sam has committed $1.4 billion in military hardware to help Mexico battle the cartels. But as of late November no significant transfers had yet occurred.

The explosion of narco terror comes alongside a precipitous drop in oil prices and the crushing effects of a deep U.S. recession. The climate of fear is kicking the life out of the economy. The second wave of the global financial crisis is playing out in the developing world--and right on our doorstep. After expanding by 3.2% in 2007 to $900 billion, Mexico's GDP growth will slow to 1.5% this year and tumble to somewhere between zero and 0.7% in 2009, predicts Raúl Feliz, an economist at CIDE, a Mexico City think tank that specializes in economics and politics. While some of that meager expansion will come from government stimulus spending, its hands are tightly tied because state-owned oil monopoly Pemex (Petróleos Mexicanos) contributes 37%--$80 billion in 2008--of federal revenue. Next year analysts expect a plunge in petrodollars. Unemployment will jump from its current 4.1%. Throw in part-time workers, who account for roughly one-third of GDP, and the jobless figure soars to 10%. Feliz expects that number to reach 12% next year.

• Mexican billionaire Ricardo Salinas Pliego

• U.S. drug czar John Walters

• Mexican Ambassador To The U.S. Arturo Sarukhan

• U.S. Ambassador To Mexico Antonio Oscar Garza Jr.

Map

• Mexico's Drug Cartels

Credit-rating agencies are taking notice. In November Fitch put Mexican government foreign and local currency debt on "negative outlook" (though the ratings are still investment grade). It said that Mexico's ability to absorb global shocks was limited.

To say nothing of internal shocks. Eighty percent of Mexican exports--$240 billion this year, up 10% from 2007--go to the U.S., where shoppers aren't spending. You can see the effects in Ciudad Juárez, just across the border from El Paso, Tex. Roughly 223,000 people work at 330 companies in the maquiladora sector, assembling auto parts for the likes of Lear (nyse: LEA - news - people ) and Delphi (other-otc: DPHI.PK - news - people ), set-top boxes for Cisco (nasdaq: CSCO - news - people )'s Scientific Atlanta unit and medical devices for Johnson & Johnson (nyse: JNJ - news - people ), among others. But 22,000 people have lost maquiladora jobs this year, most of them since August, says Sandra Luz Montijo-Dubrule, president of the Maquiladora Association of Ciudad Juárez. "Seventy percent of our industry here is U.S.-owned factories. Now that the recession has hit, we don't have the consumers in the U.S.," she laments. Worse: Every maquiladora job supports four other jobs in the city.

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2008 was the year man-made global warming was disproved

By Christopher Booker

(source)

The first, on May 21, headed "Climate change threat to Alpine ski resorts" , reported that the entire Alpine "winter sports industry" could soon "grind to a halt for lack of snow". The second, on December 19, headed "The Alps have best snow conditions in a generation" , reported that this winter's Alpine snowfalls "look set to beat all records by New Year's Day".

Easily one of the most important stories of 2008 has been all the evidence suggesting that this may be looked back on as the year when there was a turning point in the great worldwide panic over man-made global warming. Just when politicians in Europe and America have been adopting the most costly and damaging measures politicians have ever proposed, to combat this supposed menace, the tide has turned in three significant respects.

First, all over the world, temperatures have been dropping in a way wholly unpredicted by all those computer models which have been used as the main drivers of the scare. Last winter, as temperatures plummeted, many parts of the world had snowfalls on a scale not seen for decades. This winter, with the whole of Canada and half the US under snow, looks likely to be even worse. After several years flatlining, global temperatures have dropped sharply enough to cancel out much of their net rise in the 20th century.

Ever shriller and more frantic has become the insistence of the warmists, cheered on by their army of media groupies such as the BBC, that the last 10 years have been the "hottest in history" and that the North Pole would soon be ice-free – as the poles remain defiantly icebound and those polar bears fail to drown. All those hysterical predictions that we are seeing more droughts and hurricanes than ever before have infuriatingly failed to materialise.

Even the more cautious scientific acolytes of the official orthodoxy now admit that, thanks to "natural factors" such as ocean currents, temperatures have failed to rise as predicted (although they plaintively assure us that this cooling effect is merely "masking the underlying warming trend", and that the temperature rise will resume worse than ever by the middle of the next decade).

Secondly, 2008 was the year when any pretence that there was a "scientific consensus" in favour of man-made global warming collapsed. At long last, as in the Manhattan Declaration last March, hundreds of proper scientists, including many of the world's most eminent climate experts, have been rallying to pour scorn on that "consensus" which was only a politically engineered artefact, based on ever more blatantly manipulated data and computer models programmed to produce no more than convenient fictions.

Thirdly, as banks collapsed and the global economy plunged into its worst recession for decades, harsh reality at last began to break in on those self-deluding dreams which have for so long possessed almost every politician in the western world. As we saw in this month's Poznan conference, when 10,000 politicians, officials and "environmentalists" gathered to plan next year's "son of Kyoto" treaty in Copenhagen, panicking politicians are waking up to the fact that the world can no longer afford all those quixotic schemes for "combating climate change" with which they were so happy to indulge themselves in more comfortable times.

Suddenly it has become rather less appealing that we should divert trillions of dollars, pounds and euros into the fantasy that we could reduce emissions of carbon dioxide by 80 per cent. All those grandiose projects for "emissions trading", "carbon capture", building tens of thousands more useless wind turbines, switching vast areas of farmland from producing food to "biofuels", are being exposed as no more than enormously damaging and futile gestures, costing astronomic sums we no longer possess.

As 2009 dawns, it is time we in Britain faced up to the genuine crisis now fast approaching from the fact that – unless we get on very soon with building enough proper power stations to fill our looming "energy gap" - within a few years our lights will go out and what remains of our economy will judder to a halt. After years of infantile displacement activity, it is high time our politicians – along with those of the EU and President Obama's US – were brought back with a mighty jolt into contact with the real world.

Full story

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Melamine and the Global Implications of Food Contamination

by Julie R. Ingelfinger, M.D.

In addition to its catastrophic health effects, the contamination has had major economic effects, with the United States and other countries banning the importation of milk and other food products from China. Recent news reports note that China has asked the United States to lift its ban on milk products and that the U.S. Food and Drug Administration (FDA) has opened an office in Beijing (and will open others in Shanghai and Guangzhou and in other countries) that will examine food exports destined for the United States.

Now melamine is being discovered in other foods, which are turning up worldwide. Melamine (1,3,5-triazine–2,4,6-triamine, or C₃H₆N₆) (see diagram), a chemical developed in the 1830s, has had varied and widespread legitimate uses. China is not the only country producing melamine; millions of kilograms are synthesized annually in the United States and elsewhere in the Western world. The compound is a component in many plastics, adhesives, glues, laminated products such as plywood, cement, cleansers, fire-retardant paint, and more. But melamine does not always remain where it is placed. For example, melamine in plasticware may be leached from the product by acid and thus can migrate into food, though — at least as measured — not in amounts considered toxic. Fortunately, melamine-containing plasticware becomes discolored or fractures, so it is used less often than it once was. A greater concern is that melamine is frequently added to crop fertilizer, from which it is absorbed into the soil and then, most likely, into crops themselves, though any uptake has been largely unmeasured. Thus, there is melamine in many products throughout the world, and we do not know what problems it may cause in the future.

But why would one intentionally add a nonnutritious substance such as melamine to food? Nitrogen content has long been used as a surrogate for assessing the protein content of foods, and melamine contains a substantial amount of nitrogen — 66% by mass. Before the current melamine disaster, the marked dilution of infant formula in China had resulted in marasmus in some infants,¹ which led to government directives to increase the protein content of such preparations or risk severe penalties. Thus, it is possible that the adulteration was conceived in response to a well-intentioned government directive. The fact that melamine could increase the apparent protein content and, furthermore, make the product look milky may have been irresistible to those who would adulterate.

That melamine and its congeners have toxic effects has been known for decades. These compounds are toxic to humans and animals, though the amount leading to adverse effects depends on the rate of exposure. The 2007 melamine adulteration of pet food resulted in many deaths of cats and dogs in the United States and elsewhere.^2,3 This epidemic of illness in pets should have reinforced the understanding that melamine ingestion might be very harmful to humans. Moreover, the melamine congener hexamethylmelamine was tested as an anticancer medication in the 1960s, and again in the late 1990s for advanced ovarian cancer and other conditions.⁴ Side effects of this congener were mainly gastrointestinal, not renal, but the chemotherapeutic use of hexamethylmelamine and other melamine congeners has largely been abandoned.

How much melamine must food contain to pose a risk to humans? Given the lack of data, regulatory bodies such as the FDA and international agencies such as the World Health Organization (WHO) are trying hard to develop useful recommendations. An early December meeting of experts took place in Ottawa, Canada, sponsored by the WHO and Health Canada. The experts recommended considering melamine in food as having a baseline level, the level not resulting from adulteration or misuse, and an adulteration level, the level resulting from purposeful addition of melamine. Since there are insufficient data from humans, the WHO meeting recommended a tolerable daily intake (TDI) of 0.2 milligrams per kilogram of body weight for melamine and 1.5 milligrams per kilogram of body weight for cyanuric acid. The executive summary stated that the TDI is "applicable to the whole population, including infants." However, exposure to both melamine and cyanuric acid may confer a higher risk, and there are unknowns about long-term renal and other risks. The current limit set by the FDA for melamine in food is 2.5 parts per million, calculated on the basis of ingestion by a person weighing 60 kg. The FDA initially stated that no melamine is permitted in infant formula but in late November changed that to 1 part per million being permitted.⁵ It is not clear how much melamine in other food would be "safe" for children, particularly young children, especially since they ingest far more food for their size than do adults, rendering the dose per kilogram of any toxin potentially higher. Furthermore, initial signs and symptoms may be subtle and nonspecific in very young children, who typically cannot describe how they feel. Thus, although the onset of illness, as in the current epidemic, may be insidious and unanticipated in the very young, it is far more likely to result in a catastrophic outcome.

The present epidemic illness resulted from melamine's tendency to form stones and gravel in the urinary system. Young children exposed to the median level of the brand with the highest melamine content, according to the executive summary from the WHO meeting, received approximately 40 to 200 times the TDI. Stones can cause obstructive uropathy, and marked obstruction may cause acute renal failure. In the children who died, acute renal failure was discovered too late. The available data suggest that melamine stones are not fully radiopaque, often formed by melamine and its metabolite cyanuric acid (see figure), in complex with uric acid or in a matrix with protein, uric acid, and phosphate. Once the source of these unusual stones and the contamination of powdered formula were uncovered in the present epidemic, the care given to severely affected children became more effective. Many stones could be dissolved with hydration, alkalinization, or lithotripsy, and the renal failure, if present, could be managed with supportive care, including dialysis, if needed. However, many studies indicate that the long-term sequelae of acute renal failure in children, irrespective of its cause, are often serious and include hypertension, albuminuria, and chronic kidney disease. Whether children who had melamine-induced acute renal failure will have long-term consequences is unknown.

A further problem is that melamine food contamination is more pervasive than was originally thought. Since melamine is in animal feed in China, it has now been detected in eggs; it has also been found in wheat gluten and other foods. After the discovery of the melamine contamination of pet food, a detection method involving liquid chromatography–mass spectrometry became widely available and reliably identifies both cyanuric acid and melamine. A number of suspect foods from China tested by the FDA were found to contain melamine (see table), and more are being reported around the world each week. Furthermore, the FDA has found trace levels of melamine in several U.S. infant formulas and, as of the end of November, states that 1 part per million is permitted.

Yet it is not certain what should be done going forward. In the United States, common-sense suggestions have been posted on the Web sites of both the FDA (www.fda.gov/oc/opacom/hottopics/melamine.html) and the Centers for Disease Control and Prevention (http://emergency.cdc.gov/agent/melamine/chinafood.asp), and similar content is available on the WHO Web site (www.who.int/foodsafety/fs_management/infosan_events/en/index.html). The pediatric nephrology community, the American Society of Pediatric Nephrology, and the International Pediatric Nephrology Association recommend vigilance without panic (www.aspneph.com/ASPNStatement%20Melamine%20Oct22_cbl%20(3).pdf). All these organizations suggest examining at-risk children exposed to the brands of infant formula, such as Sanlu, that are known to have been heavily contaminated by melamine.

The bottom line, however, is that nobody knows the true extent of the present epidemic or the risks to come. No more deaths have been reported since the Chinese government and the international public health community became aware of the problem. Yet the long-term health effects remain unknown.

In today's world, it is crucial to understand and deal with the global implications of foodborne diseases if problems like the melamine epidemic are to be prevented. In 2006, the WHO launched an ambitious project to estimate and understand the global burden of foodborne disease, and the Foodborne Disease Burden Epidemiology Reference Group appears to be well on its way to achievement of its initial goals. In addition, the group will be developing much-needed user-friendly tools so that outbreaks, be they due to organisms or chemical substances, can be studied more rapidly and the causes identified, reported, and eliminated.

References

1. Anhui Province poisonous infant formula incident. In: Chen K. Public health security. Hangzhou City, China: Zhejiang University Press, 2007:169-70. (In Chinese.)
2. Turnipseed S, Casey C, Nochetto C, Heller DN. Determination of melamine and cyanuric acid residues. Laboratory information bulletin no. 4421. Vol. 24. College Park, MD: Center for Food Safety & Applied Nutrition, October 2008.
3. Brown C, Jeong KS, Poppenga RH, et al. Outbreaks of renal failure associated with melamine and cyanuric acid in dogs and cats in 2004 and 2007. J Vet Diagn Invest 2007;19:525-531. [Free Full Text]
4. Hauge MD, Long HJ, Hartmann LC, Edmonson JH, Webb MJ, Su J. Phase II trial of intravenous hexamethylmelamine in patients with advanced ovarian cancer. Invest New Drugs 1992;10:299-301. [Medline]
5. Melamine contamination in China. Rockville, MD: Food and Drug Administration, December 6, 2008. (Accessed December 6, 2008, at http://www.fda.gov/oc/opacom/hottopics/melamine.html#update.)

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Higher Wages or Bubblenomics: What's it gonna be?

Wages, wages, wages. It all gets down to wages.

A strong economy must be built on a solid foundation of steadily rising wages. If wages don't keep pace with production, the only way the economy can grow is through the expansion of debt, which leads to disaster.

Consider this: the US economy is 72 percent consumer spending. That means the Gross Domestic Product (GDP) cannot grow if salaries don't keep up with the price of living. Low Income Families (LOF)--that is, any couple making less than $80,000--represent 50 percent of all consumer spending. These LOF's spend everything they earn just to maintain their present standard of living. So, how can these families help to grow the economy if they're already spending every last farthing they earn?

They can't! Which is why wages have to go up. The cost to short-term profits is miniscule compared to the turmoil of a deep recession which is what the world is facing right now. The present crisis could have been avoided if there was a better balance between management and labor. But the unions are weak, so salaries have languished while Wall Street has grown more powerful, stretching its tentacles into the government and spreading its anti-labor dogma wherever it goes.

The investor class has rejiggered the system to meet their particular needs. Financial wizardry has replaced factories, capital formation and hard assets while real wealth has been replaced by chopped up bits of mortgage paper, stitched together by Ivy League MBAs, and sold to investors as priceless gemstones. This is the system that Bernanke is trying to resuscitate with his multi-trillion dollar injections; a system that shifts a larger and larger amount of the nation's wealth to a smaller and smaller group of elites.

When Alan Greenspan appeared before Congress a few months ago, he admitted that he had discovered a "flaw" in his theory of how markets operate. The former Fed chief was referring to his belief that investment bankers could be trusted to regulate themselves. Whether one believes Greenspan was telling the truth or not is irrelevant. What really matters is that the wily Maestro managed to skirt the larger issues and stick to his script. Congress never challenged Greenspan's discredited, trickle-down economic theories which guided his policymaking from the get-go. Nor was he asked to explain how a consumer-driven economy can thrive when salaries stay flat for 30 years. An answer to that question might have exposed Greenspan's penchant for low interest rates and deregulation, the two fuel-sources for the massive speculative bubbles which emerged on Greenspan's watch. These are the tools the Fed chief used for 18 years to enrich his buddies at the big brokerage houses while workers slipped further and further into debt.

There's no "flaw" in Greenspan's thinking; his views perfectly reflect his unwavering commitment to the rich and powerful. That's never changed. Since retiring, he has continued to ingratiate himself to his Wall Street paymasters while fattening his bank account with royalties from his best seller. Unfortunately, his success has come at great cost to the country.

Millions of homeowners are now facing eviction, consumers are tapped out, and the job market is in a shambles. When equity bubbles unwind, it's never pretty and the Greenspan implosion has been particularly nasty. Assets are being sold at fire sale prices and there's a frantic rush to the safety of US Treasurys. It's a catastrophe.

That said, it may seem like a bad time to boost workers' pay, but that's not the case. Crisis creates opportunities for change---real structural change. And that's what's needed.

The bottom line is that this whole mess could have been avoided if demand was predicated on wage increases instead of asset inflation. Of course, that precludes the Fed's traditional remedies for economic malaise--easy money and massive leveraging. Just last week, Bernanke announced a plan to buy $800 billion of securities backed by mortgages and credit card debt in an effort to stimulate more borrowing. The Fed chairman would rather drown the country in red ink than support pay raises for workers. Go figure? This just illustrates the class bias that underscores the Fed's policies, which is why pointless to debate the issue or try to find common ground. The only way to effect real change is with political power.

From Bernanke and Greenspan's perspective, any small gain by workers is tantamount to communism. They will continue to do everything in their power to preserve the current labor-debasing system which keeps workers just one paycheck away from the homeless shelter. This type of hostility is neither good for the economy nor the country. It just intensifies class animosities by accentuating the chasm between rich and poor. The only way to overcome these differences is by narrowing the wealth gap and rewarding hard work with fair pay.

John Bellamy Foster and Fred Magdoff explain how establishment economists and their corporate patrons developed their ideas of how to use equity bubbles to grow the economy and shift wealth from workers to elites. In their Monthly Review article "Financial Implosion and Stagnation":

"It was the reality of economic stagnation beginning in the 1970s, as heterodox economists Riccardo Bellofiore and Joseph Halevi have recently emphasized, that led to the emergence of “the new financialized capitalist regime,” a kind of “paradoxical financial Keynesianism” whereby demand in the economy was stimulated primarily “thanks to asset-bubbles.” Moreover, it was the leading role of the United States in generating such bubbles—despite (and also because of) the weakening of capital accumulation proper—together with the dollar's
reserve currency status, that made U.S. monopoly-finance capital the “catalyst of world effective demand.”

Greenspan figured out how to strengthen the grip of the banking sector by creating asset bubbles. That was his great contribution during the Clinton years. The leveraging of complex financial products and the surge in real estate prices gave the impression of prosperity, but it was all smoke and mirrors. The "wealth effect" vanished as soon as the interest payments on mortgages could no longer be paid. That's when Maestro's bubble blew up and Greenspan retired to write his memoirs.

So far, world stock indexes have lost over $30 trillion and there will probably be another bloody leg down in 2009. As the underlying economy contracts, there's no need for a lumbering, oversized financial system. Institutions will have to be shut down and their assets will have to be sold at auction. That means prices will continue to fall, business activity will falter, and GDP will shrivel. The mismatch between output and falling demand presages a painful correction. When credit gets scarce, business activity slows, and nervous investors head for the exits. That forces businesses to lay off workers which causes prices to fall even further, accelerating the pace of deflation. Economist Henry Liu made these observations in his article "China and the Global financial Crisis":

"US neoliberal trade globalization, having promised a primrose garden of economic growth, has instead led the global economy into a jungle of poison reed, resulting in the worst financial disaster in a century, setting the whole world ablaze with a financial firestorm. This unhappy fate was finally acknowledged as having been policy-induced by Alan Greenspan, the former Chairman of the US Federal Reserve who was largely responsible for the monetary indulgence that had caused this hundred-year financial perfect storm....The Federal Reserve under Greenspan repeatedly created money faster than the global economy could profitably absorb, creating serial bubbles denominated in fiat dollars. Greenspan insisted that it was not possible, nor desirable, to identify an economic bubble in the making as he was inflating it with easy money, lest economic growth should be prematurely cut short. It was a perfect example of the rule that intoxication begins when a drinker becomes unable to know its time to stop drinking." (Henry C.K. Liu China and the Global Financial Crisis", Asia Times)

The Fed wants to stimulate demand by slashing the price of money to 0% while pumping trillions of dollars into the financial system (quantitative easing). But the millions of foreclosures, credit card and student loan defaults, indicate that the underlying economy is rapidly contracting and cannot support such an oversized system. Something's gotta' give. Homeowners and consumers are poorer than they were a year ago. They're focused on paying down their debts not creating new ones. Attitudes towards spending have changed; people are hunkering down. That's why Bernanke's radical liquidity experiment is doomed. There's no way to reflate a bubble if consumers refuse to spend.

If the Fed is serious about fulfilling its mandate, it should abandon its serial bubblemaking altogether and return to basics; productivity, good wages and sound money. The country's future rests on its workers. They don't need a bailout, just a raise.

By Mike Whitney

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Patton was assassinated

George S. Patton, America's greatest combat general of the Second World War, was assassinated after the conflict with the connivance of US leaders, according to a new book.

Daily Telegraph

'We've got a terrible situation with this great patriot, he's out of control and we must save him from himself'. The OSS head General did not trust Patton

The newly unearthed diaries of a colourful assassin for the wartime Office of Strategic Services (OSS), the forerunner of the CIA, reveal that American spy chiefs wanted Patton dead because he was threatening to expose allied collusion with the Russians that cost American lives.

The death of General Patton in December 1945, is one of the enduring mysteries of the war era. Although he had suffered serious injuries in a car crash in Manheim, he was thought to be recovering and was on the verge of flying home.

But after a decade-long investigation, military historian Robert Wilcox claims that OSS head General "Wild Bill" Donovan ordered a highly decorated marksman called Douglas Bazata to silence Patton, who gloried in the nickname "Old Blood and Guts".

His book, "Target Patton", contains interviews with Mr Bazata, who died in 1999, and extracts from his diaries, detailing how he staged the car crash by getting a troop truck to plough into Patton's Cadillac and then shot the general with a low-velocity projectile, which broke his neck while his fellow passengers escaped without a scratch.

Mr Bazata also suggested that when Patton began to recover from his injuries, US officials turned a blind eye as agents of the NKVD, the forerunner of the KGB, poisoned the general.

Mr Wilcox told The Sunday Telegraph that when he spoke to Mr Bazata: "He was struggling with himself, all these killings he had done. He confessed to me that he had caused the accident, that he was ordered to do so by Wild Bill Donovan.

"Donovan told him: 'We've got a terrible situation with this great patriot, he's out of control and we must save him from himself and from ruining everything the allies have done.' I believe Douglas Bazata. He's a sterling guy."

Mr Bazata led an extraordinary life. He was a member of the Jedburghs, the elite unit who parachuted into France to help organise the Resistance in the run up to D-Day in 1944. He earned four purple hearts, a Distinguished Service Cross and the French Croix de Guerre three times over for his efforts.

After the war he became a celebrated artist who enjoyed the patronage of Princess Grace of Monaco and the Duke and Duchess of Windsor.

He was friends with Salvador Dali, who painted a portrait of Bazata as Don Quixote.

He ended his career as an aide to President Ronald Reagan's Navy Secretary John Lehman, a member of the 9/11 Commission and adviser to John McCain's presidential campaign.

Mr Wilcox also tracked down and interviewed Stephen Skubik, an officer in the Counter-Intelligence Corps of the US Army, who said he learnt that Patton was on Stalin's death list. Skubik repeatedly alerted Donovan, who simply had him sent back to the US.

"You have two strong witnesses here," Mr Wilcox said. "The evidence is that the Russians finished the job."

The scenario sounds far fetched but Mr Wilcox has assembled a compelling case that US officials had something to hide. At least five documents relating to the car accident have been removed from US archives.

The driver of the truck was whisked away to London before he could be questioned and no autopsy was performed on Patton's body.

With the help of a Cadillac expert from Detroit, Mr Wilcox has proved that the car on display in the Patton museum at Fort Knox is not the one Patton was driving.

"That is a cover-up," Mr Wilcox said.

George Patton, a dynamic controversialist who wore pearl handled revolvers on each hip and was the subject of an Oscar winning film starring George C. Scott, commanded the US 3rd Army, which cut a swathe through France after D-Day.

But his ambition to get to Berlin before Soviet forces was thwarted by supreme allied commander Dwight D. Eisenhower, who gave Patton's petrol supplies to the more cautious British General Bernard Montgomery.

Patton, who distrusted the Russians, believed Eisenhower wrongly prevented him closing the so-called Falaise Gap in the autumn of 1944, allowing hundreds of thousands of German troops to escape to fight again,. This led to the deaths of thousands of Americans during their winter counter-offensive that became known as the Battle of the Bulge.

In order to placate Stalin, the 3rd Army was also ordered to a halt as it reached the German border and was prevented from seizing either Berlin or Prague, moves that could have prevented Soviet domination of Eastern Europe after the war.

Mr Wilcox told The Sunday Telegraph: "Patton was going to resign from the Army. He wanted to go to war with the Russians. The administration thought he was nuts.

"He also knew secrets of the war which would have ruined careers.

I don't think Dwight Eisenhower would ever have been elected president if Patton had lived to say the things he wanted to say." Mr Wilcox added: "I think there's enough evidence here that if I were to go to a grand jury I could probably get an indictment, but perhaps not a conviction."

Charles Province, President of the George S. Patton Historical Society, said he hopes the book will lead to definitive proof of the plot being uncovered. He said: "There were a lot of people who were pretty damn glad that Patton died. He was going to really open the door on a lot of things that they screwed up over there."

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Even in this crisis, the government still offers refuge to pinstriped pirates

Britain's tax havens fuel crime and corruption on a huge scale but, for Brown, keeping business happy is still the priority

George Monbiot
The Guardian

If you want to know why Britain has never completed the process of decolonisation, look at two lists side by side. One is the official register of tax havens, compiled by the OECD. The other is the list of British overseas territories and crown dependencies. Over a quarter of the world's tax havens are British property. More than half of Britain's colonial territories and dependencies are tax havens. Strip out Antarctica, the military bases and the scarcely habited rocks and atolls and, of the 11 remaining properties, only the Falkland Islands is not a recognised haven. The obvious conclusion is that Britain retains these colonies for one purpose: to help banks, corporations and the ultra-rich to avoid tax.


These figures scarcely do justice to the UK's responsibility for this menace. The website Shelter Offshore, which helps people to avoid their obligations to society, has just published its list of the world's "top 5 tax havens". Jersey, Guernsey and the Isle of Man come first. "These highly respectable British offshore tax havens," the site tells us, "can be very attractive indeed", offering "superior levels of investor privacy". Privacy is the polite word for the secrecy and obstruction that helped to bring down the world's financial systems.

Last month the British government announced that it will introduce new laws to prevent piracy: the armed forces will be allowed to detain ships and arrest suspected robbers on the high seas. Yet the same government offers an attractive portfolio of tropical and temperate islands in which pinstriped pirates can bury their treasure.

That comparison is unfair - to pirates. The freebooters who use these havens are responsible for thousands of times more deaths even than the notorious Abdul Hassan, known on the Somali coast as "the one who never sleeps". Because of the secrecy surrounding the treasure islands, no one knows how much money they divert from developing countries. Christian Aid's estimate - $160bn a year - is the lowest figure, though 60% greater than the international aid the poor world receives. The Pope suggests $255bn; the US research group Global Financial Integrity proposes $900bn. In all cases we're talking about the means by which hundreds of thousands of lives could have been preserved in the world's poorest countries. But Britain's network of tax havens permits multinational companies, dodgy businessmen and corrupt leaders to snatch money from the poor.

Gordon Brown wrings his hands over the plight of the poor, and urges impoverished countries to earn more money through trade. But by keeping our tax havens open for business, this mumbling Christian hypocrite ensures that even when the poor nations do trade successfully, they are unable to keep hold of the income.

This authorised theft, of course, affects us too. We are robbed twice by these gangsters: once when they avoid the taxes the rest of us have to pay, again when the tax havens' secret banking arrangements cause the crises which oblige us to rescue the banks. As the Tax Justice Network points out, the banking system collapsed because it became indecipherable. The banks lost confidence in each other when they could no longer tell who owns what or who owes whom, and could no longer trust each other's financial statements. Nothing has done more to promote this distrust than the lucrative secrecy the tax havens offer to their clients.

Organised crime also depends on tax havens. The OECD uses four criteria to determine that a place is a haven: it imposes no tax, there's a lack of transparency, it has laws preventing the effective exchange of information with other governments, and the money that changes hands bears no relation to the business done there. The last three criteria are all essential prerequisites for large-scale crime. In fact it's doubtful whether the traditional piracy now flourishing off the Horn of Africa would be possible without the more respectable piracy taking place in the English Channel, the Irish Sea and off the Spanish Main. Anyone who wanted to stamp out drug smuggling, kidnapping, gun-running and fraud would start by shutting down tax havens.

But the crime havens have become so respectable that even the British government is now depriving itself of revenue. It has become the major shareholder in the Royal Bank of Scotland, which has offshore subsidiaries in Jersey, Guernsey, the Isle of Man and Gibraltar. Have the bank's new owners, in return for our generosity in bailing it out, demanded that it shuts these operations? No. And that's not the worst of it. HM Revenue and Customs, responsible for collecting tax in this country, signed a private finance initiative deal transferring its buildings to a company called Mapeley Steps. Mapeley Steps, which is registered in one tax haven (Bermuda) is owned by Mapeley, registered in another (Guernsey). Mapeley has boasted of paying no income or corporation tax in any jurisdiction.

Why does the government keep these havens open? There's an answer in Geraint Anderson's book Cityboy - a crude but gripping exposure by a former research analyst at a City bank. "Eighteen years out of power has made these jokers so paranoid about being viewed as old Labour that every time Cityboys and entrepreneurs asked for business-friendly reforms they rolled over and allowed tax and regulatory changes."

There is a standard British procedure for dealing with problems like this - by which I mean problems that generate bad publicity but which you don't want to address. You commission a review and you choose the right man to conduct it. Confronted with a vocal international campaign and a new US president determined to tackle this issue, the government has selected a man called Michael Foot (not the former Labour leader).

Until last year, Foot was the inspector of banks and trust companies for the Central Bank of the Bahamas in Bermuda, a British tax haven. Though the review was launched only a fortnight ago, he already seems to have decided what it will say. Speaking about tax havens to the magazine Accountancy Age, he claimed that they had been given a clean bill of health by the IMF, and observed, "I can't see where the regulation failure is supposed to be." The Tax Justice Network maintains that throughout his long career in Bermuda, at the Financial Services Authority and elsewhere, he has never raised any public concerns about systemic problems in the financial sector. The identity of the person the government appoints is an index to the outcome it desires. Foot sounds like just the man for the job.

Even as it was commissioning this review, Brown's government tried to undermine international efforts to address the problem. Teaming up with that revolting little monarchy Liechtenstein, the UK sought to strike out a paragraph from the Doha trade agreement that aimed to eradicate tax evasion. Thanks in part to British lobbying, the draft commitment was substantially weakened.

Were Britain to release its remaining colonies, they would quickly succumb to pressure from the Obama government and the European countries trying to stamp out international evasion and organised crime. We hold on to the Falkland Islands for their oil and fish. We hold on to the other territories for something far more valuable: secrecy.

www.monbiot.com
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Desperate Double Speak: Global Cooling Is Part Of Global Warming

Corporate media engages in mental gymnastics to hide the true driver of natural climate change through eons of geological history - the sun

Paul Joseph Watson & Steve Watson
Prison Planet.com

An Associated Press article has stunned some readers by suggesting that an ongoing global cooling trend is actually indicative of how quickly the planet is succumbing to man-made global warming.

The bizarre statement appeared in a panic-inducing article that emphasizes man-made warming fears and highlights how president elect Obama must tackle them with new laws including a carbon tax “cap-and-trade” system.

“Mother Nature, of course, is oblivious to the federal government’s machinations.” writes Seth Borenstein.

“Ironically, 2008 is on pace to be a slightly cooler year in a steadily rising temperature trend line. Experts say it’s thanks to a La Nina weather variation. While skeptics are already using it as evidence of some kind of cooling trend, it actually illustrates how fast the world is warming.”

The article goes on to state:

“Since Clinton’s inauguration, summer Arctic sea ice has lost the equivalent of Alaska, California and Texas. The 10 hottest years on record have occurred since Clinton’s second inauguration. Global warming is accelerating. Time is close to running out, and Obama knows it.”

Chief global warming propagandists the World Wildlife Fund released a report earlier this year claiming that Arctic ice was shrinking at an alarming rate, leading to forecasts that the “North Pole may be ice-free for first time this summer”.

Such predictions were debunked after it emerged that Arctic ice had actually expanded 30 per cent, an area the size of Germany, a fact conveniently overlooked by the WWF.

Meanwhile temperatures have hit record lows in Denver and Montana as the Northeast United States experiences some of the worst snow and ice storms for a generation.

2008 is the coldest year of the decade and record low temperatures have hit areas all over America.

This has little to do with a “weather variation” and everything to do with the fact that the chief climate driver throughout eons of natural climate change - the sun - has exhibited a record barren spell of sunspots, which is causing the global cooling we are now witnessing all over the world. Conversely, throughout the 1990’s and in the early years of this decade, during which global warming reached its peak, the sun was more active than it had been at anytime in the previous 1,000 years.

The most recent period during which solar activity massively decreased was between 1645 and 1715, known as the Maunder Minimum, which also coincided with the geological period known as the Little Ice Age, when temperatures plummeted all over the world and the Thames in London was frozen solid.

The fact that the corporate media has openly abandoned any pretense of balance and fully thrown its weight behind the religious fervor of global warming - an orthodoxy that refuses to allow anyone to question its supreme and absolute dogma - again highlights how desperate the climate change PR assault has become in the face of over 650 scientists signing their names to a US Senate Minority report that challenges the contention of the UN’s International Panel on Climate Change that there is a scientific “consensus” on the causes of global warming.

Now that the real catalyst behind climate change, the sun, has dealt a blow to the global warming propagandists by daring to produce less sunspots, the climate change lobby will now merely claim that global cooling is a part of global warming, and that we must still lower our living standards and pay carbon taxes, while all the real environmental problems are ignored or actively made worse by the same power brokers demanding that we make sacrifices in the name of fighting a non-existent threat.

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What part of Ireland's 'no' does the EU not understand?

Asking the Irish to vote again on the Lisbon treaty is arrogant, insulting and undemocratic

Brendan O'Neill

guardian.co.uk

Imagine if, following the election of Barack Obama by 52.9% of American voters, the Republican party, which got just 45.7% of votes, demanded another election. Imagine if the Republicans described Obama's victory as a "triumph of ignorance" – brought about by an "unspeakable" and "ignorant" mass of people who should have been "swatted away by the forces of the establishment" – and insisted on holding a second election so that, this time, the voters could "get it right".

There would be uproar, outrage, widespread disgust at such elite disdain for the democratic process. Well, now you know how the Irish people must feel. In June this year, 53.4% of Irish voters rejected the Lisbon treaty, against 46.6% who supported it (giving the "No" camp a "sweeping victory" similar to Obama's). Yet now the Irish will be asked to vote again. EU officials' behind-doors deal to force a second referendum in Ireland reveals their utter contempt for Irish voters, and for democracy itself. It is an historic sucker punch against the sovereignty of the people.

As soon as the Irish people's ballots were counted in June, their rejection of Lisbon was treated as the "wrong" answer, as if they had been taking part in a multiple-choice maths exam and had failed to work out that 2+2=4. Now, they will be given a chance to sit the exam again, "until [they] come up with the right answer," says George Galloway, attacking EU elitism. The notion that the Irish "got it wrong" exposes gobsmacking ignorance about democracy in the upper echelons of the EU. The very fact that a majority of Irish people said no to Lisbon made it the "right answer", true and sovereign and final. "No" really does mean no.

The Irish were subjected to a tirade of slanderous abuse when they dared to reject officials' carefully crafted and profound (in truth, overlong and turgid) document on the future of the EU. One Brussels official described them as "ungrateful bastards", on the basis that Ireland has received lots of handouts from the EU and thus should be more obedient to its paymaster. Pro-EU commentators blamed "populist demagogues" for cajoling the Irish into voting no, and said the EU's plans should not be "derailed by lies and disinformation".

It was widely claimed that the Irish simply didn't understand the treaty, and may have been confused by its "technocratic, near incomprehensible language" (well, they are ignorant Paddies, after all). Some claimed that the Irish mistakenly, possibly even illegitimately, had used the referendum to register disgruntlement with their own ruling parties. Margot Wallström, vice-president of the European Commission, said officials should try to "work out what the Irish people had really been voting against". I would have thought that was obvious: they were handed the Lisbon treaty; they said no to it.

We've been here before. When French and Dutch voters rejected the European constitution in 2005 (and according to Valery Giscard d'Estaing, the current Lisbon treaty is the "same as the constitution"), they were sneeringly insulted by their betters in Brussels. Neil Kinnock said it was a "triumph of ignorance". Andrew Duff, Liberal Democrat MEP, labelled the "rejectionists" as an "odd bunch of racists, xenophobes, nationalists, communists, the disappointed centre left and the generally pissed off". He asked whether it is wise to "submit the EU Constitution to a lottery of uncoordinated national plebiscites".

Clearly not, since the plebs might just reject it. The EU's attempts to force the constitution/Lisbon treaty through despite its democratic rejection, and now their offer of a few addendums to the Irish people, make it come across as a corrupt, archaic oligarchy, ensconced in its palaces, looking down at the people of Europe as a strange, dumb, untrustworthy blob.

All of the Irish people I know remain passionate about the idea of Europe. Even those who rejected Lisbon think of Ireland as European, and have travelled, worked and made friends on the continent. It is not Europe that they rejected in the referendum in June, but a document produced by a cut-off and aloof European elite, those cosmopolitan poseurs who are in reality distrustful of Europe's masses, whether it's the thick Irish, the xenophobic French, or the mysterious Turks. The Irish were being properly European; the EU is being merely elitist.

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Organized Crime, Intelligence and Terror: The D-Company's Role in the Mumbai Attacks

By Tom Burghardt

What do you call a "devout Muslim" who exerts considerable control over South Asia's heroin, gambling, prostitution and smuggling rackets? Why an intelligence asset, of course!

When Lashkar-e-Taiba ("Army of the Pure"--LET) militants slaughtered nearly 200 people in Mumbai during the November 26 siege in India's financial capital, one name stood out among a list of 20 fugitives the Indian government has demanded Pakistan extradite as a key suspect responsible for providing funds and logistical support to the Kashmir-based terrorist outfit.

Enter Dawood Ibrahim, the enigmatic Mafia don of Mumbai's D-Company whose far-flung organized crime empire stretches from Dubai through Pakistan to India and beyond. If anyone knows where the proverbial "bodies are buried," that man may very well be Ibrahim. Wanted by Interpol and the U.S. Drug Enforcement Agency (DEA), Ibrahim commutes between palatial homes in Dubai and Karachi where he enjoys the protection afforded by "friends in high places."

According to a report in Asia Times Online, "Ibrahim is...suspected of orchestrating the November 26 Mumbai terrorist strikes through a businessman in Saudi Arabia said to be his frontman." The Indian-born drug kingpin has been identified by journalists and investigators as a long-time asset of both the CIA and Pakistan's notorious Inter Services Intelligence agency (ISI).

Asia Times Online investigative journalist Raja Murthy was told by Lahore-based journalist Amir Mir that "Dawood's underworld connects and business ventures are extensive. And he sublets his name in Pakistan, Thailand, South Africa, Indonesia, Malaysia and the United Arab Emirates, among other countries, to franchises in the fields of drug trafficking and gambling dens."

Karachi-based reporter Ghulam Hasnain described to Murthy why Ibrahim was amongst ISI's most valued assets: "Dawood is Pakistan's number one espionage operative. His men in Mumbai help him get whatever information he needs for Pakistan. Rumor has it that sometimes his men in Karachi accompany Pakistani intelligence agents to the airports to scan arriving passengers and identify RAW [Indian Research and Analysis Wing] agents."

And what does this "number one espionage operative" get in return? According to Hasnain, "His home is a palatial house spread over 6,000 square yards, boasting a pool, tennis courts, snooker room and a private, hi-tech gym. He wears designer clothes, drives top-of-the-line Mercedes and luxurious four-wheel drives, sports a half-a-million rupee Patek Phillipe wristwatch, and showers money on starlets and prostitutes."

Pakistan's shadowy military intelligence bureau, with organizational and operational linkages to the Taliban, al-Qaeda, the CIA and Britain's MI6 has long been suspected of funding planetary-wide terrorist operations and nuclear smuggling in part, through "black money" derived from the drugs trade and other rackets. Despite this sordid history, the ISI and their organized crime-linked assets have long been viewed by Washington as allies in America's so-called "war on terror."

While American "counterterrorism officials" are now calling for the heads of Ibrahim, his associate Tiger Memon and former ISI Director, retired Lieutenant General Hamid Gul, described by the usual unnamed sources as--what else!--"rogue elements," the United States and their NATO partners have made liberal use of these jokers in a score of destabilization ops that span continents.

Indeed, after the Afghanistan operation during the 1980s, the CIA and ISI worked together in a score of global hot spots. From Bosnia to Chechnya and beyond, wherever the dirty work needed doing, a wide pool of disposable intelligence assets under cover of "Islamic fundamentalism" were ready, willing an able to fill the breech.

It should be noted that characters such as Dawood Ibrahim and others of his ilk have as much in common with Islam as former New York crime boss, the late, though unlamented, John Gotti did with Christianity.

Destabilization and Covert Ops in South Asia

Before his execution at the hands of the Taliban, Najibullah, Afghanistan's last socialist president told an American reporter:

We have a common task--Afghanistan, the USA and the civilised world--to launch a joint struggle against fundamentalism. If fundamentalism comes to Afghanistan, war will continue for many years. Afghanistan will turn into a centre of world smuggling for narcotic drugs. Afghanistan will be turned into a centre for terrorism. (Michael Griffin, Reaping the Whirlwind: Afghanistan, Al Qa'ida and the Holy War, London: Pluto Press, 2003, p. 4)

Little did the former president know, this was precisely the fate chosen for his country by the ISI and their American partners in crime over at Langley.

Though now on the outs with Washington, Hamid Gul was a staunch U.S. ally during the 1980s anti-Soviet jihad when the CIA made liberal use of billions of taxpayer dollars to fund the so-called mujahedin or "holy warriors" in a successful bid to bring down Kabul's socialist government.

During the war, U.S. and Pakistani intelligence assets linked to organized crime gangs and various smuggling rackets quickly learned the value of Afghanistan's number one cash crop, poppy. By the time the first phase of the war ended in 1989 with the withdrawal of Soviet combat troops, heroin production had morphed into a multibillion dollar industry along Asia's Golden Crescent, one that provided a limitless source of black funds--and hardened combat veterans--to enterprising intelligence agencies.

Occupying a prominent place in the spider's web, the D-Company certainly fit the bill. India's 1990s economic "reforms" bit hard into Ibrahim's former "cash crop"--gold smuggling. As the globalized market, rather than bureaucratic Indian regulations gobbled-up D-Company profits, Ibrahim's gang turned to another profitable source of income: the global drugs trade. As investigative journalist Misha Glenny points out, Ibrahim,

took the obvious plunge and started trafficking in drugs, chiefly in heroin bound for the European market and mandrax for South Africa. And in Dawood's part of the world, if you want to guarantee the success of a narcotics business, there is only one organization you need to cozy up to--the Inter-Services Intelligence (ISI) Pakistan's secret service. (McMafia: A Journey Through the Global Criminal Underworld, New York: Alfred A. Knopf, 2008, p. 135)

Ibrahim followed in the footsteps of a long line of CIA-ISI "best friends forever." As Alfred W. McCoy documented in his landmark study, The Politics of Heroin, another darling of dodgy intelligence agencies, the pathological killer Gulbuddin Hekmatyar, who made his mark in the 1970s by throwing acid into the faces of Afghan university women, became the chief beneficiary of CIA largesse. McCoy writes,

...over the next decade, [the CIA] gave more than half its covert aid to Hekmatyar's guerrillas. It was, as the U.S. Congress would find a decade later, a dismal decision. Unlike the later resistance leaders who commanded strong popular followings inside Afghanistan, Hekmatyar led a guerrilla force that was a creature of the Pakistan military. After the CIA built his Hezbi-i Islami into the largest guerrilla force, Hekmatyar would prove himself brutal and corrupt. Not only did he command the largest guerrilla army, but Hekmatyar would use it--with the full support of ISI and the tacit tolerance of the CIA--to become Afghanistan's leading drug lord. (The Politics of Heroin: CIA Complicity in the Global Drug Trade, Chicago: Lawrence Hill Books, 1991, pp. 449-450)

It would be a travesty however, to claim that Pakistan alone was responsible for launching Ibrahim along the path of international terrorism. India's own neofascist movement, the Rashtriya Swayamsevak Sangh (National Volunteers Organization--RSS), aligned with the Hindu supremacist Bharatiya Janata Party (BJP), are intent on constructing a "pure" Hindu state purged of "alien" Muslims. As Indian socialist analysts point out,

It is no coincidence that the flourishing of fascism has accompanied the establishment of the neoliberal regime at the centre. The India to which neoliberalism has given birth, with one-fifth engaged in consumer excess as never before and four-fifths in deep misery, can only with difficulty persist alongside the maintenance of civil rights, democracy and periodic elections. If the fundamental social question, imperialist capitalism vs. socialism, were ever to be put at the centre of things, the continued existence of the landlord-big business regime that has ruled since independence would be in danger, and a truly explosive situation result. ("The Christian Pogrom in Orissa and the Growing Threat of Hindutva Fascism," Analytical Monthly Review, February 22, 2008)

This was tragically driven-home with a vengeance in the early 1990s. Indeed, the rise of Indian fascism coincides precisely with the rise of neoliberal globalization. As "market reforms" plunged tens of millions into abject poverty, the ruling elite cast about for scapegoats and, like European Jews in prewar Germany, the Muslim community became targets of religious intolerance and communalist fanaticism.

In 1992, during a 150,000 strong demonstration organized by Indian fascists, rampaging gangs destroyed the Babri Mosque in the city of Ayodhya. In the rioting that followed in a score of cities some 2,000 largely Muslim Indian citizens were murdered by Hindu supremacist mobs. Ibrahim, though nominally a Muslim, was greatly angered by the Mumbai pogrom and vowed revenge. It wasn't long in coming.

On March 12, 1993, a series of explosions wracked Mumbai in coordinated attacks believed to have been organized by the D-Company working in tandem with ISI who, like their nominal enemies in New Delhi, had their own communalist agenda. The largest blast occurred at the Mumbai Stock Exchange when a half-ton of military grade RDX was detonated in the underground parking garage and killed more than 50 people. By the time the smoke cleared, nearly 300 people lay dead and hundreds more wounded.

According to a 2002 report in India Abroad, Ibrahim organized the blasts "under pressure from the Inter-Services Intelligence of Pakistan."

The ISI, which controlled the shipping routes from the Gulf to India's west coast, demanded that the mafia transport weapons and explosives into India in return for the use of Pakistani waters, the sources said quoting official information.

The Mumbai underworld's financial interests were under pressure as gold prices had crashed and the smuggling routes between the Gulf nations and the western coast of India had come under ISI control. ("ISI pressured Dawood to carry out Mumbai blasts," India Abroad, December 22, 2002)

It wouldn't be the first time nor the last that the dapper Mafia don would do ISI's bidding.

ISI: the Enforcement Arm of Pakistan's "Military Inc."

Hamid Gul's history as a beneficiary of state largesse in the form of plum contracts and other dodgy schemes that benefitted his family goes back decades. Nor is his hostility to civilian rule. As Pakistani scholar and investigative journalist Ayesha Siddiqa writes, Gul's maneuvering against Benazir Bhutto's first government, led to her ouster in 1990 through a "soft coup" engineered by the general and other top army officials.

Benazir Bhutto...replaced the head of the ISI, Lt. General Hameed Gul, with a general of her choice, Major-General Shamsul Rehman Kallu. This did not make her popular with the army, and hence the organization retaliated. Reportedly, the higher echelons of the army, who were extremely unhappy with her attempts to curb their power by interfering in internal matters, used the ISI to remove her from power. The army chief, General Aslam Beg, and the head of the ISI, Lt. General Asad Durrani, obtained a slush fund of approximately Rs 60 million (US$1.03 million) from a private bank, and used to execute the plan for Bhutto's removal. The money was given to the ISI to destabilize the civilian government. (Military, Inc.: Inside Pakistan's Military Economy, Ann Arbor: Pluto Press, 2007, p. 91)

And what "private bank" pray tell, did the coup plotters reach out to in order to remove Bhutto from power? Why none other than Agha Hasan Abedi's Bank of Credit and Commerce International (BCCI) of course! BCCI, a corrupt financial institution that stole billions from their depositors was a long time "friend" of both ISI and CIA in their dirty dealings--from drug money laundering to arms trafficking--that spanned continents, from the covert war in Afghanistan to the Iran-Contra affair.

Days after the 2007 Karachi bombings that greeted her return to Pakistan, and just two months before her assassination in Rawalpindi, Benazir Bhutto accused Gul and Intelligence Bureau (IB) Chief Ijaz Shah, among others, as the masterminds behind the savage attacks that left more than 140 people dead and 450 injured. After her assassination, although al-Qaeda commander Mustafa Abu al-Yazid claimed responsibility for her murder, reportedly on orders from al-Qaeda's number two man, Ayman al-Zawahiri, Bhutto's followers believe the plans for her assassination came from senior ISI officials formerly in the retinue of America's "friend," the dictator General Zia ul-Haq.

Since his 1989 "retirement" from ISI, Gul has been an outspoken proponent of utilizing proxies such as LET as witting or unwitting assets in Pakistan's conflict with India over Kashmir--and as a supporter of the Taliban and another "former" group of U.S. intelligence assets, al-Qaeda. According to The Washington Post,

Gul, 71, has acknowledged that he once was a member of a group of retired ISI officers, Pakistani scientists and others that was suspected by the United States of giving material support to the Taliban and al-Qaeda. Gul said the organization, Ummah Tameer-e-Nau, was formed by a group of Pakistani businessmen to aid war-ravaged industries in Afghanistan.

The U.S. Treasury Department declared Ummah Tameer-e-Nau a terrorist group after a search of the group's offices in the Afghan capital, Kabul, unearthed documents referencing plans to kidnap a U.S. diplomat and outlining basic physics related to nuclear weapons. (Candace Rondeaux, "Former Pakistani Official Denies Links to Lashkar," The Washington Post, December 9, 2008, A12)

But what Gul (and The Washington Post) will not, cannot, reveal is that Ummah Tameer-e-Nau was also intimately connected--as was Dawood Ibrahim's D-Company--to the illicit nuclear smuggling ring of Pakistani scientist A. Q. Khan. Allegedly run to ground after overwhelming evidence surfaced linking Khan and Pakistan's military government to the underground trade in nuclear technology and know-how, nuclear smuggling is the proverbial third rail of the Pakistani--and American--defense establishments.

Operating for decades with a wink and a nod from Washington and London, Khan was quietly released from house arrest in April according to a report by the McClatchy Washington Bureau. This despite the fact that international investigators found electronic blueprints for an advanced nuclear weapon on computers belonging to Khan's smuggling network. According to The New York Times,

the latest design found on Khan network computers in Switzerland, Bangkok and several other cities around the world is half the size and twice the power of the Chinese weapon, with far more modern electronics, the investigators say. The design is in electronic form, they said, making it easy to copy--and they have no idea how many copies of it are now in circulation. (David E. Sanger, "Nuclear Ring Reportedly Had Advanced Weapon Design," The New York Times, June 15, 2008)

This closely tracks allegations made by whistleblower Sibel Edmonds earlier this year to The Sunday Times that a U.S. government official "warned a Turkish member of the [Khan] network that they should not deal with a company called Brewster Jennings because it was a CIA front company investigating the nuclear black market. The official's warning came two years before Brewster Jennings was publicly outed when one of its staff, Valerie Plame, was revealed to be a CIA agent in a case that became a cause celebre in the US."

Gul however, has a different take on Washington's newly-minted animus towards him and told the press on Monday, "I was quite a darling of theirs at the time. I don't know what this is about. It looks like they have a habit of betraying their friends."

While true as far it goes, Gul's disingenuousness is a cynical façade meant to conceal ISI's murderous policies. In an obvious appeal to dubious Western constituencies Gul declared, "I simply fail to understand what all the hullabaloo is about. It's simply because I speak loudly about the fact that 9/11 was a bloody hoax," he told the Post. "It was an inside job."

Mumbai: "Round Up the Usual Suspects!"

Though there is convincing evidence linking the D-Company to the Mumbai attacks, each new "revelation" by Indian and American authorities tend to erase Ibrahim from the picture. This subtle though noticeable reframing of the equation follows a predictable and well-known pattern. Independent press outlets such as Asia Times Online however, apparently haven't gotten the memo. According to investigative journalist Raja Murthy:

The Pakistan-based Lashkar-e-Taiba terrorists set sail from Karachi to Mumbai in the ship MV Alpha, allegedly an Ibrahim-owned vessel. After being warned of Indian navy patrols along the Indian coast, the LET terrorists hijacked an Indian fishing trawler, Kuber, and murdered its crew except for the navigator, Amarsinh Solanki.

The terrorists slit Solanki's throat five nautical miles off the Indian coast--the Indian Navy found his body aboard the abandoned trawler with his hands tied behind his back. Later, they linked up with an Ibrahim gang member in Mumbai who provided them motorized inflatable rubber dinghies in which they landed ashore after 9pm on November 26. Within 30 minutes, they struck pre-determined targets in South Mumbai starting with the Leopold Cafe in Colaba. ("India Wants its 'Osama' Back," Asia Times Online, December 9, 2008)

These attacks however, didn't come out of the blue. According to numerous reports, Mumbai police were given "solid information" from India's Intelligence Bureau (IB) and the Research and Analysis Wing (RAW) that Mumbai was on a list of cities to be targeted by terrorists. India Abroad reports that

The first alert was sounded in February 2008 following the interrogation of a terrorist arrested in connection with the fidayeen (suicide) attack at the Central Reserve Police Force camp at Rampur, Uttar Pradesh. During the interrogation, the arrested terrorist had confessed that the Lashkar-e-Tayiba had planned on attacking Mumbai. He had specifically mentioned the Taj Mahal hotel during his interrogation.

Then came the various intercepts by both the IB and RAW, which both agencies claim had passed on to the Mumbai police. The first intercept of a satellite phone conversation was three months before the Mumbai attack. The conversation suggested that the next attack would be a hotel at Mumbai. The conversation also suggested that it would be better to take the sea route as it was safer. The final intercept was made on November 18, which was eight days before the attack. (Vicky Nanjappa, "Time & again, Mumbai cops had been warned: IB," India Abroad, December 4, 2008)

This report was echoed by The New York Times, which claimed,

Two senior American officials said Tuesday that the United States had warned India in mid-October of possible terrorist attacks against "touristy areas frequented by Westerners" in Mumbai, but that the information was not specific. Nonetheless, the officials said, the warning echoed other general alerts this year by India's intelligence agency, raising questions about the adequacy of India's counterterrorism measures. (Eric Schmitt, Somini Sengupta and Jane Perlez, "U.S. and India See Link to Militants in Pakistan, The New York Times, December 3, 2008)

Despite these suspicions, Indian authorities insist that the terrorists had no "local support" in carrying out the attacks. According to a report in the Economic Times however, "the don is ensconced safely in his plush bungalow in Karachi. Sources in security agencies told TOI [Times of India] on Wednesday that it is business as usual for Dawood. ... Mohammed Ali, who is the king of the docks and a key person of the Dawood gang, is continuing his operations with impunity. Even after the November 26 terror attacks his smuggling racket remains unchecked."

And Express India reported November 29 that "Ajmal Amin, the only militant arrested during the operation, told interrogators that the dozen ultras who sailed from Karachi had come to Sasool dock from where they were taken first to Cuff Parade and later to Gateway of India in boats arranged by a front man of Dawood, who runs several custom clearing houses in Mumbai, the sources claimed."

Meanwhile, the Associated Press reported December 9, that the head of Russia's federal anti-narcotics agency, Viktor Ivanov, said that Ibrahim had helped the gunmen. "The information that has been received indicates that the well-known drug trafficker Dawood Ibrahim provided his logistics network for the preparation and implementation of the attacks."

But Ibrahim wasn't always the bête noire of U.S. intelligence agencies. According to Yoichi Shimatsu, a former editor of The Japan Times, during the CIA's Afghan campaign of the 1980s, Ibrahim "personally assisted" U.S. deep cover operations by diverting money from U.S.-owned gambling casinos operating in Kathmandu, Nepal. Shimatsu, commenting on India's demand for Ibrahim's extradition for his role in the Mumbai attacks wrote,

Washington and London both agreed with India's legal claim and removed the longstanding "official protection" accorded for his past services to Western intelligence agencies. U.S. diplomats, however, could never allow Dawood's return. He simply knows too much about America's darker secrets in South Asia and the Gulf, disclosure of which could scuttle U.S.-India relations. Dawood was whisked away in late June to a safe house in Quetta, near the tribal area of Waziristan, and then he disappeared, probably back to the Middle East. ("Did a Criminal Mastermind Stage the Mumbai Nightmare?," AlterNet, November 28, 2008)

But as time passes both India and the United States are downplaying Ibrahim's role while elevating that of alleged LET commander Zakiur Rehman Lakhvi, reportedly captured by Pakistani authorities during a raid on a training camp and now in custody. Allegations of an international whitewash of the affair are now being leveled by journalists. Jeffrey R. Hammond comments, "The recent promotion of Lakhvi to 'mastermind' of the attacks while Ibrahim's name disappears from media reports would seem to lend credence to Shimatsu's assertion."

On Friday, according to a New York Times report, Hafiz Muhammad Saeed, the founder of LET, was detained in Lahore on Thursday by "Pakistani authorities."

Despite the appearance of Pakistani resolve, the detention of Mr. Saeed was orchestrated by the government in a way to minimize what many here expect to be an angry reaction from the public, and from a broad spectrum of Islamic militant groups sympathetic to Lashkar-e-Taiba. (Jane Perlez and Salman Masood, "Pakistan Detains Founder of Group Suspected in Mumbai Attacks," The New York Times, December 11, 2008)

Saeed, briefly detained in 2002 after an earlier "crackdown" on militant outfits, became the leader of the Islamic charity, Jamaat-ud-Dawa, which is a recruiting arm for the LET.

Meanwhile, according to the Times, "There was still uncertainty on Thursday about whether Maulana Masood Azhar, the leader of Jaish-e-Muhammad, another militant group, had been placed under house arrest, and whether the Lashkar commander suspected of running the Mumbai operation, Zaki ur-Rehman Lakhvi, had been arrested."

So much for arresting Mumbai's alleged "masterminds." Sounds more like Captain Renaud's quip in Casablanca: "Round up the usual suspects!"

Indeed, a deal earlier this year to have Pakistan hand Ibrahim over to Indian authorities was scotched by the CIA. The Agency, fearful that too many dirty little secrets would come to light, including the criminal activities of high-level CIA personnel, nixed the proposal. According to this reading, the Mumbai attacks were a backlash for the proposed double-cross of Ibrahim and that any future arrangements along these lines would have serious consequences.

Why would India seek to downgrade Ibrahim's role? Hammond comments,

But while Lakhvi, Muzammil, and Hafiz Saeed have continued to be named in connection with last month's attacks in Mumbai, the name of Dawood Ibrahim seems to be either disappearing altogether or his originally designated role as the accused mastermind of the attacks being credited now instead to Lakhvi in media accounts.

Whether this is a deliberate effort to downplay Ibrahim's role in the attacks so as not to have to force Pakistan to turn him over because of embarrassing revelations pertaining to the CIA's involvement with known terrorists and drug traffickers that development could possibly produce isn't certain. But what is certain is that the CIA has had a long history of involvement with such characters and that the US has a track record of attempting to keep information about the nature of such involvement in the dark or to cover it up once it reaches the light of public scrutiny. (Jeffrey R. Hammond, "Role of Alleged CIA Asset in Mumbai Attacks Being Downplayed," Foreign Policy Journal, December 10, 2008)

And so it goes, on and on... Meanwhile, business as usual will continue and the bodies pile up. Which just goes to show, as investigative journalist Daniel Hopsicker has reminded us on more than one occasion: "Being connected means never having to say your sorry."

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, an independent research and media group of writers, scholars, journalists and activists based in Montreal, his articles can be read on Dissident Voice, The Intelligence Daily and Pacific Free Press. He is the editor of Police State America: U.S. Military "Civil Disturbance" Planning, distributed by AK Press.

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