FRANCE TURNS OUT TO BE THE WINNER AFTER ALL

Many in Britain and the United States are in mourning for what’s taken as the suicide of the American (or Thatcherite, or Chicago-school) model of capitalism, accompanied by the non-interventionist state that hands the national economy over to business and financial leaders to run.

Not least among the mourners ought to be The Economist magazine in London, a major part of whose charm has always been the insolent certitude with which it expresses its views. It is not a publication used to lunching on its own words. But The Economist too has become a victim of the world crisis, and its current issue’s cover story pays a handsome tribute to the success of the formerly scorned, centralized, interventionist, Colbertist French economic model, and the state practices and values that support it.

“France’s economy,” it writes, “has been less hard hit than many. Its GDP is expected to shrink by 3 percent this year ... against 4 percent in Britain, 4.4 percent in Italy, and 5.6 percent in Germany. It is less dependent on exports than Germany, and consumer spending in the first quarter of 2009 was up on the same period last year. The government ... is set to have a deficit in 2009 (6.2 percent of GDP) well below those in America (13.6 percent) and Britain (9.8 percent).”

French household debt is half that in America, no bank has failed, none has been nationalized, executive pay is reasonable, and “the income gap between the top 10 percent and the bottom 10 percent is far smaller than in Britain or America.” The country is crisscrossed by 230-mph TGV trains, 80 percent of the power is nuclear (and more is exported), its auto producers are in reasonably good shape, Air France is the most profitable airline in the world, and French-dominated Airbus sells more planes than Boeing.

The French are uncertain of what to make of this tribute, since self-denigration is (oddly enough) a national characteristic, and they have only recently elected Nicolas Sarkozy, another font of certitudes, who won the presidency while insisting to the French that the “French model” was obsolete and that France had to learn new ways to live by adopting the “Anglo-Saxon” model of laissez-faire capitalism, market freedom and financial innovation.

It is, of course, premature to say that what the French call capitalisme sauvage is dead. One doubts that it’s really dead—the cadaver twitches; the Obama administration in the U.S. has yet to drive a stake through its heart. A decade from now, Barack Obama might well be discovered on the board of Goldman Sachs, and Timothy Geithner will almost certainly be there. But the capitalism they serve may not quite be the same.

The United States is certain to learn something from the French success in long-term state planning, infrastructure development and, one would hope, will build a vastly improved health system (the World Health Organization considers France’s the best in the world) and other social protections.

The business model that has dominated the British and American economies since the 1960s, and been propagated worldwide, crashed because it is inherently unstable. It works in only one direction, to take value away from the real economy and give it to stockholders and bankers. It’s an asset-stripping system that benefits company managers and directors, bankers, stock traders and financiers. To workers and their families, who in the past believed that they had a stake in the business economy, and to the communities suffering de-industrialization, it said, “Too bad, but you’ll be better off in the long term—if you are still around.”

To be fair, this was the unintended result of an ideological position of political origin, which claimed that unregulated property ownership is the fundamental right of a free society, and which in its American version subordinated the interests of the labor force and local and national communities to the pursuit of ever-higher returns on investment.

This doctrine concerning property rights historically was a reaction against the 20th century totalitarian communism that intended to destroy private property. While the modern economic system makes a natural appeal to greed, its theoretical origins lie in the work of certain Central European intellectuals—notably Frederick Hayek, Karl Popper and, to an extent, Joseph Schumpeter—who were exiles from the political crisis in Europe and fearful of the abuse of centralized government power.

The business model that Margaret Thatcher, her advisers and conservative Americans constructed from this foundation was condemned to its eventual self-destruction by its disequilibrium.

The classic English and Scottish economists (Adam Smith, David Ricardo, etc.) believed that a business enterprise was an agent of social benefit, in that it created goods and wealth, but also had obligations to its workforce and society as a whole. The same values are responsible for the “French model,” and are now demonstrating that they can succeed in bad times as well as good.

Visit William Pfaff’s Web site at www.williampfaff.com.

© 2009 Tribune Media Services Inc.

Mowing the Sward of Damocles-fred reed

I’ve been reading the news again. It’s great fun, like watching an EEG trace as it…slowly…flat-lines. Reading a newspaper increasingly reminds me of watching a leper to see which finger falls off next. You can make bets.

In the news I find more on torture. I’m so proud. Home of the brave, land of the free, though we may pull your fingernails out. What nobody talks about is where we get our torturers. I mean, is it a rating, like Radioman First Class? Do recruiters offer it? What civilian applications do they see when an eager young Torquemada leaves the military? Local police?

The question of recruiting is fascinating. How much would you have to be paid to crush knees with a sledge hammer? Where do they find these guys? The boss at Langley presumably doesn’t just walk through the office saying, “Hey, we need someone TDY for Guantanamo to crush genitals. Sally, you up for it? Bill? You get overseas pay and it looks good on your rseume.”

Or does he? The military didn’t have any trouble getting those girl soldiers at Abu Ghreib into it. Ooooh! King-ky!

Sadism is sexual. People don’t do it who don’t like it. We’re not talking fun and games among suburban S&M hobbyists who like to spank each other. Don’t even think about what goes on in Saudi prisons in league with the American military. Do our twisted patriots spend a few hours breaking some poor kid’s mind and then rush into an adjoining room to masturbate? Do they swap techniques?

Next, I see that some guy named Ahmadinnerjacket claims he has been elected Prez of Iran again. It seems that he is being threatened by the Prime Minister of Israel, who for some time I believed to be named Bibi Nut-and-Yahoo. This struck me as unusually candid. Why don’t I care? Sounds like a personal problem. If they nuked each other, the planet would be so much quieter.

Meanwhile North Korea threatens South Korea with nuclear war, and the US pledges noisily to defend the South at all costs. Why? The South has lots more population and industry than does the North. If South Korea wants to defend itself, it can. If it doesn’t want to, I don’t care. I’m not Seoul’s mother.

When you enlist in the military you pledge to defend the Constitution. Is it in Korea? I didn’t pay much attention in high-school civics.

Next, I see that the US has killed thirteen more civilians with drone strikes in Afghanistan. Lovely. What fun. I picture some wet-lipped CIA psychopath goobering at his screen in search of someone to blow up. It’s a cinch they don’t know who they are aiming at. The CIA has never been very good at intelligence, but it doesn’t matter. It’s the spirit of the thing. Besides, Afghans breed like flies. If you splatter one kid with a really neat drone, got buttons, got knobs, they can beget another.

Next, California is broke. Good. They deserve it. It’s not as if bankruptcy were an act of God, like getting hit on the head by a giant meteor. It was deliberate stupidity. Spend more than you make, and you end up on the street. I’m supposed to feel sorry for that? I’ve known roundworms with better sense. As I understand it, the Democrats refuse to cut spending and the Republicans refuse to raise taxes. See? A lobotomy in two-part harmony. Sounds like the whole country.

Next, I see that Precedent O’Bama wants to take on the pharmaceutical companies to lower the price of prescriptions. The subhead alleged that important congressmen have “ties to the industry,” as if this were somehow not right or normal.

OK, a brief excursion into cosmic truth. First, socialism. Hard-line conservatives with little grasp of economics refer to anything they don’t like—Hillary, national health care, regulation of anything if it might cost them money—as “socialist.” It’s a utility pejorative, devoid of meaning, as “racist” and “elitist” are for political south-paws. Socialism is of course a system in which the government owns the means of production. Check your dictionary.

Ah! But in America, the means of production own the government. Inverted socialism it is. Here is a far better thing. If you are a means of production, anyway.

Example: Bausch & Lomb makes ophthalmic salt water, useful in treating corneal edema, under the trade name “Muro.” In the Yankee Capital, it costs $23 for 1.8 ounces; in Wincherster, Va., $19; in Farmacias Guadalajara, about $6. The identical product. The generic here, Hipoton, comes in at about $3.

You could call it price-fixing, but I prefer to think of it as governmental regulation of prices. It is perfectly legal, because Big Pharma owns the government.

I believe that Econ textbooks say that price controls haven’t worked from Diocletian on. Wrong. They work splendidly. Ask Bausch & Lomb. If you could make over twenty-two bucks on a dime’s worth of salt water, wouldn’t you be in favor of governmental interference in the economy?

Let me explain medicine briefly. It’s an unholy scam. Here in Mexico my wife occasionally gets ear infections. At any pharmacy, we pick up Amoxicillin, 250mg three times a day for ten days. Six bucks.

Recently we were staying in Maryland with friends, and she got an ear ache. Amoxicillin is by prescription only in the US, which means that doctors have a monopoly on ear aches. It was Friday evening. It was either agony until Monday or go to one of those mall-based walk-in clinics, which wanted $150 for the appointment and prescribed $78 in medicines.

It’s a scam, pure and simple. Above the level of county government, the US is as corrupt as Mexico could ever be, and it’s mostly legal. Yes, I know all the who-struck-John from doctors about engendering resistant bugs. Funny. Any pharmacist in Thailand will tell you the same thing a US doctor will—Amoxicillin, take all ten days’ worth, etc. Scam.

Finally, I find that Northrop has “unveiled” an unmanned fighter, the X-47 I think. (“Unveiled” is a curious word, suggesting a blushing virgin.) Again, iit’s nverse socialism. America has no military enemies and the country is going broke, but the means of production own the government, and so we’ll get the thing at some huge cost. Northrop is picking the pocket of the corpse as it begins to decompose. Reminds me of Wall Street. Government by looters.

Aaagh!

.

FEAR MONGERING SWINE FLU

On June 11 the World Health Organization (WHO) warned 194 member nations to expect up to 1/3 of the population to be infected with the swine flu. However they also reinforced that this is a mild illness in the majority of cases.

The KEY here is to recognize that absolutely nothing has changed from when I first posted my major update on Swine Flu on April 29 that has now been viewed over one million times.

This promotion to Stage Six is still fear mongering, plain and simple. While it certainly qualifies for a pandemic in the strict definition of the term, they are using that term to instill fear in the population.

All a pandemic implies is that the infection is spread across the world.

It is important to note that even the fear spreading WHO is still stating the disease is mild, and the latest stats support this. As of June 12 only 145 deaths have occurred in the entire world. Mexico has the majority of the deaths at 108 and the US has had 27 deaths.

While any death is tragic, let me put these numbers in perspective for you. If you believe the CDC, 35,000 people die every year in the U.S. alone from the regular flu. That means that in the last six weeks when 27 people died from wine flu, there were over FOUR THOUSAND people who died from the regular flu. That is 150 times as many people dying from regular flu as swine flu.

Time magazine adds to the fear mongering by stating that:

“The last pandemic — the Hong Kong flu of 1968 — killed about 1 million people. Ordinary flu kills about 250,000 to 500,000 people each year.”

If you use those numbers, the statistics for the swine flu are even worse.

Let’s assume the midpoint of 375,000 people die every year from ORDINARY flu. That means that 43,000 people have died from ordinary flu in the last six weeks and only 145 from swine flu. So nearly 300 times more people died from ordinary flu than swine flu, further confirming that swine flu is a relatively MILD disease for the vast majority of people.

The WHO announcement is simply more of the same. NOTHING has changed.

It is no surprise that more people have died or will continue to die. The major point is that this is a mild illness that will have virtually no major impact on death rates. It is not the Flu Pandemic of 1918 that killed 20 million people worldwide.

If you want further details on swine flu please review my original Critical Alert. Reviewing it again will provide a counterbalance to the major fear mongering the media is unleashing on you.

STEVE BANTA

On Sunday buses will return to the Portland Mall after being on 3rd and 4th avenues for almost 2 1/2 years. Many people thought that the move away from the Mall in January 2007 was going to be difficult, but once things were transitioned it turned out to be a decent operating environment. I have a feeling that the return to the Mall will be an even smoother experience, given the care and attention put into its design, and the hard work from those involved to make this a safe and successful opening.

As of this week, more than 1700 individuals have been through training on how the Mall will operate. Operators have been making announcements, and Ride Guides have been on the street informing riders of the service change. Television spots have aired to inform customers of the changes and provided them with safety tips. TriMet and partner-agency staff have been working for months to ensure that the system elements are ready for Sunday.

Here are a few things that are important to know:

* Safety is our highest priority. Be patient and watch for motorists, pedestrians and bicyclists who have not gotten used to the new rules of the Mall.

* Operators should contact station management to report issues they experience on the Mall.

* Watch for bulletins next week with updates on issues that arise and adjustments made in the first few days of operating on the Mall.

* Dispatch is ready to respond to incidents through the new "Mall Call" procedure.

* The final elements of Mall construction will continue, even after buses return on Sunday:

o All Mall bus shelters should be installed by the end of August, with high-ridership stops being installed first, beginning in mid-June.

* MAX training on the Mall will resume on Monday, June 1.

Clowns riding in Friday's bus parade

celebrating buses back on the Mall.

For the 60,000 bus riders who pass through downtown each day, this milestone is significant. After 2 1/2 years of relocation, our bus service will once again operate on streets designed for transit. It is important that we celebrate the achievements of our bus system and the hard work that has gone into making this transition successful.

JAMES STENGER (fired by TRIMET) gives his side of the incident

What Good Is a Union For?

Union politics and the deals made out of view of the public killed my career and my retirement pension.

by

Jim Stenger

I was a member of the Amalgamated 757 union in good standing for many years. I was a Trimet employee who had earned several performance and driver safety awards. I was on the verge of retirement. But then the world came crashing down on me over false allegations, unsubstantiated half-truths, and a local media that was thirsty for a hot story. The result? I lost my job. I lost my pension. And I lost my career.

What did the 757 do to help me? Nothing! Here’s my story.

Back in 2004, I was having dinner with a friend, Ken West, at Kauai Island Grill in Portland. I had noticed that the restaurant’s staff was acting rude.

In the words of my witness, Ken West, he said, “I was with Jim Stenger the evening that he had a problem with employees at the Hawaiian restaurant. When we were ordering food, we were treated very rudely by a female taking our order. I wanted to leave at that time because she was being unnecessarily rude and discourteous. Jim wanted to stay. While we were waiting for our food, she was walking around us giving us dirty looks for no reason. We received our food, which was below average in quality. While we were eating our food the lady seemed to have a problem with us and began talking to a young male cook. The lady even went outside on the sidewalk in front of the window we were sitting at. She kept looking at us and making faces at us.”

The restaurant’s staff’s behavior was bizarre. Not wanting to cause a stir, we departed the restaurant peaceably. But I really I wondered what we had done to deserve such bad treatment. So, I turned around and attempted to go back inside to find out what the problem was.

When I got to the door, it was either stuck or locked and I couldn’t open it with my hand. I tried once more with my shoulder and foot and still couldn’t get it open. I turned around to leave and then all of a sudden the door opened and an older woman appeared. I turned around talk with her.

“While Jim and the lady were talking the young male cook came outside and started dancing around with his fists up,” said West. “He took a punch at Jim hitting him in the ear. Jim never retaliated in any way. Jim then got in the car again and the restaurant people looked like they were writing down his car license number. We then left,” West stated.

But, within a couple of hours, a policeman knocked on the door of my apartment and arrested me for intimidation, that is, allegedly making a racial comment in the restaurant. This was unbelievable!

As I stated under sworn testimony in the Circuit Court of the State of Oregon—a case where the intimidation charge against me was dropped—I testified that, “The incident didn’t happen the way my accusers said it happened. The guy assaulted me because I went to make a complaint about rude treatment that we, my friend and I, encountered at this restaurant, which ensued that the guy came out charging at me, assaulting me, and he hit and he punched me in the left ear. I did not retaliate, other than exchange words, but I did not make a racial comment.”

I have never used a racial word towards anyone. I lived in Hawaii for 20 years. My grandchildren are of Hawaiian descent. Even my girlfriend is Micronesian.

But this is only the beginning of my story. The arresting police officer wouldn’t listen to my side of the story. Then a week after the incident, a Channel 6 story was broadcasted and alleged that I made racial comments at the restaurant. The reported never contacted me for the story. The story was based upon hearsay, not solid, professional reporting. They just threw a story out there to stir up attention to boost their ratings, I guess. My bad luck didn’t stop there. Maxine Bernstein, a writer with The Oregonian, wrote an article about me stating that I was seen around Portland, making threats, and that I was seen back at the restaurant. I wasn’t even in the U.S. when she wrote the story; I was on an overseas visit in Asia.

It should be no surprise that once my employer, Trimet, got wind of this incident, I would be called to defend myself. During the investigation, the Trimet station manager never went to the restaurant to take a statement from my accuser. I believe Trimet wanted to fire me and it used the Union to help get rid of me. During a union arbitration hearing, my witness wanted to testify. Then, the worst possible thing happened that could have cleared up this terrible affair: the Union would not let my witness testify. In his own words, my witness, Ken West said: “Later when the transit union had a hearing for Jim, he was out of the country so I attended to tell what I witnessed. I was asked a couple of questions, but not allowed to give any testimony.”

Ultimately, I was given a choice: either resign or file a grievance. I chose the latter. But I knew something was wrong when my shop steward never gave me a heads up when the meetings for the grievance process were coming up. It’s pretty obvious to me now: The executive board members of the union didn’t want to hear any testimony in my defense. Instead of supporting me and helping me solve this problem, the union sided with Trimet and swept the whole matter under the rug. I have requested the transcripts of the union arbitration meeting but they have refused my request.

In the end, I was charged with a misdemeanor, which was thrown out. In the pretrial hearing, I was accused of saying a racial slur. The prosecutor told her side of the story based upon my accuser, who never came to the trial, and I told mine. The judge dropped the charge because there were contradictions in what was actually said on the night of the incident.

This was a “He Said She Said” incident that could not stand up in court.

I paid my union dues for years so the union would come to bat for me when I needed them. But the moral of the story is pretty clear: Union politics and the deals made out of view of the public killed my career and my retirement pension.

GET ORGANIZED

Learn the Secrets of the Super-Organized

If you want to get more organized, there are simple habits that you can develop over time that will get you to where you want to be. These are habits that you can apply to your work, your home, your hobbies, your life.

If your life is a mess, start with the first habit, and work your way down. Do it a little at a time, one area of your life at a time, one area of your home or office at a time. Work on a habit for a month or so, then move on to the next one.

1. Reduce before organizing. The mistake most people make when trying to organize is that it's too complicated. If you have a closet crammed full of stuff, you can buy a bunch of closet organizers, but in the end you'll still have a closet crammed full of stuff. The solution: reduce, eliminate, simplify. If you take your closet full of 100 things and throw out all but the 10 things you love and use, now you don't need a fancy closet organizer.
   
   
2. Write it down now, always. Instead of using your mind as storage for things you need to remember, write it down. Carry a small pocket notebook wherever you go, and write things down immediately. Then you can process the ideas and tasks later into a calendar or to-do list, so you don't forget.
   
   
3. Have one inbox & process. You actually need two inboxes -- one for home and one for work. But many people have many more than that; paper comes to their desk and lands in any number of places, phone messages get placed everywhere, notes to self are posted all over the place. Instead, have one inbox, and put all incoming stuff in there. Then, once a day (or once a week at home if that works better for you), process the inbox to empty.
   
   
4. A place for everything. Related to the above tip is to have a place for each item in your life. Where do your car keys go? You should have one place for them and you'll never lose them again. Where do your pens go? How about your magazines? The same concept applies to information: do you have one place where you put all your information? If not, try a personal wiki -- it's accessible from work and home, and you can create pages for each type of information in your life.
   
   
5. Put it away now. Most people have a habit of putting something on a table or counter top or on their desk with the intention of "putting it away later". Well, this is how things get messy and disorganized. Instead, put it away now -- in its home. It only takes a few seconds, and this one habit will save you a lot of cleaning and sorting and organizing later.
   
   
6. Clean as you go. Closely related to Habit 5, this habit is effective because it's much easier to clean things as you work or as you move through your day than to let them pile up and do a big cleaning session later. So if you're cooking, try to wash your dishes as you use them, and wipe the counter, instead of leaving a huge mess.
   
   
7. Develop routines & systems. If you've gotten everything uncluttered and organized, you might sit back and enjoy the pleasantness of it. Being organized and having a simplified working environment or home is tremendously satisfying. But the problem is that after a little while, things tend to start to get disorganized and cluttered again. You need to develop systems to keep your organization in place. All systems follow the same guidelines -- specific procedures and a routine that is done at a set interval. Once those systems are in place, you need to be vigilant about keeping them going, and then things will stay organized.

Politics, Profits & Pandemic Fear Mongering

Politics, Profits & Pandemic Fear Mongering

by Barbara Loe Fisher

Are you grabbing your face mask, stocking up on food and Tamiflu, locking your doors and keeping your TV tuned to the news to find out just how bad the "swine flu pandemic" really is going to get?

While Americans are being scared to death, few are noticing how much of their tax money politicians are giving to drug companies and government health officials to grease the skids to create more experimental flu vaccines and drugs and more effective ways to quarantine or force their mass use whenever a "public health emergency" is declared in the future.

Call me cynical but not clueless. The bird's eye view I have had for the past 27 years at the National Vaccine Information Center www.NVIC.org has taught me one thing: the global alliance between Big Pharma and Big Public Health is a prescription for disaster that could extend far beyond a bout with the flu.

The international drama playing out right now before our eyes is an example of how citizens around the world can be easily manipulated by doctors and politicians engaging in fear mongering in the name of disease control to forward agendas that have more to do with ideology, power and corporate profits than health.

In 2006, the World Health Organization (WHO) issued an international call for all nations to do whatever it takes to increase public appetite and demand for annual influenza shots as the main strategy to prepare for an influenza pandemic. In April 2007, the WHO used money donated by the U.S. Department of Health and Human Services (DHHS) to fund the creation of influenza vaccine manufacturing plants in Mexico and other countries one week after the FDA gave Sanofi Pasteur a license to produce an experimental bird flu (H5N1) vaccine. Sanofi Pasteur is just one of many drug companies the U.S. government has given millions of dollars to for the creation of bird flu vaccines.

On February 19, 2009, the FDA's Vaccines & Related Biological Products Advisory Committee (VRBPAC) discussed whether to give approval for the testing of experimental bird flu vaccine on American infants. VRBPAC consumer member, also NVIC's Director of Patient Safety Vicky Debold,PhD, warned that testing of an experimental pandemic bird flu vaccine on infants in the absence of a real epidemic and without assurances that unapproved novel oil based (squalene) adjuvants (AS03, MF59) are safe, could pose unacceptable risks in terms of inducing severe immune dysfunction.

On February 27, 2009 it was confirmed that an influenza vaccine maker, Baxter International, had released a mixture of seasonal influenza viruses mixed with unlabeled live bird flu viruses to facilities in Czechoslovakia, Germany, and Slovenia. Baxter, which is waiting for a license to manufacturer bird flu vaccine, explained it was an "accident" and that no harm was done.

On April 23, 2009, the world heard the first news reports about a mysterious pig (H1N1) and bird (H5N1)and human hybrid influenza virus that was making people sick near a Mexican pig farm. By April 30, the WHO had issued a Phase 5 "Alert" warning that the world was facing an imminent pandemic influenza epidemic on the strength of several hundred cases of "swine" flu and less than 10 confirmed deaths.

The pandemic flu panic that has an especially strong grip on people living in Mexico and the U.S., thanks to the governments of both countries declaring a "public health emergency," has been a good thing for pharmaceutical companies in the pandemic flu business.
Wall Street revealed that the pandemic scare sent stock prices soaring for drug companies making anti-viral drugs, rapid flu diagnosis tests and influenza vaccines. Sanofi Pasteur, GlaxoSmithKline, Novavax, Baxter, Johnson & Johnson, Roche, BioCryst, and Vical are among the drug companies likely to benefit from the world pandemic panic.

In all the chaos that has Americans running to drug stores to buy face masks, closing schools to wipe desks down with rubbing alcohol and avoiding public transportation, there is action being taken behind the scenes by politicians and government health officials to prepare the way for implementation of future quarantine and mass vaccination of citizens with experimental vaccines and drugs that have by- passed normal FDA regulations for demonstrating purity and potency of pharmaceutical products.

A "public health emergency" has become an excuse to grease the skids and rush to market experimental drugs and vaccines that are not subject to product liability in the civil courts.

The mandated, mass use of multiple vaccines has become big business in the last quarter century since the U.S. Congress passed a law in 1986 shielding vaccine makers and doctors from liability for vaccine injuries and deaths and the numbers of vaccines recommended by the federal health officials for American children multiplied from 23 doses of 7 vaccines to 48 doses of 14 vaccines from birth to age six. For older children and adults, there are several dozen more federally recommended or state mandated vaccinations.

All of this liability protection and government vaccine mandating has been a boon for vaccine profit- making and public health agency empire building. In 1986, four drug companies made and sold vaccines in America and, by 2007, after corporate mergers and acquisitions there were six drug company giants making and selling vaccines in the U.S.

Today, there are more drug companies seeking to enter the lucrative multi- billion dollar U.S. vaccine market as financial predictions for global profits from the worldwide vaccine business by 2010 have climbed to more than $20B.

Politicians should not bow to additional pressure from vaccine manufacturers and public health officials to by-pass normal FDA standards in proving safety and efficacy of pandemic flu vaccines and their components for the purpose of rushing them to market in response to the pandemic panic that has been created. The swine flu debacle of 1976 should have taught Congress that lesson.

A rational perspective that reduces pandemic fear and includes common sense advice for staying healthy in every season is being offered by holistic health doctors, such as Joseph Mercola, D.O. and physician Congressman Ron Paul, M.D. The next time you turn on the TV or the radio or search the internet for the latest news on the flu pandemic, take a deep breath and consider all the natural ways to stay healthy and resist influenza or any illness : washing your hands; eating nutritious food; drinking plenty of pure water; getting enough exercise, rest and sunshine, and lowering stress - which includes not walking around filled with fear, anxiety and dread.

IS THIS JIM KARLOCK?

Critical Alert: The Swine Flu Pandemic – Fact or Fiction? (AA) highly respected DR MERCOLA!

Critical Alert: The Swine Flu Pandemic – Fact or Fiction? (AA)

By Dr. Mercola

American health officials declared a public health emergency as cases of swine flu were confirmed in the U.S. Health officials across the world fear this could be the leading edge of a global pandemic emerging from Mexico, where seven people are confirmed dead as a result of the new virus.

On Monday April 27th, the World Health Organization (WHO) raised its pandemic alert level to four on its six-level threat scale,¹ which means they've determined that the virus is capable of human-to-human transmission.

The number of fatalities, and suspected and confirmed cases across the world change depending on the source, so your best bet -- if you want the latest numbers -- is to use Google Maps' Swine Flu Tracker.

Several nations have imposed travel bans, or made plans to quarantine air travelers² that present symptoms of the swine flu, such as:

• Fever of more than 100
• Coughing
• Runny nose and/or sore throat
• Joint aches
• Severe headache
• Vomiting and/or diarrhea
• Lethargy
• Lack of appetite

Top global flu experts are trying to predict how dangerous the new swine flu strain will be, as it became clear that they had little information about Mexico's outbreak. It is as yet unclear how many cases occurred in the month or so before the outbreak was detected. It's also unknown whether the virus was mutating to be more lethal, or less.

Is This the Pandemic Health Officials Have Been Waiting for?

Folks, you can expect to see a lot of panic over this in the near future. But I wouldn't be too hasty -- this isn't the first time the public has been warned about swine flu. The last time was in 1976, right before I entered medical school and I remember it very clearly. It resulted in the massive swine flu vaccine campaign.

Do you happen to recall the result of this massive campaign?

Within a few months, claims totaling $1.3 billion had been filed by victims who had suffered paralysis from the vaccine. The vaccine was also blamed for 25 deaths.

However, several hundred people developed crippling Guillain-Barré Syndrome after they were injected with the swine flu vaccine. Even healthy 20-year-olds ended up as paraplegics.

And the swine flu pandemic itself? It never materialized.

More People Died From the Swine Flu Vaccine than Swine Flu!

It is very difficult to forecast a pandemic, and a rash response can be extremely damaging.

As of Monday April 27, the worldwide total number of confirmed cases was 82, according to WHO, which included 40 cases in the U.S., confirmed by the Centers for Disease Control. But does that truly warrant the feverish news headlines?

To put things into perspective, malaria kills 3,000 people EVERY DAY, and it's considered "a health problem"... But of course, there are no fancy vaccines for malaria that can rake in billions of dollars in a short amount of time.

One Australian news source,³ for example, states that even a mild swine flu epidemic could lead to the deaths of 1.4 million people and would reduce economic growth by nearly $5 trillion dollars.

Give me a break, if this doesn't sound like the outlandish cries of the pandemic bird-flu I don't know what does. Do you remember when President Bush said two million Americans would die as a result of the bird flu?

In 2005, in 2006, 2007, and again in 2008, those fears were exposed as little more than a cruel hoax, designed to instill fear, and line the pocketbooks of various individuals and industry. I became so convinced by the evidence AGAINST the possibility of a bird flu pandemic that I wrote a New York Times bestselling book, The Bird Flu Hoax, all about the massive fraud involved with the epidemic that never happened..

What is the Swine Flu?

Regular swine flu is a contagious respiratory disease, caused by a type-A influenza virus that affects pigs. The current strain, A(H1N1), is a new variation of an H1N1 virus -- which causes seasonal flu outbreaks in humans -- that also contains genetic material of bird and pig versions of the flu.

Interestingly enough, this version has never before been seen in neither human nor animal, which I will discuss a bit later.

This does sound bad. But not so fast. There are a few reasons to not rush to conclusions that this is the deadly pandemic we've been told would occur in the near future (as if anyone could predict it without having some sort of inside knowledge).

Why a True Bird- or Swine Flu Pandemic is Highly Unlikely

You may not know this, but all H1N1 flu's are descendants of the 1918 pandemic strain. The reason why the flu shot may or may not work, however, from year to year, is due to mutations. Therefore, there's no vaccine available for this current hybrid flu strain, and naturally, this is feeding the fear that millions of people will die before a vaccine can be made.

However, let me remind you of one very important fact here.

Just a couple of months ago, scientists concluded that the 1918 flu pandemic that killed between 50-100 million people worldwide in a matter of 18 months -- which all these worst case scenarios are built upon -- was NOT due to the flu itself!⁴

Instead, they discovered the real culprit was strep infections.

People with influenza often get what is known as a "superinfection" with a bacterial agent. In 1918 it appears to have been Streptococcus pneumoniae.

Since strep is much easier to treat than the flu using modern medicine, a new pandemic would likely be much less dire than it was in the early 20th century, the researchers concluded.

Others, such as evolutionary biologist Paul Ewald,⁵ claim that a pandemic of this sort simply cannot happen, because in order for it to occur, the world has to change. Not the virus itself, but the world.

In a previous interview for Esquire magazine, in which he discusses the possibility of a bird flu pandemic, he states:

"They think that if a virus mutates, it's an evolutionary event. Well, the virus is mutating because that is what viruses and other pathogens do. But evolution is not just random mutation. It is random mutation coupled with natural selection; it is a battle for competitive advantage among different strains generated by random mutation.

For bird flu to evolve into a human pandemic, the strain that finds a home in humanity has to be a strain that is both highly virulent and highly transmissible. Deadliness has to translate somehow into popularity; H5N1 has to find a way to kill or immobilize its human hosts, and still find other hosts to infect. Usually that doesn't happen."

Ewald goes on to explain that evolution in general is all about trade-offs, and in the evolution of infections the trade-off is between virulence and transmissibility.

What this means is that in order for a "bird flu" or "swine flu" to turn into a human pandemic, it has to find an environment that favors both deadly virulence and ease of transmission.

People living in squalor on the Western Front at the end of World War I generated such an environment, from which the epidemic of 1918 could arise.

Likewise, crowded chicken farms, slaughterhouses, and jam-packed markets of eastern Asia provide another such environment, and that environment gave rise to the bird flu -- a pathogen that both kills and spreads, in birds, but not in humans.

Says Ewald:

"We know that H5N1 is well adapted to birds. We also know that it has a hard time becoming a virus that can move from person to person. It has a hard time without our doing anything. But we can make it harder. We can make sure it has no human population in which to evolve transmissibility. There is no need to rely on the mass extermination of chickens. There is no need to stockpile vaccines for everyone.

By vaccinating just the people most at risk -- the people who work with chickens and the caregivers -- we can prevent it from becoming transmissible among humans. Then it doesn't matter what it does in chickens."

Please remember that, despite the fantastic headlines and projections of MILLIONS of deaths, the H5N1 bird flu virus killed a mere 257 people worldwide since late 2003. As unfortunate as those deaths are, 257 deaths worldwide from any disease, over the course of five years, simply does not constitute an emergency worthy of much attention, let alone fear!

Honestly, your risk of being killed by a lightning strike in the last five years was about 2,300 percent higher than your risk of contracting and dying from the bird flu.⁶ I'm not kidding! In just one year (2004), more than 1,170 people died from lighting strikes, worldwide.⁷

So please, as the numbers of confirmed swine flu cases are released, keep a level head and don't let fear run away with your brains.

So is the Swine Flu Getting More or Less Dangerous?

On Sunday, April 26, The Independent reported that more than 1,000 people had contracted the swine flu virus in Mexico, ⁸ but by the afternoon that same day, Mexican President Calderon declared that more than two-thirds of the 1,300 thought to have contracted the disease had been given a clean bill of health and sent home.⁹

Additionally, the number of actual confirmed cases appears to be far lower than reported in many media outlets, leading me to believe that many reporters are interchanging the terms "suspected cases" and "confirmed cases." According to the World Health Organization's Epidemic and Pandemic Alert and Response site; as of April 27, there are:

• 40 laboratory confirmed cases of A(H1N1) in the U.S. -- 0 deaths
• 26 confirmed cases in Mexico -- 7 deaths
• 6 confirmed cases in Canada -- 0 deaths
• 1 confirmed case in Spain -- 0 deaths

Additionally, nearly all suspected new cases have been reported as mild.

Personally, I am highly skeptical. It simply doesn't add up to a real pandemic.

But it does raise serious questions about where this brand new, never before seen virus came from, especially since it cannot be contracted from eating pork products, and has never before been seen in pigs, and contain traits from the bird flu -- and which, so far, only seems to respond to Tamiflu. Are we just that lucky, or... what?

Your Fear Will Make Some People VERY Rich in Today's Crumbling Economy

According to the Associated Press at least one financial analyst estimates up to $388 million worth of Tamiflu sales in the near future¹⁰ -- and that's without a pandemic outbreak.

More than half a dozen pharmaceutical companies, including Gilead Sciences Inc., Roche, GlaxoSmithKline and other companies with a stake in flu treatments and detection, have seen a rise in their shares in a matter of days, and will likely see revenue boosts if the swine flu outbreak continues to spread.

As soon as Homeland Security declared a health emergency, 25 percent -- about 12 million doses -- of Tamiflu and Relenza treatment courses were released from the nation's stockpile. However, beware that the declaration also allows unapproved tests and drugs to be administered to children. Many health- and government officials are more than willing to take that chance with your life, and the life of your child. But are you?

Remember, Tamiflu went through some rough times not too long ago, as the dangers of this drug came to light when, in 2007, the FDA finally began investigating some 1,800 adverse event reports related to the drug. Common side effects of Tamiflu include:

• Nausea
• Vomiting
• Diarrhea
• Headache
• Dizziness
• Fatigue
• Cough

All in all, the very symptoms you're trying to avoid.

More serious symptoms included convulsions, delirium or delusions, and 14 deaths in children and teens as a result of neuropsychiatric problems and brain infections (which led Japan to ban Tamiflu for children in 2007). And that's for a drug that, when used as directed, only reduces the duration of influenza symptoms by 1 to 1 ½ days, according to the official data.

But making matters worse, some patients with influenza are at HIGHER risk for secondary bacterial infections when on Tamiflu. And secondary bacterial infections, as I mentioned earlier, was likely the REAL cause of the mass fatalities during the 1918 pandemic!

Where did This Mysterious New Animal-Human Flu Strain Come From?

Alongside the fear-mongering headlines, I've also seen increasing numbers of reports questioning the true nature of this virus. And rightfully so.
Could a mixed animal-human mutant like this occur naturally? And if not, who made it, and how was it released?

Not one to dabble too deep in conspiracy theories, I don't have to strain very hard to find actual facts to support the notion that this may not be a natural mutation, and that those who stand to gain have the wherewithal to pull off such a stunt.

Just last month I reported on the story that the American pharmaceutical company Baxter was under investigation for distributing the deadly avian flu virus to 18 different countries as part of a seasonal flu vaccine shipment. Czech reporters were probing to see if it may have been part of a deliberate attempt to start a pandemic; as such a "mistake" would be virtually impossible under the security protocols of that virus.

The H5N1 virus on its own is not very airborne. However, when combined with seasonal flu viruses, which are more easily spread, the effect could be a potent, airborne, deadly biological weapon. If this batch of live bird flu and seasonal flu viruses had reached the public, it could have resulted in dire consequences.

There is a name for this mixing of viruses; it's called "reassortment," and it is one of two ways pandemic viruses are created in the lab. Some scientists say the most recent global outbreak -- the 1977 Russian flu -- was started by a virus created and leaked from a laboratory.

Another example of the less sterling integrity of Big Pharma is the case of Bayer, who sold millions of dollars worth of an injectable blood-clotting medicine to Asian, Latin American, and some European countries in the mid-1980s, even though they knew it was tainted with the AIDS virus.

So while it is morally unthinkable that a drug company would knowingly contaminate flu vaccines with a deadly flu virus such as the bird- or swine flu, it is certainly not impossible. It has already happened more than once.

But there seems to be no repercussions or hard feelings when industry oversteps the boundaries of morality and integrity and enters the arena of obscenity. Because, lo and behold, which company has been chosen to head up efforts, along with WHO, to produce a vaccine against the Mexican swine flu?

Baxter!¹¹ Despite the fact that ink has barely dried on the investigative reports from their should-be-criminal "mistake" against humanity.

According to other sources,¹² a top scientist for the United Nations, who has examined the outbreak of the deadly Ebola virus in Africa, as well as HIV/AIDS victims, has concluded that the current swine flu virus possesses certain transmission "vectors" that suggest the new strain has been genetically-manufactured as a military biological warfare weapon.

The UN expert believes that Ebola, HIV/AIDS, and the current A-H1N1 swine flu virus are biological warfare agents.

In addition, Army criminal investigators are looking into the possibility that disease samples are missing from biolabs at Fort Detrick -- the same Army research lab from which the 2001 anthrax strain was released, according to a recent article in the Fredrick News Post.¹³ In February, the top biodefense lab halted all its research into Ebola, anthrax, plague, and other diseases known as "select agents," after they discovered virus samples that weren't listed in its inventory and might have been switched with something else.

Should You Accept a Flu Vaccine -- Just to be Safe?

As stated in the New York Times¹⁴ and elsewhere, flu experts have no idea whether the current seasonal flu vaccine would offer any protection whatsoever against this exotic mutant, and it will take months to create a new one.

But let me tell you, getting vaccinated now would not only offer no protection and potentially cause great harm, it would most likely be loaded with toxic mercury which is used as a preservative in most flu vaccines..

I've written extensively about the numerous dangers (and ineffectiveness) of flu vaccines, and why I do not recommend them to anyone. So no matter what you hear -- even if it comes from your doctor -- don't get a regular flu shot. They rarely work against seasonal flu...and certainly can't offer protection against a never-before- seen strain.

Currently, the antiviral drugs Tamiflu and Relenza are the only drugs that appear effective against the (human flu) H1N1 virus, and I strongly believe taking Tamiflu to protect yourself against this new virus could be a serious mistake -- for all the reasons I already mentioned above.

But in addition to the dangerous side effects of Tamiflu, there is also growing evidence of resistance against the drug. In February, the pre-publication and preliminary findings journal called Nature Precedings published a paper on this concern, stating¹⁵:

The dramatic rise of oseltamivir [Tamiflu] resistance in the H1N1 serotype in the 2007/2008 season and the fixing of H274Y in the 2008/2009 season has raised concerns regarding individuals at risk for seasonal influenza, as well as development of similar resistance in the H5N1 serotype [bird flu].

Previously, oseltamivir resistance produced changes in H1N1 and H3N2 at multiple positions in treated patients. In contrast, the recently reported resistance involved patients who had not recently taken oseltamivir.

It's one more reason not to bother with this potentially dangerous drug.

And, once a specific swine flu drug is created, you can be sure that it has not had the time to be tested in clinical trials to determine safety and effectiveness, which puts us right back where I started this article -- with a potential repeat of the last dangerous swine flu vaccine, which destroyed the lives of hundreds of people.

Topping the whole mess off, of course, is the fact that if the new vaccine turns out to be a killer, the pharmaceutical companies responsible are immune from lawsuits -- something I've also warned about before on numerous occasions.

Unfortunately, those prospects won't stop the governments of the world from mandating the vaccine -- a scenario I hope we can all avoid.

How to Protect Yourself Without Dangerous Drugs and Vaccinations

For now, my point is that there are always going to be threats of flu pandemics, real or created, and there will always be potentially toxic vaccines that are peddled as the solution. But you can break free of that whole drug-solution trap by following some natural health principles.

I have not caught a flu in over two decades, and you can avoid it too, without getting vaccinated, by following these simple guidelines, which will keep your immune system in optimal working order so that you're far less likely to acquire the infection to begin with.

• Optimize your vitamin D levels. As I've previously reported, optimizing your vitamin D levels is one of the absolute best strategies for avoiding infections of ALL kinds, and vitamin D deficiency is likely the TRUE culprit behind the seasonality of the flu -- not the flu virus itself.

This is probably the single most important and least expensive action you can take. I would STRONGLY urge you to have your vitamin D level monitored /sites/articles/archive/2002/02/23/vitamin-d-deficiency-part-one.aspx to confirm your levels are therapeutic at 50-70 ng.ml and done by a reliable vitamin D lab like Lab Corp.

If you are coming down with flu like symptoms and have not been on vitamin D you can take doses of 50,000 units a day for three days to treat the acute infection. Some researchers like Dr. Cannell, believe the dose could even be as high as 1000 units per pound of body weight for three days.

• Avoid Sugar and Processed Foods. Sugar decreases the function of your immune system almost immediately, and as you likely know, a strong immune system is key to fighting off viruses and other illness. Be aware that sugar is present in foods you may not suspect, like ketchup and fruit juice.
  

• Get Enough Rest. Just like it becomes harder for you to get your daily tasks done if you're tired, if your body is overly fatigued it will be harder for it to fight the flu. Be sure to check out my article Guide to a Good Night's Sleep for some great tips to help you get quality rest.
  

• Have Effective Tools to Address Stress . We all face some stress every day, but if stress becomes overwhelming then your body will be less able to fight off the flu and other illness.
  
  If you feel that stress is taking a toll on your health, consider using an energy psychology tool such as the Emotional Freedom Technique (EFT), which is remarkably effective in relieving stress associated with all kinds of events, from work to family to trauma. You can check out my free, 25-page EFT manual for some guidelines on how to perform EFT.
  

• Exercise. When you exercise, you increase your circulation and your blood flow throughout your body. The components of your immune system are also better circulated, which means your immune system has a better chance of finding an illness before it spreads. You can review my exercise guidelines for some great tips on how to get started.
  

• Take a good source of animal based omega-3 fats like Krill Oil. Increase your intake of healthy and essential fats like the omega-3 found in krill oil, which is crucial for maintaining health. It is also vitally important to avoid damaged omega-6 oils that are trans fats and in processed foods as it will seriously damage your immune response.
  

• Wash Your Hands. Washing your hands will decrease your likelihood of spreading a virus to your nose, mouth or other people. Be sure you don't use antibacterial soap for this -- antibacterial soaps are completely unnecessary, and they cause far more harm than good. Instead, identify a simple chemical-free soap that you can switch your family to.
  

• Eat Garlic Regularly. Garlic works like a broad-spectrum antibiotic against bacteria, virus, and protozoa in the body. And unlike with antibiotics, no resistance can be built up so it is an absolutely safe product to use. However, if you are allergic or don't enjoy garlic it would be best to avoid as it will likely cause more harm than good.

In this particular case, I'd also recommend you stay away from hospitals unless you're having an emergency, as hospitals are prime breeding grounds for infections of all kinds, and could be one of the likeliest places you could be exposed to this new bug.

IMF RULES THE WORLD

Not much substantive news was expected to come out of the G-20 meetings
that ended on April 2 in London – certainly no good news was even
suggested. Europe, China and the United States had too deeply distinct
interests. American diplomats wanted to lock foreign countries into further
dependency on paper dollars. The rest of the world sought a way to avoid
giving up real output and ownership of their resources and enterprises for
yet more hot-potato dollars. In such cases one expects a parade of smiling
faces and statements of mutual respect for each others’ position – so
much respect that they have agreed to set up a “study group” or two to
kick the diplomatic ball down the road.

The least irrelevant news was not good at all: The attendees agreed to
quadruple IMF funding to $1 trillion. Anything that bolsters IMF authority
cannot be good for countries forced to submit to its austerity plans. They
are designed to squeeze out more money to pay the world’s most predatory
creditors. So in practice this G-20 agreement means that the world’s
leading governments are responding to today’s financial crisis with
“planned shrinkage” for debtors – a 10 per cent cut in wage payments
in hapless Latvia, Hungary put on rations, and permanent debt peonage for
Iceland for starters. This is quite a contrast with the United States,
which is responding to the downturn with a giant Keynesian deficit spending
program, despite its glaringly unpayable $4 trillion debt to foreign
central banks.

So the international financial system’s double standard remains alive and
kicking – at least, kicking countries that are down or are falling.
Debtor countries must borrow a trillion from the IMF not to revive their
own faltering economies, not to pursue counter-cyclical policies to restore
market demand (that is only for creditor nations), but to pass on the IMF
“aid” to the poisonous banks that have made the irresponsible toxic
loans. (If these are toxic, who put in the toxin? To claim that it was all
the “natural” workings of the marketplace is to say that free markets
curdle and sicken. Is this what is happening?)

In Ukraine, a physical fight broke out in Parliament when the Party of
Regions blocked an agreement with the IMF calling for government budget
cutbacks. And rightly so! The IMF’s operating philosophy is the
destructive (indeed, toxic) belief that imposing a deeper depression with
more unemployment will reduce wage levels and living standards by enough to
pay debts already at unsustainable levels, thanks to the kleptocracy’s
tax “avoidance” and capital flight. The IMF trillion-dollar bailout is
actually for these large international banks, so that they will be able to
take their money and run. The problem is all being blamed on labor. That is
the neo-Malthusian spirit of today’s neoliberalism.

The main beneficiaries of IMF lending to Latvia, for example, have been the
Swedish banks that have spent the last decade funding that country’s real
estate bubble while doing nothing to help develop an industrial potential.
Latvia has paid for its imports by exporting its male labor of prime
working age, acting as a vehicle for Russian capital flight – and
borrowing mortgage purchase-money in foreign currency. To pay these debts
rather than default, Latvia will have to lower wages in its public sector
by 10 per cent -- and this with an economy already depressed and that the
government expects to shrink by 12 percent this year!

To save the banks from losing on their toxic mortgages, the IMF is bailing
them out, and directing the Latvian government to squeeze labor all the
more – and to charge for education rather than providing it freely. The
idea is for families to take a lifetime of debt not only to live inside
rather than on the sidewalk, but to get an education. Alcoholism rates are
rising, as they did in Russia under similar circumstances in Yeltsin’s
“Harvard Boys” kleptocracy after 1996.

The insolvency problem of the post-Soviet economies is not entirely the
IMF’s fault, to be sure. The European Community deserves a great deal of
blame. Instead of viewing the post-Soviet economies as wards to be brought
up to speed with Western Europe, the last thing the EU wanted was to
develop potential rivals. It wanted customers – not only for its exports,
but most of all for its loans. The Baltic States passed into the
Scandinavian sphere, while Austrian banks carved out financial spheres of
influence in Hungary (and lost their shirt on real estate loans, much as
the Habsburgs and Rothschilds did in times past). Iceland was
neoliberalized, largely in ripoffs organized by German banks and British
financial sharpies.

In fact, Iceland ( where I’m writing these lines) looks like a controlled
experiment – a very cruel one – as to how deeply an economy can be
“financialized” and how long its population will submit voluntarily to
predatory financial behavior. If the attack were military, it would spur a
more alert response. The trick is to keep the population from understanding
the financial dynamics at work and the underlying fraudulent character of
the debts with which it has been saddled – with the complicit aid of its
own local oligarchy.

In today’s world, the easiest way to obtain wealth by old-fashioned
“primitive accumulation” is by financial manipulation. This is the
essence of the Washington Consensus that the G-20 support, using the IMF in
its usual role as enforcer. The G-20’s announcement continues the U.S.
Treasury and Federal Reserve bank bailout over the past half-year. In a
nutshell, the solution to a debt crisis is to be yet more debt. If debtors
can’t pay out of what they are able to earn, lend them enough to keep
current on their carrying charges. Collateralize this with their property,
their public domain, their political autonomy – their democracy itself.
The aim is to keep the debt overhead in place. This can be done only by
keeping the volume of debts growing exponentially as they accrue interest,
which is added onto the loan. This is the “magic of compound interest.”
It is what turns entire economies into Ponzi schemes (or Madoff schemes as
they are now called).

This is “equilibrium”, neoliberal style. In addition to paying an
exorbitant basic interest rate, homeowners must pay a special 18 per cent
indexation charge on their debts to reflect the inflation rate (the
consumer price index) so that creditors will not lose the purchasing power
over consumer goods. Labor’s wages are not indexed, so defaults are
spreading and the country is being torn apart with bankruptcy, causing the
highest unemployment rate since the Great Depression. The IMF approves,
announcing that it can find no reason why homeowners cannot bear this
burden!

Meanwhile, democracy is being torn apart by a financial oligarchy, whose
interests have become increasingly cosmopolitan, looking at the economy as
prey to be looted. A new term is emerging: “codfish republic” (known
further south as banana republics). Many of Iceland’s billionaires these
days are choosing to join their Russian counterparts living in London –
and the Russian gangsters are reciprocating by visiting Iceland even in the
dead of winter, ostensibly merely to enjoy its warm volcanic Blue Lagoon,
or so the press is told.

The alternative is for debtor countries to suffer the same kind of economic
sanctions as Iran, Cuba and pre-invasion Iraq. Perhaps soon there will be
enough such economies to establish a common trading area among themselves,
possibly along with Venezuela, Colombia and Brazil. But as far as the G-20
is concerned, aid to Iceland and “doing the right thing” is simply a
bargaining chip in the international diplomatic game. Russia offered $4
billion aid to Iceland, but retracted it – presumably when Britain gave
it a plum as a tradeoff.

The IMF’s $1 trillion won’t help the post-Soviet and Third World debtor
countries pay their foreign debts, especially their real estate mortgages
denominated in foreign currency. This practice has violated the First Law
of national fiscal prudence: Only permit debts to be taken on that are in
the same currency as the income that is expected to be earned to pay them
off. If central bankers really sought to protect currency stability, they
would insist on this rule. Instead, they act as shills for the
international banks, as disloyal to the actual economic welfare of their
countries as expatriate oligarchs.

If you are going to recommend more of this consensus, then the only way to
sell it is to do what British Prime Minister Gordon Brown did at the
meetings: announce that “The Washington Consensus is dead.” (He might
have saved matters by saying “deadly,” but used the adjective instead
of the adverb.) But the G-20’s IMF bailout belies this claim. As Turkey
was closing out its loan last year, the IMF faced a world with no
customers. Nobody wanted to submit to its destructive
“conditionalities,” anti-labor policies designed to shrink the domestic
market in the false assumption that this “frees” more output for export
rather than being consumed at home. In reality, the effect of austerity is
to discourage domestic investment, and hence employment. Economies
submitting to the IMF’s “Washington Consensus” become more and more
dependent on their foreign creditors and suppliers.
    
The United States and Britain would never follow such conditionalities.
That is why the United States has not permitted an IMF advisory team to
write up its prescription for U.S. “stability.” The Washington
Consensus is only for export. (“Do as we say, not as we do.”) Mr.
Obama’s stimulus program is Keynesian, not an austerity plan, despite the
fact that the United States is the world’s largest debtor.

Here’s why the situation is unsustainable. What has enabled the Baltics
and other post-Soviet countries to cover the foreign-exchange costs of
their trade dependency and capital flight has been their real estate
bubble. The neoliberal idea of financial “equilibrium” has been to
watch “market forces” shorten lifespans, demolish what industrial
potential they had, increase emigration and disease, and run up an enormous
foreign debt with no visible way of earning the money to pay it off. This
real estate bubble credit was extractive and parasitic, not productive. Yet
the World Bank applauds the Baltics as a success story, ranking them near
the top of nations in terms of “ease of doing business.”

One practical fact trumps all the junk economics at work from the IMF and
G-20: Debts that can’t be paid, won’t be. Adam Smith observed in The
Wealth of Nations that no government in history had ever repaid its
national debt. Today, the same may be said of the public sector as well.
This poses a problem of just how these debtor countries are not going to
pay their foreign and domestic debts. How will they frame and politicize
their non-payment?

Creditors know that these debts can’t be paid. (I say this as former
balance-of-payments analyst of Third World debt for nearly fifty years,
from Chase Manhattan in the 1960s through the United Nations Institute for
Training and Research [UNITAR] in the 1970s, to Scudder Stevens & Clark in
1990, where I started the first Third World sovereign debt fund.) From the
creditor’s vantage point, knowing that the Great Neoliberal Bubble is
over, the trick is to deter debtor countries from acting to resolve its
collapse in a way that benefits themselves. The aim is to take as much as
possible – and to get the IMF and central banks to bail out the poisonous
banks that have loaded these countries down with toxic debt. Grab what you
can while the grabbing is good. And demand that debtors do what Latin
American and other third World countries have been doing since the 1980s:
sell off their public domain and public enterprises at distress prices.
That way, the international banks not only will get paid, they will get new
business lending to the buyers of the assets being privatized – on the
usual highly debt-leveraged terms!

The preferred tactic do deter debtor countries from acting in their
self-interest is to pound on the old morality, “A debt is a debt, and
must be paid.” That is what Herbert Hoover said of the Inter-Ally debts
owed by Britain, France and other allies of the United States in World War
I. These debts led to the Great Depression. “We loaned them the money,
didn’t we?” he said curtly.

Let’s look more closely at the moral argument. Living in New York, I find
an excellent model in that state’s Law of Fraudulent Conveyance. Enacted
when the state was still a colony, it was enacted in response British
speculators making loans to upstate farmers, and demanding payment just
before the harvest was in, when the debtors could not pay. The sharpies
then foreclosed, getting the land on the cheap. So New York’s Fraudulent
Conveyance law responded by establishing the legal principle that if a
creditor makes a loan without having a clear and reasonable understanding
of how the debtor can repay the money in the normal course of doing
business, the loan is deemed to be predatory and therefore null and void.

Just like the post-Soviet economies, Iceland was sold a neoliberal bill of
goods: a self-destructive Junk Economics. Just how moral a responsibility
– and perhaps even more important, how large a legal liability –should
fall on the IMF and World Bank, the U.S. Treasury and Bank of England whose
economies and banks benefited from this toxic Washington Consensus junk
economics?

For me, the moral principle is that no country should be subjected to debt
peonage. That is the opposite of democratic self-determination, after all
– and of Enlightenment moral philosophy that economic policies should
encourage economic growth, not shrinkage. They should promote greater
economic equality, not polarization between wealthy creditors and
impoverished debtors.

At issue is just what a “free market” is. It’s supposed to be one of
choice. Indebted countries lose discretionary choice over their economic
future. Their economic surplus is pledged abroad as financial tribute.
Without the overhead costs of a military occupation, they are relinquishing
their policy making from democratically elected political representatives
to bureaucratic financial managers, often foreign – the new Central
Planners in today’s neoliberal world. The best they can do, knowing the
game is over, is to hope that the other side doesn’t realize it – and
to do everything you can to confuse debtor countries while extracting as
much as they can as fast as they can.

Will the trick work? Maybe not. While the G-20 meetings were taking place,
Korea was refusing to let itself be victimized by the junk derivatives
contracts that foreign banks sold. Korea is claiming that bankers have a
fiduciary responsibility to their customers to recommend loans that help
them, not strip them of money. There is a tacit understanding (one that the
financial sector spends millions of dollars in public relations efforts to
undermine) that banking is a public utility. It is supposed to be a
handmaiden to growth – industrial and agricultural growth and
self-sufficiency – not predatory, extractive and hence anti-social. So
Korean victims of junk derivatives are suing the banks. As New York Times
commentator Floyd Norris described last week, the legal situation doesn’t
look good for the international banks. The home court always has an
advantage, and every nation is sovereign, able to pass whatever laws it
wants. (And as America’s case abundantly illustrates, judges need not be
unbiased.)

The post-Soviet economies as well as Latin America must be watching
attentively the path that Korea is clearing through international courts.
The nightmare of international bankers is that these countries may bring
the equivalent of a class action suit against the international diplomatic
coercion mounted against these countries to lead them down the path of
financial and economic suicide. “The Seoul Central District Court
justified its decision [to admit the lawsuit] on the kind of logic that
would apply in the United States to a lawsuit involving an unsophisticated
individual investor and a fast-taking broker. The court pointed to
questions of whether the contract was a suitable investment for the
company, and to whether the risks were fully disclosed. The judgment also
referred to the legal concept of “changed circumstances,” concluding
that the parties had expected the exchange rate to remain stable, that the
change in circumstances was unforeseeable and that the losses would be too
great for the company to bear.”

As a second cause of action, Korea is claiming that the banks provided
creditor for other financial institutions to bet against the very contracts
the banks were selling Korea to “protect” its interests. So the banks
knew that what they were selling was a time bomb, and therefore seem guilty
of conflict of interest. Banks claim that they merely were selling goods
with no warranty to “informed individuals.” But the Korean parties in
question were no more informed than were Iceland’s debtors. If a bank
seeks to mislead and does not provide full disclosure, its victim cannot be
said to be “informed.” The proper English word is misinformed (viz.
disinformation).
.
Speaking of disinformation, an important issue concerns the extent to which
the big international banks may have conspired with domestic bankers and
corporate managers to loot their companies. This is what corporate raiders
have done for their junk-bond holders since the high tide of Drexel Burnham
and Michael Milken in the 1980s. This would make the banks partners in
crime. There needs to be an investigation of the lending pattern that these
banks engaged in – including their aid in organizing offshore money
laundering and tax evasion to their customers. No wonder the IMF and
British bankers are demanding that Iceland make up its mind in a hurry, and
commit itself to pay astronomical debts without taking the time to ask just
how they are to pay – and investigating the creditor banks’ overall
lending pattern!

Bearing the above in mind, I suppose I can tell Icelandic politicians that
I have good news regarding the fate of their country’s foreign and
domestic debt: No nation ever has paid its debts. As I noted above, this
means that the real question is not whether or not they will be paid, but
how not to pay these debts. How will the game play out – in the political
sphere, in popular ideology, and in the courts at home and abroad?

The question is whether Iceland will let bankruptcy tear apart its economy
slowly, transferring property from debtors to creditors, from Icelandic
citizens to foreigners, and from the public domain and national taxing
power to the international financial class. Or, will Iceland see where the
inherent mathematics of debt are leading, and draw the line? At what point
will it say “We won’t pay. These debts are immoral, uneconomic and
anti-democratic.” Do they want to continue the fight by Enlightenment and
Progressive Era social democracy, or the alternative – a lapse back into
neofeudal debt peonage?

This is the choice must be made. And it is largely a question of timing.
That’s what the financial sector plays for – time enough to transfer as
much property as it can into the hands of the banks and other investors.
That’s what the IMF advises debtor countries to do – except of course
for the United States as largest debtor of all. This is the underlying
lawless character of today’s post-bubble debts.

Michael Hudson is a former Wall Street economist. A Distinguished Research
Professor at University of Missouri, Kansas City (UMKC), he is the author
of many books, including Super Imperialism: The Economic Strategy of
American Empire (new ed., Pluto Press, 2002) He can be reached at
mh@michael-hudson.com