Corporate Fairy Tales in Afghanistan

/in /by

It’s a corporate fairy tale: working class boy joins the military, goes into banking, brings the joys of mineral exploitation to exotic locales.

From Congo to Colombia, from Iraq to Sierra Leone, [Ian] Hannam [the JP Morgan banker overseeing the development of a gold mine in Afghanistan] and his small team of soldiers-turned-bankers and advisers did business with oligarchs, gem dealers, and former mercenaries. He could be bracingly direct. When he landed in Baghdad for a meeting with Iraq’s oil minister, the minister asked, “What are you here for?”

“I’m here to make five new Iraqi billionaires every year for the next 10 years,” Hannam said with a twinkle in his eyes.

And it ends, I guess, as corporate fairy tales do: with the mineral riches finally being liberated from the oppressive soil.

But at least someone will have begun releasing the wealth trapped in Afghanistan’s stones.

It’s all the bits in between that raise eyebrows about the viability of our little project in Afghanistan and the structure of our empire. While the story focuses on Hannam, the JP Morgan banker, it’s as much a story about General Petraeus.

Then, in 2009, mining in Afghanistan got the push it needed — from the U.S. military. Petraeus had been appointed commander of U.S. Central Command, which had ultimate authority over Afghanistan. He realized that a U.S. exit from Afghanistan depended on getting the country’s economy running.

[snip]

Realizing that conventional foreign-aid organizations weren’t getting the job done, Petraeus moved a crack economic stabilization team from Iraq into Afghanistan. That team quickly realized that mining would be key.

And Deputy Under Secretary for Defense Paul Brinkley.

Hannam was at the banquet hall for a reception thrown by the Trade Bank of Iraq to honor J.P. Morgan. Also at the reception was Paul Brinkley, a deputy under secretary of defense charged with jump-starting Iraq’s stalled economy. A former tech company executive, Brinkley served as a matchmaker of sorts between Iraqi entrepreneurs and foreign businessmen. With the blessing of Defense Secretary Robert Gates, he operated outside normal bureaucratic channels, eschewing the bulletproof vests and helmets his civilian colleagues wore in combat zones. In three years he had secured some $8 billion in private investment contracts for Iraq, helping start textile mills, cement factories, and electronics companies. Hannam and Brinkley had heard about each other’s work. J.P. Morgan had been one of the first Western companies to plant the flag in Iraq, overseeing the country’s currency and setting up a big oil project in Iraqi Kurdistan. Hannam and Brinkley fell into conversation about Afghanistan, which was to be Brinkley’s next posting.

These men, of course, were prominently seen last June pushing James Risen to report a breathless story on Afghanistan’s $1 trillion mineral riches the night before Petraeus would testify to Congress.

[Risen] explained that he based his report on the work of a Pentagon team led by Paul Brinkley, a deputy undersecretary of defense charged with rebuilding the Afghan economy. Using geological data from the Soviet era and USGS surveys conducted in 2006, Brinkley dispatched teams to Afghanistan last year to search for minerals on the ground. The data they’ve come back with, combined with internal Pentagon assessments that value the deposits at more than $900 billion, constitute news, according to Risen. (Those surveys are still under way, according to a briefing Brinkley gave yesterday.)

[snip]

So was the story a Pentagon plant, designed to show the American public a shiny metallic light at the end of the long tunnel that is the Afghan war, as skeptics allege? Risen said he heard about the Pentagon’s efforts from Milt Bearden, a retired CIA officer who was active in Afghanistan in the 1980s. The men co-authored a book, “The Main Enemy,” in 2003, and Bearden is now a consultant working with Brinkley’s survey team.

“Several months ago, Milt started telling me about what they were finding,” Risen said. “At the beginning of the year, I said I wanted to do a story on it.” At first both Bearden and Brinkley resisted, Risen said, but he eventually wore them down. “Milt convinced Brinkley to talk to me,” he said, “and Brinkley convinced other Pentagon officials to go on the record. I think Milt realized that things were going so badly in Afghanistan that people would be willing to talk about this.” In other words, according to Risen, he wasn’t handed the story in a calculated leak. Calls and emails to Brinkley and to Eric Clark, a Pentagon public relations contractor who works with him, were not immediately returned.

All of which makes you wonder about the provenance of this story…

And of course, in addition to Hannam, Petraeus, and Brinkley, there is JP Morgan itself, which seems to be investing a lot of time in a project they don’t expect to be profitable and won’t put their own money into.

In late September, J.P. Morgan CEO Jamie Dimon, Brinkley, and Mining Minister Wahidullah Shahrani met at J.P. Morgan’s headquarters in Manhattan. Dimon pledged J.P. Morgan’s support. On the way down in the elevator, Dimon told Shahrani, “You’re in good hands with Ian. He’s eccentric, but he gets things done.”But soon Brinkley’s team was wondering. On the day the deal signing was to take place, Hannam’s team stopped acting like former warriors and began behaving like, well, nervous investment bankers. Hannam, after talking about how rich he was going to make his clients, suddenly began to complain that there was no way to make a profit. The 26% royalty rate for the mine, his team claimed, was way too high. Mining Minister Shahrani was bewildered — the rate had been agreed upon years before, when the Naderi family had first bid for the mine. Nothing had changed.

Brinkley’s Pentagon team was deeply frustrated. They felt the bankers had pulled a fast one. Had Hannam’s group not done its homework? Or were they just being bankers, trying to squeeze more money out of the deal with some 11th-hour brinkmanship?

Brinkley lit into the J.P. Morgan group: “When are you going to get this done? You’ve told people you’re going to do it!” The bankers, in turn, felt they were being unfairly pressured by the government, which seemed desperate to get the deal done even if it was uneconomical.

[snip]

J.P. Morgan says it isn’t putting any of its own money into the project. Hannam secured $40 million from investors in the U.S., Asia, and Europe. They included Enso Capital founder Joshua Fink, son of BlackRock’s Larry Fink; British mining titan Peter Hambro; and Thai businessman Pairoj Piempongsant. Hannam created an investment vehicle, Central Asian Resources, to enter into a joint venture with Naderi’s new mining company, Afghan Gold.

Which in turn makes you wonder about the off-and-on relationship between the President and Jamie Dimon, particularly in the months leading up to JP Morgan playing hardball on the gold mine in Afghanistan. Have there been other considerations involved in the government’s relationship with JP Morgan? When Dimon boasts about JP Morgan being a good bank–in spite of the fact that they practice some of the same reprehensible policies as their rivals–is he saying something more?

Mind you, it’s not that Petraeus is wrong: Afghanistan needs something besides poppies if it’s ever going to become a viable nation-state.

I’d just like a bit more transparency about the public-private endeavors our government builds to make that happen. And I’d like a lot more information about all the favors being exchanged to make that happen.

Share this entry

ComcastSucks Got Suckier So FCC Commish Could Get a Swank New Job

/in /by

Our entire country’s mediascape will no doubt get suckier as Comcast returns to its typical bad behavior after having eaten NBC. We will become less well-informed. We will fall further behind the rest of the world for broadband access. And we will continue to wait for ComcastSucks repairmen.

And all so Meredith Attwell Baker could get a swank new job at ComcastSucksNBC.

Meredith Attwell Baker, one of the two Republican Commissioners at the Federal Communications Commission, plans to step down—and right into a top lobbying job at Comcast-NBC.

The news, reported this afternoon by the Wall Street Journal, The Hill, and Politico, comes after the hugely controversial merger of Comcast and NBC earlier this year. At the time, Baker objected to FCC attempts to impose conditions on the deal and argued that the “complex and significant transaction” could “bring exciting benefits to consumers that outweigh potential harms.”

Four months after approving the massive transaction, Attwell Baker will take a top DC lobbying job for the new Comcast-NBC entity, according to reports.

In ComcastSucksNBC’s announcement, Baker boasted about how excited she is to start her new job.

I’ve been privileged to serve in government for the past seven years under President Obama at the FCC and President Bush at NTIA, I’m excited to embark on a new phase of my career with Comcast and NBCUniversal,

Somehow, she forgot to mention how proud she is about personally contributing to the decline of her country to serve her own greed.

Share this entry

MI Dems to Benton Harbor: You’re on Your Own

/in /by

Eclectablog, who has been doing solid reporting on the takeover of Benton Harbor by an Emergency Financial Manager, has been wondering why MI’s Democratic Party hasn’t been more vociferous in supporting Benton Harbor. Today, he reported that MI Dems Chair Mark Brewer told Berrien County’s Dems that the MDP would not help them.

The occasion was the monthly meeting of the South County Democratic Club in Berrien County. Commissioner Dennis Knowles was in attendance. According to Commissioner Knowles, with whom I have spoken, Chair Brewer informed him that the MDP “could not help Benton Harbor” though he encouraged their recall effort of Rep. Al Pscholka. The MDP, however, will not assist in any way. In other words, Benton Harbor is on their own.

Now, while I don’t always agree with Brewer’s tactics, I respect his pragmatism, so I suspect part of what’s going on is driven by funding and/or a sense of the viability of recall efforts (the Snyder recall, in particular, would be really difficult to pull off because of the way our recall law is written).

But I also suspect something else is going on. Remember, Democrats in MI have themselves supported the concept of Emergency Financial Managers. In fact Jennifer Granholm’s administration put Pontiac and Benton Harbor itself into EFM status. So while Dems might be happy to knock off some Republican State Reps, they apparently remain committed to a city-based approach to financial stability. And that, it seems, stems at least partly from the way race has played out in this state.

As I noted before, one of the key factors contributing to Benton Harbor’s awful state is racism. Ditto Detroit, the schools of which are widely assumed to be the next target for Snyder’s EFM law. In both cases, a long history of segregation has resulted in the loss of the tax base of the city as more affluent whites left. The proper financial solution to that problem should have been more regionalized funding, but that wasn’t politically viable. Remember–MI is the home of the Reagan Democrats, the working class whites whom Reagan persuaded to put social  issues ahead of their own class interest.

The thing is, it probably could be today. Or could have been just after the 2008 election. Here’s what Stan Greenberg said at that point when he claimed–prematurely, given the rise of the TeaPartiers–the Reagan Democrats were dead.

For more than 20 years, the non-college-educated white voters in Macomb County have been considered a “national political barometer,” as Ronald Brownstein of National Journal described them during the Democratic convention in August. After Ronald Reagan won the county by a 2-to-1 margin in 1984, Mr. Brownstein noted, I conducted focus groups that “found that these working-class whites interpreted Democratic calls for economic fairness as code for transfer payments to African-Americans.” So what do we think when Barack Obama, an African-American Democrat, wins Macomb County by eight points?

I conducted a survey of 750 Macomb County residents who voted Tuesday, and their responses put their votes in context. Before the Democratic convention, barely 40 percent of Macomb County voters were “comfortable” with the idea of Mr. Obama as president, far below the number who were comfortable with a nameless Democrat. But on Election Day, nearly 60 percent said they were “comfortable” with Mr. Obama. About the same number said Mr. Obama “shares your values” and “has what it takes to be president.”

Given Macomb’s history, this story helps illustrate America’s evolving relationship with race. These voters, like voters elsewhere, watched Mr. Obama intently and became confident he would work for all Americans and be the steady leader the times required.

For a brief period in 2008, MI (which is a pretty damned segregated state) put aside its legacy of racism in hopes a black President could bring benefits for all Americans. (Then Republicans used Obama’s imperfect effort to do that–in the form of health care–to stoke that racism again.)

It seems to me, Democrats need to finally, enthusiastically embrace a model that puts collective well-being at the center of a plan to respond to globalization, rather than letting black cities suffer the twin plights of racism and globalization. And that ought to include not only some political support for Benton Harbor’s fight for democracy, but also some creative solutions that don’t amount to starving cash strapped cities all in the name of short term–and short-sighted–fiscal responsibility.

Share this entry

Dangerous Counter-Narratives: Our Global Finance Ponzi Scheme and Iranian Cooperation

/in , /by

According to this post, this op-ed in the WSJ got badly edited after it was originally published. The bolded words are just some of what WSJ axed after the fact. (h/t Naked Capitalism)

The official wisdom is that Greece, Ireland and Portugal have been hit by a liquidity crisis, so they needed a momentary infusion of capital, after which everything would return to normal. But this official version is a lie, one that takes the ordinary people of Europe for idiots. They deserve better from politics and their leaders.

To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them. Let’s follow the money.

At the risk of being accused of populism, we’ll begin with the obvious: It is not the little guy that benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a kind of deadly symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever-more money back to our governments, keeping the scheme afloat.

In a true market economy, bad choices get penalized. Not here. When the inevitable failure of overindebted euro-zone countries came to light, a secret pact was made. Instead of accepting losses on unsound investments—which would have led to the probable collapse and national bailout of some banks—it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund, Ireland’s NAMA and a lineup of special-purpose vehicles that make Enron look simple. Some politicians understood this; others just panicked and did as they were told.

The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.

The edits are interesting in their own right. But I couldn’t help but think of an op-ed Flynt Leverett wrote back in 2006. Though the entire op-ed was, according to CIA officials, unclassified, during the review process the White House decided the parts that described Iran’s cooperation with the United States after 9/11 had to be redacted.

Back in 2006, the fact that Iran had made significant efforts to reach out the US undercut the Village’s entire narrative about national security.

It’s not clear whether WSJ’s editors decided on their own that revealing that the serial bankster bailouts benefit just the banksters was too dangerous for WSJ’s readers, or whether someone in Timmeh Geithner’s neighborhood called to complain (as they did when an Irish Times columnist revealed that Timmeh was behind nixing the IMF’s efforts to restructure Ireland’s debt).

But when a counter-narrative comes to be viewed as this dangerous, it’s usually a testament to the fragility of the narrative it threatens. In Leverett’s case, the counter-narrative threatened the stupid efforts to shore up US hegemony in the Middle East by attacking Iran; in this case, the counter-narrative threatens our continuing willingness to embrace austerity so the banksters can get richer. Of course both narratives are about the same thing: sustaining US power.

I can’t decide whether it’s pathetic or funny that our power continues to rest on such fragile narratives.

Share this entry

Obama Administration Finally Brags about Jobs Created in Auto Bailout

/in , /by

The Obama Administration was gung ho to brag about the GM IPO last year. But if I’m not mistaken, this is the first time the White House has bragged nationally about jobs created thanks to the auto bailout (Ron Bloom, who got promoted into an official Assistant to the President role at the beginning of the year, wrote this).

Today brings word of more good news for the American auto industry. GM announced that it would hire 4,200 workers at seventeen of its plants around the country.

President Obama took office amidst the worst recession in a generation and nowhere was this devastion [sic] felt harder than in the American auto industry and the communities it has supported for decades. In the year before GM and Chrysler filed for bankruptcy, the auto industry shed over 400,000 jobs.

Facing this situation head on, the President made a bold and, at the time, politically unpopular choice: Despite calls from critics to simply let these companies – and the entire American auto industry – crumble, he refused to allow these companies to fail. Had the Administration failed to intervene, conservative estimates suggest that it would have cost at least an additional one million jobs and devastated vast parts of our nation’s industrial heartland.

But at the same time, the President did not provide unconditional support.  He insisted that the companies and their stakeholders make tough choices and undertake massive restructurings requiring huge sacrifices from all of their stakeholders.

Because of this “tough love,” the American auto industry is now positioned to grow and prosper as the economy recovers.  Since GM and Chrysler emerged from bankruptcy in June 2009 the auto industry has added 115,000 jobs – the fastest pace of job growth in the auto industry since 1998. Last year, for the first time in 16 years, the Detroit Three actually gained market share compared to their foreign counterparts.

And these companies are not  just making cars and trucks – they’re making the kind of fuel efficient cars and trucks that will power us to energy independence, protect consumers against rising gas prices, and ensure America wins the future.

Some of the workers GM is hiring and re-hiring in today’s announcement will be at work producing larger-than-initially-planned quantities of the widely acclaimed Chevy Volt. And just last month, Ford – which didn’t receive government assistance but which supported our aid to GM and Chrysler and has said publicly that it would not have survived if the rest of the American auto industry had been allowed to collapse – reported its best first-quarter profit in more than a decade thanks in large part to its new fuel-efficient vehicles.

In the wake of an historic recession, there is no doubt that much work remains. And we will not rest until every American who is looking for work can find a job. But today’s announcement is another positive sign – including more than 2 million private sector jobs created over the past 14 months – that we’re seeing across the country.

The comparative silence about the success of the bailout in the terms that really matter to actual people–jobs–not only confirms Main Street suspicions about the White House viewing the economy solely through the lens of the banksters, but it also leads beltway folks like John Dickerson to wonder out loud whether there is anything a President can do to fix the economy (Dickerson must have skipped those weeks when his American history class covered the New Deal).

The effects of the too-small stimulus, though real, are a lot harder to see. But aside from the decade-long Military Industrial Complex stimulus the DC area has enjoyed, the auto bailout and related energy investments was the biggest concentrated stimulus the Administration championed. And it has had an effect, both in hiring at GM and Chrysler, but also in hiring in MI more generally.

It’d be nice if the Administration not only bragged about that, but replicated it for places like Nevada.

Update: John Dickerson corrects me; this July 2010 briefing (a presser leading up to an Obama trip to visit several plants in the MidWest, bragged about jobs created). Thanks to Dickerson for the correction.

Share this entry

Air Force: We’re Screwed

/in /by

The Air Force is using stimulus dollars to rebuild some family housing at Eielson Air Force Base in Alaska. Since they’re using stimulus dollars, they have to get a waiver for anything they say they can’t source to an American company. Among the list of items that can’t be sourced in America?

Screws:

  • 1″ Collated Screws, Shank #10
  • 2-1/2″ Collated Screws
  • 3″ Ceramic Coated Bugle Head Course Thread Screws
  • 3/4″ Collated Screws, Shank #10

And it’s more than screws that Americans don’t make anymore, according to the Air Force. Lots of stuff that you or I might buy at Lowes (or better yet, a local hardware store). Things like “Residential Style Polished Chrome Toilet Paper Holders” and “24″ Bath Vanity Light Fixtures.”

Now, as Mike Mandel–who found the entry in the Federal Register where the Air Force granted this waiver to buy screws and other stuff from China–notes, the official data show that we do still make screws. So it may be the data aren’t catching our decline in screw-making, or it may be the Air Force didn’t look very hard for American-made screws.

I see four possibilities.

First, the Air Force could be lazy. The parts are really available, but they can’t find them.

Second,   U.S. manufacturers only make sophisticated parts, not towel bars and door stops.

Third,  these industries were doing great through 2007,   and have only gone offshore since the recession.

Fourth,  the official data didn’t pick up the offshoring in the 2000s.

And frankly, even if Americans no longer do make screws, that’s not as big of a problem as some more complex items that we’re on the verge of not making anymore: propellant chemicals, space qualified electronics, power sources for space and military applications (batteries and photovoltaics), specialty metals, hard disk drives, and flat panel displays (LCDs). Those are the kind of things that, when we stop making them, we lose the capacity to make them going forward (and open up our military machine to vulnerabilities).

Still, there’s something viscerally disturbing about not making screws in this country anymore. Sure, like underwear and socks, they’re probably all made in one Chinese city somewhere. But it seems like a key skill, like boiling water, that we no longer want to do anymore.

Share this entry

Some Context on MI’s Emergency Financial Manager Law

/in /by

On Saturday, I described how the democratically-elected government of Benton Harbor, a poor, segregated MI city about an hour south of me, lost its power to the city’s Emergency Financial Manager.

There are two parts of the story that I didn’t explain, which this post from wizardkitten does well. First, the EFM law goes back some years in MI and EFMs already had a great deal of power.

The idea of the state appointing an Emergency Financial Manager for local governments in distress actually dates as far back as 1988, and that led to Public Act 72 of 1990 (Blanchard did it!). Basically, it said that in order for the state to protect it’s own credit and fiscal operations, any city or school district that was on the verge of bankruptcy would receive a review of their finances from a state-appointed team, and, if that panel found that the city or school district did not have an adequate plan to get out of trouble, a manager would then come in and help clean up the mess.

The manager could hire staff and direct existing staff. They did not need public approval for a new fiscal plan. They could do anything they wanted with the outstanding financial obligations (i.e., the bills). They could renegotiate labor contracts, but they could not abrogate those contracts. They could eliminate positions except of those of elected officials, cut pay and benefits even for elected officials, sell property, review payroll – anything but touch retirement. They could not raise taxes. They also had the ability to start Chapter 9 bankruptcy if all else had failed.

Michigan’s initial muted response to Governor Rick Snyder’s move to increase EFM powers derives, IMO, from our familiarity with the concept and the fact so many are at a loss to figure out what to do with cities gutted by globalization. We’re the frogs in the boiling water of globalization, I guess, and we didn’t notice the heat going up on democracy itself.

The other really important part of Snyder’s new empowerment of EFMs has to do with the real target: teachers. Specifically, the teachers in Detroit’s public schools.

I believe this is a warm-up for Detroit, and perhaps the 150 other school districts that Snyder’s budget cuts are going to put closer to bankruptcy. DPS EMF Robert Bobb has indicated that he “planned to exercise his power as emergency manager to unilaterally modify the district’s collective bargaining agreement”, and by law the school district has now sent out 5,466 layoff notices to its union employees, and 250 pink slips to their administrators as well. (that is nearly a yearly occurrence anyway lately – but this time it takes on a new urgency.)

Bobb, under order by law to produce a plan to balance the books, came up with closing half of Detroit’s schools by 2014, 70 to be exact. He doesn’t want to do this, as class size is expected to swell to 60 and parents would flee the district costing the schools even more money – but the state has given the order. Some schools may turn to charters, and a GM-style bankruptcy that separates the bad debt has been talked about. Whatever happens, it’s going to be seismic.

As far as the city goes, Detroit Mayor Dave Bing is asking for benefit concessions from city employees and a new tax on casinos to help balance a budget that has a $155 million deficit and could grow to $1.2 billion by 2015, and his plan is already meeting resistance. Bing claims that, “If we are unable or unwilling to make these changes, an emergency financial manager will be appointed by the state to make them for us” – a bit of leverage, given what is going on with the Detroit Public Schools, and now this takeover in Benton Harbor. The heat is getting turned up fast in Motown, and it should reach a boiling point soon.

One other reason, I think, why we boiling froggies haven’t reacted sooner: the UAW. What EFMs have in store for teachers really matches what the auto companies accomplished with UAW’s workers even before the 2009 bailout. The UAW willingly accepted a two-tier system of wages (effectively meaning starting UAW workers make less than workers at transplant factories in other states), and took on the costs of retiree health care.

In other words, one of our state’s unions has already been gutted in the face of harsh threats. The threat of EFMs will make it easier to do so with the public unions too.

It’s all about turning MI from a state with a solid middle class into one with desperate workers willing to make huge sacrifices just to keep their jobs.

Share this entry

Using New Emergency Financial Manager Law, They Start Dissolving Governments in Michigan

/in /by

In what is likely to be just the first of several dissolutions of democratically elected city governments and school boards in Michigan, the Emergency Financial Manager of Benton Harbor, Joseph Harris, just took away all authority from the city’s elected government.

I, Joseph L. Harris, the duly appointed Emergency Manager for the City of Benton Harbor, Michigan (the “City”), pursuant to the power and authority granted by Act 4 of the Public Acts of Michigan of 2011, being MCL 141.1501 et seq (the “Act”), do hereby resolve and order as follows:

WHEREAS, Section 19(ee) provides that the Emergency Manager may exercise any power or authority of any office, employee, department, board, commission or similar entity of the City, whether elected or appointed;

WHEREAS, the power of the Emergency Manager as set forth in Section 19(ee) of the Act is superior to and supersedes any such officer or entity; and

WHEREAS, now, no City Board, Commission or Authority has authority or power to act on behalf of the City as provided in the Act.

NOW, THEREFORE BE IT RESOLVED AS FOLLOWS:

1. Absent prior express written authorization and approval by the Emergency Manager, no City Board, Commission or Authority shall take any action for or on behalf of the City whatsoever other than:

i) Call a meeting to order.

ii) Approve of meeting minutes.

iii) Adjourn a meeting.

2. That all prior resolutions, or acts of any kind of the City in conflict herewith are and the same shall be, to the extent of such conflict, rescinded.

3. This order shall be effective immediately.

Harris, the former Auditor of Detroit, was appointed last year under the Granholm administration. After Harris cut cops and firemen last year, local residents started talking about firing him.

There are two things it helps to know about Benton Harbor. First, it has long been almost entirely dependent on Whirlpool for jobs. And as Whirlpool moved manufacturing out of state and country, its operations in the city have shifted from manufacturing to call center and resort work.

Just about all the cities that have EFMs now–along with Benton Harbor, Pontiac, Ecorse and Detroit’s schools–or have had EFMs–Hamtramck, Highland Park, Flint, and Three Oaks–have been gutted by the shift of manufacturing under globalization.

But Benton Harbor is particularly notable because of how segregated it is. Here’s how CSM described the segregation in a 2003 report on race riots in Benton Harbor (note, the boundary between Benton Harbor and St. Joseph is the river you can see in the map above).

On one side lies St. Joseph, an Eden-like beach town, brimming with barbered lawns, boutique coffee shops, and summer art festivals. Cross to Benton Harbor, and everything changes. White becomes black, and affluence turns to poverty. Frustrated residents sit on sagging stoops and walk by boarded-up businesses.

When Benton Harbor erupted in violence this week, the trigger was ostensibly a high-speed police chase through a residential neighborhood. It was the second such pursuit in three years, and the second to result in the death of a young black.

But as with most riots, this is a story that goes much deeper than the immediate event that lit the fuse. It’s about years of pent-up frustration over that gulf that separates Benton Harbor from St. Joseph. Over the sense most Benton Harbor residents have that a fair trial is impossible in Berrien County, which encompasses both towns, and that the police force engages in practices – like high-speed chases – that would be unheard of across the river. Over the accumulated anger of being pulled over by cops too often, of having job applications rejected before they were glanced at, of the assumptions that if you live in Benton Harbor, you must be a drug dealer, a criminal, a drop-out.

[snip]

The town of 11,000 is 92 percent black. Federal figures show that the average income is $17,000 a year.

By contrast, St. Joseph (population 8,800) is 90 percent white. Bustling with clothiers and cafes, its average unemployment rate last year was below 2 percent. Indeed, most of Berrien County is white, conservative, and affluent.

Now, Harris is black, and the other cities with EFMs aren’t as segregated (Pontiac is 39% white and 48% African American and Ecorse is 52% white and 40% African American, though Detroit is 12% white and 81% African American).

But it is rather telling that the first city in MI to have its democracy taken away under Rick Snyder’s EFM law is one that has long suffered under both globalization and racism. Rather than finding real solutions to those long-festering problems, we’re just going to shut it down.

Share this entry

The United States of Monsanto

/in , /by

Last night, I was on BlogTalkRadio with former Ambassador to Nigeria John Campbell talking about WikiLeaks, secrecy, and democracy. As a way to illustrate how the secrecy of diplomatic cables hides a great deal of undemocratic ideas, I raised the emphasis State Department Under Secretary for Management Patrick Kennedy placed in a hearing on WikiLeaks on State’s role in pitching US business.

This formal channel between Washington and our overseas posts provides the Department and other U.S. Government agencies crucial information about the context in which we collectively advance our national interests on a variety of issues. For example, these communications may contain information about promoting American export opportunities, protecting American citizens overseas, and supporting military operations.

I pointed out that WikiLeaks had revealed that our diplomats had proposed a “military-style trade war” to force Europeans to adopt Monsanto’s controversial products.

The US embassy in Paris advised Washington to start a military-style trade war against any European Union country which opposed genetically modified (GM) crops, newly released WikiLeaks cables show.

In response to moves by France to ban a Monsanto GM corn variety in late 2007, the ambassador, Craig Stapleton, a friend and business partner of former US president George Bush, asked Washington to penalise the EU and particularly countries which did not support the use of GM crops.

“Country team Paris recommends that we calibrate a target retaliation list that causes some pain across the EU since this is a collective responsibility, but that also focuses in part on the worst culprits.

“The list should be measured rather than vicious and must be sustainable over the long term, since we should not expect an early victory. Moving to retaliation will make clear that the current path has real costs to EU interests and could help strengthen European pro-biotech voices,” said Stapleton, who with Bush co-owned the St Louis-based Texas Rangers baseball team in the 1990s.

Here’s another example of how our government bureaucracy has decided that Monsanto and highly subsidized American cotton growers are more important than things like funding heating oil for the poor or teachers. {h/t Raj Patel)

On February 18, Republicans in the House of Representatives defeated an obscure amendment to the House Appropriations bill by a 2-to-1 margin. The Kind Amendment would have eliminated $147 million dollars that the federal government pays every year directly to Brazilian cotton farmers. In an era of nationwide belt tightening, with funding for things like education and the U.S. Farm Bill on the chopping block, defending payments to Brazilian farmers may seem curious.

These subsidies are the compromise the US and Brazil have concocted to resolve a trade dispute: Brazilian cotton growers won a case against US cotton subsidies. In response, Brazil proposed suspending its Intellectual Property obligations. Instead, our government effectively agreed to subsidize Brazilian growers to make sure we can continue to pay silly cotton subsidies here in the US without endangering Monsanto’s royalties in Brazil.

In WTO language, Brazil was allowed to suspend its obligations to U.S. companies under the Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement. This constituted a major threat to the profits of U.S. agribusiness giants Monsanto and Pioneer, since Brazil is the second largest grower of biotech crops in the world. Fifty percent of Brazil’s corn harvest is engineered to produce the pesticide Bt, and Monsanto’s YieldGard VT Pro is a popular product among Brazilian corn farmers. By targeting the profits of major U.S. corporations, the Brazilian government put the U.S. in a tough spot: either let the subsidies stand and allow Brazilian farmers to plant Monsanto and Pioneer seeds without paying royalties, or substantially reform the cotton program. In essence, Brazil was pitting the interests of Big Agribusiness against those of Big Cotton, and the U.S. government was caught in the middle.

The two governments, however, managed to come up with a creative solution. In a 2009 WTO “framework agreement,” the U.S. created the Commodity Conservation Corporation (CCC), and Brazil created the Brazilian Cotton Institute (BCI). Rather than eliminating or substantially reforming cotton subsidies, the CCC pays the BCI $147 million dollars a year in “technical assistance,” which happens to be the same amount the WTO authorized for trade retaliation specifically for cotton payments. In essence, then, the U.S. government pays a subsidy to Brazilian cotton farmers every year to protect the U.S. cotton program—and the profits of companies like Monsanto and Pioneer.

Now, how did our country decide this kind of insanity is really in the “national interest”? Who decided Monsanto was a more worthy American “citizen” than the poor and the children?

Share this entry

DC Mayor Gray Arrested: Finally a Leader In Washington DC Finds His Shoes

/in , , , /by

Barack Obama famously promised his supporters and voting base in 2007

And understand this: If American workers are being denied their right to organize and collectively bargain when I’m in the White House, I will put on a comfortable pair of shoes myself, I’ll will walk on that picket line with you as President of the United States of America. Because workers deserve to know that somebody is standing in their corner.

But, of course, now that Mr. Obama is safely ensconced in Washington DC at the oh so elite address on Pennsylvania Avenue, neither he nor his shoes are anywhere to be found when when workers and “their right to organize and collectively bargain” are under not just attack, but siege, in Wisconsin, Ohio, and other locales.

Today, however, we see what real Democratic leadership in Washington DC looks like when the rights of their citizens and constituents are being trampled on. District of Columbia Mayor Mayor Vincent Gray and other DC Council members found their shoes, took to the street to protest the wrongs occasioned upon the District and its women by the budget compromise that Mr. Obama applauded and congratulated himself over late Friday night. Mayor Gray and friends led by example:

Updated, 6:22 p.m.: Mayor Vincent Gray, D.C. Council Chairman Kwame Brown (D) and council members Yvette M. Alexander (D-Ward 7), Tommy Wells (D-Ward 6), Muriel Bowser (D-Ward 4) and Michael A. Brown (I-At Large) have been arrested by U.S. Capitol Police officers.

Also arrested was Sekou Biddle (D), who is filling Brown’s former at-large council seat on an interim basis.

More than 200 protesters gathered, including local officials and activists. Police let them sit in the street for 30 minutes, then began arresting them. Protesters chanted, “No justice, no peace.”

Mayor Gray and council members Brown, Alexander, Wells, Bowser and Brown not only found their shoes and their voice to stand up for the people they represent, they were willing to put their physical liberty on the line to do so. Gray et. al should be congratulated for this principled stand.

There is a lesson to be learned here by other inhabitants of our nation’s capitol.

Share this entry