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Financial Macrophilia and Shrinking the Banks

Posted by Admin on December 7, 2010

The big bank problem won’t go away anytime soon. There is a simple reason: financial institutions as huge and diversified as our modern universal banks are a persistently lurking threat to financial stability because if any one of them goes down we will have a major systemic problem and, as sure as night follows day, the need for another bailout. And, given their complexity, the risk of such catastrophic failure is likely to be greater than with smaller, less permutatively connected and more easily liquidated financial institutions.

America ducked this problem with the Dodd-Frank Act, though not before a valiant effort by some Senators to address the issue. Europe took some strong action to address it when the European Commission insisted that ING be broken apart and the British government insisted on some downsizing for Lloyds Bank. This week the issue returned.

First, it was reported that British banks threatened to move their headquarters to other countries if faced with the demand that they be broken into smaller units. Then one of the chief issuers of this threat lost his job. Today the British Independent Commission on Banking suggested in a lengthy issues paper that the government should use its ownership stake (read bailout investment) in the Royal Bank of Scotland, Lloyds and other banks to “restructure” them (read break them up). The chairman of the Commission, Sir John Vickers, is quoted in the Financial Times to have said of threats by bankers to pack up toys and leave:

[O]n the idea put about that banking operations would leave the UK if resulting reforms were uncongenial to banks, I sometimes wonder if those who say this realise how sharp a conflict they are suggesting between the interests of the banks and the public interest.

Modular structures, as championed by one of the leading thinkers on the subject, Andy Haldane of the Bank of England (see his “Regulation or prohibition: the $100 billion question”, are the way to go in reducing our global financial system to greater stability. Now the Commission is taking this idea very seriously.

What will we do in the United States? Is macrophilia too overwhelming an obsession or will we have the courage to look at the situation objectively as well, before the collapse of one of the behemoths leads to another round of claims that “we could not have seen it coming”?

The Financial Crisis Inquiry Commission still has time to deal with the issue in its report, expected in November. It has so far shown itself to be a little more willing to address the issue directly than the Congress or Treasury Department so we might still see some November fireworks.

COMMENTS SECTION

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Isn’t it interesting this has been the biggest factor to increasing our recent deficit, but not a word from the Tea Party on the Bailouts, other than to say they are against the TARP, which as horrid as it was, was probably the only option to save us from the abyss???

I mean, for example, have we heard the old hag running for Senator in Nevada say a single word about capital reserve requirements for banks?? And Christine O’Donnell??? Are you kidding me??? If you talked to her about capital reserve requirements O’Donnell would probably tell you she thought that banks should have the freedom to put big letters or small letters on their logo.

We’ll never know what would have happened if Paulson hadn’t pushed for the $700billion, and as angry as it still makes me to this day, I don’t think we would’ve wanted to risk that coin flip.

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Lawrence,
Good of you to highlight what the UK is investigating, although, I’m afraid as with Senator Dodds initial radical overhaul plans, the UK Commissions findings will amount to little – the City is indeed that strong in the governing party.

That said, an a most salient point for us to bare in mind is this little known fact: The UK’s casino banks/ too-big-to-fail exist solely due to the fact of the UK and USA bank bailouts, had these not occurred, all would have become insolvent and failed – this applies to HSBC, Barclays and RBS, HSBC being a special case in that it is listed in both Hong Kong and London.

Now, at the moment, all casino banks/TBTFs are the beneficiaries of near zero interest rates in the UK, USA and Euro Zone, all engage in borrowing funds from their respective central banks and purchasing sovereign debt issued by their national governments, thus earning a risk free 2-3%.

Now, just suppose Barclays Bank was to de-list and move to the Cayman Isles to avoid any form of regulation and enjoy low taxation of earnings/profits. For starters, its balance sheet could not rely on a 2-3% risk free return, the implied notion that the government would step in if it went pear shaped would be gone, hence, its use of wholesale market funds would increase, costs of CDSs for its counterparties would increase, and basically, in a September 2008 style crisis the bank would implode.

The reality is this, would the UK now actually welcome Citigroup to list on the LSE, and vice-versa, which nation would like to gamble on having to bailout a TBTF for the pleasure of earning a few pennies a year in corporate.

Shout as they may, without the implied backdrop of the state behind them, most TBTFs could not conduct business as they have, there shareholders would not stand for it – I mean, imagine bondholders and shareholders losing all their capital, be it in shares, corporate bonds or business deposits.

As with the IIF paper in May suggesting Basel III was a calamity and its imposition lead to a global depression, its really all posturing and hyperbole.

My own view is simple, call their bluff and see what the market does next, given the costs all tax payers have been forced to incur, the resultant loss of earnings due to a recession caused by the TBTFs, the loss of jobs and all other hidden subsidies they receive, it would be cheaper in the long run for sovereign states to actually ask their TBTF’s to move elsewhere, the cost savings alone would pay for those who lost their jobs to enjoy lavish lifestyles if distributed solely between them.

Utter nonsense, and crass nonsense at that.

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Hi Chris,

I very much do get your drift and you make an excellent point about the risk premium Barclays and others would have to pay. It is all mostly bluster and bloviating, with Josef Ackermann losing all credibility this week in a related context by now complaining about a “race to the top”! It is as if these people are so intoxicated by power and ego that they can’t even think straight. Yet we continue to drift, like deer in the headlights, toward identified disaster while doing nothing about it.

Thanks for your thoughtful post. I now appreciate entirely why the threat to move is such baloney.

Lawrence

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Troubled Asset Relief Program – TARP Definition

What Does Troubled Asset Relief Program – TARP Mean?
A government program created for the establishment and management of a Treasury fund, in an attempt to curb the ongoing financial crisis of 2007-2008. The TARP gives the U.S. Treasury purchasing power of $700 billion to buy up mortgage backed securities (MBS) from institutions across the country, in an attempt to create liquidity and un-seize the money markets. The fund was created by a bill that was made law on October 3, 2008 with the passage of H.R. 1424 enacting the Emergency Economic Stabilization Act of 2008. The Treasury will be given $250 billion immediately, and the President must certify additional funds as they are needed. The additional funds will be distributed as $100 billion, and then as the final $350 billion is given, Congress has the right to not approve the additional amounts.

Investopedia explains Troubled Asset Relief Program – TARP
Global credit markets came to a near stand still in September 2008, as several major financial institutions, such as Lehman Brothers, Fannie Mae, Freddie Mac and American International Group, went under. In a few surprising moves, heavyweights Goldman Sachs and Morgan Stanley even changed their charter to become commercial banks, in an attempt to stabilize their capital situation. The bailout will attempt to increase the liquidity of the secondary mortgage markets by purchasing the illiquid MBS, and through that, reducing the potential losses that could be felt by the institutions who currently own them.

In October of 2008, revisions to the program were announced by Treasury Secretary Paulson and President Bush; allowing for the first $250 billion to be used to buy equity stakes in nine major U.S. banks, and many smaller banks. This program demands that companies involved lose some tax benefits, and in many cases incur limits on executive compensation.

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Bill C-36 and India Food Law! Nov 2/10

Posted by Admin on November 7, 2010

Template for Template:Food safety

Template for Food & Safety

Tuesday, 02 November 2010 13:15

CDSAPI’s Added Comment: This article by Vandana Shiva, written when India was faced with a law similar to Bill C-36 (Canada, to empower Health Canada) and Bill S-510 (USA, to empower the FDA), is a must read. If you have found these laws difficult to comprehend, and have failed to see the “alarm factor” in their passage, Vandana Shiva clearly delineates the disastrous fallout consequences (indeed, the hidden agenda and intention) of these Corporate-driven, draconian, pseudo Consumer Food and Product Safety Laws.

Please read this article in its entirety to get a full grasp of the complete and inevitable destructive impact that follows in the wake of these “safety” laws, which “international HARMonization” (WTO) demands of all signatory countries. Bill C 36 and similar concurrent laws are bureaucratic monstrosities of regulatory dictatorship, giving free license to monopoly corporations, while mandating the destruction of local enterprise and sustainability, criminalizing that which is inherently safe, healthy and local, and deregulating the Corporate toxic and health destructive. The local food which you now take for granted, and those who produce it, are about to be criminalized through these fake and fraudulent “consumer safety regulations”.

Look at what happened in India, and see where Bill C 36 is taking the consumer and the local producers in Canada. Take Note! BELIEVE IT! Don’t allow it!!

Bill C 36 has just passed Third Reading in Parliament (because there was not enough public awareness and protest – and media silence) and MUST NOW BE STOPPED in the SENATE!!! It must never be allowed to become LAW in Canada! We cannot permit “citizen democracy and national sovereignty” to be usurped by Global Corporate Dictatorship – through the Dictatorship of Internatioanl Corporate Regulations implemented under the fraudulent camouflage of “citizen safety and protection.”

Inga Canadian Health Network cdsapi@shaw.ca

Highlights have been added ———————

The Law For Food Facism

By Vandana Shiva

22 February, 2005

Food laws and Food Safety for India’s diverse and local food economy

The Government has drafted a Food Safety and Standards Bill 2005 as an “Integrated Food Law” which has been prepared with the intention to be contemporary, comprehensive, and ensure better consumer safety through food safety management systems and settling standards based on science and transparency as also meeting the dynamic requirements of international trade and Indian Food Trade and Industry. Clearly, the law has been designed to lubricate international trade and the expansion of the global agribusiness. Consumer health, nutrition, and food culture are not even mentioned as objectives of the integrated food law.

PFA needs strengthening, not dismantling

The case in the Indian Supreme Court filed by the Centre for public interest litigation shows how Coke and Pepsi are violating the Prevention of Food Adulteration Acts. We need strengthening the PFA, not diluting it or dismantling it through a new Food Law which floods India with toxics in foods and replaces our strict PFA and our natural food systems with toxic processed food. That is why we must reject the integrated food law which through Article 102 (overriding effect of this Act over all other food related laws) states

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

In effect, the Food Safety Law 2005 is a dismantling of the PFA. It is in effect the legalizing of adulteration of our entire food system with toxic chemicals and industrial processing.

There is no reference in the objectives to most distinctive aspects of India’s food systems – indigenous science, cultural diversity and economic livelihoods in local food provisioning. Ninety nine per cent of India’s food is processed naturally and locally for local consumption and sale. Our science of food is based on Ayurveda, not the reductionist science which has treated unhealthy food as safe. This “free economy” that serves local community is governed by community control, and local culture, is now to be regulated by the centralized rules and standards appropriate for a 1% industrialized large scale manufacture. The “integrated Food Law” is a law to dismantle our diverse, decentralized food economy.

We need stronger food safety laws, especially in the context of toxics in food and the introduction of GMOs in food crops. The Prevention of Food Adulteration Act needs to be strengthened, not substituted by the proposed law.

Industrial food systems produce food hazards and disease

The case of Coca Cola and Pepsi Cola selling soft drinks with phosphoric acid, ethylene glycol, and huge amounts of sugar or High Fructose Corn Syrup shows that industrial food producers need to be regulated with strict safety laws designed through democratic participation. The report of the Joint Parliamentary Committee following the disclosure of pesticides in soft drinks by the Centre for Science and Environment, as well as recent studies published in a large number of medical journals have clearly indicated that soft drink manufacturers have been using significant quantities of very harmful and toxic chemicals in their drinks in order to make them more attractive and addictive. They have been clearly pushing their sales and profits at the cost of public health. The sustained attempt by the Coke-Pepsi companies to refuse to disclose the contents and ingredients of their drinks, is clear Coke-Pepsi are refusing to abide by the order of the Rajasthan High Court ordering Coke-Pepsi to disclose the contents of their drinks (including pesticides) on Coke-Pepsi labels, and instead are resorting to endless review petitions and appeals. In fact the requirement to disclose the ingredients of all packaged food items on their labels has been there in the Prevention of Food Adulteration rules for a long time. The fact that it has not been enforced again shows how Coke-Pepsi subvert and undermine our national laws.

It is now known that most soft drinks contain an extremely toxic brew of chemicals which are now known to be very harmful to human health. Apart from pesticides, the chemicals which are deliberately added include large quantities of phosphoric Acid (added to give them ‘bite’), caffeine (added to make them addictive), large quantities of sugar (to make it extra sweet), ethylene glycol (an extremely toxic and freeze compound added to allow them to be drunk ‘extra chilled’ at sub zero temperatures) and Carbon Dioxide.

Food safety is a growing concern with the industrialisaiton and globalisation of food. Food related diseases have spread.

As Tim Lang, Professor of Food Policy at City University, London reports, “incidence of food borne disease has in fact risen during the era of the productionist Paradigm. In West Germany cases of infections S.Enterites rose from 11 per 100,000 head of population in 1963 to 193 per 100,000 in 1999, in England and Wales formal notifications of the same disease rose from 14,253 cases in 1987 to 86,528 in 2000.”

Food hazards have increased with industrialization of food production and processing. As Colin Tudge observes “the modern food supply chain is convoluted and so long that it allows endless opportunities for malpractice of all kinds – including many that beggar the imagination of those who are not criminally inclined. The supply chain is impossible to police because it is so complex, and because policing is so expensive (and nobody wants to pick up the bill – certainly not the governments who win votes by keeping the price of food down). Sometimes though, it is not at all easy to draw a line between outright villainy (like the adding of contaminants) from the standard, legitimate practices of the modern food industry.

On a global scale, new diseases are emerging and more virulent forms of old diseases are growing as globalisation spreads factory farming and industrial processing and agriculture. Disease epidemics and food hazards are the outcome of food production methods based on hazardous inputs and processes.

In the U.K., more than 2 million cattle were found to be infected with Bovine Spongiform Encephelopathy (BSE) — the mad cow disease. By August 2002, 133 people had died from variant Creutz feld-Jacob Disease (VCJD) – the human equivalent of BSE .

New strains of Ecoli 0157 have led to 75 million cases of food poisoning annually in the US, resulting in 325,000 hospitalisation and 5000 deaths.

The Swine fever in Asia led to killing of millions of pigs. A newly emerged Nipah Strain killed 100 pig farm workers, infected 150 with non-fatal encephalitis and led to the slaughter of a million pigs to control the disease .

The Avian flu has already led to human deaths and the killing of millions of ducks and chicken. The first sightings of the H5N1 virus behind the Avian influenza came in November. The epidemic has spread to 10 countries. The disease has jumped from chickens to humans and killed eight people in Vietnam and Thailand. In 1997 the H5N1 Strain killed six people in Hong Kong .

Food production technologies have undergone two generations of changes over the last few decades. The first shift in food production technologies was the introduction of chemicals in agriculture under the banner of the Green Revolution. Toxic chemicals used in warfare were deployed in agriculture in times of peace as synthetic fertilizers and pesticides. Agriculture and food production became dependent on “Weapons of Mass Destruction”. The Bhopal disaster in which a leak from a pesticide plant killed thousands in 1984, and has killed nearly 30,000 since then, is the most tragic reminder of how agriculture has become dependent on war technologies designed to kill.

Genetic Engineering will introduce new food hazards.

New traits of viral promoter, antibiotic resistance markers being introduced in GM foods need public approval and strict monitoring for safety.

Dr. Mae-Wan Ho in “Genetic Engineering: Dream or Nightmare? (1999) has identified the following risks to human health from genetically engineered foods.

> Toxic or allergenic effects due to transgene products or interactions of transgene with host genes.

> Vector-mediated spread of antibiotic resistance marker genes to gut bacteria and to pathogens.

> Vector-mediated spread of virulence among pathogens across species by horizontal gene-transfer and recombination.

> Potential for vector-mediated horizontal gene transfer and recombination to create new pathogenic bacteria and viruses.

> Potential of vector-mediated infected cells after ingestion of transgenic foods, to regenerate disease viruses, or for the vector to insert itself into the cell’s genome causing harmful or lethal effects including cancer.

While Toxic and GM foods need stricter laws, local, natural processing in small dhabas, small outlets cannot be subjected to industrial regulation, both because they are not a source of toxic threat and because they are not centralized producers needing centralized regulation.

Whose Safety Rules ? Whose Standards?

However, while food hazards grow, food safety laws are being shaped which deregulate large corporations and over-regulate the small scale self organized economy. Such industrial food safety standards promote large scale globalised production, and act against local foods. These laws are also the basis of the Sanitary and Phyto Sanitary Agreement of WTO. An example of these inappropriate standards was used to destroy India’s diverse, decentralize edible oil industry.

In August 1998, a new packaging order was introduced for edible oils on grounds of food safety which shut down millions of small scale local oil mills and local edible oils like mustard. Combined with WTO trade rules of removing import restrictions, the laws of false food safety flooded India’s markets with oil from genetically engineered soyabeans.

India has used the coconut, groundnut, linseed, mustard, sunflower, and sesame for edible oil. Biodiversity has gone hand in hand with cultural diversity.

The main consequence of the mustard oil ban and the ban on sale of edible oils in unpackaged forms is the destruction of our oilseed biodiversity and the diversity of our edible oils and food cultures. It is also a destruction of economic democracy and economic freedom to produce oils locally, according to locally available resources, and locally appropriate food culture.

Since indigenous oilseeds are high in oil content, they can be processed at household or community level, with ecofriendly, decentralized and democractic technologies.

Soyabean oil is based on concentration of poor, from the seed, to trade, to processing and packaging. Monsanto controls seeds through its patents and its ownership of seed corporations. Cargill, Continental and other trading giants control the trade and milling operations internationally. Because of its low oil content, the extraction of soyabean oil needs heavy processing which is environmentally unfriendly and unsafe for health.

Pseudo safety standards destroy safe and healthy oils and have flooded the market with unhealthy hazardous oils.

Mustard oil and our indigenous oilseeds symbolize freedom for nature, for our farmers, our diverse food cultures and the rights of poor consumers.

Soyabean oil symbolizes concentration of power and the colonization of nature, cultures, farmers and consumers.

The manipulation of oil prices and the restrictions put on indigenous oilseed processing and sales are forcing Indians to consume soyabean oil and thus further strengthen a monoculture and monopoly system.

Free trade and economic globalisation has been projected as economic freedom for all. However, as the case of the mustard oil crisis and soyabean imports reveals, so called free trade is based on many levels of destruction of economic freedom of small producers, processors and poor consumers.

Small farmers are loosing their freedom to grow the diverse oilseeds adapted to their soils, ecosystems and cultures. With new patent laws, they will be forced to pay royalties for seeds and will be further pushed into poverty.

Small processors of eco-friendly and safe edible oil are being rendered illegal through new laws like the ‘packaging’ order which is in effect an instrument of market take-over of big industry.

Further, while the rhetoric of free trade is that the government should step out of business, the decision on free import of soyabean, the packaging order and the proposed Food Safety Act reveal how the government is a major player in the transfer of production from small scale decentralized systems to large scale, centralized systems under monopoly control.

The state in fact is the backbone of the free trade order. The only difference is that instead of regulating big business, it leaves big business free, and declares small producers and diverse cultures illegal so that big business has monopoly control on the food system.

The asymmetric treatment of the small and the big is also evident in the regulation of food safety.

While the government reacted immediately to ban mustard oil, it has done nothing to prevent the dumping of toxic, genetically engineered soyabean. Adulteration in various forms undertaken by the global players gets protection rather than punishment from governments, in India, in the U.S., and across the world. This is why the PFA is being dismantled to legalise adulteration with toxic chemicals and toxic genes.

The highest level political and economic conflicts between freedom and slavery, democracy and dictatorship, diversity and monoculture have thus entered into the simple acts of buying edible oils and cooking our food. Will the future of India’s edible oil culture be based on mustard and other edible oil seeds or will it become part of the globalised monoculture of soyabean with its associated but hidden food hazards.

In Europe too the food safety laws were threatening small producers of typical foods. For example, Slow Food organised half a million signatures that forced the Italian government to amend a law that would have forced even the smallest food maker to conform to the pseudo hygienic standards that suit corporations like Kraft Foods.

Need for pluralism to protect food livelihoods and diverse food cultures

Local natural organically processed food is not the same as chemically processed food which is different from genetically engineered food. Different foods have different safety risks and need different safety laws and different systems of management. That is why in Europe there are different standards for organic, for industrial and genetically engineered foods. Organic standards are set by organic movements while the standards for genetic engineering are set at European level through the Novel Food laws. There is in addition the movement to protect cultural diversity of food, which is destroyed when industrial food processing standards are applied. Cultural diversity is protected through “unique” and “typical” foods. Carving out these spaces of freedom in the face of a globalised industrial food economy has been the contribution of the Slow Food Movement. These standards are cultural, based on indigenous science and community control, not industrial “science” and controlled by central government manipulated by Food giants like Cargill, ConAgra, Lever, Nestle, Phillip Morris and Gene Giants like Monsanto.

India, like Europe, needs 3 different laws governed at different levels for different food systems based on different production processes which produce different foods.

1. An organic processing law for local, natural small scale food processing governed by gramsabhas, panchayats and local communities. In cities this could be based on licensing by resident welfare associations as Urban Panchayats, and local municipalities. Community control through citizen participation is the real guarantee for safety.

2. An industrial processing law which already exists and is the Prevention of Food Adulteration Act. This could be updated to deal with new food hazards. It should definitely not be dismantled.

3. A GMO food law which controls imports, labeling, segregation, traceability etc. This is the new law that the consumers need. This law should be drafted by the Central Government, but states and local communities should be free to introduce stricter standards. If regions want to be GMO free, this should be allowed under the principles of decentralized democracy.

However, the central government cannot try to license the last dhaba in India. It will unleash the worst form of license and inspector raj. It will establish a food facism based on food mafia, serving global corporations. It will destroy our food freedom, livelihoods, our food safety, our food diversity. The proposed integrated food safety law will be used to criminalise every tiny dhabawala and street vendor who are not introducing obesity and diabetes, cancer and heart disease in our society. They are providing safe, affordable dal and roti to millions of working people.

Since different food systems need different levels of management for safety, it is totally inappropriate to lump together all kinds of food – organic, industrial, GMOs into one category as is done in Def 3 (k) which treat all food providers as the same. “Food business” means any undertaking, whether for profit or not, and whether public or private, carrying out any of the activities related to any stage of production, processing and distribution of food and includes import, export and sale of food and food service providers.

How food is processed determines its quality, nutrition, safety. Home processed bread is not the same as industrial bread. They are not “like products” in the W.T.O. jargon. They are different products in terms of their ecological content and public health impact. A factory chicken is not the same as a free range chicken both in terms of animal welfare and in terms of food quality and safety. A GMO corn is not the same as organic corn. The former contains antibiotic resistance markers, viruses used as promoters, and gene for producing toxins such as Bt. Regulating Bt. corn for safety needs different systems than organic corn, factory farming needs different regulatory processes than free-range chicken.

Pluralism of production processes and products needs pluralism of laws and science appropriate to the safety issues and governance systems that a product or production process demands.

Chemical processing need chemistry labs and chemists, GMOs need genetic I.D. Laws, organic processing needs indigenous science and community control. The response of government to the mustard oil contamination in 1998 was to demand that every ghani have a lab, a chemist and must package oil. This response was inappropriate for the scale and method of production. One million ghanis were shut down, 20,000 small and tiny crushers were criminalized by an inappropriate law that opened the flood gates for import of soy oil. We cannot repeat the destruction unleashed by pseudo safety laws in the edible oils sector in other sectors of our indigenous food economy and food culture. We cannot replace safe systems with unsafe systems through manipulated laws and rules which serve agribusiness, leave them free to spread food hazards and disease, destroy our diverse foods and substitute them with unhealthy, anti-nutritive, hazardous industrial foods. We do not need to deregulate global trade and over-regulate domestic production. We need to regulate chemicals and GMOs through centralized structures and regulate local, domestic food systems through local, democratic, decentrlaised, participatory processes.

The principles of food safety used in the proposed law are inappropriate to the indigenous self-organised food systems of India Act 17 (b) states that the Food Authority will take into account International Standards.

However, in the case of GMOs, there are no International Standards. There are European laws on novel foods and the absolute deregulation of GM foods in the U.S. On May 13th 2003, the US together with Canada and Argentina challenged Europe’s moratorium on GM crops and foods. Arguing that their GM products were being unfairly discriminated against, they challenge the precautionary principle in decision making about GM crops that is supposed to be embodied into European decision making. Bringing this case to the WTO is another excuse to attack the use of the precautionary approach in international law.

The new EU Regulations take account of the EU’s international trade commitments and of the requirements of the Cartagena Protocol on Biosafety with respect to obligations of importers. The EU’s regulatory system for GMOs authorization is in line with WTO rules: it is clear, transparent and non-discriminatory. There is therefore no issue that the WTO needs to examine.

Many countries are now looking at the EU policy to develop their own policy. The US fears that several countries will adopt a similar approach as the EU to regulate GMOs and GM food and feed products. The new Swiss GM legislation, entered into force on January 1st 2004, is a good example.

The Swiss law is stricter than current EU legislation on the liability and co-existence aspects. It is based on the precautionary principle and “the polluter pays” principle (Article 1) and aims to protect health and security of human beings, animals and environment. It also aims to permanently maintain biological diversity and fertility of the soil and to allow freedom of choice for consumers. The EU Moratorium represents the will of its people not to be force-fed. It crystallizes (as the patent on seeds still does) the worldwide mobilization of people against the reinterpretation of national security and sovereignty to increase the global control of US corporations over resources and market.

If Europe had not suspended its approvals process in 1998, these would have been some of the consequences:

> The indirect effects of growing GM herbicide tolerant (HT) crops on farmland wildlife would not have been taken into account. GM HT sugar/fodder beet and spring oilseed rape now known to be damaging to farmland wildlife would have been grown commercially in Europe.

> No requirement for monitoring of environmental or human health effects would have been introduced, maintaining the ‘no evidence of harm’ claim for safety.

> Consumers would not have been able to make a choice not to eat products derived from GM crops as the new labeling laws now allow for.

> There would have been no traceability requirement for GM foods. If an adverse effect had emerged, it would have been impossible to withdraw the product from the market quickly and easily. Following BSE, traceability is a cornerstone of European food safety systems.

Under India’s diverse decentralized plural economy, a centralized integrated law is inappropriate on many counts. Indigenous Gur and Mithai have no international standards, they need indigenous standards. India must craft her laws for her conditions. These laws must be appropriate to the level and content which they address. One law for all food systems is a law that privileges large-scale industrial commercial establishments and discriminates and criminalizes the small, the local, the diverse.

Our kitchens and dhabas, our cottage and household industry is being put in the same category as Nestle’s Cargills and ConAgra’s massive super industrial processing. Domestic and local consumption, including “not for profit” food provisioning is being put in the same category as imports of hazardous GMOs. This is not a science based contemporary system. It is an obsolete, corrupt crude and coercive system proposed by a corporate state to destroy 99% of our indigenous food processing so that global agribusiness MNCs which have spread disease and ill health control our entire food economy, destroying millions of livelihoods and millennia of diverse gastronomic traditions.

The Right to Information Vs Confidential Information

Instead of regulating hazardous food industry like Coke and Pepsi, the Food Safety law is in effect a law for deregulating hazardous industry. Article 14(5) on Functions of Food Authority states:

The food Authority shall not disclose or cause to be disclosed to third parties confidential information that it receives for which confidential treatment has been requested and has been acceded.

Coke and Pepsi are hiding behind Trade Secrets to not disclose the ingredients of their soft drinks to the Rajasthan High Court. Union Carbide hid behind Trade Secrets to not disclose the nature of the gas leak in Bhopal and allowed thousands to die and millions to be crippled. Food and health are too important to be sacrificed to corporate confidentiality. The Right to Information must be the basis of any Food Safety Law.

In the year 2004, we need to learn from the food mistakes of the industrialized food systems. Systems that have created Mad Cow Disease and unleashed an epidemic of obesity and diabetes. These diseases of unhealthy processing are not identified as “food hazards” in food safety laws, though they are a hazard to health. That is why the proposed law is obsolete – it fails to take into account the diseases related to industrial food processing which are creating ill health and should be treated as unsafe.

Law for Food Facism : The License Permit Raj for the Food Economy

The Food Safety and Standards Bill 2005 threatens to create a culture of “Food Facism”.

Industrial foods need chemical labs, genetically engineered foods need genetic I.D. labs, but cooking fresh dal and roti does not need testing for toxic chemicals and transgenes. The risk and safety standards for Lassi in a Dhaba and a synthetic Milkshake at a Fast Food chain must be different. As Eric Schlosser has reported in his best seller “Fast Food Nation”, “A typical artificial strawberry flavor, like the kind found in a Buger King strawberry milk shake, contains the following ingredients: amyl acetate, amyl butyrate, amyl valerate, anethol, anisyl formate, benzyl acetate, benzyl isobutyrate, butyric acid, cinnamyl isobutyrate, cinnamyl valeratge, cognac ssential oil diacetyl, dipropyl ketone, ethyl acetate, ethyl amyl ketone, ethyl butyrate, ethyl cinnamate, ethyl heptanoate, ethyl heptylate, ethyl lactate, ethyl methylphenylglycidate, ethyl nitrate, ethyl propionate, ethyl valerate, heliotropin, hydroxyphenyl-2 butanone (10 per cent solution in alcohol), a-ionone, isobutyl anthranilate, isobutyl butyrate, lemon essential oil, maltol, 4-methylacetophenone, methyl anthranilate, methyl benzoate, methyl cinnamate, methyl heptine carbonate, methyl naphthyl ketone, methyl salicylate, mint essential oil, neroli essential oil, nerolin, neryl isobutyrate, orris butter, phenethyl alcohol, rose, rum ether, y-undecalactone, vanillin, an solvent.

We are better off sticking to Lassi and treating these toxics as Food Adulterants under PFA rather than allowing them into our food systems, and using the toxic food culture of U.S. as the standard for pseudo safety. Risk Assessment in the hands of centralized corruptible agencies is no protection for consumers as the disease and health epidemic in the U.S. linked to over processed, industrial foods shows. Even while the U.S. is at the epicenter of the food related public health crises, the U.S. government is trying to export its Food laws which deregulate the industry and over regulate ordinary citizens and small enterprise. This deregulation of the big and toxic and over regulation of the small and ecological is at the core of Food Facism, which the proposed Integrated Food law tries to introduce on the basis of the U.S. Model.

Firstly, it sets up a coercive apparatus of centralized control, which lends itself to corruption.

It creates a license permit Raj in food when the rhetoric is about ending it.

A license and inspector raj controlled from Delhi is a recipe for corruption.

In the area of food, corruption could kill.

Secondly, it is inappropriate to “integrate” what are in effect different activities and different products. Small scale, local natural food processing for largely local consumption use fresh foods is based on transparent cooking, natural and organic processing without toxic chemicals in front of the consumer. This cannot be measured with the same safety standards as needed for large-scale processing with chemicals, or for foods containing GMOs.

Traceability is a particular challenge created by GMO’s. IN a law for GM foods it would have a place. However to demand that in India’s’ self organized, informal, orally organized local food economy, every food operator will have systems and procedures for traceability in which all for this information to be made available to the competent authorities is to kill small food providers with the burden of a corrupt and unwieldy bureaucratic control (Article 27 on Traceability). The core of the Act is bureaucratic control through a licence permit raj. Article 31(1) states that no person shall manufacture, sell, stock, distribute or exhibit for sale any article of food, including ready-to-serve food, irradiated food except under a licence issued by the state Commissioner of Food Safety or its authorized officer. Roasted peanuts or chanas, and irradiated foods have been lumped in the same category of hazards. A “bharbuja” (maker of roasted grains) and the Mumbai dabbawalas will be burdened with the same licensing arrangements as a High Fructose Corn Syrup factory of Cargill. This mix up between a small scale self organized sector and a large scale industrialized food sector is the most lethal aspect o the proposed law. Undemocratic, bureaucratically designed, corporate driven food safety laws like the proposed law destroy safe alternatives and promote unsafe industrial food production. According to Colin Tudge “overall, the food-safety laws of Britain are extensive and intricate and more and more detailed, so that its becoming very difficult even to keep a few chickens or pigs for local use, or to run a village shop, or to sell cakes at the church bazaar. Men and women in suits ow with nylon hats and clipboards descend like flies to point out ways in which small farmers and traders could in theory poison their customers. AT the same time, the government that makes these laws presides over policies that seem designed expressly to maximize the spread of disease.

In England where local economies have been destroyed, pseudo safety laws prevent little old ladies from selling their homemade cakes in churches for charity. In India such laws would criminalise “annadana”, the langars of gurudwaras, the zakat at the Mosques and Dargahs, and the bhandaras which feed millions of poor people daily in temples, the livelihoods of our chaiwalas and dhabawalas, the entire household and cottage industry in food processing would be made illegal overnight, leading to the criminalisation of our safe foods and legalisation of food crimes.

There is only one system for food safety – locally produced, freshly processed food – of which we have abundance in India’s non-industrial local food systems. Pseudo hygiene and food safety laws that are designed for the disease producing industrial, long distance convoluted system of getting food from farms to tables will not produce safety. They will produce poverty and unemployment by destroying millions of small-scale livelihoods in food production and processing.

A modern food law would recognize that our decentralized food economy enhances nutrition, safety, culture and livelihoods. We need laws to protect our diverse local food cultures from the disease causing homogenous, centralized industrial food culture of the west. Our biodiversity and cultural diversity of food have built robust localized food economies. Our skilled and knowledgeable food processes are the future of food.

We cannot allow a law manipulated by global food giants, promoted by power hungry bureaucrats to take away our food freedom and food sovereignty.

We need a stronger PFA. We do not need a food police from Delhi to destroy our rich food culture through pseudo safety standards which serve global business. We need society led, participatory, democratic systems to enrich our food systems, promote health and nutrition and guarantee food safety. Delhi needs to control the Monsantos, Coca Colas and Cargills, not our dhabas and our kitchens. Let the government regulate agribusiness through the PFA. We will regulate ourselves as community and civil society. We will not be ruled through the law for food facism. We will shape laws for our food freedom. This is our food sovereignty. This is our Anna Swaraj.

Posted in India Forgotten | Tagged: , , , , , , , , , | Comments Off on Bill C-36 and India Food Law! Nov 2/10

Intel Wars 1 (Sacrificial RAM)

Posted by Admin on October 11, 2010

 

Godfather of Exopolitics

Godfather of Exopolitics

 

UFO/ET Intelligence Wars (Part 1, Sacrificial RAM)
By Ed Komarek
2/4/10
Copy and Distribute Freely
My Blog: http://exopolitics.blogspot.com/

Quote of the day, “First they ignore you, then they laugh at you, then they fight you, then you win.”Mahatma Gandi

I have been remiss of late for not having paid enough attention to the latest upheaval and uproar amongst the UFO/ET intelligence professionals associated with the Ron Pandolfi http://www.colinandrews.net/CIA-Pandolfii-XFile.html and Jack Sarfatti group.http://en.wikipedia.org/wiki/Jack_Sarfatti These rogues have been at it again big time with their undisputed Spy In Chief, Ronald Pandolfi. Once again Ron has instigated a ruckus as part of a continuing high stakes game of political UFO/ET Washington gamesmanship, that I believe leads right up into the halls of Congress!

For you neophyte readers still in kindergarten and not having read prior articles of mine RAM is directed by a old Nixon era counterintelligence agent rumored to have been the Umbrella Man in the Kennedy Assassination. Gorden Novel http://en.wikipedia.org/wiki/Gordon_Novelis no lightweight to intelligence games. RAM since as its inception has focused on developing an Alien Reproduction Vehicle (ARV) based on key patents that the Cartel seems to failed to apply for and RAM applied for and received. Gordan believes the patents are basic to the trillion or multi-trillion dollar secret international space fleet code named Solar Warden. http://exopolitics.blogspot.com/2009/04/solar-warden.htmlhttp://exopolitics.blogspot.com/2009/05/solar-warden-articles.html
http://exopolitics.blogspot.com/2008/01/americas-secret-space-fleet-by-ed.html

RAM could be a real headache for the Corporate Cartelhttp://exopolitics.blogspot.com/2009/02/understanding-alien-resource-corporate.html in the future costing it huge sums of money in litigation. RAM could be a very important asset and chip for any politicians trying to reign in the Cartel corporations that have been almost totally outside the law and constitution for decades since the MJ 12 purges and privatization of the Nixon administration.

Gordon also claims that RAM has just put a very important UFO/ET movie disclosure script on Steven Spielberg’s desk. With fame and fortune and millions even billions of dollars in sight it appears all is being swept away and Gordon may soon find himself homeless living under a bridge with only his trusted blackberry in tow. 🙂 What the CIA gives it seems it can take away! At least that is the appearance being projected. As we know appearances can be deceiving.

Folks should keep in mind that there is historical precedence here and it would be a good time to remember James Black especially because John Alexander http://en.wikipedia.org/wiki/John_B._Alexander has been in regular contact with Gorden and has become quite friendly with Gordon. James Black was an inventor that formed a company to get these same kinds of technologies out into the public domain. He was befriended by John Alexander who once he had infiltrated James’s group promptly blew it up. http://exopolitics.blogspot.com/2005/04/who-was-james-black.html Lets hope that Gorden comes out of this in better shape than James. 🙂

A couple of weeks before James was to file a lawsuit against John Alexander, LANL, the American and Canadian governments he was found dead in his hotel room. Being that Gordon is threatening to sue for 30 billion dollars I am beginning to feel a sense of Deja Vu. I wonder if Alexander is thinking that he too has been double crossed by Ron for not blowing up RAM long ago. 🙂 One angle would be that this ruckus is to give the appearance of blowing up RAM in order to placate John, MJ 12 and the Cartel.

An even more interesting speculation has been made by Dan Smith that Ron is deliberately creating this ruckus and focusing the attention on himself and away from his political handlers in order to have Gorden throw him into the media, legal and congressional brier patch. Remember Brr Rabbit says, “Please oh please do anything you want to me Brr Fox, but don’t throw me in that brier patch!” Already Gordon has been on Coast to Coast and Dan says Jack is scheduled in the near future and then he Dan may follow. Dan even suggested that I might want to get into the act to play my part and has encouraged me to write this article.

These intelligence rascals and even the skeptics never learn. Anybody who points out to them that their character, thoughts and emotions are being played and orchestrated daily by one of the best counterintelligence men the CIA has to offer, still believe Ron when he tells them that the accuser is nuts! Brr Rabbit stuck it to Brr Fox time and time again because Brr Fox never learned to distrust what Brr Rabbit was saying and instead watch and learn from what he was doing. Gorden Novel is just the latest of the Brr Foxes to be double crossed and tricked by Ron to serve his and his handlers political agenda.

Gorden now admits he has been tricked and used by Ron.

“Ryan:
Please send me a phone number and or e-mail contact for David Reitzes. He is about to finally make me spend some money or time to get him to get rid of his “CIA or Con Man” marquee I cannot believe RP and Associates remotely appreciates. I have over a thousand e-mails and equal number of phone calls along with a lot of well witnessed meetings with RP since 1997. We were not discussing tiddlywinks. Ron currently by his or his associates choosing is my “Brer Rabbit” and I his “Brer Fox“. Until he fixes whats wrong in our relationship starting with Muradhttp://www.americanantigravity.com/documents/Murad-on-Torsion.pdfhe has a “TARBABY” of very large magnitude to deal with and no “Brier Patch” to hide in and I ain’t giving him one. In my viewpoint he is still a brilliant much admired and respected friend I gladly use to risk my life for. He is not my enemy – just a very serious disappointment in hero worship.

David’s using me as his whipping boy in his historical claim to fame like the Flame for Fame Jackal tried to do until my son and some of my friends got his go away while you still can attention is about to get legally speaking for him very dangerous. You also owed me the right of rebuttal before you wrote that fallacious and salacious “RU” hatchet job. This interview would have gone a lot smoother without the pseudo “Reality Uncovered” sandbag job piece and your e-mails clearly supporting Jack’s libelous attacks if you really were interested in getting to the truth. You need to remove that specious crap, rant, and diatribe off my overall web site or this is going to be a very tough interview for you. “Once burned – twice shy”. I suggest you get my SCS REPORT book so you know exactly what it is your asking me about. RP should still be willing to confirm that I am no ones fool including his. GN”

In response to the above I wrote back.

“Hi Gordon thanks for putting me in the loop. I think you did a very good assessment of the mistakes you made with Ron. As long as a person realizes that Ron is a master of gamesmanship and a clever sociopath that so plagues the beltway mentality, he can be worked with. One just has to remember in his world people and friendships are considered political currency to be used, abused and everybody is expendable. I suspect while this may work well in Washington politics elements of the military may have a quite different perspective on how friends and fellow comrades should be treated.

The beltway bandits moral compass of course is seriously flawed based on the assumption that the end justifies the means. That’s a very fundamental error and character flaw individually and collectively because in truth the means creates or is the end. Destructive means eventually corrupt the most admirable of ends.

As long as a person understands that Ron creates friendships and associations to be used to his political advantage and played one against one another on a continuous basis then as long as one is always watching their back a person can stay safe. Forget this and as you have seen the price must be paid. I doubt that Ron has any real friends with Dan Smith being the closest to being a real friend but even Dan knows Ron is his handler and a CIA asset but others like yourself don’t realize that or tend to forget the fact. Once you interact with Ron you are being used as a expendable asset, that’s just the reality of being in any association with Ron.

The phone conversation I had with Ron quite a while back involved Ron sizing up a number of characters in this intelligence network. It was obvious to me that once Ron has figured out a persons character, mind and emotions he knows how to brilliantly manipulate that person to his advantage and he does that on a continuous basis and that is why he has risen to the top of the CIA and Washington politics.

Ron spent a lot of time helping you build up RAM as a valuable CIA asset and poker chip to be played in a high stakes game of political poker. Now think about that and try to figure out what’s his game. Don’t trust what he says without verification from other sources. I think this apparent double cross is a tactical move in response to getting concessions from the Cartel corporations. I don’t expect him to completely blow up such a valuable asset, just make it look that way to the Cartel in just another political maneuver. Remember he knows what you are going to do even before you think of doing it. He knows you inside and out and exactly how you will react when provoked to play out the role assigned to you by him.

If Brr Fox paid more attention to what Brr Rabbit was doing and less to what he was saying he would not have been the butt of Brr Rabbits tricks so often. Unfortunately Brr Fox never learns like so many other folks who foolishly believe the talk and get taken in. He knows how to play Jack just as well as he does you and I wonder if Jack has any idea of how well Ron manipulates him. Ed”

I agree with Gordon that Jack Sarfatti, Ron’s principle attack dog, has been deliberately unleashed against the now poverty stricken Gorden Novel and his RAM group. But Gordon, that’s not the half of it, because undoubtedly Ron the past several years has been covertly feeding Jacks anger and resentment to use against you and RAM at the appropriate time. I assume he has also been feeding the skepticism at Reality Uncovered as well.

It is a undisputed fact that Ron has been devoting large amounts of his valuable time over the past several years to help Gordon his loyal bulldog build RAM. In a phone conversation Gordon says that he has been in touch with Ron the past several years almost daily. This is confirmed by Dan Smith who let it slip to me in a recent phone conversation that he is just a tad bit resentful for all the attention Gordon has been getting from Ron. 🙂

Dan says as far as he knows in a recent phone conversation, that in the public domain he and Gordon have received the most attention from Ron than anybody and they both have become important key CIA assets with Ron as their handler. The important difference between Dan and Gordon until recently is that Dan knows he is being adroitly manipulated and Gordon did not. Gordon mistakenly believed that Ron and the Washington politicians have a correct moral compass that guides their gamesmanship. Now he pays the price for not realizing that in the Beltway, the false idea that the end justifies the means, is wildly rampant in political gamesmanship and maybe instead of plotting revenge Gordon should be flattered for being screwed? 🙂

So why in the world would Ron go to all this trouble to build up RAM only to inexplicably blow it up? I believe this question can only be answered by enlarging our perspective to the degree that the answer becomes obvious. Critical to this enlargement of perspective is to understand the way high stakes politics works and Ron is inadvertently being my teacher just as I am inadvertently his CIA asset. Just as important are some important assumptions and facts.

How many folks remember when Ron appeared before Congress and blew up an illegal corporate technology transfer to China during the Clinton administration that was a severe national security threat? Here is a tiny but very important ti-bit of information that speaks volumes as to who Ron’s handlers are. After the s— hit the fan Dan received a call from Ron’s wife telling Dan that she had received a call from a very important Committee Chairman telling her not to worry and that things were not as they seemed and Ron was not in trouble. At the time Dan could hear Ron yelling at his wife not to tell Dan this. Obviously Ron’s whistle-blowing was being orchestrated at the highest levels. (See first link in this article.)

Dan and I now suspect that this past covert operation run out of the halls of Congress was a precursor to Ron’s CIA activities today as point man and congressional briefer in all matters extraterrestrial. My guess is that Ron could be coordinating the activities of all the secret stakeholders with the three main stakeholders being the Cartel, Congress and Executive Branch, and the Military.

If my source in my ET integration articles is correct this may be orchestrated through a Top Secret Contact Committee,http://exopolitics.blogspot.com/2010/02/integration-into-et-reality-part-2.html which makes sense as this is much bigger issue than any single committee in Congress can tackle. Dan says Ron is one of the very few people who does not have to go by strict limiting protocols and can walk in and meet any member of Congress as he pleases, freely.

I might be possible that Ron is coordinating Secret Contact Committee disclosure efforts. If these other sources are correct humanity’s integration into extraterrestrial society is so far along that he may be involved in many other extraterrestrial related things like ET trade, cultural exchanges, scientific and technology efforts, etc. etc. as well. The Ad hoc UFO Military Working Grouphttp://exopolitics.blogspot.com/2009/03/naval-officer-source.htmlseems to be a maverick operation and this might be why Ron deceived Gordon in saying that Source A was hoaxing. Ron would not want any of his assets moving over and coordinating with any maverick operations being run by the Navy. I expect Ron to do his best to attempt to keep CIA control over all things extraterrestrial as best he can.

I hope that Ron’s Congressional handlers have a little more moral authority than Ron himself. My father used to have a man like Ron working for him that was always stirring up trouble amongst the rest of the staff playing people against off each other for entertainment unless he was kept busy. Ron strikes me as that sort of person that might have to be taken to the woodshed from time to time by his Congressional handlers, else his gamesmanship gets totally out of control. Meanwhile he and his confusing antics on the Internet undoubtedly remain a very useful asset in the Intelligence Wars centered around UFO/ET disclosure.

I would appreciate if if all parties involved could send me URLs and material I can quote for my next article. I am wading into this bit late and not up on the details of this controversy. In the meantime folks might want to go to Jake Reason’s thread at OM that gives many of the details as to what this is all about. http://lucianarchy.proboards.com/index.cgi?board=dansmithsom&action=display&thread=7268&page=1

To be continued:

Posted in Exopolitics by Ed Komarek and Others | Tagged: , , , , , , , | Comments Off on Intel Wars 1 (Sacrificial RAM)

How some retired military officers became well-paid consultants

Posted by Admin on September 4, 2010

Seal of the United States Department of Defense

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Retired military officers cash in as well-paid consultants

    WASHINGTON — Six months after Marine Lt. Gen. Gary McKissock retired in 2002, he did what many other ex-military leaders do: He joined the board of directors of a defense contractor, a company doing business with his former service.

    McKissock also had a second job. The Marines brought him back as an adviser, at double the rate of pay he made on active duty. Since 2005, the Marines have awarded McKissock contracts worth $1.2 million, in addition to his military pension of about $119,000 a year.

    McKissock is one of at least 158 retired admirals and generals the Pentagon has hired to offer advice under an unusual arrangement. Most of the retired officers, one to four stars in rank, have been paid hundreds of dollars an hour by the military even as they worked for companies seeking Defense Department contracts, a USA TODAY investigation found. That’s in addition to pensions of $100,000 to $200,000 a year for officers with 30 or more years of service.

     

    As “senior mentors,” as the military calls them, the retired officers help run war games and offer advice to former colleagues. Some mentors make as much as $330 an hour as part-time government advisers, more than triple what their rate of pay was as high-level, active-duty officers. They earn more — far more, several mentors said in interviews — as consultants and board members to defense companies.

    Retired generals have taken jobs with defense contractors for decades, reaping rewards for themselves and their companies through their contacts and insights. But the recent growth in the use of mentors has created a new class of individuals who enjoy even more access than a typical retired officer, and they get paid by the military services while doing so. Most are compensated both by taxpayers and industry, with little to prevent their private employers from using knowledge they obtain as mentors in seeking government work.

    Nothing is illegal about the arrangements. In fact, there are no Pentagon-wide rules specific to the various mentor programs, which differ from service to service.

    Based on interviews and a review of public records, USA TODAY found:

    • Of the 158 retired generals and admirals identified as having worked for the military as senior mentors, 80% had financial ties to defense contractors, including 29 who were full-time executives of defense companies. Those with industry ties have earned salaries, fees or stock options as consultants, board members or full-time employees of defense firms.

    • Mentors are paid from about $200 to $340 an hour, plus expenses — many times the rate of pay for active-duty generals, who typically make $170,000 to $216,000 a year, including a housing allowance.

    • Mentors are hired as independent contractors and are not subject to government ethics rules that would apply if they were hired as part-time federal employees. They don’t have to disclose, either to the military or the public, the identities of their clients. Mentors are not barred from lobbying the same officers they are advising, from advertising their military adviser role on company websites, or from taking commercial advantage of insights gleaned through their government work.

    • Mentors operate outside public scrutiny. Although the services have released broad pay rates, most won’t say how much individual mentors have been paid, and one, the Missile Defense Agency, declined to release any names. Other services released some names but couldn’t say the lists were complete. USA TODAY identified many mentors by scouring military documents and other public records.

    • In some cases, mentors also work for weapons-makers who have an interest in the military planning the mentors are assisting. A Marines exercise last year, which explored how to launch operations from ships, employed mentors who also had financial relationships with companies that sell products designed to aid those operations.

    “This setup invites abuse,” says Janine Wedel, a George Mason University public policy professor and author of a forthcoming book on government contracting. “Everyone in this story is fat and happy. Everyone, of course, except the public, which has virtually no way of knowing what’s going on, much less holding these guys to account.”

    If retired generals advising the Pentagon also are “being paid by somebody who wants to make money off the government, I think it’s important the public know that,” says Sen. Claire McCaskill, D-Mo., who chairs the subcommittee on contracting oversight. “The reason … is so the people have confidence that the decisions are being made based on merit, and not based on inside baseball.”

    Marine Gen. James Mattis is the commander of Norfolk-based Joint Forces Command, which pays at least 34 senior mentors to train active-duty generals and admirals. He confirms that mentors who also work for defense clients may pick up information that benefits their private employer, but he believes that’s the only way to ensure that top experts are teaching officers.

    “If your concern is that we’re exposing them to things that would allow them to have an advantage for their company, I doubt if that can be refuted,” Mattis says. “I believe that’s a reality. The only way to not have that would be to have either amateurs on their boards of directors, or amateurs in our thing.”

    Imposing “an assumption of distrust and firewalls,” could sour retired generals on the mentoring program, Mattis says. “Ultimately it comes down to trust.”

    ‘Way below industry average’

    Mentors say they police themselves and would never abuse their positions.

    Retired Marine Gen. Anthony Zinni, 66, served as a mentor for a Joint Forces strategy exercise last year. “If it ever came across that you were pitching a product (as a mentor), I don’t think you’d ever be invited back,” he says.

    Zinni, who retired in 2000 as chief of U.S. Central Command, is chairman of the board of BAE Systems, a large U.S. defense contractor. He had been executive vice president for Dyncorp International, another major defense firm, which paid him $946,000 last year, securities records show. Zinni is eligible for an annual pension of about $129,000, according to military formulas.

    “Obviously it informs how you think about things,” he says. “I don’t think you can deny that. But sometimes your involvement in the defense industry is exactly what they’re looking for beyond your military experience.”

    The Joint Forces Command says it cannot disclose what Zinni and others were paid as mentors because the information is held by a government-paid contractor, Northrop Grumman, which hires the mentors as subcontractors. The rate for three-star generals — Zinni is a four-star — is around $1,600 a day plus expenses, the command said in a statement.

    The Marines say its mentors are paid $187 an hour for labor alone, while the Navy released figures showing mentors were paid an average of $330 an hour including expenses. Air Force mentors are paid $160 to $486 an hour, not including expenses, the Air Force says.

    Retired Army Gen. Gary Luck, 72, helps coordinate the mentor program for Joint Forces Command. Luck says he considers the pay “way below the industry average. … I’m almost embarrassed about this.”

    He says he tells mentors, “Look, part of your pay is being kept up to date, being included, so you’re getting paid in two ways — monetarily and informationally.”

    Luck, the former top commander in Korea, serves on the advisory board of TASER International, a defense contractor. He says it poses no conflict with his full-time mentoring work.

    Information learned by mentors has great value, says Richard Aboulafia, chief aerospace analyst at the Teal Group, which consults for the government and industry on aerospace issues. Teal doesn’t employ retired generals.

    “It’s the most valuable form of market intelligence for a lot of companies,” Aboulafia says of senior mentors in war games. “The companies get an insight into what kind of technologies and products are needed to meet emerging strategic visions and requirements.”

    After Lt. Gen. McKissock retired and started mentoring the Marines on managing supplies, his specialty, he joined the board of Sapient Corp., a Marines contractor. He worked closely while on active duty. As a Sapient director, he was paid a total of $663,000 from 2003 to 2009, securities records show. He left the board this year.

    While McKissock was the Marines’ senior mentor, Sapient continued to win supply management contracts from the Marines. In 2006, the company was named a prime vendor by the Marines for business services.

    McKissock says he “never talked to a soul in the Marine Corps” about Sapient while he was on the company’s board.

    “I lose money when I do it,” McKissock says of serving as a mentor. He was paid $166,500 plus expenses as a mentor in 2009, Marine records show.

    Some retired officers say they would not work as mentors if they couldn’t also work for defense firms.

    “My wife wouldn’t let me,” says Adm. Gregory Johnson, 63, the former commander of U.S. naval forces in Europe.

    Johnson says he works as a mentor for about five weeks a year and consults for undisclosed defense firms. Additionally, he was paid about $133,000 last year to serve on the board of defense contractor CACI International, securities records show. With mentoring alone, “you can’t make enough money,” he says.

    “I don’t buy that. That’s baloney,” counters Maj. Gen. Waldo Freeman, an analyst at the non-profit Institute for Defense Analyses who mentors part time. “I think it’s absolutely wrong for somebody to have one foot in both camps.

    “I don’t see how somebody can be on some (corporate) board, and then be a senior mentor — whereby he is learning information that could advantage his company — and say that’s ethical.”

    ‘Not your business’

    The U.S. Army says it began paying retired generals to come back as mentors in the late 1980s. The Joint Forces Command program dates to 1995. The Air Force began a mentoring program in 2000, the Marines in 2002 and the Navy in 2004, according to the military services and commands.

    Some mentoring is done in classrooms at war colleges, some in meetings at the Pentagon and some in war zones. Though they are modeled after one another, the programs are separate — run by the military branches and various commands, not the Defense Department. There is no single budget or set of policies.

    In fact, Air Force Chief of Staff Norton Schwartz in May ordered his staff to determine the number, location and compensation of Air Force mentors, according to the general doing the review, Brig. Gen. John R. “Bob” Ranck.

    In interviews, Mattis, Ranck and other active-duty officials extol the benefits of the programs, calling them an invaluable way to train leaders and hear from experts who no longer have to worry about career advancement. Mentors give advice untainted by their business interests, they say. “They’re pretty self-policing,” Ranck says.

    Spending on the programs has grown in recent years. The Navy, for example, went from spending $112,000 to pay mentors in 2005 to $838,000 for its four mentors in the current year, according to figures that service released, which do not include the Marines. Other services would not release similar spending figures, but said the programs have expanded. The Army now uses mentors in 70 exercises a year, up from 31 in 2002, says Col. Steven Boylan, an Army spokesman.

    Other information is kept from public view. For example, the military services have never made public a full list of their senior mentors. All but the Marines say they are unable to disclose how much each mentor has been paid. They can’t do so, they say, because the information is the property of contracting firms who pay the mentors as subcontractors.

    The Air Force, Marines, Army and Navy released some names after repeated requests by USA TODAY. Spokesmen for the Air Force, Marines and Army said they could not be sure the lists were complete. The Air Force, for example, was only able to provide names for the most recent fiscal year. The Missile Defense Agency, the Defense Department’s missile defense research, testing and deployment arm, refused, without explanation, to disclose the names.

    None of the services collects data about the mentors’ private business affiliations.

    “Government ethics laws are in place for a reason,” Rep. Edolphus Towns, D-N.Y., chairman of the House Committee on Oversight and Government Reform, said in a statement. “These laws require that any potential conflicts of interest be disclosed, evaluated and managed. I would expect the Pentagon to fully comply with both the letter and spirit of these requirements. The invaluable expertise of retired military officers should be utilized without sacrificing transparency and accountability.”

    Some mentors earn more as part-time advisers than they did while serving.

    For example, the Marines say they paid retired Lt. Gen. Martin Berndt $212,000 plus expenses to be a part-time mentor in the 12 months that ended Sept. 30. Berndt, 62, retired in 2005 as commander of Marines forces in the Atlantic region, a job that paid about $148,000 a year.

    In 2008, he was paid $133,787 in stock and fees to serve on the board of Point Blank Solutions, which sells body armor to the Marines, securities records show.

    There was no conflict of interest, he says, because he played no role in the Marines buying from Point Blank, whose board he left in June.

    “My role as a board member did not involve selling or marketing,” he says.

    Others, who are full-time consultants or employees of defense firms, spend just a few weeks a year mentoring. Retired Adm. Robert Natter, who commanded the Atlantic fleet from 2000-03, is a senior mentor and helps lead a U.S. Pacific Command war games exercise each year in Taiwan, he says. The military did not disclose his pay for mentoring.

    Natter, 64, is a registered lobbyist for the city of Jacksonville, Fla., who lobbies the Navy and Defense Department on military basing issues, Senate lobbying records show.

    He is also a defense consultant and a board member of weapons-maker BAE Systems. From 2004 through 2006, his firm received $1.5 million from the state of Florida to lobby the Navy and Congress on base-closing decisions, federal lobbying records show.

    Natter declined to discuss the full list of his clients, saying, “It’s my business, not your business.” The website for his consultancy, R.J. Natter & Associates, says clients have included Lockheed Martin, Microsoft, IBM and Embraer North America.

    “The reality is that you know that the people in the room are not stupid,” he says, when asked how he juggles potential conflicts of interests while mentoring. “And secondly, you very seldom get into specific systems of ships or tanks or things like that.”

    Natter was a mentor last year on a Marine exercise designed to explore how to build bases using ships at sea. In 2006, a BAE executive told Defense Daily the company was developing a close-range gun that could be mounted on ships used for what is known as sea basing. The system is still in development, BAE spokesman Scott Fazekas says.

    Natter says he is unaware of any specific products by BAE or any of his consulting clients related to sea basing.

    “The taxpayers are getting a steal,” Natter says about his mentor pay.

    A game with few rules

    Private defense companies have long been hiring retired senior officers to help them do business with the military, and Congress periodically has sought to regulate the practice.

    Post-Watergate ethics laws prohibited senior government officials from immediately lobbying their former agencies. A decade later, amid a massive Pentagon bribery scandal, Congress strictly regulated the purchasing system to insulate it from outside influence.

    Nevertheless, access and insider knowledge are still prized. A Government Accountability Office report last year found that as of 2006, defense contractors employed 2,435 former generals, admirals, senior executives, contracting officers or others in acquisition positions senior enough to be subject to lobbying rules.

    Retired generals and admirals, like other senior government officials, are barred from representing companies before their agency for a year after leaving office. They are prohibited for life from representing a company about a particular matter they worked on, such as a specific contract. After a year, however, they are free to lobby their former colleagues on new matters.

    The U.S. government, and the Pentagon specifically, also has ethics rules for hiring consultants.

    “In the Department, almost all consultants and all members of advisory committees are appointed as Special Government Employees,” says guidance posted on the website of the Defense Department’s Standards of Conduct Office. “This means that upon appointment, you assume the responsibilities, obligations and restrictions that are part of public service.”

    Employees who work more than 60 days in a year and are paid at an executive rate are required to file public financial disclosure reports. They also are forbidden from lobbying the agency about contracts and other specific matters, according to the Office of Government Ethics.

    Senior mentors for the military don’t have to follow those rules, however, because they are contractors, not employees.

    The Marines hire mentors directly on individual personal services contracts, while the other services contract with a defense company and require that firm to hire the retired generals as subcontractors. Luck, the head Joint Forces mentor, called that arrangement an accounting device, a “pass-through. There’s no question to anybody where I work, who I work for.”

    Ranck, the general examining Air Force mentoring programs, says one reason that mentors are not hired as employees is so they can get higher pay and have freedom from the government ethics bureaucracy. Special consultants can only be paid up to $80 an hour, he says, and the ethics rules constrain their ability to consult for private companies.

    Not all mentors consider it appropriate to also work for defense contractors. Admiral Henry Chiles, 71, who retired in 1996 as commander of the U.S. Strategic Command and who now mentors at the National Defense University, says he steers clear of defense companies. “I think by virtue of doing that work for the government, it behooves me not to represent defense contractors,” he says.

    Under a policy directive issued last week by Air Force Secretary Michael Donley, the Air Force will encourage that mentors be hired as government employees when possible. Senior mentors hired on contract who might “potentially influence procurement decisions” would be required to file a confidential financial disclosure under the policy. The Air Force says the new policy is unrelated to USA TODAY’s inquiries.

    Ranck says retired four-star generals probably would continue to be hired as contractors because they would want the higher pay and freedom from government ethics rules.

    A rule barring senior mentors from representing defense firms before the military “would cause people to reassess,” says Air Force Gen. Gregory “Speedy” Martin, who retired in 2005 as commander of the Air Force Materiel Command. He now mentors for Joint Forces Command and the Air Force. His consulting clients have included Northrop Grumman and Lockheed Martin, he says. He also advises a private equity firm whose website boasts that its stable of retired generals has “a nearly unmatched sense of how the armed forces will spend its money.”

    Martin acknowledges he has contacted Air Force officials involved in acquisitions on behalf of firms paying him. He says he always identified his clients and never did anything inappropriate. He would not be more specific.

    Martin recognizes that the insights gleaned while participating in classified planning exercises could make him a more valuable defense consultant. “I am sure that I am getting current information and updates that could make me ‘useful’ to some aerospace contractor,” Martin says in an e-mail.

    However, he adds, the information he got through mentoring is no more useful than what he got through other connections with active-duty officers, including briefings and social contacts. “The question,” he says, “is what you do with that information.”

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    Warning: Why Cheaper Money Won’t Mean More Jobs

    Posted by Admin on August 31, 2010

    by: Robert Reich  |  Robert Reich’s Blog | Op-Ed

    photo
    (Photo: MNicoleM; Edited: Jared Rodriguez / t r u t h o u t)

    Can the Fed rescue the economy by making money even cheaper than it already is? A debate is being played out in the Fed about whether it should return to so-called “quantitative easing” – buying more mortgage-backed securities, Treasury bills, and other bonds – in order to lower the cost of capital still further.

    The sad reality is cheaper money won’t work. Individuals aren’t borrowing because they’re still under a huge debt load. And as their homes drop in value and their jobs and wages continue to disappear, they’re not in a position to borrow. Small businesses aren’t borrowing because they have no reason to expand. Retail business is down, construction is down, even manufacturing suppliers are losing ground.

    That leaves large corporations. They’ll be happy to borrow more at even lower rates than now — even though they’re already sitting on mountains of money.

    But this big-business borrowing won’t create new jobs. To the contrary, large corporations have been investing their cash to pare back their payrolls. They’ve been buying new factories and facilities abroad (China, Brazil, India), and new labor-replacing software at home.

    If Bernanke and company make it even cheaper to borrow, they’ll be subsidizing a third corporate strategy for creating more profits but fewer jobs — mergers and acquisitions.

    The M&A wave has already started. Continental and United Airlines just got approval to merge. Biotech giant Genzyme is on the auction block after Sanofi-Aventis announced a $18.5 billion bid. On Friday, 3Par, a data storage company, accepted a $1.8 billion takeover offer from Dell – one day after Hewlett-packard raised its offer. Campbell Soup is eyeing parts of United Biscuits, BHP Billiton has put in a takeover bid for Potash, Oracle or H-P are likely to pay up to $1.5 billion for security software maker ArcSight. Bain Capital is expected to acaquire Air Medical Group for almost $1 billion. The insurance industry is headed for the biggest merger boom in recent history.

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    Who wins from all this? If history is a guide, shareholders of acquired companies do better than shareholders of companies doing the acquiring. Top executives who end up running bigger corporations get fatter pay packages. And Wall Street and big-name corporate law firms who engineer the M&As reap a bundle.

    Who loses? Large numbers of ordinary workers will lose their jobs. After all, the purpose M&As is to create greater economies of scale and more “synergies.” Translated: More pink slips.

    Last week at the Fed’s annual confab in Jackson Hole, Ben Bernanke insisted the Fed will do what’s necessary to increase consumer and business spending in order to keep the economy growing. But cheaper money won’t necessarily create the kind of spending that generates more jobs. In fact, right now it’s having the opposite effect. When consumers and small businesses can’t and won’t borrow more, big businesses use cheap money to bid up the prices of corporate assets and cut payrolls.

    What we need now is more jobs, not bigger corporations. And that means focusing on the demand side of the economy, not the supply side.

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    Posted in Truthout Articles | Tagged: , , , , , , , | Comments Off on Warning: Why Cheaper Money Won’t Mean More Jobs