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Archive for March 7th, 2010

Iraq Shiite Showdown

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A relatively decent article out of The Times on today’s election in Iraq. I must commend the NYT on it’s coverage out of Iraq this election cycle. They remain unabashedly pro-Maliki, but have begun to allow a few dissenting voices space in its articles (albeit, small space), including one standout gem in the linked report.

Many of you remember the famed “Basra Offensive” in March 2009 (just as the Dow was hitting bottom), which “flushed out” the Shi’a Mahdi Army and made Basra safe. That’s the prevailing narrative, anyway, and the Times basically assumes its true.

But they do allow this gem from an opposition Shi’a candidate aligned with the “defeated” Mahdi army regarding the Basra Offensive, what the Iraqis call the “Knights operation”:

“They did arrest criminal groups, but the groups only came back later with different names,” he said. “What they refer to as the Knights operation was really the targeting of political groups. They killed many. It was a crime against the Iraqi people.”

They spend the rest of the article tacitly supporting the opposite claim (that the Basra Offensive was a success and not a crime), but at least they entertained the possibility of it being a political pogrom instead of a legitimate military action.

A rare forum for dissent from a paper whose job is basically to manufacture consent for US actions in Iraq.

Written by pavanvan

March 7, 2010 at 9:07 pm

US Government Pays Its Companies To Violate Iran “Sanctions”

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The Times has a hilarious investigative report in today’s issue. Apparently $100 billion in government cash has gone into the pockets of energy companies doing business with the nefarious Iran.

Its worth getting out of the way first that sanctions don’t work. They never have. Numerous studies have concluded that the net effect of “sanctions” is invariably to strengthen the targeted regime, and an article on sanctions in Iran – especially on how US companies are violating them – should probably mention this.

Instead, The Times plumps for the opposite approach – that instead of the sanctions themselves being a vicious attack on the Iranian people, the violation on the part of the US companies of the sanctions is the real crime. It bears mentioning that the major Israeli paper, Haartez, ran a similar story, “US Rewarding Firms That Defy Iran Sanctions“, with a much angrier headline. The pro-Israel lobby clearly isn’t happy about this.

The whole Times article really deserves to be read in full, as it presents a case study in systemic bias. Observe:

For years, the United States has been pressing other nations to join its efforts to squeeze the Iranian economy, in hopes of reining in Tehran’s nuclear ambitions. Now, with the nuclear standoff hardening and Iran rebuffing American diplomatic outreach, the Obama administration is trying to win a tough new round of United Nations sanctions.

The third paragraph. Note how nonchalantly The Times speaks of “squeezing” the Iranian economy and “reining in” its nuclear ambitions, as though we have an implicit right to do such things. The next sentence accuses Iran of “rebuffing American diplomatic outreach” (an Orwellianism, that), completely ignoring Iran’s agreement to ship its uranium for inspection in Russia. The US demanded to send its own specialists into Iran to “inspect” their sites, something which Iran rightfully refused. Actually, when one thinks of it, the Americans rebuffed Iran’s outreach, but in true propaganda style, The Times reverses the accusation.

After a few paragraphs describing how easily US companies and those of our “allies” can operate in Iran and how eager Iran is for foreign investment, The Times says:

One of the government’s most powerful tools, at least on paper, to influence the behavior of companies beyond the jurisdiction of the embargo is the Iran Sanctions Act, devised to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies.

That has given rise to situations like the one involving the South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.

Once again, the implicit assumption is that these “sanctions” (a) work, and (b) are legitimate. After all, why shouldn’t South Korea be allowed to invest where it wishes? The Times claims that the Army’s $111 million investment in S. Korea should have bought at least some respect for our sanctions, but this is a facile argument.

Later, they complain that Brazil, the Netherlands, France, and other “US allies” are investing in Iran while taking US dollars.

The Iranian government has engaged in some unsavory acts this past year, but the amount of violence it visited upon its citizens is minuscule compared to that of our “allies”, particularly Israel. Even the highest estimates of the death toll in Iran’s post-election violence only reach the low hundreds. In January of the same year, Israel killed more than 2,000 Gaza civilians, and dozens die from lack of food, water, or sanitation as a result of that action and the surrounding blockade every day.

If we’re really going to castigate countries for human-rights violations and write massive “exposes” on US companies violating sanctions , shouldn’t we focus on a more murderous country than Iran?

Written by pavanvan

March 7, 2010 at 8:09 pm

Europe’s New Debt Solution – Its Own Credit Agency

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Spiegel reports that the EU is unhappy with the standard American credit rating agency, Moody’s, and seeks to create its own. Moody’s is notorious for over-rating US debt, and under-rating nearly everyone else’s, so the frustration is understandable. During the Crisis, Moody’s engaged in outright fraud by pricing worthless derivatives as “Triple-A” paper, along with a raft of other deceptions.

A particular danger now is that Moody’s will downgrade Greece’s debt rating, prohibiting them from borrowing from the EU central bank. If this happens, the Euro is pretty much toast. Their solution is to just create their own rating agency, which seems like a good idea. Relying on Moody’s to gauge the health of an investment is like asking a homeless guy how much he thinks your diamond ring is worth.

But its worth taking a look at the motivations behind Europe’s push for its own rating agency. According to Spiegel, the EU’s major beef with Moody’s is not its widespread fraud and malfeasance during the crisis, but merely the possiblility that it might “downgrade” Greece, along with the “veto power” it exerts over European banks – and indeed, whole countries:

Under existing rules, the ECB can only accept euro-zone sovereign bonds as collateral when lending money if at least one of the three main rating agencies gives the country issuing the securities an A- rating or better. Moody’s is now the only main rating agency that still gives Greece an A2 rating; Standard & Poor’s and Fitch have already lowered their grades to the BBB level.

Although an exception to the rule is in place as a result of the financial crisis — the current minimum rating is just BBB- — that rule will expire at the end of 2010. If Moody’s were to downgrade Greece, as it threatened to do last week, the country would be cut off from ECB loans as of Jan. 1, 2011, triggering a liquidity crisis for the country. This means that Moody’s effectively has a veto over Greece’s access to Europe’s key financing facility.

So what they want is not a stable, accountable rating agency – just one that will consistently give their countries AAA ratings. In effect, they want a “European Moody’s” – a ratings agency that will ignore all tangible market signs and spit out the ratings the big bosses command, just as Moody’s did in America.

I fail to see how this will be an improvement.

Written by pavanvan

March 7, 2010 at 10:01 am