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What if People Owned the Banks, Instead of Wall Street?

By Jimmy Tobias. This article was first published in The Nation.

From Seattle to Santa Fe, cities are at the center of a movement to create publicly owned banks.

Protest outside Chase

Demonstrators protest against the Wall Street bailout outside Chase in Times Square. (AP Photo / Edouard H.R. Gluck)

When Craig Brandt marched into the City Council chambers in Oakland, California, in the summer of 2015, he was furious about fraud.

The long-time local attorney and father of two had been following the fallout from the Libor scandal, a brazen financial scam that saw some of the biggest banks on Wall Street illegally manipulate international interest rates in order to boost their profits. By some estimates, the scheme cost cities and states around the country well over $6 billion. In June of 2015, Citigroup, JPMorgan Chase, and Barclays, among other Libor-rigging giants, pleaded guilty to felony charges related to the conspiracy and agreed to pay more than $2.5 billion in criminal fines to US regulators. But, for Brandt, that wasn’t enough. He wanted the banks banished, blocked from doing business in his city.

“I was totally pissed about it,” he says. “It was straight-up fraud.”

So, in a small act of stick-it-to-the-man defiance, Brandt drafted a resolution that barred the municipality from working with any firm that had either committed a felony or had recently paid more than $150 million in fines. He presented the homespun and eminently reasonable legislation to city officials and urged them to adopt it.

“The city councilors said they couldn’t do it,” Brandt says. “If they did, they wouldn’t have a bank left to work with. They said there wouldn’t be any bank big enough to take the city’s deposits.” Oakland, it seemed, was hopelessly dependent on ethically dubious and occasionally criminal financial titans. Brandt, however, was undeterred.

After the City Council turned him down, he started looking for other ways to wean Oakland off Wall Street. That’s when he fell in with a group of locals who have been nursing an audacious idea. They want their city to take radical action to combat plutocracy, inequality, and financial dislocation. They want their city to do something that hasn’t been done in this country in nearly a century, not since the trust-busting days of the Progressive Era. They want their city to create a bank—and, strange as the idea may seem, it’s not some utopian scheme. It’s a cause that’s catching on.

Across the country, community activists, mayors, city council members, and more are waking up to the power and the promise of public banks. Such banks are established and controlled by cities or states, rather than private interests. They collect deposits from government entities—from school districts, from city tax receipts, from state infrastructure funds—and use that money to issue loans and support public priorities. They are led by independent professionals but accountable to elected officials. Public banks are a way, supporters say, to build local wealth and resist the market’s predatory predilections. They are a way to end municipal reliance on Wall Street institutions, with their high fees, their scandal-ridden track records, and their vile investments in private prisons and pipelines. They are a way, at long last, to manage money in the public interest.

Since 2011, advocates from a national nonprofit called the Public Banking Institute have traveled across the country, preaching the practical benefits of public banking and recruiting or training activists and organizers to take up the cause. They have found willing and enthusiastic supporters from coast to coast. The movement has been embraced in Philadelphia, where the city council held hearings on the idea last year. It’s been championed in Seattle and San Francisco, where a number of city supervisors are calling for a task force to study public banking. It’s taken root in Santa Fe, with backing from the mayor, and in Oregon, Vermont, and even New Jersey, where a leading Democratic gubernatorial candidate, Phil Murphy, has proclaimed his desire to create a state bank right next door to the financial capital of the world.

“I believe this is the wave of the future,” says Craig Brandt, who is now a leader of Friends of the Public Bank of Oakland, the group advocating for public banking in the city. “And I hope Oakland will be the first one out the door to do it.”

The city is well on its way. Last November, the Oakland City Council passed a resolution announcing their intention to explore the creation of a public bank. In February, elected officials and community activists gathered at City Hall for a packed forum on the benefits of a public bank, including the possibility that it could hold deposits from the state’s multibillion-dollar cannabis industry and help promote affordable-housing development. This summer, meanwhile, the council will likely vote on whether to dedicate as much as $100,000 to fund a feasibility study that will explore the technical requirements of creating an independent publicly owned financial institution in Oakland.

“The fundamental point is to have a bank whose purpose is to be responsive to community needs.” —Rebecca Kaplan

“The fundamental point is to have a bank whose purpose is to be responsive to community needs,” says Oakland Councilmember Rebecca Kaplan, a key backer of the local public-banking movement. “This would allow us to save money compared to traditional corporate bank rates, and it would allow us to fund vital projects based on community need rather than having those decisions driven by the profit motive.” She says the City is also interested in the possibility of creating a regional public bank by partnering with neighboring cities like Berkeley and Richmond, California.

“The more folks on board,” she said, “the stronger the support for taking this kind of action.”

Public banks have a long, though subterranean, history in the United States that stretches back to the days of Benjamin Franklin, who helped establish a public land bank in Pennsylvania to provide cheap loans to small farmers. Even today many public institutions, from the Federal Deposit Insurance Corporation to the Small Business Administration to the Federal Housing administration, are essential components of America’s banking system. But there’s only one true public bank in this country and it’s not in Washington or New York or some coastal liberal enclave. It’s in North Dakota, where it has survived and thrived for nearly a century.

First established in 1919 by populist state legislators eager to extend credit to cash-strapped farmers and ranchers, the state-owned Bank of North Dakota (BND) is now a modern and multifaceted financial juggernaut. The bank holds deposits from government agencies. It provides low-cost credit for school construction and municipal infrastructure projects. It refinances student debt at reduced interest rates. Rather than opening branches of its own, it generously partners with local community banks and credit unions tos issue small-business, home, and agricultural loans. Best of all, it funnels its profits back into state coffers whenever North Dakota has budget troubles. The bank is, in other words, essentially socialist.

It’s also a steady source of profit. Last year, according to its annual report, the Bank of North Dakota saw its 13th consecutive year of record profits, taking in more than $136 million in income while growing its loan portfolio by $449 million dollars. And, unlike some of its counterparts, the bank accomplished all that without opening fraudulent accounts or manipulating interest rates or otherwise scamming consumers.

The bank’s success—its long track-record of supporting and stabilizing local economies, sharing the wealth, and minting a profit to boot—has turned it into an intriguing model for cities around the country that are keen to find creative fixes for their ongoing financial woes.

“Public banking is finding its time now because municipal executives have very poor choices,” says Walt McRee, the chair of the Public Banking Institute. “As things deteriorate and have to be fixed, as population grows but jobs decline, as tax receipts dry up, cities can either can cut services, raise taxes, fire people, or privatize things. But those trends are enormously destructive.”

“The prospect of a public bank does something entirely different,” he continues. “It gives a community the ability to liquefy its own assets and lend itself money, to do things it needs to do with money it already has, to hold on to people’s capital instead of sending it to Wall Street.”

Consider municipal bonds. Cities regularly go to the municipal-bond market to raise money for big projects, from school construction to bridge building to park development and more. These bonds, however, come with overhead costs in the form of fees that normally hover around 1 percent, but can climb as high as 10 percent, of the bond’s principal value. A recent report by the University of California Berkeley’s Haas Institute estimates that cities and other public entities pay upward of $4 billion a year in such fees, an enormous sum that serves only to fatten the purses of multinational banks, legal firms, and others involved in the bond-issuance business. A public bank could help reduce these costs and free up funds by enabling a city to deposit its money in a public entity instead of a profit-centric institution like Wells Fargo or JPMorgan Chase. The city would then be able to borrow money from its own bank rather than turning to the Wall Street bond market, with its overhead costs and market-set interest rates. It could, in short, introduce a radical alternative into the realm of municipal finance.

One of the other places where this radical alternative has taken root, surpassing even Bay Area efforts, is Santa Fe, New Mexico. The movement in that city of 67,000 started gathering momentum in 2014, when a small but determined group called Banking on New Mexico held a symposium to promote the idea. More then three hundred people showed up, including the newly elected progressive mayor, Javier Gonzales.

“A group of advocates met with me early in my term,” says Gonzales. “I was really intrigued and excited about an opportunity to explore a different way to have fiscal relationships.”

In early 2015, Santa Fe commissioned a private consultant, in partnership with New Mexico State University, to conduct a feasibility study into public banking. A year later, in January 2016, the report came back and the news was positive: By funding the city’s capital needs and improving municipal cash management, among other functions, a public bank could generate more than $24 million in savings and earnings for Santa Fe over a seven-year period. And such a bank would be particularly effective, says Katie Updike, the consultant who authored the study, if it serviced the city as well as the surrounding county and school district.

“In the case of Santa Fe, where I saw the biggest benefit is if the city, county, and school district worked together,” she says. “When you begin to step out of the jurisdiction of the city and look at the county and the school district too, which are separate entities, all their cash could be pooled and used to fund projects and then it began to get more interesting.”

In late April of this year, based on the results of the feasibility study, Santa Fe’s city council announced that it was creating a nine-person task force to spend six months digging deeper into the legal and financial prerequisites of establishing a public bank. The task force will focus, above all, on developing a governance structure for the bank.

“Governance is a concern for a lot of people,” says Elaine Sullivan, a leader of Banking on New Mexico and a passionate promoter of the cause. “People don’t want the bank run by political officials, and it wouldn’t be. There would be a clear distinction between the public bank, which would be managed by public bankers, and the city of Santa Fe.”

Indeed, the prospect of political interference into a public bank is one of the most common critiques of the idea. If public banks are to succeed in cities around the country, say skeptics and supporters alike, they must to be firmly insulated from the whims of legislative bodies and elected officials.

Across the country, activists, mayors, and city council members are waking up to the promise of public banks.

Here, once again, the Bank of North Dakota offers a model. While overseen by a commission of elected officials, including the state’s governor and attorney general, BND is managed on a day-to-day basis by an independent and highly transparent executive committee of professional financial managers. Its operations are also subject to regular inspection by independent auditors. BND, moreover, maintains public goodwill by declining to compete with local banks. It has no retail locations or ATMs. Rather, it partners with community banks and credit unions to provide its services.

By putting similar structure in place and starting small, Sullivan believes a public bank in Santa Fe could someday be a smash hit. It wouldn’t just provide ample economic benefits to the city but would serve a larger purpose too.

“As the global banks and major corporations that don’t have a moral tether have become more and more powerful, communities have become weaker and weaker and more passive,” she says. “A public bank is about addressing plutocracy. It is about restoring hope.” A public bank, she asserts, would be a red-hot engine of local economic democracy.

This essential fact, more than anything else, explains why the public-banking movement is blossoming in a post-recession, too-big-to-fail America where Donald Trump rules the White House and Wall Street rules Washington.

“We are seeing a resurgence of community-oriented life and activism and vision in this imperial era,” says Councilmember Kaplan of Oakland. “And it has strengthened the movement.”

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Today's Stunted Oil Prices Could Cause Oil Price Shock In 2020

By Haley Zaremba for Oilprice.com

As oil prices remain unsteady and OPEC continues to make headlines every hour, the world is focused on oil's immediate future. As Saudi Arabia announces plans to slash production and move their economy away from oil dependency, many industry insiders are predicting that the now over-saturated market will reach an equilibrium with higher commodity prices by 2018 and U.S. shale production will continue to grow along with global demand.

Robert Johnston, the CEO of one of the world's biggest political risk consultancies, is unconvinced. In a speech made at the Association of International Petroleum Negotiators' 2017 International Petroleum Summit, Johnston laid out his concerns for the future of oil.

"What I don't hear people asking is, ‘then what?' Are the Saudis going to maintain these production cuts forever, or at some point do they have to start reversing that? I think in 2018 they will be reversing those production cuts," he said. These important questions aren't getting enough attention according to Johnston, whose firm Eurasia Group foresees a fast-approaching supply gap that Saudi Arabia and U.S. oil may not be able to fill.

Eurasia Group forecasts about 7 million barrels per day (MMbbl/d) of new crude supply by 2022. This includes about 5 MMbbl/d of U.S. shale growth and about 2 MMbbl/d from oil sands and deepwater extraction. But by the year 2022, another 15 MMbbl/d of new supply may be needed, as demand trends predict an annual growth rate of about 1 MMbbl/d. With this kind of impending discrepancy between supply and demand, the industry needs to start looking for new sources of oil, and quickly.

Despite the recent dip in oil prices, industry experts have been predicting a supply-gap and rising oil prices for years. This is due in large part to an oil investment drought marked by two year of consecutive decline, a statistic that has no precedent in the oil industry. This year a report by the International Energy Agency concluded that if oil investment remains stagnant over the next few years, by 2020 we will see a significant increase in the price of oil as global demand continues to climb.

The IEA's Executive Director Fatih Birol addressedthese findings in a keynote address at the Atlantic Council Global Energy Forum in Abu Dhabi in January, announcing that no major oil projects were started in the last year and there were zero large oil discoveries "because there is no money for exploration. You find something if you look for it," Birol said

The potential supply gap has far-reaching implications that we are not ready to combat. Gas and oil are still fundamental to much of the world's infrastructure, despite a steady increase of research and utilization of renewable energy resources. While electric cars continue to show a promising future, especially in the light of ambitious new green car policy initiatives in India and China, they still account for less than 2 percentof the world's cars. And, as the global middle class continues to grow and exercise their buying power, the demand for oil will continue to grow alongside them.

The oil industry desperately needs new sources of oil, and they need new investors and technologies to find those sources quickly. There are currently a wide variety of techniques employed to find new deposits (seismic prospecting, well logging, gravity surveying, magnetic prospecting, and geochemical prospecting, etc.) but these are all methods with significant limitations in their ability to accurately estimate the size of new oil and gas deposits.

Many companies, including oil giant BP, have begun efforts to develop of artificial intelligenceprograms with algorithms that will allow them to find and drill with unprecedented accuracy in the future, but the technology is not yet ready. We can only hope that it will be ready by 2020 or that the IEA is wrong in their predictions.


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The Manchester Bombing is Blowback from the West’s Disastrous Interventions and Covert Proxy Wars

By Max Blumenthal / AlterNet
How the US and UK helped bring jihadists like Salem Abedi to Libya and Syria

Sens John McCain and Lindsey Graham with Libyan Islamic Fighting Group leader Abdelhakim Belhaj

The heinous suicide bombing by British-born Salman Abedi of an Arianna Grande concert in Manchester was not merely the work of an “evil loser,” as Donald Trump called it. It was blowback from interventionist policies carried out in the name of human rights and “civilian protection.” Through wars of regime change and the arming and training of Islamist proxy groups, the US, UK and France played out imperial delusions across the Middle East. In Syria and Libya, they cultivated the perfect petri dish for jihadist insurgency, helping to spawn weaponized nihilists like Abedi intent on bringing the West’s wars back home.

The son of anti-Qaddafi immigrants to the UK, Abedi grew up in Manchester’s community of Libyan exiles. A report in the London Telegraph indicated that he had traveled just weeks before his attack to Libya, where Salafi-jihadi militias are competing for control of the destabilized country. Abedi had also reportedly traveled to Syria to join up with the extremist rebels that have waged a six-year-long insurgency against the country’s government, with billions of dollars in assistance from the West and its Gulf allies. According to French Interior Minister Gerard Collomb, it was in these conflict zones where Abedi was radicalized.

The impressionable 22-year-old returned to the UK with enough training to make a fairly sophisticated bomb that massacred 22 concert goers, many of them children. “It seems likely — possible — that he wasn’t doing this on his own,” Britain’s home secretary, Amber Rudd, told the BBC. She described the bomb as “more sophisticated than some of the attacks we’ve seen before.”

According to the Telegraph, “A group of Gaddafi dissidents, who were members of the outlawed Libyan Islamic Fighting Group (LIFG), lived within close proximity to Abedi in Whalley Range.” They included Abd al-Baset Azzouz, an expert bomb maker who controls an Al Qaeda-affiliated militia in eastern Libya.

When the uprising against Gaddafi began in 2011, Ramadan Abedi, the father of Salem, returned to his home country to fight with the LIFG. He was part of the rat line operated by the MI5, which hustled anti-Qaddafi Libyan exiles to the front lines of the war.

"I was allowed to go [to Libya], no questions asked," a British Libyan who had been under house arrest at the time for ties to extremist groups, told Middle East Eye.

While it is not known if Salman Abedi himself was involved with the LIFG, the group’s links to British and American intelligence are well established, and go back decades.

The West’s favorite Al Qaeda affiliate?

A rogue former officer of Britain’s MI5 intelligence services named David Shayler alleged that his government had covertly funded the LIFG to carry out the failed 1996 assassination attempt on Qaddafi. Two years later, Libyan state television produced footage of a failed grenade attack on Qaddafi that it alleged was carried out by a British agent. At the time, the LIFG was an affiliate of Al Qaeda whose members included Anas al-Libi, a top lieutenant of Osama bin Laden.

In March 1998, Qaddafi’s Libya became the first country to issue an Interpol arrest warrant for bin Laden. The warrant was studiously ignored by American and British intelligence, according to French journalist Guillaume Dasquié and Jean-Charles Brisard, an adviser to French President Jacques Chirac. Five months later, Al Qaeda struck the US embassies in Kenya and Tanzania. (Among the participants in the attack were al-Libi and Ali Abdelsoud Mohammed, a spy for Al Qaeda leader Ayman al-Zawahiri who had entered the US on a CIA-approved visa and managed to rise to the rank of corporal at the John F. Kennedy School of Special Warfare at Ft. Bragg, where he smuggled special forces training manuals out to Al Qaeda cadres.)

Even as the ex-agent Shayler gradually drifted towards the conspiratorial fringe, a MI6 document leaked online in 2000 lent credibility to his account. According to the Guardian, the document revealed that British intelligence was aware of a plot in 1995 to kill Qaddafi that included “Libya veterans who served in Afghanistan.” LIFG’s leader, Abdelhakim Belhaj, had been among those veterans, fighting against the Soviet-backed government in Afghanistan in the 1980’s alongside local mujahedin armed and trained by the CIA. He moved his operations to Sudan in 1991, the same year that bin Laden set up camp outside the Sudanese capital of Khartoum.

It took the attacks of 9/11 and the inauguration of the so-called “war on terror” to make Belhaj a target of the West. He was captured in 2001 by the CIA in Pakistan, where he had fled after fighting alongside the Afghan Taliban, and was rendered to Libya two months later. Six years later, he was released from prison thanks to a de-radicalization program overseen by Saif Qaddafi and facilitated through negotiations with the Qatari government.

A secret 2008 US embassy cable described Qaddafi’s government as a bulwark against the spread of Islamist militancy. “Libya has been a strong partner in the war against terrorism and cooperation in liaison channels is excellent,” the cable read. “Muammar al-Qadhafi’s criticism of Saudi Arabia for perceived support of Wahabi extremism, a source of continuing Libya-Saudi tension, reflects broader Libyan concern about the threat of extremism. Worried that fighters returning from Afghanistan and Iraq could destabilize the regime, the [government of Libya] has aggressive pursued operations to disrupt foreign fighter flows, including more stringent monitoring of air/land ports of entry, and blunt the ideological appeal of radical Islam.”

The author of that cable was the late foreign service officer, J. Christopher Stevens.

“Libyan patriots who want to liberate their nation”

When the Libyan uprising broke out in March 2011, Qatar and the United Arab Emirates immediately pumped arms and logistical support into the armed opposition. Then-Secretary of State Hillary Clinton saw the insurgency as an opportunity for America to assert its influence amidst the tumult of the Arab Spring. She advocated arming the rebels on the grounds that Washington could get “skin in the game,” according to her Middle East advisor, Dennis Ross.

Ignoring warnings from NATO’s supreme allied commander Adm. James Stavridis about the presence of Al Qaeda in the opposition, President Barack Obama approved shipments of TOW missiles, armored Humvees, and advanced radar systems to the Libyan insurgents.

When she learned of the newly up-armed rebels’ rapid advances, Clinton reportedly exclaimed, “Good! This is the only language that Qaddafi is understanding.”

French President Nicolas Sarkozy, a subject of Qatari political influence and alleged bribery over the 2022 FIFA World Cup vote, urged his Western allies to “ask our Arab friends” to distribute weapons to the National Transitional Council, the official body of the Libyan opposition. When a French shipment of missiles and machine guns arrived through the port of Benghazi, the NTC’s acting defense minister handed them over to Belhaj and the LIFG.

As the insurgency gathered steam, Belhaj found a powerful ally in John McCain, the Republican chairman of the Senate Foreign Relations Committee. After a friendly meeting with Belhaj and his militiamen in Benghazi on April 22, 2011, McCain called on “responsible nations” to provide the Libyan rebels with “battlefield intelligence, training, and weapons.”

McCain emerged from the meeting stirred with inspiration. "I met these courageous fighters, and they are not al-Qaeda,” the senator proclaimed. “To the contrary: they are Libyan patriots who want to liberate their nation. We need to help them do that.”

“They want to control the Mediterranean and then they will attack Europe”

In the early days of the insurgency, on February 25, Qaddafi reached out to Tony Blair, the former British Prime Minister who had cut the “deal in the desert” that brought Qaddafi out of the political wilderness in 2004.

In a series of panicked phone calls that day, Qaddafi warned Blair that his removal would open the floodgates for a jihadist takeover. “I want to tell you the truth,” he said to Blair. “It is not a difficult situation at all. The story is simply this: an organization has laid down sleeper cells in North Africa called the Al Qaeda organization in North Africa. They don’t use Arabic words, they use Islamic [ones]. The sleeper cells in Libya are similar to the ones in America before 9/11.”

Qaddafi then mentioned rebels who had spent time in Guantanamo detainee who had joined Al Qaeda and trained at a camp run by bin Laden in Afghanistan. He was referring to Abu Sufian Ibrahim Ahmed Hamuda bin Qumu, a member of the Libyan Islamic Fighting Group who was captured by the US in Pakistan thanks to a tip from Qaddafi’s own intelligence services. Qaddafi complained that Qumu was now leading the forces seeking his ouster, a claim confirmed by the New York Times two months later when it described the rebel leader as "a US ally of sorts."

The Libyan strongman predicted that if the rebels overthrew him, they would set up an Islamic state in the country, or what he called an “Al Qaeda Emirate.”

He concluded: “They want to control the Mediterranean and then they will attack Europe.”

Blair brushed Qaddafi’s ominous warnings aside and calmly urged him to relinquish power through a “peaceful transition.” A week later, Obama declared, “Moammar Qaddafi has lost legitimacy to lead, and he must leave.”

Qaddafi’s son, Saif, warned at the time that the removal of Libya’s government by force would lead to a refugee crisis of titanic proportions. “Libya may become the Somalia of North Africa, of the Mediterranean,” the younger Qaddafi declared in 2011. “You will see the pirates in Sicily, in Crete, in Lampedusa [the Italian island home of migrant detention facilities]. You will see millions of illegal immigrants. The terror will be next door.”

A failed state, courtesy of NATO

Almost six years after Moamar Qaddafi was sodomized to death with a bayonet in the streets of his hometown of Sirte by Western-backed rebels operating under NATO air cover, then left to rot in a butcher shop in Misrata, his most dire warnings have come true.

Libya today is a failed state, its public coffers and oil reserves looted by the foreign powers that oversaw the war of regime change in 2011. Its shores are a main disembarkation point for migrants, where women fleeing conflict and poverty in sub-Saharan Africa are beaten, raped and starved in "living hellholes," according to UNICEF. The United Nations International Organization for Migration has recorded testimony of open air slave markets in Libya where migrants from West Africa are bought and sold. The refugee crisis has propelled the rise of the far-right in Europe, fueling the demagogic politics of figures from Nigel Farage to Marine Le Pen that blame the victims of the West’s catastrophic interventions.

While Belhaj has emerged as a powerbroker of the “free” Libya, leading the Islamist al-Watan Party and operating his own private media empire with backing from Qatar, Libya has been overrun by warlords affiliated with jihadist groups like the Islamic State and Ansar al-Sharia, the Al Qaeda affiliate that participated in the notorious 2012 attack on the US consulate in Benghazi. Salem Abedi’s younger brother, Hashem, is a member of the Islamic State, according to a rival militia, and helped plan the Manchester attack from inside Libya.

The British Foreign Affairs Committee report released in September 2016 on the Libyan intervention concluded that, “Intelligence on the extent to which extremist militant Islamist elements were involved in the anti-Gaddafi rebellion was inadequate.”

Its authors added, “The possibility that militant extremist groups would attempt to benefit from the rebellion should not have been the preserve of hindsight. Libyan connections with transnational militant extremist groups were known before 2011, because many Libyans had participated in the Iraq insurgency and in Afghanistan with al-Qaeda.”

Lingering questions

In the wake of the Manchester bombing, British citizens deserve a new public inquiry. Acquaintances of the Abedi family said that neighbors in Manchester had notified an anti-terrorism hotline several years ago when Salman Abedi expressed public support for suicide bombing. But British authorities took no action.

Was British intelligence attempting to groom Abedi as an informant, as it had tried with Mohammed Emwazi, the wayward London youth who somehow wound up in ISIS-controlled territory in Syria as the fearsome decapitator known as “Jihadi John”? What did the British government know about Abedi and when did it know it?

The right-wing demagogues pouring out their wrath on Muslim immigrants and rallying for more restrictionist policies are diverting blame from where it should ultimately lie. In their pursuit of imperial delusions in Libya and beyond, Western leaders cynically sacrificed the security of their own citizens, setting the stage for the massacre in Manchester. The interventionists should be held accountable before they can strike again.

Max Blumenthal is a senior editor of the Grayzone Project at AlterNet, and the award-winning author of Goliath and Republican Gomorrah. His most recent book is The 51 Day War: Ruin and Resistance in Gaza. Follow him on Twitter at @MaxBlumenthal.

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Brazil’s Political Rupture and the Left’s Opportunit

By Alfredo Saad-Filho. This article was first published on Socialist Project.

Fora Temer – eleições diretas já!

"Out with Temer – direct elections now!" Amid meltdown in Brazil, the left calls for democracy, while the right must find ways to deny the people a voice.

The Brazilian Workers’ Party (Partido dos Trabalhadores, PT) won the country's presidential elections four times in a row; first with Luís Inácio Lula da Silva (2003-06, 2007-10), then with his hand-picked successor, Dilma Rousseff (2011-14, 2015-16). During its 13 years in office, the PT changed Brazil in many ways; four are principally worth mentioning, as they would come to play key roles in the elite conspiracy to impeach Dilma Rousseff and destroy her party.

Fora Temer - Out with Temer

First, the PT democratized the state. It implemented the social and civic rights included in the 1988 ‘Citizen's Constitution’, and advanced Brazil's emerging welfare state across several fields of social provision.

Second, the PT changed the social composition of the state through the appointment of thousands of leaders of mass organizations to positions of power. For the first time in Brazilian history, millions of poor citizens could recognise themselves in the bureaucracy and relate to close friends and comrades who had become ‘important’ in Brasília.

Third, PT policies contributed to a significant improvement in the distribution of income, through the creation of millions of unskilled jobs, a rising minimum wage, and higher transfers and benefits.

Fourth, although the government never abandoned the neoliberal macroeconomic policy framework imposed in the 1990s, it gradually introduced, in parallel, neodevelopmental (that is, expansionary Keynesian) policies that helped to secure faster growth, higher profits and wages, and distributional gains.

Successes and Failures

Yet the PT failed to reform media ownership, which secured the space for a virulent opposition aligned with the country's neoliberal elites. The party also endorsed a model of distribution based on financialization, consumption, low-paid jobs, and transfers: essentially, both the rich and the poorest gained, while millions of skilled jobs were lost through the ‘globalization’ of production, privatizations, the simplification of managerial structures and new information technologies. They sliced not only the number of ‘good jobs’ in manufacturing, but also middle management posts, and increased precarity even for relatively senior jobs.

The Workers’ Party elicited mounting opposition by the neoliberal elite and the upper middle class both because of what it did do, and because of what it failed to do. PT economic policies irked finance and most of the bourgeoisie; they suffered losses because of greater state intervention, the reduction of interest rates and the economic downturn since 2011; they also resented the perceived loss of their control over state policy under Rousseff.

The upper middle classes were alienated from the PT because of their ideological commitment to neoliberalism, and because the party supported the economic and social ascent of the working class. The upper middle classes were also tormented by losses in their income and their dislocation from the outer circle of state power.

Rousseff repelled most professional politicians because of her unwillingness to conform to the established principles of pork-barrel politics. The government lost the support of large segments of informal workers, notably the flocks of Pentecostal churches that opposed the expansion of civic rights and progressive values, with flashpoints around Dilma's opening toward the liberalization of abortion and citizenship rights for homosexuals.

Finally, the expansion of the courts, the Attorney General's Office and the federal police – in terms of size, resources and powers – enabled them to launch a devastating attack on the PT.

These elite groups converged around an aggressive ‘alliance of privilege’ that was cemented ideologically by the mainstream media. The weakness of the political parties of the right enabled the media to take up the mantle of the opposition, hunting down the PT systematically, drawing upon a discourse which incorporated right-wing values, neoliberal economics, and strident allegations of corruption.

The Revolt of the Elite

The revolt of the elite was triggered by Dilma Rousseff's re-election in 2014. Her victory came as a surprise to the alliance of privilege, who underestimated the capacity of the PT and the left to mobilise a progressive coalition drawing upon the working class and the poor.

However, Rousseff's triumph was fragile, and coincided with the continuing deterioration of the economy, which has plunged the Brazilian economy into the worst crisis in its recorded history. The distributional improvements that had legitimised the PT administrations stagnated. Repeated policy failures, the media onslaught, and the disorganization of the government's base within the most right-wing congress in decades, combined to create a generalised dissatisfaction that focused on the state.

Since 2005, the mainstream media and the judiciary launched successive waves of attack against the PT, with corruption emerging as the ideal tool to fell the Rousseff administration. The lava jato (carwash) operation, pioneered by the federal police since 2014, revealed that a cartel of engineering and construction companies had bribed a group of politically-appointed directors of the state-owned oil conglomerate Petrobras, in order to secure a virtual monopoly over oil and other contracts. Those bribes allegedly channelled funds to several political parties, among them the PT.

The federal police and public prosecutors made overt political use of these investigations. They disregarded evidence that right-wing parties were involved in similar cases, selectively leaked compromising information to the media, and sought to implicate the PT wherever this was possible. Prominent politicians and the managers of several large firms were routinely arrested in order to extract plea bargains. Those refusing to co-operate were imprisoned indefinitely. When they finally surrendered, the aspersions cast on the PT were blatantly used to fuel the scandal mill. Accusations against the other parties were normally ignored.

The unfolding scandal catalysed the emergence of a mass right-wing movement populated by the upper middle classes, whose grievances included a laundry list of deeply felt but unfocused dissatisfactions articulated as demands for the ‘end of corruption’ and Dilma's impeachment. Their excitement was misguided, for three reasons.

First, the anti-corruption discourse of the alliance of privilege was selective. It targeted the institutions and parties aligned with neodevelopmentalism, suggesting that their most important goal was to change government policy, rather than eliminate corruption.

Second, chatter about corruption provided a convenient figleaf, obscuring meaningful debate on economic policy. For example, the neoliberal bourgeoisie would find it difficult to campaign to curtail labour rights, cut pensions, weaken domestic industry and cripple Petrobras. However, if these goals were disguised as a ‘struggle against corruption’, policy changes could be smuggled in later, regardless of the interests of the vast majority.

Third, the coordinated attack by the judiciary and the media disconnected the PT from its sources of funding and its mass support. The loss of millions of jobs and billions of dollars in output and investment were merely collateral damage.

Lava jato was remarkable for another reason, unrelated to corruption: it was indicative of a severe distortion of Brazil's constitution, by which guarantees of the independence of the judiciary supported the emergence of a self-appointed group of ‘pure’ investigators, in fact aligned with the political right, who called upon themselves to clean up the political system.

Their mission was fortuitously supported by elites’ mounting animosity toward the PT, the sensitivities of the middle classes, the deepening economic crisis, and the paralysis of the Rousseff administration. In the mêlée, the economic crisis, rising unemployment, gargantuan corruption and a torrent of scandals became thoroughly enmeshed.

The mainstream media began trumpeting a message that the PT was at the centre of a web of thievery without precedent: Lula and Dilma were robbing the republic by day and at night, they conspired to turn Brazil into a satellite of Venezuela. Rousseff lost a voter on her impeachment in the Chamber of Deputies by 367-137, on 17 April 2016, and by 61-20 in the Senate, on 31 August.

Dilma Rousseff's impeachment was a grotesque spectacle. Her trial was overtly political, all legal niceties having been abandoned long ago, and it was transparently orchestrated by a cabal of thieving politicians. They claimed the right to impose an unconstitutional vote of no confidence on a President who had made mistakes, but committed no crime.

The impeachment process was driven by an unholy coalition between the leadership of the opposition, bitterly regretting their four consecutive defeats in Presidential elections, leading figures in the judiciary, Rousseff's traitorous Vice-President, Michel Temer, and the Machiavellian speaker of the Chamber of Deputies, Eduardo Cunha, who was struggling with heavy corruption charges in Brazil and in Switzerland (he would end up in prison soon afterwards, his usefulness to the coup overwhelmed by the heavy political cost of the allegations being made against him). They were trailed by a motley crew of minor characters, many of whom were accused of egregious crimes – not least corruption – and by a parade of business leaders whom the media fêted as if they were the nation's saviours.

After the Impeachment

In the following months, the administration led by Michel Temer engaged in a fully-fledged attempt to restore orthodox neoliberalism, undermine employment rights and internationalize the economy. The government's attack was impeded only by its own venality, incompetence and endless tribulations, as Temer stumbled against the law, emerging mass resistance and the ongoing threat that his parliamentary base of support would disintegrate.

This was expected. What came as a surprise was the recent split in the alliance of privilege. The main interest of capital as a whole was the restoration of orthodox neoliberalism, relying on the judiciary to continue dismantling the PT.

But by now the judicial attack had already gained its own momentum, and it has been strongly backed by the upper middle classes, which treat the judges and public prosecutors as major celebrities. In the country of football megastars, soap operas and Carmen Miranda, this is important. And indeed the media has harnessed huge revenues from popular interest in the investigations.

On 18 May, the owners of JBS, the world's largest meat processing conglomerate, agreed a plea bargain. They revealed JBS funding to 28 parties and almost 2,000 politicians, and produced evidence of large cash payments to the leader of the right wing PSDB (Brazilian Social Democracy Party) and runner-up in the 2014 presidential elections, Aécio Neves, against whom multiple accusations had already emerged but were never investigated seriously. Finally, JBS produced the recording of a conversation between one of its owners and President Temer, suggesting that JBS would pay Eduardo Cunha for his continuing silence while in jail, in order to avoid incriminating his old friend Temer.

The reaction in Brazil was explosive. Temer, already tainted by multiple allegations of corruption and other misdemeanours, and facing difficulties pushing his neoliberal agenda in congress, was abandoned by parts of the mainstream media, who spotted a lame duck and called for his resignation or, failing that, impeachment. His political allies are jumping ship. Temer is probably doomed.

The problem for the remnants of the alliance of privilege is what to do next: the constitution suggests that congress should elect an interim president to steer the ship until the 2018 elections. The left is calling for direct elections now. Elections are unacceptable for the alliance of privilege, because the political right is divided and has no readily viable candidate.

In contrast, the left could field Lula, who is leading in the polls in spite of the attacks he has been enduring for several years, and despite the fact he is facing investigations that are certain to find him guilty of something: in a few months, he is likely to be unable to run for public office.

Despite the political chaos, the Brazilian left finds itself in a good position for the first time in several years. The genie has not only escaped from its bottle; it has gone berserk. Temer is damaged goods rather than a statesman; it has become incontrovertible that Dilma Rousseff was overthrown by a criminal gang; the alliance of privilege is split, and the left is calling for elections while the right must find ways to deny the people a voice.

The left can win this battle, and upend the conspiracy of the elites. Now is the time to fight, on the streets, in the offices, factories, and neighbourhoods: Fora Temer – eleições diretas já!

Alfredo Saad-Filho is Professor of Political Economy in the Department of Development Studies, SOAS, University of London. This article first published on the openDemocracy website.

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Yet Another Video Shows U.S.-Funded White Helmets Assisting Public Executions in Rebel-Held Syria

By Ben Norton, Max Blumenthal / AlterNet

The shocking regime change scandal mainstream media refuses to touch.

Photo Credit: Facebook screencapture

Syria Civil Defense, popularly known as the White Helmets, can be seen in a new video assisting in a public execution in a rebel-held town in Syria. It is at least the second such execution video featuring members of the Nobel Prize-nominated group.

The White Helmets have received at least $23 million in funding from the U.S. Agency for International Development (USAID), a wing of the State Department. The British Foreign Office and other European governments have pitched in as well.

Frequently cited as an invaluable source of information by major Western media outlets, the group was the subject of an Academy Award-winning 2016 Netflix documentary, The White Helmets.

Endorsements from A-list Hollywood celebrities like George Clooney and Justin Timberlake, as well as Hillary Clinton and British Foreign Minister Boris Johnson, have followed.

Large corporate media networks have yet to report on the dark side of the White Helmets, however, and films like the widely celebrated Netflix feature function as uncritical commercials for the group, helping to keep the public in a state of ignorance about the domination of the Western-backed Syrian armed opposition by extremist Salafi jihadist groups, and about the civil conflict in general.

While CNN and other outlets rely heavily on footage taken by White Helmets members, not one major Western media outlet has reported on the latest execution video starring the group’s uniformed members.

The video, which Syrian opposition activists uploaded to Facebook, shows three men from the White Helmets rushing into the center of a crowd, mere seconds after an alleged criminal was shot in the head, and removing the body on a stretcher. A member of the White Helmets can be seen celebrating along with the crowd of onlookers.

WARNING: This video features violence that may disturb viewers.

The men in the video were clearly identified by their signature white helmets, along with vests embroidered with the Syria Civil Defense logo.

The public execution took place in the small city of Jasim, in Syria’s southern Daraa province — which is often described as a hub for "moderate" rebels. Activists posted the video on May 16 on the Facebook page Coordination of the City of Al-Harra, Mother of the Martyrs, a site for the opposition in the neighboring city of Al-Harra.

Two days later, Syria Civil Defense released a carefully crafted statement admitting its members were involved in the execution. The statement noted that a tribal council in Jasim had asked the White Helmets "to humanely dispose of the body of a person that had been sentenced to death, by the local court, for murder." The group said it had "conducted an investigation" into the execution, and in response dismissed a White Helmet leader, while temporarily suspending two other team members.

Executing an Oscar-worthy performance

This is not the first time the White Helmets have appeared as participants in a public execution.

A jarring execution filmed in 2015 in the rebel-held town of Haritan shows two members of Syria Civil Defense waiting just off camera while a member of Syria's al-Qaeda affiliate, Jabhat al-Nusra, reads out a death sentence, before shooting a man dressed in street clothes in the head. Seconds later, the White Helmets team tosses the man's body onto a stretcher and scrambles away.

WARNING: This video features violence that may disturb viewers.

The 2015 video prompted a carefully worded statement by the organization, condemning the killing and claiming its members were simply fulfilling their task by performing “the emergency burial of the dead.”

A British public relations outfit called the Syria Campaign was hired by an influential British-Syrian billionaire, Ayman Asfari, to market the White Helmets to the Western public. As Max Blumenthal has reported for AlterNet, the Syria Campaign was itself the creation of a slick New York City- and London-based public relations firm called Purpose. Among the PR group’s greatest achievements was fundraising for the widely celebrated Netflix documentary.

This year, the makers of the film were awarded with an Oscar for Best Documentary Short. As he received the honor before millions of viewers around the world, director Orlando Einsiedel read a prepared statement from Read al-Saleh, the director of the White Helmets: “Our organization is guided by a verse in the Quran: ‘To save one life is to save all of humanity.’”

But the execution videos call into question the White Helmets’ claims to act as an impartial, life-saving rescue organization, and raise serious questions about the motives of its funders and promoters within public relations firms and mainstream newsrooms.

‘Hidden soldiers’ of al-Qaeda and ISIS?

The White Helmets operate exclusively within the armed Syrian opposition, working closely with al-Qaeda’s local affiliate, Jabhat al-Nusra, and even ISIS. The British journalist and ISIS hostage John Cantlie inadvertently exposed the group’s relationship with ISIS when he referred to a White Helmets team as “the Islamic State’s fire brigade” in a propaganda video he was forced to participate in.

Videos and photos of White Helmets members posing triumphantly on the corpses of Syrian soldiers and joining fighters in accosting an alleged political opponent have circulated throughout social media.

In March 2015, the extremist-sympathizing opposition media outlet Sarmeen posted a video featuring the White Helmets gleefully joining a chant with Salafi jihadist fighters in Idlib, as they fire a fusillade of bullets into the air.

A member of Syria Civil Defense grabs a flag from one of the militants and begins waving it: a black flag with the shahada in white letters, a common Salafi jihadist symbol, emblazoned with the name of Jaish al-Sunna, an extremist Islamist militia that is allied with Syria’s al-Qaeda affiliate and that has reportedly recruited child soldiers with the help of the al-Qaeda-linked fundamentalist Saudi warlord Abdullah al-Muhaysini.

Another upload to YouTube, posted the same day by the rebel media outlet, shows White Helmets joining the extremist militants in songs and chants.

Al-Muhaysini, the ideological leader of Syria’s Salafi jihadist rebels, has repeatedly praised the White Helmets. The Saudi warlord, who has been implicated in numerous war crimes in Syria, including mass executions of captured Syrian soldiers, insisted in an interview that there is no difference between the “mujahideen” (Salafi jihadist fighters) and the White Helmets. He even favorably described Syria Civil Defense members as mujahideen.

In May 2015, a White Helmets member named Muawiya Hassan Agha posted a grotesque video to Facebook (since deleted) that showed extremist Syrian rebels torturing two captured soldiers they later executed. Agha had also been filmed celebrating the capture of Idlib by al-Qaeda’s Syrian affiliate. Rumors circulated that Agha was dismissed from the White Helmets when his involvement in the atrocities came to light.

This March, a leader of Hay'at Tahrir al-Sham, the powerful newly rebranded al-Qaeda-led rebel coalition in Syria, hailed the White Helmets in a special video message as the “hidden soldiers of the revolution.”

For more coverage of the White Helmets scandal, read Max Blumenthal’s two-part investigation here and here, and Gareth Porter’s expose of White Helmets misinformation.

Ben Norton is a reporter for AlterNet's Grayzone Project. You can follow him on Twitter at @BenjaminNorton.

 

Max Blumenthal is a senior editor of the Grayzone Project at AlterNet, and the award-winning author of Goliath and Republican Gomorrah. His most recent book is The 51 Day War: Ruin and Resistance in Gaza. Follow him on Twitter at @MaxBlumenthal.

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