Iceland – When an entire Country goes Bankrupt

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Stunned Icelanders Struggle After Economy’s Fall
By SARAH LYALL
November 9, 2008

REYKJAVIK, Iceland – The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”

This country, as modern and sophisticated as it is geographically isolated, still seems to be in shock. But if the events of last month – the failure of Iceland’s banks; the plummeting of its currency; the first wave of layoffs; the loss of reputation abroad – felt like a bad dream, Iceland has now awakened to find that it is all coming true.

It is not as if Reykjavik, where about two-thirds of the country’s 300,000 people live, is filled with bread lines or homeless shanties or looters smashing store windows. But this city, until recently the center of one of the world’s fastest economic booms, is now the unhappy site of one of its great crashes. It is impossible to meet anyone here who has not been profoundly affected by the financial crisis.

Overnight, people lost their savings. Prices are soaring. Once-crowded restaurants are almost empty. Banks are rationing foreign currency, and companies are finding it dauntingly difficult to do business abroad. Inflation is at 16 percent and rising. People have stopped traveling overseas. The local currency, the krona, was 65 to the dollar a year ago; now it is 130. Companies are slashing salaries, reducing workers’ hours and, in some instances, embarking on mass layoffs.

“No country has ever crashed as quickly and as badly in peacetime,” said Jon Danielsson, an economist with the London School of Economics.

The loss goes beyond the personal, shattering a proud country’s sense of itself.

“Years ago, I would say that I was Icelandic and people might say, ‘Oh, where’s that?’ ” said Katrin Runolfsdottir, 49, who was fired from her secretarial job on Oct. 31. “That was fine. But now there’s this image of us being overspenders, thieves.”

Aldis Nordfjord, a 53-year-old architect, also lost her job last month. So did all 44 of her co-workers – everyone in the company except its owners. As many as 75 percent of Iceland’s private-sector architects have probably been fired in the past few weeks, she said.

In a strange way, she said, it is comforting to be one in a crowd. “Everyone is in the same situation,” she said. “If you can imagine, if only 10 out of 40 people had been fired, it would have been different; you would have felt, ‘Why me? Why not him?’ ”

Until last spring, Iceland’s economy seemed white-hot. It had the fourth-highest gross domestic product per capita in the world. Unemployment hovered between 0 and 1 percent (while forecasts for next spring are as high as 10 percent). A 2007 United Nations report measuring life expectancy, real per-capita income and educational levels identified Iceland as the world’s best country in which to live.

Emboldened by the strong krona, once-frugal Icelanders took regular shopping weekends in Europe, bought fancy cars and built bigger houses paid for with low-interest loans in foreign currencies.

Like the Vikings of old, Icelandic bankers were roaming the world and aggressively seizing business, pumping debt into a soufflé of a system. The banks are the ones that cannot repay tens of billions of dollars in foreign debt, and “they’re the ones who ruined our reputation,” said Adalheidur Hedinsdottir, who runs a small chain of coffee shops called Kaffitar and sells coffee wholesale to stores.

There was so much work, employers had to import workers from abroad. Ms. Nordfjord, the architect, worked so much overtime last year that she doubled her salary. She was featured on a Swedish radio program as an expert on Iceland’s extraordinary building boom.

Two months ago, her company canceled all overtime. Two weeks ago, it acknowledged that work was slowing. But it promised that there would be enough to last through next summer.

The next day, everyone was herded into a conference room and fired.

Employers are hurting just as much as employees. Ms. Hedinsdottir has laid off seven part-time employees, cut full-time workers’ hours and raised prices. The Kaffitar branch on Reykjavik’s central shopping street was perhaps half full; in normal times, it would have been bursting at its seams.

While business is dwindling, costs are soaring. When the government took over the country’s failing banks in October, Ms. Hedinsdottir’s latest shipment of coffee – more than 109,000 pounds – was already on the water, en route from Nicaragua. She had the money to pay for it, but because the crisis made foreign banks leery of doing business with Iceland, she said, she was unable to convert enough cash into foreign currency.

“They were calling me every day and asking me what the situation was, and they got really nervous,” Ms. Hedinsdottir said of her creditors. They got so nervous that they sent the coffee to a warehouse in Hamburg, Germany, where it now sits while she tries to find the foreign currency to pay for it.

Her fixed costs are no longer fixed. Five years ago, the company built a new factory, borrowing the 120 million kronur – about $1.5 million – in foreign currencies. But the currency’s fall has increased her debt to 200 million kronur. This summer, her monthly payments were 2.5 million kronur; now they may be double that – the equivalent of $38,500 in Iceland’s debased currency.

“My financial manager is talking to the banks every day, and we don’t know how much we’re supposed to pay,” Ms. Hedinsdottir said.

In a recent survey, one-third of Icelanders said they would consider emigrating. Foreigners are already abandoning Iceland.

Anthony Restivo, an American who worked this fall for a potato farm in eastern Iceland and was heading home, said all of the farm’s foreign workers abruptly left last month because their salaries had fallen so much. One man arrived from Poland, he said, then realized how little the krona was worth and went home the next day.

At the Kringlan shopping center on the edge of Reykjavik, Hronn Helgadottir, who works at the Aveda beauty store, said she could no longer afford to travel abroad. But the previous weekend, she said, she and her husband had gone for a last trip to Amsterdam, a holiday they had paid for months ago, when the krona was still strong.

They ate as cheaply as they could and bought nothing. “It was strange to stand in a store and look at a bag or a pair of shoes and see that they cost 100,000 kronur, when last year they cost only 40,000,” she said.

In Kopavogur, a suburb of Reykjavik, Ms. Runolfsdottir, the recently fired secretary, said she had worried for some time that Iceland would collapse under the weight of inflated expectations.

“If you drive through Reykjavik, you see all these new houses, and I’ve been thinking for the longest time, ‘Where are we going to get people to live in all these homes?'” she said.

The real estate firm that used to employ Ms. Runolfsdottir built about 800 houses two years ago, she said; only 40 percent have been sold.

By Icelandic law, Ms. Runolfsdottir and other fired employees have three months before they have to leave their jobs. At the end of that period, she will start drawing unemployment benefits.

Meanwhile, her husband’s modest investment in several now-failed Icelandic banks is worthless. “They were encouraging us to buy shares in their firms until the last minute,” she said.

She feels angry at the government, which in her view has mishandled everything, and angry at the banks that have tarnished Iceland’s reputation. And while she has every sympathy with the hundreds of thousands of foreign depositors who may have lost their money, she wonders why the Icelandic government – and, in essence, the Icelandic people – should have to suffer more than they already have.

“We didn’t ask anyone to put their money in the banks,” she said. “These are private companies and private banks, and they went abroad and did business there.”

Despite all this, Icelanders are naturally optimistic, a trait born, perhaps, of living in one of the world’s most punishing landscapes and depending for so much of their history on the fickle fishing industry. The weak krona will make exports more attractive, they point out. Also, Iceland has a highly educated, young and flexible population, and has triumphed after hardship before.

Ragna Sara Jonsdottir, who runs a small business consultancy, said she had met for the first time with other businesses in her office building. “We sat down and said, ‘We all have ideas, and we can help each other through difficult times,’ ” she said.

But she said she was just as shocked as everyone else by the suddenness, and the severity, of the downturn. When the prime minister, Geir H. Haarde, addressed the nation at the beginning of October, she said, her 6-year-old daughter asked her to explain what he had said.

She answered that there was a crisis, but that the prime minister had not told the country how the government planned to address it. Her daughter said, “Maybe he didn’t know what to say.”

Famous Cariboo Barbie Quotes – aka Sarah Palin

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“Math is hard. Let’s go shopping.”

cariboo barbie - aka sarah palin

cariboo barbie - aka sarah palin

“Never interrupt your enemy when he is making a mistake.” – Napoleon Bonaparte

sarah palin scares me

sarah palin scares me

Top 150 words spoken at the Biden-Palin Debate

Top 150 words spoken at the Biden-Palin Debate

Great performance, Sarah Palin, but we are not that stupid

Sarah Palin - George Bushs Mini Me

Sarah Palin - George Bush's Mini Me

Bush in a Skirt

Bush in a Skirt

Palin = G.W Bush with lipstick

Palin = G.W Bush with lipstick

Nope Poster - Sarah Palin

Nope Poster - Sarah Palin

The Rise Disaster Capitalism Again – Credit Default Swaps

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April 14, 2005
By Naomi Klein

Fittingly, a government devoted to perpetual pre-emptive deconstruction now has a standing office of perpetual pre-emptive reconstruction.

Gone are the days of waiting for wars to break out and then drawing up ad hoc plans to pick up the pieces. In close cooperation with the National Intelligence Council, Pascual’s office keeps “high risk” countries on a “watch list” and assembles rapid-response teams ready to engage in prewar planning and to “mobilize and deploy quickly” after a conflict has gone down. The teams are made up of private companies, nongovernmental organizations and members of think tanks–some, Pascual told an audience at the Center for Strategic and International Studies in October, will have “pre-completed” contracts to rebuild countries that are not yet broken. Doing this paperwork in advance could “cut off three to six months in your response time.”

The plans Pascual’s teams have been drawing up in his little-known office in the State Department are about changing “the very social fabric of a nation,” he told CSIS. The office’s mandate is not to rebuild any old states, you see, but to create “democratic and market-oriented” ones. So, for instance (and he was just pulling this example out of his hat, no doubt), his fast-acting reconstructors might help sell off “state-owned enterprises that created a nonviable economy.” Sometimes rebuilding, he explained, means “tearing apart the old.”

Few ideologues can resist the allure of a blank slate–that was colonialism’s seductive promise: “discovering” wide-open new lands where utopia seemed possible. But colonialism is dead, or so we are told; there are no new places to discover, no terra nullius (there never was), no more blank pages on which, as Mao once said, “the newest and most beautiful words can be written.” There is, however, plenty of destruction–countries smashed to rubble, whether by so-called Acts of God or by Acts of Bush (on orders from God). And where there is destruction there is reconstruction, a chance to grab hold of “the terrible barrenness,” as a UN official recently described the devastation in Aceh, and fill it with the most perfect, beautiful plans.

“We used to have vulgar colonialism,” says Shalmali Guttal, a Bangalore-based researcher with Focus on the Global South. “Now we have sophisticated colonialism, and they call it ‘reconstruction.'”

It certainly seems that ever-larger portions of the globe are under active reconstruction: being rebuilt by a parallel government made up of a familiar cast of for-profit consulting firms, engineering companies, mega-NGOs, government and UN aid agencies and international financial institutions. And from the people living in these reconstruction sites–Iraq to Aceh, Afghanistan to Haiti–a similar chorus of complaints can be heard. The work is far too slow, if it is happening at all. Foreign consultants live high on cost-plus expense accounts and thousand- dollar-a-day salaries, while locals are shut out of much-needed jobs, training and decision-making. Expert “democracy builders” lecture governments on the importance of transparency and “good governance,” yet most contractors and NGOs refuse to open their books to those same governments, let alone give them control over how their aid money is spent.

Three months after the tsunami hit Aceh, the New York Times ran a distressing story reporting that “almost nothing seems to have been done to begin repairs and rebuilding.” The dispatch could easily have come from Iraq, where, as the Los Angeles Times just reported, all of Bechtel’s allegedly rebuilt water plants have started to break down, one more in an endless litany of reconstruction screw-ups. It could also have come from Afghanistan, where President Hamid Karzai recently blasted “corrupt, wasteful and unaccountable” foreign contractors for “squandering the precious resources that Afghanistan received in aid.” Or from Sri Lanka, where 600,000 people who lost their homes in the tsunami are still languishing in temporary camps. One hundred days after the giant waves hit, Herman Kumara, head of the National Fisheries Solidarity Movement in Negombo, Sri Lanka, sent out a desperate e-mail to colleagues around the world. “The funds received for the benefit of the victims are directed to the benefit of the privileged few, not to the real victims,” he wrote. “Our voices are not heard and not allowed to be voiced.”

But if the reconstruction industry is stunningly inept at rebuilding, that may be because rebuilding is not its primary purpose. According to Guttal, “It’s not reconstruction at all–it’s about reshaping everything.” If anything, the stories of corruption and incompetence serve to mask this deeper scandal: the rise of a predatory form of disaster capitalism that uses the desperation and fear created by catastrophe to engage in radical social and economic engineering. And on this front, the reconstruction industry works so quickly and efficiently that the privatizations and land grabs are usually locked in before the local population knows what hit them. Kumara, in another e-mail, warns that Sri Lanka is now facing “a second tsunami of corporate globalization and militarization,” potentially even more devastating than the first. “We see this as a plan of action amidst the tsunami crisis to hand over the sea and the coast to foreign corporations and tourism, with military assistance from the US Marines.”

As Deputy Defense Secretary, Paul Wolfowitz designed and oversaw a strikingly similar project in Iraq: The fires were still burning in Baghdad when US occupation officials rewrote the investment laws and announced that the country’s state-owned companies would be privatized. Some have pointed to this track record to argue that Wolfowitz is unfit to lead the World Bank; in fact, nothing could have prepared him better for his new job. In Iraq, Wolfowitz was just doing what the World Bank is already doing in virtually every war-torn and disaster-struck country in the world–albeit with fewer bureaucratic niceties and more ideological bravado.

“Post-conflict” countries now receive 20-25 percent of the World Bank’s total lending, up from 16 percent in 1998–itself an 800 percent increase since 1980, according to a Congressional Research Service study. Rapid response to wars and natural disasters has traditionally been the domain of United Nations agencies, which worked with NGOs to provide emergency aid, build temporary housing and the like. But now reconstruction work has been revealed as a tremendously lucrative industry, too important to be left to the do-gooders at the UN. So today it is the World Bank, already devoted to the principle of poverty-alleviation through profit-making, that leads the charge.

And there is no doubt that there are profits to be made in the reconstruction business. There are massive engineering and supplies contracts ($10 billion to Halliburton in Iraq and Afghanistan alone); “democracy building” has exploded into a $2 billion industry; and times have never been better for public-sector consultants–the private firms that advise governments on selling off their assets, often running government services themselves as subcontractors. (Bearing Point, the favored of these firms in the United States, reported that the revenues for its “public services” division “had quadrupled in just five years,” and the profits are huge: $342 million in 2002–a profit margin of 35 percent.)

But shattered countries are attractive to the World Bank for another reason: They take orders well. After a cataclysmic event, governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. And with the local population struggling to find shelter and food, political organizing against privatization can seem like an unimaginable luxury.

Even better from the bank’s perspective, many war-ravaged countries are in states of “limited sovereignty”: They are considered too unstable and unskilled to manage the aid money pouring in, so it is often put in a trust fund managed by the World Bank. This is the case in East Timor, where the bank doles out money to the government as long as it shows it is spending responsibly. Apparently, this means slashing public-sector jobs (Timor’s government is half the size it was under Indonesian occupation) but lavishing aid money on foreign consultants the bank insists the government hire (researcher Ben Moxham writes, “In one government department, a single international consultant earns in one month the same as his twenty Timorese colleagues earn together in an entire year”).

In Afghanistan, where the World Bank also administers the country’s aid through a trust fund, it has already managed to privatize healthcare by refusing to give funds to the Ministry of Health to build hospitals. Instead it funnels money directly to NGOs, which are running their own private health clinics on three-year contracts. It has also mandated “an increased role for the private sector” in the water system, telecommunications, oil, gas and mining and directed the government to “withdraw” from the electricity sector and leave it to “foreign private investors.” These profound transformations of Afghan society were never debated or reported on, because few outside the bank know they took place: The changes were buried deep in a “technical annex” attached to a grant providing “emergency” aid to Afghanistan’s war-torn infrastructure–two years before the country had an elected government.

It has been much the same story in Haiti, following the ouster of President Jean-Bertrand Aristide. In exchange for a $61 million loan, the bank is requiring “public-private partnership and governance in the education and health sectors,” according to bank documents–i.e., private companies running schools and hospitals. Roger Noriega, US Assistant Secretary of State for Western Hemisphere Affairs, has made it clear that the Bush Administration shares these goals. “We will also encourage the government of Haiti to move forward, at the appropriate time, with restructuring and privatization of some public sector enterprises,” he told the American Enterprise Institute on April 14, 2004.

These are extraordinarily controversial plans in a country with a powerful socialist base, and the bank admits that this is precisely why it is pushing them now, with Haiti under what approaches military rule. “The Transitional Government provide[s] a window of opportunity for implementing economic governance reforms…that may be hard for a future government to undo,” the bank notes in its Economic Governance Reform Operation Project agreement. For Haitians, this is a particularly bitter irony: Many blame multilateral institutions, including the World Bank, for deepening the political crisis that led to Aristide’s ouster by withholding hundreds of millions in promised loans. At the time, the Inter-American Development Bank, under pressure from the State Department, claimed Haiti was insufficiently democratic to receive the money, pointing to minor irregularities in a legislative election. But now that Aristide is out, the World Bank is openly celebrating the perks of operating in a democracy-free zone.

The World Bank and the International Monetary Fund have been imposing shock therapy on countries in various states of shock for at least three decades, most notably after Latin America’s military coups and the collapse of the Soviet Union. Yet many observers say that today’s disaster capitalism really hit its stride with Hurricane Mitch. For a week in October 1998, Mitch parked itself over Central America, swallowing villages whole and killing more than 9,000. Already impoverished countries were desperate for reconstruction aid–and it came, but with strings attached. In the two months after Mitch struck, with the country still knee-deep in rubble, corpses and mud, the Honduran congress initiated what the Financial Times called “speed sell-offs after the storm.” It passed laws allowing the privatization of airports, seaports and highways and fast-tracked plans to privatize the state telephone company, the national electric company and parts of the water sector. It overturned land-reform laws and made it easier for foreigners to buy and sell property. It was much the same in neighboring countries: In the same two months, Guatemala announced plans to sell off its phone system, and Nicaragua did likewise, along with its electric company and its petroleum sector.

All of the privatization plans were pushed aggressively by the usual suspects. According to the Wall Street Journal, “the World Bank and International Monetary Fund had thrown their weight behind the [telecom] sale, making it a condition for release of roughly $47 million in aid annually over three years and linking it to about $4.4 billion in foreign-debt relief for Nicaragua.”

Now the bank is using the December 26 tsunami to push through its cookie-cutter policies. The most devastated countries have seen almost no debt relief, and most of the World Bank’s emergency aid has come in the form of loans, not grants. Rather than emphasizing the need to help the small fishing communities–more than 80 percent of the wave’s victims–the bank is pushing for expansion of the tourism sector and industrial fish farms. As for the damaged public infrastructure, like roads and schools, bank documents recognize that rebuilding them “may strain public finances” and suggest that governments consider privatization (yes, they have only one idea). “For certain investments,” notes the bank’s tsunami-response plan, “it may be appropriate to utilize private financing.”

As in other reconstruction sites, from Haiti to Iraq, tsunami relief has little to do with recovering what was lost. Although hotels and industry have already started reconstructing on the coast, in Sri Lanka, Thailand, Indonesia and India, governments have passed laws preventing families from rebuilding their oceanfront homes. Hundreds of thousands of people are being forcibly relocated inland, to military style barracks in Aceh and prefab concrete boxes in Thailand. The coast is not being rebuilt as it was–dotted with fishing villages and beaches strewn with handmade nets. Instead, governments, corporations and foreign donors are teaming up to rebuild it as they would like it to be: the beaches as playgrounds for tourists, the oceans as watery mines for corporate fishing fleets, both serviced by privatized airports and highways built on borrowed money.

In January Condoleezza Rice sparked a small controversy by describing the tsunami as “a wonderful opportunity” that “has paid great dividends for us.” Many were horrified at the idea of treating a massive human tragedy as a chance to seek advantage. But, if anything, Rice was understating the case. A group calling itself Thailand Tsunami Survivors and Supporters says that for “businessmen-politicians, the tsunami was the answer to their prayers, since it literally wiped these coastal areas clean of the communities which had previously stood in the way of their plans for resorts, hotels, casinos and shrimp farms. To them, all these coastal areas are now open land!”

Disaster, it seems, is the new terra nullius.

About Naomi Klein
Naomi Klein is an award-winning journalist and syndicated columnist and the author of the international and New York Times bestseller The Shock Doctrine: The Rise of Disaster Capitalism (September 2007); an earlier international best-seller, No Logo: Taking Aim at the Brand Bullies; and the collection Fences and Windows: Dispatches from the Front Lines of the Globalization Debate (2002). more…

Mortgage crisis has Washington putting aside free-market ideology

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Mortgage crisis has Washington putting aside free-market ideology
By Nelson D. Schwartz, Sunday, September 7, 2008

Despite decades of free-market rhetoric from Republican and Democratic lawmakers, Washington has a long history of providing financial help to the private sector when the economic or political risk of a corporate collapse appeared too high.

The effort to save Fannie Mae and Freddie Mac is only the latest in a series of financial maneuvers by the government that stretch back to the rescue of the military contractor Lockheed Aircraft and the Penn Central Railroad under President Richard Nixon, the shoring up of Chrysler in the waning days of the Carter administration and the salvage of the U.S. savings and loan system in the late 1980s.

More recently, after airplanes were grounded because of the terrorist attacks of Sept. 11, 2001, Congress approved $15 billion in subsidies and loan guarantees to the faltering airlines.

Now, with the U.S. government preparing to save Fannie and Freddie only six months after the Federal Reserve Board orchestrated the rescue of Bear Stearns, it appears that the mortgage crisis has forced the government to once again shove ideology aside and get into the bailout business.

“If anybody thought we had a pure free-market financial system, they should think again,” said Robert Bruner, dean of the Darden School of Business at the University of Virginia.

The closest historical analogy to the Fannie-Freddie crisis is the rescue of the Farm Credit and savings and loan systems in the late 1980s, said Bert Ely, a banking consultant who has been a longtime critic of the mortgage finance companies.

The savings and loan bailout followed years of high interest rates and risky lending practices and ultimately cost taxpayers roughly $124 billion, with the banking industry kicking in another $30 billion, Ely said.

Even if the rescue of Fannie and Freddie ends up costing tens of billions of dollars, the savings and loan collapse is still likely to remain the costliest government bailout to date, said Lawrence White, a professor of economics at the Stern School of Business at New York University.

“The S.& L. debacle cost upwards of $100 billion, and the economy is more than twice the size today than it was in the late 1980s,” he said. “I don’t think this will turn out to be as serious as that, when over 2,000 banks and thrifts failed between the mid-1980s and mid-1990s.”

Most of those losses were caused by the shortfall between what the government paid depositors and what it received by selling the troubled real estate portfolios it acquired after taking over the failed thrifts.

In the Chrysler case, Carter and lawmakers in states with auto plants helped push through a package of $1.5 billion in loan guarantees for the troubled carmaker, while also demanding concessions from labor unions and lenders.

While Chrysler is remembered as a major bailout, White says it was minor compared with the savings and loan crisis or the current effort to shore up Fannie and Freddie.

The government did not have to give money directly to Chrysler, and it actually earned a profit on the deal because of stock warrants it received when the loan guarantees were provided. At the time, Chrysler had a work force of more than 100,000 people.

Still, Ely makes a distinction between the rescue of Fannie and Freddie and the thrifts versus the aid packages for Chrysler and other industrial companies. “They didn’t have a federal nexus,” he said. “They weren’t creatures of the federal government.”

This effort is also different from the others because of the potential fallout for the broader economy and especially the beleaguered housing sector if it does not succeed.

Unlike a particular auto company or even a major bank like Continental Illinois National Bank and Trust, which was bailed out in 1984, “we depend on Fannie and Freddie for funding almost half of our mortgage market,” said Thomas Stanton, an expert on the two companies who also teaches at Johns Hopkins University.

“The government,” he added, “has many less degrees of freedom in dealing with these companies than in the earlier bailouts.”

Telemarketers face ‘do-not-call’ axe on Sept. 30

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Wednesday, July 30, 2008, CBC

Canadians will be able to give telemarketers the slip as of Sept. 30th, 2008 when the national do-not-call-list officially begins operating.

Under the new rules, announced Wednesday by the Canadian Radio-television and Telecommunications Commission, telemarketers will not be allowed to call anyone who registers either by phone with Bell Canada Inc., which is administering the list on behalf of the CRTC, or online.

Telemarketers will have a grace period of 31 days to contact people who have registered, but after that will be eligible for fines of $1,500 in the case of an individual or $15,000 for corporations should a registrant complain.

Graphic shows the number of registrations with the federal do-not-call list as a percentage of total population; 2c x 3 1/8 inches; 96.3 mm x 79.4 mm. From AP Photo by Pete Santilli.

Bell will forward complaints to the CRTC, which decided to use a middle man in order to lighten its workload.

“We tried to delegate as much as possible,” CRTC spokesman Denis Carmel said.

Registration will last three years, after which individuals will have to re-enter their information. Canadians can register landlines, cellphones and fax numbers.

However, many organizations will be exempted under the rules.

Charities, political parties, polling firms, newspapers and companies that have done business with an individual over the past 18 months can continue to make unsolicited phone calls. Canadians who do not wish to receive such calls can ask at the time of a call to be removed from the organization’s list, or contact them ahead of time and request the same.

The CRTC’s list has been criticized for allowing too many exceptions.

In March, an internet law professor at the University of Ottawa set up a website, iOptOut, that allows users to proactively prevent calls from organizations on the exception list. The site has a database that allows users to choose from the hundreds of excepted organizations and send them an automated e-mail removal request.

 

Video

Marisa Dragani reports: Telemarketers to watch who they call (Runs: 1:59)

External Links

RBS issues global stock and credit crash alert

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By Ambrose Evans-Pritchard, International Business Editor

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the “Crossover” index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

“I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

“Cash is the key safe haven. This is about not losing your money, and not losing your job,” said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America’s fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

“Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” he said.

US Federal Reserve and the European Central Bank both face a Hobson’s choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. “The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation,” he said.

“The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets,” he said.

Kit Jukes, RBS’s head of debt markets, said Europe would not be immune. “Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

“The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured,” he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

Scott Ritter on War With Iran

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Scott Ritter on War With Iran

By Scott Ritter, Dec 19, 2007

Scott Ritter

The Truthdig columnist (and WMD expert) warns that war with Iran could be inevitable, despite the National Intelligence Estimate report that says Iran dismantled its nuclear program in 2003. Bush, Ritter argues, doesn’t let facts get in the way of what he wants.

Listen to this interview. (PodCast)

Transcript:

James Harris: This is Truthdig. James Harris sitting down with Scott Ritter, former chief weapons inspector in Iraq. And today we’re talking about the latest report from the National Intelligence Estimate. The report says that Iran is not, as of mid-July, in the nuclear weapons business. Scott Ritter-I think, wisely-told me to look at this report with caution and that this means nothing to the White House, that they [members of the Bush team] are about regime change. Please explain.

Scott Ritter: Well, I think it’s important to assess patterns of behavior. When we take a look at the Bush administration and how it has sought to implement its policies of regional transformation in the Middle East, inclusive, these policies include the notion of regime change, removing unpopular regimes, regimes that the United States unilaterally declares incompatible with its vision, removing them from power. This includes Saddam Hussein and the theocracy in Tehran. They have demonstrated a tendency to exaggerate threats in the form of weapons of mass destruction to exploit the ignorance of the American public and the fear that is derived from this ignorance. They did so with Iraq. They made a case for war based upon weapons of mass destruction that they fail to back up with anything other than rhetoric. I can say, as a former weapons inspector who ran the intelligence programs from ’91 to ’98, that we had fundamentally disarmed Iraq, so for the president to say that there’s this new weapons capability, he would have to demonstrate some new information, and he failed to do so. And that’s why I said, unless he provides this new data, that there isn’t the WMD threat that he said. The same thing can be said about Iran.

Harris: Why should we be cautious about what President Bush is telling us right now?

Ritter: Here’s a president who has said Iran is a threat, a threat in the form of a nuclear weapons program. But for some time now I have been saying, “Where’s the beef, Mr. President? …”

Harris: Hmm.

Ritter: ” … I hear the rhetoric, but your pattern of behavior leads me to believe that you might be exaggerating the threat, fabricating the threat, misrepresenting data to achieve your policy objective of regime change, trying to exploit the ignorance of the American public and the fear derived from this ignorance.” Now we have a National Intelligence Estimate that is released that says, “Time out. There hasn’t been a nuclear weapons program in Iran since 2003.” Now I need to make a point here: I continue to say that there’s never been a nuclear weapons program in Iran. And the National Intelligence Estimate doesn’t provide any evidence to sustain its assertion that there was a nuclear program. But be that as it may, they’re saying that the concept of Iran today pursuing nuclear weapons is a fallacy. There’s no data to promote this. Now, if we lived in world where government functioned the way it’s supposed to when it comes to policy-that is, you get your intelligence, you look at it, you examine it, you assess it, and you say, “OK, how do we now interact with the target, the nation, in this case, Iran?”-that’s normal. That’s cause-and-effect relationship.

Harris: Sure.

Ritter: But what we have is, the administration has already made up its mind about what it wants to do with Iran and had been fabricating a case based upon a nuclear weapons program that the U.S. intelligence community now says doesn’t exist today. Do you think there will be a change in policy? And the answer, of course, is no, because they’ve got the cart before the horse. They put the policy out in front. Inconveniently, the intelligence community didn’t back them on the nuclear weapons issue. …

Harris: But you say Iran’s status as a terrorist organization also plays into this. How so?

Ritter: Not only does the Bush administration continue to say that Iran is a terrorist state, that it supports terrorists who were directly or indirectly involved in the events of Sept. 11, 2001. The United States Senate has passed a resolution that says the same thing and certifies the Iranian Revolutionary Guard command is a terrorist organization. So anybody who thinks for a second this National Intelligence Estimate somehow retards the ability of the Bush administration to engage in military action against Iran, you’re sadly mistaken. The Bush administration’s policy has been made. This estimate was not used to make that policy, and as you yourself have reflected, the president’s not going to let this estimate get in the way of his continuing to articulate Iran as a threat.

Harris: Well, Scott, if you’re right, that’s a high crime. That’s wanton disregard for American wishes, disregard for any of the national intelligence agencies that supposedly cover our back.

Ritter: It’s wanton disregard for everything we stand for as a nation. We elect representatives to government to do our bidding. We expect them to operate within a framework of due process set forth by the rule of law. We might call this the Constitution or laws derived from the Constitution. We speak of checks and balances where we have three separate but equal branches of government, and when it comes to foreign policy and national security policy, really, two. The judiciary takes a step aside and it becomes the executive and the legislative branch. And there’s a system, a bureaucratic system there-the State Department, the CIA, the Defense Department-that is supposed to weigh in on these issues. And like I said, you want to gather the facts, examine the reality, and then make the policy. What we have here is an administration that, ideologically, has committed itself to certain policy actions divorced from what we’ll call reality, early on in the Bush administration.

Harris: Hmm.

Ritter: We heard people speak of a new reality, that the Bush administration can make its own reality. I’m not joking. Paul O’Neill, former secretary of the Treasury, who sat in Cabinet meetings where this was said. And so we now take a look at a situation where the president and his administration are continuing to march forward on a policy direction, regardless of what the data says. Am I jaded? No. I’m alarmed, as much as you are, but I think it’s imperative that we address this responsibly by first realistically acknowledging what’s occurring. There’s too many pundits out there today who are raising the flag of victory, saying, “Aha! Because of this NIE, this National Intelligence Estimate, war’s off the table. We don’t have to worry about it. The Bush plan has been undermined.” It most certainly hasn’t, because the Bush administration has never shown a tendency to respect the normal system of government. This estimate won’t have an impact at all.

Harris: Is it likely that George Bush will look at this report, throw it in the garbage and continue on, business as usual? The business, in this case: engage hostilely with Iran.

Ritter: The answer is yes. He is engaging hostilely with Iran. Remember: I’ve been saying for some time now that the Bush administration is taking the nuclear issue off the front burner. The CIA’s estimate follows on the heels of a finding by the International Atomic Energy Agency back in September that said the same thing: There’s no evidence of a nuclear weapons program. And this was one of their final analyses. They’ve been saying this for some time. The Bush administration has been, for many months now, having a hard time selling Iran’s nuclear threat as a causa bella. This is why they’ve shifted to terror and terrorism. The Bush administration is going to use the gift it was given by the U.S. Senate, this target list of the Iranian Revolutionary Guard command to serve as the cornerstone of its target list when it comes to launching a limited military operation against Iran that’ll probably take place some time in the spring. This is the plan, and the NIE-I don’t think-has changed this one iota. Now, it could. Let’s say Congress woke up all of a sudden. Let’s say Congress said, “Oh my goodness, this president’s been pulling our chain, been lying to us, hyping this thing up. There’s no threat,” and Congress intervenes in a way that it’s refused to do so to date, then maybe, maybe this war could be stopped. But if Congress continues to turn a blind eye or worse, as in the case of the Senate resolution, to facilitate Bush’s hyping of Iran as a threat, I think war is inevitable.

Harris: They’ve been asleep for five years now. Why would they wake up now? Why …

Ritter: [Unintelligible.]

Harris: Yeah. Hillary Clinton voted “yes.” She’s a U.S. senator, she’s running for president, and she said, “Yes, the Iranian Revolutionary Guard is indeed a terrorist organization.” Does this further the idea that “the Democrats and the Republicans-you know what?-they’re all in bed together”?

Ritter: It furthers the notion that front-runners are all in it together. The bottom line is, Hillary is getting money from the same sources that fund Giuliani. And if you take a look at their foreign policies, they’re pretty much one and the same. They’re very aggressive foreign policies. They’re based upon the premise of a unitary executive, that the president has the right to pre-emptively launch military strikes against threats that emerge, and maybe do so in a manner which negates Congress. There’s no difference between Hillary and George W. Bush or Rudy Giuliani when it comes to issues of this sort. There’s other Democrats out there who of course take a more nuanced, I would say responsible, point of view. Bill Richardson, governor of New Mexico, an outstanding candidate. But he’s not getting money from the same sources that are underwriting Hillary and Giuliani and others.

Harris: Scott, tell me what you think our president should be all about these days.

Ritter: The president should govern in accordance with the Constitution. What we have here is a situation that has existed for some time now where successive presidential administrations, frustrated by the inadequacies of democracy, so to speak-.

Harris: [Laughs.]

Ritter: It’s an ugly process. It takes time. It’s not convenient. And presidents want to wield their executive authority. And so, especially in time of war, they’ve created this concept-and it’s totally at odds with the Constitution-of the unitary executive where the president has unilateral powers in times of war. Somebody like Ron Paul, I think, somebody who knows the Constitution, takes a look at this notion of unitary executive authority and says, “Humbug. That’s ridiculous.” And I agree with him. I think it’s imperative that whoever becomes president understands that there are constitutional restrictions on what the president can and can’t do. I also think it’s imperative that Congress start reading the Constitution and flexing its constitutional muscles. That there is a role for Congress to play. It’s called oversight. And that Congress can retard irresponsible policy, that the president doesn’t get a blank check when it comes to foreign policy and national security policy. But, as you mentioned, we don’t have a Congress that seems to be enlightened in this fashion, and outside of a Ron Paul we don’t have too many people who have announced themselves as candidates for the president who will publicly commit to reversing this trend towards a unitary executive.

Harris: Before we move on, what are you optimistic about as we close the year and some of us being to make resolutions? Having told us before, there are no weapons of mass destruction, having been vociferous about the fact that the Bush administration is not doing their job, what keeps you optimistic in all of this? How do you not become jaded? How do you not become disillusioned?

Ritter: I’m a student of history. I allow myself to go back and examine the history of the United States, and I recognize that throughout our history our nation has been faced with serious problems, and yet we overcame these problems. It wasn’t pretty, and it didn’t happen overnight, but I’m a firm believer in the resiliency of the American people and our system of government because it’s founded in the Constitution. And as long as we respect that Constitution and abide by that Constitution, I’m comfortable with the fact that we will recover. It’s not going to happen overnight. It won’t happen in the next decade. I’ve said-. This invasion of Iraq has set in motion events that are going to take decades to cure. And so I’m not optimistic about 2008, 2009, 2010; I’m optimistic about 2020, that America will heal itself. But we’re not going to heal ourselves without a fight. That doesn’t mean that I can just sit back and throw my feet up and say, “I’ll just wait until the time passes.” No. We’ll heal ourselves because we will wake up collectively. Congress will reawaken. The presidency will be brought in line with the Constitution, but not without a fight. And so 2008 is going to be a fight, 2009 is going to be a fight. We have to fight, because if we don’t, then I have no confidence whatsoever in America healing itself.

Harris: Tell me a little about your dig. You’re leading a dig on Truthdig, Truthdig.com. And it’s called “Calling Out Idiot America.” Can you share with us some of what you’re saying? Your thesis, if you will?

Ritter: That was the first piece I wrote. I was approached by Mr. Scheer [Robert Scheer, Truthdig editor] and Ms. Kaufman [Zuade Kaufman, Truthdig publisher] to write for Truthdig. I thought probably the best thing to do is to set the tone of how I was going to approach this, which wasn’t going to be a kinder, gentler dig; it was going to be an in-your-face dig, but not one that was irresponsible. I chose, right off the bat, the issue of Iraq. I say we have a responsibility to the soldiers, sailors, airmen and Marines who are over there and a responsibility to our government to be engaged on Iraq. But, sadly, most Americans were ill equipped. I was driving down- I had just talked to the publishers and the editors of Truthdig and I was driving down from L.A. to San Diego, formulating this concept of-how do I explain Shia, Kurds and Sunni to people? And I was listening to the radio and the Green Day song came on, “Calling Out to Idiot America.” I said, “That’s a great title. That’s pretty much what I’m trying to do.” With all due respect to the American people, we’re 300 million people, technologically advanced, but we’re probably the most ignorant people in the world …

Harris: How do you mean? How do you mean?

Ritter: … so I have no qualms about calling Americans idiots when it comes to issues like Iraq, Iran and other areas around the world that somehow in our nationalistic-. We thump ourselves on the chest and say we have a right to intervene, but when you ask people to talk about the reality of that country, we know nothing about it, so we’re basically sticking our nose in an area that we’re ignorant of.

Harris: Mm-hmm. How do we cure that? Because I think that’s the main reason we can’t make change. At least that’s one speculation: that we are thousands of miles away from where the action is going down. We’re disconnected. We’re over here living our lives, we’re doing our own thing and there’s a war going on. Maybe that’s why we aren’t up in arms collectively.

Ritter: It’s a huge part of the problem, the complacency of a society that has been dumbed down by the narcotic of consumerism. If you just think about it, we wrapped ourselves in this cocoon of comfort and so long as the powers that be keep us waddling down a relative path of prosperity, we don’t want to rock the boat. But the fact is, we must empower ourselves with knowledge and information. That’s why I’m grateful to Truthdig for giving me a chance to write, because I view it as an outstanding forum for informing people and for having people empowered with knowledge and information so that we make informed decisions. We go back. We talk about our system of government. It doesn’t work if we, the people, are divorced. And if you accept, as I do, that the Constitution of the United States is the foundation of our government, that preamble says that we, the people of the United States of America, we shouldn’t take that lightly. The Supreme Court has said, because of that preamble, the Constitution belongs to us; we are the defenders of the Constitution. And so it’s imperative that we, the people, get empowered and we empower ourselves through the acquisition of knowledge and information and then assert ourselves onto a system of government. But it’s going to require people to stand up and shake off this apathy, as I said, the narcotic of consumerism brings the bear. I love Christmas. I help my Jewish friends celebrate Hanukkah. I think there’s nothing wrong with this time period, but we also need to reflect on how far we’ve shifted away from a holiday that celebrates human beings coming together and instead become involved in a holiday that’s about conspicuous spending.

Harris: Yeah.

Ritter: We need to recognize that there’s an enemy out there. And if we look in the mirror long enough, we’ll realize that the enemy is us.

Harris: I think you make a good point. Some of my busy friends would say, “You know what? What time do I have to make a difference? Is there anything the average Joe can do to help affect change? Besides writing the senator and writing the congressman, what else can you do?

Ritter: The first thing is to recognize that there’s a need. That’s step one. You have to say, “There is a need for change.” The next thing, after that, is to allocate time. I keep hearing people say, “I don’t have time.” Last night was Monday Night Football. Heckuva game, by the way. I sat in a bar with my friends. These are good guys; they’re not stupid. But they keep telling me over and over again, “That foreign policy stuff is too complicated, man. How do you expect us to get our fingers wrapped around it? You’ve been living this for your life, but we don’t do this. We have jobs and everything.” And I said, “That’s fair enough.” But then we’re watching the game, and they start criticizing play calls. They say, “You know, if they’d given the ball to the fullback on this play, statistically speaking on second down through the guard and tackle off the right side, he’s going to gain 3.5 yards.” I said, “How do you know that?” They go, “Oh, we studied the stats.” I’ll tell you what: If you’ve got enough time to study sports stats so that you know this kind of information, you can make that kind of analysis, you’ve got enough time to study American foreign policy and have an informed opinion about places where Americans are dying.

Harris: You would agree, then, that the more informed, and the more masses, the more people that are informed, the better off we are. We benefit from that, don’t we?

Ritter: It’s the only way we can be. It’s not one of these things that we would say is an “elective.” We don’t get to opt out of this one. If you call yourself an American citizen, you have to be informed. It’s a responsibility of citizenship. It’s not something you can opt into or opt out of. If you opt out of it, turn in your passport and leave my country. If you want to be a citizen in America, you’ve got to opt in and say: “Hey! I’m here. I count. I’m relevant, and I’m going to be informed.”

Harris: I think it is the job of every American to know something about foreign policy and something about government and be able to talk intelligently about these subjects, because that only means a better public. So I agree with you there. But we are preaching that Americans need to participate, yet the chief American is not participating. He’s not doing the things that we’re preaching Americans should do. So then, how, at this time, can we mount an effort to overcome the backward thinking that’s coming out of the White House?

Ritter: One of the reasons why the executive headed down the path towards unilateral executive power is that they got frustrated with the slow pace of democracy. I think the first thing we have to recognize is that the American people can’t allow themselves to be frustrated by the slow process of democracy. The other thing they have to recognize is that the rule of law means nothing unless the law is enforced. And we have a president who is showing a wanton disregard for the rule of law. There are constitutional remedies for executives who behave in this manner. It’s called impeachment. And I’m a big fan of the American public letting Congress know that impeachment is on the table. It’s Congress’ job, not to impeach, per se, but to investigate. And we have clear examples in the case of Iraq of the potential of wrongdoing that Congress has yet to investigate in a satisfactory manner. And now we’re taking a look at Iran. If we speak of holding the president to account for his actions, how about starting to hold Congress accountable for their failure to act in accordance with the will of the people? And what I’m talking about is a Nancy Pelosi and a Harry Reed, these “great” Democrats. And I say “great” in quotations because I don’t think they’re great at all. These Democrats who were elected to office by the will of the people and who have said that they are going to do nothing to tie the hands of this president when it comes to issues such as Iran and Iraq. And the last thing they’re going to do is defend the Constitution by holding the president accountable for his failure to abide by the Constitution. It’s time we started holding these people accountable as well.

Harris: Certainly refreshing to hear that you still maintain optimism and that you still have belief.

Ritter: I have belief in the American people. The government, as long as it’s reflective of the will of the people within the framework of the Constitution, I’ll continuously eye it in a suspicious fashion. But the government we have in play today? No, I don’t have any faith in it. It needs to be changed, and this is our collective responsibility to elect people to office who will do our bidding in accordance with the Constitution and who will be held accountable to us. Too many times we vote, but then that’s it. We don’t do the second half of the representative democracy equation, which is to hold them to account.

Harris: Yeah. If we keep calling the people, maybe they will answer one day. I believe they have to answer.

Ritter: I agree.

Harris: Scott Ritter, the former chief weapons inspector in Iraq, is also the author of “Iraq Confidential” and the first man I heard say there are no weapons of mass destruction in Iraq. Scott Ritter, thank you for joining us today on Truthdig.

Ritter: Thank you for having me.

Harris: All right then. For Scott Ritter, this is James Harris, and this is Truthdig.

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